TaxTMI 
TaxTMI 
2024 (12) TMI 857
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....46,382/- u/s. 69C of the Act of commission expenditure was made, was dismissed. 2. The assessee is aggrieved and, therefore, the appeal in before us with the following grounds: "1. That on the facts and in the circumstances of the case, the CIT(A)NFAC grossly erred in upholding the validity of order passed by ld AO. 2. That on the facts and in the circumstances of the case, the CIT(A)NFAC grossly erred in sustaining the addition of Rs. 49,27,649/- made by ld. AO on account of unexplained cash credit u/s 68 of the Act. 3. That on the facts and in the circumstances of the case, the CIT(A)NFAC grossly erred in confirming the disallowance of exemption claimed u/s 10(38) on long term capital gain. 4. That on the facts and in the circumstances of the case, the CIT(A)NFAC grossly erred in upholding the finding of ld. AO that the transaction of long term capital gain as bogus. 5. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC grossly erred in not appreciating the legal & valid evidence 6. That on the facts and in the circumstances of the case. the CIT(A)NFAC grossly erred in sustaining addition of Rs. 49,27,649/- by relying on report of investigati....
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....that:- i. shares of the company in which assessee has earned long term capital gain appears in the list of 84 entities covered in the report of the investigation wing of Calcutta stating it to be a penny stock in the capital gain arising to the beneficiaries is bogus. ii. one Mr. Subrata Haldar Director of BSAS Securities P. Ltd. during survey u/s. 133A has confirmed on oath of providing bogus long term capital gain to several entities. 6. The learned assessing officer made enquiry, issued a show cause notice to the assessee which was submitted on 20.12.2016. The assessee reiterated all the evidence and thereafter relied upon the judicial precedents. 7. Findings of the learned assessing officer were that:- i. assessee has purchased the shares physically on 06.04.2012 through Island Media and Entertainment Pvt. Ltd. and not through recognized stock exchange. ii. consideration paid for purchase how paid is not known. iii. The Assessing Officer was also guided that he has made correspondence with SRK Industries Ltd. requiring to furnish details and documents in respect of share transaction with the assessee, but such communication is returned back undelivered with remarks ....
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....efore, it has returned back as left. The company is in existence and is being traded on the stock exchange. vii. The statement of Mr. Haldar noted by the Assessing Officer is neither the broker of the assessee and nor assessee has dealt with him. He has also not named the assessee or any of his brokers in his statement. viii. Sebi, Kolkata investigation report may be the first trigger point of investigation, but when the assessee has submitted all the available details to the assessing officer, he must make at least minimum enquiry to prove that the long-term capital gain on by the assessee is not genuine. ix. Merely the addition under section 68 cannot be made without rejecting the evidence submitted by the assessee. The assessee has proved the nature and source of the credit which has not been disputed by the learned assessing officer. x. The assessee has submitted the copy of the bill from womb the assessee has purchased the shares, the payment has been made to that party by an account payee cheque which is reflected in the bank account of the assessee, therefore these details were submitted before the assessing officer and the statement of the assessing officer that it ....
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....06.04.2012. b. Rs. 70,000/- was paid by the assessee from his bank account with IDBI Bank Ltd. by Cheque No. 53065 on 07.04.2012. c. Above shares of 7000 were dematerialized in the Demat Account of the assessee with IDBI Bank on 11.04.2012 and credited in client IDBI A/c No. 12380628. d. On 20.05.2013, the above shares of SRK Industries Ltd. as per the scheme of arrangement between Transat Commerce Ltd. and SRK Industries Ltd. become the shares of Transcend Commerce Ltd. in the ratio of 222 shares for every 100 shares. Accordingly, 7000 shares of SRK Industries Ltd. resulted into 15540 shares of Transcend Commerce Ltd. These shares appeared in the Demat account of the assessee on 16.05.2023. e. The shares of the SRK Industries Ltd. were also subdivided from face value of Rs 10 per shares to face value of 12730. f. The assessee sold thus 21905 shares having the cost of Rs. 70,000/-. g. These shares were sold in small trenches from 15.07.2013 till 14.02.2014 resulting into sales of Rs. 49,07,924/-. h. The assessee sold these shares through its broker registered at Bombay Stock Exchange namely Networth StockBroking Ltd. having address of 10th Floor Atlanta Centre, Gorega....
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....ks of account of the assessee. In this case, the source of the credit in the books of account of the assessee is sale of shares, consideration received from the broker through electronic platform of Bombay Stock Exchange which were acquired and sold by the assessee through a company. The learned Assessing Officer could not have expressed dissatisfaction without making any enquiry. The explanation of the nature and source of the credit given by the assessee remains uncontested by the AO. Therefore, in these circumstances, the denial of deduction u/s. 10(38)of the Act of the long term capital gain is not proper. 14. It is clear that the addition could have been made in the hands of the assessee on the basis of preponderance of the probabilities by merely citing a judgment or judicial precedents. It is needless to state that question of fact of earning of the long term capital gain by the assessee must be decided on the principles of preponderance of the probabilities giving due weight to the specific facts as found so as to draw the conclusion that reasonable person appointed with the relevant acknowledge would draw on the basis of same fact. To find the facts, they should have been....