TaxTMI 
TaxTMI 
2025 (12) TMI 1649
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....(3), Mumbai, passed u/s 143(3) read with section 147, date of order 30/12/2019 for A.Y.2012-13. 2. Both the appeals pertain to the same assessee, therefore, both the appeals were heard together and are disposed of by this common order. ITA No.5268/Mum/2024 (A.Y. 2011-12) (Assessee's appeal) 3. The brief facts of the case is that the assessee purchased 4000 shares of Sakshi Vyapar Pvt Ltd (SVPL) on dated 17/04/2009 and that the payment was debited from his bank account on dated 22/04/2009. The 4000 shares of SVPL were in physical form & preferential allotment was on dated 24/11/2008. On 28/02/2009, the said shares were transferred in the name of assessee and endorsement was completed on same date. Pursuant to the order of Hon'ble Calcutta High Court in SVPL, the company was merged with M/s Oasis Cine Communications Ltd (OCCL) on dated 04/08/2009. Accordingly, 4000 shares of SVPL dematerialized in demat account of the assessee on 08/10/2009. On 29/10/2009, in pursuance of the merger, the assessee was allowed the shares of OCCL in ratio of 1:8. Accordingly, the assessee was allotted 32,000 shares of OCCL. The assessee sold the shares through BSE in following manners, in the r....
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.....e. Purchase Bill of Sakshi Vyapar Ltd. Copy of letter from Oasis Cine Communication for Sakshi Vyapar Ltd. Shares merged into Oasis Cine Communication Ltd, Court order dated 15.06.2009 for merger of Sakshi Vyapar Ltd. Into Oasis Cine Communication in the ratio of 1:8, etc. 9.2. This transaction is clearly a staged and synchronized transaction to bring unaccounted money into books of accounts. The assessee has been dealing in Shares & Securities and has done all his transaction from Mumbai. However, only the 26000 shares of Oasis Cine Communication has been done through SajendraMookim from Kolkata and balance 6000 shares through broker K. Prasad & Co, Kolkata totaling at Rs. 1,02,75,459/ 9.3. It is relevant to mention here that the Oasis Cine Communication Ltd. (presently known as Ecowave Infotech Limited) is one of those shell companies which were delisted by the SEBI vide order SEBI/HO/ISD/OW/P/2017/18183 dated August 7, 2017. This fact clearly establishes that Oasis Cine Communication Ltd. is shell company and the transactions of sale and purchase of Oasis Cine Communication Ltd. are manipulated and staged transaction to bring unaccounted money into the books o....
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....ed in the foregoing paragraphs and as per the directions given by the Addl. Commissioner of Income Tax, Central Range-4, Mumbai vide order dated 26.11.2018, it is clearly established beyond doubt that the assessee has conducted a dubious deal and it is not genuine transaction conducted in ordinary course of business. Hence, the sale consideration received on account of sale of shares of Oasis Cine Communication Limited is Rs 1,02,75,459/- is added back to the total income of the assessee under section 68 of the 1. T. Act, 1961. (Addition: Rs. 1,02,75,459/-" 5. The Ld. AR further contended that, both during the assessment proceedings as well as in the appellate proceedings, the assessee duly submitted all relevant documents in support of his claim. However, none of these documents has been specifically rejected or controverted by the revenue authorities. Accordingly, the assessee has successfully discharged his onus, and the burden thereafter shifted to the Department. The relevant documents filed before the revenue authorities, and placed on record before the Ld. AO as well as the Ld. CIT(A), are annexed at APB pages 45 to 77. The details of the said documents are as under:- ....
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....2/Mum/2018 Assessment Year : 2015-16 d. Shri Harakchand Meghji Dodhia, ACIT Circle - I.T.A. No.5543/Mum/2018 Assessment Year 2015-16 e. Shri Ritesh Mansukhlal Dodhia Vs ACIT Circl-1 - I.T.A. No.5541/Mum/2018 Assessment Year : 2015-16." The Ld. AR respectfully relied on the order of the coordinate bench of ITATMumbai E-Bench is case of Kashyap M. Vora (HUF) vs ITO, ITA No. 3394/Mum/2024 date of pronouncement 26/05/2025. The relevant paragraph is reproduced as below:- "7. We have carefully considered all the relevant facts of the case. It appears to us that both the lower authorities have heavily relied on a generalized report of the Investigation wing and failed to take note of the evidences submitted by the assessee in support of the contention that he was an investor having invested in various scrips from time to time for last several years and made all the transactions on platform of BSE through registered broker and also through banking channels. Shares were credited to the demat account though of the broker. Nothing has been brought on record by the AO to specifically demonstrate that the assessee in any manner colluded with price manipulators for ....
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....n made by the AO is devoid of any merit. The documentary evidences could not be rejected without bringing on record any substantial piece of evidence. Thus, we have no hesitation is setting aside the appellate order. The AO is therefore, directed to delete the addition made. Moreover, the ad hoc addition u/s 69C being consequential only, the AO is directed to delete the same as well. As a result, ground nos. 2 to 6 on merits are allowed." 7. The Ld. DR contended and submitted that the assessee had entered into a bogus transaction, and that the modus operandi adopted was clearly brought out by the Ld. AO in the impugned assessment order. He further drew attention to the records pertaining to the assessee's transactions, pointing out that the share purchase bill was dated 24/11/2008 (APB page 45), whereas the purchase consideration of Rs. 4,00,000/- was paid on 22/04/2009, and the shares were endorsed on 28/02/2009. According to the Ld. DR, this time lag between the issuance of the purchase bill, the payment of consideration, and the endorsement of shares casts serious doubt on the genuineness of the transaction. The Ld. DR respectfully relied upon the orders of the revenue author....
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.... referred to as CSE) which is a rise of 49.067% within a period of 8 months 2 Securities and Exchange Board of India (hereinafter referred to as 'SEBI) conducted investigation in respect of buying, selling and dealing in the shares ofthe company. The period of investigation was from August 17, 2004 to March 31, 2005 3. It was observed that five brokers, namely Bubna Stock Broking Pvt. Ltd., Shyamal Sultania, M. Bhiwaniwala & Co, Sajendra Mookim and Ahilya Commercial Pvt. Ltd. accounted for 79.7% of the total traded volume in the scrip of the company at CSE, during the investigation period. Most of these trades were in the nature of cross and synchronised trades. 4. Shreya Tie Up Pvt. Ltd. (hereinafter referred to as the noticee") was one of the major clients who had allegedly transacted through Sajendra Mookim during the period under investigation." 8.11. Thus, even while the appellant was selling the shares through Sajendra Mookim, the doubtful role played by the said broker is already available in public domain. It is also noted that Oasis Cine Communication Ltd. was delisted in August 2017 owing to the finding of the same being a shell ent....
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.... in the absence of specific incriminating material. The reliance placed by the assessee on the coordinate bench decision in Kashyap M. Vora (HUF) (supra) squarely applies to the facts of the present case, wherein it has been held that additions based merely on generalized investigation reports, without independent enquiry and without disproving the assessee's documentary evidences, are unsustainable in law. In the present case, the revenue has failed to rebut the evidences produced by the assessee or to bring on record any cogent material to establish collusion, price manipulation, or accommodation entry in the hands of the assessee. The denial of exemption under section 10(38) of the Act and the consequent addition of the entire sale consideration under section 68 are thus based on conjectures and surmises rather than concrete evidence. Accordingly, in the absence of any legally sustainable basis for treating the impugned share transactions as bogus, the addition made under section 68 of the Act cannot be upheld. The assessee, having duly discharged the initial onus cast upon him, is entitled to the benefit of exemption claimed under section 10(38) of the Act. So, the impugned ....
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....g the assessment proceedings as well as in the appellate proceedings, the assessee duly submitted all relevant documents in support of his claim. However, none of these documents has been specifically rejected or controverted by the Ld. AO. Accordingly, the assessee has successfully discharged his onus, and the burden thereafter shifted to the Department. The relevant documents filed before the revenue authorities, and placed on record before the Ld. AO as well as the Ld. CIT(A), are annexed at APB pages 3 to 11. The details of the said documents are as under:- Sr.No. Particulars Page No. 1 Contract Note for purchase of shares of Clarus Finance and Securities 3-6 2 Contract Note for sale of shares of Clarus Finance and Securities 7 3 Broker Ledger Report 8-9 4 Demat account statement 10-11 14. The Ld. AR further argued and respectfully relied on the order of the Ld.CIT(A) in paragraph 7, which is extracted below:- "7. Ground No. 2, 3 & 4 are interlinked and taken up together for adjudication. The AO observed that the appellant has purchased 17,000 shares of M/s. Clarus Finance and Securities (now known as Scan Steel Ltd.) on ....
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....possible for us to come to a fair decision.". Eventually, the Hon'ble Tribunal held that balance of convenience was apparently tilting in favour of the assessee and ruled as such. 7.3. Applying the above ratio, given the set of facts before me, I am of the view that balance of convenience lies in favour of the appellant. There are enough doubts posed by the appellant in the findings of the AO because of which the additions deserve to be deleted. Accordingly, (i) the disallowance of short term capital loss of Rs. 18,89,773/-, (ii) the addition u/s 68 of Rs. 5,74,600/-, and (iii) addition u/s 69C of Rs. 73,867/- stand deleted. 7.4. Accordingly, Ground No. 2, 3 & 4 stand ALLOWED." 15. We have carefully considered the rival submissions, perused the material available on record, and examined the findings of the Ld. CIT(A) in the impugned appellate order. It is evident that the assessee had duly furnished complete documentary evidence in support of the purchase and sale of shares of M/s Clarus Finance and Securities Ltd. (now known as Scan Steel Ltd.), including contract notes, broker ledger accounts, and demat statements. These documents were placed before the Ld. A....