NIKITA KAPOOR Vs ITO, NFAC, DELHI / ITO, WARD 54(1), NEW DELHI

Parties Involved

Facts Summary

The return of income was filed on 30.7.2016 declaring total income at Rs. 5,89,560/-. Subsequently, information was received from the insight portal indicating a high-risk profile case regarding fictitious profits in equity/derivative trading. The assessment was reopened after obtaining prior approval from the Appropriate Authority for the AY 2016-17. Notice u/s. 148 was issued on 31.3.2021 and served upon the assessee. In response, the assessee filed a return of income on 19.7.2021, declaring total income at Rs. 5,69,860/-. The AO noted that the return was filed much later than permitted and treated it as nonest. The assessee earned exempted LTCG of Rs. 4,04,237,535/- on the sale of shares of Yamini Investment Company Limited. The AO disallowed the claim of LTCG and added the LTCG of Rs. 4,04,27,535/- u/s. 68 of the Act and made another addition for alleged unexplained commission expenditure @5% of LTCG i.e. Rs. 20,21,377/-, which was added u/s. 69C of the Act.…

Legal Issues

• 1. Validity of assessment made u/s. 47 rws 144B Dt. 29.03.22 in the absence of issuance of mandatory notice U/s. 143(2).
• 2. Validity of reassessment framed U/s.144 assuming that no valid ITR has been filed.
• 3. Sustainability of initiation of reassessment proceedings u/s. 147/148.
• 4. Validity of approval u/s. 151 for initiation of reassessment proceedings.
• 5. Disposal of all objections against initiation of reassessment proceedings.
• 6. Disallowance of claim of exempted LTCG of Rs.4,04,27,532/- U/s.10(38) on sale of shares of Yamini Investment Co. Ltd.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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