ACIT Vs Tushar Gupta (ITAT Delhi)
Delhi ITAT Upholds LTCG Exemption on Penny Stock Sale as Revenue Failed to Disprove Documentary Evidence
The Delhi ITAT dismissed the Revenue’s appeal and upheld the deletion of the addition of ₹70.61 lakh made under section 68 in respect of alleged accommodation entries arising from the sale of shares. The assessee had purchased shares of Seaview Suppliers Pvt. Ltd., which were subsequently converted into shares of Access Global Ltd. pursuant to a court-approved amalgamation. These shares were sold through a recognized stock exchange, with STT duly paid, and the sale proceeds were received through banking channels.
The Tribunal observed that even if the date of cheque payment for purchase of the shares was taken as the date of acquisition, the shares had been held for more than 12 months, making the gains long-term capital gains eligible for exemption under section 10(38). The Assessing Officer had not disputed the period of holding, the amalgamation, the sale through the stock exchange, or the payment of STT. Further, the reliance on adverse findings against the broker in an unrelated scrip did not establish any connection with the assessee’s transactions in Access Global Ltd.
Holding that the purchase, holding and sale of shares were fully supported by documentary evidence and that no specific defect had been pointed out by the Revenue, the Tribunal upheld the CIT(A)’s order deleting the addition under section 68 and allowing the exemption under section 10(38). The Revenue’s appeal was dismissed.
Cases Discussed
- Suman Poddar vs. Income Tax Officer (SC), (2019) 112 taxmann.com 330 (SC) / [2020] 268 Taxman 320 (SC)
- Pr. Commissioner of Income Tax vs. Swati Bajaj (Calcutta HC), [2022] 139 taxmann.com 352 (Calcutta)
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal (ITA No.- 1918/Del/2026) filed by the Revenue and the Cross Objection (C.O. No.- 180/Del/2026) filed by the assessee, are against the order dated 05.12.2025 of the National Faceless Appeal Centre [hereinafter referred to as ‘the Ld. CIT(A)], Delhi, arising out of order dated 30.03.2022, passed by the Assessment Unit, Income-tax Department under Section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), pertaining to Assessment Year (A.Y.) 2013-14.
