MAHAVEER RANKA HUF,NAVI MUMBAI V. INCOME TAX OFFICER, WD-28(2)(1), NAVI MUMBAI

ITA 1001/MUM/2024

AI Insights

The case revolves around the denial of long-term capital gains tax exemption claimed by Mahaveer Ranka HUF on the sale of shares purchased from M/s. Unisys Softwares & Holdings Ltd. The shares were bought and sold through the Bombay Stock Exchange, with transactions conducted online. The Income Tax Officer and the Commissioner of Income Tax (Appeals) had denied the exemption, citing allegations of share price rigging based on investigations by the Directorate of Investigation of Bombay and Kolkata. However, the Tribunal found that the Assessee had provided sufficient documentation to prove the legitimacy of the transactions and that no specific allegations or evidence substantiated the claims of malpractices.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396564 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: PRAKASH JHUNJHUNWALA
• Section: 68

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.1001/Mum/2024 Assessment Year: 2013-14 Mahaveer Ranka HUF Plot No-12, Sector-12A, Vashi, Navi Mumbai-400705 PAN: AAIHM0939A VS. Income Tax Officer Wd- 28(2)(1) 4th floor, Tower No.6, Vashi Railway Station Building, Vashi, Navi, Mumbai- 400703 (Appellant) (Respondent) Present for: Assessee by : Shri Prakash Jhunjhunwala Revenue by : Shri Hemanshu Joshi, Sr DR Date of Hearing : 24.04.2025 Date of Pronouncement : 26.05.2025 O R D E R Per : Narender Kumar Choudhry, Judicial Member: This appeal has been preferred by the Assessee against the order dated 16.02.2024, impugned herein, passed by the National Faceless Appeal Centre (NFAC), Delhi/ u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2013-14. 2. In the instant case, the Assessee had purchased 25000 shares of M/s. Unisys Softwares & Holdings Ltd. on a consideration of Rs.4,20,459/- @ Rs.17 on dated 25.01.2010 through online platform of Bombay Stock Exchange. The payment for purchase was made on the very same date through online mechanism of Bombay Stock Exchange. Subsequently, the Assessee sold such shares on dated 18.04.2012 on a consideration of Rs.51,62,671/- @ Rs.207 approx. through online platform of Bombay Stock Exchange and has received the sale consideration through RTGS on 2 ITA No. 1001/Mum/2024 AY: 2013-14 Mahaveer Ranka HUF 24.4.2012 and claimed the long-term capital of Rs. 51,75,671/- being exempt u/s 10(38) of the Act. Both the Authorities below denied such claim of the Assessee and therefore the Assessee being aggrieved has preferred this appeal. 3. Heard the parties and perused the material available on record. Admittedly, the Assessee held such shares for a period of more than 27 months and in order to substantiate its claim u/s. 10(38) of the Act, filed relevant documents such as: (i) Contract note-cum-purchase bills, (ii) Confirmation of SEBI registered stock broker M/s. IIFL Securities, (iii) Bank Statements showing making of payment purchase of shares, (iv) D-mat statement, (v) Balance sheet of earlier years and other relevant documents etc. and therefore, in our considered view, the Assessee has duly discharged the onus cast on him u/s. 68 of the Act. 4. Even otherwise, neither any allegations were leveled against the Assessee or its stock broker nor any preventive or penal action has been taken by the SEBI or other agency. Further, even otherwise both the authorities below have not attributed any specific role to the Assessee qua rigging of the share prices, but in fact on the basis of investigation carried out by the Directorate of Investigation of Bombay and Kolkata and general allegation, made the additions of Rs. 51,75,671/- u/s. 68 of the Act on account of sale proceeds of the shares and Rs. 2,58,784/- on account of commission paid on arranged capital gain, without being corroborated by any evidence. Admittedly, the transactions of purchase and sale of shares involved in the instant case, have been carried out through online platform i.e. Bombay Stock Exchange and banking channels. 3 ITA No. 1001/Mum/2024 AY: 2013-14 Mahaveer Ranka HUF 5. Thus, considering the above peculiar facts and circumstances in totality, as the Assessee has duly discharged the onus cast u/s. 68 of the Act, the additions under consideration as made by the Ld. AO and affirmed by the Ld. Commissioner, are un-sustainable, thus, the same are deleted. 6. In the result, appeal filed by the Assessee stands allowed. Order pronounced in the open court on 26.05.2025. Sd/- Sd/- (PRABHASH SHANKAR) (NARENDER KUMAR CHOUDHRY) ACCOUNTANTMEMBER JUDICIAL MEMBER * Divya R. Nandgaonkar, Stenographer Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy./Asstt. Registrar, ITAT, Mumbai. "