VIJAYA MOTELS PVT. LTD.,KOLKATA vs. I.T.O., WARD - 5(4),, KOLKATA

PDF · subscribers
ITA 2500/KOL/2025Status: DisposedITAT Kolkata26 February 2026AY 2012-20133 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that once the amount of investment made in the assessee company by the subscriber, M/s Lovely Properties Pvt. Ltd., has been settled under the VSVS scheme and the due taxes were paid by the subscriber, there is no justification for adding back the amount of share capital and premium in the hands of the assessee. The Tribunal noted that the subscriber's assessment was framed under Section 147/143(3) and an addition of Rs. 3,32,37,000/- was made, out of which the investment in the assessee company was a part. The fact that the subscriber paid due taxes on this amount was brought to the notice of the Ld. CIT(A), who recorded this finding but still dismissed the appeal. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and directed the AO to delete the addition.

What were the facts?

The assessee, Vijaya Motels Pvt. Ltd., is in appeal against the order of the National Faceless Appeal Centre, Delhi (NFAC), dated 15.10.2025, for Assessment Year 2012-13. The appeal challenges the confirmation of an addition of Rs. 3,42,00,000/- made by the Assessing Officer (AO) under Section 68 of the Income-tax Act, 1961. This addition pertains to share application money received from M/s Lovely Properties Pvt. Ltd. The AO noted the receipt of Rs. 3,42,00,000/- from the issuance of 3,42,000 equity shares at a premium. Despite the assessee providing evidence, the AO treated the amount as an unexplained cash credit as directors of the shareholding company did not appear in response to a notice under Section 131. The NFAC confirmed the AO's order.

What were the issues?

1. Whether the addition of Rs. 3,42,00,000/- as unexplained cash credit under Section 68 of the Income-tax Act, 1961, is justified, in light of the subscriber company settling the amount under the VSVS Scheme and paying due taxes. Assessee's contention: The assessee argued that the amount received as share application money should not be added to its income because the subscriber company, M/s Lovely Properties Pvt. Ltd., had settled the investment amount under the Voluntary Scheme for Settlement of Disputes (VSVS) and paid the due taxes. This fact was brought to the notice of the Ld. CIT(A). Revenue's contention: The judgment does not record any specific contentions made by the revenue before the Tribunal. However, it notes that the AO treated the amount as unexplained cash credit and the Ld. CIT(A) confirmed the addition.

Which sections of the Income-tax Act were involved?

Section 68,Section 131,Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRIPRADIP KUMAR CHOUBEY, JM

For Appellant: Shri S.S. Gupta, AR
For Respondent: Shri S.B. Chakraborthy, DR
Hearing: 19.01.2026Pronounced: 26.02.2026

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 15.10.2025 for the AY 2012-13.

2.

The only issue raised by the assessee is against the confirmation of addition ofRs.3,42,00,000/- as made by the ld. AO u/s 68 of the Income-tax Act, 1961 (the Act) in respect of share application money received from M/s Lovely Properties Pvt. ltd.

3.

After hearing the rival contentions and perusing the materials available on record, we find that during the course of assessment

4.

In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO.

5.

We note that in the case of the subscriber i.e. M/s Lovely properties Pvt. Ltd. the assessment was framed u/s 147/143(3) of the Act vide order dated 26.10.2019, wherein the addition was made u/s 68 of the Act of ₹3,32,37,000/- out of which the investment was made in the assessee company. The copy of the order is available from page no.35 to 37 of the Paper Book. We also note that the said subscriber has gone into VSVS Scheme and paid the due taxes on the said amount and the fact was also brought to the notice of ld. CIT (A) during appellate proceedings and the ld. CIT (A) in para no.4.3 recorded the finding to this effect but finally, dismissed the appeal of the assessee. In our opinion, once the amount of investment made in the assessee company by the subscriber has been settled in the VSVS scheme and due taxes were paid, then there is no question of adding back the amount of share capital share/premium in the hands of the assessee. consequently, we set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition.

Order pronounced on 26.02.2026.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →