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TMI Blog2023 (1) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the information. The bench is of considered view that tax authorities below have fallen in error as Ld. AO recorded reasons without applying mind independently but based on surmises and conjectures out of financial status of the assessee. While Ld. CIT(A) and Ld. AO have both ignored the factual aspects of purchase of shares five years prior to the sale for substantial amount and have tried to paint its findings based on modus operandi of tainted Kayan brothers, with whom actually there was no dealing by the assessee. Assessee appeal allowed. - ITA No.576/Del/2019 - - - Dated:- 18-1-2023 - Sh. Pradip Kumar Kedia, Accountant Member And Sh. Anubhav Sharma, Judicial Member For the Assessee : Sh. R.R.Singla, CA For the Revenue : Smt. Sunita Singh, CIT(DR) ORDER PER ANUBHAV SHARMA, JM: The appeal has been filed by the Assessee against order dated 27.12.2018 in Appeal No. 74/18-19 assessment year 2010-11 passed by Commissioner of Income Tax (appeals), Ghaziabad (hereinafter referred to as the First Appellate Authority or in short Ld. F.A.A. ) in regard to the appeal before it arising out of assessment order dated 22/12/2017 u/s 147/143(3) of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viding accommodation entry in the form of bogus long term capital gains in connivance with entry operators and promoters of scripts at Calcutta Stock Exchange as well. He named penny stocks at BSE and CSE which were used for the purpose of providing accommodation entry in the form of long term capital gains. The assessee has invested in scrip i.e. Konarak Commerce Industries Limited and claim LTCG of Rs. 3,50,280/- . Ld. AO in the assessment order observes that the perusal of ITR filed by the assessee for the A.Y. 2010-11, it reveals that the assessee has shown income of Rs. 2,03,895/- and tax liability created of Rs. 4,882/- which show that the financial position is not very sound. 2.2 Therefor after recording the reasons and taking necessary approval from the pr. CIT, Delhi-14, New Delhi, notice u/s 148 of the I.T.Act, 1961 dated 28.03.2017 was issued served upon the assessee. 2.3 In reply to the same, assessee had filed a letter dated 01.12.2017 in which it was stated that the assessee was not able to submit the Statement of Affairs as on 31.03.2009. No details of Depository and also filed justification regarding the Long Term Capital Gains. It was also submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 68 of the Income Tax Act. 5. The ld. CIT(A) has grossly erred in facts and failed in distinguishing the present case with the hypothecations and presumptions relied upon by the ld. AO. 6. The ld. CIT(A) has erred in law and facts while upholding the addition of gross sale value of shares as undisclosed income. 7. The ld. CIT(A) has erred in law and facts while upholding the addition based on his own whims and surmises. 8. The assessee may please be allowed to add, later, amend its ground of appeal at any time before or during the course of hearing of the appeal. 5. Heard and perused the record. 6. Ld. AR made submissions with regard to exercise of jurisdiction and re-assessment by ITO, Ward 17(4), New Delhi submitting that notice u/s 148 dated 28.03.2017 was issued by ITO, Ward-14(3) and no notice was issued by ITO, Ward 17(4) within the statutory period as the notice was issued u/s 148 on 08.08.2017 followed by notice u/s 143(2) on 04.09.2017 and both were time barred. Ld. AR relied judgment of Hon ble Kerala High Court in P.A.Ahammed vs. Chief Commissioner of Income Tax(2006) 282 ITR 334 Kerala and Hon ble Delhi High Court in Sunworld Infrast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nny stocks at BSE and CSE which were used for the purpose of providing accommodation entry in the form of Long term capital gains. 10 penny stocks were identifies which were used for providing bogus LTCG at the CSE which are as below: S.No. Name of the scrip Scrip Code 1. Blue Print Securities Limited 12630 2 Konarak Commerce Industries Limited 21155 3 Shardaraj Tradefin Limited 29209 4 Access Global Limited 29096 5 Bakra Pratisthan Limited 12133 6 Coronet Industries Limited 13165 7 Concrete Credit Limited 29396 8 BSR Finance and Constructions Limited 12226 9 Multiplus Resources Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced the information which was received from the Investigation Wing and refers to the 10 penny stocks, and from which in one Konarak Commerce Industries Limited, assessee has invested and claimed LTCG of Rs. 3,50,280/-. However, in the reasons there is not iota of words of assessee having transactions with Kayan brothers. There is no discussion as to how the investment of assessee in the scrip has resulted into escaping income. Merely it is observed in the concluding part of the reasons that; The assessee has invested in scrip i.e. Konarak Commerce Industries Limited, and claim LTCG of Rs.3,50,280/- and on the perusal of ITR filed by the assessee for the AY 2010-11, it reveals that the assessee has shown income of Rs.2,03,895/- and tax liability created of Rs.4,882/- which shows that the financial position is not very sound . These observations are mere expression of Ld. AO s perspective on financials of the assessee and do not have any reasons to show that there is live link between the information reproduced and the failure of assessee to disclose fully and truly all material facts necessary for assessment. Apparently the Ld. AO has merely expressed reason to suspect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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