Assistant Commissioner of Income Tax vs Rajen Kirtilal Shah

Parties Involved

Facts Summary

The case involves an appeal by the Revenue against the order of the National Faceless Appeal Centre (NFAC), Delhi, which had allowed the appeal of Rajen Kirtilal Shah against an assessment order. The Assessing Officer had made an addition of INR 2,48,96,000 under Section 68 of the Income Tax Act, 1961, on the basis of information received from the Deputy Director of Income Tax (Investigation) that Rajen had sold shares of Bakra Pratisthan Ltd., a penny stock, for a trade value of INR 2,48,96,000 during the relevant previous year. Rajen denied any such transaction and provided documents to support his claim that he had not traded in the shares of Bakra Pratisthan Ltd.…

Legal Issues

• 1. Whether the CIT(A) erred in deleting the addition of INR 2,48,90,000 made by the AO under Section 68 of the Act.
• 2. Whether the CIT(A) correctly deleted the addition made on account of penny stock transaction.
• 3. Whether the CIT(A) erred in directing the deletion of the addition despite the scrip being a penny stock.
• 4. Whether the CIT(A) erred in deleting the addition without appreciating the AO's action based on information from the investigation wing.
• 5. Whether the CIT(A) erred in deleting the addition without considering the arranged nature of the transaction.
• 6. Whether the CIT(A) erred in deleting the addition without appreciating the use of the scrip for bogus LTCG.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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