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Facts
The assessee claimed long-term capital gains (LTCG) exemption of Rs 1,57,78,700 under Section 10(38) for AY 2016-17. The Assessing Officer reopened the case under Section 147 and made additions for alleged bogus LTCG under Section 68 and deemed commission under Section 69C. These additions were based on information from the INSIGHT portal, alleging the assessee was a beneficiary of bogus LTCG in YICL shares, citing SEBI suspension of the scrip and mismatched financials. The assessee had acquired YICL shares through amalgamation and sold them between June 9 and June 24, 2015.
Held
The Tribunal held that the Assessing Officer's additions were made solely based on information from the INSIGHT portal, without conducting further inquiry or adducing material contrary to the assessee's claim. It noted that the assessee's share purchase transactions were previously accepted by the Revenue, and the SEBI order cited by the AO pertained to an inquiry period that predated the assessee's share sales. Relying on a coordinate bench decision with similar facts regarding the same scrip, the Tribunal found the AO's reliance misplaced and quashed the impugned additions.
Key Issues
Whether additions made under Section 68 and Section 69C for alleged bogus long-term capital gains are sustainable when based solely on borrowed satisfaction from an information portal without independent inquiry, and when the supporting evidence (SEBI order) relates to a different period than the assessee's transactions.
Sections Cited
147, 144B, 10(38), 148, 143(3), 69C, 68, 131(1)(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA&
This appeal is preferred by the assessee against the order dated 09.08.2024 of the Ld. National Faceless Appeal Centre (NFAC) Delhi, in DIN & Order No : ITBA/NFAC/S/250/2024-25/1067505369(1) arising out of the order dated 30.03.2022 u/s 147 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Assessment Centre, for AY: 2016-17.
Heard and perused the records. The first issue raised was that the reopening reasons are borrowed satisfaction and show non application of mind. Which has been opposed by ld. DR asserting that reopening reasons are self contained.
Now what comes up is that the appellant filed his return of income on 29.03.2017 declaring total income Rs 25,59,000; claimed long-term capital gains Rs 1,57,78,700 as exempt under section 10(38) of the Act. Notice dated 31.03.2021 under section 148 of the Act was issued and the case of the appellant was re-opened. The Assessing Officer in the order dated 30.03.2022 passed under section 147 r.w.S. 143(3), makes impugned addition of Rs 1,57,78,700 on the ground that the appellant has claimed bogus long-term capital gains and also makes an addition of Rs 7,88,935 under section 69C of of the capital gains. Which stands sustained by Ld. CIT(A).
The Assessing Officer makes the impugned addition under section 68 on the following grounds -
(a) that information is received from the INSIGHT portal that the appellant is one of the beneficiaries of bogus LTCG of total amount of Rs 1,62,02,500 in the shares of Yamini Investments Company Limited
(hereinafter referred to as YICL); based on search conducted in the case of Dutta & Tyagi group
(b) that the SEBI suspended trading in the scrip of YICL by their order dated 02.09.2010, which has been revoked by order dated 29.05.2012
(c) that the financials of YICL is not commensurate with the high share price on the recognised stock exchange (the BSE).
(d) Pre-arranged transaction
(e) Commission under section 131(1)(d) was sent by Assessing Office to the Investigation Wing, Delhi and Kolkata. The Assessing Officer states that reports from the respective Wings have been received. He has issued summons to the alleged exit providers and also deputed inspector for spot verifications.
Now what is relevant is that the appellant purchased 1,00,000 shares of Anax Com Trade Limited on 10.01.2013 for Rs. 1,25,000/- and 2,50,000 shares of Fidelo Power and Infrastructure Limited on 03.04.2014 for Rs. 2,50,000. The aforesaid two companies amalgamated into YICL and on amalgamation of Anax Com Trade Limited with YICL, the appellant received 80,000 shares of YICL and on amalgamation of Fidelo Power and Infrastructure Limited with YICL, the appellant received 2,00,000 shares of YICL. Thus, the purchase consideration of Rs 3,75,000 for 2,80,000 shares in YICL. The appellant sold the shares in YICL on the following dates:-
Date No of shares Sale price Sale consideration 09.06.2015 40,000 61.51 24,60,400 12.06.2015 5,000 55.48 2,77,400 15.06.2015 35,000 61,81 21,63,350 16.06.2015 40,000 60.67 24,26,800 18.06.2015 40,000 57.53 23,01,200 22.06.2015 40,000 51.89 20,75,600 23.06.2015 10,000 55.43 5,54,300 23.06.2015 25,000 55.73 13,93,250 24.06.2015 45,000 55.58 25.01.100 solely on the basis of information received from the INSIGHT portal and without any further enquiry and application of brining any further facts or details of alleged transaction any positive material contrary to the claim of the appellant. Further, the purchase transaction undertaken by the appellant during the previous year ended 31st March, 2013 and 31s March, 2014 has been accepted by the Revenue and no adverse inference has been drawn on the same that certainly needed brining on record at times of reopening the facts contrary to claim of assessee, to show how said shares were purchased by companies controlled, directly or indirectly, by Dutta and Tyagi group.
The shares are sold on the recognised stock exchange and through a SEBI- registered share broker and hence, suffered STT. The order of the Securities and Exchange Board of India (SEBI) is for enquiries conducted from September, 2013 to January, 2014 with regard to the behaviour of the scrip YICL. The appellant had sold his shares during the period 9th June, 2015 to 24th June, 2015, which is much after the period of enquiry and hence, the support by the Assessing Officer on the SEBI order in assessment is misplaced and shows that while recording reasons only INSIGHT portal information was relied. Reliance as placed on decision in the case of Ajay similar facts and the same scrip (YICL) and allowed the appeal of the appellant therein, also comes to the benefit of assessee before us.
Ld. CIT(A) seems to have applied no rational independently considering the peculiar facts but the impugned order of ld. CIT(A) shows that as if facts of some other assessee involving shares of Pearl Electronics were considered.
We are thus inclined to sustain the ground no. 1 and 2 and allow the appeal of assessee. The impugned additions are quashed.
Order pronounced in the open court on 17.12.2025