IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER &

SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील स.ं /ITA No.266/SRT/2025 Assessment Year: (2010-11)

(Hybrid Hearing)

ITO, Vs. SVS Tex O Fab Pvt. Ltd., Ward – 2(1)(3), 4247/48, Millenium Market, Surat Ring Road, Station Road, Surat - 395002 èथायीलेखासं./जीआइआरसं./PAN/GIR No: AANCS8465R (Appellant) (Respondent)

Appellant by Shri Suresh K. Kabra, CA Respondent by Shri Ajay Uke, Sr. DR Date of Hearing 16/10/2025 Date of Pronouncement 18/12/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM:

This appeal by the revenue emanates from the order passed under section

250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 31.12.2024 by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2010-11.

2. The grounds of appeal raised by the revenue are as under:

“i. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made on account of unexplained share Capital and Share Premium amounting to Rs. 2,55,00,000/- without appreciating the fact that the assessee failed to prove genuineness of transactions and creditworthiness of investors during the assessment proceedings.

ii. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the share capital and share premium received by the assessee company is of capital nature and has not appreciated the provision of section 68 of the Act?

iii. On the facts and circumstances of the case and in law, the Ld CIT(A) has not appreciated that the investors are not having capacity to prove the sources of investment made in shares of the company and the assessee company has accommodated his own money in the guise of the share premium and share capital through these investors.

iv. On the basis of the facts and circumstances of the case and in law, the Ld.

CIT(A) ought to have upheld the order of the Assessing Officer.

v. It is therefore prayed that the order of the Ld. CIT(A) may kindly be set aside and that of the Assessing Officer be restored.

vi. The appellant craves leave to add, alter, amend and/or withdraw any grounds of appeal either before or during the course of hearing of the appeal.”

3. Brief facts of the case are that the assessee filed its ITR for the AY 2010-11 on 26.09.2010, declaring total income at Rs.20,68,050/-. In this case, Shri Sunil Ramesh Bodra had invested in 2,55,000 equity shares of Rs.10/- each, at a premium of Rs.90/-, aggregating to Rs.100/- per share in the assessee company. The assessee company had received share capital and premium to the tune of Rs.2,55,00,000/- during the year under consideration from Shri Sunil Bodra. Thereafter, the case of the assessee was reopened u/s.147 of the Act for the reason that the company had availed accommodation entry to the tune of Rs.2,55,00,000/- during the year. Notice u/s.148 of the Act was issued on 31.03.2017. The assessee submitted copy of return of income in response to the same. Thereafter, notices u/s.143(2), 142(1) of the Act and show cause notice were issued seeking details on the relevant issue. In compliance, assessee furnished its submissions and reply.

4. On perusal of the same, the AO noticed that the assessee failed to discharge the onus cast upon him to establish the identity, creditworthiness of the lender and genuineness of the transaction. Accordingly, the amount to the tune of Rs.2,55,00,000/- shown to have been received by the assessee as share capital including premium was treated as unexplained cash credits in the hands of the assessee and added to the total income of the assessee u/s.68 of the Act. The assessment order was passed u/s.143(3) r.w.s. 147 of the Act on 19.12.2017, determining total income at Rs.2,75,68,050/-.

5. Aggrieved by the order of the AO, assessee filed appeal before the CIT(A). During appellate proceedings, in compliance to notices i