Runwal Commercial Assets Pvt. Ltd. Vs ITO (ITAT Mumbai)
Sec 68 Addition on Share Capital Deleted – Round-Tripping Allegation & Lack of Commercial Expediency Not Sufficient Without Evidence – ITAT Mumbai
AO treated ₹85.90 Cr received towards share capital as unexplained cash credit u/s 68 alleging round-tripping of funds within group entities and absence of commercial substance. CIT(A) upheld addition holding that identity alone is not sufficient and assessee failed to prove creditworthiness & genuineness beyond banking trail.
ITAT held that identity of subscriber, genuineness of share capital and banking trail stood established through confirmations, audited financials and replies to notices u/s 133(6). Tribunal observed that capital restructuring, conversion of OCD into equity and inter-corporate advances are matters of commercial expediency and AO cannot sit in armchair of businessman to question business wisdom. Mere movement of funds within group or absence of turnover does not justify Sec 68 addition without evidence that funds originated from assessee itself. As no material proved sham or unexplained source, addition of ₹85.90 Cr deleted. Assessee appeal allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This appeal by the assessee is directed against the order dated 29.09.2025 passed under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”], for Assessment Year 2023–24, arising out of the assessment order passed under section 143(3) read with section 144B dated 25.03.2025.
