TMI Blog2023 (9) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... BI after detailed investigation and considering the facts of the case exonerated the assessee from the charges leveled in the show-cause notice, which means that SEBI which controls the platform on which transaction of purchase and sale of equity shares is carried out, has specifically carried out the detailed investigation and the preponderance of probability was ruled out and the assessee was not found to be engaged in the manipulation of price of the alleged penny stock companies. Thus the facts of the case before us in the case of M/s. Gateway Financial Services Limited are totally distinguishable and cannot be applied in the facts of the case of the assessee in the instant appeal as no such order of the SEBI exonerating the assessee has been placed before us. Therefore, since no other binding precedence in favour of assessee is placed before us, we respectfully following the decision of this Tribunal 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, thus, dismiss all the grounds raised by the assessee for A.Y. 2015-16. Appeal of the assessee is dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nderers involved in providing bogus accommodation entries of long-term capital gain and short-term capital loss. The ld. Assessing Officer was of the considered view that the assessee has dealt with penny stock company, the financial statement of which truly states that increase in the price of equity shares were not commensurate to the business activities being carried out and has thus LTCG claimed is bogus not eligible for exemption under section 10(38) of the Act and alleged receipt of sale consideration is liable to be added as unexplained cash credit under section 68 of the Act. The assessee failed to get any relief from the ld. CIT(Appeals). Being aggrieved, the assessee is in appeal before the Tribunal. 3. The ld. Counsel for the assessee apart from reiterating the submissions before the lower authorities and also referring to the paper book dated 21.05.2019 containing 32 pages also placed reliance on the decision of this Tribunal in the case of M/s. Gateway Financial Services Limited Others in ITA No. 982/KOL/2018 Others dated 14th July, 2023 stating that the assessee was not found to be engaged in the alleged manipulation of price nor has been involved in the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f long-term capital gain arising sale of equity shares from the listed companies, which were found to be the penny stock companies by both the lower authorities and the long-term capital gain so claimed found to be bogus in nature. We find that recently this Tribunal has adjudicated the similar issue under identical in the case of Shyam Sunder Bajaj in ITA No. 2552/KOL/2018 and others vide order dated 17th October, 2022 and after placing reliance on the judgment of Hon ble Jurisdictional High Court in the case of Swati Bajaj Others (2022) 139 taxmann.com 352(Cal.) pronounced on 14.06.2022, observed as under:- 4. All the present cases were selected for scrutiny u/s. 143(3) through CASS and the issue in all of them for selection relates to suspicious long term capital gain on shares . In all the above appeals, according to the ld. AO, LTCG reported by the assessee in respective return was bogus and the entire transactions were done with the objective to introduce unaccounted money of the assessee in the books by using the route of LTCG which was exempt from tax u/s 10(38) of the Act, except in one case, where the assessee has booked trading loss on transaction of shares of tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , merely by mentioning that statements have not been furnished can in no manner advance the case of the assessee. If the report was available in the public domain as has been downloaded and produced by the revenue, nothing prevented the assessees who are ably defended by the Chartered Accountants and Advocates to download such reports and examine the same and thereafter put up their defence. Therefore, the based on such statements of violation of principles of natural justice the assessees have not made out any case. [para 65] c) The test to be applied is the test of preponderance of probabilities to ascertain as to whether there has been violation of the provisions of the Income-tax Act. In such a circumstance, the conclusion has to be gathered from various circumstances like the volume from trade, period of persistence in trading in the particular scrips, particulars of buy and sell orders and the volume thereof and proximity of time between the two which are relevant factors. Therefore, the methodology adopted by the revenue cannot be faulted. [para 69] d) Test of preponderance of probabilities have to be applied and while doing so, the court cannot loose sight of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The Assessing Officers and the Commissioner (Appeals) have culled out proximate facts in each of the cases, took into consideration the surrounding circumstances which came to light after the investigation, assessed the conduct of the assessee, took note of the proximity of the time between the buy and sale operations and also the sudden and steep rise of the price of the shares of the companies when the general market trend was admittedly recessive and thereafter arrived at a conclusion which is a proper conclusion. [para 99] l) For all the above reasons, we hold that the Tribunal committed a serious error in setting aside the orders of the CIT(A) who had affirmed the orders of the Assessing Officer. [para 101] m) In the result, these appeals are allowed and the substantial questions of law framed/suggested are answered in favour of the revenue and against the assessee restoring the orders passed by the respective Assessing Orders as affirmed by the CIT(A). [para 102] 6. In the context of factual matrix of the present appeals before us narrated above, the position of law as enunciated by the Hon ble jurisdictional High Court of Calcutta in Swati Bajaj (supra) car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Exchange Board of India, in which one of the parties was the assessee dealt by this Tribunal and the SEBI after detailed investigation and considering the facts of the case exonerated the assessee from the charges leveled in the show-cause notice, which means that SEBI which controls the platform on which transaction of purchase and sale of equity shares is carried out, has specifically carried out the detailed investigation and the preponderance of probability was ruled out and the assessee was not found to be engaged in the manipulation of price of the alleged penny stock companies. Thus the facts of the case before us in the case of M/s. Gateway Financial Services Limited are totally distinguishable and cannot be applied in the facts of the case of the assessee in the instant appeal as no such order of the SEBI exonerating the assessee has been placed before us. 9. Therefore, since no other 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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