2022 (10) TMI 339 - AT - Income Tax

Addition u/s 68 - genuineness of the transactions entered into by the appellant for purchase and sale of shares not proved - HELD THAT - As stated by the CIT(A) that the financial capacity of Shri Manoj Aggarwal was not commensurate the transaction carried out by him. The assessee has not contradicted this by placing any contrary material on record. Therefore, do not see any reason to disturb the finding of Assessing Authority, the same are rejected. Thus, grounds raised by the assessee are dismissed.

Summary

Issues:
1. Addition of Rs.20,35,000 under section 68 of the Income Tax Act, 1961.
2. Validity of the assessment order and the appeal process.

Issue 1: Addition of Rs.20,35,000 under section 68 of the Income Tax Act, 1961:

The appellant contested the addition of Rs.20,35,000 under section 68 of the Income Tax Act, 1961, related to the sale proceeds of shares of M/s Urvashi Finvest Pvt. Ltd. The Assessing Officer noted discrepancies in the purchase and sale of shares, alleging a mechanism to evade tax liability. The appellant failed to provide necessary documentation to support the transactions, leading to the conclusion of a bogus loss. The CIT(A) upheld the addition after considering the evidence and lack of credible material to establish the genuineness of the transactions. The appellant's arguments were dismissed as the financial capacity of the seller did not align with the transactions, and no contradictory evidence was presented. Therefore, the Tribunal affirmed the addition of Rs.20,35,000 as a bogus loss, rejecting the appellant's contentions.

Issue 2: Validity of the assessment order and the appeal process:

The appellant repeatedly sought adjournments during the appeal proceedings, leading to multiple delays. Despite opportunities, the appellant did not attend the hearings, resulting in the case being heard in their absence. The Tribunal proceeded with the available records to make a decision. The Tribunal emphasized the importance of timely and active participation in the appeal process. The absence of the appellant during crucial proceedings impacted the outcome of the appeal. Ultimately, the Tribunal dismissed the appeal due to the lack of representation and the failure to provide substantial evidence to counter the authorities' findings.

In conclusion, the Tribunal upheld the addition of Rs.20,35,000 under section 68 of the Income Tax Act, 1961, due to insufficient evidence provided by the appellant to substantiate the genuineness of the transactions. The Tribunal also highlighted the significance of active participation and timely representation in appeal proceedings to ensure a fair and just process.