M/S. SUPRERSMELT INDUSTRIES PVT. LTD.,,KOLKATA vs. ITO, WARD 1(1),, KOLKATA

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ITA 2811/KOL/2025Status: DisposedITAT Kolkata17 February 2026AY 2015-20165 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition made by the AO and confirmed by the NFAC was unsustainable. The assessee had provided substantial evidence, including confirmation letters, ITRs, audited balance sheets, and bank statements of the subscribers and itself, which were admitted by the AO. Crucially, the AO had not conducted any independent enquiry or issued statutory notices to the subscribers. The Tribunal noted that the shares were issued at a premium as per Rule 11UA, and no addition was made under Section 56. The AO's addition was based on a general modus operandi and presumption, not on specific evidence. The Tribunal found that the net worth of KLG Tradefin Pvt. Ltd. (a sister concern) was ₹9.58 crores, and it sourced funds from fixed deposit maturity proceeds and refunds. Reality Vincom Pvt. Ltd. also had a substantial net worth of ₹24.52 crores. The Tribunal relied on a series of decisions of the Kolkata High Court, including PCIT Vs. Goodview Marketing P. Ltd., PCIT vs. Kunjal Synergies Private Limited, and others, which supported the assessee's position. Consequently, the Tribunal set aside the order of the NFAC and directed the AO to delete the addition.

What were the facts?

The assessee, M/s Suprersmelt Industries Pvt. Ltd., is in appeal against the order of the National Faceless Appeal Centre, Delhi (NFAC), for Assessment Year 2015-16. The appeal concerns the confirmation of an addition of ₹6,56,98,750/- made by the Assessing Officer (AO) on account of share capital/share premium. The assessee had declared a loss of ₹3,88,781/-. The AO made the addition treating the share capital and premium received from three entities – M/s Divij Mercantile Pvt. Ltd., KLG Tradefin Pvt. Ltd., and Reality Vincom Pvt. Ltd. – as unexplained cash credit. The assessee had provided confirmations, ITRs, audited accounts, and bank statements of both itself and the subscribers. The AO did not conduct any independent enquiry or issue notices under Section 133(6) or summons under Section 131. The NFAC confirmed the AO's order, stating the assessee failed to prove the three limbs of Section 68 and issued shares at a high premium without justification.

What were the issues?

1. Whether the addition of ₹6,56,98,750/- made by the AO under Section 68 of the Income Tax Act, 1961, treating share capital and premium as unexplained cash credit, is sustainable? Assessee's Contentions: The assessee argued that it had furnished all necessary details and documents, including confirmation letters, ITRs, final audited accounts, and bank statements of both the assessee and the subscribers, to establish the identity, creditworthiness, and genuineness of the transactions. The AO did not conduct any independent enquiry or investigation. The shares were issued at a premium as per Rule 11UA, and no addition was made under Section 56. The AO's addition was based on a general modus operandi and presumption, not on specific findings. Revenue's Contentions: The revenue, through the AO and confirmed by the NFAC, contended that the assessee failed to prove the three limbs of Section 68 of the Act and that the shares were issued at a very high premium without justification. The revenue relied on the AO's observation of a general modus operandi of cyclical money rotation.

Which sections of the Income-tax Act were involved?

Section 68,Section 133(6),Section 131,Section 56,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

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

For Appellant: Shri Sunil Surana, AR
For Respondent: Shri Sanat Kumar Raha, DR
Hearing: 05.02.2026Pronounced: 17.02.2026

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 21.11.2025 for the AY 2015-16.

2.

The assessee during the course of hearing pressed ground no.2,3,4,5 & 6, which are against the order of ld. CIT (A) confirming the addition of ₹6,56,98,750/- as made by the ld. AO in respect of share capital/ share premium.

3.

The facts in brief are that the assessee filed the return of income on 25th September, 2015, declaring loss of ₹3,88,781/-. The case of the assessee was selected for scrutiny and statutory notices along with questionnaire were issued, which were duly replied by the assessee.

4.

In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO by noting that the assessee has failed to prove the three limbs of Section 68 of the Act and the assessee has issued shares at a very high premium without there being any justification for the same.

5.

After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessee raised share

6.

We note that the ld. AO has only relied on a general modus operandi as stated in para no.2.5 and 2.6, wherein he noted that on the basis of past experience it is noticed that such type of routing of money in a cyclical manner and finally added the money in the hands of the assessee. Therefore, the addition made on the basis of presumption and surmises that these are bogus entities who invested in the assessee company, whereas the companies, are active and regularly filing their income tax returns as well as the ROC returns. Similarly, the ld. CIT (A) simply affirmed the order of the ld. AO without giving any coge3nt finding. So far as the source of money is concerned, the major money was raised from KLG Tradelink Pvt. Ltd. of ₹4,99,85,000/- out of total money received of ₹6,56,98,750/-. We note that the said company is a sister’s concern of the assessee

7.

Consequently, respectfully the above the decisions of the Hon'ble Kolkata High Court, we set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition.

8.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 17.02.2026.

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