M/S VARDHMAN POLYTEX LTD.,LUDHIANA V. DCIT, C-1, LUDHIANA

ITA 759/CHANDI/2019

AI Insights

The case involves M/s Vardhman Polytex Ltd, a public listed company, appealing against the addition of Rs.218.20 Lacs to their income under section 68 of the Income Tax Act, which was confirmed by the Commissioner of Income Tax (Appeals)-1, Ludhiana. The addition was based on the issuance of 21.82 Lacs equity shares to M/s Altfort Merchants Pvt. Ltd. (AMPL) at a premium, which the Assessing Officer initially accepted but later questioned the source of the investment. The Tribunal found that the immediate source of the investment was adequately documented and that the 'source of source' requirement was not applicable, leading to the decision to allow the appeal and delete the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716687 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 16-05-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA DHAR LD.
• Assessee Lawyers: ASHISH AGGARWAL LD
• Section: 143(3)

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.759/CHANDI/2019 (िनधाŊरण वषŊ / Assessment Year: 2015-16) M/s Vardhman Polytex Ltd Vardhman Park, Chandigarh Road Ludhiana. बनाम/ Vs. DCIT Central Circle -1 Ludhiana.141001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACV-5821-H (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Ashish Aggarwal (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Smt. Priyanka Dhar (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 04-08-2025 घोषणाकीतारीख /Date of Pronouncement : 18-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of an order of learned Commissioner of Income Tax (Appeals)-1, Ludhiana [CIT(A)] dated 06-03-2019 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 30-12-2017. The sole grievance of the assessee is confirmation of addition of Rs.218.20 Lacs u/s 68. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. Printed from counselvise.com 2 2. The impugned addition stem from the fact that the assessee issued 21.82 Lacs number of equity share to M/s Altfort Merchants Pvt. Ltd. (AMPL) on 15-12-2014. The shares were issued on face value of Rs.10/- each with a premium of Rs.45/- per share. In terms of requirements of Sec.68, the assessee furnished address, PAN of AMPL alongwith its Auditor Report, financial statements for FYs 2013- 14 to 2015-16. The return of income of AMPL was also furnished for AY 2015-16. The assessee also furnished detailed note on source of source of said investment by AMPL which has been extracted on Page 49 of the assessment order. The assessee stated that the issue price was fixed as per SEBI norms. However, Ld. AO rejected the same on the allegation that no information was provided by the assessee on source of source of investment in share capital. However, similar transaction of shares issued to Shri Adish Oswal was duly accepted by Ld. AO. Finally, the share capital of Rs.218.20 Lacs was added u/s 68. Pertinently, the share premium received from this entity was duly been accepted by Ld. AO. The Ld. CIT(A), referring the various judicial decisions, confirmed the impugned addition against which the assessee is in further appeal before us. 3. Having considered factual matrix, we are of the considered opinion that the impugned addition is not sustainable for multiple reasons. Firstly, the assessee is a public listed entity and in terms of Sec.68, it is not required to prove the source of source of share capital. The immediate source of investment has not been doubted by any of the lower authorities in the present case. The assessee has filed Printed from counselvise.com 3 sufficient documentary evidences (as enumerated in preceding para-2) to prove the immediate source of the impugned investments. Secondly, it also emerges that part of the investment has been received by the assessee in preceding year which has duly been accepted. Further, the source of share premium as invested by AMPL, in this year as well as in preceding year, has also been accepted by Ld. AO. M/s AMPL has paid substantial premium of Rs.981.90 Lacs which has been accepted whereas the genuineness of share capital of Rs.218.20 Lacs has not been accepted. The same is quite contrary in itself. Thirdly, no independent enquiry has been conducted by Ld. AO from the investor entity to ascertain the genuineness of the transaction. In the absence of any contrary findings on record, the impugned addition would have no legs to stand. For all these reasons, we delete the impugned addition of Rs.218.20 Lacs. The Ld. AO is directed to recompute the income of the assessee. 4. The appeal stand allowed. Order pronounced on 18-08-2025 Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 18-08-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF Printed from counselvise.com 4 ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "