ACIT-2(1)(1), MUMBAI V. GSB SHARE CUSTODIAN SERVICES LTD., MUMBAI

ITA 4033/MUM/2024

AI Insights

The case involved an appeal by the Assistant Commissioner of Income Tax against the order of the CIT(A), which had deleted the disallowance of a loss on the sale of shares of a 'penny stock scrip'. The revenue contended that the CIT(A) erred in ignoring the evidence of price rigging and other manipulations associated with the scrip. However, the respondent chose to settle the matter under the Vivad se Vishwas Scheme 2024, leading to the withdrawal of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26574 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHANGEPATIL PUSHKARAJ
• Keywords: Speculation loss; Tax effect
• Section: 250; 92

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘G’ BENCH MUMBAI BEFORE: SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER ITA No. 4033/MUM/2024 (Assessment Year : 2011–12) Asst. Commissioner of Income Tax, Circle-2(1)(1), Mumbai-400020 Vs. M/s GSB Share Custodian Services Ltd. 78/80, Alli Chambers, Tamarind Lane Fort Mumbai- 400023 PAN/GIR No. AABCG0388D (Appellant) .. (Respondent) Assessee by None Revenue by Shri. Bhangepatil Pushkaraj Ramesh Sr. DR Date of Hearing 05/03/2024 Date of Pronouncement 05/03/2025 आदेश / O R D E R PER NARENDRA KUMAR BILLAIYA (A.M): This appeal by the revenue is preferred against the order of NFAC Delhi dated 05.06.2024 pertaining to A.Y. 2011-12. 2. The grievance of the revenue reads as under:- “The Ld. CIT(A) erred in deleting the disallowance of loss on sale of the shares of 'penny stock scrip'. M/s G S Auto International Ltd. Rs.16.690/- from the loss under the head speculation loss of Rs.12,98,365/- ignoring the fact of rigging in the price of the penny stocks script elaborately analyzed and recorded in the report of the Investigation. ITA no. 4033/MUM/2024 GSB Share Custodian Services Ltd. 2 2. The Ld. CIT(A) erred in deleting the disallowance of loss on sale of the shares of 'penny stock scrip', M/s G S Auto International Ltd. Rs.16,690/- from the loss under the head speculation loss of Rs.12,98,365/- in the face of large scale price rigging, issue of preferential shares, splitting of share of the shares and admission of no genuine business activity in the statements of the responsible persons recorded, forming part of the report of the Investigation which formed the basis of the reasons issue of notice u/s 148 initiating income escaping assessment proceedings. 3. The tax effect on the ground of deletion of disallowance of loss of Rs. 16,690/-in respect of scrip of GS Auto International Ltd. is Rs. 5,157/- only, which is below the prescribed monetary limit in filing appeal before Hon'ble ITAT. However, this appeal is being authorized as the monetary limit to filing appeal before Hon'ble ITAT would not apply in this case (as per clause 3.1 para h) of the CBDT Circular No. 5/2024 dated 15.03.2024. 4. The appellant craves the leave to add, amend, alter and/or delete any of the grounds of appeal as above.” 3. Before us the authorized representative filed following letter:- DATE 15/02/2025 To, THE REGISTRAR, I.T.A.T. MUMBAI RE: APP NO. ITA 4033/MUM/2024 BEFORE G BENCH-CASE TYPE DBC ASS YEAR 2011-12 ITA no. 4033/MUM/2024 GSB Share Custodian Services Ltd. 3 ACIT-2(1)(1) vs GSB SHARE CUSTODIAN SERVICES LTD Subject: Application for Withdrawal of CIT (Appeals) under Vivad se Vishwas Scheme 2024 In the case of GSB SHARE CUSTODIAN SERVICES LTD PAN NO: AABCG0383D Dear Sir/Madam, The above mentioned appeal has been preferred by the Income Tax Dept. against the order passed by the ADD/JCIT (A) MADURAI in our case for the above mentioned assessment year under section 250 of the Income Tax Act, 1961. The above appeal has been fixed for hearing on 05/03/2025 before G Bench. However we have opted to resolve the dispute involved in the present appeal under the Vivad se Vishwas Scheme 2024, as per the provisions of the Income Tax Act, to achieve finality in this matter and contribute to the government's initiative to reduce litigation In this regard, we have filed Form-1 with the designated authority and have received a Form-2, a certificate under sub section (1) of section 92 of the Finance (2) Act, 2024, directing us to pay a sum of Rs.2,579/-, which has been paid by us on 15/02/2025 under challan no. 00347, With BSR CODE 0220002-BOI COPY OF FORM NO 2 AND CHALLAN ENCLOSED. As part of the conditions under the scheme, we hereby request the withdrawal of the aforementioned appeal. Kindly ITA no. 4033/MUM/2024 GSB Share Custodian Services Ltd. 4 consider this application and confirm the withdrawal of the said appeal. We have ensured compliance with all the requirements of the Vivad se Vishwas Scheme, we would appreciate it if you could expedite the processing of this request. Thank you for your assistance in this matter. For GSB SHARE CUSTODIAN SERVICES LTD” 4. Noting the contents of the letter, the appeal is dismissed. Order is pronounced in the open court on 05.03.2025. Sd/- Sd/- (SAKTIJIT DEY) VICE PRESIDENT (NARENDRA KUMAR BILLAIYA) ACCOUNTANT MEMBER Mumbai; Dated 05/03/2025 Disha Raut, Steno Copy of the Order forwarded to: BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "