IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER (Assessment Year: 2014-15)

Shri Hareshkumar Mafatlal vs ACIT 19(1), Mumbai Shah, Room No. 203, 2^nd Floor, Matru 18/9, 1^st Floor, Hariharwala Mandir, Tardeo Road, Mumbai-

Building, 10/11, S.V.P. Road, 400007 Mumbai-400 004 PAN: ANQPS5958J APPLICANT RESPONDENT Assessee by : Shri K Gopal a/w Shri Om Khandalkar Respondent by : Shri Hemanshu Joshi, SR DR Date of hearing : 19/11/2025 Date of pronouncement : 04/12/2025 O R D E R Per Shri Anikesh Banerjee, JM:

Instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre, Delhi (NFAC) (for brevity, ‘Ld.CIT(A)’), order passed under section 250 of the Income-tax Act, 1961 (for brief, ‘the Act’) for Assessment year 2014-15, date of order 27/09/2024. The impugned order was emanated from the order of the Learned Assistant Commissioner of Income-tax, Circle-19(1), Mumbai (for brevity the “Ld. AO”), passed under section 143(3) of the Act, date of order

28/12/2016.

2. The assessee has taken the following grounds:-

“GROUND 1: Addition of the sale proceeds of the share u/s 68 of the Act.

Learned Assessing Officer committed error of law and of facts in not appreciating that the Appellant had earned tax free long term capital gain u/s. 10(38) by selling his shares held for more than 1-2 years on Stock Exchange Platform and has duly paid STT levied by said Stock Exchange. Learned Assessing Officer generally relied upon the statements given by some Vipul Shatt and nowhere learned AO could prove that assessee was part of the modus operandi or he was in any way connected to Vipul Bhatt or to any other entity involved in this racket. Even Appellant's request for cross examination of Vipul Shatt was also grossly rejected thereby depriving appellant of natural justice. Further addition is made u/s 68 whereas Appellant has duly explained the whole capital gain and therefore the question of unexplained cash credit does not a rise at all. Hence addition of Rs.

2,41,53,979/- deserves to be deleted.

GROUND 2: Addition on Account of Commission paid u/s 69C of the Act.

That the Ld. Assessing Officer has grossly erred in adding commission based on statement of some Vipul Bhatt with whom appellant had no relation and learned AO also could not provide any link between appellant and Vipul Bhatt. Appellant request for cross examination of Vipul Bhatt was grossly rejected thereby depriving appellant of natural justice and without justifying learned AO made said addition. That addition of Rs

9,66,159/- deserves to be deleted.”

3. The brief facts of the case are that the assessee is an individual and has earned income from business, long term capital gain and income from other sources. The assessee filed the return during impugned assessment year declaring total income of Rs. 37,53,200/-. During the assessment proceedings, the Ld.AO found that the assessee has made the share transaction and claimed exemption u/s 10(38), total amount to Rs.2,41,53,979/- related to long term capital gain (LTCG). The assessee submitted that the assessee has purchased 10,000 shares of Conart Traders Ltd on 12/09/2011 through off-market purchase from “M/s Santoshima Tradelink Pvt Ltd” at price of Rs.20 per share. Thereafter Conart Traders Ltd was amalgamated with Sunrise Asian Ltd (SAL) and 10,000 fresh shares of Sunrise Asian Ltd were issued to the assessee. The assessee sold the shares of SAL and Monarch Health Services Ltd (MHSL) through his broker, M/s Monarch Research & Brokerage Ltd. The details of purchases and sale of shares of Conart Traders Ltd were examined and it was found that the assessee has been allotted 10,000 shares of this company through preferential placement on 19/09/2011. The assessee has earned profit by selling of the scrip SAL amount to Rs. 47,52.907/- and (MHSL) amount to Rs. 1,94,01,072/- which comes total amount to Rs. 2,41,53,979/-