TaxTMI 
TaxTMI 
2024 (2) TMI 531
X X X X Extracts X X X X
X X X X Extracts X X X X
....crip M/s Radford Therefore, the decision relied on by the Ld. CIT(A)-14, New Delhi is not applicable to the facts of the present case. c. Ld. CIT (A)-14, New Delhi erred in deleting the addition of Rs. 5,93,06,611/-on the ground that the addition was made on mere suspicion. AO has not given the summons to Brokers as it was already done by Kolkata Investigation Unit. AO has given sufficient opportunities of natural justices to assessee. AO has made additions after in-depth research and analysis in 61 pages of assessment order. d. Ld. CIT (A) has not appraised the fact that the share price rose to 7442% during that period. The return was 2309%.Ld. CIT(A)-14, New Delhi has not appraised the detailed financial analysis of the scrip done by AO. In light of the above facts it is clearly evident that the Ld CIT(A)-14, New Delhi has erred in deleting the addition of Rs. 5,93,06,611/-. 3. At the very outset the Counsel for the assessee stated that on identical set of facts in the case of the brother of the assessee Sh. Mukesh Mittal this Tribunal in ITA No.761/Del/2020 has decided the issue in favour of the assessee and against the revenue. 4. The DR fairly conceded to this but placed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctices relating to Securities market) Regulations, 2003 (PFUTP Regulations) in respect of following 82 entities (against whom directions were issued vide the interim orders as confirmed vide the above said confirmatory orders) warranting continuation of action under section 11B r/w/ 11(4) of SEBI Act. However investigation has found adverse findings against Radford which warrants Adjudication proceedings". 5.1 The name of the assessee appears at item 77 of the list. Further it was held in Para 10 as under: "10 Considering the fact that there are no adverse findings against the aforementioned 82 entities with respect to their role in the manipulation of the script of Radford, I am of the considered view that the directions issued against them vide interim orders dated December 19, 2014 and November 9, 2015 which were confirmed vide orders dated October 12, 2015, March 18, 2016 and August 26, 2016 are liable to be revoked." 5.2 The decision of ITAT in the case of Shri Brij Bhushan Singhal vs. ACIT (supra), considered the scrip of M/s Radford Global Ltd. on identical facts and held as under: "30. Further, the assessing officer has heavily relied upon the various orders passed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....Ys. 2011-2012 to 2017- 2018 and for the assessment year under appeal the financials are reproduced above, which clearly show that this Company is dealing in actual business activities. Its financials are very heavy and as such the modus operandi of this type of penny stock companies would not be available in the case of M/s EBFL. The findings of the A.O. are entirely based upon interim order of SEBI. However, it is an admitted fact that interim order of the SEBI have been later on revoked by the SEBI on assessee as well as M/s EBFL have been cleared from all allegations and charges. In the case of Amar NathGoenka vs. vs., ACIT reported in 54 CCH 344, the ITAT, Delhi Bench considered the scrips of M/s EBFL on identical facts and held as under: "Assessee placed sufficient documentary evidences before A.O. to prove genuineness of the transaction. The assessee purchased shares through banking channel and actually got the shares transferred in his name. Purchase was made through cheque which is supported by bank statement. The transactions of sale have been made through Demat account. The contract note along with other details were produced to show that purchase and sale of the share....
X X X X Extracts X X X X
X X X X Extracts X X X X
....evoked against the assessee and M/s EBFL, therefore, nothing survives in favour of the A.O. The A.O. did not make any further investigation or enquiry into the matter and merely relied upon the interim order of the SEBI and investigation carried out by the Kolkata Wing. Further, it is not clear from the assessment order whether Investigation Wing report have been confronted to the assessee or any right of cross-examination have been allowed to any statement recorded at the back of the assessee. The assessee asked for the cross-examination of any statement which is used against the assessee for making the addition. But, the assessment order is silent on this aspect. Therefore, the above facts clearly show that assessee entered into the genuine transaction and as such the profit on sale of scrip was exempt from tax. The Ld. D.R. relied upon decisions of the ITAT, Delhi Benches, Delhi in the cases of SumanPoddar vs., ITO (supra) and UditKalra vs., ITO (supra), in which the findings of the Tribunal had been that these are cases of penny stock companies which fact is not there in the present case. Therefore, these decisions would not support the case of the Revenue as having distinguish....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice of shares of M/s Radford Global Ltd. However, isolated fact of increase in prices of a scrip, without evidence of any involvement of the assessee cannot b the basis to deny the claim made by the assessee, particular when SEBI has specifically exonerated the assessee. The addition has, thus, been made on surmises, conjectures a suspicion. The transactions of the assessee are prior to any enquiry or order made by SEBI. Thus, when a person who has been absolved by SEBI and, when the revenue has not placed any material in the shape of statement or otherwise to prove any involvement of the assessee in alleged wrong doing, then there remains no justification to hold that the amount credited represented unexplained credits u/s 68 of the Act. The decision of the ITAT in the case of Karuna Garg (supra) also supports the above wherein it was held as under: "21. A perusal of the assessment order clearly shows that the Assessing Officer was carried away by the report of the Investigation Wing Kolkata. It can be seen that the entire assessment has been framed by the Assessing Officer without conducting any enquiry from the relevant parties or independent source or evidence but has merely ....