TaxTMI 
TaxTMI 
2025 (3) TMI 2028
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....aneous applications seeking recall of the order passed in their appeals ex-parte. The miscellaneous application filed by Shri Rajesh M Trivedi was numbered as M A No.413/Mum/2023 and the earlier order was recalled in the order dated 30-08-2023 passed against the above said miscellaneous application. The miscellaneous application filed by Shri Mukesh M Trivedi was numbered as M A No.412/Mum/2023 and the earlier order was recalled in the order dated 27-10-2023 passed against the above said miscellaneous application. Accordingly, both these appeals came to be placed before this bench again for hearing afresh. 3. The facts relating to the issues contested by both the assessees are identical in nature. They are stated in brief. Both the assessees are sons of Shri Manuprasad Trivedi, who is a civil contractor undertaking sub-contract works from SMC Group. A search action was undertaken in the hands of SMC group on 23-05-2012. Consequent thereto, the assessment of the year under consideration was completed in the hands of both the assessees herein u/s 143(3) r.w.s 153A of the Act. Both the assessees had claimed exemption of long term capital gains declared by them on sale of shares of ....
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....tated that certain brokers were manipulating prices of shares of penny stock companies in order to generate bogus long term capital gains. The Assessing Officer also noticed that the shares sold by the investors are usually purchased by certain set of peoples categorized as Exit Providers. The AO issued notices u/s 133(6) of the Act to some of the Exit providers, but did not get any response from them. The AO, then referred to the report of the investigation wing with regard to unusual rise in the prices of shares, which were not commensurate with the financial strength of both the above said companies. He also referred to the statements given by the directors of M/s. Tuni Textiles Mills Ltd, wherein they had admitted that the prices of shares of that company were manipulated. Accordingly, by placing his reliance fully on the report of the investigation wing, the Assessing Officer took the view that the long term capital gains declared by both the assessees is bogus in nature. Accordingly he assessed the long term capital gains of Rs. 83,31,639/- and Rs. 90,01,964/- declared by Shri Mukesh M Trivedi and Shri Rajesh M Trivedi respectively as bogus and accordingly assessed them as un....
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....e said companies have been manipulated to generate bogus long term capital gains. Further, the notices issued by the Assessing Officer under section 133(6) of the Act to the exit providers have not been responded to. He further submitted that the some of the operators have admitted before the Kolkata investigation wing that they have been providing accommodation entries in the form of bogus long term capital gains. Accordingly the learned DR submitted that the assessees have not proved the genuineness of the purchase and sale of shares of above said companies, in the back ground of investigation report. 8. In the rejoinder, learned AR submitted that the SEBI has not conducted any enquiry with both these assessees. Both the assessees have purchased shares at the then prevailing price from the stock exchange platform in the ordinary course. Subsequently, they were sold in the stock exchange platform at the then prevailing prices. The AO has not found any discrepancy or deficiency in the documents furnished by the assessee. The Ld A.R further submitted that the facts prevailing in these two cases are identical with the decision rendered by Hon'ble Bombay High Court in the case ....
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.... noticed that though the AO placed reliance on the report of investigation wing, yet he did not establish that the said reports of investigation wing would be applicable to the facts prevailing in the present cases. Whenever, a generalized report is received by the AO, it is his duty to examine as to whether the transactions undertaken by the assessee are that of the nature reported by the investigation wing. Without establishing that, in our view, the AO was not justified in rejecting the genuineness of the transactions undertaken by the assessees. At this stage, we may refer to the decision rendered by Hon'ble Supreme Court in the case of Adamine Construction P Ltd (99 taxman 45), wherein, while dismissing the appeal of Revenue, the Hon'ble Supreme Court has referred to the following observations made by Hon'ble Delhi High Court:- "What is evident is that the AO went by only the report received and did not make the necessary further enquiries - such as into the bank accounts or other particulars available with him but rather received the entire findings on the report, which cannot be considered as primary material. The assessee had discharged the onus initially cast upon....