PRINCIPAL COMMISSIONER OF INCOME TAX 2 KOLKATA vs. KARNI INFRAPROJECTS PRIVATE LIMITED

OD 4

ORDER SHEET ITAT/168/2025 IA NO:GA/2/2025 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE

PRINCIPAL COMMISSIONER OF INCOME TAX-2, KOLKATA VS KARNI INFRAPROJECTS PRIVATE LIMITED

BEFORE: The Hon’ble JUSTICE RAJARSHI BHARADWAJ AND The Hon’ble JUSTICE UDAY KUMAR Date: 28th January, 2026.

Appearance: Mr. Aryak Dutt, Adv. Mr. Amit Sharma, Adv. …for the appellant

Mr. Avra Mazumder, Adv. Ms. Alisha Das, Adv. Ms. Sreeja Mukherjee, Adv. Ms. Rupomita Ghosh, Adv. …for the respondent

The Court: Learned counsel appearing for the appellant/revenue has suggested the following substantial questions of law: “i) Whether on the facts and circumstances of the case, the Learned Tribunal was justified in law to delete the addition made by the Assessing Officer under Section 68 of the Income Tax Act, 1961 on account of share capital and premium as unexplained cash credit

2 despite the respondent assessee failing to establish the genuineness of the transactions as well as identity and creditworthiness of the share subscribers ? ii) Whether on the facts and circumstances of the case, the Learned Tribunal was justified in law in failing to appreciate that neither the creditworthiness of the share subscribing companies nor the genuineness of the transactions has been established and as such addition made by the Assessing Officer was perfectly justified ? iii) Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in law to delete the addition made under Section 68 of the Income Tax Act, 1961 by ignoring the judicial precedents that the onus is on the assessee to explain and establish the source of funds which in the instant case, the assessee has failed to do ? iv) Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in law to delete the addition made under Section 68 of the Income Tax Act, 1961 without giving due weightage to the unjustified receipt of high premium from seemingly unprospective entities and ignoring the ratio laid down in the case of Principal Commissioner of Income Tax (Central)-I, Kolkata Vs. NRA Iron & Steel (P) Ltd. reported in [2019] 103 taxmann.com 48 and in the case of PCIT (Central)-2, Kolkata Vs. BST Infratech Ltd. reported in [2024] 161 taxmann.com 668 (Calcutta) by the Jurisdictional High Court ?

3 v) Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in law to hold that the assessee had discharged its onus to prove identity and creditworthiness of the share subscriber without considering that identity, creditworthiness or genuineness of the transaction is not established by merely showing that the transaction was through banking channels or by account payee instrument as held by the Jurisdictional High Court in the case of Principal Commissioner of Income Tax Vs. BST Infratech Ltd. reported in [2024] 161 taxmann.com 668 (Calcutta) ?” This Court perused the memorandum of appeal, application for stay and the impugned judgment of the Tribunal dated 26.11.2024. The Tribunal held that “The Hon’ble Supreme Court, thus, has held that once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers, then the AO is duty bound conduct to conduct an independent enquiry to verify the same. However, as noted above, the Assessing Officer in this case has not made any independent enquiry to verify the genuineness of the transactions. The assessee having furnished all the details and documents before the Assessing Officer and the Assessing Officer has not pointed out any discrepancy or insufficiency in the said evidences and details furnished by the assessee before him. As observed above, the assessee having discharged initial burden upon him to furnish the evidences to prove the identity and creditworthiness of the share subscribers and genuineness of the transaction, the burden shifted upon the Assessing Officer to examine the evidences furnished and even made independent inquiries and thereafter to state

4 that on what account he was not satisfied with the details and evidences furnished by the assessee and confronting with the same to the assessee. In view of this, even applying the ratio laid down by the Hon’ble Supreme Court in the case of PCIT vs. NRA Iron and Steel Pvt. Ltd. (supra), impugned additions are not warranted in this case.” Heard learned counsel for the appellant/revenue. The materials were all available on the file of the Assessing Officer as well as before the CIT and no question can be raised regarding the genuineness, identity and creditworthiness of the creditors. Hence, the Tribunal has rightly dismissed the appeal filed by the revenue. For the above reasons, we find that no substantial question of law arises for consideration in this appeal and the appeal is dismissed. No order as to costs.

(RAJARSHI BHARADWAJ, J.)

(UDAY KUMAR, J.)

B.Pal