ITO Vs Stenly Securities Limited (ITAT Kolkata)
The ITAT Kolkata dismissed the Revenue’s appeal against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), for Assessment Year (AY) 2018-19, thereby upholding the deletion of an addition made under Section 68 of the Income-tax Act in respect of transactions involving shares of Stampede Capital Ltd.
The assessee had originally filed its return of income on 25.10.2018 declaring total income of ₹1,20,850. The assessment was reopened under Sections 147 and 148 based on information relating to alleged unexplained credits. After passing an order under Section 148A(d), the Assessing Officer issued notice under Section 148 on 07.04.2022. The assessee filed a return declaring the same income as originally returned.
During assessment, the Assessing Officer observed that the assessee held an opening stock of 9,66,364 equity shares of Stampede Capital Ltd. valued at ₹1,85,54,189 as on 01.04.2017. During the year, the assessee received 2,56,590 bonus shares and purchased another 25,000 shares for ₹3,20,634. It sold 2,56,590 shares for ₹2,02,67,586 and disclosed a profit of ₹13,92,763 in its profit and loss account. The assessee also disclosed intraday trading profit of ₹1,06,001.29 from the same scrip. Although the assessee furnished documentary evidence supporting the purchase and sale transactions, the Assessing Officer treated Stampede Capital Ltd. as a shell company and made an addition of ₹1,81,57,011 under Section 68 read with Section 115BBE, restricting the addition to the sale consideration received.
