Income Tax Officer, Mumbai Vs. Sunita Chaudhary

Parties Involved

Facts Summary

The assessee, Sunita Chaudhary, is an individual and a Director of certain Private Limited Companies, engaged in trading and investment in shares and securities. During the year under consideration, she sold shares of M/s. First Financial Services Ltd. at Rs. 3,15,72,400/-, which were purchased in earlier years and held in her Demat Account. The shares were sold in small tranches on the Bombay Stock Exchange through her regular share broker, M/s. Anand Rathi Shares and Stock Brokers Ltd. The Assessing Officer raised doubts regarding the genuineness of these transactions based on an investigation report indicating that the share prices had increased manifold on the stock exchange. Consequently, reassessment proceedings under section 147 were initiated by the Assessing Officer, who treated the Long Term Capital Gain (LTCG) of Rs. 2,92,12,400/- as unexplained investment/income from other sources. Aggrieved by this order, the assessee appealed before the Commissioner of Income Tax (Appeals), who allowed the appeal, deleting the addition of Rs. 2,92,12,400/- and Rs. 78,931/-. The revenue then appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in reversing the findings of the Assessing Office by relying on a decision of the Hon'ble ITAT for A.Y. 2013-14, which is under appeal by the Revenue before the Hon'ble High Court.
• 2. Whether the Ld. CIT(A) erred in deleting the addition of Rs. 2,92,12,400/- as bogus LTCG.
• 3. Whether the Ld. CIT(A) erred in deleting the addition of Rs. 78,931/- as commission paid to entry providers/brokers.
• 4. Whether the Ld. CIT(A) erred in ignoring the credible information received from the office of DGIT (Investigation) Mumbai.
• 5. Whether the Ld. CIT(A) erred in ignoring the fact that the assessee traded in shares of M/s. First Financial Services Ltd. to reduce taxable income.
• 6. Whether the Ld. CIT(A) erred in deleting the addition of Rs. 2,92,12,400/- without considering the negligible Net Worth and business activity of M/s. First Financial Services Ltd.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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