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TMI Blog2019 (8) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... by both the sides, though perused, but not considered on the facts of the case in hand. We accordingly direct the Assessing Officer to accept the long term capital gains declared as such. As mentioned elsewhere the facts of all the appellants are identical, the companies whose shares have been purchased / sold giving rise to long term capital gain are same, though the quantum may differ. For our detailed discussion here in above, the appeals of all the appellants are allowed with the direction to accept the long term capital gain declared as such. Since we have accepted the long term capital gains we do not find any merit in the additions on account of alleged payment of commission to the brokers and, therefore, additions made on this account is also directed to be deleted. - ITA No.1069 /DEL/2019, ITA No.2772/DEL/2019, ITA No.1168/DEL/2019, ITA No.1169/DEL/2019, ITA No.1070/DEL/2019, ITA No.1264/DEL/2019 - - - Dated:- 6-8-2019 - Sh. N. K. Billaiya, Accountant Member And Ms. Suchitra Kamble, Judicial Member For the Appellant : Sh. Kapil Goel, Advocate For the Respondent : Ms. Rinku Singh, Sr. DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings the Assessing Officer noticed that the assessee has shown long term capital gain of ₹ 4051874/- from sale of shares and has claimed the same as exempted u/s. 10 (38) of the Act. ASSESSING OFFICER S OBSERVATION 9. The Assessing Officer proceeded by heavily relying upon the investigation report of Pr. DIT (Investigation) Calcutta unit regarding list of companies engaged in providing accommodation entries in the garb of bogus long term capital gain modus operandi involving the penny stocks trading through recognized stock exchanges. The Assessing Officer observed that the assessee was one among the beneficiaries in the list by accepting bogus long term capital gain entries through stock brokers trading in circular, penny stocks. The Assessing Officer further observed that the assessee has traded the script where funds were received from Kolkata based company and operated by entry operators. 10. To verify the aforementioned transactions reported by the assessee, the Assessing Officer asked the assessee to furnish all details including bank statement, share brokers note, ledger account copies, share certificates, and all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a show cause notice to the assessee asking to explain on all the points raised in the show cause to establish the genuineness of its income shown on account of LTCG on sale of penny stock of M/s. Esteem Bio Organic Food Processing Ltd and M/s. Rander Corporation Limited. The show cause notice runs into 30 pages and starts from para 8 of the Assessment Order to para 21 of the Assessment Order. The show cause notice incorporate all the statements recorded by the Investigation Wing, Calcutta. The Assessing Officer further observed that the brokers in the Calcutta Exchange dealing with the scripts have also admitted of rigging the shares and providing accommodation entries to the beneficiaries including the assessee in the form of LTCG. According to the Assessing Officer the unusual transactions of shares purchased and exempt gains create doubt of the genuineness on the purchases of share transaction specifically when the purchases is from the company where major share manipulation transactions were unearthed by the Income Tax Department. 15. Further drawing support from one of the statements recorded by the Investigation Wing, Calcutta, the Assessing Officer was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... varying rates from 1 to 7%. Accordingly, the addition of Rs. ₹ 2,83,631/- (7% of ₹ 40,51,874/-) u/s 69C of the IT Act, is hereby confirmed. DECISION 19. We have carefully considered the orders of the authorities below and the relevant documentary evidences brought on record in the form of paper book in the light of Rule 18 (6) of ITAT Rules. Whether or not a person has discharged the burden cast upon him by the provisions of section 68 of the IT Act is always a question of fact. All that has to be seen by us is whether the appellant has discharged the initial onus cast upon him by the provisions of section 68 of the IT Act. 20. There is no dispute that the shares of the two companies were purchased online, the payments have been made through banking channel, and the shares were dematerialized and the sales have been routed from de-mat account and the consideration has been received through banking channels. 21. A perusal of the assessment order clearly shows that the Assessing Officer was carried away by the report of the Investigation Wing Kolkata. It can be seen that the entire asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding by trading in M/s. Esteem Bio Organic Food Processing Ltd - a further list of 25 persons is mentioned and once again the names of the appellants do not find place in this list also. 25. As mentioned elsewhere the brokers of the assessee namely ISG Securities Limited and SMC Global Securities Limited are stationed at New Delhi and their names also do not find place in the list mentioned here in above in the SEBI order. There is nothing on record to show that the brokers were suspended by the SEBI nor there anything on record to show that the two brokers of the appellants mentioned here in above were involved in the alleged scam. The Assessing Officer has not even considered examining the brokers of the appellants. It is a matter of fact that SEBI looks into irregular movements in share prices on range and warn investor against any such unusual increase in shares prices. No such warnings were issued by the SEBI. 26. There is no dispute that the statements which were relied by the Assessing Officer were not recorded by the Assessing Officer in the assessment proceedings but they were pre-existing statements recorded by the Investigation Wing and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment we find that no question of law was formulated by the Hon ble High Court of Delhi in the said case and there is only dismissal of appeal in limine as the Hon ble High Court found that the issue involved is a question of fact. 29. As mentioned elsewhere the shares of M/s. Esteem Bio Organic Food Processing Ltd were suspended from trading in the stock exchange but that was from 29.06.2015 which is date of the order of the SEBI. The shares of two companies were purchased by the assessee in the month of February 2013 and November, 2012 which were sold in the month of February/ March 2014 and these transactions took place much before the report of the Investigation Wing and also before the order of the SEBI. 30. Considering the vortex of evidences, we are of the considered view that the assessee has successfully discharged the onus cast upon him by provisions of section 68 of the Act as mentioned elsewhere, such discharge of onus is purely a question of fact and therefore the judicial decisions relied upon by the DR would do no good on the peculiar plethora of evidences in respect of the facts of the case in hand and hence the judicial decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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