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TMI Blog2022 (11) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... n record which indicated that the appellant having filed all evidences relating to purchase and sale of shares and having earned Long Term Capital gains, the Ld. CIT (A) ought not to have dismissed the appeal on surmises and conjectures in view of the fact that the evidences adduced by the appellant in support of earning of Long Term Capital Gains have not been assailed or controverted. (4) For that the appellant had earned Long Term Capital Gains amounting to Rs.1,27,71,907/- in respect of which the appellant has submitted relevant acceptable evidences before the A.O. who simply proceeded on the basis of some informations which were not verified by him and that the Ld. CIT (A) erred in dismissing the appeal of the appellant on the alleged grounds. (5) For that the Ld. CIT (A) ought to have taken into consideration the fact that the A.O. passed entirely an illegal order proceeding on the basis of statements of some persons without affording any opportunity to the appellant to cross examine them. (6) For that the order of assessment passed by the Ld. A.O. had been arbitrary and the Ld. CIT (A) was wrong in confirming the same. (7) For that the use of statements of some perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pported by Contract Note of purchase of shares, transactions statement, relevant bank account. He pleaded that the transactions being genuine, the impugned proceedings deserve to be quashed. 7. On the other hand, ld. D.R. vehemently argued supporting the order of the ld. PCIT. 8. We have heard the rival submissions and perused the relevant record placed before us. During the year, the assessee has earned longterm capital gain from sale of equity shares of M/s. Unno Industries Limited and exemption under section 10(38) of the Act has been claimed. Directorate of Income Tax (Investigation), Kolkata unearthed a racket of penny stock companies, which are managed by entry operators and brokers, wherein share prices are rigged, abnormally high so as to provide accommodation entries in the form of bogus long-term capital gain to various beneficiaries. The investigation report mentioned the list of 84 companies, which were found to be penny stock companies and all these companies have poor financial, no regular business activity was carried out and the share prices increased abnormally with the help of entry operators and brokers. Recently Hon'ble Jurisdictional High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 before us, we are concerned with the first category whose relevant observations and findings by the Hon'ble High Court are noted below: a) From the assessment order passed in the case of the assessee Smt. Swati Bajaj, we find that the genesis of the issue commenced from an investigation report submitted by the Directorate of Income Tax, Investigation, Kolkata (DIT). The investigation report has been prepared by the Deputy Director of Income Tax, Investigation Unit -II and III, Kolkata. [para 43] b) The assessee were conscious of the fact that they have not been name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 scam. Thus, the orders of the tribunal are not only perfunctory but perverse as well. 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] k) In such factual scenario, the Assessing Officers as well as the Commissioner (Appeals) have adopted an in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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