TaxTMI 
TaxTMI 
2025 (6) TMI 1763
X X X X Extracts X X X X
X X X X Extracts X X X X
..... c). That the Ld. CIT(A) has failed to appreciate that there was no nexus of the alleged information as available with the Assessing Officer viz-a-viz conclusion to be drawn. d). That the Ld. CIT(A) has erred in giving a finding with regard to the reopening of the case in para 5.2.2 of his order. 2. That the Ld. CIT(A) has erred in confirming the addition of Rs. 4,98,22,473/- u/s 68 and disallowing the exemption as claimed at Rs. 4,98,22,473/- u/s 10 (38) of the Income Tax Act. 3. That the Ld. CIT (A) has failed to appreciate the documentary as provided to Assessing Officer during assessment proceedings and has only confirmed the addition on the basis of report of the Inv. Wing, Kolkata. 4. That no opportunity of cross examination of the statements recorded at the back of the assessee of various persons have been provided to the assessee and, as such, as per binding judgement of Hon'ble Apex Court in the case of Andaman Timber Industries, the very basis of addition as confirmed by the Ld. CIT(A) is not in order. 5. That the Ld. CIT(A) has failed to appreciate that when the documentary evidences have been furnished in respec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thus, the Assessing Officer formed a reason to belief that the income chargeable to tax to the tune of Rs. 5,05,29,200/- have escaped assessment, within the meaning of provisions of section 147 of the Act as the assessee had sold entire number of shares to the tune of Rs. 1,55,800/-. 5. The Ld. Counsel of the assessee then referred to the objections as filed by the assessee before the Assessing Officer, in which, it was contended that the transactions of shares had duly been discussed in the return of income as filed originally and also on all such dealings in shares, the 'security transaction tax' had been paid. It proves the genuineness of transaction. Further, it was stated in the objections that during the year under consideration, the assessee had sold shares numbering 17140 as per detail submitted during assessment proceedings and such transactions have duly been disclosed by the assessee. Further, it was stated in the objections that it was a routine information and there was no specific name of the assessee. The case has been reopened only for the purposes of 'investigation' and on the basis of 'borrowed satisfaction'. There was no independent app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....024]165 taxmann.com 197 (Amritsar - Trib.) IN THE ITAT AMRITSAR BENCH Sukhvir Singh v. Income-tax Officer iv) Smt. Monika Rani in ITA no. 582/CHD/2019 dated 28.02.2020 v). Fortune Metaliks Limited vs. DCIT. ITA No. 1090/Chd/2019 dated 12.01.2021 - CHD Trib. vi). Gaurav Joshi vs. ITO as reported at (2019) 55 CCH 0083 (Jalandhar Camp) vii). Baba Kartar Singh Dukki Educational Trust vs. ITO (2016) 158 ITD 965 (Chd.)tTrib.) viii). Kissan Fats Limited. Hazi Rattan Link Road, Bathinda. vs. The DCIT, Central Circle-1. Ludhiana in ITA No. 407/CHD/2023 10. It was also argued that the reopening has been made on 'wrong reasons' to believe and on incorrect facts. It was further argued that even there was no tangible material and it was merely a change of opinion. There was no nexus of the conclusion sought to be drawn and the information as received from the 'Investigation Wing'. He relied upon the judgment of Hon'ble 'Apex Court' in Sh. Lakhmani Mewal Dass, reported in 103 ITR 437. It was further argued that no reopening could be made on borrowed satisfaction, for which, reliance was made on the following judgments: -....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns u/s 10(38) of the Income Tax Act. Later on, on the basis of certain information received from Investigation Wing regarding that the Long-Term Capital Gain as disclosed by the assessee is in the nature of accommodation entries. After recording the reasons u/s 148 and relying upon the information as received from the Investigation Wing, the Assessing Officer disallowed the exemption u/s 10(38) and made the addition being in the nature of penny stock. The CIT (A) confirmed the addition. When the matter was taken to the ITAT, both on the issue of reopening of the case u/s 148 and on merits, the appeal of the assessee was allowed. 14. On merits, it was argued that the facts, which are borne out from the reasons that the assessee purchased 4100 shares of 'Sarthi Dealers' and, thereafter, the above company alongwith three other companies were amalgamated into 'Twenty first Century (India) Ltd.' The assessee was allotted 38 shares of TFCIL in lieu of one share of amalgamation and this amalgamation was approved by the Hon'ble Kolkata High Court on 26.09.2011, where the department was also party to the said amalgamation and it had submitted 'no objection' fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany, for which, the contract note have been furnished and also the 'contract notes' for the purchase of shares was also furnished in respect of 4100 shares. In the said contract note, the date, sale in quantity, rate and amount of sale and 'securities tax paid' have been given, both on purchases and sales of shares. It was also argued that all such sale proceeds were received through banking channels and confirmed copy of account of assessee in the books of broker had been submitted, along with the bank statement of assessee. Except the statement of Mr. Khemka, there was no material for the allegation of handing over alleged cash by the assessee to the broker for any accommodation entry. 17. It was further argued by Ld. Counsel that, how, the total number of shares of 5,05,29,200/- and 1,11,11,519/- have been arrived at by the Assessing Officer has not been substantiated by the AO or by the Ld. CIT(A). He relied upon the submissions made during assessment proceedings vide letter, dated 04,11,2019 and 25.12.2019 alongwith relevant Annexures. It was further argued that even the cross examination was sought for, right at the time of filing the objections and, later....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ACIT vs. Bhavik Bharatbhai Padia as reported in [2017] 78 taxmann.com 133 (Ahmedabad-Trib.) * Rama Mittal vs. ITO, NFAC as reported in [2024] 163 taxmann.com 612 (ASR-Trib.) * Durga Devi Bagree vs. ITO as reported in [2023] 157 taxmann.com 607 (Raipur-Trib.) * Sheela Ashok Bafna vs. ITO as reported in [2025] 170 taxmann.com 307 (MUM-Trib.)3. 19. The assessee referred to order of CIT(A) and argued that the submissions of the assessee have been recorded by the CIT(A) from pages 3 to 15 of the order. The reopening u/s 148 have been held to be valid on conjectures and surmises, without discussing anything about the detailed submissions of the assessee. On merits, without relying upon the documentary evidences, as furnished and other facts as highlighted in the written submissions, the Ld. CIT(A) has dismissed the appeal of assessee. 20. The Ld. CIT (DR) argued that the reopening was made on the basis of valid information received from the Investigation Wing, Kolkata and there was proper reason to believe as formed by the AO as per reasons recorded by him and, as such, there was no justification in the arguments of the Ld. Counsel. Further, the ld. DR a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Ld. Counsel and CIT (DR) along with Paper Books, Brief Synopsis and 'judgment set' filed by the Ld. Counsel. The facts are not disputed by either side and the same are borne out even from the record of AO and CIT(A). The assessee had declared long term capital gain on the sale of shares amounting to 17140 and claimed the same as exempt u/s 10(38). During the reassessment proceedings, the documentary evidences of purchase and sale of shares in the shape of contract notes and confirmed copy of account of the assessee in the books of the broker, Sh. Sunil Kumar Kayan have been furnished, along with the assessee's bank account, in which, the sale proceeds of shares have been received by the assessee through banking Channel. The AO/CIT(A), have not been able to find any fault/defect in such documentary evidence. We have also gone through the assessment order for the year under consideration and for the Asstt. Year 2013-14, which has been placed in the Paper Book along with computation of income for Asstt. Year 2013-14, wherein sale of shares of 'Twenty First Centre India Ltd.' amounting to 40360 shares have been considered and assessed by Assessing Officer. Thus,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pproved the amalgamation of companies into 'Twenty First Century India Ltd., it is no case for the Department to call the same company, a paper company just after a year. Therefore, we are of this considered view that the findings given by the Assessing Officer in the assessment order and Ld. CIT(A) in his appellate order are not based on sound basis and correct appreciation of the situation. Thus, we have no hesitation in rejecting the findings of both these authorities below. Accordingly, Assessee's appeal on merit is allowed. Apart from addition made on the basis of sale of shares of 'Twenty First Century India Ltd.', the Assessee has made addition of Rs. 1,11,11,519/- on the basis of sale of shares of DLC Exports Ltd. The Assessee right from the beginning has been arguing that it never dealt in the purchase and sale of shares of DLC Exports Ltd. but the Assessing Officer made the addition of the same without bringing any documentary evidence against the Assessee. The ld. CIT(A) has also confirmed it without bringing any relevant document for the same. 24. During proceedings before us, the Revenue could not produce any evidence regarding trading of shares of DLC expor....