TaxTMI 
TaxTMI 
2023 (12) TMI 877
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....Considering the identical issues involved in the appeals, we shall first take up ITA No. 97/Viz/2020 in the case of Smt. A. Harshitha as a lead appeal. ITA No.97/Viz/2020 (AY: 2014-15) (In the case of A. Harshitha) 3. Brief facts of the case are that the assessee Smt. A. Harshitha, an individual, filed her return of income for the AY 2014-15 on 28/07/2014 admitting a total income of Rs. 8,08,510/-. While filing the return of income, the assessee claimed exemption u/s. 10(38) of the Act with respect to Long Term Capital Gains [LTCG] derived of Rs. 4,75,65,374/- from the sale of listed equity shares. The case was subsequently selected for scrutiny under CASS and a notice u/s. 143(2) of the Act was issued on 18/09/2015. Consequent to search and seizure operation u/s. 132 of the Act conducted on 14/10/2015 in the case of the assessee, the assessment proceedings got abated. Simultaneously, search and seizure operation was conducted in the cases of Sri A.T. Rayudu, Sri A. Avnash, Smt. A. Ammaji and M/s. ATR Ware Housing Pvt Ltd., Visakhapatnam on the same day. During the course of the said proceedings, certain documents and loose sheets, books of account of the assessee were fou....
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.... to Rs. 1/- thereby increasing the number of shares to 10,00,000 to the assessee. The assessee during the period October, 2013 to March, 2014 sold 7,08,358 shares at the Kolkata Stock Exchange for a sale consideration of Rs. 4,87,61,418/-. It was further submitted by the Ld. AR that the shares were held for more than 12 months and transacted on the recognised stock exchange, the assessee has claimed exemption of the long term capital gains u/s. 10(38) of the Act which was duly reflected in the return of income filed for the AY 2014-15. The Ld. AO considered these transactions as abnormal and caused certain enquiries. During the course of enquiry, the Ld. AO found that M/s. Global Infratech & Finance Limited has manipulated the share prices and has indulged in providing accommodation entries to various investors. The Ld. AO, after detailed enquiries of the exit operators, has recorded the statements from various entry operators as detailed in the assessment order. Further, it was also observed by the Ld. AO from the seized material that the assessee has paid a commission of 5.75% on the sale price. The Ld. AO therefore once again issued a show cause notice on 30/10/2017 asking the a....
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....Treatment of long term capital gains as unexplained cash credit u/s. 68 of the Act. * The Ld. CIT(A) has erred in law and on facts by holding the sum of Rs. 4,86,27,910/- earned by the assessee as unexplained cash credit u/s. 68 of the Act. * The Ld. CIT(A) has erred in holding that the transactions in shares are bogus in nature and are a sham. * The Ld. CIT(A) has not appreciated the facts and circumstances of the case, wherein the appellant has entered into these transactions in a bonafide and genuine manner. Treatment of commission expenditure as unexplained expenditure under section 69C of the Act. * The Ld. CIT(A) has erred in law and on facts by holding that the sum of Rs. 28,03,781/- as unaccounted expenditure u/s. 69C of the Act. * The Ld. CIT(A) has erred on facts in holding that the said expenditure is unexplained by incorrectly holding that the transactions due to which such expenditure has arisen, are bogus in nature. * The Ld. CIT(A) has not appreciated the facts and circumstances of the case, wherein the appellant has entered into these transactions in a bonafide and genuine manner." 5. The first ground....
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....Revenue Authorities be quashed. In support of his argument, the Ld. AR relied on the following case laws: 1. Decision of the Hon'ble Bombay High Court in the case of Pr. CIT vs. Indravardan Jain (HUF) in ITA No. 454 of 2018. 2. Decision of Hon'ble ITAT, Mumbai in the case of ITO vs. Indravardhan Jain (HUF) in ITA No. 4864/Mum/2014, dated 27/05/2016. 3. Decision of the Hon'ble ITAT, Ahmedabad in the case of DCIT vs. Shri Rajnikant Prabhudas in ITA Nos. 401 & 402/Ahd/2019, dated 25/09/2023. 4. Judgment of the Hon'ble High Court of Allahabad in the case of Pr. CIT vs. Smt. Renu Agarwal reported in [2023] 153 taxmann.com 578 (Allahabad). 5. Judgment of the Hon'ble High court of Delhi in the case of Pr. CIT vs. Smt. Krishna Devi reported in [2021] 431 ITR 361 (Delhi). 6. Judgment of the Hon'ble High Court of Gujarat in the case of Pr. CIT vs. Sandipkumar Parsottambhai Patel reported in [2023] 150 taxmann.com 192 (Gujarat). 7. Per contra, the Ld. DR heavily supported the order of the Ld. AO and argued that the Ld. AO has made proper enquiries before concluding the transaction as a sham. The Ld. DR referred to the order of the Ld. A....
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....see has received back to back cash for the accommodation entries provided by M/s. Global Infratech & Finance Limited. It is also seen from the documents provided before us that these shares were quoted on the recognized stock exchange that the payment for purchase of shares and the realization of sale consideration was through banking channels. It is also noted that the assessee has paid securities transaction tax on the sale transaction. It is also the fact that these shares are sold on the floor of the recognized stock exchange ie., Kolkata Stock Exchange. Further, we find from the case DCIT vs. Shri Rajnikant Prabhudas Mandavia (supra) relied on by the Ld. AR, the Coordinate Bench of Ahmedabad has found that the assessee in that case has invested in M/s. Global Infratech & Finance Limited which was quoted in the Bombay Stock Exchange and therefore the transactions cannot be considered as manipulated by the assessee. It is also found that in the instant case the investment was made through banking channels and merely because the shares were allotted on preferential basis, it cannot be viewed that the assessee was engaged in manipulation of the share prices for earning bogus LTCG.....
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....Company and therefore the appellants were connected to Noticee nos. 1 to 7 who were involved in price manipulation is patently erroneous and based on surmises and conjectures. There is no finding that there was a meeting of minds between the appellants with Noticee nos. 1 to 7. There is no finding nor there is any allegation that there was any collusion of the appellants with Noticee nos. 1 to 7 with regard to the alleged scheme and in manipulating the price. 15. We also find it strange that the Company had issued preferential allotment to 93 allottees and notice has only been issued to only to some of the allottees. No proceedings whatsoever was initiated against the remaining preferential allottees. These preferential allottees were also connected to theCompany but for reason best known, proceedings were not initiated against the remaining preferential allottees. 16. In Umang Dhanuka & Ors vs SEBI in Appeal no. 102 of 2020 and other connected appeals decided on June 08, 2021 this Tribunal held:- "Further, having a business connection with the Company does not mean that there were part of the scheme of manipulating the price or they were part of some collusion wh....
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....e purpose of earning bogus LTCG and hence we are inclined to allow the ground raised by the assessee. 9. With respect to the third ground on treatment of commission expenditure as unexplained expenditure u/s 69C of the Act, since the LTCG earned by the assessee are bonafide in nature, the commission expenditure shall be allowed as a deduction from the LTCG and hence this ground raised by the assessee is allowed. 10. In the result, appeal of the assessee is allowed. ITA No. 98/Viz/2020 (AY: 2014-15) (In the case of Smt. A. Ammaji) 11. This appeal is filed by the assessee and the assessee has raised the following grounds of appeal: "The order of the Ld. CIT(A) is bad and unsustainable in the eyes of law as the same is passed without proper application of mind, as it was contrary to the spirit and provisions of the Income Tax Act, 1961. Grounds of Objection for notice issued u/s. 153A * That having regard to the facts and circumstances of the case, the present assessment pursuant to section 153A is not justified as the search conducted on the appellant was based on illegal search warrant. * That having regard to the facts and circumst....