Assessment Year: 2014-15
This case analysis details the appeal by Suman Poddar against the order by the CIT(A)-13, New Delhi, regarding the assessment year 2014-15. The central issue revolves around the treatment of alleged long-term capital gains (LTCG) claimed by Poddar, which were treated as non-genuine by the assessing officer and upheld by the CIT(A).
Suman Poddar reported LTCG of Rs. 73,77,806 as exempt under section 10(38) of the Income Tax Act, which was subsequently challenged by the Income Tax Department. The gains were attributed to shares sold that were allegedly part of an accommodation entry scheme, according to the department’s investigation.
During the proceedings, Poddar contended the authenticity of the transactions and provided extensive documentation, including bank statements, dematerialization records, and a series of legal and share amalgamation documents. However, the department presented evidence suggesting the gains were orchestrated through pre-arranged trades to evade taxes.
The Tribunal examined the extensive documentary evidence against the background of the department’s investigation, finding that the pattern and timing of the transactions, alongside the negligible operational scale of the involved companies, suggested the gains were not credible. The Tribunal relied on precedents and similar cases to affirm the non-genuineness of the LTCG claimed.
The appeal was dismissed, upholding the lower authorities’ decision, concluding that the transactions were an orchestrated scheme to misuse the provisions of the Income Tax Act intended for genuine capital gains.
The case underlines the critical judicial stance against the misuse of stock market mechanisms to claim bogus tax exemptions, reinforcing the scrutiny over such transactions.
The order was pronounced in open court, emphasizing the transparency and finality of the judiciary’s decision-making process.
ITA No. 1006/DEL/2019 – Suman Poddar vs. ITO, Ward-39(5), New Delhi
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