2 days ago
Mumbai ITAT Upholds ₹85 Lakh Share Gains Claim
Amita Agarwal made money by selling shares of Sunrise Asian Ltd.
She told the tax department that the money was long-term capital gain.
The tax officer thought the shares were part of a suspicious scheme.
The officer therefore treated the gain as unexplained income and also alleged a commission payment.
Agarwal showed that she bought the shares through banks.
She also showed that the shares were held in her demat account and sold through a recognised stock exchange.
The Tribunal found no problem with her documents.
It also found no direct evidence that she helped manipulate prices.
So, the Tribunal removed the tax addition, while making clear that every suspicious-share case will still depend on its own evidence.
The Mumbai ITAT deleted a ₹85.35 lakh addition against Amita Rambilas Agarwal’s LTCG claim.
Agarwal had reported gains from selling 8,000 shares of Sunrise Asian Ltd.
The Assessing Officer treated the gains as unexplained income under Section 68 and alleged a bogus penny-stock transaction.
The Tribunal found banking, demat and recognised-exchange records, with no defect identified in the documents.
It held that suspicion about the stock alone was insufficient without evidence linking Agarwal to manipulation or accommodation entries.
- Who
- Amita Rambilas Agarwal, the Income Tax Department’s Assessing Officer and the Mumbai Income Tax Appellate Tribunal.
- What
- The Mumbai ITAT deleted a ₹85.35 lakh addition relating to Agarwal’s claimed long-term capital gains and made the related commission issue infructuous.
- Where
- The case was heard by the Mumbai bench of the Income Tax Appellate Tribunal.
- When
- The order was pronounced on 21 July 2026 for assessment year 2014-15.
- Why
- The Tribunal found documented purchases, demat holdings and exchange-traded sales, but no direct evidence linking Agarwal to price manipulation or an accommodation-entry arrangement.
Taxpayer’s position
Revenue’s position
Whether the share gains were genuine
Taxpayer’s position
Agarwal said the transactions were genuine because the shares were bought through banking channels, held in her demat account and sold through a recognised stock exchange.
Revenue’s position
The Assessing Officer treated the claimed LTCG as a bogus penny-stock transaction and added ₹85.35 lakh as unexplained income under Section 68.
Effect of a suspicious stock
Taxpayer’s position
The taxpayer argued that general suspicion about Sunrise Asian Ltd. could not invalidate her claim without evidence connecting her to manipulation or an accommodation-entry provider.
Revenue’s position
The Revenue rejected the exemption after treating the scrip and the reported gains as part of a suspicious transaction pattern, according to the case account.
Alleged commission payment
Taxpayer’s position
Agarwal denied that she paid any commission to obtain a bogus LTCG entry and said there was no evidence of such an arrangement.
Revenue’s position
The tax department made a separate ₹2.56 lakh addition on the basis that it represented commission for obtaining the alleged accommodation entry.
Key facts
- Taxpayer
- Amita Rambilas Agarwal
- Stock
- Sunrise Asian Ltd., formerly known as Santoshi Maa Tradelinks Ltd.
- Shares sold
- 8,000 equity shares
- Claimed LTCG
- ₹85.35 lakh
- Assessment year
- 2014-15
- Main provision invoked
- Section 68 of the Income-tax Act, 1961
- Alleged commission addition
- ₹2.56 lakh
- Order date
- 21 July 2026
Quotes
Rajesh Gandhi
Partner at Deloitte India LLP
“A subsequent ITAT bench would generally consider and follow the earlier decisions, particularly where the facts and evidence are similar and the Revenue has not brought any new or taxpayer-specific material. However, each case must ultimately be decided on its own facts.”
financialexpress.com
“Where the taxpayer is able to substantiate the transaction through contract notes, banking records, demat statements and exchange-traded sale records, the Revenue would generally be expected to demonstrate a direct nexus between the taxpayer and the alleged manipulation.”
financialexpress.com
Sources
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