INCOME TAX OFFICER, WARD - 10(2),, KOLKATA vs. KHATU NIKETAN PRIVATE LIMITED, KOLKATA

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ITA 944/KOL/2025Status: HeardITAT Kolkata05 August 2025AY 2013-14Bench: SHRI GEORGE MATHAN (Judicial Member)3 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the CIT(A) quashed the reopening of the assessment by applying the decision of the Hon'ble Supreme Court in Rajiv Bansal. Since the revenue did not raise any ground challenging the CIT(A)'s action of quashing the reopening on technical grounds, the appeal filed by the revenue was dismissed as non-survivable.

What were the facts?

The Revenue appealed against the CIT(A)'s order which deleted an addition of Rs. 55,10,850 made under Section 69C for non-genuine loss claimed by the assessee in derivative trading. The CIT(A) had quashed the reopening of the assessment itself, rather than deciding the case on merits.

What were the issues?

The key issue was whether the CIT(A) was correct in quashing the reopening of assessment on technical grounds, thereby deleting an addition made under Section 69C, and whether the revenue's appeal against this technical quashing could survive.

Which sections of the Income-tax Act were involved?

Section 69C,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(7)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA

Before: SHRI GEORGE MATHAN

Hearing: 05/08/2025Pronounced: 05/08/2025

(नििाारण वर्ा / Assessment Year. :2013-2014) Income Tax Officer, Vs Khatu Niketan Private Limited, Ward-10(2), Kolkata GPO 27, Brabourne Road, Mezzanine Floor, Narayani Building Kolkata-700001 PAN No. : AAECK 2891 E (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) राजस्व की ओर से /Revenue by : Shri Mrinmoy Basak, Sr. DR नििााररती की ओर से /Assessee by : Shri Siddharth Kejriwal, AR सुनवाई की तारीख / Date of Hearing : 05/08/2025 घोषणा की तारीख/Date of Pronouncement : 05/08/2025 आदेश / O R D E R This is an appeal filed by the revenue against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 05.03.2025, for the assessment year 2013-2014.

2.

Shri Mrinmoy Basak, ld. Sr.DR appeared on behalf of the revenue and Shri Siddharth Kejriwal, ld. AR appeared on behalf of the assessee 3. It was submitted by the ld. Sr. DR that the ld.CIT(A) has deleted the addition made by the Assessing Officer representing certain non-genuine loss claimed by the assessee in respect of derivative trading. It was the submission that the order of the ld. CIT(A is liable to be reversed.

4.

In reply, ld. AR vehemently supported the order of the ld. CIT(A).

5.

I have considered the rival submissions. The grounds raised

by the revenue in its appeal are as under :-

1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing the appeal of the assessee by Rs. 55,10,850/-made u/s 69C of the Act ignoring the merit of the case.

2. Whether on the facts and circumstances of the case and in law, the CIT(A) erred in ignoring the CBDT's Instruction No. 01/2022 dated 11.05.2022.

3.

Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in deleting the addition made by the AO u/s 69C, which were based on the probability of surrounding circumstances whereinthe transactions were blatantly suspicious and the rules of suspicious transactions apply, as has been held in the case of Hersh W. Chadha v. Deputy Director of Income-tax, Circle-1(1), International Taxation[2011]9 taxmann.com 1 (Delhi)/[2011] 43 SOT 544 (Delhi)/[2011] 135 TTJ513 (Delhi).

4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in facts and in law in not appreciating the judicial principles laid down in the matter of Pr. CIT Vs. Swati Bajaj reported in (2022) 139 taxmann.com 352 (Cal)/446 ITR 56 (Cal) wherein the Hon'ble High Court at Calcutta laid down guidelines on the manner in which the allegation against the assessee has to be considered.

5. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) has failed to appreciate the judicial principles lald down in the matter of SumatiDayal v. CIT [1995] 214 ITR 801 (SC) and also in the matter of CIT Vs. Durga Prasad More 1973 CTR (SC)500: [1971] 82 ITR 540 (SC).

6.

The appellant prays that the tax effect in the instant case is 18,54,000/- which is below the monetary limit prescribed by the CBDT Circular No. 9/2024 dated17.09.2024. However, it is humbly prayed that the case falls within the exception clause 3.1(h) of Circular No. 05/2024 dated 15.03.2024 as a modus operandi of evasion is involved in the case, meaning thereby that large amounts of money have been brought to the books /system of the assessee company in highly suspicious circumstances.

7.

That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds hereinabove before or at the time of hearing of this appeal.

6. A perusal of the order of the ld. CIT(A) shows that the ld. CIT(A) has relied upon the decision of the Hon’ble Supreme Court in the case of Rajiv Bansal, reported in [2024] 167 taxmann.com 70 (SC) and has quashed the

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