REGAL DEALMARK PVT. LTD.,KOLKATA vs. WBG-W-104(1), KOLKATA
PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. This appeal arises from order under Section 250 of the Income Tax Act, 1961 (hereafter “the Act”), passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, NFAC, Delhi [hereafter “the Ld. CIT(A)], dated 28.12.2023. 1.1 In this case, originally an order had been passed dated 13.06.2024 by the ITAT by dismissing the appeal of the assessee. Thereafter, the matter was recalled vide order dated 07.03.2025, leading to the present proceedings. 1.2 Aggrieved with the order of Ld. CIT(A), the assessee has approached the ITAT with the following grounds: “1. For that the Ld. CIT(A)-National Faceless Appeal Centre (NFAC), Delhi erred in dismissing appeal filed by the Appellate Assessee.
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Regal Dealmark Pvt. Ltd.
For that on the facts and in the circumstances of the case, the CIT(A)-National Faceless Appeal Centre (NFAC), Delhi was unjustified in law and on facts in upholding the AO's order for the addition for business transactions and profit and loss in shares. 3. For that the Ld. Assessing Officer erred in assessing the transactions with various parties in the normal course of its business as accommodation entry amounting to Rs.3,52,34,953.00, loss in equity shares as fictitious to the tune of Rs.37,64,520/- and profit in equity shares as fictitious to the tune of Rs.4,49,100/- had been added by the Ld.AO. 4. The Ld. AO had neglected the facts that the business transactions, profit and loss in equity shares as genuine transactions were duly recorded in books of accounts, banking transactions were done through proper banking channels with regular income tax return filer. 5. For that the Ld. Assessing Officer in order to independently verify the identity and capacity of the share applicants and genuineness of the transactions issued summons to the share applicants which were duly served upon the applicant. However, there was hardly any time left with the share applicants to make compliance to the summon by furnishing the details, documents, explanations and evidences as called for by the Ld. Assessing Officer. 6. For that the Ld. Assessing Officer erred in assessing the business transactions, profit and loss in equity shares as genuine transactions but added the same without putting any material evidence on record to justify his claim. All the transactions were duly recorded in the books of accounts, banking transactions were executed through proper banking channels with regular income tax return filer. 7. For that under the facts and circumstances of the case, the Ld. Assessing Officer erred in assessing the business transactions and profit and loss on share transactions as fictitious and merely based upon his own surmises and conjectures and contrary to evidences on record. 8. For that under the facts and circumstances of the case the CIT(A) confirmed the order of the Ld.AO vide order dated 28.12.2023 on the ground that there is no response from the appellant inspite of the fact that the appellant had duly submitted the necessary documents as asked in the notice such as Form 35, Assessment order, Grounds of Appeal, Facts of the case and asked for 60 days' time to make the submission in support of grounds vide reply dated 20.12.2023. 9. That the appellant craves leave to add, alter, adduce further grounds at the time of hearing.” 3. Brief facts of the case are that the assessee had filed its return of income for the AY 2014-15 by 31.03.2016 declaring total income of Rs.12,090/-. On the basis of the information available with the Income Tax Department, relating to accommodation entries from shell companies/entities of Naresh Manakchand Jain and M/s. Handloom Supply, alleged fictitious losses in equity/derivative trading with M/s. VMS Industries Ltd. and alleged
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Regal Dealmark Pvt. Ltd.
fictitious profit in penny stock and after recording the reasons and taking required approval from the competent authority the assessment for AY
2014-15 was reopened and notice u/s. 148 of the Act was issued and served upon the assessee. Subsequently, notices u/s. 142(1) were also issued on four occasions and a show cause notice u/s. 144 of the Act was also issued to the assessee on 15.02.2022 as to why the assessment should not be completed u/s. 144 of the Act. The assessee was required to submit its response through registered e-filing account. Since there was no compliance nor any details were furnished by the assessee, the AO completed the assessment on the basis of material/information available on record and to the best of judgment u/s. 147 r.w.s. 144 r.w.s. 144B of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who vide order dated 26.03.2022 upheld the order of the AO. Aggrieved with the order of the Ld. CIT(A), the assessee is now in appeal before us.
4. Before us, the Ld. AR stated that unfortunately due to a communication gap between the assessee and his tax consultant, the matter could not be properly handled before the authorities below. It was prayed that in case another chance is given then the assessee would be able to present the facts of his case and thereby hope for a fair order.
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The Ld. DR relied on the orders of authorities below.
5. We have carefully considered the submissions of Ld. AR/DR and have gone through the orders of authorities below. We find that not only before the Ld. AO, but also before the Ld. CIT(A), no compliance whatsoever was made by the assessee. Accordingly, it was decided and announced in the open court that the assessee would be visited with a cost of Rs. 1,00,000/- for wasting the time and resources of the Department and this matter would be remanded back to the file of Ld. AO for fresh assessment, with the following directions:
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Regal Dealmark Pvt. Ltd.
(a) The assessee would produce the Directors of the company for investigation and examination by the Ld. AO.
(b) The assessee would also produce the Principal Officers of the share applicants and other entities with whom the impugned transactions have taken place. In case, the assessee is not able to do so for whatever reason then he would be duty bound to inform the Ld. AO about the correct addresses etc. of such Principal Officers so that the Ld. AO can issue summons to them.
(c) The assessee would file all necessary documents in support of his claim.
(d) The Ld. AO would be free to conduct any other enquiry as deemed fit by him.
6. Accordingly, the impugned order is set aside and the matter is remanded back to the file of Learned Assessing Officer for fresh assessment. The cost of ₹ 1,00,000/- will be paid by the assessee within
60 days of receipt of this order to the Legal Aid Services, 3rd floor of the Centenary Building, High Court, Calcutta, 700001. 7. In result, this appeal is partly allowed for statistical purposes.
Order pronounced on 27.10.2025 (George Mathan) (Sanjay Awasthi)
Judicial Member Accountant Member
Dated: 27.10.2025
AK, Sr. P.S.
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Regal Dealmark Pvt. Ltd.
Copy of the order forwarded to:
1. Appellant
2. Respondent
3. Pr. CIT
4. CIT(A)
CIT(DR)
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By order