TMI Blog2022 (3) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... rty asked the assessee to sell the said shares and after selling the said shares assessee made entries for adjusting the amount received from loan given to the said party and returned the balance amount to the said party. Hence, there is no claim of long term capital gain under section 10(38) of the Act in the books of the assessee. This aspect has been duly supported by documents submitted. None of the above has been controverted by the Revenue. Hence, addition has been made without considering facts, law and income returned by the assessee. Such order without application of mind is not at all sustainable in law. Hence addition made under section 69 of the Act claimed to be for long term capital gain claimed exemption by the assessee under section 10(38) of the Act is not actually correct and same is liable to be set aside on this account also. Accordingly, decide the issue in favour of the assessee. - I.T.A. No. 752/Mum/2021 - - - Dated:- 8-3-2022 - Shri Shamim Yahya (AM) For the Assessee : Shri Dharmesh Shah For the Department : Shri T. Sankar ORDER This appeal by the assessee is directed against the order of National Faceless Appeal Centre (NFAC), Delhi v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12 and received pay out as sales consideration to the tune of ₹ 21,23,378/-. Thereafter the Assessing Officer referred to the finding in the case of M/s. Diamant Infrastructure Ltd., Script analysis, price movement etc. The Assessing Officer referred to the modus operandi in such cases. Finally he held that because of this investigation the assessee has traded in this script during F.Y. 2011-12 at ₹ 21,23,378/-. He held that the assessee has revised long term capital gain and claimed them to be exempt income under section 10(38) of the Act and same is treated as unexplained investment under section 69 of the Act. 5. Against the above order assessee has filed appeal before learned CIT(A). The NFAC has passed the appellate order. Before it in the statement of facts, the assessee had submitted that it has not traded in the impugned shares on its behalf. That the assessee has given loan to M/s. Ira Aarna Online Painting Pvt. Ltd. and in lieu thereof for security the shares of the said company belongs to M/s. Ira Aarna Online Painting were transferred to the assessee which was sold to return the amount of loan by the assessee. That this was transaction entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the onus was on the assessee to prove how M/s Diamant infrastructure Ltd. is a genuine company, what is its turnover, its balance sheet, its assets, and liabilities. The A.O had given the clear finding that it is a paper company, only providing entries and bogus LTCG to the beneficiaries. In CIT vs N.R. Portfolio Pvt. Ltd., it has held by Hon'ble lordship of Delhi High Court that transaction through banking channel does not make any accommodation entry a genuine transaction. Hon'ble Supreme Court in the case of Pr CIT (Central)-1 vs NRA Iron Steel Pvt. Ltd. held that the assessee is under a legal obligation to prove the receipt of share capital/premium to the satisfaction of the AO. Reliance is made upon both the judgments of Hon'ble Courts. Hence, the addition of the A.O of ₹ 21,23,378/- as bogus long term capital gains is confirmed, and the appeal of the assessee is dismissed. 6. Against the above order the assessee is in appeal before the ITAT. 7. I have heard both the parties and perused the records. At the outset learned Counsel of the assessee submitted that the assessee has duly filed objection to the reopening vide his letter dated 14.5.2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fatal mistake and vitiates the order of Assessing Officer. Hon'ble Jurisdictional Bombay High Court decision in Asian Paints Ltd. Vs. DCIT (296 ITR 90) duly supports this proposition. When it remains uncontroverted that the assessee has objected to the reopening and the same was not disposed off the validity of jurisdiction by the Assessing Officer loses its legality on the touchstone of the aforesaid decision of Hon'ble Bombay High Court. Hence, I set aside the orders of the authorities below on the ground of jurisdiction defect. 11. As regards the merits of the case I note that the Assessing Officer has added unexplained investment under section 69 of the Act. Section 69 of the Act read as under :- Unexplained investments. 69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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