TaxTMI 
TaxTMI 
2024 (11) TMI 765
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....A) has failed to appreciate that the assessment order passed u/s 147 is illegal, bad in law and without jurisdiction. 3. That on the facts and circumstances of the case and the provisions of the law, the Ld. CIT(A) has failed to appreciate that the approval u/s 151 is illegal, bad in law and without application of mind and consequently the assessment order passed requires to be quashed. 4. That On the facts and circumstances of the case, the Ld. CIT(A) has failed to appreciate that the assessment order being passed in violation of the principle of natural justice by not providing opportunity for cross examination of persons, whose statements have been relied upon by the AO, in spite of specific request made by the appellant in assessment proceedings as well as before CIT(A) and without giving adequate time and opportunity to the assessee to represent its case. 5. On the facts and circumstances of the case, the learned Ld. CIT (A) New Delhi has erred, both on facts and in law, in sustaining the assessment of the appellant at income of Rs. 1,12,16,378/- as against the income of (Rs. 13,36,590/-) declared by the appellant. 6. That the Ld. CIT(A) has....
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....n 10(38) of the Act to the tune of Rs. 2,71,88,988/- being STT paid on it. Based on the Investigation report, the AO considered the said claim of Long Term Capital Gain as part of accommodation entry and made addition of both Long Term Capital Gain income and also added the cost of acquisition under section 68 of the Act for Assessment Year 2012-13 and 2013-14. 5. As against the above assessment orders for Assessment Year 2012-13 & 2013-14, the assessee preferred appeals before the Ld. CIT(A). The Ld. CIT(A) apart from sustaining the addition vide order dated 23/09/2022, also enhanced the income on account of a notional commission at 2% paid for arranging the accommodation entries. Aggrieved by the impugned orders of the Ld. CIT(A), the assessee preferred the captioned appeals on the grounds mentioned above. 6. Ld. Counsel for the assessee addressing on the grounds of appeal vehemently submitted that the Assessee produced all the relevant documents such as bank statement, contract notes, transaction account statement with the registered broker namely M/s. K.K. securities Ltd. to prove the legitimacy of the transaction. The Ld. AO only based on some investigation report, chose....
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....see in physical form with a lock in period of 12 months and those shares were dematerialized later. Out of 1,500 shares the Assessee sold 42,750/- shares in Assessment Year 2012-13 through a broker named M/s K. K. Securitizes Ltd. through online mode and earned Long Term Capital Gain to the tune of Rs. 80,79,788/-. Further out of total 1,15,000/- shares, Assessee sold balance shares in financial years 2012-13 relevant to assessment year 2013-14 for a total sale consideration of Rs. 2,86,25,434/- and the same was claimed exemption under section 10(38) of the Act to the tune of Rs. 2,71,88,988/- being STT paid on it. 9. A search u/s 132 of the Act was conducted on M/s Radford on 09/04/2015, wherein as per the A.O, it was alleged that the shares of M/s Wagend Infra Ventures Ltd. were used as accommodation entries, therefore, the assessment of the Assessee has been reopened u/s 147 of the Act alleging that the Assessee has earned Long Term Capital Gain for both the Assessment Year 2012-13 and 2013-14 on the sale of shares of M/s Wagend Infra Ventures Ltd. and the same are bogus, accordingly, the A.O. also disallowed the cost of the acquisition of the sales and made addition u/s 68 o....
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....ng judicial notice of the fact that there was an astronomical increase in the share price of a company which was not commensurate with the financial parameters of the said company, yet this Court finds that a Coordinate Bench of this Court in PCIT vs. Smt. Krishna Devi [ITA 125/2022] & connected ITAs has upheld the ITAT order which is impugned in the present appeal. 4. The relevant portion of the order in PCIT vs. Smt. Krishna Devi (supra) is reproduced herein below:- "11. On a perusal of the record, it is easily discernible that in the instant case, the AO had proceeded predominantly on the basis of the analysis of the financials of M/s Gold Line International Finvest Limited. His conclusion and findings against the Respondent are chiefly on the strength of the astounding 4849.2% jump in share prices of the aforesaid company within a span of two years, which is not supported by the financials. On an analysis of the data obtained from the websites, the AO observes that the quantum leap in the share price is not justified; the trade pattern of the aforesaid company did not move along with the sensex; and the financials of the company did not show any reason for the....
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....materialized and the sales have been routed from demat account and the consideration has been received through banking channels." The above noted factors, including the deficient enquiry conducted by the AO and the lack of any independent source or evidence to show that there was an agreement between the Respondent and any other party, prevailed upon the ITAT to take a different view. Before us, Mr. Hossain has not been able to point out any evidence whatsoever to allege that money changed hands between the Respondent and the broker or any other person, or further that some person provided the entry to convert unaccounted money for getting benefit of LTCG, as alleged. In the absence of any such material that could support the case put forth by the Appellant, the additions cannot be sustained. 12. Mr. Hossain's submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind ey....
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....ax charged; amount of Securities Transaction Tax charged; amount of BSE transaction charges paid; amount of stamp duty paid. Therefore, evidence with regard to source and purpose for which amount had been received and credited in the books has been submitted and which has not been found false, forged and fabricated. The Identity of the party is established from the contract note itself wherein it has been prominently stated that name of the Share Broker is Mrs. Tradebulls Securities Pvt Ltd and that they are member of the Bombay Stock Exchange Ltd. The Decial Account statement evidencing holding of equity shares of Company of which shares have been dealt with at Bombay Stock Exchange and also the quantity which has been sold and the date on which such quantity was sold. The demat account statement, contains BSE settlement number which is very much matching with settlement number appearing in the contract note issued by the share broker. The Bank statement evidencing receipt of funds from the Share Broker has already been furnished in the course of assessment proceedings. The AO have not brought any material indicating that said amount proposed to be taxed has not been received from....
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....owed the appeal by the assessee. In doing so the tribunal held that the transactions cannot be brushed a side on suspicion and surmises. However, it was held that the transactions of the shares are genuine. Therefore, we do not find that there is any reason to hold that there is no substantial question of law held in this matter. Hence the appeal being ITA No. 620/2008 is dismissed." 27. In the aforesaid facts and circumstances of the case, we hold that the Id.CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We therefore delete the addition of Rs. 33,15,263. 28. Since, we have deleted the main addition of Rs. 33,15,263/-, therefore, the addition on account of commission payment of Rs. 3,29,188, which is consequential in nature, and hence the same is here by deleted." 13. During the assessment proceedings, the Assessee stated that he is a regular investor and making investments in the shares and the said fact has not been denied by the A.O. while passing the assessment order. Merely because alleged script to be a penny stock does not mean that actually that script is a penn....