R. SHOBHA LODHA,CHENNAI vs. ITO, NON CROP. WARD 9(1), CHENNAI

This appeal by the assessee is arising out of the order of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in Order No.ITBA/NFAC/S/250/2022- 23/1051232494 (1) dated 24.03.2023. The assessment was framed by the Income Tax Officer, Non-Corporate Ward 9(1), Chennai for - 2 - 2016-17 u/s.147 r.w.s.144 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 30.09.2021.

At the outset, it is noticed that this appeal is barred by limitation by 125 days. The assessee has filed condonation petition for condoning the delay along with affidavit. The order of CIT(A) is dated 24.03.2023 and as per Form No.36, the date of communication of order is also mentioned as 24.03.2023. The appeal was filed by assessee in Tribunal on 25.09.2023, thereby there is a delay of 125 days. The assessee contended in her petition for condonation of delay that the last date for filing of appeal before Tribunal fell on 24.05.2023 however, this could not be filed and hence, there was a delay of 125 days for the reason that the CIT(A) order got misplaced and the orders from website were not available due to technical errors or due to the assessee not well conversant with the technology. The ld.counsel for the assessee contended that the cause is reasonable and the delay of 125 days may be condoned. On the other hand, the ld.Senior DR opposed condonation of delay.

The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in assessing the Long Term Capital Gain arising out of purchase and sale of shares as unexplained credit u/s.68 of the Act and disallowed the claim of exemption u/s.10(38) of the Act as claimed by assessee. For this, assessee has raised various grounds, which are argumentative, exhaustive and factual, hence need not be reproduced.

Brief facts are that the assessee an individual filed her return of income for the relevant assessment year 2016-17 on 24.03.2018. The ITO received information from DDIT(Inv), Unit-I(I), Vadodara that the assessee has traded in one penny scrip namely Rekvina Laboratories Ltd., and sold the shares at a value of Rs.9,51,795/-. On verification of ITR-1 filed by assessee, the AO noted from the investigation report of the investigation wing that this company is engaged in providing entry i.e., profit on sale of shares in the shape of Long Term Capital Gain, which is claimed to have been exempt u/s.10(38) of the Act, hence the AO reopened the assessment by issuing notice u/s.148 of the Act dated 06.03.2020. The AO after

The CIT(A) after going through the entire facts upheld the action of AO by observing in para 4.3.13 & 4.3.14 as under:- 4.3.13 On the basis of above discussion, following facts emerge: (i) The appellant had purchased these shares in cash and there are no broker notes available with the appellant. (ii) The appellant had not shown these transactions in the Return of Income filed by the appellant and had claimed it to be exempted u/s 10(38) without claiming it in the Return of Income. This raises suspicion that the appellant wanted to conceal these transactions on the pretext of being exempted, so that she avoids the scrutiny of this transaction from the Income Tax Department. (iii) The appellant had not traded in any shares except the shares of Ms RRL in FY 2014-15. 2015-16 & 2016-17, thereby, indicating that this was an isolated transaction in three years and appellant is not well-versed with the stock market. (iv) The appellant had invested in huge number of shares of penny stock M's RLL without any knowledge of individual scrips and ignoring the financials of this company, leading to huge profits in this scrip, thereby, raising the suspicion that the appellant was part of cartel managing the accommodation entries of exempted LTCG in this Scrip.

We have heard rival contentions and gone through facts and circumstances of the case. Before us, the assessee could not produce any evidence that the transactions entered into by the assessee is a genuine transaction rather the assessee apart from bald stated that the transaction is genuine, could not produced any evidence. We noted that the AO has carried out enquiry and rightly reached to a conclusion that the assessee has routed here own money by way of sale of shares and hence, he has rightly considered the entire sale of Rs.9,51,795/- as ‘income from other sources’ and assessed u/s.68 of the Act. The CIT(A) has also rightly upheld the - 6 - AO and hence, we confirm the order of CIT(A). Accordingly, the appeal of the assessee is dismissed.

In the result, the appeal filed by the assessee is dismissed.