ALKA RAJESH VANIGOTA,MUMBAI vs. COMMISSIONER OF INCOME TAX (A)-52, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH
MUMBAI

BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER
&

SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
Alka Rajesh Vanigota
1001, 10th Floor
Om Residency
28, Gilder Lane
Mumbai Central,
Mumbai- 400 008
Vs. Commissioner of Income
Tax(A)-52,
Mumbai
PAN/GIR No.ACRPV6181E
(Appellant)
..
(Respondent)

Assessee by Shri Vimal Punmiya
Revenue by Shri Aditya M.Rai, Sr. DR
Date of Hearing
19/06/2025
Date of Pronouncement
24/07/2025

आदेश / O R D E R

PER AMIT SHUKLA (J.M):

The aforesaid appeal has been filed by the assessee against the order dated 20/12/2024, passed by the learned
Commissioner of Income Tax (Appeals)-52, Mumbai, for the quantum of assessment passed under section 147 of the Income Tax Act, 1961, for the Assessment Year 2016-17. 2. The sole grievance of the assessee relates to the addition of Rs.85,48,487/-, being the disallowance of exemption claimed under section 10(38) in respect of Long-Term Capital
Alka Rajesh Vanigota

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Gains (LTCG) arising from the sale of shares of M/s.
Greencrest Financial Services Limited, which has been treated as a bogus transaction and consequently taxed as unexplained income under section 69A. In addition, the assessee has also challenged the further addition of Rs.42,749/- under section 69, being the alleged unexplained investment towards commission paid at the rate of 50 paise per Rs.100 on the said transaction, treating the same also as part of the bogus arrangement.

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featured among the companies identified in that investigation report.

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Greencrest Financial Services Ltd., who purportedly admitted to price rigging of the company’s shares. Without a cogent rebuttal of the assessee’s evidentiary record, the AO proceeded to incorporate the findings of the investigation and made the impugned additions after his own analysis, which is extracted below in extenso:

“1.Preferential allotment of 150000 shares of M/s. Greencrest
Financial Services Private Limited, a penny stock company was made to the assessee @ Rs.1.20 on 11.02.2013. Such preferential allotment was made in offline so that transaction of such shares is limited between closed group of people who opted to launder their unaccounted money in the form of pre- arranged bogus LTCG Hence contract notes are also not available for such purchase

"Sir, M/s. Greencrest is a penny stock traded in the stock exchange, the benificiaries who wanted to route their unaccounted income in the form of LTCG used to purchase the scrip offline at a very low price and then the entry operator used to raise the price of the scrip by way of rigging without any financial rationale of the company M/s. Greencrest
Financial Services Private Limited

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securities. However out of total investments of Rs. 183,976,109
made in FY 2012-13 most of the investments were made in unquoted shares to the tune of Rs. 17,54,77,400. Such financial results do not show steady growth of the company instead it showed a bleak feature of the company. Hence assessee's statement in this respect is not tenable

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4. The assessee sold 132700 shares in 10 different dates starting from 30.06.2015 and ending on 09.10.2015. In this respect the assessee stated " sold the shares in staggered manner because I wanted to make more gain with price increase. Later i felt that the prices might go down so I sold the shares on different dates." The assessee sold 15000 shares
Rs.66 75/-on 30.06.2015 and 15000 shares @ Rs.66.15 on 01.07.2015 If she felt that prices might go down on and after
01.07.2015 then she should sell all the remaining shares on 03.07.2015. But she kept 102700 shares for sell on 01.07.2015 and waiting for three long months sold such shares on 8 different dates upto 09.10.2015 at different lower prices starting from Rs.65.90 to even at lowest price of Rs.64.50. Such incidents clearly indicate towards specific bogus capital gain to the tune of Rs.8548487/- which the assessee required to launder her unaccounted money in the form of pre-arranged bogus LTCG

On the basis of detailed investigation report as discussed above alongwith statement of Sushil Parakh director of Greencrest Financial Services Pvt Ltd (scrip code 531737) involved in organized racket of money laundering and from the detailed discussion above it is evident that scrip Greencrest
Financial Services Pvt Ltd (scrip code 531737) had been used to give rise to pre-arranged bogus long-term capital gains to various beneficiaries. In the instant case the assessee traded the Greencrest Financial Services Pvt Ltd (scrip code 531737) and claimed bogus long-term capital gains for trading such scrip. An organised money-laundering racket had been in operation over the period who rigged the price of penny scrip
Greencrest Financial Services Pvt Ltd (scrip code 531737) to give rise to organised tax evasion scam. In the instant case the assessee traded the Greencrest Financial Services Pvt Ltd
(scrip code 531737) and claimed bogus LTCG and evaded taxable income equivalent to Rs.8548487/-(8,707,727-
159,240). The assessee laundered her unaccounted money to the tune of Rs.8548487/- in the form of pre-arranged bogus
LTCG. Thus Rs.8548487/- is hereby added with the returned income u/s 69A of the IT Act as unexplained money in the form of pre-arranged bogus LTCG.
Alka Rajesh Vanigota

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5. Although no specific adverse comments have been made by the Assessing Officer with regard to the purchase of shares particularly the mode of payment, dematerialisation, and the holding period, the Assessing Officer nevertheless proceeded to treat the entire sale proceeds of Rs.87,07,727.40 as unexplained income under section 69A. This was done on the premise that the sale transaction was fictitious and formed part of a premeditated arrangement to launder unaccounted money. No deduction was allowed even towards the cost of acquisition, thereby taxing the gross sale consideration as unexplained income.

Name of scrip: Marigold Glass Industries Limited now known as Greencrest Financial Services Limited), a SEBI verified scrip.

Date of Purchase
No.
of shares
Purchased
Date of split of shares
Ratio of split of shares
No.
of shares after split
11.02.2013 1,50,000
05.06.2014 1:10
15,00,000/-
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Particulars
Amount / Value / Dates
Date of Sale
30/06/2015 to 09/10/2015
Sale Consideration
Rs. 87,07,727.40/-
Cost of Purchase
Rs. 1,80,000/-
Long
Term
Capital
Gain exempt under section 10(38) of the Act
Rs.85,27,727.40

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is no evidence to show that the assessee gave any cash or engaged in any colourable device. The transaction was fully routed through banking and capital market systems, supported by verifiable documentation.

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observations of the Assessing Officer. On a holistic appraisal of the material, it is evident that the entire foundation of the impugned addition rests upon the investigation report of the Directorate of Investigation. While such a report may undoubtedly serve as a prima facie source for initiating inquiry or raising a doubt, it cannot, by itself, constitute conclusive evidence to disregard a transaction otherwise supported by cogent documentation furnished by the assessee. Once the assessee furnished comprehensive details including the source of investment, contemporaneous allotment letters, demat statements, contract notes, and bank statements reflecting the transaction through recognised banking channels, it was incumbent upon the Assessing
Officer to examine, evaluate, and rebut those evidences with specific material findings. A mere reiteration of third-party statements or generalised observations in the report, without any independent corroboration vis-à-vis the assessee’s conduct or transaction, does not suffice.

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various dates through the Bombay Stock Exchange, after paying Security Transaction Tax and other statutory levies.
These shares were held in dematerialised form and the entire transaction was routed through the recognised stock exchange mechanism, leaving little scope for suspicion or manipulation at the behest of the assessee.

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5. We have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities.
6. From the records we noticed that based on the information received from DDIT (Inv) that the assessee had obtained accommodation entries in the form of bogus long term capital gain, AO on the basis of statement of operator Alka Rajesh
Vanigota, Mumbai of M/s Green Crest Financial Services Pvt
Ltd., (previously known as M/s Marygold Glass Industries Ltd) and on his admission of bogus entry provider, treated long term capital gain as unexplained income of the assessee and consequently made additions u/s 69A of the Act which were also uphold by Ld. CIT(A).
7. We noticed that the name of the scrip M/s Mary Gold Glass
Industries Ltd., (now known as Green Crest Financial Services
Ltd), which is "SEBI verified script" and the assessee had sold part shares and earned long term capital gain the details of which are given below:
Particulars
Amount / Value / Dates
Date of Sale
12/05/2016 to 02/08/2016
Sale Consideration
Rs. 61,88,587/-
Cost of Purchase
Rs. 1,19,160/
Long Term Capital Gain exempt under section 10(38) of the Act
Rs. 60,69,427/-

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approved by SEBI were allotted in favour of assessee.
Regarding which the assessee had made payment of full consideration on 05.02.2013 through account payee cheque and in this way payment was made through banking channel.
But on 18.02.2013 the assessee was allotted preferential equity shares and thereafter M/s Mary Gold Industrial Limited changed to M/s Green Crest Financial Services Pvt Ltd who splited shares from 10:1 each in June 2014. The assessee had sold part shares regarding which the sale consideration was also received through banking channel and the same was also been reflected in the bank statement.
10. Admittedly the shares were sold through recognized stock exchange on which the respondent had paid Security
Transaction Tax (STT) and other statutory taxes. It is well known fact that when the shares are sold at online platform the stock exchange, the seller of the shares does not know as to whom the shares are being sold. The shares are transferred in DMAT form to the stock exchange clearing house and the seller only receives sales consideration from the stock exchange through the share broker. Therefore, neither the seller knew the purchasers, nor the purchasers knew the seller.
Therefore, in absence Alka Rajesh Vanigota, Mumbai of any corroborative evidence that both Seller and Purchaser have indulged into some clandestine transactions, there is not even a remote possibility of hobnobbing. Therefore, under these circumstances the assessee cannot be said to be a part of the group indulging into rigging of share prices of the script as has been by the AO.
10. However during the course of assessment proceedings the assessee submitted following documents to substantiate her claim of long term capital gain which is exempted under section 10(38) of the Act:-
• Copy of share allotment
• Copies of sale bills
• Copy of bank statement
• Copy of demat account
• Copy of contract notes

Even at the Bombay Stock Exchange, the price of the shares of M/s Greencrest Financial Services Limited had continuously
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been in the range of Rs. 9 - 248 per share from January 2012
to January 2015 a period of more than 3 year. In this regard relevant documents are placed on record at Pg No. 29-31 of Paper Book.
It is important to mention that the assessee sold the shares during the month of May 2016 to August 2016 in Alka Rajesh
Vanigota, Mumbai the FY. 2016-17 from a price range of Rs.
60/- to 65/- per share and the price of the shares were in the same range for next 38 month even after the shares were sold by the assessee.
We noticed that the assessee had purchased the shares directly from the Company under Private Placement and sold at Bombay Stock Exchange through its share brokers. The shares were received directly from the company and then dematerialized and on sale, the demat shares were delivered to the clearing corporation of BSE through its share broker.
11. Even in spite of that AO denied the claim of long-term capital gain on sale of shares under section 10(38) and made addition of LTCG u/s 68 of the Act, whereas the shares had been directly allotted by the company and the payment had been made through account payee cheques duly disclosed by assessee in the earlier year and said purchase of shares was evidenced not only from the bank statement but also by the allotment of shares. Thus, possession of the shares was not in doubt at all because same was also reflected in Demat account.
12. We also noticed that not only the sale of shares was evidenced from transaction undertaken through registered stock at a specific trade time in BSE and even after the sale of shares, the net receipts had also been credited to Alka Rajesh
Vanigota, Mumbai the assessee's bank account. Hence, the nature of the transaction was clearly purchase and sale of shares and the source of the credit, from the material facts on record were quite evident that it was from the sale of shares.
As there was no tangible material brought on record to convert these transactions then it is very difficult to treat the sale proceeds of the shares as unexplained cash credit to be added under deeming provisions of section 68. Throughout the assessment proceeding there was no evidence or any whisper
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that some unaccounted money had been routed and hence, sale proceeds should not be added.
13. Under the above circumstances, we place reliance upon the following decision:……………………………………………………..
14. We are also of the view that AO has been very imprecise about the statements provided by the operators basis which the scrutiny assessment has been conducted. Since assessee has mentioned name of the operators in the Assessment Order, but none of those are related to the Company in which the assessee has invested. This goes to show that the AO was unclear about Alka Rajesh Vanigota, Mumbai the statements of the operators which is the key evidences on which AO has relied and based on which the entire assessment is conducted.
Since there was no clarity about the key evidences, therefore the assessment order should is not sustainable.
We have gone to the extent of appreciating the fact that additions made on the basis of third party statement have also been deleted and in this regard, we rely upon the decision in the case of Hon'ble Supreme Court in the case of Omar Salav
Mohamed Sait reported in (1959) 37 ITR 151 (S C), wherein it was held that no addition can be made on the basis of surmises, suspicion and conjectures, the Hon'ble Supreme
Court in the case of Umacharan Shah & Bros. Vs. CIT 37 ITR
271 held that suspicion however strong, cannot take the place of evidence and Hon'ble Calcutta High Court in the case of CIT vs. Bhagwati Prasad Agarwal in I.T.A. No. 22/Kol/2009 dated
29.04.2009 at para 2 held as follows:
15. At the end we conclude that AO has placed nothing on record to suggest that Traded Shares (Scrips) were not listed on stock exchange.
Traded Shares (Scrips) are of bogus companies.
Demat /Bank account not in the name of assesse or do not exist.
Enquiry with Depository Participant ie N L/CDSL As share is purchased and sold through Stock Exchange.
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Alka Rajesh Vanigota, Mumbai
16. Therefore we are of the view that assessment in the present case was made on suspicion, whims, assumption and surmises without providing the copy of material relied upon.
Therefore in our view the additions were made in violation of the principles of natural justice and in this regard we placed reliance upon the decision of ………………………………………………………………………………
17. We have further noticed that the name of the company is mentioned at Noticee-12 in the SEBI adjudication. The same has been disposed in the SEBI adjudication order without imposing any penalty and the relevant portion has been reproduced herein below:
"Para
59. In view of the aforesaid facts and circumstances of the case, I, hereby, dispose of the SCN dated December 20, 2017 in respect of Notices no. 12, 13,
14 and 15 without imposition of penalty."
18. That at the end another important aspect was brought to our notice that the Coordinate Bench of ITAT had Alka Rajesh
Vanigota, Mumbai already dealt with in detail with regard to the "same script" and have allowed the appeals of the respective assessee in the case of Minkal K. Doshi Vs. ITO, in ITA No. 1093/Mum/2020, wherein relevant portion of said order reproduced herein below:
"11. I find that in the case at hand before me, relevant evidence were produced to suggest that the transactions
(purchase and sale of shares) were undertaken and thereaf ter the same was reflected in the Demat Account; and the transactions have taken place through banking channel and through registered broker of Stock Exchange; and there is no evidence to disprove these relevant documents which support the claim of assessee (LTCG). Therefore, the claim of LTCG on the scrip under question cannot be disallowed based on general enquiry conducted by department unless the involvement of assessee is shown in the illegal activities, without which, the impugned action to disallow the claim of assessee cannot be sustained.
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13. Therefore, in view of the decisions of the juri ictional
High Court and other decisions of Tribunal, and in the factual back ground discussed (supra), I find that the addition of Rs.24,66,000/- under section 68 of the Act made by the AO is unsustainable and therefore direct the AO to delete the same and allow the LTCG income of Rs.24,58,602/- as exempt under section 10(38) of the Act.
Assessee gets relief as afore-stated. And consequently the brokerage charge added of Rs 12,730/- is also deleted.
Ground nos.lis allowed.
15. In the result, the appeal of the assessee is partly allowed.
19. Therefore taking into considered the entire facts and circumstances of the present case, keeping in view the decision of juri ictional High Court decision and the decision of Coordinate Bench of Tribunal while dealing Alka Rajesh
Vanigota, Mumbai with the "same script" and ad-hearing to the principles of judicial consistency and discipline we find that additions made u/s 69A of the Act by the AO are unsustainable and therefore AO is directed to delete the same and allow the long term capital gain income earned by the assessee as exempt u/s 10(38) of the Act. Since the assessee got relief as aforesaid consequently the brokerage charges added u/s 69 of the Act also stands quashed. Consequently both the grounds raised by the assessee are allowed.
16. Having regard to the totality of facts and evidences on record, and in light of the judicial pronouncement rendered in the assessee’s own case for the Assessment Year 2017–18 by a coordinate Bench of this Tribunal, we are of the considered opinion that the facts and circumstances prevailing in the present assessment year are materially identical and indistinguishable. The documentary evidences furnished by the assessee such as the allotment letter, demat statements, contract notes, and bank records remain consistent, and there is no emergence of any new or contrary material on record which would justify a deviation from the earlier
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decision. Hence, respectfully following the binding precedent and applying the principle of consistency, we hold that the addition of Rs.85,48,487/- made under section 69A, being disallowance of exemption under section 10(38) on alleged bogus long-term capital gain, is unsustainable in law and on facts, and the same stands deleted.

Order pronounced on 24th July, 2025. (GIRISH AGRAWAL) (AMIT SHUKLA)
ACCOUNTANT MEMBER
JUDICIAL MEMBER
Mumbai; Dated 24/07/2025
KARUNA, sr.ps
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Copy of the Order forwarded to :

BY ORDER,

(Asstt.