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TMI Blog2024 (11) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... to be unexplained cash credit in terms of sec. 68 of the Act. Accordingly, we set aside the order passed by the Ld.CIT(A) on this issue and direct the AO to delete the addition made u/s. 68 of the Act relating to sale consideration of shares. Decided in favour of assessee. Assessment of the deposits made into the bank account and disallowance of claim of interest expenditure u/s 24 - In the interest of natural justice, we set aside the order passed by the Ld.CIT(A) on both these issues and restore them to the file of the AO for examining them afresh. We also direct the assessee to fully co-operate with the AO for expeditious completion of assessment. - Shri B.R. Baskaran, Accountant Member And Shri Amit Shukla, Judicial Member For the Assessee : Shri Arvind Shukla, And Shri Asim Zafar, Advocates For the Revenue : Smt. Kavita Meena, Sr.DR ORDER PER B.R. BASKARAN, A.M : Both the appeals filed by the respective assessees are directed against the order passed by Ld CIT(A), Varanasi in their respective hands and they relate to the AY.2014-15. Since the underlying facts relating to the additions made in the hands of both the assessees are identical in nature, these appeals were heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to provide exit to allottees at higher price in order to generate fictitious long term capital gains. Accordingly, the AO took the view that the share price movements are beyond the scope of human probabilities and hence suspicious in nature. Accordingly, by placing reliance on the investigation report, the AO took the view that the long term capital gains declared by the assessee is bogus in nature. Accordingly, the AO assessed the entire sale consideration of Rs. 24,60,700/- as unexplained cash credit u/s. 68 of the Act. 7. The Ld.CIT(A) also confirmed the same. 8. We heard the parties and perused the record. We notice that the AO has primarily placed reliance on the report given by the Investigation Wing of the Income Tax Department, Kolkata in order to arrive at the conclusion that the long term capital gains reported by the assessee is bogus in nature. We notice that the investigation report prepared by Investigation Wing, Kolkata is a generalized report with regard to the modus operandi adopted in manipulation of prices of certain shares and generation of bogus capital gains. We notice that the AO has placed reliance on the said report without bringing any material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pearing on behalf of the Assessee in each of these Appeals, invites our attention to the finding of the Tribunal. He submits that if this was nothing but an accommodation of cash or conversion of unaccounted money into accounted one, then, the evidence should have been complete. Change of circumstances ought to have, after the result of the investigation, connected the Assessee in some way or either with these brokers and the persons floating the two companies. It is only, after the Assessee who is supposed to dealing in shares and producing all the details including the DMAT account, the Exchange at Calcutta confirming the transaction, that the Appeal of the Assessee has been rightly allowed. The Tribunal has not merely interfered with the concurrent orders because another view was possible. It interfered because it was required to interfere with them as the Commissioner and the Assessing Officer failed to note some relevant and germane material. In these circumstances, he submits that the Appeals do not raise any substantial question of law and deserve to be dismissed. 5. We have perused the concurrent findings and on which heavy reliance is placed by Mr.Sureshkumar. While it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere sold, on what dates and for what consideration and the sums received by cheques have been referred extensively by the Tribunal in para 10. A copy of the DMAT account, placed at pages 36 37 of the Appeal Paper Book before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were available and which gave details of the transactions. The contract note is a system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But the Tribunal concluded that itself, is not enough to prove that the transactions in the impugned shares were bogus/sham. The details received from Stock Exchange have been relied upon and for the purposes of faulting the Revenue in failing to discharge the basic onus. If the Tribunal proceeds on this line and concluded that inquiry was not carried forward and with a view to discharge the initial or basic onus, then such conclusion of the Tribunal cannot be terme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntirely different. 5. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law. 12. Further, in the case of CIT vs. Jamnadevi Agarwal (20 taxmann.com 529 (Bom), the Hon ble Bombay High Court has held that the transactions of purchase and sale of shares cannot be considered to be bogus, when the documentary evidences furnished by the assessee establish genuineness of the claim. In the case of PCIT vs. Indravadan Jain (HUF) (ITA No. 454 of 2018)(Bom), the broker through whom, the assessee had carried out the transactions have been alleged to have been indulged in price manipulations and the SEBI had also passed an order regarding irregularities and synchronized trades carried out in the shares by the said broker. However, the evidences furnished by the assessee with regard to purchase and sale of shares were not doubted. Under these set of facts, the Hon ble Bombay High Court held as under:- .The CIT(A) came to the conclusion that re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld.CIT(A) on this issue and direct the AO to delete the addition made u/s. 68 of the Act relating to sale consideration of shares. 16. The next two additions contested by the assessee are (a) assessment of the deposits made into the bank account and (b) disallowance of claim of interest expenditure u/s 24 of the Act. We notice both the additions have been made by the tax authorities, since the assessee failed to furnish any evidence that were called for by the AO. The Ld. A.R prayed that both these issues may be restored to the file of the AO for examining it afresh and also assured that the assessee will co-operate with the AO by furnishing all the evidences. Accordingly, in the interest of natural justice, we set aside the order passed by the Ld.CIT(A) on both these issues and restore them to the file of the AO for examining them afresh. We also direct the assessee to fully co-operate with the AO for expeditious completion of assessment. 17. We shall now take up the appeal filed by Smt. Rekha Devi Agrawal. This assessee also purchased 12,500 shares of M/s Paridhi Properties Ltd and got 125000 shares of M/s Luminaire Technologies Ltd. She sold 51,000 shares for a considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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