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TMI Blog2018 (5) TMI 2073X X X X Extracts X X X X X X X X Extracts X X X X ..... was not justified in upholding the action of the ld. A.O. in treating the transactions in shares of Sulabh Engineering and Services Limited resulting in Long Term Capital Gain as bogus and thereupon making addition u/s 69C on the presumption that commission @0.5% was paid for arranging the aforesaid bogus long Term. 3. The appellant craves leave to add/or amend any grounds of this appeal. 3. The brief facts qua the issue are that the assessee has filed its return of income for the assessment year 2014-15 on 28.11.2014 declaring total income to the tune of Rs. 2,73,050/-. The assessee's return of income was selected for scrutiny u/s 143(2) of the Act. The assessee is engaged in the business of trading in shares and securities during the assessment year under consideration. During the assessment proceedings the Assessing Officer noted that the assessee has earned long term capital gain on sale of shares and claimed exemption under section 10(38) of the Act. The findings of the assessing officer is given below: "4.During the course of assessment proceedings the assessee was asked to produce the details of share purchased and sold during the year under consideration and again he w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng as a syndicate in order to provide entries of tax exempt bogus long term capital gains to large number of persons in lieu unaccounted cash. The basis objective of this racket is to convert black money into white without payment of income tax. The unaccounted cash of such persons (beneficiaries) is utilized to purchase shares of such companies at a very high artificially inflated market price. This practice is generally called Accommodation Entry Scam, as the activities of such persons are carried out with prime objective of accommodating unaccounted cash of beneficiaries into their regular books of accounts without paying any tax on the same. Therefore considering the circumstances and the report of the Directorate of Investigation, it was held by the Assessing Officer that the assessee had entered into pre-designed modus of transaction and investment in shares of M/s Sulabh Engineers and Services Ltd. just to convert black money into white in the guise of long term capital gain amounting to Rs. 1,12,13,010/-. Therefore, AO made addition to the total income of the assessee to the tune of Rs. 1,12,13,010/-. The assessing officer also noted that share broker charges @ 0.10 to 0. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that in these circumstances, the addition made by AO should be suatained. 7. We have heard both the parties and perused the material available on record. We note that the assessee has submitted before us the statement showing purchases and sale of long term capital gain on sale of equity shares (PB-1). The assessee submitted allotment advice for 75,000 shares of M/s Sulabh Engineers and Services Ltd. (PB-2). The assessee submitted the bank detail for payment (vide PB-3 to 5). The assessee submitted before us NSDL statement showing preferential allotment of 75000 shares of M/s Sulabh Engineering and Services Ltd. We note that the assessee also submitted extract of resolution passed and screenshot of money control showing splitting of face value from Rs. 10 to Rs. 1 of M/s Sulabh Engineering and Services Ltd. (PB-11 to 13). The assessee submitted the NSDL statement showing allotment of 7,50,000 shares of M/s Sulabh Engineers and Services Ltd. at fair value of Rs. 1 (PB-14 to 17). The balance sheet and profit & loss account along with investment schedule showing 7,50,000 shares of M/s Sulabh Engineers and Services Ltd. for assessment year 2013-14 (PB-18 to 23) were also s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by AO. The ld AO as well as ld CIT(A), were guided by the report of the Investigation Wing, which is general in nature and no specific findings for the assessee, and hence based on these facts the SMC Bench deleted the addition, observing the following. "13. The ld AR also brought to our notice that once the assessee has furnished all evidences in support of the genuineness of the transactions, the onus to disprove the same is on revenue. He referred to the judgement of Hon'ble Supreme Court in the case of Krishnan and Agnihotri vs. The State of Madhya Pradesh [1977] 1 SCC 816 (SC). In this case the Hon'ble Apex Court held that the burden of showing that a particular transaction isbenami and the appellant owner is not the real owner always rests on the person asserting it to be so and the burden has to be strictly discharged by adducing evidence of a definite character which would directly prove the fact of benami or establish circumstances unerringly and reasonably raising inference of that fact. The Hon'ble Apex Court further held that it is not enough to show circumstances which might create suspicion because the court cannot decide on the basis of suspicion. It has to act on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit. 16. It is clear from the above that the facts of the case of the assessee are similar with the facts in the cases wherein the co-ordinate bench of the Tribunal has deleted the addition and allowed the claim of LTCG on such sale of shares Therefore, respectfully following the same ratio, I am inclined to set aside the order of Ld. CIT(A) and direct the AO not to treat the long term capital as bogus and order to allow the claim of LTCG on sale of share of M/s. SESL and delete the consequential addition." 9. As the issue is squarely covered in favour of the assessee by the decision of the SMC bench of ITAT Kolkata, and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the SMC Bench in the case of Vasudha Jain (supra), we find no reason to interfere in the said order of the SMC Bench of this Tribunal and the same is hereby upheld. Therefore, we delete the addition of Rs. 1,12,13,010/- and we also delete the consequential addition on account of unexplained expenditure towards commission at Rs. 56,065/-. 10. In the result, appeal of the assessee is allowed Order is pronounced in the open court on 10.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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