TMI Blog2023 (12) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... of sham nature. As decided in the case of Karuna Garg [ 2022 (12) TMI 858 - DELHI HIGH COURT] as well as Krishna Devi [ 2021 (1) TMI 1008 - DELHI HIGH COURT] has held that an astronomical increase in the share price of a company in itself is not a justifiable ground for holding the LTCG to be an accommodation entry. As pointed out on behalf of the assessee large number of decisions pronounced by Co-ordinate benches holds the field in favour of the assessee in respect of same scrip of CCL International Ltd. . AO in another case namely Parth Yadav has framed the reassessment order without making any additions on account of LTCG derived from sale of CCL Ltd. Shares despite reopening the assessment on such ground. Thus, the Revenue itself, in other case, broadly accepted the view point canvassed. On the substratum of the company financials, the assessee has also demonstrated that CCL Ltd. is engaged in substantial business with significant turnover and fixed assets base. We are of the view that the addition is not justified based on conjecture and surmise and the assessee is discharged primary onus which lay upon it. The Revenue, on the other hand, could not dislodge t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Participant (DP) namely Religare Broking Limited. 2,500 shares were transferred in the demat account on 04.07.2013 and other 7,500 shares on 16.11.2013. A demat account showing availability of shares before sale of shares were submitted before the AO. The assessee sold 9,700 shares between 25.11.2014 to 12.01.2015 and thus claimed Long Term Capital Gain on account of holding of shares in physical form and demat form put together for more than one year. The sale consideration aggregating to Rs. 51,06,739/- were received through banking channel for the shares sold at an average rate of 526.47 per share. The Assessing Officer however, observed that LTCG claimed as exempt income is only an accommodation entry to lounder the unaccounted income of the assessee and introduced it as exempt income in the form of LTCG. 3.2 The Assessing Officer extensively referred to Investigation Report issued by Directorate of Investigation, Kolkata explaining the modus operandi for rigging the prices of penny stocks abnormally high by involvement of multiple intermediaries and take advantage of tax provision to claim exempt income by significant jump in the share prices through such rigging. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of monthly movements of share prices were also referred to submit that no adverse interference should be drawn in the facts of the case. The learned Counsel thereafter referred to the assessment order for A.Y. 2015-16 in the case of another assessee namely Parth Yadav passed under section 147 r.w.s 144B of the Act order dated 27.05.2023 to submit that despite reopening of the assessment alleging escapement of income towards LTCG on sale of CCL Ltd in that case, the Assessing Officer found the transactions bonafide in the similar circumstances. The learned Counsel thus submitted that no adverse inference should be drawn by the AO in the case of the assessee. 6.1 Learned Counsel thereafter, referred to the judgment delivered by the jurisdictional High Court in the case of PCIT vs. Karuna Garg [ITA no. 477/2022 judgment dated 23.11.2022] to contend that mere astronomical increase in the share prices of a company which was not commensurate with the financial parameter of the said company is not a good ground for adverse inference. Reference was made to the judgment rendered in the case of PCIT vs. Prem Lal Gandhi 401 ITR 253 (P H) where the Hon ble Punjab and Haryana High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authorites and also made reference to the judgment in the case of PCIT vs. Swati Bajaj (2022) 139 taxmann.com 352 Calcutta to assail the bonafide of Long Term Capital Gains claim. In rejoinder, the learned Counsel for the assessee referred to the judgment of the Co-ordinate Bench in ACIT vs. Priyanka Ankit Miglani (ITA No.2531/MUM/2021 and others order dated 21.03.2023) wherein the decision was rendered in favour of the assessee after taking note of the judgment delivered in the case of Swati Bajaj case. 8. We have carefully considered the rival submissions and perused the material available on record. The case law cited have also been taken into account. As pointed out on behalf of the assessee, the transaction of existence of purchase and sale of CCL Ltd. giving rise to LTCG claimed to be exempt under section 10(38) of the Act is fully corroborated by the documentary evidences. The shares have been credited in the demat account and transferred out of demat account at the time of sale. Both purchase and sale transactions are carried out through banking channel and by transfer of shares. The prima facie bonafides of existence of transaction executed cannot thus be do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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