SHOBHIT GUPTA,NEW DELHI vs. ACIT, CENTRAL CIRCLE-29, NEW DELHI

PER NAVEEN CHANDRA. ACCOUNTANT MEMBER:-

This appeal by the assessee is directed against the order of the Id.

Id. CIT-30, Central, Delhi dated 26.09.2022 pertaining to A.Y 2016-17.

carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. Judicial decisions relied

upon duly considered.

individual and filed his return of income on 30.07.2016 declaring total

income at Rs. 23,53,710/-.

gathered from the search on some share brokers and other related entities

which were suspected to be involved in misusing the stock market platform

for generating manipulative trades in derivative segment for providing

bogus loss and profit, that shares of M/s Goenka Business and Finance

Limited was used to provide accommodation entries of bogus LTCG. As per

the information received from CRUI module, the name of Sh. Shobhit Gupta

PAN AAPPG5076K figured in the above mentioned beneficiaries list with

trade value of Rs. 94,14,200/- from the Shares of M/s Goenka Business and

Finance Limited.

the Income-tax Act, 1961. The proceedings u/s 148 of the Act were

initiated after duly recording the reasons in writing and obtaining sanction

dated 27.03.2021 of the JCIT, CR-8, New Delhi in accordance with the

provision of the section 151 of the Act. Notice u/s 148 of the Act dated Page 2 of 11

ITA No. 2530/DEL/2022 [A.Y. 2016-17]) Shri Shobit Gupta Vs ACTT

30-03-2021 was issued, in response to which the Assessee e-filed his return

of income for A.Y. 2016-17 on 28/04/2021 declaring income of Rs.

23.53,710/-. The copy of reasons to believe for reopening the case u/s 147

read with section 148 of the Act were provided to the assessee. The notice

u/s 143(2) of the Act, was also issued to the assessee through ITBA system

on 06/07/2021.on 21.03.2014.

M/s Goenka Business and Finance Limited (GBFL) (@ Rs. 10 per share)

through his broker M/s Knit Worth Lease Finance Ltd. for Rs. 100,000/-.

These shares were received in physical form with a lock in period of 12

months which were later dematerialized.

in FY 2015-16, at a total consideration of Rs. 47,06,745/- on BSE through a

broker named M/s K.K. Securities Ltd. The assessee declared long term

capital gain on sale of these shares to the tune of Rs. 45,91,197/- and

claimed the same as exempt u/s 10(38) of the Act. The Assessing officer

held that the assessee has failed to discharge his onus with respect to

proving the genuineness and creditworthiness of the transaction of sale of

shares of M/s Goenka Business and Finance Ltd and added the amount of

Rs. 45,91,197/-, claimed as exempt LTCG from sale of shares of M/s Goenka Page 3 of 11 Business and Finance Ltd, u/s 68 of the Act. Further, the AO also added

the cost of acquisition including transfer expenses amounting to Rs.

1,15,903/- as the assessee failed to substantiate its claim of purchase.

confirmed the assessment order.

assessee has challenged the reopening u/s 147; challenged the approval

u/s 151 being without application of mind; and claimed violation of natural

justice as no opportunity for cross examination was provided. The assessee

has also challenged the CIT(A) order on merits.

assessment proceedings, in reply to notices, the assessee appeared and

submitted the relevant replies and documents viz., (a) bank statement, (b)

Contract notes and (c) transaction account statement with the registered

broker namely M/s K.K Securities Ltd to prove the legitimacy of the

transactions. De hors these factual aspects the Assessing Officer only on

the basis of some investigation report had chosen to make the addition in

this case by invoking the provisions of section 68 of the Act.

Assessing Officer has concluded the reassessment proceedings, merely on

the basis of surmises and conjectures, without considering that there is no

connection of the alleged entry providers, much less brought on record by

the Assessing Officer, without conducting any independent inquiry, without

bringing on record any evidence against the assessee, against the principles

of natural justice, in violation of the settled legal jurisprudence and merely

and only following the alleged report. * 12. The Id AR further submitted that the Id. CIT(A) without considering

the submissions of the assessee, without pointing out any defects in the

documents submitted, confirmed the assessment order in a mechanical

manner. The Id AR stated that Id. CIT(A) has passed the order on irrelevant

and extraneous contentions mainly focusing on the modus operandi of the

penny stock cases rather than linking the same to the facts of the present

case.

banking channels and transaction were done through recognized stock

exchange. The inflow of shares is reflected by way of physical share

certificate and demat account. The shares were transferred through demat

account and the assessee does not know the buyer. There is no evidence Page 5 of 11 that assessee has paid cash in return of the receipt through cheque. In

other words, there is no evidence that the cash was recycled.

of M/s Goenka Business and Finance Ltd could be subject matter of

artificial price rigging, but there is no evidence brought on record by the

Ld. AO that either the assessee or his stock broker was involved in connived

transactions in order to earn the exempt long term capital gains. The Id.

counsel for the assessee relied on the decision of the Hon'ble Delhi High

Court in the case of Pr. CIT vs. Koruna Garg in ITA No.477/2022 order

dated 23rd November, 2022 where it was held that an astronomical

increase in the share prices of the company, in itself, is not a justifiable

ground for holding the LTCG to be an accommodation entry. Reliance in

this regard was further placed on the decision of Pr. CIT vs. Sandipkumar

Parsottambhai Pate I [2023] 150 taxmann.com 192 (Gujarat).

statements recorded by the Investigation Wing as well as information

received from the Investigation Wing and has made no independent enquiry

from the relevant parties or independent source or evidence. The AO has

not even got confirmed or corroborated by the person, the statement

recorded by the Investigation Wing, during the assessment proceedings. Page 6 of 11 The Id AR relied on the decision of the jurisdictional High Court in the case

of Pr. CIT v. Smt. Krishna Devi [2021] 126 taxmann.com 80 (Delhi).

assessee in case of any price rigging or price increase. The assessee is a

regular investor and there is no adverse report against the Assessee. The

Id AR submitted that there is no whisper either in the reassessment order

or the CIT(A) order that the assessee has taken an accommodation entry or

has routed his unaccounted money. The bank statement evidencing receipt

of funds from the Share Broker has already been furnished in the course of

assessment proceedings. The Assessing Officer has not brought any

material indicating that said amount proposed to be taxed has not been

received from the Share Broker or the sum received is from the sources

other than the sale consideration claimed against sale of shares. No

evidence has been brought on record to establish any link between the

assessee herein with the entry operators who were allegedly involved in

price rigging of shares artificially or any other person named in the

assessment order being involved in any price rigging and also the exit

provider.

material to implicate the assessee. Any suspicion how so ever strong, Page 7 of 11 cannot partake the character of legal evidence. Reliance in this regard is

placed on the decision of PCIT v. Sandipkumar Parsottam bhai Patel

[2023] 150 taxmann.com 192 (Gujarat).

whose statement has been recorded, was granted to the assessee despite

being specially asked for.

been allowed by the ITAT Delhi Benches:

i)Archit Gupta ITA 2527/D/2022 dated 29.10.2025(lnvolving the same scrip i.e., M/s Goenka Business & Finance Ltd.) ii) Udita Gupta ITA 2532/D/2022 dated 17.11.2025(lnvolving the same scrip i.e., M/s Goenka Business & Finance Ltd.) iii)Archit Gupta ITA 2624-2625/D/2022 dated 06.11.2024 iv) Jyoti Gupta ITA 5419/D/2018 and 2528/D/2022 dated 06.11.2024 v) Shobhit Gupta ITA 2626-2627/D/2022 dated 13.11.2024

The Id DR further relied upon the following case laws:

Page 8 of 11

21. In his rejoinder, the Id AR submitted that the facts in the Zulu

Merchandise is distinguishable, as the AO in the case of Zulu Merchandise

had conducted detailed enquiry, whereas there was no independent

enquiry in the instant case by the AO. The Id AR further distinguished the

case of PCIT V Swati Bajaj 446 ITR 56(Cal).

relevant material on record. We find that whereas the assessee submitted

the documents and evidence to discharge its onus of proving the

transaction in shares as genuine, the AO has not been able to point out any

deficiency/defects in the document. We further note that the AO has

extensively relied on the Investigation report with regard to manipulations

and misuse of stock market platform for generating manipulative trades in

shares, but he has not established any direct link/nexus between the

assessee or its broker with the operation of generating bogus loss or profit.

We do not find that the AO has brought in any cogent evidence on record

to establish the fact that the assessee was directly involved in converting

his unaccounted income into exempt long term capital gains by conniving

with the so-called entry operators and brokers who were involved in

artificial price rigging of shares. The AO has made no effort by way of

issuance of notices u/s 133(6)/131 to various parties involved and to Page 9 of 11 enquire about the involvement of the assessee, in particular, in the

aforesaid sham transaction. The AO has simply adopted the Investigation

Report. We are therefore of the considered view that merely placing

reliance on the Investigation report, without further collecting and

garnering cogent evidence/materials to corroborate the Report, the AO

cannot justify his conclusion that the transaction is sham and bogus. We

are fortified in our view by the decision of the hon’ble Delhi Court in the

case of PCIT V Smt Krishna Devi (supra).

the Gupta family, relied upon as above, and in assessee’s own case for AY

2012-13 and AY 2013-14, have allowed the appeal of the assessee wherein

the AO has used the same Investigation Report for disallowing the LTCG u/s

10(38) of the Act, though in context of different share. In the case of Archit

Gupta and Udita Gupta, (supra) the issue involved LTCG claimed on the

same scrip i.e., M/s Goenka Business 8t Finance Ltd. We are therefore of

the considered view that the Revenue authorities have failed to

substantiate their findings that the impugned transactions in shares was

sham and bogus. We therefore allow the ground 1 and 2.

not been proved by the assessee. The same is therefore dismissed. Page 10 of 11

adjudicated upon. ,

partly allowed.

The order is pronounced in the open court on 16.07.2026.

Sd Sd [MADHUMITA ROY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16th July, 2026. VL/ Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi

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