NUTAN VIKRAM RANDIVE,MUMBAI vs. ITO 19(2)(4), MUMBAI

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ITA 6780/MUM/2024Status: DisposedITAT Mumbai17 March 2025AY 2012-13Bench: Smt. Kavitha Rajagopal (Judicial Member), Shri Omkareshwar Chidara ( (Accountant Member)7 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee was a regular trader with a small profit and had not claimed exemption under Section 10(38). The addition of entire sale proceeds was not tenable, and the appellant did not engage in price manipulation. The additions were deleted.

What were the facts?

The assessee sold shares of VAS Infrastructure Ltd. and the AO treated the sale proceeds as unexplained cash credits under Section 68 and commission paid as bogus under Section 69C. The CIT(A) confirmed the additions.

What were the issues?

Whether the entire sale proceeds of shares can be added as unexplained cash credits under Section 68 when the assessee is a regular trader with a small profit and whether commission paid on share transactions can be added under Section 69C without corroborative evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 10(38),Section 69C,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Mumbai “SMC” Bench, Mumbai.

Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM)

For Appellant: Shri P.D. Chougule
Pronounced: 17/03/2025
1.

The Learned AddI/JCIT(A) erred in confirming the addition treating the p r oce ed s of R s. 12 ,98 ,97 5 /- fr om sale of share s of VAS Infrastructure Ltd as unexplained cash credits u/s 68 of the Act ignoring the fact that the said transactions have been treated as business transactions and duly reflected in profit and loss account by the appellant.

2. On the facts of the case and in law, the Learned Addl/JCIT(A)erred in confirming the action of AO in holding that the appellant had long term capital gain which was claimed as exempt u/s 10(38) of the Act, whereas net result of such trading in share the company during FY 2011-12 is business loss of Rs.15,375/-.

3. The Learned Addl/JCIT(A) erred in confirming the addition by the AO without considering the appellant's contention that the primary onus which lay on the appellant to establish the credit u/s 68 of the Act stood fully discharged and the onus which shifted on the AO was not discharged by him. 4. The Learned Addl/JCIT(A) erred in confirming the addition by the AO without considering the appellant's submission that the identical trading 2 Nutan Vikram Randive activity in the shares of VAS Infrastructure Ltd has been accepted as genuine, in the reassessment proceedings for A.Y. 2016-17.

5. On the facts and circumstances of the case and in law, the Learned Addl/JCIT(A) erred in confirming the action of AO making in making addition of Rs.25,980/- as commission @2% being paid on alleged bogus share sale transaction by invoking the provisions of section 69C of the Act, without there being any corroborative evidence.

6. Without prejudice to the above, the Learned Addl/JCIT(A) erred in confirming the action of AO of completion of assessment in pursuance of notice u/s 148 of the Act, which is void and illegal. Your appellant, therefore, prays this Hon'ble Tribunal to delete the additions made by the AO and confirmed by the Addl/JCIT(A).

2.

From these grounds of appeal, it can be seen that the Ld. AO made addition of entire sale proceeds of shares under section 69C of the I.T. Act.

3.

The Ld. AO exhaustively mentioned the modus operandi of price manipulated of shares, investigation report of Kolkata Investigation Directorate and finally held that the appellant was a beneficiary of artificially jacking up of share value of VAS Infrastructure Limited. Hence, the entire sale proceeds of shares was added by the Ld. AO under section 68 of the I.T. Act.

4.

The Ld. CIT(A) relied on the decisions of Sanjay Bimalchand Jain of Hon'ble Jurisdictional High Court and Swati Bajaj of Kolkata High Court and confirmed the decision of Ld. AO.

5.

Aggrieved by the orders of Ld. AO and Ld. CIT(A), the appellant filed an appeal with the above grounds of appeal mentioned in page No. 1&2 of this order .

6.

During the hearing before the ITAT the Ld. AR of the appellant has argued that the additions made under section 68 of the Act relating to sale value of shares and commission payment under section 69C of the Act are totally unwarranted as the facts in the case of Sanjay Bimalchand Jai and Swati Bajaj (supra) are totally different to the facts of impugned case. The 3 Nutan Vikram Randive Ld. AR has also stated that the appellant is a regular trader in shares and he is not into any manipulation of scrip mentioned in the assessment order. It was brought to the notice of the Bench that there is a small profit in day trading in this scrip and he has not claimed any exemption under section 10(38) of the Act and hence addition should be deleted in toto. The Ld. DR relied on the orders of the Ld. AO and Ld. CIT(A).

7.

After hearing both sides, it is decided to delete the addition made by the Ld. AO for the following reasons : a) The appellant is a regular trader in the shares and as far as this scrip is concerned, the appellant has got a small profit of Rs. 13,640/- while trading in it. So, there is no question of getting any huge profit and moreover the appellant has not claimed any exemption under section 10(38) of the Act. b) If at all, the profit in trading the scrip is to be added, whereas in this case the entire sale proceeds of share are added, which is not tenable. c) The appellant has done intra-day trading and did not participate in any price manipulations done by brokers, as alleged. d) In appellant’s own case, for A.Y. 2016-17, the Department has accepted appellant’s contention and the Revenue did not make any addition. e) The reliance placed by Ld. AO and Ld. CIT(A) on various cases-law is not applicable to the facts of this case.

8.

Hence, the additions made under section 68 of the Act and u/s. 69C of the Act are deleted.

9.

The appeal of the appellant is allowed. Order pronounced in the open Court on 17/03/2025.

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