TMI Blog2019 (8) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... ced at Page 34-36 PB it is noted that the transaction took place at Bombay Stock Exchange and not at Calcutta Stock Exchange. So the foundation of the reason given by the AO is based on wrong assumption of fact and so is erroneous. Thus, the basis on which the Assessing Officer has made the disallowance, cannot be upheld. CIT(A) relied on the so-called rules of suspicious transactions and confirmed the order of the Assessing Officer. In my view, such disallowance cannot be sustained. Thus delete this addition as the entire addition was made on wrong assumption of fact - Decided in favour of assessee. - I.T.A. No. 304/Kol/2019 - - - Dated:- 21-8-2019 - Shri A. T. Varkey, JM For the Appellant : Shri A.K. Tibre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) relied on the following judgments : a) Sanjay Bimalchand Jain v. PCIT, Order dated 10.04.2017 (Bom HC) b) Chandan Gupta vs. CIT [2015] 54 taxmann.com 10 (P H) c) Usha Chandresh Shah vs. ITO [2014-TIOL-1459-ITAT-MUM] 4. According to Ld. AR the AO did not allow its claim on the basis that the scrip viz. M/s. Comfort Fincap Limited or COMFINCAP was in the list of suspicious transactions and this was one of the reasons for selection of assessee s case for scrutiny i.e. to examine suspicious transactions in penny stock. At page 2 3 of his order, the AO had taken note that aforesaid trading loss of ₹ 6,89,049 happened since assessee had purchased 5000 shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 13 of the Securities Contracts (Regulation) Act, 1956. 5. According to Ld. AR, the Assessee Company had placed all relevant documents and evidences before the AO. The said documents and evidences included the contract notes, DEMAT account depicting share transactions and corresponding bank statements showing that purchase consideration was paid and sale proceeds were received by the Assessee through banking channel. It was brought to my notice that a perusal of the Assessment Order and even the Appellate Order shows that no defects and/or lacuna were pointed out in the following documents and evidences furnished by the Assessee Company: i. Certificate of Registration dated 12.09.2003 issued by RBI g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing judgments wherein loss incurred in the same scrip viz. M/s. Comfort Fincap Limited or COMFINCAP were held to be allowable by the Kolkata Tribunal by dealing with similar arguments of the department of theory of Preponderance of Probability, suspicious transactions and surrounding circumstances: a. Poonam Chand Dugarvs. ITO [ITA No.2419/Kol/2018, Order dt. 21.06.2019] b. DCIT vs. PRB Securities Pvt. Ltd. [ITA No.1727/Kol/2017, Order dt. 15.03.2019] 7. The Ld. AR also refers to the judgment of Meenu Goel vs. ITO [2018] 94 taxmann.com 158 (Del-Trib) were all the judgments cited by the Ld. CIT (Appeals) were considered before deciding similar issue of alleged transactions in penny stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made in the case of the assessee wherein overwhelming evidence has been produced in support of the transactions and the sole reason was that the transaction of this scrip was suspended in the Calcutta Exchange whereas in the present case the transaction happened through Banking Stock Exchange. 10. The ld. D/R, on the other hand submitted that there is no direct evidence against the assessee but the circumstantial evidence and the manner in which the transaction was done and the ultimate benefit derived by the assessee points out that the transaction is a bogus transactions and was created just to reduce the tax liability of the assessee. He pointed out that the assessee had earned long term capital gains (LTCG) a scrip w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions at Para 5 (supra). The AO has disallowed the claim of assessee on the sole reason that this scrip was suspended by Calcutta Stock Exchange from April, 2013 onwards. However, it has been brought on record by the assessee to demonstrate that the scrip is being traded even today. Moreover, from the contract note placed at Page 34-36 PB it is noted that the transaction took place at Bombay Stock Exchange and not at Calcutta Stock Exchange. So the foundation of the reason given by the AO is based on wrong assumption of fact and so is erroneous. Thus, the basis on which the Assessing Officer has made the disallowance, cannot be upheld. 15. The ld. CIT(A) relied on the so-called rules of suspicious transactions and co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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