ROLEX TRAFIN PRIVATE LIMITED,KOLKATA vs. I.T.O., WARD - 11(1), KOLKATA

Per Rajesh Kumar, AM:

This is an appeal preferred by assessee against the order of the Commissioner of Income-tax (Appeals) Kolkata-27, (hereinafter referred to as the “Ld. CIT(A)”]dated 16.10.2025 for the AY 2012-13.

“1. That, on facts and on circumstances of the case, the assumption of jurisdiction by the Ld.NeAC/NaFAC and passing assessment order u/s 143(3)/1448/254 of the Act dated 24.09.2021 is in violation to the decision of the Hon'ble Jurisdictional Tribunal vide order dated 25.09.2019. 2. That Ld.NeAC/NaFAC had no power to invoke jurisdiction u/s 142B of the Act for Faceless Inquiry u/s 142(1) of the Act prior to the notification of the Scheme of Faceless Inquiry or Valuation Scheme u/s 142B of the Act which was notified on 30.03.2022 and so the inquires conducted by the Ld.NeAC/NaFAC is without jurisdiction. 3. That the Ld.NeAC/NaFAC has erred in making assessment under faceless scheme without intimating the assessee about making fresh assessment as set aside by the Hon'ble ITAT in his case under Faceless Scheme.” 4. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised the above additional grounds of appeal challenging the jurisdiction of the AO to framed the assessment. In our opinion the issued raised in the additional grounds are purely legal issues qua

“3. That, without prejudice, the Ld. CIT(A) erred in upholding the addition of Rs.6,86,97,111/- u/s 68 of the Act on account of share premium despite the assessee having duly complied with notices u/s 142(1) of the Act and submitted comprehensive details, including the identity, creditworthiness of shareholders and genuineness of the transactions and hence the Ld. CIT(A) has wrongly alleged in a mechanical manner that the assessee failed to prove its case despite the material produced during the remand proceeding 4. That, the Ld. CIT(A) further failed to appreciate that once the assessee has discharged its initial burden of proving the identity and capacity of the subscribers and genuineness of the transactions through banking channels and the premium was received from two subscribers in the next FY 2012-13 and submitted FMV report, no addition u/s 68 is justified and the same deserves quashing.” 6. The facts in brief are that the assessee filed the return of income on 29.03.2014, declaring nil income. The case of the assessee was selected for scrutiny u/s 143(3) of the Act and accordingly, the assessment was framed on 29.03.2015, in

“5 On the merit of the additions made in the income of the assessee, there is a clear finding and about which there is no dispute that the amount added in the income of the assessee as unexplained investment or cash credit in the assessment year 1993-94 was the same amount which was credited in the books of account of the assessee for the previous year end-ing on March 31, 1992. The Tribunal has categorically come to a finding, and that finding is not under challenge, that this is not a case of cash credit entered in the books of account of the assessee during the year but it is a case in which the assessee has invested the capital in the business and this amount was shown as a closing capital as on March 31, 1992, and on April 1, 1992, it was an opening balance. Considering this aspect, the Tribunal has come to the conclusion that what was already credited in the books of account ending on March 31, 1992, for the financial year 1991-92 relevant to the assessment year 1992-93 cannot be an unexplained cash credit or investment in the books of account maintained for the financial year 1992-93, the accounting period of which ends on March 31, 1993, so as to warrant its consideration as unexplained investment or cash credit for its relevant assessment year 1993-94. 6 It does not require any elaborate argument that a carried forward amount of the previous year does not become an investment or cash credit generated during the relevant year 1993-94. This alone is sufficient to sustain the order of the Tribunal in deleting the amount of Rs. 1,55,316 from the assessment for the assessment year 1993-94. Since the appeal succeeds.”

“8. Since it is a finding of fact recorded by the CIT(A) that this credit balance appearing in the accounts of the assessee, does not pertain to the year under consideration, under these circumstances, the Assessing Officer was not justified in making the impugned addition under section 68 of the Act and as such no fault can be found with the order of the Tribunal which has endorsed the decision of the CIT(A). 9. The above being the position, no fault can be found with the view taken by the Tribunal.” 9. In case of Deputy Commissioner of Income-tax, Circle-1, Siliguri vs. Global Mercantiles (P.) Ltd. [2016] 67 taxmann.com 166 (Kolkata - Trib.)/[2016] 157 ITD 924 (Kolkata - Trib.) dated 13-01-2016, wherein it has held as under:-

“4.4.1 We find from the details available on record that the share application monies from 20 individuals in the sum of Rs. 57,00,000/- has been received by the assessee during the financial year 2004-05 relevant to Asst Year 2005- 06 and only the shares were allotted to them during the asst year under appeal. Admittedly no monies were received during the asst year under appeal and hence there is no scope for invoking the provisions of section 68 of the Act. Hence, we hold that the order passed by the Learned CITA in this regard does not require any interference. Accordingly, the ground no. 3 raised by the revenue is dismissed.” 10. Therefore, Considering the facts and circumstances of the case and also by following the ratio laid in the above decisions, we are inclined to set aside the order of learned CIT (A) and direct the AO delete the addition. The ground no. 3 and 4 are allowed.

Order pronounced on 28.07.2026.

Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (VICE PRESIDENT) (ACCOUNTANT MEMBER) Kolkata, Dated: 28.07.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Asst. Registrar Income Tax Appellate Tribunal, Kolkata