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

The ITAT Delhi ruled in favor of the assessee regarding addition under section 68 for income from undisclosed sources relating to share sales. The tribunal held that since the transaction involved sale of existing investments/shares by the assessee to other entities, and the department had not disputed the original investment in shares during A.Y. 2008-09, the sale transaction could not be treated as unexplained or bogus. The tribunal distinguished this case from share application money scenarios, noting the assessee had not received any share application money or premium from investors.

---

---

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.

---