TaxTMI 
TaxTMI 
2026 (7) TMI 900
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....aw arising out of the order dated 17.10.2024 passed by the Income Tax Appellate Tribunal, Surat, "SMC" Bench (for short "the Tribunal") in ITA No. 511/SRT/2024 for the Assessment Year 2012-13: "(A) Whether on the facts and circumstance of the case and in law, the Appellate Tribunal was justified in deleting the addition of LTCG of Rs. 11,33,225/- made on account of undisclosed income under Section 68 of the Act arising out of sale of shares of "Twenty First Century (India) Limited", a penny stock and without appreciating the findings of the Assessing Officer that the price movement of the company were not supported by financial fundamentals of the company? (B) Whether on the facts and circumstances of the case and in law, ....
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.... 30.03.2018. The main allegation pertains to selling of shares of "Twenty First Century (India) Limited" which according to the Assessing Officer was penny stock. It was alleged that the assessee had shown Long Term Capital Gains (LTCG) of Rs. 10,43,750/- on sale of listed shares of "Twenty First Century (India) Limited". 3.2. The assessee had thereafter claimed exemption of Long Term Capital Gains under Section 10(38) of the Act. Doubting the transactions of the assessee, the Assessing Officer alleged that the transactions by the assessee with regard to "Twenty-First Century (India) Limited", should be treated as unexplained cash credit. On completion of the reassessment proceedings, the Assessing Officer passed an order under Section 1....
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....year under consideration, thus, the holding period of scrips are of seven years. The shares were sold though registered broker of Bombay Stock exchange. The payment of purchase as well as sale was made through banking channel. The assessee paid STT on the sale of such shares. There is no allegation of Assessing Officer that the broker of assessee was involved in price rigging of these shares. I find that before ld CIT(A) the assessee has furnished complete details of his transaction to prove the genuineness of the transaction and the period of holding. No independent investigation of facts is carried out by LD CIT(A), nor any adverse comment were given on such evidences. The ld CIT(A) has co-terminus power of Assessing Officer. The Assessin....
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....ggesting the assessee or his broker involved in rigging up the price of scrips, the addition was rightly deleted by Tribunal. Further I find of Hon'ble Bombay High Court in the case of PCIT Vs. Indravadan Jain, HUF (supra) in Income Tax Appeal No.454 of 2018 dated 12.07.2023 also held that when Assessing Officer nowhere alleged that transactions made by assessee with a particular broker or share broker was bogus, merely because investigation was done by SEBI against the broker or its activities, the assessee cannot be said to have entered into in genuine transaction. 10. The ld Sr DR for the revenue while making his submissions strongly relied on the decisions of Kolkata High Court in Swati Bajaj (supra), which is non-jurisdict....
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....s no element of earning Long Term Capital Gain within a period of less than one year so as to disallow the entire sale consideration as unexplained investment by the Assessing Officer. It is also not in dispute that the assessee has sold the shares through stock exchange and has also paid the Security Transaction Tax (SST). This issue is also covered by the various decisions and more particularly, the decision of this Court in case of The Principal Commissioner of Income Tax-1 Surat, v. Gopalbhai Patel (HUF) rendered in Tax Appeal No. 205 of 2024 dated 04.11.2025, wherein this Court has held as under:- "4. From the facts emerging from the record, it appears that the addition of Rs. 7,15,679/- made by the Assessing Officer is made o....