Tribunal confirms addition under Income Tax Act for unexplained cash credit

The Tribunal upheld the CIT(A)'s decision to confirm the addition of Rs. 23,51,00,000 under section 68 of the Income Tax Act, 1961. The appeal was dismissed as the assessee failed to provide a plausible explanation for the unexplained cash credit, leading to the confirmation of the addition due to lack of evidence and non-compliance throughout the proceedings.

---

---

Issues:
1. Ex-parte order passed by CIT(A)
2. Validity of order u/s 144 of the Income Tax Act, 1961
3. Addition of unexplained cash credit u/s 68 of the Income Tax Act, 1961

Ex-parte Order by CIT(A):
The appeal was filed against the order of the ld. CIT(A)-18, Kolkata dated 27.06.2018 for A.Y. 2012-13. The assessee did not appear despite multiple notices, leading to an ex-parte adjudication. The registry informed a delay of 17 days in filing the appeal, which was condoned. The case proceeded based on available records.

Validity of Order u/s 144:
The AO completed the assessment to the best of judgment due to non-compliance by the assessee. The AO observed discrepancies in the balance sheet entries regarding share capital and premium. As the assessee did not provide details of shareholders, the genuineness of the transactions could not be verified. Consequently, the AO treated the unexplained cash credit as the assessee's own money and added it to the total income u/s 68 of the IT Act, 1961.

Addition of Unexplained Cash Credit u/s 68:
The assessee challenged the addition made u/s 68 for unexplained cash credit of share capital and security premium. Despite procuring substantial share capital and premium, the assessee failed to prove the source, identity, and creditworthiness of the alleged creditors. The assessee did not provide necessary details to explain the cash credit, leading to the conclusion that unaccounted income was routed through bogus share capital and premium. The Tribunal upheld the CIT(A)'s decision to confirm the addition of Rs. 23,51,00,000 u/s 68.

In conclusion, the Tribunal dismissed the appeal as the assessee failed to provide a plausible explanation for the unexplained cash credit, leading to the confirmation of the addition made by the CIT(A) under section 68 of the Income Tax Act, 1961. The decision was based on the lack of evidence and non-compliance by the assessee throughout the proceedings.

---