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TMI Blog2023 (1) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... in. That accordingly the Hon ble High Court had dealt with the issue on merits referring to the financials of the scrips not supporting the high prices at which it were sold and accordingly holding that the assessee in such circumstances was required to establish the genuineness of the transactions. DR was unable to controvert the factual distinction pointed out by the Ld.Counsel for the assessee as above. We agree therefore, in the light of the factual distinction, that the decision of the Hon ble Calcutta high court is not applicable in the present case. No infirmity in the order of the Ld.CIT(A) deleting the addition made on account of alleged bogus long term capital gains - Appeal of the Revenue is dismissed. - ITA No. 675/Ahd/2018 - - - Dated:- 11-1-2023 - SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER Assesseeby : Shri M.K. Patel, AR Revenue by : Shri Sudhendu Das, CIT-DR ORDER PERANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the Revenue against order passed by the ld.Commissioner of Income Tax(Appeals)-3, Ahmedabad [hereinafter referred to as Ld.CIT(A) ]under section 250(6) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any cases, the department had found these transactions of long term capital gains to be bogus on merits without referring to any of order of the SEBI on scrip being trade therein; iii) That the ld.CIT(A) had not dealt with the merits of the case and had deleted the addition solely on the basis that the SEBI had since then reversed its interim-order, which had made allegations of these transactions being manipulated so as to benefit the shareholders exiting from holding the same; iv) In identical facts and circumstances, where shares were found to have been trade at astronomically high prices, the Hon ble Calcutta High Court had held the transactions to be bogus despite all evidentiary pleadings of the assessee including documents evidencing purchases and sale of shares through brokers in DEMAT account being filed by the assessee. He referred to the decision of the Hon ble Calcutta High Court in the case of Swati Bajaj Vs CIT[2022] 139 taxmann.com 352 (Calcutta) in this regard He contended that all ingredients of the share transactions noted by the Hon ble High Court in the said cases were there in the present case also, and therefore, the said decision applied squarely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. We have heard rival contentions; we have also gone through the orders of the authorities below and also taken note of the decisions and documents to which our attention was drawn during the course of hearing. As is evident, the issue for adjudication before us is, whether long term capital gain returned by the assessee as exempt under section 10(38) of the Act amounting to Rs.8,90,23,838/- was genuine as claimed by the assessee or manipulated/ contrived so as to bring in illegitimate gains of the assessee without paying any taxes thereon, as claimed by the Revenue. 7. The facts relating to the long term capital gain of Rs.8,90,28,838/- earned by the assessee are that they related to 1805700shares of one Mishka Finance and Trading Limited ( MFTL for short) sold by the assessee during the year for a price/value of Rs.9,12,18,266/-. The chronology of events leading to the transaction of purchase and sale of the said shares as stated by the assessee to the authorities below and as reproduced both in the assessment order and appellate order are that : on 5.9.2012 the assessee had applied for 25,000 equity shares of Pyramid Trading Finance Ltd. ( PTFL for short) at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lations etc. Further with regard to 9 entities at S.No.105 to 113 in Table No.2, no adverse material was found in the Investigation Report with respect to prima facie violation found against them in Interim Order dated April 17, 2015 (which was subsequently confirmed) but the Investigation Report has brought out violation relating to disclosure under SEBI (Prohibition of Insider Trading) Regulations 1992 and SEBI (Substantial Acquisition of Shares And Takeovers) Regulations, 2011 warranting Adjudication Proceedings. The list of entities is as under: Table : 2 S N Name PAN 1 2 . . . 20 Gokuldham Enterprises LLP AALFG1236F 10. The revocation of the directions issued vide this order is only in respect of the entities mentioned at paragraph 7 of this order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of this interim SEBI order alone, the AO has rejected all documentary evidences filed by the assessee, as not being of any assistance to the assessee to prove the genuineness of the transaction. The Ld.DR was unable to point out how the AO had made out a case of unreasonably high price of sale of shares of MFTL. 12. It is abundantly clear therefore that the entire case of the AO rested on interim order of the SEBI. The argument of the Ld DR to the contrary is therefore rejected. 13. Further, it is fact on record that in the final order, the SEBI had absolved this scrip of MFTL from all charges of its price being manipulated to enable exiting shareholders in introducing their illegitimate gains from being introduced without payment of taxes. The Revenue does not dispute the same. As rightly pointed out by the ld.counsel for the assessee, the specific purpose of the investigation, and both the interim and final orders of the SEBI was regarding manipulation of the price this scrip for providing accommodation entries to illegitimate gains of the share holders dealing in these scrip and final order of the SEBI has found all these charges to be baseless. The case of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecome 2000000 shares. The appellant purchased these shares for investment purpose and getting reflected in the balance sheet dated 31.03.2013. It is verified that even some portion of this investment continue to be there in the balance sheet dated 31.03.2014. During the financial year under consideration the appellant had sold 1,805,700 shares on various dates for total value of Rs 9,30,66,066/-. The net long term capital gains earned was Rs 8,90,34,398/-.These shares were sold through the member of the BSE namely Progressive Share Brokers (P) Ltd on the trading platform of the BSE. Even if the first sale of impugned share transaction to earn the profit is examined in the demat account, the appellant was holding the shares in their demat account for more than 12 months as the payment for purchase of share was made through cheque on 20.09.2012. I have perused the copies of brokers bills, copy of brokers ledger account, copy of demat statement, copy of STT certificate and copy of appellant's bank statement to conclude that the appellant has submitted credible explanation. The final report of SEBI has come out on 05.10.2017 wherein it has clearly stated in Para 7 of their report t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force and b) Such transaction is chargeable to securities transaction tax (STT) under that chapter. The conditions to avail the benefit u/s.10(38) are fulfilled by the appellant, therefore, the claim of the appellant as per return of income is found to be in order. It is further mentioned that the appellant relied on the ratio of following case laws: i) CIT-I Vs. Maheshchandra G. Vakil [2013]40 taxmann.com 326 (Guj.HC) ii) CIT-I Vs. Himani M Vakil [2013]10 taxmann.com 326 (Gu. HC) iii) DCIT vs Sunita Khema in ITA nos 714 to 718/ kol/2011 (Kol. ITAT) iv) CIT Vs. Smt Sumitra Devi in ITA 54/2012 (Raj. HC) v) CIT Vs. Udit Narain Agarwal in ITA 560 of 2009 (All. HC) vi) ACIT Vs Shri RavindrakumarToshiwal in ITA nos 5302/Mum/2008 vii) TekchandRambhiya HUF in ITA nos 930/Mum/2012 viii) CIT vs. Jamnadevi (328 ITR 656) (Mum. HC) In addition to above case laws, the AR filed a copy of ITAT, Mumbai judgment in the case of ITO vs. Arvindkumar Jain HUF dated 18.09.2017 with the emphasis' that the facts of the case are exactly same wherein a relief to the appellant has been granted. I have perused the case laws (supra) an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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