Sumitra Surendra Gadodia Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, adjudicated an appeal filed by the assessee for Assessment Year 2014–15 against the order of the Commissioner of Income-tax (Appeals), NFAC. The dispute primarily related to addition on account of alleged non-genuine long-term capital gains (LTCG) arising from sale of shares of KDJ Holidayscapes Resorts Limited and a small addition under section 68 relating to SRK Industries shares.
The assessee had declared LTCG of ₹81.72 lakh from sale of shares of KDJ Holidayscapes Resorts Limited and claimed exemption. The Assessing Officer, relying on Investigation Wing reports and price movement analysis, treated the transaction as non-genuine and added the entire sale consideration of ₹88.27 lakh. The CIT(A) upheld the addition, holding that the transaction was part of a scheme to convert unaccounted money into exempt capital gains.
Before the Tribunal, the assessee submitted documentary evidence including contract notes, demat statements, bank statements, and broker records, establishing that the shares were purchased and sold through recognized stock exchanges and banking channels. It was also argued that no independent inquiry was conducted and no adverse material linked the assessee to any alleged accommodation entry.
The Tribunal observed that the assessee had furnished complete documentary evidence and discharged the burden of proving genuineness of transactions. It noted that the Assessing Officer relied mainly on investigation reports and third-party statements without conducting independent verification or providing cross-examination. The Tribunal further observed that similar issues involving the same scrip had been decided in favour of assessees in earlier decisions.
