TaxTMI 
TaxTMI 
2026 (7) TMI 203
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.... 2. The ld. CIT(A) erred in confirming validity of jurisdiction assumed by the ITO u/s 147 of the Act. 3. The ld. CIT(A) erred in holding that the assessment made was in accordance with law even if no opportunity was given to the appellant to cross examine the persons whose statements were heavily relied upon in drawing the adverse inference in the light of the fact that no corroborative evidence was brought on record to support the said statements and he did not appreciate that giving of opportunity to cross-examine was highly imperative in the facts and circumstances of the case and non-giving thereof has violated the principles of natural justice which has rendered the assessment as null and void. 4. The assessment ....
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....** Moreover, the ld. CIT(A) erred in relying on the decision of the Kolkata HC in the case of Swati Bajaj & Others in preference to the binding decisions of the jurisdictional high court relied upon by the appellant. Besides, in dismissing the appeal, the ld. CIT(A) merely relied on the said decision without establishing how the facts of the said case is identical to the facts of the appellant. 6. The ld. CIT(A) erred in confirming the action of the AO in making addition of Rs. 354250/- as unexplained expenditure u/s 69C of the Act. Your appellant, therefore, submits that the assessment order be annulled and in the alternative the additions so made be deleted. Your appellant craves leave to add to, delete, amend o....
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....O had neither recorded any finding that the documents submitted by the assessee were false, fabricated, or bogus nor brought any independent material on record to discredit their genuineness and authenticity. The assessee further submitted that, in the absence of any adverse material directly linking the assessee with any alleged accommodation entry, the evidences furnished could not be disregarded merely on the basis of a generalized Investigation Report of the Directorate of Investigation, Kolkata. It was thus contended that the Ld.AO was not justified in denying the exemption claimed u/s 10(38) of the Act and making consequential additions u/s. 68 and towards alleged commission without establishing any specific nexus between the assessee....
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....argued that the addition was made merely on the basis of the generalized Investigation Report of the Directorate of Investigation, Kolkata, which only referred to the alleged modus operandi adopted by certain operators in penny stocks, without establishing any specific nexus between the assessee and such alleged activities. It was submitted that the report and statements relied upon by the Revenue did not specifically implicate the assessee or establish that the assessee had obtained any bogus long-term capital gain entry. 3.2. The Ld.AR further submitted that the conditions for invoking section 68 of the Act were not satisfied since the identity of the broker, genuineness of the transaction through BSE platform, and the receipt of sale ....
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....garded without bringing contrary material on record. 3.4. On the contrary, the Ld.DR supported the orders of the lower authorities and submitted that the assessee had claimed exemption u/s 10(38) of the Act in respect of long-term capital gain arising from sale of shares of JMD Telefilms Ltd., which was identified as a penny stock by the Investigation Wing. It was submitted that the investigation revealed a modus operandi involving manipulation of share prices to provide bogus long-term capital gains entries to beneficiaries, and the assessee's transaction was part of such arrangement. 3.5. The Ld.DR contended that mere furnishing of contract notes, demat statements, and banking details does not establish the genuineness of the transa....
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....on record to establish that the assessee was involved in any manipulation of the scrip or had obtained any accommodation entry. The addition has been made mainly on the basis of general information regarding modus operandi adopted in penny stock cases, without establishing any direct nexus between the assessee and the alleged operators. Generalised investigation reports, by themselves, cannot displace the documentary evidences furnished by the assessee unless supported by independent corroborative material. 4.3. We also note that the shares were sold through a recognized stock exchange after holding the same for more than twelve months and the transactions were subjected to STT. Further, the fact that the assessee sold the shares at an a....