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2023 (4) TMI 182 - AT - Income TaxBogus LTCG claimed u/s 10(38) in the ROI held to be income from undisclosed source - CIT(A) found that the increase in the share price from Rs. 500/- to Rs. 6,12,867/- is not justifiable and he confirmed the action of the AO as to reopening of the assessment and also confirmed the addition as income from undisclosed sources by denying exemption u/s 10(38) - HELD THAT - Bench taking into consideration of all the aspects discussed by the lower authorities hereinabove finds that the assessee has neither furnished any details of purchasing of shares nor details of the source of such purchases alongwith copy of demat account when the shares came into demat account of the assessee in order to justify the claim u/s 10(38). Hence, in the absence of these details, the Bench feels to restore the issue to the file of the AO to decide it. Thus the appeal of the assessee is allowed for statistical purposes.
Issues:
1. Reopening of assessment by AO 2. Addition of Rs. 6,12,367 as income from undisclosed sources Reopening of Assessment by AO: The appeal was against the order of the ld. CIT(A) regarding the reopening of the assessment for the assessment year 2012-13. The ld. CIT(A) dismissed the grounds of appeal raised by the assessee, stating that the AO correctly treated Rs. 6,12,367 as income from undisclosed sources by denying exemption u/s. 10(38). The ld. AR of the assessee argued that the AO erred in reopening the assessment without sufficient basis. Detailed submissions were made, citing various judgments to support the claim. The AR contended that the CIT(A) did not consider the written submissions and relevant judicial pronouncements, leading to an arbitrary decision. The AR emphasized that the AO's actions lacked evidence, inquiry, or investigation, making the reopening unjustified and legally flawed. The AR requested the tribunal to consider the submissions and allow the appeal. Addition of Rs. 6,12,367 as Income from Undisclosed Sources: The AO alleged that the gains of Rs. 6,12,367 made by the assessee in a penny scrip were illogical and defied human probabilities, leading to the addition of this amount as income from other sources. The AR of the assessee provided detailed documentation during the assessment proceedings, including a computation of income, bank statements, and other relevant evidence to support the claim of genuine LTCG under section 10(38). However, the AO disregarded this evidence and made a substantial addition without substantial basis. The AR cited various judgments to challenge the AO's decision and argued that the addition was unjustified, lacked evidence, and should be deleted. The CIT(A) upheld the AO's decision without considering the detailed submissions and judicial precedents presented by the assessee. The tribunal, after hearing both parties and reviewing the case laws cited, found that the assessee failed to provide essential details to justify the claim under section 10(38). Consequently, the tribunal decided to restore the issue to the AO for further examination, providing the assessee with an opportunity to substantiate the claim with necessary details. The appeal of the assessee was allowed for statistical purposes. In conclusion, the tribunal allowed the appeal for statistical purposes, directing the issue of the addition of Rs. 6,12,367 as income from undisclosed sources to be reconsidered by the AO with the provision of adequate opportunity for the assessee to present relevant details.
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