Sindhumati Ramavtar Pathak Vs ACIT (ITAT Mumbai)
Sunrise Asian LTCG Held Genuine: ITAT Mumbai Deletes s.68 & s.69C Additions Despite Penny-Stock Allegations
ITAT Mumbai (F Bench) in Sindhumati Ramavtar Pathak vs ACIT (ITA No. 4914/Mum/2025, AY 2015-16, order dated 24.12.2025) has allowed the assessee’s appeal, deleting additions made u/s 68 (sale proceeds) and u/s 69C (alleged commission) in respect of Long-Term Capital Gains on sale of shares of Sunrise Asian Ltd.
The Assessee, a senior citizen widow and regular investor, purchased shares of Conart Trader’s Ltd. in 2011 through banking channels, which later amalgamated with Sunrise Asian Ltd. pursuant to a Bombay HC-approved scheme. Shares were dematerialised in 2013 and sold after more than 30 months through a recognised stock exchange with STT paid, and sale proceeds received through bank. AO treated the transaction as a pre-arranged penny-stock accommodation entry, taxing the entire sale proceeds u/s 68 and estimating commission u/s 69C. NFAC sustained the s.68 addition.
Reversing NFAC, ITAT held that the Assessee discharged the onus by producing purchase documents, bank statements, demat records, contract notes and STT proof; part of the shares continued to be held. No evidence of price rigging or manipulation by the Assessee was brought on record; no adverse SEBI finding existed against her. Mere reliance on investigation reports, price rise, human probability or third-party statements without corroboration is insufficient.
The Tribunal followed a consistent line of decisions on the same scrip (Sunrise Asian Ltd.), including Gujarat HC in Divyaben Prafulchandra Parmar and several Mumbai ITAT rulings, holding that long-held investments sold on-market cannot be branded bogus in absence of direct evidence. Once the substantive addition u/s 68 failed, the commission addition u/s 69C also collapsed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
