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TMI Blog2021 (6) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... uineness of the capital gain derived from sale of shares of GFL Financials, the assessing officer issued summons under section 131 of the Act to the assessee. In the statement recorded, the assessee stated that she was ignorant about the share transaction and it was entirely managed by her son, Shri Ashok Samarth kumar Mali. Based on such statement of the assessee, the assessing officer issued summons under section 131 of the Act to assessee's son and examined him on oath. In the statement recorded, assessee's son admitted that he handled the share transaction of the assessee. Further, with reference to sale of shares of GFL Financials, assessee's son submitted that the shares were purchased through a broker, viz. Pragati Shares & Stock Services, both, by him and his mother and were sold through Nirmal Bang Securities Pvt Ltd. Explaining the reason for purchases of shares of GFL Financials, it was stated that when the share prices reduced to around Rs. 17 from Rs. 118/-, he purchased the shares in his name as well as in the name of his mother. Further explaining the reasons for sale of shares, he stated that since the price of shares started falling, he sold a part of his mother's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings, the assessing officer, on mere presumption and surmises has treated the share transaction as non genuine and added back under section 68 of the Act. He submitted, result of enquiry conducted by the assessing officer with the brokers was never confronted to the assessee. He submitted, only after completion of assessment, the assessee could get a copy of the report by filing application under the RTI Act. He submitted, learned Commissioner of Income Tax (Appeals) simply relied upon the observations of the assessing officer while upholding the addition made. He submitted, in the report received from the Investigation Wing of the department, there is no reference to GFL Financials. Further, he submitted, neither the assessing officer nor learned Commissioner of Income Tax (Appeals) has conducted any independent enquiry with GFL Financials to ascertain the genuineness of the share transaction. He submitted, when the entire share transactions were done in a transparent manner and all supporting evidences have been furnished by the assessee to prove the genuineness of the share transaction, the assessing officer and learned Commissioner of Income Tax (Appeals) were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officer clearly shows that the share transaction was non genuine. Drawing our attention to certain observations of learned Commissioner of Income Tax (Appeals), learned departmental representative submitted, the fact that the broker from whom the assessee claimed to have purchased the shares on 02-04-2012 kept the shares in its pool account and transferred to the demat account of the assessee only on 16-04-2013 makes the transaction suspicious. Further, she submitted, the cheque issued by the assessee towards purchase of shares was also encashed with substantial delay. She submitted, looking at the standing of GFL Financials, the substantial increase in the price of shares within a short span of 18 months also makes the claim of the assessee doubtful. Thus, she submitted, the facts on record clearly prove that the assessee has been used as an intermediary to provide safe exit to some entities by selling the shares at a high price. Thus, she submitted, the assessing officer was justified in rejecting assessee's claim of long term capital gain and making addition under section 68 of the Act. In support of her contentions, learned departmental representative relied upon the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery same report of the investigation wing. However, it is the specific argument of learned counsel for the assessee that neither the assessing officer nor learned Commissioner of Income Tax (Appeals) has conducted any independent enquiry to get to the root of the matter and has simply relied upon the report of the investigation wing. To demonstrate that the share transaction is genuine, learned counsel for the assessee has drew our attention to the copies of the contract note, demat account, bank statement, confirmation received from the brokers through whom the assessee had purchased and sold the shares, etc. 7. Undisputedly, the assessee had purchased the shares at the cost of about Rs. 17 per share on 02-04-2012 and has sold a part of such shares in August/September, 2013 at Rs. 42/- per share. Thus, there is definitely substantial increase in cost of shares within a short span of time. However, the crucial fact which requires examination is, what is the investigation/enquiry conducted by the investigation wing at Kolkata in respect of GFL Financials Ltd and whether there is any reference, at all, to GFL Financials in the report furnished by the investigation wing, Kolkata. Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the doubts raised by the departmental authorities in their respective orders, may not have been put forward to the assessee seeking clarification. It is also a fact that enquiry which was required to be done by the departmental authorities to go to the root of the matter and ascertain the genuineness of the shares of GFL Financials, have not been done. Thus, in our view, the entire issue relating to the genuineness of share transaction involving the shares of GFL Financials requires fresh consideration at the end of the assessing officer. As regards the decisions relied upon by learned counsels appearing for the parties, though, there cannot be any dispute regarding the principle/ratio laid therein; however, they have to be applied only after full facts are brought on record. Since, in the facts of the present case we are of the view that the facts relating to the disputed issue have not been fully brought on record, we cannot apply the ratio laid down in the decisions relied upon in vacuum. Accordingly, we deem it appropriate to set aside the impugned order of learned Commissioner of Income Tax (Appeals) and restore the issue to the file of the assessing officer for fresh adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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