TMI Blog2020 (1) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically for the reasons for causing the loss with supporting evidences from the assessee and assesee has also not explained the reasons for causing the loss and supporting evidence. It would be in the interest of justice, if these issues of STCL on account of sale and purchase of shares of Pearl Agri (15000) shares and Pearl Elec (15000) shares be set aside to the file of the Assessing Officer to examine the same as per law, after giving full opportunity to the assesee with the clear directions to the AO to call for the reasons for causing the loss on account of sale and purchase of shares of two companies with the supporting documentary evidences. If the AO is satisfied with the explanation given by the assessee with the supporting evidences, then the AO is at liberty to decide the same, as per law, after giving full opportunity to the assessee to substantiate its claim.- Appeal of the Assessee is partly allowed for statistical purposes. - ITA No. 2007/DEL/2019 - - - Dated:- 6-1-2020 - Shri H.S. Sidhu, Judicial Member For the Assessee : Sh. Lalit Mohan, CA For the Revenue : Sh. Sanjay Kapoor, Sr. DR. ORDE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The brief facts of the case are that assessee filed its return of income on 31.8.2015 declaring income of ₹ 11,13,740/-, which was processed u/s. 143(1) of the Income Tax Act, 1961 (in short Act ). Later on, the case was selected for complete scrutiny through CASS. Accordingly, notice u/s. 143(2) of the Act was issued on 28.7.2016 to the assessee which was duly served upon the assessee. Subsequent notices u/s. 142(1) of the Act and other notices were issued during the course of assessment proceedings. In response to the these notices, the AR of the assessee appeared and filed reply and details. 2.1 During the assessment proceedings, AO observed that assessee has sold one plot at TDI and earned short term capital gain of ₹ 48,00,000/- from sale of a plot. Assessee has set off this gain from short term capital loss in securities which the AO has reproduced in para no. 2 at page no. 1 of the assessment order. According to the AO, on the basis of the Investigation Report, the shares of M/s Cressanda Solution Ltd. (also known as Smart Champ IT and Infra Limited before amalgamation), Pearl Agriculture Limited and Pearl Electronics Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penny stocks. 2.4 To examine all these issues, the AO confronted the same vide order sheet entry dated 20.11.2017 and requested the assessee to produce the assessee on 27.11.2017, but the assessee did not appear against summons dated 6.12.2017 issued u/s. 131 of the Act for personal deposition on 11.12.2017, but again assessee did not appear. Finally, a show cause notice was issued and assessee was asked why the short term capital loss of ₹ 36,95,007/- should not be disallowed and added to the income of the assessee. In response to the same, assessee filed her reply dated 11.12.2017 which the AO has reproduced in para no. 9.6 of his order. 2.5 The AO has considered the reply and other documentary evidences filed by the assessee and held that despite giving sufficient opportunities, assessee did not appear personally so that she could be examined how she invested in the shares of these companies which are not carrying out any significant business activities. AO was of the view that assessee has not discharged her onus for substantiating the claim made in her return of income and finally held that the short term capital loss earned by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court of India as well as ITAT, Delhi Benches including the Hon ble Delhi High Court decision dated 08.3.2019 in the case of Udit Kalra vs. ITO in ITA No. 220/2019 CM No. 10774/2019 and the Hon ble Supreme Court decision dated 22.11.2019 in the case of Suman Poddar vs. ITO decided in SLP(C) No. 26864/2019. In addition to his written submissions and the judgements, the Ld. DR has also filed the copy of ITAT, E Bench Delhi order dated 14.6.2019 passed in the case of Sh. Sanat Kumar vs. Asstt. Commissioner of Income Tax, Circle 36(1), New Delhi passed in ITA No. 1881/Del/2019 (AY 2014-15). He also draw my attention towards the findings of the Bench and stated that in the present case M/s Cressanda Solution Limited is a Company from where the assessee has purchased and sold the shares and claimed short term capital loss which was suspended by the Bombay Stock Exchange in February, 2013 and business of this company is revoked w.e.f. March, 2013 meaning thereby that this Company is non-existent at the time of purchasing of shares by the assessee. Therefore, this is a sham transaction only to evade the tax and he requested that the appeal filed by the assessee may be dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.10.2014 1219329 -961693 Cressanda Solution Limited (5880) 18.02.2015 68208 68208 02.12.2014 299880 -231672 Cressanda Solution Limited (18500) 18.02.2015 214600 214600 22.01.2015 496725 -282125 Cressanda Solution Limited (18500) 18.02.2015 214600 214600 22.01.2015 493950 -279350 Cressanda Solution Limited (18500) 18.02.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi order dated 14.6.2019 in the case of Sh. Sanat Kumar vs. Asstt. Commissioner of Income Tax, Circle 36(1), New Delhi passed in ITA No. 1881/Del/2019 (AY 2014-15) in which the Bench has observed that Investigation Wing has called information u/s. 133(6) of the Act from Bombay Stock Exchange Company namely Cressanda Solution Ltd. Whose shares have been purchased and sold by the assessee to claim STCG was suspended for trade within last 3 years. The AO was specifically replied from the Bombay Stock Exchange i.e. separate record available with Stock Exchange that as per record available with the exchange, trading in the securities of the Company, Cressanda Solution Ltd. was suspended on account of reduction of capital , thus had become clear that it was merely providing accommodation entries in the form of bogus LTCG and STCG in order to evade the taxes. The contention of the assessee is that she has purchased the shares from banking channels and as such when the purchase is genuine then the sale cannot be questioned itself, because the entire transaction of sale and purchase is to be seen in entirety in the light of attending circumstances is not tenable keeping in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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