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2022 (11) TMI 523 - AT - Income TaxRevision u/s 263 - Reopening of assessment u/s 147 - Long Term Capital Gain from the position of the possibility of it being a sham transaction - HELD THAT:- On giving our thoughtful consideration to the claims and counter claims of the parties before us, we deem it appropriate to first cull out the facts necessary for adjudicating the issue before us namely; can the order passed by the PCIT u/s. 263 exercising the Revisionary Powers be said to be a valid order in the eyes of law on the basis of facts and evidences on record. In order to examine the said question, we need to set out the relevant and necessary facts on the basis of which the answer to the said question can be determined. The assessee in the facts of the present case has sold the shares of M/s. CCL International Ltd. which were acquired as a result of amalgamation of M/s. CCL International Ltd. with M/s. AAR Infrastructure wherein the assessee had originally invested a certain amount. It is an accepted fact that the Amalgamation Scheme under the aegis of the Hon'ble Delhi High Court has attained finality. The number of shares received by the assessee as a result of the amalgamation is not the issue for determination in the present proceedings. AO considering the information noticed that the assessee had sold 750000 shares in M/s. CCL International Ltd. and has not disclosed those in its return dated 02.08.2013. Considering the information after recording reasons and fulfilling the necessary formalities, he issued notice u/s. 148. The assessee filed its return on 26.10.2016 disclosing the sale of transactions. AO recording the reasons for re-opening the assessment in the impugned order dated 27.11.2017 itself required the assessee to explain and justify its claim of Long Term Capital Gain claim made in the revised return in the backdrop of the information of scam in penny stock company. This order is set aside by the ld. PCIT u/s. 263 of the Act. No contrary evidence has been filed by the Revenue. The suspicions and conjectures in the absence of any evidence have no relevance whatsoever. The argument that subsequently the share price rose and the fact that the assessee sold it at a lesser price on an earlier date is a suspicion which cannot be taken as an evidence that the share price was rigged. This fact in no way discredits the assessee's claim, infact it only fortifies the fact that assessee had no apparent "insider's knowledge" or clairvoyance that the share price would rise further. With hindsight most everyday rationale decisions may ultimately appear to be ill-advised actions, however none of us are clairvoyants and hence being incapable of seeing the future we act in the present. Decisions taken in the present are based on available input. What lies in the future is always an estimated guess. By accepting an estimated addition the broker cleverly evades penal consequences of Detection and discovery of client fund mis-management. These statements of surrender by Brokers it cannot be over emphasized should be treated with utmost caution in the interests of the economic activity in the country and as a safeguard to the trusting citizens who engage and pay for the services of these Brokers. These surrenders consciously and unscrupulously made invite whimsical consequences for the bonafide investors. How and why the tax department should accept the words of such a manipulative fast thinking person and why the words of such a manipulative person be permitted to be given a precedence over the documents and evidences relied upon by a person relying in good faith on the bonafide of his Broker needs to be seriously introspected upon and addressed by the tax authorities. Permitting such criminal acts by carelessly accepting the statements/surrenders made by unscrupulous brokers needs to be addressed consciously especially when applied to the clients of such brokers who may have trusted the financial acumen of these brokers. These innocent trusting lambs should not be carelessly allowed to be thrown at the wolves by the manipulative brokers. These surrender statements should be viewed with due care and caution. It is necessary for the tax authorities to examine whether the traded company has actually been barred from the Stock Exchange or was still continuing on the Stock Exchange. For the sake of removing doubts, it is being clarified that the observations are made to the transaction of buy/sale through the D-Mat account on the Stock Exchange in listed companies. On a careful consideration of the entire facts, circumstances and position of law as discussed in detail in the earlier part of this order and considering the evidences which were filed before the AO and the ld. PCIT and even further elaborated before us by both the parties, we find on facts that the Revisionary order in the peculiar facts and circumstances proceeds entirely on presumptions, conjectures and surmises. The twin conditions as laid down by plethora of decisions from the case of Malabar Industries [2000 (2) TMI 10 - SUPREME COURT], we find are not met. Accordingly, for the reasons given hereinabove in detail, the impugned order is quashed. Appeal of assessee allowed.
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