IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.410/Nag./2019 (Assessment Year : 2014–15)

Asstt. Commissioner of Income Tax ……………. Appellant Central Circle–2(1), Nagpur v/s Shri Nandkumar Khatumal Harchandani

469, Poonam Villa, New Colony ……………. Respondent Nagpur 440 013 PAN – AATPH2594R Assessee by : Shri Manoj G. Moryani Revenue by : Shri Sandipkumar Salunke Date of Hearing – 21/01/2025 Date of Order – 25/02/2025

O R D E R

PER K.M. ROY, A.M.

This appeal by the Revenue is directed against the impugned order dated 31/10/2019, passed by the learned Commissioner of Income Tax (Appeals)-3, Nagpur [“learned CIT(A)], for the assessment year 2014-2015.

2. Following grounds have been raised by the Revenue:-

“I On the facts and in the circumstances of the case the Ld. CIT(A) erred in deleting the addition of Rs. 2,84,35,115/- made by AO U/s. 68 of the I.T. Act, 1961 on account of long term capital gain claimed as exempt income u/s.

10(38) without appreciating that it was a bogus accommodation entry.

i) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 2,84,35,115/- made by AO on sale proceeds of the share u/s. 68 of the I.T. Act, without appreciating the fact that as per investigation done by income tax Department (Inv), Kolkata dated 27.04.2015, the name of the assessee featured in the list of the persons who have availed bogus LTCG and exemption u/s. 10(38) of the Income Tax Act.

ii) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate the ground realities that the documents in the case of shell companies are always in order so that they can act as a conduit in aiding tax evasion.

iii) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate that documents are manufactured to give genuineness to the otherwise coloured transaction aiding in tax evasion.

iv) On the facts and circumstances of the case & Law, the Ld. CIT(A) failed to appreciate the fact of layered transaction of purchase and sale of shares which clearly depicted that the LTCG of the assessee is a sham transaction, clearly explained by AO from Para 7.1 to 11.2.

v) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to enumerate while giving relief that how the facts of the case relied upon are similar to facts of the case of the assessee.

vi) On the facts and circumstances of the case & law, the Ld. CIT(A) failed to appreciate the financials of M/s. Parag Shilp Infrastructure & Services Ltd. enumerated at Para 7.2 of the assessment order on whose share the assessee alleged to have earned enormous Long Term Capital Gain is very weak.

vii) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate that M/s. Parag Shilp Infrastructure & Services Ltd. is only a paper company literally having no business operations.

viii) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate that M/s. Parag Shilp Infrastructure & Services ltd., a penny stock company, does not have any worthwhile asset, creditworthy business, strong financials or any other indicator in justify its soaring share prices which has been manipulated to give accommodation entries in the form of bogus long term capital gains to beneficiaries.

ix) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate the role of entry operators in artificially hiking the share price of M/s. Parag Shilp Infrastructure & Services Ltd. to enable to assessee to legitimize his unaccounted fund.

x) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate that the entire gamut of direct & circumstantial evidence placed on record shows that claim of Long Term Capital Gain is Bogus in nature.

xi) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate that t