TaxTMI 
TaxTMI 
2024 (10) TMI 422
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.... same as exempt u/s 10(38) of the Act. The assessee had purchased 2,00,000 shares of above said company on preferential basis in June, 2012 @ Rs. 15/- per share (Face value Rs. 10/- and premium Rs. 5/-). The face value of the shares was split from Rs. 10/- per share to Re 1.00 per share. Consequently, the assessee received 20,00,000 shares of Re 1.00 each in lieu of 2,00,000 shares of Rs. 10/- each. The Investigation Wing had carried out investigation with regard to the price manipulations and generation of bogus long term capital gains in number of stocks, classified as penny stocks. The AO noticed that the shares of the above said company was also identified as one of the penny stocks. The AO noticed that the assessee has sold 7,88,000 shares for a consideration of Rs. 7.04 crores and declared Long term capital gains of Rs. 6.92 crores. Relying fully upon the report given by the Investigation wing, the AO took the view that the long term capital gain declared by the assessee on sale of shares of above mentioned company was pre-arranged method employed by the assessee with the connivance of the operators in order to generate bogus long term capital gains. 3. The AO noticed that....
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....ssessee has purchased the shares in the off market. The tax authorities have noticed that financials and fundamentals of this company were very poor. Hence the rise in the prices of shares was not commensurate with the financial strength of the company. The Investigation Wing has also conducted enquiries with various share brokers and they have confessed to have indulged in manipulating the prices of shares in order to provide bogus long term capital gains. The SEBI had also suspended the trading of shares of above said company upto 18-11-2011. Accordingly, the Ld D.R submitted that the AO was justified in denying exemption to the long term capital gains and accordingly, the order of Ld CIT(A) requires to be reversed. 7. The Ld A.R submitted that the assessee has purchased the shares in preferential allotment. He submitted that the shares were issued on preferential basis only after revocation of suspension by SEBI. Hence the Revenue could not have placed reliance on the suspension order of the SEBI for the transactions carried on by the assessee. He submitted that the shares were dematerialized and subsequently sold in Stock exchange platform. He submitted only a part of shares....
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.... on the report given by the Investigation Wing of the Income tax Department in order to arrive at the conclusion that the long term capital gains reported by the assessee is bogus in nature. We notice that the investigation report prepared by Investigation Wing is a generalized report with regard to the modus operandi adopted in manipulation of prices of certain shares and generation of bogus capital gains. We notice that the AO has placed reliance on the said report without bringing any material on record to show that the transactions entered by the assessee were found to be a part of manipulated transactions, i.e., it was not proved that the assessee has carried out the transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of prices. It is stated by Ld A.R that the transactions carried on by the assessee were not subjected to scrutiny by SEBI at all. 9. We notice that the AO has recorded statement from the assessee u/s 131 of the Act, but he could not find any fault with the assessee. The AO has only observed that the assessee could not explain as to why he invested in the shares of company, whose fundamentals are we....
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....Department. Once the onus on the Department was discharged, according to Mr.Sureshkumr, by the Revenue-Department, then, such a finding by the Tribunal raises a substantial question of law. The Appeal, therefore, be admitted. 4. Mr.Gopal, learned Counsel appearing on behalf of the Assessee in each of these Appeals, invites our attention to the finding of the Tribunal. He submits that if this was nothing but an accommodation of cash or conversion of unaccounted money into accounted one, then, the evidence should have been complete. Change of circumstances ought to have, after the result of the investigation, connected the Assessee in some way or either with these brokers and the persons floating the two companies. It is only, after the Assessee who is supposed to dealing in shares and producing all the details including the DMAT account, the Exchange at Calcutta confirming the transaction, that the Appeal of the Assessee has been rightly allowed. The Tribunal has not merely interfered with the concurrent orders because another view was possible. It interfered because it was required to interfere with them as the Commissioner and the Assessing Officer failed to note some rel....
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.... of Bolton Properties Ltd. purchased by the Assessee during the month of January 2003 and he continued to hold them till 31 March 2003. The present case related to 20,000 shares of Mantra Online Ltd for the total consideration of Rs. 25,93,150/-. These shares were sold and how they were sold, on what dates and for what consideration and the sums received by cheques have been referred extensively by the Tribunal in para 10. A copy of the DMAT account, placed at pages 36 & 37 of the Appeal Paper Book before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were available and which gave details of the transactions. The contract note is a system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But the Tribunal concluded that itself, is not enough to prove that the transactions in the impugned shares were bogus/sham. The details received from Stock Exchange have been relied u....
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....n against the assessee that it has participated in any price rigging in the market on the shares of RFL. 3. Therefore we find nothing perverse in the order of the Tribunal. 4. Mr. Walve placed reliance on a judgement of the Apex Court in Principal Commissioner of Income tax (Central)-1 vs. NRA Iron & Steel (P) Ltd (2019)(103 taxmann.com 48)(SC) but that does not help the revenue in as much as the facts in that case were entirely different. 5. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law. In the case of CIT vs. Jamnadevi Agarwal (20 taxmann.com 529 (Bom), the Hon'ble Bombay High Court held that the transactions of purchase and sale of shares cannot be considered to be bogus, when the documentary evidences furnished by the assessee establish genuineness of the claim. In the case of PCIT vs. Indravadan Jain (HUF) (ITA No. 454 of 2018)(Bom), the broker through whom, the assessee had carried out....