ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-31, DELHI, NEW DELHI V. DINESH GUPTA HUF, NEW DELHI

ITA 3740/DEL/2025

AI Insights

The case involves the Assistant Commissioner of Income Tax, Central Circle-31, Delhi (Appellant) against Dinesh Gupta, HUF (Respondent) concerning the assessment year 2016-17. The primary issue was the addition of Rs.3,38,01,547/- as unexplained long-term capital gain and Rs.8,45,038/- under section 69C of the Income Tax Act, 1961. The Assessing Officer had made these additions based on the suspicion of the transactions being part of a scheme to generate bogus capital gains through penny stocks. The CIT(A) partly allowed the appeal of the assessee by deleting the addition of Rs.3,38,01,547/-, which led the Department to file an appeal against this decision. The Tribunal dismissed the Department's appeal, citing lack of specific evidence against the assessee and reliance on general suspicions and observations about penny stock manipulations.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846923 (ITAT-NEW DELHI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Delhi
• Assessment Year: 2016-2017
• Appeal Filed On: 05-06-2025
• Other Referred Cases: PCIT vs. Krishna Devi & Others, PCIT vs. Nand Kishore Agarwala, PCIT vs. Swati Bajaj, Shri Tapas Kumar Mallick vs. ACIT, Sanjeev Jain vs ITO, Shivani Gupta vs ITO, Renu Gupta vs ITO, Karuna Garg vs ITO, Bindu Garg vs ITO, Har Dev Sahai Gupta vs ITO, Suman Poddar vs ITO, Sumati Dayal vs CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SALIL AGARWAL; .
• Keywords: Condonation of delay; Question of law; Income from undisclosed sources; Cost of acquisition; Onus to prove; Period of limitation; Capital Gains; Sham transactions; Accommodation entries; Earning of tax free income; Penny stocks; Bogus
• Section: 143(3); 142(1); 68; 131; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.3740/Del/2025 (ASSESSMENT YEAR 2016-17) Asst. CIT, Central Circle-31, Delhi. Vs. Dinesh Gupta, HUF B-393, New Friends Colony, New Delhi-110025. [ PAN-AACHD9271Q (Appellant) (Respondent) Assessee by Shri Salil Agarwal, Sr. Adv. and Shri Shailesh Gupta, Adv. Department by Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 21.01.2026 Date of Pronouncement 25.03.2026 O R D E R PER VIMAL KUMAR, JM: The application for condonation of delay of 9 days in filing of appeal and appeal of Revenue are against order dated 28.02.2025 of the Learned Commissioner of Income Tax (Appeals)-30, New Delhi [hereinafter referred to as ‘the Ld. CIT(A)’] passed u/s 250 of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’] arising out of assessment order dated 21.12.2018 of Ld. Assessing Officer, Ward No.28(4), Delhi (hereinafter referred on “the AO”) u/s 143(3) of the Act for Assessment Year 2016-17. 2. Brief facts of the case are that assessee had filed return of income on 30.05.2016 declaring income of Rs.14,35,910/-. Case was selected for Limited Printed from counselvise.com 2 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF scrutiny “whether the investment and income relating to securities transactions are duly disclosed”. Notice u/s 143(2) dated 07.07.2017 was issued to the assessee. Notice u/s 142(1) was issued. Sh. Satvinder Singh CA, Authorized Representative for assessee filed various details on ITBA portal. On completion of proceedings Ld. AO vide order dated 21.12.2018 made additions of Rs.3,38,01,547/- and Rs.8,45,038/-. Against order dated 21.12.2018, assessee filed appeal before Ld. CIT(A) which was partly allowed vide order dated 28.02.2025 and deleted addition of Rs.3,38,01,547/-. 3. Being aggrieved, the Department of Revenue preferred the present appeal on following grounds: “1. Whether on the facts and in the circumstances of the case, the Ld. CTT (A) has erred in deleting the addition of Rs. 3,38,01,547/- u/s 68 of the Act and addition of Rs. 8,45,038/- u/s 69C of the Act by ignoring the larger scam of organized tax evasion by way of bogus capital gain generated in penny stock? 2. Whether the Ld. CIT(A) has committed substantial error in law in deleting the disallowances of LTCG of Rs. 3,38,01,547/- overlooking that the entire transactions were stage managed with the object to facilitate the assessee to plough back its unaccounted income in the form of fictitious Long Term Capital Gain of Rs.3,38,01,547/- and claim bogus exemption? 3. Whether the Ld. CIT(A) has committed substantial error in law by not admitting that unexplained LTCG comes under the purview of unexplained cash-credits under section 68 of the Income-tax Act, 1961 and suspicious transaction in shares cannot be exempted under section10(38) of the Act? 4. Whether the Ld. CIT(A) has committed substantial error in law by not holding that the Assessee is under a legal obligation to prove the receipt of share capital/premium to the satisfaction of the Assessing Officer, failure of which would justify addition of the said amount to the income of the Assessee? 5. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. 6. The grounds of appeal are without prejudice to each other. 7. The appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either on or before the final hearing of the appeal.” Printed from counselvise.com 3 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF 4. Ld. Departmental Representative submitted that there is delay of 5 days in filing of appeal for administrative reasons i.e., the Departmental Authorities has a lot of pendency of time barring matter and other judicial matter to penalty proceedings reopening of cases u/s 148, audit matters etc. In view of submissions made by Ld. Departmental Representative, it is evident that there is delay of 5 days in filing of appeal for administrative reasons. The explanation for condonation of delay does not smack of malafides as, the appellant has not gain of anything by not filing appeal within period of limitation. Therefore, delay of 5 days in filing appeal is condoned. 5. Ld. Departmental Representative submitted that Ld. CIT(A) failed to appreciate that the detailed analysis of transactions done by the AO was mentioned in the assessment order dated 21.12.2018. It was revealed that trading transactions of purchase and sale of shares had not been effected, for commercial purpose but to create artificial gains, with a view to evade taxes- (i) Transactions of shares were not governed by market factors prevalent at relevant time in such trade, but the same were product of design and mutual connivance on part of assessee and the operators. (ii) The assessee resorted to a preconceived scheme to procure long-term capital gains by way of price difference in share transactions not supported by market factors. (iii) Cumulative events in such transactions of shares revealed that same were devoid of any commercial nature and fell in realm of not being bona fide and, hence, impugned Long Term Capital Gain is not allowable. Printed from counselvise.com 4 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF (iv) The findings of SEBI referred above has also given the similar finding that the prices of the shares were determined artificially by manipulations and cannot be considered a product of market factors and commercial principals. 5.1 Further, during the assessment proceedings, the assessee failed to discharge its onus to prove that the alleged transactions were not sham. Moreover, the assessee was not able to prove that the unusual rise and fall of share prices was natural and based solely on the market forces. It was evident that such share transactions were closed circuit transactions and clearly structured one. The financial analysis of the penny stock companies (i.e. Kalpa Commercial Ltd and Aplaya Creations Ltd (previously known as EINS Edutech Ltd.) established that the net worth of these companies were negligible. The cash trail in the accounts of the entry providers in the fund flow analysed in the accounts of the entry providers as unearthed by the Kolkata Investigation Wing have established that the cash has been routed from various accounts to provide accommodations to assessee. 5.2 The transactions entered by the assessee were arranged transactions which involved the series of preconceived steps, the performance of each of which was depending on the others being carried out. The true nature of such share transactions lacked commercial intent, being artificially structured transactions, and were entered into with the sole intent of evade taxes. The truth or genuineness of such transactions must prevail over the smoke screen, created by way of pre-meditated series of steps taken by the assessee, with a view to imparting a color of genuineness and character of commercial nature, to such share transactions. Needless to say that one has to look at the whole transactions and a series of steps taken to accomplish such share transactions, in an integrated manner, with a view to ascertaining the true nature and character of such purchase and sale of shares. Printed from counselvise.com 5 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF 5.3 Thus, the facts and circumstances of the case, clearly suggest that the revenue cannot take or accept such make-believe transactions of the assessee and the Ld. CIT(A)'s decision to delete the additions based on such sham transactions is unaccepatable. Further, the Ld. CIT(A) has relied on the judgement of ITAT, Delhi in the case of Shri Tapas Kumar Mallick, West Delhi.vs., ACIT, Circle-32(1), New Delhi considering identical issue in the light of recent judgment of the Hon'ble Delhi High Court in the case of PCIT vs., Krishna Devi & Others. The Ld. CIT(A) has quoted decision of CIT(A)-10, Delhi in the case of the assessee for AY 2015-16 wherein the claim of LTCG u/s 10(38) of the Act of amount Rs. 22.50 lakhs were allowed and ITAT. Further, the Ld. CIT(A) has also quoted favourable ruling on the same shares by ITAT, Delhi bench in the case of Shivani Gupta in ITA No.5204/Del./2019 for AY 2015-16. 5.4 However, the Ld. CIT(A) has ignored the judgment of the Hon'ble Calcutta High Court in the case of PCIT vs. Nand Kishore Agarwala [2022] 143 taxmann.com 402 (Calcutta) and PCIT vs. Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta) wherein facts of the case were identical and the additions made by the Assessing Officer were upheld and further it was held that merely because a transaction was done through banking channel itself could not validate the genuinity of the transaction and the burden of proof was on assessee to prove genuineness of the claim. 5.5 Further during the course of the hearing the counsel of the assessee argued that the issue of penny stock in the case of Kalpa Commercial Ltd. And Aplaya Creations Ltd. (previously known as EINS Edutech Ltd.) is covered by the decisions of Hon'ble ITAT, Delhi Bench in the cases of ITO Vs Shivani Gupta, Pooja Gupta Vs ITO and ITO Vs Renu Gupta and in assessee's own case for A.Y. 2015-16 which Printed from counselvise.com 6 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF is not true as in the case of Pooja Gupta Vs ITO the scrip involved is M/s Dhanicela Investment & Trading Co. Ltd. Further in the cases of Shivani Gupta and Renu Gupta the scrip involved is only Aplaya Creations Ltd. (previously known as EINS Edutech Ltd.). No case law has been brought on record by the assessee with respect to the scrip Kalpa Commercial Ltd. 6. Ld. Authorized Representative of respondent assessee submitted that the AO has made the impugned addition only on the basis of suspicion without finding any discrepancy in the documentary evidences and has erred in making additions u/s 68 of the Act without appreciating the fact that the payment against sale of such shares was realized from the Bombay Stock Exchange through the member brokers by account payee cheques/RTGS and transactions are verifiable from the DEMAT statement of the assessee. Learned AO did not carry any enquiry and sat back with folded hands and failed to do his duty. It is well settled law, that AO is an investigator as well as an adjudicator, and by lapse on his part in performing his duties, assessee cannot be saddled with huge liabilities. AO, being part of the department has all wherewithal and requisite resources to conduct enquiries. Reliance is placed on following case laws- A) CIT vs. FCS International Marketing reported in 203 CTR 601 (P&H HC) B) Pr. CIT vs. Krishna Devi reported in 431 ITR 361 (Delhi HC) 7. From examination of record in light of aforesaid rival contentions, it is crystal clear that Ld. CIT(A) vide order dated 28.02.2025 deleted addition of Rs.3,38,01,547/- by observing as under: “8. Addition of Rs. 3,38,01,547/- (LTCG Exemption under Section 10(38)) To claim exemption under Section 10(38), the appellant must demonstrate:  The shares were held for more than one year (long-term).  The sale occurred on a recognized stock exchange.  STT was paid. Printed from counselvise.com 7 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF 8.1 The appellant has fulfilled these conditions by submitting  Purchase and sale contracts, bank statements, and Demat account statements proving the holding period and transaction details.  Evidence of STT payment and use of a SEBI-registered broker on a recognized stock exchange. 8.2 The AO's rejection of the exemption hinges on:  General observations from the Investigation Wing about penny stock schemes.  An \"astounding jump in share prices not supported by the companies' financials.  Alleged evasive answers during the appellant's statement on oath. 8.3 However, the AO's case suffers from critical deficiencies:  Lack of Specific Evidence: No direct link has been established between the appellant and any operators, exit providers, or price manipulation schemes. The AO's reliance on the Kolkata Wing's findings is contextual but not specific to the appellant.  Documentary Evidence Unrebutted: The AQ has net identified discrepancies in the appellant's documents or provided evidence of fraud. In tax law, documentary evidence carries significant weight unless contradicted by cogent material.  Stock Exchange Mechanism: Transactions through a recognized stock exchange are transparent and regulated, reducing the scope for direct manipulation by the seller. The AO's concern about share price jumps is valid but irrelevant unless the appellant's involvement is proven. 8.4 Appellant has relied on the precedent followed by Hon'ble CITIA) and ITAT. The CIT (Appeals) order for A.Y. 2015-16 deleted a similar addition for EINS Edutech Limited shares, indicating consistency in the appellant's favor. For sake of completeness same is extracted here as under: 6.1.1 Through Ground Nos. 1 to 6, the appellant has impugned the addition of Ra 22.50 lacs to the income of the assessee by the AO by rejecting the claim of exemption u/s 10(38) of the Act earned through sale of listed equity shares of M/s Ein Edutech Ltd (previously known as Thyrocare Laboratories Ltd) on BSE. Since grounds are in respect of common issue hence these grounds are being clubbed together. 6.1.2 In his return of income the assessee has clemed Long term Capital Gains (LTCO) from transactions on which STT has been paid exempt uls 10(38) to the extent of Rs 1,08.01.142. Out of this, Rs. 1,47,04,020/ wes LTCG on account of transaction of shares of M/s Shilpi Cable Technologies Ltd and Rs 22.28,213/- was on account of sale of 8,000 shares of M/s Eine Edutech Ltd. The AO has considered the capital gain in the case M's Eine Edutech Lid as bogus, the sale consideration of which has been shown in the ITHE at Rs.23,08,002/- and the purchase cost at Rs.81,789/-, He made addition of Rs.22.50 lace to the income of the assessee being the bogus sale consideratlors of these shares introduced in the books of accounts being his unaccounted Income Introduced through this sham transaction. The assessee had invested Rs. 22,50,000/- by two cheques in purchase of 1,50,000 equity shares of M's Eins Eductech Ltd in the month of July, 2013 through preferential allotment Rs.15/- per share. These shares were credited in the demat account of the assessee on 25/11/2013. These shares remained in lock-in by order of the SEBI till 15/10/2014. Out of these shares 5,000 shares were sold out by the assessee in the month of February, 2015 for a total consideration of Rs.23,08,002/- through his Printed from counselvise.com 8 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF broker M/s SMP Securities Ltd. In his assessment order, the AC has mainly relied on the investigation report prepared and disseminated by the Kolkata Directorate. He discussed the findings of the Kolkata Directorate in detail as how the LTCG are arranged by various entry operators for the beneficiaries through the sales carried out on the recognized stock exchanges. He discussed the complete modus operandi as how the shares are purchased and sold after a period of 1 year or more for claiming bogus profits exempt u/s 10(38) and also how the shares are purchased and sold to eam bogus STCL for the beneficiaries to adjust their profits. He also discussed roles of various entry operators, brokers and the exit providers in arranging the bogus LTCG/STCL The AO has discussed the financials of M/s Eins Edutech Ltd which was earlier known as M/s Thyrocare Laboratories Ltd and now as M/s Aplaya Creations Ltd w.e.f 13/04/2015. He discussed the financial of the company from March, 2013 to March, 2017 like P&L account and balance sheets and as well as capital structure obtained from the internet. It is noticed that during the period under consideration the company has authorized capital of 15 Crore and issued share capital of 14.38 Crores. He alleged that the net worth of the company is negligible and even then the share prices have been artificially rigged by the group of operators to accommodate beneficiaries seeking LTCG or STCL. He apprehended that no prudent business man and particularly trader or Investor in stock will invest in such penny scrip which is defunct and in-operative. The AO has discussed the business activity of the company that the income earning is very low. The company is in education business to readymade garments and trading of sarees. The AO has also reproduced the relevant questions of the statements of Sh. Bhagwan Das Aggarwal (one of the director of the company) dated 10/01/2014 and Sh. Pawan Kumar Kayan (a sub-broker and cine of the exit provider) dated 30/03/2015 recorded u/s 131 by the Kolkata Directorate in which they accepted that they are arranging accommodation entries on commission basis 8.1.3 During the assessment proceedings, the AO had called the assessee is 131 and recorded his statement on cath. The statement of the assessee has been reproduced by the AO in the order from page 22 to 24. The AO found the replies of the assesso0 20 unconvincing because he did not go through the financials of the company before investment and also he could not reply as to who recommended the investment in M/s Eins Edutech Ltd. The AO relying on the findings of investigation wing added the sum of Rs.22.50 facs to the income of the assessee. 6.1.4 The AR of the appellant during the appellate proceedings filed a detailed submission contesting the above addition and also submitted relevant documents in a paper book which included his bank statements, copies of the contract notes for sale of shares in February, 2015, coples of the documents relating to purchase of shares through cheques in July, 2013 and dematerialization of these shares in the demat account on 25/11/2013, demat account etc. The AR has also relled on several judicial pronouncements which are in his favour. Ha also placed his reliance upon several orders of jurisdictional bench of ITAT, Delhi which are also in his favour under the same facts and circumstances and the Hon'ble ITAT has deleted the additions. The detailed written submission of the AR has been reproduced in this order in the paras supra, Printed from counselvise.com 9 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF 5.1.5 I have gone through the facts and circumstances of the case. The assessee had subscribed 1,50,000 equity shares of M/s Eins Educiech Ltd (previously known as Thyrocare Laboratories Ltd and now Aplaya Creations Ltd) in July, 2013 @ Rs. 15/- per share through preferential allotment. He applied for the shares by making payment of Rs. 22.50 lacs through two cheques duly reflected in his bank account. These shares were transferred to his demat account on 25/11/2013 and thereafter remained in the same account. These shares remained in lock-in by order of the SEBI till 15/10/2014. Out of these 1,50,000 equity shares the appellant had sold out only 5,000 shares in this year cost of which was Rs. 75,000/-and indexed cost Rs.81,789/-. The remaining 1,45,000 shares having cost of Rs.21,75,000/- are still unsold. The appellant sold out these 5,000 shares on BSE through his brokar Mis SMP Securities Ltd for a sale value of Rs.23,08,002/- and claimed the capital gain of Rs. 22,26,213/- exempt u/s 10(38). It is noticed that the appellant is regular investor in shares and he is not new in this business as on 31/03/2015 his total cost of investment in the shares is Rs. 14,30,73,530/-, During the year, the appellant has declared capital gain of Rs. 1,72,22,515/- out of which Rs. 1,69,91,142/- is STT paid. The AO has doubted the capital gain only in the case of Eins Edutech Lid. He strongly relied on the report of the Kokata Directorate and on the basis of which he held the LTCG as bogus and disallowed the entire claim made u's 10(38) and added Rs. 22.50 lacs to the income of the appellant. The AO has not made any independent enquiry to prove that the transaction was sham in nature. He falled to bring any material on record to prove that the appellant was also involved in bogus share transactions and he was directly involved in any manner to get benefitted with the bogus entries of LTCG. Mere reliance on the investigation report without directly pin pointing the role of the appellant in the transactions it is not justifiable to disallow his claim of exempt Income uls 10(36). In view of the submissions made by the appellant and his reliance on various case laws including decisions of jurisdictional ITAT under the identical facts eg. Sanjeev Jain vs ITO ITA No. 3381/Del/2017 etc. and that no direct evidence against the appellant is available I hereby delete the addition of Rs.22.50 lacs made by the AD and direct him to allow the claim of LTCG uts 10(38). In the result, these grounds 1 to 6 are allowed. 8.5 Further, the ITAT's favorable ruling on the same shares further strengthens the appellant's position. For sake of completeness same is extracted here as under: 7. the We have considered the rival submissions of both the parties and perused the material available on record. It is not in dispute that assessee has purchased preferential shares in preceding A.Y. 2014-2015 in July, 2013. The A.O. did not doubt the purchase of shares by assessee through banking channel. The assessce, thereafter, credited these shares to the Demat Account in November, 2013 ie., in preceding assessment year. According to the impugned orders the shares were locked in by the Order of the SEBI till 15.10.2014 and thereafter the assessee sold the shares through the registered broker of the BSE at the BSE. The assessee paid STT on these transactions. The shares sold through recognized stock exchange through the SEBI registered stock brokers which have not been doubted by the A.Ο. The sale proceeds were received through registered broker of Printed from counselvise.com 10 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF the SEBI through banking channel and BSE has issued stamped contract note to show that transactions were traded online at BSE. It is also not in dispute that assessee has been regularly trading in shares in earlier years as well as in assessment year under appeal not only in respect of the impugned transactions, but, also traded in respect of other unlisted companies. Thus, the assessee is regularly trading in the shares. Whatever inquiry was conducted at Kolkata at the back of assessee was not confronted to assessee and assessee was never allowed to cross-examine to such statement, if recorded during the course of investigation by the Kolkata Wing. The statement recorded of Shri Devesh Upadhayaya and others have not been confronted to the assessee and no right of cross- examination have been given. Even it is not clarified how the statement of Shri Devesh Upadhayaya or other were incriminating in nature against the interest of assessee because they never made any allegation against the assessee. Therefore, such evidence would not be relevant for the purpose of deciding the case of assessee. The assessee admittedly filed copy of the bank statement, contract note for sale of shares, documents of purchase of shares and Demat Account to show assessee genuinely entered into transaction which have not been doubted by the A.Ο. The A.O. merely suspected the transactions of the assessee because of the modus operandi of some of the brokers of penny stock companies who indulge in sham transactions. The A.O. did not make any independent inquiry into the matter. No evidence was collected against the assessee directly or indirectly for her involvement in sham transactions. The A.O. did not bring any material on record to prove as to how the assessee was involved in sham transactions. The A.O. merely proceeded on the basis of the low financials of the company for low purchase price to come to the conclusion that transactions were accommodation entries and thus sham transactions. The conclusion drawn by the A.Q. that there were conversion of the unaccounted money by taking sham long term capital gains in this manner is entirely suspicion of the A.O. which is unsupported by any material on record. The assessee has explained before the authorities below that increase in the share price of a particular company on the stock exchange is not merely dependent on its financials. There are many reasons and that it is not possible to sale/purchase the shares of any company on the stock exchange in variance to the prevailing market price at any point of time. Therefore, the mere fact that shares were sold on high price would not be a ground to allege that has converted someone's unaccounted money through accommodation entry. The findings of the A.O. are merely based on conjectures and surmises without bringing any evidence on record. There is no other basis to doubt the transaction of the assessee for earning of long term capital gains which is exempt under Law. The ITAT, Delhi G-Bench, Delhi in the case of Shri Tapas Kumar Mallick, West Delhi vs., ACIT, Circle-32(1), New Delhi in ITA.No.8142/Del./2018. for the A.Y. 2015- 2016 vide Order Dated 19.03.2021 considering identical issue in the light of recent Judgment of the Hon'ble Delhi High Court in the case of PCIT vs., Krishna Devi & Others Dateche 15.01.2021 in paras 17 to 24 held as under: \"17. A perusal of the assessment order clearly shows that the Assessing Officer was carried away by the report of the Investigation Wing and the exparte Ad Interim order of the SEBI. It can be seen that the entire assessment order has been framed by the Assessing Officer without conducting any enquiry from the relevant parties or independent source Printed from counselvise.com 11 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF or evidence but has merely relied upon the SEBI order without conducting any independent and separate enquiry in the case of the appellant. 18. It is provided u/s 142(2) of the Act that for the purpose of obtaining full information in respect of income of loss of any person, the Assessing Officer may make such enquiry as he considers necessary. 19. Similar facts were considered by the coordinate bench in the case of Smt. Karuna Garg ITA No. 1069 & 2772/DEL/2019, Smt Bindu Garg in ITA No. 1168 & 1169/DEL/2019, Smt Krishna Devi in ITA No. 1070/DEL/2019 and Har Dev Sahai Gupta in ITA No. 1264/DEL/2019. In these cases, the quarrel was in respect of scrip of M/s Esteem Bio Organic Food Processing Ltd, which is one of the four companies whose names are mentioned at Para 12 of this order. 20. In these cases also since the exparte interim order of the SEBI dated 29.06.2015 has named 239 persons and names of the appellants did not find place in the said lists and on the given facts, all these appeals were decided in favour of the assessee and against the revenue and order of the coordinate bench has been upheld by the Hon'ble High Court of Delhi in ITA No. 125/2020, 130/2020 and 131/2020 vide order dated 15.01.2021. The relevant findings of the Hon'ble High Court of Delhi read as under: “11. On a perusal of the record, it is easily \"11. discernible that in the instant case, the AO had proceeded predominantly on the basis of the analysis of the financials of M/s Gold Line International Finvest Limited. His conclusion and findings against the Respondent are chiefly on the strength of the astounding 4849.2% jump in share prices of the Iment aforesaid company within a span of two years, which is not supported by the financials. On an analysis of the data obtained from the websites, the AO observes that the quantum leap in the share price is not justified; the trade pattern of the aforesaid company did not move along with the sensex, and the financials of the company did not show any reason for the extraordinary performance of its stock. We have nothing adverse to comment on the above analysis, but are concerned with the axiomatic conclusion drawn by the AO that the Respondent had entered into an agreement to convert unaccounted money by claiming fictitious LTCG, which is exempt under Section 10(38), in a pre-planned manner to evade taxes. The AO extensively relied upon the search and survey operations conducted by the Investigation Wing of the Income Tax Department in Kolkata, Delhi, Mumbai and Ahmedabad on penny stocks, which sets out the modus operandi adopted in the business of providing entries of bogus LTCG. However, the reliance placed on the report, without further corroboration on the basis of cogent material, does not justify his conclusion that the transaction is bogus, sham and nothing other than a racket of accommodation entries. We do notice that the AO made an attempt to delve into the question of infusion of Respondent's unaccounted money, but he did not dig deeper. Notices issued under Sections 133(6)/131 of the Act were issued to M/s Gold Line International Finvest Limited, but nothing emerged from this effort. The payment for the shares in question was made by Sh. Salaşar Trading Company. Notice was issued to this entity as well, but when the notices were returned unserved, the AO did not take the matter any further. He thereafter simply proceeded on the basis of the financials of Printed from counselvise.com 12 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF the company to come to the conclusion that the transactions were accommodation entries, and thus, fictitious. The conclusion drawn by the AO, that there was an agreement to convert unaccounted money by taking fictitious LTCG in a pre-planned manner, is therefore entirely unsupported by any material on record. This finding is thus purely an assumption based on conjecture made by the AO. This flawed approach forms the reason for the learned ITAT to interfere with the findings of the lower tax authorities. The learned ITAT after considering the entire conspectus Tribunal of case and the evidence brought on record, held that the Respondent had successfully discharged the initial onus cast upon it under the provisions of Section 68 of the Act. It is recorded that \"There is no dispute that the shares of the two companies were purchased online, the payments have been made through banking channel, and the shares were dematerialized and the sales have been routed from de-mat account and the consideration has been received through banking channels.\" The above noted factors, including the deficient enquiry conducted by the AO and the lack of any independent source or evidence to show that there was an agreement between the Respondent and any other party, prevailed upon the ITAT to take a different view. Before us, Mr. Hossain has not been able to point out any evidence whatsoever to allege that money changed hands between the Respondent and the broker or any other person, or further that some person provided the entry to convert unaccounted money for getting benefit of LTCG, as alleged. In the absence of any such material that could support the case put forth by the Appellant, the additions cannot be sustained. 12. Mr. Hossain's submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent. With regard to the claim that regard to observations made by the CIT(A) were in conflict with the Impugned Order, we may only note that the said observations are general in nature and later in the order, the CIT(A) itself notes that the broker did not respond to the notices. Be that as it may, the CIT(A) has only approved the order of the AO, following the same reasoning, and relying upon the report of the Investigation Wing. Lastly, reliance placed by the Revenue on Suman Poddar v. ITO (supra) and Sumati Dayal v. CIT (supra) is of no assistance. Upon examining the judgment of Suman Poddar (supra) at length, we find that the decision therein was arrived at in light of the peculiar facts and circumstances demonstrated before the ITAT and the Court, such as, inter alia, lack of evidence produced by the Assessee therein to show actual sale of shares in that case. On such basis, the ITAT had returned the finding of fact against the Assessee, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix at hand. Similarly, the case of Sumati Dayal v. CIT (supra) too turns on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue. 13. The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are Printed from counselvise.com 13 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order. 14. In this view of the matter, no question of law, much less a substantial question of law arises for our consideration.\" 21. In our considered view, whether the assessee has discharged his onus cast upon him by provisions of section 68. of the Act or not is purely a question of fact and considering the vortex of evidences, we are of the considered view that the assessee has successfully discharged the onus cast upon him by provisions of section 68 of the Act. As mentioned elsewhere, the discharge of onus is purely a question of fact, the judicial decisions relied upon by the ld. DR would do no good on the peculiar plethora of evidences in respect of facts in hand and hence the judicial decisions relied upon by both the sides, though perused, but not considered on the facts of the case in hand except the decision of the coordinate bench discussed elsewhere because the same exparte Ad-Interim order of SEBI was considered and facts are mutatis mutandis same. We, accordingly, direct the Assessing Officer to accept the long term capital gain declared as such and delete the addition of Rs. 2, 10,23,848/-. 22. Before parting, the Id. DR has supported his submissions by supplying print outs of the Metropolitan Stock Exchange and The Economic Times Markets, which we find that he must have searched from Google petwork wherein the Id. DR pointed out that SEBI now vide order dated WTM/SM/VD/D3/9896/2020-21 dated 22.12.2020 has issued the following directions: 'Notice nos. 2 and 3 (promoters of the Company) are directed to make a public offer through a merchant 11 banker to acquire shares of the Company from public shareholders by paying them the value determined by the valuer in the manner prescribed in Regulation 23 of the SEBI (Delisting of Equity Shares) Regulations, 2009 and acquire the shares offered in response to the public offer, within three months from the date of this Order. II. BSE to facilitate valuation of shares to be purchased as directed at (1) above, and compulsorily delist the Company, if the public shareholding reduces below the minimum level in view of aforesaid purchase. iii. The Notice no. 1 is hereby restrained from accessing the securities market by issuing prospectus, offer document or advertisement soliciting money from the public in any manner for a period of 8 years. iv. Notice no. 2 and 3 are hereby restrained from holding post of director, any managerial position or associating themselves in any capacity with any listed public company and with any public company which intends to raise money from the public, or with any Intermediary registered with SEBI for a period of 3 years. v. The Noticees, as mentioned below are hereby restrained and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in any manner whatsoever manner, for the period specified in their respective columns: Printed from counselvise.com 14 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF Sr. No. Name of the Noticee PAN Debarred vide interim Order Period of debarment 1 HPC Biasciences Ltd. AABCH6762Q Yes Till date of this order 2 Shri Tarun Chouhan AGXPC30496 Yes Till date of this order 3 Ms Madhu Anand AXTPA8813F Yes Till date of this order 4 Goldline International Finvest Ltd. AACCG6377M Yes Till date of this order 5 Shri Modhukar Dubey & its Proprietorship firm viz. N V Sales Corporation, Magnum Industrial AIJPD7329J Yes Till date of this order 6 Shri Satendra Kumar & Its Proprietorship firm viz. Nisha Traers AWWPK8525E Yes Till date of this order 7 Avisha Credit Capital Pvt. Ltd. AAACA5715D Yes Till date of this order 8 Shri Sumit Kumar & Its Proprietorship firm viz. Durga Prasad & Co. ARUPK1589P Yes Till date of this order 9 Shri Raj Kumar & its Proprietorship firm viz. Bright BNBPK2681L Yes Till date of this order 10 Shri Prakash Gupta & Its Proprietorship firm viz. Shiv Traders ARVPG7849R Yes Till date of this order 11 AMS Powertronic Pvt. Ltd. AAECA8718H Yes Till date of this order 23. This SEBI order is dated 22.12.2020 whereas the transactions which have been considered in this appeal took place in F.Y. 2014-15 and therefore, restrain after a gap of more than 5 years would do no good to the Revenue. This order has restrained named noticees from accessing security offer document or market by issuing prospectus, advertisement soliciting money from the public in any manner for a period of 8 years. prospective. Obviously, this restraint is prospective. Printed from counselvise.com 15 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF 24. In the result, the appeal filed by the assessee in ITA No. 8142/DEL/2018 is allowed.\" 7.1. The issue is, therefore, by the aforesaid Order of the Tribunal in favour of the assessee wherein the Tribunal followed the Judgment of Hon'ble jurisdictional Delhi High Court and has deleted the entire addition. The Tribunal has considered almost similar circumstances and do not find any allegation against the assessee for earning bogus long term capital gains under section 10(38) of the I.T. Act, 1961. The initial onus upon the assessee to prove source of the money credited in the Bank account of the assessee has been discharged by producing the documentary evidences and material on record. The A.O. did not rebut the documentary evidences furnished by the assessed. Therefore, the Ld. CIT(A) on proper appreciation of facts and material on record correctly deleted the addition. We, therefore, do not find any infirmity in the Order of the Ld. CIT(A) in deleting the addition. In view of the above, appeal of the Department is dismissed. 8. In the result, appeal of the Department ITA.No.5204/Del./2019 dismissed.  In Pr. CIT-12 Vs. Smt. Krishna Devi, the Delhi High Court held that suspicion alone cannot override documented transactions absent concrete evidence of wrongdoing. 8.6 In view of above decisions and on the basis of facts of the case, it is held that AO's addition is based on suspicion and conjecture rather than specific evidence. The appellant has discharged its burden of proof, while the AO has failed to substantiate the claim of bogus transactions. Respectfully following the ratio of Hon'ble ITAT order dated 06.04.2021. The exemption under Section 10(38) is valid, and the addition of Rs.3,38,01,547/- is unsustainable.” 7.1 From the above discussion and findings of Ld. CIT(A), it is apparent on record, that the assessee had sold part of his shares in EINS Edutech Limited even in the immediate preceding year when addition was made on similar grounds and such addition stood deleted as per the CIT(A) order dated 05.03.2019 in Appeal No.160/2022-18 for Assessment Year 2015-16- copy at page no.76 to 86 of the paper book. The order had become beneficial and no appeal filed by the Department. 7.2 ITAT Delhi in the case of Shivani Gupta in ITA No.5204/Del/2019 has deleted the addition made on similar grounds on sale of shares of EINS Edutech vide order dated 06.04.2021. Printed from counselvise.com 16 ITA No.3740/Del/2025 ACIT vs. Dinesh Gupta HUF 7.3 Further Delhi Bench of ITAT in the case of Renu Gupta in ITA No.5155/Del/2019 has deleted the addition made on similar grounds on sale of shares of EINS Edutech Limited vide order dated 19.05.2025. 7.4 In view of above material facts and judicial precedents, the above findings of Ld. CIT(A) being just, fair and reasonable are upheld. Therefore, grounds of appeal are rejected. 8. In the result, the application for condonation of delay of 5 days in filing appeal is allowed and the appeal filed by the Revenue is dismissed. Order is pronounced in the Open Court on 25.03.2026. Sd/- Sd/- (S. RIFAUR RAHMAN) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25.03.2026 *PK, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "