TaxTMI 
TaxTMI 
2024 (8) TMI 1296
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....see has earned profit of Rs. 3,22,794/- and offered the same for taxation in its return of income. 3. Learned CIT (A)/A.O has erred in making addition of assessee had conducted the trade of sale after purchase of shares in open market and source of the same without payment of money for purchase and without receiving sale proceeds of Rs. 26,02,810/-. Assessee has credited with Rs. 3,22,794/-. Looking at the above facts your appellant praises your honor to kindly delete the addition obliged." 3. The facts of the case, in brief, are that the assessee is an individual and has been deriving income from investment and trading in shares. It has been stated by the AO in the assessment order that it had received information from DDIT (Inv.), Unit 6(2), Mumbai vide letter dated 23.03.2018 that during the assessment year under consideration, the assessee had traded in penny stock scrip of M/s. VAS Infrastructure Ltd., amounting to Rs. 26,02,910/- and this VAS infrastructure Ltd. has been used by the beneficiaries to launder money in the garb of Long Term Capital Gain (LTCG) while claiming exemption u/s. 10(38) of the Income Tax Act. The assessee was one of such beneficiaries of th....
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.... November, 2010, which was not prima facie supported by financial statements. The Assessing Officer has clearly given a finding that the appellant had not shown the penny stock transactions of Rs. 26,02,910/- in November, 2010 and held that the entire sale and purchase transactions are dubious in nature and the entire sale consideration on sale of shares of Rs. 26,02,910/- in non disclosure of sale of shares. The same need to be brought to tax. 6.6. It is seen from the return of income, the appellant had shown the income of Rs 37,586/- which includes long term capital gains of Rs. 28.461/-but, the appellant had not shown any exempt income. The appellant herself submits she earned profit of Rs. 3,27,794/- on trading of shares of M/s. VAS Infrastructure Ltd. In that case, the appellant should explain how this profit was reflected in the return of income. Mere Long Term Capital Gains of Rs. 28,461/- does not seem to explain such huge profit. Also, it is pertinent to note that the appellant claims to have paid STT, but no exempt income under section 10(38) of the Income Tax Act, 1961 was shown in the return of income. Therefore, the appellant failed to give explanation/documen....
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....t is given at page no. 3 to 5 of the paperbook. The shares trading account being part of financial statements is enclosed at pg no. 32 of the paper book. 3) One of the shares dealt with by the appellant in the year under appeal is M/s. VAS Infrastructure Ltd. During the year under appeal, the appellant has purchased 34337 shares and sold 26250 shares of the said company on various dates. Kindly refer to pg no. 5 of the paperbook for details. Out of these transactions of purchase and sale of shares, the Id AO disputes only the transaction of purchase and sale of 24000 equity shares which has taken place in the month of November 2010. The appellant has purchased 24000 equity shares of M's. VAS Infrastructure Ltd on 04.11.2010 for the consideration of Rs. 22,97,760/- and sold the same between 04.11.2010 and 08.11.2010 for the total consideration of Rs. 26,02,910/-, thereby earning short term capital gain of Rs. 3.05,150/- (pg no.1 of the paperbook). The gain on sale of shares translates to 13.28% ROI. This gain of Rs. 3,05,150/- is credited to the shares trading short term account (pg no. 32 of paperbook) and is part of total short-term sales of Rs. 3,58,77,933-. ....
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....llant is of Rs. 3,05,150/- only. Thus, when the benefit to the appellant is credit of Rs. 3,05,150/- only, any addition over and above the said amount is not justified. Needless to say, this amount of Rs. 3,05,150/- is also offered to tax as part of sale proceeds credited to shares trading short term account. Accordingly, it is the case of the appellant that no addition on account of the said transaction is warranted. 6) In support, the appellant relies upon the following decisions, all of which deal with purchase and sale of equity shares of M/s. VAS Infrastructure Ltd. The same may kindly be taken into consideration while deciding the present appeal. i. PCIT-vs-Genuine Finance P. Ltd., 152 taxmann.com 330 (Gujarat) [2023] ii. ITO-vs-Kamalesh Mohandas Lakhwani, Hon. Members "SMC" Bench. ITAT Mumbai ITA No. 253/Mum/2023. iii. ITO -vs- Ronak Iqbal Lakhani, Hon. Members "I" Bench, ITAT Mumbai ITA No. 835/Mum/2022 dt. 17.01.2023. iv. Naveen Kishor Mohnot-vs-ITO, 152 taxmann.com 658 (Mumbai - Trib) [2023] Similarly, the appellant also relies upon the under mentioned decision of the Hon. Jurisdictional High Court in support ....