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2023 (3) TMI 85
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....einafter referred to as Act) dated 29/12/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle-3(4), Mumbai (hereinafter referred to as ld. AO). ITA No.1606/Mum/2021 (A.Y.2013-14) & ITA No.1608/Mum/2021 (AY: 2014-15) These appeals in ITA Nos. 1606/Mum/2021 & 1608/Mum/2021 for A.Y.2013-14 & 2014-15 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-51, Mumbai in appeal Nos.CIT(A)-51, Mumbai/10056/2017-18 & CIT(A)-51, Mumbai/10058/2017-18 dated 27/07/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 27/04/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle-3(4), Mumbai (hereinafter referred to as ld. AO). ITA No.1607/Mum/2021 (A.Y.2015-16) This appeal in ITA No. 1607/Mum/2021 for A.Y.2015-16 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-51, Mumbai in appeal Nos.CIT(A)-51, Mumbai/10632/2017-18 dated 15/07/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 29/12/2017 by the ld. Dy. Commissioner of Income Tax, Cent....
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....n individual and working as director/partner in certain company/partnership firms and also engaged in trading of shares. The return of income was e-filed for the A.Y. 2014-15 u/s.139(1) of the Act on 30/09/2014 showing total income of Rs 1,67,47,875/-. Subsequently, a search u/s.132 of the Act has been carried out by the Department on 09/04/2015 at the residential premises of the assessee on the plea that he was indulged in evasion of income tax by introducing unaccounted money into the books of account in the grab of bogus Long term capital gains claimed to be exempt u/s.10(38) of the Act. In response to notice u/s.153A dated 08/08/2016, the assessee filed his return of income on 22/08/2016 showing total income of Rs 1,67,47,875/- which was the same as shown in the return of income furnished u/s.139(1) of the Act. In filing the return of income, the assessee has shown Long term capital gains (LTCG) of Rs 8,10,79,859/- on sale of shares of Radford Global Ltd. ("Radford") and Blazon Marble Ltd. ("Blazon") which have been claimed to be exempt u/s.10(38) of the Act. Details of such LTCG are as under:- Sr. No. (1) Name of the Company (2) No. of Shares purchased (3) Date of ....
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....levant periods. d) Contract notes cum bills raised by the share broker. e) Securities transaction tax paid details f) Details of long term capital gains earned by the assessee. 4.3. The ld. AO issued a show cause notice to the assessee wherein he sought to deny the claim of exemption u/s 10(38) of the Act treating the transactions as bogus and merely accommodation entries and also adding some commission on an estimated basis thereon. In response to the said notice, the assessee furnished a detailed written submission vide letter dated 05/12/2017 and gist of those submissions were summarized by the ld. AO as under:- a. The assessee denies that any operator has approached him directly or indirectly. Securities and Exchange Board of India (SEBI in short) has investigated the allotment of preference shares by Radford Global Ltd, and has not found any adverse evidence/findings relating to the assessee. The shares of the said company were traded on the floor of the stock exchange and all the transactions were in the knowledge of stock exchange. b. The so-called price rigging in the shares of Blazon Marble Ltd. was never in the knowledge of ....
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....watch dog does not find any abnormality in price change. i. SEBI has passed final orders that investigations did not find any adverse evidence / findings in respect of violations of provisions of SEBI (Prohibition of Fraudulent & Unfair Practices relating to security market) Regulations, 2003 in the case of Radford Global Ltd. j. It is known fact and a practice in general that whenever a person subscribes to an IPO, the investment is not done before perusing any financials. The investment is based purely upon market hear say. The assessee admits of having invested in the company inspite of weak financials but at the same time it needs to be appreciated that share market is known for fetching returns when the stock is weak and price & volume is bleak. It is therefore known as Market of Opportunities. k. During the course of search action not an inch of paper was found to suggest that the assessee has any unaccounted source of income to buy long term capital gains from accommodation providers. No evidence was found to show that the investment in Blazon Marble Ltd or Radford Global Ltd was bogus or in the nature of accommodation. The search action is the ult....
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....essment u/s.143(3) r.w.s.153A of the Act did not heed to the aforesaid contentions of the assessee and proceeded to treat the sale proceeds of shares amounting to Rs 8,41,04,109/- as unexplained cash credit u/s 68 of the Act by treating the same as an accommodation entry and also added an amount of Rs 50,46,247/- on account of unexplained commission expenditure incurred u/s 69C of the Act at the rate of 6% of sale proceeds of Rs 8,41,04,109/- on the following reasons:- 15. CONCLUSION :- 15.1 The following points summarise that Blazon Marbles Ltd. & Radford Global Ltd. are bogus penny stock companies: • The business profile and financials of Blazon Marbles Ltd. & Radford Global Ltd. show that the company was not engaged into any substantial activity, esp. when the preferential shares were allotted. It is also seen that the company was not having any future plans which could attract investors from all over India to invest in the company. • The whole process of preferential allotment was a prearranged and managed process so as to allot preferential shares to beneficiaries of bogus LTCG/STCG. • The reported profits were also not ....
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.... of taking cash and issuing cheques in the guise of subscription to share capital. The question required a thorough examination and a superficial one. From the facts of the case, one fact is oozing out that merely a paper work was camouflaged by the assessee. 15.3 Thus, based on the above mentioned facts and circumstances, the revenue has sufficient, cogent, tangible, reliable, authenticated proof to show that Long term capital gains booked by assessee in his books were pre-arranged method to evade taxes and launder money which can be summarized as follows: a. Failure of Assessee to discharge his onus: assessee has been unable to provide any explanation or rationale behind the preferential/off-market allotment/purchase of the shares of the said penny stock. The assessee has not been able to prove the unusual rise and fall of share prices to be natural and based on the market forces. It is evident that such share transactions were closed circuit transactions and clearly structured one. b. Ignorance of the assessee about shares and penny stock companies: Assessee has failed to show of having any knowledge about the shares traded and having any knowledge abo....
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....ken, it is only logical to assume that the assessee must have also paid commission to the accommodation entry providers for arranging the accommodation entry of bogus LTCG. As it has been admitted on oath by various accommodation entry providers that for accommodation entries in the nature of LTCG they charge commission ranging from 4% 6%, thus 6% of the sale consideration is being taken as the unexplained expenditure incurred by the assessee for arranging the accommodation entries. 15.5.2 In view of the above facts it is crystal clear that the assessee utilized his unaccounted cash to obtain the above said bogus LTCG. Since it has been admitted by various accommodation entry providers that for providing accommodation entries in the nature of bogus LTCG they charge a commission ranging from 4% to 6%, it is logical that the assessee also paid commission in cash to the accommodation entry providers. In light of the above facts and evidences, the said alleged LTCG and claim of exemption u/s 10(38) is hereby rejected." 15.6.1.In the light of the facts & discussion in the preceding paragraphs, I am of the opinion that the transactions of purchase & sale of 97000 shares....
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....t evidences of the scripts of these company having been manipulated during the period during which the assessee has held the shares of these companies. Further, these shares have been offloaded to exit providers and not genuine investors. In light of the fact that the transactions are managed through synchronised trading and are not genuine transactions even though conducted on the Stock Exchange, the gain made by the assessee is required to be taken as bogus Long Term Capital Gain. 7.35. In light of the above discussion, the claim by the assessee that the addition has been made merely on presumption and without any evidence is not found acceptable. The reliance placed by the AO on the decisions in case of SumatiDayal (supra) and Durga Prasad More 82 ITR 540 (SC)is found correct. In Sumati Dayal, the Hon'ble Supreme Court has discounted the existence of well-maintained documentation as against the normal human behaviour and preponderance of probability in certain case. The appellant"s case indeed falls within the same parameters. Instead of explaining the plausibility of the transaction, the appellant has merely harped on the technicalities and his impeccable documentation....
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....operators ; that assessee resorted to preconceived scheme to procure bogus long term capital gains and hence the transactions are not bonafide ; that SEBI also passed an interim order in the case of Radford Global Ltd holding that share prices were determined artificially by manipulations ; that these are close circuit transactions and are pre-structured; that assessee had failed to discharge his onus cast on him ; that net worth of Radford Global Ltd and Blazon Marbles Ltd is negligible and that its share prices were artificially rigged ; that investigations prove that cash is routed through various accounts to provide these bogus long term capital gain entries. The ld. AO by making these observations proceeded to treat the sale proceeds of the shares as unexplained cash credit u/s 68 of the Act. Since the receipt of sale proceeds was treated as bogus, the ld. AO also proceeded to add estimated commission @ 2% for arranging the said bogus transaction as unexplained expenditure u/s 69C of the Act. 5.1. At the outset, we find that the documentary evidences submitted by the assessee were found to be genuine and no adverse inferences were drawn by the revenue on the same. The trans....
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.... question were, in fact, purchased by the assessees on the respective dates and the company had confirmed to have handed over the shares purchased by the assessees. Similarly, the sale of the shares of the respective buyer was also established by producing documentary evidence. It is true that some of the transactions were off-market transactions. However, the purchase and sale price of the shares declared by the assessees were in conformity with the market rates prevailing on the respective dates, as was seen from the documents furnished by the assessees. Therefore, the fact that some of the transactions were off-market transactions could not be a ground to treat the transactions as sham transactions. On a perusal of those documentary evidences, the Tribunal had arrived at a finding of fact that the transactions were genuine. Nothing was brought to notice of the Court that the findings recorded by the Tribunal were contrary to the documentary evidences on record. Therefore, no substantial question of law arose from the order of the Tribunal. 5.5. We find that independent enquiries were conducted by SEBI and SEBI had passed an interim order dated 19/12/2014 in the case ....
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....ssee is reflected in Serial Number 26 which is part of 82 entities acquitted by SEBI, on whom clean chit has been given. Further Radford Global Limited is reflected in Serial Number 1 which is also part of 82 entities acquitted by SEBI, on whom clean chit has been given. 5.5.2. With regard to Blazon Marbles Ltd, we find that though an order was passed u/s 15I of SEBI Act, 1992 by SEBI on 13/10/2017, the same was passed only for levying penalties on certain persons for making procedural violations and for non-appearance to the summons issued by SEBI. The said order of SEBI does not allege any involvement of the assessee herein with the manipulation of share prices. 5.6. We find that the assessee had held the shares in the instant case for 33 months in the case of Blazon Marbles Ltd and for 15 to 17 months in the case of Radford Global Ltd and then sold the shares in the open market at prevailing market prices. From the above order of SEBI , it is very clear that SEBI, based on its investigations and replies given by various parties, had ordered either to take action against certain parties or had acquitted certain parties on the ground that they are not involved in the price m....
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.... time of search proceedings and also during recording of statement u/s 132(4) of the Act with regard to shares invested by the assessee in Blazon Marbles Ltd. 5.8. Hence the entire addition has been made merely by placing reliance on the Kolkata Investigation Wing report which are more general in nature and does not implicate the assessee herein in any manner whatsoever. We are unable to persuade ourselves to accept to the contentions of the ld. DR that Kolkata Investigation Wing had conducted a detailed enquiry with regard to the scrip dealt by the assessee herein and hence whomsoever had dealt in this scrip, would only result in bogus claim of long term capital gain exemption or bogus claim of short term capital loss. Merely because a particular scrip is identified as a penny stock by the income tax department, it does not mean all the transactions carried out in that scrip would be bogus. So many investors enter the capital market just to make it a chance by investing their surplus monies. They also end up with making investment in certain scrips (read penny stocks) based on market information and try to exit at an appropriate time the moment they make their profits. In this ....
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....ct the AO to delete the impugned addition of Rs 84,45,050. Further, since the other addition of Rs 22,712 by AO is also consequent to the aforesaid impugned addition, therefore, the said addition is also directed to be deleted. 5.9. We hold that the entire addition has been made based on mere surmise, suspicion and conjecture and by making baseless allegations against the assessee herein. Now another issue that arises is as to whether the ld. AO merely on the basis of Kolkata investigation wing report could come to a conclusion that the transactions carried out by the assessee as bogus. In our considered opinion, the ld. AO is expected to conduct independent verification of the matter before reaching to the conclusion that the transactions of the assessee are bogus. More importantly, it is bounden duty of the ld. AO to prove that the evidences furnished by the assessee to support the purchase and sale of shares as bogus. This view of ours is further fortified by the decision of Hon'ble Delhi High Court in the case of PCIT vs Laxman Industrial Resources Ltd in ITA No. 169/2017 dated 14/03/2017. It is well settled that the suspicion however strong could not partake the character o....
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....nt and vital for the purpose of the present case was whether the transactions in shares were genuine or sham and bogus. If the purchase and sale of shares are reflected in the Assessee's DMAT account, yet they are termed as arranged transactions and projected to be real, then, such conclusion which has been reached by the Commissioner and the Assessing Officer required a deeper scrutiny. It was also revealed during the course of inquiry by the Assessing Officer that the Calcutta Stock Exchange records showed that the shares were purchased for code numbers S003 and R121 of Sagar Trade Pvt Ltd. and Rockey Marketing Pvt. Ltd. respectively. Out of these two, only Rockey Marketing Pvt.Ltd. is listed in the appraisal report and it is stated to be involved in the modus-operandi. It is on this material that he holds that the transactions in sale and purchase of shares are doubtful and not genuine. In relation to Assessee's role in all this, all that the Commissioner observed is that the Assessee transacted through brokers at Calcutta, which itself raises doubt about the genuineness of the transactions and the financial result and performance of the Company was not such as would jus....
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.... of the above discussion, we do not find any substance in the contention of Mr.Sureshkumar that the Tribunal misdirected itself and in law. We hold that the Appeals do not raise any substantial question of law. They are accordingly dismissed. There would no order as to costs. 8. Even the additional question cannot be said to be substantial question of law, because it arises in the context of same transactions, dealings, same investigation and same charge or allegation of accommodation of unaccounted money being converted into accounted or regular as such. The relevant details pertaining to the shares were already on record. This question is also a fall out of the issue or question dealt with by the Tribunal and pertaining to the addition of Rs.25,93,150/-. Barring the figure of loss that is stated to have been taken, no distinguishable feature can be or could be placed on record. For the same reasons, even this additional question cannot be termed as substantial question of law. 5.12. We find that the ld. CIT(A) relied on the decision of Hon'ble Delhi High Court in the case of Suman Poddar vs ITO reported in 112 taxmann.com 329 dated 17/09/2019 where the decision was re....
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....by claiming fictitious LTCG, which is exempt under section 10(38), in a preplanned manner to evade taxes. The AO extensively relied upon the search and survey operations conducted by the Investigation Wing of the Income-tax Department in Kolkata, Delhi, Mumbai and Ahmedabad on penny stocks, which sets out the modus operandi adopted in the business of providing entries of bogus LTCG. However, the reliance placed on the report, without further corroboration on the basis of cogent material, does not justify his conclusion that the transaction is bogus, sham and nothing other than a racket of accommodation entries. We do notice that the AO made an attempt to delve into the question of infusion of Respondent's unaccounted money, but he did not dig deeper. Notices issued under sections 133(6)/131 of the Act were issued to M/s Gold Line International Finvest Limited, but nothing emerged from this effort. The payment for the shares in question was made by Sh. Salasar Trading Company. Notice was issued to this entity as well, but when the notices were returned unserved, the AO did not take the matter any further. He thereafter simply proceeded on the basis of the financials of the compa....
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....respond to the notices. Be that as it may, the CIT(A) has only approved the order of the AO, following the same reasoning, and relying upon the report of the Investigation Wing. Lastly, reliance placed by the Revenue on Suman Poddar case (supra) and Sumati Dayal case (supra) is of no assistance. Upon examining the judgment of Suman Poddar case (supra) at length, we find that the decision therein was arrived at in light of the peculiar facts and circumstances demonstrated before the ITAT and the Court, such as, inter alia, lack of evidence produced by the Assessee therein to show actual sale of shares in that case. On such basis, the ITAT had returned the finding of fact against the Assessee, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix at hand. Similarly, the case of Sumati Dayal (supra) too turns on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue. 13. The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax ....
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....n.com 48 (SC) but that does not help the revenue in as much as the facts in that case were entirely different. 5. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law. 6. The appeal is devoid of merits and it is dismissed with no order as to costs. 5.14. We find that the ld. DR had relied on the decision of Hon'ble Calcutta High Court in the case of PCIT vs Swati Bajaj reported in 139 taxmann.com 352 which is an elaborate decision rendered after considering various decisions of various High Courts on the subject. In the said decision, it was held that assessee had to establish the genuineness of rise of price of shares within a short period of time that too when general market trend was recessive. But we find that when there are several decisions of Hon'ble Jurisdictional High Court as stated supra are already in favour of the assessee, the same would prevail over this tribunal and this tribunal need not ta....
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....ng term capital gains u/s 10(38) of the Act and estimated commission @ 6% against the same. Accordingly, the ground nos. 1 & 2 raised by the assessee are allowed. 6. The Ground No. 3 raised by the assessee is challenging the levy of interest u/s 234B and 234C of the Act, which would be consequential in nature and does not require any specific adjudication. 7. The Ground No. 4 raised by the assessee is challenging the initiation of penalty proceedings u/s 271(1) (c ) of the Act, which would be premature for adjudication at this stage. Hence dismissed. 8. In the result , the appeal of the assessee Shri Yogesh Popatlal Thakkar in ITA No. 1605/Mum/2021 for A.Y. 2014-15 is partly allowed . Shri Yogesh Thakkar - ITA No. 1612/Mum/2021 - Asst Year 2015-16 - Assessee Appeal 9. Though the assessee has raised several grounds before us, we find that the effective issue to be issued in this appeal is as to whether the ld. CIT(A) was justified in confirming the action of the ld.AO in denying the exemption claimed u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of Greencrest Financial Services Ltd and PS IT Infrastructure & Services Ltd, in th....
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....2013 having a face value of Rs.10/- and premium of Rs.2/- per share and consideration paid thereon was Rs 24,00,000/-. Subsequently, the shares having face value of Rs.10/- were split into 10 share having face value of Re.1/-. Post split, the total shares credited into demat account were 2000000 shares. During the year under consideration, the assessee has sold 765000 shares after holding for a period of 18 months and balance share holding still remains unsold as on 31/03/2022. Similarly, the assessee purchased 10000 shares of Crescent Digital Technologies Pvt Ltd. of face value of Rs. 10 for a consideration of Rs.1,00,000/- on 28/06/2012 in off-market. Crescent Digital Technologies Pvt Ltd. subsequently amalgamated with Parag Shilpa Investment Ltd in accordance with a scheme of amalgamation and Parag Shilpa was subsequently renamed "PS IT Infrastructure & Services Ltd." or PS IT in short. These shares were sold during the F.Y.2014-15 after holding for a period of 2 years. For both the shares, the payments for purchase of shares were made by the assessee by account payee cheques out of sources duly disclosed in the books of accounts. 10.2. The ld. AO in the assessment framed u/s....
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....e any specific adjudication. 13. The Ground No. 4 raised by the assessee is challenging the initiation of penalty proceedings u/s 271(1) (c ) of the Act, which would be premature for adjudication at this stage. Hence dismissed. 14. In the result , the appeal of the assessee Shri Yogesh Popatlal Thakkar in ITA No. 1612/Mum/2021 for A.Y. 2015-16 is partly allowed . Smt Nisha Yogesh Thakkar - ITA No. 1607/Mum/2021 - Asst Year 2015-16 - Assessee Appeal 15. Though the assessee has raised several grounds before us, we find that the effective issue to be issued in this appeal is as to whether the ld. CIT(A) was justified in confirming the action of the ld.AO in denying the exemption claimed u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of Greencrest Financial Services Ltd in the facts and circumstances of the case. The inter connected issue involved therein to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the addition made on account of estimated commission expenditure as unexplained u/s 69C of the Act in the facts and circumstances of the case. 15.1. The brief facts of this issue are that the a....
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.... 15.4. When the appeal was pending before the ld. CIT(A) , SEBI had passed an order u/s 11(1), 11(4) and 11B(1) of SEBI Act, 1992 dated 05/06/2020 in the case of Greencrest Financial Services Ltd, wherein certain parties were debarred for a period of 3 years from accessing the securities market and were further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner. In the said list of persons who were debarred, the name of the assessee or its registered share broker was not reflected. Accordingly, it was pleaded before the ld. CIT(A) that even as per SEBI investigation and its order dated 05/06/2020, the assessee cannot be stated to be involved in artificial price rigging of shares. 15.5. The ld. CIT(A) however did not heed to the contentions of the assessee and proceeded to confirm the order of the ld. AO in the same manner as was done by him in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove. 16. We have heard the rival submissions and perused the materials available on record. The findings given by us hereinabove for the A.Y. 2015-16 in the case of Shri Yogesh T....
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....ing total income of Rs 37,90,814/- which was same as assessed u/s.143(1) of the Act. In the said return of income, the assessee has shown Long term capital gains (i.e. LTCG) of Rs 3,33,38,324/- on sale of certain shares which have been claimed to be exempt u/s.10(38). Such LTCG has been earned on sale of shares of Confidance Finance and Trading Ltd. (i.e. "Confidance"), brief details of which are as under:- No. of shares Sale of shares Cost of shares LTCG (Rs ) Date Sale price Date Cost 1,10,000 Various dates 3,49,88,324 23-8-2011 16,50,000 3,33,38,324 21.2. The assessee was allotted 200000 shares of "Confidance" on 27/09/2011 at a face value of Rs 10/- and premium of Rs.5/- per share on preferential basis and consideration paid thereon was Rs 30,00,000/-. These shares were duly dematted by the assessee. Out of these shares, she sold 110000 shares in the month of January and February 2013 for a consideration of Rs 3,49,88,324/- after holding for a period of 15 months and balance share holding remains unsold as on 31/03/2013. The payment for purchase of shares was made by the assessee by account payee cheques out of sources duly....
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....ed by the assessee is challenging the initiation of penalty proceedings u/s 271(1) (c ) of the Act, which would be premature for adjudication at this stage. Hence dismissed. 25. In the result , the appeal of the assessee Smt Harsha Nitin Thakkar in ITA No. 1606/Mum/2021 for A.Y. 2013-14 is partly allowed . Smt Harsha Nitin Thakkar - ITA No. 1608/Mum/2021 - Asst Year 2014-15 - Assessee Appeal 26. The Ground No. 1 challenging the validity of reassessment proceedings was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly the Ground No.1 raised by the assessee is hereby dismissed as not pressed. 27. Though the assessee has raised several grounds before us, we find that the effective issue to be issued in this appeal is as to whether the ld. CIT(A) was justified in confirming the action of the ld.AO in denying the exemption claimed u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of Confidance Finance and Trading Ltd in the facts and circumstances of the case. The inter connected issue involved therein to be decided in this appeal is as to whether the ld. C....
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....framed u/s 143(3) r.w.s 147 of the Act in the same manner by making the same observations as was done in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove by treating the sale proceeds of shares of Rs 2,85,47,832/- as unexplained cash credit u/s 68 of the Act and an estimated commission expenditure of Rs 17,12,870/- (28547832 *6%) as unexplained u/s 69C of the Act at the rate of 6% of sale proceeds of shares. 27.4. When the appeal was pending before the ld. CIT(A) , SEBI had passed an order u/s 11(1), 11(4) and 11B(1) of SEBI Act, 1992 dated 31/12/2018 in the case of Confidance Finance and Trading Ltd, wherein certain parties were debarred from accessing the securities market and were further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner. In the said order, SEBI had disposed of the show cause notices issued to the following persons without any directions :- Noticee No. Name of the Noticee 1 Confidance Finance and Trading Ltd 2 Mr Manoj Kumar Naginlal Jain 3 Mr Amruth Jaochim Coutinho 4 Mr Lalitkumar Roshanlal Maroo 5 Ms.Swati Pa....
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....ed commission expenditure as unexplained u/s 69C of the Act in the facts and circumstances of the case. 33.1. The brief facts of this issue are that the assessee is an individual and working as director / partner in certain company / firms. The return of income for the A.Y. 2013-14 was originally e-filed u/s.139(1) of the Act on 28/07/2013 showing total income of Rs 1,25,18,500/-. The assessment was originally completed u/s.143(1) of the Act on 13/12/2013 determining total income of Rs 1,25,18,500/-. Subsequently, the assessment was sought to be reopened by issuing notice u/s. 148 of the Act on 22/12/2016. In response to the notice u/s.148 of the Act , the assessee e-filed his return of income on 05/01/2017 showing total income of Rs 1,25,18,500/- which was same as assessed u/s.143(1) of the Act. In the said return of income, the assessee has shown Long term capital gains (i.e. LTCG) of Rs 4,85,01,939/- on sale of certain shares which have been claimed to be exempt u/s.10(38) of the Act. Such LTCG has been earned on sale of shares of Confidance Finance and Trading Ltd. (i.e. "Confidance"), brief details of which are as under:- No. of shares Sale of shares Cost of shares....
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....rm the order of the ld. AO in the same manner as was done by him in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove. 34. We have heard the rival submissions and perused the materials available on record. The findings given by us hereinabove for the A.Y. 2015-16 in the case of Shri Yogesh Thakkar shall apply mutatis mutandis to assessee herein for A.Y. 2013-14 also. Accordingly, the Ground Nos. 2 & 3 raised by the assessee are allowed. 35. The Ground No. 4 raised by the assessee is challenging the levy of interest u/s 234B and 234C of the Act, which would be consequential in nature and does not require any specific adjudication. 36. The Ground No. 5 raised by the assessee is challenging the initiation of penalty proceedings u/s 271(1) (c ) of the Act, which would be premature for adjudication at this stage. Hence dismissed. 37. In the result , the appeal of the assessee Shri Nitin Popatlal Thakkar in ITA No. 1610/Mum/2021 for A.Y. 2013-14 is partly allowed . Shri Nitin Popatlal Thakkar - ITA No. 1609/Mum/2021 - Asst Year 2014-15 - Assessee Appeal 38. Though the assessee has raised several grounds before us, we find that the effective issue to be issued ....
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....tal Technologies Pvt Ltd. of face value of Rs. 10 for a consideration of Rs.1,00,000/- on 28/06/2012 in off-market. Crescent Digital Technologies Pvt Ltd subsequently amalgamated with Parag Shilpa Investment Ltd in accordance with a scheme of amalgamation and the Parag Shilpa was subsequently renamed "PS IT Infrastructure & Services Ltd." or PS IT in short. These shares were duly dematted in the demat account of the assessee. These shares were sold by the assessee on 11/03/2014 for Rs 53,11,573/- after holding for a period of 21 months. The payments for purchase of shares of both the companies were made by the assessee by account payee cheques out of sources duly disclosed in the books of accounts. 38.3. The ld. AO in the assessment framed u/s 143(3) of the Act in the same manner by making the same observations as was done in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove by treating the sale proceeds of shares of Rs 1,80,13,488/- as unexplained cash credit u/s 68 of the Act and an estimated commission expenditure of Rs 5,40,405/- (18013488 *3%) as unexplained u/s 69C of the Act at the rate of 3% of sale proceeds of shares. 38.4. When the appeal was pending befor....
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....ssessee is challenging the levy of interest u/s 234B and 234C of the Act, which would be consequential in nature and does not require any specific adjudication. 41. The Ground No. 5 raised by the assessee is challenging the initiation of penalty proceedings u/s 271(1) (c ) of the Act, which would be premature for adjudication at this stage. Hence dismissed. 42. In the result , the appeal of the assessee Shri Nitin Popatlal Thakkar in ITA No. 1609/Mum/2021 for A.Y. 2014-15 is partly allowed . Shri Dineshchandra D Chhajed - ITA No. 1611/Mum/2021 - Asst Year 2015-16 - Assessee Appeal 43. Though the assessee has raised several grounds before us, we find that the effective issue to be issued in this appeal is as to whether the ld. CIT(A) was justified in confirming the action of the ld.AO in denying the exemption claimed u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of PS IT Infrastructure & Services Ltd in the facts and circumstances of the case. The inter connected issue involved therein to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the addition made on account of estimated commission expend....
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....e duly reflected in the demat account of the assessee. 43.3. The ld. AO in the assessment framed u/s 143(3) of the Act in the same manner by making the same observations as was done in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove by treating the sale proceeds of shares of Rs 2,80,97,839/- as unexplained cash credit u/s 68 of the Act and an estimated commission expenditure of Rs 16,85,870/- (28097839 *6%) as unexplained u/s 69C of the Act at the rate of 6% of sale proceeds of shares. 43.4. When the appeal was pending before the ld. CIT(A), SEBI had passed an order u/s 11(1), 11(4) and 11B(1) of SEBI Act, 1992 dated 05/06/2020 in the case of PS IT Infrastructure Services Ltd, wherein certain parties were debarred for a period of 3 years from accessing the securities market and were further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner. In the said list of persons who were debarred, the name of the assessee or its registered share broker was not reflected. 43.4.1. Accordingly, it was pleaded before the ld. CIT(A) that even as per SEBI investigation and its....