ACIT Vs Nita Rastogi (ITAT Delhi)
Borrowed Satisfaction- Insight Portal Flag Not Enough—Tribunal Says No Tangible Material, 147 Void Ab Initio
Revenue filed appeal against order of CIT(A) quashing reassessment u/s 147 r.w.s.144B. Assessee originally filed return declaring income of Rs.17,06,660/-. AO reopened assessment based on Insight Portal information alleging bogus LTCG of Rs.2,28,22,400/-. In reassessment, AO made addition of Rs.3,55,88,404/- u/s 68 treating entire LTCG on TTK Prestige Ltd shares as fictitious & added 2% commission thereon.
Before CIT(A), Assessee demonstrated that AO had recorded reasons mechanically—without naming the scrip, dates, quantity, broker or any transaction details. The reasons alleged LTCG of Rs.2.28 crore whereas Assessee had actually declared Rs.3.55 crore LTCG from sale of 10,210 shares of TTK Prestige Ltd, a reputed listed company held from 2009 to 2012. Ld. CIT(A) held that reasons were vague, factually incorrect, based solely on Investigation Wing flagging & showed no independent application of mind, citing detailed judicial precedents such as Meenakshi Overseas, Movish Realtech, Well Trans Logistics, Bharat Kumar Nihalchand Shah, Paresh Babubhai Bahalani, Tata Capital, etc.
Tribunal examined reasons recorded & noted that AO failed to supply underlying Investigation Wing report, failed to establish a live link between material & alleged escapement, & relied entirely on borrowed satisfaction. Tribunal also relied on Supreme Court in Rakesh Ramanlal Shah (477 ITR 296) and Delhi High Court in Sanjay Kaul (30.05.2025) to hold that reopening based on generic suspicion without tangible material is invalid.
