TMI Blog2022 (4) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... . Appellant has held the shares for over 13 years and it would be incorrect to treat sale of shares as bogus merely on the basis of suspicion and on account of fact that a substantial quantum of capital gains has been made by the assessee. In the present case, no material has been brought on record to suggest that purchase and sale of shares were bogus. Assessing Officer has not brought any material to support his finding that there has been collusion or connivance between the broker and the assessee for the introduction of his own unaccounted money. In the present case, the transaction of purchase and sale of shares were duly supported by contract note, demat account and payments were made through banking channel. - Decided in favour of assessee. - ITA No. 1580/Ahd/2019 Cross Objection No. 19/Ahd/2020 (in ITA No. 1580/Ahd/2019) - - - Dated:- 30-3-2022 - Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Ms. Nupur Shah, A.R. For the Revenue : Shri Rajdeep Singh, Sr. D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- The revenue is in appeal before us against the order of ld. CIT(A)-1, Ahmedab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase, bank statement of broker and DMAT account showing transfer in and out of shares, the AO was not justified in bringing to tax capital gain arising from sale of shares as unexplained cash credit and the Ld. CIT(A) has rightly deleted the addition made by the AO u/s. 68 of the Act of ₹ 1,96,04,023/-. 3. The Respondent craves right to add, amend, alter, modify substitute, delete or modify all or any of the above grounds of cross objection. 3. The brief facts of the case are that the assessee in the captioned year filed a return declaring total income of ₹ 6,32,130/- on 20-06-2013. An information was received from the investigation wing that the assessee has claimed exempt LTCG during different assessment years. The assessee has claimed exempt LTCG on sale of shares of M/s. Suryanagari Fin-lease Ltd. amounting to ₹ 1,53,04,249/- in assessment year 2013-14. The assessee had also claimed exempt LTCG on sale of shares of M/s. Surabhi Chemicals and Investments for a sum of ₹ 5,33,76,731/- in the following assessment year i.e. AY 2014-15. In the information received by the investigation wing, it was stated that from the ITD data base analysis, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any can command in the market. Therefore, the Assessing Officer held that it is evident that the price of the scrip has been artificially manipulated so as to route the assessee s unaccounted funds in the garb of LTCG which was claimed as exempt income in the year under consideration. Accordingly, the ld. Assessing Officer added an amount of ₹ 1,96,04,023/- which is the sale consideration of the impugned scrip M/s Suryanagri Fin Lease Ltd. to the income of the assessee u/s. 68 of the Act. 3.2 The ld. CIT(A) in appellate proceedings allowed the assessee s appeal and deleted the addition of ₹ 1,96,04,023/- made by the Assessing Officer. The ld. CIT(A) observed that the assessee had been holding the shares of M/s Suryanagari Fin-lease Ltd. from 1994 which is public listed company on Bombay Stock Exchange (BSE). The assessee had purchased 80,539 shares of the company between 12-04-2007 to 12-06-2007 from BSE at ₹ 12.29 to ₹ 14.80 per share. The appellant sold 4,00,000 shares of the company through stock exchange in the price range of ₹ 47.45 to 49.95 per share during financial year 2012-13. The ld. CIT(A) noted that the Assessing Officer has not brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brokers to provide long term entry of bogus long term capital gain. The appellant's case is on a different footing where acquisition of shares is not doubted and appellant has held the Share of 13 years. The addition u/s. 68 of long term capital gain cannotbe made merely on suspicion and on high capital gain. In appellant'scase, there is no material to suggest that the purchase and sale of the shares were bogus. The Honourable Kolkata Tribunal in the case of DCITVs. SunitaKhema in ITA No.714 to 718/KOL/2011 has held that the AO cannot treat transaction as a bogus only on the basis of suspicion or surmise. He has to bring material on record to support his findings that has been collusion / connivance between the broker and the assessee for the introduction of its unaccounted money. A transaction of purchase and sale of shares supported by contract notes, DMAT accounts and account payee cheque cannot be treated as bogus. The Honourable Gujarat High Court in the case of Commissioner of Income Tax-1 Vs. MaheshchandraG. Vakil [40 Taxmann.com 326] has held that where assessee prove genuineness of share transactions by contract notes for sales and purchase, bank statement of brok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. s name is not appearing in such list of companies as penny stock company. The assessee argued that addition has been made purely on the basis of assumptions and there is no evidence or material to prove that the assessee s own unaccounted money has been brought in to purchase alleged penny stock and on which exempt LTCG has been claimed. The assessee placed reliance on the observation made by the ld. CIT(A) in his order. 4. We have heard the rival contentions and perused the material on record. On going through the various materials, it is observed that the assessee had acquired 4,27,420 shares of M/s Suryanagri Finlease Ltd. a company listed on BSE, from 1994 to 2007. The assessee has brought to our notice the fact that the shares were sold in the range of ₹ 47.45 to 49.95 per share on the stock exchange though the price of share of the company subsequently rose up to ₹ 103 per share as on 01-10-2015 i.e. almost three years after the appellant sold his shares. Therefore, from the facts it is seen that the assessee has held the shares for a substantially long period of time before selling its shares during F.Y. 2012-13. The Assessing Officer has not doubted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order. (ii) The Lucknow ITAT in the case of Achal Gupta vs. ITO (ITAT Lucknow) I.T.A. No.501/Lkw/2019 held that the documents demonstrates that the assessee had purchased shares through Brokers for which the payment was made through banking channels. The assessee had sold shares through an authorized stock broker and payment was received through banking channels after deduction of STT. The AO has not doubted any of the documents. The only objection raised is that the scrip from which the assessee had earned Long Term Capital Gain has been held by the Investigation Wing of the Revenue to be a paper entity and that this scrip was being used for creating artificial capital gain. The objection was not found to be acceptable. (iii) The Mumbai ITAT in the case of Dipesh Ramesh Vardhan vs. DCIT (ITAT Mumbai) I.T.A. No.7648/Mum/2019 held that the AO has not discharged the onus of controverting the documentary evidences furnished by the assessee and by bri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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