SAMIRBHAI RASIKLAL SHAH,AHMEDABAD vs. THE ITO, WARD-5(3)(2), AHMEDABAD
Facts
The assessee filed income tax return for AY 2018-19. Following information from a search, the AO found the assessee received accommodation entries of Rs.14,58,475/- from M/s Ishan Infrastructure and Shelters Ltd (IISL), disallowing alleged long-term capital loss as bogus and adding it as unexplained investment u/s 69C. The CIT(A) dismissed the assessee's appeal due to repeated non-compliance.
Held
The Tribunal restored the matter to the Assessing Officer for de novo adjudication, allowing the assessee a final opportunity to present all necessary documents and explanations. A cost of Rs.10,000/- was imposed on the assessee for repeated non-compliance, to be deposited in the "Prime Minister's Relief Fund".
Key Issues
Whether the disallowance of long-term capital loss and addition as unexplained investment under Section 69C for alleged bogus accommodation entries was justified, and whether the CIT(A) erred in dismissing the appeal due to non-compliance, thereby violating principles of natural justice.
Sections Cited
Section 250, Section 69C, Section 132, Section 148A, Section 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: MS. SUCHITRA R. KAMBLE
This appeal filed by the assessee is directed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "CIT(A)" for short], dated 15.10.2025 passed under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act" for short] for the Assessment Year (AY) 2018-19.
The assessee has raised following grounds of appeal : -
“1.1 The order passed u/s 250 passed on 15.10.2025 for AY 2018-19 by NFAC, [CIT(A)], Delhi (for short CIT(A)) upholding the addition of Rs.14,58,475/- as unexplained investment u/s 69C in respect of LTC loss on sale of shares of Ishan Infrastructure and Shelters Ltd., (for short ‘IISL’) is wholly illegal, unlawful and against the principles of natural justice.
2.1 The ld. CITIA), has grievously erred in law and or on facts in not appreciating that there was a sufficient cause for failure to upload the
ITA No. 2479 /Ahd/2025 Samirbhai Rasiklal Shah Vs. ITO Assessment Year: 2018-19 Page 2 of 4 written submission with documents in response to notice dtd.13.03.2025. Even otherwise, the appellant was allowed very insufficient time and the tax consultant was engaged with tax and GST matters. Thus there was violation of principles of natural justice.
2.2 The Ld. CIT(A) has failed to appreciate that the appellant had furnished the necessary documents/material in relation to the impugned LTC Loss during the course of assessment proceedings which ought to have been taken into consideration while disposing the present appeal by CIT(A).
3.1 The Id. CITIA) has grievously erred in law and or on facts in upholding that the LTC Loss on sale of shares of Ishan Infrastructure and Shelters Ltd. was bogus and thereby making addition of Rs. 14,58,475/- as unexplained investment u/s 69C. The Id. CTT(A) ought not to have appreciated that the computation of LTC Loss of Rs. 14,58,475/- in respect of IISL was erroneous.
3.2 That the in the facts and circumstances of the Id. CIT(A), ought not to have upheld the addition of Rs.14,58,475/- as unexplained investment u/s 69C in respect of the LTC Loss on sale of shares of Ishan Infrastructure and Shelters Ltd. was bogus.”
The brief facts of the case are that the assessee filed return of income for AY 2018-19, declaring total income of Rs.19,43,190/-. During the course of a search u/s 132 of the Act in the case of Jignesh Shah & Sanjay Shah, information was received that the assessee allegedly received accommodation entries from M/s Ishan Infrastructure and Shelters Ltd (IISL), totalling to Rs.14,58,475/-. The Assessing Officer issued notices u/s 148A and 148, and assessment was completed on 21.03.2023 disallowing the alleged long-term capital loss as bogus and adding it as unexplained investment u/s 69C of the Act. The appeal before Ld. CIT(A) was dismissed on the ground of non-compliance.
ITA No. 2479 /Ahd/2025 Samirbhai Rasiklal Shah Vs. ITO Assessment Year: 2018-19 Page 3 of 4 4. On perusal of the records, it is observed that the assessee was afforded several opportunities of hearing before the Ld. CIT(A) on 08.10.2024, 20.03.2025, 29.08.2025 and 15.09.2025 to furnish details, clarifications and explanations to substantiate the source of unexplained investment under section 69C of the Act. However, the assessee failed to effectively comply with the notices and did not place the requisite material on record. We further observe that even during assessment proceedings, the assessee could not fully substantiate the genuineness of the impugned transaction to the satisfaction of the Assessing Officer.
Before us, the Ld. Counsel for the assessee submitted that if one final opportunity is granted, the assessee shall fully cooperate and furnish all necessary documents, bank statements, confirmations and explanations before the Assessing Officer.
Considering the totality of facts and in the interest of justice, we are of the considered view that the matter deserves to be restored to the file of the Assessing Officer for de novo adjudication after affording reasonable opportunity of being heard to the assessee.
However, keeping in view the repeated non-compliance, we deem it appropriate to impose a cost of Rs.10,000/- (Rupees Ten Thousand only) on the assessee, which shall be deposited in the “Prime Minister’s Relief Fund”. The receipt of the same shall be furnished before the Jurisdictional Assessing Officer, who shall take it on record before passing the consequential order. The assessee is directed to file all relevant documents, bank statements and explanations and to strictly comply with
ITA No. 2479 /Ahd/2025 Samirbhai Rasiklal Shah Vs. ITO Assessment Year: 2018-19 Page 4 of 4
all notices issued by the revenue authorities without seeking unnecessary adjournments.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 28th January 2026
Sd/-
(SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 28th day of January, 2026 Btk* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order
