9911796707
TMI Blog2019 (11) TMI 1543X X X X Extracts X X X X X X X X Extracts X X X X ..... ., at the rate of Rs. 20 per share from M/s. Purva Shareregistry (India) Pvt. Ltd., off market, on 04.04.2013. Later, the assessee sold these shares and 21,000 shares of M/s. Kailash Auto Finance Ltd. During the assessment, after considering the assessee's explanation, material etc., based on the outcome of the investigations done by the Revenue by the Directorate of Investigation, Kolkata, and after analyzing these transactions, the Assessing Officer concluded that the Long Term Capital Gains booked by the assessee were not genuine and not carried out in the course of the investment or business to reap genuine and legal return. Further, the Assessing Officer found that not only the assessee but also his relatives and associates adopted sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the lower authorities, the Ld. DR supported those orders and pleaded that this appeal be upheld. 4. We have considered the rival submissions. It is noticed that the assessee has not been given a fair opportunity to prove the genuineness but the assessment has been made primarily, based on the evidences collected by the Revenue in the course of the investigation conducted by them on the brokers / share broking entities etc. This is not permissible. This being so, in the interests of natural justice, the issue of the genuineness of the transactions require readjudication. Since, the right to exemption must be established by those who seek it, the onus therefore lies on the assessee. In order to claim the exemption from payment of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in penny stock company, namely, M/s. Concrete Credit Limited. The assessee also admittedly sold the said shares and claimed exemption under Section 10(38) of the Act during the year wider consideration. Therefore,, the Assessing Officer has not disputed the source for investment. The Assessing Officer disallowed the claim of exemption on the ground that the investment was in a penny stock company. From the material available on record it appears that a copy of information said to be received from the Investigation Wing of the Department at Kolkata was not furnished to the assessee. It is not brought on record the relationship of the assessee with the promoters of M/s Concrete Credit Limited. It is also not brought on record the role ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .CIT(A) nor from the side of the assessee. The main foundation of the assessment in the present case is the statement of one Shri Ashok Kumar Kayan who has admitted to have provided bogus Long Term Capital Gains to his clients. The said Shri Ashok Kumar Kayan also allegedly seems to have provided the assessee's name and PAN as one of the beneficiaries. However, this statement given by Shri Ashok Kumar Kayan cannot be the foundation for the purpose of assessment in so far as Shri Ashok Kumar Kayan has not been provided to the assessee for cross-examination. In the absence of opportunity of cross-examination, the statement remains mere information and such information cannot be foundation for assessment. 10. Admittedly, the assessee has cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee take possession of the shares in its physical form? In Para No.8.1 of the Assessment Order, it is mentioned that the assessee is an investor and has been regularly trading in shares. If this is so, does the demat account show such transactions being done by the assessee or is this the only one of transaction. Thus, clearly the facts required for adjudicating the appeals are not forthcoming. There is no evidence whatsoever to show that the assessee has held the shares for more than 12 months. This is because assuming that the demat has been done and the shares of M/s.BPL has come into the assessee's demat account and has immediately flown out. Then the factum of the possession of the shares for more than 12 months have to be prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es as required by the AO to substantiate the claim as also by producing the persons through whom the assessee has undertaken the transaction of the purchase and sale of the shares which would include the sub-broker, friend and the broker through whom the transaction has been done, before the AO for examination. 13. In the result, the appeals filed by the assessee in ITA Nos.2786 & 2787/Chny/2017 are partly allowed for statistical purposes." 6. Respectfully following the above orders, on the facts and circumstances of this case, we deem it fit to remit the issue of exemption in this appeal back to the file of the Assessing Officer for readjudication on the lines indicated above. Therefore, the Assessing Officer shall require the assessee; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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