TaxTMI 
TaxTMI 
2022 (5) TMI 501
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....ing of Kolkata the reassessment was initiated. During the re-assessment Assessing Officer observed that assessee has shown long term capital gain on shares of M/s. Shreenath Commercial & Finance Ltd., of Rs.2,12,47,086/- by crediting it to the capital account and treated it as exempt u/s. 10(38) of the Act. When the assessee was asked to substantiate the claim made u/s. 10(38) of the Act and why the claim should not be rejected. In response assessee filed letter dated 20.12.2017 which is reproduced below: - "With reference to our abovementioned client, we the undersigned authorized representatives acknowledge the receipt of your letter requiring the assesse to show cause as to why the Sale Consideration of long term capital gains offered should not be treated as unexplained cash credit. Sir, in this connection we wish to state that the income is rightly offered as long term capital gains and the same cannot be treated as income u/ s 68 of the Act in the light of the following submission. 2. Sir, during the year, the appellant has earned Rs. 2,07,59,000/- in the form of long term capital gains from sale of shares of Shreenath Commercial & Finance Ltd. In order to understand the ....
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....The direct evidences furnished by the assessee support the claims made by him in the return of income. The purchase of the shares of Shreenath Commercial & Finance Ltd in FLY. 2010-11 is through a reputed broker (Shree Naman Secunties & Finance Put Ltd). The said shares are received in the demat account of the assessee. The sale of shares of Shreenath Commercial & Finance Ltd is through a reputed broker (Shree Naman Securities & Finance Put Ltd) and the transaction is undertaken on the floor of Bombay Stock Exchange. The said broker has remitted the sale proceeds and the same its reflected in the bank statement of the assessee. Please refer to documents submitted at Page 1-8 as well as bank statements of the assessee submitted during the course of assessment proceedings. 8. As regards the invoking of section 68, we wish to reiterate that the sale of shares is transacted with the stock exchange through its broker Shree Naman Securities & Finance Put Ltd., _the said stock exchange has remitted funds to the assessee through the said broker and therefore the identity of the payer, source of funds received and genuineness of the transaction is absolutely established. .... .... .....
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....that all transaction in relation to the said shares were bogus in nature when the assesse himself doesn't know from whom it has purchased the shares and sold the same as the same were transacted on the floor of stock exchange; c) No reliance can be placed upon the information/findings received from the Investigation Wing without verifying in statement whether it is applicable to the appellant or not; d) No reliance can be placed upon the unilateral statements given by certain operators as none of such operators had specifically admitted to be providing any accommodation entries to the appellant neither the assesse knows from whom and to whom the shares are sold being the fact that the shares were purchased and sold on the floor of recognized stock exchange. 3. The learned A.O. further erred in computing the assessed income as the additions made of Rs. 2,12,47,086/is much more than long term capital gains earned from sale of shares of M/s.SHREENATH COMMERCIAL FINANCE (alleged penny stock company) of Rs. 2,07,59,000/. 4. The Ld. AO erred in levying interest u/s 234B and 234C of the Income Tax Act, 1961." 6. At the time of hearing, Ld. AR submitted that facts in the present c....
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....in entries. Nowhere the AO has brought on record any other evidence than relying on the report of investigation wing that the assessee is beneficiary of this huge racket of taking bogus entries of long term capital gain. The AO has disbelieved these documents by observing that these are sham and bogus documents without pointing out any specific defect or infirmity as these were issued as per the system of the recognised stock exchange through registered brokers. Similarly, the Ld. CIT(A) has upheld the order of AO by holding that the assessee is beneficiary of a big racket whereby the prices of the shares were rigged and manipulated to yield bogus gain to various entities/individuals of which assessee was one. Thus we find merit in the arguments of the Ld A.R. that assessee has furnished all the informations, details, documentary evidences before the AO but the AO has not done any further verification to find out the truth or done anything to prove the money trail of the funds as has been alleged in the order. Under these circumstances, we are not in a position to sustain the order of Ld. CIT(A) upholding the order of AO wherein the long term capital gain has been held to be non ge....
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....und that the investigation stopped at a particular point and was not carried forward by the Revenue. There are 1,30,000 shares of Bolton Properties Ltd. purchased by the Assessee during the month of January 2003 and he continued to hold them till 31 March 2003. The present case related to 20,000 shares of Mantra Online Ltd for the total consideration of Rs.25,93,1507-. These shares were sold and how they were sold, on what dates and for what consideration and the sums received by cheques have been referred extensively by the Tribunal in para 10. A copy of the DM AT account, placed at pages 36 & 37 of the Appeal Paper Book before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were available and which gave details of the transactions. The contract note is a system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But The Tribunal concluded that itself, is not enough to p....