2024 (2) TMI 158 - AT - Income Tax

Assessee wins section 68 challenge as share sale transaction deemed genuine, not unexplained income

Smt. Poonam Bajaj, Smt. Pushpa Devi Bajaj, Sh. Pramod Kumar Bajaj Versus DCIT, Central circle-32, Delhi

The ITAT Delhi ruled in favor of the assessee regarding addition under section 68 for income from undisclosed sources relating to share sales. The ... Addition u/s 68 - income from undisclosed sources - sale of shares as unexplained - HELD THAT:- Co-ordinate Bench of the Tribunal in the case of Lalita Bajaj and Namita Bajaj [2023 (10) TMI 557 - ITAT DELHI] assessee has not received any share application money or premium from the investor but the impugned transaction in the present case pertains to sale of investment/shares by the assessee to the other entities and such transaction cannot be alleged as unexplained or bogus particularly when the Department has not disputed the investment in shares by the assessee during the earlier period of time i.e. in the A.Y. 2008-09 in the year of investment by the assessee. Decided in favour of assessee. Issues involved:The judgment involves appeals filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals) for the Assessment Year 2015-16, 2016-17 & 2015-16 respectively.Issue 1 - Addition u/s 68 of the Act on account of income from undisclosed sources:The Assessee filed a return of income declaring total income under 'income from house property' and 'other sources'. An order u/s 153A read with Section 143(3) was passed making an addition of Rs. 5,00,000/- u/s 68 of the Act as income from 'undisclosed sources'. The Assessee appealed against this addition, arguing that the investment in shares of PNB Infrastructure Pvt. Ltd. were sold at Rs. 10 per share directly from the company. The Assessee relied on additional evidence and a remand report to support their case. The Tribunal noted that similar issues had been decided in favor of other parties in previous cases. The Tribunal found that the Assessee's explanations and documentary evidence were satisfactory, leading to the deletion of the additions made by the Assessing Officer and confirmed by the CIT(A).Conclusion:The Tribunal allowed the appeals on merit, deleting the additions made u/s 68 of the Act on account of income from undisclosed sources. The Tribunal followed previous decisions where similar issues were resolved in favor of the Assessee. Other grounds of appeal were not adjudicated upon as the main issue was decided in favor of the Assessee.