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TMI Blog2021 (7) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming the arbitrary, unjust and erroneous order of learned Assessing Officer (AO) is bad in law, arbitrary and unjust which requires to be reversed, cancelled and set aside. 2. The learned CIT(A) has erred in law and on the facts and in the circumstances of the case in upholding additions of Rs. 2,36,02,476/- made by learned AO under Section 68 of the Income Tax Act, 1961 (the Act). 3. The learned CIT(A) has erred in law and on the facts and in the circumstances of the case in upholding additions of Rs. 7,08,074/- made by learned AO under Section 69C of the Income Tax Act, 1961 (the Act). 4. The learned CIT(A) erred in law in calculating the Gross Tax in income computation form as Rs. 73,25,977/- instead of Rs. 72,77,383/-. Becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (LTCG) of Rs. 236.02 Lacs on sale of shares of an entity namely M/s Sunrise Asian Limited (SAL). The gains were claimed to be exempt u/s 10(38) of the Act. The 50000 numbers of shares of this entity were stated to be purchased by the assessee on 01/02/2012 at cost of Rs. 10 Lacs which were ultimately sold during impugned financial year for aggregate sale consideration of Rs. 246.02 Lacs giving rise to LTCG of Rs. 236.02 Lacs in the hands of the assessee. However, this scrip was alleged to be a penny stock scrip, the prices of which were allegedly rigged to generate huge profits / losses through manipulate affairs. In the investigation carried out by the department, this scrip was found among those shares which were used to provide bogus LT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was observed that trades were executed with mutual understanding by placing simultaneous synchronized orders and the gains were arranged one. It was also noted that SEBI passed certain orders on the issue of manipulation of share market for providing accommodation entry of bogus LTCG. The action includes passing interim direction & suspension of trade etc. 4.5 However, the assessee, vide reply dated 26/12/2016 controverted the allegations of Ld. AO by submitting that it has duly furnished purchase & sale notes, demat account statement, Bank statement and documents relating to conversion of shares received by the assessee upon amalgamation of M/s STL & M/s SAL. The assessee also submitted that investigation carried out by the investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention to the documentary evidences furnished by the assessee, the assessee denied having carried out any transactions with any such operator of penny stock. It was submitted that the shares were sold through stock exchange through registered brokers. To draw strength, reliance was placed on favorable judicial pronouncements. Various other arguments were also made to assail the action of Ld. AO. 5.2 The Ld. CIT(A), in para-4, noted that there was increase in price which was almost 472 times the price prevailing at the time of purchase. The rise in share price was not in accordance with any commercial principles or market factors. The department recorded the statement of Shri Anuj Agarwal who was the main person and director of M/s SAL wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee as well as estimated commission was rightly added to the income of the assessee. Accordingly, the action of Ld.AO in making the additions was upheld. Aggrieved, the assessee is in further appeal before us. Our Adjudication 6. Having considered factual matrix as well as the orders of lower authorities, we find that the assessee has purchased certain shares of M/s STL in an off-market deal. These shares are stated to have been sold at stock exchange through registered stock broker. On the basis of the same, the assessee submits that there was no direct dealing with the purchaser of the shares. The assessee also denies having transacted with any of the penny stock operator as identified by the investigation wing. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEBI in the case of this scrip. It was submitted by Ld. AR that there is no adverse finding in case of assessee and few other decisions has already considered the fact of the SEBI investigation. In this background, Ld. AR submitted that investigation would not impact the applicability of this decision to the fact of the case. 9. After due consideration of fact and circumstances as enumerated, the bench deem it fit to set-aside the findings of Ld. CIT(A) and restore the matter back to the file of Ld. CIT(A) for fresh adjudication after affording due opportunity of hearing to the assessee. The Ld. CIT(A) is directed to reconsider the factual matrix in terms of the cited decision of the co-ordinate bench of this Tribunal as relied upon by Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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