9911796707
TMI Blog2025 (2) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue has failed to establish that the LTCG earned by the assessee is non-genuine, and the addition made under Section 68 is unsustainable. Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sharp rise in market price within a short period. 3. Extremely low trading volume except during the manipulation period. 4. Most investors receive their initial capital back in cash, with only a small portion retained as security. 5. Companies have little to no real business activity. 6. The stock price movement is not backed by fundamentals or company performance. 3.2. The Securities and Exchange Board of India (SEBI) had taken action against various penny stock scams, including the one involving Kappac Pharma Ltd. (KPL). The AO noted that BSE suspended trading in KPL shares on 01.01.2015 due to price manipulation concerns and suspension was in force at the time of assessment. Upon examining the sale transactions of KPL shares by the assessee, the AO found that the counterparties were Affluence Commodities Pvt. Ltd. and Unipon India Ltd. (formerly Oasis Textiles Pvt. Ltd.) The AO also noted that Affluence Commodities Pvt. Ltd. was involved in tax evasion schemes by booking fictitious losses and Unipon India Ltd. was a suspended company on BSE, further indicating its involvement in accommodation entries. 3.3. The AO issued a show cause notice to the assessee on 06.11.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Long Term Capital Gain of Rs. 1,17,78,534/-. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 4. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 5. This case is covered under exception as per CBDT's Circular No.23 of 2019 dated 06.09.2019 read with Office Memorandum dated 16.09.2019 vide F.No.279/Misc./M-93/2018-ITJ(Pt.). 7. During the course of hearing before us, the Departmental Representative (DR) relied on the order of AO and pointed out that the purchase was made offline, and assessee has traded in only one share. The Authorized Representative (AR) of the assessee argued that the assessee has not dealt with only one share and the CIT(A) has concluded that the assessee is making the investment in shares of different companies since years and has substantial investment in share in proportion to her capital. 8. The AR stated that the AO has noted in his order that the counter parties of the sale in case of the assessee are Affluence Commodities Pvt. Ltd. and Unipon India Ltd. (Oasis Textile Ltd.) and in case of Affluen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppac Pharma Ltd. was treated as genuine. The AR contended that when the purchase by the counterparty is held to be genuine, the sale by the assessee cannot be treated as bogus in the absence of any contrary material brought on record by the AO. 10.2. In rebuttal, the DR submitted that in the case of Affluence Commodities Pvt. Ltd., the purchase was treated as a business transaction that resulted in a loss, whereas in the case of the assessee, the sale resulted in LTCG, and hence, the factual matrix is distinguishable. 10.3. At the outset, we find that the CIT(A) has examined the assessee's transactions in detail, including the mode of purchase, sources of funds, period of holding, and sale through a recognized stock exchange with payment of STT. The Revenue has not brought any conclusive evidence to rebut these findings. 10.4. We also note that the contention of the AO that the assessee traded in only one share is factually incorrect. The CIT(A) has categorically observed that the assessee has been making investments in various shares over the years, which forms part of her regular investment portfolio. The Revenue has not controverted this factual finding with any contrary evid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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