NEENA BIHANI,KOLKATA V. I.T.O., WARD -49(2), KOLKATA

ITA 1900/KOL/2024

AI Insights

The case involves Neena Bihani, the appellant, who contested the order of the National Faceless Appeal Centre, Delhi, for the Assessment Year 2015-16. The primary issue was the reopening of her assessment under section 147 of the Income Tax Act, based on alleged unexplained investments in shares of Jackson Investment Ltd. The AO had initially issued a notice under section 148, which led to a reassessment where long-term capital gains were erroneously assessed. The Tribunal found that the AO's actions were inconsistent and lacked proper reasoning, leading to the quashing of the reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25024 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONALISHA PAL MUKHERJEE
• Assessee Lawyers: NARENDRA KEDIA
• Keywords: Reopening of assessment; Capital Gains; Accommodation entries; Bogus
• Section: 147; 148; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 1900/KOL/2024 (Assessment Year:2015-16) Neena Bihani, 48A, Canal Street, Lake Town, Sreebhumi, Kolkata-700048, West Bengal Vs. ITO Ward 49(2) Income Tax Office, Manicktala, Civil Centre, Uttarapna Building Complex, Ultadanga, Kolkata-700057 West Bengal (Appellant) (Respondent) PAN No. ADEPB6847P Assessee by : Shri Narendra Kedia, AR Revenue by : Ms. Monalisha Pal Mukherjee, DR Date of hearing: 13.03.2025 Date of pronouncement : 25.03.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 19.07.2024 for the AY 2015-16. 02. At the time of hearing the ld. Counsel for the assessee pressed the ground no.6, which read as under:- “6. On the facts and in the circumstances of the case, and in accordance with the order under section 148A(d) of the Act, and in the show cause notice also the allegation of escaped income pertained to the purchase of shares, which led to the issuance of a notice under section 148. However, the assessment order erroneously assessed the case based on long-term capital gains, which contradicts the principles of equity and fairness in completed assessments.” Page | 2 ITA No.1900/KOL/2024 Neena Bhani; A.Y. 2015-16 03. The facts in brief are that the assessee filed the return of income, declaring total income of ₹2,35,680/-. The ld. AO received information that the assessee has purchased shares of Jackson Investment Ltd. worth ₹1,30,17,199/- and the source of investments remained unexplained. Accordingly, notice u/s 148 of the Act was issued on 28.07.2022, after reopening of assessment u/s 147 of the Act. The assessee filed the return of income on 28.09.2021 originally and requested the ld. AO to treat the same as return filed in response to Section 148 of the Act. Thereafter, the notice u/s 142(1) of the Act dated 25.01.2023, was issued, requesting the assessee to furnish the details of investment made in Jackson Investment Ltd. and the ld. AO also noted that the assessee has obtained bogus accommodation entries in the form of Long-Term Capital Gain/ Loss and Short-Term Capital Gain / Loss. The assessee replied the said notice of the ld. Assessing Officer. Thereafter, the ld. AO on page no.8 noted that the assessee has made Long Term Capital Gain of ₹1,30,17,199/- with purchase of 41,900/- equity shares of Jackson Investment Ltd. through SMC Global Securities Limited on 26.08.2014 to 16.10.2015 and the said shares were sold on 09.07.2015, through Geojit BNP Paribas. Thereafter, the ld. AO noted that the assessee has not furnished any documentary evidences to establish the purchase and sale of shares to prove the same to be genuine and accordingly, treated the sales of ₹1,30,17,199/- as sale during the impugned year under consideration. The ld. AO further noted that since the assessee has failed to establish the sales with supporting documents like bank statements entries, purchase/ sale invoices contract cum sale bills reflecting the demat account etc, therefore, ₹1,30,17,199/- is added to the income of the assessee as bogus Long Term Capital Gain. Page | 3 ITA No.1900/KOL/2024 Neena Bhani; A.Y. 2015-16 04. The ld. CIT (A) dismissed the appeal of the assessee on the legal issue raised by the assessee of invalid reopening of the assessment of the assessee. 05. After hearing the rival contentions and perusing the materials available on record, we find that the reasons recorded by the ld. AO to reopen the assessment and issued notice u/s 148 of the Act on 28.07.2022. We note that in the order passed u/s 148A(d) of the Act and in the show cause notice the allegation was with regard to escapement of income pertaining to purchase of shares which led to issuance of notice u/s 148 of the Act. However, in the assessment framed the ld. AO has made a very incoherent finding sometimes referring to the escapement of income and sometime stating that the assessee has not explained the purchase and sale of shares with cogent evidences with contract notes and Demat accounts, bank statement, etc. and on page no.8 para 2, the ld. AO himself noted that these shares were sold in the next assessment year and these shares of M/s Jackson Investment Ltd. numbered 41,000/- equity shares were sold through SMC Global Securities Limited and finally, added the same on account of Long Term Capital Gain. In our opinion there is total non-application of mind while passing the order u/s 148A(d) of the Act, issuing show cause notice and while framing the assessment at every stage as the AO was fully of casual and there was complete non-application of mind. Under these circumstances, we are not in a position to sustain the reopening of assessment by the ld. AO. We note that AO recorded a finding that the shares were sold in the next financial year whereas the addition was made on account of long term Page | 4 ITA No.1900/KOL/2024 Neena Bhani; A.Y. 2015-16 capital gain. Consequently, we quash the reopening of assessment and also the assessment framed thereafter. 06. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 25.03.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 25.03.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "