Itat/241/2023 Of Principal Commissioner Of Income Tax 5 Kolkata v. Rajesh Kumar Damani

OD-21 ORDER SHEETIN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION(INCOME TAX)ORIGINAL SIDE ITAT/241/2023IA NO: GA/1/2023PRINCIPAL COMMISSIONER OF INCOME TAX-5, KOLKATA-VS-RAJESH KUMAR DAMANI BEFORE: THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAM ANDHON’BLE JUSTICE SUPRATIM BHATTACHARYA DATE: 5 FEBRUARY 2024. Mr. P. Dudhoria, Adv., for appellant. The Court: This appeal, filed by the revenue under section 260A of the Income Tax Act, 1961, is directed against the order dated May 4, 2023, passed by theIncome Tax Appellate Tribunal, SMC Bench, Kolkata in ITA No.2187/Kol/2019relating to the assessment year 2011-12. The revenue also raised the following substantial questions of law forconsideration: a. b. c. d. Whether the Hon’ble ITAT had erred in law and on facts inquashing the assessment u/s 147/143(3) of the Income Tax Act,1961 by holding the same as invalid as reopening of the saidassessment itself was not in accordance with law even though theAssessing Officer had reason to believe that income of the assesseehad escaped assessment for the A.Y. 2011-12 which is aprerequisite for reopening asessment u/s 147 and alsocommunicated the same to the assessee?Whether the Hon’ble ITAT had erred in law and on facts bydeleting the consequential additions made by the Assessing Officerwhereas the decision of the Hon’ble Jurisdictional High Court inthe lead case of Pr. CIT –vs- Smt. Swati Bajaj squarely covers thispart i.e. Long Term Capital Gain on penny stock?Whether the Hon’ble ITAT has erred in law without going into anyspecific details of the facts of the cases and without considering thereport of Bombay Stock Exchange & SEBI which amounts tosevere perversity? Whether the Hon’ble ITAT has erred in law by not appreciatingthat the assessee could not substantiate the genuineness of thetransaction to prove that it had not indulged in dubious sharetransactions meant to account for undisclosed income in the garb e. f. g. of Long Term Capital Gain(LTCG) to claim exemption undersection 10(38) of the Act? Whether the order of the Hon’ble ITAT is perverse in overlookingthat it is the duty of the Tribunal to scratch the surface and probedocumentary evidences in depth in light of conduct of assessee andother surrounding circumstances in order to see whether theassessee is liable to provisions of section 68 of the Income Tax Actor not? Whether the Hon’ble ITAT has erred in law by deleting theaddition made under section 68 of the Income Tax Act, 1961 onaccount of disallowance of the claim of Long Term Capital Gain(LTCG) treating the same as fraudulent, overlooking the fact thatthe entire transactions were stage managed with the objective tofacilitate the assessee to plough back its unaccounted income in theform of sale proceeds relating to fictitious Long Term Capital Gainand claims of bogus exemption thereby giving rise to the vice inthe decision making process? Whether the Hon’ble ITAT has erred in law when it failed to givecredence to investigations made by the Assessing Officer,investigation wing of the Income Tax Department as well as SEBImade into the astronomical rise in price of shares of companies which have no net worth and no financial foundation and thereby failed to apply the test of human probability to ascertain the truenature of transactions resulting the bogus Long Term Capital Gain (LTCG)? We have heard Mr. Dudhoria, learned Senior Standing Counselappearing for the appellant-revenue. None appears for the respondent-assessee. The issues raised in this appeal by the revenue are squarely covered in favour of the revenue by a decision of this Court in the case of PrincipalCommissioner of IncomeTax –vs- Smt. Swati Bajaj), reported in 2022 SCC OnLine1572. Thus, following the above decision, the appeal filed by the revenue is allowed and the substantial questions of law are answered in favour of the revenue-appellant and against the respondent. The stay application stands closed. (T.S. SIVAGNANAM, CJ.) (SUPRATIM BHATTACHARYA, J.)