ARUN DISTRIBUTORS PVT. LTD.,,KOLKATA vs. ITO, WARD 7(1),, KOLKATA

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 15.09.2025 for the AY 2012-13.

2.1. The facts in brief are that the assessee filed the return of income on 11.09.2012, declaring total income of ₹24,05,093/-. The case of the assessee was selected for scrutiny under CASS and the notice u/s 143(2) and 142(2) of the Act along with questionnaire were issued and served upon the assessee. The assessee complied with the said 2.2. In the appellate proceedings, the ld. CIT (A) dismissed the appeal of the assessee after taking into consideration the reply/ submission of the assessee and after calling for the report from the ld. AO. The ld. CIT (A) noted that the assessee received share capital/ share premium of ₹1,62,46,000/- from sister concerns M/s Arun Distributors, a partnership firm in which the directors of the assessee companies were partners. Thereafter, the ld. CIT (A) noted that the assessee never argued that the ld. AO has not issued notice u/s 133(6) or 131 of the Act for independent verification of these transactions. The ld. CIT (A) referred the remand report dated 01.07.2025 and noted that the assessee had advanced substantial loans to the subscribers firm with an opening balance of ₹1,35,62,221/- and further, disbursement during the year ₹92,53,311/-. The ld. CIT (A) noted that thereafter the said firm subscribed the shares at huge premium of ₹90. The ld. CIT (A) also referred to the remand report wherein the ld. AO noted that the assessee deposited ₹20,24,000/- as cash in the bank account during the year and assessee has not filed any contemporaneous evidence 2.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has filed before the ld. AO the names, addresses, copies of PAN ,bank account, audited accounts, confirmation from the subscriber which happened to be a partnership concern in which both the directors of the assessee company were partners. Therefore, the assessee raised this money by way of share capital/ share premium from the sister concern. We note that the ld. CIT(A) also called for remand report which was submitted by the Assessing Officer. The assessee has also filed reply to the said remand report. It was stated in the remand report that as noted by the ld. CIT(A) in para 8.3(i) that it is admitted that the assessee has advanced substantial money to this partnership firm in the earlier year amounting to ₹1,35,62,221/- and during the year as well of ₹92,52,311/-. The only basis for making the addition in the hands of the assessee is that the assessee has advanced money to this firm in the earlier year amounting to ₹1,35,62,221/- and during the year ₹92,52,311/-. We note that the ld. AO did not point out any defect or deficiency in the evidences furnished by the assessee nor did the ld. CIT (A). We also note that the ld. AO has not issued notice u/s 133(6) of the Act or summons u/s 131 of the Act in order to independently verify the transactions. Therefore, we cannot sustain the order of the ld. CIT (A) just upholding the order of ld. AO without any reasoning. If at all the addition was to be made , the AO could have proceeded against the subscriber whose details were filed by the assessee before the Assessing Officer. In view of these facts, we are in a position to sustain the order of the ld. CIT (A). The case of 2.3.1. Consequently, we set aside the order of ld. CIT (A) on this issue and direct the ld. AO to delete the addition.