AHMED P. SURANI,MUMBAI vs. ACIT 3(1)(1), MUMBAI

5. The appellant prays that, the order of the Ld. AO on the above grounds be set aside.

6. Any other relief, which the Hon. Tribunal may deem fit.

2. The brief facts of the case that the assessee is an individual and derives income from salary, House property, income from capital gains and income from other sources. The assesse has filed the return of income for the A.Y 2015-16 on 10.11.2015 disclosing a total income of Rs. Ahmed P. Surani, Mumbai 10,46,460/- and the return of income was processed u/sec 143(1) of the Act. Subsequently the case was selected for scrutiny under CASS and notice u/sec 143(2) and u/sec142(1) of the Act along with questionnaire was issued. The Assessing Officer (A.O) has received information from Kolkata Investigation Wing on the trading of shares of M/s Vishvjyoti Trading Ltd by the assessee in F.Y.2014-15 and notice was issued. In compliance to the notice, the Ld. AR of the assessee appeared from time to time and submitted the details and information. On perusal of the details, the Assessing Officer found that the assessee has disclosed and claimed the exemption U/sec10(38) of the Act being long term capital gains on sale of shares of Rs.1,80,23,875/- and called for the information. The AO on verification of the financial statements found that found that the assessee has earned long term capital gains on sale of shares of M/s Vishvjyoti Trading Ltd and the assessee was asked to produce the details of purchase of shares, mode of payment and relevant supporting evidences.

3. Whereas the assessee has purchased 1,50,000 equity shares of Rs.10/- paid up each from the company through cheque/RTGS on 20.02.2013 for Rs.15,00,000/- as per the DCB Bank statement of the assessee and the shares were allotted vide allotment letter of the company dated 21.02.2013 with the lock in period up to 20-02-2014. And the shares were credited to the DCB Bank demat account Ahmed P. Surani, Mumbai of the assessee Subsequently these shares were split in the ratio of 1:10 shares and the assessee was allotted 15,00,000 shares of Rs.1/- paid up on 20 March 2014 and these shares were credited to demat account. Whereas the assessee has sold 6,18,250 shares of M/s Vishvjyoti Trading Ltd in F.Y.2014-15 at a average sale of Rs.29,27 per share through SEBI Registered Broker BSE M/s SIC Stocks & Services Pvt Ltd for a consideration of Rs.1,80,23,875/- and earned Long Term Capital Gains (LTCG)of Rs.1,74,05,625/- and claimed exemption U/sec10(38) of the Act. The AO has dealt on the purchase/allotment confirmation, sale contract notes, bank statements, demat account of shares credit on allotment, split, sale of shares and relied on the various factual aspects of share trends, modus operandi and report of the Kolkata Investigation Wing statements recorded, ITDA data, BSE data and has doubted the earning of long term capital gains on shares. Further the AO has issued summons u/sec 131 of the Act on the assesse on 09.11.2017 and a statement was recorded. Further the AO find that there is no correlation of price rise and the financial/ fundamental statements of the company. Finally the AO was not satisfied with the explanations and material information and observed that the transactions are not genuine and made addition of sale proceeds u/sec 68 of the Act of Rs.1,80,23,875/- and assessed the total

4. Aggrieved by the order, the assessee has filed an appeal with the CIT(A), whereas the CIT(A) has considered the grounds of appeal, submissions of the assessee, findings of the AO in respect of addition u/sec 68 of the Act and has confirmed the action of the AO and dismissed the assesse appeal. Aggrieved by the order of the CIT(A), the assessee has filed appeal with the Hon’ble Tribunal.

5. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the AO in sustaining the addition under section 68 of the Act overlooking the major facts and submissions made on various dates and that the assesse is a regular investor in shares and securities and derives income from other sources, interest income and the dividend income. The purchase of shares are genuine through banking channels and the assesse has substantiated with various details referred in the assessment order. Further there is no scope for the AO to make the additions based on the surmises and conjectures as the assesse has filed the voluminous documentary evidence in support of the claim. The Ld.AR explained the reasons for purchase of the shares and has sold the shares in the F.Y 2014-15 and the remaining shares are held by the assesse along with the other family members who were allotted the shares by the company.

Ahmed P. Surani, Mumbai The Ld. AR mentioned that the AO has only relied on the investigation report and no independent enquiry conducted. The Ld.AR substantiated the submissions with the synopsis, paper books I & II and the judicial decisions and prayed for allowing the appeal. Per Contra, the Ld.DR mentioned that the share transactions are not genuine and relied on the order of the CIT(A).

6. We heard the rival submissions and perused the material on record. The sole matrix of the disputed issue is that the CIT(A) has sustained the addition u/sec 68 in respect of sale of shares overlooking the material information and evidences filed in the course of the assessment proceedings and appellate proceedings. The Ld. AR submitted that the assesse has furnished the information with evidences of purchase price, financial statements and summary of shares sold in F.Y 2014-15, ledger account copy, copies of bank account statement, copy of the contract notes and sale of the shares, demat account statement and copy of allotment letter. The assessee has purchased 1,50,000 equity shares of Rs.10/- paid up each from the company through cheque on 20.02.2013 for Rs.15,00,000/- as per the DCB Bank statement of the assessee and shares were allotted vide allotment letter of the company dated 21.02.2013 with the lock in period up to 20-02-2014. And the shares were credited to the DCB Bank demat account of the assessee. Subsequently, these shares were split in the ratio of 1:10 Ahmed P. Surani, Mumbai shares and the assessee was allotted 15,00,000 shares of Rs.1/- paid up value on 20 March 2014 placed at page 16 to 31 of the paper book and these shares were credited to demat account. During May2014 and June2014, the assesse has sold 6,18,250equity shares for a consideration of Rs.1,80,23,875/- and claimed exemption of Long term capital gains u/s 10(38) of the Act. The assessee has sold the shares in the financial year 2014-15 through a SEBI registered, BSE &NSE broker M/s SIC Stocks & Services Pvt Ltd. The Ld. AR referred sale cum bills contract notes, securitisation tax (STT) paid at page 38 to48 of the paper book. Similarly the demat account statement and ledger account reflecting the details of sale of shares page 33 to 37 of the paper book. The Ld. AR also referred to the share purchase/ allotment letter at page 15 of the paper book in F.Y 2012-13 to justify the genuineness of the purchases. The shares are sold through recognized stock exchange where the STT has been paid in respect of listed shares and held for more 12 months. The Ld.AR demonstrated the sales cum contract notes, computation of long term capital gains and copy of the bank statement reflecting the payment for purchase of shares at page 13 to 14 and also the bank statement at page 55 to 58 reflecting the receipt of sale value/consideration.

7. Further the Ld. AR relied on the submissions filed/ uploaded before CIT(A) in the appellate proceedings on the share transactions supported by the evidences and Ahmed P. Surani, Mumbai judicial decisions placed at page 60 &61 of the paper book. The Ld. AR submitted that the assessee is actively trading in shares and also referred to the details with respect to dematerialization of other shares. The Ld. AR submitted that the shares were purchased earlier under preferential allotment directly from the company through banking channel and the assessee has sold the shares subject to securitization charges/STT. The Ld. AR has referred to the demat statement reflecting the debits on account of sale of shares. The assessee has held the shares for more than one year from the date of purchase/ allotment and after completion of one year lock in period, the shares were sold in the month of May2014 & June2014. The A.O. relied on the statements of the investigation report and no independent inquiry was conducted. The Ld.AR emphasized that the assessee is only an investor and was not involved in the price rigging of shares and no enquiry was conducted by the SEBI and BSE against the assessee. The Ld. AR relied on the fallowing judicial decisions in support of the submissions as under:

1. The High Court Of Delhi, Principal Commissioner Of Income- Tax V/S Rajat Finvest, TO 15 OF 2023† January 12, 2023 2 In The Income Tax Appellate Tribunal Mumbai "A" Bench, Mumbai, Lalitaben Pravin Shah V/S CIT(A) New Delhi, (A.Υ. 2014- 15) 3 In The Income Tax Appellate Tribunal, 'C' Bench Mumbai, Shri Pannalal Hastimal Gulecha v/s The ITO, Ward23(2)(7), Smt. Pawanben Pannalal Gulecha v/s The ITO, Ward- 18(2)(5), Mumbai, (AY :2010-11)

4 In The Income Tax Appellate Tribunal Mumbai Bench "Smc", Mumbai, Aadesh Commodities Pvt Ltd V/S National Faceless Assessment Centre, Delhi, (AY 2015- 16)

5 The Income Tax Appellate Tribunal "D" Bench, Ahmedabad Deputy Commissioner of Income Tax Vs. Shri Rajnikant Prabhudas Mandavia, & 402/Ahd/2019 AY:- 2014-2015 & 2015-16 6 In The Income Tax Appellate Tribunal "SMC" Kolkata Bench, Kolkata Mangilal Jain v.s. Income Tax Officer Ward- 3(3), Nr. Lal Kothi AY-2014-15

8. In the Supreme Court Of India, Principal commissioner Of Income Tax Vs Kuntala Mohapatra. SLP (Civil) Dairy Nos. 5269 of 2024 AY-2014-15

10. PCIT-31 Mumbai Vs Indravadan Jain Huf OF 2018 dated12-07-2023. 11.PCIT VS Renu Aggarwal(2023)(456 ITR 249)(SC) 12. Shri Abhishek Doshi Vs Acit -19(1) ITA.NO 3122/M/2022.

13..Vipul M Shah Vs. The ITO 17(3)(5) Mumbai. /Mum/2023 15.. DCIT, Central Circle-6(2) Vs. Shri Dilip B. Jiwrajka ITA No. 2349/Mum/2021. 16. Shri Yogesh P. Thakkar Vs. The DCIT, CC-3(4) ITA No. 1605/Mum/2021.

17.Mrs. Pallavi Mayur Gandhi Vs. ITO-33(2)(5) ITA No. 2251/Mum/2022. 18. Renudevi Hisaria Vs. DCIT, CC-2(4 1291/Mum/2021 (A.Y. 2012-13)

(A.Y. 2015-16) (A.Y. 2017-18)

5. We also find no infirmity in the order passed by the ITAT and no substantial questions of law as proposed in the appeal arised.

Section 68 of the Income-tax Act, 1961 Cash credit (Share dealings) - Assessment years 2003-04 to 2006-07 Assessee declared capital gain on sale of shares of two companies. Assessing Officer, observing that transaction was done through brokers at Calcutta and performance of concerned companies was not such as would justify increase in share prices. held said transaction as bogus and having been done to convert unaccounted money of assessee to accounted income and, therefore, made addition under section 68 - On appeal, Tribunal deleted addition observing that DMAT account and contract note showed credit/details of share transactions; and that revenue had stopped inquiry at particular point and did not carry forward it to discharge basic onus Whether on facts, transactions in shares were rightly held to be genuine and addition made by Assessing Officer was rightly deleted Held, yes [Para 7] [In favour of assessee] It was revealed during the course of inquiry by the Assessing Officer that the Calcutta Stock Exchange- words showed that the shares were purchased for code numbers S003 and R121 of STPL and RMPL pectively. Out of these two, only RMPL is listed in the appraisal report and it is stated to be involved in dus operandi It is on this material that the Assessing Offices holds that the transactions of sale and purchase of shares are doubtful and not genuine. In relation to assessee's role in all this, all that the Commissioner observed is that the assessee transacted through brokers at Calcutta, which itself raises doubt about the genuineness of the transactions and the financial result and performance of the company was not such as would justify the increase in the share prices. Therefore, he reached the conclusion that certain operators and brokers devised the scheme to convert the unaccounted money of the assessee to the accounted income and the assessee utilized the scheme Para 5] The Tribunal concluded that there was something more which was required, which would connect the assessee to the Ahmed P. Surani, Mumbai transactions and which are attributed to the promoters/directors of the two companies. The Tribunal referred to the entire material and found that the investigation stopped at a particular point and was not cared forward by the revenue. A copy of the DMAT account, placed before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were available which gave details of the transactions. The contract note is a system generated and prescribed by the stock exchange. From this material, the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client code has been referred to. But the Tribunal concluded that same, by itself, is not enough to prove that the transactions in the impugned shares were bogus sham. The details received from stock exchange have been relied upon for the purposes of faulting the revenue in failing to discharge the basic onus. If the Tribunal proceeds on this line and concluded that inquiry was not carried forward and with a view to discharge the initial or basic onus, then such conclusion of the Tribunal cannot be termed as perverse. The conclusions as recorded in the Tribunal's order are not vitiated by any error of law apparent on the face of the record either. [Para 6]

Section 10(38) of the Income-tax Act, 1961 Capital gains Income arising from transfer of long-term securities (Shares) Assessment year 2014-15 Assessee-individual engaged in business of trading in shares claimed long term capital gains arising out of sale of shares as exemption under section 10(38) - Assessing officer denied claim and made certain additions into assessee's income on grounds that said gains were earned through bogus penny stock transactions and companies to whom sold shares belonged were bogus in nature Tribunal observing that assessee by submitting records of purchase bills, sale bills, demat statement, etc., had Ahmed P. Surani, Mumbai discharged his onus of establishing said transactions to be fair and transparent, same not being earned from bogus companies was eligible for exemption under section 10(38) High court by impugned order held that no substantial question of law. arose from Tribunal's order - Whether SLP against said impugned order was to be dismissed -Held, yes (Para 2) (In favour of assessee)

Capital gain-Share transaction-Addition-Deletion thereof- During course of assessment proceedings u/s 153A, it was noticed by AO that assessee had shown long term capital gain on sale of shares of company-AO treated share transaction as non-genuine transaction and amount was shown as long term capital gain on share transaction was added to income of assessee-CIT(A) deleted addition-Tribunal upheld order passed by CIT(A) and dismissed appeal of revenue-Held, assessee sold shares through MTL shares and Stock Broker limited which was SEBI registered Stock Broker-Payment for sale of shares was received through banking channels-All documentary evidence being in favour of assessee, deletion of addition made by CIT(A) was upheld by Tribunal-All these documentary evidences in favour of assessee were rejected by AO merely on basis of some casual replies given by assessee to AO- Documentary evidences were in favour of assessee and CIT(A) had passed very reasoned and speaking order-Dividend amount was received with regard to holding of shares and said amount was disclosed by assessee in his return of income and exemption was claimed accordingly-Thus, addition being without any logical basis was deleted-Revenue's appeal dismissed.

Held:

The CIT(A) examined the matter and the comments of the Assessing Officer in the remand report. It has been recorded by the CIT(A) that the purchase of shares in the financial year 2006-07 for an amount of Rs. 11 lakhs had been physically transferred in favour of the assessee in the books of the Ahmed P. Surani, Mumbai company namely GeeFCee Finance Limited. Further, the said shares were dematerialized and credited in the assessee's account maintained with depositary participant i.e. HDFC on 16.10.2006. The dividend amount of Rs. 1,50,000/- had been received with regard to aforementioned holding of shares on 23.10.2007. The said amount had been disclosed by the in his return of income and exemption was claimed accordingly. Thus, the addition being without any logical basis was directed to be deleted. (Para 4)

Assessee had sold shares through MTL shaes and Stock Brokers Limited as is noted by Assessing Officer in reply to question No.24 which is a SEBI registered Stock Broker. Furthermore the payment for sale of shares was received through Banking channels. All these documentary evidences in favour of the assessee were rejected by Assessing Offiver merely on the basis of some casual replies given by assessee to the Assessing Officer. However, the fact remains that all the documentary evidences are in favour of assessee and learned CIT(A) has passed a very reasoned and speaking order and we do not find any infirmity in the same."

Income-Cash credit-Genuineness of share transactions- Assessees offered long- term capital gains arising from sale of shares-On the basis of material seized during the search in the case of various assessees who belong to H group, AO did not accept the capital gains and treated the entire sale proceeds of the shares as income from undisclosed sources under s. 68-Not justified-Fact that the assessees in the group have purchased and sold shares of the same companies through the same broker cannot be a ground to hold that the transactions are sham and bogus, especially when documentary evidence has been produced to establish the genuineness of the sale- Company has confirmed that it has handed over the shares purchased by the assessees-Similarly, the sale of shares to the respective buyers is also established by producing documentary evidence-Purchase and sale price of Ahmed P. Surani, Mumbai the shares declared by the assessees is in conformity with the market rates prevailing on the respective dates-Thus, the fact that some of the transactions were off-market transactions cannot be a ground to treat the transactions as sham transactions-Tribunal has arrived at a finding of fact that the transactions were genuine-Nothing has been brought on record to show that the findings recorded by the Tribunal are contrary to the documentary evidence-Also, no fault can be found with the finding recorded by the Tribunal that the cash credits in the buyers' bank accounts cannot be attributed to the assessees-Therefore, the decision of the Tribunal is based on findings of fact and no substantial question of law arises.

The fact that the assessees in the group have purchased and sold shares of similar companies hrough the same broker cannot be a ground to hold that the transactions are sham and bogus, especially when documentary evidence was produced to establish the genuineness of the claim. From the documents produced, it is seen that the shares in question were in fact purchased by the assessees on the respective dates and the company has confirmed to have handed over the shares purchased by the assessees. Similarly, the sale of the shares to the respective buyers is also established by producing documentary evidence. It is true that some of the transactions were off-market transactions. However, the purchase and sale price of the shares declared by the assessees were in conformity with the market rates prevailing on the respective dates as is seen from the documents furnished by the assessees. Therefore, the fact that some of the transactions were off-market transactions cannot be a ground to treat the transactions as sham transactions. The statement of the broker P that the transactions with the H Group were bogus has been demonstrated to be wrong by producing documentary evidence to the effect that the shares sold by the assessees were in consonance with the market price. On perusal of those documentary evidence, the Tribunal has arrived at a finding of fact that the transactions were genuine. Nothing is brought on record to show that the findings recorded by the Tribunal are contrary to the documentary evidence on record. The Tribunal has further recorded a finding of fact that the cash credits in the bank accounts of some of the buyers of shares cannot be linked to the assessees. Moreover, in the light of the Ahmed P. Surani, Mumbai documentary evidence adduced to show that the shares purchased and sold by the assessees were in conformity with the market price, the Tribunal recorded a finding of fact that the cash credits in the buyers' bank accounts cannot be attributed to the assessees. No fault can be found with the above finding recorded by the Tribunal. Therefore, the decision of the Tribunal is based on finding of facts. No substantial question of law arises from the order of the Tribunal.-Asstt. CIT vs. Kamal Kumar S. Agrawal (Indl.) & Ors. (2010) 41 DTR (Nag) (Trib) 105: (2010) 133 TT) (Nag) 818 affirmed; Sumati Dayal vs. CIT (1995) 125 CTR (SC) 124: (1995) 80 Taxman 89 (SC) distinguished. (Paras 11 to 14 & 16)

Conclusion:

Assessees having established the genuineness of purchase and sale of shares by producing documentary evidence and declaring the purchase and sale price of shares in conformity with the market rates prevailing on the respective dates, the finding of the Tribunal that the transactions were genuine is a finding of fact based on documentary evidence on record and, therefore, no substantial question of law arises from the order of the Tribunal deleting the addition under s. 68.

"Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was justified in deleting the addition of Rs.1,03,33,925/- made by AO u/s 68 of the I.T. Act, 1961, ignoring the fact that the shares were bought/acquired from off market sources and thereafter the same was demated and registered in stock exchange and increase in share price of Ramkrishna Fincap Ltd. is not supported by the financials and, therefore, the amount of LTCG of Rs.1,03,33,925/- claimed by the assessee is nothing

2. We have considered the impugned order with assistance of the learned Counsels and we have no reason to interfere. There is a finding of fact by the Tribunal that the transaction of purchase and sale of the shares of the alleged penny stock of shares of Ramkrishna Fincap Ltd. ("RFL") is done through stock exchange and through the registered Stock Brokers. The payments have been made through banking channels and even Security Transaction Tax ("STT") has also been paidThe Assessing Officer also has not criticized the documentation involving the sale and purchase of shares. The Tribunal has also come to a finding that there is no allegation against assessee that it has participated in any price rigging in the market on the shares of RFL.

3. Therefore we find nothing perverse in the order of the Tribunal.

4. Mr. Walve placed reliance on a judgment of the Apex Court in Principal Commissioner of Income-tax (Central)-1 vs. NRA Iron & Steel (P) Ltd.' but that does not help the revenue in as much as the facts in that case were entirely different.

6. The appeal is devoid of merits and it is dismissed with no order as to costs.

Ahmed P. Surani, Mumbai 14. The Hon’ble Supreme Court in the case of Principal Commissioner of Income Tax Vs. Smt. Renu Aggarwal (2023) 456 ITR 249 (SC) dated 3-07- 2023 has observed as under “CASH CREDITS-TRANSACTIONS IN PENNY STOCKS-FINDING THAT THERE WAS NO ADVERSE COMMENT FROM STOCK EXCHANGE OR COMPANY WHOSE SHARES INVOLVED- ASSESSING OFFICER QUOTING FACTS PERTAIN- ING TO COMPLETELY UNRELATED PERSONS NAME OF ASSESSEE NEITHER QUOTED BY ANY SUCH PERSONS NOR MATERIAL RELATING TO ASSESSEE FOUND IN INVESTIGATION- TRIBUNAL AFFIRMING AND HIGH COURT DIS- MISSING DEPARTMENT'S APPEAL-SUPREME COURT-SPECIAL LEAVE PETI- TION DISMISSED-INCOME-TAX ACT, 1961, ss. 68, 260A.

Where the High Court dismissed the Department's appeal saying that no question of law arose from the order of the Tribunal affirming the order of the Commissioner (Appeals) allowing relief to the assessee, and the findings of the Commissioner (Appeals) to the effect that there was no adverse comment from the stock exchange or the company whose shares were involved in these transactions, that the Assessing Officer quoted the facts pertaining to completely unrelated persons whose statements were recorded and on the basis of unfounded presumptions, that the name of the assessee was neither quoted by any of such persons nor was any material relating to the assessee found at any place where investigation was done by the Investigation Wing, on a petition for special leave to appeal to the Supreme Court special leave to appeal to the Supreme Court The Supreme Court dismissed the petition. Decision of the Allahabad High Court (printed below) affirmed.

Petition for Special Leave to Appeal (C) No. 13033 of 2023.

Petition under article 136 of the Constitution for special leave to appeal from the judgment and order dated July 6, 2022,of Ahmed P. Surani, Mumbai the Alla habad High Court in I. T. A. No. 44 of 2022. The judgment of the High Court (coram: SURYA PRAKASH KESARWANI and JAYANT BANERJI JJ.) ran as follows:

"JUDGMENT Heard Sri Krishna Agarawal, learned counsel for the appellant. This appeal under section 260A of the Income-tax Act, 1961 has been filed challenging the order dated January 17, 2022, passed by the Income- tax Appellate Tribunal, Lucknow Bench 'SMC' Lucknow in IT. A. No. 205 of 2020 (assessment year 2014-15).

The basic question involved in the present appeal is with regard to deletion of some amount which was added by the Assessing Officer on the allegation of penny stock.

The appeal of the respondent-assessee was allowed against the assessment order The appeal filed by the assessee was allowed by the Com- missioner (Appeals)Against the appellate order the Revenue had filed the aforesaid income-tax appeal which has been dismissed by the Income-tax Appellate Tribunal.

After detailed discussion, the Income-tax Appellate Tribunal has recorded the following findings of fact The above findings recorded by the learned Commissioner (Appeals) are quite exhaustive whereby he has discussed the basis on which the Assessing Officer had made the additionsWhile allowing relief to the assessee, the learned Commissioner (Appeals) has spe- cifically held that there is no adverse comment in the form of general and specific statement by the principal officer of the stock exchange or by the company whose shares were involved in these transactions and he held that the Assessing Officer only quoted the facts pertain- ing to various completely unrelated persons whose statements were recorded and on the Ahmed P. Surani, Mumbai basis of unfounded presumptionsHe further held that the name of the appellants were neither quoted by any of such persons nor any material relating to the assessee was found at any place where investigation was done by the Investigation Wing. The learned Commissioner (Appeals) relying on various orders of the Lucknow Benches and other Benches has allowed relief to the asses- see by placing reliance on the evidence filed by the assessee before the Assessing Officer. I do not find any adversity in the order of the learned Commissioner (Appeals) specifically keeping in view the fact that the Lucknow Benches in a number of cases after relying on the judgment of the hon'ble Delhi High Court in the case of Krishna Devi had allowed relief to various assessees."

The concurrent findings of fact have been recorded by the first appellate authority and the Income-tax Appellate Tribunal. Thus, no substantial question of law is involved in the present appeal. The matter is concluded by findings of fact.

For the reasons aforestated, we do not find any good reason to entertain this appeal. Consequently, it is dismissed. Balbir Singh, Additional Solicitor General, (Raj Bahadur Yadav, Prahlad Singh, Samarvir Singh and Prashant Rawat, Advocates, with him) for the petitioner.”

“5.13. We find that the ld. CIT(A) relied on the decision of Nagpur Bench of Hon‟ble Jurisdictional High Court in the case of Sanjay Bimalchand Jain vide order dated 10/04/2017 reported in 89 taxmann.com 196 which is against assessee. In this regard, we find that in the facts of Sanjay Bimalchand Jain, that assessee had indulged in dubious share transactions and the broker through which shares were sold did not respond to the notices issued by the ld. AO. However, in the case of the assessee herein, all the materials in support of the share transactions were duly placed on record and are in order and the ld. AO had not drawn any adverse inference on the said documents to treat them as false or fictitious. Hence this crucial distinguishing fact of Sanjay Bimalchand Jain makes it inapplicable to the facts of the case before us. Moreover, we find that the Hon‟ble Jurisdictional High Court in the recent case of PCIT vs Ziauddin A Siddique in Income Tax Appeal No. 2012 of 2017 dated 04/03/2022 had held as under:-

3. Therefore we find nothing perverse in the order of the Tribunal.

4. Mr. Walve placed reliance on a judgement of the Apex Court in Principal Commissioner of Income Tax (Central)- 1 vs. NRA Iron & Steel (P) Ltd (2019) 103 taxmann.com 48 (SC) but that does not help the revenue in as much as the facts in that case were entirely different.

5. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand,

5.15. ………..

5.16. Considering the totality of the facts and circumstances of the instant case and respectfully following the judicial precedents relied upon hereinabove, we are not inclined to accept to the stand of the ld. CIT(A) in sustaining the impugned additions on account of denial of exemption for long term capital gains u/s 10(38) of the Act and estimated commission @ 6% against the same. Accordingly, the ground nos. 1 & 2 raised by the assessee are allowed.

Ahmed P. Surani, Mumbai 16. The Hon’ble Supreme Court in the case of Principal Commissioner of Income Tax Vs. Kuntala Mohapatra, [2024] 160 taxmann.com 608 (SC), dated 04.03.2024 has observed as under:

SLP dismissed against order of High Court that where shares were purchased via account payee cheques, held in Demat Account for over 12 months, and sold through a recognized stock exchange after payment of security transaction tax assessee was eligible to claim exempt u/s 10(38) for long term capital gains.

Section 10(38), read with sections 68 and 69, of the Income- tax Act, 1961 Capital gains Income arising from transfer of long long term securities (Illustrations) - Assessment year 2014-15 Assessee filed its return for relevant year - Subsequently, pursuant to a survey assessee filed revised return and claimed exemption in respect of long-term capital gains on shares under section 10(38) - Assessing Officer rejected assessee's plea and made additions under sections 68 and 69 by relying on statements from 'entry operators' On appeal, Commissioner (Appeals) accepted assessee's claim, noting that shares were purchased via Account Payee Cheques, held in a Demat Account for over 12 months, and sold through a recognized stock exchange after payment of security transaction tax Tribunal upheld Commissioner (Appeal)'s decision, emphasizing assessee's right to correct mistakes and criticized Assessing Officer's reliance on statements from 'entry operators' to support additions under sections 68 and 69 as those statements were recorded in unrelated proceedings before survey on assessee, and assessee was not afforded an opportunity to challenge or cross-examine providers of those statements - On revenue's appeal, High Court confirmed order of Tribunal - Whether there was no reason to interfere with order passed by High Court and therefore, SLP was to be dismissed Held, yes [Para 3] [In favour of Assessee.