DY. COMMISSIONER OF INCOME TAX CIRCLE -2, NAGPUR vs. SULEMAN SHABUDDIN RAIYANI, NAGPUR

ITA 365/NAG/2025Status: DisposedITAT Nagpur31 August 2026AY 2015-1617 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the sale consideration received on the sale of shares could not be treated as unexplained cash credit under Section 68. The Tribunal agreed with the CIT(A) that the AO failed to establish the assessee's involvement in bogus LTCG and upheld the deletion of the addition.

What were the facts?

The assessee claimed exemption for Long-Term Capital Gain (LTCG) on the sale of shares of M/s Parag Shilpa Investments Ltd., which the Assessing Officer (AO) disallowed, treating it as bogus. The AO's decision was based on an investigation report identifying the company as a penny stock used for generating fake LTCG.

What were the issues?

Whether the LTCG claimed as exempt under Section 10(38) was bogus due to penny stock manipulation, and if the sale consideration could be treated as an unexplained cash credit under Section 68.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 68,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR BENCH :: NAGPUR

For Appellant: Shri Himesh Demble, CA
For Respondent: Shri Surjit Kumar Saha, Sr.DR
Hearing: 09.06.2026Pronounced: 31.08.2026

PER KHETTRA MOHAN ROY, AM:

This appeal filed by the Revenue is directed against the order of National Faceless Appeal Centre, Delhi, (for short, “CIT(A)”), dated 31/03/2025 passed under section 250 of the Income Tax Act, 1961 (for short, “Act”) which is emanating from the assessment order dated 22.12.2017 passed u/s. 143(3) of the Act by the ITO, Ward-2(3), Nagpur for the Assessment Year (AY) 2014-15. 2. The sole issue for our consideration is whether Ld.CIT(A) was justified in deleting the addition of Rs.2,25,87,790/- made by the Ld. Assessing Officer (AO) on account of alleged bogus Long-Term Capital Gain (LTCG) claimed u/s. 10(38) of the Act from the sale of shares of M/s Parag Shilpa Investments Ltd. (now PS IT Infrastructure & Services Ltd.).

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