[ad_1]
Calcutta High Court
Principal Commissioner Of Income Tax vs Balaka Vinimay Private Limited on 21 July, 2025
Author: T.S. Sivagnanam
Bench: T.S. Sivagnanam
OD-1
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
ITAT/131/2025
IA NO: GA/1/2025
GA/2/2025
PRINCIPAL COMMISSIONER OF INCOME TAX-1, KOLKATA
VS.
BALAKA VINIMAY PRIVATE LIMITED
BEFORE :
THE HON'BLE THE CHIEF JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE JUSTICE CHAITALI CHATTERJEE (DAS)
DATE: 21ST JULY, 2025
Appearance:
Mr. Prithu Dudhoria, Adv.
...for Appellant
The Court : This appeal filed by the appellant/revenue under Section
260A of the Income Tax Act, 1961 (the Act) is directed against the order dated
21st June, 2024 passed by the Income Tax Appellate Tribunal, "B" Bench,
Kolkata, in ITA Nos.160 & 161/Kol/2024 for the assessment year 2008-09.
The revenue has raised the following substantial questions of law for
consideration:
"(a) WHETHER in facts and in the circumstances of the case
the Ld. Income Tax Appellate Tribunal was not justified in
law in not considering the direct and circumstantial
evidence brought on record by the Assessing officer to
establish that the assessee had introduced its own
unaccounted money in the form of share capital and share
2
premium and deleting the addition made by the Assessing
officer of Rs. 13,94,00,000/- as an unexplained cash
credit U/s. 68 of the Income Tax Act, 1961?
b) WHETHER in facts and in the circumstances of the case
the Ld. Income Tax Appellate Tribunal was not justified in
law in denying that non-compliance to the Summons U/s.
131 of the Income Act, 1961 by the Directors of the share
subscriber companies is a reason for dissatisfaction of the
Assessing Officer regarding the genuineness of the source
of the Cash Credit ?
c) WHETHER in facts and in the circumstances of the case
the Ld. Income Tax Appellate Tribunal was not justified in
law in observing that the creditworthiness and
genuineness of the transaction in the form of share
premium and share capital have been established which is
contrary to the decision of the jurisdictional High Court in
the case of Commissioner of Income Tax Vs. Prevision
Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal) and
Commissioner of Income Tax Vs. Ruby Traders & Export
Ltd. (2003) 263 ITR 300 (Cal) ?"
We have heard Mr. Prithu Dudhoria, learned standing Counsel appearing
for the appellant/revenue.
The notice sent to the respondent/assessee has returned.
There is a delay of 177 days in filing the appeal. As the delay has been
properly explained for not preferring the appeal within the period of limitation,
the same is condoned. The application for condonation of delay being IA No:
GA/1/2025 is allowed.
3
The assessee has preferred the appeal before the learned Tribunal
challenging the order passed by the appellate authority affirming the
assessment order passed under Section 143(3) and also assailed the
correctness of the penalty order passed under Section 271(1)(c) of the Act. The
Assessing Officer made the addition under Section 68 of the Act for
unexplained share capital. During the year under consideration, the assessee
company floated 6,97,000 equity shares of Rs.10/- each at a premium of
Rs.190/- per share. Initially, the assessment was completed by the Assessing
Officer accepting the stand taken by the assessee. Subsequently, an order was
passed by the Commissioner under Section 263 of the Act and pursuant to the
directions issued, the Assessing Officer reopened the assessment and called
upon the assessee to explain the nature and source of the alleged sum to his
satisfaction. It is not in dispute that the assessee had filed complete details of
each of the shares to prove the identity and creditworthiness of the
shareholders and the genuineness of the transactions was proved by producing
copies of the confirmation letters, bank statements, audited financial
statements, identity proofs, source of funds, investments by the share
subscribers in the assessee company, replies which were given to the notice
issued under Section 133(6) of the Act and various other details to show that
most of the share subscribers have also passed through scrutiny proceedings.
These details were placed before the learned Tribunal by way of paper books in
three volumes. The learned Tribunal has in extenso referred to the details
which have been furnished. Furthermore, the shareholders have responded to
4the notice under Section 133(6) of the Act directly to the Assessing Officer and
their respective assessment orders framed under Sections 147/143(3) of the
Act were also placed before the Assessing Officer as well as before the learned
Tribunal. Thus, it is evident that the assessee has produced all the documents
before the Assessing Officer not once but twice and the authority except
indicating a theory of routine entries of paper companies/shell companies, no
discrepancies had been pointed out in the financials of the alleged cash
creditors. Furthermore, all the share subscribers are private limited companies
duly registered with the Ministry of Corporate Affairs and have been furnishing
the audited financial statements in the portal of the Ministry. That apart, the
share subscribers have also demonstrated that there was immediate source of
funds available in the bank accounts which had been applied for making
investments in the equity shares of the assessee company. One more particular
important factor which was lost sight of is, that the matter pertains to the
financial year 2007-08 and the scrutiny assessment was completed on
27.09.2021. After a gap of 13/14 years, after actual transactions had taken
place and final assessment orders had been passed, proceedings was initiated.
Thus, the predicament faced by the assessee was taken note by the learned
Tribunal and it had observed that it is practically difficult that after a gap of 10
to 12 years, the assessee can call for the share subscribers who invested long
time before and there is every possibility that the shareholders would have sold
their equities and new shareholders would have taken their place. The learned
Tribunal referred to the decision of the co-ordinate Bench in the case of True-
5
Man Consultants Pvt. Ltd. vs. ITO in ITA No.1158/Kol/2023, wherein almost
identical issue of unexplained share capital from various share subscribers
came up for adjudication and after considering the factual aspect and following
the judicial pronouncements, the appeal filed by the assessee was allowed by
the Tribunal. The revenue preferred an appeal before this Court in
ITAT/203/2024 and by order dated 25th April, 2025, the appeal filed by the
revenue was dismissed.
Thus, we find that the factual issues have been thoroughly adjudicated
by the Tribunal apart from noting that the assessee had been put to multiple
levels of scrutiny and the assessee was able to bring on record documents in
support of their claim. Therefore, we are of the view that the addition made
under Section 68 of the Act was rightly ordered to be deleted.
For the above reasons, we find no ground to interfere with the order
passed by the learned Tribunal. Accordingly, the appeal fails and the same is
dismissed. The substantial questions of law are answered against the revenue.
Consequently, the stay petition (GA/2/2025) also stands dismissed.
(T.S. SIVAGNANAM, CJ.)
(CHAITALI CHATTERJEE (DAS), J.)
sm
[ad_2]
Source link