TaxTMI 
TaxTMI 
2026 (5) TMI 227
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.... addition is beyond the scope of provision. 3. Because, on merits Id. C.I.T (Appeals) has erred in sustaining an addition of Rs. 2969600/- against claim of exemption u/s. 10(38) for Rs. 2859645/- earned on said sale of listed equity shares held in physical form duly tfd. and thereafter dematerialized in d-mat a/c, sold electronically through stock exchange, suffered STT, consideration is recd. through banking channel which is duly supported with contract note etc. and all the possible evidences without even allowing cost of acquisition and changing head of income while none of the evidences are rejected. 4. Because, Id. CIT(A) further failed to appreciate that, a) Neither anybody transaction bogus as specifically charged there is nor material/evidence against the transaction any b) Addition is based on surmises and conjectures based upon enquiry on some unrelated parties with ref. to general modus operandi. c) No material is ever supplied / confronted. d) Cases of CCL International Ltd. are accepted u/s 143(3) and revenue is generally accepting dealing in said script with identical facts. 5. Because Ld. CIT(A) grossly e....
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....ut the Karta always avoided the examination. The AO further issued notice to the broker M/s Narayan Securities, Sikandrabad who was found to be non-existent at the given address. The AO made detailed analysis of prices of the above said shares of M/s CCL International Ltd and found that unprecedented increase in prices were not backed by any financial fundamentals. Considering all the above factors, the AO disallowed the exemption u/s 10(38) and added the amount of Rs 29,69,600/- credited by the assessee out of the purported share sale receipts u/s 69 r.w 115BBE of the Act. 7. Further, the AO found that the assessee could not explain the loan of Rs 40,00,000/- and added the same as unexplained cash credit u/s 68 of the Act. 8. On appeal, the CIT(A) found that no sale bill in the name of the assessee was ever issued by M/s Narayan Securities for purchase of shares. The purchase was made in cash and the sale note dt. 22.08.2011 was issued by M/s Narayan Securities in the name of Shri Gaurav Goel. Further, the CIT(A) found that sale note has been issued on 22.08.2011 acknowledging date of transaction of purchase of shares by the assessee to be 17.08.2011. The CIT(A) also found t....
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....overed by various decision of various high courts/tribunals. * PCIT V Smt. Krishna Devi 431 ITR 361(DEL) * Pr. CIT vs. Prempal Gandhi ITA No. 95 of 2017 dated 18.01.18 (P&H) * CIT vs. Sudeep Goenka (2013) 29 taxmann.com 402 (ALL) * Smt. Karuna Garg--ITA No.1069/2019 (DEL-A)- dt. 06.08.2019 * Swati Luthra [2020] 115 taxmann.com 167 (Delhi - Trib.) 12. The ld AR challenged the order that addition made u/s 69 is beyond the scope of provision as transaction is of receipt of money and not of any investment, thus could have been added only u/s 69A. The ld AR relied on the following: * Smt. Sarika Jain vs. CIT - 407 ITR 254(ALL) * Vijay Kumar V ITO-ITA 2483/2015-Order dt. 27.11.18(DEL-F) * Inder Singh V ITO-ITA 1931/2016 -order dt. 5.12.18(DEL-B) * Smt. Shanta Devi V Cit (1987) 171 ITR 532 (P&H) * Jitendra Kumar Yadav - ITA ΝΟ. 1808/D/2016 (Del-F) 13. The ld AR further relied on the following where with identical facts case is squarely covered by various co-ordinate benches of hon'ble ITAT allowing claim u/s 10(38) by holding script genuine and not penny stock: * Sarika ....
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....Ltd, on 19.08.2011. Whereas the date of transaction recorded by the broker Narayan Securities, for sale of said shares to the assessee, is 17.08.2011 i.e., two days prior to the ownership of shares by the original shareholder. ii) The sale note of the broker Narayan Securities dated 22.08.2011 before the CIT(A), is in the name of Gaurav Goel, with address J-58, Nehru Nagar-II, Ghaziabad, Uttar Pradesh-201001 while the assessee produced before us the same sale note of Narayan Securities dated 22.08.2011 but in the name of Dinesh Kumar(HUF), with the same address J-58, Nehru Nagar-II, Ghaziabad, Uttar Pradesh-201001. We have reproduced the two 'sale note' for ready reference below: iii) Similarly, we note that the assessee, as a proof of purchase, submitted before the lower authorities, a payment receipt from the broker Narayan Securities, of Rs 1,25,000/- dated 17.08.2011 in the name of Gaurav Goel, the person to whom the sale note was issued. The said payment receipt, submitted before us, however shows the name of Dinesh Kumar (HUF) with same amount of Rs 1,25,000/- and same date 17.08.2011. iv) The AO made enquiries with respect to whereabouts of the bro....
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....tal gain u/s 10(38) of the Act, was upon the assessee which in the instant case has not been satisfactorily discharged by the assessee. In the above factual matrix of the instant case, we reiterate that the purchase of shares in physical form and the payment being made in cash, non-existent broker, coupled with the fact of manipulation and fabrication of purchase documents, establishes that the purchase of shares of M/s CCL International Ltd itself was not genuine and assessee is one of beneficiaries of accommodation entry receipts in form of long term capital gains. Once we consider the genuineness of purchase of shares of M/s CCL International Ltd, as not established, the capital gain earned from the sale transaction of the same shares cannot be lent credence to. We refer to the decisions of hon'ble Supreme Court in thew case of Sumati Dayal v CIT (1995) 214 ITR 801(SC) and CIT Versus Durga Prasad More (1971) 82 ITR 540 and the decision of hon'ble Delhi High Court Udit Kalra ITA 220/2009 and Suman Poddar (2019) 112 taxmann.com 330(SC) dismissing the SLP arising out of the decision of Hon'ble Delhi High Court in the case of Suman Poddar (2019) 112 taxmann.com 329(Del). Consequentl....