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TMI Blog2022 (11) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the conduct of the assessee, took note of the proximity of the time between the buy and sale operations and also the sudden and steep rise of the price of the shares of the companies when the general market trend was admittedly recessive and thereafter arrived at a conclusion which is a proper conclusion - Decided against assessee. - I.T.A. No. 509/KOL/2019 And I.T.A. No. 1365/KOL/2019 - - - Dated:- 31-10-2022 - Dr. Manish Borad, Accountant Member And Shri Sonjoy Sarma, Judicial Member For the Assessee : None For the Revenue : Smt. Ranu Biswas, Addl . CIT(DR) ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :- These captioned two appeals filed by different assessees are against the separate orders of ld. CIT(Appeals) passed against respective separate assessment orders by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. Since common issue is involved in both the appeals relating to the disallowance of claim of exemption u/s. 10(38) of the Act in respect of long-term capital gains (LTCG) arising from sale of shares, we dispose of both the captioned appeals by this consolidated order fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Long-term capital gain, which as per the ld. Assessing Officer, the assessee had paid to arrange the said sum. Appeal against this addition made by the Assessing Officer before the ld. CIT(Appeals), and the assessee did not get any relief from the ld. CIT(Appeals). Aggrieved, the assessee is now in appeal before this Tribunal. 3.2. ITA No. 1365/KOL/2019 (A.Y. 2014-15): Brief facts of the case are that the assessee is in individual, who derived income from business, capital gain and other sources. The assessee filed his return of income on 24.07.2014 declaring total income of Rs.1,96,660/-. The case was selected for scrutiny assessment through CASS followed by serving of notices under section 143(2) and 142(1) of the Act. During the course of assessment proceedings, the ld. Assessing Officer noticed that the assessee has earned long-term capital gain of Rs.52,83,100/- from sale of equity shares of Parag Shilpa Investments Limited and exemption under section 10(38) was claimed. The ld. Assessing Officer based on the information received by it from Directorate of Income Tax (Investigation), Kolkata found that M/s. Parag Shilpa Investments Limited is part of the list of 84 liste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he similar issue under identical in the case of Shyam Sunder Bajaj in ITA No. 2552/KOL/2018 and others vide order dated 17th October, 2022 and after placing reliance on the judgment of Hon ble Jurisdictional High Court in the case of Swati Bajaj Others (2022) 139 taxmann.com 352(Cal.) pronounced on 14.06.2022, observed as under:- 4. All the present cases were selected for scrutiny u/s. 143(3) through CASS and the issue in all of them for selection relates to suspicious long term capital gain on shares . In all the above appeals, according to the ld. AO, LTCG reported by the assessee in respective return was bogus and the entire transactions were done with the objective to introduce unaccounted money of the assessee in the books by using the route of LTCG which was exempt from tax u/s 10(38) of the Act, except in one case, where the assessee has booked trading loss on transaction of shares of two Companies, which have been treated as penny stock. Thus, ld. AO held that the said LTCG/loss are fabricated/engineered transactions by the respective assessees, sale of which falls under the category of penny stocks and the same were treated as bogus which were added in the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accountants and Advocates to download such reports and examine the same and thereafter put up their defence. Therefore, the based on such statements of violation of principles of natural justice the assessees have not made out any case. [para 65] c) The test to be applied is the test of preponderance of probabilities to ascertain as to whether there has been violation of the provisions of the Income-tax Act. In such a circumstance, the conclusion has to be gathered from various circumstances like the volume from trade, period of persistence in trading in the particular scrips, particulars of buy and sell orders and the volume thereof and proximity of time between the two which are relevant factors. Therefore, the methodology adopted by the revenue cannot be faulted. [para 69] d) Test of preponderance of probabilities have to be applied and while doing so, the court cannot loose sight of the fact that the shares of very little known companies with in-significant business had a steep rise in the share prices within the period of little over a year. [para 73] e) The assessee was not named in the report and when the assessee makes the claim for exemption, the onus of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e between the buy and sale operations and also the sudden and steep rise of the price of the shares of the companies when the general market trend was admittedly recessive and thereafter arrived at a conclusion which is a proper conclusion. [para 99] l) For all the above reasons, we hold that the Tribunal committed a serious error in setting aside the orders of the CIT(A) who had affirmed the orders of the Assessing Officer. [para 101] m) In the result, these appeals are allowed and the substantial questions of law framed/suggested are answered in favour of the revenue and against the assessee restoring the orders passed by the respective Assessing Orders as affirmed by the CIT(A). [para 102] 6. In the context of factual matrix of the present appeals before us narrated above, the position of law as enunciated by the Hon ble jurisdictional High Court of Calcutta in Swati Bajaj (supra) carrying force of binding nature on the issue under consideration for us, was confronted to the respective ld. Counsels of the assessee who appeared before us. Ld. Counsels were fair enough to state that issue involved in these appeals is squarely covered against the assessee by the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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