TMI Blog2022 (2) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... indings of the CIT A that the provisions of section 72 speaks about setting off of brought forward business losses against business income only and as the above sum of ₹ 7.86 crores has been taxed u/s 68 of the act, same cannot be said to be a business income and therefore the brought forward business losses cannot be allowed to be set off against that addition stop similarly is the case for the set off of unabsorbed depreciation under section 32 - In view of this we do not find any infirmity in the order of the CIT- A in confirming the action of the learned assessing officer in not allowing set off of business losses carried forward and unabsorbed depreciation against the above addition. Accordingly ground No. 2 of the appeal is dismissed. - ITA No. 2630/Mum/2019 - - - Dated:- 23-2-2022 - Shri Vikas Awasthy, JM And Shri Prashant Maharishi, AM For the Appellant : None For the Respondent : Shri C T Mathew SR DR ORDER PER PRASHANT MAHARISHI, AM: 1. This appeal is filed by Mirage ceramics Private Limited Mumbai (assessee/ Appellant) against the order passed by The Commissioner Of Income Tax (Appeals) 21, Mumbai ( CIT (A)) dated 21st of January 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 131 of the income tax act to The Assistant Director of Income Tax (Investigation), Kolkata on 22/11/2016. On 6/12/2016, the ADIT, Kolkata submitted his report stating that the physical existence of the party was not found at the said address. Thereafter assessee was asked to show cause why the said share capital of ₹ 78,600,000 should not be treated as unexplained cash credit under section 68 of the act. 5. On 20/12/2016, assessee replied that the directors of the above depositors are out of town and the details could be submitted when they arrive and sought adjournment. The assessee further stated that now the name of the above depositors has changed to Navkar Nivesh private limited and its present address is 81, Metcraft Street, Calcutta 700013. The ADIT investigation, Kolkata was once again contacted and asked to verify the genuineness of the above party at the new premises. According to his report dated 29/12/2016, even at the new address that party was not found. 6. As in assessment proceedings the assessee provided only Acknowledgement of the income tax return filed by the depositor and no information was received with respect to the notice under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the addition under section 68 of the act is a separate addition, set off of brought forward business losses is not permissible. Similarly he confirmed disallowed the setting off of unabsorbed depreciation under section 32 of the income tax act. Accordingly the appeal of the assessee on this ground was dismissed however some other grounds were allowed. Therefore the assessee is agreed with that order and has preferred appeal before us. 8. Originally this appeal was fixed for hearing on 19/4/21 , however assessee remained unrepresented as none appeared on its behalf. Similar is the story on 27/5/21, 8/7/21, 26/8/21, 5/10/21, 1/12/21, 19/1/22 and also today. Thus after filing of the appeal the assessee remained unrepresented. The most of the notices issued by the registered AD post returned by the postal authorities with the remark left . The registry at the direction of the bench, directed the learned assessing officer to serve the notice to the assessee. The report of assessing officer dated 28/10/2021 stated that the assessee is not available at the address mentioned in the records. As the assessee is not traceable, the notice has been served by affixture on 28/10/2021 at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 78,60,000 shares. On issue of notice under section 133 (6) of the act, at the original address given in the tax audit report, the notices remained unserved. The local investigation was also carried out by issuing commission under section 131 to the investigation Department in Kolkata who denied any fixed physical existence of the party at the given address. Thereafter the assessee was confronted by issue of notice and assessee was directed to produce the shareholder either before the investigating authorities at Kolkata or before the assessing officer. The assessee stated that the directors of the depositor company are out of town and he will submit the necessary details as and when they arrive. Meanwhile the assessee submitted on 27/12/2016 a letter from a chartered accountant which stated that the name of the depositor has changed and the address of the depositor is now also different. The same commission of the investigation wing of the income tax, Calcutta was given commission however the report was received that even at the new address no such entity was found. As the assessee has only furnished the income tax returns of the depositor and no evidences were placed about the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax (Investigation) Kolkata. The facts in the present case also are somewhat similar to paragraph No. 12 of the decision of the honourable Supreme Court wherein the parties could not be found at the addresses given and therefore the genuineness of the transaction was found to be completely doubtful. The return for a negligible taxable income filed by the depositors which creates doubt about the genuineness of the transaction. The learned CIT A noted a peculiar aspect that the above sum of ₹ 7.86 crores were invested in lot of ₹ 20 lakhs which clearly shows that the initially funds were received as an advance but a letter on treated as preferential capital. The terms and conditions of the preferential capital whether those are redeemable, rate of dividend, nature of cumulative or noncumulative dividend was not at all forthcoming. In view of above facts, uncontroverted findings of the lower authorities and absence of the assessee to produce any further evidence , despite repeated opportunities of hearing , we confirm the finding of the learned CIT A wherein the addition made by the learned assessing officer under section 68 of the act of ₹ 7.86 crores is made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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