Kimaya Anurag Agarwal Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad restores penny stock LTCG case for fresh assessment – Assessee claims genuine documents were ignored, seeks opportunity to prove transactions
Assessee earned Long-Term Capital Gain of ₹2.28 crore from sale of shares of Regency Trust Ltd. & claimed exemption u/s 10(38). AO reopened the assessment based solely on Investigation Wing information alleging that Regency Trust was a penny stock used for bogus LTCG accommodation entries. Without conducting any independent enquiry or providing any material to Assessee, AO treated the LTCG as bogus & taxed it as unexplained income. Assessee claimed to have submitted contract notes, broker bills, confirmations & other evidences, but the AO ignored them.
In appeal, Assessee again stated that genuine documentary evidence existed. However, CIT(A) dismissed the appeal ex-parte, stating that despite multiple opportunities Assessee did not furnish details. Thus, the addition was confirmed without examining the evidence or giving any meaningful hearing.
Before Tribunal, Assessee argued that AO relied only on Investigation Wing report & did not verify the transactions independently. It was also submitted that no cross-examination of persons whose statements were relied upon was offered, which violated natural justice. Assessee assured Tribunal that, if given one opportunity, all bank statements, contract notes & supporting documents will be produced to prove the genuineness of the share transaction.
