Mr. Rajan Aggarwal (HUF), Ludhiana V. ACIT, C-2, Ludhiana

ITA 1036/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0817 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 02-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N.D.GUPTA
• Keywords: Unexplained cash credit; Tangible material; Assessment record; Capital Gains; Bogus
• Section: 68; 69C; 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH SMC CHANDIGARH , ! BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 1036/CHD/2018 / ASSESSMENT YEAR : 2015-16 SHRI RAJAN AGGARWAL (HUF), HOUSE NO. 3503, STREET NO. 14, NEW SHIVAJI NAGAR, LUDHIANA. VS THE ACIT, CIRCLE-2, LUDHIANA. ./PAN NO. : AANHR8153G /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI GAURAV SHARMA / REVENUE BY : SHRI N.D.GUPTA, JCIT ! ' # /DATE OF HEARING : 22.05 .2019 $%&' # /DATE OF PRONOUNCEMENT : 03.06. 2019 '# /ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 02.07.2018 OF CIT(A)-I LUDHIANA PERTAINING TO 2015-16 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT ON THE FARTS AND THE CIRCUMSTANCES OF THE CASE , THE ORDER OF LEARNED CIT(A) IS BAD IN LAW. 2. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CONFIRMING THE A DDITION OF RS. 44,48,344/- MADE BY HIM ON ARBITRARY AND ESTIMATED BASIS. 3. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN REJECTING THE CLAIM OF LONG TERM CAPITAL GAIN OF RS. 43,18,780/- ON SHARES SOLD ONLINE THROUGH STOCK EXCHANGE. 4. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ABOVE ADDITION EVEN AFTER THE FACT THAT THE ASSESSING OFF ICER HAS NOT BROUGHT ANY DOCUMENTARY EVIDENCE OR ANY TANGIBLE MATERIAL TO SUBSTANTIATE THAT THE L ONG TERM CAPITAL GAIN OF RS. 43,18,780/- WAS UNEXPLAINED CASH CREDITS FOUND IN THE BOOKS OF THE APPELLANT. 5. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ABOVE ADDITION EVEN AFTER THE FACT THAT THE APPELLANT HAD DULY SHOWN THE ABOVE AMOUNT AS LONG TERM CAPITAL GAIN IN ITS RETURN OF INCOME AND HENCE SECT ION 68 OF THE INCOME TAX ACT, 1 961 IS INAPPLICABLE IN THE CASE OF THE APPELLANT. 6. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 1,29,564 UNDER SECTION 69C OF THE I NCOME TAX ACT, 1961 MERELY ON THE BASIS OF ITA 1036/CHD/2018 A.Y. 2015-16 PAGE 2 OF 7 PRESUMPTIONS WITHOUT BRINGING A SINGLE EVIDENCE ON RECORD THAT THE APPELLANT HAD INCURRED AMOUNT OF RS. 1,29,564/- BY WAY OF BROKERAGE. 7. THAT BOTH THE ABOVE ADDITIONS MADE BY THE ASSESSING OFFICER ARE ON THE BASIS OF PREPONDERANCE OF PROBABILITIES, SURMISES AND CONJEC TURES. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND TH E GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 2. THE LD. AR INVITING ATTENTION TO THE IMPUGNED OR DER SUBMITTED THAT FULL FACTS ON RECORD HAVE NOT BEEN CONSIDERED BY THE CIT(A). RELYING UP ON SYNOPSIS FILED, IT WAS HIS SUBMISSION THAT BEFORE CIT(A) FOLLOWING ARGUMENTS, HAD BEEN AR GUED : A) MOST IMPORTANT POINT - M/S GOLDLINE INTERNATIONAL FINVEST LIMITED (IN SHORT 'M/S GOLD LINE') CURRENTLY BEING TRADED AT THE BOMBAY STOCK E XCHANGE > CURRENT MASTER DATA FROM MCA WEBSITE FURNISHED BEFORE YOUR HONOUR > THE COMPANY IS INCORPORATED IN THE YEAR 1992. B) THE COMPANY NOT SHUT DOWN AS SHELL COMPANY BY SEBI. C) M/S GOLD LINE HAD ITS REGISTERED OFFICE AT FLAT NO. 116, IST FLOOR, HEMKUNT CHAMBER 89, NEHRU PLACE, NEW DELHI (COPY OF MASTER DATA TAKEN IN 2016 FROM MCA WEBSIDE ENCLOSED AT PAGES NO. 35 & 36 OF THE PAPER BOOK. D) THE COPY OF ASSESSMENT ORDER DATED 31.12.2016 IN CASE OF M/S GOLD LINE FOR THE A/Y 2014- 2015 IS A PART OF ASSESSMENT RECORD - THE INCOME O F M/S GOLD LINE ASSESSED AT ITS RETURNED INCOME BY LD. ITO, WARD-10(2), NEW DELHI - > COPY OF ASSESSMENT ORDER AT PAGE NO. 83 OF THE PAPER BOOK - WORTH NOTING THAT ADDRESS MENTIONED ON ASSESSMEN T ORDER SAME ON WHICH LD. AO SENT NOTICES U/S 133(6) -> MEANS M/S GOLD LINE WAS WORKING AT THAT ADDRESS E) THE ASSESSMENT CASE OF M/S GOLD LINE FOR THE A/ Y 2015-2016 ALSO FIXED WITH LD. ITO, WARD- 10(2), NEW DELHI -> TIME BARRING DATE TO BE 31.12.2 017, SAME AS IN OUR CASE. F) THE ASSESSMENT CASE OF M/S GOLD LINE FOR THE A/ Y 2013-2014 ALSO FIXED WITH LD. ITO, WARD- 10(2), NEW DELHI -> TIME BARRING DATE TO BE 31.12.2 015. THIS MEANS THAT THE COMPANY IS REGULARLY ASSESSED WITH DEPARTMENT. 3. IT WAS ALSO HIS SUBMISSION THAT THE SAID COMPANY WHICH IS STATED TO BE A BOGUS COMPANY BY THE REVENUE, STILL CONTINUES TO TRADE AT THE BOM BAY STOCK EXCHANGE AND CURRENT MASTER DATA FROM THE MSA SOUGHT TO BE FILED BY THE LD. AR, IT W AS SUBMITTED, EVIDENCED THIS FACT. THE SAID COMPANY, IT WAS SUBMITTED WAS INCORPORATED IN 1992. REFERRING TO PAGE 11 OF THE ASSESSMENT ORDER PARA 4.10 AND 4.11, IT WAS HIS SUBMISSION THA T OUT OF THE SIX COMPANIES WHICH HAD BEEN CONSIDERED TO BE NON-GENUINE BY THE INVESTIGATION U NIT OF THE INCOME TAX DEPARTMENT, THE SEBI VIDE ITS ORDER DATED 29.06.2015 HELD THAT ONLY FOUR COMPANIES WERE NON-GENUINE AND M/S GOLDLINE INTERNATIONAL FINVEST LTD. WHEREIN THE ASS ESSEE HAD INVESTED IN SHARES WAS NOT HELD TO BE NON-GENUINE BY SEBI. IT WAS SEEN THAT ON A READ ING OF PARA 4.10 AND 4.11, THE FACTS AS ARGUED BY THE LD. AR ARE NOT COMING OUT AS IT MERELY RECOR DS THAT OUT OF THE SIX COMPANIES CONSIDERED FOUR WERE HELD TO BE NOT GENUINE. WHICH WERE THE T WO GENUINE CONCERNS IS NOT CLEARLY SPELT OUT. THE LD. AR WAS REQUIRED TO ADDRESS AS TO HOW THE AS SESSEE WHO HAS NEVER INVESTED IN SHARES AS ITA 1036/CHD/2018 A.Y. 2015-16 PAGE 3 OF 7 NOTED BY THE TAX AUTHORITIES CAME TO INVEST IN A CO MPANY WHICH ADMITTEDLY HAD NO SUPPORTING FACTS JUSTIFYING SUCH A VENTURE. REFERRING TO THE RECORD, IT WAS POINTED OUT THAT THE AO HAS FAULTED THE ASSESSEE ON THESE GROUNDS ALSO AND THAT THE ASSESSEE HAS FAILED TO FURNISH EVIDENCE IN REGARD TO PURCHASE OF THESE SHARES STATED TO HAVE B EEN MADE IN CASH WHEREIN THE ASSESSEE HAS FAILED TO ADDRESS AT WHICH PLACE THE PAYMENT WAS MA DE AND HOW HE CAME ACROSS THE PERSON SHRI GAGAN KUMAR OF BANGALORE FROM WHOM SHARES ARE STATE D TO HAVE BEEN PURCHASED. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS ADDRESSED THESE ISS UES IN HIS STATEMENT RECORDED ON 14.12.2017 BY THE AO IN THE COURSE OF THE ASSESSMENT PROCEEDIN GS ITSELF. THIS HAS BEEN RESPONDED TO IN SPECIFIC QUESTION NO. 6 THAT HE CAME ACROSS SHRI GA GAN KUMAR IN A CLUB IN LUDHIANA. THE RECORDING OF SELECTIVE FACTS IN THE ORDERS WAS ASSA ILED. THE SPECIFIC QUESTION NO. 6 REFERRED TO AND THE ANSWER THERETO IS EXTRACTED HEREUNDER : Q6. HOW DID YOU COME TO KNOW ABOUT THE SHARES OF PVT. UNLISTED COMPANY M/S GOLDLINE INTERNATIONAL FINVEST LIMITED (WHEN YOU BOUGHT THESHARES). A6 AT THAT TIME A PRIVATE CLUB WAS RUNNING IN DHYAN SINGH COMPLEX, NEAR LUDHIANA BUS STAND. THERE I MET SH. GAGAN KUMAR, WH O WAS SELLING THE SHARES OF M/S GOLDLINE INTERNATIONAL FINVEST LI MITED. I ENQUIRED ABOUT THE COMPANY ON MCA WEBSITE (WITHOUT LOGIN, GE NERAL ENQUIRY) AND I DECIDED TO INVEST RS. 15,000/-. 3.1 IT IS PERTINENT TO NOTE THAT THE LD. AR DID NOT REFER TO QUESTION NO. 10 AND 11 WHICH WERE ALSO PUT ACROSS TO THE ASSESSEE AT THE SAID POINT O F TIME. THESE ARE ALSO EXTRACTED HEREUNDER FOR THE SAKE OF COMPLETENESS : Q10. DO YOU HAVE MEMBERSHIP CARD OF THE CLUB RUNNING IN DHYAN SINGH COMPLEX NEAR LUDHIANA BUS STAND A10 I DID NOT HAVE ANY MEMBERSHIP OF THE C LUB AND I AM NOT SURE WHETHER THE CLUB WAS REGISTERED OR NOT. Q11. KINDLY GIVE THE NAME OF THE MEMBERS OR O RGANIZERS OF THE ABOVE CLUB. A11 AT THIS TIME I CANNOT RECALL. 4. THE LD. SR.DR RELIED UPON THE ORDERS. HE ARGUED THAT THE STATEMENT WAS RECORDED BY THE AO. ON QUERY, HE WAS UNABLE TO SHOW FROM THE ORDER OF THE CIT(A) AS TO WHAT FINDING OF FACT HAS BEEN GIVEN QUA THE ASSESSMENTS BEING CONCLUDED BY THE DEPARTMENT OF M/S GOLDLINE INTERNATIONAL FINVEST LTD. WHICH IS SHOWN TO BE CON TINUING OVER THE YEARS, THE CLAIM OF THE ASSESSEE AS ARGUED IS SUPPORTED BY COPIES OF THE AS SESSMENT ORDERS STATED TO BE MADE AVAILABLE TO THE CIT(A). ITA 1036/CHD/2018 A.Y. 2015-16 PAGE 4 OF 7 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE WH O IS A HUF DERIVING INCOME FROM OTHER SOURCES AND CAPITAL GAIN AS PER THE ASSESSMENT O RDER. THE ASSESSEE HUF MADE AN INVESTMENT FOR THE VERY FIRST TIME IN SHARES OF A SPECIFIC COM PANY M/S GOLDLINE INTERNATIONAL FINVEST LTD. THERE IS NOTHING ON RECORD TO SHOW WHETHER THE ASSE SSEE HAS BEEN TAXPAYER OVER THE YEARS BUT THE FACT IS THAT THE ASSESSEE IN THE YEAR UNDER CONSIDE RATION IS FOUND TO HAVE FOR THE FIRST TIME INVESTED IN A COMPANY AS NOTED BY THE AO ACCORDING TO WHOM THE COMPANY HAS BEEN HELD TO BE PENNY STOCK COMPANY WHERE THE OPERATORS ARRANGE FO R BOGUS LONG TERM CAPITAL GAIN OR LOSS. THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEE DINGS WAS REQUIRED TO EXPLAIN THE REASONS FOR THE INVESTMENT AND THE FACTORS TAKEN INTO CONSIDERA TION FOR MAKING THE INVESTMENT AND NAME THE PARTIES TO WHOM THE STOCKS WERE ULTIMATELY SOLD. A PERUSAL OF THE RECORD SHOWS THAT THE SHARES WERE SOLD TO (I) M/S SIDHIMAN VYAPAAR PVT. LTD. (PA N- AATCS3687H); (II) M/S ANTARYAMI TRADERS PVT. LTD. (PAN- AALCA7880J); (III) M/S MURL IDHARGIRDHAR TRADING PRIVATE LIMITED (PAN- AAICM3230H); (IV) SH. KARAN S/O RADHA CHARN, (PAN- ABTPK6055A) AND THE ENQUIRIES MADE BY THE TAX DEPARTMENT OR THE STOCK E XCHANGE SHOWED THAT THEY HAD BEEN MADE THROUGH THE BROKER M/S SHARE INDIA SECURITIES LTD. |AS PER RECORD, NOTICES TO M/S GOLDLINE INTERNATIONAL FINVEST LTD. U/S 133(6) COULD NOT BE SERVED AND ON QUERIES MADE BY THE DEPARTMENT IN THE BACKGROUND OF THE FOUR PARTIES TO WHOM SHARE S WERE STATED TO HAVE BEEN SOLD, IT WAS FOUND THAT M/S SIDDHIMAN VYAPAAR PVT. LTD. AND M/S ANTARY AMI TRADERS PVT. LTD. WERE NOT FILING ANY RETURNS AND THEY WERE NOT FOUND TO BE FUNCTIONING F ROM THE ADDRESSES MADE AVAILABLE. FROM THE ENQUIRY MADE AT THE ADDRESS OF M/S GOLDLINE INTERNA TIONAL FINVEST LTD. RUN BY PARTIES MENTIONED AT PARA 4.5 OF THE ASSESSMENT ORDER, FURTHER EFFORT S MADE U/S 133(6). M/S GOLDLINE INTERNATIONAL FINVEST LTD. WAS NOT FOUND ON THIS ADDRESS. HOWEVE R, SOME EVIDENCE SEEMS TO HAVE BEEN CONSIDERED THAT IT WAS FUNCTIONING AT THAT PLACE AT A CERTAIN POINT OF TIME. FOR CONSIDERING THE CLAIM OF PURCHASE FROM SHRI GAGAN KUMAR THE NOTICE SENT ALSO RETURNED BACK UNSERVED.. STATEMENTS OF SOME SHARE BROKERS, ENTRY OPERATORS A ND EXIST PROVIDERS RECORDED BY INVESTIGATION WING, KOLKATA HAS BEEN REFERRED TO IN PARA 4.12 BY THE AO (I) MR. SANJAY GORA - SHARE BROKER (II)MR. SATYENDERA KUMAR JHA - SHARE BROKER (III)MR .SOUMEN CHOUDERY - ENTRY OPERATOR (IV) MR. SANDEEP SUREKA - EXIT PROVIDER (V)MR. DEVESH UP ADHYAYA - EXIT PROVIDER, ON THE BASIS OF WHICH AND AFTER CARRYING OUT THE ANALYSIS OF THE BA LANCE SHEET OF M/S GOLDLINE INTERNATIONAL FINVEST LTD. IN PARA 5 AT PAGES 16 TO 19, IT WAS CO NCLUDED BY THE AO THAT THE COMPANYS GROWTH IN A SHORT SPAN OF THREE YEARS WITHOUT ANY FINANCIA L BACK UP COULD NOT BE EXPLAINED. IT WAS ITA 1036/CHD/2018 A.Y. 2015-16 PAGE 5 OF 7 CONCLUDED THAT THE GROWTH WAS BASED ON MANAGED TRAN SACTIONS AND THE CLAIM OF LONG TERM CAPITAL GAIN WAS ADDED AS PRE ARRANGED BOGUS CAPITA L. THE BROKERAGE EXPENSES WERE ALSO ADDED AS IT WAS HELD TO BE AN EXPENSE INCURRED TO CONVERT BLACK MONEY INTO LONG TERM CAPITAL GAIN. AS A RESULT THEREOF, ADDITION WAS MADE U/S 69C OF T HE ACT. 6. THE CIT(A) CONFIRMED THE ADDITION HOLDING THAT T HE ASSESSEE HAS BEEN A FUNCTIONARY OF AN ORGANIZED RACKET. HE HAS HELD THAT THE ASSESSEE WAS A BENEFICIARY OF AN ORGANISED RACKET OF PROVIDING BOGUS ENTRIES OF LONG-TERM CAPITAL GAINS ON EXCHANGE OF AN EQUIVALENT AMOUNT OF UNACCOUNTED AND UNTAXED MONEY OR ALONG WITH A MARK- UP FOR COMMISSION OR BROKERAGE. REFERRING TO GENERAL FACTS HE OBSERVED THAT A PENNY STOCK COMPANY IS GENERALLY A COMPANY WITHOUT ANY SIGNIFICANT TRADING, MANUFACTURING OR S ERVICE ACTIVITY, OR WITH HIGH-VOLUME LOW MARGIN TRANSACTIONS-TO GIVE IT A COLOUR OF A NORMAL BUSINESS COMPANY, USED AS A VEHICLE FOR VARIOUS FINANCIAL MANOEUVRES WHICH MAKES IT ILLEGAL AND NOT PERMISSIBLE. HE OBSERVED THAT THESE COMPANIES HAVE A SEMBLANCE OF A GENUINE COMPANY - E XISTENCE OF IDENTITY, A STATUTORY DOCUMENTATION AS NECESSARY FOR A LEGITIMATE BUSINES S CONCERN AND OTHER DOCUMENTATION TRAIL AS A LEGITIMATE COMPANY WOULD NORMALLY HAVE. THE ONLY TH ING, HE OBSERVED WHICH SETS SUCH COMPANIES APART FROM THE GENUINE COMPANY IS LACK OF GENUINENESS IN ITS ACTUAL OPERATIONS. THE OPERATIONS CARRIED OUT BY THESE COMPANIES, HE OBSER VED WERE ONLY TO FACILITATE FINANCIAL MANOEUVRING FOR THE BENEFIT OF ITS CLIENTS, OR, WIT H THE PREDOMINANT UNDERLYING OBJECTIVE, TO GIVE A COLOUR OF GENUINENESS TO THESE ENTITIES. THE PENN Y STOCK COMPANIES, HE NOTED WERE ROUTINELY USED TO LAUNDER UNACCOUNTED MONEY AND THESE WERE HA RD FACTS OF LIFE AND A PART OF THE UNDERBELLY OF THE FINANCIAL WORLD LIKE MANY OTHER EVILS AFFLIC TING THE SOCIETY. EXPOUNDING FURTHER ON HOW THE RIGGING IS DONE, THE CIT(A) NOTED THAT; A BENEFICIARY OF THIS RACKET IS ONE WHO IS DESIROUS OF LAUNDERING HIS UNACCOUNTED AND UNTAXED MONEY. ON HIS REQUEST, HE IS MADE TO BU Y SOME SHARES OF A PREDETERMINED PENNY STOCK COMPANY CONTROLLED BY THE OPERATORS. THE SHARES OF SUCH COMPANIES ARE TRANSFERRED TO THE BENEFICIARY AT A VERY NOMINAL PRICE, MOSTLY OFF-LINE, THROUGH PREFERENTIAL ALLOTMENT OR OFF-LINE SALE, MOSTLY TO SAVE ON STT. THE BENEFICIARY HOLDS THE SHAREFOR ONE YEAR, WHICH IS THE STATUTORY PERIOD AFTER WHICH LONG-TERM CAPITAL GAINS IS EXEMPT UNDER THE PROVISIONS OF SECTION 10 (38) OF THE ACT. IN THE ME ANTIME, THE OPERATORS RIG THE PRICE OF THE STOCK BY CIRCULAR TRADING AND GRADUALLY RAISE ITS PRICE MANIFOLD. THIS IS DONE THROUGH LOW-VOLUME TRANSACTION INDULGED IN BY THE DUMMIES OF THE OPERA TOR AT A PREDETERMINED PRICE. WHEN THE PRICE REACHES THE DESIRED LEVEL, THE BENEFICIARY WHO BOUG HT THE SHARES AT A NOMINAL PRICE, IS MADE TO SELL IT TO A DUMMY PAPER COMPANY MAINTAINED BY THE OPERATOR. FOR THIS, UNACCOUNTED CASH IS ITA 1036/CHD/2018 A.Y. 2015-16 PAGE 6 OF 7 PROVIDED BY THE BENEFICIARY WHICH IS ROUTED THROUGH A FEW LAYERS OF PAPER COMPANIES BY THE OPERATOR AND IS FINALLY PARKED WITH THE DUMMY PAPER COMPANY THAT ULTIMATE LY BUYS THE SHARES. THEREAFTER HE MADE A REFERENCE TO SOME ORDER OF SEB I, THE ADDITION HAS BEEN CONFIRMED: 14 . NOW COMING TO THE SPECIFICS OF THE INSTANT CASE, IT IS NOTED WITH CONCERN THAT THE APPELLANT HUF IS NOT A REGULAR INVESTOR IN AS MUCH AS IT HAS NOT, IN THE PAST, SPENT ANY CONSIDERABLE AMOUNT ON PURCHASE OF SHARES OF COMPAN IES. THIS PURCHASE IS AN ISOLATED TRANSACTION. THE PURCHASE OF 10,000 SHARES OF AN EN TIRELY UNKNOWN COMPANY, M/S GIF LTD., WHICH HAD NO CREDENTIALS AT ALL, FROM A PERSO N LOCATED AT BANGALORE @ RS.1.50/- PER SHARE IN CASH FOR AN AMOUNT OF RS.15,000/-IS, D ECIDEDLY, A PRE-MEDITATED ACT WITH DUBIOUS MOTIVES. SUCH ISOLATED INVESTMENT CANNOT, I N THE CIRCUMSTANCES NOW KNOWN, BE CLOAKED WITH A COVER OF GENUINE TRANSACTION AIMED A T REAPING BENEFITS EITHER BY WAY OF ANY DIVIDEND OR GENERAL APPRECIATION OF THE PRICE O F THE SHARES IN DUE COURSE. THE INTENTION BEHIND SUCH A PURCHASE IS NOT FAR TO SEEK . IT WAS ONLY MEANT TO ENCASH IT AFTER HOLDING IT FOR A YEAR, WHEN THE PRICE OF THE SHARE WOULD BE MANIPULATED AND NGGED AND WOULD BE SOLD THROUGH THE GOOD OFFICES OF A BROKER WHO IS PART OF THE RACKET. MERELY BECAUSE THE APPELLANT HUF RECEIVED THE SALE CONSIDE RATION THROUGH BANKING CHANNELS DOES NOT ESTABLISH THE GENUINENESS OF THE TRANSACTI ON. FROM THE CIRCUMSTANCES, IT CAN SAFELY BE DEDUCED THAT DESPITE THE APPARENT COMPLIA NCE TO THE FORMALITIES IN TERMS OF SALE THROUGH REGISTERED SHARE BROKERS AND RECEIPT O F SALE CONSIDERATION BY BANKING CHANNELS, SALE ON THE SCREEN OF STOCK EXCHANGE AND PAYMENT OF STT THEREON, THE APPELLANT HUF ACTUALLY AND IN REALITY ONLY INDULGED IN LAUNDERING ITS UNACCOUNTED MONEY THROUGH THE CARTEL OF BROKERS AND OPERATORS/T HE PROBABILITY OF THE APPELLANT HUF INDULGING IN THIS NEFARIOUS ACT IS HEAVILY STAC KED AGAINST IT. WHEN THE SHARES OF M/S GIF LTD. WAS PURCHASED FROM SHRI GAGAN KUMAR OF BAN GALORE FOR A PITTANCE, IT WAS QUITE KNOWN TO THE APPELLANT THAT IT WAS ONLY A PAP ER COMPANY. THERE WAS A MEETING OF MINDS REGARDING THE CONSPIRACY OF BUYING SHARES AT A NEGLIGIBLE VALUE AND HOLDING IT FOR A YEAR TO ESCAPE THE RIGOURS OF TAXATION ON THE SAL E PROCEEDS WHICH WOULD BE MANY TIMES HIGHER THAN THE PURCHASE AMOUNT. THERE WAS NO WORTH WHILE BUSINESS IN THE SAID COMPANY WHICH COULD HAVE ATTRACTED THE APPELLANT HU F, WHO WAS NOT EVEN A REGULAR INVESTOR IN THE STOCK MARKET. THE CREDENTIALS OF TH E COMPANY, M/S GIF LTD. WAS NOT SUCH AS TO PERSUADE ANYBODY TO INVEST FOR ULTIMATE ADVAN TAGE IN TERMS OF EITHER DIVIDEND OR GENUINE APPRECIATION IN THE PRICE OF THE SHARES. WI TH THE MANIPULATION INDULGED IN BY THE OPERATORS AND BROKERS, THE APPELLANT WAS SUCCESSFUL IN LAUNDERING ITS UNACCOUNTED MONEY. THERE WAS NO BUSINESS IN THE COMPANY, WHOSE SHARES LEAD TO SUCH A HUGE GAIN TO THE APPELLANT HUF. 7. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE I TAT. ON A CONSIDERATION OF THE FACTS RECORDED IT IS SEEN THAT NO SPECIFIC FINDING HAS BE EN GIVEN BY THE CIT(A) ON THE ISSUE WHETHER M/S GOLDLINE INTERNATIONAL FINVEST LTD. WAS HELD TO BE A NON-GENUINE COMPANY BY SEBI OR NOT. IN THE FACTS ON RECORD, IT IS SEEN THAT THE ASSESSE E HAS CLAIMED THAT M/S GOLDLINE INTERNATIONAL FINVEST LTD. IS A COMPANY WHICH CONTINUE TO TRADE A T THE BOMBAY STOCK EXCHANGE. IT IS THE CLAIM OF THE ASSESSEE THAT M/S GOLDLINE INTERNATION AL FINVEST LTD. HAS NOT BEEN HELD TO BE A BOGUS COMPANY. THE ASSESSMENT ORDERS DATED 31.12.2 015, 31.12.2017 AND 31.12.2016 PERTAINING TO 2013-14, 2015-16 AND 2014-15 ASSESSME NT YEARS IN THE CASE OF M/S GOLDLINE ITA 1036/CHD/2018 A.Y. 2015-16 PAGE 7 OF 7 INTERNATIONAL FINVEST LTD. HAVE ALSO BEEN RELIED UP ON TO SHOW THAT IT IS A COMPANY WHICH IS DOING GENUINE BUSINESS. IT HAS BEEN ARGUED THAT THESE CL AIMS HAVE BEEN MADE BEFORE THE CIT(A) AND THUS THE ADDITION BE DELETED. HOWEVER, I FIND THAT IN THE ABSENCE OF ANY DISCUSSION ON THESE ISSUES, IT WOULD BE APPROPRIATE TO REMAND THE ISSUE S BACK TO THE CIT(A) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW ADDRESSING THE SPECIFICS OF THE PRESENT CASE. THE REMAND IS MADE TAKING NOTE OF THE FACT THAT THE TAX AUTHORITIES IN THE LIGHT OF THE DISCUSSION IN THE IMPUGNED ORDER OF THE MANIPULATIVE PRACTICES OF DUB IOUS COMPANIES, I HOLD WERE FULLY JUSTIFIED ON FACTS TO BE VIGILANT, ALERT AND ALIVE TO THE POS SIBLE MONEY LAUNDERING ACTIVITIES OF SOME PARTIES, HOWEVER THE FACTS AVAILABLE I.E. THAT NO A CTION ADVERSE TO THE SAID COMPANY HAS BEEN TAKEN BY SEBI AND IT CONTINUES TO TRADE ON THE BOMB AY STOCK EXCHANGE AS ON DATE ARE CLAIMS MADE IN SUPPORT OF THE TRANSACTIONS. THESE CLAIMS N EED TO BE ADDRESSED BY CATEGORIC FINDINGS. ACCORDINGLY, WHILE DIRECTING A REMAND, IT IS ADVISE D THAT THE ASSESSEE SHALL MAKE FULL AND PROPER COMPLIANCES BEFORE THE CIT(A) AS IN THE EVENTUALITY OF ABUSE OF THE TRUST REPOSED, THE CIT(A) SHALL BE AT LIBERTY TO PASS AN ORDER ON THE BASIS O F MATERIAL AVAILABLE ON RECORD AND CARRYING OUT NECESSARY ENQUIRIES ETC. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS REM ANDED WITH THE ABOVE OBSERVATIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JUNE, 2019. SD/- ( ) (DIVA SINGH) ! /JUDICIAL MEMBER $ % %( )* +* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ! , / CIT 4. ! , ( )/ THE CIT(A) 5. *-. / , # / , 012.3 / DR, ITAT, CHANDIGARH 6. .2 4' / GUARD FILE %( ! / BY ORDER, 5 / ASSISTANT REGISTRAR