TMI Blog2021 (1) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... en and therefore, these were heard together and for the sake of convenience, a common and consolidated order is being passed. 2. At the outset, Learned counsel for the assessee submitted that in these appeals there is a delay of four days in filing the appeals and which had occurred as the assessee counted the prescribed period from the date of physical delivery of order instead of counting it from the day when it was delivered electronically. Learned counsel for the assessee submitted that if the date of service is considered as having received through e-mail then there is delay of four days and if the physical receipt of order of learned CIT(A) is to be considered then there is no delay. Therefore, it was submitted that little delay if any had occurred due to confusion and it was prayed that the delay in filing the appeal be condoned. Learned D. R. did not have objection for condoning the delay in filing the appeals. Finding the reason for delay in filing the appeals reasonable, the delay was condoned and the Learned counsel for the assessee was asked to proceed with his arguments. 3. Learned counsel for the assessee submitted that he will be arguing the appeal in I.T.A. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned counsel for the assessee further submitted that the broker of the assessee was not investigated and neither the broker examined by the Investigation Wing made available to the assessee for cross examination and therefore, also the addition sustained by learned CIT(A) is not sustainable. 4. Learned D. R., on the other hand, vehemently argued that there was a racket of bogus capital gain which was unearthed by the Investigation Wing of the Revenue and after recording statement of various brokers, some scripts including the script traded by the assessee was held to be a penny stock and paper entity and therefore, the Assessing Officer has rightly disallowed the claim of the assessee. It was submitted Hon'ble Delhi High Court in the case of Udit Kalra vs. Income Tax Officer, I.T.A. No.220/2019, vide order dated 08/03/2019 has dismissed the appeal of the assessee under similar facts and circumstances. Learned D. R. further submitted that facts regarding this script being a penny stock and paper entity was already there in the possession of the Revenue and therefore, the authorities below have rightly made and sustained the addition. Learned DR further stated that before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opy of Contract note issued by Broker Edlwise Financial Adnsons Ltd. 18-24 4. Copy of Bank Account of Achal Gupta 25-31 5. Copy of Transaction statement issued From National Securities Depositary Ltd. 32-46 6.1 The above documents clearly demonstrates that assessee had purchased shares through Brokers for which the payment was made through banking channels. The assessee had sold shares through authorized stock broker and payment was received through baking channels after deduction of STT. On Page 16 which is a copy of Bank account of assessee there is evidence of payments to Suktara Trade link amounting to ₹ 8,25,000/- for purchase of 25000 equity shares of CCL Ltd. The bill of broker of Suktara Trade Link is at Page 17. The evidence of sale of such shares through Edelwise financial Advisors Ltd showing deduction of service tax and securities transaction tax is placed at P.B. 18 to 23. Paper book pages 32 shows that shares of CCL International Ltd. were in the demat account of assessee and the fact of these shares having been transferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re us the ld. counsel has in his brief note has stated that following documents and statements were filed before the authorities below: (a) All the transactions were supported by proper Contracts Notes and delivery of shares was made through De-mat Account with stock broker, M/s Indianivesh Securities Pvt. Ltd. (who is the member of BSE and registered with SEBI). The shares were sold in the open market. The appellant has fulfilled all the condition u/s 10(38) of the Income Tax Act, 1961. The appellant has already filed National Security Depository Limited generated Demat Account and the broker statement relating to the sale of share in our paper book, also relevant demat statement highlighting the shares purchased has already been submitted before the Ld. AO. (b) The appellant has earned long term capital gain through genuine purchase and sale of shares of the listed companies in normal course. There was no default on the part of the appellant. Moreover, the appellant has earned the income strictly following the norms and guidelines of SEBI. If M/s CCL International has been identified as BSE Listed penny stock, the appellant is not even remotely connected with these companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been mentioned, in fact, Assessing Officer himself mentions that there was brief suspension in the year 2010, whereas the assessee has purchased shares in the year 2011 and sold them in the year 2012. Coming to the financials, as culled out from the records, the revenue from the operation of M/s. CCL International Ltd. from March, 2010 to March, 2012 was between ₹ 55.25 crore to ₹ 79 crore. Thus, it cannot be held that it was mere a paper entity. From a bare perusal of the history of listing and trading of shares and the quote of Bombay Stock Exchange as quoted in the assessment order, it clearly reflects that as on 06.02.2010, the closing price was ₹ 50 and there was a steady increase and within the period of 4 years the price had reached up to ₹ 609 on 25.11.2014. Nowhere, it has been pointed out that the rise was beyond the cap laid down by the SEBI, because the price of the scrip cannot rise beyond the cap prescribed by the SEBI. If the shares have been purchased and sold from the stock exchange on a quoted price with proper contract number, trade time and after paying STT, then it is very difficult to assume that the sale proceeds received from sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the said judgment we find that no question of law was formulated by the Hon'ble High Court of Delhi in the said case and there is only dismissal of appeal in limine as the Hon'ble High Court found that the issue involved is a question of fact. 6.4 Similarly in the case of Swati Luthra (supra), the Hon'ble Tribunal while dealing with the case law of Udit Kalra vide para 14 has held as under: 14. That the ld DR during the course of hearing placed heavy reliance on judgment of Hon'ble High Court of Delhi in the case of Udit Kalra vs ITO in ITA No. 220/2019. Relevant extracts of said judgment are extracted as below: The assessee is aggrieved by the concurrent findings of the tax authorities - including the lower appellate authorities rejecting its claim for a long term capital gain reported by it, to the tune of ₹ 13,33,956/- and ₹ 14,34,501/- in respect of 4,000 shares of M/s Kappac Pharma Ltd. The assessee held those shares for approximately 19 months; the acquisition price was ₹ 12/- per share whereas the market price of the shares at the time of their sale, was ₹ 720/-. It is contended that the assessee was not granted fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y distinguishable from the facts of the case of Udit Kalra vs ITO so relied by ld DR. Therefore, the case law relied upon by Learned D. R. is not applicable to the facts and circumstances of the present case as that case was decided by Hon'ble High Court on the basis of facts and circumstances of that case. Therefore, the present case is fully covered by the decision of Hon'ble Delhi Tribunal in Reeshu Goel (supra) wherein the same script from which the assessee had obtained Long Term Capital Gain has been held to be genuine. Therefore, following the same, we hold that the scrip of CCL International Ltd. is genuine and not a penny stock and paper entity. 7. In view of the above judicial precedents and keeping in view the facts and circumstances of the case, Ground No. 5 to 8, the appeal of the assessee in I.T.A. No. 501 is allowed. Ground Nos. 9 and 10, are also allowed in view of our findings that the transaction was not bogus. 8. In nutshell, the appeal of the assessee in ITA No. 501 is partly allowed. 9. Now coming to appeals in ITA Nos. 502, 504 and 505. The facts and circumstances in all these appeals are similar and there is also the same scrip of CCL Int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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