Exotica Enclave Pvt. Ltd. Vs ITO (ITAT Kolkata)
Share Capital from Promoters Cannot Be Added Without Evidence — ITAT Kolkata Deletes ₹55 Lakh Section 68 Addition
The Kolkata Bench of the ITAT allowed the appeal of Exotica Enclave Pvt. Ltd. for AY 2012-13 and deleted the addition of ₹55 lakh made under section 68 towards alleged unexplained share capital.
The assessee, a real-estate company of the Goel Group, had raised ₹60 lakh from four promoter-group subscribers. Though full details such as ITRs, bank statements, audited financials and personal appearance under section 131 were furnished, the AO added the entire amount merely on the ground that shares were issued at a premium without “cogent justification.” The CIT(A) partly sustained the addition by doubting the “source of source” in respect of three subscribers.
The Tribunal held that the assessee had fully discharged its burden by proving identity, creditworthiness and genuineness of all shareholders. It observed that the CIT(A)’s doubts were based only on suspicion and conjectures without any tangible adverse material. The Tribunal further held that the proviso to section 68 (requiring explanation of source of source) is prospective and applicable only from AY 2013-14 and cannot be invoked for AY 2012-13, relying on CIT v. Gagandeep Infrastructure (P) Ltd. and Lovely Exports.
Since all three statutory tests under section 68 stood satisfied, the addition of ₹55 lakh was directed to be deleted and the assessee’s appeal was allowed
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 18.08.2025passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’) for the AY 2012-13.
