2023 (2) TMI 571 - AT - Income Tax

Reopning of assessment u/s 147 - unexplained cash credit u/s 68 - Bogus LTCG -CIT(A) upheld the initiation of reassessment proceedings stating that AO has followed the due procedure for reopening the assessment AND Appellant has taken bogus long term capital gain accommodation entry in order to plough back his unaccounted income in his regular books - HELD THAT - CIT(A) after considering the submissions of the assessee and findings of the AO has dismissed the appeal filed by the assessee both on jurisdiction as well as on merits of the case. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. Accordingly, grounds raised by the assessee in this appeal are dismissed.

Summary

Issues:
Challenging order under section 250 of the Income Tax Act, 1961 for the assessment year 2013-14.

Analysis:
The appeal was filed by the assessee against the order passed under section 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals)-11, Pune. The assessee did not appear during the hearing despite previous instances of non-appearance. The Tribunal proceeded ex-parte and disposed of the appeal based on material available on record.

The assessee raised grounds questioning the validity of issuing notice under section 148 of the IT Act, 1961, and the addition made to the returned income. The case involved the assessee claiming exemption of long-term capital gains in share transactions, which were classified as penny stocks. The Assessing Officer (AO) considered investigation reports and SEBI actions on the companies involved, NCL Research and Tuni Textile. The AO found discrepancies in the financial statements and trading practices of these companies, leading to the disallowance of the claimed exemptions.

The Commissioner of Income Tax (Appeals) upheld the initiation of reassessment proceedings and the addition made by the AO. The CIT(A) found that the AO followed due procedure for reopening the assessment and dismissed the appeal challenging the reopening. Regarding the addition on account of trading in shares, the CIT(A) noted the investigation reports and the appellant's failure to provide required information. The CIT(A) concluded that the appellant engaged in a series of steps to bring unaccounted income into the books through bogus long-term capital gain entries, upholding the addition made by the AO.

During the hearing, the Departmental Representative presented the case, and the Tribunal upheld the CIT(A)'s order, dismissing the appeal by the assessee on jurisdiction and merits. The Tribunal found no contradictory material to interfere with the CIT(A)'s decision and upheld the dismissal of the appeal.

In conclusion, the Tribunal dismissed the appeal by the assessee, affirming the orders of the lower authorities. The decision was pronounced in open court on 07/02/2023.