Case Law Details
DCIT Vs Rakesh Saraogi & Sons (HUF) (ITAT Raipur)
The bone of contention is the sale of shares of Gautam Resources Limited and Naxgeshwar Investment Ltd. In some enquiry made by the DDIT, Kolkata some brokers were found to be engaged in clandestine activities in the stock exchange by which share prices of certain scrips were found to be manipulated giving rise to Long Term Capital Gains. The assessee has done transaction with one of such broker namely P.K. Agrawal. P.K. Agrawal was examined by the DDIT (Inv.), Kolkata who in his statement explained the modus operandi of artificially jacking up the market prices of some scrips in the Kolkata Stock Exchange. Taking a leaf out of such admission, the A.O. treated the transactions as bogus and the Long Term Capital Gains from the sale of the impugned scrips was treated as income from undisclosed sources.
In his statement and the related enquiries, there is nothing on record to suggest that the brokers have given accommodation entries to the assessee. Nor there is any reference to the transactions done by the assessee. The A.O. has simply presumed that the assessee is also engaged in such bogus/sham transaction.
Direct and clinching evidences have been completely ignored by the A.O. All the shares purchased were routed through the Demat account with the depository stock holding corporation of India Ltd. The sale transactions are also found duly recorded in the Demat account with the depository. The Demat statements are exhibited at pages 70 to 72 of the paper book. Purchase contracts are exhibited from pages 54 to 57 of the paper book and the sale contracts are exhibited at pages 58 to 61 of the paper book. The purchase and sale of shares have been done through the banking channels. Copies of cheques are exhibited at pages 65 to 69 of the paper book.
There is not even a whisper about these direct evidences in the assessment order.
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