TaxTMI 
TaxTMI 
2024 (8) TMI 221
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....ained commission estimated @ 5% on the sale proceeds of the said alleged shares. 3. Brief facts of the case are that assessee is engaged in the business of trading in ferrous and non-ferrous metals. Return of income was filed on 28.08.2015 reporting total income at Rs. 12,08,750/-. Case of the assessee was taken up for scrutiny assessment by issuing notice under section 143(2), dated 29.09.2016 based on information from the Investigation Wing of the Department that the assessee had transacted in certain shares characterised by the Department as penny scrip. After necessary investigation and examination, said assessment proceeding was completed by passing order under section 143(3) dated 28.12.2017. In this assessment, ld. Assessing Officer enquired about the capital gain of Rs. 99,80,463/- on sale of shares of PS IT Infrastructure and Services Limited (PS IT), claimed as exempt under section 10(38) of the Act. Assessee furnished necessary details in this respect. It is to be noted that assessee had reported total long-term capital gain of Rs. 1,00,09,012/- on sale of various listed shares which included long-term capital gain on the alleged penny scrip of PS IT also. Statement s....
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....of the assessee 4. In the course of assessment, statement of assessee was recorded by the Ld. Assessing Officer to verify the genuineness of the share transactions, part of which are reproduced in the impugned assessment order. In the said statement, assessee had given the details relating to the share transactions undertaken by him. Ld. Assessing Officer also issued notices under section 133(6) to the purchaser of the shares sold by the assessing, referred to as "exit providers" which according to him remained un-complied. Ld. Assessing Officer also referred to statement of one Mr. Anuj Agarwal who according to him was running the racket of providing accommodation entries by manipulating the share prices of alleged penny scrip of the PS IT. Ld. Assessing Officer noted that statement of Mr Anuj Agarwal was recorded under section 131 during the course of survey operation under section 133A by the DDIT (Inv.), Kolkata to state that he had provided accommodation entries in the alleged penny scrip. 4.1. Assessee had submitted that transaction in the said shares were subjected to STT levy and consideration of sale and purchase for the said scrip had been routed through normal bank....
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....s on which also LTCG is earned by the assessee. Aggrieved, assessee went in appeal before the CIT(A) who upheld the same by simply relying on the decision of Hon'ble High Court of Calcutta in the case of Swati Bajaj & others v. PCIT [2022] 446 ITR 56 (Cal) by stating that issue agitated is a covered matter which has been examined in detail by the Hon'ble Court. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, ld. Counsel for the assessee has reiterated the submissions made before the authorities below. He has also placed on record all the relevant documents and evidences in the form of paper book, details of which are already noted above, backed by judicial precedents of the Hon'ble jurisdictional High Court of Bombay. The submissions so made are not reiterated to avoid duplicity. 6. We note that transactions for purchase was undertaken in an offline mode which is an acceptable mode and that of the sale of the aforesaid shares were undertaken on the stock exchange platform through the SEBI registered broker on which STT was levied and the consideration was routed through normal banking channel. The entire flow of these transactions is corroborated by releva....
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....lso draw our force from the decision of Hon'ble High Court of Delhi in the case of PCIT v. Krishna Devi [2021] 126 taxmann.com 80 (Del) wherein the Hon'ble Court noticed that the reasoning given by the Assessing Officer to disbelieve the capital gain declared by the assessee, viz. astronomical increase in the price of shares, weak fundamentals of the relevant companies are based on mere conjectures. 7.2. Reliance placed by the ld. Assessing Officer on the report of investigation wing without further corroboration based on cogent material does not justify the conclusion that the impugned transaction is bogus, sham and part of racket of accommodation entries. It does not prove that the assessee has carried out the impugned transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of share prices. In absence of any such material, enquiry and examination, the addition made pertaining to receipt of sale consideration of the impugned transaction cannot be sustained. In our considered view, ld. Assessing Officer has not established that the assessee was involved in price rigging. 8. We note that ld. Assessing Officer has obser....
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....he assessee. Furthermore, the said shares are being currently traded on the stock exchange as demonstrated by the assessee from the screen shot of the website of www.bseindia.com dated 29.05.2024 at Rs. 20.42, furnished at the direction of the bench. In our considered view, assessee cannot be put to the rigors of section 68 in respect of sale proceeds received for sale of shares on the stock exchange (BSE). 9. Admittedly, it is also a fact on record that similar sale transactions of shares were undertaken by the assessee of other listed shares on the same platform of the stock exchange which have been accepted by the ld. Assessing Officer without any disallowance or addition. The same is evident from the statement of LTCG extracted above. Further, assessee continues to hold 42,000 shares of the PS IT along with shares of other companies duly reported in the balance sheet as on 31.03.2015. Shares of other companies include WESCOS, Anantraj, GIC Housing, Adani Power, Electro Steel, Edelweiss Cap and Unichem Lab. 10. From the perusal of the statement of assessee recorded by the ld. Assessing Officer during the course of assessment, part of which is reproduced in the impugned ord....
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....usions have to be drawn on the basis of certain admitted facts and materials and not on the basis of presumption of fact that might go against the assessee. Once nothing has been proved against the assessee with the aid of any direct material, nothing can be implicated against the assessee on the presumption or suspicion, howsoever, strong it might appear to be true. 13. For our observations and to arrive at the findings, we find force of binding nature from the decisions of Hon'ble High Court of Bombay being a jurisdictional High Court: i) Pr. CIT v. Ziauddin A Siddique [Income-tax Appeal No. 2012 of 2017, dated 4-3-2022] held as under:- "1. The following question of law is proposed: "Whether on the facts and in the circumstances of the case and in law, the Hon'ble Tribunal was justified in deleting the addition of Rs. 1,03,33,925/- made by AO u/s 68 of the I.T. Act, 1961, ignoring the fact that the shares were bought/acquired from off market sources and thereafter the same was DMATed and registered in stock exchange and increase in share price of Ramkrishna Fincap Ltd. is not supported by the financials and, therefore, the amount of LTCG of R....
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....t be treated as unaccounted income under section 68" 14. Ld. CIT(A) has without dealing with the facts and detailed documentary evidences placed on record by the assessee, dismissed the appeal by stating that issue is a covered matter by the decision in the case of Swati Bajaj (supra). In the said decision, it was held that assessee had to establish the genuineness of rise in price of shares within a short period of time that too, when general market trend was recessive. However, we note that there are several decisions of Hon'ble Jurisdictional High Court as stated supra which are in favour of the assessee. Accordingly, the same would prevail on the issue before this Tribunal. In the present case, decision of the Hon'ble Non-Jurisdictional High Court carries only a persuasive value. The law is very well settled by the Hon'ble Supreme Court in the case of Union of India vs Kamalakshi Finance Corporation Ltd reported in 55 ELT 43 (1991) that the decision of Hon'ble Jurisdictional High Court would have higher precedence value on the Tribunal than the decision of Hon'ble Non- Jurisdictional High Court. Hon'ble Supreme Court emphasised therein that the orders....
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....SING FINANCE G.I.C HOUSING FINANCE IDFC IDFC PS IT INFRA 1,787.87 PS IT INFRA 1000 NO. 2,234.79 100 NO. 04.01.12 12,077.70 27.11.14 18,002.06 100 NO. 04.01.12 12,077.70 28.12.14 15,554.52 100 NO. 04.01.12 15,497.58 31.12.14 16,253.93 100 NO. 07.10.12 12,752.24 31.12.14 16,253.93 800 NO. 07.05.12 07.05.12 3,476.82 756.35 QTY D.O.P P. VALUE D.O.S S. VALUE PROFIT/LOSS 5,924.36 3,501.69 06.06.14 436,565.34 434,777.47 07.06.14 560,713.36 558,478.57 PS IT INFRA PS IT INFRA (900 NO. 07.05.12 (1000 NO. 07.05.12 2,234.79 2,011.32 16.06.14 504,686.72 502,675.40 02.07.14 563,794.19 561,559.40 PS IT INFRA PS IT INFRA PS IT INFRA PS IT INFRA (1000 NO. 07.05.12 2000 NO. 07.05.12 1000 NO. 07.05.12 1000 NO. 07.05.12 2,234.79 16.07.14 564,589.25 562,354.46 4,469.58 19.07.14 1,099,960.20 1,095,490.62 2,234.79 26.07.14 548,787.50 546,552.71 PS IT INFRA PS IT INFRA 2,234.79 1000 NO. 07.05.12 2,234.79 9000 NO. 07.05.12 20,113.15 09.08.14 570,651.58 29.07.14 557,731.89 555,497.10 02.08.14 525,681.20 523,446.41 550,538.43....