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2022 (12) TMI 843 - AT - Income TaxAddition u/s 68 - Bogus LTCG - proximity of the time between the buy and sale operations - addition being 0.5% as alleged cost of arrangement of accommodation entry by treating it as unexplained expenditure u/s. 69C - HELD THAT:- The test to be applied is the test of preponderance of probabilities to ascertain as to whether there has been violation of the provisions of the Income-tax Act. In such a circumstance, the conclusion has to be gathered from various circumstances like the volume from trade, period of persistence in trading in the particular scrips, particulars of buy and sell orders and the volume thereof and proximity of time between the two which are relevant factors. Therefore, the methodology adopted by the revenue cannot be faulted. Test of preponderance of probabilities have to be applied and while doing so, the court cannot loose sight of the fact that the shares of very little known companies with in-significant business had a steep rise in the share prices within the period of little over a year. The assessee was not named in the report and when the assessee makes the claim for exemption, the onus of proof is on the assessee to prove the genuinity. It is incorrect to argue that the assessees have been called upon to prove the negative in fact, it is the assessees duty to establish that the rise of the price of shares within a short period of time was a genuine move that those penny stocks companies had credit worthiness and coupled with genuinity and identity. The assessee cannot escape from the burden cast upon him and unfortunately in these cases the burden is heavy as the facts establish that the shares which were traded by the assessees had phenomenal and fanciful rise in price in a short span of time - The assessee had opportunity to prove that there was no manipulation at the other end and whatever gains the assessee has reaped was not tainted. This has not been proved or established by any of the assessee.Assessing Officers as well as the Commissioner (Appeals) have adopted an inferential process which is found to be a process which would be followed by a reasonable and prudent person. Thus in the context of factual matrix of the present appeal before us narrated above, the position of law as enunciated in Swati Bajaj [2022 (6) TMI 670 - CALCUTTA HIGH COURT] carrying force of binding nature on the issue under consideration for us, we note that issue involved in this appeal is covered against the assessee by the said decision as the fact pattern is similar to that which were before the Hon’ble High Court. Since none appeared before us on behalf of the assessee, the relevant factual matrix was captured with the assistance of Ld. Sr. DR. After taking into consideration the factual matrix of the case before us vis-à-vis the decision of Hon’ble jurisdictional High Court of Calcutta in Swati Bajaj & others (supra), we respectfully following the said decision carrying the force of binding nature, being the jurisdictional High Court, dismiss the appeal of the assessee and confirm the action of the Ld. CIT(A). Appeal of the assessee is dismissed.
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