ACIT Vs Sushila Sultania (ITAT Patna)
Bogus LTCG Deleted – ITAT Patna Upholds CIT(A) as AO Relied Solely on Investigation Report
Assessee filed return of income declaring ₹19.11 lakh. The case was reopened u/s 147 based on information that Assessee was a beneficiary of alleged bogus long-term capital gains. AO noted that Assessee had purchased 3,00,000 equity shares of M/s Surabhi Chemical & Investment Ltd. at ₹2 per share which were subsequently sold for ₹1.75 crore, resulting in LTCG of ₹1.69 crore claimed exempt u/s 10(38). AO, without conducting any independent enquiry or pointing out defects in the evidences furnished, treated the entire sale consideration of ₹1.75 crore as unexplained cash credit u/s 68. Further, he estimated 5% commission on such alleged bogus transactions amounting to ₹8.79 lakh & added the same u/s 69C.
In appeal, CIT(A) deleted both additions. It was noted that Assessee had filed all supporting evidences including purchase & sale bills, contract notes, demat account statements & proof of payments through banking channels. CIT(A) observed that AO merely relied on the investigation wing’s report without applying independent mind or verifying facts. It was further noted that SEBI, vide its order dated 27.01.2021, had identified nine entities involved in price rigging of shares but neither Assessee nor M/s Surabhi Chemical & Investment Ltd. figured in the list. Importantly, Assessee’s purchase on 29.06.2012 & sale on 19.11.2013 did not fall within the SEBI-noted rigging period of 10.08.2012 to 04.09.2013.
