Anirudh Anil Gaggar Vs ITO (ITAT Mumbai)
The assessee appealed against the order dated 16.06.2025 passed by the National Faceless Appeal Centre (NFAC) for Assessment Year 2011-12. The appeal challenged the validity of the reassessment proceedings as well as the denial of exemption under Section 10(38) of the Income-tax Act, addition under Section 68 in respect of long-term capital gains arising from sale of shares of JMD Telefilms Ltd., and the addition of ₹3,54,250 under Section 69C towards alleged commission.
The assessee, an individual engaged in derivative trading and investment in shares, filed a return declaring total income of ₹14,24,050 and claimed exemption under Section 10(38) on long-term capital gain of ₹1,14,68,337 arising from the sale of shares of JMD TAnirudh Anilelefilms Ltd. The Assessing Officer treated the scrip as a penny stock, denied the exemption, treated the sale consideration of ₹1,18,08,337 as unexplained cash credit under Section 68, and made a further addition of ₹3,54,250 under Section 69C towards alleged commission for obtaining an accommodation entry. The CIT(A) upheld these additions.
Before the Tribunal, the assessee submitted that the transactions were genuine and supported by documentary evidence, including the gift deed showing acquisition of shares from the assessee’s father, capital account, balance sheet, demat statements, contract notes issued by a SEBI-registered broker, demat transaction statements, Securities Transaction Tax (STT) certificates and evidence of receipt of sale consideration through banking channels. It was contended that the shares were acquired through a genuine gift, held for more than twelve months and sold through a recognised stock exchange after payment of STT, thereby satisfying the conditions for exemption under Section 10(38). The assessee also argued that the Assessing Officer had not conducted any independent enquiry and had relied only on a general Investigation Report of the Directorate of Investigation, Kolkata, without establishing any nexus between the assessee and the alleged accommodation entry operators. It was further pointed out that the assessee sold the shares at an average price of about ₹59 per share, although the scrip had reached around ₹145 per share during the relevant period.
