NLM PROJECTS PRIVATE LIMITED,KOLKATA vs. DCIT, CENTRAL CIRCLE 3(4),, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No.2814 & 2815/Kol/2025 Assessment Year: 2012-13 NLM Projects Private Limited………………….………………………….Appellant 53C, Motilal Nehru Road, Sarat Bose Road, S.O., Kolkata- 700029 [PAN No. AADCN9271A] Vs. DCIT, Central Circle 3(4)……………..………………..…………….………... Respondent Aayakar Bhawan Poorva, 110, Shantipally, Kolkata- 700107. Appearances by: Miraj D. Shah, AR, appeared on behalf of the Appellant. Mongtinlen Haokit, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : June 09, 2026 Date of pronouncing the order : June 24 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: The present appeal has been preferred by the assessee against the order dated 14.10.2025& 15.10.2025 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 144 of the Income Tax Act (hereinafter referred to as the ‘Act’).

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13 3. The brief facts of the case of the assessee is that assessee being a company filed its return of income for the Assessment Year 2012-13 declaring total income of Rs. NIL. The case of the assessee was selected for scrutiny, notice u/s 143(2) was issued and notice u/s 142(1) has also been issued. In response to the notices, the AR of the assessee has appeared and filed details. As per the assessment order, the assessee company was incorporated on 23.03.2012 with an initial page up capital of Rs. 1,00,000/- against issue of 10,000/- shares of face value of Rs. 10 each. The company made further allotment and manages to raise additional capital of Rs. 2,40,000/- as against the issue of Rs. 24,000 shares (face value of Rs. 10/-) with premium of Rs. 1,17,60,000/- at Rs. 490/- per share, notice u/s 133(6) was issued to the subscriber companies. The Ld. AO finds that on perusal of the balancesheet of the companies, it appears that it had no track record or asset base with no visible source leading to the inference that the subscriber companies were incorporated having no visible business activity and creditworthiness for making the investment. Summon u/s 131 of the act was issued to the director for personal appearance that has not been complied as a result of which entire amount of Rs. 120,00,000/-

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13 which included Rs. 2,40,000/- share capital and Rs. 117,60,000/- of premium introduced was added as unexplained credit in the books of the assessee company and added to the total income u/s 68 of the Act.

Aggrieved by the said order, assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been dismissed. Being aggrieved by and dissatisfied the assessee preferred appeal before us.

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13 details and information furnished by the shareholders companies. The Ld. AR further submits that the transactions were made through banking channel and duly reflected in the banking statement of the companies.The companies have subscribed in shares of the assessee company and all the companies are assessed to Income Tax holding PAN. The Ld. AR further submits that there was no material or evidence available on the record to establish that the share capital along with premium was not genuine. Hence, disallowance made in this respect is bad in law and should be deleted. The Ld. AR placed reliance on the following decision of the Hon’ble High Court:-

i. Principal CIV vs Sreeleathers reported in 2022 (448) ITR 332 Kolkata. ii. PCIT vs. Jealous Commercial Private Limited (308 taxman 80) iii. PCIT vs. Balaka Vinimay Pvt Ltd

Contrary to that, the ld. DR supports the impugned order

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13 was no compliance u/s 131 of the IT Act. The Ld. CIT(A) in its order has also confirmed the order of the AO on the sole basis that the director of the companies did not appear in compliance to the notice u/s 131 of the Act. It is pertinent to mention here that in course of assessment proceeding assessee company had filed all the share capital, based on which the Ld. AO issued notice u/s 133(6) and in response to the said notices u/s 133(6), the information and details asked for were furnished along with the required documents. From the documents furnished by the assessee, it is evidence that companies were incorporated under companies Act. The transactions were made through banking channels and duly reflected and the bank statement of the companies. All the companies are assessed to income tax. The Ld. CIT(A) in its order has discussed the provisions of Section 68 and dismissed the appeal of the assessee by holding that summon u/s 131 was issued to the director of the assessee company for personal appearance but the assessee company did not comply with the same so identity of the subscriber companies remained unverifiable. In this context we have perusal the judgment of the Hon’ble High Court and find that in the case of Sreeleathers Hon’ble High Court has held thus:-

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13 "The documents annexed to the reply were classified under 3 categories namely: to establish the identity of the lender, to prove the genuineness of the transactions and to establish the creditworthiness of the lender. The assessing officer has brushed aside these documents and in a very casual manner has stated that mere filing PAN details, balance sheet does not absolve the assessee from his responsibility of proving the nature of transaction. There is no discussion by the assessing officer on the correctness of the stand taken by the assessee. Thus, going by the records placed by the assessee, it could be safely held that the assessee has discharged his initial burden and the burden shifts on the assessing officer to enquire further into the matter which he failed to do.

The Kolkata High Court further in the case of PCIT Vs. Naina Distributors Pvt. Ltd has also held thus:-

"After carefully considering the findings recorded by the Commissioner of Income Tax, (Appeals) 7 Kolkata (CITA) in his order dated 21.09.2020 and the findings recorded by the learned Tribunal we find that the entire matter is fully factual. The learned Tribunal has independently examined as to the genuinity of the transaction in the matter of raising share capital and the Tribunal 6

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13 noted that even during the assessment proceedings, the assessee has furnished afl details ill respect of the share capital and share premium raised by the assessee besides the details of the investors by their submission dated 9.6.2014 in reply to the notice issued by the Assessing Officer under Section 142 of the Act dated 5.5.2014. The Tribunal also noted that the assessee had produced all documents, disclosed the names and addresses and PAN Numbers of the investors, copies of the share allotment advice, copies of the share application form, bank statement, statement giving details of share application, money receipt during the year, copy of Form No.2 evidencing return of allotment and copy of Form No.5 for increase in various capital. Further the assessing officer has issued notice to the investors under Section 133(6) on 11.06.2014 for carrying out independent verification of the transaction and those investors duly responded to those notice and filed the requisite details such as the number of shares subscribed, ledger account, bank statement, explanation for source of funds, income tax returns and audited financial statements and also assessment order framed under Section 143(3) of the Act in all the cases. The Tribunal further noted that in spite of such being the factual position, the only reason for making the addition in the

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13 hands of the assessee the director of the assessee company did not respond to the summons issued by the assessing officer under Section 131 of the Act. The correctness of this was also considered by the learned Tribunal and it was held that non appearance of the director cannot be made a ground for addition in the hands of the assessee under Section 68 of the Act when other evidence relating to the raising of share capital qua the share subscriber were available on record as furnished by the assessee and also cross verified by the assessing officer pursuant to the enquiry conducted in response to the notices issued under Section 133(6) of the Act. The leamed Tribunal also referred to the decision of this Court in the case of Crystal Networks Pvt. Ltd. Vs. CIT reported in 353 ITR 171 (CAL).

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13 the Act is not legally tenable and accordingly, the same is hereby deleted.

As a result, both the appeals of the assessee are hereby allowed.

Kolkata, the 24th June, 2026.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member

Dated:. 24 .06. 2026. DC, PS

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

ITA No.2814 & 2815/Kol/2025 Assessment Year- 2012-13