Tribunal directs AO to verify source of income on sale of unquoted shares to prevent double addition

The Tribunal partially allowed the appeal for statistical purposes, directing the Assessing Officer to verify if the addition of Rs. 6,92,50,000 on account of the sale of investment in unquoted shares was from previously settled income. The decision aimed to prevent double addition and ensure accurate treatment of the sale proceeds, emphasizing the importance of aligning with the Vivad Se Vishwas Scheme. The Tribunal's judgment focused on addressing challenges to the additions made by the Assessing Officer, particularly concerning the sale of investment in unquoted shares.

---

---

Issues:
1. Addition of Rs. 6,92,50,000 made by the Assessing Officer on account of sale of investment in unquoted shares.
2. Challenge to the additions made by the Assessing Officer in the assessment completed under section 143(3)/147 of the Act.
3. Appeal filed before the Tribunal against the order of the ld. CIT(Appeals).

Issue 1: Addition of Rs. 6,92,50,000 on account of sale of investment in unquoted shares:
The appeal was filed against the order of the ld. CIT(Appeals) confirming the additions made by the Assessing Officer to the total income of the assessee. The main issue revolved around the addition of Rs. 6,92,50,000 made by the Assessing Officer on account of the sale of investment in unquoted shares, treating it as unexplained cash credit. The assessee argued that the investment was made from money received as share capital and share premium in a previous year, which had already been added to the total income and settled under the Vivad Se Vishwas Scheme. The assessee contended that treating the sale proceeds of such investment as income again would result in double addition. The Tribunal decided to restore this issue to the Assessing Officer for verification. If it is found that the sale proceeds were from the share capital and share premium already accepted as income, it cannot be treated as income again to avoid double addition.

Issue 2: Challenge to the additions made by the Assessing Officer:
The additions made by the Assessing Officer were challenged by the assessee in the appeal filed before the ld. CIT(Appeals). The ld. CIT(Appeals, after considering the submissions, confirmed all three additions made by the Assessing Officer to the total income of the assessee. Subsequently, the assessee appealed to the Tribunal against the order of the ld. CIT(Appeals), leading to a detailed argument and decision primarily focusing on the addition related to the sale of investment in unquoted shares.

Issue 3: Appeal filed before the Tribunal:
The assessee, aggrieved by the order of the ld. CIT(Appeals), filed an appeal before the Tribunal. After hearing arguments from both sides and examining the relevant material on record, the Tribunal decided to partly allow the appeal for statistical purposes. The decision to restore the issue of the addition of Rs. 6,92,50,000 to the Assessing Officer for verification was the key outcome of the Tribunal's judgment, aiming to prevent double addition and ensure the correct treatment of the sale proceeds of the investment in unquoted shares.

In conclusion, the judgment addressed the challenges raised by the assessee against the additions made by the Assessing Officer, particularly focusing on the addition related to the sale of investment in unquoted shares. By deciding to send the matter back to the Assessing Officer for verification, the Tribunal aimed to ensure that the treatment of the sale proceeds aligns with the previously settled income under the Vivad Se Vishwas Scheme, avoiding any potential double addition.

---