TaxTMI 
TaxTMI 
2018 (10) TMI 1914
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.... a sum of Rs. 11,02,118/- as unexplained income u/s.68 of the Act. 2. Ld. Counsel for the assessee submitted that assessee had sold 31500 shares of one M/s. Kailash Auto Finance Ltd for a consideration of Rs. 11,02,118/- and earned long term capital gains of Rs. 10,70,618/- arising from such sale, which was claimed as exempt u/s.10(38) of the Act. As per the ld. Authorised Representative, the lower authorities disbelieved the sale of the shares, relying on reports of Directorate of Income Tax (Investigation) Kolkata and Delhi, which mentioned that M/s. Kailash Auto Finance Ltd was a penny stock company. As per the ld. Authorised Representative, assessee had purchased 31,500 shares of M/s. Kailash Auto Finance Ltd on 9.4.2013 for Rs. 31,500....
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....Tribunal had given directions to the ld. Assessing Officer for reconsidering the issue adhering to the rules of natural justice. 3. Per contra, ld. Departmental Representative strongly supporting the orders of the authorities below submitted that there were sufficient and more reasons for lower authorities to disbelieve the transactions claimed by the assessee in the equity shares of M/s. Kailash Auto Finance Ltd. As per the ld. Departmental Representative, assessee could not produce any evidence to show how he indentified the shares of the said company for making an off market purchase. Ld. Departmental Representative also placed reliance on a decision of Co-ordinate Bench in the case of Shri Heerachand Kanunga vs. ITO (ITA Nos. 2786 & 27....
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....rom the SEBI report, lower authorities had also relied on a statement obtained from Mr.Sunil Dokania on 12.06.2015 and the report of Investigation Wing of the Department. What I can discern from the orders of the lower authorities is that the statement given by Mr. Sunil Dokania, nor the report of the Investigation Wing relied on by the Assessing Officer, was made available to the assessee, during the course of assessment proceedings. Since these went against the assessee, rules of natural justice require that assessee is given an opportunity to explain what was mentioned in such statement and if necessary, an opportunity to examine Mr. Sunil Dokania. I also find that the AO had not enquired how the assessee had become aware of the availabi....
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....ed 21.09.2017(supra) did vacate its interim exparte order dated 29th March, 2016 restraining 244 entities, inter alia including M/s. Kailash Auto Finance Ltd., from buying, selling or dealing in securities. 16. In the facts and circumstances of the case, I am of the opinion that the question whether the transactions claimed by the assessee, as giving rise to the long term capital gains exempt from tax u/s.10(38) of the Act, were real or sham, requires a re-visit by the ld. Assessing Officer. I set aside the orders of the lower authorities and remit the issue back to the file of the ld. Assessing Officer for consideration afresh in accordance with". 5. In the case of Heerachand Kanunga (supra) relied on by the ld. Departmental Representat....
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....the provisions of Sec.40A(3)? Was there adequate cash availability in the books of the assessee on 24.04.2008? Did the assessee travelled to Kolkata? How was the transaction done? Who applied for the demating of the shares? When were they demated? When were the shares transferred to the demat account of the assessee? To whom were the shares sold during the Assessment Years 2010-11 & 2011-12? When were the cheques received by the assessee? From whom did the assessee received the cheques? Was there any cash deposit immediately prior to the issuing of the cheque from the bank account of the purchaser of the shares of the assessee? 11.A perusal of the Assessment Order at Para No.7.1 shows that in the Written Submissions, the assessee states t....
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....pany which had lead to the share value of the company to go up from Rs. 20/- to Rs. 352/- in a period of two years. This would clearly be a case where the share value of the company was hitting the circuit breaker of the stock exchange on a daily basis and obviously it would have drawn attention. This being so, as the facts are not coming out of the Assessment Order nor the order of the Ld.CIT(A) nor from the side of the assessee, we are of the view that the issues in this appeal must be restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate its case and we do so. 12.The statement recorded by the Revenue from Shri Ashok Kumar Kayan cannot be used as an evidence against the asses....