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TMI Blog2020 (3) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... EBFL, therefore, nothing survives in favour of the A.O. The A.O. did not make any further investigation or enquiry into the matter and merely relied upon the interim order of the SEBI and investigation carried out by the Kolkata Wing. It is not clear from the assessment order whether Investigation Wing report have been confronted to the assessee or any right of cross-examination have been allowed to any statement recorded at the back of the assessee. The assessee asked for the cross-examination of any statement which is used against the assessee for making the addition. But, the assessment order is silent on this aspect. Therefore, the above facts clearly show that assessee entered into the genuine transaction and as such the profit on sale of scrip was exempt from tax. D.R. relied upon decisions of the ITAT, Delhi Benches, Delhi in the cases of Suman Poddar vs., ITO [ 2019 (9) TMI 1089 - DELHI HIGH COURT] and Udit Kalra vs., ITO [ 2019 (4) TMI 834 - DELHI HIGH COURT] in which the findings of the Tribunal had been that these are cases of penny stock companies which fact is not there in the present case. Therefore, these decisions would not support the case of the Revenue as having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already listed company, the entire shareholding of which is bought by the syndicate to provide LTCG entries. These are generally dormant company with no business and with accumulated losses and (2) A new company which is floated just for the purpose giving LTCG entries. The A.O. further noted as to how the parties have been operating through the entry provider and rigging the price to show long term capital gains and loss. The A.O. also noted that SEBI has indicted the assessee as one of beneficiary of LTCG of artificial price jacking of shares of M/s EBFL, a paper company. In the interim order, the SEBI has directed that such company including the assessee shall not buy, sell or deal in securities either directly or indirectly in any manner, whatsoever, till further Orders. The interim order of the SEBI is considered against the assessee. The A.O. also referred to the investigation carried out by Kolkata Investigation Wing and noted fundamentals of scrip of the same company and came to the conclusion that there is a price raise without any reasons which cannot be accepted. The show cause notice was issued to the assessee as to why the same be not treated as unexplained income un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2,20,768/- on account of commission paid for sale of shares. 3. The assessee challenged both the additions before the Ld. CIT(A). The submissions of the assessee are reproduced in the appellate order in which the assessee reiterated the submissions made before the A.O. and filed details of purchase and sale of M/s EBFL shares to show that he has entered into genuine transaction which is supported by documentary evidences. It was further submitted that the interim order of the SEBI have been revoked and assessee and M/s EBFL have been cleared from all allegations. The Ld. CIT(A), however, did not accept the contention of assessee and following the Rule of Preponderance of Probability dismissed the appeal of assessee. 4. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and referred to PB-65 which is final Order of the SEBI in which SEBI after detailed investigation revoked the interim order against the assessee as well as M/s EBFL. He has submitted that this was the sole reason for rejecting the claim of assessee. The A.O. did not make any further investigation into the matter. He has referred to the financials of M/s EBFL from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee relied upon Judgment of Hon'ble Supreme Court in the case of Kishanchand Chellaram 125 ITR 713 (SC) and Andaman Timber Industries vs., CCE 314 ELT 641. Learned Counsel for the Assessee submitted that in case of Amar Nath Goenka vs., ACIT (supra), the Tribunal considered an identical issue in support of the same company M/s EBFL. In that case also interim order of the SEBI was rejected and appeal of assessee have been allowed. He has, therefore, submitted that the issue is covered in favour of the assessee by the aforesaid decisions. 5. The Ld. D.R. on the other hand relied upon the Orders of the authorities below and submitted that the assessee entered into bogus transaction and purchase value is very less and shares have been sold at a high price. Therefore, the Ld. CIT(A) rightly invoked principles of preponderance of probability against the assessee. The modus operandi was seen by the Kolkata Investigation Wing because there is a rigging in the profit. Therefore, the authorities below correctly made the addition against the assessee. He has relied upon Order of Hon'ble ITAT, Delhi Bench in the case of Suman Poddar vs., ITO Dated 25.07.2019, which is confirmed by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. The assessee pleaded that the Interim Order of the SEBI have been diluted by passing final order in which no adverse view have been taken against the aforesaid company. Thus, the assessee's claim of purchase and sale of shares have been supported by documentary evidences. The statement of Shri Sanjay Vohra was recorded by the Investigation Wing, Kolkata, but, the same was not confronted to the assessee and his statement was also not subjected to crossexamination on behalf of the assessee. Therefore, his statement cannot be read in evidence against the assessee. The A.O. did not mention any fact as to how the claim of assessee was sham or bogus. The assessee satisfied the conditions of Section 10(38). The broker through whom transactions were carried-out have not denied the transaction conducted on behalf of the assessee. It, therefore, appears that the addition is merely made on presumption and assumptions of certain facts which are not part of the record. There is no other material available on record to rebut the claim of assessee of exemption claimed under section 10(38). Issue is decided in assessee 's favour." 6.1. In the present case, the assessee submitted sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X
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