Appeal challenging benefit denial under Income Tax Act dismissed; recall option available if needed.

The appeal challenging the denial of benefit under Section 10(38) of the Income Tax Act for Assessment Year 2015-16 was dismissed as withdrawn. The appellant failed to appear at the scheduled appeal hearings and the case was adversely impacted by previous judgments against the appellant. Despite expressing intent to settle under the Vivad se Vishwas Scheme, the appellant did not attend the hearing. The dismissal was technically treated as withdrawn, with the possibility of recall if necessary, granting the appellant liberty to file for recall if the settlement under the scheme was not granted.

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Issues:
Appeal against order denying benefit under Section 10(38) of the Income Tax Act, 1961 for Assessment Year 2015-16.

Analysis:
The appeal was filed by the assessee challenging the order of the ld. CIT (Appeals) for Assessment Year 2015-16, which added the claim under Section 10(38) of the Income Tax Act, 1961, amounting to Rs. 2,22,87,246/- on account of the sale of shares of M/s KAPPAC Pharma Ltd. under Section 68 of the Act, thereby denying the benefit under Section 10(38) of the Act. The appeal hearing was scheduled on two occasions, 1st December 2020 and 21st December 2020, but none appeared on behalf of the assessee on both occasions.

On the merits, it was noted that the case of the assessee was adversely impacted by a judgment of the Hon'ble Delhi High Court in the case of Udit Kalra vs. ITO, where M/s Kappac Pharma was declared a bogus company engaged in accommodation entries, with the assessee being a beneficiary. This decision was further supported by various decisions of coordinate benches ruling against the assessee.

The assessee, through a letter dated 12th March 2020 signed by the Chartered Accountant, expressed contemplation of opting for the Vivad se Vishwas Scheme to settle the dispute. Despite repeated notices, the assessee did not appear for the hearing. Given the intention of the assessee to settle the dispute under the Vivad se Vishwas Scheme, the appeal was technically treated as withdrawn and dismissed. The assessee was granted liberty to file an application for recall of the order in case Form No. 3 under the Vivad se Vishwas Scheme was not granted for the settlement of the dispute. Consequently, the appeal filed by the assessee was dismissed as withdrawn, with the option for potential recall if necessary.

The order was pronounced in the open court on 21st December 2020 by the members of the Appellate Tribunal ITAT Delhi, Shri H. S. Sidhu, Judicial Member, and Shri Prashant Maharishi, Accountant Member.

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