NAVNITA DEALCOMM PVT. LTD.,KOLKATA V. I.T.O., WARD - 6(3), KOLKATA, KOLKATA

ITA 1369/KOL/2024

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Navnita Dealcom Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, which confirmed the addition of Rs. 1,21,50,000 as unexplained cash credit in respect of share capital/share premium under section 68 of the Income Tax Act. The AO had initially made this addition after the assessee failed to produce the managing director of the subscribing company during the assessment proceedings. The Tribunal, after examining the evidence and considering various judicial precedents, concluded that the addition was unjustified as the assessee had provided ample evidence regarding the transactions and the creditworthiness of the investors.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469668 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 20-06-2024
• Other Referred Cases: PCIT vs. NRA Iron & Steel Pvt. Ltd., Grafton Merchant Pvt Ltd Vs DCIT, Orissa Corporation Ltd. vs. CIT, Crystal Networks Pvt. Ltd. vs. CIT, Cygnus Developers India Pvt. Ltd. vs. ITO, Raj Kumar Agarwal vs. CIT, Devinder Singh Shant vs. ITO, Yash Movers Pvt. Ltd. vs. ITO, Naina Distributors Pvt. Ltd. vs. PCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Question of law; Unexplained cash credit; Accommodation entries; Source of fund
• Section: 143(3); 143(1); 68; 131; 133(6)

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. 1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. (PAN: AAACN 8369 A) Vs. ITO, Ward-6(3), Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 24.09.2024 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 09.10.2024 For the Appellant/ Ǔनधा[ǐरती कȧ ओर से Shri Manish Tiwari, FCA For the Respondent/ राजèव कȧ ओर से Smt. Ranu Biswas, Addl. CIT, Sr. DR ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 22.05.2024 for the AY 2012-13. 2. The only issue raised is against the confirmation of addition of Rs. 1,21,50,000/- by the Ld. CIT(A) as made by the AO on account of unexplained cash credit in respect of share capital / share premium u/s 68 of the Act. 2 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. 3. Facts in brief are that the assessee filed return of income on 31.05.2013 declaring total income of Rs. 62,986/- which was processed u/s 143(1) of the Act. The case of the assessee was selected under CASS for scrutiny and statutory notices were duly issued and served upon the assessee during the course of assessment proceedings. The AO noted that the assessee has received share application money of Rs. 1,21,50,000/- by issuing 6075 equity shares of face value of Rs. 10/- each at a premium of Rs. 1,990/- per share to M/S Zeus Vinimay Pvt Ltd . The assessee furnished the details of share subscribers from whom money was raised and even furnished the details as called for vide summon dated 19.02.2015 issued u/s 131 of the Act calling upon the assessee to furnish the details of managing director of the subscribing company and also to produce then but was not complied with. Finally, the said amount was treated as unexplained cash credit and added to the income of the assessee u/s 68 of the Act. 4. In the appellate proceedings, the Ld. CIT(A) simply confirmed the order of AO on the ground that the credentials of the assessee company did not justify the issue of equity shares at such a high premium and also noted that summons u/s 131 of the Act remained unfruitful as investor did not appear before the AO. 5. After hearing the rival contentions and perusing the material on record, we note that during the year the assessee has issued 6075 equity shares at face value of Rs. 10/- each at a premium of Rs. 1,990/- per share to Zeus Vinimay Pvt. Ltd. , thereby receiving Rs. 1,21,50,000/-. The assessee is a non-banking finance company duly registered with RBI and source of share subscribing company was furnished before the AO during the course of assessment proceedings. The assessee produced before the AO the copy of audited financial statement for the year ended 31.03.2012, details of share allotment, copy of relevant bank statement, copy of Form 2 filed with ROC, copy of certificate of registration of NBFC in respect of share subscriber, details of share application forms, details of investment along with mode and source of payment, copy of ITR, copy of certificate of registration of NBFC and copy of master data etc. The notice/summon u/s 131 of the Act was also issued to the assessee company calling upon to produce the managing director of the share holding company. We note that the assessee has filed all 3 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. the details called for by the AO, however, no one appeared personally. We have examined the evidences placed before us and find that the assessee has issued shares at a premium of Rs. 1,990/- and since this being AY 2012-13 and there was no restriction on the issue of shares at a high premium. Moreover, the assessee is a non-banking finance company during the year and has received income of Rs. 1,41,09,174/- in the impugned assessment year vis-à-vis Rs. 1,14,92,685/- in the preceding assessment year and therefore it is not a case that these are shell companies and money exchanged in the form of accommodation entries. We note that the notice u/s 131 was complied with by filing necessary details on 11.03.2015 and thus there was no information which was not provided but the AO has not conducted further enquiry into the matter. In our opinion, the AO has solely relied on the non-appearance of the share applicant to draw the adverse inference treating share application as unexplained share investment. We also note that the department has merely harped on the decision of Hon’ble Supreme Court in the case of PCIT v. NRA Iron & Steel Pvt. Ltd. (2019) 412 ITR 161 (SC) and Grafton Merchant Pvt Ltd Vs DCIT ITA No. 230/Kol/2023 A.Y. 2010-11which are distinguishable on facts. In the first case, the Ld. CIT(A) has conducted a very extensive enquiry whereas in the present case, the AO merely issued notice u/s 131 of the Act to the assessee to produce the managing director of the subscriber company with certain details. The assessee filed all the details as called for by the AO but there was no appearance of the managing director of the subscriber company. The second case relates to shell company whereas this is not the case before us as neither the AO nor CIT(A) has given a finding that the assessee or the subscriber is a shell company .We note that in the present case the AO has not conducted any enquiry into the evidences and documents filed by the assessee to find out the truth and made the addition that the managing director of the subscriber company was not produced. In our considered opinion the addition can not be made on the ground that managing director was not produced pursuant to summon u/s 131 of the Act by the assessee. We note that despite having filed all the evidences, no enquiry was done and the Ld. CIT(A) has simply affirmed the finding of the AO by holding that no identity and creditworthiness of the creditors could not be proved by the assessee by ignoring all the evidences placed before 4 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. him. Under the circumstances, we are not in a position to sustain the order of Ld. CIT(A). The case of the assessee finds support from numerous decisions some of which are discussed below .We find support from the decision of Hon’ble Supreme Court in the case of Orissa Corporation Ltd. 159 ITR 78 (SC) wherein the Hon’ble Apex Court has held as under: “That in this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notices under Section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. I f the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such arose. The High Court was right in refusing to state a case.” 5.1. The case of the assessee is also squarely covered by the decisions of Hon’ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT 353 ITR 171 (Cal ) wherein it has held that where all the evidences were filed by the assessee proving the identity and creditworthiness of the loan transactions , the fact that summon issued were returned un-served or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. The relevant portion of the decision is extracted below: “We find considerable force of the submissions of the learned Counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the Ld. CIT(A) has taken the trouble of examining of all other materials and documents viz., confirmatory statements, invoices, challans and vouchers showing supply of bidi as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued in our view is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or note. When it was found by the Ld. CIT(A) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact findings. Indeed the Tribunal did not really touch the aforesaid fact finding of the Ld. CIT(A) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide in this situation. In the said judgment noted by us at page 463, the Supreme Court has observed as follows: 5 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. “The Income-Tax Appellate Tribunals performs a judicial function under the Indian Income-tax Act. It is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and records its findings on all the contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law.” The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. It is also ruled in the said judgment at page 465 that if the Tribunal does not discharge the duty in the manner as above then it shall be assumed the judgment of the Tribunal suffers from manifest infirmity. Taking inspiration from the Supreme Court observation we are constrained to hold in this matter that the Tribunal has not adjudicated upon the case of the assessee in the light of the evidence as found by the Ld. CIT(A). We also found no single word has been spared to up set the fact finding of the Ld. CIT(A) that there are materials to show the cash credit was received from various persons and supply as against cash credit also made. Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Ld. CIT(A). The appeal is allowed.” 5.2. The case of is also covered by the decision of the coordinate bench by ITO Vs M/s Cygnus Developers India Pvt. Ltd. (ITA No. 282/Kol/2012) the operative part whereof is extracted below: “8. We have heard the submissions of the learned D.R, who relied on the order of AO. The learned counsel for the assessee relied on the order of Ld. CIT(A) and further drew our attention to the decision of Hon’ble Allahabad High Court in the case of CIT vs. Raj Kumar Agarwal vide ITA No. 179/2008 dated 17.11.2009 wherein the Hon’ble Allahabad High Court took a view that non-production of the director of a Public Limited Company which is regularly assessed to Income tax having PAN, on the ground that the identity of the investor is not proved cannot be sustained. Attention was also to the similar ruling of the ITAT Kolkata bench in the case of ITO vs. Devinder Singh Shant in ITA No. 208/Kol/2009 vide order dated 17.04.2009. 9. We have considered the rival submissions. We are of the view that order of Ld. CIT(A) does not call for any interference. It may be seen from the grounds of appeal raised by the revenue that the revenue disputed only the proof of identity of share holder. In this regard it is seen that for AY 2004-05 Shree Shyam Trexim Pvt. Ltd. was assessed by ITO, Ward-9(4), Kolkata and the order of assessment u/s 143(3) dated 25.01.2006 is placed in the paper book. Similarly Navalco Commodities Pvt. Ltd. was assessed to tax u/s 143(3) for AY 2005-06 by ITO, Ward-9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd. was assessed to tax for AY 2005-06 by the very same ITO, Ward-9(3), Kolkata assessing the assessee. In the light of the above factual position which is not disputed by the revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon’ble Allahabad High Court as well as ITAT, Kolkata Bench on which reliance was placed by the learned counsel for the assessee also supports the view that for non- production of directors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue.” 6 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. 5.3. The Co-ordinate Bench in the case of Yash Movers Pvt. Ltd. vs. ITO in ITA No. 601/Kol/2023 for AY 2009-10 dated 22.08.2023 held as under: “5. After hearing the rival contentions and perusing the material on record, we note that the assessee during the year has raised Rs. 18,00,000/- from three parties as stated hereinabove. The assessee has filed the necessary evidences comprising names, addresses, PANs, bank statements, ITRs, balance sheet, profit and loss accounts, share allotment letter, share application with bank statement besides filing the bank statements of the assessee thereby evidencing the receipt of amounts of from these investors. We note that the assessee is a trading in shares and textiles and all the subscribers were also trader in textiles. We also note that it’s customary in the business of textiles to business dealings in cash and so deposit into the banks accounts out of sales proceeds is in the normal course of business. Therefore mere fact that the cash has been deposited in the bank accounts of the subscribers immediately one or two days before issuance of cheques in favour of the assessee will not perse prove that these transactions were non-genuine. We have also examined the evidences filed before us in respect of share subscriber companies. We note that these companies are in fact having business in textiles and their turnover justified the cash deposits. Therefore the reasoning given by authorities below without looking into the nature of business of the assessee and the subscribers qua the cash deposit in the account of the subscribers before the date of the payment to the assessee is not sustainable. Besides the mere fact that the assessee has failed to produce the principals / directors of the subscribing company due to which investment could not be verified cannot be a ground for making addition in the hands of the assessee. The Ld. CIT(A) has upheld the order of AO simply reiterating the finding of the AO that principals/directors of the subscribers were not produced and source was not explained. However both the authorities have failed to point out any defects in the documents/evidences furnished by the assessee and simply relied on the theory principal officers/ directors of the assessee company were not produced. In our opinion, the addition is based upon conjecture and surmises and not on the records which were available before the authorities below. Moreover the addition cannot be made on the basis of that principal officer/ director of the company were not produced. The case of the assessee finds support from the decision of Co-ordinate Bench in the case of ITO vs. Naina Distributors Pvt. Ltd. in ITA NO. 651/Kol/2020 for AY 2012-13 dated 04.01.2023. The operative part is reproduced as under: 5. After hearing the rival contentions and perusing the material on record, we observe that the assessee has raised a share capital of Rs. 4,67,50,000/- by issuing equity share of face value of Rs.10/- at a premium of Rs. 490/- per share. We observe that during the assessment proceedings, the assessee has furnished all the details in support of share capital and share premium raised by the assessee beside the details of the investors vide written submissions dated 9.6.2014 filed in reply to notice dated 5.5.2014 issued u/s 142 of the Act. We note that the assessee has filed names, addresses PANs of the investors, copies of share allotment advice, copies of share application forms, bank statements, statement giving complete details of share application money received during the year, copy of Form 2 evidencing Return of Allotment and Copy of Form 5 for increase in Authorized capital. We also note that the AO has issued notice u/s 133(6) to all the investors on 11.06.2014 for carrying out independent verification of these transactions which were duly responded by these investors by filing all the requisite details comprising shares subscribed, ledger accounts, bank statements, explanation for source of funds, ITRs and audited financial statements and also assessment order framed u/s 143(3) in all the cases. The copy of these which are also placed before us at page 15 to 340 in the PB. We also note that the AO has issued summon u/s 131 to the directors of the assessee company to produce managing directors of the share subscribing companies which were not complied with and this is the sole reason for making the addition in the hands of the assessee. The AO has not pointed out any defect or deficiency in the evidences filed by the assessee as well as by the investors. The Ld. CIT(A) has allowed the appeal of the assessee after taking into account all the above facts and has given a detailed findings of fact that AO has not pointed out any defect in the 7 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. evidences by the assessee as well as by the share subscribers and mainly harped on the non-production of managing directors of the share subscriber companies to make the addition. The Ld. CIT(A) has noted that the assessee has discharged its onus by filing all the details and evidences which were the part of the record and therefore the addition made by the AO was wrong and ordered to be deleted. In view of these facts, we do not find any infirmity in the order of Ld. CIT(A) as the assessee has discharged its onus by filing all the details in the assessment proceedings. Moreover, the assessment framed u/s 143(3)/147/144 of the Act in all the cases of investors were also furnished before both the authorities below and copies of assessment order were also enclosed in the PB as stated hereinabove. Considering these facts, we do not find any infirmity in the order of Ld. CIT(A) which is otherwise a very reasoned and speaking order passed after discussing various factual details about each and every subscribers in para 4.6 such their source of investments, creditworthiness , etc. In our opinion, non-production of directors of the investors cannot be a ground for making addition in the hands of assessee u/s 68 of the Act when the other evidences relating to the raising share capital and also qua the share subscribers are available on record as furnished by the assessee and also the cross-verification done by the AO on the basis of notices issued u/s 133(6) as discussed above. The case of the assessee is squarely covered by the decisions of Hon’ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT(Supra) wherein it has held that where all the evidences were filed by the assessee proving the identity and creditworthiness of the loan transactions , the fact that summon issued were returned un-served or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. The relevant portion of the decision is extracted below: “We find considerable force of the submissions of the learned Counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the Ld. CIT(A) has taken the trouble of examining of all other materials and documents viz., confirmatory statements, invoices, challans and vouchers showing supply of bidi as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued in our view is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or note. When it was found by the Ld. CIT(A) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact findings. Indeed the Tribunal did not really touch the aforesaid fact finding of the Ld. CIT(A) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide in this situation. In the said judgment noted by us at page 463, the Supreme Court has observed as follows: “The Income-Tax Appellate Tribunals performs a judicial function under the Indian Income-tax Act. It is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and records its findings on all the contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law.” The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. It is also ruled in the said judgment at page 465 that if the Tribunal does not discharge the duty in the manner as above then it shall be assumed the judgment of the Tribunal suffers from manifest infirmity. Taking inspiration from the Supreme Court observation we are constrained to hold in this matter that the Tribunal has not adjudicated upon the case of the assessee in the light of the evidence as found by the Ld. CIT(A). We also found no single word has been spared to up set the fact finding of the Ld. CIT(A) that there are materials to show the cash credit was received from various persons and supply as against cash credit also made. Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Ld. CIT(A). The appeal is allowed.” The case of is also covered by the decision of the coordinate bench by ITO Vs M/s Cygnus Developers India Pvt. Ltd. (supra) the operative part whereof is extracted below: “8. We have heard the submissions of the learned D.R, who relied on the order of AO. The learned counsel for the assessee relied on the order of Ld. CIT(A) and further drew our attention to the decision of Hon’ble Allahabad High Court in the case of CIT vs. Raj Kumar Agarwal vide ITA No. 179/2008 dated 17.11.2009 wherein the Hon’ble Allahabad High Court took a view that non-production of the director of a Public Limited Company which is regularly assessed to Income tax having PAN, on the ground that the identity of the investor is not proved cannot be sustained. Attention was also to the similar ruling of the ITAT Kolkata bench in the case of ITO vs. Devinder Singh Shant in ITA No. 208/Kol/2009 vide order dated 17.04.2009. 8 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. 9. We have considered the rival submissions. We are of the view that order of Ld. CIT(A) does not call for any interference. It may be seen from the grounds of appeal raised by the revenue that the revenue disputed only the proof of identity of share holder. In this regard it is seen that for AY 2004-05 Shree Shyam Trexim Pvt. Ltd. was assessed by ITO, Ward-9(4), Kolkata and the order of assessment u/s 143(3) dated 25.01.2006 is placed in the paper book. Similarly Navalco Commodities Pvt. Ltd. was assessed to tax u/s 143(3) for AY 2005-06 by ITO, Ward-9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd. was assessed to tax for AY 2005-06 by the very same ITO, Ward-9(3), Kolkata assessing the assessee. In the light of the above factual position which is not disputed by the revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon’ble Allahabad High Court as well as ITAT, Kolkata Bench on which reliance was placed by the learned counsel for the assessee also supports the view that for non-production of directors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue.” In the instant case before us also, the assesse has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. The AO simply harped on the non production of managing directors of the share subscribing companies to make the addition which is not correct. The ld CIT(A) has passed a very reasoned and speaking order discussing all facts and satisfaction of all the ingredients of section 68 of the Act while allowing the relief as stated above. Under these facts and circumstances and considering underlying facts in the light of ratio laid down in the decisions as discussed above , we are inclined to uphold the order of Ld. CIT(A) by dismissing the appeal of the revenue. 5.1. Similarly the Hon’ble Calcutta High Court in the case of PCIT vs. Naina Distributors Pvt. Ltd. has decided the issue in favour of the assessee by holding that mere non-production of director cannot be the ground for making any addition in the hands of assessee u/s 68 of the Act. The operative part is reproduced as under: “After carefully considering the findings recorded by the Commissioner of Income Tax, (Appeals) 7 Kolkata (CITA) in his order dated 21.09.2020 and the findings recorded by the learned Tribunal we find that the entire matter is fully factual. The learned Tribunal has independently examined as to the genuinity of the transaction in the matter of raising share capital and the Tribunal noted that even during the assessment proceedings, the assessee has furnished all details in respect of the share capital and share premium raised by the assessee besides the details of the investors by their submission dated 9.6.2014 in reply to the notice issued by the Assessing Officer under Section 142 of the Act dated 5.5.2014. The Tribunal also noted that the assssee had produced all documents, disclosed the names and addresses and PAN Numbers of the investors, copies of the share allotment advice, copies of the share application form, bank statement, statement giving details of share application, money receipt during the year, copy of Form No. 2 evidencing return of allotment and copy of Form No. 5 for increase in various capital. Further the assessing officer has issued notice to the investors under Section 133(6) on 11.06.2014 for carrying out independent verification of the transaction and those investors duly responded to those notice and filed the requisite details such as the number of shares subscribed, ledger account, bank statement, explanation for source of funds, income tax returns and audited financial statements and also assessment order framed under Section 143(3) of the Act in all the cases. The Tribunal further noted that in spite of such being the factual position, the only reason for making the addition in the hands of the assessee the director of the assessee company did not respond to the summons issued by the assessing officer under Section 131 of the Act. The correctness of this was also considered by the learned Tribunal and it was held that non appearance of the director cannot be made a ground for addition in the hands of the assessee under Section 68 of the Act when other evidence relating to the raising of share capital qua the share subscriber were available on record as furnished by the assessee and also cross verified by the assessing officer pursuant to the enquiry conducted in response to the notices issued under Section 133(6) of the Act. The learned Tribunal also referred to the decision of this Court in the case of Crystal Networks Pvt. Ltd. Vs. CIT. reported in 353 ITR 171 (CAL). Thus we find that there is no question of law much less substantial question of law arising for consideration in this appeal. Accordingly, the appeal fails and is dismissed.” We therefore respectfully following the ratio laid down in the above decisions, set aside the order of the Ld. CIT(A) and direct the AO to delete the addition. The ground nos 1 to 4 are allowed.” 9 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. 5.4. In the present case before us the assessee has furnished all the evidences before the AO but the AO has failed to conduct any further enquiry into these details /evidences and merely relied on the theory of non production of director of the subscribing company by the assessee while issuing no summon u/s 131 or notices u/s 133(6) of the Act to the subscriber. The summon was issued to the assessee who duly appeared and filed all evidences but could not produce the director of the subscriber company. Considering the facts of the case in the light of the above decisions of the co-ordinate benches, jurisdictional High Court and Hon’ble Apex Court , we are not in agreement with the conclusion of the ld CIT(A) and accordingly set aside the appellate order passed by the Ld. CIT(A) and direct the AO to delete the addition. 6. In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 9th October, 2024 Sd/- Sd/- (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) (Rajesh Kumar/राजेश क ुमार) Judicial Member/ÛयाǓयक सदèय Accountant Member/लेखा सदèय Dated: 9th October, 2024 SM, Sr. PS 10 I.T.A. No.1369/Kol/2024 Assessment Year: 2012-13 Navnita Dealcom Pvt. Ltd. Copy of the order forwarded to: 1. Appellant- Navnita Dealcom Pvt. Ltd., 1/1/ Meredtith Street, 4th Floor, Kolkata- 700072. 2. Respondent – ITO, Ward-6(3), Kolkata 3. Ld. CIT(A)- NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "