TMI Blog2019 (1) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... y establishes that the assessee was holding a sizeable portfolio and it is not the stray incident of purchasing one scrip for this purpose only. There is no allegation as to the incorrectness of the documents or manipulation by SEBI or BSE. Hon’ble Apex Court in the case of M/s Andaman Timber Industries vs Commissioner of Central excise [2015 (10) TMI 442 - SUPREME COURT] for the principle that the failure to provide the assessee the right to cross examine the witness whose statement are relied upon, results in breach of principles of natural Justice and is a serious flaw which renders the order a nullity. In this case also an opportunity for the cross examination of the persons, on whose statements the learned AO based his suspicion was not allowed to the assessee, so that the assessee could have defended himself from the allegations, if any, made against him. In these circumstances, mere suspicion of AO does not take the place of legal proof of any bogus transaction. It shall be kept in mind that the assessee held the shares quite for a long time between 22nd of June 2011 till 23re March, 2012 bonus shares were allotted and subsequently deposited them in the demat account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,000 shares. After amalgamation order passed by the Hon ble Mumbai High Court, M/s Baviscon Vincom Private Limited got amalgamated with the M/s Unno Industries Ltd w.e.f. 31/03/2013 and M/s Unno industries Ltd allotted 10 shares to each shareholder of M/s Baviscon Vincom Private Limited for each share held of M/s Baviscon Vincom Private Limited and accordingly the assessee got 1,60,000 shares of M/s Unno industries Ltd. The assessee sold these shares on 18/08/2014 and 19/12/2014 respectively for a consideration of ₹ 21,85,891/-and computed the capital gains exempt under section 10(38) of the Act to the tune of ₹ 19,85,891/-. 4. After examining the assessee, in the light of the facts that are unearthed during the search and survey operations carried out by the Department on some share broking entities and more than 20 entry operators in the process of which the statements of one Pawan Dalmia and Alok Harlalka were recorded, learned assessing officer found that all that is apparent is not real in this case and the transaction of purchase and sale than by the assessee is nothing but sham transaction and aimed only to bring unaccounted money of the assessee in the guise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ker and the money was paid and received through banking channels. IN the circumstances it is submitted that mere suspicion of the learned Assessing Officer should not lead to the addition of the sale consideration under section 68 of the Act, that too, when learned Assessing Officer himself admitted that there is no mention of assessee s name in the statement of Mr Pawan Dalmia. 8. Per contra, it is the argument of Ld. DR that the demat account of the assessee does not contain the date of credit of the shares; that M/s Unno Industries was suspended twice on 31st of March 2016 and 26th May 2016 due to surveillance measures and penal reasons respectively by SEBI as could be seen from the screenshot of the BSE incorporated by the learned Assessing Officer in his order. She further argued that the learned Assessing Officer noted that the financials of the companies show that the movement of price was abrupt, unrealistic and not based upon any realistic parameters; that the history of investment in shares made by the assessee also generally reveals that he has not been dealing in shares in such a huge quantity on a regular basis but it was found that the entries of LTCG were taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22nd February 2012. The confirmation of accounts dated 27th March 2012 issued by Oasis Tradewings Private Limited establishes that towards the cost of 200 equity shares of BVPL sold by them to the assessee they have received the bank cheque No. 199304 on 22nd June, 2011. The money receipt, copy of which is to be found at page No. 59 shows that it is only after receipt of such share transfer, the amount was paid. 10. Ld. Assessing Officer referred to the said survey operations and the recording of the statements of various share brokers and entry operators including the Managing Director/Director/Promotor of M/s Unno industries Ltd wherein there was an admission on the part of the Managing Director of the said entity by name Mr Pawan Dalmia and Mr Pawan Dalmia admitted that the company was involved in providing accommodation entries. It is not the case of the Revenue that Mr Pawan Dalmia referred to any involvement of the assessee in the affairs of this company or knowledge of the assessee about the accommodation entries provided by them. 11. Assessee produced before the learned Assessing Officer that the documents submitted by him, namely, the contract note dated 18/08/2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (Calcutta) held that when the AO has not doubted the genuineness of the documents based on the information on record by the assessee, no disallowance can be made. 15. Further reliance is placed on the decision of the Hon ble Punjab and Haryana High Court reported in PCIT vs Prem Pal Gandhi in ITA No.95/2017 where the Hon ble High Court held that the appreciation in value of shares is high, does not justify the transaction being treated as a fictitious and the capital gains being assessed as undisclosed income if (a) the shares are traded on the stock exchange, (b) the payments and receipts are routed through the bank, (c) there is no evidence to indicate it is a closely held company and (d) the trading on the stock exchange was manipulated in any manner. 16. Further, basing on the statements of Mr Pawan Dalmia and Alok Harlalka, the director/promoters of M/s Unno industries Ltd recorded u/s 132(1) of the Act before the DIT (Inv) , Kolkata at para No. 8.2 of the assessment order, learned Assessing Officer reached a conclusion that the transactions made by the assessee were not genuine transactions but sham transactions. However, it is an admitted fact that no opportunity of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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