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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 ..... 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 any lawful basis or finding in respect of transactions of appellant and is grossly wrong, unjustified and contrary to the law. Appellant prays for deleting the same. Rs.13,50,320/- 2) 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. 2,18,498/- on account of unexplained expenditure u/s 69C of the Act, which is presumed to have been incurred @ 5% of above LTCG, whereas there has not been an iota of finding or lawful basis for assuming the genuine LTCG earned by appellant as 'arranged' nor there has been any finding of incurring of any such unexplained expenditure by the appellant. Addition so made and susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing 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 provider recorded by DDIT (Inv.), Unit 2(3) wherein they accepted that M/s Mishka Finance & Trading Ltd. has treated in prepared bogus LTCG/STCG and provided bogus capital gains. On the basis of such modus operandi, asked the Authorized Representative (AR) of assessee to produce Karta of the assessee to explain the transactions and issued summons under section 131 of the Act for personal appearance. Karta of Umesh P Mahansaria appeared on 02.11.2017 and statement was record. The Assessing Officer recorded on asking that on whose guidance they purchased the shares of Mishka Finance Ltd. was purchase. The Karta of the assessee stated that he does not remember the name. He further st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 addition made in the assessment order, assessee filed appeal before Ld.CIT(A). The Ld.CIT(A) confirmed the action of Assessing Officer by taking view that assessee failed to produce any submission during appellate stage and there is no need to interference with the addition made in the assessment order. Further, aggrieved, assessee has filed present appeal before the Tribunal. 5. We have heard the submission of Ld. Authorized Representative (Ld.AR) for the assessee and Ld. Senior Departmental Representative (Ld. Sr-DR) for the Revenue. The Ld. AR of the assessee submits that he has raised additional ground that assessment order is invalid and bad in law. The assessment order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23 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 ground of appeal was raised before First Appellate Authority, the assessee has not filed any objections or written submission either raising such issue or on merit. Such additional ground is raised for the first time before Tribunal. The Ld. Sr-DR for the Revenue stated that assessee has not objected before Assessing Officer despite fully participating during assessment proceedings, so now therefore the assessee is preclude raising such additional ground before Tribunal. The ld Sr DR for the revenue also filed his detailed written submissions on the additional grounds of appeal, with various case laws, which is taken on record. On merit the ld Sr DR for the revenue supported the order of lower autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) also held that when assessee discharged his onus by establishing that transactions were fair and transparent and all relevant details with regard to transfer furnished by Income Tax Authority and the Tribunal have also took the notice of fact that the shares remained in the account of assessee, the assessee also furnished demat account and details of bank transaction about the sale and purchase of shares, the addition was deleted. 11. Further I find of Hon'ble Bombay High Court in the case of PCIT Vs. Indravadan Jain, HUF (supra) in Income Tax Appeal No.454 of 2018 dated 12.07.2023 also held that when Assessing Officer nowhere alleged that transactions made by assessee with a particular brok ..... X X X X Extracts X X X X X X X X Extracts X X X X
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