AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1114
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....rcumstances of the case and in law, the Ld.CIT(A) erred in quashing the assessment order u/s.147 by holding that the reopening of assessment proceedings were merely on the basis of information provided by the investigation wing without appreciating that there is nexus between the information available on record and the reasons to believe and the reasons recorded in as much as the shares of Nyssa Corporation Ltd were dealt by Shri Jain as part of penny stock manipulations."? 3. On facts and in circumstances of the case, whether the Ld. CIT(A) erred in deleting the addition of Rs.1,19,37,679/- made u/s. 68 of the Income Tax Act, 1961 being proceeds on sale of the Scrip without appreciating that the statement of various relevant persons admitting that these companies were indulged in giving accommodation entries, abnormal rise in prices over short period, cash trails in the accounts of entry operators etc. 4. On facts and in circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 1,19,37,679/-granting relief without considering the ratio laid down in the decisions of Hon'ble Supreme Court in the cases of Sumati Dayal Vs. CIT (19....
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....to the books as LTCG and for implementing this scheme, shares of some Penny Stock Company are used. The shares of the penny stock company is acquired by the beneficiary of LTCG at very low prices generally through the route of preferential allotment (private placement) or off market transaction and these shares have a lock-in period of 1 year as per Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 However, to circumvent the provision, the operator usually records a back-date entry of the name of the beneficiaries in the share register of the penny stock company as the entire transaction is off-market. According to the information, the assessee is also one of the beneficiaries of the penny stock during the FY 2016-17 relevant to A.Y 2017-18 and the trade value of such transaction is Rs. 1,19,37,679/-" 5. In response to the notice the Assessee filed return of income on 29.04.2021 declaring nil Income and requested for copy of reasons recorded. Thereafter, the Assessee filed his detail objection before the Assessing Officer against re-opening giving the entire details and facts about the share transaction of the script Nyssa Co....
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.... by the beneficiary of LTCG at very low prices generally through the route of preferential allotment (private placement) or off market transaction and these shares have a lock-in period of 1 year as per Securities and Exchange Board of India (issue of Capital and Disclosure Requirements) Regulations, 2009 However, to circumvent the provision, the operator usually records a back-date entry of the name of the beneficiaries in the share register of the penny stock company as the entire transaction is off- market. According to the information, the assessee is also one of beneficiaries of the penny stock during the FY 2015-16 relevant to A Y 2016-17 and the trade value of such transaction is Rs. 13,47,767/- "From perusal of the reasons recorded, it is seen that the AO has stated that the appellant has sold shares of Naresh Manakchand Jain at the Stock Exchange and the sales proceeds have been claimed as LTCG. It is also mentioned in the reasons recorded by the AO that the shares of Naresh Manakchand Jainwere acquired by the appellant through preferential allotment or off-market transaction and the shares were sold within a short period at a high price. The AO further noted in the assess....
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.... account, working of STCG/LTCG, mode of acquisition of shares. Mode of payment, details of bonus/split shares, broker statements and bank statements etc. In response to that the appellant vide letter dated 23.03.2018 had submitted requisite details which included complete details of STCG in respect of sale of shares of M/s. Nyssa Corporation Ltd and Swarna Sarita Gems and LTCG in respect of Avon Organics Ltd. However, no addition has been made in respect of STCG claim made by the appellant in respect of sale of shares of M/s Nyssa Corporation Ltd. Thus, the issue related to the capital gain was examined by the AO during the original assessment proceedings u/s. 143(3) of the Act. The appellant has also submitted that the notice u/s 148 was issued on 21.04.2021 and thus, it was issued after 31.03.2021. Therefore, the AC was to follow the new procedure for reopening of the assessment as provided u/s. 148 and 148A of the Act. No enquiry has been conducted by the AO as prescribed u/s. 148A of the Act and also the reopening of the assessment has been done beyond 3 years. 8. Thereafter, Ld. CIT(A) after referring to various judgments, held that re-opening is bad in law and he quashed t....