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of <h1>ITAT Kolkata grants condonation of delay, upholds deletion of additions under section 68</h1> <h3>Deputy Commissioner of Income Tax Circle-3 (1), Kolkata Versus M/s. Alishan Steels Pvt. Limited</h3> Deputy Commissioner of Income Tax Circle-3 (1), Kolkata Versus M/s. Alishan Steels Pvt. Limited - TMI Issues:1. Condonation of delay in filing appeal by Revenue before ITAT Kolkata.2. Deletion of addition under section 68 relating to share capital and share premium.3. Deletion of disallowance of provisional power expenditure made by the Assessing Officer.Analysis:1. The Revenue filed an appeal before ITAT Kolkata with a delay of ten days, seeking condonation which was granted due to sufficient cause shown, and the appeal was heard on merit.2. The issue in Grounds No. 1 to 3 involved the deletion of an addition of Rs. 6,00,00,000 made by the Assessing Officer under section 68 regarding share capital and share premium. The Assessing Officer treated the amount as unexplained cash credit, alleging a sham transaction. However, the CIT(A) deleted the addition after verifying that no cash payment was received against the issue of shares, and the shares were allotted under a barter system, not invoking section 68.3. The ITAT upheld the CIT(A)'s decision based on similar cases, including one involving M/s. Bhagwat Marom Pvt. Limited, where no cash inflow was involved in the share transactions, and section 68 was not applicable. The decision was supported by the judgment of the Hon'ble Calcutta High Court in the case of Jatia Investment Co., emphasizing that no real credit of cash occurred in the transactions.4. In Ground No. 4, the Revenue challenged the deletion of a disallowance of Rs. 1,61,21,595 on account of provisional power expenditure. The Assessing Officer disallowed the amount as a contingent liability, but the CIT(A) deleted the disallowance after verifying that the amount was actually paid by the assessee to the Damodar Valley Corporation for electricity used in its business.5. The ITAT upheld the CIT(A)'s decision on the power expenditure issue, as the provision made by the assessee was found to be an actual liability payable to DVC, supported by the verification of relevant bills and subsequent payment. The ITAT found no infirmity in the CIT(A)'s order granting relief to the assessee on this issue.6. Consequently, the appeal of the Revenue was dismissed by ITAT Kolkata, and the decision was pronounced on March 18, 2020.
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