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2018 (4) TMI 981
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....ow and with the assistance of the ld. Representatives; we have considered the relevant documentary evidences brought on record in the form of a paper book in the light of Rule 18(6) of the ITAT Rules. 3. The assessment was framed u/s. 143(3) of the Act vide order dated 20.12.2006 in which the Long Term Capital Gains declared by the assessee being earned on the sale of scrips was considered as a sham transaction and the LTCG was treated as income from undisclosed sources. 4. The matter travelled up to the Tribunal and the Tribunal restored the matter to the files of the CIT(A). The relevant findings of the Tribunal read as under:- Para 5: After hearing the rival submissions and carefully perusing the material available on record, we find that there is no dispute regarding the folio-wing two facts: i) That the Ld. CIT(A) specifically asked the A.O to enquire from the brokers mentioned in column 5 of the table mentioned by the A. O. in his order regarding the genuineness of the transactions done in the scrip mentioned in column no.4 of the same table. But before this enquiry could be done by the A.O. and Ld. CIT(A) has given his verdict in favour of th....
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....iew of the above, you are requested to submit your remand report in the matter after making necessary enquiries. Your remand report should reach the undersigned on or before 04.09.2009." 6. On receiving no response from the Assessing Officer, a reminder letter no. 805 dated 23.09.2009 was again sent to the ACIT 1(1), Raipur. Once again, no response given by the A.O. and again vide letter no. 2582 dated 08.02.2010, the A.O. was asked to submit the remand report positively. 7. After lapse of more than two years, the A.O. submitted a remand report dated 23.11.2011. In the said remand report, the assessing Officer has routinely reproduced the observations made by the A.O. in the assessment order dated 20.12.2006 framed u/s. 143(30 of the Act. 8. The ld. CIT(A) was left with no choice but to confirm the findings of his predecessor and allowed the appeal filed by the assessee. 9. Before us, the ld. D.R. reiterated what has been stated by the A.O. in his assessment order dated 20.12.2006 framed u/s. 143(30 of the Act. 10. The bone of contention is the sale of shares of Gautam Resources Limited and Naxgeshwar Investment Ltd. In some enquiry made by the DDIT, Kolkata some bro....
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....ed May 11, 2006 and May 12, 2006 and the suspension imposed on the trading in the shares of Nageshwar Investment Ltd., Adinath Bio-labs Ltd., Globe Stocks & Securities Ltd., Goenka Business & Finance Ltd., and Coronet Industries Ltd., since November 30, 2005 and already undergone by them, I am inclined to take a lenient view. In exercise of powers conferred in---terms of Section 19 "read with Section 11 and 11 B 'of SEBl Act, 1992, hereby direct that the proceedings against Nageshwar investment Ltd., Adinath Bio-labs Ltd., Globe Stocks & Securities Ltd., Goenka Business & Finance Ltd., and Coronet Industries Ltd., shad stand terminated and I vacate the adinterim order dated November 30, 2005. 15. Though the suspension order in respect of the some brokers including P.K. Agrawal & Company continued to be enforced till further orders which SEBI may pass on conclusion of the investigation proceedings. Incidentally, there is no mention of the other scrips Gautam Resources Pvt. Ltd. in the SEBI order. 16. It is an admitted fact that the brokers replied to the notices sent by the A.O. and confirmed the impugned transactions. Moreover, Pravin Kumar Agrawal of P.K. Agrawal & Co. (....
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.... the shares to the respective buyers is also established by producing documentary evidence. It is true that some of the transactions were off-market transactions. However, the purchase and sale price of the shares declared by the assessees were in conformity with the market rates prevailing on the respective dates as is seen from the documents furnished by the assessees. Therefore, the fact that some of the transactions were off-market transactions cannot be a ground to treat the transactions as sham transactions. The statement of the broker P that the transactions with the H Group were bogus has been demonstrated to be wrong by producing documentary evidence to the effect that the shares sold by the assessees were in consonance with the market price. On perusal of those documentary evidence, the Tribunal has arrived at a finding of fact that the transactions were genuine. Nothing is brought on record to show that the findings recorded by the Tribunal are contrary to the documentary evidence on record. The Tribunal has further recorded a finding of fact that the cash credits in the,bank accounts of some of the buyers of shares cannot be linked to the assessees. Moreover, yn the lig....
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.... as well as before the Tribunal that the sale proceeds have been accounted for in the accounts of the assessee and were received through account payee cheque. The Tribunal was right in rejecting the appeal of the Revenue by holding that the assessee was simply a shareholder of the company. He had made investment in a company in which he was neither a director nor was he in control of the company. The assessee had taken shares from the. market, the shares were listed and the transaction took place through a registered broker of the stock exchange. There was no material before the AO, which could have lead to a conclusion that the transaction was simplicitier a device to camouflage activities, to defraud the Revenue. No such presumption could be drawn by the AO merely on surmises and conjectures. In the absence of any cogent material in this regard, having been placed on record, the AO could not have reopened the assessment. The assessee had made an investment in a company, evidence whereof was with the AO. --Therefore, the AO could not have added income, which was rightly deleted by the CIT(A) as well as the Tribunal. It is settled law that suspicion, howsoever strong cannot take th....
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....Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their exfactory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of crossexamination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is men....
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.... be denied on the basis of presumption and surmises in respect of penny stock by disregarding the direct evidences on record relating to the sale/purchase transactions in shares supported by broker's contract notes, confirmation of receipt of sale proceeds through regular banking channels and the demat account. 19. Accordingly, we direct the A.O. to treat the gains arising out of the sale of shares under the head capital gains- "Short Term" or "Long Term" as the case may be. The other grievance of the assessee becomes infructuous. 24. The ld. D.R. had relied upon the decision of the Hon'ble Bombay High Court in the case of Bimalchand Jain in Tax Appeal No. 18 of 2017. 25. We have considered the judgment relied upon by the ld. D.R.. We find that the facts are totaling different from the facts of the case in hand. Firstly, in that case, the purchases were made by the assessee in cash for acquisition of shares of companies and the purchase of shares of the companies was done through the broker and the address of the broker was incidentally the address of the company. The profit earned by the assessee was shown as capital gains which was not accepted by the A.O. and the ....