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TMI Blog2023 (8) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... se and sale of shares through the broker Hem Securities were settled only via banking channel. There appears no ambiguity in the sale and purchase of shares through the SEBI brokers Hem Securities and all the transactions took place through banking channel and on the transactions of purchase and sale of Shares, STT had been paid having time and date stamp. Hence, taking into consideration of the above facts and circumstances of the case, we do not concur with the findings of the ld. CIT(A) on the issue in question. Ground No. 1 of the assessee is allowed. Also as purchase and sale of shares as bogus transactions not confirmed there is no question arises as to making addition by the AO on account of commission paid by the assessee. Hence, the Ground No. 2 of the assessee is allowed. - Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri Mukesh Khandelwal (C.A.) For the Revenue : Ms Monisha Choudhary (Addl.CIT) ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal is filed by the assessee against the order of the ld. CIT(A) National Faceless Appeal center, Delhi [hereinafter referred as NFAC ] dated 13-01-2023 for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which has been proved a bogus entry. This way, the assessee was in receipt of bogus short term capital loss of Rs. 3,41,083/- for which he failed offer any satisfactory explanation, especially in light of credible evidences gathered by the department. The sum of Rs. 3,41,083/- claimed as the assessee as short term capital loss is being hereby disallowed and added to the total income of the assessee. In light of detailed discussion on the issue, I am satisfied that the assessee has concealed his income and furnished inaccurate particulars of income and therefore, penalty proceedings u/s 271(1)(c) of the Income-tax Act, 1961 are initiated separately.[Addition of Rs. 3,41,083/-] (7). The reply of the assessee on another issue i.e. commission paid in lieu of bogus entry of short-term Capital Loss, has been considered but not found tenable. The submission of the assessee that he has not entered into any accommodation or bogus transaction hence question of commission on this transaction does not arise is far from truth. The assessee has failed to explain that why any syndicate which includes many members of different cities working in different capacity will take so much pain to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO had observed that the companies where shares were allegedly dealt with were not very well known and it was entirely unlikely that there was huge rise in the price in the price as being of manipulation of stock broker. The Hon'ble High Court had highlighted that AO's findings are based more on presumption rather than on cogent proof. However, in our case the AO has highlighted thee modus operandi with admission of the main person /director of the company Luminaire Technology that the Company was not doing any worthwhile business but was engaged in giving accommodation entries against commission. Sufficient and cogent evidences have been recorded by the appellant. Similarly the facts of the other decisions cited by the appellant are different from the facts of the instant case. As mentioned in Para 5 of the assessment order, the AO has made own analysis and also relied upon the evidences detected based on survey conducted on 03.06.2015 in the business premises of M/s Luminaire Technology Ltd and other evidences highlighted in assessment order The AO has also pointed out that SEBI has suspended this particular scrip from trading in BSE/NSE 5.2.3 Further reliance is pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant wishes to submit as under :- 1. In para 5(e) at page 39 of the assessment order the ld. AO states that the entire scheme gets revealed after the above analysis that the huge capital gain earned by the assessee within a very short period of time by investing in a penny stock i.e. Luminnaire Technologies Ltd. whose fundamentals had no support for the premium it commanded, was neither the result of a coincidence nor of a genuine investment activity but were carried through well planned and executed scheme in which the company, the bankers and buyers and sellers of the scrip worked in tandem to achieve the predetermined objectives. This shows that the ld. AO merely used cut and paste for framing the order without verifying the relevance of the above said para which had been framed for assessing a case of bogus capital gain and not capital loss. 2. The ld. AO has acted merely on the basis of information in his possession without linking the same with the appellant and hence his action was with pre conceived notion of making disallowance. 3. No material, statements of parties were shares with the appellant and hence reliance put thereon without allowing opportuni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the ld. AO and sustained by the ld. CIT (A) is liable to be quashed both in law and as per facts of the case. This Ground No. 2 is consequential ground which is dependent on the judgement of this Hon`ble Bench on ground no. 1. Further to that it is submitted that the ld. AO made this addition merely on his presumptions without having any material in his hand about incurring of such cost by the appellant. It is therefore sincerely submitted that the orders of the ld. AO as well ld. CIT (A) may kindly be quashed and oblige. 2.4 On the other hand, the ld. DR has relied upon the order of the ld. CIT(A) 2.4.1 The details regarding the transaction of D Mat account relating to Luminaire Technologies Ltd. has been explained by the ld. AR of the assessee as under:- Shares purchased on 17-02-2014 18-02-2014 (APB 7 8) Shares credited in the D Mat account No. 1201770100039114 11-03-2014 Shares sold on 13-03-2014 (APB 9) Shares transferred from D Mat account No. 1201770100039114 18-03-2014 During the course of heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee on 18-03-2014 through online bank transfer against sale consideration of shares of Luminnaire Technologies Ltd. which is evident from APB 13. The assessee had submitted all relevant bank statements to the AO as mentioned at 21 of the assessment order. Hence, it is undisputed fact that the transaction of purchase and sale of shares of Luminnaire Technologies Ltd. were undertaken through banking channel. We have also verified that on purchase and sale of shares of Luminnaire Technologies Ltd., the assessee had paid Securities Transaction Tax (for short STT ) which is evident at APB 7 8 and these are the purchase bills issued by the Broker and APB-9 denotes the sale bill. It is noted from the assessment order that the assessee had purchased 25000 shares of Luminnaire Technologies and sold the same after a month for which the assessee had to incurred a short term capital loss of Rs. 3,41,083/-. The AO based on information about transactions in this company to be bogus determined such claim of Short Term Capital Loss as bogus and thus a show cause notice was issued to the assessee. However, the assessee submitted the plausible explanation before the AO but he was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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