TaxTMI 
TaxTMI 
2025 (10) TMI 429
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....f the Act of Sh. Dipen Patel by questioning the integrity of the confession made by him where the statement given by a person on oath is a legally valid evidence and carries high evidentiary value. 2. Briefly stated, facts are that in this case, the assessee filed her return on 09.10.2015 declaring total income of Rs. 4,15,910/-. The assessee claimed exempt income to the tune of Rs. 37,97,757/- on account of "Long term Capital gains from transactions on which Security Transaction Tax is paid" Subsequently, credible information as received from the Deputy Director of Income Tax (Investigation), Unit 2(2), Mumbai with regard to transactions made in penny stocks, namely M/s Sunstar Realty Development Limited (PAN : AAMCS4495C) with Scrip Cod : 535141 by the assessee during the previous year 2014-15. Notice u/s. 148 dated 30.3.2021 of the I.T. Act, 1961 was issued and served upon the assessee. In response to the notice u/s. 148 of the Act, the assessee filed return on 21.4.2021 declaring total income of Rs. 4,15,910/- and claimed exempt income to the tune of Rs. 37,79,757/- on account of "Long Term capital gains from transactions on which Security Transaction Tax is paid". Notice u/....
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....e AO also relied upon the fact that notices were issued to many exit provider but all of them failed to comply such notices and never filed any submission in response to these notices issued. Furthermore, one of the exit providers Sh. Kamal Kumar Kothari, is a regular offender and ahs been banned by the SEBI for further trading. She further submitted that the financial worth of the said company was meagre and, moreover, there was abnormal rise in price of shares i.e. 20 times in the short span of 16 months and that is even without any extraordinary increase in profits of the company. Hence, she submitted that action of the Ld. CIT(A) in deleting the additions in dispute is not justified. 4. Per contra, Ld. AR has relied upon the order of the Ld. CIT(A) and submitted that he has passed a well reasoned order which does not need any interference on my part. 5. I have heard the rival contentions and gone through the facts of the case. I find that Ld. CIT(A) has discussed the issue in dispute elaborately by observing as under:- "10. Grounds No. 4, 5, 5.1, 5.2 and of the appeal have been raised in respect of addition of Rs. 39,69,000/- on account of alleged unexplained cas....
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....as under:- "Reply to Para no.6 of the AO's comments: The Ld. AO's averment are wrong and denied and apart from the fact that the Ld. AO has tried to draw reference to extraneous information which was not a part of either the assessment order or confronted to the assessee during the assessment proceedings, it would be pertinent to note, in any case, that the purchase by the assessee of the scrip of Sunstar Realty Development Limited was done on 24.12.2012 and the proceedings of the SEBI sought to be relied upon concerned themselves with the trading activity between November, 2013 and June, 2015 and therefore, there cannot be any adverse inference drawn upon the assessee being an innocent investor. In furtherance of our response to Para No.6 of the AO's comments, it is also essential to highlight that the Ld. AO has placed reliance on the order of SEBI in the case of Sunstar Realty Development Limited wherein an identification of 23 noticees was done, of which the assessee was not a part of, who were claimed to be orchestrators and beneficiaries of the manipulation. Therefore, no adverse inference can be warranted in the case of the assessee solely by im....
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.... for more than one year. After a period of one year the shares were sold by the said broker on various dates in the Kolkata Stock Exchange. Pursuant to sale of shares the said broker had also issued contract notes cum bill for sale and these contract notes and bills were made available during the course of appellate proceedings. On the sale of shares respondent effected delivery of shares by way of Demat instructions slip and also received payment from Kolkata Stock Exchange. The cheque received was deposited in respondent's bank account. In view thereof, the CIT(A] found there was no reason to add the capital gains as unexplained cash credit under Section 68 of the Act. The tribunal while dismissing the appeals filed by the Revenue also observed on facts that these shares were purchased by respondent on the floor of Stock Exchange and not from the said broker. deliveries were taken, contract notes were issued and shares were also sold on the floor of Stock Exchange. The ITAT therefore, in our view, rightly concluded that there was no merit in the appeal". 10.2 It is further, observed that the appellant is a regular investor and its share holding period is quite substa....
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....s of Sunstar Realty Development Ltd, complete detail of investment in shares, statement of transaction from broker, M/s Anand Rathi share and stock Brokers Limited, form 10DB, the list of shell companies issued by the SEBI, which did not include M/s Sunstar Realty Development Ltd, holding statement of shares, contract notes, statement of transaction of sale of shares, ledger account for sale of shares and BSE notice on split of shares. Therefore, in light of all these evidences, I am of the firm view that the action of the AO in making addition of Rs. 39,69,000/- on account of alleged bogus long term capital gain as unexplained cash credit u/s 68 and Rs. 39,690/-on account of cash commission u/s 69C of the IT Act, 1961 cannot be upheld, as it is unjustified in law, in the facts and circumstances of the case. Besides the case of the appellant is covered in favours of the appellant by the judgement of the Hon'ble ITAT Kolkata A Bench in the case of ITO Vs. Shaleen Khemani in TIA No. 1945/Kol/2014 dated 18.10.2017 at para 9.1 held as follows:- "9.1 We further find that the transaction of sale of shares by the assessee was duly backed by all evidences including Contract No....