TMI Blog2023 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... appac Pharma Limited scrip price shares. These objections are separate objections by the AO from the investigation report. The assessment order is not solely based on investigation but the AO has verified each aspect about increase in the share and how transaction took place in assessee s own case. Though the assessee has sold the scrip through Bombay Stock Exchange, it has not purchased from the stock exchange market and, therefore, the conclusion of the Assessing Officer was based on factual circumstances in assessee s own case. The purchase of Kappac Pharma Limited share is in fact appears bogus in nature as the scrip when having share price of Rs.17.45 was purchased by the assessee at Rs.20/- outside the regular stock exchange. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO in the assessment order which are not case specific and subject matter of the show-cause, contrary to the facts of the case and thus highly irrelevant and not applicable to the appellant's case. 1.1 The learned CIT (A) has grievously erred in not appreciating the fact that the AO though relied upon the finding of the investigation report of the DIT - Kolkata made the addition while treating the purchase of shares as non genuine and thereby sale of shares as non genuine. The learned CIT (A) has accordingly grievously erred in failing to appreciate the fact that if the purchase of shares were treated as non-genuine then how the delivery shares taken and demated in the demat form and delivery of shares given on sale of shares given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y from whom the appellant has purchased or the broker through whom the shares are sold has not been disputed, the STT and other Govt. levies on sale of shares have been duly paid and thus all the conditions laid down under the provisions of law for claiming exemption u/s 10(38) of the Act have been duly fulfilled. The impugned addition of Rs.13,47,989/- thus being based on mere surmises and conjectures is wholly unjustified and bad in law. 1.5 The learned CIT(A) has failed to appreciate the fact that the AO has miserably failed to bring on record any cogent material/evidences which could establish/prove that the transactions of sale of shares of Kappac Pharma Limited and LTCG earned thereon is a sham transaction and in the nature of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that the assessee derived income from salary, tuition income, agricultural income, interest income and also business income related to share trading therein the LTCG was claimed and exempted under Section 10(38) of the Act. The Assessing Officer observed that the assessee derived Rs.13,47,989/- as LTCG from the sale of the only one scrip i.e. Kappac Pharma Limited and the assessee purchased 5000 shares on 02.04.2012 at Rs.20/- per share and sold 2000 shares through brokers. The payment of Rs.1 Lakh for these shares were made in cash while purchasing the same through off market transactions. The assessee sold 2000 shares on 27.03.2014 through ASE Capital Markets Limited. The Assessing Officer observed that there was enquiry related to pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and assumption basis. The Ld. AR further submitted that merely because the said company i.e. Kappac Pharma Limited has been treated as a penny stock company does not in any way make the genuine investment of the assessee as non-genuine/bogus investment. The Assessing Officer failed to bring on record any material evidences so as to arrive at the conclusion that the assessee is involved in the alleged activity of rigging of price of Kappac Pharma Limited in connivance with the Stock Exchange and Brokers so as to conclude that the share price of the company in question as per market was not genuine price but inflated or deflated one governed by so called accommodation entry provider. Ld. AR further submitted merely the trading in the said sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the scrip from Kappac Pharma Limited on 02.04.2012 being 5000 shares at Rs.20/- per share. The said purchase was in cash originally. This fact was undisputed. The assessee, thereafter, submitted before us that on 21.11.2014 the assessee sold 5000 shares in Bombay Stock Exchange at different dates and gained Rs.675 per share within 24 months. Thus, there was exorbitant scrip increase from 20.04.2012 to 27.12.2014. The Assessing Officer also made observations in the Assessment Order that the assessee bought shares at Rs.20./- when the market price was of Rs.17.45 on 02.04.2012 in fact. There was no basis from the analysis of the company that Kappac Pharma Limited scrip price shares. These objections are separate objections by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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