TaxTMI 
TaxTMI 
2020 (11) TMI 641
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.... of addition of Rs. 98,93,959/- by Ld. CIT(A) as made by the AO towards unexplained cash credit by treating the long term capital gain on sale of shares which were claimed by the assessee as exempt under section 10(38) and Rs. 66,948/- on account of commission paid for sourcing the long term capital gain. 3. The facts in brief are that the assessee filed the return of income electronically on 28.11.2014 declaring an income of Rs. 18,24,000/-. The case of the assessee was selected under scrutiny in CASS to examine the suspicious long term capital gain on shares. The AO observed that the assessee is beneficiary of long term capital gain of Rs. 98,93,959/- during A.Y. 2014-15 by purchasing and selling the scrips of M/s. Jolly Plastic Indust....
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..... The AO also relied on the statements recorded of the chairmen and main directors of the Companies involving in rigging of prices. Finally, the AO came to the conclusion that it was an organized way of doing price rigging, securing gains to beneficiaries by paying STT on the sale and purchase of shares done on the recognised stock exchange and finally treated the said long term capital gain as unexplained cash credit under section 68 of the Act and thus made an addition of Rs. 98,93,959/- and further added Rs. 66,948/- towards commission paid for securing such capital gain by framing assessment under section 143(3) of the Act dated 30.12.2016. 5. In the appellate proceedings, Ld. CIT(A) dismissed the appeal of the assessee by upholdi....
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....ket which was brought out by the director of investigation, Kolkata who conducted raid on the companies and operators who were engaged in providing bogus entries of long term capital gain by manipulating the prices of share on recognized stock exchange and the entire modus operandi was brought to fore. The Ld. D.R., therefore, relied heavily on the order of AO and Ld. CIT(A) and prayed before the Bench that the same may kindly be upheld by dismissing the appeal of the assessee. 8. We have heard the rival submissions of both the parties and perused the material on record. The undisputed facts are that the assessee purchased 43000 shares of M/s. Jolly Plastic Industries Ltd. on 08.05.2012 at a cost of Rs. 6,96,600/- through South Asia Port....
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.... of shares only and the source of credit in the bank account stands well established as required under section 68. The issue raised by the learned Assessing Officer and Ld. CIT(A) are that it is an unaccounted money which has been routed sham transaction of Long Term Capital Gain because for the reasons that; * Firstly, the trading of the shares of M/s. Jolly Plastic Ltd. was suspended by SEBI; and * Secondly, prices of the shares of the said company were being manipulated without any financial fundamentals. Both the authorities have quoted the general modus operandi and catena of judgment including that of Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT (1995) 214 ITR 801 and Mc. Dowell & Co. Ltd., 154 ITR 148. 11. From the p....
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....ssessee has to prove the nature and source of credit appearing in his books of account. Here, from the perusal of the nature of credit, it is seen that the same has come through sales of shares which fact has also not been doubted by the Department. The source of money is through broker who has undertaken the transaction of the shares lying with the assessee purchased in the earlier years and same has been sold after paying due taxes in the form of STT. Thus, nature of the credit stands fully explained. If it is to be held that assessee has routed his own unaccounted money, then there has to be some material to provide live link nexus to show that the unaccounted money has been routed under the garb perusal of the historic price of shares o....
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....that assessee has routed his own unaccounted money, then there has to be some material to provide live link nexus to show that the unaccounted money has been routed under the garb of transaction of purchase and sale of shares. If the availability of shares is not in doubt then the sale of the same also cannot be doubted in wake of the evidences as discussed above. Even for the sake of repetition, it is reiterated that it is not a case here that any such information or material was found or discovered that the assessee beneficiary of any accommodation entry nor there is any such statement or material either from the broker or from the stock exchange or from elsewhere. Thus, in the facts and circumstances of the case, we do not find ....