Blupex Niryat Private Limited Vs ACIT Central Circle (ITAT Kolkata)
Non-Response to 131 Summons Not Enough: Kolkata ITAT Deletes ₹10 Lakh Share Application Addition u/s 68- Identity, PAN & Bank Trail Proved—Section 68 Addition Can’t Survive
Kolkata ITAT ‘SMC’ Bench in Blupex Niryat Pvt Ltd vs ACIT, Central Circle-3(3), Kolkata (ITA No.2346/Kol/2025, AY 2009-10, order dated 23-12-2025) allowed the assessee’s appeal and deleted the addition of ₹10 lakh made u/s 68, holding that mere non-compliance of summons u/s 131 by the share applicant cannot justify addition when the assessee has discharged its primary onus.
The assessee had issued 10,000 equity shares of ₹10 each at a premium of ₹90 to M/s Point View Pvt Ltd. During reassessment proceedings u/s 147, the assessee furnished complete details including name, address, PAN, bank statements and balance sheet of the subscriber to establish identity, creditworthiness and genuineness of the share application money. However, since the subscriber did not respond to summons issued u/s 131 by ADIT (Inv.), the AO treated the amount as unexplained cash credit u/s 68. The addition was mechanically confirmed by CIT(A).
ITAT noted that neither the AO nor the CIT(A) carried out any independent verification of the documents furnished, nor was any defect pointed out in the evidences placed on record. Tribunal held that failure of the share applicant to appear in response to summons cannot be a standalone ground for addition in the hands of the assessee, especially when statutory details are duly furnished.
Relying on binding precedents including CIT vs Orissa Corporation Pvt Ltd (SC), Orchid Industries Ltd (Bom HC), Crystal Networks Pvt Ltd (Cal HC) and several coordinate bench decisions, ITAT held that once primary onus is discharged, the burden shifts to the Department, which was not done in the present case.
Accordingly, ITAT set aside the order of CIT(A) and directed deletion of the entire addition of ₹10 lakh, allowing the appeal in full.
Key takeaway:
In pre-2013 share capital cases, section 68 cannot be invoked merely because the subscriber does not respond to summons. Where PAN, bank trail and financials are on record, the Revenue must do more than rely on non-appearance—suspicion cannot replace proof.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
