TMI Blog2021 (7) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion drawn by the Revenue on human probabilities surmise and conjectures is not sustainable in the eye of law and, therefore, the rejection of the claim of short term capital loss made by the assessee is liable to be quashed. - Decided in favour of assessee. - I.T.A. No.660/Ind/2017 - - - Dated:- 28-6-2021 - Shri Manish Borad, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri S. N. Agrawal, CA For the Respondent : Shri Harshit Bari, Sr. DR ORDER PER MS. MADHUMITA ROY - JM: The instant appeal filed by the assessee is directed against the order dated 11.07.2017 passed by the Commissioner of Income Tax (Appeals), Ujjain (M.P.) arising out of the order dated 11.11.2016 passed by the ITO-1(1), Ujjain (M.P.) under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to the Act ) for Assessment Year 2014-15 with the following grounds:- 1. That the learned CIT Appeals, Ujjain (M.P.) erred in confirming the additions of ₹ 12,07,770/- being Short Term Capital loss incurred on trading of shares of UNO Industries Ltd. whereas the appellant deals in shares and loss incurred on the shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of ₹ 32.95 per shares totaling to ₹ 19,44,050/- payment whereof was made on 25.03.2014 and ultimately sold those shares on 28.03.2014; such payment has been obtained through account payee cheque. It is the case of the applicant that those shares were purchased in the normal course of share investment and detailed transaction of shares in M/s. UNNO Industries Ltd. at BSE along with the details of other shares were also submitted before the Ld. AO. In fact, the loss of other companies shares have allowed. These shares are listed on BSE and NSE and purchased and sales of these shares were affected through the recognized progress of the exchanges. Even on 29.08.2016 trading of shares of this particular company were made and trading of shares of these companies are still being permitted as the case made out by the assessee. As it appears from the records that before the Ld. AO the copy of the invoices dated 16.01.2014 issued by the broker Signet Vinimay Pvt. Ltd. in connection with the sale of 59000 equity shares of M/s. UNNO Industries Ltd. to the appellant for ₹ 19,44,050/-, the certificate issued by the said Signet Vinimay Pvt. Ltd. certifying that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the claim of the assessee that he had earned Long Term Capital Gains on purchase and sale of the shares of M/s. UNNO Industries Limited. The AO based on a general report and modus operandi adopted generally in these cases and on general observations has concluded that the assessee has claimed bogus long term capital gain. He made an addition of the entire sale proceeds of the shares as income and rejected the claim of exemption made u/s 10(38) of the Act. The evidence produced by the assessee in support of the genuineness of the transaction was rejected. 3. The assessee carried the matter in appeal and the ld. CIT(A), had upheld the addition. The ld. CIT(A) has in his order relied upon circumstantial evidence and human probabilities to uphold the findings of the AO. He also relied on the so called rules of suspicious transaction . No direct material was found to controvert the evidence filed by the assessee, in support of the genuineness of the transactions. In other words, the overwhelming evidence filed by the assessee remains unchallenged and uncontroverted. The entire conclusions drawn by the revenue authorities, are based on a common report of the Director of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Hon'ble High Courts and the ITAT. 6. The ld. Departmental Representative filed detailed written submissions and relied on the judgment of the Hon'ble Supreme Court in the case of Securities and Exchange Board of India vs Rakhi Trading Private Ltd in Civil Appeal No. 1969 of 2011 with Civil Appeal Nos.3174-3177 of 2001 and Civil Appeal No.3180 of 2011. The ld. Counsel for the assessee submits that there is no surviving order of SEBI against the assessee or the company, the script of which was purchased and sold by the assessee. When there is no surviving adverse order of SEBI, against the claim of the assessee, the judgment of the Hon'ble Supreme Court cannot be applied to the facts of this case. 6. In the case in hand also it appears from the entire records that the transactions were affected trough Demat Account, the payments were also made through banking channels by cheque. Furthermore, the sale of shares were through recognized stock exchange through authorized brokers. From the record it also reveals that the appellant has also dealt in share of other companies in this normal course of shares investment. On the other hand, it is also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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