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Income Tax Appellate Tribunal, ‘A(SMC
Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad
Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-14, Kolkata dated 04.04.2019 passed for assessment year 2014-15.
This appeal was listed on the Board on 26.11.2019. Thereafter it has been fixed almost more than twenty times. There is no response at the end of the assessee to the notices issued by the Tribunal on the address given in Form No. 36 i.e. Appeal Form. The Bench Clerk has informed the assessee through mail as well as through Mobile No. i.e.
Assessment Year: 2014-2015 Sujata Agarwal 89104304709. Information was also given on the Phone No. 8584872815, but none appeared.
With the assistance of ld. D.R., we have gone through the record carefully. The grievance of the assessee is that the ld. CIT(Appeals) has erred in confirming the addition of Rs.10,12,825/-, which was claimed by the assessee as exemption under section 10(38) of the Income Tax Act on the ground that she has earned long-term capital gain on sale of shares of Kailash Auto Finance Limited. Ld. Assessing Officer disbelieved this transaction and estimated a commission expenditure of Rs.30,385/- for arranging this transaction.
A perusal of the record would suggest that in May, 2012, the assessee had purchased equity shares of M/s. CAPL from M/s. Jatadhari Marketing (P) Limited @ Rs.1/- per share. This CAPL later on amalgamated with M/s. Kailash Auto Finance Limited (KAFL). Thus ultimately in Accounting Year relevant to A.Y. 2014-15, the assessee has sold shares of M/s. Kailash Auto Finance Limited. She has earned a capital gain of Rs.9,87,825/-, which was claimed as exempt. This claim of the assessee was rejected on the ground that Kailash Auto Finance Limited and other erstwhile was penny stock, who were artificially inflating the sale price of these penny stock shares. In brief, it was treated as a bogus claim.
Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.
We find that there are large number of assessees, who have transacted with equity shares of Kailash Auto Finance Limited and claimed exemption under section 10(38) of the Income Tax Act. Apart from this scrip, there are other scrips also in Kolkata, who were found to be penny stock and transactions on papers only. The Hon’ble Calcutta
Assessment Year: 2014-2015 Sujata Agarwal High Court has recently considered this aspect in its judgment in the case of Swati Bajaj & Others (2022) 139 taxmann.com 352(Cal.). One of the scrips dealt with by the Hon’ble High Court relates to Kailash Auto Finance Litmited. In a number of appeals, we have also rejected the claim of the assessees, namely 1122/KOL/2018, 2093/KOL/2019, 2104/KOL/2018, 868/KOL/2019, 341/KOL/2018, 1673/KOL/2019. In ITA No. 2093/KOL/2019, the assessee transacted the shares of M/s. Kailash Auto Finance Limtied. All these transactions have been held as bogus. Therefore, relying upon the decision of the Hon’ble Calcutta High Court coupled with various orders of the ITAT, 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. It is dismissed.
In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on October 17, 2022.