TaxTMI 
TaxTMI 
2025 (3) TMI 1521
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.... passing this consolidated order, as the issues involved are interconnected having the same assessment year and of the same assessee. 2.1 The grounds of appeal taken by the assessee in ITA No. 1191/JP/2024 for A.Y 2016-17 are as under; "1. Under facts and circumstances of the case and in law, the order dated 05.08.2024 passed by the Ld. CIT(A)/NFAC u/s 250 of the Income Tax Act, 1961, to the extent confirming action of the Ld. AO, is arbitrary, perverse, bad in law and without jurisdiction. 2. Under the facts and circumstances of the case and in law, Ld. CIT (A) erred in passing Impugned order u/s 250 of the Act without providing opportunity of being heard. 3. Under facts and circumstances of the case and in law, the Ld. CIT(A)/NFAC has grossly erred in confirming the assumption of jurisdiction by the Ld.AO u/s 147 of the Act. 4. Under facts and circumstances of the case and in law, the CIT (A) has erred in upholding the action of the Ld. AO in issuing the impugned notice u/s 148 of the Act and consequential assessment proceedings u/s 147 of the Act. 5. Under the facts and circumstances of the case and in law, Ld. CIT (A) erred i....
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....tment Company Limited "YICL" was managed and controlled to benefit certain pre-decided persons. The assessee sold shares of the company YICL amounting to Rs. 4,77,46,835/-. As the assessee had made the transaction, in company, which was controlled to benefit certain pre-decided persons, being penny stock, is not genuine and the same was liable to be added to the income of the assessee which the assessee has claimed as exempt from tax for an amount of Rs. 4,65,16,639/- u/s. 10(38) of the Act. Based on that set of facts the case of the assessee was re-opened by issue of notice u/s. 147 of the Act. Before issue of notice necessary approval from competent authorities was taken and thereby the notice u/s. 148 of the Act was issued on 09.04.2021 and the assessee vide letter dated 09.09.2021 provided the reasons for re-opening of the assessee. The issue of notice after 31.03.2021 because of pre-amended provision of section 148 of the Act, resulted into largescale litigation all over India. On that as per the direction of the Hon'ble Supreme Court the assessee was provided with the information and documents which were available vide letter dated 25.05.2022 and the assessee was re....
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....ini Investment Company Ltd. (YICL) was managed in such a manner that benefitted certain pre-decided person. This information came to the AO in consequence to the search and survey conducted in case of Dutta and Tyagi Group on 16.05.2018 and post-search operation in that group. It was also informed to the AO that the appellant was also one of the persons who have taken benefit of share price manipulation in YICL. The AO referred to the return of income and found that the appellant has claimed Long Term Capital Gain of Rs. 4,64,99,603/- on sale of Rs. 4,77,46,835/- worth of shares of YICL allegedly held by the appellant for more than one year. On the basis of the above information the AO recorded the reason to believe that income has escaped assessment and jurisdiction to reassess the income of the assessee was assumed. It is matter of record that against the assumption of jurisdiction to reassess the assessee is in appeal before Hon'ble High Court of Jaipur. This appeal, has not been decided so far. However, the appellant, by his submission dated 30.07.2024 has now informed that the writ petition stands abandoned after (covered in) the decision of Hon'ble Supreme C....
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....ade. Further no reference has been made to any evidence found qua the appellant during the course of search at Dutta and Tyagi Group or subsequent post search investigation on the basis of which this conclusion has been arrived by the AO. There is no mention of any incriminating document found during the course of search. Absence of any incriminating document found against the appellant also gets supported from the fact that no proceedings against the appellant have been initiated u/s 153C. Additionally, there is no mention of any recorded statement in which it has been alleged that the appellant was one of the beneficiary of price manipulation undertaken in the shares of YICL. After repetitive mention of conclusive information that the appellant is one of the pre-decided beneficiary of price manipulation in the shares of YICL, the AO concludes the following in para 4.6.2 of the impugned order: Hence, in the light of above discussions, it is concluded that the assessee has traded in the penny scrip of the M/s Yamini Investment Company Limited "YICL" amounting to Rs. 4,77,46,835/- during F.Y. 2015-16 relevant to AY 2016-17. The transactions in this scrip are bogus, col....
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....of M/s Yamini Investment Company Ltd was finalised, accordingly 12,00,000 shares of M/s Yamini Investment Company Ltd were allotted to the Appellant. 63. Subsequently, on excellence performance of share, the Appellant decided to liquidate part of shares in his portfolio and accordingly has sold total 8,66,990 shares out of the total shares 12,00,000 held by him during the year under consideration. In effecting the sale of the share, the Appellant has also paid total STT. 64. Total sales value of the share sold of M/s Yamini Investment Company is Rs. 4,75,83,341/-. Accordingly, the Appellant claimed amount of Rs. 4,64,99,603/- as exempt income u/s 10(38) of the Act. 65. The exempt income claimed by the Appellant is supported by the following documentary evidence as mentioned below: * Purchase invoices issued from Myra Apparels for the purchase of share of M/s Anax Com Trade for total value of Rs. 15,00,000/- (PB Pg. No. 38) * Bank statement which duly establish the fact that the Appellant has purchased the share payment for which was made through banking channel only. (PB Pg. No. 40-41) * Account confirma....
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....llant was invested were long term capital assets and it is clearly evident from the contract notes that securities transaction tax was charged on the transaction. The copy of contract notes available at page no.46-82 of PB. Therefore, Appellant is very much eligible to claim the exemption of u/s 10(38) of the Act as all the requirements of section were fulfilled by the Appellant. 69. Further, the Ld.AO had made the impugned addition by invoking provision of Section 68 of the Act, which is not applicable in the present case 70. In this context, it is imperative to discuss section 68 of the Income Tax Act, 1961 reads as under; "Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year." 71. On the bare perusal of Section 68 of the Act, it is clear that in a case where any sum is found credited in the books of account and the Assessee has not given any sa....
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....ial indicating that the said amount proposed to be taxed has not been received from the Share Broker or the sum received is from the sources other than the sale consideration claimed against sale of shares. In other words, none of the above stated documentary evidence were examined by the Ld. AO meaning thereby that the entire exercise of reopening the present case u/s 147/148 of the Act is merely on suspicious and devoid of authority of law. 78. The impugned addition u/s 68 of the Act is not justified as there is no sum found credited in books, rather the amount for which impugned addition is made is duly declared in the return of income, therefore, Section 68 of the Act is not applicable. For the purpose of Section 68, the first condition is that the amount must be credited in the books of accounts, Ld. AO has nowhere mentioned that he found any sum credited in appellant's books of accounts. Further, as stated above, the Appellant already submitted the sufficient documentary evidence to establish the genuineness of the exemption claimed by the Appellant u/s 10(38) of the Act, which veracity is also undisputed by the Ld.AO. therefore, the Appellant has sufficiently di....
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....ed for shares of YICL. The appellant had also produced demat account dated 08.05.2015 showing credit of the shares of YICL. Subsequent sale of YICL had taken place through the registered broker on the recognised stock exchange. The appellant filed contract notes and bank statement to demonstrate the genuineness of the share transactions. There is no finding of the AO on genuineness or otherwise of the transactions evidenced by these submitted documents. 5.3.7 Various high courts are divided on the decision of taxability of gains arising out of trading or investing in the shares which have demonstrated unusual price movements. At one hand, Hon'ble Calcutta High Court in the case of Pr CIT vs. Swati Bajaj [2022] 139 Taxmann.com 352 (Calcutta), based upon preponderance of evidence has decided that the gains arising out of trading or investing in such shares can be treated as accommodation entries. However, most of the high courts including jurisdictional high court of rajasthan in the recent case of PCIT vs. Arnav Goyal ITA No. 14/2024 decided on 19.02.2024 has decided the issue in favour of assessee in fact situation of assessee successfully demonstrating the event ....
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....iate the claim of assessee for earning agricultural income form the said land. Since the assessee has failed to furnish any documentary evidences for earning the exempted agricultural income of Rs. 11,10,170/- therefore, the exempted income of Rs. 11,10,170/- is to disallowed and treated as the income of the assessee as income from other source during the year." 5.5.2 Against this addition of the AO the following argument has been taken by the appellant in his submission dated 13.05.2024: 97. In this context, it is submitted that, during the assessment proceeding the appellant in support of the exempt agricultural income claimed in return of income of Rs. 11,10,170/- submitted the Jamabandi (PB No. 294-306). The perusal of the Jamabandi duly establish the fact that the land indeed is an agricultural land and was used for agricultural purpose. Further, it is undisputed fact that the land is an agricultural land. 98. It is further apposite to highlight that in the previous assessment year the appellant has claimed exempt agricultural income, which was also allowed by the Ld. AO while assessing the return of income. Therefore, ta....
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....herein above. Both the parties supported the order of the lower authority as favorable to them. 6. The assessee in support of the appeal so filed in ITA no. 1191/JPR/2024 supported the grounds so raised by filling a detailed written submission which reads as under : SYNOPSIS OF ARGUMENT IN THE APPEAL OF THE ASSESSEE 1. The Appellant is an individual who has filed return of income for the year under consideration on 10.10.2016 and declared total income of Rs 77,67,630/- (Pb No. 1).. The return of income filed by the Appellant was duly assessed u/s 143(1)(a) of the Act as per returned income. Appellant has claimed exempted income of Rs. 4,65,16,639/- on account of long-term capital gain u/s 10(38) of the Act in respect of sale of shares in his return of income. 2. The Ld. AO disputed the said exemption and besides this made addition in respect of agricultural income without any basis. The impugned proceedings are perse without jurisdiction and authority of law in view of the following legal arguments taken during hearing before the Hon'ble Bench. S. No Legal Basis Argument in Brief P.B. Reference 1. Barred by Limitation Ld.....
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....ase of assessee by Risk Management Strategy. In the present case, there is no such information flagged. Consequently, the notice so deemed to be notice u/s 148A(b) does not survive and liable to be dropped. In the notice issued u/s 148A(b) on 28.05.2022, it was alleged by the Ld. AO that the search and survey actions were conducted regarding Tyagi and Datta Group and it was found that certain individuals benefitted from managing and controlling the scrip of M/s Yamini Investment Company. However, no specific material was provided to the appellant to support these allegations and nothing has been brought on record as to how, Dutta and Tyagi Group is related to M/s Yamini Investment Ltd. Case laws: CBDT instruction no. F.NO. 299/10/2022-Dir (Inv. III) / 6 / 11 dated 01.08.2022 Divya Capital One (P) Ltd. v. Assistant Commissioner of Income - tax [2022] 139 taxmann.com 461 (Delhi) Rajhans Processors vs Union of India [2023] 149 taxmann.com 29 (Rajasthan) R.K. Buildcreations Private Limited vs Income Tax Officer Best Buildwell (P) Ltd. vs Income-tax Officer [2022] 141 taxmann.com 558 (Delhi) WS-5 05. Notice u/s 148 is in violation of the CBDT notification ....
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....8 of the Act, on alleged reason that the Appellant has routed his own unaccounted cash credit in the guise of bogus LTCG made. * The Ld. CIT(A) relying heavily on judicial precedents such as PCIT vs Arnav Goyal, deleted the addition without adequately examining the material facts and evidence presented by the AO. * It is submitted that for invoking the provision of Section 68 of the Act, Assessee should maintain books of accounts maintained by the Appellant. In the present case, there is no such finding by the Ld.AO that the Appellant maintain books of account and sum is found to be credited in the books of account maintained by the Assessee. * Assessee has already submitted the sufficient documentary evidence which has not been disapproved and proved false by the Ld. AO, no defect has been pointed out at the veracity of the documentary evidence placed on record, which beyond doubt establishes the genuineness of the transaction done by Assessee. Therefore, addition made u/s 68 is not justified. * Accordingly, the order of Ld. CIT(A) is supported and therefore it is incorrect to state that Ld. CIT(A) without adequately examining the material facts and evidences deleted t....
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....before Ld. CIT(A), therefore, the contention of violation of rule 46A is incorrect and misconceived. 3. * The Assessing Officer figure out the distinction from the key facts in the case of PCIT vs Arnav Goyal and PCIT vs Renu Aggarwal by stating that SEBI findings directly implicate YICL as a penny stock manipulated for accommodation entries, and the assessee is one of the beneficiaries of these transactions. . * The Assessee's name appears in the investigation conducted during search operation on Dutta and Tyagi Group, and the AO established a clear link between the assessee and the manipulated scrip. * Further, the Department has made distinction from the matter of PCIT vs Renu Aggarwal by gathering circumstantial and direct evidence, including unverified invoices and non - compliance with notices under 133(6) proving that the transactions were not genuine. . * The Assessing Officer is empowered by Section 148 of the Income Tax Act 1961 to reopen an assessment after the completion of the original assessment under section 143(3). * The Ld. AO alleged that the Assessee is not a regular Investor in the shares, and a new investor does not invest in the company w....
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....n issued by Ld. NFAC, Delhi in view of specific notification providing for eassessment of income escaping assessment. * No information or documents relied upon or investigation report has been shared with the Assessee Notice has been issued in respect of sale transaction, beyond three years, there is no escapement in the form of asset, which is primary condition for invoking extended period of limitation. Decision to make investment * In the present appeal, the appellant had produced documentary evidence for entire chain of transaction starting from investment in the shares of Anax Com Trade, payment for purchase through banking channel, holding of shares of Anax Com Trade in demat account, subsequent holding of shares of YICL in demat account, sale of shares through registered broker which were executed on registered stock exchange on which STT along with other charges were paid and receipt of sale proceed through banking channel. There are available in paper book of documents submitted. * In this context, it is submitted that the Appellant invested in the shares of M/s Yamini Investment Company based on advice given to him and after considering the potential growth of....
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....he judgment of Jurisdictional High Court. Assessee has given due verification of complete trail of transaction with third party evidence, which has not been faulted with except merely doubts have been raised. Payment of STT is the proof that transaction has been done through automated system of NSE/BSE and no offline transaction has taken place. Therefore, allegation that STT payment and banking channel do not establish genuineness is incorrect. Besides this transaction being through banking channel, there are ample evidences of accounts confirmation and D-Mat ledger debit/credit and frequency of transaction at regular interval, which distinguishes the case of the Assessee from various case laws relied upon by the department. ii. PCIT vs NRA Iron & Steel Pvt. Ltd. [2019] 103taxmann.com 48 The judgement of Hon'ble Apex Court in the case of NRA Iron & Steel Pvt Ltd is in relation to addition u/s 68 of the Act in respect of share capital issued to unidentified parties. The said decision is not with respect to capital gain exemption; thus, the case law is not applicable and hence distinguished. Moreover, in the case of the Assessee the sell transaction is through stoc....
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....has been issued without jurisdiction and approval/sanction. There is no finding in this judgment that banking transaction and STT payment are insufficient. vii. CIT vs N R Portfolio Pvt. Ltd. [2013] 29 taxmann.com 291 CIT vs. Fair Finvest Ltd (2013) 357 ITR 146 The said decision has been overruled in various courts in later decisions. Furthermore, the said decision is in regard to issuance of share capital and non-verification of shareholder, in those circumstances, the courts took adverse view against the Assessee. In the case of Appellant, there is no creditor at all, rather receipt of money from open market sources, NSE/BSE platform, therefore, the proposition that banking payment is not sufficient is not applicable in the case in hand as the facts and legal proposition laid down are entirely different and clearly distinguishable. viii. Pr. CIT vs. Vaman International Ltd. [2020] 113 taxmman.com 400 (BOMHC) There is no such finding in the order of Hon'ble Bombay High court regarding insufficiency of banking payments. The case law relates to addition u/s 69C in respect of alleged bogus purchases, thus, the facts of the case are entirely distinguishable and th....
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....ting evidences, including third party evidences, which have not been rebutted. Further reliance is placed on principle laid down in CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349 for proposition that burden of proof that apparent is not real or claim of bogus transaction in on department (person who alleges that apparent is not real or there is bogus transaction). C. CONCLUSION AND PRAYER In view of the above, appeal of the Assessee deserves to be allowed by holding that impugned proceedings are without jurisdiction and without authority of law. Thus, it is prayed that proceedings initiated by Ld. AO be declared null and void and all consequential additions made be deleted. Moreover, the departmental appeal also fails on the legal grounds itself, as there is full verification of trail of transaction and satisfaction of requirement of Section 10(38) of the Act as far as claim of exemption of capital gain is concerned. Moreover, agricultural claim is also justified and no further addition required, when after due verification, the basis of exemption is found correct and justified. Since the very basis of proceeding is non-existent and found to be non-existent despite there....
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....w; S. No Case law Relevant portion Page No. Case Laws on jurisdiction u/s 148 of the Act 1. Rajhans Processors v. Union of India. [2023] 149 taxmann.com 29 (Rajasthan) 12. Resultantly, we are of the firm view that the very foundation of the impugned notice, the reasons to believe and the order turning down objections is nonexistent. All the three proceedings are based sheerly on conjectures and surmises. The A.O. had no tangible evidence to initiate the re-assessment proceedings against the petitioner and the impugned action is based sheerly on borrowed satisfaction. Even if it is assumed for argument's sake that the transaction made by the petitioner for acquisition of immovable property at Pali may be read in place of Delhi, then also, the said transaction is duly mentioned in the return filed by the petitioner for the relevant financial year and is supported by the audited balance-sheet, which was accepted by the Assessing Officer. Hence, there is no escape from the conclusion that no tangible material was available with the Assessing Authority so as to initiate the reassessment proceedings against the petitioner by taking recourse to the provisions u....
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....icer had independently applied its mind to the information received or conducted its own inquiry into the matter for the purpose of coming to a conclusion that indeed income assessable to tax had escaped assessment or that the transaction in question with the alleged shell entity was only a paper transaction. 11. In our opinion, the impugned notice dated 30 March 2021 issued under section 148 of the Act was issued without satisfying the conditions precedent under section 147 of the Act. 6-9 Issuance of notice u/s 148 of the Act not by NFAC 3. Hexaware Technologies Limited vs Assistant Commissioner of Income Tax, Circle 15(1)(2), WRIT PETITION NO.1778 OF 2023 (vi) In paragraph 3.3 of the Office Memorandum, it is again erroneously stated that "Here it is pertinent to note that the said notification does not state whether the notices to be issued by the NFAC or the Jurisdictional Assessing Officer ("JAO")......It states that issuance of notice under section 148 of the Act shall be through automated allocation in accordance with the risk management strategy and that the assessment shall be in faceless manner to the extent provided in section 144B of the Act." The Scheme ....
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....close material facts fully and truly. It is not in dispute that by the letter dated 11th September 2015 (Exhibit H) the Petitioner have submitted all the particulars along with supporting documents to the Respondent No.1. Hence the reasons to believe and a presumption based on the statement of Shri Bhanwarlal Jain (a third party) in the course of a search, that the loans of the entities were bogus or accommodation entries was clearly dispelled. Moreover, the specific provisions of S. 153C would prevail over the general provisions of section 147 in the case of search on 3rd party." 40. In view of above discussion the notices issued under Section 148 and the impugned orders are quashed. However, the respondents shall be at liberty to proceed against the petitioners in accordance with law. 73-82 6. Shri Navrattan Kothari, vs The ACIT, Central Circle-2, Jaipur, ITA No. 425/JP/2017 Therefore, in conjoint reading of provisions of section 153A, 153C and 147/148 of the Act as well as a consistent view taken by this Tribunal in a series of decision cited (supra) we hold that the assessment or reassessment of income of the person other than search persons based on seized mater....
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....ort of the allegations made in the showcausenotice dated 16th March, 2022 within three weeks including reports, if any. Thereafter, the Assessing Officer shall decide the matter in accordance with law. With the aforesaid directions, the present writ petition along with pending application stands disposed of. The rights and contentions of all the parties are left open. 124-126 Judgment on merit: Exemption u/s 10(38) of the Act 10. Principal Commissioner of Income-tax v. Renu Aggarwal [2023] 153 taxmann.com 579 (SC) Arising out of order passed by High Court of Allahabad in Pr. CIT v. Smt. Renu Agarwal [2023] 153 taxmann.com 578. 5. After detailed discussion, the ITAT has recorded the following findings of fact : "The above findings recorded by ld. CIT(A) are quite exhaustive whereby he has discussed the basis on which the Assessing Officer had made the additions. While allowing relief to the assessee, the ld. CIT(A) has specifically held that there is no adverse comment in the form of general and specific statement by the Pr. Officer of stock exchange or by the company whose shares were involved in these transactions and he held that Assessing Officer only quoted facts....
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.... appellant denied having made any transactions in shares. The payments and receipts are made through a/c payee cheques and the transactions are routed through Kolkata Stock Exchange. There is no evidence that the cash has gone back in appellants's account. Prima facie the transaction which are supported by documents appear to be genuine transactions. The AO has discussed modus operandi in some sham transactions which were detected in the search case of B.C. Purohit Group. The AO has also stated in the assessment order itself while discussing the modus operandi that accommodation entries of long term capital gain were purchased as long term capital gain either was exempted from tax or was taxable at a lower rate. As the appellant's case is of short term capital gain, it does not exactly fall under that category of accommodation transactions. Further as per the report of DCIT, Central Circle-3 Sh. P.K. Agarwal was found to be an entry provider as stated by Sh. Pawan Purohit of B.C. Purihit and Co. group. The AR made submission before the AO that the fact was not correct as in the statement of Sh. Pawan Purohit there is no mention of Sh. P. K. Agarwal. It was also submitted that there....
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....d by assessee was not prepared or beyond of manipulation then assessee is said to have discharged his onus to prove the transaction of purchase and sale of shares and consequential capital gain. It is noted that nowhere does the AO mention that cash from assessee was received and the cash was routed back to the assessee through the bank account. Considering about documentary evidences, it clearly out ways the so called general evidences relied upon by AO. On the additions made by AO, assessee preferred appeal before The ld. CIT(A), NFAC who decided the appeal in favor of the assessee. The ld. CIT(A), NFAC noted the fact that there are no direct or even indirect substantial evidences for holding transactions to be bogus. It has been categorically held by ld. CIT(A), NFAC that additions on basis of suspicion cannot be made without converting the voluminous of evidences placed on record by the assessee. 134-176 8. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee while deciding the appeal of the assessee ld. CIT (A) has not dealt with the technical grounds raised by the assessee. Before ld. CIT(A), assessee conten....
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....ation of unaccounted money in the guise of LTCG. The AO added Rs.4,77,46,835/- to the income of the assessee under Section 68 of the Act. 1.3. The Commissioner of Income Tax (Appeals) [CIT(A)], relying heavily on judicial precedents such as PCIT vs. Arnav Goyal, deleted the addition without adequately examining the material facts and evidence presented by the AO. 1.4. The Revenue is now contesting the order of the CIT(A), highlighting errors in the CIT(A)'s reliance on judicial precedents and the omission of critical evidence, including findings of the Securities and Exchange Board of India (SEBI). 2. Critical Findings Against the Assessee 2.1. Search Findings: The assessee's transaction in YICL was flagged during a search and survey operation conducted in the case of Dutta and Tyagi Group, which revealed that YICL was a penny stock manipulated to benefit pre-decided beneficiaries. 2.2. Unverifiable Evidence: The assessee submitted a purchase bill from M/s Myra Apparels Pvt. Ltd.; however, the company failed to respond to notices issued under Section 133(6). This non-response raises significant doubts about the genuineness of the transac....
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....IT vs. Swati Bajaj upheld the AO's addition in penny stock cases, ruling that: * The onus lies on the assessee to prove the genuineness of transactions, particularly when dealing with penny stocks. * STT payment and banking channels do not establish genuineness, as these transactions are often layered to create a facade of legitimacy. 3.3.2. This principle squarely applies to the present case, as the assessee failed to substantiate the genuineness of the transactions, despite claiming compliance with STT norms and routing the transactions through banking channels. 3.3.3. Submission on Genuineness of Payment through Banking Channels, STT, Online Trading, and Reassessment under Section 148 I. Genuineness of Payment through Banking Channels, STT, and Online Trading: It is a settled legal principle that the mere routing of transactions through banking channels, payment of Securities Transaction Tax (STT), and execution of transactions through online trading platforms do not conclusively establish the genuineness of a transaction under the Income Tax Act, 1961. The Hon'ble Courts have consistently held that the substance and true nature of th....
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....payments without proving creditworthiness and genuineness fail Section 68 compliance. 3 Sajan Dass & Sons v. CIT [2003] 264 ITR 435 Delhi High Court Mere identification and routing funds through banking channels do not establish the genuineness of the gift. 4 Pr CIT v. Bikram Singh [2017] 85 taxmann.com 104 Delhi High Court Payments via cheques and banking channels were insufficient to prove transaction authenticity. 5 Securities and Exchange Board of India v. Rakhi Trading Pvt. Ltd. [2018] 13 SCC 753 Supreme Court STT payment and online trading did not prevent a finding of manipulative practices. 6 PCIT v. M/s Laxman Das Khandelwal [2019] 108 taxmann.com 183 Supreme Court Banking channels and STT payments alone were held insufficient without proving the creditworthiness. 7 CIT v. N.R. Portfolio Pvt. Ltd. [2013] 29 taxmann.com 291 Delhi High Court Banking channels alone do not establish genuineness if creditworthiness is not demonstrated. 8 CIT v. Fair Finvest Ltd. [2013] 357 ITR 146 Delhi High Court Share application money received through banking channels does not establish the genuineness o....
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....held the AO's addition, holding that penny stock transactions were bogus and meant to evade taxes. 4.4. McDowell & Co. Ltd. vs. CTO (1985) 154 ITR 148 (SC): The Supreme Court held that colorable devices cannot be part of tax planning. Bogus transactions designed to evade taxes are liable to be added back. 4.5. CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC): The burden of proof lies on the assessee to prove the genuineness of transactions and income sources. 4.6. PCIT vs. NRA Iron & Steel Pvt. Ltd. [2019] 103 Taxmann.com 48 (SC): Transactions through banking channels and STT payments without proving creditworthiness and genuineness fail Section 68 compliance. 5. Prayer In light of the above, the Revenue respectfully submits that: 5.1. The order of the CIT (A) be set aside. 5.2. The addition of Rs.4,77,46,835/- made by the AO under Section 68 be restored. 5.3. Any other relief deemed fit by this Hon'ble Tribunal may be granted." 10. The ld. DR in addition to the written submissions vehemently argued that jurisdiction has been acquired based on the decision of the apex court in the case of Ashish Aga....
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....le vide letter dated 25.05.2022 and the assessee was requested to file its response. The assessee filed the response which was discussed in the order passed u/s 148A(d) of the Act dated 25.07.2022[page 237]. Based on the available records the case was considered as per new inserted provision of section 148A(c) of the Act and thereby the notice u/s. 148 of the Act was issued to the assessee on 26.07.2022. The assessee also challenged issue notice u/s. 148 of the Act before the Jurisdictional High Court. As the High Court did not grant any stay or passed on the order the ld. AO proceeded by making the assessment based on the re-opening notice and thereby completed the assessment. The same was challenged before the ld. CIT (A) who has decided the appeal of the assessee on its merits on the part addition made by the ld. AO and thereby sustained the part addition made by the ld. AO. The assessee before us challenges the notice issued and thereby the jurisdiction assumed by the ld. AO. As is evident, that first notice was issued on 09.04.2021 i.e. after the amendment made in the Act w.e.f. 01.04.2021 to follow the new regime of issuance of notice based on the direction of the apex cou....
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....ave elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year: Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of section 149." As is evident from the above provision of the Act the notice issued on 09.04.2021 was issued for the assessment year under consideration i.e. A. Y. 2016-17 is after 3 years. The revenue argued that the Taxation and other laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as 'TOLA') would protect the impugned proceedings and under the TOLA, time was extended till 30-6-2021 and the proceedings in this case have been initiated on 09.04.2021 which is within the extension provided and for that revenue relied on Section 3 of the TOLA read with Notification 10 of 2021 dated 1-3-2021 and Notification No. 38 of 2021 da....