TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 1635
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....is a SEBI registered stock broker. The assessee company has membership of the National Stock Exchange of India (NSE), Bombay Stock Exchange Ltd. (BSE) and MCX Stock Exchange (MCX-SX). This company is mainly engaged in the business of dealing in shares and securities. It filed return of income on 29.09.2014 declaring total income of Rs. 3,12,23,356/-. The Assessing Officer competed assessment u/s 143(3) on 28.12.2016 determining the total income of the assessee at Rs. 6,52,94,158/-, inter alia disallowing, trading loss arising out of purchase and sale of shares of five companies namely (i) COMFINCAP, (ii) FIRFIN, (iii) GBLINFRA, (iv) NIKKIGL AND (v) RUTRINT during the year, on the ground that the same is treated as bogus. The Assessing Offic....
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.... to claim bogus loss. Since assessee has traded and incurred losses in shares of these five scripts and these scripts are among the 84 companies which has been identified and unearthed by the DIT (lnv.), Kolkata for being used for providing bogus accommodation entries of losses and gains, I do not consider it imperative to conduct any further enquiry into the documents submitted by the assessee, Hence, Rs. 3,37,70,302/- is disallowed u/s 68 and added back to the total income of the assessee company. Penalty proceeding u/s 271(1)(c) is initiated separately." 3. Aggrieved the assessee carried the matter in appeal before the ld. CIT(A). The ld. First Appellate Authority considered all the submissions of the assessee and granted relief to the....
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....ere manipulated to ensure that some of the beneficiaries received long term capital gain and that reverse modus operandi was adopted in order to provide short term capital loss to certain persons. He argued that the beneficiaries bought shares from existing promoters either through offline mode or through online mode and after a period of more than one year, prices of such scripts increased about 10 to 20 times the price of purchase giving rise to exempt long term capital gain. He submitted that the associated operators on his own or with the help of financial support of intermediary agent purchased a company listed on BSE and having a small capital base and thereafter the operators manipulated the share prices to provide bogus long term ca....
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....bed settlement period of the Stock Exchange. 4. These demat accounts are maintained under the relevant provisions contained in the Depository Act, 1996. 5. The copy of the entire demat account for the relevant year were filcd and the AO has not pointed out any discrepancy in such demat account. (PB, page- 199 to 224 & 322 to 323) 6. There is no offline transaction by the appellant. There is no transaction in the nature of bonus/preferential allotment/private placement etc. Even the AO has not doubted that the transactions were not through online trading system. 7 The appellant during the relevant Assessment Year 2014-15, has traded in more than 672 scripts listed in the SEBI recognized stock exchanges, viz., National Stock Excha....
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....pellant have not filed any revised return to surrender the claim of loss and no investigation was ever conducted by any investigation wing in appellant's case. 11. All the transactions were in the nature of proprietary trades and were executed in appellant's proprietary account for which no broker note is generated as per the trading regulation of the Stock Exchanges. In case of proprietary trades, the assessee is provided with system generated trade files by the stock exchange in which the settlement number, settlement date, trade date, distinct order numbers, order time, trade numbers and trade time are mentioned, which has been duly filed before the Assessing Officer during the course of assessment proceedings vide letter date....
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....ded by the Investigation wing, the Assessing Officer came to a conclusion that the entire transaction of loss on purchase and sale of shares as bogus. Therefore, I am inclined to hold that the action of AO was predetermined and completely guided by the DDIT (Inv) Kolkata's report. Thus after careful consideration of the entire gamut of assessment order, report of the investigation wing, an independent enquiries conducted by the AO during the assessment proceeding from Bombay Stock Exchange and the result of such enquiry as mentioned at para 1.7 of the assessment order, written submissions as well as the paper book submitted by the AR during the appellate proceeding and the decisions relied upon by the AR of the appellant, the disallowance a....