ABBASI VOHRA,AHMEDABAD V. THE ITO, WARD-4(1)(1), AHMEDABAD

ITA 911/AHD/2025

AI Insights

The case involves Abbasi Vohra, the appellant, who contested the addition of Rs. 59,69,286 as Long Term Capital Gain (LTCG) from the sale of shares of Kushal Limited, which was treated as income from other sources by the Income Tax Officer (ITO). The initial assessment for the A.Y. 2017-18 was reopened under Section 147 of the Income Tax Act, 1961, based on new information regarding the assessee's income. The First Appellate Authority (CIT(A)) dismissed the appeal due to non-compliance with procedural requirements, as the assessee failed to respond adequately to notices. The Income Tax Appellate Tribunal (ITAT) found the assessee's explanation for non-compliance insufficient but set aside the matter to the CIT(A) for a fresh assessment after imposing a cost on the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633238 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S. K. AGAL
• Assessee Lawyers: HARDIK VORA
• Keywords: Set aside; Income from undisclosed sources; Bogus
• Section: 147

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.911/Ahd/2025 Assessment Year: 2017-18 Abbasi Vohra, 3614/2, Moti Voharvad, Kazi Na Dhaba, Astodia Chakla, Ahmedabad – 380 001. Gujarat. [PAN – ABRPV 0917 F] Vs. Income Tax Officer, Ward – 4(1)(1), Pratyaksh Kar Bhawan, B/h. Stock Exchange, Nr. Panjara Pole X Road, Ahmedabad – 380 015 Gujarat. (Appellant) (Respondent) Assessee by Shri Hardik Vora, A.R. Revenue by Shri S.K. Agal, Sr. DR Date of Hearing 11.06.2025 Date of Pronouncement 13.06.2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC) [hereinafter referred as ‘the CIT(A)’] dated 18.03.2025 for the Assessment Year (A.Y.) 2017-18. 2. The brief facts of the case are that the assessee had filed the return of income for the A.Y. 2017-18 on 28.03.2018 declaring total income of Rs.19,24,470/-. The Assessing Officer (AO) had received information that the assessee was beneficiary of Long Term Capital Gain of Rs.59,69,286/- received in respect of transaction of shares of Kushal Limited. On the basis of this information, the case of the assessee was reopened under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) after recording the reason. The assessment was ITA No.911/Ahd 2025 Assessment Year: 2017-18 Abbasi Vohra vs. ITO Page 2 of 4 completed under Section 147 read with Section 144B of the Act on 25.05.2023 at a total income of the Rs.78,93,756/-. The AO had made addition of Long Term Capital Gain of Rs.59,69,286/- from sale of stock of Kushal Limited as income from other sources on the ground that this was a manipulated entry to route unaccounted income of the assessee as bogus LTCG. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority which was decided vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee is in second appeal before us. The following grounds have been taken by the assessee in this appeal: - 1. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming initiation of re- assessment proceedings u/s.148 of the Act. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing order without discussing grounds on merits. 3. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-Tax (Appeals) has erred in passing order without providing enough opportunities to represent the case of the assessee. 4. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-Tax (Appeals) has erred in passing order without considering that assessee was unaware about the hearing notices. 5. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming the addition of Rs.59,69,286/- on account of LTCG from sale of stock/scrip of Kushal Ltd. 6. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-Tax (Appeals) has erred in not considering that all the purchase and sale transactions of Kushal Ltd. shares were done through banking channels and Demat account and that assessee had furnished contract notes and bank statements during the assessment proceedings. ITA No.911/Ahd 2025 Assessment Year: 2017-18 Abbasi Vohra vs. ITO Page 3 of 4 7. It is therefore prayed that the above addition/disallowance made by the assessing officer may please be deleted. 8. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 5. Shri Hardik Vora, Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee for the reason that no compliance was made before him. He explained that in response to notice received from Ld. CIT(A), the assessee had sought adjournment on 07.02.2025. However, no compliance could be made to the subsequent notices as the assessee was not regular in checking the e-mail account. The Ld. AR, therefore, requested that the matter may be set aside to the file of the Ld. CIT(A) with direction to allow another opportunity to the assessee. 6. Per Contra, Shri S.K. Agal, Ld. Sr. DR supported order of the Ld. CIT(A). He, however, had no objection, if the matter is set aside to the file of Ld. CIT(A). 7. We have considered the rival submissions. We are not convinced with the explanation of the assessee for non-compliance before the Ld. CIT(A). The e-mail Id. mentioned in Form No.35 was “[e-mail]” which belonged to the assessee himself. Further, an option was also given to receive the notices/communication on this e-mail. When the assessee had sought adjournment on the first date of hearing on 07.02.2025 he should have been careful enough to access his e-mail account and make compliance before the Ld. CIT(A) on the subsequent dates. Since we are not convinced with the explanation of the assessee for the non-compliance before the Ld. CIT(A), we impose a cost of Rs.5,000/- (Rupees Five Thousand only) on the assessee which should be paid to the Prime Minister’s National Relief Fund ITA No.911/Ahd 2025 Assessment Year: 2017-18 Abbasi Vohra vs. ITO Page 4 of 4 within a period of 15 days from the date of receipt of this order. At the same time, since the Ld. CIT(A) could not decide the matter on merits in the absence of any compliance on the part of the assessee, we deem it proper to set aside the matter to the file of the Ld. CIT(A) with direction to allow another opportunity to the assessee. The Ld. CIT(A) would proceed in the matter after verifying that the cost is paid by the assessee. Further, the assessee is also directed to make compliance before the Ld. CIT(A) in the course of set-aside appeal proceeding. 8. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 13th June, 2025. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 13th June, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "