TMI Blog2023 (5) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... s not know M/s. Rukmini Impex Pvt. Ltd. nor the assessee dealt any business transaction with the said company - HELD THAT:- DR did not report any objection in remanding the issue to the file of AO for verification in terms of submissions of ld. AR. Therefore, taking into consideration the facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of AO for its fresh consideration. Addition u/s. 68 - AR submits that the assessee could not identify the individual transaction - AO proceeded to add the said amount to the income of the assessee in the absence of any evidence that the same is credited in the books of accounts of the assessee - HELD THAT:- We find force in the arguments of ld. AR and without there being entry in the books of accounts, the addition made u/s. 68 of the Act is not maintainable. Therefore, in the interest of justice, we deem it proper to remand the issue to the file of AO for its fresh consideration. - ITA No.41/PUN/2022 - - - Dated:- 9-3-2023 - SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER Assessee by : Shri Hari Krishan Revenue by : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicable to the case on hand. The AO and CIT(A) did not establish any fraud in the case of assessee but only relying on the reports of Kolkata and Bangalore Investigation wings denied the claim of assessee. Further, it was not established that any cash was provided by the assessee which was routed back by way of sale proceeds of the shares of M/s. NCL Research Financial Services Ltd. 5. The respondent-revenue did not bring on record any evidence to show that any criminal complaint or whatsoever filed by the SEBI or by any authorities for the alleged fraud or manipulation committed by M/s. NCL Research Financial Services Ltd. He vehemently argued the discussion made by the AO and CIT(A) regarding the general methods and modus operandi adopted by the alleged companies and the beneficiaries to claim exempt Capital Gains does not establish any fraud or manipulation of assessee. He pleaded in the absence of such particulars, details etc. the decision of Hon ble Supreme Court are not applicable to the facts on hand and in no way help to the respondent-revenue. 6. Shri Hari Krishan, argued the order of this Tribunal in the case of Abhishek Ashok Lohade in ITA No. 816/PUN/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wings of Kolkata and Bangalore and the same was reproduced in the assessment order. Admittedly, the said reports are available in public domain which is evident from the assessment order from pages 2 to 20 of the assessment order. Therefore, the submission of ld. AR is not acceptable that the AO did not provide the said reports to the assessee. Regarding the decision in the case of Smt. Jamnadevi Agrawal (supra) of Hon ble Bombay High Court, the AO in the present case made separate and independent enquiries with regard to claim of assessee in respect of Long Term Capital Gains, passed detailed order in this regard. Therefore, the AO examined the issue in detail and denied the claim u/s. 10(38) of the Act which was confirmed by the CIT(A). Thus, the proposition as canvassed by the ld. AR in terms of decision of Hon ble High Court of Bombay in the case of Smt. Yamnadevi Agrawal (supra) is not applicable. 9. Further, coming to the order of this Tribunal in the case of Abhishek Ashok Lohade (supra) as placed reliance in the case of Frainds Trading Co. of Hon ble Supreme Court which is not disputed the facts and circumstances of the said case are similar to the case on hand but howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is a beneficiary of accommodation entries or long term capital gains from Calcutta Entry Provider, namely, Mr. Anil Khemka of Devshyam Stock Broking P. Ltd.. The Investigation Wing of the Income Tax Department, Calcutta had conducted search and seizure operations on the said entry provider and recorded the statement on 30.03.2015 wherein it is stated that he had admitted to have provided the accommodation entries in respect of scripts as per list which includes the company M/s. SRK Limited. He further stated to have been admitted that the companies controlled by him one paper companies which were used for giving accommodation entries and list of the companies was also provided and the said companies were managed/operated by dummy directors, namely, S/Shri Sanjay Parakh, Anil Agarwal, Akash Agarwal and Devesh Upadhyaya. The investigation report dated 27.04.2015 of the Income Tax Department was available in the public domain and also narrated the modus operandi adopted for the purpose of claiming the bogus long term capital gains. During the course of assessment proceedings, the Assessing Officer had called upon to substantiate the genuineness of the transactions of purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held to have no application and the Department was held to be justified in invoking the extended period of limitation and the fact that whether the beneficiary had no knowledge of about the fraud/forged and fake DEPB licenses have no bearing the imposition of custom duty. The ratio of judgement is squarely applicable to the transaction under consideration before us. Further, the application of principle of the fraud under judicial Acts was considered by the Hon ble Supreme Court in the case of Smt. Badami (Deceased) By her L.R. vs. Bhali in Civil Appeal No.1723 of 2008 dated 22.05.2012, wherein, the Hon ble Apex Court held as follows : 20. In S. P. Chengalvaraya Naidu (dead) by L.Rs. v. Jagannath (dead) by L.Rs. and others [AIR 1994 SC 853] this court commenced the verdict with the following words:- Fraud-avoids all judicial acts, ecclesiastical or temporal observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree - by the first court or by the highest court - has to be trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuineness of transactions of purchase of shares of that company. It is nothing but a fraud played by the appellant against the Assessing Officer as well as the ld. CIT(A) who are quasi judicial authorities employed for execution of the provisions of the Income Tax Act. Therefore, the principle of fraud can be squarely applied to the facts of the present case and principles of natural justice have no application. Applying the said doctrine, we have no hesitation to hold that the transaction of purchase and sale of shares of SRK Industries under consideration before us is void ab-initio, this is nothing but sham, make believe and colourful device adopted with excellent paper work with intention bringing the undisclosed income into books of account. Accordingly, we confirm the orders of the Assessing Officer as well as the ld. CIT(A) and find no merits in the appeal preferred by the assessee before us. 10. In the light of the above, coming to the facts on hand, we note that the assessee had purchased 20,000 shares from M/s. NCL Research Financial Services Ltd. on 28-03-2011, for an amount of Rs. 17,40,200/- and thereafter sold the said shares on various dates for a total sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not claim even TDS credit in this regard. The ld. DR did not report any objection in remanding the issue to the file of AO for verification in terms of submissions of ld. AR. Therefore, taking into consideration the facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of AO for its fresh consideration. The assessee is liberty to file evidence, if any, in support of its claim. Thus, ground No. 2 raised by the assessee is allowed for statistical purpose. 13. Ground No. 3 raised by the assessee challenging the action of CIT(A) in upholding the addition made u/s. 68 of the Act. 14. The ld. AR submits that the assessee could not identify the individual transaction of Rs.1,53,230/-. However, the AO proceeded to add the said amount to the income of the assessee in the absence of any evidence that the same is credited in the books of accounts of the assessee. We find force in the arguments of ld. AR and without there being entry in the books of accounts, the addition made u/s. 68 of the Act is not maintainable. Therefore, in the interest of justice, we deem it proper to remand the issue to the file of AO for its fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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