2022 (10) TMI 34

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....) of the Act in respect of long term capital gains (LTCG) arising from sale of shares, we dispose of all these captioned appeals by this consolidated order for the sake of convenience and brevity. 3. Briefly stated, facts are narrated hereunder for each of the ITA No. captioned above, in seriatim: 3.1 ITA No. 841/Kol/2019 [AY 2014-15]: Assessee filed the return of income on 29.03.2015 reporting total income of Rs.2,17,200/-. Assessee had purchased 1000 equity shares of Turbo Tech Engineering Ltd. for Rs.35,850/- from Esquire Enclave Private Ltd. on 04.04.2012 @ Rs.35.85 per share. Assessee sold these shares through Shree Bahubali International Limited of Kolkata on 01.07.2013 @ Rs.498/- per share and the net amount received was Rs.4,86,290/-. Ld. AO made the addition towards LTCG of Rs.4,49,622/- as unexplained cash credits u/s 68 of the Act. 3.2 ITA No. 457/Kol/2019 [AY 2015-16]: Assessee filed the return of income on 14.10.2015 reporting total income of Rs.14,38,450/-. In this case, assessee has shown LTCG of Rs.8,40,287/- and claimed it as exempt. The assessee has claimed to have purchased 8000 shares of Surabhi Chemical & Investment Limited on 25.03.2013 against the sale of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....,46,200/-. Assessee purchased 50,000 shares of CCL International Ltd. for Rs.16,50,000/- from Hemlata Vinimay Pvt. Ltd. on 29.04.2013 for which was payment was made on 28.11.2013 and sold the same resulting into LTCG of Rs.2,32,93,559/- which is claimed exempted u/s. 10(38) of the Act. Ld. AO treated Rs.2,32,93,559/- as income from undisclosed sources and made the addition. 3.7 ITA No. 543/Kol/2019 for [AY 2014-15]: Assessee filed the return of income on 14.11.2014 reporting total income of Rs.2,85,200/. Assessee reported LTCG of Rs.55,73,988/- in his capital account which was claimed as exempt. Assessee had purchased 1,00,000 equity shares of Careful Projects Advisory Ltd. from Sanskriti Vincome Pvt. Ltd. @ Re. 1/- per share on 05.02.2012 and 50,000 shares of Panchshul Marketing Ltd. from Shakti Exports Pvt. Ltd. @ Rs. 2/- per share on 05.03.2016, thereby making a total investment of Rs.2,00,000/-. Thereafter, in FY 2013-14 Careful Projects Advisory Ltd. and Panchshul Marketing Ltd. got merged into Kailash Auto Finance Ltd. vide scheme of amalgamation. As a result of amalgamation scheme, 1,00,000 shares of Careful Projects Advisory Ltd. and 50,000 shares of Panchshul Marketing Lt....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....9.03.2012. According to ld. AO, the claim of LTCG of Rs.3,46,324/- having been proved to be bogus and pre arranged was disallowed. Ld. AO treated the said sum of Rs.3,46,324/- as credit in the accounts of the assessee for which no satisfactory explanation was furnished. Ld. AO thus added the said sum to the total income of the assessee u/s. 68 of the Act. 4. All the present cases were selected for scrutiny u/s. 143(3) through CASS and the issue in all of them for selection relates to 'suspicious long term capital gain on shares'. In all the above appeals, according to the ld. AO, LTCG reported by the assessee in respective return was bogus and the entire transactions were done with the objective to introduce unaccounted money of the assessee in the books by using the route of LTCG which was exempt from tax u/s 10(38) of the Act. Thus, ld. AO held that the said LTCG are fabricated/engineered transactions by the respective assessees, sale of which falls under the category of penny stocks and the same were treated as bogus which were added in the total income by treating it as unexplained cash credit u/s. 68 of the Act. Ld. AO based his decision of treating the impugned transaction o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....violation of principles of natural justice the assessees have not made out any case. [para 65] c) The test to be applied is the test of preponderance of probabilities to ascertain as to whether there has been violation of the provisions of the Income-tax Act. In such a circumstance, the conclusion has to be gathered from various circumstances like the volume from trade, period of persistence in trading in the particular scrips, particulars of buy and sell orders and the volume thereof and proximity of time between the two which are relevant factors. Therefore, the methodology adopted by the revenue cannot be faulted. [para 69] d) Test of preponderance of probabilities have to be applied and while doing so, the court cannot loose sight of the fact that the shares of very little known companies with in-significant business had a steep rise in the share prices within the period of little over a year. [para 73] e) The assessee was not named in the report and when the assessee makes the claim for exemption, the onus of proof is on the assessee to prove the genuinity. [para 73] f) It is incorrect to argue that the assessees have been called upon to prove the negative in fact, it ....