MS JASMINE SAREEN,DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI

BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACOUNTANT MEMBER

ITA Nos. 7533 & 7534/Del/2025 (Assessment Year 2013-14)

Ms. Jasmine Sareen, Vs DCIT, Circle 12(1), 6/10, Sarva Priya Vihar, New Delhi New Delhi – 110 016 (PAN: AHLPK0327Q) (APPELLANT) (RESPONDENT)

Appellant by Dr. Rakesh Gupta, Adv., Ms. Shilpa Gupta, CA & Sh. Saksham Agarwal, CA Respondent by Ms. Ankush Kalra, Sr. DR

Date of hearing: 09/4/2026 Date of Pronouncement: 24/6/2026

ORDER PER MAHAVIR SINGH, VP: These are quantum as well as penalty appeals arising out of the separate orders both dated 06.10.2025 of the Ld. Commissioner of Income Tax (Appeals/National Faceless Appeal Centre (NFAC), [in short ‘CIT(A)’], Delhi in appeal nos. CIT(A), Delhi-22/10102/20189-19 & CIT(A), Delhi- 22/10259/2016-17 respectively. Assessment was completed by the ACIT, Circle 12(1), New Delhi for the assessment year 2013-14 u/s. 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) vide order dated 4.3.2016 and the penalty was imposed vide order dated 29.9.2016 u/s. 271(1)(c) of the Act. In the quantum appeal, the only issue of the assessee is as regards to order of the CIT(A) confirming the addition made by the AO on account of sales proceeds of shares treated as bogus and assessed the income from unexplained sources amounting to Rs. 1 crore. 1

2.1 The AO required the assessee to file documentary evidences in regard to sale transaction of equity shares of M/s Icereon Communications Pvt. Ltd to prove the genuineness of the transaction. The assessee company filed the photocopy of the MOU executed amongst three persons namely assessee herself, Himanshu Sareen and Sandeep Sawhney for the sale consideration of these shares. The AO also required the assessee to file the copies of shares certificates and as to how the transaction was routed viz. through banking channel or in cash. The assessee did not file the share certificates, but stated that the entire transaction of sale of shares is through banking channel only as the amount received from Himanshu Sareen of Rs. 50 lacs and Sandeep Sawhney of Rs. 50 lacs by way of cheques and through banking channels. AO pointed out that the MOU entered into between the aforesaid three persons on 15.4.2012, but from the stamp and particulars mentioned at page no. 1A the stamp paper was purchased on 1.3.2013 from one Ravi Shanker Sharma stamp vendor of Collectorate Compound, Gautam Budh Nagar. Accordingly, he stated that the MOU entered into between these three persons is not a valid MOU as the transactions has taken place on 15.4.2012, but stamp paper purchased was on subsequent date i.e. 1.3.2013. According to AO the MOU

was a self serving document created on back date just to create evidence in support of suspicion transaction. Another objection of the AO was that the sale consideration of Rs. 1 crore it should have been at Rs. 1,03,63,538/- being the total shares of Rs. 3,22,624/- @ Rs. 31/- per share. The third objection of the AO was that the ITR filed by Sh. Himanshu Sareen shows that he has also sold 94286 shares @ 35/ share as against the rate adopted by the assessee at Rs. 31/-, which was eventually purchased by Sh. Himanshu Sareen. Hence, the AO was of the opinion that the sale transaction is nothing, but colourable device just to claim exemption u/s. 54F on the basis of making investment of house property. AO also required the assesee to explain when these shares were purchased for which assesee stated that these shares were bonus shares allotted on 27.3.2023; 27.3.2024; 30.3.2007 and 19.12.2007 of No. 32200; 54740; 496740 and 510540 respectively. The AO therefore, treated sale transaction of sale of shares for a sum of Rs. 1 crore as unexplained and added the same u/s. 68 of the Act by observing in para 4.9 as under:- 4.9 In view of above mentioned facts, it is held that income from capital gains shown by the assessee was not genuine and hence disallowed. During the year under consideration the assessee has shown received an amount of Rs. 1,00,00,000/- on account of sale of shares. Since the share transaction has not been found genuine it is held that Rs. 1,00,00,000/ was also not received against any genuine sale of shares. Since, during the year under consideration an amount of Rs. 1,00,00,000/- has been found credited in the bank account of the assessee and in view of the facts mentioned above, the same is treated to be unexplained under the provisions of Section 68 of the Act and added to the total income. This amount of Rs. 1,00,00,000/- is also required to be added in the hands of the assessee under the 3

provisions of section 56(2)(vii) of the Act. This gives an addition of Rs. 1,00,00,000/-. I am satisfied that the assessee has furnished inaccurate particulars of income and therefore, penalty proceedings u/s. 271(1)© of the Act are initiated separately.

2.2 From the above, it is clear that AO also made addition u/s. 56(2)(vii), but there is no finding at all on this aspect, how the provisions of section 56(2)(vii) applies in the present case. In terms of above, the AO added the sum of Rs. 1 crore u/s. 68 of the Act as well as u/s. 56(2)(vii) of the Act. 3. Aggrieved, assessee preferred appeal before the Ld. CIT(A). Ld. CIT(A) observed that the assessee filed only a photocopy of MOU prepared amongst three persons, but it was evident from the stamp papers of MOU at page no. 1-A that the stamp no. 2113 was purchased from one Ravi Sharan Sharma, the stamp vendor, Stamp Collectorate, Gautam Budh Nagar, hence, he noted that the AO has rightly reached to the conclusion that the MOU is not a valid MOU. However, he noted that MOU was deliberately fabricated or manipulated to falsely establish a transaction for sale of shares as subsequent investment for claim of exemption u/s. 54F of the Act. Therefore, he concurred with the findings of the AO. Aggrieved, the assessee is in appeal before us. 4. Ld. AR for the assessee submitted that Ld. CIT(A) has erred in sustaining the addition of Rs. 1 crore by treating it as alleged income from unexplained sources u/s. 68 and also u/s. 56(2)(vii) and that too by recording incorrect facts and findings and in violation of principles of natural justice and without appreciating / considering the submissions and evidences filed by the assessee. Hence, the same may be deleted. 5. Ld. DR vehemently supported the orders of the authorities below. 6. We have carefully considered the rival contentions and gone through the facts and circumstances of the case and also perused the paper book filed by the 4

assessee. The solitary issue is relating to addition of Rs. 1,00,00,000/- made by AO u/s 68 and also u/s 56(2)(vii),which was confirmed by Ld. CIT(A) on the ground that assessee could not establish that she was holding the shares that she sold. It is submitted that Assessee incorporated a company namely M/s Icreon Communication Pvt. Ltd. in year 2000 with Shri Himanshu Sareen, and Shri Sandeep Sawhney joined as third Director of the company in year 2002. Assessee subscribed shares initially and then year after year the company namely M/s Icreon Communication Pvt. Ltd. allotted bonus shares as there were substantial surplus as company was engaged in the business of providing information technology (IT) services, including software development, digital solutions, and IT-enabled services to its clients. The assessee married to Sh. Himanshu Sareen in 2004 but from 2011-12 relation between assessee and her husband Shri Himanshu Sareen started getting sour and since then the shares held by the assessee were bought/procured by Shri Himanshu Sareen and others. It was further submitted that Assessee sold 3,22,624 shares in the year under appeal to Shri Himanshu Sareen and Shri Sandeep Sawhney against the consideration of Rs. 1,00,00,000/- which was offered as LTCG as cost of these bonus shares were NIL. The evidences would show that assessee was having the shares which she sold. Ld. AR drew our attention towards paper book page nos. 13 to 16 which is the copy of the assessee’s reply dated 13.10.2015 filed before the AO submitting that she sold 3,22,624 shares of M/s Icreon Communication Pvt. Ltd. and total bonus shares held by her as on 31.03.2012 were to the tune of 18,48,940 and submitting bank statement in which sale proceeds of the shares stood deposited. He further drew our attention towards Page no. 17 of the paper book which is the detail of capital gain filed to AO showing FMV of shares at the rate of Rs. 31/- per shares. The Page No. 2, 5 of the Paper book are the computation of income showing capital gain on sale of these shares; paper book page no. 18-19 is the copy of the assessee’s reply dated 07.12.2015 filed before the AO submitting that the assessee sold these 5

3,22,624 shares of M/s Icreon Communication Pvt. Ltd.; Page no. 20 of the paper book is the FMV working of these shares as on 31.03.2012. Page No. PB 21-22 is the copy of the assessee’s reply dated 24.02.2016 filed before the AO about sale of these shares and its valuation; Paper book page no. 23-26 is the copy of the assessee’s reply dated 26.02.2016 filed before the AO submitting about valuation of shares sold and receipt of consideration and enclosing the share transfer deeds. We find that Page No. 27-28, 29-30 of the Paper Book are the copies of share transfer deeds which shows the sale of 1,61,312 and 1,61,312 to Shri Himanshu Sareen and Shri Sandeep Sawhney for Rs. 50,00,000/- each and the Page No. 31-33 of the Paper Book is the copy of MOU entered on 15.04.2012 but reduced in writing on stamp paper bought on 01.03.2013. It is noted that Page no. 44-52 of the paper book are the written submission filed before Ld. CIT(A) and Page No. 57-62, 63-68 of the paper book are the copies of Form 20B and annual return filed to ROC by M/s Icreon Communication Pvt. Ltd. in connection with AGM held on 30.09.2013 showing assessee sold 1,61,312 shares each to Shri Himanshu Sareen and Shri Sandeep Sawhney. 7. Assessee has filed additional evidences to prove that assessee was holding the shares sold to Shri Himanshu Sareen and Shri Sandeep Sawhney. Ld. AR also filed the additional evidences u/r 29 of ITAT Rules, 1963 which has been admitted being essential for the adjudication of the issue. It is observed that the said Additional evidences at page nos. 4-6 is the Copy of Form 2 dated 27.03.2003, filed with the Registrar of Companies on 04.04.2003, evidencing allotment of 65,400 bonus shares by the company, out of which 32,200 shares were allotted to the assessee on 06.03.2003. Additional evidences page nos. 7-9 is the Copy of Form 2 dated 27.03.2004, filed with the Registrar of Companies, evidencing allotment of 54,740 bonus shares by the company, out of which 26,320 shares were allotted to the appellant on 31.03.2004. Additional evidences page nos. 10-15 is the Copy of Form 2 dated 3 0.03.2007, filed with 6

the Registrar of Companies, evidencing allotment of 4,96,740 bonus shares by the company, out of which 2,36,880 shares were allotted to the appellant on 30.03.2007. Also additional evidences page nos. 16-21 is the Copy of Form 2 dated 19.12.2007, filed with the Registrar of Companies, evidencing allotment of 5,10,540 bonus shares by the company, out of which 2,36,880 shares were allotted to the assessee on 19.12.2007 and additional evidences page nos. 21A- 21G is the Copy of Form 2 dated 29.10.2010, filed with the Registrar of Companies, evidencing allotment of 15,50,919 bonus shares by the company, out of which 7,10,640 shares were allotted to the appellant on 29.10.2010. Additional evidences page nos. 22-115 are the copies of Form 20 (Annual Returns) for the years ending 31.03.2006 to 31.03.2013, evidencing that the assessee held shares in the company in the earlier years, thereby conclusively establishing continuity of shareholding. 8. It was the further contention that when the relation of assessee and her husband Sh. Himanshu Sareen started to be sour note, the shareholding of the assessee was sought to be acquired slowly and gradually by her husband and this oral understanding was entered on 15.04.2012 which was reduced in writing on stamp paper bought on 01.03.2013. It is noted that AO at page no. 4 of the assessment order mentioned that though these shares were sold @ 31/- per shares and thus the total sale consideration as per should be Rs. 1,00,01,344/- but assessee has sold these shares for Rs. 1,00,00,000/-. In reply, the deal relating to the sale of shares was done for Rs. 1,00,00,000/- and not of Rs. 1,00,01,344/- and excess Rs. 1344/- was ignored. It is observed that AO in para 4.7 at page no. 7 of the assessment order has observed that assessee was not able to prove acquisition and sale of shares and whether these shares were bonus shares to justify NIL cost. However, Page no. 57-62, 63-68(67) of the paper book are the copies of Form 20B and annual return filed to ROC by M/s Icreon Communication Pvt. Ltd. showing the actual transfer of such shares in favour of Shri Himanshu Sareen and Shri Sandeep Sawhney. It was the 7

contention of the assessee that Share transfer forms are deposited in company in original and since then there was not good relations between assessee and her husband Shri Himanshu Sareen, assessee did not have the originals. In any case AO could have issued notice to the company for documents and verified all these things which he has raised in assessment order. It is observed that AO, in para 4.2 (pages 5-6) of the assessment order mentioned that as per the ITR of Shri Himanshu Sareen for the same AY, he sold 94,286 shares for Rs.33,00,000/- and computed LTCG by adopting a cost of acquisition different from that at which he acquired the shares from the assessee, and on this basis raised doubts regarding the genuineness of the impugned share transactions. In reply, it is submitted that the purchaser, being a director and independent shareholder, could have sold shares in his own right, and there is nothing on record to show that the shares sold by him were the same as those acquired from the assessee. In view of aforesaid factual matrix and documentary evidences, it is crystal clear that the existence of shares with the assessee and the shares being bonus shares stood established and therefore action of AO in not accepting LTCG on the sale of these shares on the ground that she did not have shares, is not tenable. Keeping in view of the aforesaid discussions and documentary evidences, it is established that application of section 68 and section 56(2)(vii) does not apply in the case of the assessee, thus the addition made on these counts, deserve to be deleted. We hold and direct accordingly. 9. In the result, the quantum appeal being ITA No. 7533//Del/2025 is allowed. 10. As regards penalty appeal being ITA 7534/Del/2025 is concerned, since

we have already allowed the quantum appeal, as aforesaid, the penalty in

dispute is not sustainable in the eyes of law, hence, the same stands deleted

and accordingly, the penalty appeal of the assessee is also allowed.

Sd/- Sd/-

(MANISH AGARWAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER VICE PRESIDENT

*SR BHATNAGGAR*

Date:- 24.06.2026