MRS. NITA JAJOO,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -4(3), MUMBAI

These two appeals are filed by the assessee against the separate orders both dated 14.08.2024 passed by the Ld. Commissioner of Income Tax (Appeals), Mumbai [hereinafter referred to as “Ld. CIT(A)”] for A.Ys. 2011-12 & 2012-13 arising out of assessment

The assessee has filed this appeal on the following grounds:-

Brief facts of the case are that the assessee originally filed return of income declaring total income of Rs.38,66,410/-. The assessment was completed u/s 143(3) of the Act vide order dated 22.01.2013. Subsequently, based on information received from Investigation Wing, Kolkata alleging that certain entities were engaged in providing accommodation entries through penny stock transactions in the shares of Oasis Cine Communication Ltd., the assessment was reopened by issuance of notice u/s 148 dated 28.03.2018. In response thereto, the assessee filed return of income declaring same income as originally assessed.

During reassessment proceedings, the Assessing Officer observed that the assessee had shown long term capital gain on sale of shares of Oasis Cine Communication Ltd. According to the Assessing Officer, the said transaction represented bogus accommodation entry. The Assessing Officer relied upon investigation report and statements of certain brokers/operators and held that the transaction was not genuine. Accordingly, the Assessing Officer treated the sale proceeds received on sale of shares as unexplained cash credit u/s 68 of the Act and completed reassessment u/s 143(3) r.w.s. 147 of the Act vide order dated 29.11.2018 determining total income at Rs.1,41,63,549/-.

In A.Y. 2012-13, the Assessing Officer added the aforesaid amount of Rs.40,77,511/- treating the same as bogus sale proceeds of shares of Oasis Cine Communication Ltd. The Assessing Officer also made further addition of Rs.2,03,875/- being alleged commission expenditure at 5% for obtaining accommodation entries. The additions were confirmed by the Ld. CIT(A).

Before us, the Ld. AR submitted that the assessee had purchased 4000 shares of Sakshi VyaparPvt. Ltd. in physical form and the same subsequently got converted into shares of Oasis Cine Communication Ltd. pursuant to amalgamation approved by Hon’ble Calcutta High Court. The shares were thereafter dematerialized and sold through recognized stock exchange after payment of Securities Transaction Tax. The entire purchase and sale transactions were carried out through banking channel and supported by documentary evidences.

The Ld. AR drew our attention to the following documentary evidences filed in paper book:-

The Ld. AR further submitted that identical issue in respect of assessee’s husband Shri Kamal Jajoo involving purchase of 4000 shares of Sakshi VyaparPvt. Ltd. on same date i.e. 17.04.2009 came up before the Coordinate Bench of Tribunal in ITA No. 5268/Mum/2024 dated 22.12.2025, wherein the Tribunal deleted the addition. It was submitted that facts are identical and therefore the issue is squarely covered in favour of the assessee.

The Ld. DR, on the other hand, relied upon the orders of lower authorities and submitted that the transactions were part of organized penny stock arrangement unearthed by Investigation Wing and therefore the Assessing Officer was justified in treating the same as unexplained cash credit.

We have heard the rival submissions and perused the material available on record. We find that the assessee has placed on record complete documentary evidences in support of purchase and sale of shares of Oasis Cine Communication Ltd. The assessee has furnished purchase bill of 4000 shares of Sakshi VyaparPvt. Ltd., share certificate evidencing transfer in assessee’s name, bank statement evidencing payment through banking channel, allotment letter issued consequent to merger of Sakshi VyaparPvt. Ltd. with Oasis Cine Communication Ltd., demat statement reflecting credit of shares and contract notes evidencing sale through recognized stock exchange. The sale consideration has also been received through banking channel. Thus, the assessee has discharged the initial onus cast upon her under section 68 of the Act.

In view of the above discussion, the addition of Rs.62,19,627/- sustained by the Ld. CIT(A) for A.Y. 2011-12 is directed to be deleted.

In so far as A.Y. 2012-13 is concerned, we find that the addition of Rs.40,77,511/- represents balance sale transaction of shares of Oasis Cine Communication Ltd. which was deleted by the Ld. CIT(A) in A.Y. 2011-12 on the ground that the same pertained to subsequent year. Since we have already held the transaction of sale of shares of Oasis Cine Communication Ltd. to be genuine and deleted the substantive addition in A.Y. 2011-12, the corresponding addition of Rs.40,77,511/- made in A.Y. 2012-13 also cannot survive and the same is accordingly directed to be deleted.

The Assessing Officer has also made addition of Rs.2,03,875/- being alleged commission expenditure at 5% for obtaining accommodation entries. Since the very addition on account of alleged bogus share transaction has been deleted by us, the addition towards

In the result, both the appeals filed by the assessee are allowed.