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TMI Blog2022 (11) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 23-11-2022 - Shri Sanjay Garg, Judicial Member And Dr. Manish Borad, Accountant Member For the Assessee : Shri Anil Kochar, Advocate For the Revenue : Shri Vijay Kumar, Addl .CIT (Sr. DR) ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER: - This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-15, Kolkata dated 18.02.2019 for the assessment year 2014-15. 2. The assessee has raised the following grounds of appeal:- 1. For that the orders passed by the lower authorities are arbitrary, erroneous, without proper reasons, invalid and bad-in-law, to the extent to which they are prejudicial to the interests of the appellant. (2) For that the Ld. CIT (A) erred in dismissing the appeal of the appellant on the alleged grounds without properly considering all relevant documentary evidences submitted before the lower authorities in support of earning of Long Term Capital Gains. (3) For that the Ld. CIT (A) ought to have appreciated the facts on record which indicated that the appellant having filed all evidences relating to purchase and sale of shares and having earned Long Term Capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of tax. The ld. Assessing Officer also noticed that the prices of equity shares of Unno Industries increased drastically in a short span of time without having any sufficient financial base and also poor earning per share (EPS). The ld. Assessing Officer accordingly held the said transaction of earning long-term capital gain as sham and bogus in nature and added the same to the income of the assessee at Rs.1,27,71,907/- and assessed income at Rs.1,34,45,920/-. 4. Aggrieved, the assessee preferred appeal before the ld. CIT(Appeals), but failed to succeed as the ld. CIT(Appeals) relying on various judicial pronouncements including the judgment of the Hon ble Supreme Court in the case of Sumati Dayal reported in 214 ITR 801 (SC) and Durga Prasad More reported in 82 ITR 540 (SC) confirmed the finding of the ld. Assessing Officer. 5. Aggrieved, the assessee is now in appeal before this Tribunal. 6. Ld. Counsel for the assessee referring to the paper book containing 45 pages stated that the transactions of long-term capital gain were genuine duly supported by Contract Note of purchase of shares, transactions statement, relevant bank account. He pleaded that the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction 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 income by treating it as unexplained cash credit u/s. 68 of the Act. Ld. AO based his decision of treating the impugned transaction of sale of shares as bogus transaction by relying on the report of Investigation Wing of the Department wherein the Investigation Wing of the Department had studied the modus operandi of rigging the prices of penny stocks and generation of capital gain /trading loss there from. On appeal, ld. CIT(A) confirmed the action of the ld. AO. Aggrieved, assessees are in appeal before the Tribunal. 5. Recently on 14.06.2022, the Hon ble jurisdictional High Court of Calcutta passed a judgment in the case of Swati Bajaj and others [2022] 139 taxmann.com 352 (Cal) dealing with set of cases with similar fact patterns as narrated above for the present appeals under consideration before us. Hon ble jurisdictional High Court by taking the report of the Directorat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not 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 proof is on the assessee to prove the genuinity. [para 73] f) It is incorrect to argue that the assessees have been called upon to prove the negative in fact, it is the assessees duty to establish that the rise of the price of shares within a short period of time was a genuine move that those penny stocks companies had credit worthiness and coupled with genuinity and identity. [para 73] g) The assessee cannot escape from the burden cast upon him and unfortunately in these cases the burden is heavy as the facts establish that the shares which were traded by the assessees had phenomenal and fanciful rise in price in a short span of time. [para 75] h) The exercise that was required to be done by the Tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the 'players' can never be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 decision as the fact involved are identical to that which were before the Hon ble High Court. For cases where none appeared before us on behalf of the assessee, the relevant factual matrix was captured with the assistance of Ld. Sr. DR / CIT DR (already narrated above). Since the matter is squarely covered by the decision of Hon ble jurisdictional High Court of Calcutta in the case of Swati Bajaj others (supra), we have taken up these also for adjudication ex parte, qua the assessee. 7. After hearing both the sides and taking into consideration the factual matrix of the cases before us vis- -vis the decision of Hon ble jurisdictional High Court of Calcutta in Swati Bajaj others (supra), we respectfully following the said decision carrying the force of binding nature, being the jurisdictional High Court, dismiss the appeals of the assessee and restore the order of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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