PCIT Vs Divyaben Prafulchandra Parmar (Gujarat High Court)
The Revenue filed a tax appeal under Section 260A of the Income-tax Act, 1961 challenging the order dated 27.07.2023 passed by the Income Tax Appellate Tribunal, Surat Bench in ITA No. 73/SRT/2023 for Assessment Year 2014-15. The Revenue questioned the Tribunal’s deletion of additions made under Section 68 in respect of sale proceeds of Sunrise Asian Ltd. shares, deletion of the alleged commission addition, acceptance of the assessee’s claim of exemption under Section 10(38), and rejection of the Revenue’s case that the transactions constituted accommodation entries.
The assessee, an individual, filed her return of income on 04.03.2015 declaring total income of ₹4,22,502 and claimed exempt Long-Term Capital Gain (LTCG) of ₹45,01,840 under Section 10(38) arising from the sale of 10,000 shares of Sunrise Asian Ltd. The Assessing Officer found that the shares had originally been purchased as Conart Traders Ltd. shares, which were later amalgamated with Sunrise Asian Ltd. pursuant to an order of the Bombay High Court. Relying upon information received from the Investigation Wing, Kolkata, the Assessing Officer treated the sale proceeds of ₹49,01,840 as unexplained income under Section 68, made a total addition of ₹49,99,877, and levied tax under Section 115BBE. The Commissioner (Appeals) confirmed the assessment.
