URMILA MAHESHWARI,JAIPUR V. DCIT CIRCLE-1, JAIPUR, JAIPUR

ITA 274/JPR/2024

AI Insights

The case involves Urmila Maheshwari, the appellant, who contested the reassessment of her income by the AO, which was confirmed by the CIT(A)/NFAC. The reassessment was based on information suggesting that the shares of M/s. Birla Pacific Medspa Ltd. (BPML) were used for money laundering through bogus capital gains/losses. The AO reopened the case under Section 147 and added Rs. 50.18 Lacs to the assessee's income, considering the transaction a sham. The CIT(A) upheld this decision, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal found that the reopening of the case and the subsequent addition were unjustified, as the assessee had not engaged in any of the alleged activities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312528 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL PARIHAR; LD
• Assessee Lawyers: ROHAN SOGANI; RAJEEV SOGANI; LD. ARS
• Keywords: Business income; Reassessment proceedings; Capital Gains; Earning of tax free income; Bogus
• Section: 147; 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH “B”, JAIPUR BEFORE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER AND SHRI NARINDER KUMAR, JUDICIAL MEMBER ITA No. 274/JPR/2024 (A.Y. 2012-13) Urmila Maheshwari, B-18, New Grain Mandi, Chandpole Bazar, Jaipur 302001 PAN No. ACCPM 1441R ...... Appellant Vs. DCIT, Circle-1, Jaipur …...Respondent Appellant by : Mr. Rohan Sogani, C.A. & Mr. Rajeev Sogani, CA. Ld. ARs Respondent by : Mrs. Swapnil Parihar, JCIT, Ld. DR Date of hearing : 30/04/2025 Date of pronouncement : 01/05/2025 O R D E R PER GAGAN GOYAL, A.M: This appeal by the assessee is directed against the order of NFAC, Delhi dated 12.01.2024 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’).The assessee has raised the following grounds of appeal: - 1. In the facts and circumstances of the case and in law, Ld. CIT(A)/National Faceless Appeal Centre has erred in, confirming the action of the Ld. AO in 2 reopening the case of the assessee under Section 147 of the Income Tax Act, 1961. The action of the Ld. CIT (A)/NFAC is illegal, unjustified, arbitrary and against the facts of the case. Relief may be please be granted by quashing the entire reassessment proceedings initiated by the Id. AO and confirmed by the Ld. CIT (A)/NFAC. 2. In the facts and circumstances of the case and in law, Ld. CIT(A)/NFAC has erred in, confirming the action of the Ld. AO in reopening the case of the assessee, without obtaining approval, in accordance with law, under Section 151 of the Income Tax Act, 1961. The action of the Ld. CIT (A)/NFAC is illegal, unjustified, arbitrary and against the facts of the case. Relief may be please be granted by quashing the entire reassessment proceedings initiated by the Id. AO and confirmed by the Ld. CIT (A)/NFAC. 3. In the facts and circumstances of the case and in law, Ld. CIT (A)/NFAC has erred in confirming the action of Ld. AO in adding amount of Rs. 50, 18,000/-, being the sale consideration received by the assessee on sale of certain shares, by considering it to be a sham transaction, thereby treating such amount to be undisclosed income of the assessee. The action of the Ld. CIT (A)/NFAC is illegal, unjustified, arbitrary and against the facts of the case. Relief may be please be granted by deleting the entire addition made by Ld. AO and confirmed by ld. CIT (A)/NFAC. 4. The assessee craves her rights to add, amend or alter any of the grounds on or before the hearing. 2. The brief facts of the case are that the assessee filed her return of income on 29.09.2012 declaring income at Rs. 26,24,020/-. Specific information was there with the department received from the office of the Dy. Director (Inv.), Unit-3(2), Delhi that during the course of investigation, it was found that the scrip of M/s. Birla Pacific Medspa Ltd. (BPML) was being used on BSE for money laundering in the form of claiming bogus capital gains/losses. The assessee was one of the beneficiaries during the period relevant to the assessment year. In view of this, a notice u/s. 148 of the Act was issued to the assessee vide dated: 31.03.2019. In compliance to the notice issued u/s. 148 of the Act the assessee filed a return on 3 30.04.2019 declaring total income at Rs. 26,24,020/-. After a detailed deliberation between the assessee and the AO, case of the assessee was assessed after making an addition of Rs. 50.18 Lacs being the total sales consideration arisen. The assessee being aggrieved with this order of the AO preferred an appeal before the Ld. CIT (A), who in turn dismissed the appeal of the assessee and confirmed the order of the AO. The assessee being further aggrieved preferred the present appeal before us. 3. We have gone through the order of the AO, order of the Ld. CIT(A) and submissions of the assessee before us alongwith the grounds taken before us. It is observed that the assessee purchased 4, 00,000 Shares of M/s. BPML @ Rs. 10.30 per share on 06.07.2011 from M/s. Navneet Somani Securities Pvt. Ltd., Shares of M/s. BPML listed on bourses on 07.07.2011 and on the very same day the assessee sold all the shares for a consideration of Rs. 50.14 Lacs. On the same day, i.e. 07.07.2011 sales consideration received from M/s. Maverick Share Brokers in the assessee’s bank account. On 08.07.2011 shares purchased by the assessee on 06.07.2011 credited to her demat account. On 09.07.2011 the assessee made payment w.r.t. the purchases made of shares mentioned (supra). On 09.07.2011 itself the demat account of the assessee debited with 2, 00,000 shares towards the sales mentioned (supra) as the delivery done within T+2 days. On 11.07.2011 balance shares quantity of 2, 00,000 were debited from the assessee’s demat account (as the 10.07.2011 being Sunday). 4. Considering the facts of the case mentioned (supra) vis-à-vis the reasons assigned for reopening of the case vide page nos. 1-3 of the paper book, wherein the assessee furnished the copy of the reasons recorded by the AO for the 4 purposes of reopening of the matter. Vide para 2 and 5 of the same, categorically mentioned that the case needs reopening as the scrip of the company M/s. BPML is being used for the purposes of arranging fictitious Long Term Capital Gain/Short Term Capital Loss (LTCG/STCL). As discussed, (supra) the assessee under consideration neither claimed any exempt LTCG u/s. 10(38) of the Act not any STCL as alleged by the AO. In view of this it is observed and categorically hold that neither the reasons assigned are applicable to the assessee nor the assessee took any advantage of any exempt income/loss. Rather paid taxes on Short Term Capital Gain earned by her. 5. In view of this Ground nos. 1 and 2 raised by the assessee are found to be correct and the same are allowed with a direction to the AO for deletion of addition of Rs. 50.18 Lacs made. 6. In the result, the appeal of the assessee is allowed. The Order is pronounced in the open court on the 1st day of May 2025. Sd/- Sd/- (NARINDER KUMAR) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 01/05/2025 Copy of the Order forwarded to: 1. अपीलाथ /The Appellant , 2. \u000eितवादी/ The Respondent. 3. आयकर आयु\u0015 CIT 4. िवभागीय \u000eितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड फाइल/Guard file. BY ORDER, //True Copy// 5 (Asstt. Registrar) ITAT, Jaipur Details Date Initials Designation 1 Draft dictated on PC on 01.05.2025 Sr.PS/PS 2 Draft Placed before author 01.05.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order "