SHWETA AGARWAL,ROURKELA vs. INCOME TAX OFFICER, WARD-1, ROURKELA

आयकर अपील�य अ�धकरण, कटक �यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK (THROUGH VIRTUAL HEARING) �ी जाज� माथन, �या�यक सद�य एवं �ी राजेश कुमार, लेखा सद�य के सम� । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER आयकर अपील सं/ITA No.140/CTK/2025 (�नधा�रण वष� / Assessment Year : 2015-2016) Shweta Agarwal, Vs ITO, Ward-1, Rourkela O-18, Civil Township, Rourkela Odisha-769004 PAN No. :AUHPA 4567 D (अपीलाथ� /Appellant) (��यथ� / Respondent) .. �नधा�रती क� ओर से /Assessee by : Shri Jaish Joshi, AR राज�व क� ओर से /Revenue by : Shri Vijay Singh, Sr. DR सुनवाई क� तार�ख / Date of Hearing : 01/12/2025 घोषणा क� तार�ख/Date of Pronouncement : 01/12/2025 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order passed by the ld. Addl/JCIT(A)-2, Mumbai, dated 17.12.2024 for the assessment year 2015-2016. 2. It was submitted by the ld. AR that the only issue in the assessee’s appeal is against the actin of the ld. CIT(A) in confirming the disallowance of the claim of the assessee u/s.10(38) of the Act in respect of 70,000 shares of Kailash Auto sold on 14.11.2015 for a consideration of Rs.15,82,745/- and a claim of exemption u/s.10(38) of the Act to an extent of Rs.14,42,732/-. It was submitted by the ld. AR that the issue is squarely covered by the decision of the coordinate bench of the Tribunal in the case of Ridhi Bagaria, passed in ITA No.76/CTK/2023, order dated 18.05.2023. It was also submitted that very same issue has been upheld by the Hon’ble

2 ITA No.140/CTK/2025 Jurisdictional High Court in the case of Depansu Mohapatra, in ITA No.11 of 2022 along with other connected appeals vide order dated 08.02.2023. 3. In reply, ld. Sr. DR vehemently supported the orders of the AO and ld. CIT(A). 4. We have considered the rival submissions. A perusal of the order of the coordinate bench of the Tribunal in the case of Ridhi Bagaria, referred to supra, shows that the said decision is in regard to the shares of Kailash Auto and the coordinate bench of the Tribunal has followed the decision in the case of Mr. Ramprasad Agarwal also the decision in the case of Deepanshu Mohapatra & Ors and has held as follows :- 6. Now, I am faced with the decision of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra, referred to supra, wherein the coordinate bench of the Tribunal in the case of that assessee has also dealt with the shares in the case of M/s Kailash Auto Finance Ltd. and has been held to be eligible for exemption u/s.10(38) of the Act. In the said decision, there was another issue also considered insofar as in the course of survey the assessee therein had surrendered the claim of deduction u/s.10(38) of the Act and the coordinate bench had held that the retraction from the surrender was permissible. When the revenue filed appeal against the said decision of the coordinate bench of the Tribunal before the Hon’ble Jurisdictional High Court of Orissa, the question was raised as to whether after making certain statements in the survey the Assessee not claiming exemption under Section 10(38) of the income Tax Act, 1961 at the stage of the assessment proceedings, could the Assessee turn around and make such claim of wanting to cross-examine persons make adverse statements against the Assessee at the stage of the appeal before the ITAT?” The revenue did not challenge the factual finding of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra (supra) in regard to the claim of deduction/s.10(38) of the Act. By not challenging the merits of the addition, the revenue has accepted the decision of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra & Others (supra). Following the decision rendered in the case of Deepansu Mohapatra & Others (supra), the Single Member Bench of this Tribunal has decided the issue in the case of Rashi Agrawal, passed in ITA No.56/CTK/2023, order dated 04.05.2023 after having the following observations :-

3 ITA No.140/CTK/2025 7. I have considered the rival submissions. At the outset, the argument of the ld. Sr.DR that opportunity of cross- examination need not be granted, does not come out of the order of the AO or the CIT(A). Neither of the lower authorities have relied upon any statement or any investigation report for the purpose of the making the addition or confirming the same. It is an admitted fact that the assessee is doing the business of purchase and sale of shares. As pointed out by the ld. Sr. DR the assessee is doing purchases in IPOs. Thus, there is no dispute that the assessee earns her income from transaction in shares. Just because the assessee has shifted from the IPOs and has made a purchase of the shares in M/s Panchshul Marketing Ltd., would not shift the head of income from “capital gains” to the “Adventure in the nature of trade”, insofar as the assessee is an investor in the shares and is not in the business of dealing in shares. This being so, the decision relied on by the ld. Sr. DR would no more survive for consideration. 8. Now, I am faced with the decision of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra, referred to supra, wherein the coordinate bench of the Tribunal in the case of that assessee has also dealt with the shares in the case of M/s Kailash Auto Finance Ltd. and has been held to be eligible for exemption u/s.10(38) of the Act. In the said decision, there was another issue also considered insofar as in the course of survey the assessee therein had surrendered the claim of deduction u/s.10(38) of the Act and the coordinate bench had held that the retraction from the surrender was permissible. When the revenue filed appeal against the said decision of the coordinate bench of the Tribunal before the Hon’ble Jurisdictional High Court of Orissa, the question was raised as to whether after making certain statements in the survey the Assessee not claiming exemption under Section 10(38) of the income Tax Act, 1961 at the stage of the assessment proceedings, could the Assessee turn around and make such claim of wanting to cross-examine persons make adverse statements against the Assessee at the stage of the appeal before the ITAT?” The revenue did not challenge the factual finding of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra (supra) in regard to the claim of deduction u/s.10(38) of the Act. By not challenging the merits of the addition, the revenue has accepted the decision of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra & Others (supra). In these circumstances, the decision of the coordinate bench of the Tribunal on merits in the case of Deepansu Mohapatra (supra) have become final and binding on a Single Member Bench of the Tribunal as the said decision has been rendered by a Division Bench of this Tribunal. In view of the above, respectfully following the decision of the coordinate bench of the Tribunal in the case of Deepansu Mohapatra (supra), which has also been affirmed

4 ITA No.140/CTK/2025 by the Hon’ble Jurisdictional High Court of Orissa in the appeal filed by the revenue, the addition as made by the AO and as confirmed by the CIT(A) in respect of the claim of exemption u/s.10(38) of the Act in respect of sale of shares of M/s Kailash Auto, stands deleted. 5. The above decision of the Tribunal has been affirmed by the Hon’ble Jurisdictional High Court, reported in (2023) 293 Taxman 173/(2024) 463 ITR 678 (Orissa)(HC). Subsequently, SLP filed by the revenue has also been dismissed by the Hon’ble Supreme Court thereby upholding the decision of the Tribunal, reported in (2024) 463 ITR 671 (SC). Respectfully following the decision of the coordinate bench of the Tribunal upheld by the Hon’ble Jurisdictional High Court and the Hon’ble Supreme Court, the AO is directed to grant the assessee benefit of claim of exemption u/s.10(38) of the Act as claimed by the assessee. 6. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 01/12/2025. Sd/- Sd/- (राजेश कुमार) (जाज� माथन) (RAJESH KUMAR) (GEORGE MATHAN) लेखा सद�य/ ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER �दनांक Dated 01/12/2025 Prakash Kumar Mishra, Sr.P.S. आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant - ��थ� / The Respondent- 2. 3. आयकर आयु�(अपील) / The CIT(A), 4. आयकर आयु�त / CIT 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, कटक / DR, ITAT, Cuttack आदेशानुसार/ BY ORDER, 6. गाड� फाईल / Guard file. स�या�पत ��त //True Copy// (Assistant Registrar) आयकर अपील�य अ�धकरण, कटक/ITAT, Cuttack