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TMI Blog2024 (4) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... has not conducted any enquiry against the assessee.
AO has assessed the Sale consideration of shares as unexplained cash credit u/s 68. It is pertinent to note that the purchase of shares made in an earlier year has been accepted by the revenue. The sale of shares has taken place in the online platform of the Stock exchange and the sale consideration has been received through the stock broker in banking channels. Hence, in the facts of the case, the sale consideration cannot be considered to be unexplained cash credit in terms of sec. 68 of the Act.
In the instant case, the AO has not established that the assessee was involved in price rigging and further the AO did not find fault with any of the documents furnished by the assessee. Appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... Sun Asian Ltd. has fallen drastically afterwards. 4. The assessing officer also referred to the report given by the investigation wing and also the statement given by a person named Shri Vipul Vidur Bhatt, wherein he had admitted that he has provided accommodation entries in the form of bogus long term capital gains in the scripts of M/s Sunrise Asian Ltd. He also collected details of persons who had purchased shares that were sold by the assessee. Accordingly, the AO asked the assessee to prove the genuineness of long term capital gains declared by her. In reply, the assessee contended that the purchase and sale of sunrise asian Ltd were genuine transactions. The AO did not accept the same. Accordingly, he assessed the entire sale consideration of Rs. 88,76,410/- as income of the assessee u/s 68 of the Act. The Ld CIT(A) also confirmed the same and hence the assessee has filed this appeal. 5. The ld A.R submitted that the assessee has furnished all the evidences to prove the purchase and sale of shares of M/s Sunrise Asian Ltd. Besides the above shares, the assessee has also invested in shares of M/s Looks Health Ltd. He submitted that the AO did not find fault with any of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18)(89 taxmann.com 196)(Bom) ( c) Smt Asha Rajender Gupta vs. ACIT (ITA No.7712/Mum/2019 dated 13-04-2023 (d) Sangeetha Devi Jhunjhunwala vs. ITO (2023)(152 taxmann.com 348)(Delhi) (e) Shri Rajendra M Jain Vs. ITO (ITA No.775/Mum/2022 dated 31- 01-2023) (f) Saroj Baid vs. ITO (2023)(155 taxmann.com 630)(K0l - Trib) 7. The Ld A.R, on the contrary, submitted that it is not correct to say that the fundamentals of the company were not good. Referring to the financial details extracted by the AO, the Ld A.R submitted that the turnover of the company has increased substantially. He further submitted that the examination conducted by the AO did not bring out any fact adverse to the assessee. He further submitted that the assessee has sold the shares in the stock exchange platform and she could not have known as to who purchased the shares. Further, the non-response of the broker to the notice issued by the AO could not be a ground to disbelieve the transactions, when the assessee has furnished all evidences in support of purchase and sale of shares and further those evidences were not proved to be false. He further submitted that the shares were purchased in an earlier year and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f shares. We notice that the shares were purchase in an earlier year and the said purchase has not been suspected by the AO. Hence, there is no reason to suspect the purchase and sale of shares undertaken by the assessee. 10. The Ld D.R placed his reliance on host of case laws to contend that addition relating to penny stock transactions has been confirmed in those cases. There should not be any dispute that the purchase and sale of shares reported by the assessee is a factual matter and each of the case has to be examined on the basis of facts prevailing therein. In respect of decisions rendered by co-ordinate Mumbai benches, we notice that they did not refer to the jurisdictional Bombay High Court decisions. 11. It is noticed that the AO did not establish any link between the assessee and the reports of investigation wing. At this stage, we may refer to the decision rendered by Hon'ble Supreme Court in the case of Adamine Construction P Ltd (99 taxman 45), wherein, while dismissing the appeal of Revenue, the Hon'ble Supreme Court has referred to the following observations made by Hon'ble Delhi High Court:- "What is evident is that the AO went by only the report received and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that the Appeals do not raise any substantial question of law and deserve to be dismissed. 5. We have perused the concurrent findings and on which heavy reliance is placed by Mr. Sureshkumar. While it is true that the Commissioner extensively referred to the correspondence and the contents of the report of the Investigation carried out in paras 20, 20.1, 20.2 and 21 of his order, what was important and vital for the purpose of the present case was whether the transactions in shares were genuine or sham and bogus. If the purchase and sale of shares are reflected in the Assessee's DMAT account, yet they are termed as arranged transactions and projected to be real, then, such conclusion which has been reached by the Commissioner and the Assessing Officer required a deeper scrutiny. It was also revealed during the course of inquiry by the Assessing Officer that the Calcutta Stock Exchange records showed that the shares were purchased for code numbers S003 and R121 of Sagar Trade Pvt Ltd. and Rockey Marketing Pvt. Ltd. respectively. Out of these two, only Rockey Marketing Pvt.Ltd. is listed in the appraisal report and it is stated to be involved in the modus-operandi. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge the basic onus. If the Tribunal proceeds on this line and concluded that inquiry was not carried forward and with a view to discharge the initial or basic onus, then such conclusion of the Tribunal cannot be termed as perverse. The conclusions as recorded in para 12 of the Tribunal's order are not vitiated by any error of law apparent on the face of the record either. 7. As a result of the above discussion, we do not find any substance in the contention of Mr.Sureshkumar that the Tribunal misdirected itself and in law. We hold that the Appeals do not raise any substantial question of law. They are accordingly dismissed. There would no order as to costs. 8. Even the additional question cannot be said to be substantial question of law, because it arises in the context of same transactions, dealings, same investigation and same charge or allegation of accommodation of unaccounted money being converted into accounted or regular as such. The relevant details pertaining to the shares were already on record. This question is also a fall out of the issue or question dealt with by the Tribunal and pertaining to the addition of Rs. 25,93,150/-. Barring the figure of loss that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g irregularities and synchronized trades carried out in the shares by the said broker. However, the evidences furnished by the assessee with regard to purchase and sale of shares were not doubted. Under these set of facts, the Hon'ble Bombay High Court held as under:- "....The CIT(A) came to the conclusion that respondent bought 3000 shares of RFL, on the floor of Kolkatta Stock Exchange through registered share broker. In pursuance of purchase of shares the said broker had raised invoice and purchase price was paid by cheque and respondent's bank account has been debited. The shares were also transferred into respondent's Demat account where it remained for more than one year. After a period of one year the shares were sold by the said broker on various dates in the Kolkatta Stock Exchange. Pursuant to sale of shares the said broker had also issued contract notes cum bill for sale and these contract notes and bills were made available during the course of appellate proceedings. On the sale of shares respondent effected delivery of shares by way of Demat instruction slips and also received payment from Kolkatta Stock Exchage. The cheque received was deposited in respondent's bank ..... X X X X Extracts X X X X X X X X Extracts X X X X
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