SANTANU ROY, ITO, WARD-10(2),KOLKATA, KOLKATA vs. KAMDHENU COMMOSALES PRIVATE LIMITED , KOLKATA

आयकर अपीलीय अधिकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A”BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No.2176/Kol/2024 Assessment Year: 2010-11 ITO, Ward-10(2), Kolkata…………..………...……...........................……….……Appellant vs. Kamdhenu Commosales Private Limited.……….…..…………...……...…..…..Respondent 13, Tollygunge Circular Road, Kol-33. [PAN: AADCK6244Q] Appearances by: ShriMiraj D. Shah, AR, appeared on behalf of the assessee. Shri H. Robindra Singh, CIT DR, appeared on behalf of the Revenue. Date of concluding the hearing :March 26, 2026 Date of pronouncing the order : June, 25 2026 ORDER Per Rajesh Kumar, Accountant Member:

This is an appeal preferred by the revenue against the order of the NFAC, Delhi(hereinafter referred to as the “Ld. CIT(A)”] dated 02.09.2024passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’) for the A.Y 2010-11.

ITA No.2176/Kol/2024 the basis of information received by the Assessing Officer that the assessee derived income on trading in commodities and derivatives. The assessment u/s.143(3) r.w.s.147 was accordingly completed on 28.03.2013 at an assessed income of Rs.2,89,670/-, by making an addition of Rs.2,87,645/-. Subsequently, the A.O. again re-opened the assessment by issuing notice u/s.148 of the Act on 23.03.2017 after recording reasons to believe that income chargeable to tax at has escaped assessment after taking approval of the competent authority. In response to notice u/s.148 of the Act , the assessee filed a return of income on 03.10.2017 disclosing total income of Rs.2,89,670/-. Thereafter, statutory notice u/s.143(2) was issued on 20.10.2017. Notices u/s 142(1) of the Act along with questionnaire were issued on 7.6.2017 and 1.9.2017 respectively. The assessee furnished written submissions along with the details/information called for by the AO. The objections filed by the assessee on 23.11.2017 to re-opening of assessments were also disposed off 24.11.2017. The AO noted that the assessee issued 60000 equity shares of face value of Rs. 10/- each at a premium of Rs. 482/- per share despite not having any income or business activities. The AO also noted that the funds so raised were invested in the unlisted equities. Finally the AO held that the assessee could not prove the source of funds creditworthiness of the investors with cogent evidences and treated the entire share capital /share premium as unexplained u/s 68 of the Act and completed the assessment making an addition of Rs.29,51,00,000/- to the income of the assessee.

ITA No.2176/Kol/2024 4. After hearing the rival submissions and perusing the material on record including the appellate order, we find that the ld. CIT(A) quashed the reopening of the assessment by observing that reasons recorded are not based on any tangible material but merely on change of opinion. Thus, the reasons recorded and the issuance of notice u/s.148 do not meet the jurisdictional requirements and consequently the re-assessment proceedings initiated by the A.O. are also without jurisdiction and liable to be annulled. We note that in this case, in the original assessment proceedings u/s.143(3) r.w.s.147, the A.O. had already made enquiries from the subscriber companies which had made the investments in the assessee company and completed the assessment u/s 143(3) r.w.s. 147 of the Actg vide order dated 28.3.2013 without making any addition on account of share capital/share premium raised during the impugned financial year. The A.O. has reopened the assessment but has nowhere even mentioned or wishpered about the submissions of such evidences/documents or the enquiries u/s.133(6) of the Act during the re-assessment proceedings which culminated u/s 143(3)/147 of the Act vide order dated 28.3.2013 in the reasons recorded. Therefore, it is a case of mere change of opinion without there being any new tangible materials before the AO. We note that all the details /documents were before the AO in the original proceedings. We further note that this is a case of reopening beyond the period of 4 years wherein the A.O. was bound to satisfy the jurisdictional requirements on both counts i.e. “reason to believe” and “failure to disclose fully and truly material facts”. In this case, the assessee fully and truly disclosed all the material facts necessary for the assessment

ITA No.2176/Kol/2024 during the original proceedings. We further note that in the reasons recorded, the A.O. has made no reference to the examination of the assessment records already available with him wherein enquiries u/s.133(6) were made by the A.O. earlier from such subscriber companies and the A.O. did not find any specific defect or discrepancy whatsoever vis-à-vis the information/details claimed to be received before forming a belief that income chargeable to tax had escaped assessment. We find that there is no whisper of the amount of Rs.29,51,00,000/ in the reasons recorded and in the reassessment proceedings. The AO did not make any enquiry about the other subscriber companies from which the above share application money/share capital raised during the year. The assessment order does not mention of any such details of such subscriber companies and the transactions with those companies and also no details are given about the same in the assessment order.

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deposit of cash in different companies’ current accounts followed by transfer of funds to the current accounts of various other concerns and transfer to a number intermediary accounts which in turn transferred the same to a number of beneficiaries’ accounts and prima-facie from the pattern of the transaction, it appears that cash have been deposited to obtain cheques by the beneficiary companies. As per information, the assessee company has received the sum of Rs.1,57,50,000/- as beneficiary”. On perusal of the reasons recorded, the A.O. has discussed modus operandi of such transactions without any specific and tangible allegation against the appellant except that the appellant company has received a sum of Rs.1,57,50,000/- as beneficiary. Based on the above information, the A.O. has not made any further enquiries or verifications independently in the context of facts of this case and satisfied himself whether the information received thus prima-facie lead to a reasonable belief that income chargeable to tax has escaped assessment. In fact, in the reasons recorded, the A.O. has made no reference to the examination of the assessment record already available with him wherein enquiries u/s.133(6) were made by the A.O. earlier from such subscriber companies and the A.O. did not find any specific discrepancy vis-àvis the information claimed to be received before forming a belief that income chargeable to tax had escaped assessment. It is noted that in the case of PCIT vs. Meenakshi Overseas Pvt. Ltd. (2017) 5 TMI 1428 (Del.), wherein reopeningu/s.148 was made on the basis of information received from Investigation Wing. The Hon’ble High Court held “that such reopening which was based merely on the information received from Investigation Wing without independent application of mind by A.O. amounted to “borrowed satisfaction” and such reopening was liable to be quashed”. In the case of the appellant, the A.O. has made reference to the appellant being beneficiary of Rs.1,57,50,000/- received, which is received from M/s.SnowdropVincom Pvt. Ltd. But as contended by the appellant, in the original assessment proceedings, the A.O. had already made enquiries u/s.133(6) with the above subscriber company M/s.SnowdropVincom Pvt. Ltd. which had also responded and furnished all the details called for and no adverse view was taken on the same. Therefore, the A.O. has merely acted on the basis of input from Investigation Wing, without reference to the assessment record and any further verification or application of mind and reasons recorded are also not based on any tangible material but merely on change of opinion and the reasons recorded and the issuance of notice u/s.148 does not meet the jurisdictional requirement before issuance of notice u/s.148.

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9.3.16 I have considered the original assessment order u/s.143(3) r.w.s.147 dated 28.03.2013 and the assessment order u/s.143(3) r.w.s.147 dated 29.12.2017 under challenge in the instant appeal, the reasons recorded and the disposal of the objections raised by the appellant to the notice u/s.148 during the assessment proceedings, the written submissions filed by the appellant and the various judicial pronouncements relied upon by the appellant and also as discussed above. The maintainability of jurisdiction u/s.148 of the Act is central to the grounds raised by the appellant in the above appeal. Since this is a case of reopening beyond the period of 4 years, the A.O. was bound to satisfy the jurisdictional condition/requirements on both counts i.e. “reason to believe” and “failure to disclose fully and truly material facts”. As discussed in the preceding paras, it is a settled principle of law that the jurisdiction exercised u/s.147 by an A.O. has to be tested on the touchstone of the reasons recorded, which can neither be improved subsequently nor added in the reply or in the subsequent pleadings. It is also well settled that the reasons which are recorded by the A.O. for reopening the assessment, are the only reasons which can be considered. No substitution or deletion is permissible. No addition can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The A.O. must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for the assessment year involved, so as to establish the vital link between reasons and the evidence as this vital link is safeguard against any arbitrarily re-opening of a concluded assessment. From thedetailed analysis and appraisal of the facts of the case it is clear that in the reasons recorded the A.O. has not mentioned about the original assessment u/s.143(3) r.w.s.147 and has made no reference to the assessment records wherein the verification/enquiries were already made by the A.O. in the earlier concluded assessment proceedings. He has not brought out any specific failure on the part of the appellant to disclose fully and truly the material facts necessary for assessment and merely making this bald assertion is not enough, as held by the various judicial pronouncements extracted above. In the given facts of the case and after considering the discussion above and respectfully following the decisions by superior judicial authorities, it is held that the notice issued u/s.148 does not meet the jurisdictional requirement and vitiated in law and consequently the re-assessment proceedings initiated by the A.O. are also without jurisdiction and liable to be annulled.”

ITA No.2176/Kol/2024 6. Considering the facts and circumstances as discussed above and the ratio laid down in the above decisions , we are inclined to uphold the order of ld. CIT(A) on the legal issue of wrong re- opening without substantive /tangible material and re-opening beyond four years from the relevant assessment year without satisfaction of proviso to section 147 of the Act. The ground no 4 is allowed. 7. The issue raised in the ground no. 2 and 3 of appeal is against the confirmation of addition of Rs. 29,51,00,000/- by the ld. CIT(A) as made by the AO on account of unexplained cash credit u/s 68 of the Act being share capital/share premium. 8. Even on merit also, the ld. CIT(A) allowed the appeal of the assessee. We note that the Assessing Officer had issued notices u/s 133(6) to all such share subscriber companies and the said subscribers companies had furnished the details such as copies of ITRs, PANs, financials, audit reports, bank account extracts etc. and no addition was made on the above issue in the original assessment completed on 28.03.2013 u/s 143(3)/147 of the Act. The case was again reopened after more than 4 years from the end of assessment year. We find that reasons recorded was completely based on same information received that the assessee company had received Rs.1,57,50,000/-. But in the reasons recorded, there is no details of the information received, no details of such suspicious bank accounts wherein cash was allegedly deposited, no mention of the person/entity etc. involved except that the assessee company receiving Rs.1,57,50,000/ as share application money as beneficiary without the details as to date of receipt, from whom and in what

ITA No.2176/Kol/2024 manner the money was received. The assessee filed all the relevant details as called for by the AO and furnished the copies of the bank accounts of the above subscribing companies and the source of funds etc. We further find that no further enquiries were made by the Assessing Officer in respect of the above transactions and the details filed in the above reassessment proceeding. No show cause notice was issued to the appellant prior to making any such addition and there is no whisper of the above amount of Rs 29,51,00,000/ in the reasons recorded. Even in the reassessment proceedings, the AO did not make any enquiry about the other subscriber companies from which the above share application money/share capital were raised during the year. We also note that there was no specific defect or discrepancy pointed out by the Assessing Officer and the ld. CIT(A) deleted the addition made by the Assessing Officer u/s 68 by observing as under:

“10.4 From the facts summarized above, it is clear that the above issue was already examined by the AO in the original assessment proceedings and no addition was made in the assessment order dated 28.03.2013. Even in the re-assessment proceedings, the appellant company has furnished the details the transaction with the supporting audited financials, bank statement with the source of the above amount in the hand of the share subscribing company and had duly discharged its onus of substantiating the nature and source of the credits of Rs 1,57,50,000/. The AO had made no query regarding the other companies from which the remaining share application money/ share capital was raised either from the appellant or from such companies and there is no whisper of the same in the reasons recorded or the re-assessment order. From the documents furnished, it could be suspected that the appellant company have raised the above amount through layering of funds, but there is no evidence brought out in the assessment order to controvert the documentary evidences furnished by the appellant. The AO has not mentioned any details of the any specific information received from FIU-IND in the reasons recorded or even in the assessment order; no details of any such

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suspicious bank accounts in which cash could be deposited before layering the funds and reaching the appellant has been brought out; no linkage of the same with the appellant company has been brought out; no further enquiries were caused with the share subscriber companies. Thus, the A.O. has also not made any reference to the documents on record in the original assessment proceedings and as furnished by the appellant in the reassessment proceedings now and no specific discrepancies was pointed out or any adverse inference drawn based on the aforesaid documentary evidences furnished before him and AO made no further enquiry/verification in the reassessment proceedings and not demonstrated as to how the appellant has not discharge his onus u/s.68 and without issuing any show cause notice proceeded to make the above addition of Rs.29,51,00,000/-. 10.5 In the case of CIT v. Durga Prasad More, the Hon’ble Supreme Court held that Section 68 casts the initial burden of proof on the assessee to prove the identity of the creditor, the creditworthiness of the creditor, and the genuineness of the transaction. However, the Court also held that once the assessee has discharged this initial burden, the onus shifts to the AO to prove that the cash credits are not genuine before making such addition u/s 68 and in absence of the same, the addition cannot be sustained. In the case of CIT v. Sophia Finance Ltd. reported in [1994] 205 ITR 98 [FB], the Hon’ble Delhi High Court has observed that an enquiry by the Assessing Officer as to the existence or non-existence of the shareholder and about their creditworthiness is condition precedent for treating the cash credit as the income of the company. 10.6 In Hindustan Tea Trading Co. Ltd.,263 ITR 289(Cal), Hon'ble High Court ofCalcutta, while examining the scope of powers of AO under section 68 of the Act held: "Section 68 of the Income-tax Act, 1961, empowers the Assessing Officer to treat any sum found credited in the books of account of the assessee for any previous year, if the assessee fails to offer explanation about the nature and sources of such fund or if the explanation offered by the assessee is not, in the opinion of the Assessing Officer, satisfactory, as income from undisclosed sources and charge the same to tax as income of the assessee of that previous year. Therefore, it appears that the power of the Assessing Officer under section 68 is not an absolute one. It is subject to its satisfaction where an explanation is offered. The power is absolute where the assessee offers no explanation. The satisfaction with regard to the explanation is in effect an in-built safeguard in section

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68 protecting the interest of the assessee. It provides for an opportunity to the assessee to explain the nature and source of the fund. Once it is explained, it is incumbent on the Assessing Officer to consider the same and form an opinion whether the explanation is satisfactory or not. The expression used in the section clearly lays the burden on the assessee to explain the nature and source of the fund. Unless an explanation is offered, the Assessing Officer is free to treat the fund as income of the assessee from undisclosed sources chargeable to tax. Once an explanation is offered, the Assessing Officer is bound to consider the same. Such consideration is guided by sound principles of law. The opinion so formed must be reasonable and based on materials and shall not be perverse. The extent of the power of the Assessing Officer while considering the materials produced by the assessee is very wide. It is a question of examining as to whether the apparent is real. The Assessing Officer is empowered to lift the corporate veil and examine the real nature of the transaction. In the process, he may exercise its power of examining the materials. He may require the assessee to produce further materials if so required. He may seek information from other sources on the basis of the material produced. In the process of enquiry, the assessee has no right of hearing. But the assessee has a right to challenge the conclusion arrived at on the basis of the enquiry made. The assessee may point out the perversity in the finding. It may question the validity of the process undertaken. It may point out that a particular material was not considered. It may also point out that the enquiry made was not reasonable or was half-heartedly done. The process of enquiry is such that the assessee has to offer the explanation and produce the material in support of such explanation and then it can do no further. The onus then shifts on the Revenue to scrutinise the materials and form an opinion on the basis thereof. For the purpose of scrutinising the materials, itmay utilise its powers to seek attendance of any witness or disclosure of any information in exercise of its power under section 131. It may seek information from other sources in exercise of its power under section 133. Once a reasonable enquiry is made, then the Assessing Officer can do no further except arriving at a conclusion on the basis of such materials. If the conclusion is adverse wholly or in part to the interest of the assessee, it is incumbent on the Assessing Officer to intimate or inform the conclusion arrived at to the assessee”.

ITA No.2176/Kol/2024 10.7 Considering the above discussion and after considering the assessment order and other documents on record, the submissions and documents filed by the appellant etc., and in light of the observations and ratio of the above judicial pronouncements, it can be concluded that in the given facts of the case, the addition of Rs 29,51,00,000/ as made in the assessment order under challenge in the above grounds of appeal, is not sustainable even on merits.” 9. We further note that during the assessment proceedings the AO enquired from the assessee about the issue of raising share capital from M/S Snow Vincom Pvt Ltd. and the assessee filed all the documents concerning the said subscriber. Thereafter on the last page the AO discussed the facts about M/S Snow Vincom Pvt Ltd. and thereafter made addition in respect of total share capital/share premium raised by the assessee of ₹ 29,51,00,000/- even without carrying out any enquiry. We have perused the appellate order and find that the ld. CIT(A) has recorded factual findings to the effect that the in the original assessment proceedings the issue stood verified by the AO by calling for all the details and records which were dukly furnished by the assessee before the Assessing Officer. The ld. CIT(A) also noted that the notices issued u/s 133(6) of the Act were complied by the share subscribers by furnishing all the details and evidences as called for.In our opinion the addition made by the AO is completely wrong and was rightly deleted by the ld. CIT(A).We even note that the case of the assessee stands on better footing as even when the summons u/s 131 of the Act or letters u/s 133(6) of the Act are not responded the addtion is uncalled for when the assessee has filed all the evidences qua the share subscribers. The case of the assessee finds support from the following decisions:-

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".....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 the 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

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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- 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." 11. The case of the assessee is also supported by the decision of the Hon'ble Calcutta High Court in the case of PCIT vs. Bright Commodeal Pvt Ltd (ITAT No. 162 of 2025) dated 28.08.2025, wherein, it was held as under:

"We have perused the reasons assigned by the learned Tribunal for allowing the assessee's appeal. It is seen that the assessing officer issued notice under Section 133 (6) of the Act to the investing companies and both the parties have complied with the said notice and furnished the requisite details. Summons under Section 131 of the Act was issued to the Director of the assessee company to be personally present and also to produce the Directors of the investing company for examination of genuineness of the transaction, identity and creditworthiness of the lenders. The Tribunal noted that the Directors appeared pursuant to the summons but the assessing officer wrongly recorded that the Directors of the assessee company failed to appear in response to the summons issued under 131 of the Act. Furthermore, the Tribunal examined the factual position and noted that the assessee has filed evidences as called for by the assessing officer in respect of

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the assessee as well as the investing companies. The evidences filed comprised of income tax retums, audited balance sheet, profit and loss account, audited report, bank statement and master data in respect of each of the subscribers. Furthermore, both the parties have submitted their reply pursuant to the notice issued under Section 133(6) of the Act. After noting these facts, the Learned Tribunal held that the assessing officer as well as the CIT(A) did not cause any verification or conduct any enquiry into the evidences which were filed by the assessee and merely harped on non-compliance of the summons issued under Section 131 of the Act, which is factually incorrect. Learned Tribunal placed reliance on the decision of the Hon'ble Supreme Court in CIT-Vs- Orissa Corporation Ltd. (1986) 159 ITR 78 (SC) as well as the decision of this Court in Crystal Networks Pvt. Ltd. -Vs- CIT, (353) ITR 171 (Cal). The Tribunal also noted the decision of the Co-ordinate Bench in the case of ITO -VS- M/S Cygnus Developers India Pvt. Ltd. (ITA/282/Kol/2012) wherein the factual position was also similar to that of the case of the assessee. Thus, we find that the facts have been examined by the Tribunal and the conclusion has been arrived at and therefore, no question of law, much less substantial questions of law, arises for consideration in this appeal." 12. The decision of the jurisdictional Hon'ble Calcutta High Court in the case of Principal Commissioner Of Income Tax 1 vs M/S Shipra Enclave Pvt Ltd ITAT 94 OF 2025 also squarely applies to the assessee. In this case the facts were that the assessee had raised share capital and premium from fifteen corporate entities. During scrutiny assessment, the assessee produced comprehensive documentary evidence including PAN details, Income-tax return acknowledgements, bank records, and audited financial statements of all subscriber companies. Despite the availability of such material, the Assessing Officer issued summons under Section 131 to the directors of the subscriber companies and, upon their non-appearance, treated the entities as "shell companies" and added 26.22 crore as unexplained cash credit under Section 68, which was affirmed by the CIT(A). The Tribunal reversed the addition after noting that all subscriber companies were active taxpayers who had responded to notices issued under Section 133(6) and

ITA No.2176/Kol/2024 confirmed the transactions conducted through banking channels. Before the High Court, the Revenue argued that the low income declared by the investors compared to the high share premium suggested accommodation entries, relying on the Supreme Court judgment in PCIT v. NRA Iron & Steel (P) Ltd. However, the Court held that the assessee had discharged its burden under Section 68 by establishing the identity, creditworthiness, and genuineness of the investors through strong documentary evidence. The Court further held that the non-appearance of directors could not invalidate documented transactions, especially when the AO had powers under Section 131 to enforce attendance. Distinguishing NRA Iron & Steel, the Court observed that the said judgment applies to phantom or non-existent entities, whereas the present investors were identifiable taxpayers who confirmed the transactions. Emphasizing that suspicion cannot replace evidence, the Court upheld the Tribunal's findings and dismissed the Revenue's appeal, holding that no substantial question of law arose. It was held:

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amount of Rs 6,22,00,000/- as unexplained cash credit. This view was subsequently affirmed by the CIT (Appeals). 5. The leamed Tribunal, however, reversed this finding, noting that the subscribers were active taxpayers who had confirmed the transactions in response to notices issued under Section 133(6) of the Act. 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 PCIT vs. NRA Iron & Steel (P) Ltd. 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 the instant case, the leamed Tribunal conducted a meticulous factual inquiry and recorded a specific finding that the assessee provided a "Cast Iron" documentary foundation. The audited balance sheets of the subscribers demonstrated a substantial net worth, which was far in excess of the amounts invested. 10. Furthermore, we find that the AO's reliance on the non-appearance of the directors is misplaced and is not supported by the statutory scheme where robust documentary evidence isavailable. As held by this Court in PCIT vs. Sreeleathers [2022] 448 ITR 332 (Cal), the AO is vested with co-terminus powers under Section 131 of the Act to compel attendance. If the AO fails to exercise these powers, he cannot subsequently visit the consequences of such failure upon the assessee. Personal appearance of a director is not a statutory substitute for documented traceability in a corporate assessment, especially when the entities are active taxpayers. 11. Insofar as the reliance on NRA Iron & Steel is concerned, we find the facts of that case to be clearly distinguishable. In that case, the investors were found to be non-existent or "phantom" entities upon field inquiry. In the case before us, the investors are identifiable taxpayers who directly responded to notices u/s 133(6) and confirmed the transactions through banking channels. Equating "traceable investors" with "phantom entities" is a leap in logic that cannot be

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countenanced. Furthermore, the valuation of shares is a matter of commercial wisdom. Unless the Revenue proves a "live link" showing that the funds originated from the assessee's own coffers, the AO cannot substitute his judgment for that of the marketplace. 12. In view of the aforesaid discussion, we arrive at a definite conclusion that in a corporate assessment, documented traceability (comprising ITR acknowledgments, PAN details, and Bank Statements) through legitimate banking channels carries greater evidentiary weight than the subjective suspicion of an Assessing Officer. The "Test of Human Probability" cannot be invoked as a tool to disregard a verified and audited paper trail. We also conclude that the ratio in NRA Iron & Steel is applicable only to "phantom" or "non-existent" entities found to be non-traceable upon field inquiry. It cannot be extended to active, traceable taxpayers simply because their investment decisions appear commercially improbable to the Revenue. Equating "traceable investors"with "phantom entities" is a leap in logic that cannot be countenanced. Furthermore, the valuation of shares is a matter of commercial wisdom. Unless the Revenue proves a "live link" showing that the funds originated from the assessee's own coffers, the AO cannot substitute his judgment for that of the marketplace. 13. Upon considering the submissions made on either side and perusing the materials on record, we find that the learned Tribunal has conducted a meticulous factual inquiry. The Tribunal has recorded a specific finding that the assessee had provided "Cast Iron" documentary evidence to establish the identity and creditworthiness of the subscribers. The audited balance sheets of these companies reflected a substantial net worth, which was far in excess of the amounts invested in the assessee company. 14. We are convinced that the findings of the learned Tribunal are based on a meticulous factual inquiry. The Revenue has failed to produce any contrary material to disprove the documents filed. It is a settled position that suspicion, however strong, cannot take the place of evidence. We find no perversity in the findings of the learned Tribunal. 15. For the reasons aforementioned, we are of the view that no substantial question of law arises for consideration in this appeal. The findings of the learned Tribunal are based on a sound appreciation of facts and settled legal principles. 13. The case of the assessee is squarely covered by the decisions of Hon'ble Jurisdictional High Court in the cases of PCIT Vs. DevbhumiVinimay Pvt. Ltd. in ITAT/16/2025, IA No.GA/2/2025, vide order dated 22.07.2025, PCIT Vs. Rajshree Integrated Cold Chain Pvt. Ltd., ITAT/286/2024, IA No.GA/2/2024, vide order dated 17.07.2025, PCIT Vs. One Point Commercial Pvt. Ltd.,

ITA No.2176/Kol/2024 ITAT/27/2025, IA no.GA/1/2025, vide order dated 3.07.2025. Therefore, considering the facts before us, we do not find any infirmity in the order of ld. CIT (A), as ld. CIT(A) passed a very speaking and well reason order.

Kolkata, the 25th June, 2026. Sd/- Sd/- [Pradip Kumar Choubey] [Rajesh Kumar] Judicial Member Accountant Member

Dated: 25.06.2026. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches