ACIT Vs Arun Kumar (ITAT Delhi)
Sale of Shares Through SEBI Broker, Tax Paid—No Scope for s.68 Addition – Notice u/s 148 Violates Asian Paints Rule- Revenue’s Appeal Dismissed
Revenue appealed against deletion of addition of Rs.57,06,000/- made by AO u/s 68 on alleged penny stock transactions in shares of City Travel Solutions Ltd. Assessee had purchased 19,000 shares in April 2013 for Rs.11,86,972/- & sold them in March 2014 through Reliance Securities Ltd, a SEBI-registered broker, receiving net sale proceeds of Rs.56,94,882/-. Assessee had already declared Rs.45,08,090/- as STCG & paid tax thereon in the original assessment u/s 143(3) dated 27.10.2016. AO nevertheless treated full sale proceeds as unexplained income in reassessment.
CIT(A) found that the share transaction had been examined in the original scrutiny assessment & STCG was accepted after due enquiry. Since income had already been offered & taxed, it could not be taxed again merely because Investigation Wing categorised the scrip as a penny stock. CIT(A) held that addition u/s 68 was untenable.
Tribunal upheld CIT(A)’s findings, observing that all purchase & sale transactions were routed through banking channels & stock exchange mechanism, & tax on STCG was already paid. No infirmity was found in CIT(A)’s reasoning.
