SMT. SUMANDEVI DINESHKUMAR TULSYAN,,NASHIK vs. INCOME-TAX OFFICER, WARD - 1(5),, NASHIK

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ITA 814/PUN/2018Status: DisposedITAT Pune28 November 2025AY 2014-1538 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the long-term capital gains claimed by the assessee under Section 10(38) were not genuine and therefore not eligible for exemption. The Tribunal noted that the SEBI, in its order dated 05.10.2017, had revoked directions against 104 parties, and the assessee's name did not appear in the list of persons against whom adverse findings were given. The SEBI order indicated that while some entities had violations related to disclosure under SEBI (Prohibition of Insider Trading) Regulations, 1992, and SEBI (Substantial Acquisition of Shares And Takeovers) Regulations, 2011, there were no adverse findings against 104 entities regarding price manipulation or prima facie violations for which interim orders were passed. The Tribunal found that the assessee's initial admission during the survey, though retracted, was voluntary and not disproved on merits. The AO's detailed analysis of the modus operandi of bogus LTCG, the manipulation of Mishka's share price by entry operators, the company's poor financial fundamentals, and the suspicious nature of the share transactions, including the offline purchase and the broker's statement, supported the conclusion that the gains were bogus. The Tribunal dismissed the appeal.

What were the facts?

The assessee, Dineshkumar Ramchandra Tulsyan (HUF), claimed Rs.1,00,97,902/- as exempt long-term capital gain (LTCG) under Section 10(38) on the sale of listed shares of Mishka Finance and Trading Ltd. (formerly Pyramid Trading & Finance Ltd.). The Assessing Officer (AO) initiated scrutiny, noting the purchase of shares in 2012, bonus issue, and subsequent share split. The AO's investigation revealed that the shares were purchased offline through a broker and sold through another. Information from the Investigation Wing, Kolkata, indicated that the share price of Mishka was manipulated to provide accommodation entries for bogus LTCG. During a survey under Section 133A, the assessee admitted to purchasing bogus LTCG, but later retracted. The AO, relying on SEBI's order against the promoter and the company's poor financials, concluded the LTCG was bogus.

What were the issues?

1. Whether the long-term capital gains claimed by the assessee under Section 10(38) of the Income Tax Act, 1961, are bogus and hence not eligible for exemption? Assessee's Contention: The assessee contended that the long-term capital gains are genuine, correct, and legitimate, and the deduction claimed under Section 10(38) on the purchase and sale of Mishka shares is valid. The assessee also retracted their earlier admission made during the survey proceedings. Revenue's Contention: The revenue, through the Assessing Officer, argued that the shares were acquired through an operator who manipulated the share price of Mishka Finance to provide accommodation entries for bogus LTCG. The AO relied on information from the Investigation Wing, Kolkata, SEBI's order against the promoter of the company, the company's poor financial fundamentals, and the suspicious nature of the share transactions, including the offline purchase and the broker's statement. The AO also highlighted the assessee's initial admission during the survey.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 143(2),Section 142(1),Section 144A,Section 133A,Section 133(6),Section 11(1),Section 11(4),Section 11B,Section 12A

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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA

For Appellant: Shri Pramod S Shingte
For Respondent: Shri Rajesh Haladkar (through virtual)

Heard together (2 matters)

ITA No.813/PUN/2018
ITA No.814/PUN/2018

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आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

S.No. Details Date Initials Designation 1 Draft dictated on 19.11.2025 Sr. PS/PS 2 Draft placed before author 20.11.2025 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Head 9 Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order

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