Quiver Commercial (P) Ltd. Vs ITO (ITAT Kolkata)
Share Capital & Premium Fully Supported by Documents—Low Income of Investors Not a Ground for Section 68; Addition of ₹3.32 Cr Deleted
The Assessee appealed against NFAC order dated 06.06.2024 confirming the addition of ₹3,32,00,000 u/s 68 on account of share capital and share premium received from 12 subscriber-companies. The original assessment had been reopened u/s 147 and later revised by PCIT u/s 263, resulting in reassessment u/s 143(3)/263.
During reassessment, the Assessee filed all primary evidences, including confirmations, bank statements, ITR acknowledgements, allotment letters, share application details, and replies to summons u/s 131 from all subscribers. Despite this, AO treated the amounts as unexplained solely because the investors had low income, meagre business activity, low fixed assets, and allegedly high reserves / investment pattern, and because they did not appear personally. CIT(A) affirmed this by a brief, non-speaking order.
Tribunal noted (pages 3–4) that the Assessee had discharged the initial onus under section 68 by furnishing complete documentary evidence on identity, genuineness and creditworthiness of all 12 subscribers. It held that:
- Non-appearance cannot invalidate documentary confirmations.
- Low income or small business activity of investor companies cannot be the basis for treating share capital as unexplained.
- Replies to 131 notices and confirmations were on record and remained uncontroverted.
Tribunal relied on:
