Rambilas S Agarwal Vs DCIT (ITAT Mumbai)
The assessee appealed against the order dated 28.07.2023 passed by the National Faceless Appeal Centre under Section 250 of the Income-tax Act, 1961 for Assessment Year 2014-15.
The assessee purchased 36,500 shares of M/s. Santoshima Tradelinks Limited on 01.02.2012 for ₹7,30,000 through an account payee cheque. The shares were subsequently dematerialised on 31.12.2012, following which Santoshima Tradelinks Limited amalgamated with M/s. Sunrise Asian Limited. After holding the shares for about 17 months, the assessee sold them through the online platform of the Bombay Stock Exchange between 28.08.2013 and 22.11.2013 for a total consideration of ₹1,80,85,010, and claimed Long-Term Capital Gain (LTCG) exemption of ₹1,73,55,010 under Section 10(38).
During assessment proceedings, the Assessing Officer relied upon the investigation conducted by the Kolkata Directorate regarding 84 penny stocks and called upon the assessee to justify the exemption claim. The assessee produced purchase bills, bank account statements, demat account statements and broker notes in support of the transactions. Although the Assessing Officer acknowledged these documents, he relied upon the investigation report, the alleged abnormal rise in the share price, the mode of acquisition of the shares and the decision of the Supreme Court in Sumati P. Dayal v. CIT to treat the sale proceeds of ₹1,80,85,010 as unexplained cash credit under Section 68, taxable under Section 115BBE. The Assessing Officer also added ₹5,20,650 under Section 69 towards alleged commission at 3% and ₹1,868 relating to capital loss on sale of the scrip.
