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TMI Blog2025 (4) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... td, on rejecting the appellant's claim of exemption u/s 10(38); 2 2.0 The Ld. CIT(A), before confirming the addition of Rs 4,66,63,794/-, ought to have considered the understated vital facts, being: a) The correctness of documentary evidences being Contract-cum-bills, Confirmation of stock broker, D-mat statements, bank statements, share application, Letter of allotment, rate publication and other documents had not been disputed by lower authorities; b) The period of holding of shares in appellant's D-mat account exceeds 12 months and such shares had been sold on floor of Bombay Stock Exchange through online mechanism at prevailing market price; c) The substantial increase in stock price cannot be a sole reason to treat the bonafide transaction as non-genuine, since purchase and sale of shares had been made at prevailing market price, d) The reliance placed on general statements of 3rd parties, without providing the copies and opportunity of cross examination, is erroneous; e) The SEBI had not framed any allegations and had not passed any contrary 3. 3.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition u/s 69C of u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k brokers, Bank statement, D-mat statement, Rate publication of BSE. 9) Documents filed on purchase: Letter of allotment, Corporate Announcement for issue of preferential allotment, Bank statement, D-mart statement, Balance-sheet of earlier years 10) SEBI's Allegation : No allegation has been framed by the SEBI against the company and the appellant 11) Justification for increase in share price a) The share prices of M/s Gomti Finlease (ndia) Ltd had increased substantially due to complete diversification of business activities, as such listed company had acquired 3 other companies named - M/s KDJ Hospitality Pvt Ltd KDJ Holidayscapes Ltd on 24/07/2012 and 40.76% equity stake of M/s KDJ Hospital Ltd on 28/09/2012. The High Court of Bombay had approved the scheme of amalgamation on 13/02/2013. b) The company made the huge investments in M/s KDJ Hospital Ltd of Rs. 30 crores on 16/10/2012 and increased its equity stake at 75% in M/s KDJ Hospital Ltd. The aggrieved assessee filed appeal before the Ld. CIT(A). The Ld.CIT(A), after detailed discussion, rejected the appeal of the assessee and confirmed the addition. Being aggrieved, the assessee filed further appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petition No. 809 of 2012, in connection with Company Summons for Direction No. 699 of 2012,granted sanction to a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956. The Scheme involved the amalgamation of M/s KDJ with Two Up Financial Services Ltd. and their respective shareholders. The said amalgamation was carried out pursuant to the directions of the Hon'ble Bombay High Court. A copy of the relevant order is annexed at pages 39-42 of the assessee's paper book. The Ld. AR further contended that similar shares were also acquired by the assessee's sister-in-law, Mrs. Karishma Ajay Agarwal, who had claimed exemption under Section 10(38) of the Act. The matter was contested before the ITAT-Mumbai Bench, and the Hon'ble Bench ruled in favour of the assessee in the case of Mrs. Karishma Ajay Agarwal vs. ITO in ITA No. 2580/Mum/2022, with the order pronounced on 02/03/2023. The observations of the co-ordinate bench-H of theITAT, Mumbai, at paragraphs 15-16 are as follows: 15. We have considered the overall facts, submissions and the information find that the assessee has furnished the financials, details of broker, affidavit and the transactions status and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold by the assessee, who have not been identified, even though notices were issued u/s. 133(6) of the Act. In this respect, we have already discussed and given our findings on the functioning of SEBI regulated stock market which applies in the present case mutatis mutandis. Thus, by following the above detailed observations and findings arrived at by us in ITA No.3264/Mum/2024, we delete the addition made u/s.68 towards proceed of listed shares of Gomti Finlease India Ltd. on the said sale claimed exempt by the assessee u/s.10(38). Accordingly, grounds taken by the assessee in this respect are allowed. In the result, appeal of the assessee is allowed." 5. The Ld.DR vehemently argued and supported the orders of the revenue authorities. The Ld.DR filed a written submission dated 02/04/2025, the relevant part of which is extracted below:- "32. In conclusion, the Revenue submits that the assessee's appeal holds no merit and should be dismissed. The facts demonstrate a clear case of tax evasion masked as stock market profits. The assessee's grounds of appeal have been effectively rebutted by evidence, logic, and binding precedents. What the assessee touts as a genuine capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such documents have been placed on record in the assessee's paper book. Regarding the rise in share price, the Ld. AR has adequately explained that M/s KDJ had plans to invest in its proposed subsidiary, KDJ Hospital Ltd., and that an amalgamation took place between Two Up Financial Services Ltd. and KDJ pursuant to the order of the Hon'ble Bombay High Court. This amalgamation was carried out through a proper legal process. It is further noted that the assessee is a regular investor in stocks and securities. As reflected in the balance sheet as of 31stMarch 2012, the assessee had investments in equity shares and mutual funds amounting to Rs. 2,22,59,604/-, which increased to Rs. 4,31,76,951/- as of 31stMarch 2013. This indicates consistent investment activity in the equity market. Importantly, the documents submitted by the assessee during the assessment proceedings were neither challenged nor discredited by the Revenue authorities. Therefore, the assessee has discharged the primary onus of proving the genuineness of the transactions. Furthermore, confirmations from the stock brokers, M/s B.R. Jalan Securities Pvt. Ltd. and M/s Shilpa Stock Brokers Pvt. Ltd are placed on record at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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