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TMI Blog2019 (2) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale of the shares, relying on reports of Directorate of Income Tax (Investigation) Kolkata and Delhi, which mentioned that M/s. Kailash Auto Finance Ltd was a penny stock company. As per the ld. Authorised Representative, assessee had initially purchased 37000 shares of M/s. Panchshul Marketing Limited which was later merged with M/s. Kailash Auto Finance Ltd. Further, as per the ld. Authorised Representative, assessee was allotted equal number of shares in the latter company on such merger, which was under a scheme approved by Hon'ble Allahabad High Court. Contention of the ld. Authorised Representative was that purchase of the shares of M/s. Panchshul Marketing Limited was genuine though it was done off market. The sale of 37000 shares of M/s. Kailash Auto Finance Ltd. as per the ld. Authorised Representative, was made through recognized stock exchange and ought not have been disbelieved. Contention of the ld. Authorised Representative was that statements recorded from various persons were relied on by the lower authorities for disbelieving the transactions and coming to a conclusion that prices of M/s. Kailash Auto Finance Ltd were jacked up artificially and assessee had m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Ltd, this Tribunal had held as under at para 13 to 16 of its order dated 6. 04. 2018. ''13. I have considered the rival contentions and perused the orders of the authorities below. The ld. Assessing Officer as well as Ld. CIT(A) had relied on SEBI order dated 29. 03. 2016, in the case of M/s. Kailash Auto Finance Ltd. . It is true that in the above order, there is a detailed analysis of modus operandi adopted by about eleven numbers of companies, inter alia including M/s. Kailash Auto Finance Ltd. It also mentions how M/s. Kailash Auto Finance Ltd. , had built up a huge share premium within a short time of its incorporation. SEBI had also analysed the financials of M/s. CPAN and M/s. PML, which were merged with M/s. Kailash Auto Finance Ltd. , and found that there was disproportionate issue of bonus shares by these two companies. Apart from the SEBI report, lower authorities had also relied on a statement obtained from Mr. Sunil Dokania on 12. 06. 2015 and the report of Investigation Wing of the Department. What I can discern from the orders of the lower authorities is that the statement given by Mr. Sunil Dokania, nor the report of the Investigation Wing relied on by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Assessing Officer. I set aside the orders of the lower authorities and remit the issue back to the file of the ld. Assessing Officer for consideration afresh in accordance with''. 5. In the case of Heerachand Kanunga (supra) relied on by the ld. Departmental Representative, Co-ordinate Bench had held as under:- ''9. A perusal of the facts in the present case admittedly given room for suspicion. However, assessments are not to be done on the basis of mere suspicion. It has to be supported by facts and the facts are unfortunately not forthcoming in the Assessment Order, in the order of the Ld. CIT(A) nor from the side of the assessee. The main foundation of the assessment in the present case is the statement of one Shri Ashok Kumar Kayan who has admitted to have provided bogus Long Term Capital Gains to his clients. The said Shri Ashok Kumar Kayan also allegedly seems to have provided the assessee's name and PAN as one of the beneficiaries. However, this statement given by Shri Ashok Kumar Kayan cannot be the foundation for the purpose of assessment in so far as Shri Ashok Kumar Kayan has not been provided to the assessee for cross-examination. In the absence of opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 months have to be proved by the assessee. This is also not forthcoming. In reply to a specific query, as the date of the demat of shares, it was submitted by the Ld. AR that the demat was done on various dates. Then the question rises as to why there is so much of difference in the dates of demating when 15000 shares have been purchased together on 24. 04. 2008. No details in respect of M/s. BPL company is known, what is the product of the company which had lead to the share value of the company to go up from Rs. 20/- to Rs. 352/- in a period of two years. This would clearly be a case where the share value of the company was hitting the circuit breaker of the stock exchange on a daily basis and obviously it would have drawn attention. This being so, as the facts are not coming out of the Assessment Order nor the order of the Ld. CIT(A) nor from the side of the assessee, we are of the view that the issues in this appeal must be restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate its case and we do so. 12. The statement recorded by the Revenue from Shri Ashok Kumar Kayan cannot be used as an evidence against the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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