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Facts
The assessee filed an appeal against an order from the Commissioner of Income Tax (Appeals). The appeal was time-barred by 52 days, but the delay was condoned. The case involved information about bogus long-term capital gains from penny stock transactions, where the assessee allegedly used unaccounted money.
Held
The Tribunal condoned the delay in filing the appeal. After reviewing the facts, the Tribunal found no evidence of the alleged transaction in the assessee's books or bank statements, nor any credit reflecting such a transaction. Therefore, the addition made by the Assessing Officer was deemed not legal.
Key Issues
Whether the addition made by the Assessing Officer for alleged bogus long-term capital gains is sustainable when there is no evidence in the assessee's books or bank statements, and whether the appeal filed beyond the limitation period should be admitted.
Sections Cited
10(38), 148, 142(1), 68, 144/147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2011-2012 Vikas Nahata,……..……………….………...……Appellant 1st Floor, PRN House, Burrabazar, 177, Mahatma Gandhi Road, Kolkata-700007 [PAN:ABPPN4488D] -Vs.- Income Tax Officer,…………………………..…..Respondent Ward-44(2), Kolkata, 3, Government Place (West), Kolkata-700001 Appearances by: Shri S.K. Tulsiyan, Advocate, appeared on behalf of the assessee Smt. Sima Das Biswas, Sr. D.R., Addl. CIT, appeared on behalf of the Revenue Date of concluding the hearing: October 16, 2025 Date of pronouncing the order: November 21, 2025 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 13.03.2025 passed for Assessment Year 2011-2012.
The appeal is time barred by 52 days in filing the appeal by the assessee before the Tribunal. However, the assessee filed an affidavit dated 16th July, 2025 before the ITAT in support of 1 (A.Y. 2011-2012) Vikas Nahata condonation of delay of 52 days mentioning that being non- resident Indian, living in Singapore, he could not follow the order passed by the ld. CIT(Appeals) from ITBA Portal due to oversight as the appellate order was passed after a long gap on 13.03.2015. When he came to know, he immediately approached the ld. A.R. to prefer an appeal, due to that there was a delay of 52 days in filing the appeal before the Tribunal. Therefore, he pleaded to condone the delay in the appeal.
Considering the facts and circumstances of the case, I am of the view that the assessee was prevented in filing the appeal within the stipulated time. Therefore, I am inclined to condone the delay of 52 days. Hence the delay is condoned for the appeal.
The facts in brief are that in this case, information was received from the DDIT(Inv.), Unit-3(2), Kolkata dated 26.02.2018 that a very large number of persons had taken entries of huge bogus long-term capital gain/short-term capital loss in a organized manner through share transactions of penny stock companies listed with Bombay Stock Exchange with the involvement of the promoters of the penny stock companies, unscrupulous brokers and entry operators. On analyzing the information, it was found that the assessee on sale of shares of Global Capital Market Ltd. has plough backed his unaccounted money of Rs.4,74,000/- into regular books of account in the garb of long-term capital gain on which no tax has been paid by claiming the same as exempt under section 10(38) of the Income Tax Act, 1961 through accommodation entry in lieu of cash. Accordingly, the case was (A.Y. 2011-2012) Vikas Nahata reopened under section 148 of the Act and served notice on 26.03.2018 via e-mail and also by post. The assessee filed its return of income in response to notice and the same was not e- verified. Thereafter notice under section 142(1) of the Act was issued to the assessee requesting to submit the copy of income tax return with acknowledgment, tax audit report, balance-sheet, profit & loss account, details of all bank statements, details of all business premises including godown, office, workshop factory, nature of business and details of share transactions made during the relevant financial year along with contract notes and details of demat account maintained during the year 2010-11. In response, the assessee neither appeared nor submitted any documents as asked for in the notice under section 142(1) dated 22.09.2018. Getting no satisfactory explanation, ld. Assessing Officer treated the amount of Rs.4,74,000/- as unexplained cash credit relating to bogus share transaction under section 68 of the Income Tax Act and added to the total income of the assesse. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) set aside the order passed by the ld. Assessing Officer under section 144/147 of the Act dated 12.12.2018 for fresh assessment by saying that the ld. Assessing Officer made the addition of Rs.4,74,000/- without going into the merits of the case.
On being aggrieved, the assessee preferred an appeal before the Tribunal. It was the submission of the ld. Counsel for the assessee that the ld. Assessing Officer made an addition of (A.Y. 2011-2012) Vikas Nahata Rs.4,74,000/- under section 68 of the Income Tax Act as unaccounted money, which was claimed exempted under section 10(38) of the Income Tax Act. He further submitted that there was no such transaction in shares of Global Capital Market Ltd. The ld. Assessing Officer also failed to bring on record to substantiate his reason in support of his contention. There is no evidence establishing the entry of such capital gain transaction in the books of account of the assessee or bank account. Therefore, he pleaded to set aside the order passed by the lower authorities.
On the other hand, ld. Departmental Representative relied on the orders passed by the ld. Assessing Officer and ld. CIT(Appeals).
I have heard both the sides and perused the material available on record. It is an admitted fact that there is no such transaction recorded in the books of account of the assessee and there is no bank transaction for an amount of Rs.4,74,000/-. The assessee further submitted that he filed the RTA but there is no such transaction/claim of long-term capital gain under section 10(38) of the Act, therefore, I am of the view that it is an admitted fact that there is no evidence to establish that the appellant has received any amount of money from the alleged transaction in the shares of Global Capital Market Ltd. or any credit of any amount from any transaction in the shares of the said entity which is also not reflecting in the books of account of the assessee for the financial year 2010-11 relevant to assessment year 2011-12. There is no evidence to show that the entries were found or reflected in the shares of the said entity either in the books of account of the (A.Y. 2011-2012) Vikas Nahata assessee or bank statement of the assessee, which could invite the provision of section 68 of the Income Tax Act. Therefore, in view of the above, I am of the view that the addition is not legal and liable to be deleted. Hence, the grounds raised
by the assessee on merits are allowed. So far as the other issues are academic in nature, and no need to interfere.
9. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 21/11/2025.