TaxTMI 
TaxTMI 
2026 (7) TMI 1478
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....me for AY 2015-16 on 01.09.2015 declaring total income of Rs. 1,02,10,430/-. The case was selected for scrutiny under CASS with the main reason of 'suspicious sale transaction in shares and exempt long term capital gains shown in return". Accordingly, notices u/s. 143 (2) and 142(1) of the Income-tax Act, 1961 (for short 'the Act') were issued and served on the assessee. In response, ld.AR of the assessee attended the proceedings from time to time and submitted relevant information as called for. 4. During assessment proceedings, the AO observed that the assessee has declared income of Rs. 1,02,00,000/- under the head Income from Salary, income of Rs. 65,818/- under the head Income from House Property, interest income of Rs. 65,757/- under the head income from other sources and Long Term Capital Gain (LTCG) of Rs. 95,57,458/- under the head Income from Capital Gains during the previous year relevant to the AY 2015-16. 5. On examination of the submissions made by the assessee, AO found that the assessee had purchased 20,000 shares of M/s. CCL International Ltd @ Rs. 39.00 per share for a total amount of Rs. 7,80,000/- as per letter dated 26.03.2013 from M/s Dristi Textile Pvt ....
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....secured loans were taken during the year. On perusal of the details, AO observed that the copy of bank account for loan received from Shri Vijay Gupta reflected entries of loan of Rs. 20,00,00/- on 31.10.2014 Rs. 20,00,000/- taken on 10.11.2014 & Rs. 10,00,000/- on 21.11.2015. In addition, the bank statement for loan of Rs. 25,00,000/- taken from M/s Ambient Land Holdings Ltd. had not been furnished. Further AO observed that the ld. AR vide letter dated 26.12.2017 filed confirmations of the unsecured loans but the copy of the bank statement of the Shri Vijay Gupta & M/s Ambient Land Holdings Ltd. which was specifically asked for was not furnished. Accordingly, AO held the sum of Rs. 50,00,000/- received from Sh. Vijay Gupta and Rs. 25,00,000/- received from M/s Ambient Land Holdings Ltd. to be unexplained, accordingly added to the income of the assessee u/s. 68 of the Act. 10. Further AO observed that in the computation, the assessee has claimed deduction under Chapter VIA of Rs. 1,21,149/-. Vide questionnaire issued along with notice u/s. 142(1) dated 15.09.2017, the assessee was asked to file evidence for claim of deduction under Chapter VI. In response, photocopies of two rec....
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....red in law and on facts by not providing the Appellant or confronting the Appellant with the substantive part or portions of the report by Directorate of Investigation, Kolkata and with an opportunity to cross examine the source of evidence or any statement recorded of any person or evidence collected behind his back even after request and inclusion in written submissions before the Ld. A.O and Hon'ble CIT(A), which renders the Assessment void and also violates the cardinal principles of natural justice. The statement recorded of any person or evidence collected behind Assessee's back has no evidentiary value as: • These statements cannot bind Assessee, who was not subject matter of any parallel survey operation, • These statements are pre-existing as were recorded by investigation wing and no where independently re-examined by the Ld. Assessing Officer, • The Assessee had never made the transaction through person whose statements were recorded and relied. 6. That the Hon'ble CIT(A) has erred in law and on facts in sustaining the action of Ld A.O in making addition of Rs. 1,03,37,458/- without appreciating that basis of fi....
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.... 2. It is submitted that appellant purchased 20,000 shares of M/s CCL International Ltd. on 26.03.2013 from M/s Drishti Textile P. Ltd. for a consideration of Rs. 7,80,000/- and the same has been paid through the banking channel. 3. It is submitted that the appellant has sold the shares of M/s CCL International from 07.10.2014 to 15.12.2014 by holding them more than one year, a tabulated chart of the sale is at page 2 of the assessment order. 4. It is further submitted that the appellant has duly enclosed the long term capital gain in his return of the income and claimed exemption u/s. 10(38) of the Act (pages 8-9 of paper book). 5. It is submitted that the appellant's case was selected for scrutiny and on 21.09.2016 notice u/s. 143(2) of the Act was issued to the appellant for the main reason of "Suspicious sale transaction in shares and exempt long term capital gains in return" (page 1 of the assessment order). 6. It is submitted that the learned Assessing officer solely relied upon the "Findings of the SEBI and investigation wing report" and failed to comment any adverse observation of any involvement of the appellant with the operator or ....
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....the documents filed by the assessee claiming the deductions u/s. 10(38) of the Act. At the same time, even though all the characteristics of the penny stock exists in the present case, still the revenue has not brought on record any materials linking the assessee in any of the dubious transactions relating to entry, price rigging or exit providers. Even in the SEBI report, there is no mention or reference to the involvement of the assessee. We can only presume that the assessee is one of the beneficiaries in these transactions merely as an investor who has entered in investment fray to make quick profit. Even the assessing officer has applied the presumptions and concept of human probabilities to make the additions without their being any material against the assessee. 16. Further we observed that ld. AR relied on various decisions of Hon'ble Courts and Tribunal and heavily relied on the decision of the coordinate Bench in the case of Rachna Gupta vs. ACIT (supra) (in which Accountant Member is the author of that order. In that case, coordinate Bench has relied on the decision of Hon'ble Bombay High Court in the case of Pr. CIT v. Ziauddin A Siddique in Income Tax Appeal No. 201....
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....1.2021 wherein it is held as under: - "8. Mr. Hossain argues that in cases relating to LTCG in penny stocks, there may not be any direct evidence in the hands of the Revenue to establish that the investment made in such companies was an accommodation entry. Thus the Court should take the aspect of human probabilities into consideration that no prudent investor would invest in penny scrips. Considering the fact that the financials of these companies do not support the gains made by these companies in the stock exchange, as well as the fact that despite the notices issued by the AO, there was no evidence forthcoming to sustain the credibility of these companies, he argues that it can be safely concluded that the investments made by the present Respondents were not genuine. He submits that the AO made sufficient independent enquiry and analysis to test the veracity of the claims of the Respondent and after objective examination of the facts and documents, the conclusion arrived at by the AO in respect of the transaction in question, ought not to have been interfered with. In support of his submission, Mr. Hossain relies upon the judgment of this Court in Suman Poddar v. ITO, ....
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....estion of infusion of Respondent's unaccounted money, but he did not dig deeper. Notices issued under Sections 133(6)/131 of the Act were issued to M/s Gold Line International Finvest Limited, but nothing emerged from this effort. The payment for the shares in question was made by Sh. Salasar Trading Company. Notice was issued to this entity as well, but when the notices were returned unserved, the AO did not take the matter any further. He thereafter simply proceeded on the basis of the financials of the company to come to the conclusion that the transactions were accommodation entries, and thus, fictitious. The conclusion drawn by the AO, that there was an agreement to convert unaccounted money by taking fictitious LTCG in a pre-planned manner, is therefore entirely unsupported by any material on record. This finding is thus purely an assumption based on conjecture made by the AO. This flawed approach forms the reason for the learned ITAT to interfere with the findings of the lower tax authorities. The learned ITAT after considering the entire conspectus of case and the evidence brought on record, held that the Respondent had successfully discharged the initial onus cast upon it ....
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....e, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix at hand. Similarly, the case of Sumati Dayal v. CIT (supra) too turns ITA 125/2020 and connected matters Page 10 of 10 on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue. 13. The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order. 14. In this view of the matter, no question of law, much less a substantial question of law arises for our consideration. 15. Accordingly, the present appeals are dismissed." 18. Therefore, we also respectfully follow the ratio of the above decisions. In this case also, the Assessing Officer and Ld. CIT(A) has applied the concept of Human probabilities and held the above said scrips to be a penny stock without bring on record how the assessee is involved in any of the scrupulous....
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.... Gupta, copy of confirmation of accounts and relevant bank account statement are placed on record. Further, we observed that the assessee also secured the unsecured loan from Ambient Land Holding Ltd. on 21.11.2014 and the same has been repaid in financial year 2017-18. In this regard, copy of return of income of M/s Ambient Land Holding Ltd., confirmation of account along with bank statement for the same and affidavit of the M/s Ambient Land Holding Ltd. are submitted by the assessee. After going through all the material available on record, we are of the opinion that the assessee is able to explain all the transactions under consideration, hence we allow the ground raised by the assessee. 23. Further with regard to disallowance of Rs. 1,00,000/- u/s. 80C of the Act, we observed that assessee has claimed deduction under Chapter VIA of Rs. 1,21,149/- and out of which, claimed of deduction of Rs. 1,00,000/- on account of HDFC Standard Life Insurance was denied by the AO stating that it pertains to AY 2016-17. However, ld. CIT (A) after observing the submissions of the ld. AR, directed the AO to consider the claim u/s. 80C and allow it is found to be correct and in adherence with ....