DAYALU FASHIONS PRIVATE LIMITED,. vs. ITO WARD -1(1), FBD, .

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI)

BEFORE YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER

PHYSICAL HEARING ITA No. 5743/DEL/2025 (A.Y. 2016-17)

Dayalu Fashions Private Limited, Vs ITO, C/o IPSO Legal H-35, Ist Floor, Ward-1(1), Jangpura Extension, New Delhi Faridabad PAN AAECD4435D

Appellant Respondent Assessee by Sh Rajiv Saxena, Advocate Ms Sumangla Saxena, Advocte and And Sh ShyamSundar, Advocate

Revenue by ShMahishGupta, Sr.DR Date of Hearing 03/02/2026 Date of Pronouncement 04/05/2026

ORDER PER KRINWANT SAHAY, AM : The present appeal is filed by the Assessee against the order

dt. 29.08.2025of Ld. Commissioner of Income Tax (Appeals)

National Faceless Appeal Centre (NFAC), Delhi for Assessment Year

2016-17.

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the Assessee filed a brief synopsis and argued on the line

of the synopsis filed before us, the relevant contents of

which are reproduced hereinunder:

“The captioned appeal was filed against the order passed by the Ld. CIT(A), NFAC u/s 250 Income Tax Act, 1961 on 29.08.2025. The only issue involved in the present case is that whether The Ld. CIT(A), NFAC was correct in confirming the addition made by Ld. AO u/s 68 of the Act amounting of Rs. 80,00,000/-, on account of share capital and share premium received by the assessee company, despite furnishing all the documentary evidence for establishing identity. creditworthiness of the investors and the genuineness of the transaction. Brief facts 1. The return of income was processed u/s 143(1) of the Act and subsequently the aforesaid case was selected for limited scrutiny under CASS to verify that whether the funds received in the form of share capital and share premium are from disclosed sources and have been correctly offered for tax. During the course of assessment proceeding various statutory notices were issued in response to which the assessee company furnished the requisite information to the best of its ability. 2. The assessee company before the lower authorities filed the relevant documents such as Certificate of Incorporation, MoA/AoA. Auditors

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report along with Balance sheet and profit and loss account, valuation report of shares, bank statements, bank ledger accounts. Further the certain documents which could not be filed during the course of assessment proceedings were filed during the course of appellate proceedings before the Ld. CIT(A). along with the application under Rule 46A of Income Tax Rules, 1962. All the aforesaid documents are forming part of the Paperbook filed beforethis Hon'ble Bench. 3. The Ld.AO even issued notice u/s 133(6) to the investor companies requiring them to furnish relevant information and confirm the investment made in the subscription of the shares in the assessee company. In response to the same, all three investor companies i.e.. M/s Goodluck Industries Ltd., M/s Pearl Multicon Pvt. Ltd. and M/s Rishi Credit and Industries Pvt. Ltd. confirmed the investment made in the assessee company and filed the relevant documents with Ld.AO as observed by Ld. AO at Page 2, Para 4 of its order by stating that" the information u/s 133(6) was sought from all the investors. The reply from the investors have been received except M/s Abhi Soap Pvt. Ltd..". However, ignoring the submissions made by the assessee and the information given by the investor companies. the Ld.AO made the addition of the entire share application received, to the income of theassessee and raised the doubts over the credibility and identity of the investors and genuineness of the transaction. 4. Aggrieved by the order of Ld. AO, an appeal was preferred before the Ld. CIT(A). The Ld. CIT(A), NFAC upheld the addition made by the Ld. AO for

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entire share application money and share premium received by the assessee company from investor companies. While dismissing the appeal of assessee Ld. CIT(A) did not accept the additional evidences which were filed in accordance with the provisions of Rule 46A of the Income Tax Rules, 1962 and further also dismissed the appeal of assessee on merits by stating that the appellant has not furnished any credible reason or explanation to rebut the categorical finding of the Ld. AO and mere reliance on filed papers without addressing the specific infirmities pointed out by the Ld. AO does not discharge the burden under section 68. Hence, aggrieved by the order of Ld. CIT(A) this appeal was preferred before this Hon'ble Bench. 5. It is further pertinent to mention that during the course of assessment proceeding, Ld. AO observed that assessee company has not furnished the requisite documents to prove the identity and creditworthiness of the investors and the genuineness of the transaction. Against this it is necessary to state that during the course of assessment proceeding few of the documents could not be uploaded properly on the E filing portal due to technical glitches and other reasons as cited in the application under Rule 46A of the Income Tax Rules 1961, and therefore assessee was left with no other option except to re-file the evidences to avoid any controversy. Additional evidences filed before the Ld. CIT(A) were not accepted as observed by Ld. CIT(A) at Para 14 of its order. Submissions : 7. It is respectfully submitted that Ld. CIT(A), NFAC while dismissing the appeal of assessee Ld.

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CIT(A) did not accept the additional evidences which were filed in accordance with the provisions of Rule 46A of the Income Tax Rules, 1962 and further also dismissed the appeal of assessee on merits by stating that the appellant has not furnished any credible reason or explanation to rebut the categorical finding of the Ld. AO and mere reliance on filed papers without addressing the specific infirmities pointed out by the Ld. AO does not discharge the burden under section 68. In doing so, the Ld. CIT(A) has, with due respect, failed to consider or appreciate the sufficient cause due to which the documents could not be filed before the Ld. AO and all the documents which were filed before him during the course of appellate proceedings. It is a settled principle of law that once the assessee furnishes documents to establish the identity and creditworthiness of the investor companies and the genuineness of the transactions, the burden shifts to the revenue authorities to bring on record any adverse material to rebut the same. 8. In the present case, neither the Ld. AO nor the Ld. CIT(A) has brought any contrary material or evidence on record to disprove the appellant's submissions. Accordingly, it is submitted that, upon perusal of the documents placed on record, comprising PAN details, ITR acknowledgments, bank statements, confirmation letters, valuation of shares as per the Rule 11UA(2) and other supporting evidences, no further compliance was required on the part of the appellant. The addition sustained under section 68 is, therefore, unjustified as the ingredients required u/s 68 of the Act i.e., identity, creditworthiness and genuineness of the transactions were fulfilled.

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authorities below.

Assessing Officer in the assessment order and the Ld.

CIT(A) in the appellate order. During proceedings before

us, the ld. Counsel for the Assessee submitted that the

Assessing Officer passed the assessment order ignoring

the submissions made by the Assessee and the

informationgiven by the investor companies. Even the Ld.

CIT(A) also did notaccept further additional evidences

although they were filed in accordance with rules as

mentioned by the Ld. Counsel for the Assessee.

submissions field by the Assessee havenot been

consideredproperly by the Assessing Officer in the

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assessment order and by the Ld. CIT(A) in the appellate

order. Therefore, we are inclined to remand this case back

to the file of the AO with a direction to consider the facts,

material and documentsbrought on record by the Assessee

before arriving at the final conclusion.Accordingly, this

case is remanded back to the file of the Assessing

Officerfor fresh adjudication for de novo order on merits,

after duly considering the submissions and evidences that

may be furnished by the Assessee, as well as the material

available on record. Needless to add, the Assessing Officer

shall afford adequate and reasonable opportunity of being

heard to the Assessee. The Assessee is also directed to

extend full cooperation in the remand proceedings. All

grounds and contentions available under law are kept

open. Ordered accordingly.

statistical purposes.

Order pronounced in the open court on 04th May,

2026

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Sd/- Sd/- (YOGESH KUMAR U.S.) (KRINWANT SAHAY) JUDICIAL MEMBER ACCOUNTANTMEMBER RKK/R.N Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI