INCOME TAX OFFICER, WARD-9(1), KOLKATA, KOLKATA vs. VIGHNAHARTA VINCOM PRIVATE LIMITED, KARNATAKA

At the outset, we observe from the appeal folder that there is a delay of 73 days in filing the appeal by the department in support of which a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtaining the administrative approval from the competent authorities, which took quite a long time and therefore the delay may be condoned as the same is attributed to sufficient reasons. The ld. AR, on the other

The only issue raised by the assessee is against the order of ld. CIT (A) deleting the addition of ₹5,53,73,000/- as made by the ld. AO in respect of share capital/ share premium by treating the same as unexplained cash credit u/s 68 of the Act.

The facts in brief are that the assessee filed the return of income on 30.03.2013, declaring total income at ₹Nil. The case of the assessee was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS) for the reason of receiving large share premium / share capital. The notice u/s 143(2) and 142(1) of the Act along with questionnaires were issued. The assessee complied with the said notices by filing certain details and documents along with the share applicants. The ld. AO also issued notices u/s 133(6) of the Act which were duly complied by the share subscribers. Thereafter, the ld. AO issued summon u/s 131 of the Act to the director of the share subscribing companies for personal attendance but there was no compliance of the summons u/s 131 of the Act. Finally, the ld. AO treating the shar capital / share premium received during the years of ₹5,53,73,000/- as unexplained cash credit and added the same to the income of the assessee u/s 68 of the Act.

In the appellate proceedings, the ld. CIT (A) after taking into account the contention and submission of the assessee, remand report called for, the rejoinder filed by the assessee by observing and holding as under:-

In such circumstances, we do not find any substantial question of law involved for the purpose of consideration by this Court as contended on behalf of the appellant.” 5.4. We also rely on the decision of the Hon’ble jurisdictional High Court in the case of PCIT vs. Balaka Vinimay Pvt Ltd (GA No. 2 of 2025) dated 21.07.2025. In this case “18. In the facts and circumstances of the present case, the shareholders who applied for the shares in the assessee stands identified. The source of funds stands satisfied. The assessee reflected the entire issue and allotment of shares at a premium in its books of accounts and submitted the same contemporaneously to the statutory authority, namely, Ministry of Corporate Affairs.

Before the Assessing Officer, the assessee produced all such relevant materials with regard to the transaction in question. The absence/non-appearance of theDirectors of the assessee before the Assessing Officer would not prompt the Assessing Officer, to render The case of the assessee is also supported by the decision of the 9. Hon’ble Calcutta High Court in the case of PCIT v. Shipra Enclave (P.) Ltd (183 taxmann.com 413)dated 04.02.2026wherein on identical facts, it was held that when, the investors are active taxpayers who had directly responded to notices u/s 133(6) and confirmed the transactions through banking channels, then merely because they failed to attend to the summons u/s 131, the share capital raised by the assessee cannot be added to the total income u/s 68 of the Act. The Hon’ble Court also held that, unless a ‘live link’ showing that the funds originated from the assessee’s own coffers, was established by the Revenue, then, it could not be alleged that the assessee had routed its own unaccounted money in the garb of share capital.

In the result, the appeal of the Revenue is dismissed.