SIDHAKSHETRA SHRAVIKASHRAM,MUMBAI vs. EXEM. WARD 2(3), MUMBAI, MUMBAI

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ITA 6263/MUM/2026Status: FixedITAT Mumbai09 September 2026AY 2026-20274 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the purchase and sale of shares were supported by documentary evidence and the assessee had a substantial holding period. No specific material connected the assessee to price manipulation or accommodation entries.

What were the facts?

The assessee purchased shares and claimed long-term capital gain exemption. The AO reopened the assessment based on investigation findings about penny stocks and added the entire sale consideration and alleged commission.

What were the issues?

Whether the addition of sale consideration and alleged commission for long-term capital gains is sustainable when the assessee provides documentary evidence and there's no specific link to price rigging or accommodation entries.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C,Section 10(38)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR

Pronounced: 09.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “G”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER And SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No. 6263/M/2025 Assessment Year: 2015-16 Girish Chimanlal Sangani, DCIT-Central Circle – 1st Floor, Plot No. 216, Sant 4(1), Mumbai, Room no. 420, 4th Floor, Tukaram Marg, Chinchbunder, Vs. Mumbai, Maharashtra - 400009 Kautilya Bhavan, Bandra PAN – AAEPS4932R Kurla Complex, Bandra (East), Mumbai, Maharashtra - 400051 (अपीलार्थी/ Appellant) (प्रत्यर्थी /Respondent) Present for: निर्धाऩिती द्वधिध/Assessee Ms. Shruti Kalyanikar represented by: िधजस्‍व द्वधिध/Revenue represented Mr. Rajesh Sakhardande, Sr. DR by:

सुनवाईकीतारीख/Date of conclusion of hearing: 27.08.2026 घोषणाकीतारीख/Date of pronouncement: 09.09.2026

O R D E R Per : Narender Kumar Choudhry, Judicial Member

This appeal has been preferred by the Assessee against the order dated 07.08.2025, impugned herein, passed by the Ld. Commissioner of Income Tax (Appeals)-52, Mumbai u/s 250 of the Income Tax Act, 1961 (in short, “the Act”) for the A.Y. 2015-16.

2.

The Assessee purchased 26,929 shares of M/s Prerna Infrabuild Ltd. in September, 2010 for Rs.13,15,923/- and sold the same during June to October, 2014 for Rs.14,20,053/-, earning long-term capital gain of Rs.1,04,130/-, and claimed

2 ITA No. 6263/M/2025 Girish Chimanlal Sangani

exempt u/s 10(38) of the Act, declaring income of Rs.35,48,120/- and by filing return of income on 24.09.2015, which was initially processed u/s 143(1) of the Act.

3.

Subsequently, on the basis of information received from the Investigation Wing relating to alleged accommodation entries in long-term capital gains, the assessment was reopened. Treating the scrip as a penny stock and relying upon the investigation findings, price movement and surrounding circumstances, such as:

mode of acquisition of shares, i. sale of shares and unusual rise in the price, ii. finding of investigation wing, iii. analysis of transactions, iv. failure of the assessee to discharge his onus, v. financial analysis of the penny stock companies qua vi. ignorance of the assessee about shares and penny stock companies, the AO added the entire sale consideration of Rs.14,20,053/- u/s 68 and further added Rs. 42,601/-, being 3% thereof, as alleged commission u/s 69C. The Ld. Commissioner affirmed the additions.

4.

We have heard the parties and perused the material available on record and given thoughtful consideration to the rival claims of the parties. The Ld. AR submitted that the transactions were genuine and supported by contract notes, broker ledgers, demat/holding statements and capital-gain statements, and that no material connected the Assessee with any price rigging or accommodation-entry arrangement. The Ld. DR relied upon the orders of the authorities below and the Investigation Wing findings.

5.

We find that the purchase of the shares for Rs.13,15,923/-, their holding for about four years and subsequent sale for

3 ITA No. 6263/M/2025 Girish Chimanlal Sangani

Rs.14,20,053/- are supported by the documents placed on record. The Assessee had furnished, inter alia, the contract notes, broker ledger accounts and statements of shareholdings for the relevant years. The material also shows that the Assessee was regularly dealing in shares of several companies such as:

 Netlink Solution (India) Limited;  Swasti Vinayaka Synthetics Limited;  Gujarat Cotex Limited;  Supertex Industries Limited;  Tirupati Sarjan Limited;  Resurgere Mines and Minerals Ltd.; and  Shri Ajit Pulp and Papers Ltd. Further it is as fact that the impugned shares were sold through the stock exchange. More importantly, no specific material has been brought on record establishing the Assessee’s involvement in price manipulation or any nexus with the alleged entry operators.

6.

In these circumstances, general findings concerning the scrip or the Investigation Wing material, without any specific evidence connecting the Assessee with the alleged accommodation-entry mechanism, are insufficient to sustain the addition.

7.

We also notice that the Co-ordinate Bench in Ravi R. Cunha v. ITO, Ward-19(3)(1), ITA No.1857/Mum/2021, order dated 26.07.2022, involving the same scrip, also deleted a similar addition, where no specific involvement of the Assessee in price rigging was established.

8.

Thus, considering the documentary evidence, substantial holding period and absence of any specific material against the Assessee, the addition of the entire sale consideration of Rs.14,20,053/- u/s 68 is unsustainable and therefore accordingly deleted.

4 ITA No. 6263/M/2025 Girish Chimanlal Sangani

9.

Consequently, the addition of Rs. 42,601/- u/s 69C towards alleged commission, being dependent upon the same alleged accommodation-entry transaction and unsupported by any independent evidence, is also deleted.

10.

In the result, the appeal filed by the Assessee is allowed.

Order pronounced in the open court on 09.09.2026.

Sd/- Sd/- (PRABHASH SHANKAR) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER (ANKIT SWARNKAR) Private Secretary Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench

//True Copy// By Order

Dy/Asstt. Registrar, ITAT, Mumbai.

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