TaxTMI 
TaxTMI 
2024 (4) TMI 1145
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....TA No. 2398/Ahd/2018 for the A.Y. 2015-16. Whether in the facts and circumstances of the case and in law, the learned ITAT has erred in deleting the addition of Rs. 2,88,72,634/- made on account of bogus Long Term Capital Gain on sale of shares of Naisargik Agritech (India) Ltd. without appreciating that the transaction was pre-arranged as well as sham and was carried out through penny scripts companies/paper companies? 2. The facts of the case giving rise to this appeal can be summarised as under. 2.1 The Assessing Officer made addition of Rs. 02,88,72,634/- being sale proceeds of 200000 shares of M/s. Naisargik Agritech (India) Ltd. under Section 68 of the Act on the ground that the purchase and sale of the shares were....
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.... certificates and the bank account of Union Bank of India from which payment of Rs. 20,00,000/- was made vide cheque no. 15390 dated 15/03/2011. The shares have been purchased at face value of Rs. 10/- each at Ahmedabad where appellant and the company are based. The purchase of shares are well documented, and payment of Rs. 20,00,000/-has been made by cheque, therefore, its genuineness cannot be doubted. Appellant has dematerialised shares with HDFC Bank and held it for three years. Appellant has subsequently sold the shares on BSE when the suspension of trading of the share of the company resumed at the prevailing exchange price ranging from Rs. 150 to Rs. 160 per share in different lot between 23/06/2014 to 11/07/....
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....oss of Rs. 1 crore on sale of shares of M/s. Naisargik Agritech India Ltd. does not by itself prove that the purchase and sales of appellant is not genuine. The addition u/s. 68 on long term capital gain cannot be made merely on suspicion and on high capital gain. Appellant has submitted number of share scripts listed on the stock exchange in which there have been gain from 16 to 71 times between the Financial Year 2011 to 2014. For instance, the shares of Marksons Pharmaceuticals Ltd. which were priced at Rs. 2.70 per share in March, 2011 has rose to Rs. 50 per share in August, 2014 which has gone up by 18 times. The long term capital gain in the penny stock companies are to be examined on its own facts. In appellant's c....
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....ng to tax capital gain arising from sale of shares as unexplained cash credit. In view of the above facts, AO was not justified to make the addition u/s. 68 of the I. Τ. Act, 1961 of sale proceeds of shares of Rs. 2,88,72,634/- held for more than three years. The addition made by the AO is accordingly deleted. The ground of appeal is accordingly allowed." 2.6 Feeling aggrieved, the appellant revenue filed appeal before the Tribunal. The Tribunal, after considering the submissions made by both the sides and taking into consideration the finding of facts arrived at by the CIT (A), dismissed the appeal of the revenue by observing as under. "7.3 In the case before us, the Assessing Officer has not doubted the purchase of shares wer....