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TMI Blog2018 (11) TMI 1575X X X X Extracts X X X X X X X X Extracts X X X X ..... s was bogus or not. We therefore set aside the orders of the lower authorities and remit the issue back to the file of the ld. Assessing Officer for consideration afresh in accordance with law. - decided partly in favour of assessee for statistical purposes. - I.T.A. No.1679 /CHNY/2018 - - - Dated:- 8-11-2018 - SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER For the Appellant : Shri D. Anand, Advocate For the Respondent : Shri. AR V. Sreenivasan, IRS, JCIT ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER In this appeal filed by the assessee, which is directed against an order dated 27.03.2018 of ld. Commissioner of Income Tax (Appeals)-12, Chennai, it is aggrieved on denial of exemption of long term capital gains of B47,06,741/-, arising on transfer of shares claimed u/s.10(38) of the Income Tax Act, 1961 (in short the Act ) and treating a sum of B49,57,500/- as unexplained income u/s.68 of the Act. 2. Ld. Counsel for the assessee submitted that assessee had sold 1,25,000 shares of one M/s. Kailash Auto Finance Ltd for a consideration of B49,57,500/- and earned long term capital gains of B47,06,741/- arising from su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Assessing Officer for reconsidering the issue adhering to the rules of natural justice. 3. Per contra, ld. Departmental Representative strongly supporting the orders of the authorities below submitted that there were sufficient and more reasons for lower authorities to disbelieve the transactions claimed by the assessee in the equity shares of M/s. Kailash Auto Finance Ltd. As per the ld. Departmental Representative, assessee could not produce any evidence to show how he indentified the shares of M/s. Careful Projects Advisory Services Ltd, for making an off market purchase. Ld. Departmental Representative also placed reliance on a decision of Co-ordinate Bench in the case of Shri Heerachand Kanunga vs. ITO (ITA Nos.2786 2787/Chny/2017, datd 03.05.2018). 4. We have considered the rival contentions and perused the orders of the authorities below. It is not disputed that long term capital gains claimed by the assessee as exempt u/s.10(38) of the Act arose on account of sale of equity shares of M/s. Kailash Auto Finance Ltd. It is also not disputed that the assessee had initially acquired the shares of one of M/s. Careful Projects Advisory Services Ltd, which was later merge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t para in the assessment order relied by the ld.A.R, for buttressing this argument reproduced at para eleven above, hardly suggest that the assessment done on the assessee was pursuant to a search. Just because an investigation was done by the investigation Department of the Department, based on some leads they might have had, reports of which were used against the assessee, would not ipso facto mean that the assessment was pursuant to any search. There is nothing whatsoever on record to suggest that the assessment was based on materials unearthed during a search. 15. However, as already mentioned by me, rules of justice do require that the reports of investigation wing, relied on bythe ld. Assessing Officer, as well as the statement recorded from Mr.Sunil Dokania are put to the assessee and its explanation sought, before deciding whether these are relevant in the assessment of the assessee. I also find the SEBI through its order dated 21.09.2017(supra) did vacate its interim exparte order dated 29th March, 2016 restraining 244 entities, inter alia including M/s.Kailash Auto Finance Ltd., from buying, selling or dealing in securities. 16. In the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011-12? When were the cheques received by the assessee? From whom did the assessee received the cheques? Was there any cash deposit immediately prior to the issuing of the cheque from the bank account of the purchaser of the shares of the assessee? 11.A perusal of the Assessment Order at Para No.7.1 shows that in the Written Submissions, the assessee states that he has purchased 15000 shares of M/s.BPL from M/s.ABPL, Kolkata. However, in Para No.8.3, it is mentioned that the assessee in good faith has purchased the shares of M/s.BPL from a sub-broker in his friends circle. What is the true nature of the transaction? From whom did the assessee actually purchase the shares? Did the assessee take possession of the shares in its physical form? In Para No.8.1 of the Assessment Order, it is mentioned that the assessee is an investor and has been regularly trading in shares. If this is so, does the demat account show such transactions being done by the assessee or is this the only one of transaction. Thus, clearly the facts required for adjudicating the appeals are not forthcoming. There is no evidence whatsoever to show that the assessee has held the shares for more than 12 months. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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