TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 179
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....,156/- and claimed the benefit of exemption u/s 10(38) in respect of the long term capital gain so derived of Rs. 39,19,157/-. The AO, thereafter, strangely has not discussed about M/s. GCM Securities Ltd. (the shares purchased and sold by the assessee) however has erroneously dealt with the scrips of M/s. Kailash Auto Finance Ltd. (M/s. KAFL) and investigation report/studies of department in the case of M/s. KAFL and hence denied the exemption claimed u/s 10(38) in respect of the long term capital gain earned on sale of shares of M/s GCM Securities Limited. Aggrieved the assessee has preferred the appeal before the Ld. CIT(A) who was pleased to confirm the same. Aggrieved the assessee is before us. 4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee has purchased 6400 number of shares of GCM Securities Ltd. The assessee has purchased shares of Rs. 1,20,000/- (6400 x 18.75) vide Cheque No. 170916 dt. 20.03.2013 in the Initial Public Offer by the said company made in conformity with the provisions of the Companies Act, 1956 and SEBI regulations. The same transaction has been duly reflected in the assessee's ICICI Ba....
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....ssessment order under appeal we note that in a very detailed and long assessment order running into 18 pages, the discussion is entirely centered around the investigation conducted by the Investigation Wing of the IT Department in the shares of M/s KAFL. We find the material/report of M/s. KAFL has been used extensively reproduced from page 4 to page 18 of assessment order to draw inference against the assessee when scrip of M/s. KAFL has nothing to do with that of assessee's claim. We also note that even in the concluding findings of the assessment order, the assessee's claim for exemption in respect of shares of M/s GCM Securities was rejected on the ground that the Investigation report proves that the transactions in shares of M/s KAFL was bogus. From plain reading of the assessment order therefore we find that except for making reference to the material/report of M/s. KAFL, the AO did not bring on record any tangible material on the basis of which he could hold that the appellant's transaction in M/s GCM Securities Ltd was bogus or sham. We find that no enquiry let alone worthwhile enquiry was conducted by the AO before drawing adverse inference against the appellant. We also n....
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....tion was settled by making / receiving payment by account payee cheques through proper banking channel. The assessee had paid securities transaction tax (STT) on sale of shares. The transaction took place at the price prevailing on stock exchange on respective transaction dates and there is no adverse finding by the lower authorities in respect to the documents produced by the assessee to substantiate the sale of M/s GCM Securities Limited.In the light of the documents filed as aforestated, the assessee has discharged the onus to prove the genuineness of the long-term capital gain derived on sale of shares. There is no evidence to show that the documents filed by the assessee before the AO are false and fabricated. 8. We also note that in the investigation report of the Department in the case of M/s KAFL much emphasis has been placed on the fact that the company's financials as well as net worth did not at all justify the prices at which the shares were transacted on stock exchange. With reference to the financial results of M/s KAFL as well as making reference to the financial track record as well as dividend declaration history, it was opined that the prices at which the shares ....
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....High Court of Punjab and Haryana in the case of Anupam Kapoor 299 ITR 179 wherein has held as under:- "The Tribunal on the basis of the material on record, held that purchase contract note, contract note for sates, distinctive numbers of shares purchased and sold, copy of share certificates and the quotation of shares on the date of purchase and sale were sufficient material to show that the transaction was not bogus but a genuine transaction. The purchase of shares was made on 28th April, 1993 i.e.. asst. yr. 1993-94 and that assessment was accepted by the Department and there was no challenge to the purchase of shares in that year. It was also placed before the relevant AO 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 regi....
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....hold that the transactions of buying or selling of shares were colourable transactions or were resorted to with ulterior motive. iv) CIT V. Shreyashi Ganguli [ITA No. 196 of 2012] (Cal HC) - In this case the Hon'ble Calcutta High Court held that the Assessing Officer doubted the transactions since the selling broker was subjected to SEBI's action. However the transactions were as per norms and suffered STT, brokerage, service tax, and cess. There is no iota of evidence over the transactions as it were reflected in demat account. The appeal filed by the revenue was dismissed. v) CIT V. Rungta Properties Private Limited [ITA No. 105 of 2016] (Cal HC) - In this case the Hon'ble Calcutta High Court affirmed the decision of this tribunal , wherein, the tribunal allowed the appeal of the assessee where the AO did not accept the explanation of the assessee in respect of his transactions in alleged penny stocks. The Tribunal found that the AO disallowed the loss on trading of penny stock on the basis of some information received by him. However, it was also found that the AO did not doubt the genuineness of the documents submitted by the assessee. The Tribunal held that the A....