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TMI Blog2024 (4) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... d the scrip dealt by the assessee herein. In our considered opinion, the entire issue has been looked into by the ld. AO from the angle of suspicion by ignoring the aforesaid factual details placed on record proving the credentials of CCL International Ltd. It is trite law that suspicion howsoever strong cannot partake the character of a legal evidence. This is a classic case of the revenue ignoring their own officers scrutiny assessment orders framed on the said company CCL International Ltd duly accepting the fact that the said company is engaged in various businesses and had reported huge incomes year after year. Hence it cannot be classified as a penny stock company at all. Once it is held that this company is not a penny stock, none of the allegations leveled by the ld. AO and upheld by the ld. CIT(A) in their orders would be applicable to the said company. The ld. AR also stated that the said company is still listed in the stock exchange and is priced at Rs 30 approximately per share. We find that the coordinate bench of Delhi Tribunal in the case of Reeshu Goel [ 2019 (10) TMI 1387 - ITAT DELHI ] had categorically given a finding that the said company CCL International Ltd c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15-16, arises out of the order of the Commissioner of Income Tax (Appeals)-Ghaziabad [hereinafter referred to as ld. CIT(A) , in short] in Appeal No. 337315361181217 dated 31.10.2018 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 16.11.2017 by the Assessing Officer, ITO, Ward-1(2), Ghaziabad (hereinafter referred to as ld. AO ). 2. The first issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the addition of Rs 49,33,062/- by denying the exemption u/s 10(38) of the Act in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. The assessee is an individual deriving income from salary and other sources. The return of income for the Asst Year 2015-16 was filed by the assesse on 28.8.2015 declaring total income of Rs 6,60,930/-. The assessee purchased 12500 equity shares of CCL International Ltd on 22.8.2011 for Rs 1,25,000/- in off market through a stock broker M/s Narayan Securities in cash. These shares carried a face value of Rs 2 per share and assessee bought the same at Rs 10 per share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee evidencing the fact that sale proceeds of shares were received by the assessee through regular banking channels from Trustline Securities Ltd; copies of audited financial statements of CCL International Ltd for the financial years 2013- 14, 2014-15 2015-16 ; copies of annual returns and financial statements as filed by CCL International Ltd before the Registrar of Companies (ROC) for the financial years 2013-14 and 2014-15 and Memorandum of Association and Articles of Association of CCL International Ltd. It is pertinent to note that the assessee had sold these 9000 shares in various tranches at prevailing market prices on various dates. The shares were sold at Rs 479.52 , Rs 496.403, Rs 578.271, Rs 585.21, Rs 592.407, Rs 598.401 and Rs 488.511 per share on various dates during the year under consideration. 3.3. After selling 9500 shares during the year under consideration, the assessee held remaining 3000 shares in his demat account. The ld. AO wrongly stated that the assessee had sold these 3000 shares on 8.12.2015 relevant to Asst Year 2016- 17. Actually no sale was made by the assessee on 8.12.2015 and these shares were consolidated on 8.12.2015 by the company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on record the Certificate of Accreditation of New / Alternative Materials / techniques technologies / equipments for adoption in the Highway Sector namely Evocrete ST issued to the said company by Indian Roads Congress vide letter dated 12.4.2016. The ld. AR also placed on record an award given by CSIR department, Government of India to CCL International Ltd. This goes to prove that the said company i.e CCL International Ltd is duly recognised by the Government of India. The ld. AR also placed on record the scrutiny assessment orders of CCL International Ltd of various assessment years as under:- Asst Year Income Returned Income Assessed Order u/s Date of Order Page No. of PB 2011-12 247270/- 289526/- 143(3) 28.2.2014 86 87 2012-13 7115100/- 7115100/- 143(3) 4.3.2015 88 89 2013-14 15775370/- 15846584/- 143(3) 22.2.2016 90 91 2014-15 9101530/- 9243927/- 143(3) 21.12.2016 92 92A 2015-16 9533430/- 9913390/- 143(3) 16.5.2017 93 to 95 3.7. The aforesaid scrutiny income tax assessment orders clearly go to prove that the said company i.e. CCL International Ltd cannot be construed as a shell company or a penny stock company as alleged by the lower authorities. On the contrary, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made u/s 69 of the Act by the ld. AO is hereby deleted. The Ground Nos. 2 to 4 raised by the assessee are allowed. 4. The Ground Nos. 4 5 raised by the assessee are challenging the addition made u/s 68 of the Act in respect of unsecured loans received by the assessee in the sum of Rs 29,56,000/- both on law as well as on facts. 4.1. We have heard the rival submissions and perused the materials available on record. The assessee raised loans from the following parties which is subject matter of dispute before us:- 13.8.2014 Kapil Gupta 16,000/- 29.10.2014 Rakesh Gupta (HUF) 17,20,000/- 24.3.2015 Ankita Garg 2,20,000/- 24.3.2015 Ankita Garg 7,00,000/- 25.3.2015 Ankita Garg 3,00,000/- TOTAL 29,56,000/- 4.2. The assessee was asked to explain the three necessary ingredients of section 68 of the Act i.e. identity of the lender, creditworthiness of the lender and genuineness of the transactions, in respect of the aforesaid loan creditors. The observations of the ld. AO in this regard are as under:- (i) No explanation was furnished with regard to deposits of Rs. 16,000/- obtained from shri Kapil Gupta. Therefore, the sum of Rs. 16,000/- is held unexplained cash credit, and added under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Securities Ltd as a registered share broker by effectively stating that all the transactions carried out through Trustline Securities Ltd should have to be treated as bogus as they had only dealt with penny stock scrips where share prices have been artificially manipulated. This is absolutely baseless and cannot be sustained in the eyes of law as it is not backed by any evidence. The ld. AO had not brought any material on record with regard to the name of the scrip dealt by Rakesh Gupta (HUF) ; when it was sold ; whether the gains thereon are short term or long term capital gain or loss ; whether STT was suffered on that transaction ; how many shares were sold. Absent all these basic details, the nature and source of credit of Rakesh Gupta (HUF) being sale proceeds of shares received from Trustline Securities Ltd (a registered share broker with SEBI) cannot be doubted. Even if the amounts received by Rakesh Gupta (HUF) from Trustline Securities Ltd is treated as income in the hands of Rakesh Gupta (HUF), still it becomes a valid source for the HUF to advance loan to the assessee herein. Hence creditworthiness of Rakesh Gupta (HUF) is proved beyond reasonable doubt i.e loan was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ledger account of Agro Auto Grind Engineers Pvt Ltd was duly placed on record by the assessee before the ld. AO itself which fact is even acknowledged by the ld. AO in his observations reproduced hereinabove. Hence there is no reason for the ld. CIT(A) to merely reject this crucial document of bank statement as additional evidence which only supports the documents already placed on record by the assessee before the ld. AO viz. the ledger account of Agro Auto Grind Engineers Pvt Ltd. Hence we have no hesitation to hold that the assessee had duly proved the identity of the lender, creditworthiness of the lender and genuineness of the transactions in respect of loan received from Ankita Garg in the sum of Rs 12,20,000/- and hence the addition made u/s 68 of the Act thereon is hereby directed to be deleted. 4.6. With regard to loan received from Kapil Gupta in the sum of Rs 16,000/-, the same was added as unexplained cash credit u/s 68 of the Act by the ld. AO on the ground that no details were furnished by the assessee. The assessee had filed confirmation from the lender , copy of Income Tax Return acknowledgement of the lender for the Asst Year 2014-15 , copy of PAN card of the ..... 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