INCOME TAX OFFICER, KOLKATA vs. STENLY SECURITIES LIMITED, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.775/KOL/2026 (Assessment Year:2018-19) ITO, M/s Stenly Securities Limited, Ward – 5(1), Vs. 15B, Dr. Rajendra Prasad Sarani, Kolkata Clive Row, Kolkata – 700001, West Bengal [PAN: AADCS6016J] (Appellant) .. (Respondent) Appellant by : Shri Dheeraj, Sr. DR Respondent by: Shri Siddharth Agrawal, Advocate Date of Hearing 15.06.2026 Date of Pronouncement 25.06.2026

O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER:

This appeal preferred by the revenue is against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (hereinafter referred to as the “ld. CIT(A)”], dated 17.12.2025 for the Assessment Year (AY) 2018-19.

ITA No.775/Kol/2026/AY 2018-19 ITO vs. Stenly Securities Ltd. re-opened u/s 147 of the Act on the basis of information received for ‘Unexplained Credits’ during the year under consideration. The notice u/s 148 of the Act was issued on 07.04.2022 after passing order u/s 148A(d) of the Act. Thereafter, the assessee filed its return of income , declaring the same income as declared in the return of income filed originally. Thereafter, statutory notices along with questionnaire were issued and served upon the assessee. The AO noted that the assessee has opening balance of equity share of Stampede Capital Ltd. as on 1.04.2017 numbering 9,66,364 with cost of Rs.1,85,54,189/-. The bonus allotted during the year 2,56,590 equity shares. Further purchased during the year 25,000 equity shares for ₹ 3,20,634/-.. The AO also noted that the assessee sold 2,56,590 shares of Stampede Capital Ltd. for Rs.2,02,67,586/-. The profit on the said sale of shares was Rs.13,92,763/-, which was shown in the profit and loss account. The AO noted that the assessee has also done intraday trade in Stampede Capital Ltd. and the profit of Rs.1,06,001.29, which were also shown in the profit and loss account. The assessee furnished all the required documentary evidences before the AO for purchase of shares. The addition was restricted to the amount whatever assessee had received as a consideration because Stampede Capital Ltd. has proved is a shell company and thereby making addition of Rs.1,81,57,011/- u/s 68 r.w.s. 115BBE of the Act.

“7. Ground No 7 is raised against the addition of Rs.1,81,57,011/- on account of alleged unexplained cash credit under section 68. The Assessing Officer has reproduced the details of transactions in the shares of M/s Stampede Capital by the assessee;

ITA No.775/Kol/2026/AY 2018-19 ITO vs. Stenly Securities Ltd.

Even though the profit generated was Rs.13,92,763 only, the Assessing Officer added Rs.1,81,57,011 from sale of 9,91,364 shares of Stampede Capital. Sale proceeds from bonus shares were not added. Further details of share transactions of the disputed share by the appellant is given below:

ITA No.775/Kol/2026/AY 2018-19 ITO vs. Stenly Securities Ltd.

From the chart it is clear, during the year under consideration, the assessee purchased shares of Stampede Capital for average price of Rs.12.82 and sold them at an average price of Rs.16.24 per share. There is no abnormal increase in share prices usually associated with penny stocks. In the case of Sudhir Babu Chalasani. I.T.A.Nos. 1348 to 1352/Hyd/2025, the ITAT Hyderabad has verified the transactions in shares of Stampede Capital and held that, 15. In the present case, going by the evidence furnished by the assessee, there is no dispute with regard to the fact that, the assessee has proved the genuineness of the transactions of purchase and sale of shares of Stampede Capital Ltd as an ordinary investor in shares which is evident from the relevant details of purchase of shares of Brilliant Securities Ltd and corresponding consideration paid through Vijaya Bank. Further, the assessee has also furnished relevant evidences in the form of consolidated share certificate issued by M/s. Venture Capital and Corporate Investments Pvt. Ltd., regarding the issue of consolidated share certificate of Brilliant Securities Ltd

ITA No.775/Kol/2026/AY 2018-19 ITO vs. Stenly Securities Ltd. and further, furnished Demat statement issued by GSV Securities Private Limited for all these assessment years, which is undisputedly proves the fact that, the assessee held the shares of Stampede Capital Ltd as an investment, but not a beneficiary bogus Long Term Capital Gains as alleged by the A.O. Had it been the case of the A.O. that the assessee is also one of the beneficiaries of bogus Long Term Capital Gains provided by the entry provider, the assessee would have sold entire lot of 1,99,900 shares in one go, when the share price of Stampede Capital Ltd has reached all time high of about Rs.510/- per equity share. In the present case, the assessee was holding shares for more than 10 years which is evident from the date of purchase and subsequent sale of shares in small lots right from F.Y. 2008-09 and upto F.Y. 2019-20 in different lots., even though the share price was reached at all-time high in earlier financial years. Further, the assessee had not only made investment in one solitary share of Stampede Capital Ltd, which is evident from the holding statement of the assessee for these assessment years, where the assessee is holding more than 145 scrips for different companies for many years. From the holding statement of the assessee, it is undisputedly clear that, the assessee is holding the Blue-Chip stocks of many companies like Bajaj Finance Ltd., Coal India Ltd., Divis Laboratories Ltd., IDBI Bank Ltd, Infosys Ltd, ITC Ltd, Reliance Industries Ltd and other shares. In our considered view, if we go by the modus operandi employed by the entry provider in respect of penny stocks, it was only one instance of purchase and sale of shares of penny stock but, in the present case, as per the facts available on record, the assessee is a regular investor in shares as an ordinary investor in the stock market and in that process, the assessee has invested in the shares of Brilliant Securities Ltd and the same has been subsequently converted into Stampede Capital Ltd. Therefore, in our considered view, the allegation of the A.O. and the Ld. CIT(A) that, the consideration received from sale of shares of Stampede Capital Ltd is unexplained money taxable u/s 69A of the Act, is totally on the basis of suspicion without there being any materialto support the findings of the A.O. and thus, the findings given by the Ld. CIT(A) to sustain the additions made by the A.O. cannot be upheld. In the case of CellcapInvofin India Pvt. Ltd [ITA No.2393/Del/2024], the Delhi ITAT verified the transactions in the share of Stampede Capital and held that, 9. In the instant case, the entire case of the Revenue rests on Information available in insight portal which was collected in some other cases and nowhere, it was established that the assessee was part of the beneficiary. Further the AO has failed to appreciate the fact that the assessee was having closing stock of Rs. 17,77,050/- of 16155 shares of Stampede Capital Ltd. however, the AO has included this stock in the sale and loss thereon. Clearly there is no basis with the AO to support the allegation that the transaction of purchase and sale of shares of M/s Stampede Capital Pvt. Ltd made by the

ITA No.775/Kol/2026/AY 2018-19 ITO vs. Stenly Securities Ltd. assessee were bogus. The assessee has been able to discharge the onus casted upon it to prove the genuineness of the transactions and was accepted by the Department in the order passed u/s 143(3), therefore, now alleging the same as bogus is nothing but mere change of opinion. In both these case, in similar and specific fact of sale of shares of Stampede Capital, tribunals have held that, where as an ordinary investor the assessee has invested in the shares of Stampede Capital Ltd, the consideration received from sale of shares cannot be taxed as unexplained money only on the basis of suspicion. Hence it is held in this case that, there is no basis to support the allegation that the transaction of purchase and sale of shares of M/s Stampede Capital Pvt Ltd made by the assessee were bogus. As a result, ground no 7 is allowed.” 5. We have heard rival submissions and perused the materials available on record. We find that the issue is squarely covered by the decision of Co- ordinate Bench which has been followed by ld. CIT(A) while deciding the appeal of the assessee and accordingly, held that the sale of share cannot be taxed as unexplained money on the basis of suspicion. The case of the Co- ordinate Bench in case of Sudhir Babu Chalasani vs. ITO, in ITA No.1348 to 1352/Hyd/2025 for A.Y. 2013-14 to 2017-18, dated 19.11.2025, wherein the similar issue involved and the Co-ordinate Bench has allowed the appeal of the assessee by observing and holding as under:

“14. Having said so, let us come back, whether the transactions of the assessee with regard to purchase and sale of shares of Stampede Capital Ltd are genuine transactions carried out by aninvestor in the ordinary course of investment activity or it was an arranged transaction in collusion with entry providers by employing a modus operandi for providing bogus Long Term Capital Gains for conversion of unaccounted income by using the scrip Stampede Capital Ltd, as alleged by the A.O. The A.O. alleged that, the scrip Stampede Capital Ltd has been used by the entry providers for conversion of unaccounted income of various individuals in the form of bogus Long Term Capital Gains, for which the A.O. took support from the investigation report submitted by the Directorate of Investigation Wing, Kolkata, where they have unearthed modus operandi employed by certain individuals for providing bogus entries of Long Term Capital Gains to various beneficiaries. Although, the A.O. refers to the report received from the Investigation Wing, Kolkata and discussed the modus operandi employed by certain individuals in his 6

ITA No.775/Kol/2026/AY 2018-19 ITO vs. Stenly Securities Ltd. assessment order at length, but nowhere provided any findings as to how the assessee had played a role in the alleged modus operandi employed by various individuals or failed to provide any findings as to whether the assessee is one of the beneficiaries of the said entries provided by various persons in the form of bogusLong Term Capital Gains of shares of Stampede Capital Ltd. Although, the A.O. has discussed the issue at length in light of financials of Stampede Capital Ltd and the findings of the investigation report, but failed to link the said investigation report to the assessee and its investment activity, which is evident from the assessment order passed by the A.O. where the assessment order is completely silent about the role of the assessee. Further, the Ld. CIT(A) also sustained additions made by the A.O. only on the basis of the findings given by the A.O. ignoring various evidences filed by the assessee on the sole basis of suspicion and surmises, but failed to link the assessee and its investment activity to the alleged investigation report submitted by the Investigation Wing, Kolkata. Therefore, in our considered view, the allegation of the A.O. and the Ld. CIT(A) that, the assessee is also a beneficiary of the bogus Long Term Capital Gains entries provided by the entry providers operating in Kolkata in the shares of Stampede Capital Ltd, is not baked by any evidences, but fully on the basis of suspicion and surmises. In our considered view, suspicion however strong cannot make it evidence. If the evidence furnished by the assessee proves otherwise then the findingsreached by the A.O. on the basis of suspicion cannot take place the evidences furnished by the assessee, so as to draw adverse inference against the assessee towards sale consideration received for sale of shares of Stampede Capital Ltd. 15. In the present case, going by the evidence furnished by the assessee, there is no dispute with regard to the fact that, the assessee has proved the genuineness of the transactions of purchase and sale of shares of Stampede Capital Ltd as an ordinary investor in shares which is evident from the relevant details of purchase of shares of Brilliant Securities Ltd and corresponding consideration paid through Vijaya Bank. Further, the assessee has also furnished relevant evidences in the form of consolidated share certificate issued by M/s. Venture Capital and Corporate Investments Pvt. Ltd., regarding the issue of consolidated share certificate of Brilliant Securities Ltd and further, furnished Demat statement issued by GSV Securities Private Limited for all these assessment years, which is undisputedly proves the fact that, the assessee held the shares of Stampede Capital Ltd as an investment, but not a beneficiary ofbogus Long Term Capital Gains as alleged by the A.O. Had it been the case of the A.O. that the assessee is also one of the beneficiaries of bogus Long Term Capital Gains provided by the entry provider, the assessee would have sold entire lot of 1,99,900 shares in one go, when the share price of Stampede Capital Ltd has reached all time high of about Rs.510/- per equity share. In the present case, the assessee was

ITA No.775/Kol/2026/AY 2018-19 ITO vs. Stenly Securities Ltd. holding shares for more than 10 years which is evident from the date of purchase and subsequent sale of shares in small lots right from F.Y. 2008-09 and upto F.Y. 2019-20 in different lots., even though the share price was reached at all-time high in earlier financial years. Further, the assessee had not only made investment in one solitary share of Stampede Capital Ltd, which is evident from the holding statement of the assessee for these assessment years, where the assessee is holding more than 145 scrips for different companies for many years. From the holding statement of the assessee, it is undisputedly clear that, the assessee is holding the Blue-Chip stocks of many companies like Bajaj Finance Ltd., Coal India Ltd., Divis Laboratories Ltd., IDBI Bank Ltd, Infosys Ltd, ITC Ltd, Reliance Industries Ltd and other shares. In ourconsidered view, if we go by the modus operandi employed by the entry provider in respect of penny stocks, it was only one instance of purchase and sale of shares of penny stock but, in the present case, as per the facts available on record, the assessee is a regular investor in shares as an ordinary investor in the stock market and in that process, the assessee has invested in the shares of Brilliant Securities Ltd and the same has been subsequently converted into Stampede Capital Ltd. Therefore, in our considered view, the allegation of the A.O. and the Ld. CIT(A) that, the consideration received from sale of shares of Stampede Capital Ltd is unexplained money taxable u/s 69A of the Act, is totally on the basis of suspicion without there being any material to support the findings of the A.O. and thus, the findings given by the Ld. CIT(A) to sustain the additions made by the A.O. cannot be upheld. 16. The assessee has relied upon the decision of ITAT, Delhi Bench in the case of ITO Vs. Smt. Shivani Gupta and Shri Dinesh Gupta (supra), the ITAT, Delhi, under identical set of facts and also on identical issue of capital gains derived from sale of sharesand claimed exemption u/s 10(38) of the Act, held that, once the A.O. does not reject the documentary evidence furnished by the assessee in support of the transactions of Capital Gains derived from sale of shares, then merely on the basis of report of Investigation, that too without there being any reference to the assessee, additions cannot be made to consideration received from sale of shares as unexplained credit u/s 68 of the Act. 17. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that, the A.O. has erred in making addition towards consideration received for sale of shares of Stampede Capital Ltd as unexplained money u/s 69A of the Act. The Ld. CIT(A) without appreciating the relevant facts, simply sustained additions made by the A.O. Thus, we set aside the order of Ld. CIT(A) and direct the A.O. to delete the additions made towards consideration received for sale of shares as unexplained money u/s 69A of the Income Tax Act, 1961.

ITA No.775/Kol/2026/AY 2018-19 ITO vs. Stenly Securities Ltd. 18. In the result, the appeal filed by the assessee in ITA No.1348/Hyd/2025 for A.Y. 2013-14 is allowed.” 6. We, therefore, in view of the facts of the case and respectfully following the decision of Co-ordinate Bench cited on the same scrip (supra), uphold the order of ld. CIT(A) by dismissing the appeal of the revenue.

The order is pronounced in the open Court on 25/06/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated: 25/06/2026 SAMANTA ] �ȯ��ȧĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to : 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent. 3. Ȳ�Ȳͬ��] ���] �ǕÈ�/ Concerned CIT 4. ] ���] �ǕÈ�(अपील) / The CIT(A) 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, ] ���\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[�ȡ_�/ Guard file.

BY ORDER, // TRUE COPY // Asstt.Registrar, ITAT, Kolkata