Yuga Printpack P. Ltd. vs Income Tax Officer, Ward-2(5)

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) (hereinafter referred to as 'the Act') dated 30.09.2025, for AY 2017-18.

The assessee in appeal has assailed the addition of Rs.45,00,000/- made u/s.68 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') on account of share capital and share premium receipts by the assessee from Teltroy Commotrade P. Ltd.

The assessee has allotted 3,52,000 equity shares having face value of Rs.10 per share at a premium of Rs. 30 per share to six investors. The total amount received by the assessee including share premium is Rs.1,41,00,000. In respect of one of the investors i.e. Teltroy Commotrade Pvt. Ltd. to whom 112500 equity shares were allotted, the Assessing Officer (AO) made enquiries about creditworthiness and identity. The AO held that since the assessee failed to furnish PAN details, confirmation and financial results of the said investor the assessee failed to discharge its onus in proving creditworthiness and identity of the investor. Thus, addition of Rs.45,00,000/- u/s 69 of the Act was made. The assessee carried the issue in appeal before the CIT(A), but remained unsuccessful. Hence, the present appeal.

Both sides heard. The ld. Counsel referred to the bank statement of the assessee at page 103 to 105 of the paper book to show that share capital and share premium aggregating to Rs.45,00,000/- was received by the assessee from M/s. Teltroy Commotrade P. Ltd. through banking channel on 30.06.2016. The ld. Counsel further referred to confirmation filed by the said company at page 123 of the paper book. He asserted that the assessee had furnished relevant documents to discharges its onus in proving genuineness of the transaction, identity and creditworthiness of the investor. The assessee had furnished certification of incorporation of Teltroy Commotrade P. Ltd. before the AO. The AO if not satisfied with the documents furnished by the assessee, the AO could have made enquiries directly from the investor. However, no such inquiries were made by the AO. Reliance was also placed on the decision of Hon’ble Apex Court in the case of CIT vs. Lovely Exports P. Ltd., 216 CTR 195 to contend that if AO had doubt over genuineness of the investor, the AO was at liberty to reopen the assessment of the investor, addition u/s 69/68 of the Act cannot be made in hands of the assessee. The ld. Counsel thus prayed for allowing appeal of the assessee and quashing the impugned order.

After examining the bank statement it is evident that the assessee has received Rs.45,00,000/- from Teltroy Commotrade Pvt. Ltd. In Lovely Exports (P) Ltd. (supra) the Hon’ble Apex Court has held that, “if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law.” Addition in hands of the assessee cannot be made u/s 68 of the Act.

Thus, in facts of the case and in light of the law expounded by Hon’ble Supreme Court of India, addition of Rs. 45,00,000/- is directed to be deleted. The impugned order is set aside and appeal of the assessee is allowed.