TaxTMI 
TaxTMI 
2023 (8) TMI 335
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....nd convenience. 3. The facts leading to these appeals are such that while filing returns of income of AY 2011-12 and 2012-13 as involved in these appeals, the assessee declared exempted long-term capital gain u/s 10(38) from sale of shares of M/s KCL Infra Projects Ltd. (KCLIPL) formerly known as M/s Kadam Construction Ltd. The cases of assessee were re-opened by revenue through notices u/s 148 and the assessment were ultimately made u/s 147 read with section 143(3) wherein the AO treated the shares of KCLIPL as what is called "penny stock" and capital gain declared by assessee therefrom as managed or non-genuine. Accordingly, the AO made addition u/s 68 amounting to Rs. 9,21,930/- and Rs. 19,42,723/- (equivalent to the full value of sale consideration received by assessee) in AY 2011-12 and AY 2012- 13 respectively. Aggrieved by action of AO, the assessee carried matter in first-appeal but could not succeed. Now, the assessee has come in next appeal before us. 4. Presently, the controversy to be adjudicated by us is whether or not the revenue is justified in treating the capital gain declared by assessee as nongenuine and thereby make addition u/s 68? 5. At the outset, we....
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.... 1,15,184 17.12.2007 2500 1,33,447 18.12.2007 7000 3,75,153 19.12.2007 3500 1,91,081 26.12.2007 2000 1,23,270 07.01.2008 4000 2,47,642 Total 35000 17,57,769 (iii) It is submitted that the assessee made payments of purchase consideration to M/s Arihant Capital Markets Ltd. on different dates through banking channel through cheques drawn on assessee's A/c with Union Bank of India, copy of bank Pass-Book is placed at Page No. 25 to 27 of Paper-Book. The payment is neither made on one single day nor in cash. The details of payments are as under: Date Cheque No. Amount 20.12.2007 141636 6,87,176 26.12.2007 141638 1,91,081 26.12.2007 141637 5,08,600 10.01.2008 141641 1,23,270 23.01.2008 141644 2,47,642 Total 17,57,769 (iv) It is submitted that after purchase the shares were immediately credited in De-mat A/c on 31.12.2008. It is pointed out that there is a slight time-gap of about 11 months in-between last purchase on 07.01.2008 and credit in De-mat on 31.12.2008 but that was for the reason that in those days, the dematerialization system was no....
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....SEBI order dated 06.10.2005, Shri Mohan Jhawar and others took over the management of company (Para No. 4 of assessment-order). (v) That the AO analyzed price-trend of KCLIPL and found that upto June, 2009, the peak price was Rs. 12.75. Thereafter from June, 2009, the price rigging started and there was exponential rise in the price of share and in volume but there was no financial backing to support the abnormal rise (Para No. 4.1 of assessment-order). (vi) That based on above observations, the AO has found that in totality and on preponderance of probabilities, it emerged that the purchase and sale of shares was executed for the purpose of lending legitimacy to assessee's unaccounted income. (vii) Lastly, Ld. DR relied upon following decisions to strengthen the revenue's stand: (a) Sumar Poddar Vs. ITO (2019) 112 taxmann.com 330 (SC) (b) PCIT Vs. Swati Bajaj (2022) 139 taxmann.com 352 (Calcutta HC) (c) Shyam Sunder Bajaj (2022) 145 taxmann.com 315 (Kolkata ITAT) (d) Pooja Ajmani (2019) 106 taxmann.com 65 (Delhi ITAT) (e) Sanjay Kaul (2020) 114 taxmann.com 186 (Delhi ITAT) (f) Sandeep Bhargava (2019) ....
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....ues; there is no payment or receipt in cash. Then, we find that immediately after purchase of shares, the assessee got those shares credited in De-mat A/c (there was some time-gap of 11 months which is suitably explained by Ld. AR). Notably, the assessee was holding share in De-mat A/c for as many as 10 years from purchase till last sale and this single factor is more than enough to dislodge any allegation of revenue on assessee's transactions. Then, we also find that the assessee is having investment in other securities as well and it is not the case that the assessee has made a stray transaction of shares of KCLIPL only. Thus, there is a complete series of factors and evidences demonstrating the genuineness of assessee's transactions and not a single of them has been disputed by revenue. 10. Now, we would like to deal with some more contentions put forward on behalf of revenue. In so far as the buyers of shares sold by assessee are concerned, we find merit in the submission of Ld. AR that the entire sale was made through platform of stock-exchange where nobody knows who is buyer. Further, the AO has not provided any details of enquiries directly undertaken by him from buyers t....
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....sessee purchased shares on 16.03.2012, de-matted on 29.12.2012 and sold just after completion of one year and few months when the investment in shares became eligible for claiming exemption u/s 10(38) with increase of almost 2823%. In Shyam Sunder Bajaj (2022) 145 taxmann.com 315 (Kolkata ITAT), the binding decision of jurisdictional High Court in Swati Bajaj (supra) was followed on admission of identical facts by counsels of parties (Para No. 6 of order). In Pooja Ajmani (2019) 106 taxmann.com 65 (Delhi ITAT), the assessee purchased shares on 13.09.2012, opened de-mat a/c on 15.01.2014, got shares credited therein and thereafter sold in the very next month. In Sanjay Kaul (2020) 114 taxmann.com 186 (Delhi ITAT), the assessee purchased shares on 05.05.2014/23.02.2014/25.03.2014 and sold within a short period on 15.03.2015/15.02.2015/15.03.2015 and declared long-term/ short-term loss and set off the same against other income. In Sandeep Bhargava (2019) 109 taxmann.com 174 (Delhi ITAT), the assessee made off market purchase directly from the company and declared more than 100 times gain within a period of about 1 year. Thus, the vital facts of all these cases were highly glaring and ....