INNOVATE DERIVATIVES PVT. LTD.,AHMEDABAD vs. THE ITO, WARD-2(1)(1), AHMEDABAD

ITA 31/AHD/2026Status: DisposedITAT Ahmedabad24 February 2026AY 2019-20Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)12 pages
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What did the Tribunal hold?

The Tribunal, following the precedent set by the Delhi High Court in PCIT vs. Krishna Devi, held that the AO's disallowance was not supported by cogent material. The Tribunal noted that the transactions were conducted through banking channels and demat accounts, and the AO had not conducted sufficient inquiry to prove the alleged manipulation.

What were the facts?

The assessee, engaged in trading shares, claimed a loss of Rs. 13,18,400/- on the sale of shares of M/s. Looks Health Services Ltd. The Assessing Officer (AO) disallowed this loss, considering it an accommodation entry to provide a bogus loss. The CIT(A) upheld the AO's decision.

What were the issues?

Whether the loss claimed on the sale of penny stock shares was genuine, and if the reassessment proceedings were validly initiated. The key issue was whether the AO had sufficient evidence to disallow the loss claimed by the assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148A,Section 148,Section 149(1),Section 68

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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH

Before: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinha

PER: T.R. SENTHIL KUMAR, JUDICIAL MEMBER

This appeal is filed by the Assessee as against the appellate order dated 18-11-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2019-20. I.T.A No. 31/Ahd/2026 A.Y. 2019-20 2

2.

Brief facts of the case is that the assessee is a company enga

The order continues below.

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