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TMI Blog2024 (7) TMI 1581X X X X Extracts X X X X X X X X Extracts X X X X ..... d transactions, i.e., it was not proved that the assessee has carried out the transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of prices. A.R submitted that the transactions carried on by the assessee were not subjected to scrutiny by SEBI at all. Assessee has purchased the shares from Stock exchange platform and also sold the shares in the stock exchange platform. Both the transactions have been carried out at the prevailing market rates only. The assessee has furnished evidences to prove the factum of purchase and sale of shares. The financial transactions have also been carried out through banking channels. The shares have entered into and exited from Demat account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace value split into Re.1/- per share and accordingly, the assessee received one lakh shares in lieu of 10,000 held by him. Subsequently, the above said company declared bonus shares in the ratio of 1:1. Accordingly, the shareholding of the assessee in the above said company came to be increased to 2 lakhs shares. The assessee sold one lakh shares in each of the years relevant to the AYs. 2015-16 and 2014-15.Accordingly, he declared long term capital gains of Rs.40,04,025/- and Rs.51,28,916/- respectively in the above said years and claimed exemption u/s 10(38) of the Act. 4. Subsequently, the AO received information from the Investigation Wing that the shares of M/s. Midland Polymers Limited is one of the penny stocks and its prices were m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on sale of shares was also received through banking channels. He submitted that the AO did not find fault with any of the documents furnished by the assessee. He submitted that the AO has placed his reliance entirely on the report given by the Investigation wing and he did not conduct any independent enquiry with regard to the transactions carried on by the assessee. The AO has also not shown that the assessee was part of the group, which was indulging in rigging of prices of shares. The assessee was also not subjected to any enquiry by the SEBI. Hence, the AO was not justified in dis-believing the transactions, without bringing any contrary material on the record. He was also not justified in estimating commission expenses without brin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on wing, Kolkatta 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 to show that the transactions entered by the assessee were found to be a part of manipulated transactions, i.e., it was not proved that the assessee has carried out the transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of prices. The Ld A.R submitted that the transactions carried on by the assessee were not subjected to scrutiny by SEBI at all. 9. We notice that the assessee has purchased the shares from Stock exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares 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 floor of Stock Exchange. The ITAT therefore, in our view, rightly concluded that there was no merit in the appeal. Accordingly, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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