TMI Blog2019 (10) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee that he has earned the gain in this case where the share price of a little-known company has jumped many times in no time and that all documentary records are available. It is noted that the assessee purchased shares at cost of ₹ 8,342/- on 29/30.4.2003. They were sold at ₹ 3,19,288/- on 23.11.2004, registering astonishing jump in share price. But there is no economic or financial justification for such astonishing jump. Quantity, price and time and sale, parties being persistent in number of such trade transactions with huge price variations, it will be too na ve to hold that the transactions are through screen-based trading and hence anonymous. Such conclusion would be overlooking the prior meeting of minds involving s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(Inv) Unit 1(4), Mumbai that the search action in the case of Mahasagar Securities Pvt. Ltd. (now Alag Securities Pvt Ltd) was conducted on 25.11.2009, During the course of search it was revealed that the Mahasagar Securities Pvt. Ltd. and its related group of 34 odd companies (the prominent on includes M/s Goldstar Finvest Pvt. Ltd. Run by Mukesh Chokshi were engaged in fraudulent billing activities and in the business of providing bogus speculation profit. The assessee had procured such bill from Mahasagar Securities Pvt. Ltd. It was also revealed during search operation that Sri Mukesh Chokshi, a chartered accountant by profession had floated some 34 companies from his office at Shree Sadashiv CHS, Santacruz, East, Mumbai. Two of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that Hon'ble Apex Court in the case of Rajesh Jhaveri Stock Brokers Private Ltd. (2007) 161 taxman 316 (SC) has held that intimation under section 143(1) is not an assessment order. Hence it cannot be said that there was any application of mind by the assessing officer in the original assessment. Moreover, at the time of reopening the escapement of income need not be conclusively proved. In this view of the matter in our considered opinion the reopening is valid. In this regard we also support from honourable jurisdictional High Court decision in the case of Export Credit Guarantee Corporation of India Ltd.(350 ITR 655). 8. In this case honourable jurisdictional High Court has expounded that even the tangible m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts of this case which undisputedly show that there is an enormous jump in no time of the share price of little-known company. The departmental examination and investigation in the case of Mukesh Choksi duly corroborate the transaction as a sham transaction. This is a classic case of penny stock transaction. Such conversion of unaccounted money through dubious method is not permitted on the touchstone of Hon'ble Supreme Court decision in the case of CIT Vs. Durga Prasad More 82 ITR 540, and Sumati Dayal Vs. CIT (1995 SCC Supl. (2) 453 vide order dated 28.3.1995). Hon'ble Apex Court had occasion to dwell upon such dubious transaction through manipulation of stock prices in the case of Securities and Exchange Board of India Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traders. I also agree with the conclusion dismissing the appeal preferred by the SEBI against the brokers. 10. In our considered opinion the ratio emanating from the above case law is also applicable on the facts of this case. In this view of the matter considering the entire conspectus of the case and relying upon the precedents as above. We do not find any infirmity in the order of learned CIT(A). Accordingly we confirm the same. 11. We note that since we have decided the issues raised on the basis of decisions from honourable Supreme Court and honourable jurisdictional High Court directly applicable on the issues, the other case laws referred by the learned counsel of the assessee are not found applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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