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2021 (4) TMI 1252
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....The Commissioner of Income-tax (Appeals) -51, Mumbai (hereinafter referred to as the CIT(A) erred in upholding the action of the Deputy Commissioner of Income-tax, Central Circle - 3(4), Mumbai (hereinafter referred to as the Assessing Officer) in issuing a notice under section 153A of the Act. The appellant contends that the notice issued under section 153A is ab initio void inasmuch as the jurisdictional conditions for the issue of the said notice have not been complied with and consequently, the assessment framed is bad in law and needs to be quashed. The appellant further, contends that the notice issued under section 153A is ab initio void inasmuch as no incriminating documents have been found during the course of search proceedings and consequently, the assessment framed is bad in law and needs to be quashed. 2. The Assessing Officer erred in not complying with the provisions of section 153D of the Act and, thereby rendering the entire assessment proceedings null and void. The appellant contends that on the facts and in the circumstances of the case and in law, the Assessing Officer ought to have complied with the provisions of section 153D of the Act and hence, the ....
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....f bogus capital gains, which has been worked out at 6% of Rs. 44,39,566. The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned addition inasmuch as there is no capital gains that is bogus in nature and hence, the impugned addition ought to be deleted. The appellant further, contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned addition and the Assessing Officer has made the impugned addition only on the basis of surmises and conjectures and failed to bring any evidence on record to suggest that the appellant has incurred the impugned expenditure and hence, the impugned addition ought to be deleted. The appellant further, contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned addition inasmuch as the same is not arising out of any incriminating documents found during the course of search and hence, the impugned addition is vi....
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....s subjected to search & seizure action u/s 132 on 09/04/2015. The original return of income was filed by the assessee on 28/07/2010 at Rs. 43.97 Lacs. On the date of search, no assessment proceedings were pending against the assessee and accordingly, it was a case of non-abated assessment year. The main allegation of revenue was that the assessee introduced its own unaccounted money in the garb of bogus Long-Term / Short-term Capital Gains (LTCG / STCG). Accordingly, a search was carried out at premises of Shri Anil Agarwal, Karta of assessee-huf on 09/04/2015. His statement was recorded u/s 132(4) on 12/04/2015 during the course of search proceedings. A copy of the same is on record and we have perused the same. Shri Anil Agarwal is stated to be director in an entity namely M/s Comfort Securities Ltd. (CSL). M/s CSL is stated to be a registered stock broker with various stock exchanges. On the basis of statement, it was alleged by Ld. AO that many of the paper / bogus entities were allowed to become clients of M/s CSL and also allowed to do trading in shares so as to provide accommodation entry of bogus capital gains. Shri Anil Agarwal is stated to have become director, in individ....
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....m assessee's demat account, ledger extract of stock brokers and bank statements evidencing receipt of funds through banking channels. The transactions of sale as well as purchase were stated to be carried out through registered stock-broker namely M/s Comfort Securities Limited (CSL) on recognized stock exchange in online mechanism. 2.4 During the course of search proceedings, statement of Shri Anil Agarwal (Karta of assessee-HUF) was recorded on 12/04/2015 u/s 132(4), a copy of which is on record. Shri Anil Agarwal submitted that his concern M/s Comfort Securities Limited (CSL) had business nexus with various concerns. M/s CSL was, inter-alia, stated to have been rendering brokerage and consultancy services to M/s First Financial Services Limited (FFSL) and M/s Splash Media & Infra Ltd. (SMIL). M/s CSL did trading of various scrips including FFSL on behalf of its clients. However, it was alleged by Ld. AO that the clients had booked heavy losses in the trading of these shares since shares were purchased at high prices but sold when the prices were extremely low. It was alleged that trading so done was not a normal trading pattern. As against this, Shri Anil Agarwal maintained t....
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....proceedings, statement of Shri Anil Agarwal was again recorded u/s 131 on 27/08/2015, the relevant portion of which has been extracted in para 3.4 of the assessment order. Shri Anil Agarwal maintained that M/s CSL provided consultancy services to FFSL. He also denied having met Shri Chandrakant Mane (director of FFSL). It was noted by Ld. AO that Shri Anil Agarwal took over M/s SMIL and became director of that entity on 24/06/2015. The said entity was stated to have been engaged in real estate development having project at Charkop, Kandivali, Mumbai. Regarding question of manipulation in share prices of SMIL, Shri Anil Agarwal submitted that since he became director only on 24/06/2015, he had no idea about the same. Further, entire process of trading took place in online mechanism through the stock exchange platform. He also denied having carried out any accommodation entries. 2.8 In para 5.2, Ld. AO upon perusal of share prices of SMIL noted that there was sharp rise in the prices which was not correlated and commensurate with the financials of the company. There was phenomenal increase in share prices which would defy any logic of shares trading pattern in primary or secondary....
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....e garb of sale proceeds on sale of shares. • The share prices were manipulated on the stock exchange through artificial influences. • Various share brokers whose statements have been recorded have been used for providing entry of bogus LTCG /STCG /loss. Consequently, the claim so made by the assessee was to be rejected and sale proceeds of the shares were to be treated as undisclosed income of the assessee. 2.12 However, the assessee maintained that the short-term capital gains earned during the year were genuine and the same could not be treated as undisclosed income of the assessee. The assessee also controverted the conclusion of Ld. AO by submitting that SMIL had development rights in projects at Juhu and Kandivali in Mumbai and there was a bright chance for the company to increase profits. The attention was drawn to the fact that shares were purchased through recognized stock broker from stock exchanges and there was no preferential allotment to the assessee in a pre-arranged process as alleged by Ld. AO. Further, no violation regarding price manipulation was found by any authority. The shares were listed and trading took place in online mech....
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....any was not having any future plans which could attract investors from all over India to invest in the company. The whole process of preferential allotment was a prearranged and managed process so as to allot preferential shares to beneficiaries of bogus LTCG/STCG. The reported profits were also not commensurate with the price rise. The shares were rigged on the Stock Exchange. The price of Splash Media & Infra Ltd. has moved in absolute disregard to the general market sentiments. Various share brokers have confirmed the fact that the shares of Splash Media & Infra Ltd. have been used for providing entry of bogus LTCG/STCG. During this period of price rigging, the volume of the shares traded on each trading day was very low and on each day just 1-2 trades have been done with a constant rise in the price of the shares which was kept just short of the circuit limit for price rise as per the exchange guidelines. Various Exit Providers have confirmed that they have purchased the shares of Splash Media & Infra Ltd. to provide entries of bogus LTCG/STCG. The Statements on oath of Exit Providers constitutes a strong testimony in order ....
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....aries. It was alleged that the scrip of FFSL and SMIL were being controlled by Shri Anil Agarwal which led to survey action on Shri Anil Agarwal. It was admitted that as per the instructions of Shri R.K.Kedia, the scrip of FFSL was being manipulated so as to provide bogus LTCG to the beneficiaries. Moreover, share brokers namely Shri Anuj Agarwal of Korp Securities and Shri Pravin Agarwal of Gateway Financial Services Ltd. admitted that the scrips of FFSL and SMIL were penny stock scrips. Therefore, heavy onus was on assessee to substantiate the genuineness of gain earned on these scrips. The allegation of price rigging would draw support from the fact that SEBI, in its final order dated 02/04/2018, found FFSL, assessee, its Karta-Shri Anil Agarwal and certain entities of the assessee group including M/s CSL to be guilty of rigging the share prices and restrained / prohibited them from accessing the market or trading for a further period of 3 years. 3.3 The admission made by the assessee in terms of decision of Hon'ble Apex Court in P. R. Metrani V/s CIT 2006 287 ITR 209 wherein it was explained that books of account, documents, money, bullion, jewelery or other valuable article....
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...., jewellery or other valuable article or thing and any statements recorded of the persons searched may be used as evidence for any proceedings under the Act. The relevant portion of the order of the Hon'ble Supreme Court is reproduced as under: "18. Section 132 is a Code in itself. It provides for the conditions upon which and the circumstances in which the warrants of authorization can be issued. Subsection (2) authorizes the authorized officer to requisition the services of any police officer or of any officer of the Central Government or of both to assist him for all or any of the purposes for which the search is conducted. Under subsection (4) the authorized officer can during the course of search or seizure examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such persons during such examination may thereafter be used in evidence in any proceeding under the Act." 5.8 Further, proceedings before the Income-tax authorities, as explained by the Allahabad High Court in Gargi Devi Jwala Prasad v. CIT [1974] 96 ITR 97, are....
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....minating material unearthed during the search action. Earlier in the Block Assessments, the assessees used to challenge the additions made related to the transactions for which entries had been duly made in the regular books of accounts on the ground that the transactions have been duty recorded in the regular books and therefore cannot be treated as undisclosed transactions. Such an issue came up before the Hon'ble ITAT Ahmedabad in the case of N K Proteins Ltd (83 TTJ Ahd 904). The Hon'ble ITAT Ahmedabad held that it cannot be said that even if the material found during the course of search exposes the falsity of the entries made in the regular books of accounts, the consequent concealed income cannot be assessed as undisclosed income in Block Assessment. This decision of the Hon'ble ITAT Ahmedabad has also been approved by the Hon'ble Gujarat High Court. In the instant case, the falsity of the claim of LTCG was exposed in the search action and therefore, in principle the action of the AO of making the said additions while completing the assessment u/s 153A rws 143(3), cannot be faulted. 5.11 In view of the above detailed discussion, no infirmity is found....
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....s and provided consultancy services to SMIL but did not said anything about bogus gains in respect of shares of SMIL. He was not the director of SMIL at the time of transaction under consideration. He merely explained the modus operandi of providing bogus capital gains but in assessee's case, the shares were directly transacted in stock exchange through registered broker at prevailing market prices. The attention was also drawn to the fact that the statement so made by the assessee was already retracted which has grossly been ignored while making the assessment order and the retracted statement could not be the basis of the assessment. 4.3 The action of Ld. AO was further assailed by submitting that Ld. AO wrongly drew inference against the assessee on the basis of enquiry made by investigation wing in respect of some of the buyers who ultimately bought the shares sold by the assessee. The report of investigation wing was specifically demanded by the assessee for further comments and Ld. AO was requested to provide the list of beneficiaries to whom the accommodation entries were provided but the same was not done. Therefore, no adverse inference could be drawn against the assess....
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....oviders. During appellate proceedings, information was sought from BSE of the counter parties / exit providers to the assessee for the year in SMIL scrip. The same has been tabulated in para 6.16 of the impugned order. It was alleged that these exit providers were dummy exit providers. However, upon careful consideration of the same, we find that the persons who purchased SMIL shares from assessee during the year are all individual whereas enquires as stated to be carried out by investigation wing on six entities are corporate entities. Only one party i.e. Shri Rakesh Bansal who has purchased 1000 shares has been tainted by the investigation wing. 5.3 Proceeding further, the contents of statement given by Shri R.K.Kedia during search operations on 13/06/2014 were noted in para 6.20 of the order. In the said statement, Shri R.K.Kedia, inter-alia, admitted that FFSL and SMIL were paper companies being controlled and managed by Shri Anil Agarwal. Thereafter during survey on assessee group, statement of Shri Anil Agarwal was recorded. In reply to question No.25, Shri Anil Agarwal denied having done business of providing accommodation entries. However, he admitted to have helped S....
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....there were evidences indicating that the transactions of capital gain were accommodation transactions through a web of stock market and multiple dubious entities involved in a financial crime of tax evasion. Since the gains were abnormal and the exemption was claimed by the assessee, onus to prove the genuineness of the same was on the assessee and the assessee was free to produce the said persons as part of his defense. The fact that the appellant has failed to produce any such person involved in the transaction clearly shows that it has no bona-fide case in the matter. The persons whose statements were relied upon by Ld. AO were examined by the Investigation Wing and there were very elaborate and detailed statements in that regard and the assessee was not able to rebut a single affirmation. Therefore, to ask for a physical presence of the persons is only to delay the matter and no basis to justify the same could be brought out by the assessee and therefore, the said request was rightly not been accorded to by Ld.AO. Further, large number of people have been involved in this dubious activity and for the department to be expected to make all the persons to be present in each and ev....
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....y, Ground Nos. 1 to 4 of the appeal are dismissed. Aggrieved as aforesaid, the assessee is in further appeal before us. 6. Our findings and Adjudication 6.1 So far as the material facts are concerned, we find that the assessee has sold 22502 shares of a scrip namely SMIL during the year. The shares were purchased on 27/03/2009 at cost of Rs. 18.79 Lacs and sold during the period 19/08/2009 to 23/09/2009 for aggregate consideration of Rs. 44.39 Lacs, thereby yielding short-term capital gain of Rs. 25.59 Lacs in the hands of the assessee. The aforesaid gain has duly been reflected by the assessee in its original return of income. During the year, the assessee has disclosed short-term gain of Rs. 43.02 Lacs on various scrips including gain on this scrip. Similarly, net Long-Term Capital gains have been reflected on other scrips also. The Balance Sheet of the assessee reveals that it has year-end investment in shares for Rs. 93.44 Lacs and another investment of Rs. 103.50 Lacs in share warrants. The perusal of the Balance Sheet would show that a substantial portion of assessee's capital has been ploughed back by way of investments. On the basis of all these facts, it could ver....
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....fact, during appellate proceedings, the details of persons who bought assessee's shares was obtained form stock exchange. All these persons were individuals and not corporate entities as alleged by Ld.AO and identified by investigation wing as entities belonging to various entry providers. Therefore, the allegation that the shares were purchased by paper entities could also not be sustained. 6.3 So far as the observations of Ld. AO as to financial and profitability of SMIL is concerned, we find that the sales transactions have taken place in online mechanism through recognized stock exchange wherein the identity of the buyer would not be known and there would be no privity of contract between the assessee and prospective buyers of shares. In online mode of trade, the prices would be guided by the buyer willing to buy the shares at certain prices and the seller willing to sell the shares at certain prices. The prices would be guided more by the market forces rather than the financials or other parameters. There would be buyers and sellers lining up on either side of a potential trade; one party willing to part with ownership and other party willing to acquire the ownership. When ....
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....ery raised by Ld. AO. At the same time, the assessee demanded details of brokers who gave the statement that the assessee has taken accommodation entries and requested Ld.AO to provide cross-examination. Similar request was made to cross-examine the alleged exit providers. Vide para-6 of the reply, the assessee also demanded a copy of investigation wing, Kolkata which has allegedly mentioned that the assessee had given cash to anyone for getting capital gains with a request of cross-examination of those persons. It was specifically asked whether the assessee was named by any broker and operator and if so, the assessee be allowed cross-examination such persons. However, the aforesaid document as well as cross-examination was never provided by Ld. AO despite the fact that the said material / statement formed the very basis of Ld. AO's allegation / conclusion that the gains earned by the assessee were bogus in nature. 6.5 Evidently, the whole basis of disregarding assessee's transactions is the findings rendered by investigation wing in the case of Shri R.K.Kedia and various operators, entry providers and stock brokers. However, there is nothing in the orders of lower authorities w....
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....cision of Hon'ble Bombay High Court in H.R.Mehta V/s ACIT (387 ITR 561). As a matter of fact, the decision of Hon'ble Allahabad High Court in Gargi Devi Jwala Prasad V/s CIT (1974 96 ITR 97) as referred to by Ld. CIT(A), also support the proposition that the principles of natural justice are applicable to assessment proceedings. The elementary principle of natural justice is that the assessee should have knowledge of the material that is going to be used against him so that he may be able to meet it. 6.7 The Ld. CIT-DR has submitted that the statement of Shri Chandrakant Mane & Shri Nirmal Singh Mertia (directors of FFSL) was confronted to the assessee by way of question nos. 11 & 12 in statement recorded from Shri Anil Agarwal on 27/08/2015. However, we find that the assessee, in reply, has denied having known these persons. Moreover, no opportunity to cross-examine these persons has ever been provided to the assessee. The statement of Shri Vicky Agarwal & Shri Hitesh J. Kanjar of M/s CSL, as placed in the paper-book by Ld. CIT-DR, is statement made during survey operations, which on standalone basis would not hold much evidentiary value. Moreover, upon perusal of the same, we ....
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....ccounted commission has been made in the hands of M/s CSL which has been accepted, would also not carry much weight to decide the genuineness of gains earned by assessee-huf. The Ld. CIT-DR also advanced argument to submit that the report of investigation wing, Kolkata was uploaded on the internet and hence, there could be no grievance to the assessee by non-furnishing of the same. However, the said plea would not meet our approval in view of the fact that the adverse material as well as cross-examination was specifically demanded by the assessee and Ld. AO was under an obligation to do so to sustain additions in the hands of the assessee. 6.9 The proposition that that additions made purely on the basis of suspicious, conjectures or surmises could not be sustained in the eyes of law stem from the decision of Hon'ble Supreme Court in Omar Salay Mohamed Sait V/s CIT (1959 37 ITR 151) wherein it was held that the suspicion however strong could not partake the character of legal evidence as held by Hon'ble Supreme Court in Umacharan Shaw & Bros. V/s CIT (1959 37 ITR 271). The additions made on mere presumptions could not be sustained and there must be something more than mere suspic....
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....e prices were rigged to provide entry of LTCG / STCL to the beneficiaries. However, there is no admission as to the fact that assessee's gains were also obtained in such a manner. In reply to question No.12, Shri Anil Agarwal has offered an additional brokerage income of Rs. 20 Lacs on account of cash commissions. No reply to question No.13 has been given wherein a question was put as to LTCG earned on sale of scrip of FFSL. Upon perusal of the same, it could be gathered that Shri Anil Agarwal has not made any admission that the gains earned by the assessee-huf on sale of shares of SMIL and FFSL were bogus in nature. Proceeding further, it is to be noted that this statement also has been retracted immediately by way of an affidavit under the cover of letter dated 14/04/2015 by assessee to DGIT(Inv.), Mumbai, inter-alia, on account of the fact that the earlier statement was given under threat and undue influence by pressure. The retraction within such short span of time would drastically reduce evidentiary value of the statement particularly in view of the fact that the statement made on 12/04/2015 is not backed up by any corroborative incriminating material as found during the cour....
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....ng and the statements made by Shri R.K.Kedia and certain share-brokers of Kolkata (Shri Anuj Agarwal during survey on Korp Securities on 31/03/2015 and Shri Praveen Kumar Aggarwal during survey on Gateway Financial Services Ltd. on 11/02/2015), would constitute incriminating material. However, it is to be noted that all these statements were recorded well before the date of search on assessee and for assessee's case, these statements could not be said to be incriminating material found during the course of search. The report of investigation wing, Kolkata identifying 32 stockbrokers with respect to 84 scrips, as referred to by the lower authorities, was received on 27/04/2015 i.e. much after the date of search on assessee and therefore, the same would also could not be said to be incriminating material found during the course of search on assessee. The Ld. CIT-DR has pointed out that a survey action was conducted u/s 133A on FFSL and many incriminating material was found therein which would constitute incriminating material to implicate assessee. However, we are unable to accede to this plea since this material could not be said to have been found during search on assessee-huf. Sec....
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.... 39. We have carefully considered the submissions and perused the records. Firstly issue in appeal is that in assessment framed under section 153(A) in case of the unabated assessment addition without reference to incriminating material is not sustainable. This issue has been clearly spelt out and affirmed by honourable jurisdictional High Court in the Catena of case laws including that of continental warehousing (supra). 40. The learned departmental representative and the learned CIT appeals have tried to distinguish this decision from Hon'ble Bombay High Court by referring to Hon'ble Delhi High Court decision in the case of Kabul Chawla (supra). 41. In this regard we are of the considered opinion that the decision from honourable jurisdictional High Court in Continental Warehousing (supra) is clear and unambiguous. It was clearly held in that case that assessments which are not pending and which have attained finality, addition under section 153(A) cannot be done without reference to incriminating seized material. We may gainfully refer to the relevant order of the honourable High Court as under: "On a plain reading of section 153A, it becomes c....
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....from honourable jurisdictional High Court decision will not apply here. The learned departmental representative has mentioned that honourable High Court has referred about assessments which have been finalized. 43. In our considered opinion, the honourable jurisdictional High Court has never mentioned that it is only assessment which has been completed under section 143(3) that addition under section 153(A) cannot be done without reference to incriminating seized material. Honourable jurisdictional High Court has clearly mentioned that it is those assessments which are unabated, that is not pending, to which the above said ratio will apply. Assessments which are not pending are not only those which have been completed under section 143(3) but also those for which the time for issuing notice under section 143(2) have already elapsed. In other words the references is to those assessments in whose case assessment under section 143 (3) cannot now be done. It is not at all the case of the revenue that in the appeals which have been claimed as unabated here there was time for assessment under section 143(3). In this view of the matter, in our considered opinion, the submission o....
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....imilar situation held that, dehorse incriminating Material assessment u/s.153A is not sustainable in the case of unabated assessment. We may gainfully refer to the said decision as under: 44. After hearing both the parties and perusing the facts on record, we observed that undisputably the assessment in the instant year has not abated on the date of search. We further find that the evidences were gathered after issuing notice under section 133(6) that assessee has carried out synchronized trades for obtaining bogus LTCG. In our opinion, the said information/data is collected after the date of search and does not constitute incriminating material found and seized during the course of search. Keeping in view the said facts and circumstances, we are of the considered view that addition to the income of the assessee can only be made on the basis of incriminating record found during the course of search. In the present case, there is no such incriminating material and therefore, the AO has no jurisdiction to make addition in the unabated assessment. The case of the assessee is squarely covered by the decision of Hon'ble Bombay High Court decision in the case of Continental Ware....
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....m/2013 dt. 4.11.2015) 48. It may also be pertinent to note here that no seized material said to be incriminating was produced before us. In light of above said case laws the observation of learned CIT(A) that incriminating material need not be specific has no legs to stand. This very observation by the learned CIT(A) itself is an admission that no specific incriminating material has been seized and referred in the assessment order Hence, in all cases of unabated assessment the assessment fails on jurisdictional defect. Thus, ITA No. 6519/MUM/2019, 6520/MUM/2019, 6515/MUM/2019, 6516/MUM/2019, 6513/MUM/2019 & 6514/Mum/2019 are dismissed on account of jurisdictional defect. It could be noted that in the above matter also, except for statement u/s 132(4), there was no incriminating material. The statement was retracted by the assessee. Therefore, the bench held that addition on the basis of retracted statement, without there being corroborative material would not be sustainable as held in various decisions. Similar are the facts before us. Therefore, applying the ratio of aforesaid decisions, since the additions are not with reference to any incriminating material, the same....
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....ng the provisions of Section 68. The addition u/s 68, in our considered opinion, was not sustainable in view of the fact that credit in assessee's bank account represents sale proceeds of shares sold in recognized stock exchange through registered stock broker. The sale transactions have taken place through recognized stock exchange and the money was received in settlement through banking channels. The assessee had delivered the shares from his demat account to the broker, who, in turn, paid sale consideration to the assessee. In such a case, there could be no doubt as to fulfillment of primary ingredients of Sec.68 viz. identity of the payer, their creditworthiness and the genuineness of the transactions. The source of credit received in the bank account could not be held to be unexplained unless it was established that assessee's own money was routed in his bank account in the garb of Capital gains. 6.14 We find that on identical set of facts, similar addition made by revenue was deleted by coordinate bench of this Tribunal in the case of Dipesh Ramesh Vardhan & ors. V/s DCIT (ITA Nos.7648/Mum/2019 & ors. dated 11/08/2020; authored by one of us) by observing as under:- ....
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....e range reflected therein was in the range of Rs. 360/- to Rs. 600/- per share. The price range was stated to be in the same range for 15 months after the period of sale of shares by the assessee, which has not been disputed by the revenue. On the basis of all these facts, it could be gathered that the assessee had duly discharged the onus casted upon him to prove the genuineness of the stated transactions and the onus had shifted on revenue to rebut the same. 7. As against the assessee's position, the primary material to make additions in the hands of assessee is the statement of Shri Vipul Bhat and the outcome of search proceedings on his associated entities including M/s SAL. However, there is nothing on record to establish vital link between the assessee group and Shri Vipul Bhat or any of his group entities. The assessee, all along, denied having known Shri Vipul Bhat or any of his group entities. However, nothing has been brought on record to controvert the same and establish the link between Shri Vipul Bhat and the assessee. The opportunity to cross-examine Shri Vipul Bhat was never provided to the assessee which is contrary to the decision of Hon'ble Supreme Court ....
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....link between the assessee and Shri Vipul Bhat. We do not find any independent investigations by Ld. AO to bring on record any tangible material to corroborate the same. There are no evident or even allegation of any cash exchange between the assessee and group entities of Shri Vipul Bhat. This is further evidenced by the fact that no substantial incriminating material / wealth of that magnitude has been found during the course of search operations on assessee which would corroborate such presumption and prove that the transactions were sham transactions, in any manner. 9. The fact that the assessee could not produce the concerned person of M/s SAL was rightly controverted by submitting that the aforesaid entity was not under the control of the assessee and the assessee was under no obligation to do so. The existence of M/s SAL is beyond doubt since it was a listed corporate entity and secondly, it was subject matter of scheme of amalgamation u/s 391 to 394. The scheme of amalgamation was duly been approved by Hon'ble Bombay High Court. Therefore, the existence of the said entity could not be doubted, in any manner. 10. The above conclusion is further fortified by ....
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....ith. This case was dealing with gains earned by the assessee on sale of same scrip i.e. M/s Sunrise Asian Ltd. 13. Therefore, considering the entirety of facts and circumstances, we are not inclined to accept the stand of Ld.CIT(A) in sustaining the impugned additions in the hands of the assessee. Resultantly, the addition on account of alleged Long-Term Capital Gains as well as estimated commission against the same, stands deleted. The grounds of appeal, to that extent, stand allowed. Similar is the decision of Hon'ble Rajasthan High court in the case of CIT V/s Pooja Agarwal (ITA No. 385/2011 dated 11/09/2017) and the decision of Hon'ble Delhi High Court in Pr.CIT V/s Smt. Krishna Devi & ors. (ITA Nos. 125/2020 & ors. dated 15/01/2021). We find that the ratio of aforesaid decisions is equally applicable to the fact of the present case before us. Conclusion 6.15 Finally, keeping in the facts and circumstances of the case, we are inclined to hold that impugned additions are not sustainable in the eyes of law. The assessee had discharged the primary onus of establishing the genuineness of the transactions whereas the onus as casted upon revenue to corroborate the i....
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.... of notice u/s 143(2) was 30/09/2015. The assessment for both the year has similarly been framed u/s 143(3) r.w.s. 153A on 29/12/2017. The Long-term gains earned by the assessee have been treated as undisclosed income and added u/s 68. The Ld. AO has estimated commission of 6% in similar manner. The impugned order has confirmed the order of Ld. AO on similar logic and reasoning. Aggrieved, the assessee is in further appeal before us with identical grounds of appeal. 8.2 An additional point that arises for consideration in both these year is the fact that impugned order refers to the order of SEBI dated 02/04/2018 wherein SEBI has found FFSL, assessee, its Karta-Shri Anil Agarwal and certain entities of the assessee group including M/s CSL to be guilty of rigging the share prices and restrained / prohibited them from accessing the market or trading for a further period of 3 years. However, as brought on record by Ld. AR, the aforesaid order of SEBI was under further challenge by the aggrieved parties before Securities Appellate Tribunal (SAT) wherein by order dated 27/09/2019 Hon'ble SAT has held as under: - 5. We have heard the learned counsels for the parties. The c....