Alco Suppliers Private Limited Vs National Faceless Assessment Center (ITAT Kolkata)
Mechanical Reliance on Investigation Report – ITAT Allows NBFC’s Appeal & Deletes Entire ₹31 Cr u/s 68 Addition- No Fresh Material, No Addition – Kolkata ITAT Raps Department for Inconsistent Stand on Identical Facts – Once Accepted Always Genuine – ITAT Deletes ₹31 Cr Addition on Sale of Investments from NCLT-Approved Merger
In this case, Assessee, a registered NBFC, sold unlisted equity shares of 16 private companies during AY 2022-23 for ₹31.28 crore. AO treated the sale proceeds as unexplained cash credit u/s 68 on the ground that the companies whose shares were sold were shell entities & that the buyers lacked creditworthiness. CIT(A) confirmed the addition.
Assessee contended that these shares were originally held by Cogzenith Solutions Pvt. Ltd., which merged with Alco Suppliers Pvt. Ltd. through an NCLT order dated 09.12.2020 passed after obtaining “no objection” from RBI & the Income Tax Department. The investments were recorded in the books of the amalgamating company since FY 2010-11 & were continuously shown in audited accounts. The sale was made at cost through proper banking channels, supported by sale bills, confirmations, ITRs, & bank statements of buyers. It was further pointed out that in the preceding AY 2021-22, identical transactions were examined u/s 148A & the proceedings were dropped vide order dated 26.06.2025 holding that it was “not a fit case” for reopening, thereby accepting the genuineness of such sale of investments.
