Sunita Chaudhry (Smt.) v. ITO

By CA Nikhil Gupta · Judgment date: 2022-10-13 · ITAT Mumbai

ITATOperative order controlsPUBLISH_READY

Important disclaimer

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Source status: Sanitized readable full judgment copy packaged; the exact issuing-court primary record remains pending. Open packaged judgment PDF. This indexed page retains explicit official-source and later-history disclosures for reliance checks.

Case in 2 minutes

S. 69 : Unexplained investments-Long term capital gains-Penny stock-Denial of exemption is not valid. [S. 10(38), 45, 131, 133A] The AO assessed the consideration received on sale of shares as penny stock and denied the exemption on the basis of information received from the Investigation wing pertaining to survey action conducted in the case of company i.e. First Financial Services Ltd in whose shares the asseee had transacted, statements recorded of other beneficiaries, finding of the Securities Exchange Board of India ( SEBI) vide interim orders in case of First Financial Services Ltd., statement of assessee…

Result: Operative order controls. The controlling text is the reasoning and operative order in the packaged judgment, not this editorial summary.

Case snapshot

Court / TribunalITAT Mumbai

Case numberITA No.143/Mum./2022

Decision date2022-10-13

Assessment yearAY 2013–14

CoramSHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER

OutcomeOperative order controls

Sections / provisions: 69

Questions before the Court / Tribunal

S. 69 : Unexplained investments-Long term capital gains-Penny stock-Denial of exemption is not valid. [S. 10(38), 45, 131, 133A] The AO assessed the consideration received on sale of shares as penny stock and denied the exemption on the basis of information received from the Investigation wing pertaining to survey action conducted in the case of company i.e. First Financial Services Ltd in whose shares the asseee had transacted, statements recorded of other beneficiaries, finding of the Securities Exchange Board of India ( SEBI) vide interim orders in case of First Financial Services Ltd., statement of assessee…
What factual, statutory and procedural conditions control the relief?
How does the operative order apply to the parties and the challenged proceeding?

JUDGMENT-GROUNDED CASE RECORD

Material facts and procedural background

Sunita Chaudhry 34, Quay Street, Darukhana ……………. Appellant Byculla, Mumbai 400 010 PAN – ACLPC7278D

Assessee by : Shri Vimalchand Punmiya Revenue by : Shri Ajay Singh

The present appeal has been filed by the assessee challenging the

2. In this appeal, the assessee has raised following grounds:

b. the objections raised by & on behalf of the appellant were not dealt with by the ld. A.O and procedure laid down by the supreme court in case of G KN Drive Shaft (India) Ltd (259 ITR 19) was not followed before assuming the jurisdiction u/s. 147,

Appellant / assessee submissions

(„learned AR„) submitted that the SEBI vide order dated 06/09/2017, inter-alia,

assessee upon completion of the investigation. The learned AR further

submitted that the said fact was not only brought to the notice of the AO by

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 the rival submissions and perused the material

11. We find that SEBI vide interim order dated 19/12/2014 and 11/08/2015,

12. We find that despite the aforesaid interim order dated 06/09/2017

Operative decision and relief

i. Admit the appeal and grant stay against the recovery of demand, ii. Set aside the order of A.O., iii. Delete all illegal additions and disallowances made by A.O., iv. Grant justice.”

14. In the result, appeal by the assessee is allowed.

Official source and later-history control

Primary record: OFFICIAL_PRIMARY_SEARCH_PENDING

Later-history status: RECTIFICATION_HIGH_COURT_APPEAL_SLP_CHECK_PENDING

ITAT rectification, jurisdictional High Court appeal and Supreme Court SLP history remain to be closed.

Release decision: Published with a sanitized local judgment copy and explicit source disclosure; official-primary retrieval and later-history surveillance remain open. Checked 2026-08-11; page is published as index,follow with these limitations disclosed.

FININ2MIN ANALYSIS

Ratio and legal principle

The packaged judgment addresses S. 69 : Unexplained investments-Long term capital gains-Penny stock-Denial of exemption is not valid. [S. 10(38), 45, 131, 133A] The AO assessed the consideration received on sale of shares as penny stock and denied the exemption on the basis of information received from the Investigation wing pertaining to survey action conducted in the case of company i.e. First Financial Services Ltd in whose shares the asseee had transacted, statements recorded of other beneficiaries, finding of the Securities Exchange Board of India ( SEBI) vide interim orders in case of First Financial Services Ltd., statement of assessee…. 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 s. 69 : unexplained investments-long term capital gains-penny stock-denial of exemption is not valid. [s. 10(38), 45, 131, 133a] the ao assessed the consideration received on sale of shares as penny stock and denied the exemption on the basis of information received from the investigation wing pertaining to survey action conducted in the case of company i.e. first financial services ltd in whose shares the asseee had transacted, statements recorded of other beneficiaries, finding of the securities exchange board of india ( sebi) vide interim orders in case of first financial services ltd., statement of assessee… 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.

Can I rely on this judgment?

Authority level	ITAT
Source integrity	Sanitized readable full judgment copy packaged; issuing-court primary pending
Repository release	PUBLISH_READY
Reliance rule	Verify current history and cite the judgment's narrow proposition, not the editorial headnote.

Does this case match your facts?

Stronger match when

The same primary issue is raised.
The same statutory version and jurisdiction apply.
The procedural stage and burden of proof are comparable.
The material documentary record is substantially similar.

Weaker / distinguishable when

A later higher-court ruling changes the position.
The statutory provision or relevant period differs.
The evidence or procedural chronology is materially different.
A defect decisive here was cured in the user's case.

Questions this judgment answers

What was the main dispute in Sunita Chaudhry (Smt.) v. ITO?

Which facts matter most?

Sunita Chaudhry 34, Quay Street, Darukhana ……………. Appellant Byculla, Mumbai 400 010 PAN – ACLPC7278D

What did the ITAT Mumbai decide?

14. In the result, appeal by the assessee is allowed.

What legal principle can be taken from the judgment?

The packaged judgment addresses S. 69 : Unexplained investments-Long term capital gains-Penny stock-Denial of exemption is not valid. [S. 10(38), 45, 131, 133A] The AO assessed the consideration received on sale of shares as penny stock and denied the exemption on the basis of information received from the Investigation wing pertaining to survey action conducted in the case of company i.e. First Financial Services Ltd in whose shares the asseee had transacted, statements recorded of other beneficiaries, finding of the Securities Exchange Board of India ( SEBI) vide interim orders in case of First Financial Services Ltd., statement of assessee…. 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.

Which provisions should be checked?

When is the case most useful?

When the user's facts raise the same issue - S. 69 : Unexplained investments-Long term capital gains-Penny stock-Denial of exemption is not valid. [S. 10(38), 45, 131, 133A] The AO assessed the consideration received on sale of shares as penny stock and denied the exemption on the basis of information received from the Investigation wing pertaining to survey action conducted in the case of company i.e. First Financial Services Ltd in whose shares the asseee had transacted, statements recorded of other beneficiaries, finding of the Securities Exchange Board of India ( SEBI) vide interim orders in case of First Financial Services Ltd., statement of assessee… - at a comparable procedural stage and under the same statutory version.

What could distinguish the case?

Different evidence, jurisdiction, statutory period, procedural chronology, or later controlling authority can materially change the result.

Can it be cited without another current-law check?

No. Read the packaged judgment and verify current appellate/review/SLP history, statutory amendments and jurisdiction before citation or advice.