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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 ..... essing Officer arising out of sale of shares of Sunrise Asian Ltd., a penny stock and without appreciating the findings of the Assessing Officer that the price movement of the company were not supported by financial fundamentals of the company? ii) "Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was justified in allowing the appeal of the Assessee by holding that the investment in shares was genuine, simply placing reliance upon the decision of Hon'ble High Court in the case of Jagat Pravin Sarabhai (2022) 142 taxmann.com 247 and overlooking the circumstantial evidences and preponderance of the probability in the case? iii) "Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was justified in ignoring the fact that, one of the entry provider involved in this case Shri Anuj Agarwal has admitted that he had given entry of bogus LTCG through 19 paper companies controlled by him, and Sunrise Asian Ltd is one of them? iv) "Whether on the facts and circumstances of the case and in law the order of the Hon'ble ITAT suffers from perversity as it ignores the facts brought on record establishi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the year are stated by the Assessing Officer on page : 5 and 6 of the assessment order. The Assessing Officer, after going through the purchase details of these shares, observed that the assessee had purchased shares of M/s. Conart Traders Ltd. on 21st August 2011 directly from the company and sold the shares of Sunrise Asian Ltd. and therefore, clarification was sought. The assessee replied that the company Conart Traders Ltd was later amalgamated with Sunrise Asian Ltd vide order dated 24th January 2013 passed by the Bombay High Court. [5] The Assessing Officer, after considering the submissions of the assessee as well as the information received through the Investigation Wing of Kolkata, came to the conclusion that the assessee has shown credit of Rs.49,01,840/- towards sale proceeds and the same was not accepted and the Assessing Officer made an addition of Rs.49,99,877/- towards unexplained unaccounted income and levied tax as per Section 115BBF of the Act. [6] The assessee challenged the assessment order passed by the Assessing Officer before the CIT(A), who confirmed the action of the Assessing Officer. [7] Feeling aggrieved by the order passed by the CIT(A), the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the Ld. CIT(A) and other material brought on record. We note that during the assessment proceedings, the assessee submitted before the assessing officer, Ledger account of Conart Trader, Debit note for purchase of share, share certificate, Bank statement of assessee. Income Tax Return (ITR), computation of total income, Financial statements for A.Y. 2014-15, copy of Ledger account of Nirmal Bang Securities Pvt. Ltd. with their contra account and Demat account, Contra notes issued by SEBI register broker Nirmal Bang Securities Pvt. Ltd. w.r.t. sales of shares in BSE with payment of STT. Copy of NSDL statement of holding as on 31.03.2013 & 31.03.2014, Evidence for Amalgamation of companies by Hon'ble Bombay High Court order, and Sunrise Asian Lid-price data downloaded from Money Control. The Assessing Officer did not find any defect in these documents and evidences except to say that these documents and evidences are not acceptable. We note that Assessing Officer has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in the market due to its volatile nature. Therefore, only because of sharp moment in prices of shares, transactions in share cannot be held bogus. It was submitted that she being a genuine invested in the share of Conart Trader's Ltd, and hold it for several months, say two and half years, being satisfied with the profit, share were sold through SEBI registered broker, in online platform of BSE. She has paid STT and sale proceeds were received directly in her bank account by RTGS and NEFT. Therefore, her case is not a case of accommodation entries. hence Id. Counsel for the assessee prays the Bench that addition of Rs. 45,01,840/- u/s. 68 and addition of Rs. 90,037/- u/s. 69 of the Act may be deleted." [10] The Tribunal, thereafter, has also considered the aspect of the receipt of sale consideration of the assessee as reflected in the bank statement and held as under: "25. We note that assessee has received sale proceeds by electronic mode of payment system, that is, RTGS and NEFT, UTIB, directly in her SBI account, as follows: Date Mode Amount (Rs) Paper book 25.02.2014 RTGS 14,50,756.68 -49 05.03.2014 RTGS 32,27,539.63 -49 11.03.2014 NEFT 1,95,711.34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory and traded on the stock exchange. The sale transactions took place through recognized stock exchange and statutory Securities Transaction Tax (STT) as well as Service Tax was paid on sale transactions. In the online platform, the identity of the seller as well as purchaser would not be known. The shares were delivered in demat form through clearing mechanism of the stock exchange. Therefore, unless any link is established, the assessee could not be held to be part of the group indulging into rigging share prices of the scrip. The sale proceeds were realized through banking channel. i.e. RIOS NEET. There was as evidence of any cash exchange. The findings as well as conclusion of Assessing Officer were based on mere suspicion, and surmises as against settled proposition of law that suspicion howsoever strong could not partake the character of legal evidence. The entire case of Assessing Officer was based on mere presumption that the assessee ploughed back her own unaccounted money in the form of Bogus LTCG. The presumption needs to be corroborated by some evidence to establish the same. It is trite law that presumption, however, strong, cannot be a substitute, nor can it take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of Swati Bajaj and other (supra), however, we are of the view that as per the judgement of Hon'ble High Court of Bombay in the case of Thanna Electricity Supply Ltd (1994) 206 (ITR) 727 (Bom) wherein it was held that decision of a High Court will have the force of binding precedent only in the State or territories in which the Court has jurisdiction. Hence we note that judgment of Hon'ble Calcutta High Court in the case of Swati Bajaj and others (supra) should not be applicable to the assessee as it is outside territorial jurisdiction of Gujarat. However, the Judgment of Hon'ble Jurisdictional High Court of Gujarat in the case of Jagat Pravinbhai Sarabhai and Nishant Kantilal Patel (supra) should be applicable in the assesse's case as there are the judgment of Jurisdictional High Court. Besides, the Jurisdictional Co-ordinate Bench of ITAT Ahmedabad in the save of M/s. Ice Worth Reality LLP. Vide ITA Nos. 565 & 566/Ahd/2020, for Assessment Year 2012-13 & 2015-16, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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, therefore, submitted that the Assessing Officer, taking into consideration the volatility of the share price of the script sold by the assessee, was justified in relying upon the report of the Investigation Wing of Kolkata as well as the fact that the SEBI has suspended the transaction of the said script for some time and accordingly, the Assessing Officer was justified in making addition of unaccounted income of the assessee on the ground of accommodation entries availed by the assessee. [15] It was further submitted that the CIT(A), after considering the documents available on record, has upheld the view taken by the Assessing Officer. It was submitted that the Tribunal, after considering the submissions made by the assessee and the Departmental Representative, allowed the appeal. It was submitted that the Tribunal, therefore, contrary to the facts and evidence on record, has allowed the appeal without considering the findings of the Assessing Officer and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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