2025 (6) TMI 312

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....ssessment orders by raising certain legal and jurisdictional issues in Ground Nos. 1 to 3, however, at the time of hearing, learned counsel appearing for the assessee urged the Bench to decide the appeals on merits in terms of Ground Nos. 4 and 5. 3. Briefly the facts are, the assessee is a resident individual. For the assessment years under dispute, the assessee had filed her returns of income in regular course. Subsequently, as per the information available in the portal of the Department, the Assessing Officer (AO) was found that assessee had sold 10250 shares of M/s. Appu Marketing and Manufacturing Ltd. also known as Ejecta Marketing Ltd. in A.Y. 2015-16 for an amount of Rs. 67,68,101/- and claimed such income as exempt under the he....

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....educed and ended at Rs. 400/- by 24.12.2015. He observed, the net worth as per the financials of the company do not justify such high pricing. Proceeding further, he observed, as per the direction of SEBI, Bombay Stock Exchange (BSE) has suspended trading in 35 listed companies including M/s Appu Marketing Ltd. Thus, ultimately, Assessing Officer concluded that the scrip of M/s Appu Marketing Ltd./Ejecta Marketing Ltd. is penny stock and the entire share transaction is non-genuine and was entered into for providing accommodation entries to generate artificial profit/loss. Thus he held that the Long Term Capital Gain shown from sale of shares of M/s Appu Marketing and Manufacturing Ltd./Ejecta Marketing Ltd. is essentially unexplained income....

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.... held on to some of the shares even till today. Pertinently, the assessee had effected sale of shares through registered stock broker M/s Allvin Securities Ltd. and copies of contract notes are available on record. No independent enquiry has been conducted by the AO to establish that the persons to whom the assessee had sold shares are essentially exit providers. 6. A reading of the assessment order would reveal that the AO has got completely swayed away by the information available in the system of the Department through investigation carried out by its Investigation Wing. In fact, the AO admits that, though, as per the direction of SEBI, BSE had imposed restriction in the trading of shares of M/s Appu/Ejecta Pvt. Ltd., however, subsequ....

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....he Ld. AO. The sale transactions of these shares were also conducted through a banking channel, and the LTCG amounting to Rs. 2,04,42,976/- earned and claimed as exempt income under Section 10(38) of the Act. This exemption applies as the sales were conducted on the Bombay Stock Exchange (BSE) and the requisite Securities Transaction Tax (STT) was duly paid. The Ld. AO, however, treated the LTCG as bogus based on an interim report by the SEBI. Upon examining the final report, we note that SEBI subsequently withdrew the restrictions imposed in its interim order against the AMML vide notice no. 20161116-32 dated 16/11/2016. Furthermore, there is no evidence to suggest that the assessee engaged in price rigging or manipulation of share prices.....

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.... that assessee had earned LTCG on sale of shares through accommodation entries was unjustified. Conversely, the Ld. DR relied on the judgment in Pr. CIT-V, Kolkata vs. Swati Bajaj, 139 taxmann.com 352 (Cal). While we have respectfully considered this case, we note that the Tribunal disposed of 89 appeals in a single consolidated order without taking into account the specific facts of each case. Such a generalized exercise lacks merit when proper facts are not considered. In the present case, the Ld. DR's argument primary related to transaction which is nothing but accommodation entry. However, it is crucial to note that the assessee sold the shares during the period from 19/12/2014, to 16/02/2015, in a staggered manner. Although SEBI had wi....