TaxTMI 
TaxTMI 
2026 (7) TMI 1695
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....income of Rs. 26,37,880/-. Subsequently, the AO received information on Insight portal from Investigation Wing that a search and seizure action was carried out in the case of Kushal Group u/s. 132 of the Act on 05.02.2019 and it was found that Kushal Group was engaged in providing accommodation entries in the forms of bogus long-term capital gains (for short, "LTCG") / short-term capital gains (for short, "STCG"). It was also found that during financial year 2017-18, the Assessee had also traded in the scrips of Kushal Group and Kushal Group, had booked LTCG/STCG of Rs. 44,19,060/-. As per information, the Assessee had entered into fictitious transactions amounting to Rs. 44,19,060/-with Kushal Group and booked bogus loss. Therefore, the AO issued show cause notice u/s. 148A(b) which was duly replied by the Assessee. 3.1 The Assessee, in her reply, apart from objecting the reopening of the assessment on legal grounds, further submitted that the Assessee had traded in the scrip of M/s. Kushal Limited in regular course and that the Assessee was not involved in any type of bogus transaction or price rigging, nor was she aware of any such activity done by any other person relating t....
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....he provisions of Section 149 of the Act as in force during the relevant period, no notice u/s. 148 could be issued for the relevant assessment year if three years have elapsed from the end of the relevant assessment year, unless the case falls under Clause (b). Since the case of the Assessee was clearly covered u/s. 149(1)(a) of the Act and the three years' time period from the end of the relevant year expired on 31.03.2022 and the notice was issued on 07.04.2022, the Ld. CIT(A), therefore, held that the same was time barred. 4.1 The Ld. CIT(A), further referred to the provisions of Section 148 of the Act providing that the no notice u/s. 148 can be issued without obtaining the prior approval of the specified authority. The Ld. CIT(A) further observed that as per the provisions of Section 151 as in force during the relevant period, the specified authority for the purpose of Section 148 and section 148A was Principal Commissioner of Income Tax, (for short, "PCIT") if three years or less than three years have elapsed from the end of the relevant assessment year; and it was Principal Chief Commissioner of Income Tax, (for short, "PCCIT") if more than three years have elapsed from t....
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....e aforesaid provisos perhaps have escaped the attention of the Ld. CIT(A). In the case in hand, the notice u/s. 148A(b) of the Act was issued by the AO on 11.03.2022 and reply thereto was filed by the Assessee on 19.03.2022. Under the circumstances, as per the above-reproduced proviso to of section 149(1), the limitation period stopped running on 11.03.2022 and restarted on 19.03.2022 and further, as per the fourth proviso, if after exclusion of the time period allowed to the Assessee for filing reply to the notice u/s. 148A(b), the period of limitation available to the AO for passing order u/s. 148A(d) of the Act is less than seven days, the remaining period shall be extended to seven days. In the case in hand, after excluding the time period consumed of eight days from the issue of notice u/s. 148A(b) till the filing of the reply by the Assessee to the said notice, the order u/s. 148A(d) and the notice u/s. 148 of the Act have been issued well within the limitation period. Similarly, in our view, for the purpose of Section 151 of the Income Tax Act, the said limitation period as provided u/s. 149 of the Act, including the third and fourth provisos for calculating the time period ....
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....he Assessee and in favour of the Revenue. 11. Now coming to the merits of the case, the Ld. CIT(A) has also deleted the additions on merits. The relevant part of the order of the Ld. CIT(A) is reproduced as under: "...6.18 In nutshell, if the facts of the case on hand are tested in the line of the decisions of the Hon'ble Courts (Supra), the same are squarely applicable in the case of the appellant in as much as the appellant has categorically demonstrated with all supporting documentary evidences including bank statements, invoice of brokers, contra accounts and statements of sale proceeds. It is reiterated that the receipt of money being sale proceeds on account of sale of shares are routed through banking channel only and in none of the account, cash was ever deposited to show circulation. It is also the fact that A.O has no evidentiary or corroborative value for the reason that the A.O has merely relied on the report of DI(Inv.), Ahmedabad. The A.O has framed the assessment order without conducting any inquiry from the relevant parties or independent source of evidence. Even the statement recorded by the Investigation Wing has not been got confirmed or corrobora....
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....ted anything about such report in the reasons recorded by him nor the A.O. has provided a copy thereof to the appellant for proper rebuttal, if need be arise. Thus, without causing any independent inquiries, the A.O. has proceeded on the basis of such borrowed satisfaction for making impugned addition u/s.68 of the Act. (iii) Even the so-called details/papers stated in the order are self serving and have no evidentiary value in the eyes of law. (iv) The A.O. has failed to corroborate or prove the contents of papers/statements being relied upon without providing copies thereof and/or affording any opportunity to the appellant to cross-examine them. (v) The company Kushal Tradelink Ltd. is an existing company incorporated in the Companies Act, 1956 having corporate identity No. INE647N01021. (vi) No notices u/s. 133(6) of the Act are issued by the A.O. to cross verify the dealing of appellant and obtain details from share brokers through whom the share transaction is undertaken by the appellant, nor such notice issued for obtaining details from company whose shares have been purchased or sold by the appellant.; nor any details gathered under such n....
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....his context, it is seen that the appellant has received the sale consideration through a recognized broker being a member with BSE/NRD/NSE, bearing SEBI Registration No. INB011107431 whose contract notes and contra accounts are produced during the course of assessment proceedings. Thus, the identity undoubtedly proved. Similarly, creditworthiness is also proved by placing contra account of the broker on record. Thirdly, with regard to genuineness of the transaction, it is submitted that the entire sale consideration has been received through proper banking channel, by producing copies of bank statements evidencing transaction of sale of shares including purchases as well. Thus, by adducing more than adequate evidences on record, the appellant has discharged not only primary onus but in entirety, cast upon the appellant within the meaning of provisions of section 68 of the Act. The case of the appellant is covered by the decision of Hon'ble Gujarat High Court in the case of Rohini Builders reported in [2002] 256 ITR 360 (Guj) for the proposition that in view of the provisions of section 68 of the Act, the appellant has to prove identity, genuineness and creditworthiness of the t....
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....cannot be doubted. Therefore, also the addition so made by A.O. is unsustainable and liable to be deleted. 6.20 In view of the above stated facts and circumstances of the case of the appellant, the premise of the appellant having earned bogus LTCG and consequent addition u/s.68 of the Act so made by the A.O. of Rs.44,19,060/- on account of LTCG in sale of scrip of Kushal Tradelink Ltd. is not sustainable. On the other hand, the appellant has duly discharged the primary onus cast under section 68 of the Act by furnishing more than adequate documentary evidences on record, as mentioned in previous paragraphs. The A.O. did not find any infirmity in those primary documents but relying on information supplied by the DDIT(Inv.), Ahmedabad, he proceeded to make addition without any inquiries thereof, in the hands of the appellant which in my opinion is not sustainable. 6.21 I need not elaborately discuss the other cases cited by the appellant. Considering the facts of the case, the evidences placed on record and in view of above detailed discussions, I am of the considered view that the appellant has discharged the onus cast upon him by provisions of section 68 of the Ac....