2022 (10) TMI 1264 - HC - Income Tax

Calcutta HC Condones Delay, Overturns ITAT Ruling for 2014-2015, Citing Section 260A and Swati Bajaj Precedent.

The Calcutta HC allowed the revenue's appeal under Section 260A of the Income Tax Act, 1961, challenging the ITAT's decision for the assessment year ... Bogus LTCG - Addition u/s 10(38) - Tribunal cancelling the disallowance of Long Term Capital Gain - HELD THAT:- We find from the order passed by Tribunal that no independent reasoning has been given by the learned Tribunal but the Tribunal chose to follow the decision of the Coordinate Bench. In fact, in the said decision the earlier decision was affirmed. Those decisions were appealed against in the case of Swati Bajaj [2022 (6) TMI 670 - CALCUTTA HIGH COURT] the appeal filed by the revenue were allowed and the substantial questions of law were answered in favour of the revenue. In the case before the Calcutta High Court, presided over by Hon'ble Justices T.S. Sivagnanam and Hiranmay Bhattacharyya, the court addressed an appeal filed by the revenue under Section 260A of the Income Tax Act, 1961. The appeal challenged the Income Tax Appellate Tribunal's (ITAT) decision regarding the assessment year 2014-2015. The appeal was delayed by 964 days, but the court condoned this delay, citing that the legal issue was already covered by a prior decision favorable to the revenue.The substantial questions of law involved whether the ITAT erred by ignoring evidence from the Assessing Officer regarding alleged manipulations by accommodation entry providers, which facilitated the assessee's unaccounted money to be recorded as fictitious Long Term Capital Gains, claimed as exempt under Section 10(38) of the Income Tax Act. The court noted that the ITAT had not provided independent reasoning and had relied on a prior decision, which was subsequently overturned in the case of Principal Commissioner of Income Tax Vs. Swati Bajaj. Applying the precedent set in Swati Bajaj, the court allowed the revenue's appeal, answering the substantial questions of law in favor of the revenue.