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TMI Blog2023 (12) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... et aside the assessment order as bad in law. - Shri N.K. Billaiya, Accountant Member, And Ms Astha Chandra, Judicial Member For the Assessee : Shri Vinod Bindal, CA, Ms. Rinky Sharma, ITP And Shri Saurabh Sharma, Adv For the Department : Shri Vivek Vardhan, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the ld. CIT(A)-24, New Delhi dated 14.03.2019 pertaining to A.Y. 2014-15. 2. The grievances of the assessee read as under: 1. The CIT(A) erred in law and on facts in confirming the addition of Rs. 78,85,851/- by holding the long term capital gain declared on sale of shares of a listed company through recognized stock exchange as non-genuine ignoring the submissions and evidences placed on record. Thus the addition so made should be deleted. 2. The CIT(A) erred in law and on facts in confirming the said addition of Rs. 78,85,851/- as bogus capital gain though the same was received in the regular bank account of the assessee and the source of the same was duly declared in his, return of income and nothing has been brought on record by the AO that the assessee paid any considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and vide order dated 30.12.2016 framed u/s 143(3) of the Act returned income was assessed at Rs. 94,12,810/- after making addition of Rs. 79,64,709/- on account of bogus long term capital gains. 7. The challenge before us is that the impugned assessment order is bad in law in as much as the same should have been framed u/s 153A r.w.s 153C of the Act. 8. It is the say of the ld. counsel for the assessee that the entire assessment is based on the outcome of search and seizure proceedings conducted at the premises of several stock brokers from where the Investigation Wing gathered information that the assessee is also one of the beneficiaries of long term capital gain earned through manipulation of shares. 9. Strong reliance was placed on the decision of the Hon'ble Supreme Court in the case of Vikram Singh Bhatia 149 Taxmann.com 123. 10. Opposing the submissions of the ld. counsel for the assessee, the ld. DR vehemently stated that the return was selected for scrutiny assessment through CASS and during the course of assessment proceedings, information was received from the INV Wing in respect of bogus long term capital gains which was the outcome of searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 153C, which is by way of substitution of the words belongs or belong to to the words pertains or pertain to shall be frustrated. As observed hereinabove, any interpretation, which may frustrate the very object and purpose of the Act / Statute shall be avoided by the Court. If the interpretation as canvassed on behalf of the respective respondents is accepted, in that case, even the object and purpose of Section 153C namely, for assessment of income of any other person (other than the searched person) shall be frustrated. 11. In view of the above and for the reasons stated above, the impugned common judgment and order passed by the High Court is held to be unsustainable and the question, i.e., Whether the amendment brought to Section 153C of the Income Tax Act, 1961 vide Finance Act, 2015 would be applicable to searches conducted under Section 132 of the Act, 1961 before 01.06.2015, i.e., the date of amendment? , is answered in favour of the Revenue and against the assessees and is answered accordingly. Therefore, it is observed and held that the amendment brought to Secstion 153C of the Act, 1961 vide Finance Act, 2015 shall be applicable to searches conducted under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or decrease artificially to generate bogus LTCG/Losses as .per requirements of the beneficiary. This activity was continuing for long time but was at a very low scale, hence same could not be detected earlier by the market or 'other investigative agencies'. But, for some time, the amount of the scam increased to such scale as the department could detect the same: and started the investigation into the same. 3(f) In their report, the wing has mentioned the names and addresses of the key persons involved in the scam. The department has, conducted through enquiry in which they have gathered the evidences to identify the persons/brokers/ companies and other entity involved in the .scam and establish their involvement in the activity of providing accommodation entries. The officers of the department have recorded the statements on oath of many of these persons including the brokers, entry providers promoters/directors of jamakharchi companies. During the statements recorded on oath, these key persons who were brokers/promoters of companies are accepted their involvement in providing the accommodation entries of bogus LTCG/Loss have furnished the modus operandi of the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was found and seized from one sub broker Shri Pawan Kumar Kayan. Many sub brokers of this 'broking house has accepted in the statement on oath recorded, to be actively involved in providing the entry by rigging the prices of M/s Unno industries Ltd. And any other scnps. 13. On the given facts, r.w. the above mentioned observations of the Assessing Officer, we do not find any merit in the submissions of the ld. DR. Even if the assessments were on going, but when search took place and when information came to the knowledge of the Revenue, pending assessments get abated as per the provisions of section 153A of the Act and proceedings u/s 153C are off shoot of proceedings u/s 153A of the Act. Therefore, the impugned assessment order should have been framed as per the provisions of section 153C of the Act as held by the Hon'ble Supreme Court in the case of Vikram Singh Bhatia [supra]. 14. Considering the facts of the case in light of the decision of the Hon'ble Supreme Court [supra], we set aside the assessment order as bad in law. 15. Since we have quashed the assessment order, we do not find it necessary to dwell into the merits of the case. 16. In the resu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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