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TMI Blog2023 (9) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... d steep rise of the price of the shares of the companies when the general market trend was admittedly recessive and thereafter arrived at a conclusion which is a proper conclusion. The issue involved in these appeals is squarely covered against the assessee. - HON'BLE JUDGES SANJAY GARG, MEMBER (J) AND DR. MANISH BORAD, MEMBER (A) For the Appellant : Amalesh Sadhu For the Respondents : P.P. Barman, Addl. CIT, Sr. D.R. ORDER DR. MANISH BORAD, MEMBER (A) 1. The captioned appeal bearing ITA No. 1029/KOL/2017 and ITA 558/KOL/2018 at the instance of assessee for assessment year 2013-14 and A.Y. 2014-15 are directed against the order of ld. Commissioner of Income Tax (Appeals)-10, Kolkata dated 30.03.2017 and 13.02.2018 are arising out of the order under section 143(3) of the Act dated 20.01.2016 and 07.12.2016 framed by ld. ITO, Ward-36(3), Kolkata. The grounds of appeal for A.Y. 2013-14 read as under:- (1) Ld Income Tax Officer has erred in law as well in fact in treating long term capital gain of Rs. 68,87,029/-as bogus and added to the returned income of your appellant as unexplained case credit under section 68 of I T. Act, 1961. (2) Ld Income Tax Officer has erred in law as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of Long Term Capital gain u/s 10(38) of I.T. Act, 1961 using the circumstantial evidence and completely ignoring the documentary evidence produced by your appellant in regard to earning of long term capital gain without rebuttal of the same. (10) Ld. CIT (Appeals) has erred in drawing the conclusion that reliance of materials placed by your appellant in A.O.record are in the nature of contention challenging criminal on civil liabilities in a court of law and have no relevance while dealing with process of adjudication of assessee tax liability i.e. assessment under Income Tax Act, 1961. (11) Ld. CIT (Appeals) has erred in drawing conclusion that is a sensitive matter like his, ever a single clue or revelation can be of great importance. To reverse the order of the A.O. are this technical plea will amount to talking a lopsided view of the proceedings. The assesses contention and objectives in this behalf that the material available on record was not admissible as evidence and it cannot be relied on by the A.O. are devoid of any merit and are rejected outright. (12) Ld C.I.T (Appeals) has failed to appreciate the judgment of Hon'ble I T.A T. 'C' Bench Kolkata in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act,1961. (5) That Ld. C.I.T.(A) erred in law as well as in fact in holding the long term capital gain on sale of shares as bogus. (6)That Ld. C.I.T.(A) erred in law and failed to appreciate the different legal decisions of Hon'ble I.T.A.T. Kolkata, which are squarely applicable in the present case of your appellant. (7) That Ld. C.I.T. (A) erred in law in disallowing the claim of your appellant on the basis of human probability and surrounding circumstances and fully ignoring the documentary evidences produced by your appellant at the time of hearing before him as well as before Ld. A.O. in support of his claim of exemption u/s,10(38) of I.T.Act,1961. (8) Whether on the facts and circumstances of the case, the Ld C.LT(A) was justified in upholding the action of the Ld A.O. in treating the transactions in share of NCL Research Financial Services Ltd. resulting in Long Term Capital Gain as bogus and thereupon making addition on the presumption that commission @ 5% was paid for arranging the aforesaid bogus Long Term Capital Gain. (9) Whether on the facts and circumstances of the case Ld. C.I.T.(A) was justified in upholding the disallowance made by the Ld AO u/s. 14A read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion that the assessee has managed to take bogus long-term capital gain. As a result, the ld. Assessing Officer made the addition for unexplained cash credit for the sale consideration received from sale of equity shares during A.Ys. 2013-14 and 2014-15 giving rise to alleged long-term capital gain. The assessee failed to get any relief from the ld. CIT(Appeals). Being aggrieved, the assessee is in appeals before the Tribunal. 5. During the course of hearing, only a staff of the assessee represented. In the past, almost more than 25 dates of hearing have been fixed but the case fixed for hearing was adjourned for one reason or another. These appeals were filed during 2017 and 2018 and are almost six years old. The staff person on behalf of the assessee failed to submit any written submission on behalf of the assessee. We, however, notice that written submissions were filed on 11.03.2019 and 06.04.2021 and the same have been considered for the purpose of adjudication of the issues in appeals before us. 6. On the other hand, ld. D.R. stated that the issues raised in the instant appeals are squarely covered in favour of the assessee by the judgment of the Hon'ble jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Hon'ble Jurisdictional High Court in the case of Swati Bajaj Others (2022) 139 taxmann.com 352(Cal.) pronounced on 14.06.2022, observed as under:- 4. All the present cases were selected for scrutiny u/s. 143(3) through CASS and the issue in all of them for selection relates to 'suspicious long term capital gain on shares'. In all the above appeals, according to the ld. AO, LTCG reported by the assessee in respective return was bogus and the entire transactions were done with the objective to introduce unaccounted money of the assessee in the books by using the route of LTCG which was exempt from tax u/s 10(38) of the Act, except in one case, where the assessee has booked trading loss on transaction of shares of two Companies, which have been treated as penny stock. Thus, ld. AO held that the said LTCG/loss are fabricated/engineered transactions by the respective assessees, sale of which falls under the category of penny stocks and the same were treated as bogus which were added in the total income by treating it as unexplained cash credit u/s. 68 of the Act. Ld. AO based his decision of treating the impugned transaction of sale of shares as bogus transaction by rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural justice the assessees have not made out any case. [para 65] c) The test to be applied is the test of preponderance of probabilities to ascertain as to whether there has been violation of the provisions of the Income-tax Act. In such a circumstance, the conclusion has to be gathered from various circumstances like the volume from trade, period of persistence in trading in the particular scrips, particulars of buy and sell orders and the volume thereof and proximity of time between the two which are relevant factors. Therefore, the methodology adopted by the revenue cannot be faulted. [para 69] d) Test of preponderance of probabilities have to be applied and while doing so, the court cannot loose sight of the fact that the shares of very little known companies with in-significant business had a steep rise in the share prices within the period of little over a year. [para 73] e) The assessee was not named in the report and when the assessee makes the claim for exemption, the onus of proof is on the assessee to prove the genuinity. [para 73] f) It is incorrect to argue that the assessees have been called upon to prove the negative in fact, it is the assessees duty to establish th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion. [para 99] l) For all the above reasons, we hold that the Tribunal committed a serious error in setting aside the orders of the CIT(A) who had affirmed the orders of the Assessing Officer. [para 101] m) In the result, these appeals are allowed and the substantial questions of law framed/suggested are answered in favour of the revenue and against the assessee restoring the orders passed by the respective Assessing Orders as affirmed by the CIT(A). [para 102] 6. In the context of factual matrix of the present appeals before us narrated above, the position of law as enunciated by the Hon'ble jurisdictional High Court of Calcutta in Swati Bajaj (supra) carrying force of binding nature on the issue under consideration for us, was confronted to the respective ld. Counsels of the assessee who appeared before us. Ld. Counsels were fair enough to state that issue involved in these appeals is squarely covered against the assessee by the said decision as the fact involved are identical to that which were before the Hon'ble High Court. For cases where none appeared before us on behalf of the assessee, the relevant factual matrix was captured with the assistance of Ld. Sr. DR ..... 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