JIVANSUDHA VINCOM PVT. LTD.,KOLKATA V. ITO WARD 6(2), KOLKATA

ITA 2322/KOL/2024

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Jivansudha Vincom Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals), which had upheld the AO's decision to treat the share capital and share premium received as unexplained cash credit under section 68 of the Income Tax Act. The AO had initially assessed the total income of the assessee at Rs. 34,71,00,000, attributing this amount to unexplained cash credits from shares issued at a premium. The assessee failed to substantiate the genuineness of the transactions, the identity of the shareholders, and the creditworthiness of the subscribers during the scrutiny assessment. The tribunal, considering the circumstances and the assessee's undertaking to produce the directors, decided to remit the matter back to the AO for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717483 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 19-11-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 143(3); 142(1); 131; 133(6); 14A

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “सी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 2322/Kol/2024 Assessment Year: 2011-12 Jivansudha Vincom Pvt. Ltd. (PAN: AACCJ 4895 P) Vs. ITO, Ward-6(2), Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 23.07.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 11.08.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Somnath Ghosh, A.R For the revenue / राजèव कȧ ओर से Shri Praveen Kishore, CITDR ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeals), -NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 21.09.2024 for AY 2011-12. Printed from counselvise.com 2 I.T.A. No. 2322/Kol/2024 Assessment Year: 2011-12 Jivansudha Vincom Pvt. Ltd. 2. Brief facts of the case of the assessee are that the assessee being a company has filed the return of income for the AY 2011-12 on 02.11.2011 declaring total income of Rs. 260/-. The return of the assessee was duly processed u/s 143(1) on returned income. The case was selected for scrutiny under CASS to verify the issue of huge increase in share capital. During the course of assessment proceedings, the Ao has noted that the assessee company has issued 3,47,100 number of shares to 12 different Pvt. Ltd. companies and received total consideration of Rs. 34,71,00,000/-. The subscriber’s company had paid Rs. 34,71,000/- at the rate of Rs. 10/- per shares towards face value of shares and Rs. 34,36,29,000/- (amount of share premium) at the rate of Rs. 990/- per shares as share premium. The AO has issued notices u/s 142(1) to assessee from time to time, requiring it to furnish certain information and also issued notice u/s 133(6) to subscriber’s company requiring certain information. The assessee was further asked to substantiate the said cash credit found in its books under the garb of fresh share capital/ share premium. After giving ample opportunities to appellant, it has failed to substantiate the genuineness of transaction, identity of shareholders, creditworthiness of persons etc. Subsequently, the AO has competed assessment proceedings u/s 143(3) of the Act and assessed total income of the assessee at Rs. 34,71,00,000/- wherein addition of Rs. 34,71,00,000/- u/s 68 on account of unexplained cash credit made by the AO. Besides this the AO has also made the following addition/ disallowance: i) Disallowance of preliminary Expenses Rs. 16,320/- ii) Disallowance u/s 14A of the Act Rs. 8,67,250/- 3. Aggrieved by the said order, the assessee preferred an appeal before the Ld. CIT(A) wherein also the appeal of the assessee has been dismissed. Being aggrieved and dissatisfied the assessee preferred an appeal before us. 4. The Ld. A.R instead of arguing into the merit of the case has only prayed that matter be remitted back to the file of AO as the order passed by the AO when the assessee failed to produce the director before him. The Ld. A.R undertakes that when Printed from counselvise.com 3 I.T.A. No. 2322/Kol/2024 Assessment Year: 2011-12 Jivansudha Vincom Pvt. Ltd. the matter be remitted back to the file of AO the assessee will produce the directors to substantiate his grievance. 5. Contrary to that the Ld. D.R though supports the impugned order but did not raise any objection in remitting the appeal of the assessee back to the file of AO for fresh consideration. 6. Upon hearing the submission of the counsel of the respective parties, we have perused the order of lower authorities. The AO in its order has held that the summon u/s 131 were issued to some of the directors of all the share capital companies to appear before undersigned to substantiate the identity of share applicant and also to look after the creditworthiness and genuineness of the applicants to neither there was any compliance from the part of the assessee company nor from the investor companies in compliance of the summon issued. The Ld. CIT(A) has also held in its order that the assessee failed to establish identity, creditworthiness and genuineness of the share transaction. Before us the Ld. A.R undertakes that the assessee will produce the director to prove genuineness and creditworthiness of the applicants. 7. Looking at the order passed by the AO there is no denying to this fact that the summon u/s 131 were issued to the directors of the assessee company asking him to appear to undersign but there was no compliance therefore process of verification of identity and creditworthiness of the share applicants and genuineness of the transaction could not be looked into. The AO in its order has clearly held that since there was no compliance from the director of the share applicant’s companies, the creditworthiness of the share applicants have not been established. Before us as we have already discussed that the assessee undertook that he will produce the director of the share applicant company before the AO. Keeping in view, submission made by the assessee, considering the order passed by the lower authorities and for the interest of justice, we are inclined to restore the appeal of the assessee before the AO with a direction to the assessee to produce the directors of the companies to establish the genuineness and creditworthiness if he fails, the AO is at liberty to pass an order without being prejudice to this order. Printed from counselvise.com 4 I.T.A. No. 2322/Kol/2024 Assessment Year: 2011-12 Jivansudha Vincom Pvt. Ltd. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 11th August, 2025 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 11th August, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Jivansudha vincom Pvt. Ltd, 2, Raja Woodmunt Street, Kolkata- 700001 2. Respondent – ITO, Ward- 6(2), Kolkata 3. Ld. CIT(A)- NFAC, Delhi 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata Printed from counselvise.com "