ELARA INDIA OPPORTUNITIES FUND LIMITED,MAURITIUS vs. DEPUTY COMMISSIONER OF THE INCOME TAX (INTERNATIONAL TAXATION) - 2(2)(1), MUMBAI

ITA 5859/MUM/2025Status: DisposedITAT Mumbai09 March 2026AY 2019-202014 pages
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What did the Tribunal hold?

The Tribunal ruled that the transactions in ICL shares were genuine, not a 'penny stock' manipulation. They found no evidence of the assessee's involvement in price rigging and noted a reasonable price increase over the holding period.

What were the facts?

The assessee, a Foreign Portfolio Investor (FPI) resident in Mauritius, sold shares of International Conveyors Limited (ICL) after holding them for about 10 years. The Revenue Authorities treated the sale as a bogus transaction, classifying ICL shares as 'penny stock', and made additions under Sections 68 and 69C.

What were the issues?

Whether the sale of ICL shares constituted a genuine transaction or a bogus one for availing long-term capital gains, and if additions under Sections 68 and 69C were justified given the assessee's status as an FPI and the holding period.

Which sections of the Income-tax Act were involved?

Section 144C(5),Section 68,Section 69C,Section 148,Section 148A,Section 153,Section 234B

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Income Tax Appellate Tribunal, I BENCH MUMBAI

Before: HONBLE SHRI SANDEEP GOSAIN & HONBLE SHRI PRABHASH SHANKAR

For Appellant: Shri Rahul Sarda
For Respondent: Shri Krishna Kumar (SR. DR.)
Hearing: 04.02.2026Pronounced: 09.03.2026

PER SANDEEP GOSAIN, JM: The present appeal has been filed by the assessee challenging the impugned order 27.06.2025 passed u/s 144C(5) of the Income Tax Act, 1961 ('the Act'), by the Dispute Resolution Panel for the assessment year 2019-20. The following grounds are reproduced below: Elara India Opportunities Fund Limited “Ground No. I- The scrip of International Conveyors Limited is not a 'penny stock'

1.

1 The learned DCIT failed to appreciate that International Conveyors Lim

The order continues below.

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