TaxTMI 
TaxTMI 
2025 (11) TMI 1887
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.... and 2017-18 respectively. The impugned orders were passed under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"] on 29.08.2024, arising out of the reassessment orders dated 25.03.2022 and 30.03.2022 passed by the Assessing Officer (National Faceless Assessment Centre, Delhi) under section 147 read with section 144B of the Act for A.Ys. 2016-17 and 2017-18 respectively. Since the issues involved in both the appeals are identical except for the quantum of addition, both appeals were heard together and are being disposed of by this common order for the sake of convenience and to avoid repetition. 2. Brief Facts of the Case 2.1 The assessee is an individual deriving income from trading in shares, capital gai....
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....odus operandi of penny stock companies, the AO held that the capital gains earned by the assessee were unexplained credits assessable under section 69 read with section 115BBE of the Act. Accordingly, penalty proceedings were initiated under section 271(1)(c) for A.Y. 2016-17 and under section 271AAC(1) for A.Y. 2017-18. 2.4 In the appellate proceedings before the learned CIT(A) the assessee challenged the validity of the reassessment proceedings and also contested the addition made by the Assessing Officer treating the long-term capital gains (LTCG) earned from sale of shares of Kushal Tradelink Ltd. as unexplained income under section 69 of the Act. The assessee submitted that the transactions of purchase and sale of shares were carrie....
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.... person relied upon. It was contended that there was no evidence of cash movement, no seizure or recovery of documents indicating collusion, and no inquiry from the brokers or stock exchange authorities to substantiate the allegation of price rigging. The AO, as per the assessee, acted on mere suspicion and generalized findings, without demonstrating any link between the assessee and any alleged operator or entry provider. Further, the assessee also highlighted procedural lapses such as denial of hearing through video conferencing despite a specific request and technical difficulties faced in uploading submissions prior to the closure of the portal. 3. After considering the submissions of the assessee and the material on record, the lear....
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....appeals in full. 4. Aggrieved by the orders of CIT(A), the Revenue is in appeal before us raising following common grounds of appeal except the quantum involved - In ITA No. 1817/Ahd/2024 1. Whether on the facts and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,38,28,376/- (In ITA No. 1818 the amount is Rs. 1,28,65,612/-), without appreciating the facts of the case? 2. Whether on the facts and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee has transacted with M/s Kushal Group, an entity which is an accommodation entry provider? 3. The appellant craves leave to add, amend, alter or withdraw any ground, which may be necessary. 4. It is therefore ....
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.... before us. 6.1 The addition of Rs. 1,38,28,376/- (in A.Y. 2016-17) and Rs. 1,28,65,612/- (in A.Y. 2017-18) made by the Assessing Officer under section 69 of the Act pertains to the sale of shares of Kushal Tradelink Ltd., which the Assessing Officer treated as a bogus accommodation entry arising out of penny stock manipulation. The AO relied primarily on a report of the Investigation Wing and general allegations of price rigging without bringing on record any direct nexus between the assessee and any accommodation entry provider. No material evidence, such as a money trail or statement implicating the assessee, was cited by the AO to substantiate the charge of sham transaction. 6.2 The learned CIT(A), after a comprehensive appreciati....
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....nted, rendering the assessment vulnerable to violation of the principles of natural justice. The CIT(A) has rightly relied upon the decisions of the Hon'ble Supreme Court in Andaman Timber Industries v. CCE [Civil Appeal No. 4228 of 2006] and the Bombay High Court in CIT v. Mukesh Ratilal Marolia [ITA No. 456 of 2007], where denial of cross-examination was held to vitiate the proceedings. 6.5 The CIT(A) also relied on the judgment of the Hon'ble Bombay High Court in PCIT v. Indravadan Jain HUF (ITA No. 454 of 2018, dated 12.07.2023), and the decisions of the coordinate Benches in Atulbhai Amritlal Mehta v. DCIT [2023 TAXSCAN (ITAT) 709], Manish Kumar Baid v. ACIT [ITA No. 1237/Kol/2017], and Kiran Kothari v. ITO [ITA No. 443/Kol/2017], t....