Anip Rastogi Vs ITO (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the appeals of two assessees for Assessment Year 2015-16 and upheld the additions made under Section 68 of the Income-tax Act, 1961, in relation to Long-Term Capital Gains (LTCG) claimed as exempt under Section 10(38) from the sale of shares of CCL International Ltd. The Tribunal held that the assessees had failed to establish the genuineness of the transactions and that the evidence on record supported the Revenue’s conclusion that the gains represented accommodation entries arising from penny stock transactions.
The lead appeal involved an assessee who had declared LTCG of ₹22,28,172 earned during the relevant financial year and claimed exemption under Section 10(38). The return of income, declaring total income of ₹9,39,250, was selected for scrutiny, and the Assessing Officer (AO) completed the assessment under Section 143(3) by treating the LTCG as bogus and making an addition under Section 68. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the assessment order, following which the assessee approached the Tribunal. Similar additions had been made in the connected appeal involving LTCG of ₹14,36,364 arising from transactions in the same scrip.
The assessees argued that the additions were based on conjectures and presumptions and that the authorities had ignored documentary evidence supporting the transactions. It was contended that the purchase and sale of shares were supported by sale notes, demat account statements, bank statements, stock exchange trading details, and financial information relating to CCL International Ltd. The assessees also argued that no material had been brought on record to establish any connection between them and the alleged entry operators. Further, it was submitted that the statements of Shri Jai Kishan Poddar, relied upon by the Revenue, had been recorded behind the assessees’ backs, no opportunity for cross-examination had been provided, and the statements did not specifically name the assessees.
