Unexplained Money u/s 69A Received Back through Banking Channel as Sale Consideration of Shares: ITAT Upholds Addition u/s 115BBE [Read Order]

The Income Tax Appellate Tribunal (ITAT), Raipur Bench, has recently, in an appeal filed before it, on finding that unexplained money under section 69A was received back through banking channel as sale consideration of shares, upheld the addition made under Section 115BBE of the Income Tax Act. The aforesaid observation was made by the Raipur ITAT, when an appeal was preferred before it by the assessee, as directed against the orders passed by the Commissioner of Income-Tax (Appeals), Raipur, which in turn arose from the orders passed by the A.O in their cases under Section 143(3) of the Income Tax Act, for the assessment year 2015-16. The ground of the assessee’s appeal being that the CIT(A) erred in confirming the addition of Rs.5,40,000/- made by the AO as undisclosed income, holding the transaction of sale of shares to be bogus, the brief facts of the case were that the assessee-HUF had e-filed its return of income for A.Y.2015-16, declaring an income of Rs.17,96,730/-. And subsequently, the case of the assessee was selected for complete scrutiny under CASS for examination of suspicious sale transaction in shares (Penny Stock tab in ITS), and notice under Section 143(2) of the Income Tax Act was issued. During the course of assessment proceedings, it was observed by the A.O that the assessee had claimed to have earned a profit of Rs. 2,81,049/- on account of Short-Term Capital Gain (STCG) by transacting in shares of CCL International Ltd. And on the basis of her aforesaid exhaustive deliberations and verifications, it was observed by the A.O that the assessee in the garb of the transaction in question, of purchase/sale of shares, had in fact introduced its undisclosed funds in the form of capital gain. The A.O therefore, rejected the assessee’s claim of having earned genuine STCG of Rs.2,81,049/- from the transaction of purchase/sale of 3000 shares of CCL International Ltd. and recharacterized the entire amount of impugned sale proceeds of shares of Rs.5.40 lac, as the undisclosed funds of the assessee. Accordingly, the A.O vide her order passed under Section 143(3) of the Income Tax Act, after making an addition of Rs. 5.40 lac to the assesse’s returned income, assessed the same at Rs.20,55,690/-. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without any success, as the CIT(Appeals) after deliberating on the exhaustive observations of the A.O, held a conviction that she had marshalled sufficient facts, which proved beyond doubt that the assessee had not carried out any genuine transaction of purchase/sale of 3000 shares of CCL International Ltd. but had only as a beneficiary, obtained accommodation entry in the garb of which it had routed its undisclosed funds. And it is being he aggrieved with the order of the CIT(Appeals), that the assessee has presently carried the matter in appeal before Raipur ITAT. Hearing the opposing contentions of both sides as submitted by Shri R.B Doshi, CA, on behalf of the assessee, and by Shri Piyush Tripathi, the Sr. DR, on behalf of the Revenue, the ITAT Coram of Ravish Sood, the Judicial Member thus held: “In terms of my observations, I concur with the view taken by the lower authorities and uphold the addition of Rs.5.40 lac made by the A.O, on the ground that the same was the undisclosed fund of the assessee that was routed back in the garb of the aforesaid transaction of purchase/sale of shares. Thus, the Grounds of appeal raised by the assessee being devoid and bereft of any merit, are dismissed in terms of my aforesaid observations.” Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Unexplained Money u/s 69A Received Back through Banking Channel as Sale Consideration of Shares: ITAT Upholds Addition u/s 115BBE [Read Order]

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Topics

Unexplained Money u/s 69A Received Back through Banking Channel as Sale Consideration of Shares: ITAT Upholds Addition u/s 115BBE [Read Order]

Your free access to Taxscan has Expired

To read the article, get a premium account.

Taxscan Premium

Sign-up to receive exclusive news and promotions straight to your inbox!

Topics