TaxTMI 
TaxTMI 
2024 (11) TMI 1488
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.... Objection challenging the validity of reopening of assessment. 2. The facts relating to the case are discussed in brief. The original assessment in the hands of the assessee was completed u/s. 143(3) of the Act on 28-12-2017. The assessee had declared income from business, Income from Capital Gains and Income from other sources. During the year under consideration, the assessee had sold shares of M/s. Splash Media & Infra Ltd. (now known as M/s. Luharuka Media & Infra Ltd.) for an aggregate consideration of Rs. 3,34,06,445/- and declared long term capital gains of Rs. 3,18,24,691/-, which was claimed as exempt u/s 10(38) of the Act. Besides the above, the assessee also sold shares of M/s. Comfort Intech Ltd., for an aggregate consideration of Rs. 41,03,617/- and declared short term capital gains of Rs. 29,72,705/-. During the year under consideration, the assessee had incurred short term capital loss of Rs. 6,66,049/- on sale of shares of M/s. Ravi Kumar Dist Ltd. After adjusting current year loss mentioned above, the assessee declared net short term capital gains of Rs. 23,06,655/-. The net short term capital gains of Rs. 23,06,655/- was set off against the short term capital ....
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....ings, the AO reopened the assessment by issuing notice u/s. 148 of the Act. In the reopened assessment, the AO assessed the sale consideration arising on sale of M/s. Comfort Intech Ltd., amounting to Rs. 41,03,617/- as unexplained income of the assessee. The Ld.CIT(A) deleted this addition also and hence the Revenue has filed another appeal numbered as ITA 1503/M/2024. 6. In the appeal filed before Ld CIT(A) against the reassessment order, the assessee had challenged the validity of reopening of assessment. Since the Ld.CIT(A) dismissed the said legal ground, the assessee has filed cross objection, contending that the reopening of assessment is not valid. 7. The Ld D.R supported the orders passed by the AO by submitting that the Investigation Wing had made detailed investigation about the modus operandi adopted by the operators and found that a group of people have been manipulating the prices of shares of penny stock companies in order to generate bogus capital gains. He submitted that the SEBI has conducted enquiries in the transactions carried in the shares of M/s. Splash media & Infra Ltd and levied penalty on the above said company. He submitted that the assessee has al....
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....ing the sale consideration of sale of shares of M/s. Splash Media & Infra Ltd., and M/s. Comfort Intech Ltd., is identical in nature, we proceed to dispose of both the appeals of the Revenue together. We notice that the AO has primarily placed reliance on the report given by the Investigation Wing of the Income Tax Department, Kolkata in order to arrive at the conclusion that the long term capital gains/short term capital gains reported by the assessee are bogus in nature. We notice that the investigation report prepared by Investigation Wing, Kolkata is a generalized report with regard to the modus operandi adopted in manipulation of prices of certain shares and generation of bogus capital gains. We notice that the AO has placed reliance on the said report without bringing any material on record to show that the transactions entered by the assessee were found to be a part of manipulated transactions, i.e., it was not proved that the assessee has carried out the transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of prices. The Ld A.R also submitted that the regulator of stock market SEBI has not conducted any enquiry a....
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....mann.com 108)(Bom), wherein the Hon'ble Bombay High Court has observed as under:- "3. Mr. Sureshkumar seriously complained that such finding rendered concurrently should not have been interfered with by the Tribunal. In further Appeal, the Tribunal proceeded not by analyzing this material and concluding that findings of fact concurrently rendered by the Assessing Officer and the Commissioner are perverse. The Tribunal proceeded on the footing that onus was on the Department to nail the Assessee through a proper evidence and that there was some cash transaction through these suspected brokers, on whom there was an investigation conducted by the Department. Once the onus on the Department was discharged, according to Mr. Sureshkumr, by the Revenue-Department, then, such a finding by the Tribunal raises a substantial question of law. The Appeal, therefore, be admitted. 4. Mr. Gopal, learned Counsel appearing on behalf of the Assessee in each of these Appeals, invites our attention to the finding of the Tribunal. He submits that if this was nothing but an accommodation of cash or conversion of unaccounted money into accounted one, then, the evidence should have been c....
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....conclusion that certain operators and brokers devised the scheme to convert the unaccounted money of the Assessee to the accounted income and the present Assessee utilized the scheme. 6. It is in that regard that we find that Mr. Gopal's contentions are well founded. The Tribunal concluded that there was something more which was required, which would connect the present Assessee to the transactions and which are attributed to the Promoters/Directors of the two companies. The Tribunal referred to the entire material and found that the investigation stopped at a particular point and was not carried forward by the Revenue. There are 1,30,000 shares of Bolton Properties Ltd. purchased by the Assessee during the month of January 2003 and he continued to hold them till 31 March 2003. The present case related to 20,000 shares of Mantra Online Ltd for the total consideration of Rs. 25,93,150/-. These shares were sold and how they were sold, on what dates and for what consideration and the sums received by cheques have been referred extensively by the Tribunal in para 10. A copy of the DMAT account, placed at pages 36 & 37 of the Appeal Paper Book before the Tribunal showed the....
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.... "2. We have considered the impugned order with the assistance of learned counsels and we have no reason to interfere. There is a finding of fact by the Tribunal that the transaction of purchase and sale of shares of the alleged penny stock of shares of Ramkrishna Fincap Ltd ("RFL") is done through stock exchange and through the registered Stock Brokers. The payments have been made through banking channels and even Security Transaction Tax ("STT") has also been paid. The Assessing Officer also has not criticized the documentation involving the sale and purchase of shares. The Tribunal has also come to a finding that there is no allegation against the assessee that it has participated in any price rigging in the market on the shares of RFL. 3. Therefore we find nothing perverse in the order of the Tribunal. 4. Mr. Walve placed reliance on a judgement of the Apex Court in Principal Commissioner of Income tax (Central)-1 vs. NRA Iron & Steel (P) Ltd (2019)(103 taxmann.com 48)(SC) but that does not help the revenue in as much as the facts in that case were entirely different. 5. In our view, the Tribunal has not committed any perversity or applied incorrect p....