High Court at Calcutta · Judgments and reasoned final orders
Principal Commissioner of Income Tax-2, Kolkata v. M/s Express Tradelink Private Limited
ITAT 95 of 2025 (IA No: GA/1/2025) ·
Deletion of Section 68 addition of Rs. 7,26,50,000/- on share capital and share premium for AY 2009-10; Finance Act, 2012 proviso to Section 68 ('source of source') is prospective from 01.04.2013; PCIT v. NRA Iron & Steel Pvt. Ltd. distinguished where all subscribers responded to Section 133(6) notices.
1. FACTS OF THE CASE
For AY 2009-10, the Assessing Officer added Rs. 7,26,50,000/- under Section 68 towards share capital and premium received from corporate subscribers on the ground that the subscribers' directors did not appear personally under Section 131. Both CIT(A) and ITAT deleted the addition after verifying that every subscriber company had responded to Section 133(6) notices with complete financial and tax records.
2. DISCUSSION BY THE COURT
The Division Bench held that: (1) The proviso inserted in Section 68 by the Finance Act, 2012 requiring a closely held company to prove the 'source of source' of share application money took effect prospectively from 01.04.2013 (AY 2013-14) and did not apply to AY 2009-10; and (2) The Supreme Court decision in PCIT v. NRA Iron & Steel Pvt. Ltd. was distinguishable because in NRA Iron & Steel field inquiries revealed non-existent or shell entities with negligible income, whereas here all investor companies were active income-tax assessees registered with the RoC who duly complied with Section 133(6) notices and established net worth far exceeding their investments.
3. JUDICIAL DECISION
Finding no perversity in the concurrent orders of the CIT(A) and the ITAT and no substantial question of law under Section 260A, the High Court dismissed the Revenue's appeal.
4. OUTCOME
Assessee - Revenue appeal dismissed; deletion of Rs. 7,26,50,000/- Section 68 addition upheld.
5. AKHB REVIEW POINT
For assessment years prior to AY 2013-14, the Finance Act 2012 'source of source' proviso to Section 68 does not apply, and NRA Iron & Steel cannot be invoked where all investor companies respond to Section 133(6) notices with verified net worth.
Source and verification
6-page official High Court at Calcutta judgment PDF (20260204_WBCHCO0013922025.pdf, 103,990 bytes).
Original PDF: 6 pages · SHA-256: 0334af9a6a30da7f6e89a6fd16b2eeebd78aeaa3cf4cc5e7d51ecacd8d4f86cd
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies Section 68 of the Income-tax Act, 1961 for AY 2009-10 prior to the Finance Act, 2012 proviso effective 01.04.2013. Income-tax Act, 2025 equivalence is not verified.
Full 6-page primary judgment PDF text read and verified page-by-page. Distinguishes PCIT v. NRA Iron & Steel Pvt. Ltd. (2019) 412 ITR 161 (SC) on facts and holds the Finance Act 2012 proviso to Section 68 prospective from AY 2013-14.
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General research only. Read the complete judgment and verify applicable law and subsequent treatment before reliance.