KIMAYA ANURAG AGRAWAL,AHMEDABAD V. THE ITO, WARD-3(3)(2), AHMEDABAD

ITA 1471/AHD/2025

AI Insights

The case involves Kimaya Anurag Agarwal, the appellant, contesting the actions of the Income Tax Officer, Ward-3(3)(2), Ahmedabad, regarding the reassessment of Long-Term Capital Gains (LTCG) from the sale of shares of M/s. Regency Trust Limited for the Assessment Year 2011-12. The appellant challenged the reopening of the assessment under section 147, the treatment of LTCG as bogus, and the denial of exemption under section 10(38). The Tribunal found that the Assessing Officer and the CIT(A) had not adequately considered the evidence provided by the appellant and had not conducted an independent inquiry into the claims of bogus transactions. Consequently, the Tribunal decided to set aside the previous orders and remand the case for a thorough re-examination of the evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780505 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-07-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHAKAR VERMA
• Assessee Lawyers: S.N DIVETIA
• Keywords: Set aside; Corroborative evidences; Capital Gains; Principle of natural justice; Reason to believe; Penny stocks; Bogus
• Section: 147

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No.1471/Ahd/2025 (Assessment Year: 2011-12) Kimaya Anurag Agarwal, C/o Krutesh Patel and Associates, B-310, Gopal Palace, Above Hotel Mann Residency, Jhansi Ki Rani BRTS, Ahmedabad-380015. [PAN :APOPA9485 J] Vs. The Income Tax Officer, Ward-3(3)(2), Ahmedabad. (Appellant) .. (Respondent) Appellant by : Shri S.N Divetia, with Shri Samir Vora, AR Respondent by: Shri Sudhakar Verma, Sr. DR Date of Hearing 07.10.2025 Date of Pronouncement 10.10.2025 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER :- Delay Condoned The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, vide order dated 29.02.2024 relevant to the Assessment Year 2011-12. Printed from counselvise.com ITA No. 1471/Ahd/2025 Asst. Year : 2011-12 - 2– 2. The assessee has raised the following grounds of appeal: 1. That the learned Assessing Officer (AO) has erred in law and on facts in reopening the assessment under section 147 without furnishing the reasons recorded for such reopening and without there being any valid \"reason to believe that income had escaped assessment. 2. That the learned AO has erred in treating the Long-Term Capital Gain (LTCG) of 228,47,365/ on sale of shares of Regency Trust Ltd. as bogus and denying exemption under section 10(38), merely relying upon information from the Investigation Wing, without conducting any independent enquiry or giving due consideration to the evidence submitted by the Appellant. 3. That the learned AO has erred in ignoring the documentary evidence filed by the Appellant in support of the genuineness of the share transaction, including broker contract notes, cash vouchers, confirmation of purchase, sale contract notes, and SEBI's list of penny stocks. 4. That the learned AO has erred in not providing the material or evidence reled upon to creat the scrip as a penny stock and in not affording any opportunity to the Appellant to cross-examine the persons whose statements formed the basis of the reassessment. 5. That the reassessment order is bad in law, based on suspicion, surmises, and conjecture, and deserves to be quashed. 6. That the Appellant craves leave to add, amend, alter or withdraw any of the above grounds at the time of hearing. 3. On perusal of the record, we find that the assessee was granted several opportunities of hearing to furnish details, clarifications, and explanations to substantiate the claim of Long-Term Capital Gains (LTCG) arising from the sale of shares of M/s. Regency Trust Limited. However, despite multiple opportunities, the assessee failed to furnish the requisite details or explanations before the Ld. CIT(A). Consequently, the Ld. CIT(A) upheld the action of the Assessing Officer and dismissed the appeal. We further note that, based on information received from the DDIT (Investigation), the Assessing Officer alleged Printed from counselvise.com ITA No. 1471/Ahd/2025 Asst. Year : 2011-12 - 3– that the assessee had earned exempt LTCG from the sale of shares, which, as per the said information, was treated as a bogus transaction. The assessee, however, contended that documentary evidence substantiating the genuineness of the share transaction had been furnished, but the same was not independently verified by the Assessing Officer. Therefore, the Ld. Counsel for the assessee submitted that, given an opportunity, the assessee would produce all necessary details, clarifications, and documentary evidence before the Revenue authorities in support of her claim. In view of the above and in the interest of natural justice, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the Assessing Officer for a de novo assessment, with a direction to verify the documentary evidence to be furnished by the assessee. The assessee shall submit all relevant bank statements, documents, and supporting evidence, and to cooperate fully with the Revenue authorities without seeking unnecessary adjournments. 4. In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 10.10.2025. Sd/- Sd/- (DR. B.R.R. KUMAR (SUCHITRA KAMBLE) VICE-PRESIDENT JUDICIAL MEMBER (True Copy) Ahmedabad; Dated 10.10.2025 MV Printed from counselvise.com ITA No. 1471/Ahd/2025 Asst. Year : 2011-12 - 4– आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "