TaxTMI 
TaxTMI 
2024 (10) TMI 852
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....appellant as non-genuine only on the basis of general 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 denyi....
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....rt-term capital gain on sale of 48651 shares of Ashika Credit and Capital Ltd and earned a short-term capital gain 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 ....
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....mentioned that the same issue was adjudicated by the coordinate bench of ITAT-Mumbai in the case of assessee's husband, Mr Abhishek Doshi and respectfully relied on the orders of the co-ordinate bench ITAT-Mumbai Bench-Ain case of Shri Abhishek Doshi ITA No.3122/Mum/2022, date of pronouncement 31/05/2013. The relevant part of the order is reproduced as below: - "5. In the assessment order in para-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 cap....
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....ainst the assessee. We observe that the Hon'ble Bombay High Court in the case of Pr. CIT v. Ziauddin A Siddique in Income Tax Appeal No. 2012 of 2017 dated 04.03.2022 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 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 th....
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....pheld. The Ld.DR relied on the order of PCIT vs Swati Bajaj (2022) 139 taxmann.com 352 (Cal) and Aakruti Ketan Mehta vs ITO, Ward 35(1)(1) ITA No.53/Mum/2023, date of pronouncement 31/01/2024 held - "31. We are not going into details of various judgments wherein additions have been deleted on this scrip of M/s. Sunrise Asian Ltd and statement of Shri Vipul Vidur Bhatt has been discarded on the ground assessee was not given cross examination. We have given our finding 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....
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....tax (Central)-1 v. NRA Iron & Steel (P.) Ltd. 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. 6. The appeal is devoid of merits and it is dismissed 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 Lt....
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....d eye to the evidence produced by the .Respondent. With regard to the claim that observations made by the CIT(A) were in conflict with (he Impugned Order, we may .*only note that the said observations are general in nature and later in the order, the CIT(A) itself notes that the broker did not respond to the notices. Be that as it may, the CIT(A) has only approved the order of the AO, following the same reasoning, and relying upon the report of the Investigation Wing. Lastly, reliance placed by the Revenue on Suman Poddar case (supra) 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 it....
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....nted monies in the guise of bogus capital gains. The order Aakruti Ketan Mehta (supra) is distinguishable in this point. The order of SEBI never contended that the assessee was involved in price rigging. 9. We find that the shares of Ashika Credit and Capital Limited were purchased from the open market i.e. recognised stock exchange through registered brokers. The purchase and sale were routed through demat accounts. The purchase and sale considerations were routed through proper banking channels. The transactions were recorded in books of accounts 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 asses....