TMI Blog2019 (9) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... troversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, we decided these issues in favour of the revenue against the assessee. - I.T.A. No. 4774/M/2018, I.T.A. No. 4776/M/2018, I.T.A. No. 4777/M/2018, I.T.A. No. 4778/M/2018 - - - Dated:- 28-8-2019 - Shri Shamim Yahya, AM And Shri Amarjit Singh, JM For the Assessee : None For the Revenue : Shri Chaitanya Anjaria (DR) ORDER PER AMARJIT SINGH, JM: The assessee has filed the above mentioned appeals against the different order passed by the Commissioner of Income Tax (Appeals)-3, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the assessment year 2015-16. 2. The assessee has filed the present appeal against the order dated 19.06.2018passed by the Commissioner of Income Tax (Appeals)-3, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the assessment year 2015-16. 3. The assessee has raised the following grounds: - 1. The Ld. CIT(A) has erred in law and in facts by confirming the addition made by AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry. The appellant statement u/s 131 of the Act was recorded. The appellant also submitted the general reply stating that the transaction was routed through stock exchange and payment was made by cheque, therefore, it should be treated as genuine. The AO rejected the claim and raised the addition of long term capital gain in sum of ₹ 21,92,278/- u/s 68 of the Act. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who affirmed the addition, therefore, the assessee has filed the present appeal before us. 5. We have heard argument advanced by the Ld. Representative of the Department and has gone through the case carefully. The notice of the assessee was not served being the assessee left out the address disclosed. The CIT(A) has given the following findings as under: - 5.0 Ground No.1 is directed against the addition of ₹ 21,92,278/- treating the Long Term Capital Gain as unexplained cash credit and not allowing the claim of exemption u/s.10(38) of the Act. (i) The Directorate of Investigation(Wing), Kolkata had carried out search and survey action, to unearth the organized racket of generating bogus ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ton 'Penny Stock' has been added on Individual Transaction Screen (ITS) to display information related to penny stock, which is enabled on the screen of the Assessing Officers(AOs). The crucial information has been provided to the AOs regarding the manipulative transactions carried out by the entry providers and riggers have been captured in the functionality, including the investigation report of the Kolkata Investigation Directorate. (iv) The investigation of penny stock cases is carried out by various agencies like Directorate of Income-tax(Investigation), BSE, SEBI surveillance team etc. In fact, the crucial information obtained by the Directorate of Income-tax, (Investigation) found at the time of search and survey has been intimated and shared with SEBI and vice versa. As such, such rampant manipulations call for concerted and coordinated action by the various enforcing agencies concerned in this regard, SEBI's proactive role In the above context Is crucial and has also established the modus operandi carried out by the entry providers, and both SEBI as well as BSE. have tanned trading in these penny stock securities. Based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statement made by the assessee, even when advanced with prima facie evidence, the AO may be justified in disbelieving the statement. (viii) Lastly, the appellant did not ask for cross examination of the operators in appellate proceedings, as evident from the grounds of appeal filed before me. The operators who had given the statements u/s.131/132(4) have not retracted their statements and confirmed that the aforesaid transactions of accommodation entries. In this regard, the Hon'ble Supreme Court has observed in the case of CIT vs. Durga Prasad More (1971) 82 ITR 540(SC) to the effect that Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and tribunals have to judge the evidence before them by applying the test of human probabilities. Therefore, genuineness of transactions has to be examined in the light of the prevailing ground realities, therefore, in the case of the appellant the modus operandi of manipulation by the operators and others have been proved by Directorate of Investigation(Kolkata), SEBI and BSE. Further reference may be made to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x-1, Nagpur Another reported in ITA No.18/2017 order dated 10.04.2017 has upheld the decision of the Hon'ble ITAT in appellant's own case reported in ITA No.61/Nag/2013, A.Y.2006-07 order dated 18.07.2016. The Hon ble High Court has decided in favour of the Revenue on penny stock addition, therefore, in principle, even in the case of the appellant is squarely applicable. In view of the above stated facts, the addition made by the AO is confirmed as the appellant has claimed LTCG in a dubious manner as established by the Directorate of Investigation, Kolkata and further established at the time of assessment proceedings. Hence, the appeal of the appellant is dismissed. 6. On appraisal of the above mentioned finding, we noticed that the Directorate of Investigation (Wing), Kolkata had carried out, the investigation in which the M/s. HPC Bio Ltd. was found indulging in the activity in contravention of SEBI Act and Rules. SEBI had suspended the trading in the securities of M/s. HPC Bio Ltd. The financial position of the company was not good while purchasing the shares whereas the company was at giving after the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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