for Penny Stock SPEAKER SHRI PARAS KOCHAR, ADVOCATE VENUE I.C.A.I. - - PowerPoint PPT Presentation

▶

Jun 29, 2023 104 likes •305 views

Workshop on CIT Appeals for Penny Stock SPEAKER SHRI PARAS KOCHAR, ADVOCATE VENUE I.C.A.I. (EIRC), KOLKATA What is penny stock ? Penny stock companies Small capital Low profit and low sale No track record No future growth

SLIDE 1

Workshop on CIT Appeals for Penny Stock

SPEAKER – SHRI PARAS KOCHAR, ADVOCATE VENUE – I.C.A.I. (EIRC), KOLKATA

SLIDE 2

What is penny stock ?

SLIDE 3

Penny stock companies

Small capital Low profit and low sale No track record No future growth Low status of promoters or directors. Low trading volume

SLIDE 4

How the capital gain is treated as bogus ?

Information through SEBI Information through own source

 Through STR and FIU  Through notice u/s131  Through Survey and searches

 OTHERS  Price movement of penny shares

 NO NETWORTH & TRACK RECORD OF COMPANY  HEAVY PRICE MOVEMENT OF COMPANY  DIRECTOR OF NO MEANS

SLIDE 5

Assessment of penny stock shares

Scrutiny u/s 143(3) Reopening u/s 148 Revision u/s 263 Furnishing of complete documents Proper reply of show cause notice and

notice u/s 142(1)

SLIDE 6

Contention before CIT(A)

General Issues Technical Issues

SLIDE 7

GENERAL ISSUES

 All the documents and details were submitted

before the AO

 CIT vs. Carbo Industrial Holdings Ltd. 244 ITR 422 (Cal.)  CIT vs. Emerald Commercial Ltd. 250 ITR 539 (Cal.)  CIT vs. Bhagwati Prasad Agarwal (ITA no 22 of 2009)  Dolarrai Hemani vs. ITO (I.T.A. No. 19/Kol/2014) (AY 2005-06)  Mrs Roshan Raja (ITAT Mumbai) 2016 TaxPub(DT) 2777

(MumTrib)

SLIDE 8

GENERAL ISSUES

Suspension of Broker or Script

Pavillion Commercial Pvt Limited Vs. ITO Ward

5(2)/Kolkata ITA No. 935/Kol/2012 date of pronouncement 12/08/2016

ITO vs. Indravadan Jain (HUF) (ITAT Mumbai)Date of

Pronouncement – 27/05/2016

Rahul Vashist vs. ITO, ITA NO. 140/K/09

Kolkata Tribunal

SLIDE 9

GENERAL ISSUES

 Cash Trail Dy. CIT vs. Rohini Builders 256 ITR 360 (Guj.) Income-tax Officer, Wd-38(1), Kolkata -Vs-

Shri Jamna Das Gupta, I.T .A No. 692/Kol/2010 dated 31.08.2010

ACIT vs. Surya Kanta Dalmia (2005) 97 ITD 235 (CAL) Jalan Timbers vs. CIT (1997) 223 ITR 11 (Gau) Income-tax Officer, Wd-38(1), Kolkata -Vs- Shri Jamna Das

Gupta, I.T .A No. 692/Kol/2010, Order dated 31.08.2010

CIT vs. M/s. Dataware Private Limited, ITAT No. 263 of 2011, GA

No. 2856 of 2011

SLIDE 10

GENERAL ISSUES

Investment in only scrip earning huge

gain.

Price movement

Mukesh R. Marolia vs. ACIT [2006] 6 SOT 247

(Mum)

SLIDE 11

GENERAL ISSUES

 Poor Networth of the Penny Stock Co.

 www.pennystocks.com  www.allpennystocks.com  www.pennystockobserver.com  www.pennystocklist.com  www.smartmoneygoal.in  www.moneyexcel.com

SLIDE 12

GENERAL ISSUES

 Presumption and Assumption

 K.P. Varghese v. Income Tax Officer (SC) (1981) 131 ITR 0597  Farrah Marker vs. ITO (ITAT Mumbai) AY 2005-06 dt. 27.04.2016  Tribunal at Kolkata in case of DCIT vs Sunita Khemka in IT A nos 714 to

718/ kol/2011 ( pronucement date 28.10.2015)

 Hon’ble Kolkata ITAT in the case of Dolarrai Hemani vs. ITO (I.T.A. No.

19/Kol/2014) (AY 2005-06) (Dt. of pronouncement 02.12.2016) wherein it has been stated that

 ITO vs Rajkumar Agarwal in ITA No. 1330 (Kol) of 2007 dated 10.8.2007  CIT Vs. Smt Sumitra Devi (2014) 268 CTR 0351(Raj.)

SLIDE 13

GENERAL ISSUES

 Purchase Being Proved Genuine

Arvind Asmal Mehta vs. ITO (ITAT Mumbai) AY 2009-

10 dt. 29.02.2016

Rajkumar Agarwal (ITA 1330/Kol/2007 dated 10/08/07) Pavillion Commercial Pvt Limited Vs. ITO Ward 5(2)/Kolkata ITA No.

935/Kol/2012

Commissioner of Income Tax vs. Korlay Trading Co. Ltd. (1999) 152

CTR 0017

SLIDE 14

GENERAL ISSUES

Buyer and seller not found or found bogus

Baijnath Agarwal v. Asstt. CIT(2010) 043 DTR 0149

Acquisition of Penny Stock due to Merger Information through SEBI regarding manipulation

f script

Farrah Marker vs. ITO (ITAT Mumbai) AY 2005-06 dt.

27.04.2016

SLIDE 15

TECHNICAL ISSUES

 Information obtained at the back of the assesse

 KALRA GLASS FACTORY VS SALES TAX TRIBUNAL – SUPREME COURT 167 ITR 488

OF 1987

 LAXMANBHAI S. PATEL V. CIT 327 ITR 291 (2010)

 CROSS EXAMINATION OF THE WITNESS

 Kishan Chand Chellaram vs CIT (1980) ITR 713 (SC)  CIT vs. Eastern Commercial Enterprises 210 ITR 103 (Cal)  S.K.Bothra & Sons (HUF) vs ITO (2011) 62 DTR (Cal) 234  CIT vs Rajesh Kumar (2008) 306 ITR 27(Del)  Prakash Chand Nahata vs CIT (2008) 301 ITR 134 (MP)

SLIDE 16

Statement of brokers, buyers promoters of the companies etc

Statement without corroborative evidence

Kailashben Mangarlal Chokshi Vs CIT (2008)

174 Taxmann 466 (Guj.) / (2008) 14 DTR 257 (Guj.)

Shree Chand Soni Vs DCIT (2006) 101 TTJ (JD) 1028

TECHNICAL ISSUES

SLIDE 17

Reopening u/s148

Reasons not recorded properly

CIT vs. Shri Atul Jain (2008) 299 ITR 383 (Del) CIT vs SFIL Stock Broking Ltd -(2010) 325 ITR 285 (Del)

Reopening u/s within time permitted. Approval of reopening u/s148 by the

appropriate authority.

TECHNICAL ISSUES

SLIDE 18

Revision u/s263,

Erroneous Prejudicial to the interest of the

revenue.

Proper drafting of notice u/s 263

TECHNICAL ISSUES

SLIDE 19

Miscellaneous points

Challenging section 68 Other facts brought on record by AO