TaxTMI 
TaxTMI 
2019 (3) TMI 2004
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....ual deriving salary income and income from Capital Gains. In the assessment proceedings. the AO had noticed that the assessee had purchased l0,000 shares of M/s. Transcend Commerce Ltd. during the F.Y. 2012-13 on 25.08.2012 for Rs.1,00,000/- @ Rs. 10/- per share off market from one M/s. Jintan Vanijya Pvt Ltd. The company M/s. Transcend Commerce Ltd. was observed to have been amalgamated subsequently with M/s. SRK Industries Ltd. in a scheme of amalgamation approved by the Hon'ble High Court and the assessee was allocated 22,200 shares of M/s. SRK Industries Ltd. in the ratio 100:222 in lieu of 10,000 shares of M/s. Transcend Commerce Ltd. held by the assessee. Subsequently, it was noticed that M/s. SRK Industries Ltd. had reduced its share....
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....puty Commissioner of Income Tax Non-Corporate Circle 9 (1), Chennai have erred in treating an amount of Rs. 80,28,170/- as unexplained cash credit u/s 68 of IT Act. The sale consideration for SRK Industries Ltd. is Rs. 78,36,184/- only and denying exemption u/s 10(38) to the tune of Rs. 77,36,184/- 2. The order of the DClT, Non-Corporate Circle 9 (1), Chennai is against the facts of the case, the provisions of law, and is unreasonable and perverted. 3. The Assessing Officer and the CIT(A)- 10 ought to have appreciated the fact that the appellant is a bonafide investor and has claimed the exemption u/s 10(38) after satisfying all the conditions. 4. All the evidences in the form of purchase and sale contracts of sha....
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....ional evidence. 4. The Ld. AR submitted that the assessee, an individual, was deriving income from salary and LTCG. The assessee had claimed the benefit of exemption u/s.10(38) in respect of sale of shares of M/s. SRK Industries Ltd. through M/s. BMA Wealth Creators Ltd. The AO examined the entire transactions in the background of information received from DIT (Inv) Kolkata and held that the said shares traded by the assessee were penny stocks, the assessee was one of the beneficiaries of trading in penny stocks and was claiming bogus long 'term capital gains etc. The assessee was not furnished with those details. The Ld. CIT(A) failed to appreciate that all the conditions required for claiming exemption under section 10(38) had been met....
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....dence. Further, perusal of assessee's case shows that it is similar to the facts in the case of Shri Heerachand Kanunga referred to supra. The relevant portions from that order is extracted as under :- "9. A perusal of the facts in the present case admittedly given room for suspicion. However, assessments are not to be done on the basis of mere suspicion. It has to be supported by facts and the facts are unfortunately not forthcoming in the Assessment Order, in the order of the Ld.CIT(A) nor from the side of the assessee. The main foundation of the assessment in the present case is the statement of one Shri Ashok Kumar Kayan who has admitted to have provided bogus Long Term Capital Gains to his clients. The said Shri Ashok Kumar Ka....
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....k 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 that he has purchased 15000 shares of M/s.BPL from M/s.ABPL, Kolkata. However, in Para No.8.3, it is mentioned that the assessee in good faith has purchased the shares of M/s.BPL from a sub-broker in his friends circle. What is the true nature of the transaction? From whom did the assessee actually purchase the shares? Did the assessee take possession of the shares in its physical form? In Para No.8.1 of the Assessment Order, it is mentioned that the assessee is an investor and has been regularly trading in shares. If this is so, does the demat account show such tr....
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....uate 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 assessee in so far as the statement has not been given to the assessee nor has Shri Ashok Kumar Kayan been provided to the assessee for cross-examination. However, the assessee shall prove the transaction of the Long Term Capital Gains in respect of which the assessee has claimed the exemption u/s.10(38) by providing all such evidences as required by the AO to substantiate the claim as also by producing the persons through whom the assessee has undertaken the transaction of the purchase and sale of the shares which would include the sub-broker, friend and the broker ....