DCIT Vs Ashok B. Jiwrajka (ITAT Mumbai)
No Incriminating Material, No s.153A Addition: ITAT Mumbai Quashes Penny-Stock LTCG Additions in Search Cases
ITAT Mumbai (A Bench) in DCIT vs Ashok B. Jiwrajka (ITA Nos. 2355, 2352, 2353 & 2351/Mum/2021; AYs 2012-13 to 2015-16; order dated 23.12.2025) has dismissed Revenue appeals and allowed assessee’s cross-objections, holding that additions u/s 68 and 69C in unabated years cannot survive in absence of incriminating material found during search.
The case arose from a search u/s 132 on 09.04.2015, followed by assessments u/s 153A alleging bogus LTCG/STCG from penny stocks (Radford Global Ltd., Global Infratech & Finance Ltd., Shree Shaleen Textiles Ltd., Rander Corporation Ltd., etc.) based on Investigation Wing inputs, SEBI interim orders and third-party statements. AO made additions of over ₹4.60 crore u/s 68 and commission u/s 69C.
ITAT noted that for AYs 2012-13 & 2013-14 (unabated years):
• No document, asset or material incriminating the assessee was found during search
• Reliance on third-party statements recorded in other proceedings does not qualify as incriminating material
• SEBI interim orders relied upon by AO were later vacated, and the assessee was exonerated
• Applying SC ruling in Abhisar Buildwell and Bombay HC ratio in Continental Warehousing, additions were jurisdictionally invalid
For AYs 2014-15 & 2015-16 (abated years), ITAT followed coordinate-bench decisions in cases of assessee’s brothers (Dilip B. Jiwrajka & Surendra B. Jiwrajka) and held that:
• Assessee had discharged onus by producing demat statements, bank records, contract notes, STT proof & preferential allotment documents
• Mere suspicion, price rise, weak financials or human probability theory cannot override documentary evidence
• Statements u/s 132(4) based on mistaken belief (later nullified by SEBI’s final order) lose evidentiary value
Accordingly, ITAT upheld deletion of entire additions u/s 68 & 69C for all years.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
