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TMI Blog2024 (1) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the authorities below, which were neither controverted or disproved. We are of the considered view that the assessee has discharged the primary onus casted on him in terms of claim of exemption of long-term capital gains u/s 10(38) of the Act by establishing the genuineness of transaction of purchase and sale of shares and satisfying the requisite conditions specified therein and therefore, the gains so arising on sale of shares has been rightly claimed as exempt u/s 10(38) of the Act. For instance, in the case of another assessee Shri Mohd. Sharif, Pali (Rajasthan) and Abhay Kumar Kuldeep Kumar HUF, on similar facts and circumstances, department has reopened assessment u/s 148 for the same reasons as of the assessee but assessments were closed by allowing exemption u/s 10(38) on sale of shares of M/s ACI Infocom Ltd. In our view, the action of the authorities below not allowing exemption u/s 10(38) to the assessee on the same facts and circumstances is bad in law and against the principles of natural justice. The order of the Ld. CIT(A) is infirm and perverse to the facts on record in rejecting the appellants claim of exemption u/s 10(38) of the Act. In view of peculiar f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such proceeding s u/s 148. He submitted that All the transaction of the purchase and sale of shares was made from registered brokers through recognized stock exchange and all transactions were by banking channels and that the complete details of such capital gain was submitted in the return of income itself where the long term capital gains at Rs. 14,68,750/- was claimed exempt u/s 10(38) of the Income Tax Act. He submitted that the proceedings were initiated in a mechanical manner merely on the basis of information received from DDIT Investigation, Mumbai without any separate enquiry to bring specific material on record so as to indicate that the shares transactions carried out by the assessee are unexplained. Thus, the said assessment was initiated merely on the basis of suspicion, surmises and borrowed satisfaction without any concrete evidence and therefore assessment proceedings u/s 148 initiated based on suspicion and borrowed satisfaction is invalid and against the principal of natural justice. 4.1 Per Contra, the Ld. DR stands by the impugned order. 4.2 Heard the rival contention, perused the material on record, impugned order and case law cited. The appellant relying on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation Wing at Kolkata has already brought into light about the nefarious activities indulged in by the brokers who work as a conduit to provide accommodation entries. It is alleged that the appellant has not been able to discharge the onus about the genuineness of the transactions. The CIT(A) also referred to the decision of CIT vs. Swati Bajaj in which it was held that the report of the Investigation department could not be thrown out on the grounds that cross examination was not allowed. Accordingly, the addition made by the AO was upheld. 7. The Ld. Counsel submitted that the appellant had purchased 10,000 Shares of M/s ACI Infocom Ltd for Rs. 2,58,739/- on 25.08.2011 through broker Nine Star Broking Private Limited and payment was made by cheque on 27.08.2011. All these shares were sold on 25.10.2012 and 08.11.2012 for Rs. 14,62,111/- with profit of Rs. 12,03,372/- on these shares and the total long-term gain derived by the assessee had been claimed to be exempt u/s 10(38) of the Income Tax Act, 1961. 7.1 The Ld. AR contended that all these trading details reflected in broker transaction statement have been submitted during the assessment proceedings. It is submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C (sic-69) of the Act is very high which is required to be discharged conclusively in this case; there is no such evidence. The assessee has purchase shares from M/s Maheshwari Sons. These purchases are evidenced from the contract note. The payment was made by cheque. These shares were transferred in the name of the assessee. The assessee held these shares for more than one year. She sold these shares to the member of stock exchange Shri J.K. Jain. Shri J.K. Jain in his letter dt. 22nd Dec. 1999 has confirmed the transaction and the payment was made through cheque. The assessee has proved all the requisite evidence in support of all transactions. Simply because Shri J.K. Jain (sic, the broker) could not produce his books of account or the quoted rate of shares in Delhi Stock Exchange being less or the transactions being not reported by Shri J.K. Jain to the stock exchange, would not made a transaction bogus. The Jaipur Stock Exchange has intimated the AO that they are only having information of the transactions between two members of the stock exchange and not otherwise. In the present case, the transaction was between a member and a non-member and therefore, such transactions were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n he talked of the possibility of the appellant earning a considerable sum as against which it showed a net loss of about Rs. 45,000. The Income Tax Officer indicated the probable source or sources from which the appellant could have earned a large amount in the sum of Rs. 2,91,000 but the conclusion which he arrived at in regard to the appellant having earned this large amount during the year and which according to him represented the secreted profits of the appellant in its business was the result of pure conjectures and surmises on his part and had no foundation in fact and was not proved against the appellant on the record of the proceedings. If the conclusion of the Income Tax Officer was thus either perverse or vitiated by suspicions, conjectures or surmises, the finding of the Tribunal was equally perverse or vitiated if the Tribunal took count of all these probabilities and without any rhyme or reason and merely by a rule of thumb, as it were, came to the conclusion that the possession of 150 high denomination notes of Rs. 1,000 each was satisfactorily explained by the appellant but not that of the balance of 141 high denomination notes of Rs. 1,000 each. 3. ITAT Jodhpur in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocom Ltd is presently traded in BSE which is meeting the SEBI Compliance as well. We find that for the purchase of shares the payment was made on 25.8.2011 to broker Nine Star Broking Private Limited (APB, Pg. 57) and the shares were being sold on 31.10.2012 and 15.11.2012 where the payment was being received on 25.10.2012 and 08.11.2012 respectively. It is noted that the broker note has been issued for the purchase as well as for the sale of shares. From the demat A/c, it is evident that the share holding statement as on 31.3.2012 and 31.3.2013 indicates the entry of ACI Shares (APB, Pg.68). It is also seen that there were other transactions of purchase and sale of shares with the same broker and those transactions are being not disputed based on the account confirmation from the broker who also confirms the transactions of M/s ACI Infotech Ltd. being carried out by the appellant. On similar facts and identical issue the ITAT Jodhpur Bench in the case of Piyush Gogad in ITA No.27/Jodh/2021 A.Y. 2014-15, being investment on same shares/ script of ACI Infocom Ltd. has held that where the complete details of purchase of shares and sale of shares is verifiable from the bank statement, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s pertinent to mention here that on similar facts where the investment were also made on the same shares (script) by the other assessees, the department has accepted the long term capital gains arising from the aforesaid shares (Script). For instance, in the case of another assessee Shri Mohd. Sharif, Pali (Rajasthan) and Abhay Kumar Kuldeep Kumar HUF, on similar facts and circumstances, department has reopened assessment u/s 148 for the same reasons as of the assessee but assessments were closed by allowing exemption u/s 10(38) on sale of shares of M/s ACI Infocom Ltd. In our view, the action of the authorities below not allowing exemption u/s 10(38) to the assessee on the same facts and circumstances is bad in law and against the principles of natural justice. 12. Considering the factual matrix and judicial precedents, we hold that the order of the Ld. CIT(A) is infirm and perverse to the facts on record in rejecting the appellants claim of exemption u/s 10(38) of the Act. In view of peculiar facts of the case, we set-aside the order of the learned CIT(A) and as such allow the claim of the assessee under section 10(38) of the act. The 2nd issue of exemption u/s 10(38) of the act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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