TaxTMI 
TaxTMI 
2018 (11) TMI 1625
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....short ''the Act'') on the long term capital gains of Rs. 8,74,250/- on sale of certain shares, and deeming the consideration of Rs. 8,76,750/- received on such sale as cash credit under Section 68 of the Act. 2. Ld. Counsel for the assessee submitted that during the relevant previous year assessee had received consideration of Rs. 8,76,750/- on sale of 25,000 equity shares of M/s. Essar (India) Limited. As per the ld. Authorised Representative, assessee had originally purchased 25000 shares of the said company on 25.10.2010. Further, as per the ld. Authorised Representative such shares having face value of Rs. 10/- each, was split by the said company into shares of face value Rs. 1/- each, resulting in assessee's holding going upto 2,50,....
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....ssee could not have been relied on by the Revenue for fastening a tax liability on the assessee. As per the ld. Authorised Representative, ld. Commissioner of Income Tax (Appeals) had confirmed the order of the ld. Assessing Officer treating the transactions to be that of penny stock companies relying on the reports of Investigation Wing of Income Tax Department, Kolkata. 3. Per contra, ld. Departmental Representative placing reliance on a decision of a Co-ordinate Bench in the case of Heerachand Kanunga vs. ITO, (ITA Nos.2786 & 2787/CHNY/2017, dated 03.05.2018) submitted that the issue might be required to be remitted back to the ld. Assessing Officer, so that due process of law is followed. 4. We have considered the rival contention....
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....by the Revenue for almost similar reasons, this Tribunal had held as under at para 9 to 12 of its order dated 03.05.2018. ''9. A perusal of the facts in the present case admittedly given room for suspicion. However, assessments are not to be done on the basis of mere suspicion. It has to be supported by facts and the facts are unfortunately not forthcoming in the Assessment Order, in the order of the Ld.CIT(A) nor from the side of the assessee. The main foundation of the assessment in the present case is the statement of one Shri Ashok Kumar Kayan who has admitted to have provided bogus Long Term Capital Gains to his clients. The said Shri Ashok Kumar Kayan also allegedly seems to have provided the assessee's name and PAN as one of....
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....usal of the Assessment Order at Para No.7.1 shows that in the Written Submissions, the assessee states that he has purchased 15000 shares of M/s.BPL from M/s.ABPL, Kolkata. However, in Para No.8.3, it is mentioned that the assessee in good faith has purchased the shares of M/s.BPL from a subbroker in his friends circle. What is the true nature of the transaction? From whom did the assessee actually purchase the shares? Did the assessee take possession of the shares in its physical form? In Para No.8.1 of the Assessment Order, it is mentioned that the assessee is an investor and has been regularly trading in shares. If this is so, does the demat account show such transactions being done by the assessee or is this the only one of transaction.....
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....atement recorded by the Revenue from Shri Ashok Kumar Kayan cannot be used as an evidence against the assessee in so far as the statement has not been given to the assessee nor has Shri Ashok Kumar Kayan been provided to the assessee for cross-examination. However, the assessee shall prove the transaction of the Long Term Capital Gains in respect of which the assessee has claimed the exemption u/s.10(38) by providing all such evidences as required by the AO to substantiate the claim as also by producing the persons through whom the assessee has undertaken the transaction of the purchase and sale of the shares which would include the subbroker, friend and the broker through whom the transaction has been done, before the AO for examination''.....