TMI Blog2019 (3) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/CHNY/2018 - - - Dated:- 14-2-2019 - Shri N.R.S. Ganesan, Judicial Member And Shri Abraham P. George, Accountant Member For the Appellant : Shri. K. Meenakshisundaram, ITP For the Respondent : Shri. B. Sagadevan, JCIT. ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER In this appeal filed by the assessee, which is directed against an order dated 01.06.2018 of ld. Commissioner of Income Tax (Appeals)-13, Chennai, it is aggrieved on denial of exemption of long term capital gains of ₹ 11,30,368/- arising on sale of shares claimed u/s.10(38) of the Income Tax Act, 1961 (in short the Act ) and treating the entire sale consideration of ₹ 11,83,700/- as unexplained income. 2. Ld. Counsel for the assessee submitted that assessee had sold 3,800 shares of one M/s. UNNO Industries Limited for a consideration of ₹11,83,700/- and claimed the long term capital gains of ₹ 11,30,368/- arising from such sale, as exempt u/s.10(38) of the Act. As per the ld. Authorised Representative, the lower authorities disbelieved the sale of the shares, relying on reports of Directorate of Income Tax (Investigation) Kolkata and Delhi, which mentioned that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O (ITA Nos.2786 2787/Chny/2017, datd 03.05.2018). 4. We have considered the rival contentions and perused the orders of the authorities below. It is not disputed that long term capital gains claimed by the assessee as exempt u/s.10(38) of the Act arose on account of sale of equity shares of M/s. UNNO Industries Limited. It is also not disputed that the assessee had initially acquired the shares of the said company through off market deals. In similar cases of Vimalchand Gulabchand, Praveen Chand, Gatraj Jain Sons (HUF) and Mahendra Kumar Bhandari (supra) where also assessees had claimed exemption u/s.10(38) of the Act on sale of shares purchased off-market, 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.Kai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee and its explanation sought, before deciding whether these are relevant in the assessment of the assessee. I also find the SEBI through its order dated 21.09.2017(supra) did vacate its interim exparte order dated 29th March, 2016 restraining 244 entities, inter alia including M/s.Kailash Auto Finance Ltd., from buying, selling or dealing in securities. 16. In the facts and circumstances of the case, I am of the opinion that the question whether the transactions claimed by the assessee, as giving rise to the long term capital gains exempt from tax u/s.10(38) of the Act, were real or sham, requires a re-visit by the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment Order, it is mentioned that the assessee is an investor and has been regularly trading in shares. If this is so, does the demat account show such transactions being done by the assessee or is this the only one of transaction. Thus, clearly the facts required for adjudicating the appeals are not forthcoming. There is no evidence whatsoever to show that the assessee has held the shares for more than 12 months. This is because assuming that the demat has been done and the shares of M/s.BPL has come into the assessee s demat account and has immediately flown out. Then the factum of the possession of the shares for more than 12 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 ₹ 20/- to ₹ 352/- in a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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