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TMI Blog2016 (9) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... allegation against the assessee individually as involved in price rigging. Unlike in the shares of Eltrol Ltd., there are no adverse witnesses or statements given by third parties questioning the genuineness of the transactions. In this case, the transactions are done very much through the exchange and the payments are made involving banking channels. No evidence is gathered by the search team during the proceedings u/s. 132 to support the allegation about the genuineness of the transactions. No evidence is gathered about the cash transfers if any either at the purchase point or at the sale point of share transaction. Nothing adverse was brought about by the search team that the assessee is personally involved in price raising of shares from ₹ 2.5/- to ₹ 185/- per share. There is no adverse inference about the bona fides of the assessee in buying and selling of the said shares of RFL. In such circumstances when there is no evidence against the assessee on the transactions involved, we are of the opinion that why not the assessee should be one genuine investor and, therefore, there is no case for invoking the provisions of section 68 for making the additions on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 28,58,138/- involving Eltrol Ltd., was subject matter of dispute in the regular assessment dated 31.12.2007 and the assessee was in appeal before the CIT(A) and then before the Tribunal. The Tribunal vide its composite order dated 25.04.2014 for A.Ys. 2002-03 to 2008 09 confirmed the said addition of ₹ 28,58,138/-. Further, the Tribunal also gave a finding mistakenly in connection with the share trading activity involving RFL too, inadvertently ignoring the fact that the same was not the subject matter of appeal. In the Miscellaneous Application proceedings of the assessee, the Tribunal expunged the said adverse conclusions on the trading transaction involving shares of RFL vide its order in Miscellaneous Application dated 10.12.2014. In effect, the Tribunal appreciated and distinguished the facts relating to the transactions involving the purchase and sale of shares of RFL from the purchase and sale of shares of Eltrol Ltd., and also mentioned that the Tribunal has no jurisdiction on such transactions involving RFL, as it is the subject matter of addition in the assessment made u/s. 153A of the Act and not the regular assessment. 4. Therefore, the issue for adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kers and transactions were confirmed by the share brokers and the related parties. There were no adverse witnesses or statements gathered by the revenue during the search action involving these transactions. He argued that since the sale of shares was done at higher rates it does not constitute conclusive evidence against the assessee. Therefore, the addition is not justified as the same is done based on surmises and conjectures. Considering the above, the CIT(A) granted relief to the assessee as per the discussions given in para 14.13 to 14.18 of the order of the CIT(A). The contents of para 14.18 are extracted hereunder for the sake of convenience:- 14.18. The facts in the applicant s case is more favourable to the appellant compared to the facts of the above mentioned Jamnadevi Agarwal s case. The Hon ble Bombay High Court decision is squarely applicable in this case. Respectfully following the Hon ble Bombay High Court judgment, I hold that the claim of long term capital gains is genuine in this case and I delete the addition of ₹ 1,03,33,955/- made u/s. 68 of the Act. Aggrieved with the said relief granted by the CIT(A), the revenue is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the decision of the Tribunal of Kolkata Bench involving the transactions of sale and purchase of shares of RFL, in this regard, learned counsel submitted that there is no such decision in existence from Kolkata Bench involving RFL. In this regard, learned counsel brought attention to the assessee s clarification vide his letter dated 16.06.2016. Thus, the AR for the assessee categorically submitted that this issue involving transactions of sale of purchase of RFL has to be independently decided/adjudicated not influenced by the decision of the Tribunal on the transactions involving purchase and sale of shares of Eltrol Ltd. The adverse comments if any are eventually expunged by the Tribunal vide miscellaneous application proceedings (supra). Otherwise, learned counsel for the assessee narrated that there is no iota of deficiencies of any kind found by the AO with regard to the documentation i.e. purchase and sale bills, contract notes, cheque payments, SEBI transactions etc. It is a straight case of buying shares of RFL though bona fide transactions involving the stock exchange and selling of the same for earning Long term capital gains. The gains are exempt from tax. The AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to be bothered by the financials of the company. This is for the experts in the capital markets to know and not for the persons like the assessee, who is involved in investing in shares for selling after a period of holding of the shares. The price of the shares in the capital market goes up and down and the same is not solely controlled by the financials of the said company. Lots of other facts such as emotions, projections, liquidity, volumes etc. have impact on the price rise of the shares in the market. Therefore, the learned AR is of the opinion that the order of the CIT(A) , which was decided based on the jurisdiction High Court judgment is fair and reasonable and the same should be confirmed. 8. We have heard both the parties and perused the relevant material available before us. We find that there is no dispute on the facts relating to the number of shares, rates/price etc. The transactions of purchase and sale of RFL shares is done through the stock exchange involving registered brokers in stock. The payments are made through banking channels. We find that the transaction of purchase and sale of shares are executed without violating any procedures prescribed by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (HUF), where similar transactions involving RFL shares on one side and the broker M/s. Basant Periwal Co. on the other, Bombay Bench of the Tribunal gave a finding that the transactions involved are genuine and the additions were deleted. The contents at para 8 of the said order of the Tribunal are relevant and we proceed to extract the same here as under: 8. We have considered rival contentions and carefully gone through the orders of authorities below and found from the record that the AO has treated the share transaction as bogus on the plea that SEBI has initiated investigation in respect of Ramkrishna Fincap Pvt. Ltd. The AO further stated that investigation revealed that transaction through M/s Basant Periwal and Co. on the floor of stock exchange was more than 83%. We found that as far as initiation of investigation of broker is concerned, the assessee is no way concerned ith the activity of the broker. Detailed finding has been recorded by CIT(A) to the effect that assessee has made investment in shares which was purchased on the floor of stock exchange and not from M/s Basant Periwal and Co. Against purchases payment has been made by account payee cheque, delivery o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tarted selling the shares in installments from 4.11. 2004 to 25.4.2005. All the sale have been carried through stock exchange. The Ld CIT(A) have also noticed that the purchase of shares have been duly accounted for in the Balance sheet filed along with the return of income pertaining to assessment year 2004-05 on 1.11.2004. The sale transactions have also been accounted for in the books. The assessee has pointed out that the share price of the above said company has gone up further after its sale by the assessee. Under these set of facts, the Ld CIT(A) held that the assessing officer has merely disbelieved the evidences furnished by the assessee only on surmises and suspicion. Accordingly he allowed the appeal of the assessee in respect of this ground. 5. During the course of hearing before us, the Ld D.R could not produce any material to contradict the findings given by Ld CIT(A). Even though the Ld D.R submitted that the Ld CIT(A) has accepted additional evidences, we notice that the first appellate authority has confronted the same with the AO by calling for a remand report. Later, the Ld CIT(A) has decided the issue in both the years in favour of the assessee by examinin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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