This article provides an exhaustive examination of the Income Tax Appellate Tribunal decision in ITA No. 1169/DEL/2019, where Bindu Garg contested the assessment by the ITO, Ward-39(4), New Delhi, for the assessment year 2015-16.
The case revolves around allegations against Bindu Garg of using penny stock transactions to generate bogus long-term capital gains (LTCG) and claim tax exemptions improperly. The appeal challenges the findings of the CIT(A) which upheld the initial assessment.
The defense argued that the transactions were legitimate, supported by proper documentation and banking channels, contrary to the claims made by the Assessing Officer (AO) that they were sham transactions aimed at evading taxes.
The tribunal noted significant flaws in the AO’s investigation, particularly the lack of independent verification of the transactions and reliance on hearsay. The Tribunal criticized the AO’s reliance on an investigation report without further corroboration.
The Tribunal overturned the lower authority’s decision, directing the AO to accept the LTCG as declared. It emphasized the need for substantive evidence over assumptions or external reports not substantiated within the case proceedings.
This case highlights critical considerations for the assessment of stock transactions in tax law, stressing the importance of concrete evidence and thorough investigation processes.
The decision in Bindu Garg vs. ITO reflects the judiciary’s stance on ensuring fairness in tax assessments, particularly in complex financial matters involving stock transactions.
Case Analysis: Bindu Garg vs. ITO, Ward-39(4), New Delhi for AY 2015-16 – ITA No. 1169/DEL/2019
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