TaxTMI 
TaxTMI 
2026 (5) TMI 1329
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....led by the Revenue. The following grounds are reproduced below: 1. Whether on the facts in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the fact that the assessed has not acted a sub-broker but as trade manipulator to facilitate the price rigging of share of Well Pack and Containers limited. 2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the fact that assesse was engaged in synchronizes trading and had created artificial volume? 3. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting addition made by AO of 5% of commission which is Rs. 3,53,99,176/- by estimating commission income to 1% of commission to Rs. 70,79,835/-? 4. The appellant craves leave to add to alter, modify and/ or delete any or all of the above said grounds of appeal. The appellant reserves its right to file further submission in this appeal. 4. All the grounds raised by the Revenue are interrelated and interconnected and relates to challenging the order of the Ld. CIT(A) in restricting the additions, therefore, we have decided to ad....
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.... loss account. An order u/s 263 was passed on 31/3/2021, directing the AO to pass a fresh assessment order after conducting the necessary enquiries with respect to the said transactions. 7.2. In the assessment proceedings, it was observed that the appellant was one of the persons involved in creating artificial volumes of trade and had thus manipulated the share price of M/s Well pack Papers and Containers Limited. Appellant had executed synchronized trades, i.e., trades in which both buy and sell orders were placed within a time difference of less than or equal to one minute and for such practices, he was debarred by the SEBI, The total sale and purchase values were Rs 45,65,09,388/- and Rs 22,06,30,868/- respectively. The appellant had further transacted in multi commodity exchange amounting to Rs 3,08,43,280/-. The AO has worked out a commission income at the rate of 5% on the total transactions of Rs. 70,79,83,536/- and added the resultant figure of Rs 3,53,99,177/- to the income of the appellant. Same is challenged in the present appeal. 7.3. The main points of argument are that; -the value of transaction provided in the AIR report was Rs 16,49,37,21....
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....on adopted by the AO is 0.5%. I have perused the assessment orders referred by the appellant. It is seen that in the later years, the appellant was involved in arranging cash against RTGS credit entries on which, the AO has adopted the rate of commission at the rate of 0.5%. For the year under consideration, the appellant is involved in price rigging of the scrip on the stock market, which is a riskier activity. Therefore, I feel that the rate of commission proposed by the appellant is low and cannot be accepted. 7.5. At the same time, I also feel that the rate of commission of 5%, adopted by the AO is on a higher side. The appellant is one of the players involved in the rigging of share price and it is unlikely that commission at the rate of 5% would be paid to the appellant alone. Paying such a high percentage to a single participant (the appellant) would render the scheme unprofitable for the main operator and ultimate financial beneficiary. Considering the overall modus, I feel that the rate of commission can be estimated at 1% of total transaction to arrive at a more realistic figure of Rs 70,79,836/-. The commission earned by the appellant is worked out at a realisti....
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....ow, after considering the material placed on record and the arguments of the Ld. DR, we noticed that although the Ld. DR specifically argued before us that the Ld. CIT(A) had wrongly considered the facts in holding that the assessee had not acted as a sub-broker, whereas, as per the Ld. DR, the assessee was a trade manipulator who facilitated price rigging of the shares of M/s. Well Pack Papers and Containers Limited, and the Ld. CIT(A) ignored the fact that the assessee was engaged in synchronized trading and had created artificial volumes. 8. We also noticed that the Ld. CIT(A), while passing the impugned order, had acknowledged the fact that the assessee was one of the persons involved in creating artificial volumes of trade and had thus manipulated the share prices of M/s. Well Pack Papers and Containers Limited, and had executed synchronized trades, i.e., trades in which both the buying and selling orders were placed within a time difference of less than or equal to one month, and for such practices he was debarred by SEBI. 9. Thus, considering the total sales and purchase value, and also considering the fact that the assessee had further transacted in the Multi-Commodit....