9911796707
TMI Blog2023 (1) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... nately AO could not point out. So the assessee s claim of LTCG need to be allowed. And the commission added also is based on surmises conjectures. Likewise on same reasoning, the LTCG claim in the case of Mrs. Rashmi Sukesh Malik Alias Jyoti Srichand Bathija need to be allowed and is ordered so. And the commission added was based on surmises conjecture which need to be deleted. Thus, no addition u/s 68 and 69C of the Act was warranted and so it is ordered to be deleted in both cases - Appeals of the assessee are allowed. - SHRI ABY T. VARKEY, JM For the Assessee : Shri Hari Raheja For the Revenue by: Ms. Nayana K. Kumar (Sr. DR) ORDER PER ABY T. VARKEY, JM: These are appeals preferred by the assessee s against the order of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi dated 25.10.2021 for the assessment year 2014-15; and that of Ld. Commissioner of Income Tax (Appeals)-04, Mumbai dated 25.09.2018 for AY. 2014-15 respectively. 2. Both the parties agree that both the appeals are identical except that of figures (sum of money). Therefore, the appeals of the assessee [Srichand Chatrumal (HUF)] ITA. No. 2334/Mum/2021 is taken up as the lead case and the result of which will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing note of the statement given by Shri Narendra Balasia (in the case of SMC Global Securities Ltd, Shri Alok Harlalka who is broker of M/s. SMC Global Securities Ltd), the AO was of the opinion that the assessee s LTCG claim on sale of M/s. KAFL was bogus. And the AO took note of the Investigation Report of Directorate, Kolkata and as well as the SEBI interim order dated 29.03.2016 against certain entry operators in respect of transaction in scrip of M/s. KAFL, wherein the SEBI opined that certain operators were involved in rigging the price of this share whereby the beneficiaries have made huge LTCG and he expressed his strong suspicion in respect of the assesses LTCG claim. The assessee contested the allegation given in the investigation report about the scrip of M/s. KAFL and pointed out that it cannot be used against the assessee because neither the investigation report nor the statement of 3rd parties which was the base of the ibid report have nothing incriminating against the assessee or its broker indulging anything wrong, and it were recorded behind the back of assessee. And also submitted that it invested in share market in various scrips and investment in shares of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee pursuant to the SCN filed documentary evidence to prove that she had purchased on 20.10.2012 shares of M/s. Panchshul Marketing Ltd for Rs. 50,000/- from M/s. Over flow Merchandise Pvt. Ltd. and filed supporting documents to prove the purchase i.e. bill, proof of amount paid by cheque delivery proof and confirmation (refer page 8-12). It was brought to the notice of AO that Hon ble High Court of Allahabad approved the scheme of arrangement and amalgamation of M/s. Panchshul Marketing Ltd with M/s. KAFL and as per the scheme of arrangement assessee was allotted 50,000/- shares of M/s. KAFL. Demat statement of holding of shares of M/s. KAFL has been filed (page no. 18 PB). Thereafter, the assessee sold the shares on 02.12.2013, 03.12.2013 09.12.2013 through broker M/s. Edelweiss Securities Ltd. and claimed LTCG of Rs. 19,51,000/-. Assessee in order to prove the sale of shares of M/s. KAFL has filed sale bill generated on those dated of sales, which shows the number of shares sold, sale prices, their brokerage and STT charges respectively found placed at page 19,20 21 of PB. The sale transaction has taken place through SEBI regulated broker M/s. Edelweiss Securities Ltd, (accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is bogus. And therefore he made an addition of Rs. 19,51,000/- u/s 68 of the Act by taking the LTCG claim and added of Rs. 58,350/- (commission @ 3%) as unexplained investment u/s 69C of the Act. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who dismissed the same by passing the impugned order dated 25.09.2018. Aggrieved, the assessee is before us. 7. Coming back to the lead case, the Ld. AR of the assessee Shri Hari Raheja assailing the action of the Ld. CIT(A)/NFAC, drew our attention to the facts that both the assessee s have purchased shares of M/s. Panchshul Marketing Ltd. on 18.10.2012 (50,000 shares) at the cost of Rs. 50,000/- through broker M/s. Overflow Merchandise Pvt. Ltd. on 18.10.2012 (AY. 2013-14). For proving the same, the Ld. AR drew our attention to the page no. 6 to 13 of the PB wherein the proof of payment by cheque, documents to prove delivery of the shares are found placed; and confirmation is found placed as well as bills from broker is also found in the PB. And thereafter, the shares were dematerialized and the Ld. AR drew our attention to the Demat account statements dated 31.10.2012, 31.03.2012 31.03.2013 showing that the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Panchshul Marketing Ltd). And also pointed out even in the interim report of SEBI, there is no prohibition/restriction on the broker (M/s. Edelweiss Securities Ltd.) through whom both the assessee s sold the shares of M/s. KAFL through the stock exchange. In this context, the Ld. AR brought to my notice the crucial fact/evidence/document which was the final order of the Security and Exchange Board of India (SEBI) dated 21.09.2017 wherein the SEBI has exonerated M/s. KAFL, M/s. Panchshul Marketing Ltd. and broker M/s. Overflow Merchandise Pvt. Ltd. from the suspect list and have held as under: - 6. Considering the fact that there are no adverse findings against the aforementioned 244 entities with respect to their role in the manipulation of the scrip of Kailash Auto, I am of the considered view that the directions issued against them vide interim order dated March 29, 2016 ad confirmatory orders dated June 15, 2016, September 30, 2016, October 21, 2016, October 27, 2016 and July 13, 2017 are liable to be revoked. 7. In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt Order of Merger of the Company 12. From perusal of the aforesaid documents, especially the contract-cum-bill which contains the details of the order no, trade no., name of shares, quantity, rate, etc is discerned. And the transaction of purchase as well as sale took place through banking channel. The shares were dematerialized the sale transaction of shares of M/s. KAFL was through broker M/s. Edelweiss Securities Ltd. in the electronic platform of stock exchange. Thus, according to the Ld. A.R. despite all the relevant evidences were filed before the authorities below, but the AO as well as Ld. CIT(A) have proceeded on surmises and presumption based solely on the investigation report and interimorder of SEBI report which suggested that these are accommodation entries and prices of shares were manipulated without doing any verification on the evidences produced by the assessee. The Ld. A.R., therefore, prayed that the addition as made by the AO may be deleted. 13. The Ld. D.R., on the other hand, relied heavily on the order of authorities below and does not want this Tribunal to interfere with the impugned order of Ld CIT(A). 14. I have heard the rival submissions of both the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r persons/entities [including the scrip M/s KAFL and M/s Panchsheel Karketing and broker M/s. Overflow Merchandise Pvt. Ltd.] were exonerated because upon completion of investigation by SEBI it did not find any adverse evidence in respect of violation of provisions of PFUTP Regulation and took note of this fact as under:- 5. Pursuant to the interim order, SEBI conducted a detailed investigation into the role of various entities in price manipulation in the scrip of Kailash Auto so as to ascertain the violation of securities laws. Upon completion of investigation by SEBI, investigation did not find any adverse evidence/adverse findings in respect of violation of provisions of the PFUTP Regulations in respect of the following 244 entities (against whom directions were issued vide the interim order and/or confirmatory orders) warranting continuation of action under section 11B r/w 11(4) of the Act. And has given the details of 244 entities exonerated, wherein the scrip of M/s KAFL and M/s. Panchshul Marketing Ltd is given as item no. 1 and 106 respectively and the broker through whom the assessee purchased the scrip of M/s. Panchshul Marketing Ltd i.e. M/s. Overflow Merchandise Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon by the AO. Therefore, the AO erred in relying on the investigation report of the investigation wing to disallow the claim of LTCG. 16. Thus, considering the facts of the case and the evidences in support of the LTCG claim clearly support the claim of the assessee that the transactions of the assessee were bonafide and genuine and therefore the AO was not justified in rejecting the assessee s claim of exemption under section 10(38) of the Act. As discussed (supra), the adverse order against the scrip (M/s KAFL and M/s. Panchshul Marketing Ltd) as well as the initial broker M/s. Overflow Merchandise Pvt. Ltd has been over-ruled by SEBI final order dated 21.09.2017 as discussed (supra). And the investigation report as discussed (supra) cannot be the basis for drawing adverse view against the claim of LTCG. When these two documents are kept aside, then only aspect surviving is the suspicious rise of share price of M/s KAFL, which cannot be the sole basis to discard the evidence given by assessee to substantiate the LTCG claim. True, the suspicious rise/fall of share price of M/s KAFL raises doubt in the mind, but Hon ble Supreme Court held that suspicion cannot take the place of ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
