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of <h1>Tribunal rules in favor of assessee, taxing income as capital gains, not from other sources. Commission deletion ordered.</h1> <h3>Smt. Sunanda Jayprakash Surana C/o Shah Khandelwal Jain & Associates, Chartered Accountants, Versus Income Tax Officer, Ward 11 (4), PMT Building, Swargate, Pune</h3> The Tribunal ruled in favor of the assessee, holding that the income of Rs. 14,06,248 should be taxed under the head 'Capital Gains' instead of 'Income ... - Issues involved: Taxability of income under different heads, addition of commission paid by the assessee.Taxability of income under different heads: The appeal was filed by the Assessee against the order of CIT(A)- I, Pune, for the A.Y. 2005-06. The Assessee contended that the income of Rs. 14,06,248 should be taxed under the head 'Capital Gains' instead of 'Income from other sources.' The Tribunal referred to a previous order where it was held that income from penny stocks should be taxed as capital gains if the shares are credited in the D-mat Account of the assessee. The Tribunal found that the impugned penny stocks/shares were indeed credited in the D-mat Account of the assessee, leading to the conclusion that the income should be assessed under the head 'Capital Gains.' The Tribunal dismissed the grounds raised by the assessee and allowed the appeal in favor of the assessee.Addition of commission paid by the assessee: The second ground of the appeal related to the addition of Rs. 28,528 towards commission paid by the assessee for services connected to the penny stock transactions. The Counsel for the assessee argued that there was no evidence to support incurring such expenditure, and it was merely assumed by the Assessing Officer. The Tribunal observed that the amount was arrived at on an ad-hoc basis and considered it as a guesswork, which is not acceptable. Consequently, the Tribunal allowed Ground No. 2 of the appeal and directed the deletion of the addition made by the CIT(A).In conclusion, the Tribunal ruled in favor of the assessee on both grounds, holding that the income should be taxed under the head 'Capital Gains' and the addition of commission should be deleted.
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