ANIL KUMAR CO MS BHARAT BOX FACTORY LTD. BEANTPURA, CHANDIGARH ROAD, LUDHIANA,LUDHIANA vs. JATIN ABHI, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, LUDHIANA, PUNJAB

आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” ,चǷीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH

HEARING THROUGH: PHYSICAL MODE

ŵी राजपाल यादव, उपाȯƗ एवं ŵी कृणवȶ सहाय, लेखा सद˟
BEFORE: SHRI. RAJPAL YADAV, VP & SHRI. KRINWANT SAHAY, AM

आयकर अपील सं./ ITA No. 811/Chd/ 2024
िनधाŊरण वषŊ / Assessment Years : 2012-13

Anil Kumar
C/o M/S Bharat Box Factory Ltd.
Beantpura, Chandigarh Road,
Ludhiana-141008
Punjab

बनाम

The ACIT
Circle-1, Ludhiana
˕ायी लेखा सं./PAN NO: ACIPK6733G
अपीलाथŎ/Appellant
ŮȑथŎ/Respondent

िनधाŊįरती की ओर से/Assessee by :
Shri Sudhir Sehgal, Advocate
राजˢ की ओर से/ Revenue by :
Shri Manav Bansal, CIT, DR

सुनवाई की तारीख/Date of Hearing :
02/09/2025

उदघोषणा की तारीख/Date of Pronouncement : 12/09/2025

आदेश/Order

PER KRINWANT SAHAY, AM:

This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC Delhi dt. 18/06/2024 pertaining to Assessment Year
2012-13. 2. In the present appeal Assessee has raised following grounds:
“1. a). That the Ld. CIT(A) has erred in confirming the order of Assessing Officer both with regard to reopening of the case u/s 148
and also confirming of income as assessed by the Assessing Officer at Rs. 4,26,44,912/-, against the returned income of Rs. 10,80,97,29/-.
b).
That the confirming the action of the Assessing Officer in reopening the case u/s 148 is bad in law, since the case of the assessee has been reopened only on borrowed satisfaction without there being any independent application of mind by the Assessing
Officer concerned.

c).
That the Ld. CIT(A) has failed to appreciate that there was no nexus of the alleged information as available with the Assessing
Officer viz-a-viz conclusion to be drawn.
d). That the Ld. CIT(A) has erred in giving a finding with regard to the reopening of the case on page no. 16 to 20 in para.
2. That the Ld. CIT(A) has erred in confirming the addition of Rs.
31,83,51,83/- u/s 68 and disallowing the exemption as claimed at Rs. 31,83,51,83/- u/s 10 (38) of the Income Tax Act.
3. That the Ld. CIT (A) has failed to appreciate the documentary as provided to Assessing Officer during assessment proceedings and has only confirmed the addition on the basis of report of the Inv. Wing, Kolkata.
4. That no opportunity of cross examination of the statements recorded at the back of the assessee of various persons have been provided to the assessee and, as such, as per binding judgement of Hon’ble Apex Court in the case of Andaman Timber Industries, the very basis of addition as confirmed by the Ld. CIT(A) is not in order.
5. That the Ld. CIT(A) has failed to appreciate that when the documentary evidences have been furnished in respect of earning of long term capital gain and confirmation of addition only on surmises and conjectures, is wholly unjustified and not considering the number of case laws as cited before him.
6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.”
3. The facts as per assessment order and order of Ld. CIT(A) are that the original return of income for assessment year under consideration disclosing salary income from Bharat Box Factory and long term capital gain, which was claimed as exempt u/s 10(38) of the Income Tax Act was filed. The said return was accepted as it is u/s 143(1). Lateron, certain information was received from the Investigation Wing, Kolkata about the list of beneficiaries of bogus long term capital gain from the sale of shares of ‘Twenty First Century
India Ltd.’ As per said information, it was found that the assesse was 3

beneficiary of entry of Rs. 3,18,35,183/- in respect of transactions in shares of ‘Twenty First Century India Ltd.’ and, as such, the action was taken u/s 148 and the assessment of the assessee for the impugned assessment year was reopened on account of the above said fact. In response to notice u/s 148, the assessee filed the return of Income as per original return.
4. During the course of proceedings before the Assessing Officer, the assessee was confronted by the Assessing Officer with regard to bogus long term capital gain of Rs. 3,18,35,183/-, to which, the assessee filed its objection and also a detailed reply which have been reproduced by the Assessing Officer in his order and concluded that it was a bogus long term capital gain and, thus, disallowed the exemption claimed u/s 10 (38) and made an addition of Rs. 3,18,35,183/-.
5. The assessee filed appeal before the Ld. CIT(A) wherein, the reopening u/s 148 was also challenged and also detailed arguments were given on the basis of merits of the addition as made by the AO.
It was further contended that the addition was made only on the basis of statement/material recorded at the back of assessee, no such opportunity of cross examination hasbeen given and the assessee also relied on the contract notes of the purchases and sales of shares and STT had been paid on the sale of shares, the sale of shares was conducted through recognized stock exchange i.e.
Kolkata Stock Exchange. Various judgments were cited to support the arguments that this was a bonafide transaction. The Ld. CIT(A), however, dismissed the appeal of the assessee on the issue of reopening of the case u/s 148 and also on merits.
6. Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.
7. During the course of hearing he Ld. Counsel of the assessee argued that all the grounds of appeals as raised before the Hon’ble
Bench are identical to the case of ‘Sh. Avi Aggarwal’, bearing ITA
No.971/Chd/2024 and in that case, the Hon’ble Bench on merits of the case has allowed the appeal of the assessee vide order, dated
23.06.2025. A copy of that order has been filed before us and our attention was drawn to the various paragraphs of that order.
8. The Ld. CIT (DR) though, admitted that the facts in the present case are paramateria with the facts in the case of Sh.Avi Aggarwal but he relied upon the order of Ld. CIT(A) and AO.
9. The Ld. Counsel of the assessee relied upon his arguments with regard to reopening of the case u/s 148 as per paras 4 to 13 of the order in the case of ‘Sh. Avi Aggarwal’ and on merits relied upon the same order from paras 14 to 19 and para 21 of the order of Sh.Avi
Aggarwal.
10. We have gone through the arguments of the Ld. Counsel and the Ld. CIT (DR) and also the order as passed in the case of Sh.Avi
Aggarwal, as cited supra, and the facts in the present case are identical to the facts in the case of Sh. Avi Aggarwal in ITA
No.971/Chd/2024, order, dated 23.06.2025. In that case, the relief was allowed to the assessee on merits and the finding on merits in that case have been given in para 22 onwards in the case of Sh.Avi
Aggarwal, which is being reproduced herewith:-
‘22. We haveconsidered therival submissions and the order of AO and CIT(A) and have also considered the submissions
/arguments as advanced by the Ld. Counsel and CIT (DR) along with Paper Books, Brief Synopsis and 'judgment set' filed by the Ld.
Counsel. The factsare notdisputed byeither side and the same are borne out even from the record of AO and CIT(A). The assessee had declared long term capital gain on the sale of shares amounting to 17140 and claimed the same as exempt u/s 10(38).During the reassessment proceedings, the documentary evidences of purchase and sale of shares in the shape of contract notes and confirmed copy of account of the assessee in the books of the broker, Sh. Sunil Kumar Kayan have been furnished, along with the assessee's bank account, in which, the sale proceeds of shares have been received by the assessee through banking Channel. The AO/CIT(A), have not been able to find any fault/defect in such documentary evidence. We have also gone through theassessment orderfor theyear under consideration and for the Asstt. Year 2013-14, whichhas beenplaced in the Paper
Book along with computation of income for Asstt. Year 2013-14, wherein sale of shares of 'Twenty First Centre India Ltd.' amounting to40360 shares have been considered and assessed by Assessing
Officer. Thus, thetotal numberof shares as sold in Asstt. Year
2012-13 & 2013-14 works out to Rs, 57500/- (17140/- +40360/-). We havealso gonethrough the 'demat account' and find that balance shares of 98300 are still lying with the assessee. Such documentary evidences have not been disproved by the lower authorities and in the impugned assessment order, the total number of shares amounting to Rs. 1,55,800/- have been considered and entire sale value of Rs. 5,05,29,200/-considered for the purposes ofassessment whichis contrary to the assessments framed for Asstt.
Year 2013-14. The shares of 98300 lying in Demat account also shows that the assessment as framed for impugned year is not correct.
23. We have considered the findings given bythe
AssessingOfficer in the assessment order. We havealso considered the detailed writtensubmissions filedby the ld.
Counsel for the Assessee and his arguments. We have gone through the relevant papers and documents and we find that in this 6

case the Assessee got shares of 'Twenty FirstCentury India Ltd.
after amalgamation of three companies duly approved by the Hon'ble Calcutta High Court on 24.12.2010. As discussed above, before according approval for amalgamation, the Hon'ble
Calcutta High Court had taken a No ObjectionCertificate fromthe Income Tax Department which means that the Department had made necessary verification before giving No Objection for amalgamation /merger ofsuch companiesinto 'Twenty First Century India Ltd. Once, No Objection had been given by the Income Tax Department for the amalgamationand threecompanies forallotment ofshares by 'Twenty FirstCentury India Ltd., we fail to understand how the Income Tax Department has come out (on the basis of statement of Mr. Ashok Kumar Khemka) that 'Twenty FirstCentury India Ltd., wasjust apaper company. The Income Tax Department either did not make proper verification beforegiving No Objection to the Hon'ble High Court for the amalgamation of these companies or merely on the basis of a statement or findings regarding 'Twenty
First Century India Ltd. (the basis ofstatement ofShri AshokKumar
Khemka) is wrong.
Both cannot be correct at the same time. In our considered view, once the Income Tax Department had given/ filed ‘No Objection’ tothe Hon'bleCalcutta HighCourt onwhich theHon'ble
HighCourt approved the amalgamation of companies into 'Twenty First Century India Ltd., it is no case for the Department tocall thesame company, a paper company just after a year. Therefore, we are of this considered view that the findings given by the Assessing Officer in the assessment order and Ld. CIT(A) in his appellate order are not based on sound basis and correct appreciation of the situation. Thus, we have no hesitation in rejecting the findings of both these authorities below.
Accordingly, Assessee’s appeal onmerit is allowed. Apart fromaddition made on the basis ofsale ofshares of 'Twenty First
Century India Ltd.’, the Assessee has made addition of Rs.
1,11,11,519/- on the basis of sale of shares of DLC Exports Ltd. The Assessee right from the beginning has been arguing that it never dealt in the purchase andsale ofshares ofDLC Exports Ltd. but the Assessing Officermade theaddition of the same without bringing any documentary evidence against the Assessee. The ld.
CIT(A) has also confirmed it without bringing any relevant document for the same.”
10.1. Thus, following the above said finding in the case of Sh. Avi
Aggarwal, the disallowance of deduction u/s 10(38) amounting to 7

Rs. 3,18,35,183/- is hereby allowed in favour of the assessee and the assessee gets the relief on merits.
11. Since the appeal of the Assessee has been allowed on merit, therefore, discussion and findings on technical issue of reopening, just remains an academic issue. We are not inclined to discuss in detail this academic issue here and accordingly, Assessee’s appeal on this technical issue is dismissed just for statistical purposes.
12. In the result, appeal of the Assessee is partly allowed.
Order pronounced in the open Court on 12/09/2025 राजपाल यादव

कृणवȶ सहाय
(RAJPAL YADAV)

(KRINWANT SAHAY)
उपाȯƗ/VICE PRESIDENT

लेखा सद˟/ ACCOUNTANT MEMBER

AG

आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :
1. अपीलाथŎ/ The Appellant
2. ŮȑथŎ/ The Respondent
3. आयकर आयुƅ/ CIT
4. आयकर आयुƅ (अपील)/ The CIT(A)
5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH
6. गाडŊ फाईल/ Guard File

आदेशानुसार/ By order,
सहायक पंजीकार/