VISHAL SINGHAL,GHAZIABAD vs. ITO,WARD 2(2)(1), GHAZIABAD

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 P a g e | 3 Mr. Vishal Singhal (AY:2016-17) the Act, on account of deemed ad-hoc commission paid at the rate 5 per cent 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Dutta & Tyagi group (b) that the SEBI suspended trading in the scrip of YICL by their order dated 02.09.2010, which has been revoked by order dated 29.05.2012 (c) that the financials of YICL is not commensurate with the high share price on the recognised stock exchange (the BSE).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

We find that the Assessing Officer has made the impugned addition 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

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.