TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 1699
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....veloping of properties and manufacturing-cum-trading of recycled betelnut. The Return of Income for the assessment year 2013-14 was filed on 19.09.2013 disclosing total income of Rs.97,64,890/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-2, Ichalkaranji ('the Assessing Officer') vide order dated 29.03.2016 passed u/s 143(3) of the Income Tax Act, 1961 ('the Act') at total income of Rs.6,23,59,430/-. While doing so, the Assessing Officer denied the claim for exemption of capital gains u/s 10(38) of the Act amounting to Rs.1,16,28,954/- by holding that the transactions of purchase of shares of the scrip S. K. Stock Dealers Pvt. Ltd. and subsequent sale is nothing, but a bogus transaction by....
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.... IDBI Bank Rs.20,00,000/- On 11.07.2012 through IDBI Bank Rs.12,00,000/- Total Rs.5,20,00,000/- 3. The Assessing Officer had also analyzed the modus operandi adopted by the appellant. For the sake of brevity, the modus operandi is not discussed herein. The appellant was also provided the copy of statements recorded by the Investigation Wing of the Department, Calcutta from Shri Navneet Kumar Singhania and Shri Beni Prasad Lahoti, who are alleged to be involved in providing accommodation entries as bogus long term capital gains by adopting modus operandi as set out by the Assessing Officer in the assessment order. During the course of assessment proceedings, the appellant had failed to substantiate that the transactions of purchase an....
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...."suspicious transaction relating to long term capital gains on sale of shares" and relating to claim of appellant for exemption of Rs.1,16,28,954/- u/s 10(38) of the Act as sale of shares of S. K. Stock Dealers Pvt. Ltd.. The case of the Assessing Officer is that the appellant is a beneficiary of accommodation entries or long term capital gains from Calcutta Entry Provider, namely, Shri Navneet Kumar Singhania and Shri Beni Prasad Lahoti. The Investigation Wing of the Income Tax Department, Calcutta had conducted search and seizure operations on the said entry provider and recorded the statement, wherein, it is stated that he had admitted to have provided the accommodation entries in respect of scrips as per list which includes the company ....
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....nt had not discharged the onus of proving the genuineness of transactions of capital gains in respect of exemption u/s 10(38)/unsecured loans. In a case involving identical facts of the case, the Hon'ble Calcutta High Court in the case of PCIT vs. Swati Bajaj, 446 ITR 56 (Calcutta) after making reference to the decisions of Hon'ble Madras High Court in the case of CIT vs. Manish D. Jain, 120 taxmann.com 180 (Mad.) and PCIT vs. Prabha Jain, 439 ITR 304 (Mad.) had confirmed the action of the Assessing Officer by holding that the Assessing Officer had cogently brought out the factual scenario to establish machinations of fraudulent, manipulative and deceptive dealings and how the stock exchanges system was misused to generate bogus LTCG. 9. T....
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....ct with the following words:- ""Fraud-avoids all judicial acts, ecclesiastical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree - by the first court or by the highest court - has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings." 21. In the said case it was clearly stated that the courts of law are meant for imparting justice between the parties and one who comes to the court, must come with clean hands. A person whose case is based on false....
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....itself to be used as an instrument of fraud and no court, by way of rule of evidence and procedure, can allow its eyes to be closed to the fact it is being used as an instrument of fraud. The basic principle is that a party who secures the judgment by taking recourse to fraud should not be enabled to enjoy the fruits thereof." 10. In the present case also, the appellant deliberately withheld the information from the Assessing Officer as well as the NFAC which is within exclusive knowledge of appellant to establish the genuineness of transactions of purchase of shares of that company/unsecured loans. It is nothing but a fraud played by the appellant against the Assessing Officer as well as the NFAC who are quasi judicial authorities employ....