SUNITA GARG,KOLKATA V. ITO, WARD 43(1), KOLKATA

ITA 1382/KOL/2023

AI Insights

The case involves Sunita Garg, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2011-12. The primary issue was the treatment of long-term capital gain and short-term capital loss from the sale of shares, which were deemed as unexplained credit under section 68 of the Income Tax Act, 1961. The Assessing Officer had made an addition to the total income of the assessee based on the findings from surveys on various share brokers, which revealed a scheme of providing accommodation entries of bogus capital gain/loss. The Tribunal found that the assessee was not given a fair opportunity to present her case and thus remitted the matter back to the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473216 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Accommodation entries; Bogus
• Section: 148; 144; 142(1); 143(2); 68

Judgement Text

" ITA No. 1382/KOL/2023 (A.Y. 2011-2012) Sunita Garg 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) & Shri Sanjay Awasthi, Accountant Member I.T.A. No. 1382/KOL/2023 Assessment Year: 2011-2012 Sunita Garg,……………………….…..…………Appellant 36A, Sahitya Parishad Street, Kolkata-700006 [PAN:ADSPG1683J] -Vs.- Income Tax Officer,…………………………....Respondent Ward-43(1), Kolkata, 3, Government Place (West), Kolkata-700001 Appearances by: Shri A.K. Tibrewal, FCA and Shri Saurabh Gupta, FCA, appeared on behalf of the assessee Shri P.N. Barnwal, CIT, D.R. and Smt. Ranu Biswas, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: January 28, 2025 Date of pronouncing the order: February 26, 2025 O R D E R Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 23rd November, 2023 passed for Assessment Year 2011-12. ITA No. 1382/KOL/2023 (A.Y. 2011-2012) Sunita Garg 2 2. Brief facts of the case are that the assessee is an individual, who filed her return of income for the assessment year 2011-12 showing total income of Rs.5,06,014/- consisting of income from other sources. The return of income was duly processed on 11.06.2012. The assessee claimed short-term capital loss of Rs.5,94,406/- from sale of shares and exempt long-term capital gain of Rs.30,50,742/- in the return of income. After getting information from Pr. Director of income Tax (Inv.), Kolkata vide letter no. F. No. 81/2017-18/7491-7518 dated 23.02.2018, surveys were conducted on various share brokers during which share brokers accepted their role in the entire scheme of providing accommodation entries of bogus long-term capital gain/short- term capital loss in the case of penny stock company i.e. “Twenty- First Century (India) Limited”. The income received by the assessee during the year from the sale of penny stock is nothing but bringing back of assessee’s own unaccounted income in the guise of exempt capital gain through arranged transaction with the promoter/broker and mediator. Therefore, the total consideration of Rs.61,59,800/- received from sale of shares for the F.Y. 2010- 11 represents assessee’s own unaccounted money. The case of reopened under section 148 of the Act with the due approval of ld. PCIT, Kolkata-15. Notice was served to the asseessee on 22.03.2018 through e-mail and also by post. In response to the same, the assessee filed return on 06.06.2018 showing total income of Rs.5,15,370/-. Thereafter notices under section 143(2) and 142(1) were issued but the assesese did not respond to the above notices. Thereafter a questionnaire was issued to the assessee on 14.11.2018 asking various queries but the assessee ITA No. 1382/KOL/2023 (A.Y. 2011-2012) Sunita Garg 3 failed to respond to the questionnaire. Thereafter a show-cause notice was issued on 04.12.2018 asking the assessee why the assessment should not be completed as per materials available under section 144 of the Income Tax Act, 1961 informing that failure to provide information, details and documents will lead to action as per the provisions of the Income Tax Act without further reference, but the assessee did not respond. Finally, the ld. Assessing Officer made an addition of Rs.7,86,050/- to the total income of the assessee and assessed total addition at Rs.69,45,850/-. 3. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). The ld. Commissioner (Appeals) treated the long-term capital gain and short-term capital loss as unexplained credit under section 68 of the Act and dismissed the appeal of the assessee. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal. 5. We have heard both the sides. It was the submission of the ld. Counsel for the assessee that the assessee had made her submissions before the ld. Commissioner (Appeals), but the ld. CIT(Appeals) did not apply his mind and did not consider the grounds of appeal on merit. Withing going into the root of the case and also the submissions of the assessee, the ld. CIT(Appeals) dismissed the appeal ex-parte. ITA No. 1382/KOL/2023 (A.Y. 2011-2012) Sunita Garg 4 6. On the other hand, it was the submission of the ld. Departmental Representative that the ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate her claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities. 7. We have perused the material available on record. By considering the totality of the facts and circumstances of the case, we are of the view that it is a fit case to remit the matter back to the file of ld. Assessing Officer in order to meet the principle of natural justice and to examine the evidences filed by the assessee and pass a detailed speaking order. We also direct the ld. Counsel for the assessee to file all the relevant documents before the ld. Assessing Officer to substantiate the case of the assessee. If the assessee fails to submit any documentary evidence, then the ld. Assessing Officer will be at liberty to pass an order basing on the material available on record. Hence, the grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 26/02/2025. Sd/- Sd/- (Sanjay Awasthi) (Duvvuru RL Reddy) Accountant Member Vice-President (KZ) Kolkata, the 26th day of February, 2025 ITA No. 1382/KOL/2023 (A.Y. 2011-2012) Sunita Garg 5 Copies to :(1) Sunita Garg, 36A, Sahitya Parishad Street, Kolkata-700006 (2) Income Tax Officer, Ward-43(1), Kolkata, 3, Government Place (West), Kolkata-700001 (3) Commissioner of Income Tax (Appeals), NFAC, Delhi (4) CIT- , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. "