Tribunal rules in favor of Assessee, directing deletion of addition under section 68

The Tribunal allowed the Assessee's appeal, condoning the delay in filing and directing the deletion of the addition under section 68 r.w.s. 115BBE. The Tribunal found the Assessee's explanations reasonable, emphasizing the lack of evidence linking the Assessee to fraudulent activities and the satisfactory documentation of the share transactions. Consequently, the Tribunal ruled in favor of the Assessee, highlighting the adequate explanation provided for the source of the credit from the sale of shares.

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Issues:
1. Condonation of delay in filing appeal
2. Addition of Rs. 30,19,500 under section 68 r.w.s. 115BBE on account of sale of equity shares

Analysis:

Issue 1: Condonation of delay in filing appeal
The appeal was filed by the Assessee against the order passed by the Commissioner of Income Tax (Appeals), Ghaziabad for the Assessment Year 2014-15. The appeal was initially barred by a 12-day limitation. The Assessee explained the delay by stating that the Chartered Accountant initially handling the appeal expressed inability to proceed further. The Tribunal, after considering the reasons for the delay, found no fault on the Assessee's part and decided to condone the delay in the interest of natural justice, allowing the appeal for adjudication.

Issue 2: Addition of Rs. 30,19,500 under section 68 r.w.s. 115BBE on account of sale of equity shares
The Assessing Officer made the addition under section 68 r.w.s. 115BBE on the Long Term Capital Gain shown by the Assessee, as the source of the amount remained unexplained and unsatisfactory. The first appeal enhanced the quantum of addition based on the lack of substantiation by the Assessee and the suspicious nature of the shares purchased. However, the Assessee argued that the shares were purchased through a recognized broker, and the sale proceeds were credited to the bank account from the sale of shares, with all transactions duly documented. The Assessee contended that there was no evidence of any unaccounted money or involvement in any fraudulent practices. The Tribunal found that the Assessee had adequately explained the nature and source of the credit in the bank account, and there was no material linking the Assessee to any fraudulent activities or accommodation entries. Therefore, the Tribunal directed the deletion of the addition made under section 68, as there was no substantiated reason to uphold the addition.

In conclusion, the Tribunal allowed the appeal of the Assessee, emphasizing that the nature of the credit from the sale of shares was adequately explained, and there was no evidence to support the addition under section 68.

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