ITAT upholds NFAC Order for Recomputation of Income as ‘Capital Gains’ due to Improper Classification u/s68 r.w.s. 115BBE

The Income Tax Appellate Tribunal (ITAT) upheld an order by the Commissioner of Income Taxes – National Faceless Appeals Centre (CIT (A)-NFAC) directing an Assessing Officer (AO) to recompute income declared by an assessee as ‘Capital Gains’ under Section 68 read with Section 115BBE of the Income Tax Act, 1961. The ITAT found no infirmity in the NFAC’s order, which addressed improper classification of income. The case involved the reassessment of income initially declared under a different head, leading to a revised computation as capital gains. This decision underscores the importance of accurate income classification and compliance with tax regulations. The ITAT’s ruling supports the NFAC’s approach to ensuring proper tax treatment and highlights the need for taxpayers to correctly classify their income to avoid reassessment and potential penalties.