TaxTMI 
TaxTMI 
2025 (4) TMI 1814
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....ibunal on 30-01-2023, since none appeared on behalf of the assessee. Subsequently, the assessee moved miscellaneous applications for recall of the orders passed ex-pare and the said applications were allowed by the Tribunal, vide its order dated 30-08-2023 and the earlier orders were recalled. Accordingly, all these three appeals are placed before us. 3. The facts relating to the above said issue are discussed in brief. In all the three years under consideration, the assessee had claimed exemption of long term capital gains arising on sale of shares u/ 10(38) of the Act. The assessee had earned above said long term capital gain on sale of shares of following companies in the assessment years mentioned below:- Asst. Year Name of Company Sale Consideration Cost Long term capital gains 2013-14 Sunrise Asian Ltd 3,18,36,057 15,40,000 3,02,24,068 2014-15 Radford Global Ltd 4,13,05,258 15,00,000 3,97,18,725 2014-15 Pine Animation Ltd PSIT Infra Ltd 1,79,25,360 3,08,07,195 60,000 4,00,000 1,78,65,360 3,04,07,195 4,87,32,555 4,82,72,555* (* The assessee has however computed cap....
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....n by the investigation wing and took adverse view that the purchase and sale of shares undertaken by the assessee are not genuine and accordingly held that the assessee's claim for exemption u/s 10(38) of the Act cannot be allowed. Accordingly, the AO rejected the claim for exemption u/s 10(38) of the Act in all the three years and assessed entire sale consideration received on sale of shares as unexplained cash credit u/s 68 of the Act. The AO also took the view that the assessee may have incurred commission expenses in getting bogus long term capital gains and accordingly estimated the commission expenses incurred on procuring bogus long term capital gains in each of the three years and assessed the same u/s 69C of the Act. The learned CIT(A) confirmed both the additions in all the three years and hence the assessee has filed this appeal before the Tribunal. 6. The Ld.AR submitted that the assessee initially purchased shares of M/s Radford Global Ltd. on preferential allotment. Other three shares mentioned in the table were purchased from off market by paying purchase consideration through banking channel. Later on, entire shares of all four companies were sold in the stock ex....
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...., wherein the Hon'ble High Court had held that the Assessing Officer could not have made the addition on the basis of the facts pertaining to completely unrelated person. 9. We heard the parties and perused the record. We notice that the assessing officer has primarily placed reliance on the report given by the Investigation wing of the Income tax department, Kolkatta in order to arrive at the conclusion that the long term capital gains reported by the assessee in all the three years is bogus in nature. We notice that the investigation report prepared by Investigation wing, Kolkatta is a generalized report with regard to the modus operandi adopted in manipulation of prices of certain shares and generation of bogus capital gains. We notice that the AO has placed reliance on the said report without bringing any material on record to show that the transactions entered by the assessee were found to be a part of manipulated transactions, i.e., it was not proved that the assessee has carried out the transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of prices. The Ld A.R submitted that the SEBI, who is regulator of stock ....
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....e persons floating the two companies. It is only, after the Assessee who is supposed to dealing in shares and producing all the details including the DMAT account, the Exchange at Calcutta confirming the transaction, that the Appeal of the Assessee has been rightly allowed. The Tribunal has not merely interfered with the concurrent orders because another view was possible. It interfered because it was required to interfere with them as the Commissioner and the Assessing Officer failed to note some relevant and germane material. In these circumstances, he submits that the Appeals do not raise any substantial question of law and deserve to be dismissed. 5. We have perused the concurrent findings and on which heavy reliance is placed by Mr. Sureshkumar. While it is true that the Commissioner extensively referred to the correspondence and the contents of the report of the Investigation carried out in paras 20, 20.1, 20.2 and 21 of his order, what was important and vital for the purpose of the present case was whether the transactions in shares were genuine or sham and bogus. If the purchase and sale of shares are reflected in the Assessee's DMAT account, yet they are terme....
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....system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But the Tribunal concluded that itself, is not enough to prove that the transactions in the impugned shares were bogus/sham. The details received from Stock Exchange have been relied upon and for the purposes of faulting the Revenue in failing to discharge the basic onus. If the Tribunal proceeds on this line and concluded that inquiry was not carried forward and with a view to discharge the initial or basic onus, then such conclusion of the Tribunal cannot be termed as perverse. The conclusions as recorded in para 12 of the Tribunal's order are not vitiated by any error of law apparent on the face of the record either. 7. As a result of the above discussion, we do not find any substance in the contention of Mr. Suresh kumar that the Tribunal misdirected itself and in law. We hold that the Appeals do not raise any substantial question of law. They are....
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....e issue at hand, then, we do not think that question as pressed raises any substantial question of law." In the case of CIT vs. Jamnadevi Agarwal (supra), the Hon'ble Bombay High Court held that the transactions of purchase and sale of shares cannot be considered to be bogus, when the documentary evidences furnished by the assessee establish genuineness of the claim. In the case of PCIT vs. Indravadan Jain (HUF) (supra), the broker through whom, the assessee had carried out the transactions have been alleged to have been indulged in price manipulations and the SEBI had also passed an order regarding irregularities and synchronized trades carried out in the shares by the said broker. However, the evidences furnished by the assessee with regard to purchase and sale of shares were not doubted. Under these set of facts, the Hon'ble Bombay High Court held as under:- "....The CIT(A) came to the conclusion that respondent bought 3000 shares of RFL, on the floor of Kolkatta Stock Exchange through registered share broker. In pursuance of purchase of shares the said broker had raised invoice and purchase price was paid by cheque and respondent's bank account has been debited. The....