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ITA.No.5882/Del./2018 - Shri Amar Nath Goenka, New Delhi I.T.A.No.5971 to 5974/Del./2018 Ms. Anupama Garg, New Delhi & Others.
3. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-7, New Delhi, Dated 08.08.2018, for the A.Y. 2015-2016, challenging the addition of Rs.14,61,585/- under section 68 of the I.T. Act, 1961, on account of long term capital gains.
4. Briefly, the facts of the case are that the assessee filed its original return of income declaring income of Rs.25.35.010/-. The assessee is an individual and declared income from Salary, House Property and Income from other sources. The assessee is Employee- Director of M/s. Premier Polyfilm Ltd. The assessee filed necessary details which have been examined by the A.O. The A.O. found that the assessee claimed Rs.23.44.613/- as long term capital gain (LTCG) on sale of listed shares. Part of the Long Term Capital Gain (LTCG) has been claimed to have been earned is through sale of shares of M/s.Esteem Bio Organic Food Processing Ltd., (Scrip Code
- EBFL Security Id-534927) listed on Bombay Stock I.T.A.No.5971 to 5974/Del./2018 Ms. Anupama Garg, New Delhi & Others. Exchange (BSE). The summary of the share transaction is as under :
Sale consideration of 1200 shares Rs.14,61,585/- Less: Cost of acquisition Rs. 60,000/-
LTCG : Rs.14,01,585/-
4.1. The assessee claimed LTCG from sale of Esteem Bio Shares as exempt from taxation under section 10(38) of Income-Tax Act, 1961. The assessee at assessment proceedings furnished details of mode of acquisition of these shares, bank A/c statements where sale proceeds are credited, depository participant statements and stock broker notes to support claim of exempt LTCG. The A.O. observed from the submissions of the assessee together with facts and circumstances of case in general and those surrounding the share transactions of M/s Esteem Bio Organic Food Processing Ltd ("EBFL") in particular and noted that the events are not as simple as described in assessee's submissions. There are several important circumstantial as well as direct evidences that lead to the I.T.A.No.5971 to 5974/Del./2018 Ms. Anupama Garg, New Delhi & Others.

Sanjay Vohra who has admitted in his statement that M/s. Esteem Bio Organic Food Processing Ltd., is a penny stock company whose shares have been artificially manipulated to provide long term capital gains. The assessee was given show cause notice as to why the same should not be treated as non-genuine transactions. The assessee explained before A.O. that all evidences related to sale and purchase of shares have been provided and there is no material to hold that transactions are bogus. All the purchases have been made through banking channels and sold through stock market platform. Reason of suspicion is insufficient. The allegation that price is rigged is baseless and without any evidence. No opportunity to cross-examine have been given of the statements which are used against the assessee. The A.O. however, did not accept the contention of the assessee and by applying the test of human probability held that long term capital gains claimed by assessee is not genuine and falls within the ambit of Section 68 of the I.T. Act. Therefore, Section I.T.A.No.5971 to 5974/Del./2018 Ms. Anupama Garg, New Delhi & Others.

notes, transaction statement of Demat account, copy of share certificates, financial ledger of the assessee with broker etc., to prove the transaction as genuine. No specific material have been brought against the assessee on record to disprove the claim of assessee. The amount is paid and received through banking channel. No information of any inquiry made from the broker have been provided. Oral evidence cannot prevail over documentary evidence. M/s. Esteem Bio Organic Food Processing Ltd., has been very much a going concern company, an acting Company on MCA website allowed till recently to trade on recognized stock exchange by the SEBI. No copy of report of Investigation Wing have been provided. Assessee has no control over activity of the company in question whether its price rig etc., The SEBI after detailed investigation pronounced its order dated 06.09.2017 that there is no irregularity found in the case of M/s. Esteem Bio Organic Food Processing Ltd., Therefore, interim order was revoked. This company still listed with BSE and shares of I.T.A.No.5971 to 5974/Del./2018 Ms. Anupama Garg, New Delhi & Others.