TaxTMI 
TaxTMI 
2025 (5) TMI 2221
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....ess Appeal Center (hereinafter referred to as 'The NFAC') has erred in reopening assessment u/s 147 r.w.s 148 of the Income Tax Act, 1961(hereinafter referred to as 'Act') II. Merit: 2. The Ld. NFAC erred in conforming the action of the AO in making the following additions A. Addition of sale consideration on transfer of shares of M/s VMS Industries Ltd. Under section 68 of the Act. Rs. 62,75,200/- B. Addition on account of alleged commission under section 69C of the Act. Rs. 1,25,504/- The above additions made without appreciating the facts, evidence placed on record and the submissions made by the Appellant is not at all justified and the same may be deleted. 3. The Ld. NFAC erred in confirming the addition of Rs.62,75,200/- being sale consideration for transfer of shares of VMS Industries Ltd. By invoking the provisions of section 68 of the Act without appreciating the fact that the shares were purchased and sold through recognized stock exchange and both the purchase and the sale transactions suffered STT. Thus, the addition made merely on the basis conjecture and surmises under section 68 of the Act is not at all ju....
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....ed in Stock manipulations leading to generating bogus Short and Long Term Capital gains, Bogus loans etc. It was inter alia found that the this group indulged in such exercise in seven scrip out of one VMS in which the assessee had made share transactions. Sri Naresh Jain in the course of search on him had admitted that this scrip was manipulation for ulterior gains providing bogus entries to various beneficiaries. Therefore, the assessee being one of the beneficiaries was considered by the AO to have indulged in such a penny stock for artificial and non genuine gain. He treated the entire transactions in the above scrip as unexplained u/s 68 of the Act. The income of the assessee was therefore determined at Rs. 70,40,760/- as per order passed under section 143 (3)/147 of the Act involving following additions: Sr. Particulars of additions/disallowance Amount (Rs.) A Unexplained Income u/s. 68 of the Act. 62,75,200/- B Estimated Commission paid to the entry provider u/s. 69C 1,25,504/- 4. Before the ld.CIT(A),the ld.AR contented that in the course of the assessment proceedings, the assessee was required to show cause as to why the sale proceeds of the s....
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....all the transactions made by the assessee were in fact made through the Demat account of the broker which proved that these were non genuine. He upheld the addition made u/s 68 in respect of the sale proceeds of the shares and also confirmed the addition u/s 69C of the Act on account of unexplained expenditure in form of commission paid. 6. Before us, the ld.DR has supported the orders of authorities below. Per contra, the ld.AR has reiterated the contentions as made before them. It is further submitted that since the transaction of sale of shares entered into on 29.03.2012 was settled on the Stock Exchange in FY 12-13 (AY 13-14) and also posted by its stock broker in FY 12-13 (AY 13-14) in the appellant's ledger, the assessee offered the said gains to tax in FY 12-13 (AY 13-14). Hence, strictly speaking the credit referred to by the Ld.AO of the sale proceeds was made in the books of the assessee in FY 12-13 (AY 13-14) and not in the books of FY 11-12 (AY 12-13). Given this, without prejudice to the assessee's contention above, the provisions of section 68 if ever invited should be invited with regard to the assessment of income for AY 2013-14 and not AY 2012-13. ....
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....s Shyam Pawar 54 Taxmann.com 108,PCIT vs Ziauddin A.Siddique in ITA No.2012 of 2017,CIT vs Jamna DeviI Agrawal 20 Taxmann.com 529.Further, reference has also been made to the decision of hon'ble Apex Court in Adamine Construction P.Ltd 99 Taxman 45. 6.4 With regard to the estimated addition u/s 69C, the ld.AR has contented that provisions of section incurrence of an expenditure. The AO has not placed any evidence or basis to say that the it in fact incurred some expense of 2% of the sale proceeds to enter into the alleged accommodation transaction. It has been merely presumed by him that some such expense may have been incurred without making any reference to any record or findings or entries. He made the addition on the premise of some matters referred to in the statements of Shri Naresh Jain and his associates who have not made any direct or indirect reference to the assessee or any person or entity associated with it in their statements. 6.5 In that light of above contentions, it is argued that in absence of tangible basis to suggest that some such expense was in fact incurred the rigours of section 69C are uncalled for in the case. Moreover, where the very basis of ....