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TMI Blog2024 (11) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... additional ground) before him. - Sri Rajpal Yadav, Vice President And Sri Rakesh Mishra, Accountant Member For the Assessee : Yash Baid C.A. and Shreyansh Kothari C.A. For the Department : Manas Mondal, Addl. CIT, DR. ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee pertaining to the Assessment Year (in short AY ) 2011-12 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the Act ) by ld. Commissioner of Income-tax (Appeals)-NFAC, Delhi [in short ld. CIT(A) ] dated 27.06.2024 arising out of the assessment order framed u/s 144/147 of the Act dated 20.12.2018. 1.1. The brief facts of the case of the appellant are that the assessee had filed the return of income for AY 2011-12 declaring total income of Rs. 7,85,146/- which was processed u/s 143(1) of the Act. Subsequently, the case was reopened by issuing notice u/s 148 of the Act on the basis of information received from the Investigation Wing, Kolkata in respect of penny stock transactions. The investigation had revealed that the trading in the said penny stock was a manipulated affair to generate entries of bogus LTCG facilitating tax evasion by large number of persons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Moreover this figure of Rs. 1,77,391/- was mentioned as Rs. 19,07,850/- in the SCN. In fact, during the FY 2010-11 the assessee did not had any Long-Term Capital Gain or Short-Term Capital Loss in the scrip of Global Capital Market Ltd and thus the allegation in respect of Exempt Capital Gain or Short-Term Capital Loss does not stand. The only transaction that the assessee had in the scrip of Global Capital Market Ltd was that of purchase of 5,000 shares on 28.03.2011 and again 5000 shares on 29.03.2011. The same may be verified from the Contract Note issued by the broker - Motilal Oswal (Page No. 25-26). The said shares were not sold during the FY 2010-11 and the assessee had 10,000 shares as on 31.03.2011. The same can be verified from the DP holding statement as on 31.03.2011 (Page No. 27). Further as the shares of Global Securities were not sold during the FY 2010-11 there can be no question of LTCG or STCL. 2.1. The assessee further contended before the ld. CIT(A) that the ld. AO was carried away by the report of the Investigation Wing, Kolkata and the entire assessment has been framed by the ld. AO without conducting any enquiry from the relevant parties or independent sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the said cash has been used for providing accommodation entries of bogus LTCG. In the same report, the scrip of M/s Global Capital Markets Limited has been identified as penny stock and being used for generating the bogus LTCG. In view of this, 1 am of the considerable opinion that the action of Assessing Officer in making addition of Rs. 1,77,391/- as bogus transaction is appropriate and I find no fault in the assessment order. 2.3. Further reliance has been placed by the ld. CIT(A) on the decision of Hon'ble Calcutta High Court in the case of Pr. CIT vs Swati Bajaj reported in [2022] 446 ITR 56 (Cal) wherein the Hon'ble Court has held that the onus is on the assessee to establish the genuineness of the price hike. Merely demonstrating the financials of the company, volume of trade, transactions through banking channels, inter alia, will not suffice. The assessee has to prove that the price of the share was not manipulated. 2.4. Further reliance has also been placed on the judgment of Hon'ble Delhi High Court in the case of Suman Poddar vs. ITO which was later upheld by the Hon'ble Supreme Court. Ld. CIT(A) held that on the basis of the judicial pronouncemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis the amount of Rs. 1,77,391/- is deemed to be the bogus transaction and added back to the total Income of the assessee. It may be noted that the manner of payment received by the account payee cheque or through RTGS is not sacrosanct and this cannot make a bogus transaction as genuine one. Further, the Ld. CIT (Appeals) also failed to take note of the facts that the shares of Global Capital Markets Limited has not been sold by the assessee during the impugned period. The order passed by the Ld. CIT (Appeals) was based on preconceived notions and surmises. 9 out of 12 pages of the order of the Ld. CIT (Appeals) has been used to reproduce the assessment order and written submission of the assessee and only 1 para has been used for conclusion. The same is being reproduced below: 5.2 I have gone through the facts of the case, assessment order and submissions made by the appellant. The entire argument of the appellant and the judicial pronouncements relied upon by the appellant supporting his contentions are carefully gone through. It is observed that during the assessment proceedings, the Assessing Officer has noted that within a short span to time the appellant managed to sell th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made by the assessee in this regard. 4. We have considered the submissions made and find that the shares were purchased in the FY 2010-11 relevant for AY 2011-12 through Motilal Oswal Investment Services and securities transaction tax and service tax along with other charges were paid to the broker. The assessee has relied upon the decision of Smt. Sudha Loyalka vs. ITO in ITA No. 399/DEL/2017 order dated 18.07.2018 in support of the claim that since the shares were not sold during the FY 2010-11 and nothing has been brought on record in support of the claim of the sale of the same, therefore, the same could not be treated as bogus transaction relating to sale of shares in the AY 2011-12 and the assessee succeeds and ground no. 2 of the appeal is allowed as the alleged transaction of sale did not take place during the previous year relevant to AY 2011-12. 5. Ground nos. 3, 4 5 relate to not mentioning the Section under which the addition was made and the ld. AO failing to issue notice u/s 143(2) of the Act and failing to serve the proper show cause notice on the assessee thus, making the order passed defective. Similarly, ground no. 6 relates to the ld. AO not supplying the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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