JAMNALAL K KABRA,AHMEDABAD V. THE ITO, WARD-1(2)(2), AHMEDABAD

ITA 342/AHD/2025

AI Insights

The case involves Jamnalal K. Kabra, the appellant, who contested the addition of Rs. 17,27,593 to his income for the Assessment Year 2019-20, which was alleged to be a result of bogus receipts from the sale of penny stocks. The Income Tax Officer (ITO) had made this addition, suspecting the transactions to be part of a scheme to manipulate long-term capital gains. The Commissioner of Income Tax (Appeals) upheld this addition. However, the Tribunal, after examining the evidence and the specific circumstances of the transactions, concluded that the assessee was not involved in any manipulation and that the profits from the shares sold were regular business profits.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839066 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 13-02-2025
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINIT MOONDRA
• Keywords: Capital Gains; Source of fund; Bogus

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD “SMC” BENCH, AHMEDABAD “SMC” BENCH, AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE BEFORE DR. B.R.R. KUMAR, VICE BEFORE DR. B.R.R. KUMAR, VICE BEFORE DR. B.R.R. KUMAR, VICE- - - -PRESIDENT PRESIDENT PRESIDENT PRESIDENT & & & & SHRI SENTHIL KUMAR, SHRI SENTHIL KUMAR, SHRI SENTHIL KUMAR, SHRI SENTHIL KUMAR, JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA No.342/Ahd/2025 (Assessment Year: 2011-12) Jamnalal K. Kabra A-3, Ghanshyam Apartment Part-1, Opp. New Madhupura Market Sahibaug Ahmedabad – 380 004 [PAN: [PAN: [PAN: [PAN: ACNPK 4064 B ACNPK 4064 B ACNPK 4064 B ACNPK 4064 B ] ] ] ] Vs. The ITO Ward-1(2)(2) Ahmedabad – 380 005 (Appellant Appellant Appellant Appellant) .. (Respondent Respondent Respondent Respondent) Appellant by : Appellant by : Appellant by : Appellant by : Shri Vinit Moondra, AR Respondent by Respondent by Respondent by Respondent by: : : : Ms. Ketaki Desai, Sr.DR Date of Hearing Date of Hearing Date of Hearing Date of Hearing 10/02/2016 Date of Pronouncement Date of Pronouncement Date of Pronouncement Date of Pronouncement 18/02/2016 O R D E R O R D E R O R D E R O R D E R PER DR. B.R.R. KUMAR, VICE PER DR. B.R.R. KUMAR, VICE PER DR. B.R.R. KUMAR, VICE PER DR. B.R.R. KUMAR, VICE- - - -PRESIDENT: PRESIDENT: PRESIDENT: PRESIDENT:- - - - This appeal is filed by the Assessee against the appellate order dated 10/01/2025 passed by the Commissioner of Income Tax (A), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] relating to the Assessment Year (AY) 2019-20. 2. The assessee has raised the following grounds of appeal: “1. In his order dated the Ld.AO has erred in law by making an addition of Rs.17,27,593/- as bogus receipt considering the source of funds i.e. sale of shares as penny stock, without identifying the facts of the case and real nature of transaction involved. The Ld. CIT(A) has erred in law by confirming the same.” 3. Heard the arguments of both the parties and perused the material available on record. In this case, against the allegation of the Revenue that the assessee is one of the persons/beneficiaries involved in altered operation of Long Term Capital Gains, we find Printed from counselvise.com ITA No.342/Ahd/2025 Jamnalal K. Kabra vs. ITO AY : 2011-12 2 that the assessee has purchased the scrip in March 2007 and sold in August 2010, after a gap of 28 months. The relevant evidences for purchase and sale of scrip and payments thereof have been submitted before the Revenue Authorities. Keeping in view the specific facts of the instant case, the assessee cannot be grouped to be among the category of the beneficiaries as the assessee is proven to be neither involved in operation of the stock nor a party to the alleged manipulations. The said scrips were operated The said scrips were operated The said scrips were operated The said scrips were operated from from from from Rs.14.28 per share Rs.14.28 per share Rs.14.28 per share Rs.14.28 per share in in in in April 2010 to Rs.825/ April 2010 to Rs.825/ April 2010 to Rs.825/ April 2010 to Rs.825/- - - - by May 2014 and fell down to Rs.4.58 by April 2017. Since the by May 2014 and fell down to Rs.4.58 by April 2017. Since the by May 2014 and fell down to Rs.4.58 by April 2017. Since the by May 2014 and fell down to Rs.4.58 by April 2017. Since the assessee has purchased the sc assessee has purchased the sc assessee has purchased the sc assessee has purchased the scrip rip rip rips s s s in 2007 in 2007 in 2007 in 2007 along with other company shares along with other company shares along with other company shares along with other company shares and sold in and sold in and sold in and sold in August 2010 August 2010 August 2010 August 2010, it is hereby held that , it is hereby held that , it is hereby held that , it is hereby held that the profits earned by the assessee the profits earned by the assessee the profits earned by the assessee the profits earned by the assessee of Rs.12 lakhs of Rs.12 lakhs of Rs.12 lakhs of Rs.12 lakhs can be considered as the regular business profits and hence no addition is called for. 4. In the result, the appeal filed by the assessee is allowed. The order is pronounc The order is pronounc The order is pronounc The order is pronounced in the open Court on ed in the open Court on ed in the open Court on ed in the open Court on 18 18 18 18/0 /0 /0 /02 2 2 2/2026 /2026 /2026 /2026 Sd/ Sd/ Sd/ Sd/- - - - Sd/ Sd/ Sd/ Sd/- - - - ( ( ( (T.R. SENTHIL KUMAR T.R. SENTHIL KUMAR T.R. SENTHIL KUMAR T.R. SENTHIL KUMAR) ) ) ) (DR. (DR. (DR. (DR. B.R.R. KUMAR) B.R.R. KUMAR) B.R.R. KUMAR) B.R.R. KUMAR) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE VICE VICE VICE- - - -PRESIDENT PRESIDENT PRESIDENT PRESIDENT Ahmedabad; Dated 18/02/2026 tc nair/btk आदेश क\u0006 \u0007\bत ल प अ\u000fे षत/Copy of the Copy of the Copy of the Copy of the Order forwarded to Order forwarded to Order forwarded to Order forwarded to : : : : 1. अपीलाथ\u0007 / The Appellant 2. \b यथ\u0007 / The Respondent. 3. संबं\u000eधत आयकर आयु\u0015त / Concerned CIT 4. आयकर आयु\u0015त(अपील) / The CIT(A)- (NFAC). Delhi 5. \u0016वभागीय \b\u001aत\u001aन\u000eध, आयकर अपील य अ\u000eधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड\" फाईल / Guard file. आदेशानुसार/ / / / BY ORDER, //True Copy// सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, , , , अहमदाबाद / / / / ITAT, Ahmedabad ITAT, Ahmedabad ITAT, Ahmedabad ITAT, Ahmedabad Printed from counselvise.com "