KROSS LIMITED,ADITYAPUR vs. DCIT, CIRCLE-1, JAMSHEDPUR

Aggrieved by the order of Ld. AO assessee went in appeal before the CIT(A) where appeal was dismissed on wrong facts.

Dissatisfied with the above order, assessee is in appeal before this Tribunal.

The Ld. AR submitted that the CIT(A) erred in facts and in law in sustaining the addition. It was contended that the amount of ₹2,00,00,000/- represents share application money pending allotment, which had been received during the financial year 2011–12, relevant to Assessment Year 2012–13, and not during Assessment Year 2013–14. The reassessment was initiated on an incorrect factual assumption without examining the accounting records. The CIT(A) also proceeded on an erroneous factual footing by relying on another assessment order dated 25.10.2019, which had been settled under the Vivad se Vishwas Scheme and had no connection with the assessment order dated 30.03.2022, presently under challenge. The learned AR placed reliance on the decision of the coordinate bench in for AY 2012–13, Adhunik Akshat Udyog Pvt. Ltd. Vs. ACIT, wherein it was held that section 68 of the Act cannot be invoked when no & 98/RAN/2025 Kross Limited fresh credit appears in the books during the relevant year. The assessee also relied on the judgment of the Hon’ble Delhi High Court in CIT v. Usha Stud Agricultural Farms Ltd. 301 ITR 384 (Del), wherein it was held that an addition under section 68 of the Act cannot be made in a year in which no fresh credit has been received.

On the other hand, although the learned DR supported the orders of the lower authorities, he could not controvert the factual position that the amount of ₹2,00,00,000/- was received in earlier years and no fresh share application money was received during the year under consideration.

We have considered the rival submissions and perused the material placed on record. The contention of the assessee is that the CIT(A) erred both in facts and in law in dismissing the appeal. It was submitted that the addition of ₹2,00,00,000/- pertains to share application money pending allotment, which had been received during the financial year 2011–12 relevant to the assessment year 2012–13 and no part of this amount was received during the assessment year 2013–14. The reassessment proceedings were initiated on an incorrect assumption of facts without verifying the relevant accounting records. On examining the records, we find force in the submissions of the learned AR. The balance sheet and other supporting documents clearly demonstrate that the sum of ₹2,00,00,000/- represents the brought-forward balance of share application money received in financial year 2011–12 relevant to assessment year 2012–13. No fresh share application money was received during the assessment year 2013–14. Hence, the basic condition for invoking section 68 of the Act i.e., receipt of a credit during the relevant previous year is not satisfied.

The learned AR placed reliance on the decision of the coordinate bench in for AY 2012–13, Adhunik Akshat Udyog Pvt. Ltd. Vs. ACIT, wherein it was held that section 68 of the act cannot be invoked when no fresh credit appears in the books during the relevant year. The & 98/RAN/2025 Kross Limited assessee also relied on the judgment of the Hon’ble Delhi High Court in CIT v. Usha Stud Agricultural Farms Ltd. 301 ITR 384 (Del), wherein it was held that an addition under section 68 of the Act cannot be made in a year in which no fresh credit has been received. Respectfully following the binding precedents and considering the undisputed factual position, we hold that the addition of ₹2,00,00,000/- made by the Assessing Officer and sustained by the CIT(A) is unsustainable in law. The same is directed to be deleted. is allowed. for Assessment Year 2012–13 has been filed by the assessee against the appellate order dated 18.11.2022 seeking rectification of the same before Ld. CIT (A). However, the Ld. CIT(A) dismissed the rectification application on the ground that no rectification proceedings lie under section 154 of the Act, holding that the application itself was void. Since the issues arising from the appellate order dated 18.11.2022 have already been adjudicated by this Bench in the present appeal in challenging the order of Ld. CIT (A) dated 17.02.2025 has become infructuous and is accordingly dismissed.”