TMI Blog2016 (5) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... ished. Regarding proving their creditworthiness or the genuineness of the transaction as they were not availed an opportunity given by the ITAT, Kolkata and pursuant to which, the proceedings under Section 131 of the Act. In enquiry by his inspector, AO found that one of the share applicants not existed at the given address. That both the share applicants did not choose to appear before the AO and The details could not be established. The valid details of the two concerns were not produced for examinations - Decided against assessee. - ITA No. 762/Kol/2013 - - - Dated:- 13-4-2016 - Shri P. M. Jagtap, A.M. and Shri S. S. Viswanethra Ravi, J.M. For the Appellant : Shri V.N.Purohit, FCA Shri H.V.Bhardwaj, CA For the Respondent : Shri S. Datta, JCIT, Sr.DR ORDER Per Shri S.S.Viswanethra Ravi, J.M. This appeal is filed by the assessee against the order dated 15.01.2013 passed by the CIT(Appeals)-XII, Kolkata for the assessment year 2003-04 framed under section 143(2)/254/251/143(3) of I. T. Act. 2. The assessee raised the following grounds before the Tribunal as under: 1. That the C.I.T.(A)-XII has erred, both on the facts and in law, in dismissing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of addition above and also directed the assessee produce all the relevant details and documents in support of the genuineness of share applicants. 5. Thus, going by the above observation of ITAT, Kolkata, the issue to be decided as to whether the AO decided the genuineness of the share applicants in accordance with law by giving an opportunity to assessee and as to whether assessee availed the opportunity granted by the ITAT, Kolkata in producing the relevant details and documents in support of its case before the AO. 6. The AO has given effect to the order of ITAT supra on 27.12.2007 and as there was no compliance from assessee and issued a notice on 03.04.2009 under section 142(1) of the Act intimating the date of hearing 14.4.2009 to assessee. The AO issued another notice on 17.6.2010 under section 142(1) of the Act fixing the hearing date on 16.7.2010 and on an adjournment petition the case was adjourned to 06.8.2010. At last, after three adjournments the assessee filed details of share applicants along with photo copies of some documents. The AO observed that said documents were not certified by the assessee. The AO also issued summons under section 131 of the Act t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entative of the assessee and submitted authorization in respect of the assessee. He failed to comply in the case of the assessee but tried to represent the case of M/s. Saroj Kumar Jhunjhunwala (HUF) without furnishing of authorization. c) In respect of M/s. Saroj Kumar Jhunjhunwala (HUF), the following requisitions were made: 1. Personal attendance for recording statement. 2. Computation, Profit Loss account or Income, Balance Sheet including all schedules, I. T. filing receipt, Bank statement for A. Y. 2003-04 (F.Y. 2002-03) and A. Y. 2002- 03 (F. Y.2001-02), 3. Cash Flow statement/Cash Book for F. Y. 2001-02 and 2002-03. 4. To furnish details of share application/allotment made in M/s.J. J. Development Pvt. Ltd. during A. Y. 2002-03 and A. Y. 2003-04 along with proof of allotment/application. 5. To furnish source of such investment in M/s. J. J. Development Pvt . Ltd. It is specifically mentioned in the Summons u/s 131 that personal attendance is required. But no personal attendance was made. The photocopies enclosed with the submission made have not been certified. No authorization has been submitted while furnishing the papers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of the assessee is supported. It has been claimed that share application money of ₹ 10,00000/- is reflected under Loans and Advance. It is seen from the Balance sheet that Loans and Advances constitute Loans of ₹ 20,05,533/-, including doubtful Loans of ₹ 90,000/- and Advances of ₹ 12,79,510/- (considered good) and ₹ 57,48,166/- (considered doubtful) but no schedule has been enclosed for such heads. Therefore, it is not known under which head it is shown. Also it is not known how application made for allotment of shares can be categorized under the head Loans and Advances . In this case also, it has not been established beyond doubt that there was creditworthiness and genuineness of the transactions. 7. At the outset, the AO observed that the assessee actually avoided to participate in the proceedings and failed to discharge its onus. Regarding the proceedings under section 131 of the Act, the AO felt that no personal attendance was made by any concerned representing the said two entities and the photo copies relating to some documents were not certified. Thereby, the AO added ₹ 18,02,000/- to the income of the assessee as unexp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of the genuineness of share applicants. Therefore, duty is cast upon the assessee to produce all details to substantiate its case. The assessee failed to discharge its duty under section 68 of the Act, except producing the photo copies of documents and details of share applicants i.e. M/s. Ramsay International Ltd. and M/s. Saroj Kumar Jhunjhunwala. 10.1 The concerned persons representing above said two entities failed to appear before the AO in person to proceed with the procedure contemplated in section 131 of the Act. We found from the record they too did not cooperate with the AO from 02.12.2011 being the first date of hearing except filing reply to summons placed at page no.44 where the details of Saroj Kumar Jhunjhunwala were filed through A.R. But, said person did not appear before the AO except stating that he is out of station. 10.2 Section 68 of the Income Tax Act, which reads as follows: Where any sum is found credited in the books of an assessee maintained for any previous year and the assessee offers no explanation about the nature and sources thereof or the explanation offered by him is not in the option of the Assessing Office, satisfactory, the sum s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 44 to 64 in paper books, but whereas about two other ingredients i.e. creditworthiness and genuineness of transaction is very much doubtful. The AO at page 5 of his assessment order observed that no personnel attendance was made and no valid documents regarding share application money were produced . Thus, the AO is right in doubting the creditworthiness and genuineness of the transaction. The section 68 of the Act reads as when an explanation is given by the assessee and then it is for the respondent Revenue to be satisfied whether the said explanation is correct or not. All other documents filed in respect of Saroj Kumar Jhunjhunwala as discussed above supports the view of AO in drawing adverse inference against the assessee and this share applicant regarding creditworthiness of share applicants and the genuineness of transaction and it is justified. 10.6 The AO noted that the address of office premises provided by the assessee of M/s. Ramsay International Ltd. is a residential area and on enquiries from neighbours, no such office in the name of M/s. Ramsay International Ltd. is existed as on that address. According to AO on behalf of said Ramsay International Ltd. also fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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