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TMI Blog2023 (5) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... erms observed that the sale consideration of 3000 shares of CCL international Ltd. of Rs.5.40 lac, was infact the routing back of the undisclosed fund of the assessee through the medium of transaction of sale of shares, therefore, it can safely; or in fact inescapably be concluded that the same was the assessee s unexplained money u/s.69A of the Act, which it had received back through banking channel in the form of sale consideration of the said shares. Thus, the Ground of appeal raised by the assessee being devoid and bereft of any merit is dismissed in terms of my aforesaid observations. - ITA No.190/RPR/2018, ITA No.191/RPR/2018, ITA No.192/RPR/2018, ITA No.193/RPR/2018 - - - Dated:- 12-5-2023 - Shri Ravish Sood, Judicial Member For the Assessee : Shri R.B Doshi, CA For the Revenue : Shri Piyush Tripathi, Sr. DR ORDER PER RAVISH SOOD, JM The present appeals filed by the captioned assessee s are directed against the respective orders passed by the Commissioner of Income-Tax (Appeals)-1, Raipur dated 06.07.2018, which in turn arises from the orders passed by the A.O in their cases under Sec.143(3) of the Income-tax Act, 1961 (in short the Act ) dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsive verifications, viz. (i). verification of the purchase/sale transaction of shares by the assessee during the year which revealed that it had transacted in only one scrip, i.e. CCL International Ltd.; (ii). referring to the investigation carried out by the Directorate of Investigation, Kolkata which had unearthed an organized racket of generating bogus entries of LTCG; (iii). referring to the modus-operandi that was adopted by the operators/exit-providers a/w. brokers of penny stock companies for providing accommodation entries of LTCG/STCG; (iv). referring to the order of the SEBI which revealed the modus-operandi that was adopted by certain persons for manipulating the market in order to generate exempt LTCG; (v). in depth verification of the transaction of purchase of shares of CCL International Ltd. by the assessee company; (vi). issuance of notice(s) u/s.133(6) of the Act to the brokers through whom the aforesaid shares were purchased/sold by the assessee; (vii). examining the history of the company, viz. CCL International Ltd. (from money control site) spread over the period 2008 to 2015; (viii). referring to the financials of the aforesaid company, viz. CCL International ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the assessee HUF as well as the other family members u/s.131 of the Act on 26.12.2017, wherein he had, inter alia, expressed his unawareness about the mode and manner of purchase of shares, i.e. whether those were purchased online or offline, and was also found to be having no knowledge of share trading and the share market. 5. On the basis of her aforesaid exhaustive deliberations and verifications, it was observed by the A.O that the assessee in the garb of the aforesaid transaction of purchase/sale of shares had in fact introduced its undisclosed funds in the form of capital gain. The A.O rejected the assessee s claim of having earned genuine STCG of Rs.2,81,049/- from the transaction of purchase/sale of 3000 shares of CCL International Ltd. and re-characterized the entire amount of impugned sale proceeds of shares of Rs.5.40 lac (supra) as the undisclosed funds of the assessee. Accordingly, the A.O vide her order passed u/s.143(3) of the Act dated 27.12.2017 after making an addition of Rs. 5.40 lac (supra) to the assesse s returned income assessed the same at Rs.20,55,690/-. 6. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds in the garb of the said transactions. 11. I shall first look into the transaction of purchase of 3000 shares of CCL International Ltd. by the assessee, details as regards which are culled out as under: Scrip Purchased CCL International Ltd. No. of shares purchased 3000/- Date of purchase 26/07/2013 Amount paid for purchase 2,55,000/- Broker through whom purchased As per the submissions of the assessee, it was an offline purchase claimed to have been from Inova Commotrade Pvt. Ltd. No. of shares sold 3000 Date of sale 3000(12/05/2014) Broker SHCIL Services Ltd. Amount received on sale Rs.5,40,000/- It is the claim of the assessee that it had on 26.07.2013 made offline purchase of 3000 equity shares of CCL International Ltd. @ Rs.85/- per share, i.e. for a consideration of Rs.2.55 lac through its broker, viz. Inova Commotrade P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . With an abundance caution we requested the broker to return the cheque issue earlier. After getting the cheque back, we paid the broker on 19/3/14 through RTGS/NEFT. In this regard, we furnish documentary evidence of the confirmation by the broker for having received the old cheque, circular by RBI instructing the bankers to accept only CTS cheque and the evidence for the payment by the banker. At this stage, I may herein observe that it is a matter of fact borne from record that though the assessee was holding De-mat account with SHCIL since October, 2006, but it had dematerialized the aforesaid 3000 shares of CCL International Ltd. only as on 25.04.2014, i.e. just before their sale on 12.05.2014. Another peculiar aspect which I find in the aforesaid transaction of purchase/sale of shares by the assessee is its claim of having made cash payment of Rs.9000/- towards initial amount of purchase consideration on 26.07.2013, which except for the confirmation of the aforementioned broker, viz. Inova Commotrade Pvt. Ltd. that initself does not inspire any confidence at all, had remained unsubstantiated on the basis of any clinching documentary evidence 13. Having given a thought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-mat account with SHCIL since October, 2006, then, there could be no logical reasoning /justification for it to have held the said shares in a paper form and dematerialized the same only on 25.04.2014, i.e. just prior to the sale transaction. On the basis of my aforesaid observations, I am persuaded to subscribe to the view taken by the A.O, that the assessee s claim of having carried out a genuine transaction of purchase of 3000 shares of CCL International Ltd. on 26.07.2013 lacks any credence and thus, is rejected. 14. Apropos the observation of the A.O that CCL International Ltd. is a Penny Stock Company, I have perused the extensive observations of the A.O, and find that she had marshaled sufficient facts which would justify raising of serious doubts about the astronomical rise in the price of its shares over a short span, despite the fact that there was neither any good Earning Per Share (EPS) or business health of the company as was revealed from its financial statements; nor was the same prompted by any such development in the company which would have promised a bright future for the shareholders. Admittedly, as stated by the Ld. AR and, rightly so, the mere fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pta, Karta of HUF that was recorded by the A.O u/s.131 of the Act on 26.12.2017. I find that Shri Rahul Gupta, a well educated graduate, who had appeared on behalf of the assessee HUF as well as his other family members, had admitted that he had no knowledge of share trading and share market. Strangely, I find that Shri Rahul Gupta (supra) on being queried as per Question No.20 of the statement as to whether shares in question were purchased by him online or offline, had expressed his unawareness about the same. Although Shri Rahul Gupta (supra) was aware about the brokers through whom he had carried out the purchase/sale of the aforesaid 3000 shares of CCL International Ltd., but had stated that he was unaware that the said company was a penny stock company. Also, Shri Rahul Gupta in reply to Question No.6 about the mode of payment of the purchase consideration of 3000 shares of CCL International Ltd., had stated that the entire purchase consideration was made vide banking channel. The aforesaid reply of the assessee is found to be incorrect. As observed by me hereinabove, the assessee as per the brokers confirmation/ledger account had stated to have made part payment of Rs.9000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act of Shri Rahul Gupta, Karta of HUF. On a cumulative perusal of the aforesaid material aspects, which when tested against the touchstone of principle of preponderance of human probabilities unearths beyond doubt the ingenuineness of the transactions of purchase/sale of 3000 shares of CCL International Ltd. I am of the considered view that no infirmity arises from the very well-reasoned order of the A.O, who on the basis of her exhaustive deliberations and verification of the various facets of the purchase/sale transaction under consideration, had rightly concluded that the assessee had not carried out any genuine transaction of purchase/sale of 3000 shares of CCL International Ltd. Before parting, I may herein observe that the contention of the ld. A.R that the A.O had herself stated in the assessment order that it could be conclusively said that the assessee had purchased the shares in the month of March or April itself for which the payment was made on 19.03.2014, would not in any way assist the case of the assessee before us. I, say so, for the reason that it had never been the case of the assessee either before the lower authorities or before us that it had purchased the 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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