Abhishek Rajesh Mehta vs. Income Tax Officer – 13(3)(4), Mumbai

Parties Involved

Facts Summary

The assessee, Abhishek Rajesh Mehta, did not file a return of income for the Assessment Year 2013-14. The case was reopened after issuing a notice under section 148 of the Income Tax Act, 1961, dated 28.03.2019, which was served upon the assessee. The assessee submitted a return of income on 13.08.2019. Subsequently, notices under sections 142(1) and 143(2) were issued. The assessee filed a reply to the notice under section 148 of the Act, showing income from business and other sources, and claimed exempted long-term capital gain of Rs. 2,73,65,564/-. A best judgment assessment under section 144 of the Act was passed, adding Rs. 5,70,243/- being 2% of Rs. 2,85,12,168/- to the total income of the assessee. Penalty proceedings were initiated. The order was challenged in appeal before the Commissioner of Income Tax (Appeals), who dismissed the appeal. The assessee appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in passing the Appellate Order without granting the appellant reasonable and effective opportunity of being heard.
• 2. Whether the Ld. CIT(A) erred in not appreciating that the Ld. AO had made addition of Rs.2,85,12,168/- being entire sale proceeds of equity shares as unexplained credit under section 68 of the I T Act without appreciating the facts and circumstances of the case.
• 3. Whether the Ld. CIT(A) erred in not appreciating that in the case of sale of shares only surplus/capital gains is liable to be taxed not the entire sale consideration and deduction has to be allowed for the cost of the shares sold.
• 4. Whether the Ld. CIT(A) erred in not appreciating that the Ld. AO had made addition of Rs. 5,70,243/- on account of commission purely on imagination and conjectures without having any material to hold that the assessee had incurred such expenditure.

Judgment Outcome

Decided in favour of Assessee.

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