Sarojben Rajkumar Bansal (L/H. of Late Rajkumar Kakaram Bansal) v. The Dy.CIT

Parties Involved

Facts Summary

The original return of income was filed by the assessee, Late Shri Rajkumar Kakaram Bansal, on 09.10.2013 for the Assessment Year (A.Y.) 2013-14, declaring a total income of Rs.84,98,510/-. The return was processed, and an assessment under section 143(3) of the Income Tax Act, 1961 was completed on 26.11.2015, accepting the returned income. The assessment was subsequently reopened under section 147 of the Act, based on information received from the Investigation Wing, Ahmedabad. The Investigation Wing conducted a search in the case of Globe Ecologistic Group on 23.01.2015 and found that several individuals, including the assessee, had engaged in non-genuine transactions involving penny stocks of KGN Enterprise Ltd. and KGN Industries Ltd. It was alleged that the assessee had sold shares of KGN Enterprise Ltd. during F.Y. 2012-13, resulting in bogus long-term capital gains (LTCG) of Rs.4,27,83,714/-, which were claimed as exempt under section 10(38) of the Act. The notice under section 148 of the Act was issued on 31.03.2021 with the prior approval of the Principal Commissioner of Income Tax (PCIT), Ahmedabad. The assessee, through legal heirs, filed a revised return on 31.05.2021, reiterating the income declared in the original return and requesting the reasons for reopening the assessment. During the reassessment proceedings, the Assessing Officer (AO) observed that the transactions in KGN shares were part of an organized racket of accommodation entries to create bogus LTCG …

Legal Issues

• 1. Whether the Ld. CIT(A) has erred in law and on facts in deciding the appeal ex-parte in violation of principles of natural justice.
• 2. Whether the Ld. CIT(A) has erred in law and on facts in deciding the appeal without entering into merits of the case in violation of Section 250(6) of the Act.
• 3. Whether the Ld. CIT(A) has erred in law and on facts of the case in confirming action of id. AO of reopening of assessment us. 147 of the Act which is made beyond the limitation period.
• 4. Whether the Ld. CIT(A) has erred in law and on facts of the case in confirming action of ld. AO of reopening the assessment u/s. 147 of the Act. Under the facts and circumstances of the case, the action of reopening is without jurisdiction and in not permissible either in law or on facts.
• 5. Whether the Ld. CIT(A) has erred in law and on facts of the case in confirming addition of Rs.4,27,83,714/- made by Ld. AO as unexplained cash credit u/s. 68 of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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