Case Number: ITA 1508/DEL/2019
Appellant: Narender Aggarwal (HUF), New Delhi
Respondent: ITO, Ward-39(4), New Delhi
Assessment Year: 2014-15
Result: 2014-15
Case Filed On: 2019-02-22
Order Type: Final Tribunal Order
Date of Order: 2020-01-08
Pronounced On: 2020-01-08
Bench: Delhi ‘SMC’ Bench, New Delhi
Member: Shri H.S. Sidhu, Judicial Member
This case involves the appeal filed by Narender Aggarwal (HUF), New Delhi against the order of the Commissioner of Income-Tax (Appeals)-13, New Delhi, for the assessment year 2014-15. The primary issue is the dispute over the addition of long-term capital gains on the sale of shares of M/s. Kappac Pharma Ltd., which were treated as bogus by the Assessing Officer.
The appellant, Narender Aggarwal (HUF), filed a return of income declaring long-term capital gains of Rs. 21,05,853/- on the sale of shares of M/s. Kappac Pharma Ltd. The Assessing Officer (AO) added this amount as unexplained cash credit under Section 68 read with Section 115 BBE of the Income Tax Act, treating the transaction as bogus.
The CIT(A) upheld the AO’s decision, leading to the present appeal before the Income Tax Appellate Tribunal (ITAT).
During the hearing on 08/01/2020, both the assessee and the Revenue presented their arguments. The Tribunal examined the case details, documentary evidence, and previous judgments in similar cases.
The AO disallowed the long-term capital gains claimed by the assessee, arguing that the transactions in shares of M/s. Kappac Pharma Ltd. were manipulated to evade taxes. The CIT(A) upheld this view, relying on the findings of the Investigation Wing of the Income Tax Department in Kolkata and observations from NSE/SEBI/SIT, which suggested that the shares were part of a bogus arrangement.
The Tribunal noted that the shares of M/s. Kappac Pharma Ltd. had been declared bogus by the ITAT in the case of Udit Kalra vs. ITO (ITA No. 6717/Del/2017), a decision upheld by the Delhi High Court. Given this precedent, the Tribunal found no reason to deviate from the previous findings that the transactions were part of a bogus scheme.
The assessee raised several legal grounds, including the lack of opportunity to cross-examine witnesses and the reliance on statements from unrelated cases. However, the Tribunal observed that the Delhi High Court in Udit Kalra’s case did not give weightage to these technical grounds, given the overwhelming evidence of the shares being bogus.
In view of the above findings, the Tribunal upheld the CIT(A)’s order, dismissing the appeal filed by Narender Aggarwal (HUF). The Tribunal emphasized that the precedent set by the Delhi High Court in Udit Kalra vs. ITO was binding and applicable to this case.
In the result, the appeal of Narender Aggarwal (HUF) was dismissed, affirming the addition of Rs. 21,05,853/- as unexplained cash credit under Section 68 read with Section 115 BBE of the Income Tax Act.
Decision: Appeal dismissed.
Signed by: Shri H.S. Sidhu, Judicial Member
Date: 08.01.2020
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