IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘B’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI NIKHIL CHOUDHARY, ACCOUNTANT MEMBER IT(SS) A Nos.336 & 337/LKW/2025 Assessment Years: 2014-15 & 2015-16 ACIT, Central Circle, Bareilly Vs. Ankur Anand Kamla Nehru Marg, Civil Lines, 148 Civil Lines, Bareilly, Bareilly, Bareilly-243001. Bareilly-243001.

TAN/PAN:AGPPA4219C (Appellant) (Respondent)

IT(SS)A No.334/LKW/2025 Assessment Year:2015-16 ACIT, Central Circle, Bareilly Vs. Mohit Anand Kamla Nehru Marg, Civil Lines, 148 Civil Lines, Bareilly, Bareilly, Bareilly-243001. Bareilly-243001.

TAN/PAN:ABUPA3002H (Appellant) (Respondent)

Appellant by : Shri Neeraj Kumar, CIT (DR) Respondent by : Shri Rakesh Garg, Advocate

ORDER

PER SUDHANSHU SRIVASTAVA, J.M.:

These three appeals are preferred by the Department in cases of two different assessees against the separate orders dated 21.03.2025 passed by the Ld. Commissioner of Income Tax (Appeals)-3, Lucknow {hereinafter called ‘CIT (A)} for Assessment Years (AY) 2014-15 and 2015-16. Since the three Departmental appeals are having identical issues, they were heard together and, therefore, they are being disposed of through this common order for the sake of convenience.

2.0 The brief facts in the case of Shri Mohit Anand for A.Y. 2015-16 in IT(SS)A No.334/LKW/2025 are that in this case, the original return was filed declaring a total income of Rs.16,86,100/- on 14.03.2016. Subsequently, a search and seizure operation was carried out by the Investigation Wing of the Income Tax Department in Harsahaimal Shaimlal Jewellers Pvt. Ltd. group of cases on 21.12.2020 and the case of the assessee was also covered under section 132 of the Income Tax Act, 1961(hereinafter called “the Act’). As per the assessment order, during the course of the above said search and seizure operations, various materials/documents were found and seized/impounded and statements were also recorded. Subsequently, the case of assessee was centralized and notice under section 153A of the Act was issued on 29.10.2021. In response to the said notice, the assessee filed his return of income on 14.12.2021 declaring total income of Rs. 16,86,100/-

i.e. the income as per the original return of income.

2.1 During the course of assessment proceedings, the Assessing Officer (hereinafter called “the AO”) observed that during the year, the assessee had claimed Long Term Capital Gain (LTCG) exempt under section 10(38) of the Act, amounting to Rs.11,17,87,500/-, on the sale of the Scrip Prem Cap for Rs. 11,47,87,502/- which was initially purchased for Rs. 30,00,000/-. The AO observed that the said scrip had been identified as one of the BSE listed penny stocks which were being used for generating bogus LTCG. The AO required the assessee to establish the genuineness of the LTCG. The response of the assessee was that the payments made for the purchase of the scrip were through proper and authenticated banking channels and that the said shares had been sold on recognized stock exchange and that further the Long-Term Capital Gains earned were completely genuine and were therefore, to be considered as exempt in terms of provisions of section 10(38) of the Act. However, the Assessing Officer did not accept the contention of the assessee in this regard and went on to hold that the assessee’s claim of Long Term Capital Gain as being exempt under section 10(38) of the Act was not a genuine claim and that the capital gains claimed as exempt were to be treated as unaccounted money of the assessee and were to be added to the income of the assessee under section 68 of the Act. The assessment was completed under section 143(3) r.w.s. 153A of the Act at Rs. 11,34,73,600/- after making an addition of Rs. 11,17,87,500/- being addition under section 68 of the Act on account of Long Term Capital Gain.

2.2 Aggrieved, the assessee preferred an appeal before the ld. First Appellate Authority challenging the addition. The ld. First Appellate Aut