9911796707
TMI Blog2025 (5) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... ased Turbotech Engineering Limited @ Rs. 2/- per share in the F.Y.2011-12. The above shares have been sold on various dates in the financial year 2013-14, through BSE @ Rs. 448/- to 502/- per share. The Assessing Officer had also referred to inputs from Investigation report of Kolkata and statement recorded from certain individuals, including Shri Sanjay Vora, Regional Director, East Zone of M/s Anand Rathi Shares & Stock Brokers and observed that the long-term capital gains declared by the assessee is bogus in nature and therefore, called upon the assessee, to explain as to why addition should not be made u/s 68 of the Income Tax Act, 1961 ("the Act"). In response, the assessee had filed relevant details, including purchase details of shares, DMAT account, sale of shares and also relevant confirmations from the parties and argued that the capital gains derived from sale of shares is genuine, which is supported by relevant evidences. The Assessing Officer, after considering relevant submissions of the assessee and also taking note of investigation report of Investigation Wing, Kolkata and also interim order passed by the SEBI, suspending the trading in shares of Turbotech Engineeri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee, further referring to copy of SEBI order in respect of Haresh Infrastructure Private Ltd., submitted that the Assessing Officer made additions towards consideration received for sale of shares u/s 68 of the Act and consequent commission expenditure on the basis of interim order passed by the SEBI, but the fact remains that in the final order dated 25.11.2014, the SEBI has given clean chit to Haresh Infrastructure Private Ltd from whom the assessee had facilitated purchase and sale of shares of Turbotech Engineering Ltd. Therefore, he submitted that the additions made by the Assessing Officer and confirmed by the Ld.CIT(A) cannot be sustained. The learned counsel for the assessee, further submitted that the issue is squarely covered by the decision of ITAT Hyderbad in the case of Ishoo Narang Vs. DCIT in ITA No. 450/Hyd/2022, where, an identical issue of long-term capital gains derived from sale of shares of Turbotech Engineering Ltd. has been held to be genuine and accordingly, deleted the additions made by the Assessing Officer u/s 68 of the Act. Therefore, he submitted that the additions made by the Assessing Officer should be deleted. 6. Dr.Sachin Kumar, Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f purchase and sale of shares to various individuals and received commission of 2% on total transactions. The Assessing Officer on the basis of investigation report coupled with statement recorded from certain individuals and also based on interim report of SEBI, came to the conclusion that the long-term capital gains declared by the assessee from sale of shares of Turbotech Engineering Ltd. is bogus in nature, which is unexplained credit taxable u/s 68 of the Act. 8. We have gone through the reasons given by the Assessing Officer to make additions towards consideration received for sale of shares u/s 68 of the Act as unexplained cash credit and sustained by the Ld.CIT(A), in light of various arguments of the learned counsel for the assessee and we ourselves do not subscribe to the reasons given by the Assessing Officer and the Ld.CIT(A), for the simple reason that the Assessing Officer merely, on the basis of investigation report, coupled with statements recorded from few individuals, came to the conclusion that the long term capital gains declared by the assessee is bogus in nature, which is taxable u/s 68 of the Act as unexplained cash credit, without carrying out further enqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave also carefully considered the relevant case laws referred to by the Assessing Officer and the learned CIT (A) in support of their findings and various case law relied upon by the learned Counsel for the assessee to support his argument. As regard the first legal ground taken by the assessee on reopening of the assessment u/s 147 of the I.T. Act, 1961, we find that the assessment has been reopened in consequent to the findings recorded during the course of survey conducted u/s 133A of the Act, where a statement on oath u/s 131 was recorded from the appellant in light of purchase and sale of shares of M/s Turbo Tech Engineering and M/s. Sharp Trading Company and ascertained that the appellant has claimed exemption u/s 10(38) of the I.T. Act, 1961 towards Long-Term Capital Gain. Based on the said information, the Assessing Officer recorded reasons for reopening of the assessment and observed that there is an escapement of income from tax on account of under assessment of Long-Term Capital Gain derived from purchase and sale of shares. From the above, it is undisputedly clear that there is fresh tangible material in the form of material, found during the course of survey which is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years back is through proper banking channels and Demat Account. Further, sale of above shares is also through proper banking channels and through Demat Account. The appellant has sold the shares through stock brokers in Demat format and received consideration in cheque. In fact, there is no dispute on these two facts, either from the Assessing Officer or from the learned CIT (A). The only dispute is with regard to the nature of transaction carried out by the appellant in light of statement recorded u/s131 of the I.T. Act, 1961 during the course of survey conducted in the business premises of the assessee on 15/09/2015. 12. During the course of survey, a statement u/s 131 was recorded from the assessee where he has stated that the Long-Term Capital Gain represents his unaccounted income routed through purchase and sale of shares of above two companies to his books of account. The appellant has also admitted for disclosure of additional income for the A.Y 2014-15 which is evident from the statement recorded during the course of survey. Admittedly, the appellant has filed a letter along with affidavit dated 30.09.2015 i.e. within 15 days from the date of recording statement u/s 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and sudden jump in share price during short period, but that alone itself is not a ground to allege that the assessee is also a part of such alleged scam and Long- Term Capital Gain derived from the appellant from purchase and sale of above shares is bogus in nature. Take an example, there may be a group of people who are in collusion with each other may have traded a particular share to jack the share price artificially in the stock market, but a common investor in stock market by watching the moment of share price of particular share may invest accidently and derives some profit or loss. Therefore, merely for the reasons that there is a sudden jump in share price, it cannot be alleged that the assessee is also a part of that group of people who are involved in providing bogus entries for deriving Long-Term Capital Gain. In the present case, the Assessing Officer neither brought out any material which suggests the role of the appellant in the alleged scam of bogus Long-Term Capital Gain nor any reference in the investigation report before coming to the conclusion that the Long-Term Capital Gain derived by the assessee is bogus in nature. 14. At this stage it is relevant to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares as fair and transparent by submitting record of purchase and sales bills, demat statement etc., and thus not being earned from bogus company was eligible for exemption u/s 10(38) of the Act. The relevant observation of the Hon'ble Supreme Court is as under: "2. We take notice of the fact that the issue in the present appeal is whether the assessee earned long term capital gain through transactions with bogus companies. In this regard, the finding of fact recorded by the Tribunal in paras 9, 10 and 11 reads thus:- "9. In our considered opinion, in such case assessee cannot be held that he earned Long Term Capital gain through bogus company when he has discharged his onus by placing all the relevant details and some of the shares also remained in the account of the appellant after earning of the long term capital gain. 10. Learned A.R. contention is that no statement of the Investigation Wing was given to the assessee which has any reference against the assessee. 11. In support of its contention, learned A.R. also cited an order of Coordinate Bench in ITA No. 62/Ahd/2018 in the matter of Mohan Polyfab Pvt. Ltd. Vs. ITO wherein ITAT has held that A.O. should have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of companies and held that once necessary evidence has been filed to prove purchase and sale of shares including Demat statement etc., then the Long-Term Capital Gain derived from sale of shares was to be allowed u/s 10(38) of the I.T. Act, 1961. Therefore, we are of the considered view that once the issue has been decided by the Hon'ble Supreme Court, in our considered view, the other judgments relied upon by the learned DR including the decision of the Coordinate Benches of Hyderabad ITAT has no binding precedent and thus are not considered. 18. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the learned CIT (A) is erred in sustaining the addition made by the Assessing Officer towards Long- Term Capital Gain derived from sale of shares and claiming exemption u/s 10(38) of the I.T. Act, 1961 as unexplained credit u/s 68 of the I.T. Act, 1961. Thus, we set aside the order of the learned CIT (A) and direct the Assessing Officer to delete the additions made towards consideration received for sale of shares u/s 68 of the I.T. Act, 1961." 10. In view of this matter and considering the facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
