SHAILESH KALWADIA (HUF),UJJAIN vs. INCOME TAX OFFICER, BPL-C(91)(1), BHOPAL

Per Paresh M Joshi, J.M.:

(I) ITA No:- 464/Ind/2025 AY-2013-14

This is an Appeal filed by the Assessee under section 253 of

the income tax Act 1961,[ herein after referred to as the Act

for sake of brevity] before this tribunal, as & by way of a

second appeal .The Assessee is aggrieved by the order

bearing No:-ITBA/NFAC/S/250/2024-25/1075250428(1)

dated 29.03.2025 passed by the Ld. CIT(A) u/s 250 of the

Act, which is herein after referred to as the “Impugned

order”. The Relevant Assessment year is 2013-14 and the

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corresponding previous year period is from 01.04.2012 to

31.03.2013

2.1 That as and by way of an Assessment order made u/s

147 rws 144B of the Act, the total income of the Assessee

was computed & assessed at Rs. 19,96,350/-. The total

income as per the return of income was at Rs.1,53,375/-.

The addition of Rs.18,42,978/- was made as income from

undisclosed sources in guise of share transaction. The tax

on total income assessed was directed to be computed. That

the aforesaid “Assessment order” bears no: -

ITBA/AST/S/147/2021-22/1041857732(1) and that the

same is dated 28/03/2022. Which is herein after referred to

as the “Impugned Assessment Order”

2.2 That the Assessee being aggrieved by the aforesaid

“Impugned Assessment Order” prefers the first appeal u/s

246A of the Act before the Ld. CIT (A) who by the “Impugned

Order” has dismissed the first appeal of the Assessee on the

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grounds & reasons stated therein. The core grounds &

reasons for the dismissal of the first appeal were as under:-

“Submission of the appellant:- 3. In the course of appellate proceedings, the appellant has not furnished any written submission or documents despite of giving several opportunities.” xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 4.2.2 The appellant could not submit any submission/explanation in support of its ground of appeal during the appellate proceeding. Neither the appellant explained the same in the statement of facts nor in the ground of appeal with any facts. Further, I have gone through the assessment order and found that the addition made by the AO is very justified and reasonable with supportive facts.

The enquiry and investigations clearly established that the appellant is the beneficiary of accommodation entry in the form of bogus LTCG. The appellant failed to explain satisfactorily the nature and source of the claimed capital gain in its return of income. During the appellate proceeding, the appellant falled to establish the genuineness of the transactions carried out through the penny stock. The appellant failed to establish that the transactions made through the penny stock company was genuine and it had not involved in getting accommodation entries through the penny stock company. The appellant failed to establish the credit worthiness of the penny stock company. It failed to establish that the price of the penny stock company has not been rigged up. The appellant failed to establish that exit providers are not bogus. The appellant grossly failed to prove that the statements given by the entry operators are not correct. Further, during the appellate proceeding, the Appellant could not controvert any of the findings made by the AO in the assessment order with any cogent material or evidences. Further, I don't find any irregularities in the assessment order. It is onus on the appellant to substantiate the transactions carried out by it with convincing explanations supported with credible documents and evidences,which the appellant has miserably failed to do so. Under the given facts and circumstances, I am convinced that the addition in respect of bogus LTCG amounting to Rs. 18,42,978/- is based on findings made during the enquiry and investigation and further crystalized during the assessment proceeding. The view taken by the AO is justified and reasonable. Accordingly, the addition made by the AO is hereby confirmed.

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These grounds of appeal have no merit and hence these are dismissed.

2.3 That the Assessee being Aggrieved by the “Impugned

Order” has preferred the instant second appeal before this

Tribunal and has raised the following grounds of appeal in

the form No. 36 against the “Impugned Order” which are as

under:-

“1. Initiation of Reassessment Based on Third-Party Information: The learned CIT(A) has erred in law and in fact in confirming the initiation of reassessment proceedings under section 147/148 based solely on third-party information, without granting the assessee any opportunity for cross-examination or verification of such information, which is bad in law. 2. Addition of?18,42,978/-on Account of Alleged Bogus LTCG: The learned CIT(A) has erred in confirming the addition of?18,42,978/- as unexplained income under section 68, ignoring the explanation and supporting documents furnished by the appellant and treating genuine Long Term Capital Gains (LTCG) as bogus LTCG on transfer of equity shares as claimed exempt income u/s 10(38) of the IT Act, by the Appellant, which is wrong and baseless. 3. Application of Section 68 and Section 115BBE: The learned CIT(A) has erred in confirming the addition of income covered u/s 68 of the IT Act being unexplained cash credit and applying the provisions of section 115BBE of the IT Act on the addition made of?18,42,978/- though the transaction considered and disclosed in return as LTCG income was duly accounted. 4. The learned CIT(A) has erred in stating that no submissions were made during the appellate proceedings, whereas the appellant had duly filed written submissions and supporting 4 documents on multiple occasions during the hearing process. The CIT(A)'s failure to consider those submissions and pass a speaking order amounts to a violation of the principles of natural justice.

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3.1 The hearing in the matter took place before this Tribunal

on 19.03.2026 when the Ld. AR for & on behalf of the

Assessee appeared before us & interalia contended that the

“Impugned Order” is bad in law, illegal & not Proper. It is

passed in the violation of the principles of natural justice. It

therefore deserves to be set aside. It was finally prayed by

the Ld. AR that no opportunities of hearing has been

provided by the Ld. CIT(A) to the assessee. In this regard our

attention was invited to page 83 of PB were in the assessee

made a grievance about no notice u/s 250 were served by the

Ld. CIT(A) before passing the impugned order to CBDT on

01.04.2025. Therefore it was contended that there is a

violation of the principles of natural justice by Ld. CIT (A)

and hence impugned order should be set aside. In fact Ld.

AR has sought one more opportunity as last chance so that

matter could be decided basis merits after hearing assessee

fully. Per contra the Ld. DR appearing for the revenue

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submitted that with regard to the “Impugned order”

appropriate decision basis law be taken by this tribunal he

however state that the matter should preferably be remanded

back to the file of Ld. CIT (A) for De novo adjudication.

Hearing was then concluded and closed.

4.1 We now have to decide the legality, validity and proprietary

of the “impugned order” basis records of the case & the rival

submission canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

4.3 We basis records of the case & after hearing & upon

examining the rival contentions of the Ld. AR & the Ld. DR

canvassed before us are of the considered opinion that the

“impugned order” deserves to be set aside as both Ld. AR and

Ld. DR are at ad idem that the “impugned order” is in the

violation of the principle of natural justice. Even otherwise the

Ld. AR has expressed that they would make full and complete

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representation before CIT (A) if one more opportunity is afforded

to them.

4.4 In view of the above premises laid down, we set aside the

“impugned order” as and by way of remand back to the file of Ld.

CIT (A) on De novo basis. The Ld. CIT (A) is directed to pass fresh

order basis merits of the case so that correct total income of the

assessee is determined basis merits of the case.

5 Order

5.1 In the result the “Impugned order” is set aside as and by

way of remand back to the file of Ld. CIT (A) on De novo basis.

5.2. The appeal of the assessee is allowed for statistical purpose.

(II) ITA No: - 160/Ind/2026 AY- 2013-14

5.3 In this appeal there is an “impugned rectification order u/s

154 of the act” as the tax on account of addition of Rs.1842987/-

[ITANo.464/Ind/2025 A.Y. 2013-14 was levied as per slab rates

instead of section 115BBE rates.[ITNS-150] & other short tax

liabilities. The amount of tax payable was accordingly corrected

as mistake apparent on record. The “impugned order’ of the Ld.

CIT (A) bears no: - ITBA/APL/S/250/2025-26/1081030245(1)

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and same is dated 23.09.2025 which upheld the rectification

order dated 07.12.2023. There is a delay of 60 days in filing this

second appeal before this tribunal for which after perusing the

affidavit dated 18.03.2026. We find “sufficient cause” in

condoning delay. Accordingly the delay is condoned and the

appeal is admitted. Since both the appeals were heard together

and identical contentions were taken up for the impugned orders

in so far as lack of opportunity of hearing before the Ld. CIT(A)

was concerned and both Ld. AR and Ld. DR are at ad idem that

“impugned orders” are in the violation of the principle of natural

justice. Therefore we set aside the same and remand the matter

back to the file of Ld. CIT (A) on De novo basis, Mutatis mutandis

order made in ITA No:- 464/Ind/2025.

5.4 In the premises both the appeals are allowed for statistical

purpose.

Pronounced in open court on 27.03.2026.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

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Indore Dated : 27/03/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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