PCIT Vs Rajshree Integrated Cold Chain Pvt Ltd (Calcutta High Court)
The Calcutta High Court has dismissed an appeal filed by the Income Tax Department, ruling that no substantial question of law was involved. The appeal challenged an order from the Income Tax Appellate Tribunal (ITAT) which had deleted an addition made under Section 68 of the Income Tax Act, 1961, against Rajshree Integrated Cold Chain Pvt. Ltd.
The dispute originated from an assessment order for the financial year 2012-13, where the Assessing Officer invoked Section 68 to add an amount related to share capital and share premium. The company had subsequently appealed, and the Commissioner of Income Tax (Appeals) [CIT(A)] set aside the assessment order. The ITAT upheld the CIT(A)’s decision, leading the department to file this appeal with the High Court.
During the proceedings, the High Court focused on the factual findings of the lower tribunals. The court noted that the ITAT had thoroughly examined the three core conditions for an addition under Section 68: the identity and creditworthiness of the shareholders, and the genuineness of the transactions.
The court highlighted that the ITAT had confirmed that the company had provided sufficient evidence, including details of share applicants being income tax assessees, their returns, share application forms, and bank statements. The transactions were conducted via account payee cheques, and the share applicants were shown to have substantial creditworthiness.
