The court determined that a mere suspicion is insufficient for tax assessments; substantial independent evidence is paramount to support any additions made by tax authorities.

JUDGMENT

Sanjeev Narula, J. (Oral)

CM APPL. 6933/2020 (for condonation of delay in re-filing)

CM APPL. 7056/2020 (for condonation of delay in re-filing)

CM APPL. 7057/2020 (for condonation of delay in re-filing)

1. For the reasons stated in the applications, the delay of 11 days in re-filing ITA 125/2020 and the delay of 13 days in re-filing ITA 130/2020 & ITA 131/2020, is condoned.

2. The applications stand disposed of.

ITA 125/2020, ITA 130/2020 & ITA 131/2020

3. The present appeals under Section 260A of the INCOME TAX ACT , 1961 [hereinafter referred to as the `Act'] are directed against the common order dated 6th August, 2019 [hereinafter referred to as the `Impugned Order'] passed in ITA No. 1069/DEL/2019 (for AY 2014-15), 2772/DEL/2019 (for AY 2015-16) and other appeals for the same AYs, by the Income Tax Appellate Tribunal [hereinafter referred to as the `ITAT']. However, the Impugned Order records the factual position only in respect of ITA No. 1069/DEL/2019.

4. The Revenue urges identical questions of law in all the afore-noted appeals with the only difference being the figures relating to the additions made under Section 68 read with Section 115BBE of the Act. Accordingly, the same are being decided by way of this common order.

5. It is not in dispute, as noted in the Impugned Order, that the factual background in all the three appeals is quite similar. However, for the sake of convenience, the facts in respect of ITA 125/2020 are being noted and discussed elaborately. Briefly stated, the Respondent-Assessee is an individual who has derived income from interest on loan, FDR, NSC and bank interest under the head of `income from other sources' in respect of A.Y. 2015-16. She filed her return of income, declaring total income of Rs.13,96,116/-. After claiming deduction of Rs.1,60,000/- under Chapter VI-A, the total taxable income of Respondent was declared to be Rs.12,36,120/-. The return was processed under Section 143(1) of the Act and thereafter the case was selected for scrutiny. During the scrutiny proceedings, the AO noticed that for the relevant year under consideration, the Respondent had claimed exempted income of Rs.96,75,939/- as receipts from Long Term Capital Gain [hereinafter referred to as `LTCG'] under Section 10 (38) of the Act. He inter alia concluded that the assessee had adopted a colorable device of LTCG to avoid tax and accordingly framed the assessment order under Section 143(3) of the Act at the total income of Rs.1,09,12,060/-, making an addition of Rs.96,75,939/- under Section 68 read with 115BBE of the Act on account of bogus LTCG on sale of penny stocks of a company named M/s Gold Line International Finvest Limited. The appeal before the CIT(A) was dismissed and additions were confirmed with the observation that the Respondent had introduced unaccounted money into the books without paying taxes. Further appeal filed by the Respondent before the learned ITAT was allowed in her favour, and the additions were deleted vide the Impugned Order, relevant portion whereof reads as under:

"21. A perusal of the assessment order clearly shows that the Assessing officer was carried away by the report of the Investigation Wing Kolkata. It can be seen that the entire assessment has been framed by the Assessing Officer without conducting any enquiry from the relevant parties or independent source or evidence but has merely relied upon the statements recorded by the Investigation Wing as well as information received from the Investigation Wing. It is apparent from the Assessment Order that the Assessing Officer has not conducted any independent and separate enquiry in the case of the assessee. Even, the statement recorded by the Investigation Wing has not been got confirmed or corroborated by the person during the assessment proceedings.

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23. It is provided u/s. 142 (2) of the Act that for the purpose of obtaining full information in respect of income or loss of any person, the Assessing Off