Nilesh Premjibhai Patel Vs. ITO, Ward 32(2)(4)

Parties Involved

Facts Summary

The present appeal has been filed by the assessee, Nilesh Premjibhai Patel, challenging the order dated 31.03.2025 passed by the National Faceless Appeal Centre, Delhi, under section 250 of the Income Tax Act, 1961, for the assessment year 2014-15. The assessee had shown an exempted long-term capital gain of Rs. 25,23,965/- on the sale of scrip Blazon Marbles Ltd. However, the Assessing Officer (AO) made an addition of Rs. 25,23,965/- under section 68 of the Act, rejecting the claim of exemption under section 10(38). The AO based this addition on the general information report of 84 alleged penny stocks companies, including Blazon Marbles Ltd, investigated by the Kolkata investigating wing of the Directorate. The AO observed that the share price of Blazon Marbles Ltd had increased significantly within a short period, despite the company's poor financial health. The assessee argued that the purchase and sale of shares were genuine, supported by demat account statements, contract notes, and bank statements.…

Legal Issues

• 1. Whether the AO was correct in making an addition of Rs. 25,23,965/- under section 68 by rejecting the claim of exemption under section 10(38).

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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