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TMI Blog2024 (1) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... or a long period, the same were sold by the assessee and therefore, reliance was placed on the decision of this Court in the case of Jagat Pravinbhai Sarabhai [ 2023 (1) TMI 44 - GUJARAT HIGH COURT] . - Decided against revenue. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR. JUSTICE NIRAL R. MEHTA Appearance: For the Appellant(s) No. 1 : Mr Karan Sanghani Advocate With Mrs Kalpana K Raval(1046) For the Opponent(s) No. 1 : None ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) [1] Being aggrieved and dissatisfied with the order dated 27th July 2023 passed by the Income Tax Appellate Tribunal, Surat Bench, Surat (for short, the Tribunal ) in ITA No. 73/SRT/2023 for Assessment Year 2014-15, the appellant - Revenue has preferred this Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short, the Act ) with the following proposed substantial questions of law: i) Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT was justified in deleting the addition of sale proceeds of the share of Rs.4 9,01,840/- on account of unexplained income u/s 68 of the Act made by the Assessing Officer arising out of sale of shares of Sunris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CASS and notice under Section 143(2) of the Act was issued on 18th September 2015 followed by notice under Section 142(1) of the Act dated 13th June 2016. The assessee furnished the details sought for by the Assessing Officer. The assessee has also shown Long Term Capital Gains of Rs.45,01,840/- in her return of income which was claimed as exempt under Section 10(38) of the Act. It was noted by the Assessing Officer that the Long Term Capital Gains claimed by the assessee included sale transactions effected during the year on the script named Sunrise Asian Ltd . [3] The Assessing Officer, thereafter, on the basis of details available on record, ascertained that the assessee sold 10,000 shares of the said company during the year under consideration on total sale prices of Rs.49,01,840/-, which has resulted in Long Term capital gains of Rs.45,01,840/-. [4] During the course of assessment proceedings, information under Section 133(6) of the Act was called for from the Bombay Stock Exchange and the details of Sunrise Asian Ltd were received by the Assessing Officer. The details of the sale of script during the year are stated by the Assessing Officer on page : 5 and 6 of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be sustained. [9] The Tribunal, after considering the findings of the Assessing Officer, CIT(A) as well as the material placed on record, has come to the conclusion and arrived at a finding of fact that the assessee has proved the genuineness of transaction of sale of 10,000 shares of Sunrise Asian Ltd. The Tribunal also relied upon the decision of this Court in the case of Jagat Pravinbhai Sarabhai reported in [2022] 142 taxmann.com, wherein it is held that the Assessing Officer has failed to substantiate that addition under Section 68 of the Act could be sustained in absence of genuineness of investment in shares of the assessee by producing copy of the transaction statement and shares were retained for a long time and sold after some time and the investment could not be held to be bogus. It was, therefore, held by the Tribunal that in the facts of the case also, when the assessee has held the shares from 2011-2014 for almost two and half years, the same cannot be said to be bogus. The Tribunal, after considering the various submissions, has held as under: 20. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has received the cash back against such transaction. 22. We note that during the assessment stage, the assessee has provided complete detail of the company. It was submitted that the company's share were listed on BSE and NSE stock exchange. The assessee has also submitted past history and business of the company, market cap and other financial data of the company. The shareholding pattern of the company and management particular, directors administrators and auditors, were also proved. A price moment chart between April, 2012 to March, 2015 was also supplied. It was submitted that during given period, high price of Sunrise Asian Ltd. (in brief SAL ) was Rs. 605.50 and low price was Rs. 548.50 per share. Further, a list of the company who has given handsome return in the span of one year or less is also supplied to the Assessing Officer. These companies are in existence but not much popular due to its fundamentals, financial and corporate news. The assessee has argued that share market activities are risky business and many persons are losing their money and capital in the market due to its volatile nature. Therefore, only because of sharp moment in prices of share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 26. We note that Assessing Officer heavily relied upon the findings of Investigation Wing without carrying out any independent investigation of his own. Nothing was brought on record which would establish that the assessee was beneficiary of alleged accommodation entries provided by the so called Shri Anuj Agrawal. No corroborative evidences to support the finding of Assessing Officer were brought on record. No nexus was established. Further, no contrary and conclusive evidences furnished by the assessee. The enquiries were conducted by the DCIT at Kolkata and the statements were recorded at the back of the assessee. The assessee was deprived off to cross examine the witness. The documentary evidences submitted by the assessee were neither proved contrary nor proved fabricated. Assuming that the brokers may have done some manipulation but the assessee cannot be held liable for the act of the brokers when the entire transactions have been done through banking channel duly recorded in the Demat accounts with a Government depository and traded on the stock exchange. The sale transactions took place through recognized stock exchange and statutory Securities Transaction Tax (STT) as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in this case, the assessee, being an investor, has held shares for 2 and 1/2 years after holding shares for long period, the assessee sold the said shares. The assessee submitted Shares holding pattern of 'SAL which is as under: Category No. of shares %age Promoters 8,447,558 18.50% General Public 16,385,687 35.88% Others 16,685,906 34.35% Financial Institutions 5,143,909 11.26% The ld. Counsel submits that the shares of Sunrise Asian were being held buy Canara Bank, New Delhi, 6% of SAL. share during September 2015 and 11.26% shares of SAL. during March 2016 and June 2016 respectively. Thus, the sale transaction of 'SAL' shares cannot be doubted as bogus and denying the exemption u/ s. 10(38) of the Act. The Id. Counsel also submitted the judgments of various Coordinate Benches of ITAT, wherein addition made by the assessing officer u/s. 68 in respect of sale of shares of Sunrise Avian Ltd. were deleted. [11] The Tribunal also distinguished the judgement relied upon on behalf of the Revenue in the case of Swati Bajaj (supra) in following paragraphs: 33. We note that Ld DR for the Revenue heavily relied on the Judgement of Hon'ble Calcutta High Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, respectfully, following the judgment of Hon'ble Jurisdictional High Court (supra) and Coordinate Bench of ITAT (supra), we deleted the addition Rs. 49,01,840/-. 35. Since we have deleted the mam addition of Rs 49,01,840/-, therefore Ground No 2 raised by the assessee for addition u/s. 69C for Rs. 98,038/-, w.r.t. notional commission expenses 2% of LTCG being unexplained expenditure, is consequential in nature and hence deleted. [12] As the Tribunal deleted the addition charging of income tax at the rate of 30% under Section 115BBE of the Act, was held to be not applicable. [13] Feeling aggrieved by the order passed by the Tribunal, the appellant Revenue has preferred this Tax Appeal on the proposed substantial questions of law narrated hereinabove. [14] Learned Senior Standing Counsel Mr. Karan Sanghani for the appellant reiterated the submissions made before the Tribunal and submitted that the Assessing Officer, after analyzing the data made available from the Bombay Stock Exchange, came to the conclusion that the price of script, which the assessee sold, was fluctuating by 24 times and after sale of shares made by the assessee, the price has reduced to Rs. 0.49. It was, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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