The Income Tax Appellate Tribunal (ITAT), Ranchi Bench, has set aside the order of the Commissioner of Income Tax (Appeals) (CIT(A)) and directed the reassessment of the long-term capital gain (LTCG) claim for the assessment year 2014-15. The tribunal’s decision came after it found that new evidence submitted by the assessee had not been considered during the earlier proceedings.
The appellant, Raj Kumar Gupta, a proprietor of Sitaram Jewellers, had earned LTCG of Rs.1,91,276 from the sale of shares worth Rs.74,30,512/. The assessee claimed this income as exempt under Section 10(38) of the Income Tax Act, 1961.
During the scrutiny, the Assessing Officer (AO) questioned the genuineness of the LTCG, alleging that the shares involved were traded through a broker, B. R. Jalan Securities Pvt. Ltd., known for engaging in unfair trade practices. The AO claimed that the shares were part of a manipulated transaction, involving artificially inflated prices. Based on this, the AO treated the transaction as a sham and added the entire amount of ₹74,30,512/- to the assessee’s income, applying tax under Section 115BBE.
Get a Complete Kit of Essential Books for Daily Practice, Click Here
The assessee, aggrieved by the addition, appealed to the CIT(A). However, the CIT(A) upheld the AO’s decision, stating that the transactions were manipulated and amounted to colorable devices. This led to the filing of the present appeal before the ITAT.
During the appeal, the PS Paul,counsel for the assessee submitted new evidence, including a detailed explanation of the transactions, the purchase of shares through an Indian Overseas Bank account, and the submission of broker’s notes.
Assesee’s Counsel argued that the purchases were made through account payee cheques and properly reflected in the books of accounts. Furthermore, he contended that the transactions did not violate SEBI and Stock Exchange Rules, challenging the AO’s findings.
Get a Complete Kit of Essential Books for Daily Practice, Click Here
After hearing both parties, the Two member Bench comprising of Partha Sarathi Chaudhary(Judicial Member) and Ratnesh Nandan Sahay(Accountant Member) found that the new evidence had not been considered by the CIT(A) in the previous order. As a result, the tribunal decided to remand the matter back to the CIT(A) to review the additional evidence and take an appropriate decision.
In Conclusion,the case is now set for further examination, and the appeal was allowed for statistical purposes.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
