Appeal dismissed as additions for alleged bogus LTCG, STCG and unexplained investment under section 69B found unsustainable

ITAT Raipur dismissed the Revenue's appeal and upheld the order of CIT(A)/NFAC deleting additions made for alleged bogus LTCG/STCG and unexplained investment under section 69B. The assessee was found to be a broker in edible oils, earning only commission by procuring orders for retailers, with no engagement in trading of shares or scrips. The Department did not dispute the nature of his business or income. The alleged share transactions were found to have been carried out by a third-party HUF, not the assessee. Consequently, no undisclosed income was established.

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Issues: Whether the addition of Rs. 4,83,507/- as unexplained investment under section 69B of the Income-tax Act, 1961 against the assessee can be sustained where the contract note shows a different name and address (mistaken identity) though the PAN was quoted, and whether the assessee was a beneficiary of the alleged sale proceeds.

Analysis: The Tribunal examined the documentary record relied upon by the Assessing Officer, the contract note issued by the broker, and the bank statements produced by the assessee. The contract note reflected the name and address of a different HUF (Manish Kumar Mohta, 6 Vivekananda Road, Kolkata) while the assessee is Manish Kumar Mehta of Durg. Although the PAN appearing on the contract note matched the assessee's PAN, further verification of the broker's ledger and bank entries showed that the credit entry pertained to the other HUF and there was no corresponding credit in the assessee's bank account. The CIT(A) verified the bank records and relevant documents and concluded that the assessee did not derive any benefit from the alleged share transaction. The Tribunal found that the Assessing Officer's addition was founded on information from the broker without adequate inquiry to establish that the assessee was the actual beneficiary; the factual matrix established a case of mistaken identity rather than proved unexplained investment attributable to the assessee.

Conclusion: The addition of Rs. 4,83,507/- under section 69B is not sustainable against the assessee; the revenue's grounds of appeal are dismissed and the order of the CIT(A) allowing the appeal is upheld.

Final Conclusion: On the material on record and verified bank entries, the assessment addition based on the broker's details amounts to taxation by mistaken identity and cannot be sustained against the assessee.

Ratio Decidendi: An addition under section 69B cannot be sustained against an assessee unless the Assessing Officer proves that the impugned investment or receipt was received by or beneficially accrued to that assessee; mere presence of the assessee's PAN on a contract note, without corroborative bank credits or other evidence establishing benefit, is insufficient to attribute unexplained investment to the assessee.

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