TaxTMI 
TaxTMI 
2019 (1) TMI 1900
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.... listed equity shares sold through Bombay Stock Exchange after payment by Security Transaction Tax, on the ground that it is a case of penny stock. 2. The facts in brief are that the assessee had purchased 1,000 shares of M/s. Kappac Pharma Ltd. at the face value of Rs. 13 per share on 13.09.2012. These shares were purchased through broker, M/s. Shah Tradwing Gujarat Pvt. Ltd. in off market transaction. After the purchase of shares, the share certificate along with share transfer deed duly signed by the transferee was given to the assessee. These shares after the transfer were shown as investment in the statement of affairs as on 31.03.2013. Later on, these shares were dematerialized in assessee's Demat account maintained with M/s. Ch....
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....r, he discussed the general modus operandi of Long-Term Capital Gain Schemes which was unearthed by the Directorate of Investigation, Kolkata. Thereafter, he referred to many judgments and finally held that amount of Rs. 6,80,000/- credited in the bank account of the assessee is an unexplained cash credit to be added u/s.68 which should be taxed under the rate of 30% as provided in Section 115BBE. 4. Ld. CIT(A) too has confirmed the said addition on the ground that the purchase of the share was off market transaction in physical form for which the assessee has shown to have made payment by cash and such a payment of purchase of share in cash is not in conformity with the regulatory guidelines of the SEBI. He further held that assessee was ....
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....showing deduction of STT on sale transaction. 6. Apart from that, he has also given the price history of stock of M/s. Kappac Pharma Ltd. from 28.05.2012 to 25.03.2014 showing that in BSE, this scrip was traded regularly and how the price has risen gradually and were always quoted in the BSE. At the time of sale, the stock price of M/s. Kappac Pharma Pvt. Ltd. was Rs. 693. He also drew our attention to the trading of shares as appearing in the contract note that these shares were traded in stock exchange in two lots and after the sale, the amount was directly credited to the bank account of the assessee. Thus, the credit appearing in the bank account was on account of sale of shares for which assessee has duly shown the possession of ....
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....he perusal of the entire assessment and appellate order, it is seen nowhere there is any evidence or information gathered during the course of any investigation or inquiry either from the broker or from the company M/s. Kappac Pharma Ltd. that assessee is beneficiary of any accommodation entry or has routed his own unaccounted money in the garb of fictious Long-Term Capital Gain. The entire addition has been made on hypothesis from general modus operandi adopted by various entry operators for providing accommodation entry in Long Term Capital Gain. Here, in this case, there is no reference of any entry provider or any information that the assessee has paid any unaccounted money for getting such kind of an accommodation entry. In the absence....
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....ansaction, either by himself or through some entry provider. There is no whisper in the assessment order or appellate order that any action has been taken by SEBI against M/s. Kappac Pharma or they have been found to be rigging the price in the stock exchange. Once a listed share which is regularly traded in the recognized stock exchange at quoted price and the sale of share is recorded in the stock exchange and sale proceeds of the said share has been credited in the bank account, then source of credit stands proved. Simply because the price of the scrip has risen manifold cannot per se be the ground to hold that credit in bank account of the assessee is unexplained. If there is some undisclosed or unexplained money which has been rou....