INCOME TAX OFFICER, WARD-20(3)(1), MUMBAI, MUMBAI vs. SHASHIKALA KAMAL JAIN, MUMBAI

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ITA 4567/MUM/2026Status: DisposedITAT Mumbai19 August 2026AY 2014-156 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings were unsustainable as the information relied upon by the Assessing Officer originated from the assessee's own IDS declaration. The CIT(A) correctly deleted the addition as the same income cannot be taxed twice.

What were the facts?

The Assessing Officer made an addition of Rs. 59,92,372/- on account of penny stock transactions, disbelieving the assessee's claim that the income was declared under the Income Declaration Scheme (IDS), 2016. The CIT(A) deleted the addition, finding that the amount was indeed disclosed and taxed under IDS.

What were the issues?

Whether the CIT(A) erred in deleting the addition made on account of penny stock transactions when the assessee claimed disclosure under IDS, 2016. Whether reassessment proceedings initiated based on the assessee's own IDS declaration are sustainable.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI MAKARAND VASANT MAHADEOKAR

Pronounced: 19/08/20206

PER SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER: This appeal is filed by the Revenue against the order of the learned CIT(A), NFAC, dated 25.02.2026 for the assessment year 2014-15.

2.

The Revenue has raised the following grounds of appeal:

1) Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in concluding that the amount of Rs.50,61,716/- represented income already declared under the Income Declaration Scheme, 2016, despite the assessees failure to furnish any documentary evidence substantiating such declaration during the assessment proceedings. 2) Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the addition resulted in double taxation, without establishing that the same income had been conclusively declared and taxed under the IDS, 2016. 3) Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in ignoring the incriminating material and findings of the Investigation Wing identifying the assessee as a beneficiary of accommodation entries in the form of bogus long-term capital gains through penny stock transactions. 4) Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not appreciating that the assessee failed to discharge the onus of proving the genuineness of the impugned transactions with credible evidence, thereby justifying the addition made by the Assessing Officer under section 69A. 5) It is prayed that this appeal is filed even if the tax effect is below the monetary limit since the case falls under exception specified in para-3.1(h) of the CBDT Circular 05/2024 dated 15.03.2024. 6) The appellant craves leave to add, amend, alter, OR withdraw any of the above grounds of appeal at the time of hearing. 7) Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing the appeal of the assessee and deleting the addition of Rs.59,92,372/- made by the Assessing Officer under section 69A read with section 115BBE of the Income tax Act, 1961. 8) Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the reassessment proceedings initiated under section 147 were unsustainable, without appreciating that the Assessing Officer had valid reason to believe based on credible and tangible information received from the Investigation Wing regarding the assessee s involvement in bogus penny stock transactions.”

3.

None appeared on behalf of the assessee nor any adjournment was sought. The appeal is disposed of on hearing the Ld. DR.

4.

Ld. DR strongly placing reliance on the assessment order, submitted that the Assessing Officer made addition of Rs.59,92,372/- in respect of the gain on penny stock transaction not accepting the submission of the assessee that the same was disclosed in Income Disclosure Scheme (IDS), 2016, in the absence of the materials and documents furnished by the assessee. Ld. DR thus submitted that the Assessing Officer has rightly brought to tax the gain on penny stock as unexplained income u/s 69A of the Act.

5.

We have heard the submissions of the Ld. DR and perused the orders of the Assessing Officer and the Ld. CIT(A). The assessee made detailed submissions and furnished evidences to prove that the long-term capital gain which was brought to tax by the Assessing Officer purportedly relating to the penny stock transactions was already disclosed under IDS, 2016. Considering the submissions and the evidences placed on record, the learned CIT(A) deleted the addition, observing as under:

“7. I have carefully considered the assessment order, grounds of appeal, submissions filed during appellate proceedings and the material placed on record. The appeal has been filed on 13.06.2023 against the order dated 25.05.2023 passed u/s 147 of the Income Tax Act, 1961 for A.Y. 2014-15.

8.

The reassessment proceedings were initiated on the basis of information that the appellant had allegedly made penny stock transactions having traded value of 50,61,716/- during the year. It is an admitted position on record that the appellant, during the relevant assessment year, had disclosed Long Term Capital Gain of 59,92,372/- and claimed exemption u/s 10(38). It is further undisputed that the appellant subsequently opted for the Income Disclosure Scheme, 2016 (IDS) and disclosed income of 50,61,716/- for A.Y. 2014-15 and paid tax thereon in accordance with the provisions of the Scheme. 9. It looks that the very figure of 50,61,716/- forming the basis of reopening has been derived from the appellant's own declaration under IDS, 2016. Thus, the "information" relied upon by the Ld. Assessing Officer is not independent external information but originates from the appellant's voluntary disclosure already subjected to tax. The appellant has furnished copies of IDS Forms and proof of payment of tax, which clearly establish that the said amount stood disclosed and taxed under the Scheme. 10. Further, the Ld. Assessing Officer has not brought on record any material to demonstrate that the alleged amount of 50,61,716/- was over and above the income declared by the appellant under IDS, 2016. No independent information or evidence has been produced to show that any additional income, separate from what was declared under IDS, had escaped assessment. The absence of such material rendersthe very basis of reopening contradictory and unsustainable, as the proceedings have been initiated on an amount already disclosed and taxed. 11. Moreover, it is a settled legal position that the same income cannot be taxed twice. In the present case, once the amount of 50,61,716/- has been voluntarily disclosed and tax has been paid under IDS, 2016, bringing the same income to tax again in reassessment proceedings, in the absence of evidence of any distinct or additional undisclosed income, amounts to impermissible double taxation. 12. In view of the above discussion, both the reopening and the consequential addition made by the Ld. Assessing Officer are not sustainable in law. The addition of 59,92,372/- made u/s 69A r.w.s. 115BBE is hereby deleted.”

6.

As could be observed from the findings of the Ld. CIT(A) that the very basis for reopening of assessment is the information called out from the IDS forms filed by the assessee and no independent extraordinary information originated to show that this was undisclosed income. On examining the copies of IDS forms and proof of payment of tax, the learned CIT(A) has held that the assessee has established that the said amounts stood disclosed and taxed under IDS 2016 scheme. Accordingly, the addition was deleted. We find no infirmity in the order passed by the Ld. CIT(A) and thus, the grounds raised by the Revenue are rejected.

7.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 19/08/2026

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR CHALLA NAGENDRA PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 19/08/2026 Prabhat Copy to: INCOME TAX OFFICER, WARD-20(3)(1), MUMBAI, 306, 3RD FLOOR, PIRAMAL CHAMBER, 1 LALBAUG, PAREL,, MUMBAI-400012, MAHARASHTRA

SHASHIKALA KAMAL JAIN, 112, HINDU COLONY, CHAITNYA BLDG, 2 4TH LANE, DADAR C.R., MUMBAI-400014, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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