IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 7624/MUM/2025 (Assessment Year: 2014-15)

Income Tax Officer-16(3)(1), vs Tejprakash Sohan Lal Dangi Mumbai 203 Mahaver Building , 44/46 Popat Wadi, Kalbadevi Road, Mumbai - 400002 (PAN: AEEPD3015Q)

Appellant Respondent Present for:

Assessee by : Shri Prakash Jhujhunwala and Shri Saiprasad Ghosh, CAs Revenue by : Shri Hemanshu Joshi, Sr. DR Date of Hearing : 03.02.2026 Date of Pronouncement : 25.02.2026

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the Revenue is against the order of National Faceless Appeal Centre (NFAC), Delhi vide Order No. ITBA/NFAC/S/250/2025-26/1081039855(1) dated 23.09.2025 passed against the assessment order u/s. 143(3) r.w.s 147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 23.12.2019 for AY

2014-15.

2. Grounds taken by the Revenue are reproduced as under:

“i. On facts and in law, the Ld. CIT(A) erred in deleting the addition of Rs.2,49,02,775/- made u/s 68 without appreciating that the transactions of purchase and sale of penny stocks were pre- arranged, non-genuine, and devoid of commercial purpose, aimed solely at evading tax.

ii. The Ld. CIT(A) failed to appreciate that the trading pattern and price movements in the shares of Radford Global Ltd., Surabhi Chemicals & Investments Ltd., and Mishka Finance & Trading Ltd. were artificially manipulated and not governed by genuine market forces.

iii. The Ld. CIT(A) ignored the financial analysis showing negligible net worth and non-existent business activity of these companies, which proves that the transactions were fictitious and arranged.

iv. The Ld. CIT(A) erred in not considering the cash trail and fund flow analysis of entry providers which established that cash was routed through multiple accounts to provide accommodation entries to the assessee.

v. On the facts and in the circumstances of the case, the Ld. CIT (A) erred in allowing the appeal of the assessee on account of addition made u/s. 69C of the Income Tax Act, 1961, of Rs.7,47,083/- towards commission paid for obtaining bogus LTCG entries.

vi. The Ld. CIT(A) wrongly relied upon the ITAT decision in Chirag Tejprakash Dangi, ignoring that each case of penny stock transaction must be examined independently based on its own evidence and fund trail.

vii. The order of the CIT(A) be set aside and the order of the Assessing Officer u/s 144 r.w.s. 147 dated 23.12.2019 be restored in full.”

3. Facts of the case are that assessee filed his return of income on 29.03.2015 reporting total income at Rs.4,09,600/- . During the course of assessment proceedings, ld. Assessing Officer noticed that the assessee has disclosed long term capital gains of Rs.2,44,18,199/- on sale of shares and claimed the same as exempt u/s.10(38) of the Act.

The relevant details thereof are tabulated below:

4. Ld. Assessing Officer noticed that all the three companies mentioned above have been identified as 'penny stock' by the Investigation Wing, Kolkata, in which prices of the shares have been rigged in order to generate bogus capital gains/capital losses. Ld.

Assessing Officer also noticed from the report prepared by the Investigation wing of Kolkata that the prices of shares of certain penny stock companies have gone up unusually and the same was not commensurate with the financial results of these companies. Accordingly, ld. Assessing Officer asked assessee to explain as to how he has invested in these shares. Assessee replied that he got information that there are reasonable chances of getting good returns in these scrips and accordingly made the investments. Assessee also submitted that the purchase and sale of the transactions are genuine and also furnished all the evidences in support of the same. Ld. Assessing Officer recorded statement from assessee u/s 131 of the Act, wherein he stated that he makes investments on long term basis.

4.1. In o