SUNIL TEXFAB PRIVATE LIMITED,SURAT vs. SURAT.ITO2.1.3, WARD 2(1)(3), SURAT

आयकर अपीलीय अधिकरण, सूरत न्यायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.111/SRT/2026 Assessment Year: 2012-13 Sunil Texfab Pvt. Ltd., ITO, Ward-2(1)(3), 532-533, Harikripa Surat Market, बनाम/ Ring Road, Vs. Surat (Assessee/Appellant) (Revenue/Respondent) PAN: AAECS2394E Assessee by Shri Rasesh Shah, CA Revenue by Shri Ashish Kumar, Sr. DR Date of Hearing 30.07.2026 Date of Pronouncement 27.10.2026 आदेश / O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by the order of first appeal dated 30.11.2025 passed by learned Commissioner of Income-Tax (Appeals)-National Faceless Appeal Centre, Delhi [“Ld. CIT(A)”], which in turn arises out of the assessment-order dated 30.03.2015 passed by learned Income-tax Officer, Ward 2(1)(3), Surat [“Ld. AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment- Year [“AY”] 2012-13, the assessee has filed this appeal.

The background facts leading to present appeal are as under: 2.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (i) The assessee is a private limited company engaged in the business of art silk cloth. For AY 2012-13 under consideration, the assessee filed its return of income declaring total income of Rs. 7,91,680/-. The case was selected for scrutiny and notices u/s 143(2) and 142(1) were issued.

(ii) During the year, the assessee issued shares and received Rs. 5,80,000/- towards share capital and Rs. 1,68,20,000/- towards share premium, aggregating to Rs. 1,74,00,000/-, from the following seven investors:

Sr. No. Name of investor Amount (Rs.) 1 Amrapali Devcon Pvt. Ltd. 42,00,000/- 2 Amrapali Metals Pvt. Ltd. 63,00,000/- 3 Brightway Tradelink Pvt. Ltd. 36,00,000/- 4 Gandheshwari Tracon Pvt. Ltd. 3,00,000/- 5 Rakesh Ishwardas Jain (individual) 19,50,000/- 6 Skytech Infracon Pvt. Ltd. 1,50,000/- 7 Starline Dealcom Pvt. Ltd. 9,00,000/- Total 1,74,00,000/-

(iii) The Ld. AO asked the assessee to explain those receipts and for this purpose issued notices u/s 142(1), show-cause notices, etc. In response, the assessee filed replies, details and documents. The Ld. AO also took actions u/s 133(6) and 131 for making enquiries.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd Ultimately, the Ld. AO treated the receipts from investors as unexplained cash credits and made addition of Rs. 1,74,00,000/- u/s 68.

(iv) Aggrieved, the assessee carried matter in first-appeal. The Ld. CIT(A) called for remand reports u/s 250(4). The Ld. AO submitted reports dated 06.09.2019 and 25.10.2023. The assessee filed its rejoinder dated 10.05.2024. Ultimately, by impugned order, the Ld. CIT(A) upheld the addition and dismissed the appeal.

Still dis-satisfied, the assessee has come in present appeal before us. (v)

The assessee has raised following grounds: 3.

“1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in making addition of Rs. 1,74,00,000/- u/s. 68 of I.T Act on account of bogus share application & share premium. 2. It is therefore prayed that assessment may be quashed and/or addition made by assessing officer and confirmed by CIT(A) may please be deleted.” 4. Thus, the limited grievance of assessee before us is the confirmation by Ld. CIT(A) of the addition of Rs. 1,74,00,000/- u/s 68 on account of unexplained share application and premium.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd 6. The Ld. AO has effectively dealt this issue in Para No. 8 to 9 / Page No. 13 to 32 of assessment-order. In Para 8 of assessment-order, the Ld. AO has started discussions with the noting that the assessee has shown to have received share premium @ Rs. 290/- per share for share of Rs. 10/-, which is unreliable and clearly shows that the investment cannot be genuine. Then, the Ld. AO has discussed the concepts of share capital and premium, the high scale of premium, the provision of section 78(2) of Companies Act, the provisions of section 68 of the Act, certain legal precedents, etc. Thereafter, on Pages 23 to 32 of assessment-order, the Ld. AO has narrated the observations and concluded that the assessee failed to prove identity, creditworthiness and genuineness of the investors. Precisely stated, the Ld. AO has made following observations:

(i) That, out of notices dated 02.01.2015 issued u/s 133(6) to all seven investors, four notices were returned unserved with the remark “Left / Unknown Address”.

(ii) That, the assessee was given two more opportunities vide order sheet entry dated 27.02.2015 and show-cause notice dated 20.03.2015 but the assessee has not made any effort to help the department in examination or production of the investors. The assessee’s non-co- operative attitude shows that the receipts were not genuine.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (iii) That, mere filing of PAN, ROC details, etc. of investors is not sufficient. The identity has to be provided by the place of work, business activity and recognition of investors in the eyes of public. The investor companies had no assets, business or meaningful income and their balance sheets were unreliable. The investors do not have fixed assets, rent and electricity expenses.

(iv) That, a commission u/s 131(1)(d) was issued to the Investigation Wing, Kolkata and the departmental inspectors were also deputed. As per reports submitted, the investors were not operational at the given addresses.

(v) That, all investor companies were operated by entry operators in Kolkata and in their sworn statements, the entry operators have accepted that they controlled huge number of companies either in their own name or in the name of various dummy directors.

(vi) That, the bank accounts of the investors showed credits on the same day or one or two days before issue of cheques/RTGS/NEFT to the assessee with meagre balances otherwise, which, according to the Ld. AO, established a nexus between the deposits and the amounts routed to the assessee.

(vii) That, the premium of Rs. 290/- per share of Rs. 10/- was not supported by any valuation report or basis. The book value of

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd assessee-company just prior to the issue of shares was below Rs. 290/-.

(viii) That, no dividend was ever paid and the return on investment was not commercially prudent.

(ix) That, the director of assessee-company evaded the proceedings despite two opportunities vide order sheet noting dated 27.02.2015 and 20.03.2015 and show-cause notice dated 20.03.2015.

(x) That, the assessee has used the money received on premium even on the date of receipt itself even before allotment; hence the provision of section 78(2) of Companies Act is not complied with.

“7. Adjudication 7.1. The appellant is a private limited company engaged in the business of art silk cloth. For the year under appeal, the appellant filed its return of income on 14.09.2012 declaring total income of Rs. 7,91,680. The return was selected for scrutiny and statutory notices under sections 143(2) and 142(1) were issued from time to time. 7.2. It is seen from the assessment order that during the relevant previous year, the appellant had issued shares, to seven entities and raised capital of Rs. 5,80,000 along with share premium of Rs. 1,68,20,000, aggregating to Rs. 1,74,00,000. These investors were the following: (1) Amrapali Devcon Pvt. Ltd., (2) Amrapali Metals Pvt. Ltd., (3) Brightway Tradelink Pvt. Ltd., (4) Gandheshwari Tracon Pvt. Ltd., (5) Rakesh Ishwardas Jain,

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (6) Skytech Infracon Pvt. Ltd., and (7) Starline Dealcom Pvt. Ltd.

7.3. The Assessing Officer (AO) issued notices under section 133(6) to the investor companies. The appellant contends that the initial notices were returned unserved at the old address but, upon being furnished with the updated addresses, the AO re-issued notices on 02.01.2015 which were duly served and complied with. The paper book filed before me includes copies of the replies furnished by several of the investors. 7.4. During assessment, summons under section 131 were also issued to the director of the appellant. The appellant claims that the director appeared and furnished details on 24.02.2015, 10.03.2015 and 12.03.2015. Thereafter, a show cause notice dated 20.03.2015 was issued requiring compliance on or before 25.03.2015. The appellant filed a detailed reply on 27.03.2015. 7.5. The AO, however, held that the appellant had failed to satisfactorily establish the identity, creditworthiness and genuineness of the seven share investors and concluded that the companies were in the nature of accommodation entry providers. The AO made an addition of Rs. 1,74,00,000 under section 68 and completed the assessment under section 143(3) on 30.03.2015. 7.6. Grounds of Appeal The appellant has raised only one substantive ground in Form 35, namely that the AO erred in making the addition of Rs. 1,74,00,000 under section 68 on account of share capital and share premium. No other issue arises in this appeal. 7.7. Submissions Before the CIT(A) and Paper Book: During appellate proceedings, the appellant filed a detailed written submission accompanied by a comprehensive paper book. The paper book includes: copies of share application forms, • board resolutions, • PAN and ITR acknowledgements of investor companies, • audited financial statements of investor companies, • bank statements of investors showing payments to the appellant, • ROC filing (Form-2) for return of allotment, • ledger copies of share capital and share premium accounts, • • copies of replies given by investors to notices under section 133(6) during assessment. The appellant submits that all documentary evidence was duly filed before the AO and that the AO failed to appreciate the same.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd Proceedings Under Section 250(4) (Remand Directions) 7.8. On perusal of the appeal record, my predecessor(s) considered it necessary to call for verification under section 250(4). Accordingly, vide letter dated 13.08.2019, the AO was directed to examine the principal officers of the share subscribing companies and verify the documents submitted by the appellant. The principal officers of the investor companies were directed to appear before the AO on 05.09.2019, with liberty to seek an alternative date if the given date was inconvenient. 7.9. The AO issued corresponding notices to the investors and the appellant on 20.08.2019. According to the AO, no one attended on 05.09.2019 and no written submission or adjournment request was filed. The AO submitted a report dated 06.09.2019 to that effect. 7.10. The appellant, however, submitted (vide letter dated 13.08.2019, placed in the paper book) that it had communicated the CIT(A)’s directions to all investor companies, advising them to appear before the AO or to seek a convenient date. Copies of its communications are part of the appellate record. Second Remand (NFAC) and Remand Report dated 25.10.2023 7.11. In view of the transition to the National Faceless Appeal Centre (NFAC), a fresh remand was called for. The AO issued another notice dated 04.10.2023 asking the appellant to furnish any additional evidence to support the genuineness of the share capital and premium. 7.12. The remand report dated 25.10.2023 states: • The appellant’s Chief Financial Officer appeared and submitted the same set of documents that were earlier filed before the CIT(A). No new or additional evidence was furnished. • • None of the principal officers/directors of the investor companies appeared before the AO in either the 2019 or 2023 remand proceedings. • The AO reiterated the conclusion that the identity, creditworthiness and genuineness of the investors were not established and recommended that the appeal be dismissed. Reply to Remand Report (Appellant’s Rejoinder) 7.13. The appellant filed a rejoinder dated 10.05.2024, placed on record. In the rejoinder, the appellant submits: • That all documents requisitioned by the AO in the remand, such as share certificates, bank statements, resolutions, return of allotment, and the earlier paper book, were duly furnished vide letters dated 11.10.2023 and 13.10.2023.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd • That the AO incorrectly stated that no new evidence was filed, whereas the AO had in fact asked only for supporting documents already submitted before the CIT(A). • That the AO’s remand report merely repeats the findings of the assessment order without discussing or rebutting the evidence placed on record. • That non-appearance of directors of investing companies cannot outweigh documentary evidence of identity (PAN, ITR), creditworthiness (audited balance sheets), and genuineness (bank transactions). That the appeal be allowed on the basis of the evidence on record. • 7.14. The above constitutes the complete procedural history of the appeal, including the assessment proceedings, the appellant’s submissions, the directions under section 250(4), the AO’s remand reports dated 06.09.2019 and 25.10.2023, and the appellant’s reply thereto. 7.15. The matter is now required to be adjudicated on merits in the subsequent paragraphs. 7.16. I have gone through the paper book containing the evidences filed by the appellant to prove the pre-requisites under section 68 i.e. identity and creditworthiness of the creditors and genuineness of the transactions. The table below contains a distillation of the findings from these documents. XXX (Table of investors .. not given for brevity) 7.17. Taken together an appraisal of the material placed on record, certain common features emerge across all six subscriber companies. All the companies are based in Kolkata, and five of them share the same address in Howrah, which itself warrants closer scrutiny. The financial statements of these entities display disproportionately heavy balance sheets with negligible taxable income. They consistently disclose large non-current investments, predominantly in the form of shares of other closely-held or obscure companies. 7.18. Such balance-sheet compositions are indicative of funds being rotated among interconnected entities, typically through inflated share premium accounts, to create an artificial appearance of net worth without any corresponding real business activity. Their operational revenue streams are indeterminate and obscure, and where revenue is shown, it is commensurate or almost equal to the purchase of shares alone, resulting in minuscule or near-zero taxable income. This stark mismatch between substantial balance- sheet size and insignificant income generation is a recognised hallmark of shell or layering entities used for accommodation entry operations. 7.19. The bank statements further reinforce this pattern. In each case, there is a spike in banking activity immediately proximate to the date of the investment in the appellant company, with single or concentrated high-value credits followed by immediate debits representing the investment amount.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd Such transaction sequencing - where funds appear temporarily in the account and are quickly siphoned out, is stereotypical of accommodation entry layering rather than genuine investment behaviour. 7.20. The notes to accounts of several subscribers reflect extensive holdings of quoted and unquoted shares, which, in the absence of any meaningful operating income, raises legitimate questions about the source of the funds deployed. This financial architecture, repeated uniformly across all the subscribers, is highly indicative of the well-documented modus operandi of Kolkata-based accommodation entry providers, particularly during the period relevant to this appeal, when such entities were known to have proliferated. 7.21. Viewed collectively, these recurring patterns across all investor entities carry significant indications of non-genuine investment activity and align closely with the established characteristics of shell companies engaged in providing accommodation entries. 7.22. In view of the detailed discussion made in the foregoing paragraphs, and after considering the assessment order, the submissions of the appellant, the material placed in the paper book, the remand report of the Assessing Officer dated 25.10.2023, and the rejoinder of the appellant dated 10.05.2024, I adjudicate the sole ground raised in this appeal as under. 7.23. The only issue involved in this appeal pertains to the addition of Rs. 1,74,00,000 made by the Assessing Officer under section 68 of the Income-tax Act, 1961, on account of share capital and share premium received by the appellant from seven investor entities. After examining the facts on record, the documentary evidence filed by the appellant, the findings of the Assessing Officer, and the material brought out during remand proceedings, the addition has been adjudicated in the preceding paragraphs. In view of my observations contained in the table above and the discussion in Para 17 to 21 the addition of Rs. 1,74,00,000 under section 68 is upheld. The appeal is thus dismissed.” 8. During hearing before us, the Ld. AR for assessee filed a Written- Submission and made oral submissions at length.

(i) Initial burden discharged - That, during assessment-proceeding, the Ld. AO issued notices u/s 142(1) and in response, the assessee filed a

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd complete reply dated 10.12.2014 to AO giving all details and documents, copy of assessee’s reply letter is placed at Page 38 of Paper-Book. Drawing our attention to same, Ld. AR submitted that the assessee filed contemporary details and documents for each of the investor, namely (a) chart of the shares issued during the year to different investors giving complete details; (b) share premium account; (c) complete documents of each investor such as contra account confirmation, acknowledgement of income-tax return, computation of total income, balance sheet and bank statement highlighting the investment transactions made in assessee’s shares; (d) board resolutions under Companies Act; (e) share allotment return [Form No. 2] filed by assessee with the Registrar of Companies under Companies Act. Further, in the very same letter, the assessee also informed these specific aspects to Ld. AO, namely (a) the share premium was decided by taking into consideration business profitability, market conditions, future expansion, etc. and (b) the amounts received from investors was utilized in business of assessee. Further, Ld. AR submitted, the assessee also filed the trade licences issued by Kolkata Municipal Corporation to the investor companies. Notably, the assessee also informed the factual aspect of filing these details/documents to Ld. CIT(A) in a letter filed in first appellate proceedings (Page 185 of Paper-Book) and the Ld. CIT(A) has also acknowledged the same in Para 7.7 of impugned order of first-appeal.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd However, the Ld. AO has made an incorrect observation on Page 31 of assessment-order thus: “However, assessee has not submitted these details till now and has not provided any evidence which can justify the whole process of share premium receipt.” Ld. AR contended that by filing a detailed reply supported by documents, the assessee had discharged initial burden cast upon it under the law. Thereafter, the burden shifted onto the revenue. The revenue has not rebutted assessee’s evidences and simply relied upon the suspicion or the alleged modus operandi of Kolkata-based companies to which the assessee was neither a party nor had any connection.

(ii) Independent compliance by investors - That, it is true that the initial notices issued by AO u/s 133(6) to the investors were returned unserved but subsequently the Ld. AO issued new notices dated 02.01.2015 on the updated addresses supplied by assessee and those notices were duly served and the investors directly replied to Ld. AO. Copies of reply-letters directly filed by the investors are placed in Paper-Book at Pages 89, 108, 129, 146, 163, 182. The assessee also informed this correct fact of filing details/documents by investors to the Ld. CIT(A) in a letter filed in first appellate proceedings (Page 186 of Paper-Book) and the Ld. CIT(A) has also acknowledged the same in Para 7.3 of impugned order of first-appeal. However, the Ld. AO has recorded incomplete/contradictory findings in assessment-order

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd which is evident from the fact that at some places in assessment- order, the Ld. AO has noted that four of the seven notices were returned unserved but at one place, on Page No. 23 of assessment- order, the Ld. AO has noted thus: “It is also important to mention here that although the notices u/s 133(6) has been served in case of all investors on the same addresses while they did not furnish the details as asked for.”

(iii) Non-production of investors not fatal - That, the assessee has provided complete documents including PANs and income-tax returns of the investors. Further, the assessee also supplied updated latest addresses of the investors to which the AO served notices u/s 133(6) and those notices were directly responded by investors. Therefore, in the situation, the assessee has done all possible efforts. Beyond this, the assessee cannot have any control over the investors. The assessee cannot be expected to enforce attendance of the investors located at Kolkata.

(iv) Presence of assessee’s director - That, the Ld. AO issued a summon u/s 131 dated 06.02.2015 requiring the presence of principal director of assessee. In response to same, the assessee’s “Shri Shanti Lal Begani” alongwith authorized representative appeared before AO on 24.02.2015 and filed necessary details. Thereafter, again on 10.03.2015, the director appeared and filed details. These facts of

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd director’s presence were duly informed to the Ld. AO in Point No. 2 of the letter dated 22.03.2025 filed by assessee on 25.03.2015 to AO himself, copy of assessee’s letter is available at Page No. 53-57 of Paper-Book and also re-produced by Ld. AO in Para 7 of assessment- order. Further, this correct position was also informed to Ld. CIT(A) during first appellate proceedings and the Ld. CIT(A) has acknowledged the same in Para 7.4 of impugned order of first-appeal. Thus, Ld. AR contended that despite presence given by assessee’s director, the Ld. AO chose not to record statements. Moreover, despite being pointed out about directors’ presence in aforesaid letter dated 22.03.2015 filed on 25.03.2015, the same was not dealt with by AO in assessment-order.

(v) Adverse material not supplied to assessee - That, the impugned addition primarily rests on the reports of Investigation Wing, Kolkata; reports of inspectors and alleged statements of Shri Rajkumar Tharad and Shri Manoharlal Nagalia (alleged entry operators). However, neither the commissions issued u/s 131(1)(d) nor the reports submitted in consequence thereof and nor the alleged statements of entry operators were provided to assessee. On Page No. 24 of assessment-order, the Ld. AO has mentioned thus: “However, the Inspector’s report in respect of all companies and their premises is discussed under show-cause notice”. But the show-cause notice dated

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd 20.03.2015 issued by AO is re-produced in Para 7 / Pages 4 to 10 of assessment-order and there is no discussion of Inspector’s Report therein. The Ld. AO has only mentioned that thus in Point No. 3.3 of show-cause notice / Page No. 6 of assessment-order: “The crux of the reports is given below: In case of the companies at Sr. No. (1) to (4), (6) & (7), it is found that none of the companies were operational at the given addresses. They were entry providing companies, which issue cheques against cash for a consideration.” The assessee is not at all aware as to from whom and how the enquiries were made and whether they were correctly, reliably and in accordance with law, made or not.

(vi) No cross-examination opportunity to assessee – That, the Ld. AO has not given any cross-examination of third parties whose statements and reports have been relied.

(vii) No evidence of return of money - That, there is no material to show that the assessee's own money was routed back as the Ld. AO did not identify any cash withdrawal or payment by the assessee or its directors, any intermediary, any bank account, any implicating statement or any seized material. The assessee had pointed out that no cash was deposited in the investors' bank accounts and the Ld. AO has not given any date, amount, account or name relating to alleged cash deposit.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (viii) Creditworthiness depends upon worth of the investors, not income of investors - That, the creditworthiness of the investors is to be seen from the audited balance sheet and funds available with the investors, and not merely from taxable income. The Ld. CIT(A) has not shown that the audited financial statements were false. The table of the Ld. CIT(A), in Para 7.16 of impugned order of first-appeal, itself records substantial networth/reserves of the investors.

(ix) Preceding credits in the a/cs of investors cannot be viewed adversely - That, the credits received by investors in their bank a/cs shortly before the investments do not by themselves prove an accommodation entry. Further, the source of those preceding credits was never investigated by AO. Moreover, the proviso to section 68 which requires proof of the source of source was not applicable to AY 2012-13 under consideration.

(x) Non-payment of dividend and the amount of premium cannot be viewed adversely - That, the absence of dividend payment does not make an investment non-genuine. Further, the premium of Rs. 290/- was charged due to profitability, growth, market conditions and expansion of business of assessee. The Ld. AO has recorded the book value of assessee at about Rs. 290/-. Moreover, the section 56(2)(viib) in the Act was inserted w.e.f. 01.04.2013 and does not apply to AY 2012-13 under consideration.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (xi) Section 78(2) of Companies Act - That, there is no violation of section 78(2) of the Companies Act and such violation, even if there be, is irrelevant to section 68 of the Act.

(xii) Order of CIT(A) is not meritorious - That, the Ld. CIT(A) has proceeded on generalisation of Kolkata-based companies. A company is not a shell merely because it is incorporated in Kolkata, shares an address, has low taxable income, makes investments, or has credits and debits in its bank account. The principle of human probabilities cannot be invoked to disprove the documentary evidences. None of the documents is found forged, nor any proceeding is shown against the investors and their assessments are not shown to be annulled or made/modified to give any conclusion against assessee.

(i) 1st Remand proceeding - The CIT(A) directed the AO to examine the principal officers of the investor companies and in pursuance thereof,

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd the Ld. AO issued notice dated 13.08.2019 (notice is re-produced in Point No. 5 of 2nd Remand Report – Refer Page 206-207 of Paper-Book) calling the presence of principal officers of the share applicant/ investor companies on 05.09.2019. The assessee took a prompt step and communicated to all investor companies for remaining present before AO on the specified date of 05.09.2019. The assessee also informed the details of this step taken by it in Point No. 1 of the letter filed to Ld. CIT(A) during first appellate proceedings, copy of assessee’s letter is placed at Page 198 of Paper-Book. Further, vide Point No. 2 of the very same letter, the assessee also informed to Ld. CIT(A) that the investors themselves responded to the inquiry letters issued by AO and filed their replies directly to the AO. The copies of the reply-letters filed by investors, were also submitted to Ld. CIT(A). Despite these steps by assessee, if the investors did not appear before AO, the assessee cannot be penalized.

(ii) 2nd Remand proceeding – The AO submitted report dated 25.10.2023, copy at Pages 204 to 207 of Paper-Book. Referring to the Point No. 2 of very same notice dated 13.08.2019 as aforesaid, Ld. AR pointed out that the Ld. AO gave direction to produce the principal officers of the share applicant/investor companies on 05.09.2019. But in next Para 5.1 of the report, the Ld. AO has made adverse

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd observation about non-presence of the “Principal Officer of assessee”. This is contradictory.

(iii) During 2nd Remand proceeding, the assessee filed a reply dated 11.10.2023 with a paper-book running over 177 pages to the Ld. AO containing all details and evidences in support of share application and share premium received. Copy of assessee’s letter duly acknowledged by Ld. AO’s office is placed at Page 201 of Paper-Book. However, in the Remand Report, the Ld. AO has merely made an objection to the Ld. CIT(A) and not given any observation on the evidences furnished by assessee.

Thus, Ld. AR contended that in 1st and 2nd remand proceedings, the assessee communicated with the principal officers of the investors; asked them to appear before AO; communicated the Ld. AO about steps taken; furnished all documents to Ld. AO, etc. Therefore, there was no lack of co- operation by assessee. Further, Ld. AR contended, the Ld. AO, despite powers u/s 131 and 133(6), did not carry the inquiry to its conclusion and this cannot be converted into an adverse inference.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (i) ITAT Surat - The Deputy Commissioner of Income-tax Vs. M/s Novacid Pvt. Ltd., ITA No. 1486/Ahd/2017 - AY 2012-13:

In this decision, the co-ordinate bench has upheld the deletion of additions by Ld. CIT(A) in respect of share applications and premium received from (a) M/s Amrapali Devcon Private Ltd., (b) M/s Amrapali Metal Pvt. Ltd. and (c) M/s Gandheswari Developers Pvt. Ltd. and dismissed revenue’s appeals. The relevant paras of order are re- produced below:

“3. During the course of scrutiny assessment proceedings, it was observed by assessing officer that the assessee company had received substantial amount of share application money during the year under consideration towards share capital and share premium. The following table depicts a bird's eye view of the receipts by the assessee towards share capital and share premium. XXX (table not produced for brevity) In questionnaire, vide notice of assessing officer, dated 07.11.2014 under section 142(1) of the Income Tax Act, the assessee was required to furnish details and supporting material to establish the identity, genuineness of source and creditworthiness in respect of addition to share capital and receipt of share premium during the year. However, there was no specific compliance in this regard from the assessee side. Then after, the assessing officer has issued notices under section 133(6) of the Act, who had paid share application money to the assessee company towards share capital and share premium. Details relating to service of notices under section 133(6) and gist of responses from the said investors is depicted in the following table:

Name of Investor Whether notice u/s 133(6) Whether reply to notice served or not u/s 133(6) received or not AMRAPALI CREATION PVT LTD Served Yes AMRAPALI DEVCON PVT LTD Served Yes AMRAPALI METAL PVT LTD Served Yes GANDHESHWARI DEVELOPERS Served Yes PVT LTD

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd During the assessment proceedings, a commission under section 131(1)(d) of the Income Tax Act was issued by the assessing officer to the Investigation Wing. Kolkata to verify the Identity, genuineness and creditworthiness of the investors of the assessee company. On the basis of commission issued u/s 131(1)(d) of the Income Tax Act, the enquiries were conducted which was brought to the notice of the assessee. In the case of M/s. Amrapali Creation Pvt. Ltd and M/s Gandeshwari Developers Pvt. Ltd. enquiries were carried out by the Investigation Wing, Kolkata to verify the Identity, genuineness and creditworthiness of the investors of the assessee company. In this connection summons were issued by the DDIT(Inv.), Kolkata to the said investors, however the summons could not be served, as the above companies is not found at the given addresses. Inspector of Investigation Wing deputed for verification in the cases of M/s Amrapali Creation Pvt. Ltd and M/s Gandeshwari Developers Pvt. Ltd, has reported that he could not find the said companies at the given addresses. The DDIT(Inv.) Kolkata has submitted in his report that as the above company is not found in the given address, so it can be presumed that above company may not exists and the investment made in the form of share application/capital and premium created suspicion. In the light of the above, the assessee was required to produce the directors of the above stated investor company before the assessing officer for cross examination and recording of statements with regard to the share capital and share premium receipts. The assessing officer also allowed alternative to the assessee to show cause why the amounts of share capital and share premium should not be treated as unexplained cash credits and why the same should not be added back to the total income of the assessee company for the A.Y 2012-13. In response, the assessee submitted bank statement, PAN number, name address, ROC details, Balance Sheet, Profit and loss account and other details of share subscribing companies. However, the assessing officer has rejected the contention of the assessee and held that assessee has failed to explain creditworthiness, identity and genuineness of the share subscribing companies therefore, the assessing officer made addition of Rs.2,00,00,000/- under section 68 of the Act. XXX 16. We note that the identity of the share applicants is established by fact that they have given confirmations, filed copy of share application, copy of income tax returns, copy of bank statements and from the fact that notices issued u/s 133 (6) by the Id AO were served and they were also complied with. The address proof filed in the form of Trade license issued by Municipal Corporation of Kolkata to the share applicants before the Ld. assessing officer stand un-refuted. It is also seen from the website of Ministry of Corporate Affairs that the said share applicant-companies are active and are filing their annual returns regularly. The credibility of the share applicants are established by fact that these companies had the required funds in their balance sheets, and no adverse findings are made regarding "source "of funds by the Ld. Assessing Officer. It is also seen that all the payments are made through bank accounts and there are no cash deposits in any of the bank accounts. The said transactions are entered in the books by both parties and

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd the shares have been allotted following due procedure and requisite compliances are filed with Registrar of Companies (ROC). It is seen that the share applicants continue to hold the said shares and there is no buy back in later years, which is a tell tale sign of bogus transactions. From these facts, the genuineness of transaction is established. It is also seen that these companies are not part of accommodation entry providers that have been searched by the Investigation Wing of the Income Tax department. The assessment order does not link the share applicant companies to any accommodation entry operator. So far the assessee company is concerned, we note that it is engaged in the business of manufacturing and job work of disperse dyes and solvent. The turnover of the assessee company for the year is Rs. 38.85 crore as against turnover of Rs. 32.55 crore and Rs. 32.18 crore for the preceding two years. Various direct and indirect expenses as debited in the Profit and Loss Account have been claimed. The gross profit for the year of the assessee company is Rs. 3.15 crore as against Rs. 2.77 crore and Rs. 2.73 crore for the preceding two years. The net profit of the assessee company, for the year is Rs.15.26 lacs as against Rs. 12.73 lacs and Rs. 11.94 lacs for the preceding two years. These facts clearly show that assessee-company is a profit making company; it is not a paper company or accommodation entry provider company. Thus, assessee company has proved identity, creditworthiness and genuineness of share applicant companies, therefore, we are of the view that addition made under section 68 of Rs.2,00,00,000/- on account of share application money in the instant case cannot be sustained and thus ld. CIT(A) has rightly deleted the addition of Rs. 2,00,00,000/-. That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid addition. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 17. In the result, the appeal filed by the Revenue is dismissed.”

(ii) ITAT Surat - Shalu Dyeing PTG Mills Pvt. Ltd. Vs. The DCIT, ITA No. 118/SRT/2023 - AY 2012-13:

In this decision, the co-ordinate bench has deleted the additions made by AO qua the funds received from (a) M/s Amrapali Metal Pvt. Ltd. and (b) M/s Gandheswari Developers.

(iii) ITAT, Kolkata - ITO Vs. Brightway Tradelink Pvt. Ltd., ITA No. 1157/Kol/2015 - AY 2012-13:

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd The ITAT has decided Revenue’s appeal against one of the investors, namely “M/s Brightway Tradelink Pvt. Ltd.” and remanded matter to the AO for a fresh assessment. This clearly establishes the identity of M/s Brightway Tradelink Pvt. Ltd. as a genuine company as also the transactions made by this investor in assessee stands proved.

(i) That, the addition is the outcome of a detailed and independent investigation of Ld. AO. Notices u/s 133(6) were issued to all the investors and several notices issued at the addresses furnished by the assessee were returned unserved, with postal remarks that the parties were not available or not known. Fresh notices were issued on revised addresses and certain replies were received by post, but the replies were stereotyped and did not explain the source of funds, financial capacity or commercial rationale of the investments.

(ii) That, the Ld. AO issued a commission u/s 131(d) to the Investigation Wing, Kolkata, whose Inspectors physically verified the addresses

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd furnished by the assessee. The field enquiries revealed that the investor companies were not functioning from those addresses, had no regular business establishment and were paper concerns, with correspondence being collected through informal arrangements.

(iii) That, the investors had declared negligible taxable income and had no worthwhile business operations, and their bank statements showed substantial credits immediately before issue of cheques to the assessee, after which the accounts were substantially depleted.

(iv) That, there is no commercial justification for unrelated parties investing at a premium of Rs. 290/- per share in a closely held company engaged in textile trading. The assessee did not produce any valuation report, feasibility study or business projection, nor complete corporate records such as the board resolution approving the issue at the premium and the minutes authorising the allotment. The addition is not made merely on account of non-compliance of Companies Act, but these deficiencies are a surrounding circumstance.

(v) That, the Ld. AO issued summons u/s 131 requiring the assessee to produce the directors or principal officers of the investor companies, but the assessee failed to produce even a single director or authorised representative of any investor company. In the two remand proceedings also, no director or principal officer appeared and no

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd fresh material on source of funds or financial capacity of the investors was produced.

(vi) That, confirmations, PAN, income-tax returns, audited financial statements and bank statements by themselves do not discharge the burden u/s 68 when the investors are not found at their declared addresses, none of their directors comes forward and their financial capacity is doubtful.

(vii) That, the decision in PCIT Vs. NRA Iron & Steel (P.) Ltd., (2019) 412 ITR 161 (SC); 103 taxmann.com 48 (SC) squarely applies. As per Ld. DR, the Hon'ble Supreme Court held that the assessee must establish identity, creditworthiness and genuineness, that mere PAN, returns, confirmations or bank statements are not sufficient where surrounding circumstances indicate lack of financial capacity or where enquiries reveal that the investors are non-existent or accommodation entry providers, and that transactions of private placement at an unusually high premium deserve careful scrutiny. The present case is stated to be similar, as the investors were not found at their addresses, no director appeared, financial capacity was not proved, the premium was unusually high without commercial basis and the enquiries showed lack of commercial substance.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (viii) That, Shalu Dyeing & Printing Mills Pvt. Ltd. Vs. DCIT, ITA No. 118/SRT/2023 (ITAT, Surat) is distinguishable, as there the notices u/s 133(6) were served and the applicants directly furnished complete financial details, and had reserves and surpluses in audited financial statements. In the present case, the notices were initially returned unserved, the replies were stereotyped, the field verification of Investigation Wing showed paper concerns at dummy addresses and the bank accounts showed immediate credit and debit entries.

(ix) That, Sumilon Polyester Pvt. Ltd. Vs. ITO, ITA No. 649/SRT/2023, order dated 14.03.2024 (ITAT, Surat) is also distinguishable, as there the assessee furnished board resolutions, notarised affidavits of directors, ROC records and share application forms, and the addition was based on general statements of third-party entry providers not naming the assessee, with no enquiries through the respective Assessing Officers of the investors. In the present case, the addition is based on direct and case-specific field verification u/s 131(d), after repeated opportunities in the assessment and two remand proceedings, and the assessee failed to produce even a single director or principal officer of any investor company.

(x) That, decisions rendered on specific factual matrices cannot dilute the law laid down in NRA Iron & Steel (P.) Ltd. (supra) and binding under Article 141 of Constitution of India. Proceedings under the Act

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd are not governed by res judicata, each AY is a separate unit, whether the burden u/s 68 is discharged is a question of fact, and decisions in other cases cannot be applied mechanically.

(i) That, the initial return of notices at old addresses cannot prove non- existence of the investors, as the Ld. AO has recorded that the notices u/s 133(6) were ultimately served on investors. Further, para 7.3 of the order of Ld. CIT(A) records that the paper-book includes copies of replies furnished by investors. Revenue itself accepts, in paras 6 to 8 of its written submission, that the documents were furnished, that fresh notices were issued on revised addresses and that replies were received. Further, the revenue has not identified which document was missing or which reply given by investor was false.

(ii) That, all documents like board resolutions, share certificates, Form No. 2 filed with the Registrar of Companies, etc. were duly filed before AO, CIT(A) and in remand proceedings. Absence of a valuation report of shares is not relevant because section 56(2)(viib) was not applicable

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd to AY 2012-13. Further, the issue price of shares was substantially near to book value and in any case, the premium was also decided having regard to commercial factors.

(iii) That, para 7.12 of the order of Ld. CIT(A) records that the Chief Financial Officer of assessee appeared in remand proceedings and submitted the documents. The rejoinder dated 10.05.2024 filed by assessee to Ld. CIT(A) also pointed out that the documents requisitioned in remand were furnished by letters dated 11.10.2023 and 13.10.2023, this is noted in Para 7.13 of the order of Ld. CIT(A). The question is not whether the evidence was new but whether the evidence already on record was rebutted.

(iv) That, the table of Ld. CIT(A) records reserves and surplus of approx. Rs. 5.90 crore for Amrapali Devcon Pvt. Ltd. (investment Rs. 42,00,000/-), approx. Rs. 3.08 crore for Amrapali Metals Pvt. Ltd. (Rs. 63,00,000/-), approx. Rs. 8.42 crore for Brightway Tradelink Pvt. Ltd. (Rs. 36,00,000/-), approx. Rs. 4.17 crore for Gandheshwari Tracon Pvt. Ltd. (Rs. 3,00,000/-), approx. Rs. 10.87 lakh for Skytech Infracon Pvt. Ltd. (Rs. 1,50,000/-) and approx. Rs. 11.08 crore for Starline Dealcom Pvt. Ltd. (Rs. 9,00,000/-). Thus, the investors had sufficient networth.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (v) That, the proviso inserted in section 68 requiring proof of source of source is w.e.f. AY 2013-14 is prospective and not applicable to AY 2012-13 in M/s Novacid Pvt. Ltd. (supra) – Para 9 of ITAT’s order; Shalu Dyeing & Printing Mills Pvt. Ltd. (supra) – Para 22 of ITAT’s order.

(vi) That, in Sumilon Polyester Pvt. Ltd. (Supra), the Revenue also argued that personal appearance of the directors of share applicants was a prerequisite, but the co-ordinate Bench held that, where profit and loss accounts, balance sheets, bank statements, ROC records, PAN and other documents were furnished, mere non-appearance could not justify the addition (paras 24-25). The same Bench called for the assessment record, found that the report of Shri Manoj Sinha, ACIT, and the Inspectors of the Investigation Wing was neither in the record nor supplied to the assessee, and held that a mere order-sheet remark is not evidence and undisclosed material cannot be used without opportunity of rebuttal (paras 21-22). In that case, the addition of Rs. 11.28 crore was deleted on premium of Rs. 990/- per share (paras 31-37).

(vii) That, in Novacid Pvt. Ltd. (supra) also the Department issued notices u/s 133(6) and a commission u/s 131(1)(d) and relied on an inspector's inability to find investors at the stated addresses, but the co-ordinate bench noted service and compliance of notices, the

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd documents furnished, absence of cash deposits in investors' accounts and availability of funds in their balance sheets, and upheld the deletion of Rs. 2 crore.

(viii) That, the assessee does not dispute the proposition held by Hon’ble Supreme Court in NRA Iron & Steel (P.) Ltd. (supra) that identity, creditworthiness and genuineness must be established but it is a fact- dependent and has been distinguished several decisions. The Ld. AR has quoted PCIT Vs. Ami Industries (India) Pvt. Ltd., Income Tax Appeal No. 1231 of 2017, judgment dated 29.01.2020, 424 ITR 219 (Bom.); D.J. Stock Broking Pvt. Ltd. Vs. ITO, ITA No. 313/Ahd/2017, order dated 03.03.2020 (ITAT, Ahmedabad); DCIT Vs. Mahalaxmi TMT Pvt. Ltd., ITA No. 1337/PUN/2016, order dated 19.04.2021 (ITAT, Pune); Siyaram Metal Udyog Pvt. Ltd. Vs. ACIT, ITA No. 373/Rjt/2015, order dated 24.02.2023 (ITAT, Rajkot) (Revenue's appeal dismissed in Tax Appeal No. 508 of 2023, order dated 29.08.2023 (Gujarat); PCIT Vs. Shipra Enclave Pvt. Ltd., ITAT No. 94 of 2025, judgment dated 04.02.2026, 183 taxmann.com 413 (Calcutta). Ld. AR contended that the personal non-appearance of investors/creditors cannot displace the documentary traceability.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd (ix) That, the Revenue has not furnished, even with its Written Submission, the commission u/s 131(1)(d), the reports of the Inspector/Investigation Wing, etc. being relied.

“Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year.” Proviso inserted by Finance Act, 2012 w.e.f. 01.04.2013: “Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee- company shall be deemed to be not satisfactory, unless – (a) The person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) Such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory.”

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd 18. The Ld. AO and the Ld. CIT(A) have tested the claim on the three parameters of identity of the investor, creditworthiness of the investor and genuineness of the transaction, and the assessee also accepts these parameters. Ld. AR has submitted that the proviso to section 68, requiring proof of the source of the source, was inserted by Finance Act, 2012 w.e.f. AY 2013-14, hence the said Proviso is not applicable to AY 2012-13 involved in present appeal. In present appeal, therefore, the assessee was required to establish the identity and creditworthiness of the direct investors and the genuineness of the transactions and not the source of the source.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd mentioned that the notices were served but the details asked for were not furnished.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd company [Refer Para 15(iv) of this order]. We are conscious that the availability of reserves and surplus, by itself, may not conclusively establish creditworthiness. However, the financial capacity of an investor cannot be measured/judged solely by the taxable income reported by it for a particular year; the relevant financial statements and the funds available at the time of making the investment must also be considered. The Ld. CIT(A) has drawn an adverse inference from the substantial non-current investments held by the investor companies; their negligible taxable income and the pattern of credits and debits in their bank accounts around the dates of investment. These circumstances undoubtedly warranted appropriate verification. However, the order of Ld. CIT(A) does not demonstrate, by reference to any specific entry in the financial statements that the funds reflected therein were fictitious or unavailable for investment. Further, the timing of credits appearing in the bank accounts of the investors immediately before the investments is a relevant circumstance, but its evidentiary significance must be assessed with reference to the nature and source of such credits and the material gathered in that regard. Accordingly, the financial statements and the surrounding circumstances are required to be considered cumulatively while examining whether the assessee has discharged its onus u/s 68. This aspect is further considered while examining the genuineness of the transactions in the succeeding paragraph.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd 22. As regards the genuineness of the transactions, we find that the payments towards share capital and share premium were received by the assessee through banking channels; shares were allotted to the investors and the return of allotment was filed with the ROC. The Ld. AO has alleged that the bank accounts of the investors reflected credits immediately before the amounts were transferred to the assessee, thereby indicating that the funds were routed through the investors. The Ld. CIT(A) has also relied upon the proximity between the dates of such credits and the investments. We agree that this pattern of banking transactions is a relevant circumstance requiring scrutiny. However, the orders of the lower authorities do not identify the specific cash deposits, their dates and amounts, or the persons who allegedly deposited cash in the bank accounts of the investors. Nor has any material been brought to our notice establishing that the funds invested by the subscribers originated from the assessee or its directors, or that the assessee was otherwise connected with the alleged entry operators. The assessee has specifically disputed the allegation of routing its own money through the investors. In these circumstances, the timing of credits in the bank accounts of the investors, without further material establishing their nature and nexus with the assessee, cannot by itself conclusively establish that the share subscription transactions were sham. The banking transactions, the allotment of shares and the other documentary evidence available on record must, therefore, be considered cumulatively. The general features of Kolkata-based entry providers, as discussed by the lower

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd authorities, can at best raise suspicion but an addition u/s 68 has to be founded on material connecting the assessee with the specific credits and not on a pattern attributed to other companies. We therefore find that the adverse inference drawn by the lower authorities is not supported by sufficient material establishing that the impugned transactions were non- genuine.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd to the AY 2012-13 under consideration. The absence of a valuation report or the non-payment of dividend, by itself, does not establish that the share subscription transactions were fictitious. The Ld. AO has also referred to section 78(2) of the Companies Act, 1956, in relation to the utilisation of securities premium. However, the question of compliance with the said provision is distinct from the question whether the amount received from the shareholders represents unexplained cash credits u/s 68 of the Act. Accordingly, neither the quantum of premium nor the alleged non- compliance with the aforesaid provision, is sufficient to sustain the impugned addition.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd the investors and that the investors furnished replies directly to the Ld. AO. The assessee has also placed on record its communications requesting the investors to appear before the Ld. AO during the remand proceedings. Further, the assessee furnished documentary evidence relating to the investors, including their PANs, income-tax return acknowledgements, financial statements and bank statements. Thus, the assessee has taken steps to substantiate the identity and financial capacity of the investors and the genuineness of the transactions. Although the non-appearance of the directors or principal officers of the investor companies is a relevant circumstance, the same cannot, in isolation, outweigh the documentary evidence and direct replies furnished by the investors. The evidentiary value of such non-appearance has to be assessed in conjunction with the entire material available on record. In the facts of the present case, therefore, the non-appearance of the investors, by itself, does not justify the conclusion that the impugned share subscription transactions were non-genuine.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd Ltd. (supra), which again is on materially similar/identical facts, the co- ordinate bench has deleted the additions made by AO qua the funds received from (a) M/s Amrapali Metal Pvt. Ltd. and (b) M/s Gandheswari Developers Ltd. Therefore, the principle applied in those decisions, as placed before us, supports the present assessee’ case. We are bound by the judicial discipline to follow the view consistently taken by the Co-ordinate Benches of ITAT, Surat.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd in present case which merit consideration. Firstly, the Ld. AO has himself recorded that the notices issued u/s 133(6) were duly served upon the investors. Secondly, the investors furnished direct replies to the Ld. AO in response to such notices. Thirdly, the Revenue relies upon the field enquiries of the Investigation Wing and the statements of the alleged entry operators, but the reports and statements themselves were not furnished to the assessee, and only the crux of the report, as stated in point no. 3.3 of the show-cause notice, was communicated. The revenue has not placed the same before us also despite the strong claim of assessee. This has limited the opportunity of the assessee to respond to the specific allegations. In the facts and circumstances of the present case, therefore, the decision in NRA Iron & Steel (P.) Ltd. (supra) is distinguishable and does not support the case of the Revenue.

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ITA No.111/SRT/2026 (A.Y. 2012-13) Sunil Texfab Pvt. Ltd Resultantly, this appeal of assessee is allowed. 29.

Order pronounced in open court on 27/10/2026

Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat दिन ांक /Dated : 27/10/2026 Kishore/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Surat Bench, Surat Digitally signed by HEMA KISHORE HEMA KISHORE JAKKA JAKKA Date: 2026.10.28 18:34:21 +05'30'

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