Jinesh Prakash Thakkar Vs ITO (ITAT Mumbai)
ITAT Deletes Bogus LTCG Addition on Green Crest Shares; Suspicion Cannot Replace Evidence
The Mumbai ITAT deleted an addition of ₹69.89 lakh made by the Assessing Officer on account of alleged bogus Long-Term Capital Gains from shares of Green Crest Financial Services Ltd. The reassessment was based on a statement of the company’s director alleging that the scrip was a penny stock. The Assessing Officer treated the exempt LTCG claimed under section 10(38) as unexplained income, primarily on the ground that the company lacked strong financial fundamentals and that the shares had been purchased in physical form.
The Tribunal found that the assessee had purchased the shares in 2012, held them for more than three years, and sold them through a recognized stock exchange after paying STT. The purchases and sales were fully supported by share certificates, contract notes, broker ledger accounts, and bank statements, with all payments and receipts routed through banking channels. The Tribunal held that once the assessee had discharged the primary onus by producing documentary evidence, it was for the Revenue to establish that the transactions were sham. Mere reliance on the “penny stock” tag, without any evidence of cash circulation or the assessee’s involvement in accommodation entries, could not justify the addition. Following earlier decisions involving the same scrip, including Sacchanand Hiralal Lalwani, the Tribunal deleted the entire addition.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 30.01.2026 in the matter of an assessment framed by Ld. AO u/s 147 r.w.s. 144B of the Act on 16.05.2023. The sole grievance of the assessee is confirmation of addition of Rs.69.89 Lacs. The Ld. AR advanced arguments and referred to various decisions of Tribunal to support the case of the assessee. The Ld. Sr. DR, on the other hand, referred to the findings of lower authorities. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
