Documented share transactions prevent unexplained-money additions without corroborated evidence, while Insight Portal information may support reassessment enquiries.
Insight Portal information may validly trigger reassessment enquiries where the taxpayer receives notice, the response is considered, and the record shows independent application of mind rather than mechanical reliance on departmental inputs. Documented share purchases and sales through recognised brokers and exchanges, supported by demat records, contract notes, bank statements and securities transaction tax, cannot be characterised as unexplained money or accommodation entries without evidence of cash dealings, fabricated records, or a link to entry providers. Uncorroborated investigation material and suspicion do not displace unrebutted transaction evidence; the reopening challenge failed, but the alleged bogus capital-gain addition was deleted.
Issues: (i) Validity of reassessment initiated on information flagged through the Insight Portal; (ii) Whether sale proceeds from shares, supported by contract notes, demat records and banking channels, could be treated as unexplained money and alleged accommodation entries.
Issue (i): Validity of reassessment initiated on information flagged through the Insight Portal.
Analysis: Information from the departmental Insight Portal was confronted through notice under section 148A(b). The response was considered before an order under section 148A(d) was made and notice under section 148 was issued. Portal-based information could validly initiate enquiry, and the record demonstrated independent application of mind rather than borrowed satisfaction or mechanical action.
Conclusion: The reassessment initiation was valid, against the assessee.
Issue (ii): Whether sale proceeds from shares, supported by contract notes, demat records and banking channels, could be treated as unexplained money and alleged accommodation entries.
Analysis: The purchases and sales were through recognised brokers and stock exchanges, recorded in the demat account, supported by contract notes and bank statements, and subjected to securities transaction tax. The assessee was also shown to be a regular investor in shares. No evidence established cash exchange, fabrication of documents, or a nexus between the assessee and alleged entry providers. The allegation rested on investigation-wing material and presumption without independent corroboration; suspicion, however strong, could not substitute legal evidence.
Conclusion: The sale proceeds could not be treated as unexplained money or accommodation entries, in favour of the assessee.
Final Conclusion: The challenge to the reopening fails, while the addition based on the alleged bogus long-term capital gain is deleted.
Ratio Decidendi: Where documented share transactions through recognised exchanges, demat accounts and banking channels remain unrebutted, an addition for alleged accommodation entries cannot rest solely on suspicion or uncorroborated investigation material.