RAJENDRA KUMAR SINGHANIA HUF,KOLKATA vs. I.T.O., WARD - 44(2), KOLKATA

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ITA 659/KOL/2026Status: DisposedITAT Kolkata12 June 2026AY 2015-20165 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(Appeals) had dismissed the appeal without going into the merits of the case. To ensure natural justice, the matter was remitted back to the CIT(Appeals) for a fresh decision.

What were the facts?

The assessee claimed exemption under section 10(38) on LTCG from sale of listed equity shares. Information revealed the shares were part of a manipulated penny stock scheme, leading to additions under section 68 and 69C.

What were the issues?

Whether the CIT(Appeals) properly adjudicated the appeal on merits, and if the assessee should be granted another opportunity to present evidence.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 148,Section 147,Section 142(1),Section 143(2),Section 68,Section 115BBE,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

Before: Shri Duvvuru RL Reddy, Vice-(KZ)

ITA No. 659/KOL/2026 (A.Y. 2015-2016) Rajendra Kumar Singhania, HUF IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) I.T.A. No. 659/KOL/2026 Assessment Year: 2015-2016 Rajendra Kumar Singhania, HUF,.……….…Appellant 92/1B, Moulana Abul Kalam Azad Sarani, Rukmani Parasmani, Flat No. 6PE, Kadapara, Kolkata-700054 [PAN:AAFHS2065E] -Vs.- Income Tax Officer,………………………..…..Respondent Ward-44(2), Kolkata, 3, Government Place (West), Kolkata-700001 Appearances by: Ms. Sweta Singhania, FCA, appeared on behalf of the assessee Ms. Sima Das Biswas, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: June 09, 2026 Date of pronouncing the order: June 12, 2026 O R D E R

The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 22.01.2026 passed for Assessment Year 2015-2016.

ITA No. 659/KOL/2026 (A.Y. 2015-2016) Rajendra Kumar Singhania, HUF 2. Brief facts of the case are that the assessee filed its return of income electronically on 31.07.2015 declaring gross total income of Rs.72,670/-. The assesse claimed exemption under section 10(38) on net Long Term Capital Gain of Rs.15,48,924/- arising from sale of listed equity shares, out of which Rs.13,03,690/- pertained to sale of shares of Appu Marketing & Manufacturing Ltd. (in short ‘AMML’). The return was processed under section 143(1) on 26.08.2015. Subsequently information from Investigation Wing revealed that the assessee transacted in penny stock of AMML identified and manipulated for providing bogus LTCG entries. Notice under section 148 dated 31.03.2021 was issued after recording reasons under section 147 and the assessee filed return in response thereto. Notices under section 142(1) and 143(2) were issued and submissions were filed on 19.01.2022. Show cause notice dated 25.03.2022 was issued querying why sale considerat4ion of Rs.13,23,690/- should not be treated as sham and added under section 68. The assessee did not reply to the show-cause notice. Thereafter, the ld. Assessing Officer added Rs.13,23,690/- as unexplained cash credit under section 68 read with section 115BBE and added to the total income of assessee. Ld. Assessing Officer also added 5% commission i.e. Rs.66,185/- as unexplained expenditure under section 69C r.w.s. 115BBE. Finally, ld. Assessing Officer determined the total assessed income of the assessee at Rs.14,62,545/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).

ITA No. 659/KOL/2026 (A.Y. 2015-2016) Rajendra Kumar Singhania, HUF 3. The ld. CIT(Appeals) dismissed the appeal of the assessee by upholding the order of ld. Assessing Officer. Being aggrieved, the assessee preferred an appeal before the Tribunal.

4.

At the time of hearing, it was the submission of the ld. Counsel for the assessee that ld. CIT(Appeals) just simply upholding the order of ld. Assessing Officer dismissed the appeal of the assessee without going into merit of the case. He prayed before the Bench to set aside the order passed by the ld. CIT(Appeals) and also prayed to give one opportunity to substantiate its case.

5.

On the other hand, it was the submission of the ld. Departmental Representative that the assessee failed to offer any explanation/supporting documents in respect of the grounds of appeal raised by him before the ld. Assessing Officer as well as ld. CIT(Appeals). The ld. D.R. pleaded that inspite of sufficient opportunities provided to substantiate his case, the assessee did not produce any supporting documents in support of its claim. Therefore, he pleaded to uphold the orders passed by the ld. CIT(Appeals).

6.

I have heard both the sides and perused the material available on record. The assessee did not furnish any documentary evidence in support of its claim before the ld. Assessing Officer. The ld. CIT(Appeals) just simply upholding the order of ld. Assessing Officer dismissed the appeal of the assessee without going into merit of the case. Considering the totality of the facts

ITA No. 659/KOL/2026 (A.Y. 2015-2016) Rajendra Kumar Singhania, HUF and circumstances of the case, I find that the assessee was not in a position to file some of the evidences before the ld. CIT(Appeals). Therefore, in order to ensure the principle of natural justice, I am of the view that it is a fit case to provide one more opportunity to the assessee and remit the matter back to the file of ld. CIT(Appeals) to decide the issues afresh, i.e. (i) with regard to the addition of Rs.13,23,690/- under section 68 treating the genuine Long-Term Capital Gain arising from sale of shares of Appu Marketing and Manufacturing Ltd. and (ii) addition of Rs.66,185/- under section 69C on account of unexplained expenditure as commission. Therefore, I remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the appeal without any inference on the observations of earlier order passed by him. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee in the appeal are partly allowed for statistical purposes.

7.

In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 12/06/2026.

Sd/- (Duvvuru RL Reddy) Vice-President (KZ) Kolkata, the 12th day of June, 2026

ITA No. 659/KOL/2026 (A.Y. 2015-2016) Rajendra Kumar Singhania, HUF

Copies to :(1) Rajendra Kumar Singhania, HUF, 92/1B, Moulana Abul Kalam Azad Sarani, Rukmani Parasmani, Flat No. 6PE, Kadapara, Kolkata-700054 (2) Income Tax Officer, Ward-44(2), Kolkata, 3, Government Place (West), Kolkata-700001 (3) CIT(A), NFAC, Delhi; (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order

Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha

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