TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 336
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....eing in violation of principle of natural justice the impugned appellant order renders itself as perverse and devoid of any merit. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has further erred in dismissing the legal grounds no. 1 & 2 of the appeal filed before him challenging the impugned assessment order so passed by the A.O. being in violation of set procedure of law and thus being void ab initio. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has further erred in denying justice, without any justification and thereby further erred in sustaining addition of Rs. 93,92,789/- representing LTCG claimed by the appellant as deemed income u/s. 68 of the Act." 3. The brief facts of the case are that the assessee filed her return of income for the Assessment Year 2017-18 declaring a total income of Rs. 13,74,880/-. The case was reopened under section 147 of the Income-tax Act, 1961 ("the Act") and assessment was completed under section 147 read with section 144B of the Act. During the reassessment proceedings, the Assessing Officer made an addition of Rs. 93,92,789/- under section 68 of the Act by treating the Lo....
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....market prices. The assessee also submitted that the Assessing Officer had not brought any material evidence on record to prove that the broker or the counterparty was engaged in providing accommodation entries, or that the assessee had received any cash in exchange for these transactions. It was contended that the addition was made merely on the basis of general findings of the Investigation Wing and not on any specific material related to the assessee. The assessee also drew attention to a decision in a comparable case of her close relative, Pranav Mahendrabhai Patel v. NFAC, Delhi (ITA No. 10118737/A.Y. 2017-18, dated 12.12.2023), wherein under identical facts and circumstances, the addition made under section 68 in respect of sale of shares of Kushal Tradelink Ltd. had been deleted by the NFAC, holding that the scrip was not a penny stock and was still being traded on BSE. However, the learned CIT(Appeals) did not accept the submissions of the assessee. In his order, the CIT(A) first dealt with the issue of validity of reopening and held that the notice under section 148 was validly issued. The CIT(Appeals) observed that tangible material had been received from the Investigation....
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....sessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. 6. We have heard the rival contentions and perused the material available on record. The issue under consideration relates to the validity of reopening of the assessment under section 147 of the Income-tax Act, 1961. The assessee has contended that the reassessment notice issued under section 148 was invalid, being based solely on information received from the Investigation Wing without any independent application of mind by the Assessing Officer. However, on a careful consideration of the findings of the learned CIT(Appeals) and the materials forming part of the assessment record, we find no infirmity in the conclusion arrived at by the CIT(Appeals). We observe that the Assessing Officer had received credible and tangible material from the Investigation Wing following search and seizure operations conducted in the Kushal Group of Ahmedabad, which revealed the group's involvement in providing accommodation entries of bogus long-term capital gains and losses. The Assessing Officer thereafter examined the material, conducted necessary verifications, and recorded satisfacti....
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....that despite repeated opportunities, the assessee has not furnished any plausible or satisfactory explanation as to why such a large number of shares of Kushal Tradelink Ltd., a company having no financial credentials, business performance, or market fundamentals, were purchased, nor was any material placed on record to justify the astronomical rise in its share price within a short span of time. Mere reliance on contract notes, demat statements, and bank payment records cannot discharge the onus placed upon the assessee under section 68 of the Act to prove the genuineness of the transactions, particularly when the surrounding facts and circumstances point to a pre-arranged and artificial accommodation entry designed to convert unaccounted income into exempt capital gains. 9. We find that the Assessing Officer has drawn his conclusions based on cogent material and well-documented findings of the Investigation Wing and the SEBI order, which established that the shares of Kushal Tradelink Ltd. were part of a manipulated trading pattern through synchronized and circular trades by connected entities, resulting in artificial inflation of the share price. The assessee's failure to jus....
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....umar Patel [2024] 167 taxmann.com 660 (Ahmedabad - Trib.), Shailesh K. Patel HUF v. ITO [2024] 164 taxmann.com 669 (Ahmedabad - Trib.), and Smt. Paramadevi Tekriwal v. ITO [2025] 172 taxmann.com 430 (Ahmedabad - Trib.), wherein it has been categorically held that long-term capital gains arising from manipulated penny stock transactions, supported only by paper documentation, cannot be treated as genuine. 12. We note that the assessee contended that the transactions were genuine and duly supported by documentary evidence such as demat statements, contract notes, and bank records. The assessee also placed reliance on the order of the ITAT Ahmedabad Bench in ITO v. Deval Pranav Patel (L/H of Late Shri Pranav Mahendrabhai Patel), ITA No. 182/Ahd/2024, dated 17.12.2024, where the Tribunal had deleted a similar addition relating to the same scrip, M/s. Kushal Tradelink Ltd., and held that the transactions were genuine. However, it is well-settled law that judicial precedents are to be applied in the context of their specific facts and circumstances. Each case must rest upon its own factual matrix, and no decision can be treated as a binding precedent for a proposition divorced from th....