Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (4) TMI 284

,69,12,820/- by selling shares of M/s Dhanleela Investment & Trading Co. Ltd. was treated as bogus by the Revenue only on the basis of suspicion and probability and without finding any defect in the various documentary evidences filed by the assessee. - As transaction of the assessee are supported by the relevant documentary evidences, the additions made by the AO by treating the sale transaction as bogus is unsustainable. We, therefore, delete the addition. - The transaction of long term capital gains derived by the assessee as genuine and correct further addition made by the Assessing Officer is also liable to be deleted and accordingly, the same is hereby deleted. - Decided in favour of assessee. - ITA No. 6890/Del/2018 - 2-4-2019 - Sh. Bhavnesh Saini, Judicial Member And Sh. N. S. Saini, Accountant Member For the Assessee : Sh. Salil Aggarwal, CA, Sh. Shailesh, Sanjeev, CA, & Sh. Madhur Aggarwal, Adv. For the Revenue : Sh. Surender Pal, Sr. DR ORDER PER N. S. SAINI, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order of Commissioner of Income Tax (Appeals)-6, New Delhi dated 18.09.2018. 2. The assessee has raised the following grounds of app .....

X X X X X X X

Full Text of the Document

X X X X X X X

of Face value of ₹ 2/- per share. Then, the share holding of the assessee became of 2,50,000 shares of Face value of ₹ 2/- per share at an average cost of ₹ 3.60 per share. 5. Out of this, the assessee sold 82,250 shares @ ₹ 205 to ₹ 207 per share during the period from 12.12.2013 to 11.03.2014 and realised total sale consideration of ₹ 1,69,12,830/-. These shares were sold by the assessee through its Broker Pee AAR Securities Ltd., New Delhi in Bombay Stock Exchange on which STT was paid. In the Return of Income filed for the assessment year 2014-15, the assessee showed Long Term Capital Gains of ₹ 1,66,16,726/- (Rs.1,69,12,830 - ₹ 2,96,100) and claimed the same as exempt under section 10(38) of the Act. 6. The Assessing Officer observed that during the Financial Year 2011-12, the Authorized & Paid-up Capital of M/s Dhanleela Investment & Trading Company Limited was ₹ 20,00,000/- which substantially increased in the Financial Year 2012-13 to ₹ 9,47,00,000/-. Thus, an amount of more than ₹ 9 crores was collected by M/s Danleela Investment & Trading Company Limited during Financial Year 2012-13 by making p .....

X X X X X X X

Full Text of the Document

X X X X X X X

tion are a smoke screen to cover up the true nature of the transactions as it is revealed that the purchase and sale of shares are arranged transactions to create bogus profit in the garb of LTCG by well organized network of entry providers with the sole motive to sell such entries to enable the beneficiary to account for the undisclosed income for a consideration or commission. 10. Before us, the Authorized Representative of the assessee submitted that the assessee has filed before the AO and CIT(A) Ledger Account of the assessee in the Books of Share Broker, Statement of Affairs of the assessee for the Financial Year 2012-13 & 2013-14, Letter of Preferential allotment of shares by the company M/s Danleela Investment & Trading Company limited dated 29.10.2012 alongwith the subscription application filed by the assessee and letter of intimation of outcome of EOGM to Bombay Stock Exchange, Letter of allotment of Bonus shares by the Company dated 15.02.2013 alongwith the certified true copy of the resolutions passed in EOGM by the shareholders of the company, Letter intimating Sub-division of Equity Shares of the company dated 15.10.2013 along with the proceedings of the AGM .....

X X X X X X X

Full Text of the Document

X X X X X X X

reliance on the decision of the Hon ble Supreme Court in the case of ITO Vs Pirai Choodi 334 ITR 262(SC) 13. We find that the transaction of the assessee of purchase of shares of M/s Dhanleela Investment & Trading Co. Ltd., holding of the shares for more than one year and the sale of shares through a registered share broker in a recognized Stock Exchange and payment of Securities Transaction Tax thereon, all are supported by documentary evidences which were placed before the lower authorities. The Revenue by making enquiry in respect of the same could not point out any specific defect therein. 14. In our considered view, effect of a transaction which is supported by documentary evidences cannot be brushed aside on suspicion or probabilities without pointing out any defect therein. 15. In the instant case, the Assessing Officer himself observed that the issue of preferential shares by M/s Dhanleela Investment & Trading Co. Ltd. raises a suspicion. The movement in price of shares of that company was without backing of financial performance of that company. 16. In our considered view, the above at best are a pointer or cause for careful scrutiny of the transaction by the Asse .....

X X X X X X X

Full Text of the Document

X X X X X X X

ts. Thus, the said report or statements was not in respect of specific transaction of the assessee. The assessee transacted through share broker, namely, Pee AAR Securities Ltd. and not through Shri Anil Khemka and Sri Harshvardhan Kayan. 21. Simply, because in the shares of M/s Dhanleela Investment & Trading Co. Ltd. some manipulation was made by few persons it cannot be concluded that all the transactions which took place in the shares of the said company were manipulated and all the persons who transacted in the shares of the said company indulged in sham transaction. The Revenue has brought no material on record to show that the assessee actually indulged in some manipulation and paid cash in lieu of cheque received against sale of shares. 22. During the course of hearing, before us, the Departmental Representative contended that SEBI has barred dealing in shares of M/s Dhanleela Investment & Trading Co. Ltd. However, Authorized Representative of the assessee contended that no such ban has been imposed. The Departmental Representative in support of his contention filed copy of SEBI order dated 19.12.2014. However, a perusal of the said order, particularly para no. 32 at .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||