TaxTMI 
TaxTMI 
2023 (9) TMI 795
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....e learned CIT(A) for confirming the Assessing Officer's action of taking the income at Rs.6,83,050/- as against income disclosed by the Assessee at Rs.1,35,860/- are insufficient and contrary to the facts and evidence on record. 4. On the facts and circumstances of the case, the learned CIT (A) erred in dismissing the appeal without appreciating the facts and evidence submitted by the Assessee. 5. On the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the AO's action of raising demand of Rs.2,39,480/-. THE GROUNDS OF APPEAL are without prejudice to one another & the appellant Craves leave to add, to alter, to amend or to modify Grounds of Appeal." 3. The only dispute raised by the assessee, in the present appeal, is against the disallowance of exemption of long-term capital gains claimed under section 10(38) of the Act and corresponding addition under section 68 of the Act. 4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is an individual and for the year under consideration filed the return of income on 13/04/2015, declaring a total ....
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....it in face value of Rs.1/-, the appellant was issued 41620 shares, out of which 655 shares were sold at Rs. 20/- per share. The company shares were again consolidated and shares of Rs. 1 were consolidated to face value of Rs.10/- The assessee was then holding 4096 shares. Thereafter, the Nouveau Multimedia Ltd. was demerged and the company got split into three new companies namely: Nouveau Ventures, Pearl Agriculture Ltd (Now Mukta Agriculture Ltd.) and Pearl Electronics Ltd.). On split of the company, the assessee got 4096 shares of Pearl Electronics (2294 shares) and Pearl Agriculture (2254 shares) which were subsequently sold during the year under consideration and the assessee earned Long term capital gains of Rs. 5,47,190/-. The appellant has submitted copy of purchase bill, share certificate, share transfer form, broker note copy, Demat a/c. ledger a/c and also the copy of bank account, to prove the genuineness of the transactions. 5.3 The main arguments of the appellant revolved around the facts that the shares were purchased during Jan and Feb 2010 through banking channel. Thereafter, these shares were sold after retaining for a period of more than3 years. t....
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....ellant is also one of the beneficiaries of the transactions entered by the Companies through multiple layering of transactions and entries provided. Even the BSE listed this company as being used for generating bogus LTCG. On the facts of the case and judicial pronouncements will give rise to only conclusion that the entire activities of the appellant is a colourable device to obtain bogus capital gains. The Hon'ble High Court of Delhi in the case of UditKalra, ITA No. 220/2009 held that the company had meagre resources and astronomical growth of the value of the company's shares only excited the suspicion of the Revenue and hence, treated the receipts of the sale of shares to be bogus. Hon'ble High Court has also dealt with the arguments of the assessee that he was denied the right of cross examination of the individuals whose statements led to the enquiry. Further, reliance is also placed on the orders of various Courts and Tribunals listed below. >M.K. Rajeshwari vs. ITO in ITA No. 1723/Bang/2018, order dated 12.10.2018 >Abhimanyu Soin vs. ACIT in ITA No. 951/Chd/2016, order dated 18.04.2018 >Sanjay Bimalchand Jain vs. ITO 89 ....
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....he company shares were again consolidated and shares of Re. 1 were consolidated to a face value of Rs.10. The assessee was then holding 4,096 shares. Thereafter, Nouveau Multimedia Ltd was demerged and the company got split into 3 new companies namely, Nouveau Global Ventures, Pearl Agriculture Ltd. (now known as Mukta Agriculture Ltd.), and Pearl Electronics Limited (now known as Mystic Electronics Limited). On the split of the company, the assessee got 4,096 shares of Pearl Electronics (2294 shares) and Pearl Agriculture (2254 shares). These shares were sold during the year under consideration and the assessee earned long-term capital gains of Rs.5,47,190. As per the assessee, the shares of Nouveau Multimedia Ltd were issued to the assessee not by way of preferential allotment or an off-market transaction but the same were purchased based on various public announcements made by the company on the stock exchange website. Further, as per the assessee, these shares were purchased through its broker HDFC Securities Ltd. In this regard, the assessee has placed on record the contract note of HDFC Securities Ltd for the transaction in shares of Nouveau Multimedia Ltd on 15/01/2010, 06/0....
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....n such price manipulation even after purchasing and selling the shares on the stock exchange through a SEBI registered stock-broker. 8. It is pertinent to note that in the statement recorded of the Authorised Representative of the assessee during the assessment proceedings, it was specifically submitted that the assessee has never invested through preferential allotment and also disclosed the name and address of the broker, i.e. HDFC Securities Ltd. However, the AO without finding any fault with the evidence submitted by the assessee proceeded to treat the transaction as non-genuine and the long-term capital gains earned by the assessee as bogus. Further, we find that the SEBI vide its order dated 26/06/2020, had conducted an enquiry into the manipulation of the price of the scrip of Mystic Electronics Limited, by certain operators and the entities connected to such operators. From the perusal of the said order, which was furnished during the course of the hearing, we find that there is no allegation that the assessee has transacted with the alleged operators or their entities for earning the long-term capital gain of Rs.5,47,190. In the absence of any other allegation of the Re....