TMI Blog2019 (1) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 263 of the income tax act and directing the assessing officer to make the necessary enquiry. No merit in the appeal of the assessee and the order passed by the learned CIT u/s 263 of the income tax act is upheld. - Decided against assessee. - ITA No. 4057/Del/2018 - - - Dated:- 31-1-2019 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Shri C. S. Anand, CA For The Revenue : Shri Samar Bhandra, CIT DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld Pr. CIT, New Delhi dated 27.03.2018 for Assessment Year 2014-15 passed under section 263 of the income tax act holding that the order passed by the income tax officer, Ward 55 (1), New Delhi under section 143 (3) of the income tax act dated 1/4/2016 is erroneous so far is prejudicial to the interest of the revenue. 2. The assessee has raised the following grounds of appeal:- 1. That the order passed by the Id. Pr. CIT, Delhi-19, New Delhi u/s 263 of the I.T. Act 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued to verify the return of income filed on 30/7/2014 declaring total income of INR 368040/- . The assessee is deriving income from salary and other sources and assessee has also earned long-term capital gain of INR 9535400/ which is declared at nil u/s 10 (38) of the act . The learned assessing officer passed an order u/s 143 (3) of the income tax act determining the total income of the assessee at INR 368500/ wherein only addition was of INR 455/ u/s 14 A of the income tax act. 4. On perusal of the records the learned principal Commissioner of income tax, Delhi-9, New Delhi found that assessing officer has not properly examined the main issue on which the case was picked up for scrutiny which is suspicious transactions relating to the long-term capital gain on sales. The learned Principal Commissioner Of Income Tax noted that assessee has shown investment in shares on 8/2/2012 and sold them on 18/2/2014 and 19/2/2014 after booking huge long-term capital gain of INR 9535400 against the investment of just INR 100,000/- . According to the Principal CIT, it created a suspicion regarding these transactions and perusal of the record showed that the AO had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the beneficiaries. Accordingly he set aside the assessment order passed by the learned assessing officer directing the AO to pass fresh assessment order after making due verification and inquiries into the genuineness of the said transaction of the company in which the assessee made investment after using the information and material passed on by the Calcutta investigation directorate for such verification and inquiries. Accordingly the order u/s 263 of the income tax act was passed on 27/3/2018. Hence, assessee, aggrieved is in appeal before us. 5. The learned authorised representative submitted that during the course of assessment proceedings detailed enquiry was made by the learned assessing officer with respect to the bank statement of the assessee showing the payment of INR 100,000 for the allotment of 10,000 shares of the company which were transferred into the demand account of the assessee on 22/2/2012 with the DCB Bank. Further on 06/02/2014 the above shares were converted into the amalgamated company s shares as shown by the demand account. He further referred to the letter dated 18/1/2016 of the assessing officer where long-term and short-term cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted the order of the learned CIT stating that the case of the assessee was selected for the purpose of verification of the suspicious long-term capital gain earned by assessee and same has not been verified completely by the assessing officer with respect to the various investigation report as well as the suspicious transaction and increase in share price of the company in which assessee earned LTCG. He further stated that the learned AO has also not enquired into the assets and net worth of the company in which the assessee has earned long-term capital gain. He further stated that the above transaction is purely a penny stock bogus capital gain transaction which has not been verified by the learned assessing officer with due perspective and therefore the learned assessing officer passed an order without verification; hence it is erroneous and prejudicial to the interests of the revenue. He further referred that if the inquiries which should have been made by the assessing officer is not made it makes the order passed by the AO as erroneous and prejudicial to the interest of the revenue. He therefore submitted that the learned principal Commissioner of income tax has correctly ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made by the broker of INR 9 622913 to the assessee after deduction of the transaction charges securities transaction tax and service tax d. Assessee also explained that Trinity trade Link private limited was amalgamated with Omnichem petroleum private limited and the name of that company letter on changed to Sharp trading and Finance Co Ltd. 9. On the basis of the above information submitted by the assessee, learned assessing officer has accepted the above long-term capital gain as genuine though for the purpose of the scrutiny the case of the assessee was selected stating that it is a suspicious transaction relating to long-term capital gain on shares. The assessment order was passed on 1/4/2016. The learned CIT has passed an order under section 263 of the income tax act stating that AO Should have enquired the above claim of exempt long-term capital gain earned by the assessee on the basis of suspicious transaction. The learned principal Commissioner has revised the order on the following counts holding it to be erroneous and prejudicial to the interest of the revenue:- i. The learned assessing officer has not drawn a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the functionality, including the investigation report of the Kolkaia Investigation Directorate. The functionality also contains a guidance note for the Assessing Officers. Such details are visible to the AOs of those assessees whose particulars have emanated out of the investigation report of Kolkata Investigation Directorate and whose cases have been considered actionable, at this stage. The details are also visible to supervisory officers of such AOs. 4. In case of any difficulty in viewing the information on ITS, Shri Vipul Agarwal, JDIT (Sys) 2(1) could be contacted on 0120-2770052 or email at vipul.agarwal@nic.in 5. The undersigned is directed to request that necessary directions may kindly be issued to the officers working under your jurisdiction to access this functionality and ensure that information available in the 'Penny Stock' functionality which may be useful for the purpose of cases presently under scrutiny, is examined and considered while finalizing assessments and considering reopening of cases under section 148 of the IT Act, 1961. 6. This issues with the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer of money from bank account of the assessee to the bank account of the broker. The assessing officers are further directed to gather certain information from other sources such as copy of contract notes and how the order was placed , share transactions from the broker of the assessee and copy of the demat account, documents given for Know your customer identification, copy of contract notes, trading account ledger etc. The sample letters are also provided for the purpose of making enquiry. Further the information is required to be obtained from the stock exchanges such as Bombay stock exchange and National stock exchange about all the trades done of specified scripts for all purchases and sales including broker detail, purchase and sale party wise and for which also the simple letters are provided. The AO must also check for any punitive action on any of such brokers by SEBI. In short after making all such enquiry the assessing officer must collect all the information and then summon assessee about knowledge about share market in general, knowledge about the script in specific, why and how investment was made, how brokers were instructed, how well the assessee knows the brokers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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