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Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Before: SHRI RAJPAL YADAV & SHRI GIRISH AGRAWAL
Present for: Appellant by : Shri Siddharth Jhajharia, FCA Respondent by : Shri Manas Mondal, Addl. CIT, Sr. DR Date of Hearing : 01.06.2023 Date of Pronouncement : 05.06.2023 O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This captioned appeal filed by the assessee is against the order of Ld. CIT(A)-10, Kolkata vide order No. 211/CIT(A)-10/C-36/2014-15/2016- 17/Kol dated 02.07.2018 against assessment order of Ld. ACIT, Circle-36, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 28.12.2016 for AY 2014-15.
Grounds raised
by the assessee are reproduced as under: “1. For that in view of the facts and in the circumstances the Ld. CIT(A) erred in confirming the addition of Rs.46,97,718/- as unexplained cash credit u/s 68 and in view of the facts and in the circumstances the transaction carried out by the appellant being genuine, the action of the Ld. CIT(A) affirming the order of the AO is wholly bad and illegal and it may be held accordingly.
2. Without prejudice to Ground No.1 above, the AO had made the addition u/s 68 on the transaction carried out by the appellant in sale and purchase of shares, merely on assumption and presumption, surmises & conjectures and is without any evidence and as such the action of the AO and the Ld. CIT(A) is wholly bad and illegal and it may kindly be held accordingly.
Shri Rohit Agarwal, AY: 2014-15 3. Without prejudice to Grounds No.1 & 2 above, the Ld. CIT(A) erred in affirming the action of the AO in making addition of Rs.1,17,443/- as unexplained expenditure u/s.69C towards aforesaid transaction in shares and such action of the AO and Ld. CIT(A) is wholly bad and illegal and it may kindly be held accordingly.
4. For that in view of the facts and in the circumstances the Ld. CIT(A) is wholly erred in levying interest u/s. 234B & 234C and your petitioner completely denies its liability for any such interest and hence such interest charged may kindly be deleted.
5. For that your petitioner craves the right to put additional grounds and I or to alter/amend/modify the present grounds at the time of hearing.”
Brief facts of the case are that assessee filed its return of income on 31.07.2014 reporting total income of Rs.39,43,860/-. In the course of assessment proceedings, Ld. AO noted that assessee has purchased shares of Ashika Credit Capital Ltd. through broker Globe Capital Market Ltd., 609, Ansal Bhavan, 16, K. G. Marg, New Delhi. Details of purchases are tabulated as under:
3.2. Details of shares sold by the assessee are tabulated as under:
Shri Rohit Agarwal, AY: 2014-15 3.3. Assessee made a significant gain within a span of few months amounting to Rs.45,04,187/-. Ld. AO called for the explanation in respect of gains earned by the assessee on these share transactions which has been identified as a penny stock. After considering the submissions made by the assessee, Ld. AO observed that extensive survey operation was carried out by Director of Income- tax (Inv.), Kolkata into some brokers of Kolkata. In their statement, they in turn accepted to have provided accommodation entries of short term capital gains. In this list of shares, Ashika Credit Capital Ltd. (in short ACCL) also found its name. Thus, Ld. AO concluded that assessee has introduced/credited capital of Rs.46,97,718/- during the year in his books, the shares of which he explained as proceeds from sale of shares. By holding that the explanation offered by the assesses as unsatisfactory, Ld. AO added the amount of Rs.46,97,718/- as income being unexplained cash credit u/s. 68 of the Act (taxable @ as provided u/s. 115BBE of the Act). Ld. AO also made an addition of Rs.1,17,443/- being 2.5% of Rs.46,97,718/- towards commission for getting bogus short Shri Rohit Agarwal, AY: 2014-15 term capital gain as unexplained expenditure u/s. 69C of the Act. Aggrieved, assessee went in appeal before the Ld. CIT(A) who confirmed the addition. Aggrieved, assessee is in appeal before the Tribunal.
We find that there are large number of assessees, who have transacted with such kind of equity shares and claimed exemption under section 10(38) of the Act. Apart from this scrip, there are other scrips also in Kolkata, who were found to be penny stock and transactions on papers only. Hon’ble Jurisdictional Calcutta High Court has recently considered this aspect in its judgment in the case of Swati Bajaj & Others (2022) 139 taxmann.com 352(Cal.). In a number of appeals, we have also rejected the claim of the assessees, where the assessee transacted in such shares. All these transactions with common modus operandi have been held as bogus by the Hon’ble Jurisdictional High Court. Therefore, respectfully following and relying upon the decision of the Hon’ble Calcutta High Court (supra), we are of the view that Revenue Authorities have rightly rejected the claim of the assessee and made the additions. We do not find any merit in this appeal. Accordingly, it is dismissed.
In the result, appeal of the assessee is dismissed.