TaxTMI 
TaxTMI 
2024 (8) TMI 1768
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....ational Faceless Appeal Center 11. CIT(A) erred in facts and law in confirming the addition made by the Id. Assessing Office u/s. 68 of the Act of sale proceeds of Rs. 96,32,530/- on sale of shares of M/s. MatraKaushal Enterprise Ltd., a listed company, treating it as undisclosed income and thereby no exemption under section 10(38) of the Act merely on his own surmises and ca without finding any defects in any of the documentary evidence placed on without even appreciating the comprehensive explanation and evidences placed by the appellant. (b) The Id. CIT(A) erred in not appreciating the fact that there is no cogent material brought on record which could establish that the transaction made by the purchase and sale of shares of Mis. Matra Kaushal Enterprise Ltd and long term earned thereon is a bogus transaction except relying upon general and vague contained in the report received from the Kolkata Investigation Wing and correlating the same with the appellant. (c) The id. CIT(A) failed to appreciate that the price and volume of trade are decided by the independent market forces and also non-financial parameters without the inter appellant at any stage and that th....
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....id suspension was also revoked later by the SEBI and that such temporary suspension by the SEBI was not invoked during the period when the shares in the alleged scrip were held by the appellant. (h) The Id. CIT(A) ought not to have upheld the action of the Id. Assessing Officer of making the impugned addition in as much as the Id. Assessing Officer has not proved that any unaccounted money in the form of cash was received by the alleged operators from the appellant. (i) Without prejudice, the Id. CIT(A) and Id. Assessing Officer failed to appreciate that the appellant is an innocent and gullible investor who acted like a normal investor by investing her surplus funds in the alleged scrip which was a nominal amount, held the scrip for some time and later when there was sufficient appreciation in the price of the scrip, she decided to take an exit and eventually earned good profits without having any link in any manner whatsoever with so called price manipulators, entry operators, etc. (3) Without prejudice, the Id. CIT(A) is not justified in confirming the action of the Id. Assessing Officer of not restricting the addition to the extent of long-term capita....
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....o demat account of the assessee on dated 16/12/2013. The shares of MKEL were also split from Rs.10/- to Rs.1/- each in ratio of 1:10. During the impugned assessment year, the assessee, after holding the share for 18 months, sold 1,91,000 shares for a total consideration of Rs.96,32,530/- on 12/1/2014 and earned LTCG of Rs. 94,41,530/-. The ld.AO has treated the entire LTCG as bogus and the exemption under section 10(38) is rejected and the entire gross receipt of sale of share was added back with the total income. The ld.AR respectfully relied on the order of the jurisdictional High Court in the case of CIT vs Sam R Pawar 54 taxman.com 108 (Bom) and orders of the coordinate bench in the cases of Pankaj Kantilal Shah vs DCIT ITA NO.576/Mum/2022, date of pronouncement 16/06/2023. The observation of the bench in Rehana Anwar Shaikh vs Assessing Authority, Delhi ITA No.1606/Mum/2022, dt of pronouncement 31/08/2023is reproduced as below:- "15. Accordingly, in the facts and circumstances of the case, we are of the view that the decision rendered by the jurisdictional Hon'ble Bombay High Court in the above said case of Shyam R Pawar (supra) and Ziauddin A Siddique (supra) sha....
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....e 191000 shares at the price of Rs. 53.43p, thus resulting the long term capital gain of Rs. 94,41,530/-, which is nearly 54 times the increase of the cost price, and as discussed the rise in share prices is not holding to any commercial principles and market factors. c. Findings of Investigation wing: The findings of the Directorate of Investigation of Mumbai and Kolkata as discussed above have proved that various entry operators and the assessee had worked out an arrangement in which the shares were acquired by the assessee, the share prices were rigged and then with the help of entry operators by routing the cash, shares were sold at high price to arrive at tax free capital gains. Analysis of transactions: Facts revealed that such trading transactions of purchase and sale of shares are not been effected, for commercial purpose but to create artificial gains, with a view to evade taxes- i. Transactions of shares were not governed by market factors prevalent at relevant time in such trade, but same were product of design and mutual connivance on part of assessee and the operators. ii. The assessee resorted to a preconceived scheme to procure lon....