TaxTMI 
TaxTMI 
2025 (2) TMI 1864
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....chased the shares of above said company under private placement @ Rs. 20/- per shares (Par value Rs. 10/- (+) Premium Rs. 10/-). According to the assessee, the above said issue price was approved by the BSE. Thus, the purchase cost of the assessee was Rs. 15.00 lakhs. Subsequently, the above said shares were sold in various installments for an aggregate consideration of Rs. 2,20,22,488/-. 3. The AO received information the Investigation Wing that M/s First Financial Services Ltd., was identified as one of the penny stock company and the prices of its shares were manipulated by a group of brokers/operators in order to generate bogus capital gains. The AO placed reliance on the investigation report and accordingly held that the long term capital gains declared by the assessee is bogus in nature. Accordingly, he assessed the entire sale consideration of Rs. 2,20,22,488/- as unexplained cash credit u/s 68 of the Act. The AO also estimated commission expenses that would have been incurred in generation of bogus capital gains @ 1% of the sale consideration and accordingly assessed a sum of Rs. 2,20,224/- as unexplained cash credit u/s 68 of the Act. In the appellate proceedings, the L....
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.... and filed following documents before learned AO at the time of assessment: * A letter form First Financial Services Ltd confirming allotment of shares Bank statement depicting payments made for purchase of shares along with details of source of investment * Statement of holding shares * Broker note for sale of shares * Bank statement depicting receipt of money after sale of shares Copy of SEBI order dated 6/9/17 where in after investigation SEBI found that there is no prima facie finding against the appellant for price manipulation in case of First Financials Services ltd. * Further, the appellant vide letter dated 19/12/2016 (at para 1.11) had asked learned AO for cross examination of the person based on whose statements, such claim of bogus sale was upheld." 4.2. The assessee also contended before the Ld CIT(A) that the AO did not find fault with any of the documents furnished by the assessee. Instead, he has fully placed reliance on the findings arrived at by the Investigation wing in respect of search conducted in the hands of some other person. It was submitted that the assessee was not subjected to any enquiry by the S....
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....of right of cross-examination is a fatal flaw which renders the assessment order a nullity Sri chand Chatrumal HUF vs ACIT [I.T.A. N o.6537/Mum/2018] "the assessee have filed the best evidence to prove the transaction in question viz. bills, contract notes, demat Statement and the bank account statements to prove the genuineness of the transaction relating in the purchase of Mis. Panchshul Marketing Ltd and thereafter sale of shares [after amalgamation] of Mis KAFL which resulted in LTCG claim of Rs. 19,51,000/-. Therefore, by applying the test of preponderance of probability, the LTCG cannot be disallowed without AO pointing out any infirmities in the evidences produced by assessee, which lll1fortwlately AO could not point out. So the assessee's claim of L TCG need to be allowed." M/S ANDAMAN TIMBER INDUSTRIES V/s CCE CIVIL APPEAL NO. 4228 OF 2006 Not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of ....
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....e false or fictitious or bogus. The facts of the case and the evidence in support of the evidence clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee exempted u/s 10(38) of the Act on the basis of suspicion, surmises and conjectures. It is to be kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence" In view of the facts, documentary evidences and circumstances of the case and having regard to varied judicial pronouncements including jurisdictional HC and ITAT, I am of the considerate view that the learned AO has not carried out investigation of the fact of the case which are specific to the appellant. The learned AO has also not provided opportunity or any finding in he assessment order, on request of appellant for cross examination which is against found to be principle of natural justice. The SEBI order dated 6/9/2017 clearly states that the appellant was not involved in price manipulation of the script. Further, the appellant has filed all the requisite documents to substantiate genuineness of the s....