TMI Blog2023 (9) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... chase and sale of scrips was furnished. No comment on such evidence was made by AO on such evidences. AO has not discussed the basic fact, whether the name of assessee was mentioned in the alleged information or the broker of the assessee was involved in price manipulation with stock exchange. CIT(A) granted relief to the assessee buy taking view that complete details of transaction in the form of contract note from broker's ledger, D-mat account and bank statement was furnished by the assessee. The assessee proved the bona fide of nature and source of sum credit in his books. Such explanation provided by assessee has not been considered by Assessing Officer. AO has not confronted with any statement or relevant part of material to the assessee, which was violated the principle of natural justice. It was also held that the AO has not brought any material on record regarding turnover or profit or net worth of Global Capital Markets Ltd, which is still continuing be traded on BSE and has not been backlisted or barred by Security Exchange Board of India. The shares were purchased through Calcutta Stock Exchange on 27.03.2003 and at that time STT Regulation has not come in force. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case and in law, the ld. CIT(A) ought to have upheld the order of the Assessing Officer. 5. It is therefore prayed that the order of ld. CIT(A) may kindly be set aside that of the Assessing Officer be restored. 6. The appellant craves leave to add, alter, amend and/or withdraw any ground of appeal either before or during the course of hearing of the appeal. 2. Brief facts of the case are that case of assessee for assessment year 2011-12 was re-opened on the basis of information received that assessee made transaction of Rs.7,15,679/- during the year under consideration in penny stock scrip name Global Cap M and scrip code 530263 . The Assessing Officer noted that assessee disclosed the transaction of scrip in his return of income. The Assessing Officer was of the view that there was failure on the part of assessee to disclose transaction in his income, which has escaped assessment. The Assessing Officer recorded that notice under section 133(6) issued to assessee on 15.03.2018 and no reply was received from the assessee. The Assessing Officer recorded reasons and after obtaining approval from superior officer issued notice under section 148 vide notice dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nized Stock Exchange. The assessee also requested to supply copy of notice served under section 148, if it was served within time limit. The assessee also relied upon on various case laws. 4. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer held that he was having information that scrip of Global Capital Markets Ltd. is used for generating bogus LTCG and LTCL. The Assessing Officer recorded modus operandi of penny stock and held that entities involved in the transactions were either bogus or to devoid of any financial capacity to make investment. The Assessing Officer treated the credit of Rs.7,15,679/- as unexplained capital in the assessment order dated 06.12.2018 passed under section 143(3) of the Act. 5. Aggrieved by the addition made in the assessment order, the assessee filed appeal before Ld. CIT(A). The case of assessee migrated before NFAC/Ld. CIT(A). Before NFAC/Ld. CIT(A) assessee challenged the validity of re-opening and service of notice under section 147 as well as addition on merit. The assessee filed detailed written submission raising all the pleas as has been raised before Assessing Officer. The assessee explained that there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons for making addition and his remarked regarding adjudication of issue in question and held that Assessing Officer has not confronted with any statement or relevant part of material to the assessee, which was violated the principle of natural justice. The Assessing Officer has not brought any material on record regarding turnover or profit or net worth of Global Capital Markets Ltd. It is still continuing be traded on BSE and has not been backlisted or barred by Security Exchange Board of India. The shares were purchased through Calcutta Stock Exchange on 27.03.2003 and at that time STT Regulation has not come in vogue. The Assessing Officer has not named the broker nor brought on record any statement on record. The Assessing Officer has not discussed anything about the evidence furnished by assessee and no evidence brought on record to show that the share price movement (price manipulation) except the fact that shares of Rs.5.39 per share in 2003 which rose to Rs.88.33 per share in 2010 and therefore no adverse order of Security Exchange Board of India or BSE or Calcutta Stock Exchange on record. On the basis of such observation, NFAC/Ld. CIT(A) held that order of Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that present tax appeal is not maintainable and the tax effect involved in the present appeal is very meagre, the Revenue itself has mentioned tax effect of Rs.2,14,267/-. Even otherwise, the case does not fall under exceptional clause as relied by Ld. Sr-DR of clause-10(c) of CBDT's Circular No.3/2018 dated 20.08.2018 such clause deals with the objection related to Audit Objection that too must be expressly accepted by Assessing Officer. 10. On merit of the addition, the Ld. AR for the assessee submits that assessee has purchased scrip through Stock Exchange in the month of March, 2003 and thereafter sold in the month of September, 2010 as assessee hold more than seven years. The Ld. AR for the assessee submits that it is far beyond imagination that a person invests for availing benefit for capital gains and wait for seven-eight years for earning surplus. The period of such a long holding itself proved the transaction as genuine. There was no material before the Assessing Officer that the scrip purchased in which assessee made investment was a part of syndicate of penny stock . The Assessing Officer neither provided any material or any statement or report of Investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation is recorded in his assessment order nor such information was shared with the assessee. The assessee in his reply, specifically mentioned that Assessing Officer considered the sale entry twice including one which is reversed on the same date. Even such fact was not examined by assessing officer. The assessing officer made addition of credit without application of mind. The assessee explained that he made transaction of sale of shares in the legitimate manner and paid STT. The assessee further explained that the holding period of the shares was more than seven years and all the evidences with regard to purchase and sale of scrips was furnished. No comment on such evidence was made by assessing officer on such evidences. The assessing officer has not discussed the basic fact, whether the name of assessee was mentioned in the alleged information or the broker of the assessee was involved in price manipulation with stock exchange. 13. I find that the ld CIT(A) granted relief to the assessee buy taking view that complete details of transaction in the form of contract note from broker's ledger, D-mat account and bank statement was furnished by the assessee. The assessee proved ..... X X X X Extracts X X X X X X X X Extracts X X X X
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