SMT. SHARMILA MAHESHWARI,PANCHKULA vs. ACIT, CIRCLE, PANCHKULA

Since the issues involved are common and the appeals were heard together, so these are being disposed off by this common order for the sake of convenience and brevity.

At the first instance we will deal with the appeal in ITA No. 159/Chd/2019. Following grounds have been raised in this appeal:

Facts of the case in brief are that the assessee e-filed return of income on 22/09/2015 declaring an income of Rs. 67,31,190/-. Later on the case was selected for ‘Complete Scrutiny’ under CASS. The A.O. during the course of assessment proceedings observed that as per the information received from the Asst. Director of Income Tax (Inv)-2, Chandigarh vide letter No. 852 datd 26/09/2016, the assessee obtained bogus Long Term Capital Gains (LTCG) and that she had voluntarily surrendered the income from scrips as income from other sources amounting to Rs. 44,65,200/-. The A.O. asked the assessee to show cause as to why LTCG on penny stock “Channel Nine Entertainment Ltd.” be not added back to her taxable income. In response the assessee furnished the written submission which is incorporated in para 2.3 of the assessment order dt. 30/11/2017, for the cost of repetition the same is not reproduced herein. The A.O. observed that the reply filed by the assessee revealed that the total sale proceeds were of Rs. 47,76,000/- while the assessee surrendered Rs. 44,65,200/- after claiming the purchase cost of shares. However, the A.O. did not allow the purchase cost claimed by the assessee and made the addition of Rs. 3,10,800/-.

Being aggrieved the assessee carried the matter to the Ld. CIT(A) who sustained the addition by observing in para 4.2 of the impugned order as under:

Now the Assessee is in appeal.

Ld. Counsel for the Assessee submitted that the Ld.CIT(A) without confronting the order dt. 29/06/2015 of the SEBI mentioned in the impugned order, to the assessee, treated the trading of the shares as bogus. He requested that the matter may be set aside to the A.O. because the opportunity was not given to rebut the order, if any, of the SEBI and moreover the reasons for not allowing the purchase cost was not given by the A.O, and that the assessee purchased the shares through banking channels and IPO.

In his rival submissions the Ld. CIT DR strongly supported the orders of the authorities below.

We have considered the submissions of both the parties and perused the material available on the record. In the present case, these facts are not clear as to whether the assessee purchased the shares through IPO and as to whether the order dt. 29/06/2015 of the SEBI was confronted to the assessee. We

In ITA No. 160/Chd/2019 pertaining to Smt. Sharmila Maheshwari, Panchkula, the facts are identical as were involved in the case of Smt. Shashi Maheswari in ITA No. 159/Chd/2019 which we have adjudicated in the former part of this order, therefore, our findings given in the said case shall apply mutatis mutandis to the case of Smt. Sharmila Maheswari.

In the result, both the appeals of the assessees are allowed for statistical purposes.