9911796707
TMI Blog2023 (3) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ld. Dy. Commissioner of Income Tax, Central Circle-3(4), Mumbai (hereinafter referred to as ld. AO). ITA No.1606/Mum/2021 (A.Y.2013-14) & ITA No.1608/Mum/2021 (AY: 2014-15) These appeals in ITA Nos. 1606/Mum/2021 & 1608/Mum/2021 for A.Y.2013-14 & 2014-15 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-51, Mumbai in appeal Nos.CIT(A)-51, Mumbai/10056/2017-18 & CIT(A)-51, Mumbai/10058/2017-18 dated 27/07/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 27/04/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle-3(4), Mumbai (hereinafter referred to as ld. AO). ITA No.1607/Mum/2021 (A.Y.2015-16) This appeal in ITA No. 1607/Mum/2021 for A.Y.2015-16 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-51, Mumbai in appeal Nos.CIT(A)-51, Mumbai/10632/2017-18 dated 15/07/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 29/12/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle-3(4), Mumbai (hereinafter referred to as ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership firms and also engaged in trading of shares. The return of income was e-filed for the A.Y. 2014-15 u/s.139(1) of the Act on 30/09/2014 showing total income of Rs 1,67,47,875/-. Subsequently, a search u/s.132 of the Act has been carried out by the Department on 09/04/2015 at the residential premises of the assessee on the plea that he was indulged in evasion of income tax by introducing unaccounted money into the books of account in the grab of bogus Long term capital gains claimed to be exempt u/s.10(38) of the Act. In response to notice u/s.153A dated 08/08/2016, the assessee filed his return of income on 22/08/2016 showing total income of Rs 1,67,47,875/- which was the same as shown in the return of income furnished u/s.139(1) of the Act. In filing the return of income, the assessee has shown Long term capital gains (LTCG) of Rs 8,10,79,859/- on sale of shares of Radford Global Ltd. ("Radford") and Blazon Marble Ltd. ("Blazon") which have been claimed to be exempt u/s.10(38) of the Act. Details of such LTCG are as under:- Sr. No. (1) Name of the Company (2) No. of Shares purchased (3) Date of Purchase (4) Purchase Amount (In. Rs.) (5) 1 "Blazon" 97000 26.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. 4.3. The ld. AO issued a show cause notice to the assessee wherein he sought to deny the claim of exemption u/s 10(38) of the Act treating the transactions as bogus and merely accommodation entries and also adding some commission on an estimated basis thereon. In response to the said notice, the assessee furnished a detailed written submission vide letter dated 05/12/2017 and gist of those submissions were summarized by the ld. AO as under:- a. The assessee denies that any operator has approached him directly or indirectly. Securities and Exchange Board of India (SEBI in short) has investigated the allotment of preference shares by Radford Global Ltd, and has not found any adverse evidence/findings relating to the assessee. The shares of the said company were traded on the floor of the stock exchange and all the transactions were in the knowledge of stock exchange. b. The so-called price rigging in the shares of Blazon Marble Ltd. was never in the knowledge of the assessee The shares of the said company were traded on the floor of the stock exchange and all the transactions were in the knowledge of stock exchange. c. From the computation of the capital gains in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating to security market) Regulations, 2003 in the case of Radford Global Ltd. j. It is known fact and a practice in general that whenever a person subscribes to an IPO, the investment is not done before perusing any financials. The investment is based purely upon market hear say. The assessee admits of having invested in the company inspite of weak financials but at the same time it needs to be appreciated that share market is known for fetching returns when the stock is weak and price & volume is bleak. It is therefore known as Market of Opportunities. k. During the course of search action not an inch of paper was found to suggest that the assessee has any unaccounted source of income to buy long term capital gains from accommodation providers. No evidence was found to show that the investment in Blazon Marble Ltd or Radford Global Ltd was bogus or in the nature of accommodation. The search action is the ultimate tool available with the department to discover evidence of unaccounted transaction and unaccounted assets. If in a search action no evidence was found of any wrong doing by an assessee, to bring to tax a genuine transaction by treating it as bogus based on assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount of Rs 50,46,247/- on account of unexplained commission expenditure incurred u/s 69C of the Act at the rate of 6% of sale proceeds of Rs 8,41,04,109/- on the following reasons:- 15. CONCLUSION :- 15.1 The following points summarise that Blazon Marbles Ltd. & Radford Global Ltd. are bogus penny stock companies: * The business profile and financials of Blazon Marbles Ltd. & Radford Global Ltd. show that the company was not engaged into any substantial activity, esp. when the preferential shares were allotted. It is also seen that the company was not having any future plans which could attract investors from all over India to invest in the company. * The whole process of preferential allotment was a prearranged and managed process so as to allot preferential shares to beneficiaries of bogus LTCG/STCG. * The reported profits were also not commensurate with the price rise. The shares were rigged on the Stock Exchange. The price of Blazon Marbles Ltd. & Radford Global Ltd. has moved in absolute disregard to the general market sentiments. * Various share brokers have confirmed the fact that the shares of Blazon Marbles Ltd. & Radford Global Ltd. have been used for pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthenticated proof to show that Long term capital gains booked by assessee in his books were pre-arranged method to evade taxes and launder money which can be summarized as follows: a. Failure of Assessee to discharge his onus: assessee has been unable to provide any explanation or rationale behind the preferential/off-market allotment/purchase of the shares of the said penny stock. The assessee has not been able to prove the unusual rise and fall of share prices to be natural and based on the market forces. It is evident that such share transactions were closed circuit transactions and clearly structured one. b. Ignorance of the assessee about shares and penny stock companies: Assessee has failed to show of having any knowledge about the shares traded and having any knowledge about the fundamentals of the penny stock companies. Assessee is unable to satisfactorily explain the reasoning behind off-market acquisition of the shares of the said bogus company which lack any fundamentals, which he has never visited, whose promoters/directors she has never met, whose meetings she has not attended and whose business activities also are not known to him. c. Financial analysis of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for arranging the accommodation entries. 15.5.2 In view of the above facts it is crystal clear that the assessee utilized his unaccounted cash to obtain the above said bogus LTCG. Since it has been admitted by various accommodation entry providers that for providing accommodation entries in the nature of bogus LTCG they charge a commission ranging from 4% to 6%, it is logical that the assessee also paid commission in cash to the accommodation entry providers. In light of the above facts and evidences, the said alleged LTCG and claim of exemption u/s 10(38) is hereby rejected." 15.6.1.In the light of the facts & discussion in the preceding paragraphs, I am of the opinion that the transactions of purchase & sale of 97000 shares of Blazon Marble Ltd & 1000000 shares of Radford Global Ltd leading to generation of exempt long term capital gains are not genuine transactions. The transactions in the shares of Blazon Marble Ltd & Radford Global Ltd were purely operator driven where the share price was pushed up to a level by the operator where the beneficiary who bought the shares at a nominal price sold it to a dummy paper company of the operator and generated huge exempt long term ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital Gain. 7.35. In light of the above discussion, the claim by the assessee that the addition has been made merely on presumption and without any evidence is not found acceptable. The reliance placed by the AO on the decisions in case of SumatiDayal (supra) and Durga Prasad More 82 ITR 540 (SC)is found correct. In Sumati Dayal, the Hon'ble Supreme Court has discounted the existence of well-maintained documentation as against the normal human behaviour and preponderance of probability in certain case. The appellant"s case indeed falls within the same parameters. Instead of explaining the plausibility of the transaction, the appellant has merely harped on the technicalities and his impeccable documentation. In light of the improbable nature of transaction of the appellant, the AO has correctly rejected the plea of correct documentation to hold that the appellant has failed to meet the onus cast u/s 68 and that the credits in the books remain unexplained. He has rightly treated the amount as the income of the appellant under section 68 of the Act. 7.36. In light of the above discussion, it is held that the amounts credited in the books of the assessee as long-term capital gains d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its share prices were artificially rigged ; that investigations prove that cash is routed through various accounts to provide these bogus long term capital gain entries. The ld. AO by making these observations proceeded to treat the sale proceeds of the shares as unexplained cash credit u/s 68 of the Act. Since the receipt of sale proceeds was treated as bogus, the ld. AO also proceeded to add estimated commission @ 2% for arranging the said bogus transaction as unexplained expenditure u/s 69C of the Act. 5.1. At the outset, we find that the documentary evidences submitted by the assessee were found to be genuine and no adverse inferences were drawn by the revenue on the same. The transactions were carried out by the assessee in the secondary market through a registered share broker at the prevailing market prices. Payments were received by the assessee by account payee cheques from the stock exchange through the registered broker. Amounts received on sale of shares were duly subjected to levy of Securities Transaction Tax (STT) at the applicable rates. 5.2. We find that no enquiries were carried out by the revenue either on the broker or with the stock exchange with regard to tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the documents furnished by the assessees. Therefore, the fact that some of the transactions were off-market transactions could not be a ground to treat the transactions as sham transactions. On a perusal of those documentary evidences, the Tribunal had arrived at a finding of fact that the transactions were genuine. Nothing was brought to notice of the Court that the findings recorded by the Tribunal were contrary to the documentary evidences on record. Therefore, no substantial question of law arose from the order of the Tribunal. 5.5. We find that independent enquiries were conducted by SEBI and SEBI had passed an interim order dated 19/12/2014 in the case of Radford Global Ltd , wherein the assessee and Radford Global Ltd were restrained from accessing the securities market, either directly or indirectly in any manner whatsoever, till the final investigation by SEBI is completed. After completion of the final investigation, SEBI had passed a final order dated 20/09/2017 in the case of Radford Global Ltd clearly acquitting 82 persons which admittedly included the assessee and the company Radford Global Ltd on the plea that they were not involved in artificial price rigging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y SEBI. The said order of SEBI does not allege any involvement of the assessee herein with the manipulation of share prices. 5.6. We find that the assessee had held the shares in the instant case for 33 months in the case of Blazon Marbles Ltd and for 15 to 17 months in the case of Radford Global Ltd and then sold the shares in the open market at prevailing market prices. From the above order of SEBI , it is very clear that SEBI, based on its investigations and replies given by various parties, had ordered either to take action against certain parties or had acquitted certain parties on the ground that they are not involved in the price manipulation. In any case, the assessee"s name or the broker, through whom assessee transacted had not figured in the said list either in the restraint list or in the acquitted list. Hence it could be safely concluded that the assessee herein is merely a gullible investor, who had resorted to make investment in the shares of Radford Global Ltd and Blazon Marbles Ltd based on market information and had sold the shares in the secondary market in prevailing market prices. It is not the case of the revenue that assessee herein had directly sold the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee herein and hence whomsoever had dealt in this scrip, would only result in bogus claim of long term capital gain exemption or bogus claim of short term capital loss. Merely because a particular scrip is identified as a penny stock by the income tax department, it does not mean all the transactions carried out in that scrip would be bogus. So many investors enter the capital market just to make it a chance by investing their surplus monies. They also end up with making investment in certain scrips (read penny stocks) based on market information and try to exit at an appropriate time the moment they make their profits. In this process, they also burn their fingers by incurring huge losses without knowing the fact that the particular scrip invested is operated by certain interested parties with an ulterior motive and once their motives are achieved, the price falls like pack of cards and eventually make the gullible investors incur huge losses. In this background, the only logical recourse would be to place reliance on the orders passed by SEBI pointing out the malpractices by certain parties and taking action against them. Since assessee or his broker is not one of the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out by the assessee as bogus. In our considered opinion, the ld. AO is expected to conduct independent verification of the matter before reaching to the conclusion that the transactions of the assessee are bogus. More importantly, it is bounden duty of the ld. AO to prove that the evidences furnished by the assessee to support the purchase and sale of shares as bogus. This view of ours is further fortified by the decision of Hon'ble Delhi High Court in the case of PCIT vs Laxman Industrial Resources Ltd in ITA No. 169/2017 dated 14/03/2017. It is well settled that the suspicion however strong could not partake the character of legal evidence. Hence the greater onus is casted on the revenue to corroborate the impugned addition by controverting the documentary evidences furnished by the assessee and by bringing on record cogent material to sustain the addition. No evidence has been brought on record to establish any link between the assessee herein with the entry operators who were allegedly involved in price rigging of shares artificially or any other person named in the assessment order being involved in any price rigging and also the exit provider. This onus is admittedly not dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 of Sagar Trade Pvt Ltd. and Rockey Marketing Pvt. Ltd. respectively. Out of these two, only Rockey Marketing Pvt.Ltd. is listed in the appraisal report and it is stated to be involved in the modus-operandi. It is on this material that he holds that the transactions in sale and purchase of shares are doubtful and not genuine. In relation to Assessee's role in all this, all that the Commissioner observed is that the Assessee transacted through brokers at Calcutta, which itself raises doubt about the genuineness of the transactions and the financial result and performance of the Company was not such as would justify the increase in the share prices. Therefore, he reached the conclusion that certain operators and brokers devised the scheme to convert the unaccounted money of the Assessee to the accounted income and the present Assessee utilized the scheme. 6. It is in that regard that we find that Mr.Gopal's contentions are well founded. The Tribunal concluded that there was something more which was required, which would connect the present Assessee to the transactions and which are attributed to the Promoters/Directors of the two companies. The Tribunal referred to the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning to the shares were already on record. This question is also a fall out of the issue or question dealt with by the Tribunal and pertaining to the addition of Rs.25,93,150/-. Barring the figure of loss that is stated to have been taken, no distinguishable feature can be or could be placed on record. For the same reasons, even this additional question cannot be termed as substantial question of law. 5.12. We find that the ld. CIT(A) relied on the decision of Hon'ble Delhi High Court in the case of Suman Poddar vs ITO reported in 112 taxmann.com 329 dated 17/09/2019 where the decision was rendered in favour of the revenue. The Special Leave Petition filed by the assessee before the Hon'ble Supreme Court in this case was dismissed by the Hon'ble Apex Court vide its order dated 22/11/2019. But we find that there is yet another decision of Hon'ble Delhi High Court in the case of PCIT vs Krishna Devi and others in ITA 125/2020 ; 130 & 131/2020 dated 15/01/2021 reported in 126 taxmann.com 80 (Delhi HC) wherein similar issue of penny stock vis a vis long term capital gain exemption u/s 10(38) of the Act was subject matter of adjudication, in favour of the assessee. This decision render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. We do notice that the AO made an attempt to delve into the question of infusion of Respondent's unaccounted money, but he did not dig deeper. Notices issued under sections 133(6)/131 of the Act were issued to M/s Gold Line International Finvest Limited, but nothing emerged from this effort. The payment for the shares in question was made by Sh. Salasar Trading Company. Notice was issued to this entity as well, but when the notices were returned unserved, the AO did not take the matter any further. He thereafter simply proceeded on the basis of the financials of the company to come to the conclusion that the transactions were accommodation entries, and thus, fictitious. The conclusion drawn by the AO, that there was an agreement to convert unaccounted money by taking fictitious LTCG in a pre-planned manner, is therefore entirely unsupported by any material on record. This finding is thus purely an assumption based on conjecture made by the AO. This flawed approach forms the reason for the learned ITAT to interfere with the findings of the lower tax authorities. The learned ITAT after considering the entire conspectus of case and the evidence brought on record, held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h basis, the ITAT had returned the finding of fact against the Assessee, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix at hand. Similarly, the case of Sumati Dayal (supra) too turns on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue. 13. The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order. 14. In this view of the matter, no question of law, much less a substantial question of law arises for our consideration. 15. Accordingly, the present appeals are dismissed. (emphasis supplied by us) 5.13. We find that the ld. CIT(A) relied on the decision of Nagpur Bench of Hon'ble Jurisdictional High Court in the case of Sanjay Bimalchand Jain vide order dated 10/04/2017 reported in 89 taxmann.com 196 which is against assessee. In this regard, we find that in the facts of Sanjay Bima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elaborate decision rendered after considering various decisions of various High Courts on the subject. In the said decision, it was held that assessee had to establish the genuineness of rise of price of shares within a short period of time that too when general market trend was recessive. But we find that when there are several decisions of Hon'ble Jurisdictional High Court as stated supra are already in favour of the assessee, the same would prevail over this tribunal and this tribunal need not take cognizance of the Hon'ble Non-Jurisdictional High Court. The law is very well settled by the Hon'ble Supreme Court in the case of Union of India vs Kamalakshi Finance Corporation Ltd reported in 55 ELT 43 (1991) that the decision of Hon'ble Jurisdictional High Court would have higher precedence value than the decision of Hon'ble Non-Jurisdictional High Court on the Tribunal. The Hon'ble Supreme Court emphasised therein that the orders of the Tribunal should be followed by the authorities falling within its jurisdiction so that judicial discipline would be maintained in order to give effect to orders of the higher appellate authorities. The Hon'ble Apex Court has observed that utmost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Yogesh Thakkar - ITA No. 1612/Mum/2021 - Asst Year 2015-16 - Assessee Appeal 9. Though the assessee has raised several grounds before us, we find that the effective issue to be issued in this appeal is as to whether the ld. CIT(A) was justified in confirming the action of the ld.AO in denying the exemption claimed u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of Greencrest Financial Services Ltd and PS IT Infrastructure & Services Ltd, in the facts and circumstances of the case. The inter connected issue involved therein to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the addition made on account of estimated commission expenditure as unexplained u/s 69C of the Act in the facts and circumstances of the case. 10. The brief facts of this issue are that the assessee is an individual and working as director/partner in certain company/partnership firms and also engaged in trading of shares. The return of income for the A.Y. 2015-16 was e-filed u/s.139(1) of the Act on 30/09/2015 showing total income of Rs 5,18,60,550/-. Subsequently, search u/s.132 of the Act was carried out by the Department on 09/04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and Parag Shilpa was subsequently renamed "PS IT Infrastructure & Services Ltd." or PS IT in short. These shares were sold during the F.Y.2014-15 after holding for a period of 2 years. For both the shares, the payments for purchase of shares were made by the assessee by account payee cheques out of sources duly disclosed in the books of accounts. 10.2. The ld. AO in the assessment framed u/s 143(3) r.w.s 153A of the Act in the same manner by making the same observations as was done in A.Y. 2014-15 in the case of the assessee herein by treating the sale proceeds of shares of Rs 5,32,06,356/- as unexplained cash credit u/s 68 of the Act and an estimated commission expenditure of Rs 31,92,381/- (53206356 *6%) as unexplained u/s 69C of the Act at the rate of 6% of sale proceeds of shares. 10.3. When the appeal was pending before the ld. CIT(A) , SEBI had passed an order u/s 11(1), 11(4) and 11B(1) of SEBI Act, 1992 dated 05/06/2020 in the case of Greencrest Financial Services Ltd and PS IT Infrastructure Services Ltd, wherein certain parties were debarred for a period of 3 years from accessing the securities market and were further prohibited from buying, selling or otherwise deali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices Ltd in the facts and circumstances of the case. The inter connected issue involved therein to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the addition made on account of estimated commission expenditure as unexplained u/s 69C of the Act in the facts and circumstances of the case. 15.1. The brief facts of this issue are that the assessee is an individual and working as partner in partnership firm of M/s Thakkar Exims. The return of income for the A.Y. 2015-16 was e-filed u/s.139(1) of the Act on 29/09/2015 showing total income of Rs 1,13,96,030/-. In the said return of income, the assessee has shown Long term capital gains (i.e. LTCG) of Rs 3,30,97,819/- after indexation on sale of shares of Greencrest Financial Services Ltd. ("Greencrest") which have been claimed to be exempt u/s.10(38). Details of such LTCG are as under:- Particulars Amount (Rs) 1) Marigold Glass Industries Ltd. (Greencrest Financial Service Ltd.) Sale consideration 5,40,000 share sold on various dates 3,38,76,636 Less: Indexed Cost of acquisition: (Purchased on 06.02.2013) Purchase co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the ld. AO in the same manner as was done by him in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove. 16. We have heard the rival submissions and perused the materials available on record. The findings given by us hereinabove for the A.Y. 2015-16 in the case of Shri Yogesh Thakkar shall apply mutatis mutandis to assessee herein for A.Y. 2015-16 also. Accordingly, the Ground Nos. 1 & 2 raised by the assessee are allowed. 17. The Ground No. 3 raised by the assessee is challenging the levy of interest u/s 234B and 234C of the Act, which would be consequential in nature and does not require any specific adjudication. 18. The Ground No. 4 raised by the assessee is challenging the initiation of penalty proceedings u/s 271(1) (c ) of the Act, which would be premature for adjudication at this stage. Hence dismissed. 19. In the result , the appeal of the assessee Smt Nisha Yogesh Thakkar in ITA No. 1607/Mum/2021 for A.Y. 2015-16 is partly allowed . Smt Harsha Nitin Thakkar - ITA No. 1606/Mum/2021 - Asst Year 2013-14 - Assessee Appeal 20. The Ground No. 1 challenging the validity of reassessment proceedings was stated to be not pressed by the ld. AR at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary 2013 for a consideration of Rs 3,49,88,324/- after holding for a period of 15 months and balance share holding remains unsold as on 31/03/2013. The payment for purchase of shares was made by the assessee by account payee cheques out of sources duly disclosed in the books of accounts. 21.3. The ld. AO in the assessment framed u/s 143(3) r.w.s 147 of the Act in the same manner by making the same observations as was done in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove by treating the sale proceeds of shares of Rs 3,49,88,324/- as unexplained cash credit u/s 68 of the Act and an estimated commission expenditure of Rs 20,99,300/- (34988324 *6%) as unexplained u/s 69C of the Act at the rate of 6% of sale proceeds of shares. 21.4. When the appeal was pending before the ld. CIT(A) , SEBI had passed an order u/s 11(1), 11(4) and 11B(1) of SEBI Act, 1992 dated 31/12/2018 in the case of Confidance Finance and Trading Ltd, wherein certain parties were debarred from accessing the securities market and were further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derived from sale of shares of Confidance Finance and Trading Ltd in the facts and circumstances of the case. The inter connected issue involved therein to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the addition made on account of estimated commission expenditure as unexplained u/s 69C of the Act in the facts and circumstances of the case. 27.1. The brief facts of this issue are that the assessee is an individual and working as director in Thakkar Popatlal Velji Sales Ltd. The return of income for the A.Y. 2014-15 was originally e-filed on 31/07/2014 showing total income of Rs 1,02,15,260/-. The assessment was originally completed u/s.143(1) on 04/03/2016 determining total income of Rs 1,02,15,260/-. Subsequently, the assessment was sought to be reopened vide issuance of notice u/s 148 of the Act on 22/12/2016. In response to the said notice u/s.148 of the Act, the assessee e-filed her return of income on 05/01/2017 showing total income of Rs 1,02,15,260/- which was same as assessed u/s.143(1) of the Act. In the said return of income, the assessee has shown Long term capital gains (i.e. LTCG) of Rs 2,65,74,138/- on sale of certain shares w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Mr Manoj Kumar Naginlal Jain 3 Mr Amruth Jaochim Coutinho 4 Mr Lalitkumar Roshanlal Maroo 5 Ms.Swati Panchal 27.4.1. In the said list of persons who were debarred, the name of the assessee or its registered share broker was not reflected. Accordingly, it was pleaded before the ld. CIT(A) that even as per SEBI investigation and its order dated 31/12/2018, the assessee cannot be stated to be involved in artificial price rigging of shares. 27.5. The ld. CIT(A) however did not heed to the contentions of the assessee and proceeded to confirm the order of the ld. AO in the same manner as was done by him in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove. 28. We have heard the rival submissions and perused the materials available on record. The findings given by us hereinabove for the A.Y. 2015-16 in the case of Shri Yogesh Thakkar shall apply mutatis mutandis to assessee herein for A.Y. 2014-15 also. Accordingly, the Ground Nos. 2 & 3 raised by the assessee are allowed. 29. The Ground No. 4 raised by the assessee is challenging the levy of interest u/s 234B and 234C of the Act, which would be consequential in nature and does not require any specific adjudication. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , brief details of which are as under:- No. of shares Sale of shares Cost of shares LTCG (` ) Date Sale price Date Cost 1,60,000 Various dates 5,09,01,939 28-9-2011 24,00,000 4,85,01,939 33.2. The assessee was allotted 200000 shares of "Confidance" on 27/09/2011 at a face value of Rs 10/- and premium of Rs.5/- per share on preferential basis and consideration paid thereon was Rs 30,00,000/-. These shares were duly dematted by the assessee. Out of these shares, she sold 160000 shares during the month of January and February 2013 for a consideration of Rs 5,09,01,939/- after holding for a period of 15 months. The payment for purchase of shares was made by the assessee by account payee cheques out of sources duly disclosed in the books of accounts. 33.3. The ld. AO in the assessment framed u/s 143(3) r.w.s 147 of the Act in the same manner by making the same observations as was done in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove by treating the sale proceeds of shares of Rs 5,09,01,939/- as unexplained cash credit u/s 68 of the Act and an estimated commission expenditure of Rs 30,54,120/- (50101939 *6%) as unexplained u/s 69C of the Act at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to be issued in this appeal is as to whether the ld. CIT(A) was justified in confirming the action of the ld.AO in denying the exemption claimed u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of Confidance Finance and Trading Ltd and PS IT Infrastructure & Services Ltd in the facts and circumstances of the case. The inter connected issue involved therein to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the addition made on account of estimated commission expenditure as unexplained u/s 69C of the Act in the facts and circumstances of the case. 38.1. The brief facts of this issue are that the assessee is an individual and working as director / partner in certain company / firms. The return of income for the A.Y. 2014-15 was originally e-filed u/s.139(1) of the Act on 30/09/2014 showing total income of Rs 2,19,32,605/- which was processed u/s 143(1) of the Act accepting the returned income. In the said return of income, the assessee has shown Long term capital gains (i.e. LTCG) of Rs 1,73,13,488/- on sale of certain shares which have been claimed to be exempt u/s.10(38). Such LTCG have been earned on sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11(1), 11(4) and 11B(1) of SEBI Act, 1992 dated 31/12/2018 in the case of Confidance Finance and Trading Ltd, wherein certain parties were debarred from accessing the securities market and were further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner. In the said order, SEBI had disposed of the show cause notices issued to the following persons without any directions :- Noticee No. Name of the Noticee 1 Confidance Finance and Trading Ltd 2 Mr Manoj Kumar Naginlal Jain 3 Mr Amruth Jaochim Coutinho 4 Mr Lalitkumar Roshanlal Maroo 5 Ms.Swati Panchal 38.4.1. In the said list of persons who were debarred, the name of the assessee or its registered share broker was not reflected. 38.4.2. Similarly in respect of scrip of PS IT Infrastructure Services Ltd, when the appeal was pending before the ld. CIT(A) , SEBI had passed an order u/s 11(1), 11(4) and 11B(1) of SEBI Act, 1992 dated 05/06/2020 in the case of PS IT Infrastructure Services Ltd, wherein certain parties were debarred for a period of 3 years from accessing the securities market and were further prohibited from b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he brief facts of this issue are that the assessee is an individual and working as director / partner in certain company / firms. The assessee e-filed his return of income for the A.Y. 2015-16 on 11/03/2016 showing total income of Rs 11,89,070/- which was duly processed u/s 143(1) of the Act accepting the returned income. In the said return of income, the assessee has shown Long term capital gains (LTCG) of Rs 2,75,97,092/- on sale of shares of PS IT Infrastructure & Services Ltd. ("PS IT") and the same have been claimed to be exempt u/s.10(38). Details of such LTCG on sale of the shares of "PS IT" are as under:- Scrip "PS IT" No. of shares 95,000 (i.e. 45,000 + 50,000) Sale price Purchase Price Transfer Expenses Exempt u/s.10(38) 2,80,97,839 5,00,000 747.20 2,75,97,092 43.2. The assessee purchased 50000 shares of face value of Rs 10/- of Crescent Digital Technologies Pvt. Ltd. (i.e. "Crescent") from Unisys Softwares & Holding Industries Ltd. on 12/06/2012 for consideration of Rs 5,00,000/- which was paid by account payee cheque in off-market. Thereafter, the company "Crescent" alongwith Swift IT Infrastructure & Services Ltd. got amalgamated with Parag Shilpa Investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res. 43.5. The ld. CIT(A) however did not heed to the contentions of the assessee and proceeded to confirm the order of the ld. AO in the same manner as was done by him in A.Y. 2015-16 in the case of Shri Yogesh Thakkar hereinabove. 44. We have heard the rival submissions and perused the materials available on record. The findings given by us hereinabove for the A.Y. 2015-16 in the case of Shri Yogesh Thakkar shall apply mutatis mutandis to assessee herein for A.Y. 2015-16 also. Accordingly, the Ground Nos. 1 & 2 raised by the assessee are allowed. 45. The Ground No. 3 raised by the assessee is challenging the levy of interest u/s 234B and 234C of the Act, which would be consequential in nature and does not require any specific adjudication. 46. The Ground No. 4 raised by the assessee is challenging the initiation of penalty proceedings u/s 271(1) (c) of the Act, which would be premature for adjudication at this stage. Hence dismissed. 47. In the result , the appeal of the assessee Shri Dineshchandra D Chhajed in ITA No. 1611/Mum/2021 for A.Y. 2015-16 is partly allowed . 48. To sum up, all the appeals of the assessee are partly allowed. Order pronounced on 03/02/2023 by way ..... 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