Krishna Devi, New Delhi V. ITO, Ward-38(3), New Delhi

ITA 1070/DEL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6236 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 11-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Share purchase agreement; Question of law; Avoidance of tax; Penny stocks; Capital Gains; Bogus
• Section: 131; 68; 69; 10; 69C; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.1069 /DEL/2019 ASSESSMENT YEAR: 2014-15 SMT. KARUNA GARG 343, NEELKANTH APARTMENT PLOT NO.49, SECTOR-13, ROHINI, DELHI-110085 PAN NO.AALPG1948E VS INCOME TAX OFFICER WARD - 39 (4) NEW DELHI (APPELLANT) (RESPONDENT) ITA NO.2772/DEL/2019 ASSESSMENT YEAR: 2015-16 SMT. KARUNA GARG 343, NEELKANTH APARTMENT PLOT NO.49, SECTOR-13, ROHINI, DELHI-110085 PAN NO.AALPG1948E VS INCOME TAX OFFICER WARD - 39 (4) NEW DELHI (APPELLANT) (RESPONDENT) ITA NO.1168/DEL/2019 ASSESSMENT YEAR: 2014-15 BINDU GARG D-47, INDRAPRASTHA APARTMENTS, SECTOR-14, ROHINI, NEW DELHI-110085 PAN NO.AEFPG0635N VS INCOME TAX OFFICER WARD 39 (4) NEW DELHI (APPELLANT) (RESPONDENT) 2 ITA NO.1169/DEL/2019 ASSESSMENT YEAR: 2015-16 BINDU GARG D-47, INDRAPRASTHA APARTMENTS, SECTOR-14, ROHINI, NEW DELHI-110085 PAN NO.AEFPG0635N VS INCOME TAX OFFICER WARD 39 (4) NEW DELHI (APPELLANT) (RESPONDENT) ITA NO.1070/DEL/2019 ASSESSMENT YEAR: 2015-16 KRISHNA DEVI D-47, INDRAPRASTHA APARTMENTS, SECTOR-14, ROHINI, NEW DELHI-110085 PAN NO.ABRPD0875E VS INCOME TAX OFFICER WARD 38 (3) NEW DELHI (APPELLANT) (RESPONDENT) ITA NO.1264/DEL/2019 ASSESSMENT YEAR: 2015-16 HARDEV SAHAI GUPTA (GARG), D-47, INDRAPRASTHA APARTMENT, SECTOR-14, ROHINI-110085 PAN NO.AAHPG1190N VS INCOME TAX OFFICER WARD 39 (4) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. KAPIL GOEL, ADVOCATE RESPONDENT BY MS. RINKU SINGH, SR. DR DATE OF HEARING: 31/07/2019 DATE OF PRONOUNCEMENT: 06/08/2019 3 ORDER PER N. K. BILLAIYA, AM: CAPTIONED APPEALS ARE BY DIFFERENT APPELLANTS PREF ERRED AGAINST THE SEPARATE ORDERS OF THE CIT(A) FOR A. Y. 2014-15 AND 2015-16. 2. REPRESENTATIVES OF BOTH THE SIDES AGREED THAT TH E UNDER LYING FACTS IN THE DISPUTE ARE IDENTICAL IN THE CASE OF A LL THE AFOREMENTIONED APPELLANTS. ON SUCH CONCESSION WE HE ARD THE REPRESENTATIVES ON THE FACTS OF ITA NO.1069/DEL/201 9 FOR A. Y.2014-15. FACTS 3. THE APPELLANT PURCHASED SHARES OF FOLLOWING COMP ANIES:- 1. M/S. ESTEEM BIO ORGANIC FOOD PROCESSING LTD. 6,000 SHARES ON 11.02.2013 2. M/S. RANDERS CORPORATION LTD. 3500 SHARES ON 20.11.2012 4. THE SHARES WERE PURCHASED ONLINE THROUGH TWO BRO KERS NAMELY ISF SECURITIES AND SMC GLOBAL SECURITIES STA TIONED AT NEW DELHI. 5. SHARES OF M/S. ESTEEM BIO ORGANIC FOOD PROCESSIN G LTD. WHICH WERE PURCHASED ON 11.02.2013 WERE DEMATERIALI ZED ON THE SAME DATE AS PER THE DE-MAT STATEMENT EXHIBITED AT PAGE 5 OF THE PAPER BOOK. THE PURCHASE CONSIDERATION PAID TO ISF SECURITIES LIMITED WAS ALSO PAID ON THE SAME DATE I.E. ON 11.0 2.2013 WHICH IS EVIDENT FROM THE BANK STATEMENT OF HDFC BANK WHI CH IS AT PAGE 4 OF THE PAPER BOOK. SHARES OF M/S. RANDER CO RPORATION 4 LTD. PURCHASED ON 20.11.2012 WERE KEPT IN THE COMMO N POOL ACCOUNT WITH SMC GLOBAL SECURITIES LIMITED WHICH IS EVIDENT FROM PAGE 6 OF THE PAPER BOOK. THE PURCHASE CONSIDERATI ON WAS PAID ON 23.11.2012 WHICH IS EVIDENT FROM THE BANK STATEM ENT OF HDFC BANK EXHIBITED AT PAGE 3 OF THE PAPER BOOK. 6. SHARES OF M/S. ESTEEM BIO ORGANIC FOOD PROCESSIN G LTD. WERE SOLD ON DIFFERENT DATES NAMELY 22.02.2014 1200 SHARES, 28.02.2014 1200 SHARES, 04.03.2014 2400 SHARES AND ON 06.03.2014 1200 SHARES. THE SALE TRANSACTIONS WERE DONE THROUGH THE DE-MAT ACCOUNT VIA ONLINE TRADING. 7. THE 3500 SHARES OF M/S. RANDER CORPORATION LIMIT ED WERE SPLIT IN THE RATIO OF 1:10 AND 3500 SHARES PURCHASE D BY THE ASSESSEE BECAME 35000 SHARES. 35000 SHARES WERE SOL D ON 03.02.2014. THE TRANSACTION WAS DONE THROUGH DE-MA T ACCOUNT VIA ONLINE TRADING. 8. THE RETURN OF INCOME WAS ELECTRONICALLY FILED WH ICH WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY ST ATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF RS.4051874/- FROM SALE OF SHARES AND HAS CLAIMED TH E SAME AS EXEMPTED U/S. 10 (38) OF THE ACT. ASSESSING OFFICERS OBSERVATION 9. THE ASSESSING OFFICER PROCEEDED BY HEAVILY RELYI NG UPON THE INVESTIGATION REPORT OF PR. DIT (INVESTIGATION) CAL CUTTA UNIT 5 REGARDING LIST OF COMPANIES ENGAGED IN PROVIDING AC COMMODATION ENTRIES IN THE GARB OF BOGUS LONG TERM CAPITAL GAIN MODUS OPERANDI INVOLVING THE PENNY STOCKS TRADING THROUGH RECOGNIZED STOCK EXCHANGES. THE ASSESSING OFFICER OBSERVED THA T THE ASSESSEE WAS ONE AMONG THE BENEFICIARIES IN THE LIS T BY ACCEPTING BOGUS LONG TERM CAPITAL GAIN ENTRIES THROUGH STOCK BROKERS TRADING IN CIRCULAR, PENNY STOCKS. THE ASSESSING O FFICER FURTHER OBSERVED THAT THE ASSESSEE HAS TRADED THE SCRIPT WH ERE FUNDS WERE RECEIVED FROM KOLKATA BASED COMPANY AND OPERAT ED BY ENTRY OPERATORS. 10. TO VERIFY THE AFOREMENTIONED TRANSACTIONS REPOR TED BY THE ASSESSEE, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH ALL DETAILS INCLUDING BANK STATEMENT, SHARE BROKERS NOT E, LEDGER ACCOUNT COPIES, SHARE CERTIFICATES, AND ALL DOCUMEN TARY EVIDENCES IN SUPPORT OF PURCHASE AND SALE OF SHARES AND MODE OF PAYMENT AND RECEIPTS OF PROCEEDS. 11. THE ASSESSEE FURNISHED THE REQUIRED DETAILS BUT THE ASSESSING OFFICER RUBBISHED THE SAME OBSERVING THAT THE ASSESSEE HAS METICULOUSLY FRAMED CHRONOLOGICALLY ORDER TO CL AIM EXEMPTION U/S.10 (38) OF THE ACT. 12. THE ASSESSING OFFICER OBSERVED THAT THE CLAIM O F THE ASSESSEE IS UNVERIFIABLE AND REPRESENTATIVE OF INTR ODUCTION OF ASSESSEES UNACCOUNTED MONEY INFUSED IN THE SHARE T RANSACTION. ACCORDING TO THE ASSESSING OFFICER THE ALLEGED TRAN SACTIONS OF PURCHASE AND SALE OF SHARES WERE NOT REAL BUT A SHA M TRANSACTION. THE ASSESSING OFFICER OBSERVED THAT TH E MODUS OPERANDI GENERALLY FOLLOWED IN SUCH TRANSACTIONS WA S FOLLOWED BY 6 THE ASSESSEES STOCK BROKER ENABLING THE ASSESSEE T O INTRODUCE HIS UNACCOUNTED MONEY IN HIS BOOKS IN THE GARB OF LONG TERM CAPITAL GAINS ACCORDING TO THE ASSESSING OFFICER THE INPUT OF THE INVESTIGATION REPORT OF INVESTIGATION WING CALCUTTA STRENGTHEN THE THEORY OF SHAM TRANSACTION IN THE FOLLOWING MANNER :- (A) THE SHARE BROKER INVOLVED ADMITTED THAT THEY HA D RECEIVED CASH FROM THE BENEFICIARIES INCLUDING THE ASSESSEE AND THE SAME WAS RETURNED IN THE FORM OF SALE PROCEEDS OF SHARES AFTER PAYING STT. (B) THE ADMISSION OF THE ENTRY PROVIDERS REVEALED T HAT SHARE SALE TRANSACTION WERE NOTHING BUT ACCOMMODATION ENT RIES WHEREIN CHEQUES WERE ISSUED IN LIEU OF CASH. (C ) THE STOCK BROKER HAD RESORTED TO MONEY LAUND ERING ACTIVITIES BY USING PENNY STOCK. THE SHARE PRICES OF THE PE NNY STOCKS WERE ARTIFICIALLY INFLATED BY THE STOCK BROKERS SO THAT CAPITAL GAIN COULD BE INTRODUCED IN THE BOOKS OF ACCOUNTS UNACCO UNTED MONEY BY CONVERTING BLACK MONEY INTO WHITE IN THE BOOKS O F ACCOUNTS AND CLAIMED EXEMPT U/S. 10 (38) OF THE ACT. 13. ONCE AGAIN DRAWING FULL SUPPORT FROM THE REPORT OF THE INVESTIGATION WING CALCUTTA THE ASSESSING OFFICER W AS OF THE FIRM BELIEF THAT PROVISIONS OF SECTION 68 OF THE ACT SQU ARELY APPLY. 14. IN VIEW OF HIS STRONG BELIEF THE ASSESSING OFFI CER ISSUED SUMMONED U/S.131 OF THE ACT TO THE ASSESSEE TO RECO RD HIS STATEMENT ON OATH ABOUT THE VERACITY OF PROCUREMENT OF ACCOMMODATION ENTRY. THE ASSESSEE APPEARED WHOSE ST ATEMENT WAS RECORDED ON 16.12.2016. THEREAFTER THE ASSESSI NG OFFICER ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ASKING T O EXPLAIN ON 7 ALL THE POINTS RAISED IN THE SHOW CAUSE TO ESTABLIS H THE GENUINENESS OF ITS INCOME SHOWN ON ACCOUNT OF LTCG ON SALE OF PENNY STOCK OF M/S. ESTEEM BIO ORGANIC FOOD PROCESS ING LTD AND M/S. RANDER CORPORATION LIMITED. THE SHOW CAUSE NO TICE RUNS INTO 30 PAGES AND STARTS FROM PARA 8 OF THE ASSESSM ENT ORDER TO PARA 21 OF THE ASSESSMENT ORDER. THE SHOW CAUSE NO TICE INCORPORATE ALL THE STATEMENTS RECORDED BY THE INVE STIGATION WING, CALCUTTA. THE ASSESSING OFFICER FURTHER OBSERVED TH AT THE BROKERS IN THE CALCUTTA EXCHANGE DEALING WITH THE SCRIPTS H AVE ALSO ADMITTED OF RIGGING THE SHARES AND PROVIDING ACCOMM ODATION ENTRIES TO THE BENEFICIARIES INCLUDING THE ASSESSEE IN THE FORM OF LTCG. ACCORDING TO THE ASSESSING OFFICER THE UNUSUA L TRANSACTIONS OF SHARES PURCHASED AND EXEMPT GAINS C REATE DOUBT OF THE GENUINENESS ON THE PURCHASES OF SHARE TRANSA CTION SPECIFICALLY WHEN THE PURCHASES IS FROM THE COMPANY WHERE MAJOR SHARE MANIPULATION TRANSACTIONS WERE UNEARTHED BY T HE INCOME TAX DEPARTMENT. 15. FURTHER DRAWING SUPPORT FROM ONE OF THE STATEME NTS RECORDED BY THE INVESTIGATION WING, CALCUTTA, THE A SSESSING OFFICER WAS CONVINCED THAT THE ASSESSEE MUST HAVE P AID COMMISSION @ 7% TO THE BROKER WHO ARRANGED CAPITAL GAINS. 16. THE ASSESSING OFFICER DRAWING SUPPORT FROM THE REPORT OF THE INVESTIGATION WING, CALCUTTA AND FURTHER REFERRING TO VARIOUS JUDICIAL DECISIONS FINALLY CAME TO THE CONCLUSION T HAT THE ASSESSEE HAS ENTERED INTO COLOURABLE DEVICE FOR AVOIDANCE OF TAX AND THE RECEIPT OF RS.44,65,717/- IS THE NOTHING BUT UNEXPL AINED CASH CREDIT U/S 68 OF THE ACT TO BE TAXED U/S. 115 BBE O F THE ACT AND 8 MADE ADDITION OF RS.44,65,717/- U/S. 68 OF THE ACT AND RS.283631/- U/S. 69C AS UNEXPLAINED EXPENDITURE. 17. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) B UT WITHOUT ANY SUCCESS. 18. THE CIT(A) WAS CONVINCED WITH THE FINDINGS OF T HE ASSESSING OFFICER AND CONFIRMED THE ASSESSMENT HOLDING AS UND ER :- 5.5 AS CAN BE SEEN FROM THE MAGNITUDE, VOLUME AND SURGICAL PRECISION OF THE ENTIRE OPERATION, IT WAS AN EXERCI SE WHICH WAS TARGETED TO INTRODUCE UNACCOUNTED MONEY INTO THE BO OKS ,THAT TOO WITHOUT PAYING TAXES, BY ABUSING THE EXEMPTION PROV ISIONS U/S 10(38) OF THE STATUTE, TO CIRCUMVENT THE LAW OF THE LAND, EVADE TAXES AND DEPRIVE THE EXCHEQUER OF ITS RIGHTFUL DUE. THE PLETHORA OF CASES QUOTED BY THE AO ALL LEND SUPPORT TO HIS DECISION, ESPECIALLY IN SUCH SCAM RIDDEN CASES, WHEREIN IT IS ESSENTIAL TO PIERC E THE VEIL OF LEGITIMACY AND INNOCENCE/ IGNORANCE AND LOOK BEHIND THE CHARADE WOVEN TO EVADE TAXES. ON THE OTHER HAND, AFTER DUE CONSIDERATION OF ARGUMENTS PUT FORTH BY THE APPELLANT, IT IS HELD TH AT THE LD. AR HAS NOT BEEN ABLE TO CONTROVERT/ SUCCESSFULLY DISTINGUI SH THE JUDICIAL PRONOUNCEMENTS QUOTED BY THE AO. ACCORDINGLY, THE A DDITION OF RS. 44,65,717/- U/S 68 OF THE IT ACT R. W. S. 115 BBE M ADE BY THE AO, IS CONFIRMED. 5.6 AO HAS MADE AN ADDITION OF 7% OF TOTAL LONG TE RM CAPITAL GAINS EARNED (RS. 40,51,874/-) AMOUNTING TO RS.2,83,631/- AS EXPENDITURE INCURRED OUT OF BOOKS TO OBTAIN SUCH ENTRY. WHILE T HE APPELLANT CLAIMS 9 IT TO BE A GENUINE TRANSACTION AND THE ADDITION BEI NG PRESUMPTIVE, IT IS A WELL KNOWN FACT, THAT THERE ARE NO FREE LUNCHES I N THE BUSINESS WORLD. AS HAS BEEN BROUGHT OUT IN VARIOUS REPORTS, THERE WERE MULTIPLE OPERATORS/ PARTIES. STATEMENT RECORDED OF SOME OF T HE OPERATORS CATEGORICALLY CONFIRMED UNDER STATEMENT ON OATH, TH AT COMMISSION WAS CHARGED AT VARYING RATES FROM 1 TO 7%. ACCORDIN GLY, THE ADDITION OF RS. RS.2,83,631/- (7% OF RS. 40,51,874/-) U/S 69 C OF THE IT ACT, IS HEREBY CONFIRMED. DECISION 19. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW AND THE RELEVANT DOCUMENTARY EVIDENCES BROUGH T ON RECORD IN THE FORM OF PAPER BOOK IN THE LIGHT OF RULE 18 ( 6) OF ITAT RULES. WHETHER OR NOT A PERSON HAS DISCHARGED THE BURDEN C AST UPON HIM BY THE PROVISIONS OF SECTION 68 OF THE IT ACT I S ALWAYS A QUESTION OF FACT. ALL THAT HAS TO BE SEEN BY US IS WHETHER THE APPELLANT HAS DISCHARGED THE INITIAL ONUS CAST UPON HIM BY THE PROVISIONS OF SECTION 68 OF THE IT ACT. 20. THERE IS NO DISPUTE THAT THE SHARES OF THE TWO COMPANIES WERE PURCHASED ONLINE, THE PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNEL, AND THE SHARES WERE DEMATERIALIZED AND THE SALES HAVE BEEN ROUTED FROM DE-MAT ACCOUNT AND THE CONSIDERATION HAS BEEN RECEIVED THROUGH BANKING CHA NNELS. 10 21. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSING OFFICER WAS CARRIED AWAY BY THE REPORT OF THE INVESTIGATION WING KOLKATA. IT CAN BE SEEN THAT TH E ENTIRE ASSESSMENT HAS BEEN FRAMED BY THE ASSESSING OFFICER WITHOUT CONDUCTING ANY ENQUIRY FROM THE RELEVANT PARTIES OR INDEPENDENT SOURCE OR EVIDENCE BUT HAS MERELY RELIED UPON THE S TATEMENTS RECORDED BY THE INVESTIGATION WING AS WELL AS INFOR MATION RECEIVED FROM THE INVESTIGATION WING. IT IS APPARENT FROM T HE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS NOT CONDUCTED ANY INDEPENDENT AND SEPARATE ENQUIRY IN THE CASE OF THE ASSESSEE. EVEN, THE STATEMENT RECORDED BY THE INVESTIGATION W ING HAS NOT BEEN GOT CONFIRMED OR CORROBORATED BY THE PERSON DU RING THE ASSESSMENT PROCEEDINGS. 22. SECTION 142 OF THE ACT CONTAINS THE PROVISIONS RELATING TO ENQUIRY BEFORE ASSESSMENT. 23. IT IS PROVIDED U/S. 142 (2) OF THE ACT THAT FOR THE PURPOSE OF OBTAINING FULL INFORMATION IN RESPECT OF INCOME OR LOSS OF ANY PERSON, THE ASSESSING OFFICER MAY MAKE SUCH ENQUIRY AS HE CONSIDERS NECESSARY. IN OUR CONSIDERED VIEW THE AS SESSING OFFICER OUGHT TO HAVE CONDUCTED A SEPARATE AND INDEPENDENT ENQUIRY AND ANY INFORMATION RECEIVED FROM THE INVESTIGATION WIN G IS REQUIRED TO BE CORROBORATED AND REAFFIRM DURING THE ASSESSME NT BY THE ASSESSING OFFICER BY EXAMINING THE CONCERNED PERSON S WHO CAN AFFIRM THE STATEMENTS ALREADY RECORDED BY ANY OTHER AUTHORITY OF THE DEPARTMENT. FACTS NARRATED ABOVE CLEARLY SHOW T HAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY AND THE ENTIRE 11 ASSESSMENT ORDER AND THE ORDER OF THE FIRST APPELLA TE AUTHORITY ARE DEVOID OF ANY SUCH ENQUIRY. 24. THE REPORT FROM THE DIRECTORATE INCOME TAX INVE STIGATION WING, KOLKATA IS DATED 27.04.2015 WHEREAS THE IMPUG NED SALES TRANSACTIONS TOOK PLACE IN THE MONTH OF MARCH, 2014 . THE EXPARTE AD INTERIM ORDER OF SEBI IS DATED 29.06.2015 WHEREI N AT PAGE 34 UNDER PARA 50 (A) M/S. ESTEEM BIO ORGANIC FOOD PROC ESSING LTD WAS RESTRAINED FROM ACCESSING THE SECURITIES MARKET AND BUYING SELLING AND DEALING IN SECURITIES EITHER DIRECTLY O R INDIRECTLY IN ANY MANNER TILL FURTHER DIRECTIONS. A LIST OF 239 PERSO NS IS ALSO MENTIONED IN SEBI ORDER WHICH ARE AT PAGES 34 TO 42 OF THE ORDER THE NAMES OF THE APPELLANTS DO NOT FIND PLACE IN TH E SAID LIST. AT PAGES 58 AND 59 THE NAMES OF PRE IPO TRANSFEREE IN THE SCRIP OF M/S. ESTEEM BIO ORGANIC FOOD PROCESSING LTD IS GIVE N AND IN THE SAID LIST ALSO THE NAMES OF THE APPELLANTS DO NOT F IND ANY PLACE. AT PAGE 63 OF THE SEBI ORDER-TRADING BY TRADING IN M/S. ESTEEM BIO ORGANIC FOOD PROCESSING LTD - A FURTHER LIST OF 25 PERSONS IS MENTIONED AND ONCE AGAIN THE NAMES OF THE APPELLANT S DO NOT FIND PLACE IN THIS LIST ALSO. 25. AS MENTIONED ELSEWHERE THE BROKERS OF THE ASSES SEE NAMELY ISG SECURITIES LIMITED AND SMC GLOBAL SECURITIES LI MITED ARE STATIONED AT NEW DELHI AND THEIR NAMES ALSO DO NOT FIND PLACE IN THE LIST MENTIONED HERE IN ABOVE IN THE SEBI ORDER. THERE IS NOTHING ON RECORD TO SHOW THAT THE BROKERS WERE SUS PENDED BY THE SEBI NOR THERE ANYTHING ON RECORD TO SHOW THAT THE TWO BROKERS OF THE APPELLANTS MENTIONED HERE IN ABOVE W ERE INVOLVED IN THE ALLEGED SCAM. THE ASSESSING OFFICER HAS NOT EVEN 12 CONSIDERED EXAMINING THE BROKERS OF THE APPELLANTS. IT IS A MATTER OF FACT THAT SEBI LOOKS INTO IRREGULAR MOVEMENTS IN SHARE PRICES ON RANGE AND WARN INVESTOR AGAINST ANY SUCH UNUSUAL INCREASE IN SHARES PRICES. NO SUCH WARNINGS WERE ISSUED BY THE SEBI. 26. THERE IS NO DISPUTE THAT THE STATEMENTS WHICH W ERE RELIED BY THE ASSESSING OFFICER WERE NOT RECORDED BY THE ASSE SSING OFFICER IN THE ASSESSMENT PROCEEDINGS BUT THEY WERE PRE-EXI STING STATEMENTS RECORDED BY THE INVESTIGATION WING AND T HE SAME CANNOT BE THE SOLE BASIS OF ASSESSMENT WITHOUT COND UCTING PROPER ENQUIRY AND EXAMINATION DURING THE ASSESSMENT PROCE EDINGS ITSELF. IN OUR HUMBLE OPINION, NEITHER THE ASSESSIN G OFFICER CONDUCTED ANY ENQUIRY NOR HAS BROUGHT ANY CLINCHING EVIDENCES TO DISPROVE THE EVIDENCES PRODUCED BY THE ASSESSEE. THE REPORT OF INVESTIGATION WING IS MUCH LATER THAN THE DATES OF PURCHASE / SALE OF SHARES AND THE ORDER OF THE SEBI IS ALSO MU CH LATER THAN THE DATE OF TRANSACTIONS TRANSACTED AND NOWHERE SEB I HAS DECLARED THE TRANSACTION TRANSACTED AT EARLIER DATE S AS VOID. 27. OUR ABOVE VIEW IS FORTIFIED BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF FAIR INVEST LIMITED REPORTED IN 357 ITR 146. THE RELEVANT FINDINGS OF THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI READ AS UNDER :- '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF THE PARTIES. IN THIS CASE THE DISCUSSION BY THE CIT(/4PPEALS) WOULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED COPIES ISSUED BY THE REGISTRAR OF COMPANIES IN RELATION TO THE SHARE APPLICATION, AFFIDAVITS OF THE DIRECTORS, FORM 2 FI LED 13 WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICANT FOR COMPANY'S SHARES, CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE ASSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF THE INVESTIGATION REPORT AND THE STATEMENT OF MR. MAHESH GARG. TO ELEVATE THE INFERENCE WHICH CAN BE DRAWN ON THE BASIS OF READING OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE SO WHEN THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE ASSESSING OFFICER OUGHT TO HAVE DONE WAS T O ENQUIRE INTO THE MATTER BY, IF NECESSARY, INVOKING HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIRECTORS. NO EFFORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCLOSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING OFFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FACTS AND THE STATEMENTS OF MR. MAHESH GAR G THAT THE INCOME SOUGHT TO BE ADDED FELL WITHIN THE DESCRIPTION OF SECTION 68.' 28. THE DR HEAVILY RELIED UPON THE JUDGMENT OF HON BLE HIGH COURT OF DELHI IN THE CASE OF UDIT KALRA VS. ITO IN ITA NO.220/2019. WE HAVE CAREFULLY PERUSED THE ORDER O F THE HONBLE HIGH COURT AND ON GOING THROUGH THE SAID JUDGMENT W E FIND THAT NO QUESTION OF LAW WAS FORMULATED BY THE HONBLE HI GH COURT OF 14 DELHI IN THE SAID CASE AND THERE IS ONLY DISMISSAL OF APPEAL IN LIMINE AS THE HONBLE HIGH COURT FOUND THAT THE ISS UE INVOLVED IS A QUESTION OF FACT. 29. AS MENTIONED ELSEWHERE THE SHARES OF M/S. ESTEE M BIO ORGANIC FOOD PROCESSING LTD WERE SUSPENDED FROM TRA DING IN THE STOCK EXCHANGE BUT THAT WAS FROM 29.06.2015 WHICH I S DATE OF THE ORDER OF THE SEBI. THE SHARES OF TWO COMPANIES WER E PURCHASED BY THE ASSESSEE IN THE MONTH OF FEBRUARY 2013 AND N OVEMBER, 2012 WHICH WERE SOLD IN THE MONTH OF FEBRUARY/ MARC H 2014 AND THESE TRANSACTIONS TOOK PLACE MUCH BEFORE THE REPOR T OF THE INVESTIGATION WING AND ALSO BEFORE THE ORDER OF THE SEBI. 30. CONSIDERING THE VORTEX OF EVIDENCES, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS CAST UPON HIM BY PROVISIONS OF SECTION 68 OF THE ACT AS MENTIONED ELSEWHERE, SUCH DISCHARGE OF ONUS IS PURELY A QUEST ION OF FACT AND THEREFORE THE JUDICIAL DECISIONS RELIED UPON BY THE DR WOULD DO NO GOOD ON THE PECULIAR PLETHORA OF EVIDENCES IN RESPE CT OF THE FACTS OF THE CASE IN HAND AND HENCE THE JUDICIAL DECISION S RELIED UPON BY BOTH THE SIDES, THOUGH PERUSED, BUT NOT CONSIDER ED ON THE FACTS OF THE CASE IN HAND. 31. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ACCEPT THE LONG TERM CAPITAL GAINS DECLARED AS SUCH. 32. AS MENTIONED ELSEWHERE THE FACTS OF ALL THE APP ELLANTS ARE IDENTICAL, THE COMPANIES WHOSE SHARES HAVE BEEN PUR CHASED / SOLD GIVING RISE TO LONG TERM CAPITAL GAIN ARE SAME , THOUGH THE QUANTUM MAY DIFFER. FOR OUR DETAILED DISCUSSION HER E IN ABOVE, 15 THE APPEALS OF ALL THE APPELLANTS ARE ALLOWED WITH THE DIRECTION TO ACCEPT THE LONG TERM CAPITAL GAIN DECLARED AS SUCH. 33. SINCE WE HAVE ACCEPTED THE LONG TERM CAPITAL GA INS WE DO NOT FIND ANY MERIT IN THE ADDITIONS ON ACCOUNT OF A LLEGED PAYMENT OF COMMISSION TO THE BROKERS AND, THEREFORE, ADDITI ONS MADE ON THIS ACCOUNT IS ALSO DIRECTED TO BE DELETED. 34. IN THE RESULT, ALL THE APPEALS FILED BY THE DIF FERENT ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.08.2019. SD/- SD/- (SUCHITRA KAMBLE) ( N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNT ANT MEMBER *NEHA* DATE:- 06.08.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI 16 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 06.08.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER