VIJAYA MOTELS PVT. LTD.,KOLKATA V. I.T.O., WARD - 5(4), KOLKATA

ITA 2500/KOL/2025

AI Insights

The case involves Vijaya Motels Pvt. Ltd., the appellant, contesting an addition of Rs. 3,42,00,000 to its income as unexplained cash credit, which was initially added by the Assessing Officer under section 68 of the Income-tax Act, 1961. The addition pertained to share application money received from M/s Lovely Properties Pvt. Ltd. The Assessing Officer had issued notices under section 131 to the directors of the subscriber company, but none appeared, leading to the addition. The Commissioner of Income Tax (Appeals) upheld this addition. However, the Tribunal reversed this decision, noting that the subscriber had settled the matter under the VSVS Scheme and paid the necessary taxes, thus negating the need for the addition in the hands of Vijaya Motels Pvt. Ltd.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 842231 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 03-11-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.B. CHAKRABORTHY
• Assessee Lawyers: S.S. GUPTA
• Keywords: Set aside; Unexplained cash credit
• Section: 68; 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA No.2500/KOL/2025 (Assessment Year: 2012-13) Vijaya Motels Pvt. Ltd. 7th Floor, room No.7 & 8, Poddar Court, 18, Rabindra Sarani, Kolkata-700001, West Bengal Vs. ITO Ward 5(4) Aaykar Bhawan, 5 th Floor, P-7, Chowringhee Square, Kolkata- 700069, West Bengal (Appellant) (Respondent) PAN No. AACCV5755E Assessee by : Shri S.S. Gupta, AR Revenue by : Shri S.B. Chakraborthy, DR Date of hearing: 19.01.2026 Date of pronouncement: 26.02.2026 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 15.10.2025 for the AY 2012-13. 2. The only issue raised by the assessee is against the confirmation of addition ofRs.3,42,00,000/- as made by the ld. AO u/s 68 of the Income-tax Act, 1961 (the Act) in respect of share application money received from M/s Lovely Properties Pvt. ltd. 3. After hearing the rival contentions and perusing the materials available on record, we find that during the course of assessment Printed from counselvise.com Page | 2 ITA No. 2500/KOL/2025 Vijaya Motels Pvt. Ltd.; A.Y. 2012-13 proceeding, the ld. AO noted that the assessee has issued 3,42,000/- equity shares at a face value of ₹10 each at a premium of ₹90 per share and thus, received ₹3,42,00,000/- from the above said party. The assessee filed before the ld. AO all the evidences. The ld. AO has also issued notice u/s 131 of the Act to the directors of shareholding company but none appeared before the ld. AO and finally, the ld. AO treated the money received by the assessee as unexplained cash credit and added the same as unexplained cash credit u/s 68 to the income of the assessee. 4. In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO. 5. We note that in the case of the subscriber i.e. M/s Lovely properties Pvt. Ltd. the assessment was framed u/s 147/143(3) of the Act vide order dated 26.10.2019, wherein the addition was made u/s 68 of the Act of ₹3,32,37,000/- out of which the investment was made in the assessee company. The copy of the order is available from page no.35 to 37 of the Paper Book. We also note that the said subscriber has gone into VSVS Scheme and paid the due taxes on the said amount and the fact was also brought to the notice of ld. CIT (A) during appellate proceedings and the ld. CIT (A) in para no.4.3 recorded the finding to this effect but finally, dismissed the appeal of the assessee. In our opinion, once the amount of investment made in the assessee company by the subscriber has been settled in the VSVS scheme and due taxes were paid, then there is no question of adding back the amount of share capital share/premium in the hands of the assessee. consequently, we set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. Printed from counselvise.com Page | 3 ITA No. 2500/KOL/2025 Vijaya Motels Pvt. Ltd.; A.Y. 2012-13 6. In the result, the appeal of the assessee is allowed. Order pronounced on 26.02.2026. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 26.02.2026 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 "