9911796707
TMI Blog2024 (7) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... from Mr. Anuj Agarwal we notice that there is no specific mention of the names of neither the assessee nor the broker through whom the assessee carried out the transactions. We see no merit in the order upholding the treatment of the LTCG as an income u/s 68 of the Act. Assessee appeal allowed. - SHRI NARENDER KUMAR CHOUDHRY, JM MS PADMAVATHY S, AM For the Appellant : Shri Nishit Gandhi, CA For the Respondent : Shri Srinivas, Sr. DR ORDER Per Padmavathy S, AM: This appeal is against the order of the Commissioner of Income Tax (Appeals)-7, Mumbai [for short 'the CIT(A)]' dated 18.07.2019 for the AY 2015-16. The assessee has raised the following grounds: ON NATURAL JUSTICE: 1.1 In the facts and circumstances of the case and in law the order passed by the Learned Commissioner of Income Tax (Appeals) - 7, Mumbai (the CIT(A) which in turn affirmed the order passed by the Learned Income Tax Officer - 16 (3)(S), Mumbai (the AO) is bad in law and deserves to be quashed since the Assessment order passed by the AO is in itself void as the same is passed in gross violation of principles of Natural Justice. ON MERITS: 2.1 In the facts and circumstances of the case and in law, the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to discharge the onus of proving the genuineness of the transaction and that the price of the scrip has increased abnormally in a period of two years. Aggrieved the assessee filed the appeal before the CIT(A) who upheld the order of the AO for the same reasons. Aggrieved the assessee is in appeal before the Tribunal. 3. During the course of hearing the ld AR presented arguments on merits and submitted that if the issue is adjudicated on merits then the ground on the legal issue will not be pressed. The ld. Authorized Representative (AR) submitted that the AO has erroneously made the addition under section 68 of the Act for the reason that the assessee has provided all the relevant details with regard to the transactions and that the sale proceeds are received through a broker from Bombay Stock Exchange after paying due Securities Transaction Tax (STT). The ld. AR further submitted that the assessee has evidenced the purchase by providing the copy of purchase bills, broker note, share certificate in the name of the assessee and copy of Demat statement. The ld. AR also submitted that both the AO and the CIT(A) have not found any fault with the documents furnished by the assessee but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the AO had relied on the report of the investigation directorate and the statement recorded that the script of Pine Animations Ltd. is used a penny stock and accordingly, the ld. DR prayed that the order of the AO should be upheld. 5. We have heard the parties and perused the material on record. The assessee had purchased the 10,000 shares of Four K Animation Ltd. on 08.12.2012 through an off-market transaction. These shares were delivered in physical form and was dematerialized in his Demat A/c. Subsequently, the name of the company was changed to Pine Animation Ltd. and there was a shares split in the ratio of 1/10 and accordingly, the assessee got entitled to 1,00,000/- shares of Pine Animation Ltd. Out of this 1,00,000/- shares assessee sold 28,000 shares in the month of November and December 2014 for a consideration of Rs. 22,33,264/- and as per the financial statement submitted for the year ended 31.03.2015 the assessee was holding the balance 72,000/- shares. The contention of the Revenue is that as per the finding of investigation wing of Kolkata which was carried out in respect of various scripts including M/s Pine Animations Ltd. was involved in artificial booking of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s actually carried out by the assessee. We also notice that the assessee had made a very detailed submission before the AO stating that the assessee is a Chartered Accountant and is involved in regularly investing in stocks for the last 25 years. The fact that as per financial statement of the assessee for the year ended 31.03.2015, the assessee is holding investments in various companies to the tune of Rs. 15 lakhs including 72,000/- shares of Pine Animation Ltd (page 8 of PB) substantiates the said claim of the assessee. However, we notice that the AO without finding any fault with the evidence submitted by the assessee has proceeded to treat the transaction as non- genuine and the long-term capital gains earned by the assessee as bogus for the reason that the name of scrip is part of Investigation report and there is an abnormal increase in the price within a period of 2 years. Therefore, we seen merit in the contention of the ld. AR that the assessee is a regular investor and that in his normal course of operation has sold a part of his investments made in Pine Animations Ltd. The fact that the assessee continues to hold the portion of shares of Pine Animations Ltd. also goes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt has been debited. The shares were also transferred into respondent s Demat account where it remained for more than one year. After a period of one year the shares were sold by the said broker on various dates in the Kolkata Stock Exchange. Pursuant to sale of shares the said broker had also issued contract notes cum bill for sale and these contract notes and bills were made available during the course of appellate proceedings. On the sale of shares respondent effected delivery of shares by way of Demat instructions slip and also received payment from Kolkata Stock Exchange. The cheque received was deposited in respondent s bank account. In view thereof, the CIT[A] found there was no reason to add the capital gains as unexplained cash credit under Section 68 of the Act. The tribunal while dismissing the appeals filed by the Revenue also observed on facts that these shares were purchased by respondent on the floor of Stock Exchange and not from the said broker, deliveries were taken, contract notes were issued and shares were also sold on the floor of Stock Exchange. The ITAT therefore, in our view, rightly concluded that there was no merit in the appeal. 5. We also find no infir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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