ITO Vs Deepak Govindbhai Gangani (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, in ITO vs. Deepak Govindbhai Gangani addressed the Revenue’s appeal against the order dated 3 September 2024 of the National Faceless Appeal Centre (NFAC), Delhi, which had allowed the assessee’s appeal for Assessment Year 2011–12. The original assessment, passed under Section 144 read with Section 147 of the Income Tax Act, 1961, had added ₹82,44,116 to the assessee’s income under Section 69 on account of unexplained investment in penny stock transactions involving Aarya Global Shares and Securities Ltd.
The case originated when the Deputy Director of Income Tax (Investigation), Mumbai, informed that Aarya Global Shares and Securities Ltd. had been used to introduce unaccounted income through artificial long-term capital gains or short-term capital losses. The assessee was identified as one of the beneficiaries. A reassessment notice under Section 148 was issued on 30 March 2018, but the assessee failed to file a timely return. During assessment, the assessee filed an affidavit claiming that his bank and demat accounts were operated by one Mr. Rakesh Doshi, who conducted share transactions in his name. The assessee further stated that he lacked financial capacity for such dealings and had been approached by Mr. Deepak Rathod and Mr. Bhavesh Makwana, associates of Mr. Doshi, who arranged all funds. He asserted that he merely acted as a commission agent for name-lending purposes.
