9911796707
TMI Blog2020 (3) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year 2014-15 on 25.12.2014 admitting a total income of Rs. 29,64,880/-, which was selected by CASS in order to examine suspicious transaction relating to LTCG. During assessment proceedings , the A O found that assessee purchased and sold penny stock of M/s Turbo Tech Engineering Ltd. and claimed exemption u/s. 10(38). An investigation carried out by the Investigation Wing, Kolkatta had revealed that large scale manipulation had been/being done in market price of shares of certain companies listed in the Bombay Stock Exchange by a group of persons acting as a syndicate in order to provide entries of tax exempt long term capital gains to a large number of persons (beneficiaries) in lieu of unaccounted cash. According to the inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the rival submissions. On the issue of exemption claim u/s 10(38), it is noticed that the assessee has not been given a fair opportunity to prove the genuineness but the assessment has been made based, primarily, on the evidences collected by the Revenue in the course of the investigation conducted by them on 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 re-adjudication. 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 tax, the assessee had to put before the Income Tax authorities proper materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see 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 of the assessee in promoting the company, namely, M/s Concrete Credit Limited, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 claimed to have purchased 15000 shares from M/s.BPL @ Rs. 20/- per share totaling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 proved by the assessee. This is also not forthcoming. In reply to a specific query, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersons 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 issues of exemption claim in this appeal back to the file of the A.O. for readjudication on the lines indicated above. Therefore, the A O shall require the assessee; to establish who, with whom, how and in what circumstances the impugned transactions were carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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