DCIT Vs Shikha Indrakumar Agrawal (ITAT Nagpur)
The Nagpur Bench of the Income Tax Appellate Tribunal dismissed the Revenue’s appeal and upheld deletion of additions made under Sections 68 and 69C in respect of long-term capital gains claimed as exempt under Section 10(38) on sale of listed shares. The assessee had purchased 24,000 shares of GCM Securities Ltd. for ₹4.80 lakh, which were later sold through a registered stock broker on the stock exchange for ₹1.36 crore, resulting in long-term capital gains of ₹1.32 crore, claimed exempt under Section 10(38). The Assessing Officer treated the sale proceeds as unexplained cash credit under Section 68 and further added 5% commission under Section 69C, alleging the transaction was part of a penny stock accommodation entry arrangement used to generate bogus exempt capital gains.
The Tribunal noted that the assessee had produced complete documentary evidence supporting the transaction, including share application records, allotment advice, demat account statements showing entry and exit of shares, contract notes issued by a registered broker, payment of Securities Transaction Tax, ledger accounts, and banking records evidencing receipt of sale proceeds through proper banking channels. The investment was also reflected in earlier balance sheets. No defect was found in these documents by the Assessing Officer.
