DCIT Vs Snow Mount Properties Private Limited (ITAT Mumbai Bench)
₹30,000 Income Cannot Eclipse ₹475-Crore Capital: Low Returned Income & Common Address Alone Cannot Turn ₹90.42-Crore Preference Share Capital Into Unexplained Cash Credit U/s 68 – ITAT Mumbai
Summary: The assessee-company filed its return declaring income of ₹18.90 lakh. Its case was selected for scrutiny through CASS to verify the substantial increase in share capital and large investments in properties.
During the year, the assessee issued 6% optionally fully convertible non-cumulative redeemable preference shares at a face value of ₹10 each. The entire preference share capital of ₹90.42 crore was subscribed by M/s Matrika Commercials LLP [MCL], which was already the assessee’s sole shareholder.
The AO called upon the assessee to prove the identity and creditworthiness of the investor and genuineness of the transaction. The assessee furnished bank statements evidencing receipt through banking channels, confirmation from MCL, its ITR acknowledgement, Form PAS-3 evidencing allotment, Board resolution and other statutory records.
The AO was nevertheless unconvinced. He observed that MCL had returned income of merely ₹30,000, the assessee and MCL shared the same registered address and the investor’s bank statement had not been produced during assessment. According to the AO, the assessee had failed to establish how MCL generated the enormous funds invested in the assessee-company.
The AO consequently treated the entire ₹90.42 crore as unexplained cash credit u/s 68 and applied section 115BBE.
The CIT(A), however, examined the evidence and deleted the addition. Aggrieved, the Revenue appealed before the ITAT.
The Revenue argued that mere entries in a balance sheet showing partner’s capital could not conclusively establish financial capacity. It was necessary to demonstrate whether funds were actually available on the dates of investment and trace their movement through the investor’s bank account. According to the Revenue, the CIT(A) had relied upon documents produced during appellate proceedings without independently verifying the fund trail.
Reliance was placed upon Roshan Di Hatti, Kale Khan Mohammad Hanif, Durga Prasad More, Sumati Dayal and NRA Iron & Steel (P.) Ltd. to contend that the apparent need not always be real and that financial transactions must withstand examination based upon surrounding circumstances and human probabilities.
The assessee countered that MCL’s identity was beyond doubt. It was a duly incorporated LLP, regularly filing income-tax returns and ROC compliances, and was already the assessee’s sole shareholder. The investment was not made by an unknown or newly introduced accommodation-entry provider.
The bank statements of the assessee demonstrated receipt of the money through regular banking channels. MCL had issued a confirmation and its own bank statement was also placed on record. The allotment was supported by Form PAS-3, Board resolution, Form 61A and statutory filings.
More importantly, MCL’s balance sheet disclosed partner’s capital of approximately ₹475.49 crore. Its return reflected investments of about ₹343.18 crore, including the preference shares subscribed in the assessee-company. The transaction also appeared in MCL’s Annual Information Statement.
The CIT(A) found that MCL had funds of ₹216.12 crore as on 31.03.2022, even before the impugned investment. The source of the funds was explained as amounts received from M/s Shripal Enterprises LLP. Thus, even the source of source was placed before the appellate authority.
The CIT(A) rejected the AO’s reliance upon the common registered address. Two independently incorporated entities do not lose their legal identity merely because they operate from the same address. Relying upon PCIT v. Matchless Glass Services Pvt. Ltd., the CIT(A) observed that a common address might be a relevant circumstance, but it could not, by itself, establish that the investor was non-existent or lacked creditworthiness.
The CIT(A) also found that MCL was engaged in making investments. Apart from the assessee-company, it had invested approximately ₹163.86 crore in another entity. Therefore, the fact that MCL had returned income of only ₹30,000 during the relevant year could not be equated with absence of financial capacity. Current-year taxable income and accumulated capital or net worth are entirely different concepts.
The assessee had accordingly established all three limbs of section 68: identity of the investor, its creditworthiness and genuineness of the transaction. If the AO still entertained doubts, he could have issued notices u/s 133(6) to MCL or to the entities identified as the source of its funds. Instead, the addition was made without undertaking such verification.
The Tribunal carefully considered the findings of the CIT(A) and the documentary evidence. It held that the assessee had proved the identity and creditworthiness of MCL and the genuineness of its subscription to the preference share capital.
Significantly, the Revenue could not rebut any of the CIT(A)’s factual findings with contrary evidence. General reliance upon human probabilities could not displace specific documentary evidence demonstrating the investor’s substantial capital, existing shareholding, bank movement and statutory compliance.
Finding no infirmity in the CIT(A)’s order, the Tribunal sustained deletion of the addition of ₹90.42 crore u/s 68 r.w.s. 115BBE and dismissed the Revenue’s appeal.
Author’s Comment
This decision highlights the important distinction between an investor’s returned income and its financial capacity. An entity may report nominal taxable income in a particular year and yet possess substantial accumulated capital, reserves or realised funds capable of supporting an investment.
Similarly, a common registered address may justify further inquiry, but it is not proof of a sham transaction. Suspicion can trigger investigation; it cannot replace investigation.
The decision does not lay down that bank routing, ROC forms and confirmations will always conclude a section 68 inquiry. Rather, the relief followed from the cumulative evidence: MCL was the existing sole shareholder, possessed partner’s capital of about ₹475 crore, had prior-year funds exceeding ₹216 crore, regularly made investments, confirmed the subscription and routed the transaction through banking channels.
Once such evidence was furnished, the AO could not merely cite NRA Iron & Steel and human probabilities while avoiding direct verification u/s 133(6). Section 68 requires proof, but it equally requires the Revenue to meaningfully examine—and factually rebut—the proof produced.
Cases Discussed
- Roshan Di Hatti v. CIT (107 ITR 938)
- Kale Khan Mohammad Hanif v. CIT (50 ITR 1)
- CIT v. Durga Prasad More (82 ITR 540)
- Sumati Dayal v. CIT (214 ITR 801)
- Pr. CIT v. NRA Iron & Steel (P.) Ltd.
- PCIT v. Matchless Glass Services Pvt. Ltd.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, MUMBAI BENCH
This appeal is filed by the Revenue against the order of the learned CIT(A)-NFAC, Delhi, dated 14.11.2025, for the assessment year 2023-24 in deleting the addition made u/s. 68 of the Act.
2. The Revenue has raised the following grounds of appeal:
1) Ground 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 90,42,00,000/- made by the Assessing Officer under section 68 r.w.s. 115BBE of the Income-tax Act, 1961, without properly appreciating the findings recorded in the assessment order and the material placed on record.
2) Ground 2. The Ld. CIT(A) has failed to appreciate that the assessee did not discharge the onus cast upon it under section 68 to establish the identity and creditworthiness of M/s Matrika Commercials LLP and the genuineness of the alleged share capital receipt of Rs. 90.42 crores and no supporting bank statement OR source of funds was furnished during assessment.
3) Ground 3. The Ld. CIT(A) has erred in ignoring the well established legal principles relied upon by the Assessing Officer, including the decisions of the Honble Supreme Court in the cases of Roshan Di Hatti, Kale Khan Mohammad Hanif, Durga Prasad More, Sumati Dayal and P. Mohanakala, WHARE it is held that apparent is not real and human probabilities must prevail when financial capacity is not proved.
4) Ground 4. The Ld. CIT(A) has erred in concluding that mere receipt of money through banking channels, filing of ROC compliance, and confirmations is sufficient to establish genuineness of transactions, ignoring the suspicious facts such as common address of assessee and investor and the absence of demonstrated financial capacity of the investor.”
3. Briefly stated, the facts are that the assessee-company filed its return of income on 11.10.2023, declaring an income of ₹18,90,720/-. The case was selected for scrutiny through CASS to verify the increase in share capital and large investments in properties. In the course of the assessment proceedings, the assessee was required to substantiate the increase in share capital by filing relevant documentary evidence including the source of capital introduced for which a notice was issued on 22.08.2024. In reply, the assessee furnished submissions dated 04.07.2024 and 05.09.2024 through which the assessee furnished relevant copies of bank statements, confirmations from shareholders, and Form No. PAS-3, evidencing the allotment of preferential share capital during the year. The assessee also enclosed the ITR acknowledgement of the shareholder to establish the identity and genuineness of the investor. It was submitted that the shares were issued at face value of ₹10/- and without any premium.
4. However, the Assessing Officer was not convinced with the explanation furnished by the assessee. The Assessing Officer observed that the assessee had not submitted a copy of the bank statement of M/s Matrika Commercial LLP, from whom the assessee had received the share application money. The Assessing Officer observed that the assessee could not establish the creditworthiness of the said party and the genuineness of the transaction as the said party had returned income of ₹30,000/- and also the addresses of both the assessee as well as the said party were the same. Therefore, the Assessing Officer was of the view that the assessee did not prove the identity, creditworthiness, and genuineness of the transactions. The Assessing Officer, observing that the creditworthiness of the party and the genuineness of the transaction were not established and the assessee had failed to discharge the initial burden, concluded that the share capital was nothing but unexplained cash credit and, accordingly, made an addition u/s. 68 of the Act.
5. On appeal, the learned CIT(A) deleted the addition made by the Assessing Officer.
6. Before us, the learned DR submitted that the assessee had received a sum of Rs.90,42,00,000/- towards subscription to 6% Optionally Fully Convertible Non-Cumulative Redeemable Preference Shares from M/s Matrika Commercials LLP (MCL). During the course of assessment proceedings, the Assessing Officer called upon the assessee to establish the identity of the investor, its creditworthiness and the genuineness of the transaction. However, despite sufficient opportunity, the assessee failed to discharge the statutory burden cast upon it under section 68 of the Act. The Assessing Officer recorded a categorical finding that the assessee failed to furnish the bank statement of M/s Matrika Commercials LLP from which the impugned investment had been made. Consequently, the assessee failed to establish how MCL had generated the funds invested in the assessee company. The Assessing Officer further observed that the return of income of MCL disclosed a taxable income of merely Rs.30,000/-, which did not establish its financial capacity to invest Rs.90.42 crore. The assessee merely stated that the investment was made out of partners’ funds but failed to substantiate the said claim by producing any cogent documentary evidence before the Assessing Officer. The Assessing Officer also observed that the assessee and MCL were operating from the same registered address and, therefore, the surrounding circumstances warranted deeper verification. In these circumstances, the Assessing Officer rightly concluded that the assessee had failed to establish the creditworthiness of the investor and the genuineness of the transaction and accordingly made the addition under section 68 of the Act. The Assessing Officer observed that the assessee company and M/s Matrika Commercials LLP were operating from the same registered address and treated the same as one of the surrounding circumstances warranting deeper verification. However, the learned CIT(A) held that merely because both the entities shared the same registered address, the identity or creditworthiness of MCL could not be doubted, as both entities were separately incorporated with the Registrar of Companies, regularly filing statutory compliances and the share application money had been received through banking channels. The learned CIT (A), however, deleted the addition primarily on the ground that MCL had partners’ capital of Rs.475.48 crore and, therefore, possessed sufficient financial capacity to make the investment.
7. Ld. DR further submitted that this finding is legally unsustainable. Mere reflection of partners’ capital in the balance sheet cannot be equated with proof of creditworthiness. The assessee was required to establish how MCL had actually generated the funds invested in the assessee company, whether such funds were available on the date of investment and whether the investment had actually flown from explained sources. In the absence of the bank statements of MCL before the Assessing Officer demonstrating the actual source and movement of funds, the statutory burden under section 68 remained undischarged. The learned CIT(A) further examined the balance sheet of MCL for the preceding assessment year and observed that MCL had funds amounting to Rs.216.12 crore as on 31.03.2022. On this basis, the learned CIT(A) concluded that MCL had sufficient funds to subscribe to the preference shares issued by the assessee. The learned CIT(A) further relied upon the balance sheet of MCL showing funds of Rs.216.12 crore as on 31.03.2022 and concluded that MCL possessed sufficient funds to subscribe to the preference shares. According to the Ld. DR such reasoning is erroneous. A balance sheet merely reflects the financial position as on a particular date and does not establish the actual availability, generation or movement of funds on the date of the impugned investment. The existence of capital in the balance sheet cannot substantive proof of the actual source of the investment, particularly when the assessee failed to produce the relevant bank statements before the Assessing Officer. The learned CIT(A) also observed that the transaction of allotment of preference shares was duly confirmed by M/s Matrika Commercials LLP and was supported by Form PAS-3, Board Resolution, Form No.61A and other statutory records. On this basis, the learned CIT(A) concluded that the genuineness of the transaction stood established. The learned CIT(A) further observed that although the bank statement of M/s Matrika Commercials LLP was not produced during the assessment proceedings, the same was furnished during the appellate proceedings along with the financial statements for Assessment Years 2022-23 and 2023-24. On the basis of these documents, the learned CIT(A) concluded that MCL possessed sufficient funds, the source of investment and source of source stood established and that the transaction had been carried out through banking channels. However, the appellate order does not record any independent verification or examination of the bank statement or the actual fund trail before arriving at the aforesaid conclusion.
8. Ld. DR submitted that the legal position is well settled by the Hon’ble Supreme Court in Roshan Di Hatti v. CIT (107 ITR 938) and Kale Khan Mohammad Hanif v. CIT (50 ITR 1), wherein it has been held that the onus of proving the source of a sum of money found credited in the books of account lies upon the assessee, and where the assessee fails to satisfactorily explain the nature and source of such receipt, it is open to the Revenue to treat the amount as income without any further burden to establish the source thereof. This principle has been consistently reaffirmed in Durga Prasad More (82 ITR 540) (SC), wherein the Hon’ble Supreme Court held that the taxing authorities are entitled to look beyond the apparent and examine the surrounding circumstances, and in Sumati Dayal v. CIT (214 ITR 801) (SC), wherein the Hon’ble Court held that the surrounding circumstances and the test of human probabilities are relevant while examining such transactions. Further, the Hon’ble Supreme Court in NRA Iron & Steel (P.) Ltd. held that the investor companies having filed income-tax returns with meagre or nil income had to explain how they had invested such huge sums of money in the assessee company and that merely filing primary evidence does not discharge the statutory onus under section 68. The ratio of the said judgment squarely applies to the facts of the present case where MCL disclosed a taxable income of only Rs.30,000/- while making an investment of Rs.90.42 crore, without satisfactorily establishing the actual source from which such funds were generated. In view of the aforesaid facts and settled legal position, it is respectfully submitted that the learned CIT(A) has erred in deleting the addition by overlooking the fundamental requirement of section 68, namely, the obligation of the assessee to establish the creditworthiness of the investor and the genuineness of the transaction through cogent evidence. The assessee failed to establish how M/s Matrika Commercials LLP generated the funds invested in the assessee company and, therefore, failed to discharge the statutory burden cast upon it under section 68 of the Act.
9. Ld. DR submitted that the order of the learned CIT(A) be set aside, the order passed by the Assessing Officer be restored, and the appeal filed by the Revenue be kindly allowed.
10. In reply, Ld. Counsel for the assessee submitted that during the assessment year under consideration, the assessee issued ₹9,04,20,000/- 6% optionally convertible non-cumulative redeemable preference shares (“RPS”) of ₹100/- each. The RPS was fully subscribed by M/s Matrika Commercials LLP (“MCL”). Ld. Counsel submitted that the entire shareholding of the assessee-company is owned by MCL, which is the sole shareholder. Therefore, Ld. Counsel for the assessee submitted that the assessee has proved the identity of the shareholder, namely, M/s Matrika Commercials LLP. Ld. Counsel submitted that during the course of the assessment proceedings, vide notice dated 22.08.2024, the assessee was asked to prove the source of preference capital raised by the assessee and to establish the identity and creditworthiness of the investing party and the genuineness of the transaction with the said party. Ld. Counsel submitted that in response to the said notice, the assessee vide letter dated 05.09.2024, inter alia, submitted necessary documents regarding the increase in share capital, viz., relevant copies of bank statements evidencing receipt of share application money from MCL, confirmation letter from MCL, Form No. PAS-3 evidencing the allotment of preference share capital, and a copy of the ITR acknowledgement of MCL. When the Assessing Officer subsequently issued a notice on 03.03.2025 proposing to make an addition amounting to ₹90,42,00,000/- to the total income of the assessee u/s. 68 of the Act, stating that the assessee had failed to establish the creditworthiness of the investor and the genuineness of the transaction between the assessee and the investor, the assessee, vide letter dated 10.03.2025 submitted that it had amply established the identity, creditworthiness, and genuineness of the transaction and under such circumstances, no addition could be made u/s. 68 of the Act and, thus, objected to the proposed variation. However, the Assessing Officer did not accept the contention of the assessee and made an addition of ₹90,42,00,000/- u/s. 68 of the Act.
11. Ld. Counsel for the assessee referring to page 19 of the paper book which is the Notes of Financial Statements for the year ended 31st March, 2023 of the assessee-company, submitted that the assessee had issued, subscribed and paid-up 9,04,20,000 preference shares of ₹10/- each, fully paid-up.
12. Referring to page 20 of the paper book, Ld. Counsel for the assessee submitted that the initially issued subscribed and paid-up capital of the assessee of 50,000 equity shares of ₹10/- each fully paid-up, was held by MCL. During the assessment year under consideration, the assessee issued preference shares to the sole shareholder of the assessee, namely, M/s Matrika Commercials LLP.
13. Referring to pages 27, 28, and 29 of the paper book, which are the HDFC Bank (Fort Branch) bank statement and Canara Bank, bank statement of the assessee, Ld. Counsel submitted that the share application money was received through banking channels.
14. Ld. Counsel for the assessee further referring to page 29 of the paper book submitted that it is a copy of the bank statement of MCL. Ld. Counsel for the assessee referring to page 30 of the paper book submitted that this is the statement showing the increase in share capital and all the payments were routed through banking channels.
15. Ld. Counsel referring to page 31 of the paper book submitted that this is the confirmation issued by MCL confirming the investment in preference shares made by it in the financial year 2022-23 relevant to the assessment year 2023-24.
16. Ld. Counsel referring to pages 32 to 54 of the paper book submitted that this is a copy of the return of allotment in Form No. PAS-3, wherein the shares were allotted to MCL.
17. Referring to page 55 of the paper book, Ld. Counsel submitted that this is a copy of the return of income filed by MCL for the assessment year 2023-24.
18. Ld. Counsel referring to page 66 of the paper book submitted that this is the detailed submission made before the Assessing Officer in the course of assessment proceedings to prove the genuineness, identity, and creditworthiness of the share capital issued to the sole shareholder of the assessee, namely, M/s Matrika Commercials LLP.
19. Referring to page 74 of the paper book which is a copy of the return filed by MCL, Ld. Counsel submitted that in the return of income filed by the shareholder, the investment made by it in the preference shares was declared at ₹343,18,00,000/. Similarly, the partners’ capital of MCL was shown at ₹475,49,52,119/-.
20. Referring to page 82 of the paper book which is the Annual Information Statement of the shareholder, MCL, a transaction of purchase of shares from the assessee-company was also reflected. Ld. Counsel submitted that all these details were furnished before the Assessing Officer to prove the genuineness, creditworthiness, and identity of the shareholder. The very same documents were also furnished before the learned CIT(A).
21. Ld. Counsel submitted that the learned CIT(A) after analysing the balance sheets for the assessment years 2022-23 and 2023-24 of the assessee as well as the shareholder, concluded that the investment made by the sole shareholder in the preference shares issued by the assessee was genuine.
22. The Assessing Officer doubted the creditworthiness and genuineness of the transaction, whereas the learned CIT(A), considering the averments of the Assessing Officer and the submissions and evidence placed on record, concluded that the assessee had proved the creditworthiness, identity, and genuineness of the transaction.
23. Ld. Counsel for the assessee further submitted that the decisions relied upon by the learned DR in the cases of NRA Iron & Steel and Sumati Dayal are factually different and distinguishable.
24. Heard rival contentions and perused the orders of the authorities below. The learned CIT(A) after considering the submissions of the assessee, the findings of the Assessing Officer and the material / evidence placed by the assessee and after analysing the same, concluded that the transaction relating to the issue of preference shares by the assessee to its shareholder was genuine and that the identity, creditworthiness, and genuineness of the transaction could not be doubted, observing as under:
“5.4 I have carefully perused the appellant’s submission and AO’s findings. The only issue under consideration is that the AO found the share capital of Rs. 90,42,00,000/- received from M/s MCL non genuine as the appellant was not able to discharge its onus to establish Identity and Creditworthiness of creditor i.e. M/s MCL and genuineness of transactions during the assessment proceedings. The AO came to his conclusion by relying on following findings:
(i) The address of appellant and creditor firm are same.
(ii) The income of M/s MCL was shown at Rs. 30,000/- only.
(ii) The appellant failed to establish source of source of fund.5.5. The above findings of the AO were carefully examined but not found satisfactory to invoke section 68 of the Act due to the following reasons:
5.5.1 Mere address of the creditor and appellant firm are same, cannot be the reason to doubt the identity of the creditor as the M/s MCL was incorporated on December 4, 2011 and it has been filing ITR and making due compliances with the concerned ROC regularly. Both the entities are different and registered with the ROC. Further, the share application money was received through banking channel only which further established the identity of MCL as it is mandatory on the part of banks to comply with KYC, due diligence. Reliance is place upon the decision of Delhi High Court in PCIT vs. Matchless Glass Services Pvt. Ltd. wherein the Hon’ble court has held that the fact that a common address is shared by several companies may not be the sole ground to doubt the identity or the creditworthiness of the companies. The court noted that while a common address is a relevant factor, the Assessing Officer (AO) must consider other cumulative factors and conduct proper inquiries to establish the lack of genuineness of the transactions.
5.5.2 The entire share capital was received through the banking channel by way of partner’s fund and transaction of allotment of preference schemes have duly confirmed by MCL. The appellant has submitted the ITR acknowledgement of MCL along with Balance sheet highlighting the fact that the investor had sufficient net worth and financial capacity in the firm of partners contribution amounting to Rs. 475 Crs to invest in preference share capital of the appellant.
5.5.3. The creditor Firm had its own fund to the tune of Rs. 475.48 Crore during the year consideration. However, for further verification, a notice dated 30.10.2025 was issued to the appellant wherein it was specifically asked to provide balance sheet of previous year (i.e. AY 2022-23). The appellant filed its submission on 31.10.2025 by providing requisite details. The relevant part of this submission as under:
5.5.4 From the above balance sheet, it is clear that the M/s MCL was having fund of Rs. 216,12,34,057/- on 31.03.2022. Hence it can be very well concluded that M/s MCL was having sufficient fund to subscribe RPS issued by the appellant company. Moreover, the appellant company has also submitted details of source of source of fund in which it has stated that the said funds were received on several dates from M/s Shripal Enterprise LLP, an LLP incorporated on 21.04.2010 wherein Mukesh Ambani, MD, RIL & his family members are designated partners and whose creditworthiness cannot be questioned. Hence, the source of source of funds is conclusively proved.
5.5.5. The transaction of allotment of shares was duly confirmed by MCL alongwith copy of form PAS-3 filed with registrar of companies, copy of resolution for issuance of preference shares passed by the board of directors, AIR in form no 61A as per sec285BA of the Act etc. This clearly establishes the genuineness of transaction more particularly when MCL was already an existing shareholder in the appellant company.
5.5.6. It is seen from the statement of MCL that the MCL had not only invested in redeemable Preference shares of appellant company but also in other entity to the extent of 163.86 Crs which clearly suggest that the making investment in companies is the main activity of MCL for which MCL had sufficient own fund in the form of partner’s capital and which has been clearly demonstrated by the appellant. Since MCL had enough fund to investment in the appellant’s company low income of MCL during the year cannot be a valid reason to held the transaction as non genuine.
5.5.7 Regarding non submission of bank statement of MCL during the assessment proceedings, it is to mention that the same has been submitted during the appellate proceedings alongwith the copy of financial statements for the A.Y 23/24 & proceeding A.Y 22-23 – On perusal of the same it is clearly established that –
i. MCL was having sufficient fund to invest in appellant’s company in the form of partner’s contribution.
ii. Source of fund of MCL is M/s Shripal Enterprises LLP wherein Shri Mukesh Ambani & family members are partner whose credit worthiness cannot be questioned.
iii. the transactions were carried out through banking channel.
iv. All the necessary compliance as per company Law & IT Act has been done by the appellant company as well as MCL.
v. Source of investment and source of source of investment are established with supporting documentary evidences.
5.6 In view of the above discussion, it is crystal clear that the appellant company has passed the litmus test by establishing the Identity and Creditworthiness of creditors and genuineness of transactions accordingly, satisfied all three limbs of section 68 i.e. Identity of the party credit worthiness of the party and genuineness of transaction of the act. Before arriving on any conclusion, the AO could have verified the facts by way of issuing notice u/s 133(6) to the source parties and source of source parties. However, the AO reached at his conclusion without deep diving into the facts which is not in accordance with the law and set procedure. In view of the above discussion made the addition made by the AO u/s 68 of the act of Rs. 90,42,00,000 is hereby deleted and appeal is allowed accordingly.”
25. On careful perusal of the findings of the Ld. CIT(A) and also evidences furnished before us, we hold that the assessee has proved the genuineness of the transaction, identity and creditworthiness of the shareholder in subscribing for preferential share capital in the assessee-company. None of the findings recorded by the Ld. CIT(A) were rebutted with evidences by the Revenue before us. Thus, we see no infirmity in the order passed by the Ld. CIT(A) in deleting the addition made by the Assessing Officer. The order passed by the Ld. CIT(A) is sustained and the grounds raised by the Revenue are rejected.
26. In the result, the appeal by the Revenue is dismissed.
Order pronounced in the open court on 11/09/2026
