JAMNALAL K KABRA,AHMEDABAD vs. THE ITO, WARD-1(2)(2), AHMEDABAD

PDF · subscribers

ITA 342/AHD/2025Status: DisposedITAT Ahmedabad18 February 2026AY 2011-12Bench: DR. B.R.R. KUMAR (Vice President), SHRI SENTHIL KUMAR (Judicial Member)2 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee was not involved in any stock manipulation, and the purchase and sale of shares were genuine. Given the 28-month holding period, the profits earned by the assessee were considered regular business profits, not bogus. Therefore, the Tribunal concluded that no addition was called for.

What were the facts?

The assessee challenged an addition of Rs. 17,27,593/- made by the AO and confirmed by the CIT(A), treating receipts from the sale of shares as bogus, originating from 'penny stock' operations. The Revenue alleged the assessee was involved in altered Long Term Capital Gains transactions. The assessee had purchased the shares in March 2007 and sold them in August 2010, after a holding period of 28 months, and submitted evidence for these transactions.

What were the issues?

Whether profits from the sale of shares, held for 28 months, constituted bogus receipts from 'penny stock' operations, and whether the addition made by the AO and confirmed by CIT(A) on this account was justified.

Which sections of the Income-tax Act were involved?

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL

Before: DR. B.R.R. KUMAR, VICE BEFORE DR. B.R.R. KUMAR, VICE- & SHRI SENTHIL KUMARSHRI SENTHIL KUMARSHRI SENTHIL KUMAR, SHRI SENTHIL KUMAR

For Appellant: Shri Vinit Moondra, AR

For Respondent: Ms. Ketaki Desai, Sr.DR

Hearing: 10/02/2016Pronounced: 18/02/2016

O R D E R O R D E R O R D E R O R D E R PER DR. B.R.R. KUMAR, VICE PER DR. B.R.R. KUMAR, VICE-PRESIDENT: PER DR. B.R.R. KUMAR, VICE PER DR. B.R.R. KUMAR, VICE PRESIDENT: PRESIDENT:- PRESIDENT:

This appeal is filed by the Assessee against the appellate order dated 10/01/2025 passed by the Commissioner of Income Tax (A), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] relating to the Assessment Year (AY) 2019-20.

The assessee has raised the following grounds of appeal:

1. In his order dated the Ld.AO has erred in law by making an addition of Rs.17,27,593/- as bogus receipt considering the source of funds i.e. sale of shares as penny stock, without identifying the facts of the case and real nature of transaction involved. The Ld. CIT(A) has erred in law by confirming the same.

3. Heard the arguments of both the parties and perused the material available on record. In this case, against the allegation of the Revenue that the assessee is one of the persons/beneficiaries involved in altered operation of Long Term Capital Gains, we find Jamnalal K. Kabra vs. ITO AY : 2011-12 2 that the assessee has purchased the scrip in March 2007 and sold in August 2010, after a gap of 28 months. The relevant evidences for purchase and sale of scrip and payments thereof have been submitted before the Revenue Authorities. Keeping in view the specific facts of the instant case, the assessee cannot be grouped to be among the category of the beneficiaries as the assessee is proven to be neither involved in operation of the stock nor a party to the alleged manipulations. The said scrips were operated The said scrips were operated The said scrips were operated from The said scrips were operated from from Rs.14.28 per share from Rs.14.28 per share Rs.14.28 per share Rs.14.28 per share inininin April 2010 to Rs.825/ April 2010 to Rs.825/- by May 2014 and fell down to Rs.4.58 by April 2017. Since the by May 2014 and fell down to Rs.4.58 by April 2017. Since the April 2010 to Rs.825/ April 2010 to Rs.825/ by May 2014 and fell down to Rs.4.58 by April 2017. Since the by May 2014 and fell down to Rs.4.58 by April 2017. Since the assessee has purchased the sc assessee has purchased the scrip assessee has purchased the sc assessee has purchased the sc rip rips in 2007 rip in 2007 in 2007 along with other company shares in 2007 along with other company shares along with other company shares and sold in along with other company shares and sold in and sold in and sold in August 2010, it is hereby held that August 2010 , it is hereby held that the profits earned by the assessee the profits earned by the assessee of Rs.12 lakhs of Rs.12 lakhs can be August 2010 August 2010 , it is hereby held that , it is hereby held that the profits earned by the assessee the profits earned by the assessee of Rs.12 lakhs of Rs.12 lakhs considered as the regular business profits and hence no addition is called for.

In the result, the appeal filed by the assessee is allowed.

Recent GST High Court judgments

Search GST case law →