2025 (11) TMI 1413

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.... craves leave, to add, urge, alter modify or withdraw any grounds before or at the time of hearing." 2. Also, the assessee has raised additional grounds of appeal which reads as follows: "Addl.Gr.No.1 "On the facts & circumstances of the case and in law, Id CIT(A) has erred in sustaining addition of Rs. 11,84,000 on the count of sale proceeds of shares of `NCL Research' as unexplained cash credit u/s. 68; assessee has discharged the onus casted upon her u/s. 68 by submitting documents/evidence before the AO; the AO has not faulted/disproved the same; onus shifted to the revenue which has not been discharged by the revenue; addition u/s. 68 is unsustainable in the eyes of law; is liable to be deleted; Adamine Construction P Ltd (2018) (SC); Parasben Kasturchand Kochar (2021) (SC); Divyaben Prafulchandra Parmar (2024) (Guj HC)." Addl.Gr.No.2 "On the facts & circumstances of the case and in law, Id CIT(A) has erred in sustaining addition of Rs. 11,84,000 by observing that it is a pre-arranged method employed by the assessee in connivance with operators to evade taxes; it is merely on surmises & conjectures; merely based on Report of Inv. Wing....

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....ansactions to rig the price of shares. The report of Investigation Wing, Kolkata further reveals that in cases of these penny stock companies although shares are listed on the Exchange, however, they are always closely held and controlled by the promoter of the penny stock company and the entry operator who is arranging for the bogus LTCG/loss. Accordingly, in the entire assessment order, detailed analysis has been given regarding report of the Investigation Wing, Kolkata of the department as to how the beneficiaries obtains the benefit of bogus LTCG/loss through entry provider and operator by transacting into scrips of penny stock companies. 4. The fact further reveals that the assessee purchased shares of "NCL Research & Finance Services Pvt. Ltd." at a total cost price of Rs. 4,000/- and subsequently, the assessee sold all shares during F.Y.2012-13 relevant to A.Y.2013-14 for a consideration of Rs. 11,84,000/- which was added to the total income of the assessee u/s. 68 of the Act. The A.O further added an amount of Rs. 23,680/- as unexplained expenditure in the hands of the assessee and thereby, assessed total income at Rs. 15,87,330/- against returned income of Rs. 3,70,650/....

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....egarding any transaction by the assessee with the entry provider or the broker. No direct evidence of conscious involvement has been placed against the assessee. 8. That in the entire assessment order, the focus of the A.O was on the report of the Investigation Wing, Kolkata, in which they had cracked the modus-oparandi involving penny stock companies, in which one of the scrips was the said "NCL Research & Finance Services Pvt. Ltd.". The Revenue has not brought out also whether it was an isolated transaction or the assessee was regularly purchasing and selling shares. Therefore, the Revenue authorities have failed to bring out any direct nexus of the assessee in share rigging activities through "NCL Research & Finance Services Pvt. Ltd." and the malafide benefit that was alleged to have been received by the assessee. In fact, the assessee had submitted that she was not aware regarding the fact that such "NCL Research & Finance Services Pvt. Ltd." scrip was rigged one and the assessee was unaware of the financial position and business activities of the said company. The Revenue has also not disputed the claim of the assessee that the shares transacted were reflected in the Dema....

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....rongdoing related to SNCFL script and that there is no evidence on record suggesting the assessee or his broker was involved in rigging up of price of script of SNCFL, addition on account of LTCG claimed as exempt u/s. 10(38) had been rightly deleted. 12. Furthermore, the Co-ordinate Bench of the Tribunal, Mumbai in the case of Farzad Sheriar Jehani Vs. ITO-17(1)(4), Mumbai, ITA No.2065 /MUM/2023, A.Y.2014-15, dated 22.12.2023 on the similar facts and circumstances has held and observed as follows: "16................ the revenue has not brought on record any materials linking the assessee in any dubious transactions relating to entry, price rigging or exit providers. Even in the SEBI report, there is no mention or reference to the involvement of the assessee. We can only presume that the assessee is one of the beneficiary in this transactions merely as unsuspecting investor, who has entered in investment fray to make quick profit. Even the assessing officer has applied the presumptions and concept of human probabilities to make the additions without their being any material against the assessee....." 13. Reverting to the facts of the present case, only reason for ad....