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TMI Blog2019 (6) TMI 1698X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee suggesting bogus STCL accommodation entries There is not even a single case which could pin-point any making against these assessees which could be taken as a revenue nexus. CBDT s circular dated 10.03.2003 has itself made it clear that mere search statements in the nature of admission in absence of supportive material do not carry weight. Coupled with this, hon ble jurisdictional high court s other decisions in CIT vs. Rungta Properties Pvt. Ltd. [ 2017 (6) TMI 521 - CALCUTTA HIGH COURT] , CIT vs. Shreyahi Ganguly [ 2012 (9) TMI 1113 - CALCUTTA HIGH COURT] , M/s Classic Growers Ltd [ 2013 (2) TMI 825 - CALCUTTA HIGH COURT] also hold such transactions in scrips supported by the corresponding relevant evidence to be genuine. We adopt the above extracted reasoning mutatis mutandis therefore to delete the impugned STCL disallowance / addition. Unexplained commission expenditure disallowance, if any shall automatically follow suit as a necessary corollary. Assessee appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... . The deliveries were received and given through depository account and the payments were made through banking channels. All the transactions are duly supported by credible evidences in no defect has been found in such documents. The submission made by the appellant was considered. The assessment order of the A.O. was based on the report of the DIT (Inv.). The Investigation Wing of the Department had come out with a comprehensive report on the racket of providing accommodation entries in the form of long term capital gains/ losses by certain unscrupulous elements who had rigged the share price of certain scripts. The report pointed out to the suspicious transactions in the scripts of certain companies with a objective of tax avoidance. The Investigation Wing identified a total of 84 listed companies, 5000 paper companies and 25 entry operators involved in this racket. The statements of the operators were recorded in which they accepted of the rigging the price of the shares and managing the market to bring desirable results which suited their clients. These operators also accepted that they were doing this only for a paltry commission of 50 paisa to 1 rupees per Rs.I00 The A/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al years, the value of shares of the company had witnessed a downward spiral. Secondly the share prices of M/s Unno Industries Ltd, are not in symmetry with the markets. It is a common knowledge, that when stocks are headed into a bull market cycle, the trend can be detected by a price rise, but when stocks are headed into a bear cycle, the trend can be detected by falling prices. The shares of M/s Unno Industries Ltd, mysteriously followed a reverse trend from the markets. In the period 2016 to 2018 when the Sensex witnessed a historic high, the shares of the company were at an all time low. The above findings, fortifies the findings of the Investigation Wing and the AO, that the transactions in shares were bogus and the share prices were rigged. This volatility in the share price of the M/s Unno Industries Ltd also came to the attention of SEBI. Based on the report of SEBBI, the Bombay Stock Exchange had suspended trading in shares of M/s Unno Industries Ltd for a certain period. The notification from SEBI is reproduced as under:- "Home Market Market Info Notices & Circulars Notices Go Back Notice No.20160504- 17 Notice Date 04 May 2016 Category Company related Segment Equi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re May 20, 2016; then:- Trading in the securities of the companies would be suspended we! May 26, 2016, and the suspension will continue till such time the Company complies including payment of fines, 15 days after suspension has been effected, trading in the shares of non-compliant companies would be allowed on trade for Trade basis in Z group only on the first trading day of every week for six months/. Revocation of suspension would be subject to the companies further complying with the procedure and all extant norms prescribed for revocation of suspension." The BSE notification specially mentions that trading in shares of M/s Unno Industries Ltd is presently suspended due to Surveillance measures wet March 31, 2016 vide provisions of Exchange Notice no, 20160328-15 dated March 28,2016. The SEBI Circular and BSE Notification have raised doubts on the genuineness of the share price of M/s Unno Industries Ltd. The analysis of the share price of M/s Luminaire Technologies revealed similar trend as follows: March-10 5.20 5.20 Nov-11 15.65 July-12 39.80 April-13 53.85 Dec-13 46.50 June-14 26.35 Nov-14 1.40 Aug-16 0.20 The sharp fluctuation in price o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that there is very strong circumstantial evidence against the assessee suggesting bogus STCL accommodation entries. I find that there is not even a single case which could pin-point any making against these assessees which could be taken as a revenue nexus. I make it clear that the CBDT's circular dated 10.03.2003 has itself made it clear that mere search statements in the nature of admission in absence of supportive material do not carry weight. I notice that this tribunal's coordinate bench's decision in ITA No. 2474/Kol/2018 in Mahavir Jhanwar vs. ITO decided on 01.02.2019 has taken into consideration identical facts and circumstances as well as latest developments on legal side whilst deleting the similar bogus LTCG addition as follows:- "2. The sole issue that arises for my adjudication is whether the Assessing Officer was right in rejecting the claim of the assessee that he had earned Long Term Capital Gains on purchase and sale of the shares of M/s Unno Industries. The AO based on a general report and modus operandi adopted generally and on general observations has concluded that the assessee has claimed bogus long term capital gain. He made an addition of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue, are listed below:- Sl. No. ITA Nos. Name of the Assessee Date of order/judgment 1 ITA No.714 to 718/Kol/2011 ITAT, Kolkata DICT vs. Sunita Khemka 28.10.2015 2 214 ITR 244 Calcutta High Court CIT vs. Carbo Industrial Holdings Ltd. 3 250 ITR 539 CIT vs. Emerald Commercial Ltd. 23.03.2001 4 ITA No.1236-1237/Kol/2017 5 ITA No.569/Kol/2017 Gautam Pincha 15.11.2017 6 ITA No.443/Kol/2017 Kiran Kothari HUF 15.11.2017 7 ITA No.2281/Kol/2017 Navneet Agarwal vs. ITO 20.07.2018 8 ITA No.456 of 2007 Bombay High Court CIT vs. Shri Mukesh Ratilal Marolia 18.01.2018 9 . ITA No.95 of 2017 (O&M) PCIT vs. Prem Pal Gandhi 18.01.2018 10 ITA No.1089/Kol/2018 Sanjay Mehta 28.09.2018 6. Regarding the case laws relied upon by the ld. Departmental Representative, I find that, in the case of M/s. Pankaj Agarwal & Sons (HUF)(supra), the issue was decided against the assessee for the reason that, the assessee could not justify his claim as genuine by producing evidence and was only arguing for the matter to be set aside to the lower authorities on the ground of natural justice. As similar arguments were not raised before the lower autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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