Swiss Park Vanijya Pvt. Ltd. Vs DCIT (ITAT Chennai)
₹24 Crore Share Capital Addition: ITAT Deletes ₹17 Crore, Sends ₹7 Crore Back for Examination
Facts of the case
Swiss Park Vanijya Pvt. Ltd. v. DCIT concerned a ₹24 crore addition under Section 68 for assessment year 2011–12. The company had received ₹2.4 crore as share capital and ₹21.6 crore as share premium. Of the total, ₹23 crore came through four Kolkata companies and ₹1 crore was invested directly by Arvind Gupta.
Following a search of the OPG Power Generation group, the tax department alleged that undisclosed funds belonging to the promoter had been routed through Kolkata entities and returned to Swiss Park as share subscriptions. The Assessing Officer reopened the company’s assessment and added the entire ₹24 crore on a protective basis. A substantive addition relating to ₹23 crore had already been made in Arvind Gupta’s assessment.
The Commissioner (Appeals) divided the receipts into three parts. He deleted ₹16 crore because an accepted declaration under the Income Declaration Scheme, 2016 (IDS) by Arvind Gupta’s HUF specifically covered the cash used to obtain those entries. He also deleted the ₹1 crore direct investment after examining evidence of its disclosed source. He sustained the remaining ₹7 crore as a substantive addition, finding that the explanation for its circuitous movement through other companies needed scrutiny. Both Swiss Park and the Revenue appealed.
