ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), MEERUT, MEERUT vs. ITI GUPTA, MEERUT

PER KRINWANT SAHAY AM

Appeal in this case has been filed by the Revenue against the order dated 06.03.2026 passed by the CIT(A)/NFAC, Delhi for the A.Y. 2013-14. Ground of appeal are as under :-

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ITR 801 (SC); PCIT Vs Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta). 6. On the facts and circumstances of the case and in law, Ld.CIT(A) has erred in deleting the additions observing that wrong section 68 was used for making additions ignoring the facts that in the substance and effect, additions were being made u/s 69A of the Income-tax Act, 1961 as it is Apparent from pages 27 and 30 of the assessment order and inadvertent error is curable as per provisions of section 292B of the I.T.Act, 1961.

“5.1.2 It is noted that the above judicial pronouncements relate to the same scrip of M/s Access Global Limited, In those cases, the Hon'ble ITAT held that the Assessing Officer had relied merely upon investigation reports of the Income Tax Department to treat the Long Term Capital Gains as bogus without conducting any independent inquiry and without disproving the documentary evidences furnished by the assessee. It was held that once the assessee discharges the initial burden by producing documentary evidences, the addition cannot be sustained. 5.1.3 The facts of the present case are found to be similar, namely: 3 | P a g e

 The case has been reopened based on transactions in the same scrip.  The AO has relied solely upon the investigation report of the department. No independent inquiry or investigation has been conducted by the AO.  No discrepancy has been pointed out in the documentary evidences submitted by the appellant.

5.1.4 From the assessment order, it is observed that the Assessing Officer has accepted the purchase of shares, but has disputed the genuineness of the sale transaction. It is also evident that the Assessing Officer has not disputed the following:  Holding period of shares exceeding one year  Sale through a recognized stock exchange

 Payment of Securities Transaction Tax (STT)

All the transactions are supported by documentary evidences and no specific defect has been pointed out by the Assessing Officer in respect of the documents submitted by the appellant.

The addition has been made merely on the basis of presumption that the transactions were sham in nature, without bringing any material evidence on record to substantiate such allegation.

 The records show that:  The shares were sold through a recognized stock exchange.  STT has been duly paid.

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 Demat account details have been furnished.  Amalgamation documents have been  Sale proceeds were received through banking channels. 5.1.5 Thus, the appellant has satisfactorily explained the nature and source of the transactions with supporting documentary evidences and has discharged the burden cast upon him. Accordingly, the addition of Rs.47,11,418/- is hereby deleted, and this ground of appeal is allowed. 5.2 Ground No. 6 The appellant has challenged the addition of Rs.10,07,364/- made by the AO u/s. 68 and the application of section 115BBE by treating the amount as Arhatiya commission income. The appellant submitted that the said amount had already been disclosed in the return of income filed under section 139(1) under the head "Income from Other Sources", and taxes were duly paid thereon. The addition was therefore made only to deny the benefit of deductions under Chapter VI-A and to subject the income to taxation under section 115BBE. 5.2.1 On verification of the return of income and computation filed by the appellant (pages A3 to A6 of the paper book filed on 10.08.2022), it is evident that the amount of Rs.10,07,364/- has already been declared as income in the return. Therefore, the action of the AO in again treating the same amount as unexplained income results in double taxation, which is not permissible in law. 5.2.2 Accordingly, the addition of Rs.10,07,364/- is deleted. Since the addition itself is deleted, the applicability of section 115BBE does not survive. Thus, Ground No. 6 is allowed. 5.3 Ground No.7 The appellant has contested the addition of Rs.2,35,570/- made under section 69C on account of alleged commission paid to entry providers at the rate of 5% of the capital gain. The AO has merely assumed that the appellant might have

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paid commission to entry providers to obtain accommodation entries of Long Term Capital Gain. However, no evidence whatsoever has been brought on record to establish that the appellant actually paid any commission.

Further, the basis of estimating such commission was the Long Term Capital Gain transaction itself, which has already been deleted while adjudicating Ground No. 5. Therefore, once the primary addition itself has been deleted, the consequential addition on account of alleged commission cannot survive. Accordingly, the addition of Rs.2,35,570/- is deleted and Ground No. 7 is allowed.”

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“Ground 1. That the appeal filed by the Department is not maintainable because the tax effect in this case is below I the monetary limit fixed by the CBDT for filing appeals before the Honourable ITAT. Therefore, the Department appeal is not maintainable and deserve to be dismissed. Ground2. That the Ld. CIT(A) erred in not adjudicating the legal ground, that the Ld. AO has reopened the 2 assessment u/s 147 only on the borrowed satisfaction. Hence, the impugned assessment order is void ab initio, illegal, unjustifiable, had in law and liable to be quashed. Ground3. That, on the facts and circumstances of the case and in law, the deletion of the addition relating to the claim of exemption of long-term capital gain of Rs. 47,11,418/-u/s 10(38) is justified, as the shares were held for a period exceeding 12 months, and sold through banking channels on a recognized stock exchange after payment of STT. Once the purchase of shares has been accepted as genuine, the subsequent sale thereof cannot be rejected Therefore, the deletion of addition by the Ld. CIT(A) deserves to be upheld. Ground4. That, on the facts and circumstances of the case and in law, the deletion of the addition of Rs. 2,35,570/-u/s 69C on account of estimated commission paid to brokers at the rate of 5 percent of capital gain without any basis is justified as the AO has merely assumed that the appellant might have paid commission to entry providers. Therefore, the deletion of addition by the Ld. CIT(A) deserves to be upheld. Ground5. That, on the facts and circumstances of the case and in law, the deletion of the addition relating to the addition of Rs. 10,07,364/- u/s 68 is justified, as Arhatiya commission to the income of the assessee which has been 5 already disclosed and offered for taxation under the head income from other sources in return of income filed u/s 139 and adding it again results to double taxation, Therefore, the deletion of addition by the Ld. CIT(A) deserves to be upheld. Ground6. That, on the facts and circumstances of the case and in law, the Ld. CIT(A) has rightly deleted the addition Rs.47.11,418/- and Rs. 10,07,364/- made under 6 Section 68, since the assessee, being an individual, was not required to maintain books of account. Therefore, the deletion of addition by the Ld. CIT(A) deserves to be upheld.

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Ground7. That the Ld. CIT(A) erred in not adjudicating the legal ground that the AO is not justified in passing the assessment order on 26.03.2022 within 4 weeks after final disposal of objections vide letter dated 12.03.2022. Hence, the impugned assessment order is void ab initio, illegal, unjustifiable, bad in law and liable to be quashed. Ground8. That the Ld. CIT(A) erred in not adjudicating the legal ground, that in spite of specific requests during assessment proceedings the AO fails to produce the concerned for cross- examination, so the addition by the AO is illegal, unjustifiable, bad in law and liable to be deleted. Ground9. That each ground of appeal is without prejudice to each other. That the tax levied, interest charged and the penalty imposed is excessive at any rate. That the appellant craved the right to add, amend and alter any OR all of the grounds of appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing.

Additional Legal Ground first time raised before ITAT

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Order pronounced in the open Court on 12.08.2026.

Sd/- Sd/-

SD (MAHAVIR SINGH) (KRINWANT SAHAY) VICE PRESIDENT ACCOUNTANT MEMBER Dated : 21/08/2026 *Neha Sr. PS* Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT (Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT NEW DELHI

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