TaxTMI 
TaxTMI 
2024 (2) TMI 1406
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.... in not considering the merit of the case, therefore, the order passed by the Ld. C.I.T.(A) is completely arbitrary, unjustified and illegal. 3. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in making disallowance of Rs. 2,27,75,452/- on account of bogus loss in share trading which is completely arbitrary, unjustified and illegal. 4. For that on the facts of the case, the Ld. C.I.T.(A) was wrong in dittoing the order of the A.O. and confirming the disallowance amounting to Rs.2,27,75,452/- as trading loss in share transaction were done on the platform of the exchange, treating the same as bogus loss which is completely arbitrary, unjustified and illegal. 5. For that on the facts of the case, the A.O. has only relied upon Investigation Wings materials but the A.O. himself has not made any independent enquiry, therefore, the disallowance amounting to Rs.2,27,75,453/- is completely arbitrary, unjustified and illegal. 6. For that on the facts of the case, the Ld. CIT(A) ought to have considered that the assessee company had discharged its onus by furnishing all the relevant documents in connection with t....
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.... & option loss and purchase of quoted share amounting to Rs. 5,34,48,339.95. So, the entire transaction of share loss is not a single transaction or a single incident in assessee's case. The relevant submission in APB page 17 is duly inserted as below: img 6. Ld. A/R in argument further, placed that during the assessment and appeal proceeding, assessee submitted all the documents before the authorities and no veracity was challenged by the Revenue authorities. The relevant documents are as follows: SL. NO. PARTICULARS Authorities before whom Hied/ available PAGE NO(s). 1. Audited Balance Sheet CIT(A) &A.0. 1 to20 2. Copy of Income Tax Return along with ITR-V CIT(A)&A.O. 21 to 60 3. Notice issued u/s 143(2) of the Act CIT(A) &A.0. 61 to 62 4. Written submission filed before AO on 27.12.2017 with all documentary evidences substantiating the transaction. CIT(A)&A.O. 63 to 74 5. Statement showing details of purchase, sale & loss as incurred by the assessee & as disallowed by the AO in the disputed shares. CIT(A) &A.0. 75 6. Scrip-wise statement of loss along with respective Contract Notes: i....
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....25,000 64,86,447.00 1,25,000 9,61,347.15 -55,25,099.85 Pearl Agriculture Ltd. 50,000 24,46,915.50 50,000 4,80,785.00 -19,66,130.50 Pearl Electric 1,00,000 50,67,462.75 1,00,000 9,20,160.00 -41,47,302.75 Rajlaxmi Industries 1,00,000 29,79,782.67 1,00,000 8,02,392.00 -21,77,390.67 Total -2,77,75,452.84 It is seen from the details that the assessee has suffered a loss of Rs.2.27.75,453/- while trading in shares transaction in listed securities, as these losses have been booked in transaction of different Penny Stocks. Therefore, the assessee is requested to explain why these loss of Rs.2.27,75,453/- should not be disallowed in computing total income." 8. The Ld. A.R further argued that the issue is duly covered by the order of the Co-ordinate Bench of ITAT-Kolkata in the case of Samrat Finvestors Pvt. Ltd. vs. ITO in ITA No. 840/Kol/2023 for AY 2014-15 date of pronouncement 11.01.2024. The relevant paragraphs are duly reproduced as below: "3. The facts qua the first issue raised by the assessee are that the assessee, during the ye....
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....s. A very peculiar fact which is noted from the assessment order/investigation wing report is that in the list of the persons whose statement was allegedly recorded and who in their statement have admitted of price rigging, the names of share brokers, entry operators and exit providers have been mentioned. The facts on the file itself show that there was meeting of minds of the entry operators and the share brokers and exit providers. The price rigging was done by giving benefit to various subscribers with connivance of share brokers and the motive was to convert their unaccounted money into tax exempt long-term capital gains and for that purpose, there were certain persons chosen as exit providers who would buy shares when the share prices would be at its peak and those exit providers thereafter would suffer losses on account of fall in the price of the shares. This specific fact on the file shows that the exit providers were already chosen to execute the plan. The motive was to give the benefit of bogus long-term capital gains to various beneficiaries and to make that plan foolproof, the exit providers were already chosen with a predetermined planning as to at what stage the bene....
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....umstances of its own case. It is only when the facts and circumstances in two cases are similar that the ratio of the former case becomes applicable to the latter case. As discussed above, in the absence of any direct incriminating evidence against the assessee, the distinguishable and weak circumstantial evidence, in our view, do not suggest the preponderance of probability of the assessee being involved in price rigging of the scrips or being the predetermined and pre planned beneficiary of the devised scheme, therefore, the impugned additions are not warranted in this case, and the same are accordingly ordered to be deleted." 38. Respectfully following the above decision of this Tribunal in the case of Raigarh Jute & Textile Mills Ltd. vs. ACIT (supra), which is squarely applicable on the facts of the instant case of assessee i.e., M/s. Gateway Financial Services Ltd., we find that the alleged loss has been incurred by the assessee in the regular course of its business. We also note that the statement of various persons recorded by the AO/investigation wing/search team in the course of other proceedings as well as the report of the Kolkata investigation wing, t....
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....der of the SEBI (extracted supra), and after a detailed investigation and examination of records exonerated, the assessee(s) from the charges levelled in the show cause notice issued to them. Therefore, when the assessee(s) have been exonerated and the charges against them have been waived and the transactions of purchase and sale of equity shares carried out by them have been found to be genuine, the theory of preponderance of probabilities is ruled out in the case of the present assessee(s). Thus, when the transactions giving rise to the long term capital gain have been found to be genuine, and as per rules and regulation of SEBI, the finding of the ld. CIT(A) deserves to be set aside and the impugned additions in case of assessee(s) in appeal before us are uncalled for." 10. We heard the rival submissions and considered the documents available in the record. We find that the assessee has made the transaction of shares and generated the loss during this financial year. The relevant documents are duly submitted before the revenue authorities and also submitted before the Bench in relation to the share trading loss. 11. There is no question about the veracity of the documents....