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TMI Blog2023 (10) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... as not brought on record any material to show that the assessee was part of the group which involved in the manipulation of prices of shares. Hence, there is no reason to suspect the purchase and sale of shares undertaken by the assessee. Thus we are of the view that the decision rendered in the case of Shyam R Pawar [ 2014 (12) TMI 977 - BOMBAY HIGH COURT] and Ziauddin A Siddique[ 2022 (3) TMI 1437 - BOMBAY HIGH COURT] shall apply in the present case, since the AO has not established that the assessee was involved in price rigging and further the AO did not find fault with any of the documents furnished by the assessee. Thus sale consideration received on sale of shares cannot be assessed as unexplained cash credit u/s 68 of the Act and the long term capital gains declared by the assessee cannot be doubted with. Decided in favour of assessee. - SHRI B.R. BASKARAN (AM) SHRI SANDEEP SINGH KARHAIL (JM) For the Assessee by : Shri Prakash Jhunjhunwala For the Department by : Smt. Mahita Nair ORDER PER B.R.BASKARAN (AM) :- The assessee has filed this appeal challenging the order dated 18.5.2022 passed by the learned CIT(A), National Faceless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. He issued notice under section 133(6) of the Act to two of said purchases, but did not receive any reply from them. The Assessing Officer also referred to the report issued by SEBI and noticed that M/s. Radford Global Limited and its promoters have been found to be involved fraudulent market price by rigging share prices. 4. The Assessing Officer noticed that the assessee has purchased shares from M/s. Atherton Glass Works Limited. Hence the Assessing Officer issued noticed to the above said party, but the said notice was returned back unserved. Hence, the Assessing Officer asked the assessee to prove the genuineness of the purchases. In response thereto the assessee submitted that it has purchased shares through M/s. Atherton Glass Works Limited by paying cheque. It was further submitted that, after dematerializing the shares, they were sold through SEBI registered broker in the Stock exchange platform and the sale consideration was received through banking channel. It was submitted that the shares were held for more than twelve months and hence the long term capital gain was claimed as exempt u/s 10(38) of the Act. The assessee placed reliance on the decision rendered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay transaction. It is discernible as to whether the assessee has understood share transactions. He submitted that the AO has taken support of SEBI report, report of Investigation wing with regard to penny stocks and exit providers to establish that the share transactions carried on by the assessee are not genuine. He submitted that the AO has also issued notices u/s 133(6) of the Act to two of the exit providers and also the person from whom the assessee has claimed to have purchased the shares. However, none of the parties has responded to the said notices. The Ld A.R placed reliance on the decision rendered by Hon ble Calcutta High Court in the case of PCIT vs. Swati Bajaj (2022)(139 taxmann.com 352)(Cal) and certain other decisions. 9. In the rejoinder, the Ld A.R submitted that the AO has made reference to the report of investigation wing, SEBI report and also issued notices u/s 133(6) of the Act to the exit providers/supplier of shares. However, the AO has not established that the assessee was part of the group which was manipulating the prices of shares. He submitted that the Hon ble jurisdictional Bombay High Court has held in the case of Shyam Pawar (supra) that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re dematerialized in April 2012 and they were sold in May, 2013. Hence we are of the view that there is no scope for suspecting the purchase of shares. 12. The AO has identified the purchasers of shares, which have been sold by the assessee and he issued notices under section 133(6) of the Act to two persons. Since the said notices were returned back/not responded, the AO has doubted the sale transactions of shares. However, it is pertinent to note that the assessee has sold the shares on the recognised stock exchange. It is not shown by the AO that the assessee was aware of the exit providers or part of the group involved in rigging the prices. Hence, mere fact of return of notices issued to two of the exit providers cannot be a ground to suspect the genuineness of sales, without bringing any other substantial evidence on record. 13. We notice that the assessing officer has not found fault with any of the documentary evidences furnished by the assessee to prove the purchases and sale of shares. As noticed earlier, the AO has not brought on record any material to show that the assessee was part of the group which involved in the manipulation of prices of shares. Hence, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion carried out in paras 20, 20.1, 20.2 and 21 of his order, what was important and vital for the purpose of the present case was whether the transactions in shares were genuine or sham and bogus. If the purchase and sale of shares are reflected in the Assessee's DMAT account, yet they are termed as arranged transactions and projected to be real, then, such conclusion which has been reached by the Commissioner and the Assessing Officer required a deeper scrutiny. It was also revealed during the course of inquiry by the Assessing Officer that the Calcutta Stock Exchange records showed that the shares were purchased for code numbers S003 and R121 of Sagar Trade Pvt Ltd. and Rockey Marketing Pvt. Ltd. respectively. Out of these two, only Rockey Marketing Pvt. Ltd. is listed in the appraisal report and it is stated to be involved in the modus-operandi. It is on this material that he holds that the transactions in sale and purchase of shares are doubtful and not genuine. In relation to Assessee's role in all this, all that the Commissioner observed is that the Assessee transacted through brokers at Calcutta, which itself raises doubt about the genuineness of the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by any error of law apparent on the face of the record either. 7. As a result of the above discussion, we do not find any substance in the contention of Mr. Sureshkumar that the Tribunal misdirected itself and in law. We hold that the Appeals do not raise any substantial question of law. They are accordingly dismissed. There would no order as to costs. 8. Even the additional question cannot be said to be substantial question of law, because it arises in the context of same transactions, dealings, same investigation and same charge or allegation of accommodation of unaccounted money being converted into accounted or regular as such. The relevant details pertaining to the shares were already on record. This question is also a fall out of the issue or question dealt with by the Tribunal and pertaining to the addition of Rs. 25,93,150/-. Barring the figure of loss that is stated to have been taken, no distinguishable feature can be or could be placed on record. For the same reasons, even this additional question cannot be termed as substantial question of law. 14. The Hon ble Jurisdictional High Court has considered an identical issue in yet another case of PCIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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