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TMI Blog2025 (4) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 2. The learned CIT (A) and the Assessing officer made additions without providing a cross-examination of the witness and not following the principles of natural justice. 3. The authority to assess the cases where search is initiated under section 132 is provided under section 153A or 153C and not under section 148 of the income tax act. The re-opening under section 148 was made without jurisdiction 4. The learned CIT (A) has passed the assessment order without any direct evidence against appellant and merely on report of investigation wing. The entire addition has been made purely on suspicion without any direct evidence against the Appellant, merely on the basis of untested and uncorroborated report of Investigation Wing and on borrowed satisfaction of the investigation authorities. 2.1. Assessee has also raised additional grounds, as ground no.5 and 6 vide application dated 08.10.2024 which are reproduced as under. For the purpose of admission of these additional grounds, it is submitted that assessee inadvertently omitted to include them in the original appeal memo in Form No.36. According to the assessee these grounds relate to legal issues and goes to the root of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,110, 111, 112, 226 Details of shares sold in A.Y. 2016-17: a. Date of sale: 01.10.2015 b. No. of shares sold: 11,470 (balance still held) c. Mode of sale: RTGS and Cheque d. Broker: Joindre Capital Services Limited (JCSL) e. Documents in support: Contract Notes, Ledger Account of JCSL, bank statement, contract notes. Refer in PB pg nos. 71, 121, 122, 142, 156, 157, 226 3.2. In the course of assessment, Ld. Assessing Officer called for details and explanations in respect of the transaction of sale of shares on which exemption has been claimed under section 10(38) on account of long-term capital gain earned by the assessee. To corroborate the facts, assessee furnished relevant documentary evidences which are placed on record in the paper book before us, containing 244 pages, which includes: i. Photocopy of contract Notes issued by JCSL. ii. Photocopy of Ledger account in the name of ass issued by JCSL. iii. Photocopy of Bank Statements showing amount paid and received to broker. iv. Copy of DMAT account where these shares are held. v. STT is duly paid by the broker and is reflected in the bills issued by the broker. 3.3. Assessee strongly contended that he i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information of those assesses. Though certain parts (relevant for reopening and objections raised by the assessee) have been discussed herein." 3.7. Further, it was pointed out by the assessee that apprehension and doubt raised by the ld. Assessing Officer about order passed by Securities Exchange Board of India (SEBI) on suspending trading in the scrip of Goenka Business and Finance Ltd. turned out to be otherwise, since the trading was resumed in 2016. Fact relating to this aspect is that Bombay Stock Exchange (BSE), after passing an interim order for suspension in trading of scrip of Goenka Business and Finance Ltd. conducted comprehensive and thorough investigation and finally passed an order resuming the trading, later in 2016. This fact is accepted by ld. Assessing Officer in the impugned assessment order, in para 5.6(1), which is reproduced as under: "On 21st December 2015, BSE suspended trading in 35 listed companies as per the direction of SEBI. These companies were found violating the various norms and were involved in fraudulent trade. The name of Goenka Business and Finance Ltd is found to be appearing at serial No. 11 of the list. However, the trading was resumed l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the assessee has reiterated the submissions made before the authorities below. He has also placed on record all the relevant documents and evidences in the form of paper book, details of which are already noted above, backed by judicial precedents of the Hon'ble jurisdictional High Court of Bombay. The submissions so made are not reiterated to avoid duplicity. Ld. Counsel for the assessee has placed on record his rebuttal and clarifications on the orders of SEBI referred by ld. Assessing Officer. According to the ld. Counsel, SEBI resumed the trading in the scrip of the company in 2016 itself. 5.1 In the course of hearing, ld. Sr.DR had placed reliance on the order of ld. Assessing Officer and referred to adjudication orders passed by SEBI and asserted that the share transactions undertaken by the assessee are of tainted scrip which were investigated and subjected to penalties. 6. We note that transactions were undertaken through the SEBI registered broker Joindre Capital Services Ltd. on the stock exchange platform on which STT was levied and the consideration was routed through normal banking channel. The entire flow of these transactions is corroborated by relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bom), wherein it was held that transactions of purchase and sale of shares cannot be considered to be bogus, when the documentary evidences furnished by the assessee establish genuineness of the claim. We also draw our force from the decision of Hon'ble High Court of Delhi in the case of PCIT v. Krishna Devi [2021] 126 taxmann.com 80 (Del) wherein the Hon'ble Court noticed that the reasoning given by the Assessing Officer to disbelieve the capital gain declared by the assessee, viz. astronomical increase in the price of shares, weak fundamentals of the relevant companies are based on mere conjectures. 8. Reliance placed by the ld. Assessing Officer on the report of investigation wing without further corroboration based on cogent material does not justify the conclusion that the impugned transaction is bogus, sham and part of racket of accommodation entries. It does not prove that the assessee has carried out the impugned transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of share prices. In absence of any such material, enquiry and examination, the addition made pertaining to receipt of sale consideration of the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not think that question as pressed raises any substantial question of law. 6. The appeal is devoid of merits and it is dismissed with no order as to costs." ii) PCIT vs. Indravadan Jain HUF [2023] 156 taxmann.com 605 (Bom) wherein it was held: "Where shares were purchased by assessee on floor of stock exchange and not from broker, payment was made through banking channel, deliveries were taken in DMAT account where shares remained for more than one year, contract notes were issued and shares were also sold on stock exchange, there was no reason to add capital gains as unexplained cash credit under section 68" iii) CIT vs. Shyam R. Pawar [2015] 54 taxmann.com 108 (Bom) wherein it was held: "Where DMAT account and contract note showed details of share transaction, and Assessing Officer had not proved said transaction as bogus, capital gain earned on said transaction could not be treated as unaccounted income under section 68" 9. Considering the totality of facts and circumstances of the case, factual matrix and submissions of parties narrated as well as discussion and observations made herein above, we delete the addition made u/s 68 towards proceeds of sale of listed sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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