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Judgment
PER AMITABH SHUKLA, AM
This appeal filed by the Revenue is directed against the order of Ld. Commissioner of Income Tax(Appeals)/NFAC, Delhi, dated 08.10.2025 arising out of assessment order dated 22.03.2024 passed under section 147 read with section 144B of the Act for the Assessment Year 2019-20. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The Registry has identified a delay of 12 days in the case, in filing of this appeal before the tribunal. The appellant revenue has submitted that the short delay was caused on account of pre-occupation in pressing official matters. All these activities contributed to the delay which was neither willful nor wanton. The Revenue submitted that there will not be case of any non-compliance now. The Ld. AR did not object to the condonation of delay. We have considered the justification put forth by the Revenue and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal.
The only issue contested by the appellant revenue in this case is regarding deletion of an addition of Rs.1,73,97,501/- by the ld. CIT(A), which was made by the ld. Assessing Officer in his assessment order. As per brief factual matrix of the case, the appellant had shown the impugned amount as received on account of share premium in respect of 1,43,781 shares. The ld. Assessing Officer proceeded to make the impugned addition u/s 68 as the assessee had failed to reproduce any valuation report or the creditworthiness of the investors. In appeal, the appellant produced all the relevant documents in the form of additional evidences to establish the genuineness of share premium account, creditworthiness and identity of the lenders. The ld. CIT(A) gave an opportunity to the ld. Assessing Officer to examine the same by way of remand proceedings. The ld. CIT(A) while considering the remand report, proceeded to delete the impugned addition by recording following observations:-
“..11. Ground No. 6: is regarding addition of Rs. 1,73,97,501/-made by Assessing Officer u/s 68 of the Act pertaining to share premium amount received.
11.1The AO noted that the appellant did not produce valid valuation reports or proof of creditworthiness from investors. Although share certificates and resolution documents were filed, the AO found the explanation unsatisfactory because the source of funds was unverified and the payments from the shareholders were unexplained in terms of genuineness.
11.2The appellant argued that the shares issued were supported by board resolutions, valuation reports, and details of shareholders, and that the funds came from persons with sufficient income. It contended that the burden of proving the creditworthiness of investors rested with the department, which it failed to discharge. The appellant also questioned the department's power to conduct roving inquiries beyond the core issue.
11.3The appellant also submitted that the share premium amount received on issuance of 1,43,781 equity shares was genuine and supported by comprehensive documentary evidence including board resolutions, PAS-3 forms, valuation reports, bank statements, and IT returns of allottees demonstrating their creditworthiness and genuineness of the transaction. The appellant argued that these documents were sufficient to discharge the onus u/s 68 of the Act to prove the identity, creditworthiness, and genuineness of the share premium receipt.
11.4During appellate proceedings, the appellant produced all relevant documents supporting the share premium receipts as genuine transactions undertaken through proper banking channels with bona fide shareholders. This included board resolutions, share allotment forms, valuation reports, detailed list of shareholders, their income tax returns, and bank statements clearly showing receipt of funds. The additional evidences so filed by appellant were forwarded to AO and a detailed remand report was called for.
11.5The AO in the remand report has acknowledged the submission of these documentary evidences during appellate proceedings and recognized their adequacy to prove the genuineness of the share premium receipts. The AO has admitted that all necessary supporting documents and proof of creditworthiness of subscribers have now been furnished and thus the initial concerns leading to the addition have been addressed.
11.6The appellant in the rejoinder to the said remand report reiterated that since all documentary evidence and explanations are on record and accepted by the AO, hence, the addition on account of share premium u/s 68 lacks any basis. The addition was made without proper appreciation of facts and is liable to be deleted.
11.7Having carefully examined the facts and submissions on record, including the remand report, rejoinder, and the documentary evidence furnished by the appellant, and noting the AO's acknowledgment of the comprehensive documentary proof produced by the appellant, 1 am satisfied that the addition of Rs. 1,73,97,501/- as share premium u/s 68 is unwarranted in the instant case. The appellant has duly discharged its burden by establishing the identity, creditworthiness, and genuineness of the shareholders through credible documents, which the AO has accepted in the remand report. Accordingly, the addition of Rs. 1,73,97,501/- made by AO u/s 68 of the Act is hereby deleted. As such this part of grounds of appeal is allowed.
12.In the result, the appeal of the appellant is hereby partly allowed….”
The ld. Counsel for the assessee reiterated the arguments taken before the ld. CIT(A) and place full reliance upon his order.
The ld. DR placed reliance upon the order of ld. Assessing Officer.
We have heard rival submissions in the light of material placed on records. There is no dispute that the additional evidences produced by the assessee during the appellate proceedings before the ld. First Appellate Authority were not examined by the ld. Assessing Officer. There is nothing on records in the order of the ld. CIT(A) so as to allude that any adverse finding were made by the ld. Assessing Officer. The ld. CIT(A) after examining the impugned evidences and the remand report of the ld. Assessing Officer has concluded that the appellant has discharged its burden of establishing identity, creditworthiness and genuineness of the transactions through credible documents. He has further observed that the ld. Assessing Officer has accepted the same in his remand report. Accordingly, we are of the considered view that no case of any intervention to the order of the ld. CIT(A) is made out at this stage. We therefore, confirm the order of the ld. CIT(A) and dismiss the appeal of the Revenue.
In the result, the appeal of the Revenue is dismissed.