Case Law Details
Shri Sanat Kumar Vs ACIT (ITAT Delhi)
Perusal of the assessment order framed by the AO apparently shows that a thorough investigation has been made by calling information u/s 133(6) of the Act from Bombay Stock Exchange as to whether company, namely, Cressanda Solution Ltd. whose shares have been purchased and sold by the assessee to claim the LTCG was suspended for trade within last three years. AO received specific reply from Bombay Stock Exchange that “as per record available with the exchange, trading in the securities of the company, Cressanda Solution Ltd. was suspended w.e.f. February 18, 2013 on account of reduction of capital and revoked w.e.f. March 14, 2013”. When we examine this fact in the light of the date of shares of sale by the assessee i.e. 25.06.2013 to 19.09.2013, it becomes clear that working of the company was not above board and it was merely providing accommodation entries in the form of bogus LTCG and STCG in order to evade the taxes.
The contention of the assessee that he has purchased the shares through banking channel and as such, when the purchase is genuine then sale cannot be questioned, is not tenable because the entire transaction of sale and purchase is to be seen in entirety in the light of the attending circumstances particularly when share of Rs.10 is sold after a period of one year at 282 times which is otherwise improbable in the ordinary course of business. More particularly when trading of the company was suspended by Bombay Stock Exchange in February 2013 and revoked w.e.f. March 2013.
Assessee was asked to explain the business of Cressanda Solution Ltd., he feigns ignorance by stating that assessee is neither promoter nor Director of the said company and he is unable to disclose these facts. We are of the considered view that when assessee is the beneficiary to the maximum extent, he cannot be allowed to step aside the questions because in the ordinary course of business, no one can be expected to invest the amount in a company having no profile in public domain. First of all, anybody who makes an investment in the company by way of purchase of shares, he used to peruse the profile and go through the balance sheet of the company.
DRI, Calcutta has thoroughly investigated 84 penny stock shares quoted on BSE and examined on oath large number of brokers, Directors of the Companies, promoters of penny stock companies, the entry operators who managed the dummy companies involving in price rigging. Investigation conducted by DRI was further shared with SEBI who has investigated 11 cases and found the allegations to be correct. So, in these circumstances, merely because of the fact that the initial purchase has been made through banking channel by the assessee, the entire transactions which are apparently appeared to be bogus providing 282 times of appreciation to the assessee by the company whose balance sheet and profile is not available, cannot be held to be valid one.
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