BAHAR MERCHANTS PVT. LTD.,HOWRAH vs. I.T.O., WARD - 2(3), KOLKATA

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ITA 2308/KOL/2025Status: DisposedITAT Kolkata10 August 2026AY 2014-201519 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the addition made by the AO and confirmed by the CIT(A). It found the share transaction to be dubious, creating an artificial loss to offset interest income, and that the assessee failed to prove the genuineness of the purchases.

What were the facts?

The assessee claimed a short-term capital loss on the devaluation of shares of a penny stock company. The Assessing Officer found the purchase of shares to be bogus, with the broker being non-existent, and added the entire purchase value as an unexplained cash credit. The CIT(A) confirmed this addition.

What were the issues?

Whether the purchase of shares of a penny stock company, where the broker was non-existent and the transaction was off-market, can be treated as an unexplained cash credit under Section 68 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH AT KOLKATA

Before: SHRI PRADIP KUMAR CHOUBEY & SHRI RAKESH MISHRA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH AT KOLKATA Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No(s). 2308/KOL/2025 Assessment Year(s) 2014-15 Bahar Merchants Pvt. Ltd. I.T.O., Ward-2(3), Kolkata Vs. (Appellant) (Respondent) PAN: AABCB9834B Appearances: Assessee represented by : Avijit Ghosal, Advocate. Department represented by : Dheeraj, Sr. DR. Date of concluding the hearing : 02.07.2026 Date of pronouncing the order : 10.08.2026 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Act for AY 2014-15 dated 14.08.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: "1. For that the Ld. CIT(A), NFAC, Delhi has erred in law as well as on facts of the case by passing order u/s 250 of the I.T. Act, 1961 dated 14/08/2025 dismissing the appeal filed by the appellant and thereby confirming the addition of Rs.2,79,00,000/- made by the Assessing Officer u/s 68 of the I.T. Act, 1961 treating the devaluation of the share price on the same line as of the Assessing Officer ignoring the totality of the submission made by the appellant which is not correct as Statement of Facts in details pointing out that there was no role of the appellant in devaluation of share price was submitted before Ld. CIT(A), NFAC.

6.

Our attention was also drawn to pages 105 being ledger account for the shares purchased on 03.01.2014 being 3 lakh shares of GBLINFRA, page 37 to 51 being the copy of the assessment order and page 40 of the paper book which gives details of the transaction in the scrip of Global Infratech and Finance Ltd and the variation of price from ₹ 0.692 ₹ 67.99 and further to ₹ 83.60 and thereafter to ₹ 34.61 in which allegation of manipulation has been made during the period of financial year 2012-13 to 28/03/2014. It was submitted that a wrong section was applied and section 68 of the Act was not applicable. The assessee had claimed short term capital loss of ₹1,57,80,000/-, which was the

Assistant Registrar ITAT, Kolkata Benches Kolkata

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