TaxTMI 
TaxTMI 
2019 (5) TMI 1670
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...., these appeals are being disposed of by this consolidated order for the sake of convenience and brevity. The grounds as well as the facts narrated in I.T.A. No. 2270/Kol/2018, for assessment year 2015-16, have been taken into consideration for deciding the above appeals en masse. 3. Grounds of appeal raised by the assessee as per "lead" case in I.T.A. No. 2270/Kol/2018, for assessment year 2015-16, are as follows: "1.a) That the Ld. CIT(A) erred in confirming the disallowance of Rs. 7,12,89,467/-made by the AO on account of deduction of LTCG claimed by the assesseeu/sl0(38) of the Act and made the alleged addition as unexplained cash credit u/s 68 based on the wild allegation. In the course of assessment as well as appellate proceedings, all the relevant supportive evidences were produced to prove the genuineness of the transaction i.e. Contract note, Bill and vouchers, Demat a/c statement etc. The said transaction was done through the Registered Stock Exchange Broker only and payment was made through proper banking channel. Therefore, the addition made by the Ld. AO and confirmed by the Ld. CIT(A) is unjustified and needs to be deleted. 1b) That the Ld. CIT(A....
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....d that the said long term capital gain of Rs. 7,12,89,467/- was shown by the assessee, as received in the return of income. The assessee during the course of assessment proceedings has furnished purchase bill of shares, bank statement, DP statement and some broker notes to strengthen his claim for long term capital gain. However, the Assessing Officer noted that there were direct evidences to show that the long term capital gain shown was not natural but was arranged one. Therefore, with this background an investigation was carried out by the investigation wing of the Department. The findings of the Directorate of Investigation Wing of Kolkata are as follows: "4.1. The Directorate of Investigation, Kolkata carried out a country wide investigation to unearth the organized racket of generating bogus entries of Long Term Capital Gains (LTCG) which is exempt from tax. The modus operandi adopted by the operators was to make the beneficiary buy some shares of a predetermined Penny stock company controlled by them. These shares are transferred to the beneficiary at a very nominal price mostly off-line through preferential allotment or off-line sale. The beneficiary (an individual....
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....perators who managed the dummy companies involved in price rigging. The money trial of transactions was also examined and, in a large number of transactions trial right from cash deposit account to the beneficiaries account was unearthed. As a result of investigation individuals who have been taken such entry of bogus LTCG amounting to several crores have been identified. The result of the investigation in brief as under: i) Individuals throughout the country identified who have taken such bogus entries ofLTCG amounting to several crores from 2010 to 2014. ii) The result of the enquiry was also shared with SEBI and the SEBI after investigating 11 cases have found the allegation to be correct. The balance cases are still being investigated by SEBI. iii) The TOP 25 groups under each investigation directorate of the country were confronted in course of further investigation. Almost all of them barring a few have accepted having taken the entries for a commission. A sum of crores has been voluntarily surrendered by such assessees. iv) In Kolkata, where this investigation was started some of the beneficiaries who had taken entries of nearly Rs. 40 cro....
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....hese scrips by pre-arranged and manipulated transactions. The entire transactions were carried out on the Stock Exchange to give it a colour of real transactions. 6. During the assessment proceedings the assessee submitted the papers/documents which were filed before the Registrar of companies, where the name of the assessee had reflected as a shareholder. The assessee furnished before the AO, the bank statement, contract notes and delivery instructions to the broker by way of proof that all these transactions were genuine. However, assessing officer rejected all the evidences and held that all evidences were pre-planned, therefore, he issued a show cause notice to the assessee and asked the assessee to prove the bona-fide of his claim. However, in response to the show cause notice issued by the Assessing Officer, the assessee submitted the following reply, which is reproduced below: "sub: Reply to show cause PAN: AASHS 7307 E Sir, In reference to your letter no. ACIT/Cir-32/Kol/2017-18/AASHS7307E/1423 dated 14.12.17 we would like to state as under: As regards to your contention that the LTCG earned by us in scrip's of Kailash Auto....
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....case the assessee had held the shares for at least 484 days which is much more than 365 days. If we at all think that the assessee was involved in so called LTCG organised racket then he would had very well could had sold the shares after the 366th day and not after so many days. iii. Assessee should have sold the shares In the instant case, the assessee has sold shares at the floor price of the Stock Exchange Contract Notes relevant the sale transaction have been furnished at the time of assessment proceedings. Further we would like to bring some fact to light that during the course of our hearing at SEBI office out of various shares sold by us it was observed by the Whole time member of SEBI that out of various shares so sold by Patwari family large number such shares which were being purchased by various FII's v.i.z. Blackrock Advisors, LLC A/C, The Master Trust Bank of Japan, Blackrock Real Asset Equity Trust, College Retirement Equities Fund, Emerging Markets Plus Series of Blackrock Quantitative Partners LLP, Ishares Core Emerging Markets Mauritius Co, Ishares India Mauritius Company, Ishares India se Mauritius Company, Merrill Lynch India Equities ....
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.... case of lifeline pharma price of the shares has increased from Rs. 6/- to Rs. 250/- (approx.), as on the date of sale. AO feels that this is unusual but let me site similar case; similar movement can be seen in the shares of Avenue Super Mart (DMART). On 24.03.15 DMART (Now Avenue Super Mart) issued 1,06,38,000 shares were issued at Rs. 34/-. On Private Placement and on the same date on 24.03.15 DMART (Now Avenue Super Mart) issued 41,51,800 shares were issued at Rs. 27/- on ESOP. Within 2 years thereafter on 21.03.17 the company got its shares listed with that day's closing price at Rs. 641.60 whooping 19 times above the last allotment and 64 times above the Face value. Whereas in our case the price had only increased by 41 times as compared from Face Value. As on today i.e. 21.12.17 closing basis its price has increased to Rs. 1150/- (approx.) i.e. increase by 33 times over allotted price and 115 times over the face value. As to your observation on para no. 5.2 regarding financials and comparative price of Kailash Auto we shall like to state that such movement can also be observed in other shares also and this movement does not make the shares dubious: Ther....
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.... like to state that we never had any business or personal connection with Shri Sunil Dokanta and would like to have opportunity to cross-examine the said person." 7. However, after going through the submissions of the assessee as noted above, the Assessing Officer held that the assessee has introduced / credited capital of Rs. 7,12,89,467/- during the year in his books, the source of which he had explained as proceeds from these share sale transactions. Since the explanation offered by the assessee in respect of the source of this capital introduced being share sale transactions has been held to be not satisfactory in view of the elaborate discussion made above, therefore section 68 is squarely applicable to the assessee, therefore, the amount of Rs. 7,12,89,467/- introduced / credited by the assessee out of these purported share sale receipts during the financial year 2014-15 in his capital account as his income being unexplained cash credit u/s 68 of the Income Tax Act. This way, the Assessing Officer made the addition u/s 68 of the Act to the tune of Rs. 7,12,89,467/-. 8. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ....
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....tions are reflected in the d-mat account. (vii) The purchase of shares (Investments) was not disputed in earlier year, where assessment is completed u/s. 143(3) of the Income Tax Act. (viii) These facts are verifiable from the regular books of accounts. (ix) The transactions can also be verified from the Stock Exchange. (x) Last but not the least that, SEBI has cleared them from the allegation of Market Rigging. Hence, the genuineness of the transaction cannot be doubted. The ld. Counsel therefore submitted before the Bench that the long term capital gain booked by way of transaction in the above said scrips would not be considered bogus and therefore addition made by the Assessing Officer should be deleted. 11. On the other hand, the ld. DR for the Revenue submitted that the assessee has generated bogus long term capital gain and therefore the order of the Assessing Officer should be upheld. In order to prove his stand, the ld. DR for the revenue submitted before the Bench the following authorities / precedents which we redecided in favour of the revenue: Therefore, ld DR for the Revenue submitted that assessee has generated bogus long ....
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....impugned order is a serious flaw which makes the order nullity. We note that same view expressed by the Hon`ble Calcutta High Court in the case of Eastern Commercial Enterprises 210 ITR 103 (Cal), wherein it was held that it is a trite law that cross examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against the party unless the party is put on notice of the case made out against him. Therefore, the addition made by the assessing officer based on thestatement of an alleged entry operator Sri Sunil Dokaniais not sustainable in law, as the assessing officer did not provide an opportunity to the assessee to cross examine the statement of Sri Sunil Dokania. 13. Now, coming to the merits of the assessee`s case, we note that ld Counsel for the assessee submitted before us paper book which contain the documents and evidences in support of the Purchase and sale of shares on which the long term capital gain(LTCG) arose to the assessee. These all documents and evidences were available before the ld CIT(A) as well as before the ld AO. The Assessee submitted before us following documents and evidences in respect of Kailash Auto Finance Lt....
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....debit transaction of the amount of Rs. 12,00,000/- paid for the purchase of shares,by cheque no. 037632 on 01.10.2012 (Paper Book Page No. 8) iii) Copy of statement of DEMAT account evidencing the debit of shares of Lifeline Drugs & Pharma Ltd. on 01.07.2014, 08.07.2014, 11.07.2014, 15.07.2014, 21.07.2014 and so on; (Paper Book Page No. 66-67) iv) Copy of Contract Notes evidencing the sale of shares of Lifeline Drugs & Pharma Ltd.; v) Copy of bank statement reflecting the transactions of sale of shares of Lifeline Drugs & Pharma Ltd. (Paper Book page No. 59-61) (3) EINS EDUTCEHLTD. (Now Aplaya Creations Ltd.) i)Copy of purchase bill dated 10.08.2013, reflecting the purchase of 50,000 shares of EINS Edutech Ltd. from Neptune Financial Advisory Pvt. Ltd. (Paper Book Page No.7); ii) Copy of Bank Statement reflecting the debit transaction of the amount of Rs. 8,00,000/- paid for the purchase of shares by cheque no. 37644 on 01.08.2013 (Paper Book Page No. 10) iii) Copy of statement of DEMAT account evidencing the debit of shares of EINS Edutech Ltd. on 01.12.2014, 02.12.2014, 06.12.2014, 11.12.2014 and so on; (Paper Book Page No.....
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....of shares are supported by contract notes. The payments were received through proper banking channel. (v) The purchase and sale transactions were subjected to Security Transaction Tax, Service Tax, Brokerage charges and Stamp duty. (vi) The share purchase and sale transactions are reflected in the D-mat account. (vii) The purchase of shares (Investments) was not disputed in earlier year, where assessment is completed u/s. 143(3) of the Income Tax Act. (viii) These facts are verifiable from the regular books of accounts. (ix) The transactions can also be verified from the Stock Exchange. (x) The SEBI has cleared these shares and scrips from the allegation of Market Rigging. Hence, the genuineness of the transaction cannot be doubted. 15. Now coming to the allegations made by the Assessing Officer for making the addition. The Assessing Officer alleged in the assessment order that on the basis of information received from the investigation wing, Kolkata, the claim of LTCGu/s 10(38) by the assessee is bogus. In the assessment order, the ld. Assessing Officer has mentioned the story that the list of 84 scrips identified by the ....
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....) The assessee is a regular investor in shares and securities as evident from past assessment records. ii) The shares were purchased and sold through a Registered Broker named "Eureka Stock & Share Broking Services Ltd." in the Stock Exchange. iii) The shares were purchased and sold based on the prevailing market condition. iv) The purchase and sale of shares are supported by contract notes. The payments were received through proper banking channel. v) The purchase and sale transactions were subjected to Security Transaction Tax, Service Tax, Brokerage charges and Stamp duty. vi) The share purchase and sale transactions are reflected in the d-mat account. vii) The purchase of shares (Investments) was not disputed in earlier year, where assessment is completed u/s. 143(3) of the Income Tax Act. viii) These facts are verifiable from the regular books of accounts. ix) The transactions can also be verified from the Stock Exchange. x) The interim order of SEBI about which the AO has discussed in his order, has been reversed by the final order of SEBI dated 21.09.2017,where the SEBI has cleared the assessee ....
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....nor any cross examination was allowed to prove the veracity of the statement. We note that the fact that in the statement of third party, the name of the assessee was not implicated. Even otherwise, according to Learned Counsel, no adverse inference could be drawn against the assessee on the basis of untested statements without allowing opportunity of cross-examination. For that we rely on the following judgements in support of the aforesaid view:- (i) Andman Timber Industries vs. CCE - [2015] 62 taxmann.com 3 (SC) (ii) ITO vs. Ashok Kumar Bansal - ITA No. 289/Agr/2009 (Agra ITAT) (iii) ACIT vs. Amita Agarwal & Others - ITA No. 247/(Kol) of 2011 (Kol ITAT) (iv) ITO vs. Bijaya Ganguly- ITA Nos. 624 & 625/Kol/2011 (Kol ITAT) (v) Ganeshmull Bijay Singh Baid HUF vs. DCIT - ITA Nos. 544/Kol/2013 (Kolkata ITAT) (vi) Rita Devi & Others vs. DCIT - IT(SS))A Nos. 22-26/Kol/2p11 (Kol-ITAT) (vii) Malti Ghanshyambhai Patadia vs. ITO - ITA No.3400/Ahd/2015Ahmedabad ITAT) (viii) Pratik Suryakant Shah vs. ITO - [2017] 77 taxmann.com 260 (Ahmedabad ITAT) Therefore, the addition made by the assessing officer based on thestate....
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....s mentioned at paragraph 5 of this order in the matter of Kailash Auto. As regards remaining entities in the scrip of Kailash Auto, violations under SEBI Act, PFUTP Regulations, etc., were observed and SEBI shall continue its proceedings against them. Hence, the directions issued vide confirmatory order dated June 15, 2016 against the remaining 2 entities shall continue. This revocation order is without prejudice to any other action SEBI may initiate as per law." We note that in the above order of the SEBI, the name of the assessee is also mentioned in the serial no. 154. Therefore, the SEBI itself has freed the assessee from market rigging allegation and thus the assessee is proved to be a bona-fide investor not involved in any malicious activities.Hence, considering the above, it is abundantly clear that no doubt can be arisen about the shares being penny stock. 17. We note that the assessee had never entered into any transaction with Sri Sunil Dokania against whom investigation wing had allegedly made inquiry. We also note that in the extracts of the statement of Sri Sunil Dokania given in the Show Cause notice, it is nowhere mentioned that the alleged person has provided ....
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....vidence to establish a link that the assessee had brought back his unaccounted income in theform of LTCG. 20. We note that since the purchase and sale transactions are supported and evidenced by Bills, Contract Notes, Demat statements and bank statements etc., and when the transactions of purchase of shares were accepted by the ld AO in earlier years, the same could not be treated as bogus simply on the basis of some reports of the Investigation Wing and/or the orders of SEBI and/or the statements of third parties. In support of the aforesaid submissions, the ldCounsel, in addition to the aforesaid judgements, has referred to and relied on the following cases:- (i) Baijnath Agarwal vs. ACIT - [2010] 40 SOT 475 (Agra (TM) (ii) ITO vs. Bibi Rani Bansal - [2011] 44 SOT 500 (Agra) (TM) (iii) ITO vs. Ashok Kumar Bansal - ITA No. 289/Agra/2009 (Agra ITAT) (iv) ACIT vs. Amita Agarwal & Others - ITA Nos. 247/(Kol)/ of 2011 (Kol ITAT) (v) Rita Devi & Others vs. DCIT - IT(SS))A Nos. 22-26/Kol/2p11 (Kol ITAT) (vi) Surya Prakash Toshniwal vs. ITO - ITA No. 1213/Kol/2016 (Kol ITAT) (vii) Sunita Jain vs. ITO - ITA No. 201 & 502/Ah....
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....ustified in taking an adverse view against the assessee on the ground of abnormal price rise of the shares and alleging price rigging. It was submitted that there is no allegation in orders of SEBI and/or the enquiry report of the Investigation Wing to the effect that the assessee, the Companies dealt in and/or his broker was a party to the price rigging or manipulation of price in BSE/CSE. The ld AR referred to the following judgments in support of this contention wherein under similar facts of the case it was held that the AO was not justified in refusing to allow the benefit under section 10(38) of the Act and to assess the sale proceeds of shares as undisclosed income of the assessee under section 68 of the Act :- (i) ITO vs. Ashok Kumar Bansal - ITA No. 289/Agr/2009 (Agra ITAT) (ii) ACIT vs.Amita Agarwal & Others - ITA Nos. 247/(Kol)/ of 2011 (Kol ITAT) (iii) Lalit Mohan Jalan (HUF) vs. ACIT - ITA No. 693/Kol/2009 (Kol ITAT) (iv) Mukesh R. Marolia vs. Addl. CIT - [2006] 6 SOT 247 (Mum) 23. We note that the ld. D.R. for the Revenue had heavily relied upon the decision of the Hon'ble Bombay High Court in the case of Bimalchand Jain in Tax A....
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....s transactions in alleged penny stocks. The Tribunal foundthat the ld AO disallowed the loss on trading of penny stock on the basis ofsome information received by him. However, it was also found that the ld AO did not doubt the genuineness of the documents submitted by theassessee. The Tribunal held that the ld AO's conclusions are merely basedon the information received by him. The appeal filed by the revenue wasdismissed. (iii) CIT V. Andaman Timbers Industries Ltd [ITA No. 721of 2008] (Cal-HC) In this case the Hon'ble Calcutta High Court affirmedthe decision of this Tribunal wherein the loss suffered by the Assessee wasallowed since the ld AO failed to bring on record any evidence to suggestthat the sale of shares by the Assessee were not genuine. (iv) CIT V. Bhagwati Prasad Agarwal [2009- TMI-34738 (Cal- HC) in ITA No. 22 of 2009 dated 29.4.2009] In this case the Assesseeclaimed exemption of income from Long Term Capital Gains. However, the ld AO, based on the information received by him from Calcutta StockExchange found that the transactions were not recorded thereat. He therefore held that the transactions were bogus. The Hon'ble Jurisdicti....
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....ted the IT return, ledger copy, letter to AO and PAN of the broker in support of his claim which is placed at pages 72 to 75 of the paper book. The ld. AR produced the purchase & sale contracts notes which are placed on pages 28 to 69 of the paper book. The purchase and sales registers were also submitted in the form of the paper book which is placed at pages 76 to 87. The Board resolution passed by the company for the transactions in commodity was placed at page 88 of the paper book. On the other hand, the ld. DR relied in the order of the lower authorities. 4.1 From the aforesaid discussion we find that the assessee has incurred losses from the off market commodity transactions and the AO held such loss as bogus and inadmissible in the eyes of the law. The same loss was also confirmed by the ld. CIT(A). However, we find that all the transactions through the broker were duly recorded in the books of the assessee. The broker has also declared in its books of accounts and offered for taxation. In our view to hold a transaction as bogus, there has to be some concrete evidence where the transactions cannot be proved with the supportive evidence." (vii).M/s Classic Gr....
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....nctions are bound by the decisions of the High Court within whose territorial jurisdiction these Courts, Tribunals &authorities functions. Therefore, respectfully following the judgments of the Jurisdictional, Hon`ble High Court of Calcutta, on similar and identical facts, the addition made by assessing officer should be deleted. 25. We note that when the transactions were as per norms prescribed by SEBI and concerned stock exchange and suffered STT,brokerage, service tax, and cess. There is no iota of evidence over thetransactions as it were reflected in demat account. AO did not doubt the genuineness of the documents submitted by assessee. Theld AO failed to bring on record any evidence to suggestthat the sale of shares by the Assessee were not genuine. The assessee produced the contract notes, details of demataccounts and produced documents showing all payments were received bythe assessee through banks. In these circumstances, the long term capital gain (LTCG) earned by the assessee should not be treated as bogus, as held by the Coordinate Benches of ITAT Kolkata, in the following cases: (i). Mr. Sanjiv Shroff,I.T.A. No. 1197/Kol/2018, Assessment Year: 2014-15, orde....
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....rt in the case of Krishnanand Agnihotri vs. The State of Madhya Pradesh [1977] 1 SCC 816 (SC). In this case the Hon'ble Apex Court held that the burden of showing that a particular transaction is benami and the appellant owner is not the real owner always rests on the person asserting it to be so and the burden has to be strictly discharged by adducing evidence of a definite character which would directly prove the fact of benami or establish circumstances unerringly and reasonably raising inference of that fact. The Hon'ble Apex Court further held that it is not enough to show circumstances which might create suspicion because the court cannot decide on the basis of suspicion. It has to act on legal grounds established by evidence. The ld AR submitted that similar view has been taken in the following judgments while deciding the issue relating to exemption claimed by the assessee on LTCG on alleged Penny Socks. (iii) ITO vs. Ashok Kumar Bansal - ITA No. 289/Agr/2009 (Agra ITAT) (iv) ACIT vs. J. C. Agarwal HUF - ITYA No. 32/Agr/2007 (Agra ITAT) 30. Moreover, it was submitted before us by ld AR that the AO was not justified in taking an adverse view agains....
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....tion." (ii) Jagmohan Agarwal Vs. ACIT, ITA No.604/Kol/2018, order dated 05.09.2018. "35.In the light of the documents stated in para 30 at Page14(supra) we find that there is absolutely no adverse material to implicate the assessee to the entire gamut of unfounded/unwarranted allegations leveled by the AO against the assessee, which in our considered opinion has no legs to stand and therefore has to fall. We take note that the ld. DR could not controvert the facts which are supported with material evidences furnished by the assessee which are on record and could only rely on the orders of the AO/CIT(A). We note that the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore consequently fail. At the cost of repetition, we note that the assessee had furnished all relevant evidence in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. Neither these evidences were found by the AO nor by the ld. CIT(A) to be false or fictitious or bogus nor the AO had issued any notice to the b....
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.... the allotment of shares was made through an account payee cheque (copy of the bank statement evidencing the source of money). Annual return no. 20B was filed with Registrar of companies by SCITIL showing the assessee's name as shareholder. The assessee lodged the said shares with the Depository ESSBSL with a Demat request. The said shares were dematerialized and copy of demat request slip along with the transaction statement is placed on record. Later on, the High Court approved the scheme of amalgamation of SCITIL with CSL. In accordance with the said scheme of amalgamation, the assessee was allotted 50000 equity shares of CSL. The demat shares are reflected in the transaction statement of the period from 1-11-2011 to 31-12-2013. The assessee sold 50000 shares through her broker SKP which was a SEBI registered broker and earned a Long Term Capital Gain. Copy of Form No. 10DB issued by the broker, in support of charging of S.T.T. in respect of the transactions appearing in the ledger is placed on record. The holding period of the said scrip is more than one year (above 500 days) through in order to get the benefit of claim of Long Term Capital Gain the holding period is requir....
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....ted based on mere conjectures unverified by evidence under the pretentious garb of preponderance of human probabilities and theory of human behaviour by the department. It is well settled that evidence collected from third parties cannot be used against an assessee unless this evidence is put before him and he is given an opportunity to controvert the evidence. In this case, the Assessing Officer relied only on a report as the basis for the addition. The evidence based on which the DDIT report was prepared is not brought on record by the Assessing Officer nor is it put before the assessee. The submission of the assessee that she is just an investor and as she received some tips and she chose to invest based on these market tips and had taken a calculated risk and had gained in the process and that she is not party to the scam etc., has to be controverted by the revenue with evidence. When a person claims that she has done these transactions in a bona fide and genuine manner and was benefitted, one cannot reject this submission based on surmises and conjectures. As the report of investigation wing suggests, there are more than 60,000 beneficiaries of LTCG. Each case has to ....
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....ion. The Assessing Officer was duty bound to make inquiry from all concerned parties relating to the transaction and then to collect evidences that the transaction entered into by the assessee was also a collusive transaction. However, the Assessing Officer has not brought on record any evidence to prove that the transactions entered by the assessee which are otherwise supported by proper third party documents are collusive transactions. The Assessing Officer having failed to bring on record any material to prove that the transaction of the assessee was a collusive transaction could not have rejected the evidences submitted by the assessee. In fact, in this case nothing has been found against the assessee with aid of any direct evidences or material against the assessee despite the matter being investigated by various wings of the Income Tax Department hence under these circumstances nothing can be implicated against the assessee One is bound to consider and rely on the evidence produced by the assessee in support of its claim and base decision on such evidence and not on suspicion or preponderance of probabilities no material was brought on record by the Assessin....
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....as deleted the addition and allowed the claim of LTCG. The assessee`s case is also covered by the various judgments of Jurisdictional High Court of Calcutta, as noted (Supra). We, therefore, respectfully following the same, set aside the order of Ld. CIT(A) and direct the AO not to treat the long termcapital as bogus and hence we delete the addition of Rs. 7,12,89,467/-. 27. The next issue in ITA No.205/Kol/2018, for A.Y. 2014-15 is in relation to confirming the addition of Rs. 57,02,785/- as unexplained expenditure towards commission charges of sale of such shares by the operator. We have already held that the transactions relating to LTCG were genuine and not the accommodation entries as alleged by the AO. Consequently, the addition of Rs. 57,02,785/- is hereby directed to be deleted. We accordingly hold that the issue is allowed in favour of the assessee. 28. Same above detailed reasoning to be followed in all remaining appeals, being, ITA No. 2268 & 2269/Kol/2018, case of former assessee and in case of latter assessee's in ITA No.205/Kol/2018, for A.Y. 2014-15, as it transpires that there are common and identical issues are involved in these two assessees relating to the ....
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....of and there was some deficiencies Assessing Officer held such transaction as ingenuine. Addition made by the Assessing Officer was upheld / Where assessee could not explain acquisition of such shares with proper documents, the sale proceeds had to be added as income under section 68. Smt. M. K. Rajeswari IN THE INCOME TAX APPELLATE TRIBUNAL "SMC-C" BENCH BANGALORE (on 12.10.2018) Vandana K Metha Income Tax Appellate Tribunal "F", Bench, Mumbai (on 18 July, 2013) It is observed that, there is no merit in the contentions of the assessee in the light of the facts that there is prevalent practice in the country through which unaccounted money is converted into long term capital gain by circuitous means. It is observed that in the light of the duration of holding period, the financials of the company whose shares were transacted, and other material Revenue has brought on record sufficient to demonstrate that unaccounted money was introduced in the books of accounts through long term capital gain by adopting such method. It is observed that whatever judicial pronouncements are relied on, these are in those cases where ....
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....uch a joint and several penalty as it is now abundantly clear that the appellants were acting together and together they inflated the notional value of their shares to more than Rs. 132 crore. If they could be party to such a fraudulent scheme whether they are a homogeneous group or otherwise they should find a way to fulfill the consequences obligation of paying the penalty jointly and severally imposed upon them. Gains from Penny Stocks: If the purchase of shares has been made solely and exclusively with the intention to resell at a profit and the purchaser has no intention of holding then the transaction is an "adventure in the nature of trade" and the gains are assessable as "business profits" and not as "short-term capital gains" Ratnakar M. Pujari, Income Tax The assessee purchased of 4000 shares of M/s Shiv Om Investment and Appellate Tribunal "D" Consultancy Limited for Rs.4,080/- off-market and payment was made in Bench, Mumbai (on 3 August, cash. The said purchases have been treated as bogus and sham as it was 2016) AY: 2006-07 observed by the AO that certain brokers have manipulated and issued pre-dated contract notes....
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....Taxman 1 (Bom) (CIT Versus Smt. Datta M. Shah) and relied on by the learned counsel for the assessee are distinguishable on facts and cannot be applied to the case in hand. From the above, I find that identical issue has been decided by the Hon'ble jurisdictional High Court against the assessee. Furthermore, the plethora of judgements referred by the Id. Commissioner of Income Tax (Appeals) in his order also supports the case of the assessee. Accordingly, I do not find any infirmity in the orders of the authority below. Accordingly, I uphold the same. Document 7 Financial Assessment Balance year year Details of No. Sheet of Value Investment shares in Investments of in shares which investment is made 2014-15 2015-16 2013-14 2014-15 At page no. 117 At page no. 121 At page no. 119 14 16,79,92,772/- At page no. 122 15 1,56,51,000/- 2012-13 2013-14 At page no. 124 At page no. 10 2,23,78,742/- 126 Document 8 Purchase Name of the SI Share No. of Shares Value Sale Value (Rs.) Long Term Capital gains No. (Rs.) (Rs.) Ka....
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....5,309 10,20,309 Kailash Auto 30000 10-02-2012 30,000 08-05-2014 12,66,357 12,36,357 Kailash Auto 30000 09-10-2012 30,000 26-05-2014 12,55,870 12,25,870 Kailash Auto 25000 09-10-2012 25,000 20-06-2014 7,64,940 7,39,940 Kailash Auto 25000 09-10-2012 25,000 04-07-2014 8,99,505 8,74,505 Kailash Auto 25000 09-10-2012 25,000 07-07-2014 9,10,743 8,85,743 Kailash Auto 25000 09-10-2012 25,000 18-07-2014 8,87,020 8,62,020 Kailash Auto 25000 09-10-2012 25,000 31-07-2014 8,84,521 8,59,521 Kailash Auto 50000 09-10-2012 50,000 27-08-2014 16,84,143 16,34,143 Kailash Auto 40000 09-10-2012 40,000 02-09-2014 13,03,372 12,63,372 Kailash Auto 28000 09-10-2012 28,000 15-09-2014 9,59,907 9,31,907 Kailash Auto 56000 09-10-2012 56,000 16-09-2014 19,14,219 18,58,219 Kailash Auto 50000 09-10-2012 Kailash Auto 150000 09-10-2012 50,000 1,50,000 16-10-2014 25-11-2014 11,20,916 10,70,916 23,62,258 22,12,258 2,35,57,282 Total Lifeline Dru....