ITAT Kolkata Judgments — November 2022

The CIT(A) deleted the addition, holding that the assessee had proved the genuineness and creditworthiness of the investors by providing IT returns, audited accounts, share application forms, PAN cards, and bank statements. The CIT(A) found that transactions were through banking channels and the investors had substantial creditworthiness.

The Tribunal held that the AO failed to conduct proper verification and examination of the issues for which the case was selected for limited scrutiny, as evidenced by the order sheet entries and the timing of submissions. Consequently, the revisionary order passed by the Pr. CIT under Section 263 was upheld.

The Tribunal noted that the assessee had provided details like PAN, affidavits, and bank statements of share applicants. The AO's addition was based on the investigation wing's report and the perceived lack of business activity of the subscribing companies, without sufficient independent inquiry.

The Tribunal affirmed the order of the CIT(A) regarding the transfer pricing adjustment, foreign exchange fluctuation loss, and the addition for payments to non-existent parties. The Tribunal found no infirmity in the CIT(A)'s reasoning for allowing these claims.

The tribunal dismissed the appeal based on the assessee's submission that the dispute was settled under the Vivad Se Vishwas Scheme. The assessee was granted liberty to apply for recall if there was any factual inaccuracy.

The Tribunal held that the AO had examined the transaction and accepted a plausible view of law regarding the write-off of debentures. Therefore, the PCIT's invocation of Section 263 was unjustified as the assessment order was neither erroneous nor prejudicial to the revenue.