9911796707
TMI Blog2022 (11) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... rief facts of the case are that the assessee is an individual and filed e-return of income on 01.10.2013 declaring total income of Rs.11,93,400/-. The assessee has claimed exempt income under section 10(38) of the Income Tax Act at Rs.2,26,86,516/- from sale of equity shares of CCL International Limited. The case of the assessee was selected for scrutiny assessment under CASS. Thereafter, the ld. Assessing Officer based on the information received from the Directorate of Income Tax (Investigation), Kolkata, which has submitted a report on 27.04.2015, wherein after undertaking the investigation, 84 listed companies were found to be the penny stock companies through which bogus long-term capital gain entries were taken in large numbers by the beneficiaries, issued notices under section 148 of the Act, which were duly served upon the assessees and reassessment proceeding was carried out. During the course of assessment proceedings, ld. Assessing Officer found that the assessee has shown exempt income under section 10(38) of the Act at Rs.2,26,85,516/- from sale of 1,87,500 equity shares of CCL International Limited. Ld. Assessing Officer observed that the said shares were purchased by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm capital gain to various beneficiaries. The assessee primarily purchased 10,000 equity shares of M/s. Swift IT Infrastructure & Services Pvt. Limited from off-market, which was subsequently merged with M/s. Parag Shilpa Investments Limited. The market prices of the scrip and market capitalization of the company in the month of May, 2012 were Rs.0.20/- and Rs.1.20 lakhs respectively. Thereafter within three years, the market price of the scrip and the market capitalization of the company had been rallied to Rs.90.50 and Rs.4865.28 crores respectively on 17.12.2014. Therefore, within twenty months, the price jumped nearly 381 times. The assessee failed to satisfy the ld. Assessing Officer that M/s. Parag Shilpa Investment is not a penny stock company by placing any credible information. The ld. Assessing Officer accordingly added the alleged long-term capital gain of Rs.52,83,100/- as unexplained cash credit under section 68 of the Act and also made an addition of commission expenditure @0.5% of the amount of loss on sale of shares i.e. Rs.26,416/- and assessed income at Rs.55,06,180/-. The addition made by the ld. Assessing Officer was challenged by the assessee before the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investigation Wing of the Department wherein the Investigation Wing of the Department had studied the modus operandi of rigging the prices of penny stocks and generation of capital gain /trading loss there from. On appeal, ld. CIT(A) confirmed the action of the ld. AO. Aggrieved, assessees are in appeal before the Tribunal. 5. Recently on 14.06.2022, the Hon'ble jurisdictional High Court of Calcutta passed a judgment in the case of Swati Bajaj and others [2022] 139 taxmann.com 352 (Cal) dealing with set of cases with similar fact patterns as narrated above for the present appeals under consideration before us. Hon'ble jurisdictional High Court by taking the report of the Directorate of Investigation of the Department as the basis, gave its observations and findings, which are summarized hereunder. 5.1. There are two category of cases dealt with by the Hon'ble High Court, viz. first category being those arising out of the order of Tribunal dated 26.06.2019 in which 90 appeals filed by the assessees were allowed and second category is of those cases where1 assessee has challenged the assumption of jurisdiction by CIT under section 263 of the Act. In the present set of appeals be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of shares within a short period of time was a genuine move that those penny stocks companies had credit worthiness and coupled with genuinity and identity. [para 73] g) The assessee cannot escape from the burden cast upon him and unfortunately in these cases the burden is heavy as the facts establish that the shares which were traded by the assessees had phenomenal and fanciful rise in price in a short span of time. [para 75] h) The exercise that was required to be done by the Tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the 'players' can never be established by direct evidence and therefore the surrounding circumstances was required to be taken note of by the Tribunal which exercise has not been done. [para 99] i) The assessee had opportunity to prove that there was no manipulation at the other end and whatever gains the assessee has reaped was not tainted. This has not been proved or established by any of the assessee. [para 99] j) The tribunal being the last fact finding authority was required to go deeper into the issue as the matter have manifested large scale sca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (already narrated above). Since the matter is squarely covered by the decision of Hon'ble jurisdictional High Court of Calcutta in the case of Swati Bajaj & others (supra), we have taken up these also for adjudication ex parte, qua the assessee. 7. After hearing both the sides and taking into consideration the factual matrix of the cases before us vis-à-vis the decision of Hon'ble jurisdictional High Court of Calcutta in Swati Bajaj & others (supra), we respectfully following the said decision carrying the force of binding nature, being the jurisdictional High Court, dismiss the appeals of the assessee and restore the order of the respective ld. AO as affirmed by the respective ld. CIT(A)". 6. Since no binding precedence in favour of assessee is placed before us, we respectfully following the decision of this Tribunal dated 17.10.2022 as well as the judgment of the Hon'ble Jurisdictional High Court in the case of Swati Bajaj & Others (supra) find no infirmity in the orders of the ld. CIT(Appeals) and, therefore, dismiss all the grounds raised by the assessee(s). 7. In the result, both the appeals of the captioned assessee(s) are dismissed. Order is pronounced in the op ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
