INCOME-TAX OFFICER, WARD-1(2)(3), AHMEDABAD, AAYAKAR BHAWAN, VEJALPUR, AHMEDABAD vs. JASMINE JAYANTIBHAI SANGHAVI, AHMEDABAD

The assessee is an individual and filed his return of income on 13.02.2017 declaring total income of Rs.3,74,130/- for A.Y. 2016-17. During the year under consideration, the assessee has undertaken transactions in the scrip of M/s. Nobel Polimers Limited for trade value of Rs.1,98,723/-. The AO observed that the same was not shown in the return of income. The case was taken up for scrutiny u/s.147 of the Act after taking approval of the competent authority. Subsequently, notice u/s.148 of the Act was issued on 30.03.2021. The assessee did not file income tax return in response to notice u/s.148 of the Act. In response to notices u/s.142(1) of the Act, the assessee filed reply on 16.02.2022 alongwith capital gain/loss computation statement, demat account statement transaction statement, Axis bank account statements, details of share before the AO. The AO observed that the assessee calculated long term capital gain by selling scrip of M/s. Nobel Polimers Limited in the capital gain computation statements but did not show the long term capital gain in his (ITO vs. Jasmine Jayantibhai Sanghavi) A.Y.– 2016-17 - 3 – income tax return. After going through the records, the AO held that the assessee brought its unaccounted money in his account through accommodation entry and has not shown bogus long term capital gone in his income tax return for the said assessment year and, thus, added Rs.1,98,723/- as bogus long term capital gain u/s.69A of the Act as accommodation entry.

Being aggrieved by the assessment order, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) allowed the appeal of the assessee.

Ld. DR submitted that the Ld. CIT(A) was not correct in deleting the addition as the amount of Rs.1,98,723/- is unexplained money u/s.69A of the Act and Rs.1,987/- was unexplained expenditure u/s.69C of the Act being 1% commission for arranging the entry without appreciating the fact that the assessee could not provide a satisfactory explanation regarding the trade value of Rs.1,98,723/- made in the scrip of M/s. Nobel Polimers Limited. The Ld. DR relied upon the assessment order.

The ld. AR relied upon the order of the Ld. CIT(A).

Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the Ld. CIT(A) has categorically mentioned that the assessee has submitted all the relevant documents which was also reflected in para 4 of the assessment order i.e. capital gain/loss computation statement, demat account statement, transaction statement, Axis (ITO vs. Jasmine Jayantibhai Sanghavi) A.Y.– 2016-17 - 4 – bank account statements, details of share and the other relevant documents which was totally ignored by the AO during the assessment proceedings. The assessee in fact has proved the genuinity and the creditworthiness of the sale transaction of long term capital gain and, in fact, has given the details of trading in shares. There is categorically mentioned in the assessment order that the assessee has mentioned this transaction in computation of capital gain through its computation statement for F.Y. 2015-16 i.e. relevant A.Y. 2016-17. This cannot negate the fact that the assessee has rightly taken the same by filing the income tax return. Thus, on the legal aspect as well as on the merits, the Ld. CIT(A) has taken a proper cognizance and there is no need to interfere with the findings of the Ld. CIT(A).

In the result, appeal of the Revenue is dismissed.