INCOME TAX OFFICER, KOLKATA vs. M/S SUDHARSHAN CASTING PVT. LTD., KOLKATA

आयकर अपील�य अ�धकरण, कोलकाता पीठ “डी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH: KOLKATA �ी राजेशकुमार, लेखा सट�य एवं �ी �द�प कुमार चौबे, �या�यक सद�यके सम� [Before Shri Rajesh Kumar, Accountant Member&Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 2708/Kol/2025 Assessment Year: 2022-23 ITO, Ward-5(1), Kolkata Vs. M/s Sudharshan Casting Pvt. Ltd.

(PAN: AADCS 9429 B) ( अपीलाथ� ) Respondent / ��यथ� Appellant / Date of Hearing / सुनवाई 16.05.2026 क� �त�थ Date of Pronouncement/ 22.05.2026 आदेश उ�घोषणा क� �त�थ For the Appellant/ Shri Miraj D Shah, A.R �नधा�रती क� ओर से For the Respondent/ Shri Sanat Kumar Raha, CITDR राज�व क� ओर से

ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC , Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 10.09.2025 for the AY 2022-23. 2. The only issue raised by the revenue is against the order of Ld. CIT(A) deleting the addition of Rs. 42,21,34,500/- by admitting additional evidence u/s 46A of the Act as made by the AO u/s 68 of the Act .

2 I.T.A. No.2708/Kol/2025 Assessment Year: 2022-23 M/s Sudharshan Casting Pvt. Ltd. 3. Facts in brief are that the assessee filed return of income on 18.10.2022 declaring total income of Rs. 17,98,810/- which was processed u/s 143(1) of the Act. The case of the assessee was selected for scrutiny on account of large share premium received during the year and also taxable receipts from other sources shown in schedule TDS2 is higher than the receipts shown in ITR. Accordingly, statutory notice u/s 143(2) dated 02.06.2023 and notice u/s 142(1) along with questionnaire were issued. The assessee has uploaded on then portal the written submissions on 15.06.2023 explaining the large share premium received during the year and also the discrepancy in taxable receipts from other source. The AO thereafter taking into account the submissions of assessee again issued notice u/s 142(1) of the Act. In the meantime, the case was transferred to JAO and notice u/s 142(1) of the Act on 21.02.2024 calling for various details and evidences which were supplied by the assessee on 22.02.2024 by uploading the details online. The AO observed that the share premium has increased substantially during the year. The AO by comparing security share premium in AY 2022-23 vis-à-vis 2021-22 noted that there is an increase of Rs. 42,21,34,500/- during the year. On perusal of the submissions, the AO noted that the assessee has not clarified the increase in share capital / share premium and why taxable receipts shown in TDS2 is higher than the receipts shown in ITR. Finally the AO treated the increase in share premium as unexplained cash credit and added the same to the income of the assessee in the assessment framed u/s 143(3) of the Act dated 27.03.2024.

“4. Decision; The assessee company, is registered as a Non-Banking Financial Company (NBFC) vide certificate dated 05.02.2003 with the Reserve Bank of India under section 45-IA of the RBI Act, 1934. During the year the company merged with the following 15 companies, pursuant to a scheme of amalgamation dated 01.02.2022 duly approved by the National Company Law Tribunal (NCLT), Kolkata Bench; s. No. Name of the Amalgamating Company Securities Premium (Rs.)

3 I.T.A. No.2708/Kol/2025 Assessment Year: 2022-23 M/s Sudharshan Casting Pvt. Ltd. 1 Moontree Mercantile Pvt. Ltd. 16,02,65,000 2 RupdharaTradecom Pvt. Ltd. 42,14,000 3 Zoom Sales Pvt. Ltd. 4214000 4 Linkplan Marketing Pvt. Ltd. 77852500 5 Pawan Designs Pvt. Ltd. 1764000 6 Vishal Garments Pvt. Ltd. 1568000 7 RashdharaVinmay Pvt. Ltd. 69065000 8 Jagprem Advisory Pvt. Ltd. 1274000 9 Jhilmil Iron Traders Pvt. Ltd. 1862000 10 Standard Vincom Pvt. Ltd. 66785000 11 Jain Commonsale Pvt. Ltd. 1372000 12 Jain Commonsale Pvt. Ltd. 1372000 13 Everlasting Export Pvt. Ltd. 29743000 14 Refine Agencies Pvt. Ltd. 392000 15 Jolly Agencies Pvt. Ltd. 392000 TOTAL 422134500 The disputed increase in the Securities Premium Reserve has arisen solely due to amalgamation of above companies with the appellant company. The above amounts represent the existing securities premium balances as per the audited financial statements of each of the amalgamating companies prior to merger. The increase in securities premium is not a fresh infusion of funds or unexplained credit. It is the carry-forward of reserves of the amalgamating companies, which have become part of the assessee company by virtue of merger sanctioned by the NCLT. The scheme of amalgamation was approved under the Companies Act, and as such, all assets and liabilities, including reserves(such as securities premium), stood transferred to the assessee company. The appellant submitted audited financial statements of each of the amalgamating companies. 4.1 The Supreme Court has held in the case of NRA Iron and Steel [SLP (Civil) No. 29855 of 2018] that the practice of conversion of unaccounted money through the cloak of Share Capital/Premium must be subjected to careful scrutiny. This would be particularly so in the case of private placement of shares, where a higher onus is required to be placed on the Assessee since the information is within the personal knowledge of the Assessee. In that case, extensive field enquiries were conducted by the AO which revealed that in several cases the investor companies were found to be non-existent. However, in the instant case under consideration, the detailed accounts of all amalgamating companies are available and no further enquiries were conducted by the Assessing Officer. Hence, the decision of Delhi High Court in CIT v. Lovely Exports Pvt. Ltd [2008, 299 ITR 268, Delhi] is applicable in this case wherein it was held that, in the case of a company the following are the propositions of law under section 68. The assessee has to

4 I.T.A. No.2708/Kol/2025 Assessment Year: 2022-23 M/s Sudharshan Casting Pvt. Ltd. prima facie prove (1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable cannels; (3) the creditworthiness or financial strength of the creditor/subscriber; (4) if relevant details of the address of PAN identity of the creditor/subscriber along with copies of the shareholders register, share application forms, share transfer register, etc, it would constitute acceptable proof or acceptable explanation by the assessee; (5) the Department would not be justified in drawing an adverse inference only because the creditor/subscriber fails or neglects to respond to its notice; The Assessing Officer is duty bound to investigate the creditworthiness of the creditor/subscriber the genuineness of the transaction and the veracity of the repudiation.” The SLP filed against the judgment was dismissed. Hence it is held that the Securities Premium Reserve is a capital reserve, and its mere increase due to amalgamation cannot be treated as income under Section 68. As a result, the appeal is allowed.” 5. After hearing the rival contentions and perusing the material on record, we note that undisputedly during the year there was an increase in the share premium to the tune of Rs. 42,21,34,500/-. The assessee is registered as a Non-Banking Financial Company (NBFC) with RBI u/s 45-IA of the RBI Act, 1934. During the year, 15 companies were merged with assessee company in the scheme of amalgamation dated 01.02.2022 duly approved by the National Company Law Tribunal, Kolkata as stated hereinabove. We note that increase in share premium, security premium reserve has only because of merger of 15 entities with the assessee company. Thus, there is no fresh increase in the share premium during the year and therefore the same cannot be treated as unexplained cash credit. The Ld. CIT(A) has recorded all the facts in details. We also note that all these information were before the AO in the assessment proceedings as the assessee has filed all the details and evidences as called for by the AO on the portal. We observe from the audited accounts that in Note no. 20.26 the fact of merger was adequately mentioned that 15 companies were merged with the assessee company for the sake of ready reference the same is extracted below:

“ 20.26. Compliance with approved Scheme(s) of Arrangements: A scheme of Arrangements has been approved by the Hon’ble National Company Law Tribunal (NCLT), Kolkata Bench in terms of Sections 230 to 232 of the Companies Act, 2013, in connection with the amalgamation of companies prescribed in Annexure-A (Transferror Company) with Shree Sudharshan Castings Pvt. Ltd. (Tranferee Company) which was approved by NCLT vide its order dated 12.01.2022. The effect of the Scheme of Arrangement in the books of accounts is in accordance with the accounting standards prescribed under Section 133 of the Companies Act, 2013.

5 I.T.A. No.2708/Kol/2025 Assessment Year: 2022-23 M/s Sudharshan Casting Pvt. Ltd.

Annexure: A Details of companies amalgamated with (Transferor company)

In view of the above facts, we are of the view the order passed by the Ld. CIT(A) is a very reasoned and correct order taking into account all the aspect of the matter and therefore it does not require our interference at all. Consequently, we uphold the order of Ld. CIT(A) by dismissing the appeal of the revenue. We also note that there is no additional evidences filed by the assessee and admitted by the Ld. CIT(A) while deciding this issue and all the evidences were available before the AO in the assessment proceedings. Therefore, we do not find any merit in the grounds raised by the assessee that additional evidences were admitted u/s 46A and accordingly the plea of the revenue is also dismissed. In the result, the appeal of the revenue is dismissed. 6. Order is pronounced in the open court on 22nd May, 2026

Sd/- Sd/- (Pradip Kumar Choubey /�द�प कुमार चौबे) (Rajesh Kumar/राजेश कुमार) Judicial Member/�या�यक सद�य Accountant Member/लेखा सद�य Dated: 22nd May, 2026 SM, Sr. PS

6 I.T.A. No.2708/Kol/2025 Assessment Year: 2022-23 M/s Sudharshan Casting Pvt. Ltd.

Copy of the order forwarded to: 1. Appellant- ITO, Ward-5(1), Kolkata 2. Respondent – M/s Sudharshan Casting Pvt. Ltd., 9/12, Lal Bazar Street, Block E, 2nd Floor, Kolkata-700001 3. Ld. CIT(A)- NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)