2023 (11) TMI 1358 - AT - Income Tax

Unexplained cash credit u/s. 68 and unexplained expenditure u/s. 69 - receipt of accommodation entry by way of bogus LTCG/STCG - HELD THAT - AO based on the information available on Actionable Information Monitoring System (AIMS) as per the investigation conducted by the Kolkata Investigation Directorate that the assessee was said to be one of the beneficiaries of accommodation entry by way of bogus LTCG/STCG. The assessee has declared income from house property business capital gains and income from other sources and had declared gain on sale of shares during the year under consideration which is exempted u/s. 10(38) - AO held the same to be penny stock and made an addition on the same. CIT(A) upheld the addition on lack of evidence in support of the assessee s claim. From the above observation we deem it fit to provide the assessee with one last opportunity to present her case before the first appellate authority on the principles of natural justice - Appeal filed by the assessee is allowed for statistical purpose.

Summary

The appeal in this case was filed by the assessee challenging the order of the Commissioner of Income Tax (Appeals) passed under the Income Tax Act for the Assessment Year 2014-15. The main issues raised by the assessee were related to additions made towards unexplained cash credit and unexplained expenditure, along with other consequential grounds.The assessee, an individual, had initially declared total income of Rs. 8,18,640. However, during scrutiny, the Assessing Officer determined the total income at Rs. 50,10,740 after making additions of Rs. 40,70,000 towards alleged bogus long-term capital gain and Rs. 1,22,100 towards commission as unexplained expenditure. The Commissioner of Income Tax (Appeals) upheld these additions on the grounds of lack of documentary evidence provided by the assessee to support her claims.In the appeal before the Appellate Tribunal, the assessee's Authorized Representative argued that the Commissioner of Income Tax (Appeals) failed to consider the documentary evidence submitted by the assessee. It was contended that the assessee had fulfilled the initial burden of proving the genuineness of the transaction, but this evidence was not properly considered by the lower authorities. The Authorized Representative requested that the issues be remanded back to the Commissioner of Income Tax (Appeals) for a fresh consideration based on the documentary evidence.On the other hand, the Departmental Representative opposed the remand, stating that the assessee had been given sufficient opportunities to substantiate her claims before the lower authorities and that the orders of the lower authorities should be relied upon.After hearing both sides, the Tribunal noted that the Assessing Officer had based the additions on information from the Actionable Information Monitoring System and an investigation by the Kolkata Investigation Directorate, alleging that the assessee was involved in a bogus long-term capital gain transaction. The Tribunal observed that the assessee had declared income from various sources, including gains from the sale of shares claimed as exempt under section 10(38) of the Act. The Assessing Officer treated these gains as penny stock and made additions due to lack of evidence supporting the assessee's claim.The Tribunal decided to provide the assessee with one last opportunity to present her case before the Commissioner of Income Tax (Appeals) on the principles of natural justice. The Commissioner of Income Tax (Appeals) was directed to reconsider the issues based on the submissions and documentary evidence provided by the assessee. Consequently, the Tribunal remanded the issues back to the Commissioner of Income Tax (Appeals) for fresh adjudication.Ultimately, the appeal filed by the assessee was allowed for statistical purposes, with the order pronounced in open court on 14.11.2023.