PCIR-2 Vs One Point Commercial Pvt Ltd (Calcutta High Court)
The Calcutta High Court heard an appeal filed by the Income Tax department (PCIT-2) against One Point Commercial Pvt Ltd, challenging an order from the Income Tax Appellate Tribunal (ITAT) dated October 16, 2024. This case, concerning the assessment year 2012-13, revolves around an addition of Rs. 4,78,50,000/- made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, relating to unexplained share capital and premium. The department raised several questions of law, including whether the Tribunal was justified in accepting a share valuation certificate produced late, deleting the addition due to alleged lack of identity, genuineness, and creditworthiness of creditors, and not adhering to prior judicial precedents set by the Calcutta High Court in cases like Pr. CIT2, Kolkata(C)-2, Kolkata Vs M/s BST Infratech Ltd. and Pr. CIT Vs. Swati Bajaj.
The Calcutta High Court reviewed the Tribunal’s decision, which had allowed the assessee’s appeal after a remand from the High Court. The Tribunal had conducted a factual examination, applying principles established by the Supreme Court in Kale Khan Mohammad Hanif vs. CIT and Roshan-Di-Hatti vs. CIT. It concluded that the identity of the five share applicant companies was established, and their financial statements indicated sufficient creditworthiness, as the investment in shares was minor compared to their overall financial standing. The Tribunal also noted that the transactions’ genuineness could not be disputed. Furthermore, the assessment of the five share applicant companies had undergone scrutiny assessments under Section 143(3) of the Act and remained unchallenged. The source of the share application money had already been taxed in the hands of the share applicants, and taxing it again in the assessee’s hands would constitute double addition, referencing the Supreme Court’s decision in Mahaveer Kumar Jain vs. CIT and the Calcutta High Court’s ruling in PCIT vs. Sreeleathers.
