INCOME TAX OFFICER, WARD - 10(2), KOLKATA V. KHATU NIKETAN PRIVATE LIMITED, KOLKATA

ITA 944/KOL/2025

AI Insights

The case involves an appeal by the Income Tax Officer, Ward-10(2), Kolkata against Khatu Niketan Private Limited concerning the assessment year 2013-2014. The appeal was directed against the order of the CIT(A), National Faceless Appeal Centre, Delhi, which had deleted an addition made by the Assessing Officer regarding a non-genuine loss claimed by the assessee in derivative trading. The revenue argued that the CIT(A)'s decision to delete the addition was erroneous and not in accordance with the law, citing various judicial precedents and CBDT instructions. However, the ITAT dismissed the appeal on procedural grounds, noting that the revenue did not challenge the CIT(A)'s decision to quash the reopening of the assessment, which was based on a Supreme Court ruling.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714729 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2013-2014
• Other Referred Cases: Hersh W. Chadha v. Deputy Director of Income-tax, Circle-1(1), International Taxation, Pr. CIT Vs. Swati Bajaj, Sumati Dayal v. CIT, CIT Vs. Durga Prasad More
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRINMOY BASAK
• Assessee Lawyers: SIDDHARTH KEJRIWAL; PRINTED FROM COUNSELVISE.COM
• Keywords: Tax effect
• Section: 69C

Judgement Text

" आयकर अपीलीय अधिकरण, “एस.एम.सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA श्री जाजज माथन, न्याययक सदस्य क े समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER आयकर अपील सं/ITA No.944/KOL/2025 (नििाारण वर्ा / Assessment Year. :2013-2014) Income Tax Officer, Ward-10(2), Kolkata Vs Khatu Niketan Private Limited, GPO 27, Brabourne Road, Mezzanine Floor, Narayani Building Kolkata-700001 PAN No. : AAECK 2891 E (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) राजस्व की ओर से /Revenue by : Shri Mrinmoy Basak, Sr. DR नििााररती की ओर से /Assessee by : Shri Siddharth Kejriwal, AR सुनवाई की तारीख / Date of Hearing : 05/08/2025 घोषणा की तारीख/Date of Pronouncement : 05/08/2025 आदेश / O R D E R This is an appeal filed by the revenue against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 05.03.2025, for the assessment year 2013-2014. 2. Shri Mrinmoy Basak, ld. Sr.DR appeared on behalf of the revenue and Shri Siddharth Kejriwal, ld. AR appeared on behalf of the assessee 3. It was submitted by the ld. Sr. DR that the ld.CIT(A) has deleted the addition made by the Assessing Officer representing certain non-genuine loss claimed by the assessee in respect of derivative trading. It was the submission that the order of the ld. CIT(A is liable to be reversed. 4. In reply, ld. AR vehemently supported the order of the ld. CIT(A). 5. I have considered the rival submissions. The grounds raised by the revenue in its appeal are as under :- 1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing the appeal of the assessee by Printed from counselvise.com ITA No.944/KOL/2025 2 deleting the addition of Rs. 55,10,850/-made u/s 69C of the Act ignoring the merit of the case. 2. Whether on the facts and circumstances of the case and in law, the CIT(A) erred in ignoring the CBDT's Instruction No. 01/2022 dated 11.05.2022. 3. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in deleting the addition made by the AO u/s 69C, which were based on the probability of surrounding circumstances whereinthe transactions were blatantly suspicious and the rules of suspicious transactions apply, as has been held in the case of Hersh W. Chadha v. Deputy Director of Income-tax, Circle-1(1), International Taxation[2011]9 taxmann.com 1 (Delhi)/[2011] 43 SOT 544 (Delhi)/[2011] 135 TTJ513 (Delhi). 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in facts and in law in not appreciating the judicial principles laid down in the matter of Pr. CIT Vs. Swati Bajaj reported in (2022) 139 taxmann.com 352 (Cal)/446 ITR 56 (Cal) wherein the Hon'ble High Court at Calcutta laid down guidelines on the manner in which the allegation against the assessee has to be considered. 5. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) has failed to appreciate the judicial principles lald down in the matter of SumatiDayal v. CIT [1995] 214 ITR 801 (SC) and also in the matter of CIT Vs. Durga Prasad More 1973 CTR (SC)500: [1971] 82 ITR 540 (SC). 6. The appellant prays that the tax effect in the instant case is 18,54,000/- which is below the monetary limit prescribed by the CBDT Circular No. 9/2024 dated17.09.2024. However, it is humbly prayed that the case falls within the exception clause 3.1(h) of Circular No. 05/2024 dated 15.03.2024 as a modus operandi of evasion is involved in the case, meaning thereby that large amounts of money have been brought to the books /system of the assessee company in highly suspicious circumstances. 7. That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds hereinabove before or at the time of hearing of this appeal. 6. A perusal of the order of the ld. CIT(A) shows that the ld. CIT(A) has relied upon the decision of the Hon’ble Supreme Court in the case of Rajiv Bansal, reported in [2024] 167 taxmann.com 70 (SC) and has quashed the Printed from counselvise.com ITA No.944/KOL/2025 3 reopening of the assessment. A perusal of the page 12 to 14 of the ld. CIT(A) shows that the ld.CIT(A) has considered the dates of events and applied the decision of the Hon’ble Supreme Court in the case of Rajiv Bansal, referred to supra. The revenue has not challenged the findings of the ld.CIT(A) in regard to quashing of the reopening of the assessment. Ld.CIT(A) has not adjudicated the issue on merits of the case and has decided the appeal only on technicality of the reopening. As the revenue has not raised any ground against the action of the ld. CIT(A) in quashing the reopening of the assessment, the appeal filed by the revenue does not survive and consequently the same stands dismissed. 7. In the result, appeal of the revenue is dismissed. Order dictated and pronounced in the open court on 05/08/2025. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 05/08/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ज फाईल / Guard file. सत्यापपत प्रयत //True Copy// Printed from counselvise.com "