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TMI Blog2021 (3) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... aper Book in light of Rule 18(6) of ITAT Rules and have also perused the judicial decisions relied upon by both the sides. 4. Briefly stated, the facts of the case are that the assessee purchased 40000 equity shares through Initial Public Offer [IPO] of HPC Bioscience Ltd on 15.03.2013 and this fact is evident from the Demat account with Axis Bank Ltd exhibited at page 4 of the paper book. Payment was made on 16.03.2013 which is evident from the Statement of Account with Axis Bank exhibited at page 6 of the paper book. 5. At the very outset, we have to state that the purchase of 40000 equity shares through IPO of HPC Bioscience Ltd was in F.Y. 2012-13 relevant to A.Y 2013-14. Therefore, in our considered opinion, since the transaction pertained to A.Y 2013-14 and not 2015-16 which is the year under consideration, no addition can be made u/s 69C of the Act for the year under consideration. Accordingly, addition of Rs. 14 lakhs is directed to be deleted. 6. As mentioned elsewhere, out of 40000 equity shares which were purchased in F.Y. 2012-13, 39000 equity shares were sold during the year under consideration for a sale consideration of Rs. 2,10,23,848/-, the sales of shares are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv) Trading Group 14. A list of Preferential Allottees in the Scrip of HPC is exhibited at pages 12 to 16 of the Paper Book. A list of Pre IPO Transferees in the Scrip of HPC is exhibited at pages 17 to 21 of the Paper Book. A list of Funding Group is exhibited at page 21 of the Paper Book and list of Trading Group is exhibited at pages 22 and 23 of the Paper Book. 15. All the names have PAN and quantity bought by the persons. We find that the name of the appellant is not in the list mentioned hereinabove. We further find that subsequent to the interim orders, investigation was carried out to look into the role of debarred entities in price manipulation and IPO manipulation of the scrips [in which the appellant's name does not appear]. Violation of provisions of SEBI Act, 1992 and SEBI [Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market] Regulations, 2003 were not observed in respect of 216 entities against whom directions were issued vide the interim orders. List of such names are exhibited at pages 31 to 35 of the paper book. Accordingly, the Ad-Interim Order was revoked on these 216 entities. 16. The entire assessment order is based upon the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly discernible that in the instant case, the AO had proceeded predominantly on the basis of the analysis of the financials of M/s Gold Line International Finvest Limited. His conclusion and findings against the Respondent are chiefly on the strength of the astounding 4849.2% jump in share prices of the aforesaid company within a span of two years, which is not supported by the financials. On an analysis of the data obtained from the websites, the AO observes that the quantum leap in the share price is not justified; the trade pattern of the aforesaid company did not move along with the sensex; and the financials of the company did not show any reason for the extraordinary performance of its stock. We have nothing adverse to comment on the above analysis, but are concerned with the axiomatic conclusion drawn by the AO that the Respondent had entered into an agreement to convert unaccounted money by claiming fictitious LTCG, which is exempt under Section 10(38), in a pre-planned manner to evade taxes. The AO extensively relied upon the search and survey operations conducted by the Investigation Wing of the Income Tax Department in Kolkata, Delhi, Mumbai and Ahmedabad on penny stocks, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson provided the entry to convert unaccounted money for getting benefit of LTCG, as alleged. In the absence of any such material that could support the case put forth by the Appellant, the additions cannot be sustained. 12. Mr. Hossain's submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent. With regard to the claim that observations made by the CIT(A) were in conflict with the Impugned Order, we may only note that the said observations are general in nature and later in the order, the CIT(A) itself notes that the broker did not respond to the notices. Be that as it may, the CIT(A) has only approved the order of the AO, following the same reasoning, and relying upon the report of the Investigation Wing. Lastly, reliance placed by the Revenue on Suman Poddar v. ITO (supra) and Sumati Dayal v. CIT (supra) is of no assistance. Upon exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BI now vide order dated WTM/SM/VD/D3/9896/2020-21 dated 22.12.2020 has issued the following directions: 'Noticee nos. 2 and 3 (promoters of the Company) are directed to make a public offer through a merchant banker to acquire shares of the Company from public shareholders by paying them the value determined by the valuer in the manner prescribed in Regulation 23 of the SEBI (Delisting of Equity Shares) Regulations, 2009 and acquire the shares offered in response to the public offer, within three months from the date of this Order. ii. BSE to facilitate valuation of shares to be purchased as directed at (i) above, and compulsorily delist the Company, if the public shareholding reduces below the minimum level in view of aforesaid purchase. iii. The Noticee no. 1 is hereby restrained from accessing the securities market by issuing prospectus, offer document or advertisement soliciting money from the public in any manner for a period of 8 years. iv. Noticee no. 2 and 3 are hereby restrained from holding post of director, any managerial position or associating themselves in any capacity with any listed public company and with any public company which intends to raise money f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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