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Facts
The assessee company e-filed its return showing a total income of Rs. 1,04,91,100/- for AY 2010-11. During this period, it received Rs. 8,50,45,030/- as share application money from 31 companies and one individual, all received in cash, and Rs. 5,11,68,800/- as membership fees recorded as 'other income'. The Assessing Officer (AO) added the share application money as unexplained income under Section 68, citing failure to prove identity, creditworthiness, and genuineness of transactions, and the CIT(A) upheld this. The assessee contended that the membership fees were a liability and not income.
Held
The Tribunal dismissed the assessee's appeal, confirming the CIT(A)'s order. It held that the assessee failed to discharge the heavy onus to prove the identity, creditworthiness, and genuineness of the share application money transactions. The investors were found to be shell companies with common directors, negligible income, and no justification for the high share premium. The Tribunal further upheld the treatment of membership fees as income, stating that the assessee's grounds for appeal were rejected.
Key Issues
Whether the addition of Rs. 8,50,45,030/- as unexplained share application money under Section 68 of the Income Tax Act, 1961, was justified, and whether Rs. 5,11,68,800/- membership fees should be treated as income or liability.
Sections Cited
143(3), 251, 143(1), 143(2), 142(1), 68, 131, 133(6), 147, 34(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, GUWAHATI BENCH AT KOLKATA
Before: SHRI MANOMOHAN DAS & SHRI RAKESH MISHRA
order
: 09-June-2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
1. This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-2, Guwahati [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 251 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2010-11 dated 27.08.2018, Sl. COMPANY NAME & ADDRESS PAN AMOUNT Mode No.
Green Valley Sales Pvt. Limited 20, Maharshi Devendra AACCG8192Q 40,00,000 Cash Road, Kolkata-700007 2. Green Valley Sales Pvt. Limited, 20, Maharshi Devendra AACCG8192Q 33,00,000 Cash Road, 4th Floor, Kolkata-700 007 3. Improve Vintrade Pvt Limited, 62, Nalini Seth Road, Floor, AACCI2544L 35,00,000 Cash Howrah-711101 4. Janpragati Merchants Pvt. Ltd. 15/2, Armenium Street, AACCJ0768K 40,00,000 Cash 2nd Floor, Kolkata-700 007 5. Tulip Goods Pvt. Limited, BN-18/A, North Complex, 35, AACCT6422C 36,00,000 Cash Lawrence Street, Uttarpara, West Bengal-712258 6. Tulip Goods Pvt. Limited, BN-18/A, North Complex, 35, AACCT6422C 5,00,000 Cash Lawrence Street, Uttarpara, West Bengal-712258 7. Topmost Tie-Up Pvt Limited 24/25, Becharam Chowdhury AACCT6449F 45,00,000 Cash Lane, 5th Floor, Howrah 8. Victor Commodities Pvt Limited, 24/25, Becharam AACCV4477H 39,00,000 Cash Chowdhury Lane, 4th Floor, Howrah-711101, West Bengal 9. Valentino Tradecom Pvt Ltd. 24/25, Becharam Chowdhury AACCV4509L 38,00,000 Cash Lane, 5th Floor, Howrah, West Bengal-711101 10. Basanti Tradecom Pvt. Limited 62, Nalini Seth Road, AADCB1003E 35,00,000 Cash Kolkata -700007 11. Basanti Tradecom Pvt. Limited, 62, Nalini Seth Road, AADCB1003E 5,00,000 Cash Kolkata- 700007 12. Country Wide Tradecom Pvt Limited, 62, Nalini Seth Road, AADCC0385J 5,00,000 Cash Kolkata-700007 13. Country Wide Tradecom Pvt. Limited, 62, Nalini Seth Road, AADCCO385J 36,00,000 Cash Kolkata-700007 14. Green Valley Mercantile Pvt. Limited, 62, Nalini Seth Road, AADCG2756K 40.00.000 Cash Floor, Howrah-711101 15. Kohinoor Commodities Pvt. Limited, 20, Maharshi AADCK0453B 37,00,000 Cash Devendra Road, 4th Floor, Kolkata- 700 007 16. Kohinoor Commodities Pvt. Limited, 20, Maharshi AADCK0453B 5,00,000 Cash Devendra Road, Kolkata-700007 17. Pleasant Sales Pvt Limited, 62, Nalini Seth Road, Kolkata- AAECP2157L 40,00,000 Cash 700007 18. Plesant Sales Pvt. Limited, 62, Nalini Seth Road, Floor, AAECP2157L 5,00,000 Cash
In the case of these 20 applicant companies the details of income in their returns filed is shown as under which has been compiled from the details filed the course of the appeal before us:
Sl. COMPANY NAME & ADDRESS PAN ITR No. (Rs.) 1. Amazing Sales Pvt. Limited, 20/2/A, M. D. Road, Kolkata- 700007 AAGCA2397B 857/- 2. Abhilasha Vyapaar Pvt. Ltd., 20/2/A, M. D. Road, 3rd Floor, AAGCA2398Q 518/- Kolkata-700007 3. Ashamangal Vanijya Pvt Ltd. 20A, Maharshee Devendra Road, AAGCA2448F Kolkata-700007 4. Victor Commodities Pvt Limited, 24/25, Becharam Chowdhury AACCV4477H 648/- Lane, 4th Floor, Howrah-711101, West Bengal 5. Topmost Tie-Up Pvt Limited 24/25, Becharam Chowdhury Lane, AACCT6449F 1,051/- 5th Floor, Howrah 6. Valentino Tradecom Pvt Ltd. 24/25, Becharam Chowdhury Lane, AACCV4509L 5th Floor, Howrah, West Bengal-711101 7. Pushpanjali Tie-UP Pvt Limited, 2C, Imam Bux Lane, Kolkata- AAECP2158F 700006 8. Basanti Tradecom Pvt. Limited 62, Nalini Seth Road, Kolkata - AADCB1003E 713/- 700007 9. Improve Vintrade Pvt Limited, 62, Nalini Seth Road, Floor, Howrah- AACCI2544L 0 711101 10. Plesant Sales Pvt. Limited, 62, Nalini Seth Road, Floor, Howrah- AAECP2157L 860/- 711101 11. Country Wide Tradecom Pvt Limited, 62, Nalini Seth Road, Kolkata- AADCC0385J 896/- 700007 12. Green Valley Mercantile Pvt. Limited, 62, Nalini Seth Road, Floor, AADCG2756K 175/- Howrah-711101 13. Shreeyukta Merchants Pvt Limited, 9/12, Lal Bazar Street, Block- AAKCS0581R 370/- A, 1st Floor Room No. 9, Kolkata-700001 14. Tulip Goods Pvt. Limited, BN-18/A, North Complex, 35, Lawrence AACCT6422C 701/- Street, Uttarpara, West Bengal-712258 15. Pushpanidhi Distributor Pvt Limited, 24/25, Becharam AAFCP3790C 300/- Chowdhury Lane, Howrah- 711101 16. Shrinu Vinimay Pvt. Ltd. 132/1, M.G. Road, 4th Floor, Kolkata - AAKCSO436R 295/- 700007 17. Janpragati Merchants Pvt. Ltd. 15/2, Armenium Street, 2nd Floor, AACCJ0768K 240/- Kolkata-700 007