ITO Vs Adhir Barter Private Limited (ITAT Mumbai)
Summary: The Revenue appealed against the order of CIT(A)/National Faceless Appeal Centre, Delhi dated 04.02.2025 concerning Assessment Year 2017-18. The assessment order dated 30.12.2019 had been passed under Section 143(3) of the Income-tax Act. The Revenue challenged deletion of an addition of Rs. 6,24,72,800/- under Section 68 concerning the claimed sale of equity shares and deletion of an addition of Rs. 6,50,000/- under Section 69C as unexplained expenditure. The assessee had claimed to have sold 7,80,910 shares of Shree Ram Urban Infrastructure Ltd. (SRUIL) to Rotunda Capital & Finance (1) Pvt Ltd (RCFPL) offline at Rs.80/- per share on 31.03.2017, with the consideration of Rs. 6,24,72,800/- adjusted against an outstanding loan. The Tribunal noted discrepancies concerning the reported shareholding and the absence of evidence showing actual movement of shares through the DMAT account. The assessee acknowledged that the share transfer form had not been lodged with SRUIL and no DMAT statement was available on record to establish movement of the shares. The Tribunal also noted the absence of contract notes, broker confirmation, stock exchange trade data and supporting bank trail for movement of funds. It observed that there was no actual movement of shares and no actual movement of funds, and that the assessee had merely passed an internal accounting entry. The Tribunal held that the claimed transaction did not establish a real transfer within the meaning of Section 2(47) of the Act on the material before it and that the alleged reduction in loan liability did not represent real income. However, rather than sustaining or deleting the addition finally, the Tribunal found it appropriate to remit the issue concerning the claimed share transaction to the CIT(A) for de novo adjudication. The CIT(A) was directed to examine the requirements relied upon in his earlier order, consider the Companies Act, SEBI regulations and relevant provisions of the Income-tax Act, and determine whether the share transfer form was subsequently lodged and whether the claimed transaction actually transpired in a later period. The assessee was directed to furnish the required documentary evidence. The Revenue’s first ground was therefore allowed for statistical purposes. On the second ground, concerning Rs. 6,50,000/- written off in the name of Shah Casting Pvt. Ltd., the Tribunal noted that the assessee had already disallowed the expenses debited to the Profit and Loss account, including the sundry balance written off, and held that the material did not warrant interference with the CIT(A)’s deletion of the Section 69C addition. The second ground was dismissed and the Revenue’s appeal was partly allowed.
