ACIT19(3), MUMBAI, MUMBAI vs. YOGESHKUMAR PRAVINKUMAR SHAH, MUMBAI

Whether on the facts and circumstances of the case and in law, Ld. CIT APPEAL has erred in deleting the disallowance of commission expenses without appreciating the nature of the transactions by accepting the documentation presented by the assessee at face value, without adequately considering the underlying fraudulent intent and the orchestrated steps taken to present these transactions as genuine. The assessment of the true character and intent behind these transactions was crucial and has been overlooked

Whether on the facts and circumstances of the case and in law, the Ld. CIT APPEAL has erred in not considering the fact that the direct and circumstantial evidences in new of the decision of Durga Prasad More 1971 82 ITR 540 SC and Sumati Dayal 1995 80 Taxmann. 89SC 1995 2014 ITR 2 Yogeshkumar Pravinkumar Shah. 801 SC 1995 125 CTR 124SC, rendered by the Supreme Court, where it was held that Honble Court and Tribunal have to judge the evidences before it by applying the test of probabilities, the surrounding circumstances which exercise had been done by the Assessing Officer.

Whether on the facts and circumstances of the case and in low, the Id. CIT APPEAL has erred in deleting the commission expenses disallowance, by ignoring the fact that in such cases, where there was a suspicious or bogus trade, the onus is on the assessee to establish the genuineness of the transaction and the claim was not manipulated. The reliance is placed on judgment of Honble Culcutta High Courts decision in the case of Pr. CIT Vs Swati Bajaj I. A. No. GA22022 in ITAT No 6 of 2022, Dated, 14.06.2022.

Whether on the facts and circumstances of the case and in law, Ld. CIT APPEAL has erred in deleting commission expenses disallowance, without appreciating the facts that on the similar issue of LTCG, and its expenses the Honble ITAT, Kolkata in the case of Manoj Jain HUF in treated the penny stock transaction as income from other sources instead of LTCG, and the same was upheld by the Honble High Court Calcutta 2024 164 taxmann.com 133 Calcutta, which has been confirmed by the Honble Supreme Court by dismissing SLP in SLP e of 216362024 Dated. 20.09.2024

The tax effect involved in this case is Rs.42,630, which is below the prescribed limit mentioned in the CBDTs Circular F. No.279Misc. 1422007- IT.JPt amended vide No. 092024 dated. 17.09.2024, however this case falls under one of the exceptions specified in the CBDTS Circular No.052024 Dated. 15.03.2024, wherein it is stated that in cases involving Organized Tax Evasion including cases of accommodation entry of penny stocks, the decision to file Appeal SLP shall be taken on merit without regard to the tax effect and the monetary limit.”

The brief facts of the case are that, the assessee has filed his return of income on 30.09.2024, declaring total income of Rs. 14,15,350/-. The case of assessee was re-opened, hence notice under section 148 was issued on 15.09.2016. Further notices under section 143(2) and 142(1) were issued in due course. During the assessment proceedings, it is observed by the ld. AO that the assessee has sold shares of alleged penny stock M/s Sunrise Asian Ltd. to the tune of Rs. 68,98,020/-, which after considering various details furnished by the assessee are treated as non-genuine transactions and accordingly the entire amount of Rs. 68,98,020/- was added as unexplained cash credit under section 68 of the Act. The ld. AO also added an amount of Rs. 1,37,960/- by estimating the commission paid @2% for carrying out of such unexplained transaction. The matter is carried before the ld. CIT(A), who had deleted the addition on account of estimation of commission but sustained the quantum addition made under section 68 for Rs. 68,98,020/- qua the bogus Long Term Capital Gain (LTCG).

The relief of addition on account of estimated commission does not find justified by the revenue, therefore the revenue is in present appeal before us.

At the outset the ld. DR reiterated the facts of case from the assessment order and the order of ld. CIT(A) and submitted that while confirming the addition of bogus LTCG granting relief on the estimated commission (which is Yogeshkumar Pravinkumar Shah. an integral part of such transaction) by the ld. CIT(A) was unacceptable, the same also needs to be confirmed.

Per contra, ld. Counsel of the assessee submitted that the aforesaid issue has already dealt with and decided by this Tribunal in assessee’s own case against the same impugned order, in vide order dated 22.10.2025, wherein the Tribunal has reversed the finding of ld. CIT(A) qua the addition on account of bogus LTCG and also directed the ld. AO to delete the brokerage/commission thereon. In view of such findings of Tribunal since the issue has already decided by the Tribunal while dealing with the appeal of assessee for same AY, the issue raised by the revenue in present appeal is duly addressed, thus, there is no scope for any further or diverse adjudication on the same issue.

We have considered the rival submissions, perused the material available on record and decision for the same AY against the same impugned first appellate order by this Tribunal in assessee’s own case in the assessee’s appeal. Admittedly, the issue of commission which was decided by the First Appellate Authority (FAA) in favour of the assessee, became the genesis of present appeal by the revenue has already decided by the Tribunal, therefore, any further examination of the same issue would be contrary to the judicial discipline. The contention raised by the revenue in present appeal, thus are rendered as academic only. However, for the sake of completeness, the relevant 5 Yogeshkumar Pravinkumar Shah. observations from the Tribunal, on the issued raised herein, in the case of assessee in are culled out as under: “8. In the light of the above judicial precedence, when we examine the facts in the present case we notice that facts are identical. The assessee in the present case has discharged the onus by submitting the relevant details and the AO has not recorded any adverse findings with regard to the details submitted. Though the AO has elaborated the modus operandi and the findings of investigation wing, the AO in the assessment order did not record anything that links the assessee to the exit providers or entry operators or the assessee's involvement in price rigging. It is also relevant to notice that the assessee during the year under consideration has sold other shares and from the details of investments submitted, we see merit in the submission that the assessee is a regular investor. (page 18 to 20 of paper book). According we are of the considered view that the ratio laid down in the above case would apply to the present assessee also and therefore we direct the AO to delete the addition made with regard to the sale of shares of Sunrise Asian Ltd and the brokerage/commission thereon.”

As evident from the aforesaid findings by the Tribunal that the addition on account of Bogus Capital Gains as well as estimated addition on account of commission paid by the assessee are directed to be deleted, while deciding the appeal of assessee in same AY 2014-15, therefore the grounds raised by the revenue against the relief granted by ld. CIT(A) to assessee qua the addition on account of estimated commission by the ld. AO has been duly decided, we thus need not adjudicate the same issue again in the present appeal by the revenue, the same therefore would be treated as not maintainable.

Consequently, the grounds of appeal raised by the revenue, being already adjudicated in an another appeal referred (supra) are liable to be dismissed. 6

In result, the appeal of revenue stands dismissed, in terms of our aforesaid observations.