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TMI Blog2012 (8) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the case of Smt. Roopal Naresh Panchal and M/s. Sugandh Estate and Investments P. Ltd. on 10.2.2006. It was found that the group was engaged in the business of trading in shares and securities and also as a share broker. It was also found that the group entities had cornered IPO shares reserved for small investors by making thousands of multiple applications in the retail segment. The applications had been made in thousands of fictitious/benami names. On receipt of IPO allotment, these allottees transferred the shares to the demat accounts of Smt. Roopal N. Panchal and M/s. Sugandh Estate and Investments P. Ltd. who in turn transferred shares at cost price or with nominal margin of profit through off market transactions to the finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ket) 4700 02.09.2005 12.09.2005 13.09.2005 15 Syndicate Bank 1 20.04.2005 12.09.2005 13.09.2005 16 Zodiac Clothing 2000 Opening 25.05.2005 30.05.2005 17 South India Corporation Ltd. 14 Opening 31.01.2006 18 J N High Liquidity Fund Growth 5415.035 298140.14 8 173978.47 8 13.04.2005 18.05.2005 27.05.2005 22.08.2005 19 J N High Liquidity Super INST Growth Fund 6335767.5 20 26.08.2005 15.09.2005 20 J N Floater Fund 4166176.8 18 20.07.2005 10.08.2005 11.08.2005 11.08.2005 2.2 The assessee in the return of income declared the income from sale and purchase of shares and units as income from short term capital gain and paid tax @ 10% although at the time of investigation the assessee had agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities of the assessee were part of the scam detected as a result of search in case of Smt. Roopal N. Panchal and M/s. Sugandh Estate and Investments P. Ltd. The assessee had made organized efforts for maximizing profit which came to the knowledge of the department only through search operations. CIT(A) therefore, upheld the view taken by the AO to assess the income as business income aggrieved by which, the assessee is in appeal before the Tribunal. 3. Before us, the ld. AR for assessee reiterated the submissions made before the lower authorities that the assessee was an investor in shares and shares had been declared as investment in the books of account. It was also submitted that the assessee had made investment in shares of only 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a scam of getting allotment of shares reserved for small investors by making multiple applications in ficticious /benami names. The assessee was financing such activities. Shares allotted were transferred by Smt. Roopal N. Panchal and M/s. Sugandh Estate and Investments P. Ltd. to the assessee and other financiers who sold shares in the market on the day of listing or immediately thereafter for making profits. It is therefore clear that the assessee was engaged in an organized activity of purchase of shares almost at allotment price, through irregular and illegal manner and selling them on profit soon after shares were listed on stock exchange. The details of transactions reproduced earlier also to show that shares have been sold in a sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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