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TMI Blog2024 (2) TMI 1406X X X X Extracts X X X X X X X X Extracts X X X X ..... We fully relied case of Samrat Finvestor Pvt. Ltd. [ 2024 (1) TMI 1306 - ITAT KOLKATA] - The same logic is also applied for transacted shares also. The assessee has suffered losses by transaction of number of shares. The assessee itself transacted huge volume of share during impugned assessment year. We find that the entire addition is made on basis of preconceive idea as generated after a general investigation of investigating authority. We accordingly set aside the appeal order and quash the addition amount - Assessee appeal allowed. - SRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SRI ANIKESH BANERJEE, JUDICIAL MEMBER For the Assessee : Sh. Soumitra Choudhury, Adv. For the Department : Sh. P.P. Barman, Addl. CIT, Sr. D/R. ORDER Per Anikesh Banerjee, Judicial Member: The instant appeal of the assessee was filed against the order of Ld. Commissioner of Income-tax (appeals)-NFAC, Delhi [in brevity ld. CIT(A) ] dated 16.10.2023 passed u/s 250 of the Income Tax Act, 1961 (in brevity the Act ) for assessment year 2015-16. The impugned order was emanated from the order of the ld. ACIT, Circle-5(2), Kolkata (in brevity the AO ) passed u/s 143(3) of the Act dated 29.12.2017. 2. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent stock which the ld. A/R has treated as the penny stock. The assessee was asked to explain the loss amounting to Rs. 2,27,75,453/- during the assessment proceedings. The assessee submitted the evidence and supporting documents before the ld. AO. But the ld. AO has added back the amount to the total income of the assessee. Being aggrieved, the assessee filed an appeal before ld. CIT(A). Ld. CIT(A) upheld the assessment order. Being dissatisfied on appeal order, the assessee filed an appeal before us. 4. Ld. A/R, Mr. Soumitra Choudhury, Advocate vehemently argued and submitted written submissions which are kept in the record. Mr. Choudhury invited our attention in appeal order page 9 and placed that ld. CIT(A) has passed the order in very cryptic manner and the decision was given by one line. The relevant paragraph is inserted below: I have gone through the facts of the case in detail. The jurisdictional High Court has passed a detailed order in favour of the Revenue in PCIT vs. Swati Bajaj and Ors. where it sums up as Respectfully following the decision of the jurisdictional High Court, I have no hesitation in dismissing these grounds of appeal. 5. Ld. A/R, Mr. Choudhury further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng loss on Penny Stock: During the course of assessment proceedings. It is noticed from the ITS details that the assessee company has purchased/sales shares transactions for which Penny Stock Trade data has been displayed and resulting in a huge loss amounting to Rs.2,27,75,452/- in transaction of Penny Stocks. Since these loss are not allowable in view of report of Investigation Wing. On hearing dated 18.12.2017 as asked from the A/R to furnished the net result from trading of below mentioned Penny Stocks, the A/R of the assessee tiled the submission with net result in Penny Stocks which is reproduced as under: Particulars Purchase Qty. Amount Sale Qty. Amount Gain/Loss Amount Cressanda Commerci 75,000 40,33,538.62 75,000 7,68,460.00 -32,65,078.62 Dhanleela Investment 25,000 48,44,569.80 25,000 23,26,587.50 -25,17,982.30 Mahavir Advanced 5,000 17,90,849.55 5,000 7,53.250.00 -10,37,599.55 Matra Kaushal 50,000 25,90,463.60 50,000 4,51,595.00 -21,38,868.60 Mishika Finance Ltd. 1,25,000 64,86,447.00 1,25,000 9,61,347.15 -55,25,099.85 Pearl Agriculture Ltd. 50,000 24,46,915.50 50,000 4,80,785.00 -19,66,130.50 Pearl Electric 1,00,000 50,67,462.75 1,00,000 9,20,160.00 -41,47,302.75 Rajla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et position, their income, dividends etc. Further, it was not a case that the shares shown to have been purchased off market/privately and thereafter they were put into demat account after sufficient lapse of time from the alleged date of physical purchase and then sale of the same within a short span of time after they were accounted in the demat account, gaining high monetary capital gains. In the case of the assessee, the shares were traded on the stock exchange, the same were kept in the demat account of the assessee. There is no allegation of involvement of the assessee or even his share broker in any type of price rigging. There even does not seem any probability of meeting minds of the assessee and/or his share broker and the promoters of the companies. A very peculiar fact which is noted from the assessment order/investigation wing report is that in the list of the persons whose statement was allegedly recorded and who in their statement have admitted of price rigging, the names of share brokers, entry operators and exit providers have been mentioned. The facts on the file itself show that there was meeting of minds of the entry operators and the share brokers and exit prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it is to be remembered that judicial utterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington Vs. British Railways Board (1972) 2 WLR 537. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. The Hon ble Karnataka High Court in the case of Flipkart India (P.) Ltd. v/s Assistant Commissioner of Income-tax , [2017] 79 taxmann.com 159 (Karnataka) has observed that considering the fact that this blind appreciation of a precedent is a frequent occurrence, in catena of cases, the Hon'ble Supreme Court has clearly opined that a judgment should not be read as a provision of law. A judgment is confined to the facts and circumstances of its own case. It is only when the facts and circumstances in two cases are similar that the ratio of the former case becomes applicable to the latter case. As discussed above, in the absence of any direct incriminating evidence against the assessee, the distinguishable and weak circumstantial evidence, in our view, do not suggest the preponderance of probability of the assessee being involved in price rigging of the scrips or being the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of surrounding circumstances but so far as the cases on hand are concerned, we notice that firstly some observations were made by the SEBI regarding some fishy transactions carried out in case of few companies. Based on such primary information, the income tax department has carried out extensive enquiries and search and surveys in the case of various entry operators and alleged companies and based on such statements, a theory was established regarding such accommodation/bogus entries in the form of capital gains. However, since in the case of the assessee, SEBI at a later stage has intensively carried out the investigation on the facts of the assessee(s) along with other persons as referred in the order of the SEBI (extracted supra), and after a detailed investigation and examination of records exonerated, the assessee(s) from the charges levelled in the show cause notice issued to them. Therefore, when the assessee(s) have been exonerated and the charges against them have been waived and the transactions of purchase and sale of equity shares carried out by them have been found to be genuine, the theory of preponderance of probabilities is ruled out in the case of the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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