Vishal Singhal Vs NFAC (ITAT Delhi)
Bogus LTCG Allegation Fails: Insight Portal Input Alone Can’t Justify Reopening or Addition
Delhi ITAT quashed additions towards alleged bogus long-term capital gains (LTCG) holding that mere information from the INSIGHT portal, without independent enquiry or corroborative material, cannot sustain reassessment or addition.
The Assessee had claimed exempt LTCG of ₹1.57 crore u/s 10(38) on sale of shares of Yamini Investments Co. Ltd. (YICL) through recognised stock exchange, supported by contract notes, demat records & STT payment. AO reopened assessment based solely on INSIGHT portal inputs arising from search in Dutta & Tyagi Group, branding transactions as pre-arranged & added ₹1.57 crore u/s 68 along with 5% ad-hoc commission u/s 69C. NFAC sustained the additions.
ITAT noted that purchase of shares in earlier years was never doubted, amalgamation into YICL was on record & sales occurred in June 2015, long after the SEBI enquiry period (Sept-2013 to Jan-2014). Tribunal found no live link between alleged entry operators & Assessee, no adverse material unearthed during enquiry & complete absence of independent application of mind by AO. Even CIT(A) was found to have mechanically relied on unrelated facts.
Relying on coordinate bench decision in Ajay Gupta (same scrip – YICL), ITAT held that LTCG cannot be treated as bogus on suspicion & generic investigation inputs. Accordingly, reopening as well as additions u/s 68 & 69C were quashed & appeal allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the assessee against the order dated 09.08.2024 of the Ld. National Faceless Appeal Centre (NFAC) Delhi, (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No : ITBA/NFAC/S/250/2024-25/1067505369(1) arising out of the order dated 30.03.2022 u/s 147 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Assessment Centre, for AY: 2016-17.
