TaxTMI 
TaxTMI 
2026 (10) TMI 166
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.... 3. That the order passed by Ld. CIT(A), ADDL/JCIT (A)-6 Delhi is bad in law and required to be quashed as no independent inquiries were made and thereby violating the Principles of Natural Justice. That the above grounds of appeal are independent of and without prejudice to each other. That the appellant craves leave to add, alter, amend or withdraw all or any grounds herein or add any further grounds as may be considered necessary either before or during the hearing of these grounds." 2. Brief facts of the case are that the assessee is a proprietor of Supreme Freight Way Carriers, Dabdiwal Bhavan, Near SBI, Camp Road, Malegaon, District Nashik. He filed his return of income for assessment year (AY) 2014-15 on 29-01-2015, declaring income of Rs. 5,68,560/-. The case was selected for scrutiny. During the assessment, the assessing officer (AO) noted that the assessee had claimed exemption of long term capital gain under section 10(38) on sale of stocks and securities Rs. 56,85,843/-. On further perusal of the computation of long-term capital gain, the AO found that the assessee had purchased shares of SRK Industries on 01-04-2012 for Rs. 72,737/- and sold th....
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....The sale consideration was paid through cheque drawn on Punjab and Maharashtra Cooperative Bank. The shares of Transend Commerce Limited were converted into SRK Industries. The shares were split in the ratio of 1:2.22 under the Scheme of Amalgamation approved by the High Court of Madras. The assessee earned capital gain on the sale of such shares. The AO, while making the addition, solely relied upon the report and inquiry of the Investigation Wing, Kolkata. The AO has not brought any material in support of his finding that there was collusion between the broker and the assessee. The AO ignored the evidence furnished by the assessee. The assessee purchased 10,000 shares at the rate of Rs. 10/- per share on 23.05.2012. On 15.5.2013, the shares were split in the ratio of 1:2.22 under the scheme of arrangement approved by the Madras High Court. The assessee sold the shares through Anand Rathi Share and Stock Broker Limited and claimed long-term capital gain. The copy of the purchase bill, bank statement, ledger account and demat account was furnished. When the shares were splitted, the assessee got resultant 22,200 shares. Out of the total shares of 22,200, the assessee sold 2,775 sha....
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....e of price manipulation in penny stocks to generate artificial long-term capital gain. The AO also discussed the report of the Investigation Wing, Kolkata, based on the survey conducted under section 133A at the office of Anand Rathi Share and Stock Brokers, Kolkata, which revealed a countrywide racket involving certain operators and shell companies engaged in providing accommodation entries by artificially inflating the prices of shares of worthless companies. Transcend Commerce Limited was also identified as part of such network. The company had no substantial business activities, there was no significant financial performance, and it was used merely as a conduit for providing accommodation entries. The assessee purchased the shares at Rs. 1.00 lakhs and, within a short span, sold them for about Rs. 57.00 lakhs, There is no material evidence to establish that such an astronomical rise in the share price was backed by the financial fundamentals of the company. The assessee failed to demonstrate any commercial rationale or economic justification for such price movement. No evidence regarding the company's performance, dividend history, market potential or industrial growth was ....
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....s were later on splitted under the scheme approved by High Court. Shares were held in demat account and sold through SEBI registered broker. Security transaction tax was paid. The AO disallowed exemption on the basis of suspicious and presumption. Similar transaction has been accepted by Tribunal in Ketan Harilal Mehta vs ACIT in ITA No. 6689/M/2025, in Ketan Harilal Mehta HUF vs ITO in ITA No. 770/M/2023 dated 30.06.2024 and in Rekha Rakesh Jogani vs ITO in ITA No. 2916/M/2023 dated 28.03.2025. 6. On the other hand, the ld. Sr. DR for the Revenue supported the order of lower authorities. The ld. Sr. DR for the Revenue submits that the assessee is beneficiary of penny scrip which were thoroughly investigated by Investigation Wing. There is huge increase in the price of impugned share which is not possible without manipulation. Hence, he fully supports the finding of AO and ld. CIT(A). 7. At the time of hearing, we confronted the facts that in the case laws relied by ld AR of the assessee are at variance in those cases the assessee were regular investor. The ld AR of the assessee submits that assessee is one time investor and may be treated at parity. 8. We have considered ....