JYOTI RAKESH ROONGTA,KOLKATA vs. ITO, WARD-43(5), KOLKATA

(A.Y. 2012-2013) Jyoti Rakesh Roongta Faceless Appeal Centre (NFAC), Delhi dated 04.01.2024 passed for A.Y. 2012-13.

The assessee has taken nine grounds of appeal, but her grievances revolve around a single issue, namely whether addition on account of bogus long-term capital gain amounting to Rs.38,97,080/- deserves to be made in the hands of the assessee or not.

Brief facts of the case are that the assessee has filed her return of income on 23.03.2013 declaring income of Rs.11,36,360/-. The ld. Assessing Officer has reopened the assessment by issuance of a notice under section 148. The ld. Assessing Officer was of the view that he got an information from the ld. DDIT (Inv.), Unit-2(1), Kolkata exhibiting that assessee has traded in penny stock shares of DLS Exports Pvt. Ltd. and earned bogus LTCG of Rs.38,97,080/-. The assessee in response to the notice of ld. Assessing Officer contended that she has not sold any shares of DLS Exports Pvt. Ltd. She further submitted that she has not earned any capital gain amounting to Rs.38,97,080/- and nor claimed it as an exempt. The ld. Assessing Officer did not pay any heed to the submission of the assessee and passed the assessment order on 27.12.2019 whereby he made an addition of Rs.38,97,080/- to the total income of the assessee.

The assessee again reiterated her stand in the statement of facts filed before the ld. CIT(Appeals). The ld. CIT(Appeals) did not (A.Y. 2012-2013) Jyoti Rakesh Roongta verify all these contentions and mechanically concurred with the ld. Assessing Officer.

The ld. Counsel for the assessee while taking us through the paper book contended that in the computation of income, there is no such claim of capital gain exemption under section 10(38)(b). He also drew our attention towards Bank statement where it does not show credit of any amount on sale of shares. The ld. Counsel for the assessee thereafter took us through paragraph no. 43 of the paper book where the assessee has made a specific reply to the ld. Assessing Officer against his reopening. The ld. Counsel for the assessee thereafter drew our attention towards sub-para 6 and 9 of the statement of facts. On the strength of all these documents, he submitted that no such capital gain deserves to be assessed in the hands of the assessee.

The ld. D.R., on the other hand, relied upon the assessment order.

We have duly considered the rival contentions and gone through the record carefully. On page no. 43 of the paper book, the assessee has placed on record a letter written to the ld. Assessing Officer submitting therein that she has not sold shares in this assessment year. This letter reads as under:-

Similarly alongwith Form 35, the assessee has annexed statement of facts. In this statement, apart from other submissions, the specific pleadings made in paragraphs no. 6 & 9 to be noticed:- “6. The assessee filed objections to the Notice issued u/s 148 on 04.11.2019 wherein it is very strange to point out that the assessment was reopened on alleged ground of the appellant earning LTCG of Rs.38,97,080/- on sale of penny stock of DLS Export Private Limited while in the disposal of 4

On perusal of this specific submission, we are of the view that neither the ld. Assessing Officer nor the ld. CIT(Appeals) has categorically rejected this claim of the assessee. The assessment order is based on general information that assessee has sold the shares. The ld. Assessing Officer has nowhere put the charge against the assessee specifically. On the other hand, the assessee has demonstrated from the Bank Statement, Computation of Income and her stand before the revenue authorities that she has not sold any shares during this assessment year and earned capital gain, which was claimed as exempt. Therefore, we are of the view that ld. Assessing Officer has reopened the assessment on erroneous formation of belief. He has made the addition without any specific details possessed by him. The addition is not sustainable. Accordingly, we allow this appeal and delete the addition made by the ld. Assessing Officer.