ARYAN PROMOTERS PVT. LTD.,KOLKATA V. D.C.I.T., CC - 2(1), KOLKATA

ITA 1789/KOL/2025

AI Insights

The case involves Aryan Promoters Pvt. Ltd., which appealed against the order of the Commissioner of Income-tax (Appeals), Kolkata, concerning the assessment year 2012-13. The primary issue was the addition of 1,34,00,000 as unexplained cash credit under Section 68 of the Income Tax Act, related to share application money. The Tribunal noted procedural delays in the appeal process but ultimately admitted the appeal, finding the reasons for the delay genuine. The Tribunal examined the merits of the case, particularly the source and treatment of the share application money, and found that the additions made by the Assessing Officer were not sustainable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784733 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-08-2025
• Other Referred Cases: COLLECTOR, LAND ACQUISITION v. Mst. KATIJI (1987) 167 ITR 471 (SC), Senior Bhosale Estate (HUF) vs. ACIT [2019] 419 ITR 732 (SC), CIT v. Prameshwar Bohra (2008) 301 ITR 404 (Raj), Commissioner of Income-tax, Delhi-VI vs. Usha Stud Agricultural Farms Ltd. [2008] 301 ITR 384 (Delhi)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANAS MONDAL
• Assessee Lawyers: S. K. TULSIYAN; LATA GOYAL; ARS
• Keywords: Set aside; Unexplained cash credit; Unexplained investment
• Section: 144; 143(3); 142(1); 68; 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.1789/KOL/2025 (Assessment Year: 2012-13) Aryan Promoters Pvt. Ltd. Ruby House, 8, India Exchange Place, 2nd Floor, Kolkata-700001, West Bengal Vs. DCIT, CC-2(1), Aaykar Bhawan Poorva, 110, Shantipally, Kolkata-700107, West Bengal (Appellant) (Respondent) PAN No. AAGCA2975B Assessee by : Shri S.K. Tulsiyan& Ms. Lata Goyal, ARs Revenue by : Shri Manas Mondal, DR Date of hearing: 15.10.2025 Date of pronouncement: 11.11.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-26(hereinafter referred to as the “Ld. CIT(A)”] dated 23.01.2025 for the AY 2012-13. 02. At the outset, we observe from the appellate folder that there is a delay of 137 days in filing the appeal of the assessee for which condonation petition along with affidavit was filed. 03. After hearing the rival contentions and perusing the materials available on record, we find from the record that the appellate order was not delivered at the address specified in from no.35 as communication address, whereas the order was uploaded on ITBA portal on 23.01.2025 which has escaped the notice of the staff of the Printed from counselvise.com Page | 2 ITA No.1789/KOL/2025 Aryan Promoters Pvt. Ltd.; A.Y. 2012-13 assessee and therefore, the assessee could not keep track of the same. We note that the issue was set aside by the ld. CIT (A) to the ld. AO. Thereafter notice u/s 142(1) of the Act dated 29.07.2025, was received through e-portal and only then it was realized that the said notice might have been sent for assessment proceedings against which the appellate order from ld. CIT (A) was yet to be received. On accessing the portal, the assessee came to know that appellate order was already passed on 23.01.2025, allowing the appeal for statistical purposes. Thereafter, the assessee immediately took steps to file the appeal and it was ultimately filed on 08.08.2025 with a delay of 137 days. In our opinion, the reasons cited by the assessee before us appears to be genuine and bonafide and therefore the assessee should not be denied justice on the technical reasons. The case of the assessee find support from the decision of Hon'ble Apex Court in the case of COLLECTOR, LAND ACQUISITION v. Mst. KATIJI (1987) 167 ITR 471 (SC), Senior Bhosale Estate (HUF) vs. ACIT [2019] 419 ITR 732 (SC) dated 07-11-2019. Considering the facts of the case in the light of the aforesaid decisions, we are inclined to condone the delay and admit the appeal for adjudication. 04. The assessee ,at the time of hearing, pressed ground no.4, which is against the confirmation of addition of ₹1,34,00,000/- (wrongly mentioned as 13.40 crores) by the ld. CIT (A) as made by the ld. AO u/s 68 of the Act in respect of share application money. 05. Ground no.1 to 3 are in support of ground no. 4 that the ld. CIT (A) should have decided the appeal instead of setting aside the same to the file of the ld. AO. 06. The facts in brief are that the assessee filed the return of income on 28.09.2012, which was selected for scrutiny. The statutory notices u/s Printed from counselvise.com Page | 3 ITA No.1789/KOL/2025 Aryan Promoters Pvt. Ltd.; A.Y. 2012-13 143(2) of the Act and other notice u/s 142(1) of the Act along with questionnaire were issued to the assessee and were duly served. However, there was no compliance by the assessee. the ld. AO also issued summons u/s 131 of the Act to the directors of the assessee company as well as to the allottee companies. Further, there was no compliance. Therefore , the ld. AO treated the share allotment during the year to the tune of ₹1,34,00,000/- to three subscribers as unexplained cash credit in the books of the assessee and added the same to the income of the assessee by passing an order u/s 144 of the Act dated 18.03.2015. 07. In the appellate proceedings, the ld. AO furnished before the ld. CIT (A) all the details/ evidences qua the allotment of shares made of ₹1,34,00,000/- (wrongly stated as 13.40 Cr). The ld. AR submitted before the appellate authority that the assessee has allotted 1,34,000 equity shares of face value of ₹10 each at a premium of ₹90 per share thereby making a total allotment for ₹1,34,00,000/-. The ld. AR also submitted before the ld. CIT (A) that as per the audited balance sheet of the assessee, the total assets/ liabilities were ₹1,35,02,000/-. The ld. AR also furnished before the ld. CIT (A) the bank statement of the assessee. The ld. AR submitted that the substantial part of the money out of which the allotment was made was received during the proceeding assessment year and only 13 lakh out of 1,34,00,000 was received during the year. However, the ld. CIT (A) instead deciding the issue himself restored the issue back to the file of the ld. AO by directing the ld. AO to examine the issue and decide accordingly. 08. After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessee has allotted equity shares worth of ₹1,34,00,000/- during the year comprising Printed from counselvise.com Page | 4 ITA No.1789/KOL/2025 Aryan Promoters Pvt. Ltd.; A.Y. 2012-13 1,34,000 equity shares of face value of 10 each at a premium of 90 per share. We note that the assessee has received Rs. 1,21,00,000 in the earlier assessment years and only ₹13,00,000/- was received during the year. The assessee allotted the shares to three subscribers namely; i) Sampoorna Merchandise Pvt. ltd. ii) Sri Siromani Dealers Pvt. ltd. and iii) Varahi Commercial Pvt. ltd. Therefore, we shall decide the issue in two parts first relating to the money received in the earlier assessment years amounting to ₹1,21,00,000/- and thereafter decide the allotment made out of money received in the current year. 09. In our opinion, the provisions of Section 68 of the Act are not applicable to the money which are received in the earlier assessment years and therefore, cannot be brought to tax u/s 68 of the Act as unexplained cash credit. The case of the assessee find support from the decision of Rajasthan High Court in the case of CIT v. Prameshwar Bohra (2008) 301 ITR 404 (Raj), wherein Hon'ble Court held as under:- “4. On the merit of the additions made in the income of the assessee, there is a clear finding and above which there is no dispute that the amount added in the income of the assessee as unexplained investment or cash credit in the assessment year 1993-94 was the same amount which was credited in the books of account of the assessee for the previous year ending on March 31. 1992. The Tribunal has categorically come to a finding, and that finding is not under challenge, that this is not a case of cash credit entered in the books of account of the assessee during the year but it is a case in which the assessee has invested the capital in the business and this amount was shown as a closing capital as on March 31. 1992, and on April 1. 1992, it was an opening balance. Considering this aspect, the Tribunal has come to the conclusion that what was already credited in the books of account ending on March 31. 1992. for the financial year 1991-92 relevant to the assessment year 1992-93 cannot be an unexplained cash credit or investment in the books of account maintained for the financial year 1992-93, the accounting period of which ends on March 31. 1993, so as to warrant its consideration as unexplained investment or cash credit for its relevant assessment year 1993-94 5. It does not require any elaborate argument that a carried forward amount of the previous year does not become an investment or cash credit generated during the relevant year 1993-94. This alone is sufficient to sustain the order of the Tribunal in deleting the amount of Rs. 1.55,316 from the assessment for the assessment year Printed from counselvise.com Page | 5 ITA No.1789/KOL/2025 Aryan Promoters Pvt. Ltd.; A.Y. 2012-13 1993-94. Since the appeal succeeds on the merits of the assessee's case in respect of the additions made in the income computed on reassessment the validity of notice dated June 17, 1997, need not be gone into,\"” 010. Similarly, the Delhi High Court in the case of Commissioner of Income-tax, Delhi-VI vs. Usha Stud Agricultural Farms Ltd. [2008] 301 ITR 384 (Delhi) dated 14-03-2008, has held as under:- “\"8. Here, the CIT(A) has deleted the addition of Rs. 15 lacs mainly on the ground that this credit balance of Rs. 15 lacs is being reflected in the accounts of the assessed over the past four to five years or so and hence this was not a fresh credit entry of the previous year underconsideration and these credit entries were already made and accounted for in the assessment years 1995-96 and 1997-98 which were introduced in the form of advance against breeding stallions owned by the assessed and thus these credit entries did not relate to the year under consideration for being considered under Section 68 of the Act. 9. Since it is a finding of fact recorded by the CIT(A) that this credit balance appearing in the accounts of the assessed, does not pertain to the year under consideration, under these circumstances, the Assexsing Officer was not justified in making the impugned addition under Section 68 of the Act and as such no fault can be found with the order of the Tribunal which has endorsed the decision of the CIT(A).\"” 011. Therefore, considering the facts of the assessee’s case in the light of aforesaid decisions , we are of the considered view that the money received in the earlier assessment years cannot be treated as cash credit in the books of the assessee during the year and consequently addition made by the ld. AO is not sustainable in the eyes of law. Accordingly, we set aside the order of ld CIT(A) and the ld. AO is directed to delete the addition. 012. So far as the money received of ₹13.00 lacs during the year is concerned, we note that the same was received from Sampoorna Merchandise Pvt. Ltd. from whom the application was also received in the earlier years. The assessee furnished before ld. CIT (A) as well as before us the details of money received during the year which clearly established the three ingredients u/s 68 of the Act. We note that the assessee has filed balance sheet, ITR, bank statements, which are Printed from counselvise.com Page | 6 ITA No.1789/KOL/2025 Aryan Promoters Pvt. Ltd.; A.Y. 2012-13 also available at page no.24 to 40 of the Paper Book. The assessee also submitted the order of the assessment framed u/s 143(3) of the Act for A.Y. 2012-13. So far as the source of the share application money is concerned, we note that the subscriber had received the refund of share application money of ₹12,50,000/- from group companies i.e. Sri Siromani Dealers Pvt. ltd. and ₹5,00,000/- from M/s Subidha Builders Pvt. Ltd (another group company). We have also examined the bank statements evidencing the payment to the assessee company. The assessee has filed copies of bank statements, audited accounts Swarnalekha Developers Pvt. ltd. and ITR of Subidha Builders Pvt. ltd. which are available at page no. 41 to 50 and 51 to 60 respectively. We observe from the financial statements of Sampoorna Merchandise Pvt. ltd. that company had its own funds to the tune of ₹14.41 crores and it has not borrowed any amount from outside. We also note that the transactions were made through banking channel too. Considering these facts, we are of the view that the assessee has proved identity, creditworthiness of the investor as well as genuineness of the transactions. Considering these facts, we direct the ld. AO to delete the addition of ₹13,00,000/- also. Consequently, the appeal of the assessee is allowed. 013. In the result the appeal of the assessee is allowed. Order pronounced in the open court on 11.11.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 11.11.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant Printed from counselvise.com Page | 7 ITA No.1789/KOL/2025 Aryan Promoters Pvt. Ltd.; A.Y. 2012-13 BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "