GEMCO ENERGY LIMITED,BHIWANI, HARYANA V. ACIT(OSD), RANGE-10, C.R. BUILDING, ITO, DELHI

CO 59/DEL/2024

AI Insights

The case involves M/s Gemco Energy Ltd., a company engaged in the production of electricity from biomass, which faced scrutiny from the Income Tax Department regarding the genuineness of share capital and unsecured loans received in the assessment years 2014-15 and 2015-16. The Assessing Officer (AO) made substantial additions to the income of the assessee under sections 68 and 56 of the Income-tax Act, 1961, questioning the authenticity of the financial transactions. The assessee appealed against these additions, and the CIT(A) deleted the additions after considering the evidence provided. The revenue, dissatisfied with the CIT(A)'s decision, filed appeals which were heard by the Income Tax Appellate Tribunal. The Tribunal, after examining the submissions and evidence, upheld the CIT(A)'s decision and dismissed the revenue's appeals.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838201 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 18-06-2024
• Other Referred Cases: Rupal Jain Vs. CIT (2023) 152 taxman.com 346 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: INDU BALA SAINI
• Assessee Lawyers: GAGAN R. KHANDELWAL
• Keywords: Additional evidence; Fair market value; Valuation report
• Section: 143(3); 11A

Judgement Text

"P a g e | 1 2 appeals and 2 COs M/s Gemco Energy Ltd. (AYs: 2014-15 & 2015-16) IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA Nos. 643 & 644/Del/2024 (Assessment Years: 2014-15 & 2015-16) ACIT (OSD) Room No. 405, 4th Floor, CR Building, IP Estate Delhi – 110001 Vs. M/s Gemco Energy Ltd. Kaushambhi Road, Village Dinod, Bhiwani Haryana – 127111 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AADCG5971E Appellant .. Respondent C.O. Nos.58 & 59/Del/2024 Arising out of ITA Nos. 643 & 644/Del/2024 (Assessment Years: 2014-15 & 2015-16) Gemco Energy Ltd. Kaushambhi Road, Village Dinod, Bhiwani Haryana – 127111 Vs. ACIT (OSD) Room No. 405, 4th Floor, CR Building, IP Estate Delhi – 110002 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AADCG5971E Appellant .. Respondent Appellant by : Sh. Gagan R. Khandelwal, Adv, Sh. JitendraWadhwa, CA Sh. Jaind Kr. Jaiswal, Adv. Respondent by : Ms. Indu Bala Saini, Sr.DR Printed from counselvise.com P a g e | 2 2 appeals and 2 COs M/s Gemco Energy Ltd. (AYs: 2014-15 & 2015-16) Date of Hearing 19.01.2026 Date of Pronouncement 18.02.2026 O R D E R PER ANUBHAV SHARMA, JM: These appeals and cross objections preferred by the revenue and Assessee against the orders of the Ld. Commissioner of Income-tax (Appeals) (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short) passed u/s 143(3) of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’). Further details of the orders of the lower authorities are as under:- ITA No. &AY Ld. FAA who passed the appellate order Appeal No. & Date of order of the Ld. FAA AO who passed the assessment order & Date of order 643/D/24 2014-15 NFAC, Delhi DIN & Order No : ITBA/NFAC/S/250/2023- 24/1058804920(1) Dated 15.12.2023 DCIT, Circle-10(1) Dated 15.12.2016 644/Del/24 2015-16 NFAC, Delhi DIN & Order No : ITBA/NFAC/S/250/2023- 24/1058810735(1) Dated 15.12.2023 DCIT, Circle-10(1) Dated 19.12.2017 Printed from counselvise.com P a g e | 3 2 appeals and 2 COs M/s Gemco Energy Ltd. (AYs: 2014-15 & 2015-16) 2. The assessee is a private limited company engaged in the production of electricity from biomass mustard husk, Guar husk, cotton waste, rice husk and other agriculture waste and comes under renewable energy project. The case of the assessee was opened to verify share capital received in AY: 2015- 16 and share capital and unsecured loans received in AY: 2014-15. The assessing officer was not satisfied with the genuineness of transactions and made an addition of Rs.5,85,00,000/- u/s 68 of Rs.1,12,49,998/- and u/s 56 in AY: 2015-16 and made an addition of Rs.705,93,467/- u/s 68 of the Act. 3. Ld. CIT(A) has benefitted the assessee of the explanation for which department is in appeal and we find that amongst ground raised by the AO there is ground that ld. CIT(A) has failed to take into consideration the decision of Hon’ble Supreme Court in Rupal Jain Vs. CIT (2023) 152 taxman.com 346 (SC). 4. At the outsetas we consider this decision it appears that AO while raising the ground has relied the decision in Rupal Jain (supra) in perfunctorymanner as that decision was in regard to an assessee who was an individual and in whose case an addition of Rs.63,58,520/- was made on the basis of unsecured loan which was deleted by the Tribunal itself. It was with Printed from counselvise.com P a g e | 4 2 appeals and 2 COs M/s Gemco Energy Ltd. (AYs: 2014-15 & 2015-16) regard to addition of Rs.15,00,000/- arising out of introduction of Rs.15,00,000/- to the proprietorship concern that the Tribunal had sustained the addition for which assessee had subsequently filed appeal before Hon’ble High Court and the SLP of the assessee was dismissed. Thus, to rely the decision in Rupal Jain (supra) to contend that ld. CIT(A) has fallen in error in not following the ratio in Rupal Jain (supra) is not sustainable and on that counts alone the appeals of the revenue deserves to be dismissed. 5. Further, ld. DR has heavily relied impugned assessment orders and the findings for which we find that for AY: 2014-15 assessee had received share capital with share premium from Nine parties on the basis of the share valuation report prepared as per Rule 11A. Assessee had filed relevant evidence in the form of ITR of shareholders, bank statement of shareholders, copy of board resolution list of allottees. However, Assessing Officer had made additions in respect of four of the investors. In the appellate proceedings assessee filed evidence in the form of bank statements and source of payments. Thus, taking into account it was established that one of the investor Dinesh Sadana had invested Rs.1,38,00,000/- in previous year and Rs.19,00,000/- was actually received in the present assessment year. The Printed from counselvise.com P a g e | 5 2 appeals and 2 COs M/s Gemco Energy Ltd. (AYs: 2014-15 & 2015-16) investment of Radhey Sham Dang of Rs.4,00,00,000/- was received in earlier years. Rakesh Mohan had money from fixed deposits closures and that became the basis to give relief to the assessee. We are of the considered view that assessee had sufficiently discharged the burden and in the absence of any evidence to the contrary at this stage the findings of ld. CIT(A) in regard to deletion of additions of Rs.607,00,000/- deserves no interference. 6. Then with regard to deletion of Rs.98,93,467/- of the addition made by the Assessing Officer on account of unsecured loan it comes up that assessee had filed copy of ITR bank statements and party confirmations of certain parties except M/s Gurudev Financial Services and M/s SaiMaa Associates and in appeal copy of ITR , copy of audited financial statements, source of income and bank statements were provided which have been considered by the ld. CIT(A) to make the deletion. 7. In regard to AY: 2015-16 the assessee had received share capital of Rs.418,74,980/- from 11 investors for which assessee claims they were existing shareholders or close relatives only. The share premium was determined as per Rule 11A and before the Assessing Officer copy of ITR of shareholder copy of bank statement of shareholder and copy of financial Printed from counselvise.com P a g e | 6 2 appeals and 2 COs M/s Gemco Energy Ltd. (AYs: 2014-15 & 2015-16) statements were filed. However, AO was not satisfied with regard to 6 of the investor and made addition of Rs.585,00,000/-. Assessee filed additional evidence only and the copy of ITR and bank statement including source of each payment which have been relied by ld. CIT(A) to make deletion. 8. As with regard to addition of Rs.112,49,998/- u/s 56(2)(viib) of the Act. One of that shares of companies were transferred to related parties @ Rs.24 per share including face value of Rs.10 and premium of Rs.14 and assessee had claimed that value of share was determined as per Rule 11(UA) of the Act at Rs.19.48 per share. The AO only considered book value of Rs.19 and allowed the premium only to the extent of Rs.9 per share. However, ld. AO did not consider the fact that assessee had considered fair market value of immovable property while calculating the value per share as prescribed in Section 56(2)(viib) of the Act. The value of land as on 31.03.2014 was Rs.6,82,80,000/- whereas original purchase price as per books as on 31.03.2009 was Rs.289,96,986/-. Thus, this appreciation of Rs.896,83,013/- was considered to value the shares at Rs.24. We find that ld. CIT(A) has duly appreciated these aspects to benefit the assessee. Printed from counselvise.com P a g e | 7 2 appeals and 2 COs M/s Gemco Energy Ltd. (AYs: 2014-15 & 2015-16) 9. At the same time we find that AO has challenged the relief given by the ld. First Appellate Authority by relying additional evidences and ld. CIT(A) had called for remand report from the AO, then in spite of repeated reminders reflecting in the order of ld. CIT(A), the assessing officer had not responded on the additional evidences which have been relied by ld. CIT(A) to give relief to the assessee. 10. Thus, the grounds as raised in the appeal of department have no legs to stand. The grounds in both the appeals are accordingly rejected. The appeals of the revenue deserves to be dismissed and the Cross Objection filed by the assessee primarily supporting the impugned orders in the appeals stand allowed. 11. The appeals of the revenue are dismissed and Cross Objections filed by the assessee are allowed. Order pronounced in the open court on 18.02.2026 Sd/- (Manish Agarwal) Sd/- (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 18.02.2026 Printed from counselvise.com P a g e | 8 2 appeals and 2 COs M/s Gemco Energy Ltd. (AYs: 2014-15 & 2015-16) Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "