Documentary proof of LTCG transactions through banking channels and recognized stock exchanges with STT prevails over suspicion of penny stock manipulation absent specific evidence linking assessee to sham dealings.

ORDER

PER VIMAL KUMAR, JM:

The application for condonation of delay of 9 days in filing of appeal and appeal of Revenue are against order dated 28.02.2025 of the Learned Commissioner of Income Tax (Appeals)-30, New Delhi [hereinafter referred to as ‘the Ld. CIT(A)’] passed u/s 250 of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’] arising out of assessment order dated 21.12.2018 of Ld. Assessing Officer, Ward No.28(4), Delhi (hereinafter referred on “the AO”) u/s 143(3) of the Act for Assessment Year 2016-17.

2. Brief facts of the case are that assessee had filed return of income on 30.05.2016 declaring income of Rs.14,35,910/-. Case was selected for Limited scrutiny “whether the investment and income relating to securities transactions are duly disclosed”. Notice u/s 143(2) dated 07.07.2017 was issued to the assessee. Notice u/s 142(1) was issued. Sh. Satvinder Singh CA, Authorized Representative for assessee filed various details on ITBA portal. On completion of proceedings Ld. AO vide order dated 21.12.2018 made additions of Rs.3,38,01,547/- and Rs.8,45,038/-. Against order dated 21.12.2018, assessee filed appeal before Ld. CIT(A) which was partly allowed vide order dated 28.02.2025 and deleted addition of Rs.3,38,01,547/-.

3. Being aggrieved, the Department of Revenue preferred the present appeal on following grounds:

“1. Whether on the facts and in the circumstances of the case, the Ld. CTT (A) has erred in deleting the addition of Rs. 3,38,01,547/- u/s 68 of the Act and addition of Rs. 8,45,038/- u/s 69C of the Act by ignoring the larger scam of organized tax evasion by way of bogus capital gain generated in penny stock?

2. Whether the Ld. CIT(A) has committed substantial error in law in deleting the disallowances of LTCG of Rs. 3,38,01,547/- overlooking that the entire transactions were stage managed with the object to facilitate the assessee to plough back its unaccounted income in the form of fictitious Long Term Capital Gain of Rs.3,38,01,547/- and claim bogus exemption?

3. Whether the Ld. CIT(A) has committed substantial error in law by not admitting that unexplained LTCG comes under the purview of unexplained cash-credits under section 68 of the Income-tax Act, 1961 and suspicious transaction in shares cannot be exempted under section10(38) of the Act?

4. Whether the Ld. CIT(A) has committed substantial error in law by not holding that the Assessee is under a legal obligation to prove the receipt of share capital/premium to the satisfaction of the Assessing Officer, failure of which would justify addition of the said amount to the income of the Assessee?

5. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.

6. The grounds of appeal are without prejudice to each other.

7. The appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either on or before the final hearing of the appeal.”

4. Ld. Departmental Representative submitted that there is delay of 5 days in filing of appeal for administrative reasons i.e., the Departmental Authorities has a lot of pendency of time barring matter and other judicial matter to penalty proceedings reopening of cases u/s 148, audit matters etc. In view of submissions made by Ld. Departmental Representative, it is evident that there is delay of 5 days in filing of appeal for administrative reasons. The explanation for condonation of delay does not smack of malafides as, the appellant has not gain of anything by not filing appeal within period of limitation. Therefore, delay of 5 days in filing appeal is condoned.

5. L