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TMI Blog2024 (11) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... r share. It is also made clear that SEBI has itself stated in its order that there is no misappropriation of funds of the company nor there is any manipulation in the price of the scrip. SEBI has further held that no disproportionate gain was caused to anyone nor created any unfair advantage to the appellants nor any specific loss was caused to any investor. There was nothing before the AO to establish any collision with any of the person involved in the manipulation of the price of share of M/s. India Infotech and Software Ltd. How the AO and ld. CIT(A) come to this conclusion that the assessee could not be able to prove the genuineness of the transaction. It is an undisputed fact that assessee has sold 2,85,000 shares of M/s. India Infotech and Software Ltd. at a price ranging from Rs. 19/- to Rs. 22/-. The shares were traded through Demat account of the assessee held with Kotak Securities Ltd., a world-wide renowned company. Copy of the contract note towards sale of the shares has also been brought before us and the same was also brought in the notice of ld. CIT(A). It is also important to mention here that the share of this company has gone as Rs. 48.6/- and as such if the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by submitting that the ld. CIT(A) as well as the ld. AO erred in making addition of Rs. 57,50,000/- and Rs. 44,47,811/- ignoring the documents and the facts of the case of the assessee, that case of the assessee is completely distinguishable from the facts of the case of Pr. CIT vs. Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta). Ld. Counsel for the assessee submits that the case of the assessee is totally different from the facts of the case of Swati Bajaj (supra) to the extent that the scrip i.e. M/s. India Infotech and Software Ltd. has been categorically stated not to be a shell company by SEBI. The ld. Counsel for the assessee placed the order of SEBI, Mumbai passed in favour of M/s. India Infotech and Software Ltd. on 04.01.2023. The ld. Counsel for the assessee further submits that the scrip i.e. M/s. India Infotech and Software Ltd. is a listed company as on date with BSE shares. The ld. Counsel for the assessee filed the new article dated 19.11.2022 published on livemint.com . Ld. Counsel for the assessee further submits that purchase and sale transaction of the shares are made through broker Kotak Securities Ltd. duly registered with the Stock Exchange of India and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsh and excessive. 2.1. It admits of no doubt that SEBI is the sole authority regulating the share trading and, in its order, SEBI has held that M/s. India Infotech and Software Ltd. is not a shell company that the company was not involved in any manipulation in the price of the scrip and consequently no fraud or unfair advantage was done due to any shareholder or investor. We further, find that an article published on 19.11.2022 in livemint.com and on perusal of the copy of the same attached in the paperbook by the assessee, it reveals thus: Multibagger penny stock rises 1163% in 3 years, Board declares rights issue With a market valuation of ₹240.83 Cr, Indian Infotech Software Ltd. is a small-cap company that operates in the financial services industry. 2.2. We have also gone through the copy of contract note towards sale of the shares which has been field by the assessee in the paper book that goes to show that the average price of the share for this company in January 2022 was around Rs. 10/- per share. It is also made clear that SEBI has itself stated in its order that there is no misappropriation of funds of the company nor there is any manipulation in the price of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus 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 asses see (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 present assessee(s). Thus, when the transactions giving rise to the long term capital gain have been found to be genuine, and as per rules and regulation of SEBI, the finding of the ld. CIT(A) deserves to be set aside and the impugned additions in case of assessee(s) in appeal before us are uncalled for. 2.3. Going over the above discussion, we find that the following facts have been arisen from the arguments and the facts of the case: a. All the transactions of purchase and sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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