Raj Kumar Kabra Vs ITO (ITAT Kolkata)
Summery: The ITAT Kolkata allowed Raj Kumar Kabra’s appeal against the CIT(A)’s order, which had upheld the Assessing Officer’s (AO) decision to reject the assessee’s claim of long-term capital gains (LTCG) from the sale of shares of M/s. Unno Industries Ltd. The AO had concluded that the LTCG was bogus based on a general investigation report and common practices observed in similar cases, adding the entire sale proceeds to the assessee’s income and denying the exemption under section 10(38) of the Income Tax Act. The AO dismissed the evidence provided by the assessee to support the genuineness of the share transactions.
The CIT(A) affirmed the AO’s findings, relying on “circumstantial evidence,” “human probabilities,” and “rules of suspicious transactions,” despite the lack of direct evidence contradicting the assessee’s submissions. The ITAT, however, emphasized that decisions should be based on concrete evidence rather than generalizations, suspicion, or conjectures. The Tribunal noted that the revenue authorities’ conclusions stemmed from a general investigation report without specific evidence against the assessee, who was not confronted with any adverse material. Citing several similar cases decided by the Kolkata ITAT and jurisdictional High Courts that had deleted such additions, the Tribunal held itself bound by these precedents. Consequently, the ITAT allowed the assessee’s appeal and directed the deletion of the addition made under section 68 of the Act.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
