TaxTMI 
TaxTMI 
2026 (3) TMI 117
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..... AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. 3. The common issue raised in all the grounds raised by the Revenue is against the order of ld. CIT (A) partly deleting the addition to the extent of Rs.2,18,15,000/- as made by the ld. AO of Rs.2,30,00,000/- u/s 68 of the Act in respect of transactions of sale of unlisted equity shares. The assessee in its appeal has also challenged the part sustaining of addition vide ground no.4 in its appeal to the tune of Rs.11,50,000/- being 5% of the total sale value of investments without any basis and prayed the same may be deleted. 3.1. The facts in brief are that the assessee filed the return of income on 05.10.2016, showing total income of Rs.12,39,240/-, and book profit u/s 115JB of the Act amounting to Rs.14,22,063/-. The return was processed u/s 143(1) of the Act accepting the returned income. Thereafter, the case of the assessee was reopened after the ld. AO received information from DGIT(Inv), Mumbai, that the assessee is engaged in the reversal trades in illiquid stock options resulting in non-genuin....
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....h vide order dated 20.09.2022. 3.2. The ld counsel of the assessee submitted that the unlisted shares were purchased by the amalgamating company in financial year 2008-09 and the investments in shares were accepted by the revenue even in the assessment proceedings in A.Y. 2008-09 which has been noted by the ld CIT(A) in the appellate order also. The case of the assessee is squarely covered by the decision of the co-ordinate Bench of group company in case of Shree Ramchandra Ingot India Pvt Ltd. Vs DCIT in ITA No. 1363/Kol/2025 for A.Y. 2017-18 & others, which was also covered in the same search. The ld. AR submitted the issue of sale of shares (unlisted equities) has been decided by the co-ordinate bench in favour of the group concern vide order dated 19.11.2025. The ld. AR therefore prayed that since the issue is similar, the present addition sustained by the ld. CIT(A) may kindly be deleted by following the said order of the co-ordinate bench. 3.3. The ld. DR on the other hand submitted that each case has different facts nonetheless the issue of sale of shares was decided by the bench in the case referred by the ld. AR. The ld. DR relied heavily on the order of AO and praye....
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.... by the amalgamating companies by overlooking the fact that the share capital of the amalgamating companies were accepted in their respective assessments by the AO. In our opinion the AO has no basis of such suspicion and therefore, we do not find any merit in the contention of the revenue that these were shell companies and has been rightly treated so by the AO while framing the assessment and the addition has been rightly made u/s. 68 of the Act at Rs. 7,33,50,000/-. In our opinion, once these investments have been accepted in the earlier assessment years in the hands of the amalgamating companies, then how the same can be treated as unexplained investments when these investments were sold by the same amalgamating companies. The decision of Hon'ble Supreme Court in the case of PCIT vs NRA Iron and Steel Pvt Ltd.(supra) is distinguishable on facts and therefore not applicable to the present case before us as in the present the buyers of shares were issued summons u/s 131 of the Act and they responded to the summons by filing their confirmations along with the supporting evidences as mentioned by the AO in second part of para 8 in the assessment order whereas in the above case PCIT....
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....d at cost by the assessee during the instant assessment year which realized Rs.11,56,20,000/- which were accepted by the Revenue right from A.Y. 2011-12 till the instant assessment year. We have also noted that the assessee has filed before the ld. AO as well as before the ld. CIT (A) all the evidences qua the purchases and sale of shares. The assessee has filed all the evidences qua the purchasers such as ITRs, names, addresses, audited balance sheets, bank statements, confirmations, etc. proving the identity, creditworthiness of the purchasers and genuineness of the transactions. We note that even the purchasing companies have filed their evidences as called for by the ld. AO comprising all the evidences as stated above. The ld. CIT (A) has recorded a finding of fact that apart from the assessee, purchasing companies had also filed all the evidences before the ld. AO however the ld. AO had not brought on record any independent and substantive evidences pointing out any defect or deficiency in the said evidences. The ld. CIT (A) finally noted that the assessee has proved the identity and creditworthiness of the parties and also the genuineness of the transactions by filing all the....
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....2 was invested in shares/securities and accounted for in the books of accounts which were audited and audited accounts are placed at page no. 102 to 111 of PB Vol.-1. We also note that the assessment for AY 2011-12 was framed u/s 143(3) of the Act vide order dated 17.03.2014 a copy of which is placed at page no. 276 and 277 of PB Vol.-1 and the neither the share capital/share premium nor the investments out of that source were doubted by the AO. 9.2. We also note that similar issue was involved in the case of M/S Swarna Kalash Commercial Pvt Ltd. Vs ACIT, Central Circle -2(2), Kolkata, a group concern of the Rashmi Group of Companies, which was also subjected to search u/s 132(1) of the Act in the same search proceedings. We note that the coordinate bench has decided the issue in favour of the assessee in ITA No. I.T.(S.S.)A.No.53/Kol/2022 A.Y.2019-20 vide order dated 01.09.2023 involving the same issue of addition of sale of shares/investments by the AO on the ground that identity and credentials of the purchasers of shares/investments were suspicious. The operative part of the order is extracted as under: "6. We have considered the rival contentions and gone thr....
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....ts sold during the year Closing Balance of Investments 20,40,10,245 66,47,63,507 17,05,60,000 69,82,13,635 11.2. The shares were held by the assessee as investments and were sold at the cost of acquisition by the assessee. Hence, there is no profit/loss on such sale of investment. We also look at the movement of investment held by the assessee, which is tabulated below: FY AY Opening Purchase Sales Amount Closing Balance by A.O. 2014-15 2015-16 63,42,00,000 63,42,00000 2015-16 2016-17 63,42,00,000 42,44,960 18,344,960 62,01,00,000 1,83,44,960 2016-17 2017-18 62,01,00,000 56,27,44,459 468,499,459 71,43,45,000 46,84,99,459 2017-18 2018-19 71.43.45,000 1,55,17,29,538 2,062,064,910 20,40,09,628 2,06,20,64,910 2018-19 2019-20 20,40,09,628 66, 47, 64, 007 170,560,000 69,82,13,635 17,05,60,000 Total 2,71,94,69,239 11.3. We also refer to the details of opening stock, purchases, sales and closing stock during the year, placed on record by the assessee: SI ....
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.... 5 Elvof Trading Pvt Ltd 361-369 Rs. 1,00,000 6 Express Image Pvt Ltd 370-542 Rs. 1,11,00,000 7 Laxhmidhan Business Pvt Ltd 544-546 Rs. 6,00,000 8 MuditVanijya Pvt Ltd 547-597 Rs. 5,50,000 9 Outright Commodities Pvt Ltd 599-846 Rs. 2,44,90,700 10 Over Arching Impex Pvt Ltd 847-1053 Rs. 81,00,000 11 RadhacharanTradevin Pvt Ltd 1055-1158 Rs. 10,00,000 12 S P Udyog Pvt Ltd 1159-1161 Rs. 25,00,000 13 SamundarTradelink Pvt Ltd 1162-1164 Rs. 34,00,000 14 Shatabdi Entertainment Pvt Ltd 1165-1193 Rs. 14,00,000 15 Spur Trading Pvt Ltd 1195-1204 Rs. 7,50,000 16 SwarnmahalVyapaar Pvt Ltd 1205-1252 Rs. 15,00,000 17 Swetang Retails Pvt Ltd 1253-1356 Rs. 50,00,000 18 Viewpoint Advisory Pvt Ltd 1357-1490 Rs. 85,00,000 19 Yuthika Merchandise Pvt Ltd 1492-1603 Rs. 25,00,000 Total (A) 9,31,50,000 SL No. NON- CORPORATE ASSESSE Page No. FY 2018-19 20 Bengal Trade Agency 1604-1613 Rs. 1,64,00,000 21 Bhagwati Trading 1614-1616 Rs. 57,90,000 22 Om Sai Enterpris....
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....04 vide order dated 10.03.16 has observed that a statement made under section 132(4) of the Act on a stand-alone basis, without reference to any other material discovered during search and seizure operation, would not empower the AO to make a block assessment merely because any admission was made by the assessee during search operation. In the case of "Commissioner of Income Tax vs. Sunil Agarwal" (2015) 64 taxman.com 107 (Delhi-HC), the assessee therein, during the course of search, made a categorical admission under section 132(4) that the cash amount seized belonged to him and it represented undisclosed income not recorded in the books of accounts. The assessee did not immediately retract from the above admission but only during the assessment proceedings at a belated stage. In his retraction, the assessee stated that the surrender was made under a mistaken belief and without looking into books of account and without understanding law and that he had been compelled and perturbed by events of search and that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and ....
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....te Jaipur Bench of the Tribunal (supra) further observed that the issue of existence of pressure, threat, coercion during search proceedings is to be judged by reference to the existing facts and circumstances, human conduct and preponderance of possibilities. During the search proceedings, record relating thereto being in exclusive custody of the searching officers, it is their wish and will which prevails during the fateful period. That it is almost impossible for the assessee to adduce demonstrative evidence of exerting such pressure. The co-ordinate bench of the Tribunal (supra) while holding so, apart from relying upon various decisions of the higher courts has also relied upon the decision of the Tribunal in the case of "Dy CIT vs. Pramukh Builders" (2008) 112 ITD 179 (Ahd.) wherein it has been held that even in the absence of proof of coercion or pressure, the statement by itself cannot be taken as conclusive. Therefore, merely in the absence of proof of pressure, threat, coercion or inducement the statement cannot be held as conclusive and additions cannot be made by solely relying on a statement or a letter. 12.3. The case of the assessee, before us, is on better ....
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....dditions in this case cannot be said to be justifiably made. 13. All the above details when kept in juxtaposition, there remains nothing to cast an iota of doubt on the sale transaction of shares held by the assessee as investments which it undertook in the ordinary course of its business, more importantly, purchases having made in the current year also. Further, as rightly pointed out by the learned Counsel, both opening balance of investment in shares and the purchases made during the year have not been disputed or doubted by the authorities below so as to bring the entire sale consideration to tax. 14. At this stage, the ld. DR has submitted that the assessee has claimed that it has undertaken this sale transaction by selling the shares at the cost at which it had acquired them in AY 2006-07. At the same time, assessee submits that it has undertaken this transaction in the ordinary course of its business. The ld. DR has submitted that the conduct of business is always with a profit motive, more particularly when the assessee had held these shares for past several years and had also made purchases during the year, deploying its funds. There ought to be certain e....
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....discharge its onus to establish identity, creditworthiness and genuineness of the transaction in respect of the money received through cash trail. The CIT(A) in course of hearing the appeal called for a remand report from the Assessing Officer and in the said remand report the Assessing Officer has in no uncertain terms accepted the receipt of the impugned sum on account of sale proceeds of investment. The Assessing Officer verified the investment sold which are shown in the balance-sheet for the financial year 2010-11 in Schedule-4 of the balance-sheet and after considering these facts it was stated that the assessee had sold shares held by way of the investment during the year to M/s. Shivshakti Communications and Investment Pvt. Ltd. and Carnation Tradelink Pvt. Ltd. and it is not a receipt of unsecured loan. This fact, apart from other factual details, were considered by the CIT(A) and by an elaborate order dated 10.5.2023 the appeal filed by the assessee was allowed. The tribunal on its part re-examined the factual position and took note of the findings rendered by the CIT(A) and concurred with the same. We also find that the tribunal has also examined thefactual position and ....
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....lowing the decision of the Co-ordinate Bench and also the decision of the Hon'ble Jurisdictional High court in the case of Tulsiyan and Sons Pvt Ltd (supra), we set set aside the order of ld. CIT (A) so far as it relates to part sustaining the addition to the extent of 5%. Accordingly, the appeal of the revenue is dismissed and cross objection of the assessee is allowed. 20. The issue involved in the assessee's appeals in ITA No.1363 to 1367/Kol/2025 and Revenue's appeal in ITA No.1551 to 1556/Kol/2025 Assessment Year: 2016-17 to Assessment Year: 2021-22 are similar to ones as decided by us in the assessee's appeal ITA No. 1368/Kol/2025 & Revenue Appeal ITA No. 1551/Kol/2025 Assessment Year 2016-17. Therefore, our decision in assessee's as well as revenue appeal in Assessment Year 2016-17 would, mutatis mutandis, apply to the above appeals of the assessee and revenue from Assessment Year 2017-18 to 2021-22. Consequently, the appeals of the assessee are allowed and appeals of the revenue are dismissed." 3.5. Consequently, we set aside the order of ld. CIT (A) on this issue and direct the ld. AO to delete the addition. The appeal of the Revenue is dismissed and the ground....