TMI Blog2015 (10) TMI 2763X X X X Extracts X X X X X X X X Extracts X X X X ..... - counsel has contended that shares were converted in the Demat account on the sale of shares. Ld. AO has field to verify the demat account. Further the company namely Fast Track Entertainment Ltd., is existing on the records of ROC as well as on the records of income tax department. AO failed to make inquiries of the said company with these agencies, and further, AO should make inquiries with the authorized persons of the brokers only. Therefore we find it appropriate to send this matter back to the file of the AO with the direction to make proper inquiries and to examine all the documentary evidences as have been submitted by the assessee in support of its claim and for this purpose the AO shall afford opportunity of hearing to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 60,97,647/- as against the returned income of ₹ 40,15,410/- by making fallowing additions and disallowances without appreciating the facts and circumstances of the case. A. Addition on account of alleged artificial capital gain ₹ 54,44,645/- B. Addition on account of alleged payment of commission ₹ 2,72,232/- A. Addition on account of alleged artificial capital gain ₹ 54,44,645/- 2. The Ld. CIT(A) erred in confirming the addition of ₹ 54,44,645/- made by the Assessing Officer on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and the same may be deleted. C. Levy of interest under section 234A, 234B,234C is not at all justified 6. The Ld. CIT(A) erred in confirming the levy of interst under section 234A, 234B, 234C is not justified as the Assessee denies the same. 7. The appellant craves leave to add, to alter or amend any of the ground before or at the time of hearing. 2. Both the parties have made submissions on the aforesaid grounds. The primary issue that arises for our consideration in this appeal is that whether the action of the lower authorities in treating the long term capital gain arising out of shares done by the assessee during the year is genuine or not. 2.1. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O and facts brought on records. In reply, the assessee is submitted that allegations made in the statements recorded by the AO are false and needs to be ignored. It was further submitted by the assessee to the AO that the impugned shares were purchased way back in the F.Y. 2002-03 and these were disclosed by the assessee in balance sheet for A.Y.2002-03. It was further submitted by the assessee that sales bills of the broker M/s. Vijay Bhagwandas and CO. were submitted wherein commission, service tax and STT have been charged. It was further observed by the AO in the assessment order that the impugned shares claimed to have been sold by the assessee belonged to the company namely M/s. Fast Track Ltd., and that Sh. Narendra Shah appeared on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of cross examination to the assessee in the remand proceedings. The Ld. CIT(A) after considering the assessment order, remand report of AO, reply of the assessee to remand report and further submissions of the assessee, decided the appeal. In the appeal order, it was held by the Ld. CIT(A) that the case of the assessee is one of the cases of penny stock shares which were used for bogus capital gain. It was further held by him that Fast Track Entertainment is one of the companies who are using penny stocks. Thereafter the Ld. CIT(A) went on describing modus operandi used by the companies who are generating bogus capital gain using penny stocks, and then finally, taking into account all the facts and circumstances of the case, he concluded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The Ld. Counsel appearing on behalf of the assessee submitted that the AO has disregarded all the documentary evidences, relying upon oral statements of the two persons. It has been contended by the Ld. Counsel that the Mr. Narendra Shah was not authorized for making statements on behalf of M/s. T.H. Vakil Shares Securities Pvt. Ltd. and therefore, his statement could not be taken into consideration. The AO should be directed to verify the facts with duly authorized person of M/s. T.H. Vakil Shares Securities Pvt. Ltd. Similarly, with regard to the statement of other person namely Mr. Vishal Shah, it has been contended by the Ld. Counsel that statement of Mr. Vishal Shah is vague and selfcontradictory and cannot be relied upon. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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