DARSHAK MAHESH RUPANI,MUMBAI vs. ITO WARD 27(1)(4), MUMBAI
What did the Tribunal hold?
The Tribunal admitted additional evidence submitted by the assessee and decided to remit the issue back to the Assessing Officer for proper verification. The AO was directed to verify the additional evidence after providing the assessee with an adequate opportunity of being heard.
What were the facts?
The assessee reported long-term capital gains (LTCG) exempt under Section 10(38). The Assessing Officer (AO) made an addition of ₹15,39,088 under Section 68, considering the transactions suspicious and relying on an investigation report. The CIT(A) dismissed the assessee's appeal.
What were the issues?
Whether the addition made by the AO under Section 68 was justified without independent evidence, and whether the CIT(A) erred in confirming the addition without proper application of mind, especially considering a potential error in identifying the scrip.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI KULDIP SINGH, HONBLE & SHRI S. RIFAUR RAHMAN, HONBLE
This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] dated 21.07.2022 for the A.Y.2014-15.
(A.Y: 2014-15) Darshak Mahesh Rupani 2. Brief facts of the case are, assessee filed its return of income for the A.Y. 2014-15 on 31.03.2015 declaring total income of ₹.5,06,290/-. The case was selected for scrutiny under CASS and notices u/s. 143(2) and 142(1) of Income-tax Act, 1961 (in short “Act”) were issued and served on the assessee. In response Authorised Representative of the assessee attended and submitted the relevant information as called for.
During the assessment proceedings Assessing Officer observed that assessee has earned long term capital gain of ₹.5,07,408/- as exempt u/s.10(38) of the Act and he observed that assessee has dealt with the scrip Global Capital Market Limited and the details of the transactions are given below:
Date of Date of Qty Value Qty. Sales LTCG purchase sale 31.3.11 100000 7,52,295 30.08.2013 100000 12,02,140 4,49,845 31.3.11 21500 2,79,385 31.03.2014 21500 3,36,948 57,563 5,07,408
Assessing Officer observed in his order the selection of the case for scrutiny is based on the suspicious long term capital gain and assessee has purchased 4,17,000 shares at ₹.32,54,716/- and Assessing Officer
(A.Y: 2014-15) Darshak Mahesh Rupani discussed the suspicious character of the scrip in his Assessment Order and made the addition of ₹.15,39,088/- u/s. 68 of the Act.
Aggrieved assessee preferred an appeal before the Ld.CIT(A), after considering the detailed submissions Ld.CIT(A) dismissed the appeal filed by the assessee.
Aggrieved, assessee is in appeal before us, raising following grounds in its appeal: - “1. On the facts and circumstances of the case as well as in law the CIT(A)-NFAC erred in confirming the action of the AO in making an addition of Rs 15,39,088/- u/s 68 of the Act being the alleged sale proceeds of traded scrips Global Capital Market by disallowing legitimate LTCG earned, without any independent evidence to fasten the allegations of the AO and exclusively relying on the investigation report. Thus the addition must be deleted.
The CIT(A) erred in concurring with the action of the AO in making the addition without independent application of mind and examination of the material/ made submissions during the assessment proceedings and also failed to appreciate the assessee's latest submissions dated 13.08.2022 which highlighted mistaken premise by AO, giving BSE's traded data of Global Capital Market Securities Ltd., scrip no- 535431, whereas, the assessee had shares of Global Capital Market Ltd., scrip no- 530263, and elected to conclude assessee's transaction as ingenuine. Thus, addition made on conjectures and surmises must to be deleted.
3. The appellant craves the leave to add, substitute, modify, alter or delete all or any ground of appeal either before or at the time of hearing.”
(A.Y: 2014-15) Darshak Mahesh Rupani 7. At the time of hearing, Ld. AR of the assessee submitted additional evidences before us, which was not submitted before the lower authorities and he prayed that these additional evidences contain the complete list of date-wise transaction of purchase / sale of scrip under consideration, D- MAT account, BSE Trade data sheets etc., and he prayed that these additional evidences may be admitted and prayed that this may be remitted back to the Assessing Officer for proper appreciation of the facts.
On the other hand, Ld.DR, however, objected for admission of additional evidences at this stage, however, he has no objection to remit this issue back to the file of the Assessing Officer for verification.
Considered the rival submissions and material placed on record, we observe that assessee has filed detailed paper book which was submitted before lower authorities and also filed before us additional evidences with regard to the issue under consideration. Since the additional evidences goes to the route of the transactions, we deem it fit and proper to remit this issue back to the file of the Assessing Officer for proper verification of the same and we direct the Assessing Officer to verify the additional evidences submitted by the assessee as per law after giving adequate
(A.Y: 2014-15) Darshak Mahesh Rupani opportunity of being heard to the assessee. Accordingly, the ground raised by the assessee is allowed for statistical purpose.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 03rd April, 2023
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