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TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 926
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....ed in law and on facts in quashing the reassessment proceedings under Section 147 without considering the fact that at the stage of issuance of notice u/s.148, the assessing officer had sufficient tangible material at his command to form a bonafide belief that the income of the assessee has escaped assessment for AY 2013-14? (b) Whether on the facts and in the circumstances of the case, learned ITAT has erred in law and on facts in not deciding the case on merits i.e. without appreciating the facts of the case and the cogent material and circumstantial evidences gathered by the Assessing Officer during the case of assessment proceedings ?" 3. We have heard Mr.Vaun K. Patel, learned Standing Counsel appearing for the revenue and have perused the material produced on record in detail. We have also perused the order dated 29.11.2021 passed by the ITAT, the assessment order dated 28.12.2017 passed under Section 143(3) r/w Section 147 of the Act of 1961 passed by Income- Tax Officer, Ward-2(3), Bharuch as also the order dated 30.8.2018 passed in CIT(A)-Vadodara-3/10389/2017-18 by the CIT(A), Vadodara-3. 4. Upon perusal of the aforesaid record, it appears that Assessing Officer, du....
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....stock claimed as exempt u/s. 10(38) of the Act was pre-arrange method adopted by the assessees to evade capital gain taxation. In the present case, the appellant has purchased 15,000 shares of M/s. Global Securities Ltd. on 01.11.2011 for Rs.18,750/-. The said 15,000 shares were sold between January, 2013 and February, 2013 for rates between Rs. 8.06/- to Rs. 156.50/- for a total consideration of Rs. 17.56,592/-. The main arguments of the Assessing Officer were that (i) the assessee was not in a position to give any satisfactory explanation regarding physical delivery of shares and transaction slips of transfer of shares either at the time of assessment proceedings or during the course of appellate proceedings (ii) Financial health of M/s. Global Securities Ltd. did not improve to an extent to have spiraled the price of shares many times within a short span of time and (iii) the findings of the investigation wing where the entry operators had accepted the modus operandi of providing bogus LTCG through purchase and sale of shares of few companies. 5.2 The shares of M/s. Global Securities Ltd. were having market price of share at around Rs. 8.95/- in November, 2011 and the price w....
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....ization is not at all humanly probable, as there is no economic or financial basis, that a share of little known company would jump abnormally. In these circumstances, I do not find any infirmity in the order of the AO. Accordingly I affirm the same and decide the issue against the assessee respectfully following the above decisions. Considering the facts of the case, I have no hesitation in holding that the transactions in purchase and sell of shares of M/s Global Securities Ltd. for Rs. 17.56,592/- were sham transactions intended to claim wrong exemption u/s 10(38) of the Income-tax Act and, therefore, I uphold the addition of Rs 17.56.592/- made by the Assessing Officer. This Ground of appeal (on merits) is also dismissed. 6.0 The next issue regarding payment of commission paid to the entry operator/ broker for arranging the bogus LTCG entry of Rs. 87,290/- The appellant has paid commission @ 5% to the entry operator / broker for purchase and sale of sham transactions to bring unaccounted money in the guise of exempted long term capital gains. Since, the commission amount paid on the bogus purchase and sale of penny stock scripts is an integral part of entire game plan, the a....
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....l statements. 24. We also note that Assessing officer and CIT(A) has relied on the case of Sumati Dayal vs. CIT (214 ITR 801) (SC). We are of the view that said decision is not applicable to the assessee under consideration, as the assessee has successfully demonstrated with help of evidences on record to have made the transaction of purchase and sale of alleged shares. No single material was brought on record indicating name of any of the entry provider taking assessee's name or assessee's broker name. We note that assessee has submitted enough evidences such as: (a) Ledger Account of Jainam Share Consultancy Securities Pvt. Ltd, (b) Contract Notes of Jainam Share Consultancy Securities Pvt. Ltd. (c) Relevant Bank Statement showing that all transactions were through banking channel. (d) Contra confirmation of broker M/s Corporate Commodity Broker Private Ltd. (e) Share Certificate, (f). Share Transfer Form, (g). Debit Note and (h) Cash Receipt etc. Therefore, addition in assessee's case cannot be made on generalization, human probabilities, suspicion, conjectures and surmises. 25. We note that assessee submitted before lower authorities th....
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....see had furnished all relevant evidences in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. Neither these evidences were found by the AO nor by the Id. CIT(A) to be false or fictitious or bogus. The facts of the case and the evidences clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee exempted u/s 10(38) of the Act on the basis of suspicion, surmises and conjectures. It is to be kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence. In the aforesaid facts and circumstance, for allowing the appeal we rely on the decision of the Hon'ble Calcutta High Court in the case of M/s Alipine Investments in ITA No.620 of 2008 dated 26th August, 2008 where in the High Court held as follows: "It appears that there was loss and the whole transactions were supported by the contract notes, bills and were carried out through recognized stock broker of the Calcutta Stock Exchange and all....