Calcutta High Court
Principal Commissioner Of Income Tax-9 vs Nikunj Dhanuka on 18 June, 2025
Author: T.S. Sivagnanam
Bench: T.S Sivagnanam
OD-29
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION [INICOME TAX]
ORIGINAL SIDE
ITAT/104/2025
IA NO: GA/2/2025
PRINCIPAL COMMISSIONER OF INCOME TAX-9, KOLKATA
VS
NIKUNJ DHANUKA
BEFORE :
THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM
-A N D-
HON'BLE JUSTICE CHAITALI CHATTERJEE (DAS)
DATE : 18th June, 2025.
Mr. Amit Sharma, Adv.
...for appellant
Mr. Siddhartha Das, Adv.
Ms. Swapna Das, Adv.
...for respondent.
The Court : This appeal has been filed by the revenue under Section
260A of the Income Tax Act, 1961 (the Act) against the order dated 24 th June,
2024 passed by the Income Tax Appellate Tribunal “C” Bench, Kolkata
(Tribunal) in ITA No. 345/Kol/2024, for the assessment year 2012-13.
The revenue has raised the following substantial questions of law for
consideration :
i) Whether in the facts and circumstances of the case the Learned
Tribunal erred in law in deleting the addition made under Section 68
and Section 69C of the Income Tax Act, 1961 made by the Assessing
2Officer by ignoring the larger scam of tax evasion by way of bogus
capital gain generated in penny stock?
ii) Whether the Assessee is entitled to tax exception under Section
10(38) of the said Act when the records and materials indicate that the
alleged income shown as Long Term Capital Gain is result of
manipulation and malpractice of an organized tax evasion?
iii) Whether the Learned Tribunal erred in ignoring the fact that the
assessee failed to produce documents/evidences to establish the
genuineness of the transaction in the penny stock “VMS Industries Ltd.”
and direct and circumstantial evidence brought on record by the
Assessing Officer to establish that the assessee had indulged in
manipulation of the share prices of “VMS Industries Ltd.” with a view to
fictitious Long Term Capital Gain of Rs.90,95,000/- claiming the same
as exempt from taxation?
We have heard learned advocates on either side.
The Tribunal by the impugned order allowed the appeal filed by the assessee
and set aside the order passed by the appellate authority dated 22 nd December,
2023 by which the assessment order dated 27 th December, 2017 passed under
Section 143(3) of the Act was affirmed. The order passed by the first appellate
authority was an ex parte order by observing that the assessee did not respond
to the notices of hearing issued by the appellate authority. The matter relates
to reopening of the assessment under Section 147 of the Act. As could be seen
from the assessment order dated 27 th December, 2017 the reopening of the
assessment was on the basis that specific information has been received from
the office of the Principal Directorate of Income Tax (Investigation), Mumbai
dated 28th March, 2019 that the assessee has claimed an amount of
3
Rs.90,95,000/- as exemption under Section 10(38) of the Act having arisen on
a scrip called ‘VMS Industries Ltd.’. The learned Tribunal has elaborately
considered the facts and has pointed out that the information based on which
the reopening was done was factually incorrect. The undisputed facts are that
the return of income submitted by the assessee was processed under the
provisions of section 143(1) of the Act. The appellant had a long term capital
gain as per accounts amounting to Rs.41,98,896/- after adjustment of long
term capital loss of Rs.4,62,646/- which was claimed as exemption under
Section 10(38) of the Act. However, the Assessing Officer reopened the
assessment under Section 147 on specific information from the Investigation
Wing at Mumbai that the assessee had claimed an amount of Rs.90,95,000/-
as exemption under Section 10(38) of the Act which arose in the share scrip
called ‘VMS Industries Ltd.’. There is nothing on record to indicate as to where
from the Assessing Officer received such information that the assessee had a
gain of Rs.90,95,000/- which, according to the assessee, is a short term capital
gain of Rs.57,46,787/- which was offered to tax in the original assessment
itself. Furthermore, it is clear from the records that there has been no long
term capital gain by the appellant in the shares of VMS Industries Ltd. as
alleged by the Assessing Officer and, therefore, the learned Tribunal was fully
justified in holding that the reopening of assessment was not bad in law. When
the assessee has not claimed any exemption under Section 10(38) of the Act,
the question of reopening would not arise. Therefore, the learned Tribunal after
examining the facts has rightly allowed the appeal filed by the assessee and set
4
aside the order passed by the Assessing Officer as well as the first appellate
authority.
Thus, we find no question of law much less substantial question of law
arising for consideration in this appeal.
Accordingly, the appeal fails and the same is dismissed.
Consequently, the stay application, IA NO: GA/2/2025 stands dismissed.
(T.S. SIVAGNANAM, CJ. )
(CHAITALI CHATTERJEE (DAS), J.)
Pkd./SN/S.Das
AR[CR]