TaxTMI 
TaxTMI 
2024 (10) TMI 852
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....l finding of Directorate of Investigation and various statements recorded by it without any cogent material on record and no nexus/ connection with the appellant being established to prove the impugned transaction as bogus 2. The learned CIT(A) failed to take cognizance of documentary evidence provided by the appellant such as bank statements, brokens contract notes and ledger accounts, demat accounts, etc. to substantiate the transactions of purchase and sale of shares. The addition made u/s 68 is merely on presumptions, suspicion, surmises, and conjectures disregarding the direct evidence placed on record. 3. The learned CIT(A) had erred in misinterpreting the SEBI order passed against the broker Daulat Laxmi Chandraliya and Ghanshyam Kamlesh Kacchawa for contributing to price rise in the scrip of Confidence Finance Trading Limited in fraudulent manner against the appellant. The learned CIT(A) failed to appreciate that the appellant was in no way related to the said brokers and she could not be punished for the wrong doings of others. 4. The learned CIT(A) erred in confirming the action of the AD denying the exemption under sec. 10(38) of the Act to the appellant to the ext....
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....in of Rs. 64,35,247. The claims of the assessee were rejected and the entire consideration of Rs. 2,67,83,731 has been added to the income of the assessee under section 68 of the Act. The purchase and sale and the income earned are uncontroverted. This action has been taken by the ld. AO for the following reasons/suspicions: - (a) such a huge long-term and short-term capital gain on virtually unknown scrips is suspicious. (b) the increase in the price of both these scrips is irrational/unnatural and not supported by the financial data of the companies, and the rise is rising on account of actions of operators and exit providers. (c) the assessee has earned this income by a prearranged method in collusion with entry providers and in connivance with them. (d) While the learned AO, has described at length, a modus operandi unearthed by the investigation wing, he has been unable to provide even a shred of evidence that connects the alleged modus operandi with the assessee; and (e) when the assessee provides documentary evidence of the sale in regulatory environment, if that is to be disbelieved or ignored the AO needs to provide some concrete evidence. The mere fact that the....
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....ra-7.2, the AO also referred to the order passed by the SEBI penalising and restraining the stockbroker, through whom the assessee purchased shares of M/s Parag Shilpa Investments Ltd, as it was involved in rigging the share price of certain shares. However, we find that there is no allegation that such a broker was involved in rigging the price of the shares in which the assessee has invested. Further, no finding of the SEBI has been brought on record to show that such rigging of price was for the benefit of the assessee or has any nexus with the assessee. This is also not a case wherein either the directors/promoters of the aforesaid Companies, in which the assessee had invested, has accepted that the company is merely a paper company and provides the benefit of bogus long-term capital gains to its shareholders. Further, despite the Revenue having the information regarding the stockbrokers through whom the shares were sold, there is no evidence on record that even these shareholders were named in the investigation conducted by the Investigation Wing of the Department. It is also pertinent to note that the AO has not given any adverse comments or drawn adverse inferences on the do....
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....he L.T. Act, 1961, ignoring the fact that the shares were bought/acquired from off market sources and thereafter the same was demated 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 Rs. 1,03,33,925/- claimed by the assessee is nothing but unaccounted income which was rightly added u/s 68 of the I. T. Act, 1961?" 2. We have considered the impugned order with the assistance of the learned Counsels and we have no reason to interfere. There is a finding of fact by the Tribunal that the transaction of purchase and sale of the shares of the alleged penny stock of shares of Ramkrishna Fincap Ltd. ("RFL") is done through stock exchange and through the registered Stock Brokers. The payments have been made through banking channels and even Security Transaction Tax ("STT") has also been paid. The Assessing Officer also has not criticized the documentation involving the sale and purchase of shares. The Tribunal has also come to a finding that there is no allegation against assessee that it has participated in any price rigging in the market on the shares of RFL. 3. Therefore we f....
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.... based on various other factors and the most crucial one, the order of the SEBI brought on record before us wherein there is detailed investigation and enquiry and finding in the case of M/s. Sunrise Asian Ltd. and how various other entities and persons connected with the manipulation and rigging of the prices in the stock exchange recommend providing accommodation entry. Thus, the addition of Rs. 2,70,01,771/- made u/s. 68 is confirmed." 8. We heard the rival submission and considered the documents available in the record. On perusal of the records, we find that the assessee, herself never involved in price rigging of the scrips. The Ld. AO has not conducted independent investigation and fully relied on the observation of the investigating authority of Kolkata. But no separate verification was conducted. The assessee has discharged her onus by submitting documents before the revenue authorities. There is no information of entry/exit provider in appeal and assessment stage. The share was duly opened by the SEBI but later on the same was revoked. The co-ordinate bench in the case of assessee's husband Shri Abhishek Tejraj Doshi (supra)&Shri Abhishek Doshi (supra) has taken a view i....
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....ed with no order as to costs." the order of the Hon'ble Bombay High Court in the case of CIT vs Shyam R Pawar 229 Taxman 256 (Bom). The relevant paragraph is reproduced as below: - "6. It is in that regard that we find that Mr.Gopal's contentions are well founded. The Tribunal concluded that there was something more which was required, which would connect the present Assessee to the transactions and which are attributed to the Promoters/Directors of the two companies. The Tribunal referred to the entire material and found that the investigation stopped at a particular point and was not carried forward by the Revenue. There are 1,30,000 shares 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 o....
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....upra) and Sumati Dayal case (supra) is of no assistance. Upon examining the judgment of Suman Poddar case (supra) at length, we find that the decision therein was arrived at in light of the peculiar facts and circumstances demonstrated before the ITAT and the Court, such as, inter alia, lack of evidence produced by the Assessee (herein to show actual sale of shares in that case. On sucuh basis, the ITAT had returned the finding of fact against the Assessee, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix At hand. Similarly, the case of Sumati Dayal (supra) too turns on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue. 13.The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come (o the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order." Further, we respectfully relied on the orders of Hon'ble High Courts on similar facts in favour of the asse....
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....nts and reflected in the return. Since the shares were held for less than one year, the appellant was offered the Short-Term Capital Gain to tax @ 15%.The shares of Confidence Finance and Trading Limited, although purchased through preferential allotment, were dematerialized in the year of purchase itself. These shares were sold on recognised Stock exchange through a registered broker. The purchase and sale considerations were routed through proper banking channels. Since the shares were held for more than one year, the appellant was claimed exemption of LTCG under section 10(38) of the Act. 10. The learned AO had asserted in the assessment order that the assessee along with her family members had sold the shares of Ashika Credit and Capital Limited to M/s Withal Commercial Private Limited. Firstly, the shares of Ashika Credit and Capital Limited are sold through the stock exchange, wherein the identity of buyers and sellers is unknown to each other. Secondly, the said assertion is made without any corroboration. The ld. AO did not appreciate that Ashika Stock Broking Limited was banned from buying/selling or dealing in securities in their own/proprietary account. Later, the ban ....