RENU GOEL,DELHI V. INCOME TAX OFFICER, DELHI, DELHI

ITA 4656/DEL/2025

AI Insights

This case involves an appeal by Ms. Pooja Dhalwani against the order of the CIT(A)/NFAC, which sustained an addition of Rs.16,29,538 under section 68 of the Income Tax Act, 1961, concerning alleged bogus Long-Term Capital Gain from the sale of shares. The assessee contested the reassessment proceedings initiated under section 148, arguing that the notice was based on incorrect facts and that the proceedings were not conducted in accordance with the principles laid down by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO. The ITAT found procedural lapses in the handling of the reassessment and the appeal, leading to the remand of the case to the CIT(A) for a comprehensive review.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840201 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 29-07-2025
• Other Referred Cases: GKN Driveshafts (India) Ltd. v. ITO, Micro Marbles Private Limited vs. ITO, PCIT vs NRA Iron and Steel, PCIT vs Swati Bajaj, Suman Poddar vs ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings; Unexplained cash credit; Reopening of assessment; Principle of natural justice; Reason to believe; Tangible material; Bogus
• Section: 147; 148; 271(1)(c); 68; 139; 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘SMC’: NEW DELHI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER ITA No.4656/Del/2025 Assessment Year 2013-14 Assessee Ms. Pooja Dhalwani, CA Respondent Sh. Manoj Kumar, Sr. DR Date of Hearing 14.01.2026 Date of Pronouncement 27.02.2026 ORDER PER C.N. PRASAD, JM, This appeal is filed by the assessee is directed against the order of the CIT(A)/NFAC dated 09.05.2025 for the A.Y. 2013- 14 in sustaining the addition of Rs.16,29,538/- made u/s.68 of the Act. 2. The assessee has raised following grounds of appeal :- 1. That the learned Commissioner of Income Tax (Appeals) [NFAC] (\"Ld. CIT(A)\") has erred both in law and on facts in confirming the addition of Rs. 16,29,538/ made by the Assessing Officer under section 68 of the Income-tax Act, 1961 on account of alleged bogus Long-Term Capital Gain Renul Goel D-301, Anupam Apartment East Arjung Nagar, Delhi PAN No. AKPPG7458K Vs ITO Delhi Assessee Respondent Printed from counselvise.com Page | 2 from sale of shares of M/s Coitre Industries Ltd./Mahavir Industries Ltd. 2. That on facts and circumstances of the case and in law, the reassessment proceedings initiated under section 148 of the Act are bad in law and void ab initio, as the very basis for issuance of notice that the appellant had failed to file a return of income under section 139 of the Act is factually incorrect. The appellant had duly filed her return of income for Assessment Year 2013-14 on 29.03.2014 under section 139 of the Act, and hence the precondition for invoking section 147 did not exist. Consequently, the notice issued under section 148 of the Act and all subsequent proceedings based thereon are liable to be quashed. 3. That on facts and circumstances of the case and in law, the reasons recorded for reopening the assessment were not fully and properly communicated to the appellant, and furthermore, the Ld. Assessing Officer (\"Ld. AO\") failed to dispose of the objections raised by the appellant in accordance with the binding principles laid down in GKN Driveshafts (India) Ltd. v. ITO [(2003) 259 ITR 19 (SC)], thereby vitiating the reassessment proceedings. 4. That on facts and circumstances of the case and in law, the reassessment proceedings initiated merely on the basis of information received from the erstwhile Ward 72(4), New Delhi, without any independent or further investigation to establish the specific involvement of the appellant, are mechanical and lack legal validity. 5. That on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in sustaining the addition merely based on generalized findings and third-party investigation reports without establishing any direct link between the appellant and any accommodation entry provider and/or without granting any opportunity of cross- examination, 6. That on facts and circumstances of the case and in law, the Ld. CIT(A) as well as Ld. AO failed to appreciate that the appellant had furnished complete documentary evidence including contract notes, demat account statements, and bank statements to substantiate the genuineness of the transaction and discharge the burden cast upon her under section 68 of the Act. 7. That on facts and circumstances of the case and in law, the assessed gross total income considered for Printed from counselvise.com Page | 3 computation of tax liability in the tax calculation sheet amounts to Rs. 24,90,706/-, whereas the assessment order reflects the assessed gross total income as Rs. 19,32,694/- , leading to excess computation of tax demand without any supporting reasoning or explanation, rendering the demand arbitrary and unsustainable. 8. That the entire addition has been made and upheld on conjectures and surrnises without any tangible material or evidence to disprove the documents and explanation furnished by the appellant. 9. That on facts and circumstances of the case and in law, the Ld. CTT(A) has failed to adjudicate all the grounds of appeal raised by the appellant as per Form 35 and disposed off the appeal in mechanical manner without giving reasoned findings on each ground, thereby violating principles of natural justice and rendering the order bad in law. 10. That on facts and circumstances of the case and in law, the Ld. CIT(A) has failed to consider the judicial precedents and case laws relied upon by the appellant in the written submissions, which goes to the root of the matter and violates principles of fair adjudication. 11. That on facts and circumstances of the case and in law, the Ld. CIT(A) as well as Ld. AO failed to consider judicial precedents holding that once the assessee has discharged her primary onus and no adverse material has been brought on record, the addition under section 68 of the Act is unsustainable. 12. That, in law and facts and circumstances of the case, Ld. AO erred in initiating the penalty under section 271(1)(c) of the Act. 13. That in law and facts and circumstances of the case, Ld. AO erred in charging interest under section 234A and 234B of the Act. 3. The Ld. Counsel for the assessee at the outset submitted that notice u/s.148 issued by the AO recording reasons for reopening is bad in law for the reason that the reasons recorded Printed from counselvise.com Page | 4 for reopening of assessment are on incorrect premises of fact that the assessee did not file return of income. However, as a matter of fact the assessee filed return of income on 29.03.2014 and therefore, the foundational fact is wrong and the reason to believe has collapsed. 4. The Ld.Counsel for the assessee further submitted that the objections filed on 28.08.2022 by the assessee for reopening of assessment were not disposed of and therefore, non- compliance with the procedure proved by the Hon’ble Supreme Court in the case of GKN Driveshafts India Ltd. Vs. ITO (259 ITR 19). 5. The Ld. Counsel for the assessee further referring to page – 36 of the paper book which are the reasons for reopening of assessment, submitted that the reasons for reopening supplied by the AO to the assessee alongwith notices u/s143(2) dated 24.01.2022 was only one liner i.e. “Financial transactions i.e. Bogus Long Term Capital Gain to the tune of Rs.21,87,550/- in the F.Y. 2012-13 relevant to A.Y. 2013-14”. The Ld. Counsel for the assessee submitted that in the reasons provided by the AO nowhere it is alleged that there is escapement of income. The Ld. Counsel for the assessee placing reliance on the decision of the Hon’ble Rajasthan High court in the case of Micro Marbles Private Limited vs. ITO (457 ITR 569) submitted that the Hon’ble High court held that when the materials referred to in the reasons to believe was not supplied to the assessee, the entire proceedings for reopening of assessment and leading to consequential assessment stands vitiated in law. Printed from counselvise.com Page | 5 6. Heard rival submissions and perused the orders of the authorities below. In this case the reasons recorded and supplied to the assessee which were placed at page -36 is as under :- “Reason for reopening: Financial transactions i.e. Bogus Long Term Capital Gain to the tune of Rs. 21,87,550 in the F.Y. 2012-13 relevant to A.Y. 2013-14. If you have any objection to the reasons recorded, you are requested to file the same on or before the date hearing. In case of non-filing of objection, it will be presumed that the assessee has no objection to reopening of the case.” 7. It is observe that the assesse has raised the several legal grounds before the Ld. CIT(A) which were extracted in page-2 of the CIT(A)’s order including the challenge of issue of notice u/s.148 of he Act as bad in law and consequently reassessment framed u/s.143(3) r.w.s. 147 of the Act is not sustainable. However, the Ld. CIT(A) disposed of the appeal in a vry cryptic manner observing as under :- 6. Decision: have considered the facts of the case, written submission and case laws relied upon by the appellant as against the observations and findings of the AO in the assessment order. The submissions and contentions of the appellant are discussed and decided as under. 6.1 Ground No.1: In this ground the appellant has challenged the addition worth Rs. 1629538/- as unexplained cash credit u/s 68 of the Income Tax Act. During the course of scrutiny, it was found that the appellant has sold scrip of M/s Coitre Industries/ Mahavir Industries Ltd. controlled and managed by entry operators. The appellant has claimed LTCG and Printed from counselvise.com Page | 6 has claimed exemption u/s 10(38) of the Income Tax Act. The AO has analyzed the working of the company M/s Coitre Industries/ Mahavir Industries Ltd from pages 4 to 20 of the assessment order and has clearly made out the case that the above mentioned company is a shell company, providing only bogus LTCG 6.1.1 Now before me in the appellate proceedings, the appellant has filed written submission. In the submission, the appellant has filed the contract notes, the D-mat account, the balance sheet of Mis Coitre Industries/Mahavir Industries Ltd. The appellant has also that it is genuine tränsaction and the appellant has satisfied all the conditions as per Section 10(38) of the Income Tax Act. The AO has clearly made out the case that M/s Coitre Industries/ Mahavir Industries Ltdis engaged in giving bogus LTCG. Since this is a clear cut case of bogus LTCG given by the appellant and there are so many decision in the favour of the revenue on this issue. The AO has relied upon the decision of Hon. SC in the case of PCIT vs NRA Iron and Steel on identical issue the decision of Hon. Kolkata HC in the case of PCIT vs Swati Bajaj has been confirmed by Hon. SC in the case of bogus LTCG. Similarly, the decision of Hon. Delhi HC in the case of Suman Poddar vs ITO has been confirmed by Hon SC again in the case of bogus LTCG. Hence the additions of the AO are confirmed and appeal of the appellant is dismissed. 6.3 Ground No.9, 10 and11: These grounds are consequential and general in nature and do not require to be adjudicated. 8. As could we observed from the above the Ld. CIT(A) did not address the grounds No.4.1 to 5.2 where legal grounds were raised by the assessee. Even on the merits the order passed by the Ld. CIT(A) is very cryptic and therefore, I am of the view that this appeal has to go back to the file of the ld. CIT(A) for deciding all the grounds on merits afresh. Thus, the appeal of the assessee is restored to the file of the Ld. CIT(A) who shall Printed from counselvise.com Page | 7 adjudicate all the grounds in accordance with law after providing adequate opportunity of hearing to the assessee. 9. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 27.02.2026. Sd/- [C.N. PRASAD] JUDICIAL MEMBER Dated: 27.02.2026 NEHA , Sr.P.S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "