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TMI Blog2019 (2) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... thed racket of bogus entries of Long-Term Capital Gain and has discussed in detail the modus operandi operated by the operators in penny stock. The entire general modus operandi has been discussed from pages 1 to 6 of the assessment order and from there he deduced that, since assessee had also shown long term capital gain, therefore, she is also one of such beneficiary of accommodation entry. Vide order sheet entry, AO required the assessee to submit various documents to prove the genuineness of the purchase and sale of shares, in response to which assessee filed the following details: - 1. Photocopy of Demat Account and other related papers regarding sales/purchase of shares, transaction statements, holding statements, Statement of Account, Bill and Contract Note etc. are being enclosed herewith for your kind consideration. The assessee earned capital gain of Rs. 19,18,892.68 as Long-Term Capital Gain on the sales of36000 shares which are exempted from tax. 2. As far as purchase / investment in above shares is concerned, it is stated that a cheque no-545679 was given from PNB, Khair Nagar Branch, Meerut for Rs. 1,25,000/- on 03.07.2013 which can also be seen from the transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o your kind honour which also has similar and circumstances." 3.1. Assessee has also relied upon catena of judgements which has been noted by the Assessing Officer at page 9 of the assessment order. 4. However, the Assessing Officer rejected the assessee's contention and held that assessee has not furnished the bank statement of the sellers from whose shares of ALPS Motor Finance Limited were purchased from the period 1st April 2013 to 13th January, 2014; and assessee could not provide the identity of the person to whom shares were sold and their copies of bank statement. He also referred to statement of one, Shri Sanjay Vora, who was Regional Director of East zone of M/s. Anand Rathi Shares & Stock Brokers Ltd., which was one of the entities utilized for providing entry of bogus long-term capital gain of M/s. ALPS Motor Finance Limited. From this statement which runs from pages 10 to 21 of the assessment order, in question no. 60, AO has incorporated a list of several companies including the ALPS Motor Finance Limited, whether the scrips of these companies were in the nature of Penny stock for bogus long-term capital gain, to which he affirmed. Again, the assessee rebutted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration as Annexure 'A' Date can be verified from the website of Bombay Stock Exchange. (iii) We have sold 36000 shares of ALPS Motor Finance Ltd. It is not justified to conclude that our 36000 shares are included in 62350 bogus LTCG shares trading out of total trading of 2,66,55,451 shares. Bogus LTCG trading is merely 0.23% out of total trading of shares (Report of 5 Months taken) of ALPS Motor Finance Ltd. (iv) It is also pertinent to note that Sh. Sanjay Vohra has not mentioned name of assessee anywhere in his statement. (v) Statement of Sanjay Vohra has not mentioned the period of trading of Bogus LTCG. Shares of M/s ALPS Motor Finance Ltd. are also doing trade in Bombay Stock Exchange as on date. Copy of BSE trading is enclosed as Annexure 'B'. Assessee has no connection with Anand Rathi shares & Stock brokers Ltd/Sh. Sanjay Vohra. 3. It is not justified in disallowing the assessee's claim of exemption under section 10(38) of the Act by concluding that the transactions of the assessee resulting in LTCG on sale of shares were bogus relying on the statements of any person recorded by Investigation Wing wherein that person accepted to have provided accommodation entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the bank statement, it is seen that assessee has paid amount of Rs. 1,25,000/- on 3rd July, 2013 for purchase of shares and the sale proceeds have been received on various dates. Not only that, from the perusal of the Demat account, it is seen that the assessee was a regular investor in shares. Ld. Counsel for the assessee before us submitted that, following documents and evidence goes to prove the genuineness and transaction of the sale and purchase of the shares which are as under: - Master Data of the company. II. Copy of BSE trading of shares. III. Copy of bank statement highlighting the payment made against the share purchased. IV. Transaction statement of the stock broker, Contract Note for the sale of shares, Transaction and holding statement, Statement of account from the broker M/s ASHlar securities Pvt. Ltd certifying the sale of shares. Receipt of share application money. V. Copy of bank statement in which sale proceed from the sale of shares received. VI. STT has been duly paid on the sale transaction in the sum of Rs. 1926- VII. List of proposed shareholders includes name of Assessee (ANKITA VIJAY). Copy of form 23- along with copy of resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or material relating to bank account of entities involved that purchase or sale by assessee has been done through cash deposits; or there is any order from SEBI/BSE where genuineness of the scrip has been doubted. When no such inquiry or material has been found or gathered that assessee is beneficiary or was involved in any such scam of accommodation entry, then it is very difficult to discard the assessee's explanation and documents. 11. Here, in this case, the shares have been directly allotted by the company and the payment has been made through account payee cheque duly disclosed by the assessee in the earlier year and said purchase of shares is evidenced not only from the bank statement but also by the allotment of shares. Thus, possession of the shares is not in doubt at all because same is also reflected in Demat account maintained with NSDL. Not only that, the sale of shares is also evidenced from transaction undertaken through registered stock at a specific trade time in BSE and after the sale of shares, the net receipts have been credited to the assessee's bank account. Hence, the nature of the transaction is clearly purchase and sale of shares and the source of the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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