TMI Blog2023 (3) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... supported by the decision of this Tribunal in the case of Abdhut Vinimay Pvt. Ltd [ 2018 (10) TMI 1430 - ITAT KOLKATA] dealing with similar issue where investments were brought forward from the preceding year and were sold during the year and provisions of Section 68 was invoked by the Assessing Officer this Tribunal decided in favour of the assessee. - I.T.A. No. 14/Kol/2021 - - - Dated:- 15-3-2023 - Shri Rajpal Yadav, Hon ble Vice President And Dr. Manish Borad, Hon ble Accountant Member For the Assessee : Shri Soumitra Choudhury, Advocate For the Revenue : Shri Ranu Biswas, Addl. CIT, D/R ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This is the appeal preferred by the revenue against the order of the Learned Commissioner of Income Tax (Appeals)-4, Kolkata (hereinafter referred to as the Ld. CIT(A) ], passed u/s 250 of the Income-tax Act, 1961 (hereinafter the Act ), dated 21/09/2022 for the Assessment Year 2014-15. 2. The Registry has pointed out that there is a delay of six (6) days in filing of this appeal in time before the Tribunal. The assessee has filed a petition for condonation of delay stating the reasons of delay. After perusing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey received. Thus, the decision of the Ld. CIT(A) is erroneous. 6. On the facts of the present case, clearly the assessee company failed to discharge the onus required under Section 68 of the Act, the Assessing Officer was justified adding back the amounts to the income of the assessee and the Ld. CIT[A] has erred in allowing relief to the assessee. 7. That the appellant craves to add, alter, amend, delete or modify any of the grounds and/or take additional grounds before or at any time of hearing of this appeal. 4. Brief facts are that the assessee is a Private Limited Company engaged in the business of trading. Nil income declared in the return filed for Assessment Year 2014-15 on 16/06/2015. Based on AIR information, case selected for scrutiny through CASS followed by issuance of notice u/s 143(2) 142(1) of the Act. During the course of assessment proceedings, ld. Assessing Officer noticed that there are sundry creditors amounting to Rs.5,61,00,000/-. It was stated by the assessee that it had sold the shares held as investment and has received the alleged sum. Due to some reason, transactions could not materialize during the year and, therefore, the alleged sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4151/Del/2010; order dt. 25/01/2012 9. We have heard rival contentions and perused the record placed before us. The sole grievance of the revenue is that the ld. CIT(A) has erred in deleting the addition made by the ld. Assessing Officer for unexplained sundry creditors amounting to Rs.5.61 Crores. It is not in dispute that the assessee held investments in equity shares in the preceding year and as on 01/04/2013, there was an opening balance of investment in equity shares for a sum of Rs.14,20,92,000/- and it comprised of nine companies. Out of these investments, a part of equity shares were sold during the year and copies of bills for sale of the said equity shares and confirmations form part of the paper book placed before us. Genuineness of the purchases of the equity shares held as investment has not been disputed by the revenue authorities. The only dispute is that the buyers of these equity shares have not been able to prove the source of payments made by them to the assessee in the form of sale consideration. The assessee before the lower authorities and before us filed various details of the alleged loan creditors to prove the identity and creditworthiness of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) Bill for sale of Investment. Peal Tree Dealmark Pvt. Ltd. (i) Bill for sale of Investment. Santosh Investment Pvt. Ltd. (i) Bill for sale of Investment. Capricon Iron and Steel Traders Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income tax. (vi) Audited Financial Accounts for F.Y. 2013-14 (vii) Bill for sale of Investment. Chandra Ghanta Commerce Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Bill for sale of Investment Shivrashi Distributors Pvt. Ltd. (i) Bill for sale of Investment Jeen Mata Dealers Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) Computation of income tax. (v) Audited Financial Accounts for F.Y. 2013-14 (vi) Bill for sale of Investment. 10. Further we notice that information called for by the ld. Assessing Officer u/s 133(6) of the Act were duly served upon all the creditors and even in the remand proceedings, most of the loan creditors have again confirmed the transaction and only in some cases, creditworthiness has been doubted by the ld. Assessing Officer based on the small amount of ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Kolkata-700001. AADCK7798K 10,00,000 2. Grade Suppliers Pvt. Ltd. 14/2, Old China Bazar Street, 2 nd Floor, Room No.1391A, Kolkata-700001. AAECG0150E 32,50,000 3. Jhankar Dealers Pvt. Ltd. P-22, Swallow Lane, Ground Floor, Kolkata-700001. AACCJ2416N 20,00,000 Total 62,50,000 4. In response to the notice issued u/s 142(1) of the Act the assessee furnished the details of sale of investments to the AO. In response to the notice u/s 131 of the Act issued by the AO, to the purchasers companies, the following documents/evidence was filed before the AO by all the three companies which purchased the shares of the company. (a) Copy of Income Tax Return (b) Copy of Certificate of incorporation (c) Copy of Audited Accounts (d) Copy of Share sale Invoice (e)Copy of the bank account of the share purchaser company The AO wanted the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment Year, the assessee cannot be put to such a situation to prove the source of buyer in the subsequent Assessment Year. Moreover, the seller can make sale of shares in cash u/s 40A(3) of the Act. v) that when assessee has shown an amount of Rs.25,10,000/- as sale proceeds of shares as income, there is no ground for making the same as addition in the income which would amount to double addition. vi) that the books of account maintained by assessee have never been disputed by the A.O. nor he has held that the purchase of shares was bogus transaction or the shares sold by the assessee were bogus one. ITA No.2404/Kol/2017 Adbhut Vinimay Pvt. Ltd. A.Y.2012-13 4 vii) In I.T.O. Vs Jatin Investment Pvt. Ltd. (supra), it is held that when the assessee purchased the shares in earlier year which were shown as investment in the books of account and reflected in the balance sheet then the assessee sold certain investments and accounted for the profit or loss, the provisions of Section 68 of the Act were not applicable. viii) Similarly, Hon'ble Jurisdictional High Court in the case cited as CIT Vs Vishal Holding and Capital Pvt. Ltd. vide order dated 9th August, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows:- 11. In his rival submissions, the Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the ITA No.2404/Kol/2017 Adbhut Vinimay Pvt. Ltd. A.Y.2012-13 5 assessee was having investment in shares etc. which were duly shown on the asset aside of the balance sheet, out of those investments some were sold and few new were purchased and if there was any gain on the sale the same was offered for taxation. It was further submitted that in earlier year 13 4325 4326/ Del/2009 under similar circumstances, the case was reopened u/s 147 of the Act and the addition made by the AO was deleted by the I.T.A.T. It was further submitted that the assessee sold the shares which were earlier purchased in different years and duly shown in the balance sheet of the respective years and that the assessee had shown the sale proceeds in the books of accounts, the investments were reduced after making the sales. It was contended that there was no obligation under the law that the assessee was required to prove the source of payee. It was further contended that the AO had not rejected the books of accounts and the purchases were duly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2000-2001 wherein the order of the Ld. CIT(A) making the similar deletion was upheld by observing in para 6 as under :- We are of the view that the assessee had produced copies of accounts, bills and contract notes issued by M/s. MKM Finsec Pvt. Ltd., and had been maintaining books of account as per Companies Act. The assessee had also demonstrated the purchase and sale of shares over a period of time as seen from the balance sheet's. In our opinion, the Assessing Officer has simply acted on the information received from the Investigation Wing without verifying the details furnished by the assessee. The assessee has also produced best possible evidence to support its claim. Consequently the addition made by the Assessing Officer cannot be sustained. 14. We, therefore, considering the totality of the facts do not see any valid ground to interfere with the findings of the Ld. CIT(A). Accordingly, we do not see any merit in this appeal of the department. In ITA no. 4326/Del./2009 of the assessment year 2004- 05 identical issue having similar facts is involved, the only difference is in the amount of addition which was deleted by the Ld. CIT(A). Therefore, our fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, we delete the addition made u/s 68 of the Act for the reasons cited above. 12. Under identical circumstances, similar view was taken by this Tribunal in the case of ITO vs. Goodwill Cresec Pvt Ltd. (supra), wherein it was held as under:- 14. We have carefully considered the rival submissions in the light of the material placed before us. In the present case, the assessee had submitted ample evidence which has already been discussed in the above part of this order to contend that the share transaction entered into by it with MKM Finsec Pvt. Ltd. was a genuine transaction. The shares which were subject matter of sale were standing in the balance sheet of the assessee which were subject matter of sale. The party to whom the sales have been made have confirmed the transactions and the transaction was supported by documentary evidence. It is also the case of the assessee that no material has been brought on record by the revenue that the share transaction of the assessee was not genuine. The addition has been made on the basis of information received by the Assessing Officer from the Investigation Wing. It is found that in respect of the very same party an addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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