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Judgment
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 09.08.2024 of the Ld. National Faceless Appeal Centre (NFAC) Delhi, (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No : ITBA/NFAC/S/250/2024-25/1067505369(1) arising out of the order dated 30.03.2022 u/s 147 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Assessment Centre, for AY: 2016-17.
Heard and perused the records. The first issue raised was that the reopening reasons are borrowed satisfaction and show non application of mind. Which has been opposed by ld. DR asserting that reopening reasons are self contained.
Now what comes up is that the appellant filed his return of income on 29.03.2017 declaring total income Rs 25,59,000; claimed long-term capital gains Rs 1,57,78,700 as exempt under section 10(38) of the Act. Notice dated 31.03.2021 under section 148 of the Act was issued and the case of the appellant was re-opened. The Assessing Officer in the order dated 30.03.2022 passed under section 147 r.w.S. 143(3), makes impugned addition of Rs 1,57,78,700 on the ground that the appellant has claimed bogus long-term capital gains and also makes an addition of Rs 7,88,935 under section 69C of the Act, on account of deemed ad-hoc commission paid at the rate 5 per cent of the capital gains. Which stands sustained by Ld. CIT(A).
The Assessing Officer makes the impugned addition under section 68 on the following grounds -
that information is received from the INSIGHT portal that the appellant is one of the beneficiaries of bogus LTCG of total amount of Rs 1,62,02,500 in the shares of Yamini Investments Company Limited (hereinafter referred to as YICL); based on search conducted in the case of Dutta & Tyagi group
that the SEBI suspended trading in the scrip of YICL by their order dated 02.09.2010, which has been revoked by order dated 29.05.2012
that the financials of YICL is not commensurate with the high share price on the recognised stock exchange (the BSE).
Pre-arranged transaction
Commission under section 131(1)(d) was sent by Assessing Office to the Investigation Wing, Delhi and Kolkata. The Assessing Officer states that reports from the respective Wings have been received. He has issued summons to the alleged exit providers and also deputed inspector for spot verifications.
Now what is relevant is that the appellant purchased 1,00,000 shares of Anax Com Trade Limited on 10.01.2013 for Rs. 1,25,000/- and 2,50,000 shares of Fidelo Power and Infrastructure Limited on 03.04.2014 for Rs. 2,50,000. The aforesaid two companies amalgamated into YICL and on amalgamation of Anax Com Trade Limited with YICL, the appellant received 80,000 shares of YICL and on amalgamation of Fidelo Power and Infrastructure Limited with YICL, the appellant received 2,00,000 shares of YICL. Thus, the purchase consideration of Rs 3,75,000 for 2,80,000 shares in YICL. The appellant sold the shares in YICL on the following dates:-
| Date | No of shares | Sale price | Sale consideration |
| 09.06.2015 | 40,000 | 61.51 | 24,60,400 |
| 12.06.2015 | 5,000 | 55.48 | 2,77,400 |
| 15.06.2015 | 35,000 | 61,81 | 21,63,350 |
| 16.06.2015 | 40,000 | 60.67 | 24,26,800 |
| 18.06.2015 | 40,000 | 57.53 | 23,01,200 |
| 22.06.2015 | 40,000 | 51.89 | 20,75,600 |
| 23.06.2015 | 10,000 | 55.43 | 5,54,300 |
| 23.06.2015 | 25,000 | 55.73 | 13,93,250 |
| 24.06.2015 | 45,000 | 55.58 | 25.01.100 |
We find that the Assessing Officer has made the impugned addition solely on the basis of information received from the INSIGHT portal and without any further enquiry and application of brining any further facts or details of alleged transaction any positive material contrary to the claim of the appellant. Further, the purchase transaction undertaken by the appellant during the previous year ended 31st March, 2013 and 31s March, 2014 has been accepted by the Revenue and no adverse inference has been drawn on the same that certainly needed brining on record at times of reopening the facts contrary to claim of assessee, to show how said shares were purchased by companies controlled, directly or indirectly, by Dutta and Tyagi group. The shares are sold on the recognised stock exchange and through a SEBI-registered share broker and hence, suffered STT. The order of the Securities and Exchange Board of India (SEBI) is for enquiries conducted from September, 2013 to January, 2014 with regard to the behaviour of the scrip YICL. The appellant had sold his shares during the period 9th June, 2015 to 24th June, 2015, which is much after the period of enquiry and hence, the support by the Assessing Officer on the SEBI order in assessment is misplaced and shows that while recording reasons only INSIGHT portal information was relied. Reliance as placed on decision in the case of Ajay Gupta (ITA No 3011/Del/202,4) where co-ordinate bench has considered similar facts and the same scrip (YICL) and allowed the appeal of the appellant therein, also comes to the benefit of assessee before us.
Ld. CIT(A) seems to have applied no rational independently considering the peculiar facts but the impugned order of ld. CIT(A) shows that as if facts of some other assessee involving shares of Pearl Electronics were considered.
We are thus inclined to sustain the ground no. 1 and 2 and allow the appeal of assessee. The impugned additions are quashed.