Pawan Kumar Kabra Vs ITO (ITAT Kolkata)
ITAT Kolkata allowed Pawan Kumar Kabra’s appeal against the CIT(A)’s order, which upheld the Assessing Officer’s (AO) rejection of the assessee’s claim of long-term capital gains (LTCG) from the sale of Unno Industries Ltd. shares. The AO, relying on a general investigation report and common modus operandi observed in similar cases, concluded that the LTCG claim was bogus and added the entire sale proceeds as income, rejecting the section 10(38) exemption. The AO dismissed the evidence provided by the assessee to prove the genuineness of the transactions.
The CIT(A) upheld the AO’s decision based on “circumstantial evidence,” “human probabilities,” and “rules of suspicious transactions,” despite the absence of direct evidence contradicting the assessee’s submitted documents. The ITAT noted that the revenue authorities’ conclusions were based on a general investigation report, and the assessee was not confronted with any specific adverse material or given the opportunity to cross-examine individuals involved in the investigation. The Tribunal emphasized its consistent stance that decisions should be based on evidence, not generalisations, suspicion, or conjectures. It cited several similar cases decided by the Kolkata ITAT and jurisdictional High Courts, which had deleted such additions in the absence of specific evidence against the assessee. Bound by these precedents, the ITAT allowed the assessee’s appeal and directed the deletion of the addition made under section 68 of the Act.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
