DURGA VIJAYKUMAR LAKHANI ,MUMBAI vs. PR. CIT -27(1), MUMBAI

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ITA 5788/MUM/2025Status: DisposedITAT Mumbai12 June 2026AY 2016-176 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged its primary onus by providing purchase bills, contract notes, demat statements, and bank statements, which were not doubted by the authorities. Relying on previous judgments concerning the same script and the jurisdictional High Court, the Tribunal deleted the addition.

What were the facts?

The assessee claimed long-term capital gains (LTCG) on the sale of shares of OJAS Asset Reconstruction Company Ltd., which was later reopened by the AO based on information suggesting the shares were used to create bogus LTCG. The AO made an addition under Section 69A for unexplained money as the assessee provided no submissions.

What were the issues?

Whether the long-term capital gains claimed by the assessee are bogus and should be added as unexplained money, or if the assessee has discharged its onus by providing sufficient documentary evidence.

Which sections of the Income-tax Act were involved?

Section 69A,Section 10(38),Section 147,Section 148,Section 68

AI-generated summary — verify with the full judgment below

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

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR

For Appellant: Ms. Ritika Agarwal, Ld. A.R
For Respondent: Shri Annavaram Kosuri, Ld. Sr. D.R
Hearing: 24.03.2026Pronounced: 12.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “D”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER And SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.5788/M/2025 Assessment Year: 2016-17

Durga Vijaykumar Lakhani, National Faceless Plot No.117, A – Lane Gokul, Assessment Centre, Near Sagar Vihar, Sector 8, Assessment Centre, Room Vashi, Navi Mumbai – 400703. Vs. No. 401, 2nd Floor, E-Ramp, PAN – AAZPL4339E Jawaharlal Nehru Stadium, Delhi – 110003. (Through Pr. CIT – 27, Mumbai). (Appellant) (Respondent)

Present for: Assessee by : Ms. Ritika Agarwal, Ld. A.R. Revenue by : Shri Annavaram Kosuri, Ld. Sr. D.R. Date of Hearing : 24.03.2026 Date of Pronouncement : 12.06.2026 O R D E R

Per : Narender Kumar Choudhry, Judicial Member:

This appeal has been preferred by the Assessee against the order dated 29.07.2025, impugned herein, passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2016-17.

2.

In the instant case, the Assessee on dated 29.01.2024 had purchased twenty thousand shares of OJAS Asset Reconstruction Company Ltd. (TOYAM Industries w.e.f.

ITA No.5788/M/2025 2 Durga Vijaykumar Lakhani 16.07.2015) on a total consideration of Rs.2,20,000/-. Thereafter the Assessee from 10.04.2015 to 29.05.2015 sold 16,500 shares on a total consideration of Rs.71,55,613/- and consequently earned the long term capital gain of Rs.69,56,229/- and claimed the same being exempt under Section 10(38) of the Act.

Subsequently, the case of the Assessee was reopened under Section 147 of the Act by issuing a notice dated 31.03.2020 under Section 148 of the Act on the basis of information received from DDIT (Inv.) Unit (3) Calcutta, to the effect:

“That OJAS Asset is also identified as penny stock used to create bogus long term capital gain and the Assessee being a beneficiary has been benefitted by trading in this script amounting to Rs.28,05,075/- in FY 2015-16. Further the Assessee has traded amounting to Rs.71,55,618/- in the shares of TOYAM Industries Ltd., a penny stock used to create bogus LTCG/Short-term loss.”

3.

Thereafter though the Assessing Officer (AO) issued various statutory notices to the Assessee however, the Assessee except seeking time, eventually filed no submissions and documents and therefore, the AO in the constrained circumstances proceeded to decide the assessment on the basis of material available on record and ultimately, held the amount of Rs.99,60,693/- as unexplained money and added to the income of the Assessee under Section 69 A of the Act by more or less holding as under:

“ On verification of the return, it is seen that the Assessee has claimed LTCG of Rs.69,56,229/- as exempt, whereas the inquiries of investigation unit has

ITA No.5788/M/2025 3 Durga Vijaykumar Lakhani established that the Assessee is a beneficiary who has availed accommodation entries to bring its unaccounted money in books of account through claim of bogus LTCG. Thus, the amount of Rs.99,60,693/- has escaped assessment for the AY 2016-17 due to failure on the part of the Assessee to disclose true and correct income. The Assessee was given several opportunities however, only on 17.03.2022 the Assessee filed its first reply and thereafter, filed its return of income only on 26.03.2022, which is being treated as nonest filed after the due date, as the time prescribed under Section 148 of the Act was over.” 4. The Assessee being aggrieved challenged the said addition by filing first appeal before the ld. Commissioner and during the appellate proceedings, filed various details and documents such as:-

(i) Script wise working of profit of sale of shares. (ii) Debit not for purchase of shares issued by DSV Finance Leasing Pvt. Ltd. (being one of the top 10 shareholders of OJAS ltd.) (iii) Bank Statement highlighting transaction of purchase and sale of shares and, (iv) Contact notes issued by broker in respect of sale of shares.

5.

The ld. Commissioner though acknowledged the said documents and the claim of the Assessee but ultimately set aside the assessment order, with a direction to the AO to make a fresh assessment in accordance with Rules and timelines prescribed under Section 153(3) of the Act by observing and holding as under:

“ The said documents were furnished before the AO but at the fag end of the timeline, gives no time to verify hence, the AO not considered the same. Further, the Assessee has filed all documentary evidence to substantiate the claim of LTCG as exempt. However, these documents are required to be thoroughly examined

ITA No.5788/M/2025 4 Durga Vijaykumar Lakhani to arrive at the real pictures of the financial transactions carried out by the Assessee. In the interest of fairness and justice, he is of the opinion that the appellant should be given one more opportunity for verification of details.

6.

Thus, the Assessee being aggrieved has preferred the instant appeal.

7.

Heard the parties and perused the material available on record. The Assessee had purchased total shares of OJAS Reconstruction Company Ltd. (TOYAM Industries Ltd. w.e.f 16.07.2015) on dated 29.01.2014 on a total consideration of Rs.2,20,000/-. Further it is a fact that during the AY 2015-16, the Assessee on dated 13.03.2015 sold 3500 shares out of 20000 shares on a consideration of Rs.19,18,000/- and consequently earned a long term capital gain of Rs.19,18,000/-. Further, the Assessee during the year under consideration sold remaining shares i.e. 16500 from 10.04.2015 to 29.05.2015 on a consideration of Rs.71,55,613/-, consequently earning the long term capital of Rs.69,56,229/-. Further, it is a fact that the purchase and sale transactions were routed through banking channels and in order to discharge prima facie onus cast under Section 69 A of the Act, the Assessee furnished all the relevant documents, such as Purchase Bills, Contract Notes, Demat Account Statement, Broker Ledger and Bank Statement, etc. which were not doubted by the Authorities below. Further, it is also a fact that sale proceeds were reflected in the books of the Assessee and corresponding entries were/are verifiable from the demat account, as well as bank account.

ITA No.5788/M/2025 5 Durga Vijaykumar Lakhani 8. We further observe that the Hon’ble Co-ordinate Bench of the Tribunal, in the case of Meena Hasmukh Salva Vs. ITO (ITA No. 2910/M/2024 decided on 18.02.2025) has also considered same script namely M/s. OJAS Asset Reconstruction Company Ltd. and by taking cognizance of the fact that the Hon’ble Coordinate Bench of the Tribunal in the case of Sanjeev Agarwal Vs. ACIT (ITA No. 1518 to 1519/DEL/2021) has also dealt with the same script and deleted the identical addition, ultimately deleted the identical addition.

9.

We further observe that the Hon’ble Jurisdictional High Court in the case of PCIT Vs. Indravadan Jain HUF (2023) 156 taxmann.com 605 (Bom.), has also held as under: “ That where the shares were purchased by the Assessee on floor of stock exchange and payment was made through banking channel, deliveries were taken in demat account, where shares remains for more than one year, contract notes were issued and shares were also sold on stock exchange and then there was no reason to add capital gains as unexplained cash credit under Section 68 of the Act.”

10.

Coming to the instant case again, as observed above, the Assessee by filing relevant documents referred to above, which were not doubted by the Authorities below, has duly discharged its prima facie onus cast under the applicable provisions of law. It is a fact that the Assessee has sold the shares through online platform of recognized stock exchange, after holding the same for more than one. Further, admittedly no allegation has ever been levelled or proved against the Assessee by any of the investigation agencies, including SEBI or Income Tax Department.

ITA No.5788/M/2025 6 Durga Vijaykumar Lakhani Thus, on the aforesaid analyzations, addition made be the AO, is liable to be deleted, hence the same is deleted.

11.

In the result, Assessee’s appeal is allowed.

Order pronounced in the open court on 12.06.2026.

Sd/- Sd/- (PRABHASH SHANKAR) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER

Tarun Kushwaha Sr. 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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