TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 1198
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.... assessing officer on account of alleged unexplained cash credit, being amount received by the appellant on issue of preferential capital. You're appellant, therefore, prays the addition under section 68 of Rs. 78,600,000 be deleted. ii. Set off of current year's loss and brought forward unabsorbed depreciation on the facts and in the circumstances of the case, and in law, the learned CIT - A ordinary object in the appellant's contention of set off of the current year's loss and brought forward unabsorbed depreciation against the above addition under section 68. You're appellant, therefore, prays that the learned AO be directed to set off of the current year's loss and brought forward unabsorbed depreciation as per the law. 3. Brief facts of the case shows that the assessee is a company engaged in the business of manufacturer and trader of ceramics and vitrified tiles. It filed its return of income on 22/11/2014 showing a loss of Rs. 22,208,015/-. The case of the assessee was picked up for scrutiny and notice under section 143 (2) was issued on 31/8/2015. 4. The learned assessing officer noted on perusal of the audit report that the assessee is in receipt of share capital of an....
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.... purchase of equity instruments in unlisted entities. He also noted that the directors of the depositor stays in some other city whereas the office of the depositor in some other city. Therefore the learned assessing officer reached at a conclusion that the depositor is a typical entry provider and which could not be found even after investigation by the ADIT (investigation) Calcutta. Therefore according to him the assessee has failed to prove the creditworthiness of the party and the genuineness of the transaction and therefore he made an addition of Rs. 78,600,000/- as unexplained cash credit under section 68 of the income tax act and passed an assessment order determining the total income of the assessee at Rs. 56,391,985/- under section 143 (3) of the act on 31 December 2016. 7. The assessee agreed with the order of the learned assessing officer preferred an appeal before the learned CIT - A. The learned CIT - A reached the conclusion that assessee has failed to provide any explanation for the credit appearing in the books of account and the capital contribution of Rs. 7.86 crores was nothing but bogus cash credit from Pingle suppliers Calcutta and hence the addition of Rs. 7.....
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....ares of the assessee and assessee is not able to trace that particular person itself shows that the transaction is not genuine. He further stated that even before the learned CIT A , assessee has not produced the details with respect to the depositor except the copies of the return of income of the above depositor. He specifically referred to paragraph No. 6 of the order stating that assessee produced its own share certificate dated 28th of March issued by the Assessee Company and copy of the Ledger account of the depositor from the books of the assessee as well as the bank account with bank of Baroda of the assessee. He submitted that these are all the evidence as produced by the assessee of its own and not of the depositor. He further referred that even the copy of the account was not confirmed by the creditor and therefore even the confirmation of the account was not provided. He further submitted that when the assessee has received such a huge sum from one company and even the assessee does not know the address of the party who deposited such a huge sum, this itself shows that the transaction is not genuine. He further relied on the decision of the learned CIT - A as well as th....
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....r noted that despite the depositor investing such a huge sum of Rs. 7.86 crores did not ask for a seat on the Board of Directors of the company when the equity share capital of the assessee company was Rs. 5 crores and assessee is incurring losses consistently year after year. There was no mention of any terms regarding the preference share dividend to be paid. He further noted that the assessee is a private limited company and who has got such a huge sum deposited as share capital could not produce the investor before the learned assessing officer or before the investigation Department Kolkata. The assessee even could not produce the confirmation of the creditor who has invested 7.86 crores as share capital. Though it is stated by the assessee before the learned CIT - A that it produced the return of income, audited accounts, bank statement, copy of share certificate, permanent account No. and copies of acknowledgement for filing of income tax returns for assessment year 2011 - 12 to 2016 - 17. The facts clearly shows that the case is identical to the issue decided by the honourable Supreme Court cited before us in NRA Iron & STell [ Supra] where the learned CIT - A, in that case ....