IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’ NEW DELHI BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT ITA No. 2797/DEL/2025 (AY 2013-14)

ACIT, CIRCLE-2(1), VS. SONAL NARAIN, GHAZIABAD 201-202, 2^ND FLOOR, NEAR PURANI HAPUR CHUNGI, GHAZIABAD UP (PAN: AAOPG9123G)

(APPELLANT) (RESPONDENT)

Appellant by : Sh. Manoj Kumar, Sr. DR .

Respondent by : Sh. Amit Rai, CA Date of Hearing 03.09.2025 Date of Pronouncement 19.09.2025 ORDER This appeal by the Revenue is directed against the order of the NFAC, Delhi passed relating to assessment year 2013-14. The Revenue has raised the following grounds:-

1. On the facts and circumstances of the case and in law, the Ld. CIT(A)

has erred in relying upon the order of ITAT, Lucknow whereas the Department has contested the order of ITAT, Lucknow before the Hon’ble Allahabad High Court and the matter is subjudice and has not attained finality.

2. On the facts and circumstances of the case and in law, the Ld. CIT(A)

has erred in deleting addition of Rs. 23,41,057/- made by the AO by treating entire receipts from the sale of shares of M/s CCL International Ltd. As unaccounted income u/s. 69 of the Act, without considering the fact that M/s CCL International Limited was one of the identified penny stock company as established by the Investigation Wing of the Department which was used for providing accommodation entry and creation of bogus capital gains exempt u/s. 10(38) of the I.T. Act, 1961.

2. Briefly stated, facts are that in this case, the assessee e-fled its ITR for A.Y. 2013- 14 on 19.11.2013 declaring total income of Rs.5,78,180/-. During the year the assessee claimed a sum of Rs. 23,41,087/- as exempt u/s 10(38) of the I.T. Act, 1961. The name of the assessee was flagged as a person who had traded in Penny Stock scrip of M/s. CCL International Limited by the Investigation Wing of the Department. Thus, the assessment was re-opened by issuing the notice u/s 148 of the IT Act, 1961. In response to the notice assessee did not file any ITR for the year under consideration. Therefore, assessment was completed u/s 147 r.w.s 144 of the Act. The AO also ascertained that shares of M/s. CCL International Limited was managed by accommodation entry providers and used by the assessee to route their undisclosed income through transactions in these penny stock and claimed exempt Long Term Capital Gain as per the provisions of section 10(38) of the I.T. Act, 1961. M/s. CCL International Limited was one of the identified penny stock by the Investigation Wing which was used for such purpose. With the aforesaid observation, the AO concluded that assessce's own money was being routed in through the mechanism of penny stocks/long term capital gain. Further, assessee reproduced the contents of the decision in the order in the case of Achal Gupta and others passed by ITAT, Lucknow wherein, the issue regarding Script of M/s CCL International Ltd. has been fully discussed and decided that Trading of Shares of CCL International LTD is treated as genuine trading and the LTCG earned by the assessee be exempted as per the provisions of section 10(38) of the I.T. Act, 1961. However, the decision on the issue of considering the capital gain and exemption u/s 10(38) of the CCL International Ltd. was agitated in High Court Allahabad and it has not attained finality at the time of assessment proceedings, the claim u/s 10(38) in ITR for the year under consideration to the tune of Rs.23,41,057 /- on sale of shares was treated as bogus and disallowed. In appeal, Ld. CIT(A) by following the decision of the jurisdictional Tribunal held that the impugned transactions cannot be treated as bogus / non-genuine/accommodation entries in a general manner without specific enquiry in this regard, hence, he deleted the addition in dispute by allowing the appeal of the assessee. Aggrieved, the Revenue is in appeal before the Tribunal.

3. At the time of hearing, Ld. DR submitted that the order of Ld. CIT(A) is not acceptable as he has not cons