TaxTMI 
TaxTMI 
2025 (8) TMI 1504
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....Assessment Year 2015-16, whereby the learned CIT(A) upheld the addition of Rs. 11,97,725/- made by the Assessing Officer under section 68 of the Act in respect of Long-Term Capital Gain (LTCG) claimed by the assessee as exempt under section 10(38) of the Act on the sale of shares of M/s. Kappac Pharma Ltd. 2. Facts of the case 2.1 The facts, in brief, as emanating from the records are that the assessee is an individual who filed her return of income on 07.09.2015 declaring total income of Rs. 6,21,190/-. The case was selected for complete scrutiny under CASS and notice under section 143(2) was issued on 28.07.2016 and duly served. Subsequent notices under section 142(1) along with questionnaires were also issued, in response to which ....
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....an of time through shares of a fundamentally weak company. He held that such gain defied commercial prudence and failed the test of human probabilities. It was further observed that the purchase of shares in physical form, dematerialisation shortly before sale, and sale at a highly inflated price suggested a premeditated scheme to create artificial long-term capital gains. The Assessing Officer applied the ratio laid down by the Hon'ble Supreme Court in the cases of CIT v. Durga Prasad More (82 ITR 540) and Sumati Dayal v. CIT (214 ITR 801) to disregard the documentary evidence produced by the assessee and held that the transaction was a colourable device. The AO also placed reliance on the investigation findings that the share price of Kap....
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....sion that the transaction was not genuine. The CIT(A) also referred to various decisions of the coordinate benches of ITAT and Delhi High Court involving identical facts and the same scrip (Kappac Pharma Ltd.), including the decisions of Co-ordinate Bench in case of Udit Kalra v. ITO (ITA No. 6717/Del/2017) and Manvi Khandelwal v. ITO (ITA No. 3212/Del/2018). The CIT(A) also noted that in case of Udit Kalra (Supra) the Hon'ble Delhi High Court dismissed the appeal filed by the assessee. Relying on these, the CIT(A) held that the LTCG in the present case was also a result of a pre-planned, orchestrated scheme and liable to be treated as unexplained income under section 68. 3. Aggrieved by the above findings, the assessee has preferred the....
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....l, the AR also furnished the ledger account of the assessee in the books of the seller, M/s. Corporate Stock Broking Pvt. Ltd., which clearly showed the debit towards share sale consideration received from the assessee. These evidences, it was submitted, fully establish the identity of the counterparty and the genuineness of the transaction, even in respect of the initial acquisition of shares in physical form. 3.2 It was further reiterated that the Assessing Officer had not made any enquiry with the seller or broker, nor examined the contract notes or demat records to disprove the transaction. There was no material on record to suggest any involvement of the assessee in accommodation entries or price rigging, nor any link established be....
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....assessee for the aforesaid assessment years, along with the computation of income. 3.4 The AR also placed reliance on the judgement of Hon'ble High Court of Gujarat in case of PCIT-1 Vs. Parasben Kasturchand Kochar (Tax Appeal No. 204 of 2020) where the appeal of the revenue against the order of the Co-ordinate Bench (ITA No. 549/Ahd/2018) was dismissed. 3.5 On the other hand, the learned Departmental Representative (DR) strongly relied upon the findings recorded by the Assessing Officer in the assessment order and the detailed reasoning of the CIT(A) in the appellate order. The DR referred the judicial precedents relied on by the CIT(A), specifically Udit Kalra v. ITO (supra) and Ms. Manvi Khandelwal v. ITO (supra). 4. We have car....
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....urn of income for A.Y. 2012-13 declared a total income of Rs. 1,56,000/-, further corroborating the limited financial capacity of the assessee. 4.2 Upon careful consideration of the factual chronology, supporting documents, rival submissions, and the consistent reasoning of the Assessing Officer and the learned CIT(A), we are of the considered view that the transaction in question does not inspire confidence as a genuine investment, and bears the hallmark of an accommodation entry scheme devised to generate tax-exempt long-term capital gain. The suspicious time gaps, the mode of acquisition (cash), lack of prior or subsequent trading activity, the scrip's tainted profile, and the implausible price appreciation, all cumulatively establish....