PCIT v. Indravadan Jain, HUF

Case snapshot

Sections / provisions: See packaged judgment

Questions before the Court / Tribunal

• Penny-stock LTCG: documentary evidence, demat/contract notes and burden on Revenue to connect taxpayer with accommodation-entry machinery.
• What factual, statutory and procedural conditions control the relief?
• How does the operative order apply to the parties and the challenged proceeding?

Material facts and procedural background

Principal Commissioner of Income Tax – 31, Mumbai ….Appellant V/s. Indravadan Jain, HUF …Respondent

---- Ms. Sushma Nagraj a/w Ms. Sakshi Kapadia for Appellant. None for Respondent. ----

BEFORE SHRI R.C.SHARMA, AM & SHRI MAHAVIR SINGH, JM आमकय अऩीर सं./ITA No.4861/Mum/2014 ( नििाारण वषा / Assessment Year :2005-2006) ITO-24(3)(1), Mumbai Vs. M/s Indravadan Jain HUF, 87/8, Kapadia Building Jawahar Nagar, S.V.Road, Goregaon (W est), Mumbai-62 स्थामी रेखा सं ./ जीआइआय सं ./ PAN/GIR No. : AAAHI 0054 E (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) AND आमकय अऩीर सं./ITA No.5168/Mum/2014 ( नििाारण वषा / Assessment Year :2005 -2006) ACIT-24(3), Bandra(E), Mumbai- Vs. Shri Indravadan Jain, 51 23/26, Vijaya Villa, Jawahar Nagar, S.V.Road, Goregaon (W est), Mumbai-63 स्थामी रेखा सं ./ जीआइआय सं ./ PAN/GIR No. : AAAPJ 9737 B (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) याजस्व की ओर से /Revenue by : Shri Vishwas Jadhav ननधाारयती की ओर से /Assessee by : Shri Pramod Kumar Parida Ms. Sajukta Chowdhury & Miss Priya Bhalawal सन ु वाई की तायीख / Date of Hearing : 30/03/2016 घोषणा की तायीख/Date of Pronouncement 27/05/2016 आदे श / O R D E R PER R.C.SHARMA (A.M): These are the appeals filed by the revenue against the order of

brief are that the assessee had shown sale proceeds of shares in the

exemption under the Act. Further the assessee had claimed to have

Appellant / assessee submissions

From the above facts and circumstances your honour will admit that merely because investigation has been done on M/s. Basant Periwal & Co by SEBI and SEBI has levied fine on him the genuine transactions done on the floor of Stock Exchange cannot be treated as ingenuine. What the appellant has done is that he purchased the shares, made the payment by alc payee cheques, sold these shares, received the delivery of shares, gave the delivery and received the payment by a/c payee cheque. Hence the genuine transaction cannot and should not be treated as ingenuine merely on arbitrary view or suspicion. It is submitted that on the similar facts the transactions have been treated as genuine and L TCG thereon has been allowed by the Hon'ble ITAT in the following decisions.

Revenue / respondent submissions

The packaged judgment does not separately label the respondent's submissions in an independently extractable passage. No contention is inferred; read the full order.

Court / Tribunal analysis and reasoning

8. We have considered rival contentions and carefully gone through

Operative decision and relief

2.7 In the above mentioned case the Assessing Officer had received information from Investigation Wing and accordingly reopened the assessment based on the information provided. Identical are the facts in appellant's case also. In view of the above discussion, I hold that the reopening is proper and valid in the eyes of law. This ground of appeal of the appellant is dismissed.

4. In the result, the appeal is "Partly Allowed"

9. In the result, both appeals of the revenue are dismissed. Order pronounced in the open court on this 27/05/2016.

Ratio and legal principle

• The packaged judgment addresses Penny-stock LTCG: documentary evidence, demat/contract notes and burden on Revenue to connect taxpayer with accommodation-entry machinery. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions.
• Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.

Why this judgment matters

This decision is relevant to practitioners and affected parties dealing with penny-stock ltcg: documentary evidence, demat/contract notes and burden on revenue to connect taxpayer with accommodation-entry machinery. Its value lies in showing how the adjudicating forum connected the applicable rule to the proved facts and procedural posture.

Practitioner action points

• Match the statutory version, jurisdiction, procedural stage and decisive evidence before relying on the result.
• Verify current appellate, review and SLP history and any later amendment or controlling authority.
• Attach the complete judgment to the working paper or filing and cite the paragraph/page supporting the proposition.

Does this case match your facts?

Section / provision impact

• See the statutory provisions identified in the packaged judgment.

Case network

Similar issue / useful comparison

• Bridge India Fund, New Delhi v. ACIT - ITAT Mumbai - I Bench
• SECUNDRABAD CLUB VS. C.I.T.-V - Supreme Court of India
• ACIT v. Ashok W. Wesavkar - Bombay High Court

Different outcome / possible distinction

• ACIT CIR 6(1) VS ASAHI INFRA & PROJECTS LIMITED - Remanded / restored
• ITO 32(2)(3) VS MAYUR R KAMDAR - Dismissed

Full judgment and source control

Read / download packaged judgment record

Source class: Sanitized local full-judgment copy; official primary replacement pending · Repository status: Later-history status: verification on hold pending source confirmation