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TMI Blog2023 (1) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... addition u/s. 68. We find that the CIT(A) discussed the transaction in detail the impugned order, wherein we completely agree with the reasoning recorded by the CIT(A) in holding the transaction entered by the assessee with paper companies a sham transaction and denial of exemption u/s. 10(38) of the Act is justified. We find no infirmity in the order of CIT(A) and it is justified. Thus, the grounds raised by the assessee are dismissed. - SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI G.D. PADMAHSHALI, ACCOUNTANT MEMBER For the Appellant : None For the Respondent : Shri M.G. Jasnani ORDER PER S.S. VISWANETHRA RAVI, JM : Both these two appeals by the different assessees against the common order dated 03-10-2018 passed by the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as to whether the CIT(A) justified in confirming the addition made by the AO u/s. 68 of the Act of Rs. 1,35,63,573/- on account of bogus Long Term Capital Gains. 6. Heard ld. DR and perused the material available on record. We note that the assessee is an individual derives income from farming and rents. The assessee claimed exemption of Long Term Capital Gains from the sale of shares of Greencrest Financial Services Limited u/s. 10(38) of the Act. The statement of assessee was recorded u/s. 131 of the Act during the assessment proceedings. 7. According to the AO, the Directorate of Investigation, Kolkata conducted country-wide investigation to unearth the organized racket of generating bogus entries of Long Term Capital Gains. The modus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er share in May, 2009 and jacked up to around Rs. 264.30/- in June, 2014. It was split in ratio of 1:10 resulting into share price at Rs. 26.90/- and went high at Rs. 63.20/- in September, 2014. The AO held that daily trading details in shares of the said company Greencrest Financial Services Limited was reaping of bogus Long Term Capital Gain during this period. We note that the assessee purchased 5,00,000 shares on 14-09-2012 for Rs. 12/- and the same has been split to the ratio of 1:10 which according to AO the number of shares increased from 5,00,000 to 50,00,000. Further, it is noted that the assessee sold 2,00,000 shares for Rs. 62.31/- on 18-09-2014 and 22,000 shares for Rs. 63.11/- on 22-09-2014. The AO held that the assessee is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instruction of the said entry operator beneficiaries buys the shares of a listed paper company which is not doing any business or with a miniscule business activity at a very low price. Then price of the said shares of the listed company would be jacked up to a desired level with the concerted and regular buyer in response to the Q. No. 20 at page 14 of the assessment order. 10. Further, it is also noted that the Investigation Team examined Shri Anuj Agarwal u/s. 131 of the Act during the course of survey operation conducted at the office premise of Korp Securities Ltd., Martin Burn House, Kolkata-01 on 30-03-2015. On perusal of the statement which are reproduced by the AO from pages 15 to 17 of the assessment order, we note that he state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. We note from Para 9.1 of the assessment order that a statement u/s. 131 of the Act recorded from the assessee, wherein, he stated that he purchased shares on the advice of his friends. It is pertinent to note that information gathered from the purchasers who bought shares from the assessee, the AO intimated the concerned jurisdictional AO s of the said purchasers and on an enquiries the said jurisdictional AO s found the said purchasers were also paper company, which clearly shows the transactions between the assessee and these paper companies are not genuine. 11. Coming to the impugned order, we find the CIT(A) justified in holding the view of AO that the transactions between the assessee and paper companies are suspicious sale transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... most importantly, Shri Soumen Sen Anuj Agarwal have admitted that Greencrest was used to provide bogus LTCG entries. On being confronted with this statement, the appellant has simply feigned ignorance without explaining any falsity in those statements. The appellant did not ask for cross examination inspite of having the copies of their statements. All the facts narrated above, have an adverse bearing on the genuineness of the transactions undertaken by the appellant. It must be understood that it is not a case where it is alleged that transactions have not taken place. What is being doubted is the genuineness of the transactions that have taken place. In such a scenario, even if a transaction is established to have been conducted, it cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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