TaxTMI 
TaxTMI 
2025 (8) TMI 1358
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing, based on wrong reasons, without hearing, and inquiry, mechanically approved and without disposing objections well 2. In the facts and circumstances of the case and in law, the learned Assessing Officer erred in adding Rs. 1,31,88.079/- being total sale proceeds received on sale of shares of SVC Resources Limited by way of cash credit u/s 68 of IT Act, 1961 a. By ignoring the details submitted in respect of Payment made for purchase of Shares and payment received for sale of shares by cheques, Copies of Bank Statements, Demat Statement. Ledger of Share broker, Bills/ Contract Notes of shares purchased and sold, Details of Short Term Capital Gain. b. On the basis of suspicion and presumption c. Based on third party statements d. Without any proof of refund of cash e. By wrongly correlating general data of listed company with the Appellant f. By making only guesswork & overlooking documents and by relying upon cases not applicable in this case. g. By not offering the opportunity to cross-examine the brokers and other persons whose statements were never furnished for rebuttal h. By overlooking STT pai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1,65,684 25,535 TOTAL 59150 1,02,24,850 1,44,11,911 41,87,061 Out of the above A.O. picked up the shares of SVC Resources Limited only for addition. The capital gain on sale of SVC Resources Limited was as Follows:- Name Date of Purchase Qty Amt of Purchase Date of Sale Amt of Sale Gain SVC Resources Limited 16/07/2010 2500 6,24,864 30/07/2010 6,53,362 28,498 11/10/2010 2000 5,42,352 10/11/2010 1000 3,18,795 26/11/2010 8,97,791 36,643 29/01/2010 15000 25,77,678 15/01/2010 10000 17,15,160 30/08/2010 66,04,978 23,12,138 15/01/2010 3000 5,14,548 05/01/2010 1000 1,52,377 18/02/2010 2250 3,96,850 31/08/2010 16,48,477 5,84,701 05/01/2010 2000 3,04,755 01/09/2010 5,27,889 2,23,134 05/01/2010 10750 16,38,059 07/09/2010 28,55,580 12,17,520 TOTAL 87,85,441 1,31,88,079 44,02,637 3.1 The assessee disclosed Short Term Capita....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8. The addition made by AO is not justified in view of the express provisions of income tax act and the well settled principles of law. Multiple ITAT/High Court/ Supreme Court judgements are very clear and unambiguous in the matter. As long as there are proper evidences in the form of Bills, Broker notes, ledger accounts, payments and receipts by account payee cheques and dealing on stock exchange, the mere suspicion of wrong doing is not sufficient to make addition u/s 68 or any other section of Income Tax Act. AO has also not provided any evidence to suggest the wrong doing except a mere suspicion based on general analysis and general enquiries of other such dealings. He has also not provided any specific evidence which co-relates to our client. Hence the addition of Rs 1,31,88,079/- u/s 68 is not a valid proposition. Following judgements were relied upon before the ld.AO as also before the ld.CIT(A): a. CIT Vs. Smt. Jamnadevi Agarwal (Bombay High Court) 328 ITR 656 b. CIT Vs Mukesh Ratilal Marolia (Bombay High Court) Appeal No 456 of 2007 arising out of Mumbai ITAT judgement in IT APPEAL NO. 1201 (MUM.) OF 2005 Revenue's Appeal in Supreme Court dismissed. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the case of ITO Ward-23(2)(6)Mumbai Vs. Manisha Narpat Kumar Chopra, relevant paras are reproduced as below for ready reference: "11. We heard rival contentions and perused the record. 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 Gain reported by the assessee is 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. ............. 12. In the statement recorded ............ We also notice that - a) the assessee has pur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o accounted one, then, the evidence should have been complete. Change of circumstances ought to have, after the result of the investigation, connected the Assessee in some way or either with these brokers and the persons floating the two companies. It is only, after the Assessee who is supposed to dealing in shares and producing all the details including the DMAT account, the Exchange at Calcutta confirming the transaction, that the Appeal of the Assessee has been rightly allowed. The Tribunal has not merely interfered with the concurrent orders because another view was possible. It interfered because it was required to interfere with them as the Commissioner and the Assessing Officer failed to note some relevant and germane material. In these circumstances, he submits that the Appeals do not raise any substantial question of law and deserve to be dismissed. 5. We have perused the concurrent findings and on which heavy reliance is placed by Mr.Suresh kumar. While it is true that the Commissioner extensively referred to the correspondence and the contents of the report of the Investigation carried out in paras 20, 20.1, 20.2 and 21 of his order, what was important and vital....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Appeal Paper Book before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were available and which gave details of the transactions. The contract note is a system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But the Tribunal concluded that itself, is not enough to prove that the transactions in the impugned shares were bogus/sham. The details received from Stock Exchange have been relied upon and forthe purposes of faulting the Revenue in failing to discharge the basic onus. If the Tribunal proceeds on this line and concluded that inquiry was not carried forward and with a view to discharge the initial or basic onus, then such conclusion of the Tribunal cannot be termed as perverse. The conclusions as recorded in para 12 of the Tribunal's order are not vitiated by any error of law apparent on the face of the record either. 7. As a result of the abo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law. 15. Further, in the case of CIT vs. Jamnadevi Agarwal (20) taxmann.com 529 (Bom), the Hon'ble Bombay High Court has held that the transactions of purchase and sale of shares cannot be considered to be bogus, when the documentary evidences furnished by the assessee establish genuineness of the claim. In the case of PCIT vs. Indravadan Jain (HUF) (ITA No. 454 of 2018) (Bom), the broker through whom, the assessee had carried out the transactions have been alleged to have been indulged in price manipulations and the SEBI had also passed an order regarding irregularities and synchronized trades carried out in the shares by the said broker. However, the evidences furnished by the assessee with regard to purchase and sale of shares were not doubted. Under these set of facts, the Hon'ble High Court held as under:- "....The CIT(A) came to the conclusion that respondent bought 3000 shares of RFL, on the floor of Kolkata Stock Exchange through registered share broker. In pursuanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....para 14 of the order has categorically observed that the decisions rendered by the jurisdictional Bombay High Court in the cases cited above i.e. Shyam Pawar(supra),Ziauddin Siddiquue and Jamnadevi Agrawal shall apply in the present case as well since the AO has not established that the assessee had rigged the prices and also AO did not find any fault in the documents filed by the assessee. Moreover, purchase of shares in earlier years were accepted as genuine. Shares were traded on online platform of the Stock Exchange. Therefore, sale transactions could not be doubted. In another case of Alka Dilip Doshi in ITA No.1837/Mum/2023 dated 20.02.2024, the tribunal has taken note of various decisions of Ahmedabad Bench of ITAT in several cases as per similar instances of transaction were held to be genuine. In another case of Manju Hiralal Baina in ITA No. 1026/Mum/2020 dated 15.4.2024, the same bench has considered similar issue at length and deleted similar addition.Reference could also be made of the decision in the case of Shailesh Jain HUF in ITA No.6068/M/2019 dated 16.02.2021 in which also identical similar issue was involved. The co-ordinate bench of Mumbai in a detailed judgeme....