Loading judgment…
Facts
The assessee, an HUF, filed its return for AY 2012-13. The case was reopened, and the Assessing Officer made an addition of Rs. 11,51,668/- under Section 69A for alleged bogus capital gains. The CIT(A) upheld the addition without properly examining the evidence submitted by the assessee.
Held
The Tribunal found that both the Assessing Officer and the CIT(A) failed to apply their minds and did not properly consider the evidence, including bank statements which showed no such transactions. The Tribunal set aside the CIT(A)'s order and directed the deletion of the addition made under Section 69A.
Key Issues
1. Whether the lower authorities properly applied their minds in making and upholding an addition for alleged bogus capital gains under Section 69A. 2. Whether the addition was sustainable without cogent evidence, especially when bank statements did not support the alleged transactions.
Sections Cited
147, 148, 69A, 271(1)(c), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2012-13 Dilip Tahlani & Sons HUF……………………………………...….……….Appellant C/o Subash Agarwal & Associates, Advocate Siddha Gibson, 1, Gibson Lane, Suite 213, 2nd Floor, Kolkata – 700069. [PAN: AAFHD1429P] vs. ITO, Ward-26(2), Kolkata.………….....................……........……...…..…..Respondent Appearances by: Shri Siddharth Agrawal, Advocate, appeared on behalf of the assessee. Shri Archana Gupta, Addl. CIT, Sr. DR, appeared on behalf of the Revenue. Date of concluding the hearing : May 14, 2025 Date of pronouncing the order : May 21, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal of the assessee is directed against the order dated 26.09.2024 passed by the National Faceless appeal Centre [hereinafter referred to as ‘the ‘ld. CIT(A)’] u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
At the outset, it is noted that there is a delay of 81 days in filing the instant appeal before the Tribunal. The assessee has submitted an application for condonation of such delay explaining reasons for the delay. We, after perusing the petition made in the application, satisfy that there were bona fide and sufficient reasons for such delay. We, therefore, condone the delay and admit this appeal for adjudication.
Brief facts of the case are that the assessee is HUF and filed return of income for the assessment year 2012-13. Subsequently, the case of the assessee was reopened u/s 147 of the Act and notice u/s 148 of the Act was issued and the assessee complied to the notices. The Assessing Officer found that the assessee had claimed bogus capital gains for manipulation in the scrips of M/s BSR Finance & Construction Ltd. Accordingly, an addition of Rs.11,51,668/- was made u/s 69A treating the same as unexplained cash credit. While doing so, the Assessing Officer also initiated penalty proceedings u/s 271(1)(c) of the Act.
Aggrieved by the above order, the assessee preferred an appeal before the ld. CIT(A). However, the ld. CIT(A) upheld the order of the Assessing Officer by dismissing the appeal of the assessee without properly examining and appreciating the evidences submitted by the assessee before him.
Dissatisfied with the above order, the assessee preferred appeal before this Tribunal raising various grounds. However, the primary contention of the ld. AR is that the alleged addition made by the Assessing Officer was erroneous and without proper application of mind. He also contended that the assessee duly filed its return of income on 25.03.2013 which was acknowledged and clearly referred in the assessment order itself. The ld. AR, therefore, stated that the remark of the Assessing Officer in the body of the order that no return was filed was factually incorrect. Before us, the assessee also submitted that the copy of ITR, final accounts of the assessee for the assessment year 2012- 13, bank statements for the relevant assessment year etc. in order to demonstrate that no such transaction as alleged had taken place. These documents were filed at the assessment proceedings as well as before the ld. CIT(A), however, both the lower authorities did not properly consider the same. He, therefore, prayed before the Bench that the addition was made without application of mind and only on the basis of third party information and even if when the assessee did not enter into any such transaction as alleged, therefore, there is no basis of making such addition, hence, the same is bad in law and the impugned addition needs to be deleted.
On the other hand, the ld. DR supported the orders of the lower authorities. However, he could not controvert the facts as submitted by the ld. AR.
We, after hearing the rival submissions and perusing the materials available on record, find that the Assessing Officer failed to apply his mind both while reopening the assessment and while making the impugned addition. We note that the conclusion of the Assessing Officer regarding the bogus capital gains which is not supported by any cogent evidence and the addition of Rs.11,51,668/- appears to be made without any basis and even the ld. CIT(A) was erred in confirming the order of the Assessing Officer without examining the merits of the case and documents submitted by the assessee before him. We examined the bank statements of the assessee for the assessment year under consideration as furnished before us for the period from 01.04.2011 to 31.03.2012 which reflected that there was no such transaction done as alleged by the Assessing Officer while passing the assessment order. The said bank statement is reproduced below for the sake of convenience:
7.1 We have also gone through the submission of the assessee which was made during the assessment proceedings vide letter dated 23.08.2019 by which the assessee clearly stated that no capital gain loss arose during the assessment year 2012-13. However, the Assessing Officer did not look into the facts and even the ld. CIT(A) also did not consider while passing the impugned order. We, therefore, set aside the order of the ld. CIT(A) and direct the Assessing Officer to delete the addition made by him.
In terms of the above, the appeal of the assessee is allowed. Kolkata, the 21st May, 2025.