TaxTMI 
TaxTMI 
2026 (6) TMI 222
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion/report from the Investigation Wing came to know all the beneficiaries of bogus Long Term Capital Gain through the scrip of M/s Access Global Ltd which is allegedly controlled by a Syndicate of Brokers, Dummy Directors, Operators and Entry Providers Managers; the list of all beneficiaries contained the name of the assessee. The assessee has allegedly purchased shares of M/s Seaview Suppliers Pvt. Ltd., a private limited company based at Kolkata through M/s Kalimata Tradecom Pvt. Ltd.; the assessee is allowed to purchase 9 months' credit as the payment for the purchase was finally debited from the bank account of the assessee on 26.04.2011. M/s Seaview Suppliers Pvt. Ltd. was got merged with M/s Access Global Ltd by the order of Hon'ble Kolkata High Court. The assessee had purchased 600 shares of Seaview Suppliers Pvt. Ltd at Rs. 484 each off market on 10.07.2010. However, the payment was not made on the same day. The payment for the purchase of shares of Seaview Suppliers Pvt. Ltd was made on 26.04.2011 after availing 9 Months long credit period. Seaview Suppliers Pvt. Ltd got amalgamated with Access Global Limited Vide order dated 15.11.2011 of the Hon'ble High Court of Ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ITO v. S.M. Bharwani in the case of Penny Stock and Hon'ble Kolkata High Court in the case of PCIT v. Swati Bajaj, the ld. CIT(A) has confirmed the addition and dismissed the appeal of the assessee. 5. Aggrieved by the impugned order the assessee is in appeal has raised the following grounds of appeal: "1. That each ground of appeal is without prejudice to each other. 2. That notice Issued u/s 148, proceedings and order passed u/s 147 r.w.s 144B of Income Tax Act, 1961 is void-ab-initio, Illegal, unjustifiable, bad in law and liable to be quashed. 3. That the Ld. AO has reopened the assessment u/s 147 only on the borrowed satisfaction and has not applied his own mind before recording the reasons and Issuing notice and concluded the proceedings mechanically on borrowed and premeditated inference without Independent application of mind. So, the order passed by Ld.AO is void ab Initio, illegal, unjustifiable, bad in law and liable to be quashed. 4. That the addition of Rs. 70,62,901/- made by the AO u/s 68 cannot be held valid in the eyes of law because assessee is not required to maintain books of accounts, so the addition cannot be made u/s 68....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lowing issues for consideration arises as under: "Whether the assessee is a bonafide investor in the share of M/s Access Global Ltd. or the assessee is indulged in acquiring and selling all these shares in order to earn fictitious claim of LTCG so as to get exemption u/s 10(38) of the Act." 7. In order to prove the nature of the investment to be genuine and real and not be a bogus LTCG, the preliminary onus is on the assessee to prove the genuineness of the transactions. The ld. AR for the assessee would submit in that regard that the assessee purchased and sold all shares in normal course, submitted purchase bill, payment proof from banking channel, share transfer form issued by Registrar of Companies, letter of amalgamation received by registered post, demat account, contract note for the sale on which STT is duly paid and bank statement to prove the genuineness of the transaction but the Ld. AO failed to rely on the facts and evidences tendered by the assessee and made addition of Rs. 70,62,901/- on account of bogus long term capital gain and denied exemption u/s 10(38) and addition was made u/s 68 of the Act. In support of above submissions, the ld. AR has submitted....
X X X X Extracts X X X X
X X X X Extracts X X X X
....18 pronounced on 12.01.2023 by ITAT Chandigarh * Smt. Anju Jindal Vs ACIT vide ITA No. 1341/CHD/2018 pronounced on 17.03.2023 by ITAT Chandigarh Further Reliance is being placed on following judgments: * PCIT vs Renu Aggarwal 153 taxmann.com 579 pronounced on 03.07.23 by Supreme Court. * PCIT vs Parasben kasturchand Kochar 130 taxmann.com 177 pronounced on 02.08.21 by Supreme Court. * PCIT vs Karuna Garg ITA 477/2022 dated 23.11.22 by High Court of Delhi. * PCIT vs Smt. Krishna Devi 126 taxmann.com 80 dated 15.01.21 by High Court of Delhi. * Archit Gupta vs ACIT ITA No. 2527/DEL/2022 dated 29.10.25 by Jurisdictional ITAT Delhi. 9. We now proceed to discuss the cases relied by the assessee in brief as under: 9.1 Amarjit Kaur Surinder Singh Kochhar Vs ITO vide ITA No. 2513/Mum/2023 Dated 22.01.2024 by ITAT Mumbai where the same scrip was involved, relevant finding contained in 15 to 17 are as under: 15. Considered the overall facts, submissions and the information find that the assessee has furnished the financials, details of broker and the transactions status. The AO has doubted the purchase and sale of s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ani case v. Asstt. CIT in ITA No. 1338/Chd/2011 order dated 12.01.2023, the Hon'ble Chandigarh Bench while dealing with the same scrip held that the Assessing Officer has in-fact failed to carry out preliminary enquiry that the assessee has originally purchased shares of M/s Mepple Group Ltd. and on its amalgamation was allotted shares of M/s Access Global Pvt. Ltd. in exchange of its existing holding and that the purchases so made were bogus and therefore, where the purchase had not been doubted, how sale had been held to be bogus. 9.4 The ld. AR has also relied on the case of PCIT v. Smt. Renu Agarwal [2023] 153 taxmann.com 579 (SC) wherein the Hon'ble Supreme Court has dismissed SLP against order of Hon'ble High Court of Allahabad in PCIT v. Smt. Renu Agarwal wherein the AO has disallowed exemption claimed by assessee u/s 10(38) and made additions to income of assessee on the ground that assessee was involved in penny stock which were being misused for providing bogus accommodation of LTCG. The ld. CIT(A) deleted addition and ITAT dismissed the appeal of the Revenue. On appeal to High Court, it was observed that the ld. CIT(A) had specifically held that there was no adverse c....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., price rigging or exit providers. Even in the SEBI report, there is no mention or reference to the involvement of the assessee. It was further held that the assessee who is one of the beneficiary in these transactions, merely is an investor who has entered in investment fray to make quick profit. In this case, the cases relied by the AO in the case in hand i.e. Sumati Poddar v. ITO and Sumati Dayal v. CIT were also discussed and it was held that the case of Sumati Dayal v. CIT and Suman Poddar v. ITO are of no assistance of the Revenue as the said cases were decided on their own facts. 10. The ld. AR has submitted that the assessee has successfully discharged the onus of proving the genuineness of the transactions and has established that he was a genuine investor and the LTCG claimed by the assessee was perfectly legal, justified and genuine and therefore the assessee was entitled to exemption u/s 10(38) of the Act. 11. The ld. DR on the other hand has relied upon the judgment of the lower authorities stating that the ld. AO has done the investigation/enquiries himself and has not simply relied upon the Investigation Wing. The ld. DR further submitted that the ld. AO has ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4.3.2 of the Assessment Order with regard to the dubious nature of stock broker M/s Prakash Nahata & Co. through whom the assessee claimed to have sold the shares of M/s Access Global Ltd., in the absence of any material brought to our notice are not correct to say that the assessee was acting in convince with M/s Access Global Ltd. so as to raise the bogus LTCG claim for seeking exemptions u/s 10(38) of the Act. Nothing has been brought to our notice that the assessee has ever been investigated by the Investigation Wing of the Income Tax Department or any question has ever been raised regarding rigging the price of shares of scrip in question by the assessee. The revenue has thus failed to discharge the onus shifted upon to prove transactions carried out by the assessee was not genuine and thus we are of the considered view that the lower authorities has rejected LTCG claim of the assessee for exemptions u/s 10(38) without any legal and factual basis. In view of the above discussion, the question framed by us in the beginning of the order is decided in favour of the assessee and against the revenue by holding that the assessee, in the given facts and circumstances, has successfull....