9911796707
TMI Blog2023 (3) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... hese Appeals involve similar issues, they are being disposed of by this common order, by treating Tax Appeal No.520 of 2022 as lead matter. 2. The revenue has proposed the following questions of law for the consideration of this Court : (a) Whether on the facts and in the circumstances of the case, learned ITAT has erred in law and on facts in quashing the reassessment proceedings under Section 147 without considering the fact that at the stage of issuance of notice u/s.148, the assessing officer had sufficient tangible material at his command to form a bonafide belief that the income of the assessee has escaped assessment for AY 2013-14? (b) Whether on the facts and in the circumstances of the case, learned ITAT has erred in law and on facts in not deciding the case on merits i.e. without appreciating the facts of the case and the cogent material and circumstantial evidences gathered by the Assessing Officer during the case of assessment proceedings ? 3. We have heard Mr.Vaun K. Patel, learned Standing Counsel appearing for the revenue and have perused the material produced on record in detail. We have also perused the order dated 29.11.2021 passed by the ITAT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Capital Gain on sale of shares at Rs. 17,56,592/- and claimed the same as exempt u/s 10(38) of the Act. Based upon the analysis from different sources as well as from the findings of the Investigation Wing that has carried out Search/Survey on the entry operators it was observed by him that entry in form of bogus LTCG through sale of penny stock claimed as exempt u/s. 10(38) of the Act was pre-arrange method adopted by the assessees to evade capital gain taxation. In the present case, the appellant has purchased 15,000 shares of M/s. Global Securities Ltd. on 01.11.2011 for Rs.18,750/-. The said 15,000 shares were sold between January, 2013 and February, 2013 for rates between Rs. 8.06/- to Rs. 156.50/- for a total consideration of Rs. 17.56,592/-. The main arguments of the Assessing Officer were that (i) the assessee was not in a position to give any satisfactory explanation regarding physical delivery of shares and transaction slips of transfer of shares either at the time of assessment proceedings or during the course of appellate proceedings (ii) Financial health of M/s. Global Securities Ltd. did not improve to an extent to have spiraled the price of shares many times within a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en able to adduce cogent evidences in this regard. There is no economic or financial justification for the sale price of these shares. The so called purchaser of these shares has not been identified despite efforts of the AO. The broker company through which shares were sold did not respond to queries in this regard. Hence the fantastic sale price realization is not at all humanly probable, as there is no economic or financial basis, that a share of little known company would jump abnormally. In these circumstances, I do not find any infirmity in the order of the AO. Accordingly I affirm the same and decide the issue against the assessee respectfully following the above decisions. Considering the facts of the case, I have no hesitation in holding that the transactions in purchase and sell of shares of M/s Global Securities Ltd. for Rs. 17.56,592/- were sham transactions intended to claim wrong exemption u/s 10(38) of the Income-tax Act and, therefore, I uphold the addition of Rs 17.56.592/- made by the Assessing Officer. This Ground of appeal (on merits) is also dismissed. 6.0 The next issue regarding payment of commission paid to the entry operator/ broker for arranging the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated in the share certificate being registered on 30.10.2012. Regarding the escalation of prices of shares of M/s Sun Shine Worldwide Ltd., that is, the prices have increased by 140 times over the period of 17 months. At this juncture, it is submitted by ld Counsel that prices of shares are determined by the market forces and not solely on the basis of financial statements. 24. We also note that Assessing officer and CIT(A) has relied on the case of Sumati Dayal vs. CIT (214 ITR 801) (SC). We are of the view that said decision is not applicable to the assessee under consideration, as the assessee has successfully demonstrated with help of evidences on record to have made the transaction of purchase and sale of alleged shares. No single material was brought on record indicating name of any of the entry provider taking assessee's name or assessee's broker name. We note that assessee has submitted enough evidences such as: (a) Ledger Account of Jainam Share Consultancy Securities Pvt. Ltd, (b) Contract Notes of Jainam Share Consultancy Securities Pvt. Ltd. (c) Relevant Bank Statement showing that all transactions were through banking channel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, which in our considered opinion has no legs to stand and therefore has to fall. We take note that Id. DR could not controvert the facts which are supported with material evidences furnished by the assessee. We note that the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore consequently fail. At the cost of repetition, we note that the assessee had furnished all relevant evidences in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. Neither these evidences were found by the AO nor by the Id. CIT(A) to be false or fictitious or bogus. The facts of the case and the evidences clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee exempted u/s 10(38) of the Act on the basis of suspicion, surmises and conjectures. It is to be kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence. In the aforesaid facts and circumstance, for al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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