Penny Stock Judgement – SRK Industries Ltd Chennai ITAT in favour of Revenue.


These appeals by the assessees are directed against the orders passed by the learned Commissioner of Income Tax (Appeals)-12, Chennai as detailed herein below for the assessment year 2014-15 passed U/s.250(6) r.w.s.143(3) of the Act :-

Appeal No. Assessee Order of the Ld.CIT(A)-12, Chennai
  No. Dated
ITA 1413 of 2018 M/s. Pankaj Agarwal
& Sons (HUF)
ITA No.192/CIT(A)-
ITA 1414 of 2018 Smt. Mamta Agarwal ITA No.185/CIT(A)-
ITA 1415 of 2018 M/s. Rajnish Agarwal
& Sons (HUF)
ITA No.191/CIT(A)-
ITA 1416 of 2018 Shri Ramkishan
ITA No.194/CIT(A)-
ITA 1417 of 2018 M/s. R. K. Agarwal &
Sons (HUF)
ITA No.190/CIT(A)-
ITA 1418 of 2018 Smt Sampatti Agarwal ITA No.187/CIT(A)-
ITA 1419 of 2018 Shri Rajnish Agarwal ITA No.184/CIT(A)-
ITA 1420 of 2018

Shri Pankaj Kumar Agarwal

ITA No.188/CIT(A)-

Since the issues in all these appeals are identical, they have
been taken up for hearing together and disposed off by this common

2. The assessees have raised several identical grounds in their appeals however the following grounds were argued before us at the time of hearing:-

(i) The Ld.CIT(A) has erred in confirming the addition made by the Ld.AO U/s.68 of the Act, by rejecting the assessees claim of exemption U/s.10(38) of the Act on the Long Term Capital Gains earned out of the purchase & sale of equity shares of the company M/s. SRK Industries Ltd., by holding that the transactions are sham and tailored to bring the unaccounted money as the legitimate gain in the guise of Long Term Capital Gain which is exempt U/s.10(38) of the Act.


(ii) In the case of Shri Ramkishan Agarwal in ITA No.1416/Chny/2018 the assessee has raised the ground that the Ld.AO had erroneously adopted the total income as Rs.5,95,016/- as against Rs.5,25,690/- declared by the
assessee in the return of income while computing the income of the assessee.


(iii) The Ld.AO had erroneously computed the aggregate value of the sale of shares of M/s. SRK Industries Ltd., as follows while computing the Long Term Capital Gain:

Assessee /Appeal No. Actual value of the shares sold Erroneous value adopted by the Ld.AO
Smt. Sampati Agarwal
ITA No.1418/Chny/2018
Rs.63,46,801 Rs.64,71,191
Shri Rajnish Agarwal
ITA No.1419/Chny/2018
Rs.63,80,898 Rs.66,77,520
Shri Pankaj Agarwal
ITA No.1420/Chny/2018
Rs.62,97,298 Rs.63,93,702


(iv) In the case of Rajnish Agarwal in ITA No.1419/Chny/2018 the assessee has raised the ground that the Ld.CIT(A) has erred in confirming the order of the Ld.AO who had not allowed the benefit of set-off of losses on the sale of shares amounting to Rs.6,01,730/- while computing the total income.


(v) The assessees object to the levy of interest U/s.234B & 234C of
the Act.


Penny Stock Judgement – SRK Industries Ltd Chennai ITAT in favour of Revenue