DCIT CC 2 4 KOLKATA, KOLKATA V. PREMIER ROAD CARRIERS LIMITED, KOLKATA

ITSSA 98/KOL/2025

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The case involves an appeal by the Deputy Commissioner of Income Tax (DCIT), CC-(4), Kolkata against Premier Road Carriers Limited concerning the assessment year 2014-2015. The primary issue was the deletion of an addition of Rs.7,50,93,750 by the CIT(A) which was initially added by the Assessing Officer as unexplained cash credit under section 68 of the Income Tax Act, due to alleged accommodation entries. The CIT(A) found that the actual amount received was Rs.4,00,50,000 and not the disputed amount. The Tribunal also addressed a secondary issue regarding the deletion of an addition of Rs.40,65,679 related to a loss on the sale of investments in Ashika Credit Capital Ltd, which was also initially treated as an unexplained expenditure by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822588 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 09-10-2025
• Other Referred Cases: Prakash Chand Bhutoria, Kolkata vs ITO, Gautam Kumar Pincha vs. ITO, Classic Growers Ltd. vs. CIT, Shreyashi Ganguli vs. CIT, Rungta Properties Private Limited vs. CIT, Samrat Finvestors Private Limited vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA
• Assessee Lawyers: SOUMITRA CHOUDHURY
• Keywords: Question of law; Unexplained cash credit; Unexplained expenditure; Accommodation entries; Source of fund; Penny stocks; Bogus
• Section: 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER IT(SS)A No.98/KOL/2025 (निर्धारणवर्ा/Assessment Year :2014-2015) DCIT CC-(4), Kolkata Vs Premier Road Carriers Limited, OM Towers 32 Chowringhee Road Kolkata, West Bengal-700071 PAN No. :AACCP 8468 Q (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) रधजस्वकीओरसे /Revenue by : Shri Sanat Kumar Raha, CIT-DR निर्धाररतीकीओरसे /Assessee by : Shri Soumitra Choudhury & Nandini Sureka, Advocates सुनवाई की तारीख / Date of Hearing : 10/12/2025 घोषणा की तारीख/Date of Pronouncement : 23.12.2025 आदेश / O R D E R Per Rajesh Kumar, AM: This is an appeal filed by the revenueagainst the order passed by the ld. CIT(Appeals), Kolkata-26, dated 14.07.2025for the assessment year2014-2015. 2. The appeal of the revenue is delayed by 22 days. Considering the facts and circumstances of the case and submission made by the ld. CIT- DR in regard to condonation of delay, we condone the delay of 22 days in filing the present appeal by the revenue and the appeal is admitted for hearing. 3. The only issue raised by the revenue is against the order of the ld. CIT(A) deleting the addition of Rs.7,50,93,750/- u/s.68 of the Act on account of unexplained cash credit in respect of share application received by the assessee. Printed from counselvise.com IT(SS)A No.98/KOL/2025 2 4. Facts in brief are that the assessee filed its return of income on 17.09.2014 declaring total income at Rs.48,06,480/-. Thereafter the case of the assessee was selected for scrutiny and notice u/s.143(2) and 142(1) of the Act along with questionnaire were issued to the assessee. The Assessing Officer on the basis of information received and the statement recorded u/s.133(6) of the Act from the various entry operators and the, information received from JDIT(Inv.), Unit-II, Kolkata, it was found that the assessee received accommodation entries to the tune of Rs.6,00,75,000/- from 10 allottees/subscribers. The details of which are given in para 8 of the assessment order which reads as under :- Name of share holders A.Y. Total GoldersNirman Pvt. Ltd. 2014-2015 1,00,12,500 NKP Steel Trading Pvt. Ltd 2014-2015 5,006,250 Ichharaj Retails Pvt. Ltd. 2014-2015 1,00,12,500 PawanshivVintrade Pvt. Ltd. 2014-2015 10,012,500 Karnal Housing Pvt. Ltd. 2014-2015 5,006,250 Sasmal Marcom Pvt. Ltd. 2014-2015 1.00,12,500 Star Dealcom Pvt. Ltd. 2014-2015 50,06,250 Lemon Vincom Pvt. Ltd 2014-2015 50,06,250 Fast Speed Enterprises Pvt. Ltd. 2014-2015 50,06,250 Premkunj Infrastructure Pvt. Ltd 2014-2015 1,00,12,500 Grand Total 2014-2015 75,093,750 5. Accordingly, the Assessing Officer issued notice to the assessee to prove genuineness of these investments. The assessee did not file any reply before the Assessing Officer, however, the addition of Rs.7,50,93,750/- u/s.68 of the Act treating the same as unexplained cash credit. 6. In the appellate proceedings, the ld. CIT(A) recorded a finding of fact that the actual money received by the assessee was Rs.4,00,50,000/- from the 10 subscribers and not Rs.7,50,93,750/-. Ld.CIT(A) allowed the Printed from counselvise.com IT(SS)A No.98/KOL/2025 3 appeal of the assessee deleting the addition after calling for the remand report from the Assessing Officer and noted that the Assessing Officer could not bring out any positive material on records to doubt the genuineness of the transactions despite opportunity being given to him by way of remand report. The ld. CIT(A) noticed that these subscribers filed certificates showing source of funds, bank statements, annual reports, pan numbers, income tax return acknowledgements, share application forms and director details etc. 7. After hearing the rival contentions of the parties and perusing the material available on record, we find that in this case the Assessing Officer made the addition on the basis of statement recorded of the entry operators during the search on them that they have provided accommodation entries in the form of share capital/share application/unsecured loans . However, we note that during the course of assessment proceedings the assessee filed all the details and evidences before the Assessing Officer in the remand proceedings though in the assessment proceedings these details were not filed and the Assessing Officer could not point out any deficiency in the said documents. The documents comprises names, addresses, confirmations of source of funds, bank statements, audited bank accounts etc. Even we note that the investors have sufficient funds to invest in the assessee company. Even the notice issued u/s.133(6) of the Act by the AO were duly responded by the subscribers and a finding of fact has been recorded by the ld. CIT(A) to this effect in the appellate order. In these circumstances, we are of the Printed from counselvise.com IT(SS)A No.98/KOL/2025 4 view that the order passed by the ld. CIT(A) is a very reasoned and speaking order which does not require any interference. Accordingly, we uphold the same and dismiss this ground of revenue. Shreee 8. So far as the second issue is concerned, which is against the deletion of addition of Rs.40,65,679/- by the ld.CIT(A) as claimed by the Assessing Officer in respect of loss on sale of investments in Ashika Credit Capital Ltd. 9. Facts in brief are that during the assessment proceedings , the AO noted that the assessee has claimed loss of Rs.40,65,679/- from sale of investments in shares. The Assessing Officer noticed that the shares were purchased for Rs.64,92,615/- whereas these were sold for Rs.24,29,700/- , thereby incurring short term capital loss. The Assessing Officer thereafter referred to the search action u/s.132 of the Act and survey action u/s.133A of the Act by the Directorate of Investigation, Kolkata which was resulted into the unearthing of a huge syndicate of entry operators, share brokers and money launderers involved in providing bogus accommodation of Long Term Capital Gain/Short Term Capital Loss. Accordingly, the Assessing Officer held that the assessee had arranged a loss of Rs.40,65,679/- on sale of investments, through the entry operators who facilitates such accommodation entries on receipt of commission only. It was also held by the AO that as reported by the Investigation Directorate, the entry operators charge a commission @5% of the amount of LTCG/Loss on sale of investment arranged. Since it has been proved beyond doubt that the assessee had taken accommodation Printed from counselvise.com IT(SS)A No.98/KOL/2025 5 entries, the aspect of payment of commission cannot be ruled out. Thus, the Assessing Officer calculated the commission payment @5% and added the same to the total income of the assessee u/s.69C of the Act treating the same as unexplained expenditure. 10. In the appellate proceedings, the ld. CIT(A) allowed the appeal of the assessee after taking into account the submissions of the appellant by observing and holding as under :- The Assessing Officer has observed that during the instant year, the appellant had purchased shares of Ashika Credit Capital Ltd of Rs. 64,92,615/- and sold the shares for Rs. 24,29,700/- and suffered short term capital loss of Rs. 40,65,679/- (net of expenses of Rs. 2,764/-). The basis of drawing adverse inference is that the Assessing Officer has mentioned that name of the scrip Ashika Credit Capital Ltd appeared in the list of penny stock maintained by the department and it appeared to Assessing Officer that the transactions done by the appellant company in the scrip of 'Ashika Credit Capital Ltd' were pre-arranged. Attention has been drawn that despite being the search year, no incriminating documents were found during the course of search to arrive at conclusion that transactions done by the appellant company in the scrip of Ashika Credit Capital Ltd are not genuine transactions. The appellant hassubmitted that the discussions made in the assessment order are general in nature, without indicating how the appellant's transactions can be treated as non-genuine. During the course of assessment hearing stage, the appellant stressed upon the fact that all the shares were purchased and sold on the platform of stock market and through approved broker at a price prevailing at the time of transactions. Copy of contract notes which contain trade no. and timing of execution in the Stock Exchange were also submitted at the assessment hearing stage (Refer Page 01-17 of Paper Book-VI). Subsequent to such contract, the shares were delivered to Stock Exchange. It was also stated that all transactions were done through banking channels. As evident from the above, the entire transactions happened in normal course of activities. It is submitted that the appellant had suffered genuine loss of Rs. 40,65,679/- in the scrip of Ashika Credit Capital Ltd and loss of Rs. 11,19,841/- only has been adjusted with LTCG earned on sale of property. Balance loss of Rs. 29,45,838/- has been carried forward to subsequent years. Had the motive of the appellant was to adjust the profit earned during the year with alleged pre-arranged loss, then the appellant would have adjusted the entire loss in the instant year. Printed from counselvise.com IT(SS)A No.98/KOL/2025 6 However, the Assessing Officer has treated the aforesaid STCL suffered by the appellant as ingenuine only mainly on the basis of facts found by the Investigation Wing and statement of alleged brokers, operators, director of paper companies, director of penny stock companies without providing copy of such facts and statements to the appellant company. In this connection, it is submitted that there is no report wherein involvement of the appellant in any of the malpractices is appearing. The alleged report was not shared/provided to the assessee. It is well settled that any document relied upon by the Assessing Officer for making an addition has to be supplied to the assessee and an opportunity should be provided to the assessee to rebut the same. It is further submitted that the transaction in the aforesaid scrip was done by the assessee through registered Brokerage Company named Samurai Securities Pvt Ltd. Further, the assessee has submitted during the course of assessment proceedings submitted various documents, including contract notes, etc to substantiate the genuineness of this transaction. It seems that the Assessing Officer was working on pre-conceived notion and was swayed by some investigation reports, which had no link with the appellant. The Assessing Officer has also failed to appreciate various documents submitted to substantiate this transaction. Reference was drawn to the \"Hon'ble ITAT Kolkata in the case of Prakash Chand Bhutoria, Kolkata vs ITO, Ward-35(1), dated 27th June, 2018, I.T.A No.2394/Kol/2017, at Para 10 has held : \"The \"D\" Bench of the Kolkata Tribunal in the case of Gautam Kumar Pincha vs. ITO, in I.T.A. No. 569/Kol/2017 dated 15.11.2017, at Para 19 onwards held as follows:- M/s Classic Growers Ltd. vs. CIT [ITA No. 129 of 2012] (Cal HC) - In this case the Id AO found that the formal evidences produced by the assessee to support huge losses claimed in the transactions of purchase and sale of shares were stage managed. The Hon'ble High Court held that the opinion of the AO that the assessee generated a sizeable amount of loss out of prearranged transactions so as to reduce the quantum of income liable for tax might have been the view expressed by the Id AO but he miserably failed to substantiate that. The High Court held that the transactions were at the prevailing price and therefore the suspicion of the AO was misplaced and not substantiated. CIT V. Shreyashi Ganguli [ITA No. 196 of 2012) (Cal HC) - In this case the Hon'ble Calcutta High Court held that the Assessing Officer doubted the transactions since the selling broker was subjected to SEBI's action. However the transactions were as per norms and suffered STT, brokerage, service tax, and cess. There is no iota of evidence over the transactions as it were reflected in demat account. The appeal filed by the revenue was dismissed. Printed from counselvise.com IT(SS)A No.98/KOL/2025 7 CIT V. Rungta Properties Private Limited [ITA No. 105 of 2016] (Cal HC) - In this case the Hon'ble Calcutta High Court affirmed the decision of this tribunal, wherein, the tribunal allowed the appeal of the assessee where the AO did not accept the explanation of the assessee in respect of his transactions in alleged penny stocks. The Tribunal found that the AO disallowed the loss on trading of penny stock on the basis of some information received by him. However, it was also found that the AO did not doubt the genuineness of the documents submitted by the assessee. The Tribunal held that the AO's conclusions are merely based on the information received by him. The appeal filed by the revenue was dismissed. Though all the documents and explanations, to prove that the transactions of purchase and sale entered in by the appellant company was no pre-planned have been duly submitted by the appellant company. However, the Assessing Officer has arbitrarily disallowed the loss. There has been no specific rebuttal or objection raised by the Assessing Officer for the specific issue even in the remand report issued by the Assessing Officer. Even otherwise, while passing the assessment order, the Assessing Officer had made addition merely on the ground of suspicion that the name of the security sold under consideration was found by the Investigation Wing. Further, statement of alleged brokers, operators, director of paper companies,director of penny stock companies were referred without any specific findings as to how such alleged statements/ paper companies are having link with the transaction done by the appellant company. No incriminating documents have been found from the custody of the appellant company during search proceedings wherefrom it is evident that the appellant company was involved in such scheme of arrangement of bogus share transactions. On the basis of discussions above, Ground no. 7, 8 and 9 is decided in favour of the appellant. Hence, this ground is treated as ALLOWED. 11. After hearing the rival submissions and perusing the material available on record, we find that the assessee has purchased shares of Ashika Credit Capital Ltd of Rs.64,92,615/- and sold the shares for Rs. 24,29,700/- and suffered short term capital loss of Rs. 40,65,679/- (net of expenses of Rs. 2,764/-). The basis of drawing adverse inference is that the Assessing Officer has mentioned that name of the scrip Ashika Credit Capital Ltd appeared in the list of penny stock maintained by the Printed from counselvise.com IT(SS)A No.98/KOL/2025 8 department and it appeared to Assessing Officer that the transactions done by the assessee company in the scrip of 'Ashika Credit Capital Ltd' were pre-arranged. Ld. CIT(A) has also noted that no incriminating documents were found during the course of search to arrive at conclusion that transactions done by the assessee company in the scrip of Ashika Credit Capital Ltd are not genuine transactions. Finally, ld.CIT(A) by referring a series of decisions deleted the addition. We note that when the assessee has filed all the evidences before the Assessing Officer even during the search no incriminating material was found then in the light of the Investigation Wing report no adverse inference cannot be drawn. The assessee in defence of his arguments relied on the decision of Hon’ble Jurisdictional High Court in the case of Samrat Finvestors Private Limited, passed in ITAT/279/2024 IA NO:GA/1/2024, GA/2/2024, dated 17.11.2025, wherein the Hon’ble High Court has held as under :- 11.2. The Hon'ble High Court, after taking into the concurrent findings of the ld. first appellate authority and the tribunal, held that no substantial question of law is involved in the appeal of the revenue and accordingly dismissed the appeal of the Revenue. In the present case before us also there is no adverse comment in the form of general and specific statement by Pr. Officer of the Stock Exchange or by the company whose shares were involved in the above said transactions. We note that the AO only referred to the report of the investigation wing which was based upon the statements of several persons who were wholly unrelated. The same is the position with regard to report of the SEBI. In the instant case also the name of the assessee was neither quoted by any of such persons nor any materials relating to the assessee as found at any place where investigation/searches were carried out the Wing. Thus find the above decision squarely applies to the instant case. 12. Considering the facts of the case in the light of the aforesaid decision, we are inclined to uphold the order of the ld. CIT(A) by dismissing the appeal of the revenue. Printed from counselvise.com IT(SS)A No.98/KOL/2025 9 13. In the result, appeal of the revenue is dismissed. Order pronounced in the open court on 23.12.2025 Sd/- (PRADIP KUMAR CHOUBEY) Sd/- (RAJESH KUMAR) न्यधनयकसदस्य / JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER कोलकाताKolkata; ददनाांक Dated 23.12.2025 Prakash Kumar Mishra, Sr.P.S. आदेशकीप्रनतललपपअग्रेपर्त/Copy of the Order forwarded to : आदेशधिुसधर/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलार्थी/ The Appellant- 2. प्रत्यर्थी/ The Respondent- 3. आयकरआयुक्त(अपील) / The CIT(A), 4. आयकरआयुक्त/ CIT 5. विभागीयप्रविविवि, आयकरअपीलीयअविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्डफाईल / Guard file. सत्यापपतप्रतत //True Copy// Printed from counselvise.com "