ITAT Delhi Quashes Section 263 Revision in Alankit LTCG Case

The “B” Bench of the Income Tax Appellate Tribunal, Delhi, allowed the appeal of Sh. Sunil Bhala for AY 2017–18 and set aside the revisionary order passed under Section 263. The dispute related to alleged bogus Long-Term Capital Gain (LTCG) claimed under Section 10(38) on sale of shares of Alankit Ltd.

Background: 153C Assessment Followed by Revision

The case was initially reopened under Section 147 on the issue of LTCG of ₹29.08 lakh. Subsequently, proceedings under Section 153C were initiated pursuant to a search in the Alankit Group, and the reassessment proceedings stood abated. The assessment under Section 153C was completed on 31 March 2023. Later, the PCIT invoked Section 263, alleging that the Assessing Officer had failed to examine the LTCG issue properly, rendering the order erroneous and prejudicial to the Revenue.

Tribunal: Issue Was Duly Examined

The ITAT noted that:

1. The assessee had declared the LTCG in the return of income.
2. The Assessing Officer issued specific queries under Section 142(1) and a show cause notice questioning the LTCG claim.
3. The assessee filed detailed replies along with contract notes, demat statements, broker ledger, and bank records.

The Tribunal found that the issue was thoroughly examined during assessment. Mere reliance on a third-party statement, which had been retracted, could not justify revision.

Holding that the assessment order was passed after due enquiry and application of mind, the Tribunal quashed the Section 263 order. The assessee’s appeal was allowed.