MOHIT MITTAL,NEW DELHI vs. ITO WARD - 16(1), NEW DELHI
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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI SAKTIJIT DEY
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI
BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER
ITA No.5353/Del/2019 Assessment Year: 2014-15 Sh. Mohit Mittal, Vs. ITO, 30, Tarun Enclave, Ward-16(1), Pitampura, New Delhi New Delhi PAN :AIWPM9299F (Appellant) (Respondent)
Appellant by None Respondent by Sh. Anil Kumar Sharma, Sr. DR Date of hearing 06.02.2023 Date of pronouncement 13.02.2023
ORDER This is an appeal by the assessee against order dated
22.03.2019 of learned Commissioner of Income Tax (Appeals)-6,
Delhi, for the assessment year 2014-15.
When the appeal was called for hearing, none appeared on
behalf of the assessee. On perusal of record it is noticed, though,
on multiple occasions, beginning from January, 2021 till date, the
appeal was fixed for hearing, either the assessee sought
adjournment or mostly remained absent. Even the last notice of
hearing issued to the assessee through speed-post on 4th
January, 2023 returned back unserved with the comment ‘left
ITA No.5353/Del/2019 AY: 2014-15
without intimation’. The aforesaid facts reveal complete negligence
of the assessee to the present proceeding. Since, sufficient
opportunities have been granted to the assessee to represent his
case, which the assessee has failed to avail, I proceed to dispose
of the appeal ex-parte qua the assessee with the assistance of
learned Departmental Representative and based on facts and
materials on record.
Briefly the facts are, the assessee is a resident individual.
For the assessment year under dispute, the assessee filed his
return of income on 12.02.2015 declaring total income of
Rs.7,21,260/-. Assessee’s case was selected for scrutiny to
examine suspicious long term capital gain on sale of shares.
Based on information received from the Investigation Wing of the
department the Assessing Officer found that the assessee is a
beneficiary of accommodation entries by way of long term capital
gain through scripts of penny stock companies. He found that in
the year under consideration the assessee has shown long term
capital gain of Rs.37,36,239/- from sale of shares of a penny
stock company. In course of assessment proceeding, the
Assessing Officer called upon the assessee to prove the
genuineness of share transaction relating to shares of M/s. 2 | P a g e
ITA No.5353/Del/2019 AY: 2014-15
Turbotech Engineering Ltd. In response to the query raised by the
Assessing Officer, the assessee denied the allegations made and
submitted that the share transaction is genuine. However, the
Assessing Officer was not convinced with the submissions of the
assessee. Ultimately, he proceeded to treat the long term capital
gain shown from sale of shares as unexplained cash credit under
section 68 of the Act and added back to the income of the
assessee. Further, he observed that for availing such
accommodation entries the assessee must have paid commission
to the brokers, which the Assessing Officer estimated at 3% of
the long term capital gain and added back an amount of
Rs.1,12,687/- as unexplained expenditure under section 69C of
the Act. The assessee contested the aforesaid additions before
learned Commissioner (Appeals). However, the additions were
confirmed.
I have considered the submissions of learned Departmental
Representative and perused the materials on record. Facts and
materials on record reveal that the Assessing Officer was in
possession of material/information received from the
Investigation Wing of the department indicating that the long term
capital gain shown by the assessee from sale of shares of M/s. 3 | P a g e
ITA No.5353/Del/2019 AY: 2014-15
Turbotech Engineering Ltd. is non-genuine as the said entity is a
penny stock company. As noted by the Assessing Officer, price of
each share of this company as on November, 2011 was Rs.2 per
shares. However, by May, 2013, there was astronomical increase
in the value of shares from Rs.2 to Rs.475, a jump of 23750%.
Further, on examination of the capital structure of the entity,
whose shares were sold to derive capital gain, revealed that the
company had authorized and paid up share capital of
Rs.0.84crores and share application money of Rs.3.60 crores in
financial year 2009-10. Whereas, in financial year 2010-11, there
was substantial increase in the equity capital to Rs.24 crores with
no share application money. Thus, there was a quantum jump of
Rs.19.60 crores in share capital without any justifiable reason
having reference to disclosures made in the Annual Report of the
company. Further, the profit and loss account of the company
reveals that it has reported minimal expenditure in the financial
years 2009-10 to 2012-13. The aforesaid facts clearly reveal that
the assessee has availed accommodation entries through sale of
penny stock to bring his unexplained income to mainstream.
Neither before the departmental authorities, nor before me the
assessee has furnished any cogent material to prove the 4 | P a g e
ITA No.5353/Del/2019 AY: 2014-15
genuineness of the share transaction. Thus, keeping in view the
concurrent factual findings of the departmental authorities, which
have remained uncontroverted, I am inclined to sustain the
additions. Accordingly, grounds raised are dismissed.
In the result, the appeal is dismissed. 5.
Order pronounced in the open court on 13th February, 2023
Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 13th February, 2023. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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