DCIT Vs Uma Vinimay Private Limited (ITAT Kolkata)
ITAT Kolkata Upholds Deletion of ₹9.86 Cr Share Capital Addition & Rejects 14A Disallowance – Revenue’s Appeal Dismissed
Assessee, a core investment company of the Rika Group, had received ₹9,85,95,750/- as share capital & premium from 19 subscribers. AO doubted the identity & creditworthiness of the shareholders & treated the entire amount as unexplained cash credit u/s 68. He also disallowed ₹51,123/- u/s 14A despite there being no exempt income.
On appeal, the CIT(A) deleted both additions, & Revenue challenged the same before the Tribunal.
Issue 1: Addition of ₹9.86 Cr u/s 68 (Share Capital & Premium)
Tribunal examined the record & found:
- Assessee furnished complete details of all 19 subscribers – Name, PAN, address, confirmations, bank statements, audited financials.
- All subscribers responded to notices u/s 133(6).
- Even group companies like Rika Global Impex Pvt Ltd had returned income of ₹10+ crore, showing strong creditworthiness.
- Mere change in company name could not invalidate identity.
- Assessee provided a valuation report under Rule 11UA, showing intrinsic value ₹547 per share, justifying premium of ₹540.
- AO made sweeping allegations without investigation or contrary evidence.
- The Tribunal relied on several precedents (including Orissa Corporation (SC), Lovely Exports (SC), & multiple Calcutta HC judgments in 2023-25) holding that once identity, creditworthiness & genuineness are proved, no addition u/s 68 can be made.
Result: CIT(A)’s deletion of ₹9.86 Cr addition sustained.
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