ZULA MERCHANDISC PVT. LTD.,KOLKATA vs. ITO, WARD-5(1), KOLKATA

ITA 553/KOL/2024Status: DisposedITAT Kolkata23 September 2024AY 2014-15Bench: Shri Rajpal Yadav (Vice President), Shri Rajesh Kumar (Accountant Member)20 pages
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What did the Tribunal hold?

The Tribunal held that the AO failed to bring on record substantive evidence to prove the loss was bogus, relying only on investigation reports and general modus operandi. Following a coordinate bench decision with similar facts, the Tribunal set aside the CIT(A)'s order.

What were the facts?

The assessee, engaged in money lending and share trading, incurred a loss of Rs. 51,33,870/- from trading in two specific scrips. The Assessing Officer (AO) disallowed this loss, treating it as bogus and intended to evade tax by setting it off against interest income.

What were the issues?

Whether the loss incurred from trading in specific equity shares, alleged to be penny stocks, can be disallowed as bogus and non-genuine without substantive evidence from the assessee's side.

Which sections of the Income-tax Act were involved?

Section 68

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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA

Before: Shri Rajpal Yadav, Vice- & Shri Rajesh Kumar]

Per Rajesh Kumar, AM: This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 23.01.2024 for AY 2014-15. 2. Though the assessee has raised nine grounds but in all the grounds a common issue is raised which is against the order of Ld. CIT(A)-NFAC confirming the disallowance of Rs. 51,33,870/- as made by the AO u/s 68 of the Act in respect of loss

2 Assessment Year: 2014-15 Zulu Merchandise Pvt. Ltd.

The order continues below.

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