PAVITRA SALES LLP (SUCCESSOR OF PAVITRA SALES PRIVATE LIMITED,KOLKATA V. I.T.O., WARD - 7(1), KOLKATA

ITA 2360/KOL/2024

AI Insights

The case involves Pavitra Sales LLP, which appealed against the order of the National Faceless Appeal Centre, Delhi, confirming the addition of \\u20b918,60,000 as unexplained cash credit by the AO. The addition was initially made following the reopening of the assessee's case under section 147 of the Income Tax Act, based on the receipt of funds from M/s Akul Multitrade Pvt. Ltd. for the sale of shares. The Tribunal examined the evidence presented, including bank statements and affidavits, and found that the transactions were legitimate and properly documented, leading to the decision to allow the appeal and direct the deletion of the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126281 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MADUMITA DAS
• Assessee Lawyers: MIRAZ D. SHAH
• Keywords: Set aside; Unexplained cash credit; National Faceless Appeal; Transactions
• Section: 147; 148; 68; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM ITA No.2360/KOL/2024 (Assessment Year:2018-19) Pavitra Sales LLP (Successor of Pavitra Sales Private Limited) 8, Camac Street, 10th Floor, Room No. 1011, Kolkata, West Bengal, 700017 Vs. I.T.O., Ward - 7(1) Aayakar Bhawan, P-7, Chowringhee Square,Kolkata, West Bengal, 700069 (Appellant) (Respondent) PAN No. AAVFP0119Q Assessee by : Shri Miraz D. Shah, AR Revenue by : Shri Madumita Das, DR Date of hearing: 16.04.2025 Date of pronouncement : 21.04.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 27.09.2024 for the AY 2018-19. 02. The only issue raised by the assessee is against the confirmation of addition of ₹18,60,000/- by the ld. CIT (A) which was made by the ld. AO u/s 68 of the Act as unexplained cash credit. 03. The facts in brief are that the case of the assessee was reopened u/s 147 of the Act after following the prescribed procedure provided in the Act, such as issuing notice u/s 148A(b) of the Act and after taking into account the reply of the assessee and passing the order u/s 148A(d) of the Act on 29.03.2022 and thereafter notice u/s 148 of the Act was Page | 2 ITA No. 2360/KOL/2024 Pavitra Sales LLP; A.Y. 2018-19 issued on 29.03.2022. The assessee purchased shares worth ₹19 lacs from M/s Cosimo Developers Pvt. Ltd. (CDPL), which were allotted on 14.02.2012. The assessee sold these shares on 10.04.2017 and 16.08.2017 to M/s Akul Multitrade Pvt. Ltd. for a consideration of ₹18,60,000/-. The case of the assessee was reopened on the ground that the assessee has received funds to the tune of ₹18,60,000/- from M/s Akul Multitrade Pvt. Ltd. during the year under consideration while the assessee submitted before the ld. AO that the money was received in liew of sale of shares. The AO also issued notice u/s 133(6) of the Act to M/s Akul Multitrade Pvt. Ltd. to verify the transactions and the said notices were duly replied by the said party confirming the transactions and an affidavit was also filed by the said party. The ld. AO however treated the same as unexplained cash credit u/s 68 of the Act by disbelieving the evidences filed by the assessee and added the same to the income of the assessee. 04. In the appellate proceedings, the order of the ld. AO confirmed by the ld. CIT (A) by dismissing the appeal of the assessee. 05. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has purchased shares of M/s Cosimo Developers Pvt. Ltd. (CDPL) of ₹19 lacs on 14.02.2012, which were paid through banking channel for which the assessee has produced the copy of bank statement of IndusInd Bank from which it is evident that the assessee made payment on 14.02.2012, to purchase said shares. These shares were sold during the year to M/s Akul Multitrade Pvt. Ltd. from whom the assessee received ₹18,60,000/- in liew of these shares. We note that the assessee filed all the evidences before the ld. AO as well as before the ld. CIT (A) qua this share transactions. We also note that the notice issued u/s Page | 3 ITA No. 2360/KOL/2024 Pavitra Sales LLP; A.Y. 2018-19 133(6) of the Act to M/s Akul Multitrade Pvt. Ltd., was duly responded with all details along with affidavit confirming the said transactions with the assessee. Under these circumstances, we do not find any basis to sustain the addition as these transactions stands fully explained. Moreover, the addition cannot be made merely on the ground that the assessee received such funds from M/s Akul Multitrade Pvt. Ltd. when there was a proper basis for those money received. Considering these facts and circumstances, we set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition. 06. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 21.04.2025. Sd/- (RAJESH KUMAR) (ACCOUNTANT MEMBER) Kolkata, Dated: 21.04.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "