TaxTMI 
TaxTMI 
2025 (6) TMI 1768
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....n the stipulated time and the appeal got delayed by 36 days. Looking into the contents of the Affidavit filed by the assessee, the delay is hereby condoned, in the interest of justice. 3. The Assessee has taken the following grounds of appeal:- 1. The CIT(A) erred both in law and on facts in confirming the adition of Rs. 55,52,890/- being LTCG exemption u/s 10(38) of the IT Act, 1961. 2. The CIT(A) erred both in law and on facts in confirming the addition of Rs. 32,70,000/- being unexplained cash credit u/s 68 of IT Act, 1961." Ground No. 1:- Disallowance on account of bogus penny stock 4. The brief facts of the case are that the Assessing Officer received information from DDIT (Investigation), Calcutta that M/s. Jai Maa Kali Enterprise (Proprietor Shri Mukesh Kumar Gupta) indulged in suspicious transactions relating to cash deposits. It was found that huge amount of cash was deposited in the bank account of such enterprise, which was later transferred to Mr. Ashok Kumar Kayan, a share broker and accommodation entry provider, who in his statement categorically admitted that he is engaged in providing entries of bogus Long Term Capital Gain (in short "LTCG....
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....bmissions made by the appellant. It is observed from the submissions as well as the assessment order that as per the bill dated 10.08.2009 of Cosmat Marketing P Ltd. Assessee purchased 3750 equity shares of Rs. 100 each for which assessee paid Rs. 35,000/- in cash on 01.11.2009 and after that balance Rs. 3,40,000/- by cheque dated 20.07.2010 after more than 8 months of time span. The appellant had not involved in any trading activities. He purchased only one script and made gain of Rs. 59 lakhs. It is confirmed by the appellant 'that it had traded in the script. This traded value was found suspicious and detailed investigation of this issue was undertaken by the DDIT (Inv), Kolkata. Various tools available including ITD data, BSE data, money control website, taxman, court rulings, internet as well as investigation wing report and findings of the SEBI were used to decide the true nature of transactions executed by the assessee. The basic aim of this dubious scheme was to route the unaccounted money earned from explained / undisclosed sourced by the Beneficiaries into their account/ books in the garb of exempt long term capital gain. This entry of LTCG is taken by selling the sha....
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.... in view of those fact, the Counsel for the assessee submitted that it is not a fit case for disallowing the LTCG as bogus. 7. In response, Ld. D.R. placed reliance on the observations made by the Assessing Officer and Ld. CIT(A), in their respective orders. 8. We have heard the rival contentions and perused the materials on record. 9. On going through the facts we observe that the assessee had initially purchased 3000 equity shares of M/s. Neopolymers Pvt. Ltd. on 19.10.2009 and purchased further 750 equity shares on 19.10.2009. Thereafter, M/s. Neopolymers Pvt. Ltd. amalgamated with M/s. Vindus Holdings Ltd. and as a result of such amalgamation, in lieu of 3750 shares of M/s. Neopolymers Pvt. Ltd. held by the assessee, 18,750 shares of M/s. Vindus Holdings Ltd. were allotted to the assessee on 19.11.2010, in the ratio of 5:1. One of the arguments taken by the Counsel for the assessee is that he did not get an opportunity of cross-examination of Mr. Ashok Kumar Kayan, despite a specific request. On going through the facts of the instant case, we are of the considered view that in each and every case, it is not possible / viable to give opportunity of cross-examination. Fu....
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....as issued by M/s. Vindus Holdings Ltd. to the assessee. All these facts further establish that the assessee has clearly engaged in fictitious / bogus transaction to obtain bogus LTCG. Accordingly, looking into the facts of the assessee's case we hold that there is no infirmity in the order of Ld. CIT(A) so as to call for any interference. 10. In the result, Ground No. 1 of the assessee's appeal is dismissed. Ground No. 2:- Cash Deposits 11. The brief facts in relation to this ground of appeal are that during the course of assessment proceedings, the Assessing Officer noted that the assessee had made huge amount of cash deposits in his bank account. In response to notice issued by the Assessing Officer, the assessee submitted that the cash was deposited in the bank account from accumulated cash balances which have been sourced out of earlier withdrawals from the bank accounts and/or out of opening accumulated cash on hand which could be verified from the cash book for the year under consideration. However, the Assessing Officer did not agree with the contention of the assessee and noted that in the cash book, opening balance is only Rs. 5,00,000/- and the assessee has not f....