TMI Blog2018 (10) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Baid [2017 (10) TMI 522 - ITAT KOLKATA] wherein held SEBI order did mention the list of 246 beneficiaries of persons trading in shares of KAFL, wherein, the assessee's name is not reflected at all. Hence the allegation that the assessee and/or Ashita Stock Broking Ltd. getting involved in price rigging of KAFL shares fails. The facts of the case and the evidences in support of the assessee’s case clearly support the claim of the assessee that the transactions of the assessee were bonafide and genuine and therefore the AO was not justified in rejecting the assessee’s claim of exemption under section 10(38) of the Act. AO was not justified in assessing the sale proceeds of shares of KAFL as undisclosed income of the assessee u/s 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of long term capital gain arising from the sale of shares of M/s. Kailash Auto Finance Ltd. by treating the same as bogus and adding the entire proceeds of such sale u/s 68 by treating the same as unexplained cash credit and also making a further addition on account of the commission allegedly paid by the assessee for obtaining the entries for making such bogus claim of long term capital gain by treating the same as unexplained expenditure. The amounts so added by the AO and confirmed by the Ld. CIT(A), which are in dispute in the present appeals, are as under: ITA No. Name of the Assessee Addition u/s 68 Addition u/s 69C 1335/K/2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year relevant to the assessment year under consideration and claimed the long term capital gain arising from such sale as exempt from tax u/s 10(38) of the Act. During the course of assessment proceedings, the claim of the assessees for such exemption was examined by the AO and on such examination, he held for the detailed reason given in the assessment orders that the claim of the assessees for long term capital gain was bogus in as much as the entire transactions giving rise to such long term capital gains were accommodation entries. Accordingly, the entire proceeds of sale of shares credited in the books of the assessees were treated by the AO as unexplained cash credits and additions to that extent were made by him to the total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) for this proposition. The various facets of the arguments of the ld AR supra, with regard to impleading the assessee for drawing adverse inferences which remain unproved based on the evidences available on record, are not reiterated for the sake of brevity. The principles laid down in various case laws relied upon by the ld AR are also not reiterated for the sake of brevity. We find that the amalgamation of CPAL with KAFL has been approved by the order of Hon'ble High Court. The ld AO ought not to have questioned the validity of the amalgamation scheme approved by the Hon'ble High Court in May 2013 merely based on a statement given by a third party which has not been subject to cross -examination. Moreover, it is also pertin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and / or the broker Ashita Stock Broking Ltd. was not the primary allottees of shares either in CPAL or in KAFL as could be evident from the SEBI's order. We find that the SEBI order did mention the list of 246 beneficiaries of persons trading in shares of KAFL, wherein, the assessee and / or Ashita Stock Broking Ltd's name is not reflected at all. Hence the allegation that the assessee and / or Ashita Stock Broking Ltd getting involved in price rigging of KAFL shares fails. We also find that even the SEBI's order heavily relied upon by the ld AO clearly states that the company KAFL had performed very well during the year under appeal and the P/E ratio had increased substantially. Thus we hold that the said orders of SEBI i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. 5. The Tribunal also allowed the consequential relief to the assessee by deleting the additions made by the A.O. u/s 69C holding that the transactions giving rise to long term capital gain being genuine, there was no question of paying any commission for obtaining the alleged accommodation entries. Since the issues involved in the present cases as well as the material facts relevant thereto are similar to the cases of Shri Manish Kumar Baid and Mahendra Kumar Baid (supra), I respectfully follow the order passed by division bench of this Tribunal and delete the additions made u/s 68 and 69C to the total income of the six assessees in the present cases. 6. In the result, the appeals of the assessee are allowed. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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