9911796707
TMI Blog2024 (7) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... is bad in law and deserves to be deleted. 2.2 While affirming the said addition the Ld. CIT(A) failed to appreciate that: (i) The addition has been made merely on the basis of surmises and conjectures and based on some extraneous and irrelevant considerations while completely ignoring the relevant documentary evidences and material as furnished by the Appellant; (ii) The addition is made on the basis of some unconfronted statements of some third parties before some other Authority and in fact the said parties are not even known to the Appellant; iii. The Appellant could not be asked to prove the negative and in fact admittedly there is no concrete evidence with the AO or even the CIT(A) on the basis of which the said addition has been made; and; iv. Even otherwise the addition made on the basis only of some third party statements is not sustainable since the Appellant was neither come provided the material gathered at the back of the Appellant and used against him and was also not granted an opportunity to cross examine the parties whose statements were used against the Appellant in spite of specific requests in this regard. 2.3 In any case, the addition made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation report and for the reason that there is an abnormal increase in the price of the script. Accordingly, the Ld. AR argued that the addition is based on probability and cannot substitute realty which is evidenced by the assessee through various documentary evidences. The ld. AR submitted that the investigation report relied on by the AO does not contain anything incriminating against the assessee and that the statement of Mr. Anuj Agarwal which the AO relied also does not mention anything adverse neither about the assessee nor about the broker through whom the assessee carried out the transaction. The ld. AR further argued that merely for the reason that assessee has traded in the shares of the company whose name is mentioned in the investigation report cannot be the reason for making the addition under section 68 of the Act. The ld. AR in this regard relied on the decision of the Bombay High Court in the case of PCIT Vs. Indravadan Jain, HUF (ITA No. 454 of 2018). The ld. AR also drew our attention to the financial statements of the assessee to submit that assessee is a regular investor in various shares and that the assessee is continuing to hold some more shares of Pine Anima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order has given a detailed report on the modus-operandi and how the beneficiaries are artificially booking LTCG with the operator by purchasing the scrip at a very low price and get a cheque by sales script at a very high rate in which case the price of the script is artificially rigged by the operator. The AO for the reason that the assessee has bought the shares of Pine Animation Ltd. at the low price of Rs. 3 per share and has sold the same at a price of Rs. 75 to 81 has treated the LTCG declared by the assessee as non-genuine. It is relevant to mention here that though the AO had given a detailed finding with regard to how the price increase of Pine Animation Ltd. is not supported by the financial performance of the company, the AO has not recorded any specific finding with regard to whether the assessee is involved in rigging the price of Pine Animations Ltd. The assessee in order to support the genuineness of the transaction has submitted all the relevant documents in the form of broker bill, contract summary, share certificate, bank statement, etc. (page 22 to 28 of paper book). It is also relevant to note that the AO without commenting on any of the evidence submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the price manipulation of the impugned shares. On perusal of the the statements recorded from Mr. Anuj Agarwal (page 16 to 24 of PB) we notice that there is no specific mention of the names of neither the assessee nor the broker through whom the assessee carried out the transactions. We in this regard noticed that the Hon'ble Bombay High Court in the case of PCIT Vs. Indrabadan Jain, HUF has considered a similar issue where it has been held that "3. Respondent had shown sale proceeds of shares in scrip Ramkrishna Fincap Ltd. (RFL) as long term capital gain and claimed exemption under the Act. Respondent had claimed to have purchased this scrip at Rs. 3.12/- per share in the year 2003 and sold the same in the year 2005 for Rs. 155.04/- per share. It was A.O.'s case that investigation has revealed that the scrip was a penny stock and the capital gain declared was held to be accommodation entries. A broker Basant Periwal & Co. (the said broker) through whom these transactions have been effected had appeared and it was evident that the broker had indulged in price manipulation through synchronized and cross deal in scrip of RFL. SEBI had also passed an order regarding irreg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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