TaxTMI 
TaxTMI 
2024 (3) TMI 1449
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....res of M/s Pine Animation Ltd were identified as one of the penny stocks by the investigation wing of the department, in which the prices were found to have been manipulated in order to generate bogus capital gains/loss. Hence the AO issued summons to the assessee and recorded a Statement from her. In the statement, the assessee submitted that she is a regular investor in Shares and she invested in the shares of M/s Pine Animation Ltd (Earlier known as Four K Animation Ltd) on the advice of her Brother in law. She admitted that she did not have information about the Company or its financials. The AO noticed that the assessee had purchased shares at Rs. 3.00 per share and sold them around Rs. 94/- per share. The AO took the view that there was abnormal increase in the prices of shares. Since the assessee had invested in the shares of above said company without analyzing its fundamentals, the AO took the view that the impugned investment transactions entered by the assessee is beyond human probabilities. Further, the AO also placed reliance on the report given by the investigation wing of Kolkatta, wherein it had been stated that the share prices of M/s Pine Animation Ltd has been ma....
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....distinguishable. He submitted that the addition relating to penny stock has been sustained in many other cases and in this regard, he placed his reliance on the following decisions:- (a) Sri Anirudh Venkata Ragi vs. ITO (ITA No. 352/Hyd/2019 dated 21.11.2023) (b) PCIT vs. Swati Bajaj (2022)(139 taxmann.com 352)(Cal) (c) Suman Poddar vs. ITO (2019)(112 taxmann.com 330)(SC) (d) Sanjay Bimalchand Jain vs. PCIT (2018)(89 taxmann.com 196)(Bom) 6. The Ld A.R, on the contrary, submitted that the assessee has furnished all the details and evidences in support of purchase and sale of shares of M/s Pine Animation Ltd. He further submitted that the shares were purchased in an earlier year and the said purchase has been accepted as genuine by the AO. Accordingly, he submitted that the AO could not have doubted sale of those shares. He further submitted that the Ld CIT(A) has granted relief by placing reliance on a decision rendered by the co-ordinate bench in identical set of facts. He further submitted that identical addition made in the hands of daughter of the assessee and HUF of her brother in law has been deleted by the co-ordinate bench in Smt Kritika Rajendra Jain vs. ITO (ITA ....
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....s through stock exchange platform (d) received the sale consideration through banking channels. Further, the shares have entered and exited the demat account of the assessee. We notice that the AO himself has not found any defect/deficiencies in the evidences furnished by the assessee with regard to purchase and sale of shares. Further, the AO has not brought on record any material to show that the assessee was part of the group which involved in the manipulation of prices of shares. We notice that the shares were purchase in an earlier year and the said purchase has not been suspected by the AO. Hence, there is no reason to suspect the purchase and sale of shares undertaken by the assessee. 9. The Ld D.R placed his reliance on host of case laws to contend that addition relating to penny stock transactions has been confirmed in those cases. There should not be any dispute that the purchase and sale of shares reported by the assessee is a factual matter and each of the case has to be examined on the basis of facts prevailing therein. Further, the assessee has submitted the copy of order passed by co-ordinate bench in the family member's cases of the assessee, viz., (M/s Shailesh....
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....investigation conducted by the Department. Once the onus on the Department was discharged, according to Mr. Sureshkumr, by the Revenue-Department, then, such a finding by the Tribunal raises a substantial question of law. The Appeal, therefore, be admitted. 4. Mr. Gopal, learned Counsel appearing on behalf of the Assessee in each of these Appeals, invites our attention to the finding of the Tribunal. He submits that if this was nothing but an accommodation of cash or conversion of unaccounted money into accounted one, then, the evidence should have been complete. Change of circumstances ought to have, after the result of the investigation, connected the Assessee in some way or either with these brokers and the persons floating the two companies. It is only, after the Assessee who is supposed to dealing in shares and producing all the details including the DMAT account, the Exchange at Calcutta confirming the transaction, that the Appeal of the Assessee has been rightly allowed. The Tribunal has not merely interfered with the concurrent orders because another view was possible. It interfered because it was required to interfere with them as the Commissioner and the Assessing Offic....
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....,30,000 shares of Bolton Properties Ltd. purchased by the Assessee during the month of January 2003 and he continued to hold them till 31 March 2003. The present case related to 20,000 shares of Mantra Online Ltd for the total consideration of Rs. 25,93,150/-. These shares were sold and how they were sold, on what dates and for what consideration and the sums received by cheques have been referred extensively by the Tribunal in para 10. A copy of the DMAT account, placed at pages 36 & 37 of the Appeal Paper Book before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were available and which gave details of the transactions. The contract note is a system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But the Tribunal concluded that itself, is not enough to prove that the transactions in the impugned shares were bogus/sham. The details received from Stock Exchange have....
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....efore we find nothing perverse in the order of the Tribunal. 4. Mr. Walve placed reliance on a judgement of the Apex Court in Principal Commissioner of Income tax (Central)-1 vs. NRA Iron & Steel (P) Ltd (2019)(103 taxmann.com 48)(SC) 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. 12. Further, in the case of CIT vs. Jamnadevi Agarwal (20 taxmann.com 529 (Bom), the Hon'ble Bombay High Court has held that the transactions of purchase and sale of shares cannot be considered to be bogus, when the documentary evidences furnished by the assessee establish genuineness of the claim. In the case of PCIT vs. Indravadan Jain (HUF) (ITA No. 454 of 2018)(Bom), the broker through whom, the assessee had carried out the transactions have been alleged to have been indulged in price manipulations and the SEBI had also passed an order r....