"| आयकर अपील य अ धकरण यायपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER & SHRI SANDEEP SINGH KARHAIL, HON’BLE JUDICIAL MEMBER I.T.A. No. 521/Mum/2025 Assessment Year: 2019 ITO Vs Ajinkya Mercantile Private Limited 43, 1st Floor, Great Western Building Fort Mumbai - 400001 [PAN: AAHCA5502B] अपीलाथ\u0012/ (Appellant) \u0014\u0015 यथ\u0012/ (Respondent) Assessee by : Shri Rashmikant Modi & Ms. Ketki Rajeshirke, A/Rs Revenue by : Shri Aditya M. Rai, Sr. D/R सुनवाई क तार ख/Date of Hearing : 10/07/2025 घोषणा क तार ख /Date of Pronouncement: 12/07/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the revenue is preferred against the order dated 27/11/2024 by NFAC, Delhi [hereinafter “the ld. CIT(A)”] pertaining to AY 2019-20. 2. Grievance of the revenue reads as under:- “1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in passing the order us 250 of the Act without considering the fact that on investigation, M/s Fibreweb India Ltd has been considered as penny stock script which is only a paper company and used for accommodation entries. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in passing the order u/s 250 of the Act that in the case of Filatex India Ltd where the Income Tax Department has conducted search action and it was found that the said company is a shell/paper company and managing its unaccounted money through accommodation entries. The price movement of the said company is also not according to its financials. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary.” I.T.A. No. 521/Mum/2025 Assessment Year: 2019 2 3. Briefly stated the facts of the case are that on the basis of the information received on the Insight Portal under the category “High Risk CRIU/VRU” the AO was in possession of the information that the assessee is one of the beneficiaries who traded in the scrip of Fiberweb India Limited and on the basis of this information, the assessment was reopened by the AO by issuance of notice u/s 148 of the Act pursuant to which, the assessee filed its return of income. While scrutinising the return of income, the AO noticed that the assessee has declared exempt long term capital gain till 31/01/2018 at Rs. 2,75,83,339/-. This long- term capital gain is mainly arising on the trading of Fiberweb India Limited and Filatex India Limite. On perusal of the chart and information furnished by the assessee, the AO found that the assessee has made a loss of Rs. 1,05,05,736/- in the shares of Fiberweb India Ltd. and gains of Rs. 3,83,01,261/- in the shares of Filatex India Limited. The assessee was asked to explain the genuineness of the transactions in the sale of shares of Fiberweb Inida Ltd. and Filatex India Ltd. and also Allcargo. The assessee furnished necessary details with supporting evidences but the same did not find any favour with the AO who found that Fiberweb India Ltd. was searched by the Income- tax Department and it was found that this company is managing its unaccounted money through accommodation entries with the help of paper/shell companies. The AO rejected the explanation of the assessee and summarised the entire transactions as under:- I.T.A. No. 521/Mum/2025 Assessment Year: 2019 3 3.1. The AO finally concluded by holding that the assessee has claimed exempt income by trading in the penny stock and the assessee has received the gains as accommodation entries to reduce its tax liability of capital gains income. Accordingly, the entire capital gains of Rs. 2,63,03,649/- was treated as unexplained cash credit u/s 68 of the Act and accordingly, the assessment was completed. 4. Assessee agitated the matter before the ld. CIT(A) and vehemently contended that the assessee had filed D-mat transactions statement showing details of shares sold along with bank statements, sample contract notes and financial details of the companies namely, Fiberweb India Ltd. and Filatex India Ltd. The assessee explained that it has not claimed any exempt income and the long-term capital gain was subject to tax @ 10% as per the relevant provisions of law. After considering the facts and submissions and the documentary evidence furnished by the assessee, the ld. CIT(A) found the addition to be unjustified and deleted the same. 5. Before us, the ld. D/R strongly supported the assessment order and read the operative part. Per contra, the ld. Counsel for the assessee strongly relied upon the findings of the ld. CIT(A). 6. We have given a thoughtful consideration to the orders of the authorities below. The following documentary evidence furnished by the assessee in support of its claim of long-term capital gain cannot be brushed aside lightly:- • Demat transaction statement and holding; • Statement showing details of shares sold; • Bank statements; • Scripwise capital gain statement; • Sample contract notes of AnandRathi & MOSL • BOB Report of Fibreweb India Ltd • Board approval docs. of Fibreweb india Ltd I.T.A. No. 521/Mum/2025 Assessment Year: 2019 4 • Fibreweb May 17 update on expansion • Fibreweb Notes • Filatex expansion updates July 2016 • Reports by various firms Filatex • Filatex EGM notice Feb 16 7. Nowhere, the AO has doubted the purchase and sale transactions and the belief of the AO is entirely based on the report submitted by the Investigation Wing or the Insight Portal. We find that the AO has not made any independent enquiry in respect of the alleged penny scrips whereas the documentary evidence brought on record clearly show that the assessee has satisfactorily explained the entire transactions. Moreover, it is a fact that the assessee has never claimed any exempt income but the long-term capital gain shown by the assessee is subject to tax @ 10% as per the relevant provisions of the Act. Therefore, it cannot be said that the assessee has been benefitted by tax free long-term capital gain in the garb of accommodation entries as alleged by the AO. 8. Considering the facts of the case in totality, we do not find any reason to interfere with the findings of the ld. CIT(A). The effectives grounds raised by the revenue are dismissed. 9. In the result, appeal of the revenue is dismissed. Order pronounced in the Court on 12th July, 2025 at Mumbai. Sd/- Sd/- (SANDEEP SINGH KARHAIL) (NARENDRA KUMAR BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 12/07/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs I.T.A. No. 521/Mum/2025 Assessment Year: 2019 5 आदेश क \u0016\u0017त\u0018ल\u001aप अ े\u001aषत /Copy of the Order forwarded to : 1. अपीलाथ! / The Appellant 2. \u0016\"यथ! / The Respondent 3. संबं&धत आयकर आयु(त / Concerned Pr. CIT 4. आयकर आयु(त ) अपील ( / The CIT(A)- 5. \u001aवभागीय \u0016\u0017त\u0017न&ध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड. फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपील य अ&धकरण ITAT, Mumbai "