Vijay Kothari Vs DCIT (ITAT Indore)
The Income Tax Appellate Tribunal (ITAT), Indore, allowed the appeal for statistical purposes and restored the matter to the Assessing Officer (AO) for fresh verification of key factual issues relating to the claim of long-term capital gain on sale of shares.
The assessee had filed a return declaring total income of ₹9,79,790 and reported exempt long-term capital gain of ₹26,04,470 from sale of 6,000 shares of Sunrise Asian Ltd. The Assessing Officer, during scrutiny, examined the transactions and concluded that the capital gain was bogus, treating it as income from undisclosed sources. The Commissioner (Appeals) upheld this finding.
Before the Tribunal, the assessee explained the entire transaction, including purchase of shares of Conart Traders Ltd., payment through bank, conversion into demat form, subsequent amalgamation into Sunrise Asian Ltd., and sale through a registered broker on the stock exchange. Documentary evidence such as share certificates, bank passbook, demat account statements, and contract notes were relied upon.
The Tribunal also considered the issue of delay of 382 days in filing the appeal. It accepted the assessee’s explanation that notices and the appellate order were served on an incorrect email ID not provided in Form 35, resulting in delayed filing. Finding sufficient cause and relying on principles favoring substantial justice, the delay was condoned and the appeal admitted.
