TaxTMI 
TaxTMI 
2025 (9) TMI 1808
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....CTS OF THE CASE Amongst others, appellant assessee has engaged in trading in three selected listed equity shares namely Ashika Credit Capital Ltd, Dhanleela Investments & Trading Co. Ltd and GFL Financials India Ltd during the Financial Year 2014-15 On the basis of information received from Investigation Wing, Kolkata, Ld AO considered it as "bogus entry " and total sale value of 11,49,008/- was considered as Unexplained Cash Credit u/s 68 without carrying out any independent investigation. Total actual Sale value of these shares aggregate to 9,14,571/- whereas Ld. AO has erroneously considered it to be Rs. 11,49,008/- without considering purchase value of the same shares amounting to 9,40,131/-, resulting into Net Loss of Rs. 25,560/- Obviously, Appellant Assessee has not claimed any exemption of long term capital gains u/s 10(38). C) ORDER OF Ld. AO and Hon'ble CIT(A), NFAC Ld. AO and Hon'ble CIT(A), NFAC have based their observations upon information as received from report of the Investigation Wing. Kolkata. Investigation report alleges that above penny stocks are used by various beneficiaries to launder money and give accommodation e....
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....ows:- "2. We have considered the impugned order with the assistance of the learned Counsels and we have no reason to interfere. There is a finding of fact by the Tribunal that the transaction of purchase and sale of the shares of the alleged penny stock of shares of Ramkrishna Fincap Ltd. ("RFL") is done through stock exchange and through the registered Stockbrokers. The payments have been made through banking channels and even Security Transaction Tax ("STT") has also been paid. The Assessing Officer also has not criticized the documentation involving the sale and purchase of shares. The Tribunal has also come to a finding that there is no allegation against assessee that it has participated in any price rigging in the market on the shares of RFL. 3. Therefore, we find nothing perverse in the order of the Tribunal." iii) Vipul Patel v. Income Tax Officer, Ward-45(4), Kolkata [2019] 110 taxmann.com 215 (Kolkata - Trib.) along with a plethora of cases in favour of the appellant assessee as discussed in the this order. "9. I note that shares of M/s. KAFL were sold by assessee through recognized broker in a recognized Stock Exchange. The details of ....
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....2020] 121 taxmann.com 100 (Mumbai - Trib.) Refer Para 31 to 35 on page 18 & 19 of the order. v) Tejash Ramesh Shah, HUF v. Income-tax Officer, [2025] 172 taxmann.com 657 (Mumbai - Trib.) "7. After hearing the rival submissions and carefully considering the documents available on record, we note that the assessee earned LTCG related to the scrip MPL through transactions conducted on the BSE. No adverse findings or comments have been issued by SEBI regarding this scrip, and the Ld. DR was unable to submit any such directions or allegations by SEBI related to the scrip in question. The Ld. AO did not reject any of these primary pieces of evidence during assessment proceeding. In this context, the Hon'ble Bombay High Court in CIT v. Shyam R. Pawar [2015] 54 taxmann.com 108/229 Taxman 256 (Bombay) held that when details of share transactions are substantiated by DEMAT account statements and contract notes, and the Assessing Officer fails to prove such transactions as bogus, the capital gains cannot be treated as unaccounted income under Section 68 of the Act. The Ld. AR respectfully relied on the order of the coordinate bench of ITAT, Mumbai, D-Bench in th....
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....Wing, Kolkata, wherein the said scrip was termed as penny stock and therefore it was concluded mechanically by Ld. CIT(A) that assessee being the beneficiary is liable for additions. However, the said findings of Ld. CIT(A) are mechanical in nature as none of the revenue authorities have carried independent verifications or investigations. Moreover an important aspect has also been ignored by the revenue authorities that the shares traded in Ashika Ltd are merely Intraday and the maximum holding period of Dhanleela Ltd is 4 days and for GFL Finance Ltd is only 3 days for 4500 shares out of 5000 shares which have been sold by the assessee. The transaction summary is contained at Anx-A which is at paper book page No.1 and the same is reproduced herein below: 6. Although assessee has shown income from trading in shares as 'business income' and thus the benefit of exemption of LTCG is not applicable to the assessee. Even otherwise the question of availing accommodation entries seems to be baseless and merely based on surmises because of the fact that since the taxable total income of the assessee is only Rs. 3,09,240/- and he sustained loss of Rs. 25,560/-. In this way the said loss....
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....ique [IT Appeal No. 2012 of 2017, dated 4-3-2022]" ii) Pr. CIT v. Ziauddin A. Siddique [IT Appeal No. 2012 of 2017 (Mumbai HC)] Concluding para reads as follows:- "2. We have considered the impugned order with the assistance of the learned Counsels and we have no reason to interfere. There is a finding of fact by the Tribunal that the transaction of purchase and sale of the shares of the alleged penny stock of shares of Ramkrishna Fincap Ltd. ("RFL") is done through stock exchange and through the registered Stockbrokers. The payments have been made through banking channels and even Security Transaction Tax ("STT") has also been paid. The Assessing Officer also has not criticized the documentation involving the sale and purchase of shares. The Tribunal has also come to a finding that there is no allegation against assessee that it has participated in any price rigging in the market on the shares of RFL. 3. Therefore, we find nothing perverse in the order of the Tribunal." iii) Vipul Patel v. Income Tax Officer, Ward-45(4), Kolkata [2019] 110 taxmann.com 215 (Kolkata - Trib.) along with a plethora of cases in favour of the appellant assessee as dis....
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....of allotment of shares by the company to the assessee." iv) Vijayrattan Balkrishan Mittal v. Deputy Commissioner of Income Tax, Central Circle-8(1), Mumbai [2020] 121 taxmann.com 100 (Mumbai - Trib.) Refer Para 31 to 35 on page 18 & 19 of the order. v) Tejash Ramesh Shah, HUF v. Income-tax Officer, [2025] 172 taxmann.com 657 (Mumbai - Trib.) "7. After hearing the rival submissions and carefully considering the documents available on record, we note that the assessee earned LTCG related to the scrip MPL through transactions conducted on the BSE. No adverse findings or comments have been issued by SEBI regarding this scrip, and the Ld. DR was unable to submit any such directions or allegations by SEBI related to the scrip in question. The Ld. AO did not reject any of these primary pieces of evidence during assessment proceeding. In this context, the Hon'ble Bombay High Court in CIT v. Shyam R. Pawar [2015] 54 taxmann.com 108/229 Taxman 256 (Bombay) held that when details of share transactions are substantiated by DEMAT account statements and contract notes, and the Assessing Officer fails to prove such transactions as bogus, the capital gains c....