E Trav Tech Limited faces ₹34 crore tax demand in appeal

E Trav Tech Limited is contesting a ₹34 crore income-tax demand for Assessment Year 2023-24 after the assessing officer added ₹12 crore as unexplained credit under Section 68 of the Income-tax Act, 1961. The March 24, 2025 order is under appeal before the Commissioner of Income Tax (Appeals), with no hearing date assigned.

Why did E Trav Tech receive a ₹34 crore share-capital tax demand?

E Trav Tech received the ₹34 crore demand after the assessing officer treated ₹12 crore of increased share capital as unexplained credit under Section 68. The Section 156 notice of demand and assessment order were both dated March 24, 2025 for Assessment Year 2023-24. Section 156 is the Income-tax Act mechanism through which the department communicates a tax amount payable following an assessment.

E Trav Tech filed its original return under Section 139(1) on October 21, 2023 and a revised return under Section 139(5) on December 27, 2023. Both returns declared income of ₹23 crore. The case was selected for scrutiny through the SCASS module because it reported substantial short-term capital gains under Section 111A in Schedule CG of the income-tax return, requiring verification of securities and mutual-fund sale consideration, trading-account reconciliation and investment sources.

The department alleged that E Trav Tech remained largely non-compliant during scrutiny. It cited Section 142(1) notices dated February 27, 2025 and March 13, 2025, and show-cause notices dated March 7 and March 18, 2025. The disclosure records a partial response, but states that the company did not provide adequate documentary evidence to establish the identity, creditworthiness and genuineness of investors connected with the increase in share capital.

Section 68 was applied because the assessing officer found that the ₹12 crore credit had not been satisfactorily explained through evidence on those three investor tests. The stated share-capital issue was separate from the short-term capital gains that initially prompted scrutiny. The March 24, 2025 order also initiated penalty proceedings under Section 271A(1C) in relation to income stated to be chargeable under Section 115FB, although the disclosure gives no separate penalty amount.

What is the present status of E Trav Tech's ₹34 crore demand?

E Trav Tech's ₹34 crore demand is being challenged before the Commissioner of Income Tax (Appeals). The disclosed stage is hearing of appeal, but no hearing date has been assigned. The source does not state the grounds of appeal, whether any amount has been paid, or whether a separate penalty order has been passed.

The appellate outcome matters because the ₹34 crore demand follows the ₹12 crore Section 68 addition. A modification or deletion of the addition could change the tax computation and any consequential action. If the addition is sustained, the finding that E Trav Tech did not substantiate the identity, creditworthiness and genuineness of the relevant investors would remain in place, subject to any further remedy available to the company.

The March 24, 2025 assessment was based on Assessment Year 2023-24, while E Trav Tech has separate disclosed proceedings for Assessment Years 2020-21 and 2024-25. Those proceedings concern unsecured loans and a revenue reconciliation, respectively. They are therefore different matters from the ₹12 crore share-capital credit considered in the ₹34 crore demand.

How much of Dove Soft's group-company tax litigation is E Trav Tech?

E Trav Tech represents about 98.9% of Dove Soft's disclosed direct-tax amount for group companies. The litigation summary records four direct-tax cases involving ₹36.65 crore for group companies, while E Trav Tech's three disclosed direct-tax demands total ₹36.24 crore. The remaining direct-tax demand is ₹40.86 lakh involving MOS Utility Limited for Assessment Year 2016-17.

The group-company summary separately records one indirect-tax case involving ₹58 lakh. That matter concerns MOS Utility, where the Deputy Commissioner, Division-10, Central GST Mumbai (West) ordered payment of ₹29 lakh of short-paid tax and a ₹29 lakh penalty for 2017-18. The ₹36.65 crore direct-tax figure does not include litigation involving Dove Soft, its promoters, directors or senior management.

What do E Trav Tech's other tax cases involve?

E Trav Tech's Assessment Year 2020-21 case concerns unsecured loans, rather than share capital. The department alleged that the company had unsecured loans of ₹5.97 crore from different parties and treated ₹2 crore as unexplained cash credit under Section 68 after finding that the company could not explain that portion. The resulting Section 156 demand dated September 27, 2022 was ₹2.07 crore.

The department sought evidence on the identity, genuineness and creditworthiness of creditors in the 2020-21 matter and issued Section 133(6) notices to creditors, some of whom responded while others did not. The order also charged interest under Sections 234A, 234B and 234C and initiated penalty proceedings under Section 270A. The Commissioner of Income Tax (Appeals) dismissed E Trav Tech's appeal on March 29, 2024, and the disclosure does not report a further challenge.

E Trav Tech's Assessment Year 2024-25 case is smaller and arose from a difference between tax-reporting data and its books. The March 28, 2026 assessment accepted the company's explanations regarding share premium, unsecured loans and legacy additions, but added ₹57.73 lakh for an unreconciled difference between ₹37.04 crore of revenue in Form 26AS and ₹36.41 crore of income offered in the books. Form 26AS is the income-tax statement that reflects specified tax and transaction information.

The 2024-25 addition raised assessed total income from the reported ₹21 crore to ₹21.58 crore and produced a ₹16.79 lakh Section 156 demand. E Trav Tech filed Form 35, the prescribed appeal form, on April 14, 2026 against the full ₹57.73 lakh addition and ₹16.79 lakh demand. That matter is also at the hearing stage, with no hearing date assigned.

Conclusion

E Trav Tech's ₹34 crore Assessment Year 2023-24 demand is the central disclosed tax exposure among Dove Soft group companies because it accounts for ₹34 crore of the ₹36.65 crore group-company direct-tax total. The demand arose from an alleged ₹12 crore unexplained share-capital credit, while E Trav Tech's other disclosed cases concern a ₹2 crore unsecured-loan addition and a ₹57.73 lakh Form 26AS reconciliation difference.

The next developments to watch are hearing dates and appellate decisions for Assessment Years 2023-24 and 2024-25. The pending 2023-24 appeal directly concerns the ₹12 crore Section 68 addition and ₹34 crore demand, while the 2024-25 appeal concerns the separate ₹57.73 lakh revenue-reconciliation addition and ₹16.79 lakh demand.