2026 (2) TMI 710

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.... ITO, Ward-4(1), Nagpur, for the Assessment Year 2014-15 (A.Y.) 2. The grounds raised by the assessee are challenging the addition for unexplained cash credit u/s. 68 of the Act at Rs.16,82,500/- received by the assessee towards sale consideration from sale of equity shares of M/s. Kappac Pharma Ltd. and the addition for unexplained expenditure at Rs.84,125/- deemed to be incurred by the assessee for arranging the long term capital gain (LTCG) u/s. 10(38) of the Act. 3. At the outset, learned counsel for the assessee referring to the plethora of decisions of the coordinate benches as well as Hon'ble High Courts submitted that the genuineness of gain/loss from sale of equity shares of M/s. Kappac Pharma Ltd. has come up for conside....

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....notices, assessment proceedings have been carried out. Ld.AO observed that assessee has claimed LTCG of Rs.16,48,270/- from sale of 2500 equity shares of M/s.Kappac Pharma Ltd. The gross sale consideration is Rs.16,82,500/- and after deduction of brokerage and Security Transaction Tax (STT), net sale amount of Rs. 16,75,770/-. Assessee has purchased 4000 equity shares on 12.10.2012, out of which assessee has sold 2500 equity shares costing to Rs.27,500/-. Ld.AO based on information received in the course of survey operations u/s. 133A of the Act at the office premises of M/s. Devshyam Stock Broking Pvt. Ltd., Kolkata came to a conclusion that M/s. Kappac Pharma Ltd. is a penny stock company and the market rate of these shares are not based ....

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....d. came up for consideration before the Hon'ble High Court of Gujarat in the case of Affluence Commodities (P.) Ltd. (supra) and the Hon'ble Court has observed that they are in complete agreement with the finding of Ld.CIT(A) and the Tribunal to the effect that assessee has proved the genuineness of the transaction established on online trading platform and that it had no control whatsoever on share price. The Hon'ble Court has further with regard to shares of M/s. Kappac Pharma Ltd. affirmed the view taken by the Tribunal that since market rate was lower, the assessee has incurred business loss. The Hon'ble Court has held that no question of law much less any substantial question of law would arise and accordingly appeal of....