TaxTMI 
TaxTMI 
2023 (12) TMI 1497
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....ry fact appellant assessee u/s 44AD of the Act is not required to maintain books of accounts thus, the AO cannot have made addition u/s 68 of the Act. (iii) That in the facts and circumstances of the instant case the Ld. CIT(A) has erred in upholding the action of ld. AO in arbitrarily computing the alleged gross total income of the appellant in the sum of Rs. 7,11,889 in respect of assessment year 2012-13. (iv) That in the facts and circumstances of the instant case the Ld. CIT(A) has erred not appreciating the very fact that ld. AO has made a hypothetical addition of Rs. 2,09,239/- as unexplained cash credit within the meaning of section 68 of the Income-tax Act, 1961. (v) That on the facts and circumstances of the case the Ld. CIT(A) erred in not considering the pre-requisite for invoking the provisions of section 68 is credit in the books of accounts of assessee, if any. In the case on hand, since the appellant assessee has not entered into transaction of neither purchase of the share of M/s. Twenty First Century India Limited nor sold the same, therefore, no credit entry is found in books of accounts of appellant assessee, hence the addition u/s 68 o....
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....arbitrary or unjustified. The Ld. CIT(A) has rejected the contention of assessee and confirmed the addition made by the AO while passing the impugned order. 5. Before the Tribunal, the Ld. Counsel for the assessee has submitted that the AO has reopened the assessment on the basis of the information received from Kolkata Investigation Wing in respect of some bogus transaction of capital gain from the purchase and sale of shares of M/s. Twenty First Century India Limited. The AO has recorded the reasons for reopening of the assessment placed at page no.69 of the paper book without verifying the record available with the AO in the shape of the return of income filed by the assessee u/s 139 of the Income-tax Act, 1961. The Ld. Counsel for the assessee has submitted that even in the reply to the notice u/s 142(1), the assessee has denied having carried out any transaction of purchase and sale in the shares of M/s. Twenty First Century India Limited and, therefore, there is no credit entry in the books of accounts of the assessee. He has, thus, submitted that the provisions of section 68 can be invoked only when there is a credit entry in the books of accounts of the assessee. The ass....
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....rty, income from business or profession, income from capital gain and income from other sources. There is no dispute that the assessee is doing trading in the shares through its Demat account the copies of which were filed by the Ld. Counsel of the assessee as directed by the bench. On going through the details of Demat account with HDFC Bank Limited and IDBI Bank Limited, we find that there is no transaction of any purchase or sale of the shares of M/s. Twenty First Century India Limited. The AO has reopened the assessment by issuing of notice u/s 148 of the Act on 31st March, 2018. The reasons recorded by the AO for reopening of the assessment placed at page no. 69 of the paper book are as under :- Thus, the AO initiated the proceedings u/s 147 on the basis of information received from Kolkata Investigation Wing regarding bogus accommodation entries for long term capital gains in penny stock of M/s. Twenty First Century India Limited of Rs. 2,09,239/-. The AO has issued notice u/s 142(1) as well as summons u/s 131 to the assessee for personal attendance and production of documents. The assessee submitted letter in the Dak and denied having any transaction of purchase and sale ....
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....not attended in this office. In response he has submitted the letter through DAK and stated that the assessee has not made the transaction with M/s. Twenty First Century India Limited. The assessee submitted nothing further. It is, therefore, the undersigned has no option for passing the assessment order u/s 144 of the Income-tax Act, 1961, on the basis of material available on record. As per the information received and material available on record, the assessee has traded 646 shares for trade value of Rs. 2,09,239/-. The information received from the Investigation Wing of the Department has to be taken into consideration. Mere denial of the transaction by the assessee without any supporting evidence cannot be accepted. 7.2 I view of the detailed discussion above and after due verification of facts and circumstances of the case, it has been established beyond doubt that the assessee's income from long term capital gains from the sale of shares of M/s. Twenty First Century India Limited is bogus, and is an accommodation entry taken for the purposes of converting his own black money into white. Therefore, the trade value of Rs. 2,09,239/- is an unexplained cash credit as un....
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....ng accommodation entry of long term capital gain in the same script as it is for A.Y. 2011-12 therefore, in view of our finding for assessment year 2011-12, the addition made by the AO for the assessment year 2012-13 is not sustainable in law and liable to be deleted. We order accordingly. 10. In the result, these two appeals filed by the assessee are allowed. Order pronounced in the open court on 11.12.2023. ============= Document 1 //ANNEXURE-A// 69 30 ;- Himanshu Botadara (HUF) Name of the Assessee Assessment year PAN :- 2011-12 :- AABHH0744M The assessee Is a HUIF and filed his return of income for A.Y. 2011-12 on 16.12.2011 declaring total income of Rs. 5,02,650/ -. An Information regarding Dissemation of Beneficiaries/Bogus LTCG/STCL in the case of Penny stock "Twenty First Century (India) Limited received from Deputy Director of Income Tax ( Investigation)-1, Indore via official e-mail dated 29/03/2018. The survey actions were conducted by the Kolkata directorate on various share brokers, during the search the share brokers accepted their role in the entire scheme of providing accommodations entry of bogus LTCG/STCL in the case of Penny ....