INDER CHAND SAND,SILCHAR vs. INCOME TAX OFFICER, WARD-2, SILCHAR

आयकर अपीलीय अधिकरण गुवाहाटी 'डीबी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI ‘DB’ BENCH AT KOLKATA [वर्ुअल कोटु] [Virtual Court] श्री राजपाल यादव, उपाध्यक्ष (कोलकाता क्षेत्र) एवं डॉ. मनीष बोरड, लेखा सदस्य के समक्ष Before SRI RAJPAL YADAV, VICE PRESIDENT (KZ) & DR. MANISH BORAD, ACCOUNTANT MEMBER I.T.A. No.: 49/Gty/2020 Assessment Year: 2015-16 Inderchand Sand....................................................Appellant [PAN: AWXPS 0225 Q] Vs. ITO, Ward-2, Silchar………….................................Respondent I.T.A. No.: 51/Gty/2020 Assessment Year: 2015-16 Saroj Devi Sand.......................................................Appellant [PAN: AJBPS 2852 A] Vs. ITO, Ward-2, Silchar………….................................Respondent Appearances by: None appeared on behalf of the Assessee. Sh. N.T. Sherpa, JCIT, appeared on behalf of the Revenue. Date of concluding the hearing : December 21st, 2022 Date of pronouncing the order : December 23rd, 2022

I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. ORDER Per Manish Borad, Accountant Member: The captioned appeals filed by two assessees pertaining to the Assessment Year (in short “AY”) 2015-16 are directed against separate orders passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals), Shillong [in short ld. “CIT(A)”] dated 29.11.2019 arising out of the assessment orders framed u/s 143(3) of the Act dated 26.12.2017 & 22.12.2017, respectively. 2. The captioned appeals have been listed for hearing on various dates but there is no response at the end of the assessee to the notices issued by this Tribunal on addresses given in Form No. 36. Efforts were made by the bench clerk to inform the assessee through e-mail but none appeared. We, therefore, decide to hear these appeals with the assistance of ld. D/R, and the available records. 3. The assessees are in appeal before this Tribunal raising the following grounds: I.T.A. No.: 49/Gty/2020 “1. That the order of the CIT-Appeals in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. The AO erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 3. That learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in confirming the addition of Rs. 71,39,620/-

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. being sale consideration on sale of shares listed on recognized stock exchange as unexplained credit u/s 68 of the Act. 4. The authorities below erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 5. That the Learned Assessing Officer erred in relying on sworn statements of various persons namely Shri Akash Agarwal, Shri Soumen Choudhary, Shri Arun Khemka, Shri Devesh upadhyaya without providing the same to the assessee for his objections and opportunity for cross examination thereby violating the principles of natural justice. 6. That the authorities below erred in not providing complete details before calling for objections from the assessee. 7. That the Learned Assessing Officer erred in relying on the findings of the Investigation Wing without furnishing any material relating to the same to the assessee before passing the assessment order. 8. That the authorities erred in relying on irrelevant material while ignoring the relevant material and further erred in making addition solely on third party statement without any corroboration. 9. That the authorities below erred in making addition of Rs.71,39,620/-u/s 68 of the Act. 10. That the authorities below erred in treating the capital gains declared by the assessee from transfer of shares of M/s. Pine Animations Limited of Rs. 58.96.530/- u/s 68 of the IT Act. 11. That the authorities below erred in treating the capital gains declared by the assessee from transfer of shares of M/s. Jacksons Investments Limited of Rs. 12,43,090/- u/s 68 of the IT Act. 12. That the authorities below erred in resorting to section 68 of the Act. 13. That the authorities below erred in refusing to grant the beneficial treatment provided under the Act of the Capital gains earned by the assessee from the transfer of shares in M/s. Pine Animations Limited of Rs. 58.96.530/-.

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. 14. That the authorities below erred in refusing to grant the beneficial treatment provided under the Act of the Capital gains earned by the assessee from the transfer of shares in Jacksons Investments Limited of Rs. 12,43,090/-. 15. The appellant denies the liabilities for interest u/s 234A, 234B & 234C of the Act. Further prays that the interest if any should be levied only on returned income. 16. No opportunity has been given before levy of interest u/s 234A 234B & 234C of the Act. 17. Without prejudice to the appellant's right of seeking waiver before appropriate authority, the appellant begs for consequential relief in the levy of interest u/s 234A, 234B and 234C of the Act. 18. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” I.T.A. No.: 51/Gty/2020 “1. That the order of the CIT-Appeals in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. The AO erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 3. That learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in confirming the addition of Rs. 50,40,340/- being sale consideration on sale of shares listed on recognized stock exchange as unexplained credit u/s 68 of the Act. 4. The authorities below erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 5. That the Learned Assessing Officer erred in relying on material/information without furnishing the same to the assessee before passing the assessment order.

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. 6. That the Authorities erred in relying on sworn statements of persons namely Sri Anuj Agarwal dt.31.03.2015 without providing opportunity of cross examination despite request by the assessee. 7. That the Authorities erred in relying on irrelevant material while ignoring -the relevant material. 8. That the Authorities erred in making addition of Rs. 50,40,340/- as unexplained credits u/s 68 of the Act. 9. That the Authorities erred in treating the capital gains declared by the assessee from transfer of shares of M/s.Pine Animations Ltd & shares of M/s. Jackson Investments Ltd of Rs. 50,40,340/- u/s 68 of the IT Act. 10. That the Authorities erred in resorting to section 68 of the Act. 11. That the Authorities erred in refusing to apply the beneficial treatment provided under the Act of the Capital gains earned by the assessee from the transfer of Shares in M/s. Pine Animations Ltd and shares of M/s. Jackson Investments Ltd of Rs. 50,40,340/- 12. That the Authorities erred in not providing complete details to the assessee before completing the assessment. 13. The appellant denies the liabilities for interest u/s 234A, 234B and 234C of the Act. Further prays that the interest if any should be levied only on returned income. 14. No opportunity has been given before levy of interest u/s 234A, 234B and 234C of the Act. 15. Without prejudice to the appellant's right of seeking waiver before appropriate authority, the appellant begs for consequential relief in the levy of interest u/s 234A, 234B and 234C of the Act. 16. For the above and other grounds and reasons which may be submitted during hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” 4. The common grievance of the two different assessees namely Inderchand Sand and Saroj Devi Sand is that ld. CIT(A) erred in confirming the addition of Rs. 71,39,620/- & Rs. 50,40,340/- in the cases of the assessees namely Inderchand Sand and Saroj Devi

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. Sand, respectively for AY 2015-16 which was made by ld. AO denying the claim of exemption u/s 10(38) of the Act from sale of equity shares of M/s. Jackson Investments Ltd. and M/s. Pine Animations Ltd. 5. A perusal of the records suggests that in the case of Inderchand Sand 4,000 shares of M/s. Jackson Investments Ltd. purchased @ Rs. 10/- per share were sold @ Rs. 31.10 per share during the year and similarly, 64,000 shares of M/s. Pine Animations Ltd. purchased @ Rs. 0.40/- per share were sold @ 93.13 per share. Similar was the case of another assessee i.e. Saroj Devi Sand wherein 4,000 equity shares of M/s. Jackson Investments Ltd. and 57,500 shares of M/s. Pine Animations Ltd. were sold during the year @ Rs. 31.10/- & Rs. 73.68/- respectively and the same were purchased @ Rs. 10/- & Rs. 4.05 respectively. Exemption u/s 10(38) of the Act has been claimed on the long term capital gain arising from the said share transactions. The said claim of the assessees was rejected by ld. AO on the ground that M/s. Jackson Investments Ltd. and M/s. Pine Animations Ltd. are penny stock companies, the prices of which are artificially inflated with the help of entry operators, brokers as well as the promoters of these companies for providing bogus capital gain to the beneficiaries. 6. Aggrieved, the assessee preferred appeal before ld. CIT(A) but failed to get relief. 7. Aggrieved, the assessee is now in appeal before this Tribunal. 8. Ld. D/R supported the orders of both the lower authorities.

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. 9. We have heard ld. D/R and perused the records placed before us. We find that the issue in the instant appeal is that of the genuineness of long term capital gain u/s 10(38) of the Act. The facts noted by both the lower authorities indicate that the companies namely M/s. Jackson Investments Ltd. and M/s. Pine Animations Ltd., the respective assessees have dealt in, do not have regular business operations, poor financial and low earning per share and the share prices have increased abnormally in a short span of time and they have typical characteristics of a penny stock company which are known to be controlled by entry operators, brokers and the promoters of such companies in order to provide bogus long term capital gain to various beneficiaries. Both the lower authorities have denied the claim of exemption u/s 10(38) of the Act. 10. Recently, the coordinate Bench of Kolkata ITAT in the case of Sujata Agarwal vs. ITO in ITA No. 1682/Kol/2019 dated 17.10.2022 dealing with the similar type of issue regarding long term capital gain from dealing in the penny stock company namely M/s. Kailash Auto Finance Ltd., dismissed the assessee’s appeal following the judgment of Hon'ble Calcutta High Court in the case of Swati Bajaj & Others (2022) 139 taxmann.com 352 (Cal.). The relevant finding of this decision is reproduced below: “6. 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 High Court has recently considered this aspect in its judgment in the case of Swati Bajaj & Others (2022) 139 Page 7 of 15

I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. taxmann.com 352(Cal.). One of the scrips dealt with by the Hon'ble High Court relates to Kailash Auto Finance Limited. In a number of appeals, we have also rejected the claim of the assessees, namely ITA Nos. 2552/KOL/2018, 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 Limited. 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.” 11. Similar view is also taken by ITAT Kolkata Bench in the case of Sri kailash Prasad Agarwal & Others vs. ITO in ITA Nos. 509 & 1365/Kol/2019 dated 31.10.2022. Relevant finding of this decision is reproduced below:

“3.1. ITA No. 509/KOL/2019 (AY 2013-14): Brief facts of the case are that the assessee is an individual and filed e-return of income on 01.10.2013 declaring total income of Rs.11,93,400/-. The assessee has claimed exempt income under section 10(38) of the Income Tax Act at Rs.2,26,86,516/- from sale of equity shares of CCL International Limited. The case of the assessee was selected for scrutiny assessment under CASS. Thereafter, the ld. Assessing Officer based on the information received from the Directorate of Income Tax (Investigation), Kolkata, which has submitted a report on 27.04.2015, wherein after undertaking the investigation, 84 listed companies were found to be the penny stock companies through which bogus long-term capital gain entries were taken in large numbers by the beneficiaries, issued notices under section 148 of the Act, which were duly served upon the assessees and reassessment proceeding was carried out. During the course of assessment proceedings, ld. Assessing Officer found that the assessee has shown exempt income under section 10(38) of the Act at Rs.2,26,85,516/- from sale of 1,87,500 equity shares of CCL International Limited. Ld. Assessing Officer observed that the said shares were purchased by the assessee on 17.02.2011 @ Rs.4/- per share and within a period of 18 to 24 months and the shares were sold at an average price ranging at Rs.141/-. Ld. Assessing Officer also noticed that CCL

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. International Limited was also in the list of 84 penny stock companies by the Directorate of Income Tax (Investigation). Financial statements of this Company were also taken note by the ld. Assessing Officer, wherein the Company had a meagre income, which did not support the sudden increase in the price of shares. Ld. Assessing Officer also noticed that there was a sudden increase and thereafter sudden decrease, which showed that some beneficiaries were provided the benefit of long-term/short-term capital loss. Based on these observations, ld. Assessing Officer opined that the alleged sum is a bogus long-term capital and is liable to be added as unexplained cash credit under section 68 of the Income Tax Act. The ld. Assessing Officer further made an addition of unexplained commission expenditure @0.5% of the Long-term capital gain, which as per the ld. Assessing Officer, the assessee had paid to arrange the said sum. Appeal against this addition made by the Assessing Officer before the ld. CIT(Appeals), and the assessee did not get any relief from the ld. CIT(Appeals). Aggrieved, the assessee is now in appeal before this Tribunal. 3.2. ITA No. 1365/KOL/2019 (A.Y. 2014-15): Brief facts of the case are that the assessee is in individual, who derived income from business, capital gain and other sources. The assessee filed his return of income on 24.07.2014 declaring total income of Rs.1,96,660/-. The case was selected for scrutiny assessment through CASS followed by serving of notices under section 143(2) and 142(1) of the Act. During the course of assessment proceedings, the ld. Assessing Officer noticed that the assessee has earned long-term capital gain of Rs.52,83,100/- from sale of equity shares of Parag Shilpa Investments Limited and exemption under section 10(38) was claimed. The ld. Assessing Officer based on the information received by it from Directorate of Income Tax (Investigation), Kolkata found that M/s. Parag Shilpa Investments Limited is part of the list of 84 listed companies, which were found to be the penny stock companies and are managed as dummy companies involved in the price rigging by the promoters and entry operators for providing bogus long-term capital gain to various beneficiaries. The assessee primarily purchased 10,000 equity shares of M/s. Swift IT Infrastructure & Services Pvt. Limited from off-market, which was subsequently merged with M/s. Parag Shilpa Investments Limited. The market prices of the scrip and market capitalization of the company in the month of May, 2012 were Rs.0.20/- and Rs.1.20 lakhs respectively. Thereafter within three years, the market price of the scrip and the

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. market capitalization of the company had been rallied to Rs.90.50 and Rs.4865.28 crores respectively on 17.12.2014. Therefore, within twenty months, the price jumped nearly 381 times. The assessee failed to satisfy the ld. Assessing Officer that M/s. Parag Shilpa Investment is not a penny stock company by placing any credible information. The ld. Assessing Officer accordingly added the alleged long-term capital gain of Rs.52,83,100/- as unexplained cash credit under section 68 of the Act and also made an addition of commission expenditure @0.5% of the amount of loss on sale of shares i.e. Rs.26,416/- and assessed income at Rs.55,06,180/-. The addition made by the ld. Assessing Officer was challenged by the assessee before the ld. CIT(Appeals), but no relief was granted by the ld. CIT(Appeals). Being aggrieved, the assessee is now in appeal before the Tribunal. 4. None appeared on behalf of the assessees when the cases were called for hearing. Per contra, the ld. D.R. vehemently supported the order of ld. CIT(Appeals) and submitted that the issue stands squarely covered by the judgment of the Hon’ble Jurisdictional High Court in the case of Swati Bajaj & Others (2022) 139 taxmann.com 352(Cal.) pronounced on 14.06.2022. 5. We have heard the ld. D.R. and perused the relevant material available on record. The common issue raised before us is with regard to genuineness of the claim of exempt income under section 10(38) of the Act in respect of long-term capital gain arising sale of equity shares from the listed companies, which were found to be the penny stock companies by both the lower authorities and the long-term capital gain so claimed found to be bogus in nature. We find that recently this Tribunal has adjudicated the similar issue under identical in the case of Shyam Sunder Bajaj in ITA No. 2552/KOL/2018 and others vide order dated 17th October, 2022 and after placing reliance on the judgment of Hon’ble Jurisdictional High Court in the case of Swati Bajaj & Others (2022) 139 taxmann.com 352(Cal.) pronounced on 14.06.2022, observed as under:- “4. All the present cases were selected for scrutiny u/s. 143(3) through CASS and the issue in all of them for selection relates to ‘suspicious long term capital gain on shares’. In all the above appeals, according to the ld. AO, LTCG reported by the assessee in respective return was bogus and the entire transactions were done with the objective to introduce unaccounted money of the assessee in the books by using the route of LTCG which was exempt from tax u/s Page 10 of 15

I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. 10(38) of the Act, except in one case, where the assessee has booked trading loss on transaction of shares of two Companies, which have been treated as penny stock. Thus, ld. AO held that the said LTCG/loss are fabricated/engineered transactions by the respective assessees, sale of which falls under the category of penny stocks and the same were treated as bogus which were added in the total income by treating it as unexplained cash credit u/s. 68 of the Act. Ld. AO based his decision of treating the impugned transaction of sale of shares as bogus transaction by relying on the report of Investigation Wing of the Department wherein the Investigation Wing of the Department had studied the modus operandi of rigging the prices of penny stocks and generation of capital gain /trading loss there from. On appeal, ld. CIT(A) confirmed the action of the ld. AO. Aggrieved, assessees are in appeal before the Tribunal. 5. Recently on 14.06.2022, the Hon’ble jurisdictional High Court of Calcutta passed a judgment in the case of Swati Bajaj and others [2022] 139 taxmann.com 352 (Cal) dealing with set of cases with similar fact patterns as narrated above for the present appeals under consideration before us. Hon’ble jurisdictional High Court by taking the report of the Directorate of Investigation of the Department as the basis, gave its observations and findings, which are summarized hereunder. 5.1. There are two category of cases dealt with by the Hon’ble High Court, viz. first category being those arising out of the order of Tribunal dated 26.06.2019 in which 90 appeals filed by the assessees were allowed and second category is of those cases where1 assessee has challenged the assumption of jurisdiction by CIT under section 263 of the Act. In the present set of appeals before us, we are concerned with the first category whose relevant observations and findings by the Hon’ble High Court are noted below: a) From the assessment order passed in the case of the assessee Smt. Swati Bajaj, we find that the genesis of the issue commenced from an investigation report submitted by the Directorate of Income Tax, Investigation, Kolkata (DIT). The investigation report has been prepared by the Deputy Director of Income Tax, Investigation Unit -II and III, Kolkata. [para 43] b) The assessee were conscious of the fact that they have not been named in the report, therefore made a vague and bold statement that the non-furnishing of report would vitiate the proceedings. Therefore,

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. merely by mentioning that statements have not been furnished can in no manner advance the case of the assessee. If the report was available in the public domain as has been downloaded and produced by the revenue, nothing prevented the assessees who are ably defended by the Chartered Accountants and Advocates to download such reports and examine the same and thereafter put up their defence. Therefore, the based on such statements of violation of principles of natural justice the assessees have not made out any case. [para 65] c) The test to be applied is the test of preponderance of probabilities to ascertain as to whether there has been violation of the provisions of the Income-tax Act. In such a circumstance, the conclusion has to be gathered from various circumstances like the volume from trade, period of persistence in trading in the particular scrips, particulars of buy and sell orders and the volume thereof and proximity of time between the two which are relevant factors. Therefore, the methodology adopted by the revenue cannot be faulted. [para 69] d) Test of preponderance of probabilities have to be applied and while doing so, the court cannot loose sight of the fact that the shares of very little known companies with in-significant business had a steep rise in the share prices within the period of little over a year. [para 73] e) The assessee was not named in the report and when the assessee makes the claim for exemption, the onus of proof is on the assessee to prove the genuinity. [para 73] f) It is incorrect to argue that the assessees have been called upon to prove the negative in fact, it is the assessees duty to establish that the rise of the price of shares within a short period of time was a genuine move that those penny stocks companies had credit worthiness and coupled with genuinity and identity. [para 73] g) The assessee cannot escape from the burden cast upon him and unfortunately in these cases the burden is heavy as the facts establish that the shares which were traded by the assessees had phenomenal and fanciful rise in price in a short span of time. [para 75] h) The exercise that was required to be done by the Tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the 'players' can never be established by direct evidence and therefore the

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. surrounding circumstances was required to be taken note of by the Tribunal which exercise has not been done. [para 99] i) The assessee had opportunity to prove that there was no manipulation at the other end and whatever gains the assessee has reaped was not tainted. This has not been proved or established by any of the assessee. [para 99] j) The tribunal being the last fact finding authority was required to go deeper into the issue as the matter have manifested large scale scam. Thus, the orders of the tribunal are not only perfunctory but perverse as well. The exercise that was required to be done by the tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the "players" can never be established by direct evidence and therefore the surrounding circumstances was required to be taken note of by the tribunal which exercise has not been done. [para 99] k) In such factual scenario, the Assessing Officers as well as the Commissioner (Appeals) have adopted an inferential process which is found to be a process which would be followed by a reasonable and prudent person. The Assessing Officers and the Commissioner (Appeals) have culled out proximate facts in each of the cases, took into consideration the surrounding circumstances which came to light after the investigation, assessed the conduct of the assessee, took note of the proximity of the time between the buy and sale operations and also the sudden and steep rise of the price of the shares of the companies when the general market trend was admittedly recessive and thereafter arrived at a conclusion which is a proper conclusion. [para 99] l) For all the above reasons, we hold that the Tribunal committed a serious error in setting aside the orders of the CIT(A) who had affirmed the orders of the Assessing Officer. [para 101] m) In the result, these appeals are allowed and the substantial questions of law framed/suggested are answered in favour of the revenue and against the assessee restoring the orders passed by the respective Assessing Orders as affirmed by the CIT(A). [para 102] 6. In the context of factual matrix of the present appeals before us narrated above, the position of law as enunciated by the Hon’ble jurisdictional High Court of Calcutta in Swati Bajaj (supra) carrying force of binding nature on the issue under consideration for us, was

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. confronted to the respective ld. Counsels of the assessee who appeared before us. Ld. Counsels were fair enough to state that issue involved in these appeals is squarely covered against the assessee by the said decision as the fact involved are identical to that which were before the Hon’ble High Court. For cases where none appeared before us on behalf of the assessee, the relevant factual matrix was captured with the assistance of Ld. Sr. DR / CIT DR (already narrated above). Since the matter is squarely covered by the decision of Hon’ble jurisdictional High Court of Calcutta in the case of Swati Bajaj & others (supra), we have taken up these also for adjudication ex parte, qua the assessee. 7. After hearing both the sides and taking into consideration the factual matrix of the cases before us vis-à-vis the decision of Hon’ble jurisdictional High Court of Calcutta in Swati Bajaj & others (supra), we respectfully following the said decision carrying the force of binding nature, being the jurisdictional High Court, dismiss the appeals of the assessee and restore the order of the respective ld. AO as affirmed by the respective ld. CIT(A)”. 6. Since no binding precedence in favour of assessee is placed before us, we respectfully following the decision of this Tribunal dated 17.10.2022 as well as the judgment of the Hon’ble Jurisdictional High Court in the case of Swati Bajaj & Others (supra) find no infirmity in the orders of the ld. CIT(Appeals) and, therefore, dismiss all the grounds raised by the assessee(s).” 12. Respectfully following the above decision and taking a consistent view, in light of the facts of the instant case which are similar to that of the decision referred herein above, we are inclined to hold that the alleged long term capital gain has been earned by the assessees from dealing in penny stock companies and therefore, the transactions carried on are bogus in nature and thus, do not qualify for exemption u/s 10(38) of the Act. The finding of ld. CIT(A) in the instant two appeals needs no interference and the same is confirmed. Thus, all the grounds

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I.T.A. Nos.: 49 & 51/Gty/2020 Assessment Year: 2015-16 Inderchand Sand & Saroj Devi Sand. raised by the assessees in ITA Nos. 49 & 51/Gty/2020 are dismissed. 13. In the result, both the appeals filed by the assessees in ITA Nos. 49 & 51/Gty/2020 are dismissed. Kolkata, the 23rd December, 2022. Sd/- Sd/- [Rajpal Yadav] [Manish Borad] Vice President Accountant Member Dated: 23.12.2022 Bidhan (P.S.) Copy of the order forwarded to: 1. Inderchand Sand, Steel Agencies, Sonai Road, Silchar, Assam-788 006. 2. Saroj Devi Sand, Steel Agencies, Sonai Road, Silchar, Assam-788 006. 3. ITO, Ward-2, Silchar. 4. CIT(A), Shillong. 5. CIT- 6. CIT(DR), Guwahati Bench, Guwahati. True copy By order

Assistant Registrar ITAT, Kolkata Benches Kolkata

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