9911796707
TMI Blog2023 (7) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, Mr. Vipul Vidur Bhatt did not comply with the summons issued u/s 131 of the Act. SEBI had barred Sunrise Asian Ltd and other entities to whom the assessee had sold the shares from accessing the securities market or buying, selling or otherwise dealing in the securities market, either directly or indirectly or be associated with the securities market in any manner for a period of 6 months to one year. Further, we find that the SEBI found the manipulative trade executed by Sunrise Asian Ltd., as well as the entities to whom these shares were sold by the assessee. Though, the assessee was not part of the investigation conducted by SEBI, however, the same does not absolve her from proving the genuineness of the transaction in shares of Sunrise Asian Ltd. under section 68 of the Act. Plea of the assessee that the payment for the acquisition of shares was made from the bank account and the shares were dematerialised and credited to the Demat account maintained by the assessee - Not only Sunrise Asian Ltd but the exit providers were also found to be involved in manipulative trade practices by the SEBI. Mr. Vipul Vidur Bhatt in his statement had admitted and confirmed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 89.06.550/- i. The Ld. CIT(A) erred in upholding the action of Ld. A.O. in making addition of Rs. 89,06,550/- treating the long-term capital gain as unexplained cash Gen credit under section 68 of the Act without appreciating the fact and circumstances of the case in proper perspective. Hence, the addition of Rs. 89,06,550/- under section 68 of the Act is unjustified and the same may be deleted. ii. The Ld. CIT(A) failed to appreciate that the Appellant has furnished all relevant documentary evidences to prove the genuineness of long term capital gains earned during the relevant year under consideration. Hence, the Appellant has discharged the primary onus cast upon her under the provisions of section 68 of the Act. Thus, the addition of Rs. 89,06,550/- under section 68 of the Act is against the provisions of law and the same may be deleted. iii. The Ld. CIT(A) further erred in treating the long term capital gains as unexplained cash credit relying on the statement of some persons with whom the Appellant has no transaction at all and the Ld. A.O. has not even provided an opportunity to cross examine them to rebut the allegations levelled against her. Thus, the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain. The AO also took into consideration the trade data downloaded from the system that shares of M/s Sunrise Asian Ltd sold by the assessee have been picked up by the entities who are mostly entities of Mr. Vipul Vidur Bhatt and their names figure in the list of entities divulged by him before the investigation authorities. The AO also took into consideration the statement of the assessee, her father-in-law, and the person who advised them to transact in the shares of M/s Sunrise Asian Ltd. Accordingly, the AO vide order dated 19/12/2017, passed under section 143(3) of the Act treated M/s Sunrise Asian Ltd. to be merely a paper company and rejected the claim of the assessee of exemption of long term capital gains in transaction in scrips of the aforesaid company. The AO treated the entire amount of Rs. 89,06,550, received by the assessee towards the sale of shares of M/s Sunrise Asian Ltd. as unexplained cash credit under section 68 of the Act and added the same to the total income of the assessee. The AO also made an addition of Rs. 1,78,131, i.e. 2% of the total traded value as commission being paid for availing the accommodation entry, and made an addition under section 69C of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not aware of the investments in M/s Sunrise Asian Ltd. and is dependent upon the investment decision of her father-in-law, therefore, in order to ascertain the genuineness of the investments, summons under section 131 of the Act were issued to her father-in-law and the statement was recorded on the same day itself. From the statement of the father-in-law, the AO observed that he has also acted on the advice of one Mr. Pankaj Dhoot. From the statement recorded of Mr. Pankaj Dhoot under section 131 of the Act, it was observed that he also possesses very minimal knowledge about the share market and has no knowledge about the nature of business carried out by M/s Sunrise Asian Ltd., its directors, its financial, such as turnover, profits, EPS, future contracts, etc. It was further observed that Mr. Pankaj Dhoot relied upon the input given by one Mr. Kamlesh Sanghvi. From the investigation carried out by the Income Tax Department, it was revealed that Mr. Kamlesh Sanghvi is a conduit and has been named as the main hawala operator for providing accommodation entries and operating as the purchaser of shares of beneficiaries who wanted to book the capital gains. In this regard, the AO refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares of (i) Santoshima Tradelink Limited (Formerly known as M/s. Santoshima Lease Finance and Investment (India) Limited) and (II) M/s. Conart Traders Limited on preferential basis, and thereafter, share holders of these companies were allotted shares of M/s. Sunrise Asian Limited in swap ratio of 1:1. Once this amalgamation was done, the price of the shares of M/s. Sunrise Asian Limited was rigged and increased through circular trading. Once the price of the shares was increased to a desired level, the beneficiaries of bogus LTCG were asked to sell the shares of M/s. Sunrise Asian Limited. For doing the same, unaccounted cash was taken from the beneficiaries and the same was routed into the accounts of some companies/firms/individuals managed and controlled by me and thereafter, the fouted funds were used to purchase the shares of M/s. Sunrise Asian Limited held by the beneficiaries of bogus LTCG. 8. We find that in the present case, the AO also issued notices under section 133(6) of the Act to the exit providers/purchases of shares from the assessee to ascertain their identity. However, either these notices were returned unserved or remained un-complied with. The AO, as note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned AR also placed on record another written submission dated 28/09/2022 filed by the assessee before the learned CIT(A), NFAC, wherein the assessee made detailed submissions against the additions made by the AO. We find from the submission dated 28/09/2022, that the assessee made a conditional request before the learned CIT(A), NFAC, to grant an opportunity of being heard, if in case, the learned CIT(A), NFAC, wants to take an adverse view. The learned AR also placed on record acknowledgement of filing of submissions and case laws pursuant to notices dated 01/11/2022 and 14/11/2022, issued by the learned CIT(A), NFAC. Thus, we are of the considered view that when the assessee had filed multiple written submissions pursuant to notices issued by the learned CIT(A), NFAC, in such circumstances, it cannot be held that no appropriate opportunity of being heard was granted to the assessee. As regards the request of being heard through physical/video conferencing, we find that such a request was not made in lieu of filing the written submissions or to explain the complex facts, however, the same was sought only in a case the learned CIT(A), NFAC, takes an adverse view. During the hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Bhatt did not comply with the summons issued under section 131 of the Act. 12. During the hearing, the learned Departmental Representative placed reliance on the final order dated 06/09/2021, passed by the SEBI. From the perusal of the aforesaid order, we note that the SEBI had barred Sunrise Asian Ltd and other entities to whom the assessee had sold the shares from accessing the securities market or buying, selling or otherwise dealing in the securities market, either directly or indirectly or be associated with the securities market in any manner for a period of 6 months to one year. Further, we find that the SEBI found the manipulative trade executed by Sunrise Asian Ltd., as well as the entities to whom these shares were sold by the assessee. Though, the assessee was not part of the investigation conducted by SEBI, however, the same does not absolve her from proving the genuineness of the transaction in shares of Sunrise Asian Ltd. under section 68 of the Act. 13. It is also the plea of the assessee that the payment for the acquisition of shares was made from the bank account and the shares were dematerialised and credited to the Demat account maintained by the assessee ..... 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