" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA No.1199/KOL/2025 (Assessment Year: 2019-20) M/s BMS Sales Pvt. Ltd. C/o SalarpuriaJajodia& Co. 7, C.R. Avenue, 3rd Floor, Kolkata-700072, West Bengal Vs. DCIT, Central Circle 3(1), Aaykar Bhawan Poorva, P-7, Chowringhee Square, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN No. AADCB8425C Assessee by : Shri Siddharth Jhajharia, AR Revenue by : Shri Raja Sengupta, DR Date of hearing: 08.10.2025 Date of pronouncement: 02.01.2026 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-21, (hereinafter referred to as the “Ld. CIT(A)”] dated 31.03.2025 for the AY 2019-20. 2. Ground Nos.1 to 3 are against the order of the ld.CIT(A) in confirming the re-opening of reassessment u/s.147 of the Act based on an invalid notice issued by the AO u/s.148 of the Act dated 15.01.2024. 2.1. Facts in brief are that the assessee company filed its return of income u/s 139(1) of the Act for the assessment year under consideration on 31.10.2019 declaring total income of Printed from counselvise.com Page | 2 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 Rs.17,25,39,330/- under normal provision and Rs. 51,82,85,619/- as per section 115JB of Income Tax Act, 1961. The return was processed u/s 143(1) of the Act on 03/06/2020. The assessee company was engaged in manufacturing of TMT Bar, Billets, Ingots, Sponge Iron, Ferro Alloy and generation of Captive Power Plant etc, and also engaged in trading activities of Iron Steel Products. A search & seizure operation u/s 132 of the Act, 1961 was conducted on Agarwal Group and its associates by the Directorate of Investigation, Kolkata on 17.09.2021 and on subsequent dates. Being one of the associate members of the above group, the assessee was also covered in search by executing a warrant. Pursuant to the search & seizure operation, the case of the assessee was re-opened u/s 147 of the Act after taking approval from the competent authority and notice u/s 148 of the Act was issued and served upon the assessee on 06.09.2022 asking the assessee to file return of income within 30 days from the receipt of the notice. On 13.10.2022 the assessee has filed return u/s 148 of the Act declaring same total income as returned originally in the return of income filed u/s 139(1) of the Act dated 31.10.2019. Thereafter, statutory notices u/s 143(2) of the Act dated 11.11.2022 and notice u/s 142(1) of the Act dated 12/01/2023 along with a set of questionnaires were issued and duly served upon the assessee. Finally, the assessment was completed vide order dated 15.01.2024 u/s/147 of the Act by making various additions. 2.2. In first appeal, the ld. CIT(A) upheld the notice issued u/s.148 of the Act and the consequent proceedings and the assessment framed by the AO on the ground that notice was validly issued and there is no infirmity in the same. Printed from counselvise.com Page | 3 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 2.3. Aggrieved with both the orders of the authorities below, the assessee is in further appeal before the Tribunal. 2.4. Ld. AR vehemently submitted that the re-opening of assessment was made invalidly without satisfying the conditions precedent to issue of notice u/s 148 of the Act. The ld AR submitted that during the course of search operation, no incriminating materials/documents were found and seized. Therefore the re-opening of assessment is bad in law and so is assessment framed. The ld AR made very elaborate and lengthy submissions which are extracted as under :- 1. Issue 1 regarding validity of impugned proceeding vide issue of order u/s 148 and subsequent completion of proceeding vide order u/s 147/143 was challenged by the appellant mainly on following grounds: - 1. i) AO failed to provide the copy of reasons recorded for the initiation of the impugned proceedings at the time of issue of notice u/s 148 or even subsequently. ii) The addition so made by the AO in the impugned order does not arise out of the search conducted u/s 132(1) on the appellant and rather the same relates to alleged search on Kesara Group (on whom the search was conducted on 30.11.2018) and Anup Majee Group (on 5.11.2020) and as such, such notice u/s 148 has itself become invalid. iii) The provisions of section 148 for search conducted on or after 1.4.2021 cannot be considered in total oblivion of the fact that no incriminating material was found with the assessee [during the search on 17.9.2021 u's 132(1) on appellant) and the impugned assessment was \"unabated\" and hence there could not be any addition as made by the AO in absence of any incriminating material found on search u/s 132(1) on it. Attention is drawn to judgement of Co-ordinate Bench (Chandigarh) in Rosha Alloys (P) Ltd. v. DCIT, Central-2025(7) TMI 238 (Chd) dt. 28.5.2025 and the relevant part (at para 32) is reproduced hereunder: - \"32. Further we find that the PCIT has accorded the approval only as per the proviso (a) to Section 148A, without their being any positive finding about the escapement of income. Printed from counselvise.com Page | 4 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 We also find that there is no incriminating material seized during the course of search with regard to any purchases & sale outside the books of accounts. Therefore, we hold that, despite the deeming fiction applicable to searched persons, the issuance of notice under Section 148 still requires the Assessing Officer to demonstrate that the information unearthed during search leads to escapement of income in the specific assessment year. The mere fact of search, in itself, is not sufficient reason to issue a notice. Failure to establish this connection would render the issuance of notice without proper approval u/s 151 as bad in law and unsustainable.\" [Copy of such order is enclosed at Annexure-1] iv) The AO at best could have initiated the proceedings w/s 153C for the alleged searches and alleged material evidences/ documents pertaining/relating to conducted on \"Kesara Group\"[on 30.11.2018) and on Anup Majee Group[on 5.11.2020] which the AO failed to issue and such addition cannot be made u/s 148 pursuant to search u/s 132(1). v) AO could not have travelled to other issues when the AO did not have any material on the basis of which the impugned 148 was initiated. vi) Deemed escapement of income without enquiry u/s 148A applied only for preceding 3 years and for travelling beyond 3 years, AO must issue notice u/s 148A which AO failed to do in this case and hence consequential proceedings and order so passed u/s 147 has become bad in law vii) Before issuing notice u/s 148 (for A.Y 2019-20) the conditions as specified in sec. 149(1)(b) were required to be satisfied and which is not satisfied in appellant's case. Such condition u/s 149(1)(b) are as follows:- a) AO is in possession books of accounts/other documents/evidence. b) Which reveal income chargeable to tax \"represented in form of asset\". AO didn't have any evidence / documents books and more so represented by \"asset\" out of impugned search on 1.4.2021 and as such issue of notice u/s 148 was void ab initio. 2. In the case of appellant, without prejudice, the AO has referred to only \"expenditure\" or \"entry in books of account\" of 3rd parties [ie. \"Anup Majee Group\" or \"Kasera Group\"] and such alleged \"information\" from such persons did not indicate any \"income chargeable to tax represented to the form of asset\" and hence such requirement of sec, 149(1)(b) (as it existed prior to amendment vide Printed from counselvise.com Page | 5 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 Finance Act, 2022 amendment effective from 1.4.2022 only) and hence it has to be considered accordingly. 3. Reliance is placed on the aforesaid contention following judicial precedents also may be relied as well, wherein Court has held that for searches conducted prior to 1.4.2014 proceedings u/s 153C can only be taken up and 148 proceedings based on searches conducted prior to 1.4.2021 is invalid. a) Tirupati Construction Company v. ITO [(2024) 165 taxmann.com 165 (Raj.)) b) Shiv Vegpro Pvt. Ltd. v. DCIT [(Rajasthan High Court) (D.B. Civil W.P. No. 15350/2022 dt.25.11.2024) c) Shyam Sundar Khandelwal v. ACIT [(Rajasthan High Court) D.B. Civil Petition No. 18363/2019 dt. 19.3.2024)] d) Jagjit Singh v. DCIT [164 taxmann.com 324 (Amritsar)] e) Koteshwar Rao v. DCIT [(2015) 64 taxmann.com 159 (Viz)] 2.5. Ld. CIT-DR, on the other hand, relied heavily on the orders of the authorities below and submitted that the case was validly reopened by the ld. AO by issuing notice u/s.148 of the Act under the new scheme of taxation which mandatorily required the AO to issue notice u/s 148 of the Act for certain assessment years irrespective of whether any incriminating materials were found and seized or not..Ld.CIT-DR submitted that under new regime of the search provisions , the old code as contained in section 153A to 153C has been discontinued and new scheme has been put in place which required the AO to re-open certain numbers of assessment years. The ld DR submitted the provisions of Section 148 of the Act after search are analogous to the provisions to the provision of Section 153A of the Act which was prevalent and applicable till now whereunder the AO was required to issue notice u/s 153A of the Act for preceding six assessment years preceding the date of search Printed from counselvise.com Page | 6 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 irrespectrive of any incriminating materials. Therefore, the issue raised by the assessee has no merit and may kindly be dismissed. 2.6. After hearing the rival contentions and perusing the material on record, we find that the assessee has challenged the issue of notice u/s.148 of the Act and also the proceedings u/s.147/143(3) of the Act on the ground that the AO has failed to provide copy of the reasons recorded in the proceedings u/s.148 of the Act and also the addition made by the AO are not arising out of the search conducted u/s.132 of the Act on the assessee, Rather the additions made were on the basis of material gathered during the course of searches on Kesara Group on 30.11.2018 and Anup Majee Group on 05.11.2020 and consequently the notice u/s.148 of the Act was itself invalid and may be quashed. We have perused the provisions under old scheme vis a vis under new scheme and find that under the new scheme of search, the AO has to issue notice u/s 148 of the Act for the number of assessment years as provided in the Act. In other words there need not be any incriminating materials and whether there is any materials warranting additions that has to be examined by the AO during proceedings u/s 147 of the Act. Therefore we do not find any merit in the contentions of the assessee that the provisions of Section 148 of the Act for search conducted on or after 1.4.2021 cannot be considered in total oblivion of the fact that no incriminating material was found with the assessee during the course of search u/s.132 of the Act and the impugned assessment was unabated and hence no addition can be made. We note that the plea of the assessee does not have force or merit as in this case the requirement of any incriminating material is not there for issuing notice u/s 148 Printed from counselvise.com Page | 7 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 and the assessment can be reopened because the provisions of Section 148 of the Act are analogous to Section 153A of the Act as applicable in the case of search pertaining to search prior to 1.4.2021. In our opinion, the AO is under obligation to reopen such assessment years prior to the date of search even if there is no incriminating material and then frame the assessment accordingly. In other words the existence of incriminating materials has to be examined during the assessment proceedings and not at the stage of issuance of notice. Ld. AR also relied on the decision of the Chandigarh Bench of the Tribunal in the case of Rosha Alloys (P) Ltd., reported in 2025 (7) TMI 238 (Chd) dtd. 28.05.2025, however, with, utmost humility and respectful disagree with the conclusion drawn by the coordinate bench of the Tribunal and, therefore, the ground Nos.1 to 5 raised by the assessee have no merit and accordingly the same are dismissed by upholding the appellate order on this issue. 3. The only issue raised by the assessee on merits is against the confirmation of addition by ld. CIT (A) of ₹42,43,50,000/- as made by the ld. AO in respect of sale of investment during the impugned year. 3.1. The facts in brief are that the assessee filed the return of income on 25.10.2019, declaring total loss of ₹11,67,951/-. The assessee revised the return on 12.02.2020, offering the same income. The assessee is engaged in the business of investment activities. A search action u/s 132 of the Act was conducted on 17.09.2021and on subsequent dates on ‘Agarwal Group’ and its associate concerns by directorate of investigation , Kolkata.Simultaneously, survey u/s 133A of the Act was also conducted at the assessee company at Printed from counselvise.com Page | 8 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 Lachhmanpur, PO Ramkanali PS-Raghunathpur, Purulia-723144 and documents bearing identification Mark BTUPL/01 to BTUPL/08 were found and impounded. On perusal of the said documents it was found that the assessee in the earlier years had raised share capital along with huge premium without any justification. The said capital/ premium raised were utilized in making investments in shares of unlisted private companies. It was further observed that the assessee company received during the impugned financial year and accordingly, a show cause notice was issued u/s 148A(b) of the Act to the assessee which was replied by the assessee. The ld. AO, after taking into account the reply of the assessee, passed order u/s 148A(d) of the Act and held that the information prima facie leads to conclusion that income has escaped assessment. The notice u/s 148 of the Act was issued on 30.03.2023. The assessee complied with the said notice by filing the return of income on 28.06.2023, declaring business loss of ₹11,67,951/-. Thereafter, notice u/s 143(2) of the Act and 142(1) of the Act along with questionnaire were issued to the assessee which were duly served. The assessee submitted the reply before the ld. AO along with evidences/documents as called for. In response to the questionnaire, the assessee submitted that it had sold investments to the tune of ₹68,94,40,000/- during the impugned financial year and also furnished the details which were extracted by the ld. AO in para 6. The ld. AO issued notices u/s 133(6) of the Act to the purchasers (nine entities) which were replied by them by furnishing all evidences as called for besides confirming the transactions of purchase of unlisted equity shares. The ld. AO , by referring to survey action on Shri Abhishek Kumar Munka and in his statement recorded u/s 131 of the Act on Printed from counselvise.com Page | 9 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 24.09.2021, stated that through an intermediary, he was dealing with the financial transactions i.e. managing cash and providing accommodation entries in lieu of the investments to the assessee. During the course of search on Mr. Munka, several documents were seized which proved that Munka has been providing entries in lieu of cash for other beneficiaries of Agrawal group. Thereafter the ld. AO extracted the cash ledger marked as AKM 189, page 130 at page no.4 of the assessment order. The ld. AO referred to some entries in the ledger of Deepak, maintained by the Munka, who was the main person of Agarwal group. Thereafter, after discussing the modus operandi, the ld. AO noted that the assessee company has received funds from sale of unlisted shares of private companies which were in the nature of cash credit u/s 68 of the Act and the onus is on the assessee to discharge the burden cast u/s 68 of the Act. The ld. AO held that these transactions were pre-arranged and concocted. Therefore, these are nothing but accommodation entries arranged by Mr. Munka, accordingly, show cause notice was issued on 27.12.2023, which was replied by the assessee vide written submission dated 28.12.2023. It was submitted that the assessee company during the financial year 2009-10 relevant to A.Y. 2010-11, issued8,25,560 equity shares of face value of ₹1 per share with a premium of ₹999 per share worth ₹82,55,60,000/- which were subscribed by 24 companies and company realized total realization of ₹82,55,60,000/-. It was also submitted that the case of the assessee was under scrutiny for A.Y. 2010-11, vide order u/s 143(3) of the Act dated 29.04.2013, passed by ITO, Ward 13, Kolkata and the issue of higher capital/ share premium raised by the assessee from 24 subscribing companies had been thoroughly examined, scrutinized Printed from counselvise.com Page | 10 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 and verified by the ld. AO and when nothing wrong was found, the same was fully accepted in the said assessment framed u/s 143(3) of the Act . Pertinent to state that this was the only issue for which the case of the assessee was selected for scrutiny. The assessee also submitted the copy of the order passed u/s 143(3) of the Act for A.Y. 2010-11. It was stated that the assessment so framed was never questioned by any authority and has attained finality and therefore, taking action against the assessee in respect of investments made in A.Y. 2010-11 and sold during the impugned year is incorrect and not sustainable in the eyes of law. It was also submitted that there was no sale or purchase of shares during the F.Y. 2010-11 to F.Y. 2017- 18, relevant to A.Y. 2011-12 to A.Y. 2018-19, either for trading or for investment purposes and therefore, investment made in A.Y. 2009- 10 to 2010-11, were held as capital asset under the head non- current investments. It was submitted that during the F.Y. 2018-19, relevant to A.Y. 2019-20 the directorship of the company changed on 31.03.2019.These investments sold during the year were old and carried forward from earlier assessment years as noted hereinabove. The investments sold during the impugned year were worth ₹ 68,94,40,000/- to nine entities however the sale of investments to the tune of Rs. 42,43,50,000/-were treated as bogus and added to the total income of the assessee u/s 68 of the Act as unexplained cash credit. 3.2. In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO after taking into account the submissions and contentions of the assessee. The learned CIT(A) also called for a remand CIT(A) noted that the report from the AO which was duly Printed from counselvise.com Page | 11 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 furnished by the AOhass not addressed the issues raised by the assessee. The learned CIT(A) noted that the AO has not carried out further enquiries nor provided any cross examination to the assessee of Abhishek Kumar Munka or Shri Deepak Kumar Aggarwal. Learned. CIT(A) also noted that statement of Shri Abhishek Kumar Munka, was perused and it was observed that no question was made to Shri Abhishek Kumar Munka regarding AKM-189 (pg 130). Learned CIT(A) noted that in the statement of Shri Abhishek Kumar Munka, the name of the assessee company did not appear even once. The learned CIT(A) further noted that there was no mention that assessee company has ever controlled by Shri Abhishek Kumar Munka. The learned CIT(A) further noted that Shri Deepk Kumar Agarwal, to whom the payment of cash is being attributed to by the learned AO was not asked a single question about this document. It is only for this reason that the assessee raised in respect of sale of shares to the tune of Rs.42,43,50,000/- as bogus on the basis of seized document AKM-189 (pg 130). The submission of the assessee was forwarded to the learned AO for his comment and the learned AO furnished the remand report in which there was no mention of the issues which were raised by the assessee. The learned CIT(A) noted that the AO has relied on the decision of Jurisdictional High Court in case of Swati Bajaj & Ors. (2022) 139 taxmann.com 352 quoting para 55 to 59 of the said decision in page no. 63 to 65 of the assessment order. The learned CIT(A) further noted that the statement of Shri Abhishek Kumar Munka was provided to the assessee well in advance at the initial stage proceedings and now the objection of the assessee is not tenable and is mere an attempt to escape from the clutches of section 68 of the Act. The learned CIT(A) Printed from counselvise.com Page | 12 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 thereafter discussed the seized document AKM 189 page 130 and discussed the same in the appellate order. Finally, the learned CIT(A) confirmed the order of the learned AO on this issue. 3.3. After hearing the rival contentions and perusing the materials available on record and also taking into account the submissions/ contentions of the assessee, evidences filed and the remand report called for in the appellate proceedings we note that the ld. CIT (A) discussed the Provisions of Section 68 of the Act. We note that the assessee has furnished all the evidences before the AO as well as before the learned CIT(A) qua the sale of investments. The ld. CIT (A) also referred to the notices issued u/s 133(6) of the Act by the ld. AO to the buyer companies and also discussed the replies filed by them in response to the said notices. The ld. CIT (A) noted that the replies received from the buyer companies was never forwarded to the assessee for seeking comments. We note that the ld. CIT (A) during the appellate proceedings sought a remand report which was filed on 06.03.2025. The ld. AO re-iteratedhis observations as made in the assessment order. The rejoinder was also called from the assessee which was duly filed. The ld. CIT (A) noted that the shares purchase companies were not having any business or revenue from operation and had returned negligible income for A.Y. 2019-20 as well as in the past assessment years. The ld. AR vehemently submitted that the investments were held since F.Y. 2009-10 with book value of ₹82,55,60,000/- were already subjected to scrutiny in the assessment proceedings for A.Y. 2010-11. The ld. AR submitted that the issue was examined at length by the ld. AO as the very purpose of the selection of scrutiny was recent share capital/ share Printed from counselvise.com Page | 13 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 premium. The ld. AR submitted that the assessment was framed u/s 143(3)/ 147of the Act for A.Y. 2010-11. 3.4. The ld. AR further submitted that these investments were consistently reflected into books of account and audited accounts till F.Y. 2017-18 relevant to A.Y. 2018-19. The ld. AR submitted that during the year the assessee has only sold a part of the investments to four buyer companies from whom the money was received through banking channel. The ld. AR also referred to the notices issued u/s 133(6) of the Act to these companies by the ld. AO and the fact that by the four companies were duly complied with the said notices by furnishing all the details/ evidences before the ld. AO. The ld. AR stated that the ld. AO has not even confronted these replies to the assessee whether they contain any adverse material against the assessee. The ld. AR submitted that the provisions of Section 68 of the Act are not applicable to the instant case as section 68 of the Act is applicable to the fresh unexplained cash credit and not to the realization of any existing assets. Therefore, the sale of existing assets cannot be treated as unexplained income of the assessee. The ld. AR submitted that the share purchase by the assessee of private unlisted companies were held as investment under the head capital asset shown under non-current asset investment till in the subsequent assessment years. The ld. AR also submitted that replies received from the respective buyer companies by the ld. AO u/s 133(6) of the Act with supporting evidences/ documents were never confronted to the assessee and the ld. AO ultimately came to the conclusion that the money received from the said four companies (as given in para 4.11 were unexplained cash credit while the very sale Printed from counselvise.com Page | 14 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 of investments by other two entities covered in the same search action were accepted as genuine by the department and therefore, on this count along ,the addition made by the ld. AO is bad in law and deserved to be deleted. 3.5. The ld. AR also submitted that the assessee was never provided the statement of Shri Abhishek Kumar Munka, an entry operator which was recorded by DDIT(Inv.), unit-1(3), Kolkata during search on one Jain group(third party) on 24.09.2021 which was distinct and separate from the assessee, having no agreement with the assessee in F.Y. 2018-19 or earlier years.The ld. AR submitted that how the third-party statement could be used against the assessee to make the addition when the assessee was not allowed cross examination of the said person which is a mandatory requirement. Therefore, the same is in violation of principle of natural justice. In defense of his argument the ld. relied on the decision of Andaman Timber Industries Vs. CIT (2015) 10 TMI 442 (SC), PCIT vs. Sreeleathers [2022] 143 taxmann.com 435 (Calcutta)/[2022] 448 ITR 332 (Calcutta)[14-07- 2022]. 3.6. The ld. AR further submitted that the statement of Shri Abhishek Kumar Munka on 24.09.2021, nowhere mentioned the name of the assessee and in fact mentioned the name of the all those companies which has no connection with the assessee company in any manner whatsoever. The ld. AR submitted that the action of the ld. AO in partly accepting the sales made to the same four purchases companies in the hands of two entities as mentioned in para 4.11 infra and rejecting the sale of investments to the same four entitiesin the hands of the assessee is a clear-cut example of non-application Printed from counselvise.com Page | 15 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 of mind by the ld. AO. The ld. AR submitted that how the investments which were accepted in the scrutiny assessment in A.Y. 2010-11 in scrutiny proceedings, wherein the assessment was framed u/s 143(3)/147 of the Act and raising of funds as well as investment of these funds into unlisted equity shares were accepted. The ld. AR submitted that the provisions of Section 68 of the Act are not applicable to the sale of investment made by the assessee in the impugned assessment year. In defense of his argument the ld. AR relied on the decision of Hon'ble Jurisdictional High Court in case of in the case of PCIT Vs. Tulsyan and Sons (P.) Ltd.ITAT/239/2024 in IA No.GA/2/2024order dated 16th April,2025 and also the decision of ACIT Vs. Pawanputra Advertising Private Limitedin IT(SS)A Nos. 144 & 145/KOL/2024 and Ors. vide order dated 26.08.2025. The ld. AR therefore prayed that the addition made by the ld. AO and as sustained by the ld. CIT (A) may kindly be deleted by allowing the appeal of the assessee. 3.7. The ld. DR on the other hand strongly opposed the arguments of the ld. AR by submitting that the raising of fund as well as the investments thereof is nothing but part of accommodation entries received by the assessee . The ld. DR submitted that the mere acceptance of particular fact during assessment proceedings, would not ipso facto prove that the same could not be doubted in the subsequent year when the genuineness the transactions came to cloud. The ld. DR submitted that though admittedly these investments were accepted in A.Y. 2010-11 in the assessment proceedings in the order passed u/s 143(3)/ 147 of the Act but the same cannot be bar to treat the said investments as bogus when Printed from counselvise.com Page | 16 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 these were sold in the year of sale. The ld. DR submitted that these accommodation entries were unearthed during a search conducted on Shri Abishek Kumar Munka u/s 132 of the Act and he admitted that he and his associated concerns is providing accommodation entries. Therefore, the addition made and sustained by the ld. CIT (A) after giving a very comprehensive finding needs to be sustained. The ld. DR further prayed that the order of ld. CIT (A) may kindly be upheld by dismissing the appeal of the assessee. 3.8. We have heard the rival submissions and perused the materials available on record, including show notice issued u/s 148A(b)of the Act, order passed u/s 148A(d) of the Act and all the material available on the assessment records. We note that the show cause notice u/s 148A(d) of the Act was issued doubting the money received by the assessee during the A.Y. 2009-10 by issuing 8,25,560 equity shares of ₹1 each at a premium of ₹999 to allotee Companies and thereby receiving ₹82,55,60,000/-. Thereafter, the ld. AO discussed that ITRs of the allottee companies have zero fixed assets, rent paid, miniscule profitability and thereby raising serious concerns about the creditworthiness of the subscriber companies, especially when the assessee company was acquired by the Agarwal group and the address was changed. 3.9. The ld. AO thereafter noted that the assessee had sold investments to the tune of ₹68,94,40,000/- during the impugned financial year relevant to A.Y. 2019-20 and the detail of said nine purchase companies were also given in the show cause notice which is extracted below:- Printed from counselvise.com Page | 17 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 SL No. Name of the Concerns to which investment sold F.Y. Amounts received 1. Astha Merchants Pvt. ltd. 2018-19 9,71,00,000 2. Monark Vinimay Pvt. ltd. 2018-19 2,90,50,000 3. Lifewood Agri Farming Pvt. Ltd. 2018-19 15,83,00,000 4. Everstrong Udyog Pvt. ltd. 2018-19 7,65,00,000 5. Pixel Traders Pvt. Ltd. 2018-19 9,61,90,000 6. Bluemotion Infotech Pvt. Ltd. 2018-19 7,49,50,000 7. Raghubar Commerce Pvt. Ltd. 2018-19 11,46,00,000 8. Safal Infraprojects Pvt. Ltd. 2018-19 4,17,50,000 9. VRC Technology Pvt. Ltd. 2018-19 10,00,000 Total 68,94,40,000 3.10. We note that the ld. AO during the course of assessment proceedings called upon the assessee to furnish the evidences qua the purchase companies, who bought shares/securities and which , accordingly, were furnished by the assessee before the ld. AO. The ld. AO also issued notices u/s 133(6) of the Act to the purchasing companies which were duly responded by furnishing all the details. We note that on the basis of such evidences filed by the assessee as well as the purchase companies, the ld. AO accepted the sale of equity shares amounting to ₹26,50,90,000/- as genuine. We note that the total shares sold by the assessee company during the year were amounting to ₹68,94,40,000/- to nine companies which have been extracted above. We also find that out of the said sale of 68,94,40,000/-, the ld. AO accepted the sale of investments amounting to ₹26,50,90,000/- as genuine. We also note that the four companies to whom the shares worth ₹42,43,50,000/- were sold were appearing in the nine companies as extracted above and the ld. AO in some cases treated the sales of share as genuine and partly as non-genuine. Therefore, how the sale of shares to the same companiescouldto be treated as genuine as well as non-genuine. In Printed from counselvise.com Page | 18 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 our opinion the said dichotomy in the treatment of sale of shares is unfair and cannot be accepted. 3.11. We also note that the AO accepted the sales of shares by DMP Vanijya Pvt Ltd and Hardco Commercial Pvt Ltd covered in the same search to the same four private companies as genuine while the sale to the same parties were treated as non genuine in the hands of the assessee as is apparent from the following table:- Name of the Companies to whom the shares were sold Assessee DMP Vanijya Private Limited Hardo Commercial Private Limited Bluemotion Infotech Pvt. Ltd. ₹7,49,50,000 ₹7,24,00,000 ₹5,73,50,000 Everstrong Udyog Pvt. ltd. ₹7,65,00,000 ₹6,16,00,000 ₹6,44,00,000 Lifewood Agri Farming Pvt. Ltd. ₹15,83,00,000 ₹3,74,00,000 ₹5,04,00,000 Raghubar Commerce Pvt. Ltd. ₹11,46,00,000 ₹4,94,00,000 ₹3,63,00,000 Accepted/ rejected by the ld. AO Rejected Accepted Accepted 3.12. We note that these two companies were also covered under the same search andare group companies.Therefore, the action of the AO in treating the sale of shares in the hands of the assessee as non genuinecannot be sustained as being arbitrary and whimsical. 3.13. We note that the shares were held by the assessee company since A.Y. 2009-10 of total cost of ₹82,55,60,000/- and were being held since then till the date of sale during the impugned assessment year. We also note that the money raised by the assessee by way of issuing of share capital/ share premium to 24 companies and investment of the same in unlisted private equity shares were examined at length during the course of assessment proceedings and the same was accepted in the assessment famed u/s 143(3)/ 147 of the Act for A.Y. 2010-11. We also note that the Printed from counselvise.com Page | 19 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 main reason for reopening of assessment in that year was examination of share capital raised/ investments by the assessee as apparent from the records before us. We note that the said shareswere held as investment till A.Y. 2018-19 and it is only during 2019-20, these shares were sold and the transactions were confirmed by the purchaser companies even in response to notices issued u/s 133(6) of the Act. 3.14. We further note that the statement of Shri Abhishek Kumar Munka was recorded u/s 131 of the Act on 24.09.2021 during the course of search on Jain Group which was distinct and separate from the assessee having no connection with the assessee, which was relied by the ld. AO without confronting the same to the assessee assessee or allowing any cross examination which is in violation of principle of natural justice as has been held in the case of Andaman Timber Industries Vs. CIT (2015) 10 TMI 442 (SC)&PCIT vs. Sreeleathers [2022] 143 taxmann.com 435 (Calcutta)/[2022] 448 ITR 332 (Calcutta)[14-07-2022]. Even the AO did not bring any corroborating evidences as to the receipt of cash by Shri Abhishek Munka from the assessee company or for that matter from Deepak who is alleged to be main person of Aggarwal Group and without questioning Shri Abhishek Munka or Deepak on AKM 189(Pge 130) and therefore the said seized document has no relevance and is rather a dumb document. The mere matching of certain entries do not legally sanctify a document without other corroborating evidences which are missing Therefore, the addition made on the said statement and without cross-examination is not sustainable in the eyes of law. We also note that the sale of investments, which was Printed from counselvise.com Page | 20 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 out of share capital and was accepted by the department in A.Y. 2010-11, even in the scrutiny proceedings which culminated in assessment order u/s 143(3)/ 147 of the Act, can not be doubted in the year of sale. We also note that out of total sales of investments of Rs. 68,94,40,000/- made by the assessee during the year , the sale of shares/investments to the tune of ₹26,50,90,000/- were accepted. This shows total non application of mind by the AO during assessment proceedings. Therefore the action of the ld. CIT (A) in confirming the order of the ld. AO is not sustainable in the eyes of law. The case of the assessee find support from the decision of Hon'ble Jurisdiction High Courtin case of Tulsyan and Sons (P.) Ltd.(supra) wherein the Hon'ble Court has held as under:- ““We have heard Mr. Aryak Dutta, learned standing counsel assisted by Mr. Soumen Bhattacharjee, learned standing counsel for the appellant and Mr. J. P. Khaitan, learned senior advocate assisted by Mr. Pratyush Jhunjhunwalla, learned advocate for the respondent. The short issue which falls for consideration is whether the learned tribunal was right in affirming the order passed by the Commissioner of Income Tax (Appeals)- 21, Kolkata [CIT(A)] dated 10.5.2023 by which the assessee’s appeal was allowed and the addition made under section 68 of the Act was deleted. The Assessing Officer made the addition by invoking section 68 of the Act on the ground that the assessee failed to discharge its onus to establish identity, creditworthiness and genuineness of the transaction in respect of the money received through cash trail. The CIT(A) in course of hearing the appeal called for a remand report from the Assessing Officer and in the said remand report the Assessing Officer has in no uncertain terms accepted the receipt of the impugned sum on account of sale proceeds of investment. The Assessing Officer verified the investment sold which are shown in the balance-sheet for the financial year 2010-11 in Schedule-4 of the balance-sheet and after considering these facts it was stated that the assessee had sold shares held by way of the investment during the year to M/s. Shivshakti Communications and Investment Pvt. Ltd. and Carnation Tradelink Pvt. Ltd. and it is not a receipt of unsecured loan. This fact, apart from other factual details, were considered by the CIT(A) and by an elaborate order dated 10.5.2023 the appeal filed by the assessee was allowed. The tribunal on its part re-examined the factual position and took note of the findings rendered by the CIT(A) and concurred with the same. We also find that the tribunal has also examined the factual position and Printed from counselvise.com Page | 21 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 took note of the remand report as called for by the CIT(A) which confirmed the alleged sum is on account of sale of investment and not otherwise. Thus, we find no question of law much less substantial question of law arises for consideration in this appeal. Accordingly, the appeal fails and the same is dismissed. Consequently, the connected application stands closed.” 3.15. The said decision of the Hon'ble High Court has been followed by the co-ordinate bench in the case of ACIT Vs. Pawanputra Advertising Private Limited in IT(SS)A Nos. 144 & 145/KOL/2024 and Ors. vide order dated 26.08.2025, the operative part of the same is extracted below:- “7. We have heard the rival contentions and perused the materials available on record including the written submissions dated 21.04.2025 and paper books No. 1 (page No. 1 to 357) ,paper book no. 2 (page No. 1 to 354 and paper book 3 (Case Laws). We find that the only dispute is sale of part unlisted equity shares to various parties thereby realizing total sales consideration of ₹11,56,20,000/-. We note that the assessee raised money by issue of equity shares in A.Y. 2008-09 of Rs. 64,85,49,000/- . We also note that entire funds raised were invested in unlisted equity shares in AY 2011-12. We note that the case of the assessee was selected for scrutiny only for this reason and the money raised by the assessee was accepted by the department and no adverse interference was drawn. We note that in A.Y. 2010-11 also, the case of the assessee was selected for scrutiny and all the money share capital /share premium was accepted. Thereafter the investments were made in private equity shares which were unlisted in A.Y. 2011-12. Similarly 2017-18 the case of the assessee was selected for scrutiny and investments were not doubted at all. Thus it is clear that over all these years the investments were not doubted by the department. These investments made in the A.Y. 20111-12 were partly sold at cost by the assessee during the instant assessment year which realized ₹11,56,20,000/- which were accepted by the Revenue right from A.Y. 2011- 12 till the instant assessment year. We have also noted that the assessee has filed before the ld. AO as well as before the ld. CIT (A) all the evidences qua the purchases and sale of shares. The assessee has filed all the evidences qua the purchasers such as ITRs, names, addresses, audited balance sheets, bank statements, confirmations, etc. proving the identity, creditworthiness of the purchasers and genuineness of the transactions. We note that even the purchasing companies have filed their evidences as called for by the ld. AO comprising all the evidences as stated above. The ld. CIT (A) has recorded a finding of fact that apart from the assessee , purchasing companies had also filed all the evidences before the ld. AO however the ld. AO had not brought on record any independent and substantive evidences pointing out any defect or Printed from counselvise.com Page | 22 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 deficiency in the said evidences. The ld. CIT (A) finally noted that the assessee has proved the identity and creditworthiness of the parties and also the genuineness of the transactions by filing all these documents and thus, discharged its initial burden. 8. We observe that the ld. CIT (A) also noted that the department has accepted all these investments in the earlier assessment years, even in the scrutiny assessments and had not drawn any adverse interference. Therefore, we do not find any infirmity/anomaly in the appellate order of the ld. CIT (A), who has passed a very reasoned and speaking order after following the decision of Hon'ble Jurisdictional High Court in case of CIT VS. Dataware Private Ltd. (supra) as well as the decision of the co-ordinate benches on the same issue namely; M/s Swarna Kalash Commercial Pvt. Ltd. vs ACIT (supra) &M/s Ashtvinayak Sales Pvt. Ltd. vs ACIT (supra). We have perused the decisions in the above referred two decisions of the coordinate benches followed by the ld. CIT (A) and find that the issue is exactly similar as before us in the present case. The operative part of M/s Ashtvinayak Sales Pvt. Ltd. vs ACIT (supra) extracted below: - 9. We have heard the rival contentions and perused the materials as placed before us. The issue for adjudication before us is in respect of confirmation of addition by ld CIT(A) as made by the AO on the ground that the identity and credentials of the purchasers are suspicious. We observe that the assessee has been in the regular business of purchase and sales of investments over the years as corroborated by the materials placed before us. Even the sales proceeds received during the current financial year were in respect of sale of shares /investments partly out of opening balance and partly out of current purchases as is apparent from the following chart placed before us:- 9.1. The assessee has also filed movement of investments over the years which showed that the phenomenon of purchase and sale of shares/investments was regular feature of the assessee’s business. This is also undisputed that the assessee company had raised share capital (including premium) amounting to Rs.119,84,67,000/- in financial year 2010-11, relevant to AY 2011-12 and the capital so raised in AY 2011-12 was invested in shares/securities and accounted for in the books of accounts which were audited and audited accounts are placed at page no. 102 to 111 of PB Vol.-1. We also note that the assessment for AY 2011-12 was framed u/s 143(3) of the Act vide order dated 17.03.2014 a copy of which is placed at page no. 276 and 277 of PB Vol.-1 and the neither the share capital/share premium nor the investments out of that source were doubted by the AO. Printed from counselvise.com Page | 23 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 9.2. We also note that similar issue was involved in the case of M/S Swarna Kalash Commercial Pvt Ltd. Vs ACIT ,Central Circle -2(2), Kolkata, a group concern of the Rashmi Group of Companies ,which was also subjected to search u/s 132(1) of the Act in the same search proceedings. We note that the coordinate bench has decided the issue in favour of the assessee in ITA No. I.T.(S.S.)A.No.53/Kol/2022 A.Y.2019-20 vide order dated 01.09.2023 involving the same issue of addition of sale of shares/investments by the AO on the ground that identity and credentials of the purchasers of shares/investments were suspicious. The operative part of the order is extracted as under: “6.1.We have considered the rival contentions and gone through the record. First we deal with the issue relating to the undated detailed order passed by the Assessing Officer even after the prescribed date of limitation for passing the assessment order for the assessment year under consideration which is other than the short cryptic order as reproduced above and which did not even bear any Document Identification Number, (in short “DIN”)as mandated vide CBDT Circular No.19 of 2019. 6.1. As mentioned in the said CBDT circular no. 19 of 2019 and as also further held by the Hon’ble Delhi High Court in the case of CIT vs. Brandix Mauritius Holdings Ltd. [2023[ 149 taxmann.com 238 (Del), any communication without mentioning of the DIN in its body is to be treated as non-est. Therefore, the subsequent undated assessment order and without any DIN mentioned in the order, and passed after the limitation period prescribed for passing of the assessment order cannot be taken cognisance of. 7. So far as the original order (extracted above) passed by the Assessing Officer is concerned, we are in agreement with the contentions of the Ld. Counsel for the assessee that the same is a small and cryptic order and the additions have been made by the Assessing Officer in the said order in a mechanical manner without any discussion on merits and without pointing out any justifying material warranting such additions. Therefore, the additions made by the Assessing Officer by way of such an cryptic order are not sustainable as per law. …….. 11. We have considered the rival contentions and gone through the record.We find force in the submissions made by the learned Counsel of the assessee which have been discussed above in detail. We note that it is an admitted fact on record that assesseeraised share capital at a premium in FY 2005-06 which was accepted by the AO in scrutiny assessment under section 143(3). The capital so raised was invested in shares of Pvt. Ltd. of various companies. These shares were sold during the year under consideration to different parties, corporate/non- corporate. The sale proceeds have come in assessee’s bank account through banking channel. Printed from counselvise.com Page | 24 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 11.1. In its normal course of business, the assessee had made purchases and sale of investments as under which is tabulated as under: 11.2. The shares were held by the assessee as investments and were sold at the cost of acquisition by the assessee. Hence, there is no profit/loss on such sale of investment. We also look at the movement of investment held by the assessee, which is tabulated below: FY AY Opening Purchase Sales Amount Closing Balance byA.O. 2014-15 2015-16 63,42,00,000 63,42,00000 2015-16 2016-17 63,42,00,000 42,44,960 18,344,960 62,01,00,000 1,83,44,960 2016-17 2017-18 62,01,00,000 56,27,44,459 468,499,459 71,43,45,000 46,84,99,459 2017-18 2018-19 71.43.45,000 1,55,17,29,538 2,062,064,910 20,40,09,628 2,06,20,64,910 2018-19 2019-20 20,40,09,628 66, 47, 64, 007 170,560,000 69,82,13,635 17,05,60,000 Total 2,71,94,69,239 11.3. We also refer to the details of opening stock, purchases, sales and closing stock during the year, placed on record by the assessee: SI No Name of the Script Opening Balance Purchases Sales Closing Balance Amount Amount Amount Amount I Bellona Supply Pvt. Ld. 1,24,57,344 0 1,24,57,344 0 2 P N Jewelers Pvt ltd 38,45,323 0 38,45,323 0 3 Rozela Tie Up pvt. Ltd. 3,64,33,053 0 3,64,33,053 0 4 Rashmi Cement Ltd. 0 1,57,32,000 0 1,57,32.00 0 5 CimmcoVinimay Pvt. Ltd. 13,32,04,353 53,71,44,701 0 67,03,49,0 54 6 Festive Vincom Pvt Ltd 28,01,625 0 0 28,01,625 7 GreenHillDealmark Pvt Ltd 26,14,850 0 0 26,14,850 8 SwabhimanCommosales Pvt Ltd 26,15,900 0 0 26,15,900 9 Topline Business Pvt Ltd 41,00,205 0 0 41,00,205 10 VidyaBuildcon Pvt Ltd 0 2,50,00,000 2,50,00,000 0 11 BadrinathMinning Pvt Ltd 59,36,974 75,250 60,12,224 0 12 Sankul Retailers Private Ltd 0 74,49,572 74,49,572 0 13 Alok Financial Services Pvt Ltd 0 8,10,000 8,10,000 0 14 Asankul Cosmetics Pvt Ltd 0 6,55,26,090 6,55,26,090 0 15 Daffodil Plaza Pvt Ltd 0 88,198 88,198 0 16 NAT Communication & Marketing Pvt Ltd 0 1,26,37,632 1,26,37,632 0 17 Alok Pattanayak 0 3,00,000 3,00,000 0 Total 20,40,10,245 66,47,63,507 17,05,60,00 0 69,82,13,6 34 Printed from counselvise.com Page | 25 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 11.4. Based on the analysis of the above details, it is evident that entire sales ismadefrom purchases & opening stock as under: Breakup of Sale of Shares Amount(Rs.) Breakup of Sale of Shares Amount(Rs.) Sold out of Opening Investment 5,86,73,194 Sold out of Opening Investment 5,86,73,194 Sold out of Investment Purchased During the Year 11,18,86,806 Sold out of Investment Purchased During the Year 11,18,86,806 Total 17,05,60,000 Total 17,05,60,000 11.5. It is also important to note that the AO has made enquiries from the buyers ofthe shares sold by the assessee by issuing summons u/s 131 of the Act who haveresponded and furnished the required details. Summary Statement of the replies madein response to notice u/s 131 by various buyers (Sale of Shares) is tabulated below: Printed from counselvise.com Page | 26 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 12. Further, according to the ld. Counsel, the only piece of evidence that is there in this case is the statement of Sri Sanjib Patwari who is one of the owners of the Rashmi group and Sri K K Verma is the accountant, recorded u/s 132(4) of the Act which have been relied upon by the Assessing Officer. These statements have been retracted the very next day by furnishing affidavits. Subsequent to retraction, no further cross- examination was conducted of these persons. The ld. Counsel has further submitted that even otherwise the addition made by the Assessing Officer was far more than the alleged disclosure made by these persons in their retracted statements and hence, no cognizance in fact can be taken for the purpose of the addition. 12.1. We find force in the above contentions of the ld. Counsel in the facts and circumstances of the case. As laid down by the various Higher Courts of the country, the retracted statement can not be made sole basis for making the additions. The Jurisdictional Calcutta High Court in the case of Principal Commissioner of Income Tax Vs. Golden Goenka Fincorp Ltd. [2023]148 taxmann.com 313(Calcutta) has held that where assessing officer solely based on statement of assessee’s director recorded during search operation treated share application money received by assessee company as undisclosed income and made additions u/s 68 of the Act, since said statement was retracted and there was no cash trail or any other corroborative evidence or investigation brought on record by AO, impugned additions were liable to be deleted. Even the Hon’ble A.P. High Court in the case of “Naresh Kumar Agarwal” (2015) 53 taxmann.com 306 (Andhra Pradesh) has observed that where, in the absence of any incriminating material etc. found from the premises of the assessee during the course of search, statement of Printed from counselvise.com Page | 27 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 assessee recorded under section 132(4) would not have any evidentiary value. Similar view has been adopted by the Jaipur bench of the Tribunal in the case of “Shree Chand Soni vs. DCIT” (2006) 101 TTJ 1028 (Jodhpur). The Hon’ble Delhi High Court in the case of “CIT vs. Harjeev Agarwal” in ITA No.8/2004 vide order dated 10.03.16 has observed that a statement made under section 132(4) ofthe Act on a stand-alone basis, without reference to any other material discovered during search and seizure operation, would not empower the AO to make a block assessment merely because any admission was made by the assessee during search operation. In the case of “Commissioner of Income Tax vs. Sunil Agarwal” (2015) 64 taxman.com 107 (Delhi-HC), the assessee therein, during the course of search, made a categorical admission under section 132(4) that the cash amount seized belonged to him and it represented undisclosed income not recorded in the books of accounts. The assessee did not immediately retract from the above admission but only during the assessment proceedings at a belated stage. In his retraction, the assessee stated that the surrender was made under a mistaken belief and without looking into books of account and without understanding law and that he had been compelled and perturbed by events of search and that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon’ble Delhi High Court, after considering the fact and circumstances of the case, while dismissing the appeal of the revenue, observed that though the fact that the assessee may have retracted his statement belatedly, yet, it did not relieve the AO from examining the explanation offered by the assessee with reference to the books of account produced before him. Although, a statement under section 132(4) of the Act carries much greater weight than the statement made under section 133A of the Act, but a retracted statement even under section 132(4) of the Act would require some corroborative material for the AO to proceed to make additions on the basis of such statement. 12.2 In the case of “BasantBansal vs. ACIT” reported in (2015)63 taxmann.com 199 (Jaipur Trib.), the assessee therein, during the search and seizure action u/s 132 of the Act, offered a summary discloser of income as undisclosed and the department accepted the summary surrender of income and thereafter advance tax for the said surrendered of income was also deposited, but thereafter it was contended by the assessee that the surrender was made under threat or coercion and that no incriminating material was found during the search action. The stand of the department was that the admission was voluntary and was not under a mistaken belief of fact or law and that the assistance had enough time to go through the facts of their case, law applicable in their case and take advice from their counsels and advisors before filing the letter of surrender of undisclosed/unaccounted income and that the Printed from counselvise.com Page | 28 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 admission by them was final and binding on them; The co-ordinate Jaipur Bench of the Tribunal, after overall appreciation of the fact and evidences before it, observed that the assessee’s surrender was not based on any incriminating material and that the discloser being not voluntary and extracted by the department in creating a coercive situation cannot be relied solely to be basis of addition as undisclosed income. The co-ordinate bench of the Tribunal while relying upon various case laws of the higher authorities observed that it is well settled legal position that merely on the basis of a statement which is not supported by the department with cogent corroborative material cannot be a valid basis for sustaining such ad-hoc addition. The co-ordinate Jaipur Bench of the Tribunal (supra) further observed that the issue of existence of pressure, threat, coercion during search proceedings is to be judged by reference to the existing facts and circumstances, human conduct and preponderance of possibilities. During the search proceedings, record relating thereto being in exclusive custody of the searching officers, it is their wish and will which prevails during the fateful period. That it is almost impossible for theassessee to adduce demonstrative evidence of exerting such pressure. The co-ordinate bench of the Tribunal (supra) while holding so, apart from relying upon various decisions of the higher courts has also relied upon the decision of the Tribunal in the case of “Dy CIT vs. Pramukh Builders” (2008) 112 ITD 179 (Ahd.) wherein it has been held that even in the absence of proof of coercion or pressure, the statement by itself cannot be taken as conclusive. Therefore, merely in the absence of proof of pressure, threat, coercion or inducement the statement cannot be held as conclusive and additions cannot be made by solely relying on a statement or a letter. 12.3. The case of the assessee, before us, is on better footing as in this case, there is no delay in retraction of the statement which was done on the very next day by filing affidavits before the Metropolitan Magistrate 12.4. Even the CBDT Letter No.286/2/2003-IT(Inv) dated Oct 3, 2003 in this respect read as under: “To The Chief Commissioners of Income Tax, (Cadre Contra) & All Directors General of Income Tax Inv. Sir, Subject: Confession of additional Income during the course of search & seizure and survey operation – regarding Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course Printed from counselvise.com Page | 29 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 of the search & seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, on confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search it seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders. Yours faithfully, 12.5. A perusal of the above circular also shows that it is in the notice of the statutory controlling body of the Income Tax Authorities that the revenue officials are used to take confessional statements from the person searched under force, pressure or threat and that is why they have made it mandatory that additions solely on the basis on such statements should not be made and that corroborative evidences should be collected or obtained before making such additions. The circular of the CBDT is binding on the revenue officials. In the facts and circumstances of this case, when seen in the light of above case laws and CBDT circular, additions in this case cannot be said to be justifiably made. 13. All the above details when kept in juxtaposition, there remains nothing to cast an iota of doubt on the sale transaction of shares held by the assessee as investments which it undertook in the ordinary course of its business, more importantly, purchases having made in the current year also. Further, as rightly pointed out by the learned Counsel, both opening balance of investment in shares and the purchases made during the year have not been disputed or doubted by the authorities below so as to bring the entire sale consideration to tax. 14. At this stage, the ld. DR has submitted that the assessee has claimed that it has undertaken this sale transaction by selling the shares at the cost at which it had acquired them in AY 2006-07. At the same time, assessee submits that it has undertaken this transaction in the ordinary course of its business. The ld. DR has submitted that the conduct of business is always with a profit motive, more particularly when the assessee had held these shares for past several years and had also made purchases during the year, deploying its funds. There Printed from counselvise.com Page | 30 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 ought to be certain element of profit embedded in the sale transaction executed which must be brought to tax. 15. Considering the above submission of the ld. DR and taking a holistic view of the facts and circumstances of the case, we find it proper to consider net profit element @ 5% of the sale consideration i.e. 5% of Rs.17,05,60,000/- which comes to Rs.85,28,000/- be subjected to tax. We, accordingly delete the addition to the extent of Rs.16,20,32,000/- made u/s 68 of the Act and sustain the balance of Rs.85,28,000/- towards profit element on the impugned sale transaction of shares undertaken by the assessee. 16. In the result, appeal of the assessee is partly allowed. 9.4. It is clear from the above that the facts in the instant case before us are materially same vis a vis the facts in the case decided by the coordinate bench supra in group concern. We, therefore, respectfully following the same set aside the order of ld CIT(A) and direct the AO to apply profit of 5% on the sales proceeds of Rs. 99,72,36,896/- whichcomes to Rs. 4,98,61,845/- and delete the remaining addition of Rs. 94,73,75,051/-. 10. In the result the appeal of the assessee is partly allowed.” 9. We have also perused decision by the Hon'ble High Court in ITAT/239/2024 in IA No. GA/2/2024 vide order dated 16th April, 2025, in the case of PCIT Vs. Tulsyan and Sons Private Limited(supra) affirming the order of the tribunal. In the said case the addition made by the ld. AO on account of sale of investment was deleted by the ld. CIT (A) and the Tribunal confirmed the order of the ld. Assessing Officer. The Hon'ble High Court while deciding the issue held as under: - We have heard Mr. Aryak Dutta, learned standing counsel assisted by Mr. Soumen Bhattacharjee, learned standing counsel for the appellant and Mr. J. P. Khaitan, learned senior advocate assisted by Mr. Pratyush Jhunjhunwalla, learned advocate for the respondent. The short issue which falls for consideration is whether the learned tribunal was right in affirming the order passed by the Commissioner of Income Tax (Appeals)- 21, Kolkata [CIT(A)] dated 10.5.2023 by which the assessee’s appeal was allowed and the addition made under section 68 of the Act was deleted. The Assessing Officer made the addition by invoking section 68 of the Act on the ground that the assessee failed to discharge its onus to establish identity, creditworthiness and genuineness of the transaction in respect of the money received through cash trail. The CIT(A) in course of hearing the appeal called for a remand report from the Assessing Officer and in the said remand report the Assessing Officer has in no uncertain terms accepted the receipt of the impugned sum on account of sale proceeds of investment. The Assessing Officer verified the investment sold which are shown in the balance-sheet for the financial year 2010-11 in Schedule-4 of the balance-sheet and after considering these facts it was stated that the assessee had sold shares held by Printed from counselvise.com Page | 31 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 way of the investment during the year to M/s. Shivshakti Communications and Investment Pvt. Ltd. and Carnation Tradelink Pvt. Ltd. and it is not a receipt of unsecured loan. This fact, apart from other factual details, were considered by the CIT(A) and by an elaborate order dated 10.5.2023 the appeal filed by the assessee was allowed. The tribunal on its part re-examined the factual position and took note of the findings rendered by the CIT(A) and concurred with the same. We also find that the tribunal has also examined thefactual position and took note of the remand report as called for by the CIT(A) which confirmed the alleged sum is on account of sale of investment and not otherwise. Thus, we find no question of law much less substantial question of law arises for consideration in this appeal. Accordingly, the appeal fails and the same is dismissed. Consequently, the connected application stands closed. 10. Since, the facts of the case before us vis-à-vis, facts of the decisions cited above are substantially similar and therefore, we respectfully following the ratio laid down in the above decisions upheld the order of ld. CIT (A) on this issue by dismissing the appeal of the Revenue. 11. So far as the Cross Objection is concerned, we note that the assessee has challenged the direction of the ld. CIT (A) to the ld. AO to make an addition at the rate of 5% of the total sales consideration towards the net profit embedded in the sales consideration. 12. After hearing the rival contentions and perusing the materials available on record, we find that the ld. CIT (A) has not given any basis for such direction to the ld. Assessing Officer. In other words, the ld. CIT (A) has just acted on the presumptions and surmises and thus, presumed that the assessee might have made some profits from sale by investments. In our opinion, the said direction by the ld. CIT (A) is without any substantive basis and therefore cannot be sustained. Accordingly, we set aside the order of ld. CIT(A) to the extent of this direction of making addition @ 5%. Accordingly, the cross objection of the assessee is allowed.” 3.16. Considering the facts of the assessee’s case , we are of the considered view that the action of the AO cannot be sustained for following reasons: i) The statement/materials relied by the AO was not confronted to the assessee ii) accepting the raising of funds and investments in private equities were itself examined and accepted by the AO in A.Y. 2010-11 in the scrutiny proceedings particularly when Printed from counselvise.com Page | 32 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 the scrutiny was selected for verification of funds raised and investments thereof and iii) partly accepting the sale of shares during the instant under consideration and partly treating as non-genuine. 4. Therefore, the order of CIT(A) upholding the assessment order cannot be sustained. Considering the ratio laid down by the Hon'ble High Court and the co-ordinate Bench in the above decisions, we set aside the appellate order and direct the AO to delete the addition. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 02.01.2026. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 02.01.2026 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 33 ITA No.1199/KOL/2025 M/s BMS Sales Pvt. Ltd.; A.Y. 2019-20 Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "