TaxTMI 
TaxTMI 
2022 (11) TMI 1061
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....rn of income for the assessment year 2014-15 was filed on 31.03.2015 disclosing total income of Rs.3,13,680/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-1(5), Nashik ('the Assessing Officer') vide order dated 28.12.2016 passed u/s 143(3) of the Income Tax Act, 1961 ('the Act') at total income of Rs.55,15,180/-. While doing so, the Assessing Officer denied the claim for exemption of capital gains u/s 10(38) of the Act amounting to Rs.50,49,171/- by holding that the transactions of purchase of shares of SRK Industries Ltd. and subsequent sale is nothing but a bogus transaction by relying upon the investigation report by the Investigation Wing of the Department and the Securities & Exchange....
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....ing. In-fact, an adjournment petition was filed in the name of one Mr. Abhay Avachat, Chartered Accountant citing that he was unable to argue the matter since he was hospitalized because of chest pains, high BP and hypertension etc., not supported by any doctor's certificate. 6. Since the issue in the present appeal is no more res integra, covered by several judicial precedents as well as one of the recent decision of the Hon'ble Calcutta High Court in the case of PCIT vs. Swati Bajaj, 446 ITR 56 (Calcutta), we proceed to dispose of the same after hearing the ld. Sr. DR even in the absence of assessee. 7. The ld. Sr. DR placed reliance on the order of the ld. CIT(A) submits that in view of the decision of the Hon'ble Calcutta High Cou....
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.... 10(38) of the Act. The case of the Assessing Officer is that the appellant is a beneficiary of accommodation entries or long term capital gains from Calcutta Entry Provider, namely, Mr. Anil Khemka of Devshyam Stock Broking P. Ltd.. The Investigation Wing of the Income Tax Department, Calcutta had conducted search and seizure operations on the said entry provider and recorded the statement on 30.03.2015 wherein it is stated that he had admitted to have provided the accommodation entries in respect of scripts as per list which includes the company M/s. SRK Limited. He further stated to have been admitted that the companies controlled by him one paper companies which were used for giving accommodation entries and list of the companies was al....
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....hat the appellant had discharged the onus of proving the genuineness of transactions of capital gains in respect of exemption u/s 10(38) of the Act. In a case involving identical facts of the case, the Hon'ble Calcutta High Court after making reference to the decisions of Hon'ble Madras High Court in the case of CIT vs. Manish D. Jain, 120 taxmann.com 180 (Mad.) and PCIT vs. Prabha Jain, 439 ITR 304 (Mad.) had confirmed the action of the Assessing Officer by holding that the Assessing Officer had cogently brought out the factual scenario to establish machinations of fraudulent, manipulative and deceptive dealings and how the stock exchanges system was misused to generate bogus LTCG. 9. There is yet one more reason as to why we are inclin....
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....d-avoids all judicial acts, ecclesiastical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree - by the first court or by the highest court - has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings." 21. In the said case it was clearly stated that the courts of law are meant for imparting justice between the parties and one who comes to the court, must come with clean hands. A person whose case is based on falsehood has no right to approa....
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....elf to be used as an instrument of fraud and no court, by way of rule of evidence and procedure, can allow its eyes to be closed to the fact it is being used as an instrument of fraud. The basic principle is that a party who secures the judgment by taking recourse to fraud should not be enabled to enjoy the fruits thereof." 10. In the present case also, the appellant deliberately withheld the information from the Assessing Officer as well as the ld. CIT(A) which is within exclusive knowledge of appellant to establish the genuineness of transactions of purchase of shares of that company. It is nothing but a fraud played by the appellant against the Assessing Officer as well as the ld. CIT(A) who are quasi judicial authorities employed for....