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TMI Blog2025 (2) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has taken accommodation entry in the form of business loss to evade its tax liability.
Therefore, find no infirmity in the impugned order denying set off of the business loss. Therefore, no interference is called for in the order passed by CIT(A). Grounds of appeal raised by the assessee are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... 1782/Kol/2018 dated 21.09.2023 observing as follows : "5. We have heard the rival contentions and perused the relevant material placed before us. We notice that the issue with regard to unexplained cash credit for alleged bogus long-term capital gain under section 10(38) of the Act is in dispute before us. We notice that the alleged long-term capital gain has been earned by the assessee during the year under appeal from sale of equity shares of Sulabh Engineers & Services Limited. This company is in the list of 84 companies, which has been found to be penny stock company. The assessee had made huge gain due to price increase, in comparison to the purchase price, but the increase in price of shares is not commensurate to the financials of the company as observed by the lower authorities. 6. It is also pertinent to observe that recently Hon'ble Jurisdictional High Court has examined the issue of bogus capital gain claim made by a large number of assessee's in Kolkata. This issue has been examined in the case of Swati Bajaj & Others (2022) 139 taxmann.com 352(Cal.) pronounced on 14.06.2022. A large number of assessee's have claimed long-term capital gain/loss. The Income Tax Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wing of the Department had studied the modus operandi of rigging the prices of penny stocks and generation of capital gain /trading loss there from. On appeal, ld. CIT(A) confirmed the action of the ld. AO. Aggrieved, assessee's are in appeal before the Tribunal. 5. Recently on 14.06.2022, the Hon'ble jurisdictional High Court of Calcutta passed a judgment in the case of Swati Bajaj and others [2022] 139 taxmann.com 352 (Cal) dealing with set of cases with similar fact patterns as narrated above for the present appeals under consideration before us. Hon'ble jurisdictional High Court by taking the report of the Directorate of Investigation of the Department as the basis, gave its observations and findings, which are summarized hereunder. 5.1. There are two category of cases dealt with by the Hon'ble High Court, viz. first category being those arising out of the order of Tribunal dated 26.06.2019 in which 90 appeals filed by the assessee's were allowed and second category is of those cases where1 assessee has challenged the assumption of jurisdiction by CIT under section 263 of the Act. In the present set of appeals before us, we are concerned with the first category whose releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine move that those penny stocks companies had credit worthiness and coupled with genuinity and identity. [para 73] g) The assessee cannot escape from the burden cast upon him and unfortunately in these cases the burden is heavy as the facts establish that the shares which were traded by the assessee's had phenomenal and fanciful rise in price in a short span of time. [para 75] h) The exercise that was required to be done by the Tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the 'players' can never be established by direct evidence and therefore the surrounding circumstances was required to be taken note of by the Tribunal which exercise has not been done. [para 99] i) The assessee had opportunity to prove that there was no manipulation at the other end and whatever gains the assessee has reaped was not tainted. This has not been proved or established by any of the assessee. [para 99] j) The tribunal being the last fact finding authority was required to go deeper into the issue as the matter have manifested large scale scam. Thus, the orders of the tribunal are not only perfunc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s squarely covered by the decision of Hon'ble jurisdictional High Court of Calcutta in the case of Swati Bajaj & others (supra), we have taken up these also for adjudication ex parte, qua the assessee. 7. After hearing both the sides and taking into consideration the factual matrix of the cases before us vis-à-vis the decision of Hon'ble jurisdictional High Court of Calcutta in Swati Bajaj & others (supra), we respectfully following the said decision carrying the force of binding nature, being the jurisdictional High Court, dismiss the appeals of the assessee and restore the order of the respective ld. AO as affirmed by the respective ld. CIT(A)" 8. On going through the above decision of this Tribunal, wherein ratio laid down by the Hon'ble Jurisdictional High Court in the case of Swati Bajaj & Others (supra) has been referred and relied. Hon'ble Court has held such transactions of earning of long-term capital gain of penny stock companies as bogus based on the test of preponderance of probability gathered from various circumstances like volume from trade, period of persistence in trading in the particular scrip, particulars of buy and sale orders, steep increase in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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