TaxTMI 
TaxTMI 
2024 (4) TMI 263
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....ls available on record. The assessee is an individual deriving income from salary and other sources. The return of income for the Asst Year 2015-16 was filed by the assesse on 28.8.2015 declaring total income of Rs 6,60,930/-. The assessee purchased 12500 equity shares of CCL International Ltd on 22.8.2011 for Rs 1,25,000/- in off market through a stock broker M/s Narayan Securities in cash. These shares carried a face value of Rs 2 per share and assessee bought the same at Rs 10 per share. The payment for the same was made out of disclosed sources of income by the assessee. Thereafter the Registrar and Transfer Agent (RTA) M/s Alankit Assignment Limited transferred the shares in the name of the assessee. The share certificates for the said purchase duly effecting the share transfer in assessee's name was also carried out as under:- Distinctive Nos. of Shares Certificate No. No. of Share Name of the original holder From To 335001 337500 1135 2500 Hasina Khatoon 7501 10000 1004 2500 Subhash 210001 212500 1085 2500 Shyam Chandra Jha 482501 485000 1194 2500 Urwashi 15001 17500 1007 2500 Rawat ....
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....years 2013-14 and 2014-15 and Memorandum of Association and Articles of Association of CCL International Ltd. It is pertinent to note that the assessee had sold these 9000 shares in various tranches at prevailing market prices on various dates. The shares were sold at Rs 479.52 , Rs 496.403, Rs 578.271, Rs 585.21, Rs 592.407, Rs 598.401 and Rs 488.511 per share on various dates during the year under consideration. 3.3. After selling 9500 shares during the year under consideration, the assessee held remaining 3000 shares in his demat account. The ld. AO wrongly stated that the assessee had sold these 3000 shares on 8.12.2015 relevant to Asst Year 2016- 17. Actually no sale was made by the assessee on 8.12.2015 and these shares were consolidated on 8.12.2015 by the company in the ratio of 5:1 and accordingly assessee was holding 600 shares in his demat account (3000/5=600) as on 28.9.2016. 3.4. The ld. AO observed in para 2.10. in page 24 of his order that the assessee was not produced before him for examination. In this regard, we find that the Chartered Accountant of the assessee vide letter dated 3.11.2017 enclosed in page 69 of the Paper Book had filed a letter before the l....
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....d company i.e CCL International Ltd is duly recognised by the Government of India. The ld. AR also placed on record the scrutiny assessment orders of CCL International Ltd of various assessment years as under:- Asst Year Income Returned Income Assessed Order u/s Date of Order Page No. of PB 2011-12 247270/- 289526/- 143(3) 28.2.2014 86 & 87 2012-13 7115100/- 7115100/- 143(3) 4.3.2015 88 & 89 2013-14 15775370/- 15846584/- 143(3) 22.2.2016 90 & 91 2014-15 9101530/- 9243927/- 143(3) 21.12.2016 92 & 92A 2015-16 9533430/- 9913390/- 143(3) 16.5.2017 93 to 95 3.7. The aforesaid scrutiny income tax assessment orders clearly go to prove that the said company i.e. CCL International Ltd cannot be construed as a shell company or a penny stock company as alleged by the lower authorities. On the contrary, the said company is regularly carrying on its business deriving income thereon regularly from both Government and Private Sector. Hence the entire allegations leveled by the revenue qua this company falls flat. We find that the ld. AO had not found any material against this company CCL....
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....n the sum of Rs 29,56,000/- both on law as well as on facts. 4.1. We have heard the rival submissions and perused the materials available on record. The assessee raised loans from the following parties which is subject matter of dispute before us:- 13.8.2014 Kapil Gupta 16,000/- 29.10.2014 Rakesh Gupta (HUF) 17,20,000/- 24.3.2015 Ankita Garg 2,20,000/- 24.3.2015 Ankita Garg 7,00,000/- 25.3.2015 Ankita Garg 3,00,000/- TOTAL 29,56,000/- 4.2. The assessee was asked to explain the three necessary ingredients of section 68 of the Act i.e. identity of the lender, creditworthiness of the lender and genuineness of the transactions, in respect of the aforesaid loan creditors. The observations of the ld. AO in this regard are as under:- "(i) No explanation was furnished with regard to deposits of Rs. 16,000/- obtained from shri Kapil Gupta. Therefore, the sum of Rs. 16,000/- is held unexplained cash credit, and added under section 68 of I.T. Act, 1961." (ii)....... (iii) Regarding loan from Shri Rakesh Gupta, HUF the assessee filed copy of bank account, confirmed copy of account and ITR acknowledgem....
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....e to be treated as bogus as they had only dealt with penny stock scrips where share prices have been artificially manipulated. This is absolutely baseless and cannot be sustained in the eyes of law as it is not backed by any evidence. The ld. AO had not brought any material on record with regard to the name of the scrip dealt by Rakesh Gupta (HUF) ; when it was sold ; whether the gains thereon are short term or long term capital gain or loss ; whether STT was suffered on that transaction ; how many shares were sold. Absent all these basic details, the nature and source of credit of Rakesh Gupta (HUF) being sale proceeds of shares received from Trustline Securities Ltd (a registered share broker with SEBI) cannot be doubted. Even if the amounts received by Rakesh Gupta (HUF) from Trustline Securities Ltd is treated as income in the hands of Rakesh Gupta (HUF), still it becomes a valid source for the HUF to advance loan to the assessee herein. Hence creditworthiness of Rakesh Gupta (HUF) is proved beyond reasonable doubt i.e loan was advanced to the assessee out of sale proceeds of shares by Rakesh Gupta (HUF). Hence the said loan is to be treated as genuine. Apart from this, the ass....
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....wledged by the ld. AO in his observations reproduced hereinabove. Hence there is no reason for the ld. CIT(A) to merely reject this crucial document of bank statement as additional evidence which only supports the documents already placed on record by the assessee before the ld. AO viz. the ledger account of Agro Auto Grind Engineers Pvt Ltd. Hence we have no hesitation to hold that the assessee had duly proved the identity of the lender, creditworthiness of the lender and genuineness of the transactions in respect of loan received from Ankita Garg in the sum of Rs 12,20,000/- and hence the addition made u/s 68 of the Act thereon is hereby directed to be deleted. 4.6. With regard to loan received from Kapil Gupta in the sum of Rs 16,000/-, the same was added as unexplained cash credit u/s 68 of the Act by the ld. AO on the ground that no details were furnished by the assessee. The assessee had filed confirmation from the lender , copy of Income Tax Return acknowledgement of the lender for the Asst Year 2014-15 , copy of PAN card of the lender as additional evidence before the ld. CIT(A), which were rejected by the ld. CIT(A) as it was not accompanied by a formal application in t....