The Income Tax Appellate Tribunal (ITAT) Delhi Bench “F” pronounced its judgment on the appeal filed by Pooja Jain against the order of the Commissioner of Income Tax (Appeals)-37, New Delhi dated 27.03.2019. The case was heard by Shri Kul Bharat, Judicial Member, and Dr. BRR Kumar, Accountant Member.
The appellant, Mrs. Pooja Jain, filed an appeal for the assessment year 2014-15 against the order of the CIT(A)-37, New Delhi. The appeal was registered as ITA No.5154/Del/2019. The appellant, residing at J-3/3, West Jyoti Nagar, Shahdara, Delhi, contested the addition of Rs. 23,12,642/- made by the Income Tax Officer, Ward-56(4), New Delhi, under Section 68 of the Income Tax Act, 1961, treating the long term capital gain (LTCG) from the sale of shares as unexplained income.
The appellant raised several grounds of appeal, contending that the Assessing Officer (AO) conducted a complete scrutiny despite the case being selected for limited scrutiny under the Computer-Assisted Scrutiny Selection (CASS). The appellant argued that the AO and CIT(A) ignored the evidence provided, including contract notes, bank statements, Demat account statements, and share certificates, which substantiated the genuineness of the share transactions.
The appellant further argued that the addition was made based on presumptions and information gathered in other cases, without any adverse material specifically related to her case. The appellant also contended that the AO’s reliance on SEBI findings and statements recorded in other cases violated the principles of natural justice, as no opportunity for cross-examination was provided.
Despite several opportunities, the appellant did not attend the hearing. Therefore, the Tribunal decided the appeal ex parte based on the material available on record. The Tribunal observed that the AO had rejected the appellant’s claim for LTCG exemption under Section 10(38) and added the amount to the income declared by the appellant. The CIT(A) had upheld this addition, citing similar cases where dubious share transactions were used to account for undisclosed income.
The Tribunal referred to the findings of the CIT(A), which noted that the share transactions were arranged to create bogus profits in the garb of tax-exempt LTCG. The CIT(A) had relied on various judicial precedents that supported the view that such transactions were sham and intended for tax evasion.
The Tribunal found no reason to interfere with the CIT(A)’s findings, as the appellant had not provided any contrary material to dispute the conclusions drawn by the lower authorities. Consequently, the Tribunal dismissed the appeal, affirming the addition of Rs. 23,12,642/- as unexplained income under Section 68 and the related addition of Rs. 70,130/- under Section 69C for commission paid for accommodation entries.
Order pronounced in the open court on 2nd August 2023.
sd/- (DR. BRR KUMAR) ACCOUNTANT MEMBER
sd/- (KUL BHARAT) JUDICIAL MEMBER
Date: 02/08/2023
MP
Copy forwarded to:
ASSISTANT REGISTRAR, ITAT, New Delhi
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