2024 (4) TMI 588 - AT - Income Tax

Delay condoned for portal access issues, section 68 addition deleted for genuine share transactions with proper documentation

Vinod Premjibhai Gangani Versus The ACIT (OSD), Ward - 3 (2) (3), Surat

The ITAT Surat condoned a 160-day delay in filing appeal after the assessee explained the delay was due to inability to access the ITBA portal caused by ... Delay in filling appeals - delays of 160 days in filing present appeal - HELD THAT:- The assessee is not likely to get any benefit in filing the appeals belatedly, rather there is always chance that such delay not be condoned. Considering the submission of Ld. AR for the assessee, wherein he has fairly accepted that he could not logged on the ITBA portal due to frequent changing in password by regular CA of assessee. We find that assessee has reasonably explained the cause of delay of 160 days, hence, the delay in the appeal is condoned. Bogus LTCG on listed company’s shares - Addition u/s 68 - disallowance of appellant’s claim of exempt income u/s 10(38) - HELD THAT:- We find that fact of the present case is identical to the facts in [2024 (4) TMI 529 - ITAT SURAT] wherein held as the assessee proved genuineness of sale transaction by bringing on record contract notes of sale and purchase, bank statement of broker and demat account showing transfer in and out of shares, Assessing Officer was not justified in bringing to tax capital gain arising from sale of shares as unexplained cash credit. Thus, addition of undisclosed income under section 68 is deleted. In the result, the ground of appeal raised by the assessee is allowed. Issues involved:The appeal by the assessee against the order of National Faceless Appeal Centre, Delhi for the assessment year 2015-16 involving the disallowance of exempt income u/s 10(38) of the IT Act and addition u/s 68 of the IT Act.Delay Condonation:The appeal filed by the assessee had a delay of 160 days in filing before the Tribunal. The assessee explained that the delay was due to the frequent changing of passwords by their regular Chartered Accountant, causing a lack of access to the ITBA portal. The delay was condoned by the Tribunal considering the reasonable explanation provided by the assessee and the lack of benefit to the assessee in filing the appeal belatedly.Merits of the Case:The case involved the purchase of shares of Conart Traders Ltd., which was later amalgamated with Sunrise Asian Ltd. The assessee claimed long-term capital gains (LTCG) as exempt income u/s 10(38) of the Act. The Assessing Officer made an addition without considering the evidence provided by the assessee, mainly relying on a report from the Investigation Wing. The assessee demonstrated the genuineness of the transaction with evidence such as bank statements, contract notes, and details of the sale. The Tribunal found that the assessee had discharged the onus of proving the genuineness of the transaction, and no adverse findings were made against the evidence provided. Citing relevant case laws, the Tribunal concluded that there was no justification for treating the LTCG as unexplained cash credit. Consequently, the addition of undisclosed income u/s 68 was deleted, and the appeal of the assessee was allowed based on the consistent view taken on similar facts in previous cases.Decision:The Tribunal allowed the appeal of the assessee based on the merits of the case, finding that the assessee had proven the genuineness of the transaction and there was no justification for the addition made by the Assessing Officer. The grounds of appeal raised by the assessee were allowed, and the appeal was pronounced in the open court on 28/03/2024.