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TMI Blog2023 (1) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... issed. - I.T.A. No. 154/KOL/2021 - - - Dated:- 16-11-2022 - Shri Sanjay Garg, Judicial Member And Dr. Manish Borad, Accountant Member For the Assessee : Shri Rajeeva Kumar, Advocate For the Revenue : Md. Ghayasuddin, CIT(DR) ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER: - This appeal filed by the assessee is against the order of ld. Principal Commissioner of Income Tax-15, Kolkata dated 22.06.2020 passed under section 263 of the Income Tax Act, 1961. 2. The Registry has pointed out that appeal is time-barred by 247 days, but it is to be observed that the impugned order was passed on 22.06.2020 after the COVID period started and the appeal has been filed before the Tribunal in May, 2022. The period of limitation is being excluded by the Hon ble Supreme Court in its order, passed time to time in suo motu Writ Petition No. 3 of 2020. The directions have been issued by the Hon ble Court and have been extended from time to time and if the COVID period is being excluded keeping in view the Hon ble Supreme Court s order, then there is no substantial delay in filing the appeal on the part of the assessee. Therefore, we condone the delay and proceed to dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted by good financials. Accordingly ld. PCIT held the assessment order as erroneous and prejudicial to the interest of revenue and set aside the said assessment order for being framed afresh considering the finding in the impugned order. 5. Aggrieved, the assessee is now in appeal before this Tribunal. 6. Ld. Counsel for the assesese referring to the paper book containing 45 pages stated that the transactions of long-term capital gain were genuine, which is duly supproted by Contract Note of purchase of shares, transactions statement, relevant bank account. He pleaded that the transactions being genuine, the impugned proceedings deserve to be quashed. 7. On the other hand, ld. D.R. vehemently argued supporting the order of the ld. PCIT. 8. We have heard the rival submissions and perused the relevant record placed before us. Revisionary proceedings under section 263 of the Act are in challenge before us. During the year, the assesee has earned long-term capital gain from sale of equity shares of M/s. CCL International Limited and exemption under section 10(38) of the Act has been claimed. Directorate of Income Tax (Investigation), Kolkata unearthed a racket of penny st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 Directorate of Investigation of the Department as the basis, gave its observations and findings, which are summarized hereunder. 5.1. There are two category of cases dealt with by the Hon ble High Court, viz. first category being those arising out of the order of Tribunal dated 26.06.2019 in which 90 appeals filed by the assessees were allowed and second category is of those cases where1 assessee has challenged the assumption of jurisdiction by CIT under section 263 of the Act. In the present set of appeals before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 established by direct evidence and therefore the surrounding circumstances was required to be taken note of by the Tribunal which exercise has not been done. [para 99] i) The assessee had opportunity to prove that there was no manipulation at the other end and whatever gains the assessee has reaped was not tainted. This has not been proved or established by any of the assessee. [para 99] j) The tribunal being the last fact finding authority was required to go deeper into the issue as the matter have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 respective ld. AO as affirmed by the respective ld. CIT(A) . 9. On perusal of the above finding of this Tribunal considering the judgment of the Hon ble Jurisdictional High Court in the case of Swati Bajaj Others (supra), we find that such kind of transactions of earning long-term capital gain from penny stock companies have been held to be bogus. It is also not in dispute that ld. Asseessing Officer has not conducted any enquiry about the said transaction even when the report of the Investigation Wing co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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