TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 312
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....bstantial delay in filing the appeal on the part of the assessee. Therefore, we condone the delay and proceed to decide the appeal on merit. 3. The assessee has raised the following ground of appeal:- "That under the facts and in the circumstances of the case, the ld. PCIT, Kolkata-15 erred in treating the LTCG of Rs.51,99,603/- claimed on the sale of shares of CCL International Limited to be bogus and therefore, setting aside the order dated 25.05.2017 u/s 143(3) of the Income Tax Act, 1961 passed by the AO holding the same to be erroneous so far as it was prejudicial to the interest of revenue in terms of section 263 of the Income Tax Act,1961. This order, so passed, is bad in law and therefore need to be quashed". 4. Brief facts of the case are that the assessee is an individual. Income of Rs.9,99,300/- declared in the e-return was filed on 11.08.2015 for assessment year 2015-16. The case was selected for scrutiny assessment through CASS and assessment under section 143(3) of the Act was framed on 05.05.2017. Income was assessed at Rs.11,38,026/- after making disallowance under section 14A of the Act at Rs.78,726/- and addition on account of drawing at Rs.60,000/-. Subsequen....
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....t has been claimed. Directorate of Income Tax (Investigation), Kolkata unearthed a racket of penny stock companies, which are managed by entry operators and brokers, wherein share prices are rigged, abnormally high so as to provide accommoation entries in the form of bogus longterm capital gain to various beneficiaries. The investigation report mentioned the list of 84 companies, which were found to be penny stock companies and all these companies have poor financial, no regular business activity was carried out and the share prices increased abnormally with the help of entry operators and brokers. Recently Hon'ble Jurisdictional High Court in the case of Swati Bajaj & Others (2022) 139 taxmann.com 352(Cal.) pronounced on 14.06.2022 dealing with the similar facts and the issue relating to the penny stock companies decided against the assessee thereby confirming the addition under section 68 of the Act as well as confirming the revisionary proceedings under section 263 of the Act. The ratio laid down by the Hon'ble Jurisdictional High Court has been considered elaborately in the decision of the Coordinate Bench in the case of Shyam Sunder Bajaj in ITA No. 2552/KOL/2018 and others vi....
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....ion of jurisdiction by CIT under section 263 of the Act. In the present set of appeals before us, we are concerned with the first category whose relevant observations and findings by the Hon'ble High Court are noted below: a) From the assessment order passed in the case of the assessee Smt. Swati Bajaj, we find that the genesis of the issue commenced from an investigation report submitted by the Directorate of Income Tax, Investigation, Kolkata (DIT). The investigation report has been prepared by the Deputy Director of Income Tax, Investigation Unit -II and III, Kolkata. [para 43] b) The assessee were conscious of the fact that they have not been named in the report, therefore made a vague and bold statement that the non-furnishing of report would vitiate the proceedings. Therefore, merely by mentioning that statements have not been furnished can in no manner advance the case of the assessee. If the report was available in the public domain as has been downloaded and produced by the revenue, nothing prevented the assessees who are ably defended by the Chartered Accountants and Advocates to download such reports and examine the same and thereafter put up their defence. Therefore....
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....ty was required to go deeper into the issue as the matter have manifested large scale scam. Thus, the orders of the tribunal are not only perfunctory but perverse as well. The exercise that was required to be done by the tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the "players" can never be established by direct evidence and therefore the surrounding circumstances was required to be taken note of by the tribunal which exercise has not been done. [para 99] k) In such factual scenario, the Assessing Officers as well as the Commissioner (Appeals) have adopted an inferential process which is found to be a process which would be followed by a reasonable and prudent person. The Assessing Officers and the Commissioner (Appeals) have culled out proximate facts in each of the cases, took into consideration the surrounding circumstances which came to light after the investigation, assessed the conduct of the assessee, took note of the proximity of the time between the buy and sale operations and also the sudden and steep rise of the price of the shares of the companies when the general market trend....