TaxTMI 
TaxTMI 
2025 (9) TMI 1882
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....as selected for scrutiny under Computer Assisted Scrutiny Selection (CASS), for the reason of "information in verification cases uploaded through CRIU" as per the DDIT (Inv), Unit 1(1), Kolkata. The ld. AO observed that the assessee is not doing any genuine business activity or making any genuine investments. The ld. AO observed that the sale of investments of Rs.9,32,00,000/- was not genuine sale of shares, as all the companies whose shares were sold were not doing any business activity nor they are holding any business assets except share capital and share premium in their balance sheets. The ld. AO thereafter discussed the modus operandi of how these companies are floated and exchanged hands to yield undue benefit to the beneficiaries through accommodation entries. Therefore, the ld. AO concluded that the assessee company has sold bogus shares and therefore the said transactions in such shares of Rs.9,32,00,000/- were also bogus and accordingly, added the same to the income of the assessee u/s 68 of the Act. 04. The ld. CIT(A) simply dismissed the appeal of the assessee by holding that the assessee company has sold unlisted shares which were not invested in real companies and....
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....le High Court in the case of PCIT Vs. Tulsyan and Sons Private Limited, in ITAT/239/2024 in IA No. GA/2/2024 order dated 16th April, 2025. 06. We have heard the rival contentions and perused the materials available on records. We find that the only dispute is sale of unlisted equity shares to various parties thereby realizing total sales consideration of Rs.- 9,32,00,000/-. We note that the investments were made in private unlisted equity shares A.Y. 2012-13. We note that in A.Y. 2017-18 and A.Y. 2018-19 the scrutiny proceedings were initiated and assessments were accordingly framed vide orders dated 20.05.2019 and 10.02.2021 and these investments were not doubted at all. We note that the subject matter of scrutiny proceedings in A.Y. 2018-19 was investments in private unlisted equities. Thus, it is clear that over all these years the investments were not doubted by the department. These investments made in the A.Y. 2012-13 were partly sold at cost by the assessee during the instant assessment year which realized Rs.9,32,00,00,000/- the purchases whereof were accepted by the Revenue right from A.Y. 2012-13 till the instant assessment year. We have also noted that the assessee ha....
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....tment. These investments made in the A.Y. 20111-12 were partly sold 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 parti....
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....rities 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: "6.1. We have considered the rival contentions and gone through the record. First ....
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....nvestments 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 byA.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 No Name of the Script Openin....
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....rvi Dealmark Pvt Ltd 267-356 Rs. 10,00,000 4 Daania Trading Pvt Ltd 357-359 Rs. 30,00,000 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 Radhacharan Tradevin 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 Swarnmahal Vyapaar 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 Agenc....
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....ee Chand Soni vs. DCIT" (2006) 101 TTJ 1028 (Jodhpur). The Hon'ble Delhi High Court in the case of "CIT vs. Harjeev Agarwal" in ITA No.8/2004 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 buil....
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....t which is not supported by the department with cogent corroborative material cannot be a valid basis for sustaining such ad-hoc addition. The co-ordinate 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....
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.... CBDT is binding on the revenue officials. In the facts and circumstances of this case, when seen in the light of above case laws and CBDT circular, additions 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 t....
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....section 68 of the Act was deleted. The Assessing Officer made the addition by invoking section 68 of the Act on the ground that the assessee failed to 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 ....