TaxTMI 
TaxTMI 
2024 (4) TMI 1325
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....o Rs. 29,69,381/- which was claimed as exemption u/s 10(38) of the Act, and the same was allowed by the AO during the assessment proceedings carried out u/s 143(3) of the Act. However, the Ld. PCIT on examination of the assessment records found that the AO while allowing the exemption u/s 10(38) of the Act, have not considered/carried out certain inquiries as detailed below: 2.1 It has now come to notice that while passing the assessment order u/s 143(3) of the Act, the AO failed to take the cognizance of, inter-alia, the following facts, which are significant to examine the correctness and genuineness of the transactions entered into by the assessee in the scrip of M/s Suchak Trading Limited as discussed in para 2 above and the correctness of claim of exemption u/s 10(38) of the Act. (i) The persons involved in the syndicate of penny stock/accommodation entries, in their respective statements recorded by the Investigation Wing Kolkata, had categorically admitted that the scrip of M/s Suchak Trading Ltd. was utilized for facilitating accommodation entries to the desired beneficiaries. (ii) In this case, at the time of purchase, the value of the shares was....
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.... 8. In the light of the aforementioned discussions and bearing in mind the entirety of the case, I am of the opinion that the assessment order passed by the A.O. 143(3) of the I.T. Act, 1961 on 22.12.2017 is erroneous insofar as prejudicial to the interest of the revenue, as discussed in preceding paras, since the order has been passed without making adequate examination of the aforesaid issues. By virtue of the powers vested in me u/s. 263 of the IT Act, I hereby set-aside the order passed u/s 143(3) of the I.T. Act, 1961 on 22.12.2017 and direct the Assessing Officer to pass a fresh assessment order after allowing adequate opportunities of being heard to the assessee, in accordance with the law following prescribed procedure and duly examining and investigating the aforementioned issue in the light of the above discussion. 4. Being aggrieved by the order of the Ld. PCIT, the assessee is in appeal before us. 5. The Ld. AR before us filed a paper book running from pages 1 to 48 and contended that there was direct inquiry by the AO during the assessment proceedings in the notice issued u/s 142(1) of the Act, which is placed on pages 7 to 13 of the paper book. Likewise, the ....
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....ve the source for making such purchases along with copy of demat account for these three financial years. v. Please also give the details of shares/equities purchased offline during the F.Y. 2011-12, FY 2012-13, FY 2013-14 and FY 2014-15 along with complete name & address of the party selling the shares. vi. Please explain as whether any financial analysis was carried out on the financial performance of the companies particularly "Suchak Trading Ltd." while purchasing the shares of the said company. vii. Please narrate when the shares/equities purchased during the F.Y. 2011-12, FY 2012- 13, FY 2013-14 and FY 2014-15 were dematerialized and please submit the duplicate share certificate given for dematerilization. viii. Please explain whether assessee was keeping the track of share prices of the company whose shares were purchased by you offline during the FY 2012-13, FY 2013-14 and FY 2014-15 and if so what was the source of the said information. ix. Please give narrations to the circumstances for deciding to sell the shares of "Suchak Trading Ltd." which were purchased on 13.03.2012. x. As per investigation conducted by the depa....
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....c in continuation of details etc furnished at the time of hearing held on 20/06/2017 1. I had invested in shares of "Suchak Trading Limited". In fact, I had made an application in the prescribed form to allot the shares in an issue being lodged by the company. 2. In India, people are investing in the shares. Most of them are not expertise in making said investment. There is no expert knowledge required in making investment more particularly when shares are applied to allot the same at par i.e. 10 /share. 3. Please find the shares/equities purchased during FY :- 2011-12 to FY :- 2014-15 marked as exhibit-7.The shares are purchased by me with only motive to earn Long Term Capital Gain. I am not doing any business or trading activity. The fund is not blocked in Debtors and Stock. So with a view to earn profit out of my Investment, I am investing in purchase of shares. 4. Please find the source of making purchases of shares during FY :- 2011-12 to FY :- 2014- 15 marked as exhibit-8. 5. I had not purchased any shares offline. There is no need to carry out any financial analysis when shares are purchases at par i.e. Rs. 10 pe....
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....nized stock exchange. Such transaction is chargeable to Security Transaction Tax. I had fulfilled the conditions laid down in the section. Exemptions shall be allowed as per the provisions of the act. 14.I also draw your attention on the last page of your notice on para 2(x) you have requested to show cause as to why the share transactions as stated should not be termed as sham/bogus transactions and the claim of exemption u / s * 10(38) of Rs: 31,37,301/- should not be rejected and Rs: 36,37,301/- should be treated as your income for the AY / - 2015 - 16 From the above you differed the amount at two different points: In fact my LTCG of Rs: 31,37,301/- consists of the following scripts Rs: 29,69,381/- on sale of shares of Suchak Trading Limited. Rs: 1,67,920/- on sale of shares of Adani Ports Rs: 31,37,301/- Total 15. In conclusion, By no stretch of the imagination, my transactions of purchase & sales of shares can be termed as sham/bogus transactions. I am also furnishing here with an affidavit on oath marked as exhibit-9 confirming that no cash element is involved in purchase & sale....
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....aid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a highe....