No Question of Law: Calcutta HC Dismisses Revenue’s Appeal Against ITAT Order Deleting Share Capital Addition u/s 68 [Read Order]

Calcutta High Court Rejects Revenue’s Plea on Share Capital Addition Under Section 68

In a significant ruling, the Calcutta High Court has dismissed an appeal filed by the Revenue department against an order passed by the Income Tax Appellate Tribunal (ITAT). The case centered around the addition of share capital under Section 68 of the Income Tax Act.

Background of the Case

The core issue revolved around the assessee’s share capital addition, which was challenged by the Revenue authorities. Section 68 deals with unexplained cash credits, and the authorities sought to add the share capital amount to the assessee’s income, arguing it was not adequately explained.

ITAT’s Earlier Ruling

The ITAT, however, had previously ruled in favour of the assessee. The Tribunal’s decision was based on its assessment that the assessee had adequately demonstrated:

• The identity of the investors.
• The creditworthiness of the investors.
• The genuineness of the transaction.

High Court’s Observations

The Calcutta High Court, in its recent judgment, concurred with the ITAT’s findings. The court observed that both the Commissioner of Income Tax (Appeals) [CIT(A)] and the Tribunal had thoroughly examined the critical requirements under Section 68. They found that the assessee had successfully established the identity of the investors, their creditworthiness, and the genuine nature of the transactions. Consequently, the court saw no reason to interfere with the ITAT’s order and dismissed the Revenue’s appeal.