TaxTMI 
TaxTMI 
2026 (8) TMI 562
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....nd the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs. 24,00,000/- as unexplained cash credit made by the AO without appreciating the facts of the case and modus operandi as a detailed investigation has been carried out by the Investigation Wing of Kolkata in the scrip M/s. Life Line Drugs and Pharma Ltd. 2. On the facts and the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made by the AO without appreciating the facts that in such penny scrip, trading transactions of purchase and sales are not affected for commercial purpose but to create artificial Gain/loss and complete the cycle of circular trading with a view to evade taxes. 3. On the facts and the circumstance of the case and in law the Ld. CIT(A) erred in not appreciating the fact that transaction of shares of such penny scrip are not governed by market factors prevalent at relevant time rather transactions are product of design and mutual connivance on part of assessee and operators. 4. On the facts and the circumstance of the case and in law the Ld. CIT(A) erred in not appreciating the fact of the case and modus operan....
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....ssee is not genuine and assessee was asked as to why the gain earned on sale of such share should not be treated as unexplained credit. In para 10 of assessment order, the AO recorded that assessee has not filed reply. The AO on the basis of information with him and by referring modus operandi of entry provider treated the entire sale consideration on sale of shares of Lifeline Drugs and Pharma Ltd of Rs. 24.00 as unexplained credit under section 68. The AO also added 3.00% commission expenses as unexplained expenditure for taking alleged entry of capital gain in the assessment order dated 27.12.2017. 3. Aggrieved by the action of AO, the assessee filed appeal before ld. CIT(A). Before ld. CIT(A), the assessee filed very details written submission running into 70 pages. The assessee also relied on various case laws wherein addition on sale of scrip of Lifeline Drugs and Pharma Ltd. was deleted. The assessee in its submissions submitted that his case also covered by various decision of Mumbai High Court of various Tribunals. The AO made addition on the basis of third party information. The assessee has earned genuine long term capital gain. The assessee purchased 15000 shares of ....
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....n record any material to prove that transaction of assessee was shame transacted. The evidence could not be rejected. There is no evidence with the AO to implicate the assessee. The allegation of AO is without any evidence and contrary to the facts and the evidence available on record. The ld. CIT(A) also held that no investigation was carried out to prove the involvement of assessee in the alleged shame transaction. The AO has not brought any evidence against the assessee. On the basis of such categorical finding, the ld. CIT(A) deleted the addition of section 68. While deleting the addition of commission expenses of Rs. 72,000/-, the ld. CIT(A) held that estimation of commission expenses is not supported by any evidence. Moreover, when addition of section 68 is deleted, the disallowance of commission expenses has no independent force. Aggrieved by the order of ld. CIT(A), the Revenue has filed present appeal before Tribunal. 5. We have heard the submission of learned Authorised Representative (ld. AR) of the assessee and the learned Senior Departmental Representative (ld. Sr. DR) for the Revenue. The ld. Sr. DR for the Revenue submits that Investigation Wing carried out a full....
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....ase laws: • Anoop Jain vs ACIT, (2020) 181 ITD 218 (Delhi Trib.) • Smt. Ritu Jain vs ACIT (2021) 187 ITD 671 (Delhi Trib.) • Smt. Ridhi Bagaria vs ITO (2023) 201 ITD 581 (Cuttack Trib.) • PCIT vs Renu Aggarwal (2023) 456 ITR 249 SC) • PCIT vs Kuntala Mohapatra (2024) 160 taxmann.com 608 (SC). 7. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that the AO made additions solely on the basis of information received from investigation with him. The AO also held that no reply was filed by the assessee. Before us, the ld AR of the assessee vehemently argued that the assessee filed reply before AO, copies of such reply along with the evidences filed before AO is also placed on record. We find that the ld CIT(A) while allowing relief to the assessee held that in support of his claim the assessee has furnished share application form, broker note for sale and purchase of shares, bank statement showing the payment of Demat statement with Nirmal Bang Securities Private Ltd., Bank statement showing the sale consideration. The ld CIT(A) noted t....
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....one by SEBI against the broker or its activities, the assessee cannot be said to have entered into ingenuine transaction. In a recent decision in PCIT Vs Mamta Rajiv Kumar Agarwal (2023) 155 taxmann.com 549 (Gujarat) also held that where the assessee had sold the shares and earned LTCG and the Assessing Officer alleged that transaction was penny stock deal aim at illegitimately claiming LTCG exemption under section 10(38), since there was no allegation on record suggesting the assessee is involved in rigging up the price of scrips, the addition was rightly deleted by Tribunal. We find that assessee made sale of shares through BSE and paid security transaction tax (STT) and there is no allegation against the assessee he was involved in entry provider or acted as exit provider on in price manipulation. Therefore, we do not find any justification in treating the LTCG as unexplained cash credit in absence of any cogent evidence against the assessee specific. 10. We find that while considering the similar scrips that is on sale of share of Lifeline Drugs and Pharma Ltd, the coordinate bench of this Tribunal in Nitesh Kumar Gadia Vs ITO (supra) and in Praveen Bokadia Vs ITO (supra) de....