TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 1062
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....ATH'). It was the submission that in respect of Shreenath Commercial & Finance Ltd., the Assessing Officer on the ground that there was information that the shares of Sreenath Commercial & Finance Ltd., had been used for creating suspicious transaction relating to LTCG of shares, disallowed the assessee's claim of the loss on account of long term capital loss in respect of the scrips of Shreenath Commercial & Finance Ltd. It was the submission that the profit generated in respect of the long term capital gain from the trading of shares of Maa Tarini Industries Ltd., was accepted. It was the submission that in the course of assessment, the Assessing Officer has relied upon the statement of one Shri Sanjay Vora recorded u/s. 131 of the Act on 8.4.2015 by the DDIT, (Investigation), Kolkata, wherein, he has mentioned the name of Shreenath Commercial & Finance Ltd., as one of the companies in which he has undertaken penny stock transaction. It was the submission that nowhere the said Shri Sanjaya Vora has referred to the assessee's name or that the assessee has been assisted in deriving in long term capital gains/loss. It was the submission that the assessee had also requested an opport....
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....s of Maa Trarini Industries Ltd., were purchased in assessment year 2010-2011 and the same were sold during the assessment year 2014-15 generating the long term capital gain of Rs. 86,34,826/-. It was the submission that it was only on account of the loss that the assessee had incurred in the transaction of shares of Shreenath Commercial and Finance Ltd., that the assessee had actually to sell the shares of Maa Tarini Industries Ltd., to set off of the loss as otherwise the loss would have eaten into the capital of the assessee. It was the submission that under similar circumstances, the Co-ordinate Bench of this Tribunal in the case of Bimal Devi Singhania (023) 146 taxmann.com 449 (Cuttack.Trib.) dated July 6,022 has deleted the addition made therein and same has already been approved by the Hon'ble Jurisdictional High Court of Orissa in ITA No.84 & 85 of 2022 vide judgment dated 10.10.2023, wherein, the Hon'ble Jurisdictional High Court of Orissa has held as follows: "6. On the basis of the pleadings available on record and also the arguments advanced by learned counsel appearing for the respective parties, this Court, vide order dated 13.09.2023, framed the substantial questi....
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.... under Section 10(38) of the Income Tax Act, 1961 three requirements need to be fulfilled. Firstly, the share should be held for more than one year, secondly, it should be listed and sold on recognized stock exchange and, thirdly, on the said sale necessary Security Transaction Tax (STT) has to be chargeable. If all these requirements are satisfied, then the benefit of exemption under Section 10 (38) of the Income Tax Act, 1961 is admissible. 9. In Bhoruka Engineering Industries Ltd. (supra), the Karnataka High Court has also laid down the above mentioned principles. Therefore, applying the provisions contained under Section 10 (38) of the Income Tax Act, 1961 and also the law laid down by the High Court of Karnataka mentioned supra, all the above noted three elements are existing in the present case and, thereby, the respondent-assessee is entitled to get the benefit under Section 10 (38) of the Income Tax Act, 1961. As such, a survey under Section 133A of the Income Tax Act, 1961 was conducted on 20.08.2015 and, without detecting any incriminating documents or evidence against the respondent-assessee, recorded the statement that tax will be paid on the claim made under Section ....
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.... seller will pay the said tax, as prescribed rate for carrying out the transaction of securities for financial gains, are liable to pay STT. All gains from such transactions are called capital gains and are classified as LTCG or STCG, depending on the holding period. Therefore, the alleged substantial questions of law as proposed by the Revenue cannot be sustained in the eye of law, as the same is contrary to clauses (a) and (b) of Section 10 (38) of the Income Tax Act, 1961 (Circular No.5/2005 dated 15.07.2005). 13. Mr. T.K. Satapathy, learned Senior Standing Counsel appearing for the Income Tax Department laid emphasis on the CBDT Circular No.23 of 2019 dated 06.09.2019, as the matter related to bogus Long Term Capital Gain on Penny stock. But the said circular can only be applied prospectively not retrospectively, because the present appeal is for the Assessment Year 2013-14. Thereby, the circular relied upon by the Senior Counsel appearing for the revenue has no application to the present case. 14. In view of the facts and circumstances, as well as the law, as discussed above, even though substantial questions of law have been framed vide order dated 13.09.2023, the same ar....