Manish Garg HUF, New Delhi ITO, Ward- 40(1), New Delhi

Last updated: 24 December 2020

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The Income Tax Appellate Tribunal dismissed the appeal filed by Manish Garg HUF concerning the assessment year 2015-16. The assessee had claimed an exemption of Rs 2,22,87,246 on the sale of shares of M/s KAPPAC Pharma Ltd. under Section 10(38) of the Income Tax Act. However, this claim was added back under Section 68, and the benefit of Section 10(38) was denied. The tribunal noted that the assessee did not appear for the hearing and that the case was covered by a Delhi High Court judgment declaring M/s Kappac Pharma as a bogus company providing accommodation entries.

Court :
ITAT New Delhi

Brief :
This appeal is filed by the assessee against the order of the ld. CIT (Appeals) for Assessment Year 2015-16, dated 7.02.2019 wherein claim under Section 10(38) of the Income Tax Act, 1961 (the Act) of Rs.2,22,87,246/- on account of sale of shares of M/s KAPPAC Pharma Ltd. was added under Section 68 of the Act and benefit under Section 10(38) of the Act is denied.

Citation :
ITA. No. 1907/Del/2019

INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “E”: NEW DELHI

BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER
A N D
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
(Through Video Conferencing)
ITA. No. 1907/Del/2019
(Assessment Year: 2015-16)

Manish Garg [HUF]
160 – Vaishali, Pitampura,
New Delhi – 110 034.
PAN: AAJHM2526E
(Appellant)

Vs.

ITO,
Ward : 40 (1)
New Delhi
(Respondent)

Assessee by : N o n e;
Revenue by: Ms. Aman Preet, Sr. D.R.;

Date of Hearing 21/12/2020
Date of pronouncement 21/12/2020

O R D E R

PER PRASHANT MAHARISHI, A. M.

1. This appeal is filed by the assessee against the order of the ld. CIT (Appeals) for Assessment Year 2015-16, dated 7.02.2019 wherein claim under Section 10(38) of the Income Tax Act, 1961 (the Act) of Rs.2,22,87,246/- on account of sale of shares of M/s KAPPAC Pharma Ltd. was added under Section 68 of the Act and benefit under Section 10(38) of the Act is denied.

2. The appeal was called for hearing on 21st December, 2020 where none appeared on behalf of the assessee. On earlier occasion on 1.12.2020 also none appeared.

3. On the merits case of the assessee is covered against him by the judgment of the Hon’ble Delhi High Court in the case of Udit Kalra vs. ITO [2019 (4) TMI 834 - DELHI HIGH COURT] wherein has declared M/s Kappac Pharma as bogus company who made only accommodation entries in which the assessee is a beneficiary. This is also followed by many decisions of coordinate benches holding against assessee.

To know more in details find the attachment file

FAQ :

The appeal concerned a claim of Rs 2,22,87,246 made by Manish Garg HUF under Section 10(38) for the sale of shares in M/s KAPPAC Pharma Ltd., which was denied by the tax authorities.

The claim was denied because the shares were sold in M/s KAPPAC Pharma Ltd., which the Delhi High Court had previously declared a bogus company that only made accommodation entries.

The tax authorities added the amount of Rs 2,22,87,246 back to the assessee's income under Section 68 of the Income Tax Act, thereby denying the benefit under Section 10(38).

No, the assessee did not appear for the hearing on multiple occasions, including the final hearing date of 21st December 2020.

The assessment year for this appeal was 2015-16.