$~22 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 471/2026, CM APPL. 39737/2026 THE PR. COMMISSIONER OF INCOME TAX -CENTRAL -3 .....Appellant Through: Mr.Gaurav Gupta, SSC, Mr.Shivendra Singh, Mr. Yojit Pareek, JSCs. versus MS. RACHNA GUPTA .....Respondent Through: None CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA O R D E R % 06.07.2026 CM APPL. 39738/2026 (DELAY OF 313 DAYS IN RE-FILING) 1. For the reasons stated in the application, the delay in re-filing of 313 days is condoned. 2. Application stands allowed. CM APPL. 39739/2026 (Exemption) 3. Allowed, subject to all just exceptions. 4. Application stands disposed of. ITA 471/2026 and CM APPL. 39737/2026 5. The instant appeal is directed against the order dated 20.12.2024 passed by Income Tax Appellate Tribunal (hereinafter referred to as ‘Tribunal’) Delhi Bench, ‘F’, New Delhi 2015-16 in ITA No. 5418/DEL/2018 for the Assessment Year 2018. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 08/07/2026 at 11:57:32 6. Mr. Gaurav Gupta, learned Senior Standing Counsel for the appellant- Department vehemently argued that the Tribunal having correctly found that the respondent-assessee had transacted in penny stocks has allowed the assessee’s appeal on unsustainable grounds. 7. He submitted that the assessee had purchased 6000 shares of a company known as Channel Nine Entertainment and M/s. CCL International on 18.03.2013, and those shares which were purchased for a sum of Rs.1,59,000/- after sometime (03.07.2014) were sold at a staggering sum of Rs.29,71,941/- and similarly the shares of other companies which were purchased for a sum of Rs.4,68,000/- were sold at a capital gain of Rs.43,31,362/-. He argued that the short term capital gain which the assessee had disclosed was not a profit derived out of genuine purchase and sale of shares. 8. He argued that during the inquiry, the assessee, who is a lady, had stated that she did not know anything about the purchase, sale or nature of transactions and that it was her son who used to deal with the share. He added that upon queries being put to the assessee’s son, he was unable to satisfy the Assessing Officer (AO) about any knowledge about financials of the company nor he had any experience in share trading. He simply stated that he had some gut feeling or input that these shares would witness upward movement in the near future. 9. Learned Senior Standing Counsel argued that such huge gain is highly surprising and one would be surprised to learn that the share prices started reducing immediately, once the assessee had sold her shares. 10. Learned counsel argued that the Tribunal has, therefore, erred in setting aside the addition made by the AO. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 08/07/2026 at 11:57:32 11. Heard learned counsel for the appellant and perused the record. 12. We find that the respondent-assessee had purchased 6000 shares of Channel Nine Entertainment on 18.03.2013 for a sum of Rs.1,59,000/-; she held those shares for nearly 15 months and sold the entire lot of 6000 shares on 03.07.2014 for a sum of Rs. 29,71,941/-. More importantly, the assessee had purchased those shares by way of cheque issued from her bank account and the proceeds thereof were also received by her by way of account pay cheque and the same was duly deposited by her in the bank account. 13. The fact that these shares were held for a sufficient period, coupled with the fact that the increase in the share prices of the scrips in question was gradual and it was not a sudden surge in the sense that the shares swelled to staggering figure in 20-30 days. 14. In that era, when the dealings in unlisted stocks was permitted, it was not uncommon that the assessee could have a tip or information about cartels which would take share prices to exceptional heights. The nature of transactions and the profit derived by the respondent-assessee cannot be held to be a non genuine profit, simply because the scrips in question were held as a penny stock. The same by itself cannot be a reason to disallow the short term capital gain, if an assessee is able to establish on record that the transactions were undertaken out of disclosed sources and she had earned the profit as a bona fide and informed investor. 15. We do not find any error or infirmity in the findings recorded by the Tribunal. 16. In any case the Tribunal has relied upon a judgment of this Court rendered in the case of Principal CIT vs. Smt. Krishna Devi in ITA 125/2020 dated 15.01.2021 which undoubtedly find us. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 08/07/2026 at 11:57:32 17. The appeal, therefore, fails. 18. All interlocutory applications stand disposed of. DINESH MEHTA, J. RAJNEESH KUMAR GUPTA, J. JULY 6, 2026 neelam This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 08/07/2026 at 11:57:32