Hasmukh Ugarchand Gadhecha Vs ITO (ITAT Ahmedabad)
Reopening Beyond 4 Years Quashed – Investigation Wing Info Without Independent Enquiry Invalid – LTCG Penny Stock Addition u/s 68 Deleted – ITAT Ahmedabad
The assessee’s completed scrutiny assessment u/s 143(3) was reopened after four years alleging bogus LTCG from Sawaca Business Machines Ltd. based on Investigation Wing information relating to accommodation entries. ITAT observed that all primary facts, including exempt LTCG claim, were already examined during original assessment and the AO failed to demonstrate any failure by the assessee to disclose material facts.
The Tribunal held that reopening beyond four years is barred by the first proviso to sec 147 when the AO merely relies on general information without independent verification or identifying specific non-disclosure. The reasons recorded showed lack of application of mind, including incorrect assumption that no scrutiny assessment existed and failure to pursue proceedings u/s 153C despite third-party search material.
Accordingly, notice u/s 148 and reassessment order were quashed as without jurisdiction, and additions u/s 68/69C became academic. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 26/12/2025 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2013-2014.
