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TMI Blog2025 (1) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is directed against the order of National Faceless Appeal Centre, Delhi/Commissioner of Income tax (Appeals) [for short to as "NFAC/Ld.CIT(A)] dated 28.12.2023 for assessment year (AY) 2015-16, which in turn arises out of assessment order passed by Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') 21.11.2017. The assessee has raised the following grounds of appeal:- Sr. No Grounds of appeal Tax effect relating to each ground of appeal 1. That on the facts and in the circumstances of the case as well as in law, the appeal order passed by ld.CIT(A) dismissing the appeal of the appellant is wrong, unjustified, invalid and bad in law. Plea of appellant 1) That on the facts and in the circumstances of the case as well as in law, the ld. CIT(A) has erred in sustaining the addition of Rs. 43,69,967/- u/s 68 of the I.T. Act, 1961 (the Act), by wrongly presuming the genuine long term capital gain (LTCG) earned from sale of listed shares on the platform of stock exchange and claimed exempted u/s 10(38) of the Act, as non-genuine and arranged LTCG. The addition so made by ld. AO and sustained by ld. CIT(a) is without a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admit and adjudicate above additional ground of appeal. With kind regards, 3. Brief facts of the case are that assessee is an HUF filed its return of income for assessment year 2015-16 on 25.03.2016 declaring income of Rs. 3,61,990/-. The case was selected for scrutiny to examine the share transaction of penny scrip. Notice under section 143(2) 20.09.2016 was issued by Income Tax Officer(ITO) Ward-1(3)(3) Surat, which was duly served on the assessee. During assessment, Assessing Officer noticed that in computation of income, assessee has shown Long-term capital gains (in short, 'LTCG') on sales of scrip of Mishka Finance Ltd. of Rs. 43,69,,967/-. On perusal of details, Assessing Officer noted that assessee has shown purchase of shares of Mishka Finance & Trading Ltd. on 03.12.2012. The assessee purchases 1,000 shares @ Rs. 35/- per share through Roongta Raising Stock Pvt. Ltd. The Assessing Officer further recorded that assessee has sold such shares through Edelweiss Financial Advisors Ltd., Surat at a huge margin within span of 18 months. The Assessing Officer recorded modus operandi of penny scrip by referring report of Investigation Wing Kolkata and the statement of entry provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssumption made by Assessing Officer about jacking of prices and booking of capital gains are hypothetical and without any substance. The assessee has no nexus directly or indirectly in managing or jacking up prices had been proved at any stage. Merely investigation by SEBI against any company cannot be termed as it is a bogus company. The assessee also relied on certain case law to substantiate the fact that all transactions were made in a good faith with a motive to earn gain. The assessee has fulfilled all conditions of Section 10(38) of the Act for earning LTCG. The reply of assessee was not accepted. The Assessing Office by referring the decisions of various Tribunals that humongous against made by assessee is devoid of any fundamentals which jumped by almost 12485 per cent within one and half years' time by defies any logic or human probabilities and cannot be genuine transaction. The Assessing Officer treated the transactions as bogus. The Assessing Office also added 2% as unexplained expenditure for claiming LTCG thereby added Rs. 2,18,498/-, being 5% of Rs. 43,69,967/- while passing the assessment order on 21.11.2017 under section 143(3) of the Act. 4. Aggrieved by the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing case laws; • Rajsheela Growth Fund (P) Ltd Vs ITO (2024) 165 taxm,ann.com 182 (Delhi), • Pankajbhai Jaysukh Lal Shah Vs ACIT (2019) 110 taxmann.com 51(Gujarat -HC) • Sudhir Kumar Aggarwal Vs ITO (ITA No. 158/RPR/2017) • Anderson Printing House (P) Ltd Vs ACIT (2021) 134 taxmann.com 4 (Kol-trib). 7. In support of original ground, on merit of the case the ld AR of the assessee submits that ground No. 2 of the appeal is covered in favour of assessee by the decision of this bench in case of family member of assessees HUF, wherein on same set of facts, similar additions were deleted in Neelu Mahansaria in. ITA No. 893/Srt/2023 (AY2015-16) and in ITA No. 197/Srt/2023 dated 17/08/2023. Thus, the assessee is liable to be succeeded on legal issue as well as on merit. The ld AR for assessee submits that he has also placed on record all the documentary evidences to substantiate all transactions of share on which the assessee earned LTCG during relevant financial year. 8. On the other hand, Ld. Sr-DR for the Revenue supported the order of lower authorities. Ld. Sr-DR for the Revenue submits that against the admission of additional grounds that no such grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee cannot be said to have enter into ingenuine transactions. So far as assessee is concerned, she has no control over the activities of the brokers or price manipulation. I further find that assessee has furnished complete evidence including contract note of shares, demat details, detail of bonus shares. However, no adverse evidence was brought against such evidence. Nor the assessing officer made adverse comment on such evidences. I further find that SEBI made a through inquiry against Mishka Finance & Trading Ltd. and vide order dated 05.10.2017 that no adverse materials were found in the investigation report with respect to prima facie violation. 10. I find that Hon'ble jurisdictional High Court in the case of Himani M. Vakil (supra) held that where assessee duly proved genuineness of sale transaction by bringing on record contract notes of sale and purchase, bank statement of broker and demat account showing transfer in and out of shares, Assessing Officer was not justified in bringing to tax capital gain arising from sale of shares as unexplained cash credit. I further find that Hon'ble jurisdictional High Court in the case of Parasben Kasturchand Kochar (supra) al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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