M/S DEEPS SPECIAL STEELS LIMITED,LUDHIANA vs. DCIT, CIRCLE-1, ALWAR

6. It may be mentioned here that the assessee-appellant is engaged in business of manufacturing of steel. As regards year under consideration, the assessee declared its total income as Nil, while submitting the return of income. The department selected the case for limited scrutiny. Thereupon, notice u/s 143(1) of the Act was issued on 18.03.2016. On initiation of proceedings, notice u/s 142(1) of the Act, accompanied by a questionnaire, was served upon the assessee. Income declared by the Assessee 7. Case of the department is that while declaring its income as ‘Nil’, in the return of income, the assessee was found to have claimed set off of the previous year loss and computed MAT u/s 115JB, to the tune of Rs. 8,20,087/-, but in its revised return of income, furnished on 17.03.2017, i.e. during pendency of the assessment proceedings, the assessee declared its income at Rs. 3,59,73,685/- and also claimed short term capital loss of Rs. 7,42,75,089/- on sale of shares of KAPAAC Pharma Limited, and in this way, net loss to be carry forward was computed at Rs. 3,83,01,404/-. Sale of certain Land-No addition 8. During assessment proceedings, it transpired that on 19.03.2015m the assessee had sold some land measuring 8,03,600 Sq. Meters, in the M/S Deeps Special Steels Ltd., Ludhiana. area of MIA, Alwar, but, in this regard no addition was made, considering the reply furnished by the assessee and finding that the provisions of section 50C were not attracted in the case of lease hold property, and the assessee was found to have taken said land on lease of 99 years, and as such, it was not a capital asset. Sale of shares of KAPPAC PHARMA 9. Coming to the only issue of sale of KAPPAC Pharma, argued before us, during the year under consideration i.e. from 16.09.2014 to 02.01.2015, the assessee purchased said shares, for Rs. 7,84,03,954/- and sold the same only for Rs. 41,28,865/-.

M/S Deeps Special Steels Ltd., Ludhiana. Said assessment order came to be upheld by Learned CIT(A) while dismissing the appeal filed by the assessee, for the reasons recorded therein. Contentions 11. Ld. AR for the appellant has submitted that this is a case where the assessment order came to be passed, thereby disallowing genuine claim of the assessee, as regards short term capital loss, which had origin from sale of shares, while the Assessing Officer ignored the material submitted by the assessee.

13. While assailing impugned order passed by Learned CIT(A), Ld. AR has contended that for the above said reasons, even the impugned order deserves to be set aside, matter may be remanded for afresh decision, after providing reasonable opportunity of being heard to the assessee- appellant. book consisting of copies of documents, including written submission etc., running from page 1 to 159, has been submitted.

Sl Particulars Proposition Pages Relevant Pages 1. The Hon'ble Gujarat High Court in case of Principal 1-4 1,3,4 Commissioner of Income-Tax V. Affluence Commodities (P.) Ltd. [2024] 161 taxmann.com 476 (Gujarat) Losses from 2. The Hon'ble Gujarat High Court in case of Principal 5-9 5,7 Commissioner of Income-Tax V. Champalal Gopiram share transactions Agarwal [2023] 155 taxmann.com 66 cannot be 3. The Hon'ble Gujarat High Court in case of Principal 10-11 10,11 disallowed or Commissioner of Income-Tax V. Sangitaben Jagdish kumar Shah [2023] 156 taxmann.com 147 (Gujarat) assessments reopened merely 4. The Hon'ble Gujarat High Court in case of Principal 12-14 12,14 on suspicion of Commissioner of Income-Tax V. Genuine Finance P. penny stock Ltd.* [2023] 152 taxmann.com 330 (Gujarat) dealings; if trades 5. The Hon'ble Bombay High Court in case of Assistant 15-24 15,23,24 are through Commissioner of Income-tax, Central Circle-8(1), recognized Mumbai V. Jainam Investments [2021] 131 exchanges, taxmann.com 327 backed by proper documents, banking channels, and no evidence of collusion, such losses are allowable.

6. Hon’ble High Court of Punjab & Haryana in the case of 25-28 25-26 Commissioner of Income Tax vs. Anupam Kapoor no adverse reported in & 378 of 2004 and 308 of inference can be 2005 made with respect 7. Assistant Commissioner of Income Tax V3. Pardeep to sale of equity 29-41 32,38 shares on Kumar Aggarwal reported in [2016] 70 taxmann.com account of high 154 (Chandigarh - Trib.) variation in sale 8. The Pr. Commissioner of Income Tax (Central), 42-46 45,48 price of the script Ludhiana vs.Sh. Hitesh Gandhi reported in of 2017 (O&M) 9. The Pr. Commissioner of Income Tax (Central), 47-49 M/S Deeps Special Steels Ltd., Ludhiana. Ludhiana vs. Prem Pal Gandhi reported in 2017 (O&M) wherein it has held that; 10. Kishan Chand Chellaram Vs. CIT, (1980) 125 ITR 713 Material collected 50-88 50,55 (SC) behind the back 11. CIT v. Sham Lal [1981] 127 ITR 816 (Punj. &Har.); of the assessee 89-90 90 cannot be used 12. Meenu Goel vs. ITO in ITA No. 6235/Del/2017 91-98 97 against him 13 Smt. Shikha Dhawan, Vs. ITO ITA No.3035/Del/2018 99-114 113-114 unless the assessee has been allowed a chance to rebut the same. 14 CIT vs. Lavanya Land Pvt. Ltd. [2017] 83taxmann.com 115-125 115,124 161 (Bom) In absence of any material to show 15 Pratik Suryakant Shah vs. ITO [2017] 77 taxmann.com 126-131 130-131 260 (Ahmedabad Tribunal) that huge cash was transferred 16 AnilNand Kishore Goyalvs.ACIT-ITA Nos. 132-176 from one side to 1256/PN/2012 (Pune Tribunal) another, addition 17 CIT vs. Jamna Devi Agrawal [2012] 20 taxmann.com 177-180 179 cannot be 529 (Bom HC) sustained 18 Commissioner of Income-tax v. Smt. Sumitra Devi Transaction 181-185 184 [2014] 49 taxmann.com 37 could not be rejected 19 Shri Dolarrai Hemani vs. ITO, ITA No. 19/Kol/2014, 186-196 192 Date of Judgement : 02.12.2016, ITAT-Kolkata altogether in absence of cogent evidence to the contrary 20 ITO-24(3)(1) vs. M/s. Arvind Kumar Jain HUF reported 197-201 200 in ITA No. 4862/MUM/2014 Assessment Year: 2005- 06 21 Commissioner of Income-tax-13 ShyamR. Pawar 202-205 202,205 reported in [2015] 54 taxmann.com 108 (Bombay)/[2015] The claim of appellant cannot 22 Vivek Agarwal vs. The Income Tax Officer Ward 1(2), 206-214 213-214 rejected where Jaipur, ITA No. 292/JP/2017 the transaction is 23 LalithaJewellery Mart (P.) Ltd. v. Deputy 215-224 215 supported by Commissioner of Income-tax reported in [2018] 99 documentary taxmann.com 408 (Madras) evidences. 24 Commissioner of Income Tax -III, Ludhiana vs. Vivek 225-226 225-226 Mehta reported in [2012] 17 taxmann.com 197 (Punj. &Har.) 25 Commissioner of Income Tax vs. Himani M. Vakil 227-228 228 reported in [2014] 41 taxmann.com 425 (Gujarat) 26 Commissioner of Income Tax vs. Udit Narain Agrawal 229-233 232-233 reported in [2013] 31 tasmann.com 76 (Allahabad) 27 CIT v. Paras Cotton Co [(2007) 288 ITR 211 (Raj.)] The claim cannot 234-239 be rejected on 28 Faqir Chand Chaman Lal v. ACIT [(2004) 1 SOT 914 basis of suspicion 240-242 242 only (Asr.)] 29 Assam Tea Co. v. ITO [(2005) 92 ITD 85 (Asr.) (SB)] 243-250 242 30 CIT vs. Carbo Industrial Holdings Ltd. [2000] 244 ITR Addition cannot 251-253 253 422 (Calcutta High Court) be made on 31 Asstt. CIT vs. BhavikBharatbhai Padia [2017] 78 default of broker 254-259 259 M/S Deeps Special Steels Ltd., Ludhiana. taxmann.com 133 (Ahmd. Tribunal) 32 Ayushi Jain vs. ITO Ward 22(4), Kolkata is 260-277 264- 2551/KOL/2018 shares of M/s 265,276 Kappac Pharma 33 Shri Prakash Javia HUF vs. ITO 5(1), Indore, ITAT 278-288 288 Indore, ITA No. 464/Ind/2019 Ltd. was held to be genuine when 34 Sidhartha Jain vs. ITO Ward 23(1), New Delhi, I.T.A. 289-292 292 supported by No.4459/DEL/2017 documentary evidence

SL Particulars Pages 1. Copy of RTI Application filed on 17.02.2025. 160-161 2. Order u/s 7(1) of the RTI Act, 2005 passed by the ACIT, 162-164 Circle-1, Alwar.

3. Copy of SIT report provided along with RTI order. 165-214 However, it is significant to note that the assessee-appellant has not filed any application seeking permission to place on record this additional evidence. For want of any such application or any justification for their non production earlier before the Assessing Officer or the first appellate authority, we are not inclined to take the material sought to be placed by way of this paper book on record. Is it correct that no reasonable opportunity of being heard was provided to the appellant by the Revenue authorities? 18. As regards the contention raised by Ld. AR that no reasonable opportunity was provided to the assessee-appellant, of being heard, it may be mentioned here that as per record, assessment proceedings commenced with issuance of notice u/s 143(2) of the Act, on 18.03.2016, whereupon the assessee was represented by its authorized representative. Notice u/s 142(1) of the Act, accompanied by questionnaire, was issued to the assessee, on 14.02.2017. Due to change in combination, fresh notice under said provision of law accompanied by a questionnaire was issued to the assessee.

M/S Deeps Special Steels Ltd., Ludhiana. That is how, the assessee furnished reply thereto, on 17.03.2017. In this way, the assessee had the opportunity to file revised return of income, and he came forward with the claim of short term capital loss.

M/S Deeps Special Steels Ltd., Ludhiana. It may be mentioned here that from the very beginning case of the Assessee is that the transactions of purchase and sale of shares were made through a renowned broker. When the assessee or its AR did not deem it an appropriate to seek any information from the department/Assessing Officer and presented a very lengthy reply to the show cause notice, it cannot be said that the department/Assessing Officer had no communication of any such information from the assessee or that on said account, the assessee had no reasonable opportunity of being heard.

You have sold KAPAAC Pharma share to M/s Robinson Worldwide Trade Limited at very low price and claimed loss. The KAPAAC Pharma is delisted from BSE/NSE, you have sold KAPPAC Pharma share physically at very low price and claimed loss it is also noted that the price of share of M/s KAPPAC Pharma Ltd, was ský rocketed without having any awesone profit, EBIDTA margin, EPS, bonus, dividend etc., later on rapidly his value is done. Therefore it seems that the company involved in penny stock. It is also noted that payment received from Sun and Shine worldwide limited on 17.03.2015 whereas shares were transferred on 19.03.2015. Payment received before transfer of share show malafide transactions. Show cause why the loss arises from sale of share is not disallowed and added to the income of the assessee.

M/S Deeps Special Steels Ltd., Ludhiana.

M/S Deeps Special Steels Ltd., Ludhiana. Subsequently, because of unpredictable nature of the stock market the price of the shares did not sustain and came down and we invested more money to bring down our average cost of purchase. Unluckily and due to unforeseen circumstances the shores of this company were delisted in January 2015, which was beyond our control, and nobody could predict the same in advance. This resulted in huge fall in the share price of the company. Sensing no immediate future of the listing of the company we made efforts to dispose of the shares at the best price available. Since, the shares were not being traded online to that time these had to be sold off line, outside the stock exchange route. But we emphatically submit that these shores has been transferred electronically through our DEMAT Account and it is wrong to suggest that the shores have been sold physically as pointed out in your goodself abovesaid notice. The shares were sold to Robinson Worldwide Trade Ltd (now Sun and Shine Worldwide Trode Ltd.) and were transferred to their DEMAT account under DP No.JN302269 Client ID no. 10357128 held with India infoline Limited Thane (Copy of the DEMAT Account of Purchaser is attached). (Annexure-4). Copy of credit note confirming purchase of shares by Robinson Worldwide Trade Limited is enclosed. (Annexure-5). Robinson Worldwide Trade Ltd (now Sun and Shine Worldwide Trade Ltd.) has issued a certificate certifying the purchase of shares and transfer of funds which is attached. (Annexure -6) The payment for purchase of shares and receipt of amount for sale of shares has been mode through banking channel only. We are submitting herewith the copies of bank statement of Axis Bank and PNB highlighting the receipt and payment in regard to purchase and sale of shares. (Annexure -7 and Annexure-8) So the above trail confirms that transaction is completely genuine and as per normal practice of trade. Further your observation that it seems company involves in penny stock is not applicable in our case and is also not correct at all. Your observation is based on fact that the price of this share of this share skyrocketed and then fell down and thus making it a Penny Stock. We hereby submit that the share of Kappac Pharma is not Penny Stock since as per stock exchange in India the penny stocks are those that trode at a very low price less than their face value, have very low market capitalization, are mostly illiquid, and are usually listed on a smaller exchange. Penny stocks in the indian stock market con have prices below Rs 10/- whilst Kappac Pharma share was listed on Bombay Stock Exchange and that too at a good price. And regarding the fall in share price of Kappac Pharma, we are to submit that share trading is subject to volatility and quotient of risk is always there. Kappac Pharma is not the only company whose shares have lost value due to fall in M/S Deeps Special Steels Ltd., Ludhiana. price. There have been a number of many other established companies listed on National Stack Exchange and Bombay Stock Exchange whose shares had fost much of their value during the year. We are submitting herewith dota of some companies whose shares fell considerably during the year 2014-15. Company High(Rs.) Low(Rs.) Reduction Reliance Comm. 156.90 56.90 64% Joiparkash Power 26.63 9.90 63% Unitech 38.60 13.27 66% Jaiparkash Asso. 89.85 23.05 74% Lanco Infatech 14.94 4.45 70% GVK Power 20.85 7.75 63% Bhushan Steel 470.05 59.50 87% This data is for some companies and there are many more companies whose shares have lost their value considerably. The details are attached. (Annexure- 9). Since incidentally we had invested in shares of Kappac Phorma and had to incur loss due to circumstances beyond our control because the share lost much of it value, this reason cannot be formed basis for disallowing our loss. We summarise our submissions as under:

1. 1. The shares of Kappac Pharma, a listed company on Bombay Stock Exchange had beenpurchased in DEMAT form through stock exchange paying STT.

2. The consideration price of these shares had been paid through banking channel only.

3. The shares had been in electronic form kept in DEMAT account.

4. The shares had been sold in DEMAT farm and not physically.

5. The payment against sale of these shares had been received through banking channel.

6. The complete transaction is as per normal practice of trade. Even for the hypothetical purpose if this share is considered to be penny stock still the trading in this share cannot be considered illegal or bogus. There are a large no of case lows on the above issue in favour of assessee, some of which are being submitted below for your immediate reference. Commissioner Of Income Tax-l vs Smt Pooja Agarwal on 11 September, 2017 HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.8. Income Tax Appeal No. 385/2011 Commissioner of Income Tax-1, New Central Revenue Building Statue Circle, Jaipur Vs Smt. Pooja Agarwal, 1783, Telepada, Jaipur order 11/09/2017.

1. Since both these appeals arise out of the same order, they are being decided by this common order.

M/S Deeps Special Steels Ltd., Ludhiana. 2.By way of these appeals, the appellant has challenged the judgment and order of Tribunal whereby the Tribunal has dismissed the appeal of the department the confirming the order of CIT(A).

3. This Court while admitting the Income Tax Appeal (2 of 6) | ITA-385/2011) No.385/2011 on 14.03.2012 has framed following substantial question of law: "Whether the Tribunal as well as CIT(A) were justified in deleting the addition of Rs. 98.56.872/- made by the Assessing Officer an account of bogus share transaction, which were nearly accommodation entries, made through one Shri P.K. Agarwal, who was found to be an entry provider, ignoring that the assessee in her deposition during survey specifically denying having made any share transactions in last 5 years?"

4. This Court also while admitting the income Tax Appeal No.603/2011 on 03.07.2013 has framed following substantial question of law: "Whether on the facts and in the circumstances of the case, the Tribunal was justified in deleting the oddition of Rs. 1,06,34,000/- which was made by the Assessing Officer and confirmed by CIT(A) on account of undisclosed investment of assessee in land and simply directing to compute 10% profit on the said investment as income of the assessee, even after holding that the investment is assessee's own turnover in land dealing and not the investment made for others?"

M/S Deeps Special Steels Ltd., Ludhiana. Reassessment proceedings were initiated by issuing notice under Section 147 R/W 148 of the Act. Vide Show Cause Notice the assessee was specifically asked as to why the amount of Rs. 98,56,872/- should not be treated as an accommodation entry.

10. After considering the entire factual matrix the Assessing Officer held that the assessee had arranged the said accommodation entries from entry providers for converting its undisclosed money into white money and thus the amount of Rs.98,56,872/- was treated as undisclosed income of the assessee.

12. However, counsel for the respondent has taken us to the order of CIT(A) and also to the order of Tribunal and contended that in view of the finding reached, which was done through Stock Exchange and taking into consideration the revenue transactions, the addition made was deleted by the Tribunal observing as under:- "Contention of the AR is considered. One of the main reasons for not accepting the genuineness of the transactions declared by the appellant that at the time of survey the appellant in his statement denied having made any transactions in shures. However, subsequently the facts came on recard that the appellont had transacted not only in the shares which are disputed but shares of various other companies like Satyam Computers, HCL, IPCL, BPCL and Tata Tea etc. Regarding the transactions in question various details like copy of contract note regarding purchase and sole of shares of Limtex and Konark Commerce & Ind. Ltd., assessee's account with P.K. Agarwal & co. share broker, company's master details from registrar of companies, Kolkata were filed. (5 of 6) (ITA-385/2011) Copy of depository a/c or demat account with Alankrit Assignment Ltd., a subsidiary of NSDL was also filed which shows that the M/S Deeps Special Steels Ltd., Ludhiana. transactions were made through demat a/c. When the relevant documents are available the fact of transactions entered into connot be denied simply on the ground that in his statement the appellant denied having made any transactions in shares. The payments and receipts are made through a/c payee cheques and the transactions are routed through Kolkata Stock Exchange. There is no evidence that the cash has gone back in appellants's account. Prima facie the transaction which are supported by documents appear to be genuine transactions. The AO has discussed modus operandi in some sham transactions which were detected in the search case of B.C. Purohit Group. The AO has also stated in the assessment order itself while discussing the modus operandi that accommodation entries of long term capital gain were purchased as long term capital gain either was exempted from tax or was taxable at a lower rate. As the appellant's case is of short term capital gain, it does not exactly fall under that category of accommodation transactions. Further as per the report of DCIT, Central Circle-3 Sh. P.K. Agarwal was found to be an entry provider as stated by Sh. Pawan Purohit of B.C. Purihit and Co. group. The AR made submission before the AO that the fact was not correct as in the statement of Sh. Pawon Purohit there is no mention of Sh. P. K. Agarwal. It was also submitted that there was no mention of Sh. P. K. Agarwal in the order of Settlement Commission in the case of Sh. Sushil Kumar Purohit. Copy of the order of settlement commission was submitted. The AO has failed to counter the objections raised by the appellant during the assessment proceedings. Simply mentioning that these findings are in the appraisal report and appraisal report is made by the Investing Wing after considering all the material facts available on record does not help much. The AO has failed to prove through any independent inquiry or relying on some material that the transactions made by the appellant through share broker P.K. Agarwal were non-genuine or there was any adverse mention about the transaction in question in statement of Sh. Pawan Purohi. Simply because in the sham transactions bank a/c were opened with HDFC bank and the appellant has also received short term capital gain in his account with HDFC bank does not establish that the transaction made by the appellant were non genuine. Considering all these facts the share transactions made through Shri P.K. Agarwal cannot be held as non-genuine. Consequently denying the claim of short term capital gain (6 of 6) | ITA-385/2011) made by the appellant before the AO is not approved. The AD is therefore, directed to accept claim of short term capital gain as shown by the appellant"

M/S Deeps Special Steels Ltd., Ludhiana. 15 The appeals stand dismissed. In case of CIT vs. Smt. Sumitra Devi (2014) 268 CTR 0351 (Raj): (2014) 102 DTR (Raj) 0342 it was held that Cash Credit-Share transaction-Assessee had shown LTCG from the sale of shares and some was claimed as exempt u/s 10(38)-AO observed that companies, whose shares were allegedly dealt with, were not very well known and it was entirely unlikely that there was a huge rise in prices of their shares in a very short span of time-AD treated huge rise in price as manipulation by stock broker and made additions in income of assessee towards transactions of purchase and sale of shares and undisclosed commission paid in cash-CIT(A) observed that shares were sold by assessee for consideration through named stock broker and appellant furnished all the evidence to establish genuineness of transactions-That AO failed to bring any evidence in rebuttal nor was it proved that documents produced by Assessee were false, fabricated or fictitious-ITAT upheld Order of CIT(A) that AO proceeded only on presumptions and was not justified in making additions under Section 68 of the Act. Held, findings of AO were based on presumptions rather than on cogent proof- CIT(A) and ITAT found that AO failed to show material documents placed on record by Assessee were false, fabricated or fictitious-Appellate authorities rightly observed that transaction could not be rejected altogether on basis of facts noticed by AQ, particularly in absence of any cogent evidence to contrary-Finding recorded by appellate authorities, after thorough consideration of material an record, that transaction of purchase and sale of shores could not be treated as non-genuine was justified-No substantial question of law worth consideration in present case -Addition under Section 68 of the Act was not sustainable after due appreciation of evidence on record, on relevant considerations, and on sound reasoning- Finding of Appellate Authorities did not suffer from any perversity-No substantial question of law was involved in Appeal-Assessee's appeal dismissed Held: Findings as ultimately recorded by AO had been based more on presumptions rather than on cogent proof. As found concurrently by the CIT(A) and the ITAT, the AO had failed to show that the material documents placed on record by the assessee like broker's note, contract note, relevant extract of cash book, copies of share certificate, de-mat statement etc. were Flaw, fabricated or fictitious. The appellate authorities have rightly observed that the facts as noticed by the AO, like the notice under Section 136 to the company having been returned unserved; delayed payment to the brokers, and de materialisation of shares just before the sale would lead to suspicion and call for detailed examination and verification but then, for these facts alone, the transaction could not be rejected altogether, particularly in absence of any cogent evidence to the contrary.

M/S Deeps Special Steels Ltd., Ludhiana. probe of the stock and the broker dealing in it. "Merely because SEBI was probing the company and broker activity in it does not mean that ossesee (investor) has entered into in genuine transaction," said Saktijit Dey and NK Prodhan, presiding over ITAT's Mumbai bench. VI ACIT (OSD), Circle-4, Ahemdabad, ACIT (OSD)Circle-7, Ahemdabad versus Deepakbhal N. Parekh, Kusum Lato Ben N. Parekh (2017) 44 ITCD 100 (Guj.), order dated 14.08.2017, it is held that that merely because the shares were sold during the said period, when the land was also sold, the former leading to long term capital loss and latter to long term capital gain would not by itself establish a colorable device to establish tax. As is held by this court as well as by Supreme court on large number of occasions, commercial expediency and legitimate tax planning is always open to an assessee. The revenue cannot question the timing of shares only because it happened that the effect of loss resulted in to reduce the ossessee's capitol gain arising out of sale of immovable property. Other Case laws on which assessee has relied upon in this regard: 1-The decisions of the Hon'ble Calcutta High Court in the case of CIT-Vs Carbo Industrial Holdings Ltd (244 ITR 422) and CIT-Vs-Emerald Commercial Ltd (250 ITR 549) are relevant to the issue where the Hon'ble High Court has held that where the payments are made by Account Payee Cheques and the existence of the brokers is not disputed share transactions cannot be held to be bogus.

M/S Deeps Special Steels Ltd., Ludhiana. Therefore, there is no reason to disbelieve this transaction. From the documents filed by the assessee case, the contract note and ledger note of the brokers and balance sheet wherein the assessee has shown the respect shares in the assets oside in the balance of the share broker on the credit side. Similarly, on sale of shares, the assessee has reflected the sale in the respective dates. The contention of the revenue that the assessee had made payments after the lapse of 16 months is not acceptable, since, In this case, the assessee has entered into several transactions both purchase/soles which is apparent from the ledger copy of M/s 5.B. Buthro & Co which was placed at page no. 6 of the paper book. The endorsement of the company made on 30.08.2003 on the share certificates and confirmation by the PSL Financial Services Ltd. Clearly establishes that the assessee has purchased the shares on 20.06.03. Similarly, the sale transactions are also reflected in the books of the assessee which are supported by the contract notes as well as bank statement which were placed in the paper book." Contentions on behalf of Department 23. While dealing with the issue of rejection of the above said claim on the point of short term capital loss, Ld. DR has relied on para 7.4.4, 7.4.5 and 7.4.6 of the impugned order passed by Learned CIT(A), and stood by the reasons recorded therein. Ld. DR has also placed on the following decisions, which were relied on by Learned CIT(A) while passing the impugned order:-  Udit Kalra vs. ITO 50(1), New Delhi, vide order dated 08.01.2019.  Udit Kalra vs. ITO, Ward-56(!), Delhi, & CM No. 10774/2019.  Atmiben Alipit kumar Doshi vs. ITO, ITA No. 940/AHD/2018 ( 2023) 149 taxmann.com 104, and submitted that the same script of M/s Kappac Pharma Ltd. was dealt with therein, while examining the case of penny stock.

M/S Deeps Special Steels Ltd., Ludhiana. Ld. DR has contended that in view of the findings recorded in the above said decisions, no fault cannot be found with the observations made by the Assessing Officer and the findings recorded by Learned CIT(A).

M/S Deeps Special Steels Ltd., Ludhiana. It may be mentioned here that from page 16 onwards (of the assessment order), the Assessing Officer has reproduced observations made by the Special Investigation Team constituted on black money. Said team was headed by Hon’ble Mr. Justice M.B. Shah (retired), as a Chairman and Hon’ble Mr. Justice Arijit Pasayat (retired) as Vice chairman. Special Investigation Team consisted of 11 members. In its report, the team described modus operandi on black money in the form of Capital Gains 25. At page 24 and 25 of the assessment order, there is specific reference, of the said report submitted by the special investigation team as regard increase in the share price of M/s Kappac Pharma Ltd. , and the conclusion that share of the said company was artificially hiked to create non-genuine LTCG to beneficiaries.

M/S Deeps Special Steels Ltd., Ludhiana. “The outcome of the investigation in brief is as under:- i) Individuals throughout the country identified who have taken such bogus entries of LTCG amounting to several crores from 2010 to 2015. ii) The result of the enquiry was also shared with SEBI and the SEBI after investigating 11 cases have found the allegation to be correct. The balance cases are still being investigated by SEBI. iii) The TOP 25 groups under each investigation directorate of the country were confronted in course of further investigation. Almost all of them barring a few have accepted having taken the entries for a commission. A sum of crores has been voluntarily surrendered by such assessees. iv) In Kolkata, where this investigation was started some of the beneficiaries who had taken entries of nearly Rs. 40 crores have voluntarily surrendered it for taxation without any further enquiry. v) Several assessees have filed revised return since the enquiry and have taken back their claim of exemption. This is one of the direct evidences to show that the Long Term Capital Gain as claimed by the assessee is not genuine one.”

M/S Deeps Special Steels Ltd., Ludhiana. As regards the report of Special Investigation Team, Learned AR has submitted that therein the question involved related to Long Term Capital Loss and Blank Money, but, this is a case of Short Term Capital Loss, and as such, the Assessing Officer wrongly applied the observations made by Special Investigation Team.

M/S Deeps Special Steels Ltd., Ludhiana. Here, facts and circumstances of present case are distinguishable.