TaxTMI 
TaxTMI 
2023 (4) TMI 1411
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....njhunwala against whom no action was taken by SEBI because the Ld. CIT(A) failed to appreciate the fact that shares were purchased from a broker who was penalized by SEBI for malpractices with mala fide intention. 1.2 On the facts and in the circumstances of the case the Ld. CIT(A) was not justified in deleting the addition by observing that the broker through whom the shares were sold was not tainted because it was not the broker but the company who made manipulation to get its share prices go high artificially. 1.3 On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in deleting the addition whereas the same authority confirmed the additions on the same issue in the assessment year 2005-06 and 2006-07. 1.4 On the facts and in the circumstances of the case, the Ld. CIT(A) was further not justified in deleting the addition by placing reliance on certain case laws because the facts of the case laws relied upon by the Ld. CIT(A) were entirely different from the facts of the instant case in as much as in those cases the brokers were neither tainted nor any penalty was imposed on them by SEBI whereas in the case under reference the broker was tainte....
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....ng transactions through a/c payee cheque do not make the transactions genuine. Ld. DR placed reliance on (i) CIT Vs. Durga Prasad More 82 ITR 540 (SC), (ii) Sumati Dayal Vs. CIT 214 ITR 801 (SC), (iii) CIT Vs. P. Mohankala (2007) 291 ITR 278 (SC). Ld. DR also placed a heavy reliance on the decision of Kolkata High Court in Pr. CIT Vs. Swati Bajaj IT Appeal No. 6 of 2021, dated 14.06.2022. 6. Replying to above, Ld. AR representing the assessee raised several contentions. He submitted that during assessment-proceeding, the assessee filed all kinds of documentary evidences which are possible to prove the genuineness of capital gain, namely (i) a statement giving complete details of the transactions, (ii) photocopies of purchase bills, sales bills and contract notes, (iii) copy of demat a/c with Indusind Bank, (iv) Bank statement, and (v) A/c copies of brokers. He submitted that the shares were purchased in September, 2004 to October, 2004 online through recognized stock exchange and purchase price was paid through account payee cheques. He submitted that the shares were sold online during current year through recognized stock exchange and sale consideration was also received through ....
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....2 to 115/Ind/2011 (supra) was rendered before decision of Hon'ble Kolkata High Court in Swati Bajaj (supra). 8. We have considered rival submissions of both sides and perused the material held on record including the orders of lower-authorities. First of all, from the first appellate order, we find that the CIT(A) has granted relief to the assessee by following observations and findings: "6. I have gone through the grounds of appeal, the assessment order and submissions of the appellant. 6.1.1] The AO while passing the assessment order, taxed the amount of long term capital gain of Rs 2,48,02,084/- as income from other sources and added the same to the taxable income of the appellant. The AO has heavily relied on the finding of the SEBI with reference to the broker through which the appellant had purchased shares and also placed reliance on the order of my predecessor as passed in the Assessment Years 2005-06 and 2006-07. 6.1.2] Shares of M/s Twenty First Century (India) Ltd. were actually purchased by the appellant in the month of Sept and Oct. 2004 and immediately transferred in the D-MAT account of the assessee maintained with Indusind Bank. The AO himself on inner Page N....
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....oker Sunil Kumar Jhunjunwala against whom there is no action of SEBI. There is no cogent reason therefore to doubt the sale of such shares when there is no finding that appellant has surreptitiously introduced his unaccounted money in bank account, in lieu of aforesaid sales. 6.1.5] The findings of SEBI for AY 2005-06 could not be imported to AY 2009-10 under consideration when there are no adverse findings by SEBI for transactions of this scrip in AY 2009-10. Similarly only SEBI is authorized to take cognizance of facts of price rigging in a particular scrip vis-a-vis the financial performance of that company. But no adverse comments of SEBI are available on record for this scrip for the year under consideration. 6.1.6] The assessing Officer in his order has stated that quotation of these shares on the date of sale were not filed. Quotation of this scrip for AY 2009-10 in Calcutta Stock Exchange are available on Internet and were submitted by appellant and they were checked on random basis and found to tally with price of sale shown in sale bills submitted by appellant. 6.1.7] Appellant has submitted date wise statement of purchase & sale of shares, copy of bills in respect ....
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....d as long as 4 years before sale. The assessee is holding Demat a/c through Indusind Bank which is a prominent independent banker. It is an undisputed fact that the assessee has sold only part of the holding and even after such sale, continued to hold remaining quantity which were carried to subsequent year. The AO has not identified any iota of negativity in these factors. (iii) Regarding the penal action taken by SEBI, we note that the said action was taken against Shyam through whom the assessee purchased shares in the year 2004-05. Thereafter, Shyam does not have any role. It is on record that the assessee sold shares through Sunil and there is no penal action against Sunil. It is also a fact that the AO made a direct verification from Sunil u/s 133(6) wherein he confirmed the sale of shares having been made by assessee through him. Thus, the factum of sale of shares through Sunil is unquestionably proved and that too without any blame. Regarding purchase of shares, we take note of an important fact from Point No. 5 / Page No. 14 of assessment order that the investment made by assessee at the time of purchase of impugned shares was accepted by department while framing assessm....