TaxTMI 
TaxTMI 
2025 (2) TMI 157
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....ction of the AO denying business loss of Rs. 10,82,319/- suffered by the assessee from purchase and sale of Equity shares of Nikki Global Finance Limited. 4. Facts in brief are that the assessee is a Private Limited company engaged in the business of Share Trading. Income of Rs. 3,378/- was declared in the return of income for the A.Y. 2014-15 filed on 23.11.2014. The case selected for scrutiny through CASS followed by validly serving of notices u/s. 143(1)/142(1) of the Act. In the course of assessment proceedings, ld. AO observed that assessee has incurred short term capital loss of Rs. 10,82,319/- from sale of Equity shares of Nikki Global Finance Limited. Ld. AO observed that Nikki Global Finance Limited is part of the 84 companies which is alleged to be a penny stock company as per the list issued by SEBI and that these companies have been allegedly used by the entry operators for arrangement of bogus long term capital gains. Ld. AO noticed that assessee set off the loss of Rs. 10,82,319/- from sale of Equity shares of Nikki Global Finance Limited against its taxable profits. Ld. AO therefore disallowed the claim and made addition of Rs. 10,82,319/-. 5. Aggrieved assesse....
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....ifferent entities, which unearthed that certain companies and professionals were providing such claim in the shape of accommodation by manipulating the stocks of certain shell companies. The Hon'ble Court has made a detailed analysis of the material found during the course of search and survey on the premises of third entities and set aside the orders of the ITAT in a group of appeals by holding that such claim by the assessee's for long-term capital gain was a bogus claim. 7. The issue raised before us is with regard to genuineness of the claim of exempt income under section 10(38) of the Act in respect of long-term capital gain arising sale of equity shares from the listed companies, which were found to be the penny stock companies by both the lower authorities and the long-term capital gain so claimed found to be bogus in nature. We find that recently this Tribunal has adjudicated the similar issue under identical in the case of Shyam Sunder Bajaj in ITA No. 2552/KOL/2018 and others vide order dated 17th October, 2022 and after placing reliance on the judgment of Hon'ble Jurisdictional High Court in the case of SwatiBajaj & Others (2022) 139 taxmann.com 352(Cal.) pronou....
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....s and findings by the Hon'ble High Court are noted below: a) From the assessment order passed in the case of the assessee Smt. Swati Bajaj, we find that the genesis of the issue commenced from an investigation report submitted by the Directorate of Income Tax, Investigation, Kolkata (DIT). The investigation report has been prepared by the Deputy Director of Income Tax, Investigation Unit - II and III, Kolkata. [para 43] b) The assessee were conscious of the fact that they have not been named in the report, therefore made a vague and bold statement that the non-furnishing of report would vitiate the proceedings. Therefore, merely by mentioning that statements have not been furnished can in no manner advance the case of the assessee. If the report was available in the public domain as has been downloaded and produced by the revenue, nothing prevented the assessee's who are ably defended by the Chartered Accountants and Advocates to download such reports and examine the same and thereafter put up their defence. Therefore, the based on such statements of violation of principles of natural justice the assessee's have not made out any case. [para 65] c) The tes....
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....m. Thus, the orders of the tribunal are not only perfunctory but perverse as well. The exercise that was required to be done by the tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the "players" can never be established by direct evidence and therefore the surrounding circumstances was required to be taken note of by the tribunal which exercise has not been done. [para 99] k) In such factual scenario, the Assessing Officers as well as the Commissioner (Appeals) have adopted an inferential process which is found to be a process which would be followed by a reasonable and prudent person. The Assessing Officers and the Commissioner (Appeals) have culled out proximate facts in each of the cases, took into consideration the surrounding circumstances which came to light after the investigation, assessed the conduct of the assessee, took note of the proximity of the time between the buy and sale operations and also the sudden and steep rise of the price of the shares of the companies when the general market trend was admittedly recessive and thereafter arrived at a conclusion which is a proper....
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....ding in the particular scrip, particulars of buy and sale orders, steep increase in the price of the equity shares not commensurate with the financial of the alleged penny stock companies and also rigged of entry operators, who have accepted of being providing accommodation entries in the form of bogus long-term capital gain. We find that the said judgment of the Hon'ble Jurisdictional High Court in the case of Swati Bajaj & Others (supra) is completely applicable on the facts of the instant case. So far as the reliance placed by the ld. A.R. on the decision of this Tribunal in the case of M/s. Gateway Financial Services Limited(supra), we find that this Tribunal after considering the order of the Security & Exchange Board of India, in which one of the parties was the assessee dealt by this Tribunal and the SEBI after detailed investigation and considering the facts of the case exonerated the assessee from the charges leveled in the show-cause notice, which means that SEBI which controls the platform on which transaction of purchase and sale of equity shares is carried out, has specifically carried out the detailed investigation and the preponderance of probability was ruled out an....