DCIT, CENTRAL CIRCLE-1, JAIPUR, JAIPUR vs. PRIYANKA JAIN, JAIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 1739/JPR/2025 (Assessment Year:2012-13) DCIT Vs. Smt. Priyanka Jain Central Circle 1 1563, Jain Bhawan, Singhi Jaipur Ji Ki Gali, Chaura Rasta, Jaipur �थायीलेखासं./जीआइआरसं./PAN/GIR No:ABTPJ 8113 H Appellant .. Respondent

Appellant by : Ms. Kanishka Kansal, Adv Respondent by : Mrs. Aarti Rawat, Addl. CIT

Date of Hearing 24.06.2026 Date of Pronouncement 30.06.2026 O R D E R The present appeal has been filed by the Revenue against the order passed by the Office of the Commissioner of Income Tax, Appeal CIT(A), Jaipur-04 (hereinafter referred to as “Ld. CIT(A)”), dated 29.09.2025under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). 2. The grounds of appeal raised by the Revenue are read as under: 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in the deleting the addition of Rs. 82,274/- made by the AO after disallowing the

P a g e | 2 ITA No. 1739/JPR/2025 Priyanka Jain exemption of Bogus Long Term Capital Gains claimed u/s. 10(38) of the Income Tax Act, 1961? 2. Whether, on the facts in the circumstances of the case, the Ld. CIT(A) is justified in granting relief to the assessee ignoring the facts that the case of the assessee falls under para 3.1(h) of the exception laid down by the CBDT vide Instruction F.No.279/Misc. 142/2007-ITJ (Pt.) dated 15.03.2024 issued as Circular No. 5 of 2024 wherein it has clearly been directed that cases involving organized tax evasion including cases of bogus capital gain/loss through penny stocks and cases of accommodation entries needs to be appealed further? 3. The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal?

P a g e | 3 ITA No. 1739/JPR/2025 Priyanka Jain

During assessment proceedings, Id: AO noticed that appellant earned long term capital gain and claimed exempt income u/s 10(38) of the I.T. Act, 1961. Ld. AO noted that appellant had sold shares of Quest Financial Services. The appellant had purchased shares of Quest Financial Services on 27.04.2005 for Rs.15,334/-. The appellant had sold the same shares on 13.04.2011 and declared long term capital gain of Rs.82,274/- as long term capital gain and declared in exempt income. The Id. AO held that the script of Quest Financial Services has been treated as penny stock by the Income Tax Department and added the long term capital gain of the appellant of Rs.82,274/- on sale of share to total income of appellant.

During appellate proceedings, appellant contended that investment in the shares of the company was made by appellant six years back from the date of sale by making purchase of shares from the open market through the share broker and the payment was also made by account payee cheque and all such purchased shares from the date of purchase were appearing in the D-mat account till the same were sold. The appellant also contended that she had made the investment in shares of Quest Financial Services Ltd 8 years back and when the market was high the same ware sold which resulted into profit of Rs. 82.274/-.

The appellant relied upon the judgement of jurisdiction ITAT bench, Jaipur in ITA No.402/JP/2017 relevant to assessment year 2012-13 on the identical facts in the case of Omprakash Modi V/s DCIT, Central Circle-II, Jaipur which is relating to the same company being Quest Financial Services Ltd.

The appellant produced copy of order of Hon'ble ITAT in the case of Om Prakash Modi and contended that in this case issue was identical as well as the script of the company was also of Quest Financial Servies Ltd. and the ITAT Jaipur bench has treated the same as exempt under section 10(38) of the Act. The appellant also stated that recently in the case of Nathu Lal Jain HUF in ITA No.859/JP/2024 for assessment year 2011-12 the ITAT Jaipur bench vide order dated 11.09.2024 has ordered that the capital gain claimed by the assessee in respect of sale of shares of Quest Financial Services Limited was held as genuine.

I have gone through the facts of the case, observations of the Id. Assessing officer and the submission made by the appellant

The appellant has placed reliance on the Hon'ble ITAT, Jaipur bench decision in the case of Shri Nathu Lal Jain (HUF) v/s ITO Ward-6(2), Jaipur (ITA No. 359/JP/2024) and Om Prakash Modi and others V/s DCIT. Central Circle-II. Jaipur (ITA No. 402 403, 406 & 413/JP/2017).

From the perusal of the Hon'ble ITAT order in the above cases, I find that these pertain to the issue of buying /selling of shares of Quest Financial Services Limited. I also find

P a g e | 4 ITA No. 1739/JPR/2025 Priyanka Jain that the case of the appellant is squarely covered by the decision of the Hon'ble ITAT, Jaipur bench in the case of Shri Nathu Lal Jain vs. ITO, Ward-6(2), Jaipur, ITA No.859/JP/2024. Respectfully following the decision of Hon'ble jurisdictional ITAT, bench, Jaipur in the case laws mentioned above, the appeal of the appellant is allowed. These grounds of appeal No. 1 & 2 are allowed.” 5. The ld. DR before me, was unable to dislodge the findings of Ld. CIT(A) that the issue in the present case was identical to that in the cases dealt with by the ITAT in the cases of Omprakash Modi (Supra) and Nathu Lal Jain (Supra), wherein the ITAT had deleted the identical disallowances made in their hands. 6. In view of the above, I see no reason to interfere in the order of Ld. CIT(A), deleting the addition made of alleged bogus Long Term Capital Gains amounting to Rs.82,274/-.The facts relevant to the issue being that the assessee had traded in shares of Quest Financial Services. The said shares had been purchased 6 years back and were dealt through a registered broker with STT paid thereon. The shares were dematedon purchase itself. In identical facts and circumstances, I have noted, both in the cases of Omprakash Modi (Supra) and Nathu Lal Jain (Supra), the ITAT has categorically held that there is no case for treating the said transaction in the aforesaid facts and circumstances, to be bogus, and has deleted the addition made by the AO. 7. Accordingly, noting the issue in the present case to be squarely covered by the decision of ITAT in the cases of Omprakash Modi (Supra) and Nathu Lal Jain (Supra), and the Ld. DR being unable to distinguish the said decisions either on facts or on law before me, I

P a g e | 5 ITA No. 1739/JPR/2025 Priyanka Jain confirm the order of the Ld. CIT(A) deleting the disallowance of Rs.82,274/- in the hands of the assessee. 8. In the result, the appeal of the Revenue is accordingly, dismissed. Order pronounced in the open court on 30.06.2026.

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 30.06.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur