The Income Tax Appellate Tribunal (ITAT), Kolkata bench has held that since the assessee has duly offered the capital gain out of sale proceeds under the Income Declaration Scheme, 2016, the addition under section 68 of the Income Tax Act, 1961 is not sustainable.
The assessee, Jyoti Swaroop Kashuka (HUF) was aggrieved by the order of the income tax department making addition under section 68 of the Income Tax Act relying on the report of the Investigation Wing of the Department. On first appeal, the CIT(A), confirmed the order and made an extensive write-up on the subject matter of black money and plugging of loopholes in the system by the Revenue which has been garnered in the form of bogus long-term capital gain by the assessees through typical features of penny stock companies.
A two-member bench comprising Shri Sanjay Garg, Judicial Member and Shri Girish Agrawal, Accountant Member observed that in the same assessment order of the individual, the concerned Assessing Officer has noted that Shri Jyoti Swaroop Kashuka (individual) has disclosed the long-term capital gain being the sale proceeds under the IDS 2016 and paid taxes accordingly which was cross verified from the records available with the Department. Accordingly, the concerned Assessing Officer accepted the returned income of the individual.
“Admittedly, it is a fact that assessee has brought on record all the details relating to the mistake committed by the broker in respect of executing the sale transaction of 8000 shares of GCM securities Ltd, both before the ld. AO and the ld. CIT(A), along with relevant corroborative documentary evidence. Submissions made by the assessee before both the authorities have been reproduced in their respective orders. In our understanding, once the mistake is brought to fore and is in knowledge of the authority, it is incumbent upon the authority, who is possessed with all the powers, to take a deep dive into the matter to ascertain the correct facts and understand the mistake as well as see how the effect of mistake was mitigated,” the ITAT observed.
Granting relief to the assessee, the Tribunal held that “The factual matrix in the present case evidently demonstrates that a mistake was committed which was mitigated by the assessee and the relevant income arising from the transaction of sale of shares erroneously executed in the account of the assessee, was duly reported in the return of income of the individual, which was offered by the individual in the IDS 2016 and was accepted in the scrutiny assessment made under section 143(3) of the Act of the individual. We note that addition made by the ld. AO and sustained by the ld. CIT(A) is without going into the actual facts of the case.”
Shri K.K. Goswami, Advocate appeared for the assessee.
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