BABA HEALTHCARE PRIVATE LIMITED,. V. ACIT CIRCLE -1, FBD, .

ITA 476/DEL/2025

AI Insights

The case involves Baba Healthcare Pvt. Ltd, which appealed against the order of the National Faceless Appeal Centre (NFAC) sustaining an addition of Rs. 61 lakhs made by the AO under Section 68 of the Income-tax Act, 1961. This addition was related to share premium and share capital received by the company, which the AO deemed as unexplained cash credit. The Tribunal found that the AO had not adequately verified the factual matrix concerning the sources of funds used for the investments in question. Consequently, the Tribunal restored the matter to the AO for a thorough examination of the fresh evidence that the assessee may provide.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827605 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 27-01-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: RAJIV SAXENA
• Keywords: Unexplained cash credit; Fair market value; Valuation report; Source of fund; Share purchase agreement
• Section: 143(3); 68; 56(2)(vii)(b); 133(6)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI C. N. PRASAD, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 476/Del/2025 (Assessment Year: 2016-17) Baba Healthcare Pvt. Ltd, C/o. IPSO Legal, H-35, 1st Floor, Jangpura Extension, New Delhi Vs. ACIT, Circle-1, Faridabad (Appellant) (Respondent) PAN: AADCB7985R Assessee by : Shri Rajiv Saxena, Adv Ms. SSumnagla Saxena, Adv Shri Dishant Sethi, Adv Revenue by: Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 04/12/2025 Date of pronouncement 07/01/2026 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.476/Del/2025 for AY 2016-17, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2024- 25/1065146252(1) dated 27.05.2024 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 29.12.2018 by the Assessing Officer, ACIT, Circle-1, Faridabad (hereinafter referred to as ‘ld. AO’). 2. The only issue to be decided in this appeal is as to whether the Learned NFAC was justified in sustaining the addition of Rs. 61 lakhs made by the Learned AO under Section 68 of the Act on account of share Printed from counselvise.com ITA No. 476/Del/2025 Baba Healthcare Pvt. Ltd Page | 2 premium and share capital received by the Assessee in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. The return of income for the assessment year 2016-17 was electronically filed by the Assessee company on 3-10-2016 declaring taxable income of Rs. 85,43,330. The Learned AO in the scrutiny assessment proceedings observed that Assessee has received share premium from 5 parties during the year. The list of parties from whom the share capital and share premium was received are tabulated in page 2 of the assessment order. The Learned AO noted that the share premium was justified by the Assessee by placing reliance on the valuation report obtained from a chartered accountant dated 9-9-2015, wherein the fair market value of the share was determined at Rs. 66 per share as required under Section 56(2)(vii)(b) read with Rule 11UA of the Income Tax Rules. The Learned AO, however, in respect of amounts received from Mass Securities P Ltd in the sum of Rs. 21 lakhs and Deepit Real Estate P Ltd received in the sum of Rs. 40 lakhs, noted that the source of funds which are used for the share premium money are not through credible source. The Learned AO accordingly sought to verify the identity and creditworthiness of the investor together with the genuineness of the transaction by issuing notice under Section 133(6) of the Act dated 22-11- 2018, seeking the following information:- a) Confirmation whether any share was purchased of the Assessee company b) Mode of payment towards share capital and share premium c) Copy of acknowledgement of income tax return. 3.1. Both the parties submitted the requisite details in response to notice under Section 133(6) of the Act. On perusal of the details filed by the Printed from counselvise.com ITA No. 476/Del/2025 Baba Healthcare Pvt. Ltd Page | 3 parties directly before the Learned AO, the Learned AO in respect of Mass Securities private limited noted that it had returned a loss of Rs. 70,465/- and there was no credible source of income available for making investment towards share capital and share premium in the sum of Rs. 21 lakhs. Further, on perusal of the bank statement of the said investor, the Learned AO noted that before the issuance of cheque to the Assessee company, there were certain immediate credits in the form of RTGS entries in the bank statement which raised suspicion and accordingly the credibility of the source of funds was doubted by the Learned AO. With regard to Deepit Real Estate private limited, the said party had returned a loss of Rs. 25,50,340/- in its income tax return and the Learned AO made similar observations as were made for Mass Securities private limited for this investor company also and doubted the credibility of source of funds. Accordingly, the Learned AO proceeded to make addition under Section 68 of the Act treating the amounts received towards share capital and share premium as unexplained cash credit and added a sum of Rs. 61 lakhs in the assessment. This action of the Learned AO was upheld by the Learned NFAC. 4. We find that the Assessee on its part had furnished the following documents to prove the three ingredients of section 68 of the Act:- a) ITR acknowledgement of assessment year 2016-17 of the investor companies b) Audited financial statements of investor companies for the year ended 31-3-2016 c) Bank statements of investor companies d) Confirmation of account from investor companies Printed from counselvise.com ITA No. 476/Del/2025 Baba Healthcare Pvt. Ltd Page | 4 e) Ledger account of Assessee as appearing in the books of investor companies f) Copy of Share Certificates 5. The Learned AR submitted that the investor companies had advanced loans to certain parties in earlier years and the same were duly recovered during the year and those amounts were duly invested in the Assessee Company towards share capital and share premium. Hence the source of source is also established beyond reasonable doubt. In our considered opinion, these facts require factual verification by the Learned AO. Hence in the interest of justice and fair play, we deem it fit and appropriate, to restore this issue to the file of Learned AO for denovo adjudication in accordance with law. The Assessee is given liberty to furnish fresh evidences, if any, in support of its contentions. The Learned AO is directed to pass a speaking order on examination of all the evidences available and placed on record by the Assessee. The grounds raised by the Assessee are allowed for statistical purposes. 6. In the result, the appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open court on 07/01/2026. -Sd/- -Sd/- (C. N. PRASAD) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07/01/2026 A K Keot Copy forwarded to Printed from counselvise.com ITA No. 476/Del/2025 Baba Healthcare Pvt. Ltd Page | 5 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "