Mukesh Vallabhdas Shah Vs ITO (ITAT Mumbai)
ITAT Mumbai held that capital gains cannot be treated as unaccounted income under section 68 of the Income Tax Act since AO nowhere proved that assessee himself was involved in price rigging of any of the scrips. Accordingly, appeal of assessee stands allowed.
Facts- The present appeals have been filed by the assessee challenging the impugned order dt. 28.01.2025 passed under section 250 of the Income Tax Act, 1961, by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2015-16. The solitary ground raised by the assessee relates to challenging the order of CIT(A) in confirming the addition made u/s 68 of the Act.
Conclusion- Held that it is nowhere proved that assessee himself was involved in price rigging of any of the scrips and AO have also not conducted any independent investigations on this aspect and had fully relied upon the observations of the Investigation Authorities of Kolkata. Whereas the assessee has discharged his onus by submitting all the documentary evidences in the shape of purchase and sale of the said scrips and a certificate from the broker regarding confirmation thereby confirming transaction of equity shares which goes to prove the genuineness of transactions under taken by the assessee for the year under consideration through BSE/NSE stock exchange. I also noticed that the entire payments have been made through banking channel and AO has not criticized or found fault in any of documentation involving the share purchases and share sales, no allegation has been found against the assessee to the effect that he had participated in any price rigging in the market on these shares. Thus considering the overall situation and legal preposition as discussed by me above, I direct the AO to delete the additions made u/s 68 of the Act, accordingly the grounds raised by the assessee stands allowed. In the result, the appeal filed by the assessee stands allowed.
