DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI V. ARCHIT AGGARWAL, DELHI

ITA 4384/DEL/2024

AI Insights

The case involves an appeal by the Revenue against the decision of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which had allowed the assessee's appeal regarding the classification of capital gains from the sale of shares as long-term. The shares were initially gifted to the assessee, Sh. Archit Aggarwal, by Sh. Viney Prakash Aggarwal, who received them as a gift from Smt. Sudesh Kumari. The Revenue contested the CIT(A)'s decision, arguing that the shares should be treated as short-term capital assets. However, the Tribunal found that the shares qualified as long-term capital assets, and the gains from their sale were eligible for exemption under section 54F of the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789591 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 23-09-2024
• Other Referred Cases: Daulat Ram Rwatumall Vs CIT (1973) 87 ITR 349{SC}, CIT Vs. Manjula Shah (2011) 16 taxmann.com 42 (Bom.)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDER SINGH
• Assessee Lawyers: MANISH UPNEJA
• Keywords: Capital asset; Additional evidence; Cost of acquisition; Gift; Capital Gains; Capital asset converted into stock in trade
• Section: 143(3); 45(2); 54F; 10; 139(5)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘A’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.4384/Del/2024 Assessment Year: 2021-22 DCIT, New Delhi Vs. Sh. Archit Aggarwal, E-873, Saraswati Vihar, New Delhi PAN: AOMPA1037K (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This Revenue’s appeal for assessment year 2021-22, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1066954880(1), dated 24.07.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused. Assessee by Sh. Manish Upneja, Adv. Department by Sh. Jitender Singh, CIT(DR) Date of hearing 12.11.2025 Date of pronouncement 25.11.2025 Printed from counselvise.com ITA No.4384/Del/2024 2 | P a g e 2. The Revenue pleads the following substantive grounds in the instant appeal: 1. Whether on fact and circumstances of the case, the CIT(A) has erred on facts in deleting the addition of Rs.15,84,78,027/-. 3. We next note with the able assistance coming from both the parties that the learned CIT(A) has accepted the assessee’s lower appeal vide the following detailed discussion: “7. Having addressed the admissibility issue for additional evidence, I now move on to address each ground of appeal raised by the appellant in the appeal. The appeal's first ground is a general one that doesn't need adjudication, so it's dismissed. 7.1 The appellant contends in ground No. 2.1 of the appeal that the AO was incorrect in determining that shri Viney Prakash Agarwal bought 6,51,000 equity shares of Viney Corporation Pvt Ltd from Mrs. Sudesh Kumari. The detailed observations of the AO and the appellant's submission regarding the purchase of the shares in question by Shri Viney Prakash Agsrwal from Sudesh Kumari have been discussed above and do not need to be repeated here. The appellant's initial submission to the AO was that Viney Prakash Agarwal provided him with 6,51,000 shares as a gift and that Shri Agarwal acquired the shares in question on 10/11/2010. Subsequently, the appellant provided a document to the AO that detailed Viney Prakash Agarwal's acquisition of VCL shares from 1995. 7.2. In the assessment order, the AO reproduced the document submitted by the appellant in table form, which had information about the movement of Viney Prakash Agarwal's shares since 1995.Viney Prakash Agarwal's share acquisition from Sudesh Kumari is depicted in the ath row of the table. As indicated in the chart, Shri Agarwal acquired 9,23,826 shares of VCL from Sudesh Kumar on 02/07/2019. In the column concerned, Rs 2,16,683/- was mentioned as the consideration for the acquisition of shares. Taking note of the discrepancy in the appellant's submission regarding the mode, date, and cost of acquiring the shares in question, the AO requested clarification from the appellant through a show cause notice. Printed from counselvise.com ITA No.4384/Del/2024 3 | P a g e 7.3. In response, the appellant submitted to the AO that Shri Viney Prakash Agarwal provided him with 6,51,000 shares as a gift from the 9,23, 826 shares he received from Sudesh Kumari as a gift. The appellant presented a copy of the gift deed executed on 02/07/2019 by Sudesh Kumari as evidence of his claim. According to the appellant, the chart displaying Viney Prakash Agarwal's share movements, which was given by Vinney Corporation Ltd and filed in the assessment proceedings, had a blank remarks column for Sudesh's 9,23,826 shares gift on 02/07/2019. The appellant stated that Sudesh Kumari bought 24,46,590 shares of VCL before 31/03/2016, and 9,23,826 of these shares were given to Viney Prakash Agarwal as a gift. Furthermore, the appellant provided copies of VCL's return of income from 2016 that showed the share holdings of Sudesh Kumari and Viney Prakash Agarwal, as well as a statement indicating that Sudesh Kumari transferred 9,23,826 shares from her demat account maintained with Pee Arr Securities Ltd to the demat account of Viney Prakash Agarwal. The appellant asserted before the AO that Sri Viney Prakash Agarwal didn't buy 9,23,856 shares of VCL from Sudesh Kumari, but received them as a gift, a1S per the detailed clarification and documents produced in the assessment proceedings. 7.4 The appellant's clarification and the supporting documents were not convincing to the AO. The AO noted that the gift deed submitted by the appellant was executed following a show cause notice to conceal the transfer of shares without adequate consideration in a family settlement, and this was merely an afterthought. In addition, the AO stated that the gift deed was only notarized. Taking into account the above observations and the documents relating to Viney Prakash Agarwal's share movements that the appellant had originally submitted, the AO concluded that the documents were authentic and that Agarwal purchased 9,23,826 shares of VCL on 02/07/2019 for a price of Rs. 2,16,683/-. 7.5 In the appeal, the appellant reiterated his assertion that Viney Prakash Agarwal did not acquire 9,23,836 shares of VCL through a purchase, but rather obtained them as a gift on 02/07/2019, contrary to what the AO held. In the appeal, the appellant has provided another paper book, which contains a clarification letter dated 01/02/2024 sent by Vinny Corporation Pvt Ltd to Shri Viney Prakash Agarwal, as well as revised extracts of the shares movements in Viney Prakash Agarwal's case. To reiterate, the appellant's submitted documents in the additional paper book are additional evidence which was sent to the AO for verification and findings. The AO's remand report has been placed on record, and I will address it later. Printed from counselvise.com ITA No.4384/Del/2024 4 | P a g e 7.6. The AO raised doubts about the authenticity of the gift deed signed by Sudesh Kumari on 02/07/2019 due to apparent inconsistencies in the appellant's presentation regarding the mode, date, and cost of Viney's acquisition of 9,23,826 shares of VCL. Moreover, the AO observed that the gift deed was executed after the show cause notice, and it was merely a means of concealing transfer shares in without adequate consideration in a family settlement. The appellant's submission had inconsistencies, but that is not enough to question the authenticity of the gift deed without evidence. The AO's observation was simply based