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TMI Blog2023 (1) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 250 of the Income Tax Act, 1961 (in short the Act ) by ld. Commissioner of Income-tax (Appeals), Shillong [in short ld. CIT(A) ] dated 29.11.2019 arising out of the assessment orders framed u/s 143(3) of the Act dated 26.12.2017 22.12.2017, respectively. 2. The captioned appeals have been listed for hearing on various dates but there is no response at the end of the assessee to the notices issued by this Tribunal on addresses given in Form No. 36. Efforts were made by the bench clerk to inform the assessee through e-mail but none appeared. We, therefore, decide to hear these appeals with the assistance of ld. D/R, and the available records. 3. The assessees are in appeal before this Tribunal raising the following grounds: I.T.A. No.: 49/Gty/2020 1. That the order of the CIT-Appeals in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. The AO erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 3. That learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liabilities for interest u/s 234A, 234B 234C of the Act. Further prays that the interest if any should be levied only on returned income. 16. No opportunity has been given before levy of interest u/s 234A 234B 234C of the Act. 17. Without prejudice to the appellant's right of seeking waiver before appropriate authority, the appellant begs for consequential relief in the levy of interest u/s 234A, 234B and 234C of the Act. 18. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered. I.T.A. No.: 51/Gty/2020 1. That the order of the CIT-Appeals in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. The AO erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 3. That learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in confirming the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evi Sand is that ld. CIT(A) erred in confirming the addition of Rs. 71,39,620/- Rs. 50,40,340/- in the cases of the assessees namely Inderchand Sand and Saroj Devi Sand, respectively for AY 2015-16 which was made by ld. AO denying the claim of exemption u/s 10(38) of the Act from sale of equity shares of M/s. Jackson Investments Ltd. and M/s. Pine Animations Ltd. 5. A perusal of the records suggests that in the case of Inderchand Sand 4,000 shares of M/s. Jackson Investments Ltd. purchased @ Rs. 10/- per share were sold @ Rs. 31.10 per share during the year and similarly, 64,000 shares of M/s. Pine Animations Ltd. purchased @ Rs. 0.40/- per share were sold @ 93.13 per share. Similar was the case of another assessee i.e. Saroj Devi Sand wherein 4,000 equity shares of M/s. Jackson Investments Ltd. and 57,500 shares of M/s. Pine Animations Ltd. were sold during the year @ Rs. 31.10/- Rs. 73.68/- respectively and the same were purchased @ Rs. 10/- Rs. 4.05 respectively. Exemption u/s 10(38) of the Act has been claimed on the long term capital gain arising from the said share transactions. The said claim of the assessees was rejected by ld. AO on the ground that M/s. Jackson In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Limited. In a number of appeals, we have also rejected the claim of the assessees, namely ITA Nos. 2552/KOL/2018, 1122/KOL/2018, 2093/KOL/2019, 2104/KOL/2018, 868/KOL/2019, 341/KOL/2018, 1673/KOL/2019. In ITA No. 2093/KOL/2019, the assessee transacted the shares of M/s. Kailash Auto Finance Limited. All these transactions have been held as bogus. Therefore, relying upon the decision of the Hon'ble Calcutta High Court coupled with various orders of the ITAT, we are of the view that Revenue Authorities have rightly rejected the claim of the assessee and made the additions. We do not find any merit in this appeal. It is dismissed. 11. Similar view is also taken by ITAT Kolkata Bench in the case of Sri kailash Prasad Agarwal Others vs. ITO in ITA Nos. 509 1365/Kol/2019 dated 31.10.2022. Relevant finding of this decision is reproduced below: 3.1. ITA No. 509/KOL/2019 (AY 2013-14): Brief facts of the case are that the assessee is an individual and filed e-return of income on 01.10.2013 declaring total income of Rs.11,93,400/-. The assessee has claimed exempt income under section 10(38) of the Income Tax Act at Rs.2,26,86,516/- from sale of equity shares of CCL Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss, 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 listed companies, which were found to be the penny stock companies and are managed as dummy companies involved in the price rigging by the promoters and entry operators for providing bogus long-term capital gain to various beneficiaries. The assessee primarily purchased 10,000 equity shares of M/s. Swift IT Infrastructure Services Pvt. Limited from off-market, which was subsequently merged with M/s. Parag Shilpa Investments Limited. The market prices of the scrip and mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 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. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athered 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 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 unfort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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