TaxTMI 
TaxTMI 
2026 (8) TMI 1813
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.... earlier order passed by the Coordinate Bench of this Tribunal in the assessee's brother case Shri Suresh J Kothari (HUF) vs. ITO in ITA Nos. 650/Bang/2019 dated 31/07/2019. The Coordinate Bench had remitted the issue to the AO for verification and examination with similar directions issued in the assessee's brother's case as stated supra. 3. Pursuant to the said remand, the matter was again taken up for hearing and the AO had furnished the copy of the investigation report of the Principal Director of Income Tax (Investigation), Kolkata and thereafter notices u/s. 142(1) were issued. The AO on analysis of the information available with the department and comparing it with the data contained in the return of income, had alleged that the assessee sold shares of the script Sunrise Asian Ltd. during the F.Y. 2013-14 for a value of Rs. 1,20,32,895/- and claimed the entire income as long term capital gains eligible for deduction u/s. 10(38) of the Act. Originally, the assessee had purchased 25,000 shares of M/s. Conart Traders Ltd. for a price of Rs. 20/- each and thereafter the said company was merged with M/s. Sunrise Asian Ltd. vide order of the Hon'ble Bombay High Court and conseq....
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....gged in the stock exchange. 5. As against the said order, the assessee is in appeal before this Tribunal. 6. At the time of hearing, none appeared on behalf of the assessee even though several notices were issued on various dates. The assessee filed adjournment applications for all the hearing notices except filing a written submission on 16/12/2025. Further, we have also perused the order sheet entries in which the assessee had not appeared on all the occasions and in such circumstances, the appeal being filed in the year 2024 and also it is a second round of litigation, we are deciding the appeal based on the materials available before us including the written submissions and also after hearing the Ld.DR. 7. The Ld.DR submitted that the AO had scrupulously followed the directions of this Tribunal and therefore, the order of the AO is in order. 8. The Ld.DR also submitted that in respect of the manipulation of the share prices of M/s. Sunrise Asian Ltd., a detailed investigation was done by SEBI and confirmed that there was a rigging of prices of shares of M/s. Sunrise Asian Ltd. and therefore the orders of the lower authorities are in order. The Ld.DR also relied on t....
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....odified. 4. Being aggrieved by the said assessment order dated 29.08.2021, the Appellant filed an appeal before CIT Appeal on 04/09/2021vide Acknowledgement Number 433676030040921 and no relief was given by CIT Appeal. 5. Being agreed by the order passed by CIT Appeal. Appellant preferred this appeal on following grounds, which are independent and without prejudice to one another. GROUNDS OF APPEAL (a) At the outset, it is respectfully submitted that the addition of Rs. 1,20,32,895/- made by the Learned AO and confirmed by the CIT(A) is unjustified, as the same is solely based on a generalized Investigation Wing, Kolkata report which does not even mention the name of the appellant as a beneficiary. The AO has neither brought any independent cogent material on record nor verified the genuineness of transactions from the stock exchange or the broker. (b) No Adverse Material Against Appellant i. The entire disallowance is based on a generalized Investigation Wing Report, Kolkata, which does not even mention the appellant as a beneficiary. ii. No independent inquiry has been conducted by your good self from the concerned st....
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....able. viii. CIT v. Lavanya Land Pvt. Ltd (Bombay HC) - Revenue must bring on record cogent evidence linking assessee to accommodation entries; mere reliance on general report is not sufficient. ix. Kailashben Manharlal Chokshi v. CIT [220 CTR 138]- Gujarat High Court- Suspicion, however strong, cannot take place of evidence. AO must establish with cogent material that transaction is sham. x. PCIT v. Jatin Investment Pvt. Ltd- Delhi High Court- Denial of exemption u/s 10(38) not sustainable when all documents like Demat, bank, and contract notes support genuineness of transactions. xi. ITO v. Shamim Bharat Shah- ITAT Ahmedabad- Additions cannot be made merely on general information of penny stock scam unless direct nexus with assessee is established. (f) CBDT's Own Circulars: i. CBDT Circular No. 6/2016 dated 29.02.2016 clarified that income from sale of listed shares held for more than 12 months should be treated as capital gain and not business income, to reduce unnecessary litigation. ii. CBDT has time and again directed AOs not to make additions based merely on suspicion or third-party reports without pr....
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....e assessee had relied on the case laws and also the circulars issued by the CBDT. In paragraph number 6, the assessee submitted that because of the viral fever, he was not able to gather and compile the necessary data and documents required for the hearing and prayed that the hearing may kindly be adjourned and fixed in March, 2026. From the said paragraph, we find that the assessee could be able to gather and compile the necessary data and documents in support of his case and therefore prayed an adjournment. This Tribunal also considered the said request and adjourned the appeal to 10/03/2026 and the appeal was again adjourned to 19/05/2026. Then again the appeal was adjourned to 20/07/2026 since the bench was not sitting on that date. Finally, the appeal was listed for hearing on 20/07/2026. But unfortunately, the assessee had neither appeared nor filed the data and documents even after seven months which shows that the assessee is not really interested in pursuing the appeal pending before this Tribunal. In such circumstances, we don't have other alternative except to decide the appeal on merits based on the available documents. 11. As submitted by the Ld.DR, there was an inv....