DIVYA ELECTRONICS PVT. LTD.,,KOLKATA vs. ITO, WARD 6(2),, 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 09.04.2025 for the AY 2012-13.

4.1. The facts in brief are that the assessee filed the return of income on 11.01.2013, declaring total income at ₹1,01,754/-. The return was processed u/s 143(1) of the Act. Thereafter, the case of the assessee was selected for scrutiny and notice u/s 143(2) and 142(1) of the Income-tax Act, 1961 (the Act) along with questionnaire were issued and duly served upon the assessee. The ld. AO called upon the assessee to furnish the evidences/ explanation regarding share capital raised during the year from three parties by allotting equity shares which were duly furnished before the ld. AO. The assessee issued shares of face value of ₹10/- each at a premium of ₹990/-. Thus, assessee filed before the ld. AO the names, addresses, PANs, the accounts/ audited accounts/ bank statements and confirmations of the subscribers. The ld. AO also issued notice u/s 131 of the Act to the directors of the assessee company and of the subscribers. The shares were allotted to three entities/ subscribers. The shares were allotted to three entities/ subscribers, (i) M/s Ranbhumi Marketing (P) Ltd. of ₹5,00,000/- (ii) Kamla Devi Kothari of ₹2,50,000/- (iii) R.C. Suppliers Pvt Ltd. of ₹50,00,000/-. The ld. AO noted that in case of none of the 4.2. The ld. CIT (A) confirmed the addition in the appellate proceedings.

4.3. After hearing the rival contentions and perusing the materials available on record, we find that the issue of equity shares to three subscribers. We note that the assessee has produced all the evidences before the ld. AO as well as the ld. CIT (A) qua the share subscribers. The ld. AO also issued summons u/s 131 of the Act. However, the addition was confirmed on the ground that there was no compliance to the summons and the subscriber have low incomes. The ld. AO has not pointed out any deficiency or defect in the documents furnished by the assessee and merely made the addition for non-compliance u/s 131 of the Act. In our opinion, the addition made by the ld. AO and sustained by the ld. CIT (A) is not correct and therefore, cannot be sustained. The Ld. AR stated that even the information sought by the AO in the summons issued u/s. 131 of the Act were duly complied. In defense of his argument he relied on the following decisions: i. CIT Vs. Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 (SC); ii. CIT Vs. Orchid Industries Ltd. 397 ITR 136 (Bom); iv. ITO Vs. M/s. Cygnus Developers India Pvt. Ltd.(ITA No. 282/Kol/2012) and v. Joy Consolidated Pvt. Ltd. Vs. ITO (ITA No. 547/Kol/2020.

4.3.1. Considering the facts of the assessee in the light of the above decisions, we are inclined to set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition of ₹55 lacs.

5.1. The facts in brief are that the ld. AO, during the course of assessment proceedings, observed that employment benefit expenses increased from 54,12,854/- in the preceding financial year to ₹62,88,525/- in the current financial year. Similarly, the other expenses have also gone up. The assessee produced before the ld. AO the books of account to prove of payments by cheque/ cash to the employees. The ld. AO also issued letter u/s 133(6) of the Act to the employees, who also replied the said notices confirming the payments received from the employer towards salary. However, the ld. AO noted that salary and other expenses have increased astronomically during the year.

5.2. We have examined the audited accounts of the assessee during the year and find that though there is some increase in the expenses of the assessee but the income of the assessee has also gone up from

Order pronounced in the open court on 20.01.2026.