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TMI Blog2024 (10) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... ion by taking view that as per data of Form AS-26, the assessee has not offered complete salary for taxation and thus made addition on account of difference in salary income - CIT(A) has already held that addition on the basis of Form 26-AS is factually wrong - HELD THAT:- We find that assessee has placed on record, copy of Form 26-AS wherein the total amount of salary is only of Rs. 4,05,000/- only. Thus, there is no mismatch in the salary offered by assessee, thus, the Assessing Officer is directed to delete the addition - Ground No.4 is allowed. - Shri Pawan Singh, Judicial Member For the Appellant : Shri Ramesh Malpani, CA For the Respondent : Shri Mukesh Jain, Sr-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as NFAC/Ld. CIT(A) ] dated 30.05.2023 for assessment year 2012-13, which in turn arises out of assessment order passed by the Assessing Officer under section 144 r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 10.12.2018. The assessee has raised the following grounds of appeal: 1) That on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deriving her income from salary, house property income and capital gains. The assessee filed her return of income for assessment year 2012-13 on 31/07.2012 declaring income of Rs. 1,75,040/-. The case of assessee was reopened by issuing notice under section 148 on 30.03.2018 after recording reasons that assessee has sold shares of Twenty First Century (India) Ltd., which is a penny stock. The Assessing Officer recorded reasons of reopening issued notice under section 148 of the Act, as issuance of notice under section 148 and recording of reasons under section 147 of the Act is not pressed by ld AR of the assessee. Therefore, such facts are not discussed herein. During assessment, the Assessing Office noted the assessee has also shown long-term capital gains (LTCG) of Rs. 10,43,750/- on sale of listed share Twenty First Century (India) Ltd. The assessee claimed exemption of LTCG under section 10(38) of the Act. The Assessing Officer issued show-cause notice to the assessee to substantiate her transactions along with supporting documents and as to why sale of Twenty First Century (India) Ltd should not be treated as unexplained cash credit. For doubting the transaction of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for reopening was information received from DGIT (Inv.) Ahmedabad that assessee made transaction (sale of penny stock of Twenty First Century (India) Ltd. as per information of Investigation Wing that shares were artificially raised on stock exchange in order to book bogus claim of LTCG. The Assessing Officer not made any independent enquiry or verification of fact. The assessee purchase equity shares in financial year 2004-05 and sold after seven years and such long period itself proved the bona fide of the transactions the shares were purchased through registered broker on the platform of stock exchange on 17.11.2004. The payments were made through account payee cheque. The shares were held by assessee in demat account for several years. The same was sold on a platform of recognized stock exchange through SEBI registered broker and delivery of shares were given from demat account. The assessee received gross amount of Rs. 11,33,225/- and after deducting brokerage and other charges, the assessee received net amount Rs. 11,31,012/- through banking channel as per procedure of stock exchange. The assessee sold the shares on prevailing market rate after holding for seven years, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er data available with Assessing Officer and as claimed by the assessee. The ld CIT(A) directed to verify the correct salary as per Form AS-26 and tax correct salary income. Further aggrieved, the assessee has filed present appeal before this Tribunal. 6. I have heard the submissions of the learned authorised representative (AR) of the assessee and the learned Senior departmental representative (Sr DR) of the revenue. With their assistance, I have also perused the orders of lower authorities. The ld AR of the assessee submits that the assessee purchased share of Twenty First Century (India) Ltd. in financial year 2004-05 and sold in assessment year 2012-13, after holding the scrips for seven years. The assessee sold share of his stock in market when it was very high. The assessee sold shares through Stock Exchange registered share broker. STT was paid on sale of these shares and claimed exemption under section 10(38) of the Act. Such long period of holding cannot be considered as a transaction of penny stock. Sole reasons for reopening was information received from DGIT (Inv.) The Assessing Officer not made any independent enquiry or verification of fact. The assessee purchase equi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived nor notice under section 143(2) of the Act or reasons recorded were received by assessee. To support all his submissions, the ld AR of the assessee relied on the following decisions; PCIT Vs Mamta Rajivkumar Agarwal (2023) 155 taxmann.com 549 (Guj), PCIT Vs Renu Agarwal (2023) 153 taxmann.com578 (All-HC), PCIT Vs Krishna Devi (2021) 126 taxmann.com 80 (Delhi), Vikram N Chandan Vs ITO (2024) 165 taxmann.com 340 (Mumbai-Trib) 7. On the other hand, Ld. Sr-DR for the Revenue submits that investigation wing of revenue carried out search and seizure action in Kolkata on the office premises of various entity, who were managing the penny stock companies, actively involved in bogus transaction of long-term capital gain or short-term capital gain. Survey was also carried out at the premises of accommodation entry providers, during investigation beneficiary of such entries were also identified by investigation wing. Twenty First Century (India) Limited is one of the penny scrips, which was identified by investigation wing. The prices of such penny scrips were rigged to provide LTCG. Price of shares were rigged up to desired level. No dividend was ever declared by such penny scrips comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice of fact that the shares remained in the account of assessee, the assessee also furnished demat account and details of bank transaction about the sale and purchase of shares, the addition was deleted. In a recent decision in PCIT Vs Mamta Rajiv Kumar Agarwal (2023) 155 taxmann.com 549 (Gujarat) also held that where the assessee had sold the shares and earned LTCG and the Assessing Officer alleged that transaction was penny stock deal aim at illegitimately claiming LTCG exemption under section 10(38), since there was no allegation on record suggesting the assessee or his broker involved in rigging up the price of scrips, the addition was rightly deleted by Tribunal. Further I find of Hon'ble Bombay High Court in the case of PCIT Vs. Indravadan Jain, HUF (supra) in Income Tax Appeal No.454 of 2018 dated 12.07.2023 also held that when Assessing Officer nowhere alleged that transactions made by assessee with a particular broker or share broker was bogus, merely because investigation was done by SEBI against the broker or its activities, the assessee cannot be said to have entered into ingenuine transaction. 10. The ld Sr DR for the revenue while making his submissions st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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