ACIT CC-8(3), MUMBAI, MUMBAI vs. TILAK VENTURES LIMITED, MUMBAI

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ITA 8459/MUM/2025Status: DisposedITAT Mumbai08 September 2026AY 2013-1424 pages

In favour of the Revenue: the Revenue's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee has provided sufficient documentary evidence to establish the genuineness of the share capital and premium. The AO's addition under Section 68 was found to be unsustainable.

What were the facts?

The assessee, a listed company, received share capital and premium. The Assessing Officer (AO) reopened the assessment, alleging escapement of income due to excessive share premium. The assessee contended that provisions of Section 56(2)(viib) and the first proviso to Section 68 are not applicable to listed companies.

What were the issues?

Whether the addition made by the AO under Section 68 for share capital and premium is justified, and whether the reassessment proceedings were validly initiated.

Which sections of the Income-tax Act were involved?

Section 68,Section 147,Section 148,Section 56(2)(viib)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

For Respondent: Smt Amrita Singh, CIT DR
Pronounced: 08.09.2026

Heard together (2 matters)

ITA 8459/MUM/2025
ITA 9180/MUM/2025

Read from the judgment's own cause title. This page is filed under one of them.

PER SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER: These two appeals are filed by the Revenue and the assessee against the order of ld. CIT(A)-50, Mumbai, vide DIN ITBA/APL/S/250/2025-26/1081698260(1), dated 13.10.2025 against the reassessment order passed u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) dated 28.03.2024, for Assessment Year 2013-14.

2.

Grounds taken by the Revenue are reproduced as under:

1.

"Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the AO rightly made addition of Rs. 10,92,50,000/-u/s. 68 of the Act as assessee failed to satisfactorily establish the creditworthiness of the shareholders and the genuineness of the share capital/share premium transactions." 2. "Whether on the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating the fact that that mere filing of primary documents such as PAN, ITRs, and demat statements does not discharge the assessee's onus under Section 68 of the Act, in view of binding decisions of Hon'ble Supreme Court in the case of PCIT v. NRA Iron & Steel Pvt. Ltd." 3. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has placed undue reliance on SEBI's finding and disregarded the AO's observation of circumstantial and financial irregularities, which justify an addition under the Act. This reliance neglects the fact that SEBI's scope does not extend to identifying undisclosed income or assessing tax liabilities under the Income Tax Act." 4. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in concluding that approvals of BSE/NSDL/CDSL establish genuineness of the share capital, without appreciating that such approvals do not verify the source of funds of the shareholders." 5. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the first proviso to Section 68 is not applicable "rigorously" to a listed company, which is contrary to statutory provisions and settled judicial principles."

6.

"The assessee craves leave to amend or alter any ground or add a new ground which may be necessary." 3. Grounds taken by the assessee are reproduced as under: 1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the validity of notice u/s 148, though the provision of Sec.56(2)(viib) to establish the correctness of Share premium shall not apply to the assessee, being a listed company in which public are substantially interested; 2.0 On facts and circumstances of the case and in law, the reassessment order passed u/s.147 is bad-in-law, since the addition of Share premium u/s.56(2)(viib) of Rs.13,81,60,000/- and disallowance of Capital loss of Rs.2,50,000/-, as alleged in the notice u/s.148 had ultimately not been made in the reassessment order; 3.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the validity of notice u/s.148 issued in absence of fresh tangible material, in mechanical manner and on the basis of borrowed satisfaction and without having reason to believe of escapement of income. The assessee craves leave to add, amend, alter and/or withdraw any of the grounds of appeal at the time of hearing. 4. Revenue is in appeal contesting on the merits of the case for the addition of Rs. 10,92,50,000/- made under section 68 as unexplained cash credit towards share capital/share premium transaction. Assessee is in appeal contesting on the jurisdictional issue of initiation of reassessment proceedings by issuing notice under section 148 and passing the impugned reassessment order under section 147 on the premise that since assessee is a public listed company, provisions of section 56(2)(vii)(b) does not apply to it and that there is no fresh tangible material to validate the issue of notice under section 148. Since both the appeals arise out of the same impugned reassessment order, the two are taken up together for adjudication by passing this consolidated order. We first take up appeal of the revenue to deal with the merits of the case.

5.

Brief facts of the case as culled out from the records are that assessee is a company in which the public are substantially interested and is listed on the Bombay Stock Exchange (BSE). During the year under consideration, assessee filed its return of income on 30.06.2013, reporting total income at Rs. 5,22,060/-. During the same year, assessee made an allotment of equity shares, as under: No. of shares allotted 62,80,000 shares No. of shareholders 43 share holders Share capital received Rs. 62,80,000/- Share capital per share Re. 1/- per share Share premium received Rs. 13,81,60,000/- Share premium per share Rs. 22/- per share Prevailing market price in BSE Rs. 44.10 per share Listing in Stock Exchange Bombay Stock Exchange

5.1. Ld. Assessing Officer reopened the completed assessment by issuing notice u/s 148 on 31.03.2021, alleging that the entire share premium of Rs. 13,81,60,000/- received by assessee was excessive and had led to escapement of income. In response, assessee e-filed a return of income on 31.05.2021, reporting the same total income at Rs. 5,22,060/- and requested ld. Assessing Officer to provide a copy of the recorded reasons. Ld. Assessing Officer provided a copy of the recorded reasons along with notice u/s 143(2) on 04.06.2021. In response, assessee filed objections on 30.06.2021, disputing the validity of notice u/s 148 and the reasons so recorded. Ld. Assessing Officer passed the order disposing the objections on 27.07.2021, based on incorrect facts. Assessee filed a writ petition before the Hon'ble High Court of Bombay challenging the validity of notice u/s 148 and the reasons recorded therein. Hon'ble High Court, vide order dated 16.03.2022, quashed the order disposing the objections and directed ld. Assessing Officer to dispose the objections afresh within four weeks. Accordingly, the last date to pass the reassessment order was 13.10.2022. However, ld. Assessing Officer, without providing copies of the material relied upon, incorrectly passed the reassessment order dated 13.10.2022, which was digitally signed on 14.10.2022 and carries a DIN generated on the same date. In the reassessment order dated 13.10.2022, ld. Assessing Officer made an addition u/s 68 of the entire share capital/premium received, of Rs. 14,44,40,000/-.

5.2. Assessee filed a second writ petition before the Hon'ble High Court of Bombay, challenging violation of the substantive rights available to it. Hon'ble High Court of Bombay, vide order dated 18.12.2023, quashed and set aside the reassessment order passed u/s 143(3) r.w.s. 147 dated 13.10.2022, and directed ld. Assessing Officer to provide all documents and information to assessee and pass a fresh assessment order after affording assessee an opportunity of being heard. Ld. Assessing Officer accordingly issued notice u/s 142(1) dated 25.12.2023, provided copies of the documents and information to assessee for rebuttal and sought justification for the share premium of Rs. 13,81,60,000/- received from 43 shareholders. Details furnished by the assessee in the course of reassessment proceedings in respect of each of the shareholders so as to establish identity and creditworthiness of the investors and the genuineness of the transactions as required under Section 68 are tabulated below. All these relevant documents mentioned in the table below are placed on record in the paper book file before us.

Sr Identity of the shareholders Genuineness of the transaction Credit-worthiness Page No No of the Shareholders 1 Sanjay V Parmar Rs. 57,50,000 1) Share Application Form 1) I.T.Ack Receipt 1.1 - 1.22 1) PAN/A.O Details 2) Share Allotment Letter 2) Bank Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-mat Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6) 6) Reply To Notice u/s 131 7) Statement U/s 131 2 Vinod Goenka HUF Rs. 46,00,000 1) Share Application Form 1) I.T.Ack Receipt 2.1 - 2.7 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 4) Reply To Notice u/s 133(6)/131 3 Rashmi Vinay Bhatt Rs. 29,90,000/- 1) Share Application Form 1) I.T.Ack Receipt Allowed by 1) PAN/A.O Details 2) Share Allotment Letter 2) Balance Sheet Ld. AO 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-mat Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6)/131 4 Amardeep Kadam Rs. 92,00,000 1) Share Application Form 1) I.T.Ack Receipt Allowed by 1) PAN/A.O Details 2) Share Allotment Letter 2) Balance Sheet Ld. AO 2) I.T.Ack Receipt 3) Own Bank Statement 3) Bank Statement 4) Reply To Notice u/s 133(6)/131 5 Sanjay Kumar Didwania Rs. 1) Share Application Form 1) I.T.Ack Receipt 5.1 - 5.12 46,00,000 2) Share Allotment Letter 2) Bank Statement 1) PAN/A.O Details 3) Own Bank Statement 3) D-mat Statement 2) I.T.Ack Receipt 4) D-mat Statement 3) D-Mat Statement / Client Master 5) Reply To Notice u/s 133(6) of Share Holder 6 Nand Kishor Didwania Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 6.1 - 6.12 1) PAN/A.O Details 2) Share Allotment Letter 2) Bank Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-mat Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6) 7 Vinod Goenka Rs. 46,00,000 1) Share Application Form 1) I.T.Ack Receipt Allowed by 1) PAN/A.O Details 2) Share Allotment Letter Ld. AO 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master of Share Holder 8 Kalpana Mukesh Ruia Rs. 92,00,000 1) Share Application Form 1) I.T.Ack Receipt 8.1 - 8.7 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master of Share Holder 9 Padma Vinod Goenka Rs. 46,00,000 1) Share Application Form 1) I.T.Ack Receipt 9.1 - 9.12 1) PAN/A.O Details 2) Share Allotment Letter 2) D-mat Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6) 10 Dipti M Doshi Rs. 69,00,000 1) Share Application Form 1) I.T.Ack Receipt Allowed by 1) PAN/A.O Details 2) Share Allotment Letter Ld. AO 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master of Share Holder 11 Sunil Kumar Bagaria Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 11.1 - 11.12 1) PAN/A.O Details 2) Share Allotment Letter 2) Bank Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-mat Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6)

12 Govind Patodia Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 12.1 - 12.11 1) PAN/A.O Details 2) Share Allotment Letter 2) D-mat Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6) 13 Abhishek Rao Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 13.1 - 13.6 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master of Share Holder 14 Varsha Patodia Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 14.1 - 14.11 1) PAN/A.O Details 2) Share Allotment Letter 2) D-mat Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6) 15 Akash Didwania Rs. 46,00,000 1) Share Application Form 1) I.T.Ack Receipt 15.1 - 15.12 1) PAN/A.O Details 2) Share Allotment Letter 2) Bank Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master 4) Reply To Notice u/s 133(6)/131 of Share Holder 16 Sanjay Agarwal (HUF) Rs. 34,50,000 1) Share Application Form 1) I.T.Ack Receipt 16.1 - 16.5 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 17 Suresh Shyam Lal Tibrewala Rs. Deceased Assessee 17.1 - 17.2 34,50,000 Death Certificate Attached 18 Mahendar Singh Arora Rs. 1) Share Application Form 1) I.T.Ack Receipt Allowed by 46,00,00/- 2) Share Allotment Letter 2) Bank Statement Ld. AO 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 4) Reply To Notice u/s 133(6)/131 19 Pushpa Damani Rs. 11,50,000 1) Share Application Form 1) I.T.Ack Receipt 19.1 - 19.10 1) PAN/A.O Details 2) Share Allotment Letter 2) Computation of 2) I.T.Ack Receipt 3) Own Bank Statement Income 3) D-Mat Statement / Client Master 4) Reply To Notice u/s 133(6)/131 3) Balance Sheet of Share Holder 20 Mukesh Ramniranjan Ruia Rs. 1) Share Application Form 1) I.T.Ack Receipt 20.1 - 20.12 23,00,000 2) Share Allotment Letter 2) Bank Statement 1) PAN/A.O Details 3) Own Bank Statement 3) D-mat Statement 2) I.T.Ack Receipt 4) D-mat Statement 3) D-Mat Statement / Client Master 5) Reply To Notice u/s 133(6) of Share Holder 21 Sanjay Kumar Didwania HUF Rs. 1) Share Application Form 1) I.T.Ack Receipt 21.1 - 21.14 46,00,000 2) Share Allotment Letter 2) Bank Statement 1) PAN/A.O Details 3) Own Bank Statement 3) D-mat Statement 2) I.T.Ack Receipt 4) D-mat Statement 3) D-Mat Statement / Client Master 5) Reply To Notice u/s 133(6) of Share Holder 22 Babita Agarwal Rs. 34,50,000 1) Share Application Form 1) I.T.Ack Receipt 22.1 - 22.8 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master of Share Holder 23 Jayesh J Shah Rs. 11,50,000 1) Share Application Form 1) I.T.Ack Receipt Allowed by 1) PAN/A.O Details 2) Share Allotment Letter Ld. AO 2) I.T.Ack Receipt 3) Own Bank Statement 24 Dahyabhai Muljibhai Dhameliya Rs. 1) Share Application Form 1) I.T.Ack Receipt 24.1 - 24.7 11,50,000 2) Share Allotment Letter 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 3) D-Mat Statement / Client Master of Share Holder 25 Rasikbhai Ratnabhai Dhameliya Rs. 1) Share Application Form 1) I.T.Ack Receipt 25.1 - 25.5 11,50,000 2) Share Allotment Letter 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 26 Sanjay Agarwal Rs. 46,00,000 1) Share Application Form 1) I.T.Ack Receipt 26.1 - 26.7 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master of Share Holder 27 Hansrajbhai Mohanbhai Virani Rs. 1) Share Application Form 1) I.T.Ack Receipt 27.1 - 27.7 23,00,000 2) Share Allotment Letter 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 3) D-Mat Statement / Client Master of Share Holder 28 Mahesh P Vaghani Rs. 46,00,000 1) Share Application Form 1) I.T.Ack Receipt 28.1 - 28.6 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master of Share Holder 29 Mukeshbhai Kurjibhai Khunt Rs. 1) Share Application Form 1) I.T.Ack Receipt 29.1 - 29.7 23,00,000 2) Share Allotment Letter 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 3) D-Mat Statement / Client Master of Share Holder 30 Darshana Umakant Rege Rs. 1) Share Application Form 1) I.T.Ack Receipt 30.1 - 30.8 46,00,000 2) Share Allotment Letter 2) Bank Statement 1) PAN/A.O Details 3) Own Bank Statement 3) D-mat Statement 2) I.T.Ack Receipt 4) D-mat Statement 3) D-Mat Statement / Client Master 5) Reply To Notice u/s 133(6) of Share Holder 31 Maheshbhai M Nayani Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 31.1 - 31.7 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master of Share Holder 32 Urmila Didwania Rs. 46,00,000 1) Share Application Form 1) I.T.Ack Receipt 32.1 - 32.13 1) PAN/A.O Details 2) Share Allotment Letter 2) Bank Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-mat Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6) 33 Sujata Tripathi Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 33.1 - 33.10 1) PAN/A.O Details 2) Share Allotment Letter 2) I.T.Ack Receipt 3) Own Bank Statement 3) D-Mat Statement / Client Master 4) Reply To Notice u/s 133(6) of Share Holder 34 Mansukhbhai Kurjibhai Khunt Rs. 1) Share Application Form 1) I.T.Ack Receipt Allowed by 23,00,000 2) Share Allotment Letter Ld. AO 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 3) D-Mat Statement / Client Master of Share Holder 35 Sushila Devi Didwania Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 35.1 - 35.16 1) PAN/A.O Details 2) Share Allotment Letter 2) D-mat Statement 2) I.T.Ack Receipt 3) Own Bank Statement 3) Bank Statement 3) D-Mat Statement / Client Master 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6)/131 36 Hiteshbhai Kurjibhai Khunt Rs. 1) Share Application Form 1) I.T.Ack Receipt Allowed by 23,00,000 2) Share Allotment Letter Ld. AO 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 3) D-Mat Statement / Client Master of Share Holder 37 Arpit Tibrewala Rs. 23,00,000 1) Share Application Form 1) D-mat Statement 37.1 - 37.9 1) PAN/A.O Details 2) Share Allotment Letter 2) D-Mat Statement / Client Master 3) Own Bank Statement of Share Holder 4) D-mat Statement 5) Reply To Notice u/s 133(6) 38 Kalawati Ramlakhan Singh Rs. 1) Share Application Form 1) I.T.Ack Receipt 38.1 - 38.10 23,00,000 2) Share Allotment Letter 2) D-mat Statement 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 4) D-mat Statement 3) D-Mat Statement / Client Master 5) Reply To Notice u/s 133(6)/131 of Share Holder 39 Dharmendra J Shah Rs. 11,50,000 1) Share Application Form 1) I.T.Ack Receipt Allowed by 1) PAN/A.O Details 2) Share Allotment Letter 2) Balance Sheet Ld. AO 2) I.T.Ack Receipt 3) Own Bank Statement 3) Bank Statement 3) D-Mat Statement / Client Master 4) D-mat Statement 4) D-mat Statement of Share Holder 5) Reply To Notice u/s 133(6)/131 40 Prakashkumar R Khokhariya & 1) Share Application Form 1) I.T.Ack Receipt 40.1 - 40.6 Vaishali P Khokhariya Rs. 23,00,000 2) Share Allotment Letter 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 3) D-Mat Statement / Client Master of Share Holder 41 Rajeshbhai & Shobhana Khokhariya 1) Share Application Form 1) I.T.Ack Receipt 41.1 - 41.9 Rs. 23,00,000 2) Share Allotment Letter 1) PAN/A.O Details 3) Own Bank Statement 2) I.T.Ack Receipt 3) D-Mat Statement / Client Master of Share Holder 42 Pultibai K Khunt Rs. 23,00,000 1) Share Application Form 1) I.T.Ack Receipt 42.1 - 42.12 1) PAN/A.O Details 2) Share Allotment Letter 2) Balance Sheet 2) I.T.Ack Receipt 3) Share Certificate 3) D-mat Statement 3) D-Mat Statement / Client Master 4) Own Bank Statement of Share Holder 5) D-mat Statement 6) Reply To Notice u/s 133(6) 43 Kurjibhai Harjibhai Khunt Rs. 1) Share Application Form 1) I.T.Ack Receipt 43.1 - 43.8 23,00,000 2) Share Allotment Letter 2) Balance Sheet 1) PAN/A.O Details 3) Share Certificate 2) I.T.Ack Receipt 4) Own Bank Statement

5.3. Assessee further submitted that it is a company in which public are substantially interested and is listed in Bombay Stock Exchange and therefore, provision of Sec.56(2)(viib) and 1st proviso to Sec.68 shall not apply and accordingly, it is legally not required to explain the source of funds of the shareholders. Further, it furnished exhaustive documentary evidences on record in addition to what is tabulated above, stated as under: -

1) Bombay Stock Exchange (BSE) Portal and Registrar of Companies (ROC), disclosing the assessee as a listed company;

2) Name, address and PAN of 43 share-holders;

3) Rate Publication, disclosing the traded price of assessee's listed shares as on 18.10.2012 @ 44.10 per share;

4) Return of Allotment of shares filed before Registrar of Companies (ROC) dated 18.10.2012 @ Rs.23/- per share;

5) Bank statements of the assessee company;

6) In principle approval granted by BSE for allotment and listing of shares on 04.10.2012;

7) Final approval granted by BSE for listing of newly allotted shares on 04.12.2012;

8) Certificates of NSDL and CSDL, crediting the shares to D-mat account of respective share-holders on 12.12.2012;

9) Information Memorandum dated 29.08.2012;

10) Notice of Annual General Meeting dated 28.09.2012, proposing to issue the shares;

11) Special Resolution dated 28.09.2012 passed in Annual General Meeting filed before BSE and ROC for allotment of shares;

12) Securities & Exchange Board of India (SEBI) Adjudication Order dated 30.07.2021;

13) Documents of all the share-holders, already tabulated above;

5.4. Despite detailed submissions made by the assessee explaining its case, supported by corroborative documentary evidence, ld. AO proposed to make the addition of ₹14,44,40,000 under section 68, against which assessee resubmitted its reply that 1st proviso to Sec.68 shall not apply as the shares of assessee are listed on BSE and accordingly, assessee is a company in which public are substantially interested and therefore, addition proposed u/s 68 cannot be made solely for non-justification of source of funds of shareholders. It further submitted that entire shares were credited directly in D-mat account of respective shareholders and in support filed the certificates issued by NSDL and CDSL depositories. Assessee also filed copies of SEBI adjudication order dated 30.07.2021, wherein SEBI authority had acquitted 40 shareholders from whom share capital/premium was received of Rs. 14,09,90,000/-. Assessee also filed a tabular chart displaying the worth of the shareholders vis-à-vis share capital/premium received from such shareholders. Assessee also relied on catena of direct judicial decisions to support its case.

5.5. However, in the impugned reassessment order, ld. Assessing Officer held that 1st proviso would apply to the Public listed companies including to the assessee and thus, is liable to prove the credit- worthiness of the shareholders. Ld. AO held that assessee had properly proven the identity, genuineness and credit-worthiness of 9 shareholders from whom the share capital/premium had been received of Rs.3,51,90,000/- and accordingly, did not make such addition in the reassessment order. He further held that the identity and genuineness of balance 34 shareholders had been proven by the assessee, however the credit-worthiness of such 34 shareholders is not proved. Accordingly, solely for the reason that the assessee had not proved the credit worthiness of 34 shareholders, made the addition u/s 68 of share capital and share premium received from such 34 shareholders amounting to Rs. 10,92,50,000/-.

5.6. Summary of the above events which took place in the course of entire impugned reassessment proceedings is tabulated below for ready reference as a summary: Particulars Date Original return u/s.139(1) 30.06.2013 Notice u/s. 148 31.03.2021 Return filed in response to notice u/s. 148 31.05.2021 Reasons provided to the assessee 04.06.2021 Objections raised by the assessee u/s. 148 30.06.2021 Disposal of Objection Order-(1st time) 27.07.2021 Order of Hon'ble High Court of Bombay directing the AO to 16.03.2022 dispose the objection afresh Disposal of Objection Order - (2nd time) 07.04.2022 Assessment order u/s.143(3) r.w.s. 147 (1st Round) 13.10.2022 [Addition u/s 68 of Rs.14,44,40,000/-] Order of Hon'ble High Court of Bombay setting aside the 1st 18.12.2023 assessment order, with a direction to reframe the assessment order Notices u/s.142(1) & Showcause notice 25.12.2023, 19.01.2024 & 07.02.2024 Replies filed by the assessee 16.01.2024, 03.02.2024, 04.03.2024 & 15.03.2024 Reassessment order u/s.143(3) r.w.s.147 (impugned order) 28.03.2024 [Addition u/s 68 of Rs. 10,92,50,000/-]

6.

Aggrieved, assessee went in appeal before the ld. CIT(A). In 1st appeal, ld. CIT(A) carefully analyzed the documents filed by the assessee and furnished by share-holders u/s 133(6) and held that the assessee had proven the identity and credit-worthiness of share-holders and genuineness of share capital and premium and deleted the entire addition made in assessment u/s.68 of Rs.10,92,50,000/-. Ld. CIT(A) held that assessee had filed the PAN, I.T. acknowledgement receipt, Client master data, D-mat account of shareholders, share application forms, letter of allotment of shares, Special resolution filed before ROC, 12 replies u/s.133(6) of shareholders, I.T returns, balance sheet and bank statements of shareholders, which establishes the identity and credit- worthiness of shareholders and genuineness of share capital and premium. He took cognizance of exhaustive documents with explanation placed on record.

6.1. Further, he noted that assessee is a listed company, in which public are substantially interested, thus 1st proviso to Sec.68 as well as Sec 56(2)(vii)(b) shall not apply in comparison to an unlisted company. It is also noted by him that various share-holders had furnished their replies and documents in response to notice issued u/s 133(6) by the ld. AO. Assessee had not allotted the shares at excess share premium, since such shares had been allotted on 18.10.2012 @ Rs.23 per share, when the shares were traded in the BSE @Rs.44.10 per share and moreover, ld. AO, in reassessment order, had accepted the correctness of same share capital and premium received from 9 share-holders @ Rs.23/-per share. The SEBI vide order dated 30.07.2021 had adjudicated the process of allotment of shares made by the assessee and examined the bank statements, D-mat account and documents of shareholders and thereafter, had not held the allotment of shares made by the assessee as non-genuine. The addition made by ld. AO was thus, deleted. Aggrieved, Revenue is in appeal before the Tribunal on the relief granted by the ld. CIT(A).

7.

Before we deal with the issue contested before us, it is appropriate to understand the amendment brought to section 68 by way of proviso inserted by the Finance Act, 2012, with effect from 01.04.2013, applicable from Assessment Year 2013-14. Section 68, as it stood for Assessment Year 2013-14, is reproduced as under:

"Cash Credits

68.

Where any sum is found credited in the books of the assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof in the explanation offered by him is not, in the opinion of the assessing officer, satisfactory, the sum so credited may be charged to Income tax as the income of the assessee of that previous year. Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory. Provided further, that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10." 7.1. The first proviso provides that where the assessee company is not a company in which the public are substantially interested, the proviso would apply and it would need to explain the source of source. In other words, the said proviso is not applicable to the companies where public is substantially interested. This proviso casts an additional responsibility/onus on the assessee not only to explain the source in its hands, but also in the hands of the resident shareholders. For this additional responsibility/onus, the proviso carves out an exception for companies in which public is substantially interested, that is, public listed companies. It can thus, be said that with this proviso, the already existing ingredients of section 68, that is, proving identity, creditworthiness and genuineness of the transaction is not done away with, but an extra burden/responsibility has been casted upon the assessee to also prove the source in the hands of the shareholders in the case of company in which public is not substantially interested.

7.2. In the present case, assessee is governed by the main body of section 68, which in any event requires it to establish, to the satisfaction of ld. Assessing Officer, the identity and creditworthiness of the investors and genuineness of the transaction. It was submitted by ld. Counsel for the assessee, a submission already considered by ld. CIT(A), that the additional responsibility/onus cast through the proviso does not apply to assessee, so as to explain the source of source, which ld. Assessing Officer failed to appreciate in its proper perspective.

7.3. Before us, ld. CIT DR referred to para 21 of the impugned reassessment order, contending that ld. Assessing Officer had rightly observed that the penultimate source of funds, in respect of certain allottees, traced back either to assessee or to persons associated with it and its directors. It was submitted that these allottees did not possess adequate creditworthiness and that the transaction, in substance, resulted in assessee funding its own share subscription. Ld. CIT DR relied on circumstantial evidence which on preponderance of probability, spoke to the non-creditworthiness of the investors to whom shares had been allotted. Ld. CIT DR laid emphasis on this circumstantial evidence to justify the addition made by ld. Assessing Officer, without pointing to anything cogent material brought on record.

8.

Per contra, ld. Counsel for assessee reiterated the submissions made before the authorities below, more particularly before ld. CIT(A), who had considered every aspect of the case elaborately. Ld. Counsel emphasised the applicability of proviso to section 68 to assessee, which, according to him, had been wrongly inferred by ld. Assessing Officer, since assessee is a company in which the public is substantially interested and is therefore not required to explain the source of source. He referred to documentary evidence placed in the paper book demonstrating assessee to be a listed company on the Bombay Stock Exchange. Despite this position under the Act, assessee has adequately demonstrated, through all the documentary evidence and details placed on record and systematically tabulated above, a position which has not been considered by ld. Assessing Officer in its proper perspective. According to him, the same amount of premium, that is, Rs. 22/- per share, was charged from all the shareholders without discrimination. Ld. Assessing Officer accepted receipt of share premium and capital from 9 out of the total 43 shareholders, all of whom had contributed at the same rate of Rs. 22/- per share. Thus, ld. Assessing Officer was not justified in partially accepting and partially rejecting the share premium received from the same class of shareholders.

9.

We have heard the rival contentions and perused the material on record. We have also given our thoughtful consideration on the submissions made before us as well as to the orders of the authorities below. Admittedly, the factual position emanating from the records is that assessee has furnished all the relevant details, explanations supported by corroborative documentary evidence, all of which is placed on record. These details are already extracted in the above paragraph by way of tabulation. List of documents furnished by the assessee for each of the shareholders as well as explaining its case is also listed above. It is also an admitted fact that assessee is a public listed company, fact of which remains uncontroverted. Assessee has allotted its shares electronically and the newly allotted shares had been credited by the depositories NSDL and CDSL directly in the D-mat account of respective shareholders. Also, final approval was granted by the Bombay Stock Exchange for listing of the newly allotted shares. Further, SEBI vide order dated 30.07.2021 had adjudicated the process of allotment of shares made by the assessee and examined the bank statements, D-mat account and documents of shareholders and thereafter did not hold anything adverse against the allotment of shares made by the assessee so as to taint it as non-genuine.

9.1. Ld. Assessing Officer has not bothered to discuss or point out any defect or deficiency in the documents of the share subscribers brought on record. This evidence has neither been controverted by ld. Assessing Officer during the assessment proceedings, nor has anything substantive been brought on record to justify the addition so made. Thus, going by the material placed on record, it can be safely held that assessee has discharged its initial burden and the burden shifted to ld. Assessing Officer to enquire further into the matter, which was not done. It is relevant to quote the decision of Hon’ble jurisdictional High Court of Bombay in the case of CIT v. Creative World Telefilms P. Ltd. [2011] 333 ITR 100 (Bom) wherein it was held as under:

“In the case in hand, it was not disputed that the assessee had given the details of name and address of the shareholder, their PAN/GIR number and had also given the cheque number, name of the bank. It was expected on the part of the Assessing Officer to make proper investigation and reach the shareholders. The Assessing Officer did nothing except issuing summons which were ultimately returned back with an endorsement "not traceable". The Assessing Officer ought to have found out their details through PAN cards, bank account details or from their bankers so as to reach the shareholders since all the relevant material details and particulars were given by the assessee to the Assessing Officer. In the above circumstances, the view taken by the Tribunal could not be faulted. No substantial question of law was involved in the appeal.''

9.2. Similar view was taken by the Hon’ble High Court of Madras in the case of Pranav foundations Ltd. [2015] 229 Taxman 58 (Mad) wherein it was held as under:

“In view of the fact that all the four parties, who are subscribers of the shares, are limited companies and enquiries were made and received from the four companies and all the companies accepted their investment. Thus, the assessee has categorically established the nature and source of the said sum and discharged the onus that lies on it in terms of section 68. When the nature and source of the amount so invested is known, it cannot be said to undisclosed income. Therefore, the addition of such subscriptions as unexplained credit under section 68 is unwarranted.”

9.3. Further, reliance is placed on the decision of Hon’ble Supreme Court in the case of CIT v. Orissa Corporation (P) Ltd. [1986] 159 ITR 78 (SC) wherein it was held as under:

“In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were the income-tax assessees. Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of the assessee, 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 credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such could arise. The High Court was, therefore, right in refusing to refer the questions sought for. Decision of the High Court affirmed.”

9.4. Reliance is also placed on the decision of Hon'ble High Court of Calcutta in the case of PCIT vs. Delta Dealers (P) Ltd. [2025] 173 taxmann.com 911 (Cal) wherein it was held that, where ld. Assessing Officer made addition u/s. 68 to income of assessee company on account of share capital and share premium, since all share subscribing companies had responded to notices issued u/s. 133(6) and made their submissions and produced documents and Assessing Officer failed to deal with those documents, to point out any discrepancies, Tribunal was justified in deleting the addition.

9.5. Revenue has referred to the decision of Hon’ble Supreme Court in the case of PCIT v. NRA Iron & Steel Pvt. Ltd. 412 ITR 161 (SC). In this regard, we note in para 8.2 of the said decision, the following observations:

“8.2 As per settled law, the initial onus is on the Assessee to establish by cogent evidence the genuineness of the transaction, and credit-worthiness of the investors under Section 68 of the Act.

The assessee is expected to establish to the satisfaction of the Assessing Officer CIT v. Precision Finance (P) Ltd. [1995) 82 Taxman 31/[1994]208 ITR 465 (Cal.): Proof of Identity of the creditors; Capacity of creditors to advance money; and Genuineness of transaction This Court in the land mark case of Kale Khan Mohammed Hanif v. CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) laid down that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and creditworthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income of the assessee, and there would be no further burden on the revenue to show that the income is from any particular source."

9.6. Further, in para 9 of the said decision, Hon'ble Supreme Court has observed as under:

"9. The Judgments cited hold that the Assessing Officer ought to conduct an independent enquiry to verify the genuineness of the credit entries. In the present case, the Assessing Officer made an independent and detailed enquiry, including survey of the so-called investor companies from Mumbai, Kolkata and Guwahati to verify the credit-worthiness of the parties, the source of funds invested, and the genuineness of the transactions. The field reports revealed that the share-holders were either non-existent, or lacked creditworthiness."

9.7. Thereafter, Hon'ble Supreme Court summed up the principles which emerged by deliberating upon various case laws as under:

"11. The principles which emerge where sums of money are credited as Share Capital/Premium are: i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and credit-worthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. ii. The Assessing Office is duty bound to investigate the credit-worthiness of the creditor/subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name lenders.

iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act.”

9.8. Hon'ble Supreme Court, thus, held that once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers, then, AO is duty bound to conduct an independent enquiry to verify the same. However, as noted above, ld. AO in this case has not made any independent enquiry in the course of impugned reassessment proceedings to verify the genuineness of the transactions. Assessee, having furnished all the details and documents before ld. AO, and ld. AO not having pointed out any discrepancy or insufficiency in the evidence and details so furnished, the discrepancies noted have been resolved and reconciled in the remand proceedings in the present case, as already noted above. Also, as observed above, assessee having discharged its initial burden to furnish evidence proving the identity and creditworthiness of the share subscribers and genuineness of the transaction, the onus shifted to ld. Assessing Officer to examine the evidence furnished, make independent inquiries, and thereafter confront assessee with the specific respects in which the details and evidence furnished were found unsatisfactory.

10.

We further note that this Bench has in ITA No. 3484/Mum/2023 of Fateh Granite Ltd. v. DCIT, Central Circle 6(3), AY 2010-11, order dated 09.07.2024, taken a consistent view on an addition u/s 68 towards share capital and share premium raised from 18 share subscribing companies, holding that identity, creditworthiness and genuineness stand established where the subscribers are income-tax assessees, have responded to notices u/s 131/133(6) and have furnished bank statements and financial statements evidencing their creditworthiness and that ld. Assessing Officer cannot sustain an addition without pointing to any specific defect or deficiency in such material. That order drew upon CIT v. Orchid Industries Pvt. Ltd. [2017] 397 ITR 136 (Bom) and PCIT v. Paradise Inland Shipping Pvt. Ltd. [2017] 84 taxmann.com 58 (Bom), both of the Hon’ble jurisdictional High Court, for the proposition that mere non-appearance of directors, once documentary evidence establishing the subscribers’ existence has been furnished, shifts the burden to the Revenue. The facts of the present case, involving 43 shareholders of whom the identity and genuineness of all and the creditworthiness of 9, already stand accepted by ld. Assessing Officer himself, fall squarely within this consistent approach and we see no reason to depart from it.

11.

Considering the facts and circumstances of the case as discussed above, the details and documents placed on record corroborating the claim of assessee, the judicial precedents referred to above and the detailed, fact-based findings arrived at by ld. CIT(A), we find no reason to interfere with the findings of ld. CIT(A) in deleting the addition made by ld. Assessing Officer. Accordingly, grounds raised by the Revenue are dismissed.

12.

In the result, appeal of the Revenue is dismissed.

13.

We now take up the appeal filed by assessee, contesting the jurisdictional validity of the impugned reassessment proceedings. According to ld. Counsel for assessee, the reasons recorded for issuing notice u/s 148 are invalid. Reference was made to the reasons for reopening, placed in the paper book at page 2. On perusal, it is noted that the reasons mention that assessee had invested in penny stocks, such as NCL Research, SR India and Turbotech, for a bogus claim of short-term capital loss (STCL) of Rs. 2,50,000/- as per an invalid return of income for Assessment Year 2013-14. The other reason alleges escapement of income in respect of the entire share premium received by assessee, of Rs. 13,81,60,000/- against issue of 62,80,000 shares by the assessee of face value of Re. 1/- at a premium of Rs. 22/- per share. In this regard, it is very categorically mentioned that: "Further, on verification of the balance sheet, it is seen that...". This shows that the allegation of escapement of income was based on material already available with ld. Assessing Officer and that no fresh material was brought on record for the same.

13.1. Submission of assessee in this regard is that, on the first issue relating to short-term capital loss on a penny scrip amounting to Rs. 2,50,000/-, no such addition/disallowance has been made by ld. Assessing Officer in the impugned reassessment order. The correct factual position is that assessee had incurred a loss on sale of a fixed asset, which was incorrectly inferred as a loss on a penny scrip transaction. Once this was explained in the course of reassessment proceedings, no addition was made on this account.

13.2. On the second allegation, relating to receipt of share premium of Rs. 13,81,60,000/-, the contention of assessee is that no separate addition of share premium has been made. What has been added is under section 68, towards share capital and share premium received from 34 out of 43 shareholders, since assessee could not establish their creditworthiness. This addition rests on no new or tangible material, but on verification of the balance sheet filed by assessee along with its original return of income. Further, assessee is a public listed company in which the public are substantially interested, so that section 56(2)(vii)(b) does not apply to it and there is accordingly no occasion for the receipt of share premium to lead to escapement of income. Thus, on every count, the allegation of escapement of income on account of receipt of share premium fails and the initiation of reassessment proceedings and the reassessment order passed thereafter, are bad in law liable to be quashed ab initio.

14.

On these submissions being put to ld. CIT DR, no effective rebuttal was placed on record, save reliance on the orders of the authorities below.

15.

We have heard both the parties and perused the material on record. Giving thoughtful consideration to the submissions made before us, it is noted that the reasons to believe recorded by ld. Assessing Officer are on account of two issues. The first relates to short-term capital loss incurred by assessee on a penny scrip transaction, of Rs. 2,50,000/-. It is an admitted fact that no addition has ultimately been made on this account in the impugned reassessment.

15.1. The second issue relates to addition made on account of receipt of share premium, for shares issued by assessee at a premium of Rs. 22/- per share on a face value of Re. 1/- per share. This allegation arises from verification of the balance sheet of assessee, as noted by ld. Assessing Officer in the reasons to believe so recorded. Evidently, nothing has been brought on record to demonstrate any new or fresh tangible material available with ld. Assessing Officer for recording these reasons to believe, for the purpose of initiating proceedings u/s 148 r.w.s. 147. The balance sheet of assessee was already available with ld. Assessing Officer, having been filed along with the original return u/s 139(1). Further, as already noted, assessee is a public listed company in which the public are substantially interested. Section 56(2)(vii)(b) does not, therefore, apply to it and receipt of share premium would not lead to an escapement of income on this account. What has in fact been added in the hands of assessee, being share capital and premium received from 34 out of 43 shareholders u/s 68, rests on a different footing altogether, namely, non-establishment of creditworthiness and is not what was alleged in the reasons to believe. In these facts and circumstances, we find that the reasons to believe recorded by ld. Assessing Officer, for the purpose of issuing notice u/s 148, stand invalid. The entire proceeding, and the impugned reassessment order, are accordingly bad in law and liable to be quashed ab initio. We hold accordingly. Grounds raised by the assessee are allowed.

16.

In the result, appeal of the revenue is dismissed and appeal of the assessee is allowed.

Order pronounced in open court on 08th of September, 2026.

Sd/- Sd/- AMIT SHUKLA GIRISH AGRAWAL JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 08.09.2026. Kunal Kr. P.S. Copy to: 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai.

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