GLASTER COMTRADE LLP (ERSTWHILE ENHANCE DEALMARK LLP),KOLKATA vs. ITO, WARD 37(1) (EARLIER WARD 14(2),,, KOLKATA

Brief facts of the case are that the assessee had filed the return of income for the AY 2012-13 on 04.09.2012 declaring the total income at ₹NIL. The case was originally completed and subsequently revised u/s 143(3) r.w.s. 264 of the Act on 30.03.2016, determining the total income at ₹21,563/-. Subsequently, the case was reopened u/s 147 of the Act based on the information received from the Investigation Wing that the assessee had benefited from high-value transactions amounting to ₹25,00,000/-, the source of which remained unexplained. In response to the notice issued u/s 148 of the Act, the assessee filed the return of income on 05.12.2019. The Assessing Officer (hereinafter referred to as Ld. 'AO') completed the reassessment u/s 147 r.w.s. 144 of the Act on ITA No(s). 2681/KOL/2025 Assessment Year(s) 2012-13 Glaster Comtrade LLP (Erstwhile Enhance Dealmark LLP). 05.12.2019, assessing the total income of the assessee at ₹12,84,15,000/- by treating the share capital and share premium raised as unexplained. Aggrieved with the assessment order, the assessee had filed an appeal before the Ld. CIT(A), who observed that the assessee had failed to furnish any new evidence and miserably failed to establish the genuineness and creditworthiness of the shareholders to the tune of ₹12,84,10,000/-. The Ld. CIT(A) also held that the Ld. AO had rightly reopened the assessment u/s 147 of the Act based on the information available on record. Accordingly, the Ld. CIT(A) confirmed the action of the Ld. AO and dismissed the appeal of the assessee.

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined. The Ld. AR, at the outset, drew our attention to the fact that the reopening was done in respect of the order dated 29.03.2019 by issuing notice u/s 148 for the return filed on 04.09.2012 disclosing total income of ₹ nil. The relevant extract for making the addition is as under: “The assessee company filed its return of income for the assessment year: 2012-13, on 04-09-2012, disclosing a total income of Rs. NIL. Subsequently, information was received from the office of the Investigation Wing of the Dept, Kolkata, that the assessee had benefited from high value transaction amounting to Rs.25,00,000/- during the F.Y-2011-12, the sources of which remained unexplained.

The Ld. AR drew our attention to the order dated 30.03.2016 passed u/s 143(3)/264/143(3) of the Act in which it is mentioned that the assessment u/s 143(3) of the Act was completed on 25.03.2015 assessing the total income at ₹12,84,15,000/- and in the assessment proceeding, the share capital and premium thereon raised during the year amounting to ₹12,84,00,000/- was added to the total income u/s 68 of the Act. Subsequent to the completion of the assessment, the assessee filed an application u/s 264 of the Act on 25.05.2015 before the Ld. PCIT-5, Kolkata requesting for revision of the assessment order. The Ld. PCIT-5, Kolkata went through the detailed submissions of the assessee and the assessment record as well as the report of the Assessing Officer and after a detailed examination of the above, vide his order dated 03.06.2015, he has observed as under: “It is undeniable that there is a strong possibility that the assessee was unable to present his view point during assessment proceedings to the full Glaster Comtrade LLP (Erstwhile Enhance Dealmark LLP). Whether this happened due to the lack of time with the AO or due to the multifarious reasons enumerated above it is impossible to judge. The assessee, in all fairness has submitted himself to full scrutiny before me during these proceedings and in order to provide sufficient opportunity of being heard by the assessing officer to the assessee as well as to safeguard the interests of revenue, the assessment order u/s 143(3) dated 25/03/2015 passed by the assessing officer is being set aside with a direction to frame a fresh assessment order after making detailed inquiries and providing reasonable opportunity of being heard to the assessee”

It was also submitted that the assessment proceedings were made afresh as per direction of the Ld. PCIT-5, Kolkata and the case was heard by issuing notice u/s 142(1) of the Act and only a disallowance u/s 14A of the Act amounting to ₹2,15,630/- was made. It is also mentioned that subsequently the summons u/s 131 of the Act were issued to the directors in order to examine the genuineness of the share capital and sale of investment in respect of each and every transaction and statements were also recorded on oath. The assessee had invested its shares of ₹NIL as on 31.03.2011 and ₹1,23,39,60,502/- as on 31.03.2012. Although the assessee did not earn any dividend during the year under consideration, which is exempt income in respect of dividend as well as in the form of long-term capital gain, the assessee did not make any disallowance u/s 14A of the Act in respect of such investment in shares and the disallowance of ₹3,08,490/- worked out was reduced to the extent of total expenses debited by the assessee in the profit and loss account which were ₹2,15,630/-. In the assessment order made subsequent to this order giving effect to the revision order of the Ld. PCIT-5, Kolkata, nowhere is there any mention of this revision order or the setting aside of the initial assessment order dated 25.03.2015 which was not in existence as on the date of order u/s 147/144 of the Act dated 05.12.2019. Yet the Ld. AO mentions that after going through the details and materials available manually and ITA No(s). 2681/KOL/2025 Assessment Year(s) 2012-13 Glaster Comtrade LLP (Erstwhile Enhance Dealmark LLP). Department's online system and also considering the assessment order u/s 143(3) of the Act for the same assessment year passed on 25.03.2015, income as per order u/s 143(3) of the Act dated 25.03.2015 at ₹12,84,15,000/- has been assessed. Although the information was received from the Investigation Wing and the Ld. AO had the liberty to reopen the assessment on the receipt of fresh information, however, what could have been reopened was the order dated 30.03.2016, it was submitted.

We have no benefit of the reasons recorded nor any of the reasons are mentioned in the order of the Ld. CIT(A) consequent to the reassessment proceeding initiated. Therefore, since the very order dated 25.03.2015 was set aside by the Ld. CIT(A) and the then Assessing Officer had passed a consequential order on 30.03.2016 giving effect to the direction of the Ld. PCIT in which the share capital earlier added had been accepted, there does not appear any justification for upholding the additions on the basis of the income as per order u/s 143(3) of the Act dated 25.03.2015, which was not in existence. Therefore, the order of the Ld. CIT(A) is based upon erroneous appreciation of facts and the same is set aside and the appeal of the assessee is allowed.

In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 20th July, 2026. [Yogesh Kumar US] [Rakesh Mishra] Judicial Member Accountant Member Dated: 20.07.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Kolkata Benches, Kolkata.

Guard File. //// By order