9911796707
TMI Blog2025 (1) TMI 1489X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation from Investigation conducted by Income Tax Department. After considering the reply filed by the Assessee and the document produced thereon, A.O. was fully satisfied about the genuineness of the transition and credits appearing in the bank account, accepted the Long Term Capital Gain as per Section 10(38) as genuine and framed the assessment order accepting in the returned income of the Assessee. It is not the case of no enquiry conducted by the A.O., on the other hand. The Assessee was re-opened in respect of the transaction made with M/s Trinity Trade Link Ltd. Company on the issue of Long Term Capital Gain and the Assessee produced all the relevant documents and after verification of the documents and due diligence. A.O. fully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Act, 1961. III. That the Ld. PCIT has erred in not appreciating that the Ld. A.O. has sought detailed response and documents from the Assessee to prove the genuineness of the trades placed by the Assessee in the scrip Trinity Tradelink Ltd vide its notice u/s 142(1) of the Act, 1961 dated 25.01.2022 & 10.03.2022 and the Assessee duly provided the computation of income, proof of purchase of equity shares, Demat Statement, Broker statement and bank statement along with explanation vide its replies dated 31.01.2022, 02.02.2022 and 12.03.2022. 2. IV. That the Ld. PCIT has erred in not appreciating that the Ld. A.O. has duly applied his mind and accepted the submissions of the Assessee which is evident from the para 2 & 3 of the Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above grounds at or before the hearing." 3. Brief facts of the case are that, the Assessee filed return for Assessment Year 2014-15 declaring total income of Rs. 2,59,030/- by claiming exempt Long Term Capital Gain of Rs. 96,44,515/- resulting from trade in script of M/s Trinity Tradelink Ltd. of total value of Rs. 97,68,000/-. The case of the Assessee was reopened by issuing notice u/s 148 of the Income Tax Act, 1961 ('Act' for short) dated 31/03/2021. The Assessee filed return of income in response to notice u/s 148 and also submitted certain documents to the A.O. The Ld. A.O. after examination of all the documents and after considering the submission of the Assessee, accepted the Long Term Capital Gain as genuine and framed assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport of SEBI. Further submitted that the issue of Long Term Capital Gain has been examined by the A.O. by collecting the data and documents and all relevant materials and after due diligence, the A.O. completed the assessment u/s 143(3) r.w. Section 147 r.w. Section 144 of the Act. The Ld. Counsel for the Assessee relying on various judicial pronouncements sought for allowing the Appeal. 6. Per contra, the Ld. Departmental Representative submitted that the Ld. A.O. has not made any enquiry and verifications which should have been made. The A.O. has mechanically accepted the reply filed by the Assessee and held that the capital gain earned on transfer of shares of M/s Trinity Tradelink Ltd. were genuine and further submitted that the SEBI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions in the penny stock scrip Sharp Trad F (name changed to Trinity Tradelink Ltd., scrip code 512417), while being involved in trades resulting in a trade value/sale of Rs. 97,68,000/-. It is pertinent to note that the issue of penny stocks have been examined in considerable detail by the Income Tax Department, where it has been found that such scrips are used by beneficiaries to book non-genuine long-term capital gains/capital loss/trading loss in order escape paying tax on such consideration. Further investigation revealed that scrip namely Sharp Trad F is a penny stock, and quite likely that the gains/losses booked by the assessee in respect of the same are not genuine. This is based on the information received in this office, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 263. 11. Apart from the same, the Ld. PCIT has observed that the said M/s Trinity Tradelink Ltd. has accepted before the SEBI that it is a shell Company. As per the ld. Assessee's Representative, the said finding of the PCIT is contrary to the order and the investigation conducted by SEBI and the same was not disturbed by the Hon'ble SAT. It is found that as on the date of issuing notice u/s 148 of the Act i.e. on 31/03/2021 and as on the date of passing assessment order u/s 147 of the Act i.e. on 14/03/2022, there was no such order of the SEBI and the SEBI has passed the order only on 29/06/2022, thus at no stretch of imagination, the A.O. could take cognizance to the findings of either SEBI or SAT orders. Nevertheless, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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