Ahmedabad ITAT Rejects Borrowed Satisfaction Challenge but Deletes Bogus LTCG Addition

Vineet Arya Vs DCIT (ITAT Ahmedabad)

Insight Portal Information May Justify Reopening, but Penny-Stock LTCG Cannot Be Taxed Without Evidence Linking Assessee to Price Rigging: Ahmedabad ITAT

Summary: The Ahmedabad ITAT has deleted an addition of ₹15,93,499 made by treating long-term capital gains from shares of Oasis Tradelink Ltd. as a bogus accommodation entry. The Tribunal held that general findings of the Investigation Wing, suspicion surrounding a scrip and possible manipulation by brokers cannot substitute evidence connecting the particular assessee with the alleged arrangement. At the same time, the Tribunal upheld the reopening under Section 147, observing that information appearing on the Insight Portal can validly initiate an enquiry where the Assessing Officer confronts the material to the assessee, considers his response and thereafter passes a conscious order under Section 148A(d).

Background

The assessee filed his original return for Assessment Year 2018-19 declaring total income of approximately ₹3.17 crore.

The Assessing Officer subsequently received information that the assessee had allegedly obtained an accommodation entry in the form of exempt long-term capital gains through transactions in shares of Oasis Tradelink Ltd.

A notice under Section 148A(b) was issued on March 9, 2022. After considering the assessee’s response, the AO passed an order under Section 148A(d) on March 23, 2022 and issued a reassessment notice under Section 148 on April 4, 2022.