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TMI Blog2024 (2) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale have been made through Demat Account which is corroborated by contract note and other details and transaction is carried out through banking channel through stock exchange through Demat Account on which Security Transaction Tax have also been paid. The A.O. merely relied upon interim order of the SEBI to make addition against the assessee, otherwise, there were no evidence or material on record to disprove the claim of assessee. Since the interim order of the SEBI have been revoked against the assessee and M/s EBFL, therefore, nothing survives in favour of the A.O. The A.O. did not make any further investigation or enquiry into the matter and merely relied upon the interim order of the SEBI and investigation carried out by the Kolkata Wing. It is not clear from the assessment order whether Investigation Wing report have been confronted to the assessee or any right of cross-examination have been allowed to any statement recorded at the back of the assessee. The assessee asked for the cross-examination of any statement which is used against the assessee for making the addition. But, the assessment order is silent on this aspect. Therefore, the above facts clearly show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in deleting the addition of Rs. 5,93,06,611/-. 3. At the very outset the Counsel for the assessee stated that on identical set of facts in the case of the brother of the assessee Sh. Mukesh Mittal this Tribunal in ITA No.761/Del/2020 has decided the issue in favour of the assessee and against the revenue. 4. The DR fairly conceded to this but placed strong reliance on the assessment order. 5. We have carefully perused the assessment order dated 27.12.2016. The quarrel revolves around the claim of exemption u/s. 10 (38) of the Act in respect of long term capital gains to the tune of Rs. 57513700/-. The bone of contention is the sale of shares of Radford Global Ltd which resulted into long term capital again of Rs. 5.75 crores. 6. Based upon the investigation report of Pr. DIT, Investigation Wing Kolkata unit the AO formed a belief that the said company is a penny stock company and heavily drawing support from the investigation report and placing strong reliance on the modus operandi of some brokers, the AO denied the benefit of long term capital gains and made addition of Rs. 57513700/- and further Rs. 1792911/- being alleged commission paid to the brokers for such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were confirmed vide orders dated October 12, 2015, March 18, 2016 and August 26, 2016 are liable to be revoked. 5.2 The decision of ITAT in the case of Shri Brij Bhushan Singhal vs. ACIT (supra), considered the scrip of M/s Radford Global Ltd. on identical facts and held as under: 30. Further, the assessing officer has heavily relied upon the various orders passed by The Securities and Exchange Board of India in various companies in which the assessee has earned the long-term capital gain as well as in case of the assessee. First Such order relied upon is interim ex parte orders dated 19/12/2014 passed in case of M/s First financial services Ltd and M/s Redford global Ltd. The learned CIT-A was also heavily harping upon the orders of the SEBI for confirming the addition. In interim order in Redford global Ltd, dated 19/12/2014 assessee was restricted to access the securities market till further directions. Subsequently, on 20/09/2017, SEBI passed an order in that company holding that there are no adverse findings against the aforementioned 82 entities, which included the family of the assessee, and the assessee himself with respect to their role in the manipulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces before A.O. to prove genuineness of the transaction. The assessee purchased shares through banking channel and actually got the shares transferred in his name. Purchase was made through cheque which is supported by bank statement. The transactions of sale have been made through Demat account. The contract note along with other details were produced to show that purchase and sale of the shares have been made through banking channel through recognized Stock Exchange through Demat account on which Security Transaction Tax have also been paid. The A.O. did not make any enquiry on the documentary evidences filed by the assessee. No material have been brought on record against the assessee to disprove the claim of assessee. It is not the case of the Revenue that amount received on sale of shares is more than what is declared by the assessee. The assessee pleaded that the Interim Order of the SEBI have been diluted by passing final order in which no adverse view have been taken against the aforesaid company. Thus, the assessee's claim of purchase and sale of shares have been supported by documentary evidences. The statement of Shri Sanjay Vohra was recorded by the Investigation Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrip was exempt from tax. The Ld. D.R. relied upon decisions of the ITAT, Delhi Benches, Delhi in the cases of SumanPoddar vs., ITO (supra) and UditKalra vs., ITO (supra), in which the findings of the Tribunal had been that these are cases of penny stock companies which fact is not there in the present case. Therefore, these decisions would not support the case of the Revenue as having distinguishable on facts. The authorities below have not rebutted the explanation of assessee that he has indulged in dealing in scrips in earlier year as well as in subsequent years. It would, therefore, show that assessee is regularly dealing in scrips. The A.O. has not brought any adverse material against the assessee so as to make the above additions. Considering the totality of the facts and circumstances of the case and financials of M/s EBFL as reproduced above and other years (PB-76), we set aside the Orders of the authorities below and delete both the additions. 7 In the result, appeal of the assessee allowed. 5.4 We also find that the AO has held that many share brokers as well as many employees of these share broking companies in Kolkata, in their statements recorded under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Karuna Garg (supra) also supports the above wherein it was held as under: 21. A perusal of the assessment order clearly shows that the Assessing Officer was carried away by the report of the Investigation Wing Kolkata. It can be seen that the entire assessment has been framed by the Assessing Officer without conducting any enquiry from the relevant parties or independent source or evidence but has merely relied upon the statements recorded by the Investigation Wing as well as information received from the Investigation Wing. It is apparent from the Assessment Order that the Assessing Officer has not conducted any independent and separate enquiry in the case of the assessee. Even, the statement recorded by the Investigation Wing has not been got confirmed or corroborated by the person proceedings. during the assessment proceedings. 22. Section 142 of the Act contains the provisions relating to enquiry before assessment. 23. It is provided u/s. 142 (2) of the Act that for the purpose of obtaining full information in respect of income or loss of any person, the Assessing Officer may make such enquiry as he considers necessary. In our considered view the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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