JOINT COMMISSIONER OF INCOME TAX, AJMER vs. VIJETA LODHA, JAIPUR

In view of the above discussion, reasons and findings, the impugned order passed by Learned CIT(A) deleting the addition of Rs. 65,63,180/- deserves to be set aside. We order accordingly.

As noticed above, this addition was made by the Assessing Officer while observing that the assessee had failed to explain as to why any entity working in different cities would take so much pain in arranging bogus entry of LTCG without any benefit. In this regard, the Assessing Officer relied on what was unearthed on search/seizure operations conducted by the department in suchlike cases, including admissions by promoters/Directors of penny stock companies, share brokers to have provided bogus entries of LTCG in lieu of commission.

In this regard, Learned CIT(A) simply relied on decision by Co- ordinate Bench, ITAT, Jaipur Bench in the case of Vigyan Lodha, ITA No.169/JP/2022. In said decision, it was observed that the issue was consequential to the issue of LTCG claim and that since a finding was recorded that transaction of purchase and sale of shares and consequential LTCG could not be treated as bogus, the addition on account of notional commission was not sustainable, being consequential.

Herein, as noticed above, for the reasons recorded by us, the main addition made by the Assessing Officer has been sustained.

Learned CIT(A) without narrating or discussing the facts of present case observed that the decision by the Co-ordinate Bench was applicable Vijeta Lodha, Jaipur. to the facts of this case. How could Learned CIT(A) so observe when he did not narrate the facts of this case or compare the same with the facts in the decision by the Co-ordinate Bench, even while dealing the main addition?

When LTCG claim has been held to be bogus are based on sham transactions, there is no merit in the contention raised on behalf of the assessee that no such addition on account of payment of commission could be made. There is no explanation from the side of the assessee as to why any person or entity would provide suchlike accommodation entry without any charges, say commission herein.

As a result, the impugned order by Learned CIT(A) deleting the consequential addition of the amount of commission of Rs. 1,42,604/-paid by the assessee, deserves to be set aside.

Consequently, the appeal filed by the Revenue is partly allowed as regards the abovesaid two additions made by the Assessing Officer by File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 19/11/2025.