RANJANBEN CHUNILAL GADA,MUMBAI vs. TIO 34(3)(2), MUMBAI

ITA 5842/MUM/2025Status: DisposedITAT Mumbai27 January 2026AY 2014-1524 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged the initial onus by providing all relevant documentary evidence to prove the share transactions. It was undisputed that the shares were purchased through a registered broker from the stock exchange, with payments made via banking channels, and delivery received in the demat account. All contract notes, payment of taxes like STT, stamp duty, and SEBI turnover tax were on record. The company was listed on the BSE and never delisted. The Tribunal relied on a coordinate bench decision in RNR Trading Pvt Ltd Vs. ITO (ITA No. 3697/Mum/2024) which dealt with the same script and deleted additions. The revenue failed to rebut the documentary evidence or prove the assessee's involvement in script manipulation. Therefore, adhering to judicial consistency and discipline, the Tribunal directed the AO to delete the additions made under Sections 69A and 69C. Regarding the validity of reassessment proceedings (Ground No. 1), since the additions were deleted on merits, this legal ground was rendered academic and left open.

What were the facts?

The assessee, Ranjanben Chunilal Gada, filed an appeal against the order of the CIT(A) dated 28.07.2025, which upheld reassessment proceedings under Section 147 read with Section 144B of the Income-tax Act, 1961, for Assessment Year 2014-15. The reassessment order dated 18.05.2023 made additions of Rs. 69,67,752/- under Section 69A for alleged sale proceeds of equity shares and Rs. 1,39,355/- under Section 69C for alleged commission. These additions were based on information received from an investigation into a syndicate led by Shri Naresh Jain, who allegedly provided accommodation entries for Long-Term Capital Gains (LTCG). The assessee contended that the reassessment proceedings were invalid due to lack of proper information provided during the Section 148A(d) stage and that the additions were unsubstantiated, as the share transactions were genuine, conducted through recognized exchanges, and supported by documentary evidence.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 read with Section 144B are valid, considering the alleged deficiencies in providing information during the Section 148A(d) stage and the absence of independent verification by the Assessing Officer (AO)? (Question of law and fact, concerning Sections 147, 148A, 144B). The assessee argued that the order under Section 148A(d) was passed without providing necessary documents, violating Supreme Court directions in Ashish Agrawal, and that the information from the INSIGHT portal was deficient and lacked independent verification. The revenue's contentions are not explicitly recorded in this section of the judgment. 2. Whether the additions of Rs. 69,67,752/- under Section 69A and Rs. 1,39,355/- under Section 69C are justified, given that the assessee claims to have purchased and sold shares through recognized stock exchanges via banking channels, held them for over a year, and provided all supporting documentary evidence which the AO failed to rebut? (Question of law and fact, concerning Sections 69A, 69C, 10(38)). The assessee contended that the information from the INSIGHT portal was non-specific, no connection was proven between the assessee and the alleged entry operator, and no direct evidence of bogus transactions was available. The assessee also detailed the legitimate process of share purchase and sale, supported by evidence, and highlighted that the transactions were executed on SEBI-monitored systems. The revenue's contentions are not explicitly recorded in this section of the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148A,Section 69A,Section 69C,Section 10(38),Section 68

AI-generated summary — verify with the full judgment below

Before: SHRI ANIKESH BANERJEE

For Appellant: Shri B.V. Jhaveri,AR
For Respondent: Shri Umashankar Prasad, (CIT DR)
Hearing: 04.12.2025Pronounced: 27.01.2026

PER PRABHASH SHANKAR [A.M.] :-

The present appeal arising from the appellate order dated

28.07.

2025 is preferred by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless

Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 147 r.w.s 144B of the Income-tax Act, 1961

[hereinafter referred to as “Act”] dated 18.05.2023 for the Assessment

Year [A.Y.] 2014-15. AL

The order continues below.

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