GEMINI DEALCOM PVT. LTD.,KOLKATA vs. I.T.O., WARD - 6(3), KOLKATA

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 03.02.2026 for the AY 2012-13.

3.2. The ld. CIT (A) in the appellate proceedings dismissed the appeal of the assessee by relying on the decision of Hon'ble Calcutta High Court in case of Principal Commissioner of Income-tax vs. Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta)/[2022] 288 Taxman 403 (Calcutta)/[2022] 446 ITR 56 (Calcutta)[14-06-2022]and Balgopal Merchants (P.) Ltd. vs. Principal Commissioner of Income-tax [2024] 162 taxmann.com 465 (Calcutta)/[2024] 468 ITR 136 (Calcutta)[13-05-2024], CIT Vs. N.R. Portfolio Pvt. Ltd. [35 DTR 237 (del)].

3.3. After hearing the rival contentions and perusing the materials available on record, we note that during the year the assessee has issued equity shares to four group companies at face value of ₹10 each at a premium of ₹20. The assessee furnished before the ld. AO the names, addresses, PANs, ITRs, audited accounts and bank statements of the subscribers who are group companies. We also note that the ld. AO in order to independently verify the transactions issued summon u/s 131 of the act on 17.02.2015, to the directors of the assessee company directing them to produce the directors of the shareholding

a)In case of Omar Salay Mohamed Sait vs. Commissioner of Income-tax [1959] 37 ITR 151 (SC)[05-03-1959], wherein it has held as under:-

“The Tribunal had not applied its mind to the evidence which was there on the file of the appellant in the shape of information gathered subsequently and it had improperly rejected that evidence. That being the position the revenue could not very well resist the order which the Supreme Court proposed to made, setting aside the order of the Tribunal and remanding the matter back to it for dealing with the same in accordance with law, after taking into consideration all the circumstances, the whole evidence which was available in the file of the appellant and such further evidence as the parties might be advised to lead before it. The Tribunal is a fact finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it the Supreme court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due case and the Tribunal must have given its finding

b) In case of Principal Commissioner of Income-tax 1 Kolkata vs. Shipra Enclave (P.) Ltd. [2026] 183 taxmann.com 413 (Calcutta)/[2026] 309 Taxman 457 (Calcutta)[04-02-2026], wherein it has held as under:-

“6. We have heard Mr. Soumen Bhattacharjee, learned Advocate for the Revenue, and Mr. S.M Surana, learned Advocate for the respondent-assessee. 7. Mr. Bhattacharjee strenuously argued that the meagre income declared by the subscriber companies, when contrasted with the high premium paid to acquire the shares of the assessee, leads to an irresistible conclusion that the transactions were mere accommodation entries. He relied heavily on the decision of the Hon'ble Supreme Court in NRA Iron & Steel (P) Ltd. (supra) and contended that the AO was justified in looking behind the "paper trail" to ascertain the true creditworthiness of the investors and genuineness of the transaction. 8. Per contra, Mr. Surana, learned Advocate for the assessee, submitted that as a regulated NBFC, the assessee's financial transactions are subject to stringent oversight by the RBI and the MCA. He pointed out that all fifteen subscribers were active assessees on the records of the Income Tax Department and had duly responded to the notices issued by the AO under Section 133(6) of the Act. 9. We have carefully considered the rival submissions and perused the materials on record. It is a settled legal position that to discharge the initial onus under Section 68, the assessee must establish the identity of the creditor, their creditworthiness, and the genuineness of the transaction. In

“14. There are three provisos to Section 68 of the Act of 1961. The first proviso deals with a loan or borrowing. The second proviso deals with share application money and the third proviso speaks about venture capital fund. 15. In the facts and circumstances of the present case, the assessee issued allotted shares at a premium. Therefore, at the highest, the second proviso to Section 68 will come into operation, assuming though not admitting that the first part of Section 68 of the Act of 1961 stands satisfied. In the facts and circumstances of the present case, the consistent finding of the appellate authority and the income tax appellate tribunal is that, the persons who applied for the shares stand identified and that, the assessee offered sufficient explanation about the nature of the transactions in question. 16. In course of hearing before us, the appellant is not in a position to produce any additional or new materials to substantiate that, the concurrent finding of fact by the two authorities, namely, the appellate authority and the income tax tribunal with regard to the explanation offered by the assessee is perverse. 17. In Naina Distributors (P) Ltd (supra) the co-ordinate Bench, found in the facts and circumstances of that case that, the transaction in share allotment in respect of the assessee concerned, was verified independently and that, independent verification did not render any finding so as to invoke Section 68 of the Act of 1961.

“2. We have heard Mr. J.P. Khaitan, learned Senior Advocate assisted by Mr. Pratyush Jhunjhunwala, Ms. Sretapa Sinha and Mr. Samit Rudra, learned advocates appearing for the appellant assessee and Mr. Om Narayan Rai, learned Senior Standing Counsel along with Mr. Soumen Bhatacharyya, learned Senior Standing Counsel appearing for the respondent department. 3. The assessee filed the return of income disclosing a total income of Rs. NIL. The return was processed under Section 143(1) of the Act. Subsequently, the case was selected for scrutiny and notices under Section 143(2) and 142(1) were issued and served on the assessee. In response to the said notice, the authorised representative of the assessee appeared and filed details as called for. The assessing officer noted that the business of the assessee is only investment and during the previous year, the assessee had received huge share application money along with the premium. Summons under Section 131 were served on the directors of the assessee calling upon them to produce the proof of identity/Pan Card, list of companies where the directors was a director or shareholder from the assessment year 2008-2009 and the date of appointment along with DIN, proof of acknowledgement of filing personal income tax return, copies of the accounts, proof of address, copy of bank statement of the companies reflecting all transactions during the period 01.04.2011 to 31.03.2012 with complete narration and source of

3.3.2. Therefore, in view of the facts of the assessee’s case and ratio laid down in the above decisions, we are inclined to set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. Ground no.2 is allowed.

4.1. We have heard the rival contentions and perused the materials placed before us. Undisputedly there is no exempt income earned by the assessee during the impugned financial year. In our opinion no disallowance is called for where there is no exempt income. Therefore, we set aside the order of ld. CIT(A) on this issue and direct the AO to delete the addition. The ground no 3 is allowed.

Order pronounced on 22.07.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 22.07.2026 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