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TMI Blog2024 (7) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... such a huge suspicious transaction to RBI and Stock exchanges, [5] How synchronized trade of purchases by the assessee took place and to whom exit was provided , [6] where the shares appearing in Demat account were diverted to, who operated Demat account of this assessee,] should have summoned to Mr. Kamlesh Sanghavi who deposited cross account payee cheques in the bank account of the assessee as alleged by assessee himself. AO should have definitely made a larger inquiry because such a kind of scam cannot happen without connivance of the bankers, demat agencies, brokers [who sold shares on behalf of assessee] on stock exchange platform. After making all these inquires AO should also take necessary action in case of all other persons in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in deciding the appeal ex-parte in view of the fact that no notice was received by the appellant for hearing of appeal. 2. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in dismissing the appeal and confirming addition of Rs. 4,16,36,800 as unexplained cash credit under section. 68 of the IT, Act, 1961 ignoring the admitted fact on record and categorical finding of investigation wing of the department that the appellant was one of the entity in the chain to facilitate the accommodation entries for providing Long Term Capital Gains (LTCG). He ought to have directed to the ld. A.O. to assess the commission income at 0.25 percent of the total amount deposited in the bank accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income on 28th July, 2014, declaring total income of ₹ 2,07,210/-. The return was picked up for scrutiny. The brother of the assessee and Authorized Representative represented the case. The income of the assessee is commission income and income from other sources. It was found that the assessee has purchased 84,800 shares of Sunrise Asian Limited and out of that assessee has sold 13,888 shares during the year. These shares were purchased at an average rate of ₹ 491 per share amounting to ₹ 4,16,36,800/-, as per AIR data. The learned Assessing Officer found that this company was a penny stock company and prices are rigged up. During the course of search on 9th February, 2016 on Mr. Vipul V. Bhatt, he admitted the same. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hvi and the assessee has merely received commission income. He further stated that he is not aware about company, whose shares he has purchased or transacted. He also stated that no books of accounts are maintained by him. Subsequently, the show cause notice was issued under Section 142(1) of the Act, as to why unexplained investment of ₹ 2,48,88,704/- on purchase of 70,912 shares of Sunrise Asian Limited should not be treated as income. A further show cause notice with respect to the purchase of 13,888 shares should not be treated as bogus. The assessee replied on 14th December 2016, and explained the modus operandi of hawala operator Mr. Kamlesh Sanghvi, and stating that he has only received the commission. The learned Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities only in terms of ground no 1 of the appeal. Ld AR agreed with the same. Therefore, Ms pawar was heard and adjournment requested was rejected. 06. Ld DR submits that assessee is claiming him to be an exit provider in case of one penny stock company Sunrise Asian Limited in which Mr. Vipul Vidhur Bhatt and his accomplices provided exit to several beneficiaries for earning bogus long term capital gain. Assessee has also named one Mr. Kamlesh Sanghvai who deposited cross bearer cheques in the account of the assessee for providing funds for pay out in stock exchange. He is not produced. Assessee has failed to produce any of other parties before ld AO and also did not represent before ld CIT (A). Therefore, there is nothing wrong in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction to RBI and Stock exchanges, [5] How synchronized trade of purchases by the assessee took place and to whom exit was provided , [6] where the shares appearing in Demat account were diverted to, who operated Demat account of this assessee,] should have summoned to Mr. Kamlesh Sanghavi who deposited cross account payee cheques in the bank account of the assessee as alleged by assessee himself. Ld AO should have definitely made a larger inquiry because such a kind of scam cannot happen without connivance of the bankers, demat agencies, brokers [who sold shares on behalf of assessee] on stock exchange platform. After making all these inquires ld AO should also take necessary action in case of all other persons in accordance with law. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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