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TMI Blog2024 (9) TMI 1723X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer-Wd 25(2)(4) Mumbai (the AO) making huge addition to the Returned Income is bad in law and deserves to be quashed since the Assessment order passed by the AO is in itself void having been passed in gross violation of principles of Natural Justice 1.2 In the facts and circumstances of the case and in law the order passed by the Ld. CIT(A) deserves to be quashed for being passed in gross violation of principles of natural justice and also being based on extraneous considerations while ignoring the relevant, material, considerations and submissions made by the Appellant. 2. ON VALIDITY OF THE PROCEEDINGS 2.1 in the facts and circumstances of the case and in law, the Assessment order passed by the Ld. AO and affirmed by the Ld. CIT(A) is bad in law, void and deserves to be quashed since the same is passed in violation of the extant law and judicial precedents in this regard. 3. ON MERITS 3.1 in the facts and circumstances of the case, and in law the Ld. CIT(A) erred in confirming the action of the Ld. AD in making an addition of Rs. 47.51,164/- under section 68 of the Act thereby denying the claim for 2 exemption under section 10(38) on sale of shares of Sunrise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete or modify any or all the above grounds of Appeal" 3. The brief fact of the case is that the assessee has earned Long Term Capital Gain (in short LTCG)amount of Rs. 47,51,164/- on sale of shares of "Sunrise Asian Ltd" during the impugned assessment year which has been claimed as exempt u/s 10(38) of the Act. The facts related to the issue are that the assessee had purchased 10,000 shares off market of "SantoshimaTradelinks Ltd", an unlisted company at Rs. 25/- per share from M/s. P. Saji Textiles Ltd. and the payment of Rs. 2,50,000/- was made in advance on 29/09/2011 vide cheque number 214328 of The Kapol Co-operative Bank Ltd, Vile Parle West Branch. M/s. P. Saji Textiles Ltd. issued the debit note dated 17/11/2011 and the shares were transferred in the assessee's name on 20.11.2011. Application for dematerialization of these shares was made on 08.10.2012 and the shares were dematerialized on 29/10/2012 in Demat. By the order dated 08.10.2012 of Hon'ble High Court of BOMBAY, "SantoshimaTradelinks Ltd" was amalgamated with "Sunrise Asian Ltd"and the assessee had been allotted 10000 shares of "Sunrise Asian Ltd"in 1:1 ratio on 26.06.2013 in Demat Account. Finally, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was conducted behind the back of the assessee.Further, there is no enquiry/investigation/adverse reporting by SEBI or BSE on the assessee or its broker. This fact was even brought to the notice of the AO which has been conveniently ignored by letter dated 19.08.2016 filed with ld. AO. 4.5. The purchases of the assessee have not been doubted and in fact accepted in assessment of earlier years. Further, off-market purchases are not prohibited and in any case the purchases are not doubted. The ld. AR respectfully relied on order of coordinate bench of ITAT Mumbai-G bench in the Smt. Geeta Khare v/s ACIT-Cir-3, Kalyan, ITA No. 4267/Mum/2018, date of pronouncement-29/05/2019. The addition in this case is made simply on the basis of statements of some third persons without linking the same to the assessee and hence not sustainable. The ld. AR respectfully relied on CIT v/s Shyam R. Pawar (2015) 229 Taxman 256 (Bombay). 5. We find that the assessee has discharged his onus by submitting all relevant documents before the ld.CIT(A) and ld.AO. The date-wise submission of the documents is reproduced as below:- IN THE HON'BE INCOME TAX APPELLATE TRIBUNAL, MUMBAI 'E' BENCH HARES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions and considered the documents available in the record. The ld.AR respectfully relied on the order of the Hon'ble Gujarat High Court in the case of PCIT-1 vs Divyaben Prafulchandra Parmar 2024(1) TMI 800 date of order02-01-2024and Hon'ble Gujarat High Court held that where the ITAT, Ahmedabad Bench has allowed the exemption under section 10(38) for dealing with the shares of "Sunrise Asian Ltd", in which the assessee also dealt in this impugned assessment year. The Hon'ble Gujarat High Court has upheld the order of the ITAT and after detailed discussion, the scrip "Sunrise Asian Ltd" is duly accepted for transaction and claiming of deduction under section10(38) of the Act. The assessee in both appeal and assessment stages discharged its onus by submitting all the purchase and sale documents. He revenue was not able to bring any such fact whether the assessee is directly involved in rigging of the share scrips and there is no such evidence that the SEBI has taken coercive action against "Sunrise Asian Ltd". 7.1. For our observations and to arrive at the findings, we respectfully relied on the decisions of Hon'ble High Court of Bombay being a jurisdictional High Court: Pr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd that we find that Mr.Gopal's contentions are well founded. The Tribunal concluded that there was something more which was required, which would connect the present Assessee to the transactions and which are attributed to the Promoters/Directors of the two companies. The Tribunal referred to the entire material and found that the investigation stopped at a particular point and was not carried forward by the Revenue. There are 1,30,000 shares of Bolton Properties Ltd. purchased by the Assessee during the month of January 2003 and he continued to hold them till 31 March 2003. the present case related to 20,000 shares of Mantra Online Ltd for the total consideration of Rs. 25,93,150/-. These shares were sold and how they were sold, on what dates and for what consideration and the sums received by cheques have been referred extensively by the Tribunal in para 10. A copy of the DMAT account, placed at pages 36 & 37 of the Appeal Paper Book before the Tribunal showed the credit of share transaction. The contract notes in Form-A two brokers were available and which gave details of the transactions. The contract note is a system gene and prescribed by the Stock Exchange. From this ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r facts and circumstances demonstrated before the ITAT and the Court, such as, inter alia, lack of evidence produced by the Assessee (herein to show actual sale of shares in that case. On such basis, the ITAT had returned the finding of fact against the Assessee, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix at hand. Similarly, the case of Sumati Dayal (supra) too turns on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue. 13.The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come (o the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order." 7.2. The ld. CIT(A) in impugned appeal order respectfully relied on the order of Hon'ble Calcutta High Court in the case of CIT vsSwati Bajaj[2022] 446 ITR 56 (Calcutta) where on same set of facts related taxability of LTCG on sale of shares considered as manipulated penny stock & the action of the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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