ARYAVRAT SAVINGSUNIT LIMITED.,KOLKATA V. D.C.I.T., CIRCLE - 1(1), KOLKATA, KOLKATA

ITA 1545/KOL/2024

AI Insights

The case involves Aryavrat Savingsunit Limited, a Non-Banking Financial Company (NBFC), which appealed against the order of the Commissioner of Income-tax (Appeals) - NFAC, Delhi. The dispute arose from the assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961, which added back profits and disallowed losses from share transactions, deeming them bogus. The Tribunal examined the documentary evidence provided by the appellant, including financial statements and transaction records, and found that the transactions were genuine and properly recorded in the books of accounts.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46771 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 18-07-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus
• Section: 143(3); 142(1); 250

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री राजेश क ुमार, लेखा सदस्य एवं श्री प्रदीप क ुमार चौबे, न्याधयक सदस्य क े समक्ष Before SRI RAJESH KUMAR, ACCOUNTANT MEMBER & PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited…………………………………………..Appellant [PAN: AACCA1111H] Vs. DCIT, Circle-1(1), Kolkata.....................................................Respondent Appearances: Assessee represented by: P.K. Himmatsinghka, AR. Department represented by: Monalisha Pal Mukherjee, JCIT. Date of concluding the hearing : September 26th, 2024 Date of pronouncing the order : November 29th, 2024 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2015-16 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by ld. Commissioner of Income-tax (Appeals)- NFAC, Delhi [in short ld. ‘CIT(A)’] dated 30.05.2024 arising out of the assessment order framed u/s 143(3) of the Act dated 17.11.2017. 1.1. The brief facts of the case of the appellant are that the assessee is a Non-Banking Financial service in short NBFC engaged in the business of sale and purchase of shares on regular basis. The assessee filed its return of I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 2 of 10 income on 16.09.2015 declaring total income of Rs. of Rs. 84,28,880/-. The case of the assessee was selected for scrutiny, notice 142(1) of the Act was issued that was duly complied by the assessee. In course of the assessment the Assessing Officer (hereinafter referred to as ld. 'AO') alleged that profit of Rs. 9,48,344/- arising on the sale of shares of GCM Securities Ltd. and loss of Rs. 41,85,268/- arising on the sale of shares of Rajlaxmi Industries Ltd. were bogus and accordingly, the Ld. AO added back the said profit and loss in the total income of the appellant. The said order has been placed by the assessee before the Ld. CIT(A) wherein after hearing the parties Ld. CIT(A) has directed the Ld. AO to verify whether the sum already forms part of the total income under the head 'income from business and profession', if this then further addition would tantamount to double addition, with respect to the profit of Rs. 9,48,344/- from transaction in the shares of GCM Securities Ltd. but so far, the disallowing sale consideration of Rs. 41,85,268/- from sale of shares of Rajlaxmi Industries Ltd. the appeal of the assessee has been dismissed. Being aggrieved and dissatisfied with the impugned order, the present appeal has been preferred. 1.2. Ld. Counsel for the assessee challenges the impugned order thereby submitting that the Ld. AO as well as Ld. CIT(A) did wrong and passed order without going over the documentary evidences filed by the assessee in which assessee has explained that entire transaction was bona fide one. The ld. Counsel for the assessee submits that Ld. CIT(A) did not appreciate the facts in proper perspective that sale proceeds were already credited in the audited books as revenue receipts and any further attempt in making addition amounts to double addition. The ld. Counsel for the assessee further submits that entire sale proceeds already been credited as trading receipts under Schedule/Note 16 as sales of shares and securities in the audited profit and loss account under the group 'revenue from operation'. The ld. Counsel for the assessee further submits that the appellant has made valid purchase of the said shares through banking channels and sold them through recognized stock exchange and also received sale consideration in his bank accounts. I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 3 of 10 Hence, the addition made by the Ld. AO and disallowance of the loss is unlawful and bad in law. The ld. Counsel for the assessee filed the following papers before us: i) Computation of Income for the asst, year 2015-16 ii) Audited Financial Statement as on 31-03-2015 iii) Details of purchase & sale of shares Rajlaxmi Industries Ltd. iv) Contract note of purchase & sale of Rajlaxmi Industries Ltd. v) Demat statement of In & Out of Rajlaxmi Industries Ltd. vi) Statement of payment & received along with Bank Statement vii) Statement of stock quantity & valuation from 01-04-2014 to 31-03- 2015 1.3. On the contrary, the ld. DR supports the impugned order. 2. We have perused the order as well as facts of the case of the assessee. The facts in nutshell are that the assessee purchased 6400, 1200 and 3200 equity shares of M/s. GCM Securities Ltd. and 8000 and 8500 equity shares of Rajlaxmi Industries Ltd. respectively through M/s. Eureka Stock and Broking Services Ltd. the registered broker of the assessee, online from the trading platform of stock exchange. On perusal of the order of the Ld. AO it appears to us that the Ld. AO in his findings has held that the transaction related to trading in the two scrips namely Kailash Auto Ltd. and Cressenda Solutions Ltd. are bogus, coloured and not genuine. It is surprising to us that the scrips of Kailash Auto Ltd. and Cressenda Solutions Ltd. are not relevant to the appellant's transaction. It is also important to mention here that Ld. CIT(A) in its order has directed the Ld. AO to verify taxation of profit of Rs. 9,48,344/- from transaction in the shares of M/s. GCM Securities Ltd. that whether this sum already forms part of the total income under the head 'income from business and profession'. But at the same time, he did not consider the documentary evidences filed by the appellant with respect to the shares of Rajlaxmi Industries Ltd. We have gone through the documents filed by the assessee and find that assessee filed audited financial statements as on 31.03.2015 and at page 11 which deals thus: I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 4 of 10 2.1. We have also gone through the details of purchase and sales of shares of Rajlaxmi Industries Ltd. which is as such: I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 5 of 10 2.2. The assessee has also filed demat statement of in and out of Rajlaxmi Industries Ltd. in respect to the transaction with M/s. Eureka Stock and Broking Services Ltd. which is as under: I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 6 of 10 I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 7 of 10 I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 8 of 10 2.3. We have also gone through the statement of payment and receipt with bank statement filed by the assessee which is as follows: 3. Going over the entire documents as discussed above, we find that appellant has made valid purchase of the said shares through regular banking channels, held them in demat account and thereafter sold them through recognized stock exchange at the prevalent market rates and also received the I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 9 of 10 sale consideration in his bank accounts. It admits of no doubt that the assessee is in the business of trading in shares and carries a large number of transaction payments are made by the broker at regular/periodic intervals. The payments for the said shares were credited to the running account of the assessee maintained with M/s. Eureka Stock and Broking Services Ltd. The appellant has filed sufficient documentary evidences, bank statement, demat account, contract notes of sale, details of purchase and sales of shares of Rajlaxmi Industries Ltd. and hence, we are in this view that appellant had offered complete explanation supported by documentary evidences conclusively establishing the genuineness of the transaction carried out by him. We do not find anything in the order of the Ld. AO as well as the Ld. CIT(A) to discard the documentary evidences of the assessee. Accordingly, the appeal of the assessee is hereby allowed, the addition made by the Ld. AO with regard to Rajlaxmi Industries Ltd. are hereby deleted. 4. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 29th November, 2024. Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 29.11.2024 Bidhan (P.S.) I.T.A. No.: 1545/KOL/2024 Assessment Year: 2015-16 Aryavrat Savingsunit Limited. Page 10 of 10 Copy of the order forwarded to: 1. Aryavrat Savingsunit Limited, C/o. P.K. Himmatsinghka & Co., 41, B. B. Ganguly Street, Central Plaza, 2nd Floor, Kolkata, West Bengal, 700012. 2. DCIT, Circle-1(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "