TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 769
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....,000 shares of M/s. Rosette Resorts Limited in November, 2011 at a price of Rs. 10/- per share. Subsequently the name of the above said company was changed into M/s. Radford Global Limited. In January, 2013 the face value of the shares of Rs. 10/- per share was split into shares of Rs. 2/- per share. Accordingly, the assessee received 1,25,000 shares of Rs. 2/- each against 25000 shares purchased by it. The assessee sold the entire 1,25,000 shares between 13.5.2013 to 17.5.2013 for an aggregate consideration of Rs. 1,04,94,756/-. Since the shares were held for more than one year, the assessee computed long term capital gains of Rs. 1,02,44,756/- on sale of shares and claimed the same as exempt under section 10(38) of the Act. 3. The Assessing Officer noticed that the price of the shares of the above said company has started falling from August, 2013 onwards and it was trading around Rs. 4.75 per share in March 2014. He also noticed that the financials of the above said company did not justify the average selling rate of Rs. 83/- per share realized by the assessee. The Assessing Officer also referred to the findings of the Kolkata Investigation Directorate, wherein the investigatio....
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....ved by the assessee on sale of shares is required to be assessed as taxable income of the assessee under section 68 of the Act. Accordingly, the Assessing Officer assessed the sale consideration as unexplained cash credit under section 68 of the Act. The learned CIT(A) confirmed the same. He also held that the profit earned by the assessee from sale of shares is beyond human probabilities and in this regard, he took support of the decisions rendered by Hon'ble Supreme Court in the cases of CIT vs. Durga Prasad More (1971)(82 ITR 540) and Sumati Dayal vs. CIT (214 ITR 801). 6. Aggrieved by the orders passed by tax authorities, the assessee has filed this appeal before us. 7. The Ld A.R submitted that the assessee has furnished all evidences to the tax authorities to prove genuineness of purchases and sales of shares. He submitted that the AO has primarily relied upon the SEBI's interim report to come to the conclusion that the prices of shares of Radford global Ltd have been manipulated. However, the name of the assessee does not find place in the said SEBI report. In any case, the SEBI, vide its investigation report dated 20th September, 2017 has categorically held that it did n....
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....eport for arriving at the conclusion that the long term capital gains reported by the assessee is bogus in nature. With regard to the SEBI report, the Ld A.R brought to our notice the final report of SEBI, wherein it has been held that it did not find any adverse evidence/adverse findings in respect of violation of provisions of SEBI Regulations. With regard to the investigation report of Investigation wing, we notice that the AO has relied upon the said generalized report with regard to the modus operandi adopted in manipulation of prices and generation of bogus capital gains. It is not the case of the AO that the transactions entered by the assessee were found to be a part of manipulated transactions. 11. With regard to purchase of shares from a concern named M/s Atherton Glass Works Ltd, it is the case of the AO that the said concern did not respond to the notice issued by him u/s 133(6) of the Act. In this regard, a specific query was put to the counsel as to how the assessee purchased shares of M/s Radford Global Ltd from the above said concern. The Ld A.R submitted that M/s Atherton Glass works Ltd has given advertisement in the news paper stating that it is dealing in physi....
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....ere was some cash transaction through these suspected brokers, on whom there was an investigation conducted by the Department. Once the onus on the Department was discharged, according to Mr. Sureshkumr, by the Revenue-Department, then, such a finding by the Tribunal raises a substantial question of law. The Appeal, therefore, be admitted. 4. Mr. Gopal, learned Counsel appearing on behalf of the Assessee in each of these Appeals, invites our attention to the finding of the Tribunal. He submits that if this was nothing but an accommodation of cash or conversion of unaccounted money into accounted one, then, the evidence should have been complete. Change of circumstances ought to have, after the result of the investigation, connected the Assessee in some way or either with these brokers and the persons floating the two companies. It is only, after the Assessee who is supposed to dealing in shares and producing all the details including the DMAT account, the Exchange at Calcutta confirming the transaction, that the Appeal of the Assessee has been rightly allowed. The Tribunal has not merely interfered with the concurrent orders because another view was possible. It interfered becau....
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....on stopped at a particular point and was not carried forward by the Revenue. There are 1,30,000 shares of Bolton Properties Ltd. purchased by the Assessee during the month of January 2003 and he continued to hold them till 31 March 2003. The present case related to 20,000 shares of Mantra Online Ltd for the total consideration of Rs. 25,93,150/-. These shares were sold and how they were sold, on what dates and for what consideration and the sums received by cheques have been referred extensively by the Tribunal in para 10. A copy of the DMAT account, placed at pages 36 & 37 of the Appeal Paper Book before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were available and which gave details of the transactions. The contract note is a system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But the Tribunal concluded that itself, is not enough to prove that the transactio....