MALTI TANUJ THAKUR,MUMBAI vs. ADDL/JCIT (A)-1, BENGALURU

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ITA 6103/MUM/2026Status: DisposedITAT Mumbai19 August 2026AY 2011-20126 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the mere appearance of the assessee's name in the investigation report, without corroborative material, cannot justify the addition. The assessee's own Demat and bank statements, showing no such transactions, were not controverted by the revenue.

What were the facts?

The assessee, a salaried individual, was alleged to be a beneficiary of bogus Long-Term Capital Gain through share transactions. The Assessing Officer added the gain under Section 68 and commission under Section 69C, based on information from the Investigation Wing.

What were the issues?

Whether additions under Section 68 and 69C are sustainable solely on the basis of third-party information without establishing the assessee's actual involvement in the alleged transactions.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “H(SMC

Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BANERJEE

For Appellant: Ms. Malti Thakur (A’s in person), Shri Pravin Salunkhe, Sr. DR
Hearing: 19/08/2026

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against the order dated 24.03.2026 passed by the learned Addl./Joint Commissioner of Income-tax (Appeals), Bengaluru [in short, “the learned CIT(A)”], for Assessment Year 2011-12. The assessee has challenged, inter-alia, the addition of Rs.1,07,167/- under section 68 of the Income-tax Act, 1961 [in short, “the Act”], on account of alleged bogus Long-

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Term Capital Gain and consequential addition of Term Capital Gain and consequential addition of Rs.3,215/ Rs.3,215/- under section 69C towards alleged commission. towards alleged commission. The grounds raised by The grounds raised by the assessee are reproduced as under the assessee are reproduced as under:

“1. The order passed by the l 1. The order passed by the learned CIT(A) is bad in law and on facts. earned CIT(A) is bad in law and on facts. 2. The authorities below have erred in treating the appellant as a beneficiary of 2. The authorities below have erred in treating the appellant as a beneficiary of 2. The authorities below have erred in treating the appellant as a beneficiary of alleged bogus Long Term Capital Gain without establishing any direct linkage alleged bogus Long Term Capital Gain without establishing any direct linkage alleged bogus Long Term Capital Gain without establishing any direct linkage such as DEMAT account, bank transactions, or broker re such as DEMAT account, bank transactions, or broker records. cords. 3. The appellant is a salaried individual and has never purchased or sold shares 3. The appellant is a salaried individual and has never purchased or sold shares 3. The appellant is a salaried individual and has never purchased or sold shares of G.S. Auto International Ltd. The entire addition is based on mistaken identity. of G.S. Auto International Ltd. The entire addition is based on mistaken identity. of G.S. Auto International Ltd. The entire addition is based on mistaken identity. 4. The addition of Rs. 1,07,167/ 4. The addition of Rs. 1,07,167/- u/s 68 is made solely on third u/s 68 is made solely on third-party information without any independent evidence or verification. ithout any independent evidence or verification. 5. No documentary evidence such as DEMAT statements, contract notes, or bank 5. No documentary evidence such as DEMAT statements, contract notes, or bank 5. No documentary evidence such as DEMAT statements, contract notes, or bank entries have been provided to establish involvement of the appellant. entries have been provided to establish involvement of the appellant. entries have been provided to establish involvement of the appellant. 6. The authorities have violated principles of natural justice by not providing: 6. The authorities have violated principles of natural justice by not providing: 6. The authorities have violated principles of natural justice by not providing: o Investigation report o Investigation report o Reasons recorded u/s 148 o Reasons recorded u/s 148 o Opportunity for cross o Opportunity for cross-examination 7. The appellant has already submitted DEMAT and bank statements showing no 7. The appellant has already submitted DEMAT and bank statements showing no 7. The appellant has already submitted DEMAT and bank statements showing no such transaction, which has been ignored. saction, which has been ignored. 8. The addition of Rs. 3,215/ 8. The addition of Rs. 3,215/- u/s 69C towards alleged commission is purely u/s 69C towards alleged commission is purely consequential and without basis since the main transaction itself does not exist. consequential and without basis since the main transaction itself does not exist. consequential and without basis since the main transaction itself does not exist. 9. The entire assessment is based on assumptions, suspicion, and third party 9. The entire assessment is based on assumptions, suspicion, and 9. The entire assessment is based on assumptions, suspicion, and data without corroborative evidence. data without corroborative evidence. 10. The appellant prays that the additions be deleted in full and relief be The appellant prays that the additions be deleted in full and relief be The appellant prays that the additions be deleted in full and relief be granted.” 2. Briefly stated, the assessee, a salaried individual, filed her Briefly stated, the assessee, a salaried individual, filed her Briefly stated, the assessee, a salaried individual, filed her return of income on 28.07.2011 declaring total income of return of income on 28.07.2011 declaring total income of return of income on 28.07.2011 declaring total income of Rs.1,72,443/-. Subsequently, the Assessing Officer received . Subsequently, the Assessing Officer received . Subsequently, the Assessing Officer received information from the Investigation Wing alleging that the assessee information from the Investigation Wing alleging that the assessee information from the Investigation Wing alleging that the assessee

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was a beneficiary of an accommodation entry in the form of Long eficiary of an accommodation entry in the form of Long- eficiary of an accommodation entry in the form of Long Term Capital Gain through transactions in the shares of G.S. Auto Term Capital Gain through transactions in the shares of Term Capital Gain through transactions in the shares of International Ltd. On the basis of the information so received and On the basis of the information so received and On the basis of the information so received and after recording reasons, the assessment was reopened under after recording reasons, the assessment was reopened under after recording reasons, the assessment was reopened under section 147 of the Act. 47 of the Act. In the reassessment proceedings, the In the reassessment proceedings, the Assessing Officer treated Assessing Officer treated Rs.1,07,167/-, stated to represent the , stated to represent the sale proceeds of shares of G.S. Auto International Ltd., as sale proceeds of shares of G.S. Auto International Ltd., as sale proceeds of shares of G.S. Auto International Ltd., as unexplained cash credit under section 68 of the Act. The assessee, unexplained cash credit under section 68 of the Act. The assessee, unexplained cash credit under section 68 of the Act. The assessee, however, consistently contended that she had neither purchased sistently contended that she had neither purchased sistently contended that she had neither purchased nor sold any shares of the said company during the relevant year nor sold any shares of the said company during the relevant year nor sold any shares of the said company during the relevant year and that no such transaction was reflected in her Demat account Demat account and that no such transaction was reflected in her or bank account. 3. The learned CIT(A) rejected the challenge of the assesse The learned CIT(A) rejected the challenge of the assesse The learned CIT(A) rejected the challenge of the assessee to reopening of assessment as well as reopening of assessment as well as confirmed the addition. confirmed the addition. On merit, he observed that the Investigation Wing had identified the e observed that the Investigation Wing had identified the e observed that the Investigation Wing had identified the assessee as one of the beneficiaries of alleged accommodation assessee as one of the beneficiaries of alleged accommodation assessee as one of the beneficiaries of alleged accommodation entries through the penny stock of G.S. Auto International Ltd. entries through the penny stock of G.S. Auto International Lt entries through the penny stock of G.S. Auto International Lt According to the learned CIT(A), the investigation had revealed a According to the learned CIT(A), the investigation had revealed a According to the learned CIT(A), the investigation had revealed a modus operandi involving artificial price manipulation and modus operandi involving artificial price manipulation and modus operandi involving artificial price manipulation and provision of accommodation entries in the guise of Long-Term provision of accommodation entries in the guise of Long provision of accommodation entries in the guise of Long Capital Gain. He further observed that the assessee's name Capital Gain. He further observed that the assessee's name Capital Gain. He further observed that the assessee's name appeared in the beneficiary data and that the assessee had not in the beneficiary data and that the assessee had not in the beneficiary data and that the assessee had not produced substantive evidence sufficient to rebut the information produced substantive evidence sufficient to rebut the information produced substantive evidence sufficient to rebut the information received from the Investigation received from the Investigation Wing. The learned CIT(A.) relied The learned CIT(A.) relied

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upon the principles enunciated by the Hon’ble Supreme Court in upon the principles enunciated by the Hon’ble Supreme Court in upon the principles enunciated by the Hon’ble Supreme Court in Sumati Dayal v. CIT, [1995] 214 ITR 801 (SC) Dayal v. CIT, [1995] 214 ITR 801 (SC) and and CIT v. Durga Prasad More, [1971] 82 ITR 540 (SC) Prasad More, [1971] 82 ITR 540 (SC), and by the Hon’ble Delhi , and by the Hon’ble Delhi High Court in CIT v. Nova Promoters & Finlease (P.) Ltd., [2012] CIT v. Nova Promoters & Finlease (P.) Ltd., [2012] CIT v. Nova Promoters & Finlease (P.) Ltd., [2012] 342 ITR 169 (Delhi) 342 ITR 169 (Delhi) and Pr. CIT v. NDR Promoters (P.) Ltd., Pr. CIT v. NDR Promoters (P.) Ltd., [2019] 410 ITR 379 (Delhi) 379 (Delhi), and, applying the test of surrounding , and, applying the test of surrounding circumstances and human probabilities, sustained the addition of circumstances and human probabilities, sustained the addition of circumstances and human probabilities, sustained the addition of Rs.1,07,167/-.

3.1 Before us, the assessee appeared in person and advanced Before us, the assessee appeared in person and advanced Before us, the assessee appeared in person and advanced submissions in support of her contention that she had neither submissions in support of her contention that she had neither submissions in support of her contention that she had neither purchased nor sold any shares of the impugned scrip during the rchased nor sold any shares of the impugned scrip during the rchased nor sold any shares of the impugned scrip during the relevant year. The learned Departmental Representative, on the relevant year. The learned Departmental Representative, on the relevant year. The learned Departmental Representative, on the other hand, relied upon the orders of the authorities below and other hand, relied upon the orders of the authorities below and other hand, relied upon the orders of the authorities below and supported the addition sustained therein. supported the addition sustained therein.

4.

We have heard the riva We have heard the rival submissions and perused the material l submissions and perused the material available on record. The controversy before us is whether the available on record. The controversy before us is whether the available on record. The controversy before us is whether the assessee actually entered into the impugned transaction in the assessee actually entered into the impugned transaction in the assessee actually entered into the impugned transaction in the shares of G.S. Auto International Ltd. G.S. Auto International Ltd. resulting in the alleged resulting in the alleged Long-Term Capital Gain of Term Capital Gain of Rs.1,07,167/-. The assessee has . The assessee has consistently denied having purchased or sold any shares of the said consistently denied having purchased or sold any shares of the said consistently denied having purchased or sold any shares of the said company. This specific contention was raised before the Assessing company. This specific contention was raised before the Assessing company. This specific contention was raised before the Assessing Officer as well as the learned CIT(A.) and, importantly, was Officer as well as the learned CIT(A.) and, importantly, was Officer as well as the learned CIT(A.) and, importantly, was supported by the assessee by fu supported by the assessee by furnishing her Demat account and Demat account and

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bank statements, neither of which reflects the impugned , neither of which reflects the impugned , neither of which reflects the impugned transaction or receipt of the alleged sale consideration. transaction or receipt of the alleged sale consideration. transaction or receipt of the alleged sale consideration.

5.

In these circumstances, the mere appearance of the assessee's In these circumstances, the mere appearance of the assessee's In these circumstances, the mere appearance of the assessee's name in the information received from the Inv name in the information received from the Investigation Wing, estigation Wing, without any corroborative material establishing that the impugned without any corroborative material establishing that the impugned without any corroborative material establishing that the impugned transaction was actually undertaken by her, cannot by itself justify transaction was actually undertaken by her, cannot by itself justify transaction was actually undertaken by her, cannot by itself justify the addition under section 68 of the Act. The general modus the addition under section 68 of the Act. The general modus the addition under section 68 of the Act. The general modus operandi alleged in respect of accommodation operandi alleged in respect of accommodation entries through entries through penny stocks may constitute a basis for investigation; however, it penny stocks may constitute a basis for investigation; however, it penny stocks may constitute a basis for investigation; however, it cannot substitute the primary requirement of establishing that the cannot substitute the primary requirement of establishing that the cannot substitute the primary requirement of establishing that the particular transaction attributed to the assessee was, in fact, particular transaction attributed to the assessee was, in fact, particular transaction attributed to the assessee was, in fact, entered into by her. It is also possible, entered into by her. It is also possible, as contended by the as contended by the assessee, that the PAN may have been erroneously reported or assessee, that the PAN may have been erroneously reported or assessee, that the PAN may have been erroneously reported or mapped in the information. mapped in the information.

6.

We find that neither the Assessing Officer nor the learned We find that neither the Assessing Officer nor the learned We find that neither the Assessing Officer nor the learned CIT(A.) has brought on record any independent evidence to CIT(A.) has brought on record any independent evidence to CIT(A.) has brought on record any independent evidence to establish that the assesse establish that the assessee purchased or sold the shares in e purchased or sold the shares in question or received the alleged sale consideration. The primary question or received the alleged sale consideration. The primary question or received the alleged sale consideration. The primary records produced by the assessee, namely, her Demat account and records produced by the assessee, namely, her Demat account and records produced by the assessee, namely, her Demat account and bank statements, have not been controverted by any corresponding bank statements, have not been controverted by any corresponding bank statements, have not been controverted by any corresponding transaction-specific evidenc specific evidence. In such circumstances, the addition e. In such circumstances, the addition cannot be sustained merely on the basis of the investigation report cannot be sustained merely on the basis of the investigation report cannot be sustained merely on the basis of the investigation report and an inference that the assessee must have been a beneficiary of and an inference that the assessee must have been a beneficiary of and an inference that the assessee must have been a beneficiary of the alleged accommodation entry. the alleged accommodation entry.

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7.

Once the foundational fact that the assessee e Once the foundational fact that the assessee e Once the foundational fact that the assessee entered into the impugned transaction itself has not been established, the question impugned transaction itself has not been established, the question impugned transaction itself has not been established, the question of treating Rs.1,07,167/ Rs.1,07,167/- as unexplained cash credit under section as unexplained cash credit under section 68 does not arise. Consequently, the consequential addition of 68 does not arise. Consequently, the consequential addition of 68 does not arise. Consequently, the consequential addition of Rs.3,215/- under section 69C under section 69C, being founded upon the same upon the same alleged accommodation entry, also cannot survive. alleged accommodation entry, also cannot survive.

8.

We, accordingly, set aside the finding of the learned CIT(A.) We, accordingly, set aside the finding of the learned CIT(A.) We, accordingly, set aside the finding of the learned CIT(A.) and delete the additions of Rs.1,07,167/ delete the additions of Rs.1,07,167/- under section 68 and under section 68 and Rs.3,215/- under section 69C of the Act under section 69C of the Act. The grounds raised by . The grounds raised by the assessee on merits are accordingly allowed. the assessee on merits are accordingly

9.

In the result, the appeal of the assessee is In the result, the appeal of the assessee is allowed allowed.

Order pronounced in the open Court on ounced in the open Court on 19/08 08/2026.

Sd/- Sd/- (ANIKESH BANERJEE ANIKESH BANERJEE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 19/08/2026 /2026 Kunal Kr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai

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