ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), KOLKATA, KOLKATA vs. SHYAM SUNDER SOMANI, KOLKATA

Per Rajesh Kumar, AM:

In these appeals of Revenue and CO of the assessee are against the order of the Commissioner of Income-tax (Appeals), Kolkata-20, (hereinafter referred to as the “Ld. CIT(A)”] dated 31.07.2024 for the AY 2013-14.

ITA No. 2395/KOL/2024& CO No. 64/KOL/2025 Shyam Sunder Somani; A.Y. 2013-14 2. At the outset, we observe from the appeal folder that there is a delay of 57 days in filing the appeal by the department and in support of which a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtaining the administrative approvals from the competent authorities, which took quite a long time and accordingly, the delay may be condoned. The ld. AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing.

ITA No. 2395/KOL/2024 4. The only issue raised by the Revenue is against the order of ld. CIT (A) deleting the addition of ₹1,66,66,035/-.

4.1. The facts in brief are that the assessee filed the return of income on 31.03.2014, declaring total income at ₹7,03,800/-. The case of the assessee was reopened after the ld. AO received information from DDIT (Investigation) Unit-2 (2), Kolkata, that assessee is a beneficiary of accommodation Page 2 of 6

ITA No. 2395/KOL/2024& CO No. 64/KOL/2025 Shyam Sunder Somani; A.Y. 2013-14 entries. Accordingly, the case of the assessee was reopened by issuing notice u/s 148 of the Income-tax Act, 1961 (the Act) on 20th Mary, 2020, which was complied with by the assessee by filing the return of income on 29.05.2020, declaring the same income as was shown in the original return of income. Thereafter, the statutory notices along with questionnaire were issued and duly replied by the assessee. the ld. AO noted during the year the assessee has claimed u/s 10(38) of the Act of Long-Term Capital Gain from sale of equity shares on which STT was paid and claimed as exempt, The ld. AO noted that the assessee has claimed ₹1,68,00,813/- u/s 10(38) of the Act from sale of shares of Bakra Pratishtan Ltd., which was traded through the broker Ashok Kumar Kalyan. The ld. AO also noted that the said share was listed in Kolkata Stock Exchange and has been in controversy since long time. The ld. AO also noted that the SEBI has suspended the trading of Kolkata Stock Exchange involved in trading of the said script vide order dated 8th March, 2011, after the prices of share found to be rigged. The ld. AO also noted that this company was also feature in the list of suspended companies whose trading has been stopped in CESC with effect from 21.03.2014. Finally, the ld. AO after taking into account the submission and contention of the assessee added the amount of capital gain of ₹1,66,66,036/- as unexplained cash credit u/s 68 of the Act to the income of the assessee despite the assessee filing all the evidences qua the sale and purchase of such script and also the demat

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ITA No. 2395/KOL/2024& CO No. 64/KOL/2025 Shyam Sunder Somani; A.Y. 2013-14 account payment ,proofs of transactions being done through banking channel etc.

4.2. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into account the submissions and evidences furnished by the assessee.

4.3. After hearing the rival contentions and perusing the materials available on record, we find that the issue at hand is squarely covered by the decision of the co-ordinate Bench of this Tribunal in case of Subhra Dugar Vs. ITO in ITA No. 318/KOL/2024 vide order dated 20.11.2024, wherein the same script was accepted to be genuine by the co-ordinate bench and the disallowances made in respect of Long-Term Capital Gain claimed u/s 10(38) of the Act was deleted by the co-ordinate Bench. The facts and operative part of the decision is as under:-

“3. Facts in brief are that the assessee filed return of income on 04.12.2012 declaring total income of Rs. 4,34,360/-. During the year, the assessee declared long term capital gain of Rs. 1,42,69,074.65/- under the head capital gain and claimed the same as exempt. Subsequently the case was reopened u/s 147 of the Act after obtaining approval from the competent authority i.e. PCIT-11, Kolkata after the AO received information from the Investigation Wing that the assessee involved in taking entries of bogus long term capital gain through transactions of M/s Bakra Pratisthan Ltd., a penny stock company. Accordingly, the statutory notices were duly issued and served on the assessee. During the course of assessment proceedings, the details were called for by the AO. Thereafter after looking into the accounting details and discussing modus oparendi of penny stock company added a sum of Rs. 1,32,40,990/- to the income of the assessee u/s 68 of the Act in the assessment framed u/s 143(3) read with Section 147 of the Act dated 11.12.2019. 4. In the appellate proceedings, the Ld. CIT(A) dismissed the appeal of the assessee.

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ITA No. 2395/KOL/2024& CO No. 64/KOL/2025 Shyam Sunder Somani; A.Y. 2013-14 5. After hearing the rival contentions and perusing the material on record, we find that the case was reopened for the reason that the assessee had sold shares of M/s Bakra pratisthan Ltd. a penny stock company and capital gain of Rs. 1,32,40,990/- was declared from the sale of 37500 equity shares which was claimed as exempt u/s 10(38) of the Act. The Ld. Counsel of the assessee referred to the reasons recorded u/s 148(2) of the Act a copy of which is filed at page 7 of PB which states that the assessee has traded in scrip which is a penny stock as per the report of the Investigation Wing. However, we find that the said company did not appear in the list of 84 stocks the details wherein is furnished in the PB from page 60 to 62. We find that in this case no adverse view drawn was drawn by the SEBI even nonetheless the stock remained suspended for some time through SEBI order but ultimately no adverse view was taken by SEBI and the trading on the stock exchange was restored. The ld. Counsel for the assessee relied on the decisions of Hon’ble Calcutta High Court in the case of PCIT vs. Deepa Agarwal in ITAT/47/2022, IA NO. GA/2/2022 dated 07.11.2022 and PCIT vs.Shri Abhay Kr. Jain in ITAT/63/2022 IA No. GA/2/2022 dated 10.11.2022 which have been perused and we find that the assessee case is squarely covered by these decisions. We also note that these decisions of the Hon’ble High Court after the PCIT Vs Swati Bajaj ITA No. GA/2/2022 in ITAT/6/2022 & others dated 14.6.2022. 6. Further we find merit in the contentions of Ld. A.R that the list of penny stocks did not contain this share , therefore, we are not in a position to sustain the orders of authorities below which has not done anything to find out whether the assessee has routed his own money by trading in the said stock. In our opinion, the AO is not free to generalize any inference from the report of Investigation Wing that the stock is a penny stock by ignoring the fact that stock does not even figure in the list of 84 penny stock which has been discussed by the Hon’ble Calcutta High Court (supra). We observe that the ld AO has only relied on the investigation wing report and has not done any enquiry to bring any substantive material on record.In view of the facts, we are inclined to hold that the reopening of assessment by the AO is not as per the provisions of Act and is in fact based on the borrowed satisfaction and also done without any application of mind. 7. In the result, the appeal of the assessee is allowed.” 4.4. Since, the facts of the case before us are quite similar to the facts of the case as decided by the co-ordinate (supra), we ,therefore, respectfully following the same uphold the order of the ld. CIT (A) by dismissing appeal of the revneue. The appeal of the Revenue is dismissed.

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ITA No. 2395/KOL/2024& CO No. 64/KOL/2025 Shyam Sunder Somani; A.Y. 2013-14 CO No. 64/KOL/2025 5. Since, we have dismissed the appeal of the Revenue by upholding the appellate order, the cross objection filed by the assessee becomes infructuous and hence, dismissed.

Order pronounced on 16.09.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 16.09.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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