Tarun Kumar Sarda vs. ITO, Ward-44(2), Kolkata

Parties Involved

Facts Summary

The assessee, Tarun Kumar Sarda, filed an income return for the assessment year 2016-17 on 09.08.2022, declaring a total income of ₹4,97,530/-. The Assessing Officer investigated the transactions made by the assessee in the scrips of Sunstar Realty Developers Ltd., identifying it as a penny stock and used to purchase bogus long-term capital gains, short-term capital loss, or fictitious profits. The Assessing Officer concluded that the trades were sham transactions for the purpose of laundering undisclosed/out-of-books income, and treated the transactions as accommodation entries and made an addition of ₹39,92,730/- u/s 69 of the Act as unexplained investment u/s 147 r.w.s. 144B of the Act, determining the total income of the assessee at ₹44,90,260/-. Aggrieved with the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)-NFAC, Delhi, who confirmed the action of the Assessing Officer and dismissed the appeal of the assessee. The assessee then filed an appeal before the Tribunal.…

Legal Issues

• 1. Whether the reassessment order passed by the Commissioner of Income Tax (Appeals)-NFAC, Delhi is bad in law and on facts?
• 2. Whether the addition of Rs.39,92,730/- under section 69 of the Income Tax Act, 1961 is bad in law and on facts?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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