TaxTMI 
TaxTMI 
2026 (3) TMI 625
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....d, arbitrary and contrary to the documentary evidences placed on record. The assessee sold 91,000 shares of M/s. Rutron International Ltd. for a total consideration of Rs. 2,42,39,516/ -. The resultant LTCG was duly claimed as exempt under section 10(38) of the Act. The entire transaction was executed through recognized stock exchange, supported by contract notes, demat statements, bank statements and STT payment details. Thus, the transaction satisfies all statutory conditions prescribed under section 10(38) of the Act. The Revenue has alleged that the assessee acquired shares through preferential allotment in a pre-arranged manner. In this regard, it is submitted that the share application dated 28.09.2011, as placed at page 118 of the paper book, clearly evidences the application for shares. There is no material on record to establish that the assessee had any prior arrangement or collusion with the company. Mere suspicion regarding acquaintance with the company cannot substitute legal proof. 3. The revenue has pointed out that the share application is dated 28.09.2011 whereas the cheque is dated 30.11.2011, and shares were allotted on 05.11.2011. The Ld. AR submits that p....
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....vestigation reports and surrounding circumstances, without establishing nexus between the assessee and alleged price manipulation. 8. The Ld. AR advanced her argument by submitting list of dates. The said list is reproduced as below :- S. No. Date Particulars of the event Document Type Paper Book reference 1 28.09.2011 The appellant applied for 150000/- equity shares of Rutron Internatoinal Limited ("Rutron" for short) at a face value of Rs. 10 per share, with no share premium Share application form Page No.118 2 05.12.2011 The appellant was allotted shares of Rutron on a preferential allotment basis each having face value of Rs. 10 per share Share allotment letter Page No.117 3 06.12.2011 The appellant made a payment of Rs. 15,00,000/- towards the purchase of shares of Rutron through cheque bearing No.107780/- Bank statement Page No.34 4 01.02.2012 Shares were credited to the appellant's demat account maintained with Comfort Securities Limited Demat account maintained with Comfort Securities Limited Page No.144 5 30.04.2013 The shares of Rutron held by the appellant in the demat account main....
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.... consultant who advised my husband had advised to apply. 4. Vide Q.No. 21 the officer asked her when there is no guarantee of allotment how is this possible. The assessee replied I don't know about this. 5. It is vide Q.No. 22 the assessee was asked to explain further it is seen from the share application form that the date mentioned on the form 28.09.2011 whereas the date of cheque on the form is 30.11.2011. Please explain the discrepancy. The assessee has replied to this I Can't explain it. 6. Vide Q.No.28 of statement recorded the assessee was asked that it is seen that the company Rutron International Ltd had a general meeting on 22.10.2011 where preferential issue of 99,50,000 shares were approved subsequent to which the shares were allotted on 05.11.2011 to you. Did you know about the occurrence of this general meeting, the assessee has replied that I do not have any idea. 7. Application dated 28.09.2011, cheque dated 30.11.2011 in printed form where as shares allotted to assessee on 05.11.2011. There is a huge discrepancy. 8. The trading of shares of Rutron International Ltd was suspended by SEBI and was revoked only on Ju....
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....ents made in various companies. The assessee was not aware of any connection of Mr. Anil Agarwal or the share broker i.e. Comfort Securities and the company in which the investments were made. Above all, the entire funds were paid through and received into the bank accounts of the assessee. The application for preferential allotment was made by the assessee on 28.09.2011. It is only thereafter basis the final approval for allotment made in the board meeting and in the general meeting, the shares were finally allotted to the assessee on 05.12.2011. The suspension on the trading of equity shares of Rutron International Ltd was revoked with effect from 01.07.2011 itself. The assessee had been allotted the shares basis the application dated 28.09.2011 for preferential issue on 05.12.2011. i.e. post revocation of suspension only. Further, the suspension dated 27.08.2015 was again revoked with effect from 27.09.2018. The assessee had already sold the shares of Rutron International before this period from 2015-2018. The sale of shares was done on the stock exchange only and it was impossible for the assessee to know the details of the purchasers of the ....
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....uments and statements had been produced before the assessing officer, while drawing the ultimate conclusion, the same have not been considered and dealt with at all by the assessing officer. In the entire assessment order, apart from the contents of the statements being reproduced and the third-party reports, there is no whisper why the aforesaid evidences have not been taken into consideration. The aforesaid evidences, thus, remain uncontroverted/ undisputed. In CIT v. Shyam R. Pawar: [2015] 54 taxmann.com 108, the Bombay High Court has held that where DMAT account and contract note showed details of share transaction, and Assessing Officer had not proved said transaction as bogus, capital gain earned on said transaction could not be treated as unaccounted income under section 68. Reliance is also placed on the following judicial precedents: - ACIT Vs. Mrs. Rehana Mohammed Ali: ITA Nos. 1487/Mum/2024(Mum-Trib) - Shaily Prince Goyal Vs. ITO: ITA 4271/Mum/2023 (Mum-Trib) - Tarachand Kothari Vs. ACIT: I.T.A. No. 1553/Mum/2024(Mum-Trib) - Tejash Ramesh Shah, HUF Vs. ITO: ITA No.5814/Mum/2024(Mum-Trib) - Shrenik Kumar Virch....
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....n 68 of the Act. To the same effect is the decision in the case of Sunita Motilal Sinha Vs. ITO 25(1)(3), Mumbai: ITA NO.3662/MUM/2023 (Mum-Trib) where the assessee has traded in similar scrip of Rutron and the assessing officer in their cases has disallowed long term capital gain by merely relying on statement of Shri Anil Agarwal, and Investigation Wing Report, the Hon'ble Coordinate Bench in their cases has deleted the addition with regard to following observations which are as follows: - No evidence to show that the assessee has converted his unaccounted income by claiming long-term capital gain as exempt under section 10(38). - Evidence with regard to purchase and sale of shares were not rejected by the assessing officer -The assessing officer has not brought on anything on record which could prove the involvement of the assessee in price manipulation. -Statement of Shri Anil Agarwal cannot be used against the assessee, as he has said nothing about the assessee -No independent enquiry was made by the assessing officer and rather the entire premises of addition was based upon the generalized report on modus operandi of scrip of R....