Hareshkumar Dungarmal Jain Vs DCIT (ITAT Pune)
Income Tax Appellate Tribunal (ITAT) Pune Bench heard two appeals filed by assessees, including Hareshkumar Dungarmal Jain, against separate orders dated 3 August 2024 passed by the Commissioner of Income Tax (Appeals) / NFAC, Delhi, for Assessment Year (AY) 2018–19. Since both cases involved identical issues, they were disposed of through a common order, with ITA No. 1933/PUN/2024 taken as the lead case.
Facts of the Case
The assessee filed his return of income on 26 September 2018, declaring a total income of ₹30,63,633. Based on information that the assessee had received ₹28,39,899 during AY 2018–19 from transactions in shares and was a beneficiary of long-term or short-term capital gains or losses, the Assessing Officer (AO) reopened the case under Section 147 of the Income Tax Act, 1961. A notice under Section 148 was issued, and the assessee responded by filing a revised return on 26 April 2022, declaring total income of ₹28,13,270.
During assessment, the AO asked the assessee to justify his claim of exemption under Section 10(38) in respect of gains from shares of Kushal Tradelinks Ltd. The AO referred to a search conducted under Section 132 on 5 February 2019 in the Kushal Group, Ahmedabad, where it was found that the company was engaged in price rigging and issuing bogus accommodation entries. Rejecting the assessee’s explanation, the AO added the entire sale proceeds of ₹28,39,899 under Section 69A read with Section 115BBE, denying the exemption claim.
