2020 (12) TMI 976 - AT - Income Tax

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the denial of benefit under Section 10(38) of the Income Tax Act for Assessment Year 2015-16 was dismissed as withdrawn.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 ... Addition u/s 68 - Bogus LTCG on shares - Application for Vivad se Vishwas Scheme - HELD THAT:- On the merits case of the assessee is covered against him by the judgment of Udit Kalra vs. ITO [2019 (4) TMI 834 - DELHI HIGH COURT] wherein has declared M/s Kappac Pharma as bogus company who made only accommodation entries in which the assessee is a beneficiary. This is also followed by many decisions of coordinate benches holding against assessee. As assessee has submitted a letter dated 12th March, 2020 under the signature of his Chartered Accountant Mr. Vikas Gupta that assessee is contemplating the option of Vivad se Vishwas Scheme. It was stated that at that particular time when this letter was given the Scheme was yet to be announced. Now despite notices the assessee is not appearing. The assessee has also disclosed his intention through his CA to settle the dispute under Vivad se Vishwas Scheme. As the assessee would like to opt for the above Scheme and to settle the impugned dispute, the appeal of the assessee is technically treated as withdrawn and dismissed. Appeal of the assessee is treated as dismissed as withdrawn with a liberty to the assessee that in case assessee is not granted Form No.3 under the above Scheme for settlement of the above dispute, he may file an application for recall of the above order. Meanwhile, the appeal filed by the assessee is dismissed as withdrawn. 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.