TaxTMI 
TaxTMI 
2025 (7) TMI 441
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....IT/CC- 2(2)/Intimation/2016-17/470 dated 05/12/2016. The appellant states that the information having been received before 3 years and since the entire observations and the allegations in the reasons recorded already forms part of the original assessment order passed u/s. 143(3) of the Act dated 31/03/2015 in case of the company itself as well as in the reasons recorded for reopening of assessment in case of other assesses of the group way back in the year 2015, the reopening of assessment is invalid and bad in law since no fresh tangible material has been brought or is available on record for reopening the completed assessment. 2. The ld. CIT(A) has further erred in not appreciating the fact that subsequent to the assessment u/s 143(3) of the Act vide order dated 31/03/2015, the department had initiated proceedings u/s 153C of the Act vide notice dated 02/11/2018 for A.Y.2009-10 to Α.Υ.2014-15 and had passed assessment orders dated 26/12/2018 u/s 153C of the Act. Thus, at the time of both initiation as well as completion of the proceedings u/s. 153C of the Act, the AO was already in possession of so called information dated 05/12/2016 received from DCIT, Cen....
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....ellant's objections has erred in not addressing the specific objections raised before him and having rejected the objections on the basis of irrelevant observations apart from the fact that the objections have been disposed off only one day prior to the date of assessment order as a formality thus depriving the appellant to peruse the same and file a rejoinder. The impugned reassessment order is thus wholly unjustified and bad in law and hence requires to be quashed as void-ab-initio. 7. The ld. AO has grievously erred in reopening the assessment on different stands to the convenience of the department in the reasons recorded in case of various members of the appellant's family/group concerns. The AO in some cases have disallowed only the net loss incurred in trading of shares of various companies allegedly held as penny stock companies while in some cases have disallowed and added the entire purchase value of shares of such companies on identical facts and though all such companies were treated/alleged to be penny stock companies. The appellant states that such contradictory and fluctuating stands in different cases itself speaks of the manner in which the assessm....
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....hensive evidences available/filed in support of genuineness of the purchase/sale transactions of 3 companies as well as without verification of facts by mechanically relying upon the information received from a third party before 3 years. In view of facts, submission and evidences filed during the course of original assessment proceedings u/s 143(3) of the Act and the stand taken therein by the then AO and considering the fact that the appellant is engaged in the business of trading in shares, the impugned addition of Rs. 1,16,34,370/- ought to have been deleted. 2. The ld. CIT(A) erred in not considering the fact that the impugned addition is made by the AO while alleging that the appellant company has not shown the purchase of shares of Chandni Textiles, Shri Ganesh Spinners and Avance Technologies aggregating to Rs. 1,16,34,370/- in its books of accounts and that the funds utilized for purchase of such shares have not been accounted for in the return of income and therefore have not been offered to tax, which observation is blatantly contrary to facts and evidences available on record since the purchases are duly accounted for in books of account and evidences in suppor....
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....nd entities purportedly controlled by Shirish C. Shah has been left unverified during the original assessment proceedings by the then AO and conscious decisions have been taken while passing assessment order u/s. 143(3) of the Act. Thus, the reopening of assessment on the same facts, which also stood verified extensively by the then AO is wholly unjustified and bad in law, the same being purely based on change of opinion and the same information which was available at the time of original assessment u/s. 143(3) of the Act. 6. The AO has erred in not considering and appreciating the fact that the purchase/sale transactions as well as trading in shares of Chandni Textile & Engineering Industries Ltd., Shri Ganesh Spinners Ltd. and Avance Technologies Ltd. and the resultant profit/loss, if any, is genuine and has been carried out on screen based faceless digital platform i.e. on a terminal in normal course of trading activity, through BSE/NSE and registered stock brokers, receipts/payments are through banking channels, shares are duly reflected in demat account, purchase and sale is at prevailing market rates and the STT and other Govt. levies on sale of shares have been duly....
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....same/other companies though all such companies were treated/alleged to be penny stock companies. Such an approach is wholly unjustified arbitrary and bad in law. In view of the above, the addition of Rs. 1,16,34,370/- being the purchase of stars of Chandni Textile & Engineering Industries Ltd. Shri Ganesh Spinners Ltd. and Avance Technologies Ltd. requires to be deleted. [IV] Addition on account of disallowance of loss in trading of shares of Gujarat Meditech Ltd., Dhvanil Chemicals Ltd. and Shekharati Poly Yarn Ltd. Rs. 38,48,145/- Rs. 5,95,620/- and Rs. 1,13,31,105/-respectively 1. The ld. CIT(A) has grievously erred in law and on facts in confirming the addition of Rs. 38,48,145/- Rs. 6,95,620 and Rs. 1,13,31,105/- made by the AO being loss made in trading of shares of Gujarat Meditech Ltd. Divani Chemicals Ltd. and Shettava Poly Tam Ltd. merely on surmises and conjectures as well as without verification of facts by mechanically relying upon the various findings, allegations and observations in the information received from a third party. In view of facts, submission and evidences filed and more particularly the fact that the appellant is engaged in th....
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....sons recorded and the assessment order for making the impugned addition of Rs. 38,48,145/- Rs. 6,95,620/- and Rs. 1,13,31,105/- on account of loss incurred in trading of shares of Gujarat Meditech Ltd., Dhvanil Chemicals Ltd. and Shekhavati Poly Yam Ltd., during the course of assessment proceedings for appellant's rebuttal. In view of the above, the addition of Rs. 38,48,145/- Rs. 6,95,620/- and Rs. 1,13,31,105/- being loss incurred in trading of shares of Gujarat Meditech Ltd., Dhvanil Chemicals Ltd. and Shekhavat Poly Yarn Ltd. is required to be deleted. (V) Addition on account of commission allegedly paid on purchase consideration of shares of Chandni Textile & Engineering Industries Ltd., Shri Ganesh Spinners Ltd. and Avance Technologies Ltd. and loss incurred in trading of shares of Gujarat Meditech Ltd., Dhvanil Chemicals Ltd. and Shekhavati Poly Yarn Ltd. aggregating to Rs. 2,75,09,240/- @ 0.25% - Rs. 68,773/- 1. The ld. CIT(A) has erred in law and on facts in confirming the notional/estimated addition of Rs. 68,773/- made by the AO being commission allegedly paid on purchase consideration of shares of 3 companies and loss incurred in trading i....
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....s from various entities through off line transactions. The companies through which shares have been purchased are the companies managed and controlled by Shri Shirish C. Shah, an accommodation entry provider from Mumbai. A search and survey action was carried out at the residences and offices of Shri Shirish C. Shah along with his key employees and associates. 3.1 The Assessing Officer observed evidences were found that Shri Shirish C. Shah was engaged in providing accommodation of share capital, share premium, share application money, unsecured loan, LTCG and STCG wherein he used to receive cash from various clients and against the cash so received he used to provide accommodation entries through web of 212 companies which were used for layering of funds and purchase and sale of shares. Date-wise and entity-wise details of transactions in the scrip of Chandani Textile was reproduced by the Assessing Officer in para 4.1 of the assessment order. The Assessing Officer observed that on the basis of various evidences and statement of Shri Shirish C. Shah, it was established that he was giving arranged accommodation entries through various companies which were controlled by dummy dir....
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....rs and cash received used to be given to the mediators or Angadia passing the cash used to be transferred through buyers. In such manner, the beneficiaries used to buy shares from their own cash through him and he used to get commission for accommodation entries of LTCG @ 0.25 paisa per Rs 100. After discussing the details of the transactions, the Assessing Officer observed that the assessee company has paid commission throughout these transactions. Thus, the Assessing Officer made addition of Rs. 38,48,145/- towards disallowance of loss in transactions of shares of Gujarat Meditech Pvt. Ltd.. 3.5 The Assessing Officer also made addition of Rs. 6,95,620/- towards disallowance of loss in transaction of shares of Dhvanil Chemical Ltd.. 3.6 The Assessing Officer also made addition of Rs. 1,13,31,105/- towards capital gain/loss claimed through the scrip of M/s. Sekhavati Polly Yarn Ltd. as the same was held to be not genuine. Thus, claim of loss incurred by the assessee company in transactions of purchase/sale of shares of Shekhavati Polly Yarn Ltd. was rejected and added to the total income by the Assessing Officer. 3.7 The Assessing Officer also made addition of Rs. 68,773/-....