ITO Vs Kapil Arun Agrawal (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, dismissed the Revenue’s appeal in the case of ITO Vs Kapil Arun Agrawal concerning the validity of reopening an assessment and the subsequent additions made by the Assessing Officer (AO) for the Assessment Year 2015-2016. The central issue revolved around the validity of the assessment reopening under Section 147 read with Section 148 of the Income Tax Act, 1961, based on general, unverified information, and the sustainability of subsequent additions related to alleged bogus capital gains.
The AO had initially reopened the assessment after receiving information from the Insight Portal that the assessee was a beneficiary of a bogus accommodation entry amounting to ₹70,28,400 from companies allegedly managed by Shri Naresh Jain, who was found to be involved in the price rigging of various penny stocks. The information specifically alleged that the accommodation entry was obtained by trading in certain rigged scrips, including M/s. Oasis Tradelink Ltd. During the assessment proceedings, the assessee contended that he did not receive any accommodation entry from the alleged syndicate. Regarding the trade in M/s. Oasis Tradelink Ltd., the assessee demonstrated that he had acquired the shares through an IPO/initial allotment and sold them for ₹69,87,960, resulting in a Short Term Capital Loss (STCL) of ₹92,040, not a capital gain as alleged in the reopening information.
