Amit H. Patel (HUF) Vs DCIT (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai allowed the appeals filed by Amit H. Patel (HUF) for Assessment Years 2010–11, 2011–12, 2013–14, and 2014–15, deleting additions made under Sections 68 and 69 of the Income-tax Act in respect of alleged bogus Long-Term Capital Gains (LTCG) from penny stocks and commission on accommodation entries.
Background
The assessee filed the return of income for AY 2010–11 on 6 September 2010, declaring ₹24,09,303. A search and seizure operation under Section 132 was conducted on 9 April 2015. On the date of search, the assessment for AY 2010–11 had attained finality and was an “unabated assessment.”
During assessment under Section 153A, the Assessing Officer (AO) made additions of ₹10.43 crore under Section 68 (alleged bogus LTCG) and ₹46.64 lakh under Section 69 (commission on accommodation entries), holding that share transactions in Comfort Intech Ltd. and Splash Media & Infra Ltd. were non-genuine. The AO relied on investigation reports and general findings about modus operandi of certain companies alleged to be engaged in providing accommodation entries.
The assessee contested the additions on the grounds that:
- No incriminating material was found during the search pertaining to these transactions.
- All transactions were carried out through banking channels and supported by documentary evidence (demat account, contract notes, payment of Securities Transaction Tax).
ITAT Findings – Jurisdiction under Section 153A
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