ACIT Vs Priyanka Ankit Miglani (ITAT Mumbai)
Introduction: The ITAT Mumbai ruling in the case of ACIT Vs Priyanka Ankit Miglani delves into the intricate matters surrounding long-term capital gains (LTCG) derived from the sale of shares and the application of Section 10(38) of the Income Tax Act. The appeal arises from the assessment order passed by the Deputy Commissioner of Income Tax, Central Circle 5(4), Mumbai, against the decision of the Commissioner of Income Tax (Appeals)-53, Mumbai.
Detailed Analysis: The crux of the matter revolves around whether the long-term capital gains claimed as exempt under Section 10(38) were rightfully denied by the Commissioner of Income Tax (Appeals) and the subsequent justification of deleting the addition made by the assessing officer. The case presents a scenario where the Revenue challenges the authenticity of the long-term capital gains arising from the sale of shares of Pine Animation Ltd.
The assessing officer contended that the shares in question were categorized as penny stocks and the gains derived from their sale were therefore considered as bogus. This assertion was supported by references to third-party statements and an interim order by SEBI highlighting price manipulation in the shares of Pine Animation Ltd. However, the appellant provided substantial documentary evidence, including purchase and sale details, demat statements, and compliance with tax regulations, to support the genuineness of the transactions.
The ITAT Mumbai meticulously analyzed the evidence presented by both parties. It highlighted the lack of conclusive evidence linking the appellant to any fraudulent activities or price manipulation schemes. Moreover, the final order by SEBI, absolving the appellant of any wrongdoing, significantly influenced the tribunal’s decision.
Conclusion: In conclusion, the ITAT Mumbai ruled in favor of the appellant, Priyanka Ankit Miglani, emphasizing the importance of substantiating claims with concrete evidence. The case underscores the significance of thorough investigations and adherence to legal procedures in tax assessments. This ruling provides valuable insights into the interpretation and application of tax laws concerning capital gains from share transactions, ensuring fairness and transparency in tax administration.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
ITA No. 2531/Mum/2021(AY:2015-16),2530/Mum/2021 (AY:2014-15) & CO No.91/Mum/2022 (Arising out of ITA No.2530/Mum/2021 (AY: 2014-15)
These appeals in ITA No. 2531/Mum/2021 & 2530/Mum/2021 & CO No.91/Mum/2022 for A.Yrs.2015-16 & 2014-15 respectively arise out of the order by the ld. Commissioner of Income Tax (Appeals)-53, Mumbai in appeal Nos.CIT(A)-53, Mumbai/10005/2017-18 & CIT(A)-53, Mumbai/10002/2017-18 dated 04/09/2020 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) & 143(3) r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 22/03/2017 & 23/03/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle 5(4), Mumbai (hereinafter referred to as ld. AO).
ITA No. 2533/Mum/2021(AY:2015-16),2532/Mum/2021 (AY:2014-15) & CO No.95/Mum/2022 (Arising out of ITA No.2532/Mum/2021 (AY: 2014-15)
These appeals in ITA No. 2533/Mum/2021 & 2532/Mum/2021 & CO No.95/Mum/2022 for A.Yrs.2015-16 & 2014-15 respectively arise out of the order by the ld. Commissioner of Income Tax (Appeals)-53, Mumbai in appeal Nos.CIT(A)-53, Mumbai/10003/2017-18 & CIT(A)-53, Mumbai/10001/2017-18 dated 07/09/2020 & 04/09/2020 respectively (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) & 143(3) r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 22/03/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle 5(4), Mumbai (hereinafter referred to as ld. AO).
ITA No.2528/Mum /2021(Assessment Year :2015-16)
This appeal in ITA No. 2528/Mum/2021 for A.Yr.2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-53, Mumbai in appeal Nos.CIT(A)-53, Mumbai/10004/2017-18 dated 07/09/2020 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 22/03/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle 5(4), Mumbai (hereinafter referred to as ld. AO).
ITA No.2529/Mum/2021(Assessment Year :2015-16)
This appeal in ITA No. 2529/Mum/2021 for A.Yr.2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-53, Mumbai in appeal Nos.CIT(A)-53, Mumbai/10006/2017-18 dated 07/09/2020 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 22/03/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle 5(4), Mumbai (hereinafter referred to as ld. AO).
2. At the outset, there is a delay of 291 days in filing of appeal by the revenue before us. We find that the order of ld. CIT(A) was passed during the covid pandemic period and appeal was preferred before us by the revenue on 31.12.2021. Pursuant to relaxation granted by the Hon’ble Supreme Court considering the Covid-19 pandemic with regard to the limitation for preferring appeals , we are inclined to condone the delay in filing of appeal before us by the revenue and admit the appeal for adjudication.
3. Though the assessee has raised several grounds before us, we find that the effective issue to be issued in this appeal is as to whether the ld. CIT(A) was justified in deleting the addition made by the ld. AO by denying the exemption claimed u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of Pine Animation Limited (earlier known as Four K Animation Ltd) , in the facts and circumstances of the case. The inter connected issue involved therein to be decided in this appeal is as to whether the ld. CIT(A) was justified in deleting the addition made by the ld. AO on account of estimated commission expenditure as unexplained u/s 69C of the Act in the facts and circumstances of the case.
4. We have heard the rival submissions and perused the materials available on record. The brief facts of this issue are that the assessee is an individual deriving income from capital gains and income from other sources. The assessee is a regular investor in shares of various companies as is evident from the demat statements placed on record. The return of income was electronically filed for the A.Y. 2015-16 u/s.139(1) of the Act on 31/08/2015 showing total income of Rs 3,64,760/-. The ld. AO observed that during the A.Y. 2015-16, the assessee had sold the shares of Pine Animation Ltd (formerly known as Four K Animation Ltd) and claimed the long term capital gains thereon as exempt u/s 10(38) of the Act in the return of income. In the opinion of the ld. AO, the said scrip of Pine Animation Ltd is categorised as Penny Stock and hence the long term capital gains derived from sale of such scrip is to be treated as bogus. Accordingly, the ld. AO sought to examine the purchase and sale details of those shares from the assessee. The details of purchase and sale of shares together with the respective date, number of shares, mode of payment for purchase of shares, name and address of the broker through the shares were sold in recognised stock exchange and computation of long term capital gains were duly furnished by the assessee before the ld. AO. The entire details in this regard are captured in the following table hereinbelow:-
PRIYANKAMIGLANI
PAN No:ARIPS3477L
Assessment Year: 2015-16
