OVERSURE AGENCIES PVT. LTD.,KOLKATA V. I.T.O., WARD - 6(3), KOLKATA

ITA 517/KOL/2025

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The case involves Oversure Agencies Pvt. Ltd., the appellant, who sold shares of Sarbari Vincom Pvt. Ltd. and Sadgati Trading Pvt. Ltd. to M/s Jalaram Finvest Ltd. for Rs. 40 lakhs. The Income Tax Department treated this transaction as an unexplained cash credit under section 68 of the Income Tax Act, 1961, leading to the appeal. The Assessing Officer and CIT(A) had earlier supported this view. The Tribunal found that the shares were recorded as purchased in earlier years and sold in the assessment year 2013-2014, with the sale consideration duly recorded in the books. However, due to the absence of direct confirmation from M/s Jalaram Finvest Ltd. regarding the transaction, the Tribunal restored the matter to the Assessing Officer for further investigation and confirmation of the transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714519 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBRATA AICH
• Assessee Lawyers: A. N. KESHRI
• Keywords: Opportunity of being heard; Unexplained cash credit; Share purchase agreement; Bogus

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No.517/KOL/2025 (निर्धारण वर्ा /Assessment Year : 2013-2014) Oversure Agencies Pvt. Ltd. 1, RN Mukherjee Road, Mezanine Floor, Room No.30, Kolkata Vs ITO, Ward-6(3), Kolkata PAN No. :AABCO 6133 E (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्धाररती की ओर से /Assessee by : Shri A. N. Keshri, AR रधजस्व की ओर से /Revenue by : Shri Subrata Aich, Sr. DR सुनवाई की तारीख / Date of Hearing : 04/08/2025 घोषणा की तारीख/Date of Pronouncement : 04/08/2025 आदेश / O R D E R Per George Mathan, JM: This is an appeal filed by the assessee against the order passed by the ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 12.02.2025 for the assessment year 2013-2014. 2. Shri A.N.Keshri, ld. AR appeared on behalf of the assessee and Shri Subrata Aich, Sr.DR appeared on behalf of the revenue. 3. It was submitted by the ld. AR that the assessee company had sold 3800 shares of Sarbari Vincom Pvt. Ltd and 8000 shares of Sadgati Trading Pvt. Ltd. for Rs.40 lakhs to M/s Jalaram Finvest Ltd. It was the submission that the Assessing Officer had questioned about the amount of Rs.59 lakhs. Accordingly, the Assessing Officer issued notice u/s.133(6) of the Act to both Sarbari Vincom Pvt. Ltd and Sadgati Trading Pvt. Ltd., who had confirmed the sale of their shares to the assessee. It was the submission that it was this purchase which was sold by the assessee to M/s Jalaram Printed from counselvise.com ITANo.517/Kol/2025 2 Finvest Ltd. It was the submission that in the course of assessment on the basis of statement recorded from the Directors of M/s Jalaram Finvest Ltd., the transaction of the sale of the shares by the assessee to M/s Jalaram Finvest Ltd. was treated as unexplained cash credit of the assessee. It was the submission that the assessee had requested the Assessing Officer for permission to cross-examine the Director of M/s Jalaram Finvest Ltd., which was not provided to the assessee. It was further submission that this was a sale transaction and the sale consideration has been recorded in the books and the books having not been rejected, the sale consideration recorded in the books cannot be treated as unexplained cash credit in the hands of the assessee. In respect of specific question raised by the Bench to the ld. AR that the assessee has sold the shares to M/s Jalaram Finvest Ltd. and it was the duty of the assessee to produce the Directors of M/s Jalaram Finvest Ltd. to confirm the transaction especially when the Assessing Officer was making a statement that the Directors of M/s Jalaram Finvest has denied the transaction, it was submitted by the ld.AR that the assessee had repeatedly requested the Assessing Officer for an opportunity to cross-examine, however, the same was not provided by the Assessing Officer. 4. In reply, ld. Sr.DR vehemently supported the order of the ld. Assessing Officer and ld.CIT(A). 5. We have considered the rival submissions. A perusal of the facts of the present case shows that the shares of Sarbari Vincom Pvt. Ltd had been purchased in the earlier years. The same has been sold during the Printed from counselvise.com ITANo.517/Kol/2025 3 impugned year. This is evident from the Note to the balance sheet which is placed at page 41 of the Paper Book, which reads as under :- 6. Similarly other shares have also been purchased during the earlier assessment years and have been sold during the impugned year. Further the shares of M/s Sadgati Trading Pvt. Ltd. have been purchased allegedly during the impugned year and sold during the impugned year. This is for Rs.40 lakhs. A perusal of the page 41 of the Paper Book which has been extracted above shows that the purchase was for Rs.20 lakhs in the case of M/s Sarbari Vincom Pvt. Ltd.. Similarly in page 17 and 18n of the paper book, the transactions shows the break-up of Rs.59 lakhs which reads as under :- Printed from counselvise.com ITANo.517/Kol/2025 4 Printed from counselvise.com ITANo.517/Kol/2025 5 7. The shares of M/s Sadgati Trading Pvt. Ltd. were purchased for Rs.500/- on 06.11.2012 and allegedly sold on 10.11.2012. All these shares purchased and sold by the assessee are claimed to be physical shares. It is also mentioned by the ld. AR that the purchaser M/s Jalaram Finvest Ltd. is in Ahmedabad. The assessee is in Kolkata. Obviously, the purchaser must be known to the seller as nobody would come to purchase shares in physical without knowing the seller. The connection should be either direct or indirect or through friends and relatives. This being so, it is very much right on the part of the assessee to claim that M/s Jalaram Finvest Ltd. is might not have given such statement claiming the transaction to be bogus. The assessee is fully entitled to question such transaction. This being so, in the interest of justice and so as to bring the clear facts on record by the ld.AO, the issues in this appeal are restored to the file of the Assessing Officer. The assessee shall produce the Directors or the authorities of M/s Jalaram Finvest Ltd., who have done the purchases of the said shares from the assessee for confirmation before the Assessing Officer. The Assessing Officer shall examine the transactions with the concerned persons to be produced by the assessee in respect of M/s Jalaram Finvest Ltd. and readjudicate the issues in accordance with law. 8. In regard to the submission of the ld.AR that this is a sale transaction and sale consideration has been recorded, therefore, the same cannot be treated as cash credit. This argument of the ld. AR does not stand, insofar as the sale consideration itself is in question and the shares which were allegedly transferred physically. As there is no proof the shares have actually been transferred and the share certificates numbers have also not Printed from counselvise.com ITANo.517/Kol/2025 6 been mentioned in the said bills, it is very much possible that the transaction could be bogus which is required to be considered u/s.68 of the Act. With this direction, the issues in this appeal are restored to the file of the ld. Assessing Officer for readjudication after granting the assessee adequate opportunity of being heard to substantiate its case. 9. In the result, appeal of the assessee is partly allowed for statistical purposes. Order dictated and pronounced in the open court on 04/08/2025. Sd/- (RAKESH MISHRA) Sd/- (GEORGE MATHAN) लेखा सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 04/08/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/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. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //True Copy// Printed from counselvise.com "