PCIT Vs Jajodia Finance Limited (Calcutta High Court)
Summary: The Calcutta High Court considered the Revenue’s appeal under Section 260A of the Income Tax Act, 1961 against the order dated February 29, 2024 passed by the Income Tax Appellate Tribunal, A-Bench, Kolkata in ITA/614/Kol/2023 for Assessment Year 2014-15. The dispute concerned the deletion of an addition of Rs. 1,97,94,148/- made on account of share trading loss treated by the Assessing Officer as bogus.
The assessee, a NBFC involved in trading and investment in shares, had declared nil income after setting its net income against brought forward losses. The Assessing Officer noted a share trading loss of Rs. 1,97,94,148/- and observed that the trading was in shares of private limited companies and was conducted off-market. Information received from the Directorate of Investigation, New Delhi also referred to a search and seizure operation in the KLJ Group and a consequential survey at the assessee’s office. During the survey proceedings, the assessee’s director, Rajesh Kumar Surana, gave a statement on oath admitting that the assessee’s entry operator was involved in providing bogus entries for purchase and sale of investments and share applications against commission.
The Assessing Officer issued a show-cause notice proposing to disallow the share trading loss as bogus. The assessee did not submit a reply, and the assessment was completed under Section 143(3) on 16.12.2016. The CIT(A), Lucknow-3 dismissed the assessee’s appeal on 24.04.2023 after recording that the assessee had not participated despite opportunities. The Tribunal subsequently allowed the assessee’s appeal and deleted the addition.
