2022 (12) TMI 947 - HC - Income Tax

Addition u/s 68 - unexplained credit - sale of penny stock company - bogus Long-Term Capital Gain - HELD THAT - Tribunal via the impugned order has noted, that the assessing officer has not applied his mind, and has merely relied upon the Investigation Report. According to the Tribunal, as to whether or not the assessee was aware of the fact that the shares of the aforementioned companies which had been bought were through penny stocks, was an issue of fact. It also appears from the record, that SEBI had carried out investigations against 239 persons. Tribunal records, that the names of the aforementioned companies were not in the list of the said 239 persons. As neither the Assessing Officer conducted any enquiry nor has brought any clinching evidences to disprove the evidences produced by the assessee. The report of Investigation Wing is much later than the dates of purchase /sale of shares and the order of the SEBI is also much later than the date of transactions transacted and nowhere SEBI has declared the transaction transacted at earlier dates as void . According to us, these being findings of fact, they cannot be interfered by us. We are also informed, that the appellant/revenue had preferred appeals against the very same order in the case of Ms Karuna Garg and Ms Krishna Devi 2022 (12) TMI 858 - DELHI HIGH COURT - These appeals was dismissed by a coordinate bench.

Summary

Issues:
Delay in refiling the appeal condonation.

Analysis:
The judgment involved an appeal against an order passed by the Income Tax Appellate Tribunal regarding alleged long-term capital gains from the sale of shares. The Tribunal noted that the assessing officer did not apply his mind and merely relied on an Investigation Report, without conducting an independent inquiry. The Tribunal emphasized that whether the assessee was aware of the shares being penny stocks was a matter of fact. It was highlighted that SEBI had conducted investigations against 239 persons, but the companies in question were not on the list. The Tribunal emphasized the importance of the Assessing Officer conducting a separate and independent inquiry as per Section 142 of the Act. The judgment detailed discrepancies in dates of transactions, SEBI orders, and lack of warnings issued by SEBI regarding irregular movements in share prices. The Tribunal concluded that the findings of fact could not be interfered with and dismissed the appeal, citing previous dismissals of appeals against the same order in similar cases.

In conclusion, the judgment addressed the delay in refiling the appeal and delved into the intricacies of the case involving alleged long-term capital gains from the sale of shares. It highlighted the lack of independent inquiry by the assessing officer, discrepancies in dates and SEBI orders, and the importance of corroborating evidence during assessments. The Tribunal's decision not to interfere with the impugned order was based on the previous dismissals of appeals in similar cases.