TMI Blog2017 (11) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... ause share broker was tainted violating SEBI regulations, would not make assessee’s share transactions bogus. Also see M/s Indravadan Jain HUF [2016 (7) TMI 16 - ITAT MUMBAI] - Decided in favour of assessee. - ITA No. 4862/MUM/2014 - - - Dated:- 18-9-2017 - SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Revenue : Mr. M.C. Omi Ningshen, DR For The Assessee : Mr. Naveen Kumar Mishra, AR ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the Revenue. The relevant assessment year is 2005-06. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-34, Mumbai and arises out of the assessment completed u/s 143(3) r.w.s 147 of the Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, the AO held that the scrip of Ramkrishna Fincap Ltd. is nothing but a penny stock. The assessee had done transactions with M/s Basant Periwal Co. in only one transaction i.e. Ramkrishna Fincap Ltd. , that too in the particular period for which SEBI had given a specific finding. Considering the above facts, the AO brought to tax the LTCG of ₹ 44,24,385/- shown by the assessee as unexplained cash credit u/s 68. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) relied on the decision by the Hon ble Delhi High Court in the case of M/s Rajat Export Import India Pvt. Ltd. vs. ITO 341 ITR 135 (Del) and held the reopening by the AO as valid. 4.1 Regarding the merit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere only issuing bogus bills/accommodation entries. SEBI had conducted enquiries and found that the broker M/s Basan Periwal Co. had indulged in market manipulation and inflated the price of the scrip. As per the order dated 31.08.2010 passed by SEBI Ramkrishna Fincap Ltd. had no net worth for such price hike of the shares from ₹ 3.12 per share to ₹ 165.83 per share. The Ld. DR further submits that the Calcutta Stock Exchange Ltd. had imposed penalty on M/s Basant Periwal Co. for issuance of false contract notes to its members and this fact clearly shows that the transactions were not genuine. 6. Per contra the Ld. counsel of the assessee files a Paper Book (P/B) enclosing a copy of decision in the case of Smt. Bharti Arv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in price manipulation through synchronized and cross deal in scrip of Ramkrishna Fincap P. Ltd. Furthermore, it was also communicated that SEBI had passed an order dated 09.07.2009 regarding the irregularities and synchronized trades carried out in scrip of Ramkrishna Fincap Ltd. by the broker M/s Basant Periwal Co. The AO did not accept the assessee s claim of LTCG and made an addition of it as unexplained cash credit u/s 68. In appeal, the Ld. CIT(A) deleted the addition and allowed the appeal of the assessee. The Revenue filed appeal against the order of the Ld. CIT(A) before the ITAT. The Tribunal held as under: 8. We have considered rival contentions and carefully gone through the orders of authorities below and found from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inate bench, wherein on similar facts and circumstances, issue was decided in favour of the assessee, came to the conclusion that transaction entered by the assessee was genuine. Detailed finding recorded by CIT(A) at para 3 to 5 has not been controverted by the department by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the findings of CIT(A). Moreover, issue is also covered by the decision of jurisdictional High Court in the case of Shyam R. Pawar (supra), wherein under similar facts and circumstances, transactions in shares were held to be genuine and addition made by AO was deleted. Respectfully following the same vis- -vis findings recorded by CIT(A) which are as per material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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