DEEPSIKHA DISTRIBUTORS PVT. LTD.,,KOLKATA vs. ITO, WARD 6(1), KOLKATA, KOLKATA

ITA 2446/KOL/2026Status: DisposedITAT Kolkata07 October 2026AY 2012-20139 pages
AI SummaryAllowed

What were the facts?

The assessee, Deepsikha Distributors Pvt. Ltd., is in appeal against the order of the National Faceless Appeal Centre, Delhi, dated 23.06.2026, for Assessment Year 2012-13. The appeal challenges the confirmation of an addition of ₹1,15,00,000/- made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961, treating share capital/premium as unexplained cash credit. The assessee had initially filed a return showing income of ₹279/-, but the assessment was framed at ₹1,15,00,279/-. This is the second round of appeal before the Tribunal, with the issue having been previously restored to the AO. During the set-aside proceedings, the assessee provided details and evidence for the share capital/premium. The AO treated it as unexplained cash credit due to an unsatisfactory reply, despite the assessee furnishing details and evidence from share subscribers, including compliance with notices under Section 133(6) and summons under Section 131, though without personal appearance of directors.

What did the Tribunal hold?

The Tribunal held that the assessee had discharged its onus under Section 68 of the Income Tax Act, 1961. The Tribunal noted that in the set-aside proceedings, the assessee had provided comprehensive documentary evidence for the three subscribers, including bank statements, audited financials, PANs, addresses, certificates of incorporation, source of source, ITR acknowledgments, and director details. It was observed that the subscribers had complied with notices under Section 131 and Section 133(6) of the Act by filing all requested details and evidence. The Tribunal found that the AO's addition was made for the reason of non-compliance with Section 131 due to the absence of personal appearance of directors, which it considered insufficient when robust documentary evidence was provided and complied with. The Tribunal relied on the jurisdictional Calcutta High Court's decisions in PCIT vs. Bright Commodeal Pvt Ltd and PCIT vs. Shipra Enclave Pvt Ltd, which held that documented traceability through banking channels carries greater evidentiary weight than suspicion, and that the non-appearance of directors does not invalidate documented transactions, especially when entities are active taxpayers. The Tribunal concluded that the addition was not justified and directed the AO to delete it.

What were the issues?

1. Whether the addition of ₹1,15,00,000/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961, is justified when the assessee has provided documentary evidence regarding share subscribers, including their identity, creditworthiness, and genuineness of transactions, and complied with notices under Section 133(6) and summons under Section 131, despite the non-appearance of directors of the subscriber companies? Assessee's Contention: The assessee argued that it had discharged its onus under Section 68 by furnishing all necessary details and evidences for the share subscribers. Compliance with Section 133(6) notices and Section 131 summons, along with the fact that the subscriber companies were assessed under Section 143(3) for the relevant year, should be sufficient. The assessee relied on the decisions of the Hon'ble Calcutta High Court in PCIT vs. Bright Commodeal Pvt Ltd and PCIT vs. Shipra Enclave Pvt Ltd. Revenue's Contention: The Revenue contended that the assessee failed to discharge its onus under Section 68, as merely filing documents was not sufficient to prove the identity, creditworthiness, and genuineness of the transactions. The Revenue relied on the Supreme Court judgment in PCIT v. NRA Iron & Steel (P) Ltd. and argued that the AO was justified in looking behind the paper trail to ascertain the true creditworthiness and genuineness, especially given the non-appearance of directors.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(1),Section 143(3),Section 142(1),Section 131,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Manish Tiwari, AR
For Respondent: Shri Nilkantha Chakraborty, DR
Hearing: 22.09.2026Pronounced: 07.10.2026

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 23.06.2026 for the AY 2012-13. 2. The only issue raised in various grounds of appeal is against the order of ld. CIT (A) confirming the addition of ₹1,15,00,000/- as made by the ld. AO u/s 68 of the Act in respect of share capital/ share premium by treating the same as unexplained cash credit.

3.

The facts in brief are that the assessee filed the return of income on 08.01.2013, showing total income of ₹279/-. The Deepsikha Distributors Pvt. Ltd; A.Y. 2012-13 return was processed u/s 143(1) of the Act. The case of

The order continues below.

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