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TMI Blog2024 (10) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... hares by the said broker. However, the evidences furnished by the assessee with regard to purchase and sale of shares were not doubted. In the instant case also, we noticed that the evidences furnished by the assessee to prove the purchase and sale of shares, payment made/received, entry/exit of shares in the demat account of the assessee etc., were not doubted with. In the case of PCIT vs. Smt Krishna Devi [ 2021 (1) TMI 1008 - DELHI HIGH COURT] as noticed that the reasoning given by the AO to disbelieve the capital gains declared by the assessee, viz., astronomical increase in the price of shares, weak fundamentals of the relevant companies are based on mere conjectures. Accordingly, the Hon ble Delhi High Court affirmed the decision rendered by ITAT in deleting the addition of capital gains. Thus as the AO has not established that the assessee was involved in price rigging and further the AO did not find fault with any of the documents furnished by the assessee. Thus, we hold that the long term capital gains declared by the assessee cannot be assessed as unexplained cash credit u/s 68 - Decided in favour of assessee. - Shri B.R. Baskaran, Accountant Member And Shri Sunil Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such persons named Shri Rajkumar Kedia, he had confessed to have provided accommodation entries for generating long term capital gains in the shares of above said company. The AO also noticed that the shares sold by the assessee have been purchased by certain persons who are suspected to be Exit providers. The AO issued notices u/s 133(6) of the Act to the exit providers, but they were returned back by the postal authorities. Based on the statements so given by the above said person, the AO came to the conclusion that the trading in shares of above company are controlled by various entry and exit operators in order to convert unaccounted money. 4. The AO also issued summons u/s 131 of the Act to the assessee and recorded a statement from him. He noticed that the assessee could not explain as to why he had invested in the above said company, when the fundamentals and financial position were weak. Accordingly, he took the view that the long term capital gain of Rs. 6.92 crores is liable to be taxed as unexplained income and accordingly assessed the same u/s 68 of the Act. 5. The Ld CIT(A) noticed that the assessee has furnished all the documents to prove the purchases and sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of advice given by some known persons and the same was proved to be right decision also. The Ld A.R further submitted that it was not shown by the AO that the assessee was part of any group which involved in manipulation of the prices of the above said shares. He submitted that the AO has entirely relied upon the report given by the Investigation Wing for disbelieving the transactions carried on by the assessee. However, the AO has not brought any independent material on record to show that the transactions of purchase and sale of shares undertaken by the assessee were not genuine. In fact, the AO has conducted detailed enquiry with the assessee and he could only observe that the assessee could not give the basis for making investments in the above said company. He submitted that the same cannot be a reason to disbelieve the transactions which are otherwise fully supported by the credible documents. The AO has also referred and relied upon the statement given by a person named Shri Rajkumar Kedia, but he did not supply copy of the said statement to the assessee at all. Hence the AO could not have placed reliance on the said statement, since no opportunity was given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterialized the shares and kept the same in the Demat account. (c) sold the shares through stock exchange platform (d) received the sale consideration through banking channels. Further, the shares have entered and exited the Demat account of the assessee. We notice that the AO himself has not found any defect/deficiencies in the evidences furnished by the assessee with regard to purchase and sale of shares. The assessee was not subjected to any enquiry by SEBI, meaning thereby, they were carried on by the assessee during the normal course of investment in shares. As noticed earlier, the AO has not brought on record any material to show that the assessee was part of the group which involved in the manipulation of prices of shares. The AO has also referred to a statement given by a person named Shri Rajkumar Kedia before the Investigation wing, but did not furnish the same to the assessee to rebut it. It was not known as to whether Shri Rajkumar Kedia has stated that the transactions entered by the assessee were bogus. In view of the above, we are of the view that there is no reason to suspect the purchase and sale of shares undertaken by the assessee. 10. We may now refer to certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and vital for the purpose of the present case was whether the transactions in shares were genuine or sham and bogus. If the purchase and sale of shares are reflected in the Assessee's DMAT account, yet they are termed as arranged transactions and projected to be real, then, such conclusion which has been reached by the Commissioner and the Assessing Officer required a deeper scrutiny. It was also revealed during the course of inquiry by the Assessing Officer that the Calcutta Stock Exchange records showed that the shares were purchased for code numbers S003 and R121 of Sagar Trade Pvt Ltd. and Rockey Marketing Pvt. Ltd. respectively. Out of these two, only Rockey Marketing Pvt.Ltd. is listed in the appraisal report and it is stated to be involved in the modus-operandi. It is on this material that he holds that the transactions in sale and purchase of shares are doubtful and not genuine. In relation to Assessee's role in all this, all that the Commissioner observed is that the Assessee transacted through brokers at Calcutta, which itself raises doubt about the genuineness of the transactions and the financial result and performance of the Company was not such as would ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussion, we do not find any substance in the contention of Mr.Suresh kumar that the Tribunal misdirected itself and in law. We hold that the Appeals do not raise any substantial question of law. They are accordingly dismissed. There would no order as to costs. 8. Even the additional question cannot be said to be substantial question of law, because it arises in the context of same transactions, dealings, same investigation and same charge or allegation of accommodation of unaccounted money being converted into accounted or regular as such. The relevant details pertaining to the shares were already on record. This question is also a fall out of the issue or question dealt with by the Tribunal and pertaining to the addition of Rs. 25,93,150/-. Barring the figure of loss that is stated to have been taken, no distinguishable feature can be or could be placed on record. For the same reasons, even this additional question cannot be termed as substantial question of law. 11. We may now refer to the decision rendered by Hon ble Jurisdictional High Court in the case of PCIT vs. Ziauddin A Siddique (Income tax Appeal No. 2012 of 2017 dated 4th March, 2022) and relevant discussions made by Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. In pursuance of purchase of shares the said broker had raised invoice and purchase price was paid by cheque and respondent s bank account 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 Kolkatta 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 instruction slips and also received payment from Kolkatta Stock Exchage. 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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