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TMI Blog2025 (4) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... st fact finding authority, has erred in not using his co-terminus powers u/s. 250(4), equivalent to that of the Assessing Officer, to arrive at the correct facts or directing the AO to ascertain the correct facts. 2. It is prayed that present appeal may be filed in accordance with the CBDT's Circular No.5/2024 dated 15.03.2024 as- per para 3.1(h) of the said circular. Therefore, the order of the CIT(A) may kindly be vacated and that of the AO may be restored." 4. The sole grievance of the Revenue in the present appeal is against the deletion of the addition on account of the alleged transaction of bogus longterm capital gains. 5. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is an individual and for the year under consideration filed his return of income on 17/09/2017, declaring a total income of Rs. 6,57,620, after claiming exemption of Rs. 1,28,27,860 being longterm capital gains from transactions on which Security Transaction Tax was paid. Subsequently, on the basis of the information received from Insight Portal that the price of the scrip of Tilak Venture Ltd. was manipulated to provide accommodation entry of bogu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no substantial change in the financials of the company to support such a huge share price movement. The AO also referred to the statement of a few exit providers who had named the director of Tilak Venture Ltd., alleging that on his instructions, credentials of various exit providers were obtained and trading was done in their accounts. By referring to the statement of directors of the company, the AO held that the director failed to provide the details of the content of the presentation, which was presented to the prospective allottees, convincing them to invest in the company. Accordingly, the AO held that the scrip of Tilak Venture Ltd. was used to provide bogus long-term capital gains to various beneficiaries. Thus, the AO held that earning huge tax-exempt gains within a short span of time fails the test of both genuineness and human probabilities. As a result, the AO disallowed the long-term capital gains of Rs. 1,28,27,860 claimed as exempt under section 10(38) of the Act by the assessee from the sale of scrip of Tilak Venture Ltd. and the total sale consideration on sale of stock of Rs. 1,29,61,760 was added to the total income as unexplained cash credit under section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of providing accommodation entry in penny stock and financials of Tilak Venture Ltd., the AO concluded that the scrip is a penny stock, which was used by the assessee to accommodate his unaccounted money. In this regard, the AO also referred to the statement of some exit providers who alleged that the directors of the company had instructed them to carry out the manipulation. Accordingly, the AO not only disallowed long-term capital gains claimed as exempt by the assessee under section 10(38) of the Act but also made an addition of the sale proceeds under section 68 of the Act. The AO further proceeded to make the addition under section 69C of the Act on account of the alleged payment of commission for obtaining the accommodation entry of bogus long-term capital gains. 9. As per the assessee, he purchased 1,00,000 shares of Tilak Venture Ltd. on a preferential allotment basis and out of which, he sold 49,300 shares in three tranches in the relevant financial year through his share broker, namely, Nirmal Bang Securities Ltd. In the present case, it is undisputed that these shares were purchased by the assessee on 20/10/2012. We find from the DEMAT statement placed on page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igging. Thus, there is no reference to any portion of sworn statements wherein any adverse observation is made against the assessee. Therefore, we find merits in the findings of the learned CIT(A) that merely because the assessee is one of the persons who has earned long-term capital gains from the sale of the scrip of Tilak Venture Ltd. may not be sufficient to hold that the assessee was indulged in manipulation of scrip and has obtained accommodation entry on commission basis which is liable to be considered as bogus capital gains. It is further evident from the record that the AO did not comment upon any of the evidence submitted by the assessee to prove the genuineness of the transaction. The price fluctuation of shares of the entities in which the assessee has transacted also does not support the case of the Revenue, as no material has been brought on record to show that either the assessee or his share broker was involved in such price manipulation. Therefore, in the present case, it is sufficiently evident that the AO, without finding any fault with the evidence submitted by the assessee, proceeded to treat the transaction as non-genuine and the long-term capital gains earne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been referred to. But the Tribunal concluded that itself, is not enough to prove that the transactions in the impugned shares were bogus/sham. The details received from Stock Exchange have been relied upon and for the purposes of faulting the Revenue in failing to discharge 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. Suresh kumar 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." 12. During the hearing, the learned Departmental Representative ("learned DR") submitted that the learned CIT(A), having co-terminus power under section 250(4) to the AO, failed to conduct further inquiry into the matter. In this regard, it is pertine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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