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TMI Blog2021 (6) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 2014-15 raising following grounds: 1. That the Id. CIT(A) has erred in law and on facts while upholding the decision of the Id. AO of making additions of ₹ 41,00,925/- on sale of shares of Cressanda Solutions Ltd. as non- genuine LTCG without appreciating the submissions of the assessee. As such, the addition of ₹ 41,00,925/- may please be deleted. 2. That the Id. CIT(A) has erred in law while not considering that the Id. AO has made an addition of ₹ 41,00,925/- under section 68 of the Income Tax Act, 1961 without properly appreciating the supporting documents placed on record including allotment letter, acknowledgment of bank regarding request for dematerialization, contract note for sale, ledger account of assessee in the books of broker, Demat account etc. As such, the addition of ₹ 41,00,925/- may please be deleted. 3. That the Id. CIT(A) erred in law and facts of the case while not appreciating that the addition made Ld. AO is merely on the basis of conjecture and surmises without bringing on record any specific cogent material against the assessee. As such, the addition of ₹ 41,00,925/- may please be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by way of sales as unexplained credit in terms of section 68 of the Act. The conclusion of the Assessing Officer in paragraph 5.9 of the assessment order is reproduced as under: 5.9 In view of the facts and circumstances discussed supra, it is concluded that the transactions were sham and aimed only to bring unaccounted money in the semblance of exempted long term capital gains/ STCG and paper work has been got up and done merely to give a colour of authenticity to the transaction and by creating a facade of legitimate transactions. It is pertinent to state here that the assessee preferred not to explore the possibilities by making any request for cross examination of the persons who had given statements on the basis of which the Directorate of Investigation has unearthed the scam on the issue of obtaining LTCG. The facts of the case as brought-out above, it is self- evident that here is a case where apparent is not real and therefore not sacrosanct. Most importantly, it doesn't accord with the test of human probabilities. In light of the test of human probabilities as laid down in Sumati Dayal Vs CIT , the only reasonable inference likely lo be drawn reasonably by a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 per share, however, has been sold within two years at the rate of ₹ 420 per share without any credible financials of said company. According to him, in view of preponderance of the probability, the Ld. CIT(A) is justified in sustaining the addition. 6. We have heard submission of the Learned Departmental Representative and perused the relevant material on record. We find that assessee was allotted 10,000 shares of M/s Smart Champ IT Infra Ltd directly by the company in off-line transaction by way of payment of Cheque of ₹ 1 lakh on 06/09/2011. Subsequently, the company M/s Smart Champ IT Infra Ltd merged with M/s Cressand Solutions Ltd. on 24.01.2013 and the assessee transferred dematerialized shares of M/s Cressanda solutions Ltd. to his Demat account on 14/03/2013. The shares were then subsequently sold on 26/04/2013 through Bombay stock exchange at a consideration of ₹ 42, 00, 925/-. The Assessing Officer has found that inquiries were conducted by the Securities Exchange Board of India (SEBI) and interim ex parte order dated 19/12/2014 was passed by the SEBI for restraining 108 entities including M/s Cressanda Solutions Ltd. and its promoters and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee, it is seen that the purchase transaction has been done off market in physical form. It has been done by preferential allotment of shares. It is a possibility that the transactions may be of the bad shares as discussed in para-7.3.2. This has been carried out in a planned manner to capitalize the black money by taking exemption by claiming the same as long term capital gain. (B) NOT IN CONFIRMITY WITH SEBI GUIDELINES: As evident from the above, assessee has purchased the share M/s. Cressenda Solutions Ltd. in physical form and thereafter, the same have been converted into electronic mode. The conversion has been done just a few days prior to the sale. In such case off market transactions, as per SEBI guidelines, a broker cannot issue a brokerage note containing time stamp of stock exchange traded time even though the transactions are not routed through stock exchange and such transactions are off market transactions. SEBI had vide Circular No. SMDRP/Policy/CIT-21/99, dated 14th September'1999 banned all negotiated deals including cross deals and all such deals are required to be executed only on the screens of exchanges in the price and order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed (Scrip Code 512379) are listed on the Exchange with effect from Thursday, March 14, 2013. Members are requested to note that, the above security will be a part of pre-open session for IPO and Other category of scrips as per SEBI circular no. CIR/MRD/DP/01/2012 CIR/MRD/DP/02/2012 dated January 20, 2012. Initially the securities shall be available for trading in Trade for Trade Segment and subsequently be shifted out of Trade for trade, as per SEBI circular no. SEBI/Cir/ISO/1/2010 dated September 2, 2010 Name of the Company : Cressanda Solutions Limited Registered Office : 307, Maker Bhavan No. Ill 21, New Marine Lines 3rd Floor, Mumbai - 400 020. Securities) Equity Shares issued on Reduction) Equity Shares issued issued on Amalgamation : 3,03,57,750 Equity Shares@ ₹ 10/- each 4,50,000 Equity Shares @ ₹ 10/- each 2,99,07,750 Equity Shares @ ₹ 10/- each Distinctive numbers : 1 to 3,03, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Distinctive Numbers Date of Issue Good/Bad Delivery 1 Cressanda Solutions Limited 1-90,00,000 Before Record date Bad 2 Cressanda Solutions Limited 1- 4,50,000 After Record date Good Hence, trading members should take due care and abundant caution while dealing/receiving/delivering these shares of the company from/to the market. As per the documents filed by the appellant, the distinctive numbers In respect ol Smart Champ IT Infra Ltd. were 3435001 to 3445000 while after the scheme of amalgamation, the distinctive numbers have nof been mentioned. The distinctive numboi has been mentioned as not applicable, while as per the above clarification there are certain distinctive number which are bad delivery and certain distinctive numbers which are good delivery. Even the contract issued by M/s. Sara Securities Pvt. Ltd. does not mention distinctive numbers of the shares sold. 7.3.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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