M/S. SUPRERSMELT INDUSTRIES PVT. LTD.,KOLKATA V. ITO, WARD 1(1), KOLKATA

ITA 2811/KOL/2025

AI Insights

The case involves M/s Suprersmelt Industries Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre, Delhi, confirming the addition of 6,56,98,750 as share capital/share premium to the income of the assessee for the Assessment Year 2015-16. The Assessing Officer had treated these additions as unexplained cash credits under section 68 of the Income Tax Act, 1961, based on a presumption of money rotation among companies without substantiating the genuineness of the transactions. The Tribunal found that the assessee had provided sufficient evidence to prove the identity, creditworthiness of the subscribers, and the genuineness of the transactions, which the Assessing Officer failed to adequately investigate.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 837932 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 25-11-2025
• Other Referred Cases: PCIT Vs. Goodview Marketing P. Ltd., PCIT vs. Kunjal Synergies Private Limited, PCIT vs. M/s Jealous Commercial private Limited, PCIT Vs. True man Consultants Pvt. Ltd., PCIT vs. Atlantic Dealers Pvt. ltd., PCIT Vs. Balaka Vinimay Private Limited, PCIT Vs. M/s Devbhumi Vinimay Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA
• Assessee Lawyers: SUNIL SURANA
• Keywords: Set aside; Unexplained cash credit; Bogus
• Section: 147; 143(3); 56; 68; 131; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 2811/KOL/2025 (Assessment Year: 2015-16) M/s Suprersmelt Industries Pvt. Ltd 3rd floor, Room No.304(S), Tobaco House, Kolkata-700001, West Bengal Vs. ITO, Ward 1(1) Aaykar Bhawan, P-7, Chowringhee Square, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN No. AAJCS5245H Assessee by : Shri Sunil Surana, AR Revenue by : Shri Sanat Kumar Raha, DR Date of hearing: 05.02.2026 Date of pronouncement: 17.02.2026 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 21.11.2025 for the AY 2015-16. 2. The assessee during the course of hearing pressed ground no.2,3,4,5 & 6, which are against the order of ld. CIT (A) confirming the addition of ₹6,56,98,750/- as made by the ld. AO in respect of share capital/ share premium. 3. The facts in brief are that the assessee filed the return of income on 25th September, 2015, declaring loss of ₹3,88,781/-. The case of the assessee was selected for scrutiny and statutory notices along with questionnaire were issued, which were duly replied by the assessee. Printed from counselvise.com Page | 2 ITA No. 2811/KOL/2025 M/s Suprersmelt Industries Pvt. Ltd; A.Y. 2015-16 The assessee is engaged in the business of trading. The assessee raised share capital / share premium from three entities namely; M/s Divij Mercantile Pvt. Ltd of ₹25,02,500/-, KLG Tradefin Pvt. Ltd. of ₹4,99,85,000/-& Reality Vincom Pvt. Ltd. of ₹1,32,11,250/-, aggregating to ₹6,56,98,750/-. The assessee furnished before the ld. AO all the details and documents comprising confirmation letters, ITRs, final audited accounts, bank statements of the assessee as well as that of the subscribers to prove the identity creditworthiness of the subscribers and genuineness of the transactions. The ld. AO did not conduct any enquiry or investigation or enquiry into these evidences nor did issue notices u/s 133(6) of the Act or summons u/s 131 of the Act. The ld. AO in para no.2.5 and 2.6 merely noted that payments by account payee cheques were not sacrosanct and did not make the transactions genuine. Thereafter, the ld. AO noted that past experience says that such companies act like syndicate where A is raising share capital/ share premium from getting loan from then B is investing the same amount in C as investment in unlisted equity and then C is giving loan to D to invest in shares application/ share premium in B. Therefore, there is a cycle to rotate the money and finally, added the entire share capital/ share premium to the income of the assessee in the order passed u/s 143(3) of the Act dated 23.12.2017 by treating the same as unexplained cash credit. 4. In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO by noting that the assessee has failed to prove the three limbs of Section 68 of the Act and the assessee has issued shares at a very high premium without there being any justification for the same. 5. After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessee raised share Printed from counselvise.com Page | 3 ITA No. 2811/KOL/2025 M/s Suprersmelt Industries Pvt. Ltd; A.Y. 2015-16 capital/share premium from three entities / subscribers as stated above. We note that the shares were issued at a face value of ₹10 each at a premium of ₹55 per share. The assessee filed before the ld. AO the confirmation letters, ITRs, audited balance sheets, bank statements of the subscribers as well as its own audited accounts and copy of bank accounts, which was admitted by the ld. AO at page no.2 para 1 of the assessment order. We also note that the ld. AO has not conducted any enquiry into evidences filed by the assessee nor did he issued any notices u/s 133(6) of the Act or summons u/s 131 of the Act to any of the subscribers, whereas on the other hand the assessee has filed all the evidences before the ld. AO explaining the sources of investment by the subscribers in the assessee company. We note that the ld. AO has doubted the issue of share at a high premium while on the other hand, we note that the shares were issued at a value as per Rule 11UA of the Rules and no addition was made u/s 56 of the Act by the ld. AO. 6. We note that the ld. AO has only relied on a general modus operandi as stated in para no.2.5 and 2.6, wherein he noted that on the basis of past experience it is noticed that such type of routing of money in a cyclical manner and finally added the money in the hands of the assessee. Therefore, the addition made on the basis of presumption and surmises that these are bogus entities who invested in the assessee company, whereas the companies, are active and regularly filing their income tax returns as well as the ROC returns. Similarly, the ld. CIT (A) simply affirmed the order of the ld. AO without giving any coge3nt finding. So far as the source of money is concerned, the major money was raised from KLG Tradelink Pvt. Ltd. of ₹4,99,85,000/- out of total money received of ₹6,56,98,750/-. We note that the said company is a sister’s concern of the assessee Printed from counselvise.com Page | 4 ITA No. 2811/KOL/2025 M/s Suprersmelt Industries Pvt. Ltd; A.Y. 2015-16 company and the directors Shri Akash Dhandhania, who is the director of the KLG Tradefin P ltd. is the brother of Shri Vikash Dhandhania who is the director of the assessee company. We also note that the KLG Tradelink Pvt. Ltd. was merged with Divij Mercantile P Ltd. which is another subscriber. We also note that the assessment order framed in the case of merged entity Divij Mercantile P Ltd. as passed u/s 147 of the Act is available in the paper book at serial no.3. We also note that net worth of the company KLG Tradefin P Ltd. is ₹9.58 crores as per the audited balance sheet which is available at paper book no.5 onwards and the bank statement available at page no.78 to 95 of the Paper Book. We note that the said company has sourced the funds amounting to ₹2.00 crores out of maturity proceeds of fixed deposits and ₹50 lacs have been sourced out of refund of advances given by the assessee. We also note that KLG has bank loan in the balance sheet besides office property. Therefore, there is no reason to doubt the said subscribing company. Similarly, Reality Vincom Pvt. Ltd., who subscribed ₹1,32,11,250/- had also properand explained source as the net worth of the company as ₹4.52 crores. In view of these facts, we are in a position to sustain the order of the ld. CIT (A). The case of the assessee is squarely covered by a series of decisions of the Kolkata High Court in case of PCIT Vs. Goodview Marketing P. Ltd. in ITAT/114/2025, GA/2/2025 vide order dated 3rd September, 2025, in case of PCIT vs. Kunjal Synergies Private Limited in ITAT/42/2025, IA No: GA/2/2025, in case of PCIT vs. M/s Jealous Commercial private Limited in ITAT/138/2025, IA No.GA/2/2025 vide order dated 28.10.2025, in case of ITAT/286/2024, IA No. GA/2/2025 vide order dated 17.07.2025, in case of PCIT Vs. True man Consultants Pvt. Ltd. in ITAT/203/2024, IA No.GA/I/2024, vide order dated 25th April, 2025, in case of PCIT vs. Atlantic Dealers Pvt. ltd., ITAT/41/2024, IA No. Printed from counselvise.com Page | 5 ITA No. 2811/KOL/2025 M/s Suprersmelt Industries Pvt. Ltd; A.Y. 2015-16 GA/2/2024 vide order dated 03.05.2024. in case of PCIT Vs. Balaka Vinimay Private Limited, ITAT/131/2025, IA No.GA/1/2025, vide order dated 21st July, 2025, in case of PCIT Vs. M/s Devbhumi Vinimay Pvt. Ltd. in ITAT/16/2025, IA No.GA/2/2025, vide order dated 22nd July, 2025. 7. Consequently, respectfully the above the decisions of the Hon'ble Kolkata High Court, we set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 17.02.2026. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 17.02.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "