Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
ORDER
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2014-15, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1068639287(1), dated 12.09.2024 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Case called twice. None appears at the assessee’s behest. She had also not put in appearance on all the earlier five opportunities of hearing as well. The assessee is accordingly proceeded ex-parte.
It next transpires with the able assistance coming from the Revenue side that both the learned lower authorities have inter alia treated the assessee’s alleged capital gains derived from sale of shares amounting to Rs.48,28,090/- as bogus followed by 5% commission expenditure thereupon coming to Rs.2,41,405/- as unexplained under section 69C; respectively, in assessment order dated 28th March, 2022 and upheld in the lower appellate discussion, as followed: “4. The present appeal was filed by the appellant on 21.04.2022 by raising 20 grounds of appeal. During the course of appeal proceedings, hearing notices were sent on 15.07.2024, 01.08.2024 and 20.08.2024. In response to the notices issued the appellant filed only a brief written submission as under:
This submission is very cryptic. The appellant could not substantiate the remaining Grounds of Appeal
. The appellant had filed the return of income on 22.03.2015 by declaring a total income of The AO received clearcut information from the Investigation Wing that she had traded in the scrips of M/S Presha Metallurgical Ltd. for the total value of As per the information, it is a penny stock scrip and it has been used by various operators and exit providers to provide accommodation entries in the form of bogus LTCG for the purpose of bringing un-accounted cash into the books of accounts. For this purpose, the shares of this company were used by the opera ors. Another important fact brought on record by the AO was that the market regulator SEBI has levied penalty of on this company M/S Presha Metallurgical Ltd for violation of the regulatory rules. The background of this company, management of the company, statutory orders, performs of the company, value of Steep price during a particular period without having any genuine revenue from operations etc. were investigated extensively and that has been brought on record in the assessment order. The AO has also listed out specific persons and their PAN, who have influenced the price of this scrip and recorded that only those group of people were trading in high volumes to influence the prices. None of these findings were disproved by the appellant.
6. The Department has conducted various searches and surveys on those brokers and detected the modus operandi of providing such 3 | P a g e accommodation entries by those shell companies to the beneficiaries. In the present case, the appellant was one of the beneficiaries who had purchqsed such shares/scrips of M/S Presha Metallurgical Ltd. and declared sale consideration of Rs.48,28,090/- for computing the LTCG. The AO dealt the issue exhaustively and concluded that the amount received in the form of sale of shares was nothing but unexplained cash credit u/s 68 of the IT Act. In these kind of transactions, certain brokers or commission agents used to charge certain percentage of money for facilitating such transactions. The payment made to such commission agents was separately added for a sum of Rs.2,41 ,405/- as unexplained expenditure by invoking section 69C of the IT Act. The assessment order is speaking and the AO has brought sufficient material evidences to establish that M/S Presha Metallurgical Ltd is a penny stock script. The action of the AO is upheld as he has passed a speaking order by detecting the entire modus operandi.
As a result, this appeal.”
It has come on record that the department’s investigation wing has found several evidence that there had been an artificial price rigging involving M/s. Presha Metallurgical Ltd. And also that the market regulator, namely, Stock Exchange Board of India “SEBI” had further levied penalty of Rs.3 crores in its case. This is indeed coupled with the fact that the learned Assessing Officer’s assessment from page 2 onwards has discussed the entire issue at length; including the management of the company as well as share price movement, to conclude that the appellant is a beneficiary thereof whose exemption claim under section 10(38) of the Act does not deserve to be accepted. We thus see no reason to accept the assessee’s substantive ground raised in the instant appeal for want