TaxTMI 
TaxTMI 
2019 (7) TMI 1514
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.... persons whose statements have been recorded on the back of the assessee and has been used adversely, moreso, when specific request was also made for the same. 1.2 That the findings of addition of Rs. 73,77,806/- U/s. 68 are based on no cogent material whatsoever and is a result of assumptions, presumptions, surmises and conjectures." 3. Brief facts of the case are that during the year, the assessee has declared income of Rs. 4,96,650/- by filing the ITR online on 20.03.2015. She has shown income from house property, business and other sources. She has also shown long term capital gains of Rs. 73,77,806/- and claimed it as exempt u/s 10(38). The Assessing Officer made addition of the Long Term Capital Gain u/s 68 of the Act after taking into consideration the affairs of the assessee which was supported by the findings of investigations done by the Revenue department at Kolkata. The ld. CIT (A) confirmed the addition made by the Assessing Officer for which the assessee is in appeal before us. 4. During the hearing the ld. AR argued that the assessee has purchased 1,500 shares of Smartchamps IT & Infra Ltd. vide cheque no. 31022494 dated 18.09.2011. The bank account depicting ....
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....Smartchamps IT & Infra Ltd 1,50,000/- 21.02.2013 Letter dated 21 February 2013 from M/s Cressanda Solutions Limited informing the issue of shares pursuant to the Scheme of Amalgamation of Smartchamps IT and Infra Ltd. with Cressanda Solutions Limited, approved by the Hon'ble High Court of Bombay vide order dated 24 January 2013 to prove the conversion of shares of M/s Smartchamps IT & Infra Limited into the shares of M/s Cressanda Solutions Limited in the ratio of 1:1 as on record date of 21 February 2013 (15000 shares received) This was conveyed to the assessee by M/s Sharepro Services (India) Pvt. Ltd. who was the Share Transfer agent of M/s Cressanda Solutions. 05.07.2013 Dematerialization of shares through DP, M/s KK Securities Ltd. 18.07.2013 to 12.09.2013 Sale of 15000 shares @ varying between Rs. 501.75 to Rs. 503.50 through M/s Religare Securities.(broker) 73,77,806/- 6. The ld. AR argued that the decisions have made solely on the report of the Investigation Wing and the statement of the persons recorded during the survey and opportunity of cross examination has not been provided. He further relied on the order of the Co-ordinate Bench ....
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.... not solely based on the statement of witness but a number of corroborative and direct evidences collected by the department and hence, the case of Andman Timber Industries is differentiated on facts. 8. Heard the arguments of both the parties and perused the material available on record. 9. We have gone through the rationale given by both the parties pertaining to their arguments. In this case, it is an uncontroverted fact that the assessee has failed to prove the genuineness of the transaction. The AO has worked out the glaring facts, which cannot be ignored and which are clear indicative of the non-genuine nature of the transactions. The assessee could not satisfactorily explain how the investments in the absence of any evidence as to the financials, growth and operations of the company could earn profit of 4910% over a short period of 5 months from the date of allotment of shares (21.02.2013-date of allotment and 18.07.2013 to 12.09.2013 -date of sale) of Cressanda Solutions Ltd. against the purchase of 15,000 shares of Smarchamps IT and Infra Ltd. on 22.09.2011. Most importantly, in spite of earning so much of profit, the assessee has never embarked upon any transactions f....
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....ans And Advances 0.00 0.00 0.00 0.00 0.01 Other Current Assets 0.00 0.08 0.05 0.05 0.00 Total Current Assets 0.10 0.31 29.37 26.95 0.05 Total Assets 29.30 29.81 53.68 53.98 1.79 Profit & Loss account of Cressanda Solution ---------------- in Rs. Cr. -------------- Mar 16 Mar 15 Mar 14 Mar 13 Mar12 12mths 12mths 12mths 12mths 12mths INCOME Revenue From Operations [Gross] 0.00 0.00 6.44 0.99 0.00 Revenue From Operations [Net] 0.00 0.00 6.44 0.99 0.00 Total Operating Revenues 0.00 0.00 6.44 0.99 0.00 Other Income 0.03 0.17 0.14 0.07 0.02 Total Revenue 0.03 0.17 6.58 1.06 0.02 EXPENSES Operating And Direct Expenses 0.00 0.00 5.14 0.08 0.00 Changes In Inventories Of FG,WIP And 0.00 0.00 0.70 0.00 0.00 Stock-In Trade Employee Benefit Expenses 0.05 0.04 0.03 0.06 0.00 Depreciation And Amortization Expenses 0.01 0.01 0.01 0.01 0.00 Other Expenses 0.14 0.28 2.14 0.41 0.04 Total Expe....
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....to the unreliability of the entire transaction of shares giving rise to such capital gains. The ratio laid down by the Hon'ble Supreme Court in the case of Sumati Dayal vs. CIT, 214 ITR 801 is squarely applicable to the case. Though the assessee has received the amounts by way of account payee cheques, the transactions cannot be treated as genuine in the presence of the overwhelming evidences put forward by the Revenue. The fact that in spite of earning such steep profits, the assessee never ventured to involve himself in any other transaction with the broker cannot be a mere coincidence of lack of interest. Reliance is placed on the judgment in the case of Nipun Builders and Developers Pvt. Ltd. (supra), where it was held that it is the duty of the Tribunal to scratch the surface and probe the documentary evidence in depth, in the light of the conduct of assessee and other surrounding circumstances in order to see whether the assessee is liable to the provisions of section 68 or not. In the case of NR Portfolio , it was held that the genuineness and credibility are deeper and obtrusive. Similarly, the bank statements provided by the assessee to prove the genuineness of the transac....