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TMI Blog2022 (6) TMI 1485X X X X Extracts X X X X X X X X Extracts X X X X ..... e price rise. It was held that the assessee had indulged in a dubious share transaction meant to account for the undisclosed income in the garb of long term capital gain. The gain was accordingly held to be rightly assessed as undisclosed income. Similar view has been taken by the Hon ble Delhi High Court in Suman Poddar [ 2019 (9) TMI 1089 - DELHI HIGH COURT] We adopt the foregoing detailed reasoning mutatis mutandis to uphold the learned lower authorities action making the impugned disallowance/addition in very terms. The assessee fails in his sole substantive grievance. - SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER For the Assessee : Smt. Deepa Khare For the Revenue : Shri Arvind Desai ORDER PER S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered broker(s) in the stock exchange. The Assessing Officer thereafter referred to Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC) and CIT vs. Durga Prasad More 82 ITR 540 (SC) to hold that the assessee had derived the impugned bogus long term capital gains after indulging in sham transaction which deserve to be added as unexplained cash credits u/s 68 of the Act. All this resulted in the impugned addition of Rs. 1,15,53,749/- made in the course of assessment which stands upheld in the CIT(A) s detailed discussion under challenge. 4. Learned counsel vehemently argued that both the lower authorities have erred in law and on facts in disallowing the assessee s section 10(38) exemption claim despite the fact that he had all along adopted banking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm capital gain earned on sale of equity shares of PS IT Infrastructure Services Ltd. (PS IT I SL). 3. Briefly stated, the facts of the case are that assessee s case was selected for scrutiny on the ground, inter alia, of Suspicious sale transaction in shares (Penny stock tab in ITS) . The Assessing Officer (AO) observed that the assessee declared exempt long term capital gain on sale of shares pertaining to PS IT I SL amounting to Rs. 19.32 lakh. As per the investigation report available with him, the AO noticed that the scrip of PS IT I SL was used for providing accommodation entries to several parties, which was also banned by the SEBI for its illegal activities. The assessee was called upon to establish the genuineness of the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffairs has identified PS IT I SL as a suspected shell company and further the SEBI has initiated enquiry in this matter and has also restricted trading in shares of PS IT I SL. Placing reliance on the judgment of Hon ble Supreme Court in Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC) and CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC), the AO applied the test of human probabilities and declared the long term capital gain shown by the assessee as non-genuine. Considering the judgment of Hon ble Bombay High Court in Sanjay Bimalchand Jain L/H of Shantidevi Bimalchand Jain vs. The Pr. CIT, the AO made addition of Rs. 19.32 lakh. The ld. CIT(A) confirmed the action of the AO. The assessee is in appeal against the confirmation of the addition. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of certain property should not be taxed in his hands as it was a trust property. The ITO rejected the claim and included the income in the hands of the assessee. The Tribunal affirmed the decision of the ITO, which was reversed by the Hon'ble High Court. Reversing the verdict of the Hon ble High Court, their Lordships noticed that though the assessee made a claim that income of the property was not his and produced conveyance executed in his favour and the deed of settlement executed by his wife, nearly about a year after the conveyance, however, when the ITO asked the assessee about the source from which his wife got the amount, apart from saying that it was sthridhan property, he failed to disclose any source from which his wife ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces to find out the reality and the matter has to be considered by applying the test of human probabilities . This shows that a decision based on the attending circumstances and human probabilities does not get vitiated if there are compelling reasons to reject the frontage of a transaction based on the so- called evidence, which is nothing more than a mere paper work. 7. In view of the factual and legal position discussed above, it is crystal clear that PS IT I SL is a penny stock company and the assessee obtained only accommodation entries in the garb of long term capital gain from transfer of its shares, for which an appropriate addition has rightly been made and upheld by the authorities below. My view is fortified by the judgment dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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