My Taxi India P. Ltd. vs Assistant Commissioner Of Income Tax

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short 'the CIT(A)'] dated 29.09.2025, for AY 2016-17.

Shri Ved Jain, appearing on behalf of the assessee submits that the assessee is a start-up duly recognized by Department of Industrial Policy and Promotion and was set up for providing passenger taxi services for local, intercity and inter-state travel. The assessee also provides travel package including hotel accommodation and allied services. The assessee filed its return of income for the impugned assessment year declaring loss of Rs.2,42,25,874/-. The assessee maintains regular books of account which are dully audited. During the course of scrutiny assessment proceedings, the Assessing Officer (AO) questioned the source of share capital and share premium amounting to Rs.3,81,04,132/- received by the assessee during the relevant period. The Counsel for the assessee explained that the assessee has received share capital through private placements. The share capital and share premium was received by the assessee from following investors:-

The assessee in order to substantiate the source of investments furnished, bank statements evidencing receipt of share capital and share premium though banking channel, Foreign Inward Remittance Certificates issued by the bank, Foreign Currency-Gross Provisional Return filed with RBI and Form PAS-3 filed by ROC for allotment of shares to the investors. Though, the assessee had furnished various documents to explain source of share capital and share premium, the AO doubted the source of investment on the ground that there is difference in share premium paid by two foreign investors and made addition of Rs.3,81,02,882/- as unexplained cash credits u/s.68 of the Income Tax Act,1961(hereinafter referred to as ‘the Act’). Aggrieved by the assessment order dated 13.12.2018, the assessee carried the issue in appeal before the CIT(A). During First Appellate proceedings, the assessee furnished further evidences under Rule 46A of the Income Tax Rules, 1962. The document furnished by the assessee as additional evidences before the CIT(A) inter alia includes:-

The CIT(A) records submissions of the assessee and the documents furnished but without seeking remand report on the additional evidences filed by the assessee passed the impugned order in a mechanical manner upholding additions made by the AO. The ld. Counsel for the assessee submits that a directions may be given to the Authorities below to examine the document furnished by the assessee and thereafter, pass the order or a remand report may be sought by the Tribunal from the AO and decide the issue.

Per contra, Shri Manoj Kumar representing the department defending the impinged order prayed for dismissing appeal of the assessee. The ld. DR submitted that the assessee failed to discharge its onus in proving identity and creditworthiness of the investors and genuineness of the transactions. Thus, the AO made additions of the amounts received as alleged share capital and share premium.

Both sides heard, orders of the authorities below examined. A perusal of the impugned order reveals that the CIT(A) though have recorded the detailed submissions of the assessee and also the fact of assessee filing various documents as additional evidences but neither the CIT(A) has examined the documents furnished by the assessee as additional evidences nor any remand report was sought from the AO on the additional evidences filed by the assessee under Rule 46A. The CIT(A) has merely discussed various case laws and has thereafter, dismissed appeal of the assessee. The findings of CIT(A) on the issue of addition u/s.68 of the Act are cryptic, hence, unsustainable.

In the facts and circumstances of the case, we are of considered view that the matter needs re-examination. The matter is restored to the AO for examination of the documents furnished by the assessee before the CIT(A) as additional evidences and also any other relevant document furnished by the assessee in discharge of its onus u/s.68 of the Act. The AO shall grant reasonable opportunity of making submissions to the assessee and thereafter frame assessment denovo, in accordance with law.

In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose.