Smt. Sandhya Khandelwal, Indore V. ITO 4(3), INDORE

ITA 113/Ind/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6042 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-03-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 08-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N D PATWA A RS
• Keywords: Unexplained cash credit; Deduction for capital gain; Capital asset; Income from undisclosed sources; Salary income; Share purchase agreement; Principle of natural justice; Earning of tax free income; Question of law; Accommodation entries; Sham transactions; Set aside
• Section: 143(3); 43; 48; 13; 22; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE HONBLE MANISH BORAD, ACCOUNTANT MEMBER AND BEFORE HONBLE MADHUMITA ROY, JUDICIAL MEMBER ITA NO.7/IND/2019 ASSESSMENT YEAR 2014-15 RADHEYSHYAM KHANDELWAL : APPELLANT 659, SNEH NAGAR, NEAR ILVA COLLEGE, INDORE PAN ATVPK8556H V/S ACIT-4(1), INDORE : RESPONDENT ITA NO.8/IND/2019 ASSESSMENT YEAR 2014-15 MOHANLAL KHANDELWAL : APPELLANT 659, SNEH NAGAR, NEAR ILVA COLLEGE, INDORE PAN ACBPK8243N V/S ITO-4(1), INDORE : RESPONDENT ITA NO.29/IND/2019 ASSESSMENT YEAR 2014-15 SURESH KHANDELWAL : APPELLANT 659, SNEH NAGAR, RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 2 NEAR ILVA COLLEGE, INDORE PAN ACWPK7412J V/S ACIT-4(1), INDORE : RESPONDENT ITA NO.30/IND/2019 ASSESSMENT YEAR 2014-15 RUKMANI KHANDELWAL : APPELLANT 659, SNEH NAGAR, NEAR ILVA COLLEGE, INDORE PAN ACWPK7410L V/S ACIT-4(3), INDORE : RESPONDENT ITA NO.113/IND/2019 ASSESSMENT YEAR 2014-15 SMT.SANDHYA KHANDELWAL : APPELLANT 659, SNEH NAGAR, NEAR ILVA COLLEGE, INDORE PAN ACWPK7411M V/S ACIT-4(3), INDORE : RESPONDENT REVENUE BY SHRI HARSHIT BARI, SR.DR ASSESSEE BY S/ SHRI ASHISH GOYAL & N.D. PATWA, ARS DATE OF HEARING 0 7 .04 .2021 DATE OF PRONOUNCEMENT 2 5 . 0 6 . 202 1 RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 3 O R D E R PER BENCH:- THE BUNCH OF APPEALS FILED BY THE ASSESSEE(S) ARE DIRECTED AGAINST SEPARATE ORDERS OF DIFFERENT DATES PASSED B Y THE LD. CIT(A)- II, INDORE U/S 143(3) OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) CONFIRMING THE ADDITION M ADE BY THE LD. A.O UPON DISALLOWING EXEMPTION U/S 10(38) OF THE AC T TOWARDS LONG TERM CAPITAL GAIN ON THE LISTED EQUITY SHARES TREAT ING IT AS INCOME FROM UNDISCLOSED SOURCES. SINCE ALL THE APPEALS RE LATE TO THE SAME ISSUE ARISING OUT OF THE IDENTICAL SET OF FACTS, TH ESE ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSED BY A COMMON ORDE R FOR THE SAKE OF CONVENIENCE. 2. ITA NO.7/IND/2019 IS TAKEN AS THE LEAD CASE. TH E BRIEF FACTS RELATING TO THE CASE IS THIS THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.18,22,130/- ON 30.9.2014 SHOWING IT INCOME FROM SALARY, HOUSE PROPERTY, BUSI NESS AND INCOME FROM SHARE TRADING. THE ASSESSED CLAIMED EXE MPTION U/S 10(38) OF THE ACT OF RS.20,46,018/- FOR LONG TERM C APITAL GAIN DERIVED FROM SALE OF LISTED COMPANYS SHARE NAMELY M/S TURBO TECH RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 4 ENGINEERING LTD NOT CHARGEABLE TO TAX. THE ASSESS EE HAS PURCHASED 5000 SHARES OF M/S TURBO TECH ENGINEERING PVT LTD THROUGH STOCK BROKER M/S SHAH SPACE MANAGER PVT. LT D, VADODARA (GUJARAT). AFTER THE PURCHASE OF SHARES THE SAME W AS DEMATTED. THE SALE OF SHARES WERE AFFECTED IN THE STOCK EXCHA NGE THROUGH REGISTERED SHARE BROKER AFTER DEDUCTING EXPENSES OF BROKERAGE, STT AND TRANSACTION CHARGES ON 23.05.2013 AT RS.23,14,4 92.40. SUCH SHARES WERE PURCHASED ON 22.11.2011 AND SOLD ON 23. 05.2013 UPON HOLDING THE SAME FOR A PERIOD MORE THAN 12 MON THS AND ON THAT BASIS THE ASSESSEE CLAIMED DEDUCTION U/S 10(38 ) OF THE ACT UNDER LONG TERM CAPITAL GAIN. ULTIMATELY THE LD. A .O CAME TO A CONCLUSION THAT THE TRANSACTION WAS MANAGED BY THE ASSESSEE IN A PLANNED MANNER THROUGH ACCOMMODATION ENTRIES AND TH ESE TRANSACTIONS ARE MOSTLY IN LIEU OF CASH OF EQUAL AM OUNT AND COMMISSION CHARGED OVER AND ABOVE AT CERTAIN FIXED PERCENTAGE FOR PROVIDING SUCH ACCOMMODATION ENTRIES ALLEGING THE S CRIP OF M/S TURBO TECH ENGINEERING PVT. LTD WAS A PENNY STOCK S CRIP USED TO MANIPULATION TO ENSURE TO EARN THE EXEMPT LONG TERM CAPITAL GAIN. THUS, THE CLAIM OF LONG TERM CAPITAL GAIN EXEMPTION IS BOGUS; IN RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 5 FACT NO REAL CAPITAL GAIN HAVE BEEN EARNED BY THE A SSESSEE AS THE OBSERVATION MADE BY LD. A.O, RATHER THE SAME HAS BE EN INTRODUCED FROM UNDISCLOSED SOURCES. ULTIMATELY THE EXEMPTION ON ACCOUNT OF LONG TERM CAPITAL GAIN TO THE TUNE OF RS.23,25,000/ - ON THE SAID ALLEGED PENNY STOCK WAS NOT ACCEPTED AND ADDED TO T HE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE ACT ON THE ALLEGED GR OUNDS OF INCOME FROM UNDISCLOSED SOURCES. THE LD. A.O FURTHER INCR EASED THE BROKERAGE AND COMMISSION @3% OF THE TRANSACTION AT RS.69,750/- ALLEGING MANAGING OF THE TRANSACTION OF LONG TERM C APITAL GAIN U/S 68 OF THE ACT. THESE ADDITIONS WERE FURTHER BEEN C ONFIRMED BY LD. CIT(A)-II, INDORE. HENCE, THE INSTANT APPEAL BEFORE US. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US AS FOLLOWS:- 1) THE GENUINENESS OF TRANSACTION WAS SOUGHT TO BE PROVED BEFORE THE REVENUE WITH HELP OF FOLLOWING EVIDENCE S:- (I) STATEMENT OF LONG TERM CAPITAL GAIN. (II) DEBIT NOTE FOR PURCHASE OF SHARES OF TURBO TECH ENGINEERING LIMITED. (III) PHYSICAL SHARE TRANSFER FORM EVIDENCING SHAR ES OF TURBO TECH ENGINEERING LIMITED IN ASSESSES NAME. RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 6 (IV) RECEIPT AND OTHER EVIDENCES OF SHAH SPACE MAN AGERS P LTD. (V) BROKER RECEIPT FOR SALE OF SHARES. (VI) RETURN FILED FOR A.Y. 2013-14 ON 30.07.2013 (VII) LIST OF INVESTMENT AS ON 31.03.2013 (VIII) RETURN FILED FOR A.Y. 2012-13 ON 30.07.2012 , LIST OF INVESTMENT AS ON 31.03.2012. IT IS RELEVANT TO MENTION THAT THE ABOVE DOCUMENTS HAVE ALREADY BEEN ANNEXED TO THE PAPER BOOK AS FILED BEF ORE US. 2. THAT SIMPLY BECAUSE PURCHASE WAS IN CASH, DO NOT JUSTIFY THE ACT OF LD AO AND LD CIT(A) IN TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT WHEN THE ASSESSEE HAS BEEN ABLE TO DISCHARGE ITS PRIMARY ONUS EFFECTI VELY AND SATISFACTORILY. THE REVENUE COULD NOT ESTABLISH LIV E LINK BETWEEN CASH DEPOSITED BY THE ASSESSEE IN FORM OF L ONG TERM CAPITAL GAIN. 4. THE REVENUES ALLEGATION THAT INVESTIGATION WAS CARRIED OUT BY VARIOUS AUTHORITIES AND SEBI AND THAT IT WAS CONCLU DED THAT PRICES OF THE SCRIP HAS BEEN WHOOPING DUE TO INSIDER TRADI NG DOES NOT APPLY TO THE ASSESSEE. EVEN IF THE COMPANY INDULGE ITSELF INTO MONEY LAUNDERING AND OTHER ILLEGAL ACTIVITIES, THE ASSESS EE CANNOT BE HELD RESPONSIBLE FOR THE HIKE IN SHARE PRICE. THE AMOUNT OF CAPITAL RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 7 ACQUIRED BY ASSESSEE IS TOO LESS IN RELATION TO OVE RALL SHARE CAPITAL OF THE COMPANY M/S TURBO TECH ENGINEERING LTD, ALSO APPELLANT HAS NO RIGHT OR CONTROL OVER THE OPERATIONS AS ALSO CON TENDED BY THE LD. AR. 5. AS REGARDS THE ALLEGATION IN RESPECT OF ARTIFICI AL RIGGING UP OF THE PRICE OF SHARES, IT WAS SUBMITTED THAT THE ID. A.O. DID NOT PROVIDE ANY DOCUMENTARY EVIDENCE OF A LIVE LINK AND DIRECT RELATION TO SUCH ALLEGED RIGGING OF PRICES WITH THE APPELLAN T. HENCE, NO ADVERSE INFERENCE COULD BE DRAWN AGAINST THE APPELL ANT IN THIS REGARD. 6. THE LONG TERM CAPITAL GAIN ON SALE OF SHARES IS IN COMPLIANCE WITH LAW IN ALL RESPECT AND IS ALSO ELIGIBLE FOR EX EMPTION U/S 10(38), THE ASSESSEE HAS GENUINELY DERIVED LONG TERM CAPITA L GAIN FROM SALE OF EQUITY SHARES THROUGH RECOGNIZED STOCK EXCHANGE AFTER DUE PAYMENT OF SECURITY TRANSACTION TAX. 7. IT IS FURTHER SUBMITTED THAT FOR CLAIMING EXEMPT ION U/S 10(38) OF THE ACT, THE APPELLANT SHALL HAS TO PROVE TWIN C ONDITIONS I.E. THE INCOME ARISES FROM THE TRANSFER OF LONG TERM CAPITA L ASSET AND BEING RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 8 EQUITY SHARE IN A COMPANY WHERE THE TRANSFER OF SAL E OF SUCH EQUITY SHARE IS ENTERED INTO ON OR AFTER THE DATE OF WHICH CHAPTER-VII OF THE FINANCE ACT, 2004 COMES INTO FORCE AND SUCH TRANSAC TION IS CHARGEABLE TO SECURITY TRANSACTION TAX UNDER THAT C HAPTER. 8. IN THE PRESENT CASE, BOTH TWIN CONDITIONS ARE SA TISFIED. THE APPELLANT HAS PURCHASED THE 5000 SHARES THROUGH BRO KER SHAH SPACE MANAGER PVT. LTD, VADODRA AND SOLD THE SHARES HOLDING THE SAME FOR MORE THAN 12 MONTHS AND THEREFORE IT IS LO NG TERM CAPITAL ASSET AND THE SHARES ARE EQUITY SHARES OF M/S TURBO TECH ENGINEERING LTD. BEFORE THE AUTHORITIES BELOW THE A PPELLANT FILED THE COPY OF THE SHARES TRANSFER FORM, COPY OF CONTRACT NOTE ISSUED BY ANAND RATHI SHARES AND STOCK BROKERS, COPY OF FORM EVIDENCING PAYMENT OF SECURITIES TRANSACTION TAX ON TRANSACTIO N ENTERED IN A RECOGNIZED STOCK EXCHANGE, AS SUBMITTED BY LD. AR. NEEDLESS TO MENTION THAT THOSE DOCUMENTS ARE FILED BEFORE US BY WAY OF A PAPER BOOK. 9. IT IS FURTHER SUBMITTED THAT THE SHARE PRICE IS ALWAYS DETERMINED BY THE MARKET MECHANISM AT ANY GIVEN POI NT OF TIME RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 9 BECAUSE THERE IS A ROBUST SYSTEM OF THE STOCK EXCHA NGE WHICH IS TRANSPARENT, OPEN AND EQUITABLE, AND THE APPELLANT HAS ALSO SOLD THE SHARES ON SUCH A PLATFORM AT A PRICE WHICH WAS A REFLECTION OF THE MARKET PRICE DERIVED THROUGH THE INTERPLAY OF T HE FORCES OF MARKET DEMAND AND SUPPLY AND ARE DETERMINED ON THE BASIS OF MANY FACTORS. IT IS NOT WITHIN THE POWER OF APPELLA NT TO MANIPULATE THE RATES OF SHARES ON STOCK EXCHANGE. MERELY BECAU SE THERE IS, A SHARP INCREASE IN THE RATES OF SHARES, NO ADVERSE I NFERENCE COULD BE DRAWN ONLY ON THE BASIS OF MERE SUSPICION IN ABSENC E OF ANY DIRECT OR COGENT EVIDENCE. 10. THE LD. COUNSEL APPEARING FOR THE ASSESSEE FURT HER SUBMITTED THAT THE APPELLANT HAS TRANSACTED IN THE SHARES OF M/S TURBO TECH ENGINEERING LTD.' IN THE NORMAL COURSE OF INVESTMEN T LIKE MILLIONS OF INVESTORS DO IN THE STOCK MARKET. THEREFORE, THE QU ESTION OF ALLEGED CONVERSION OF UNACCOUNTED MONEY IN THE FORM OF ALLE GED BOGUS LONG TERM CAPITAL GAIN WITH THE HELP OF MANY ALLEGED CON NECTED PARTIES THROUGH PRICE RIGGING AND PRICE MANIPULATIONS DOES NOT ARISE. 11. IT WAS FURTHER SUBMITTED BY THE LD. AR THAT THE ADDITION IN RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 10 RESPECT OF 3% OF TOTAL TRANSACTION OF RS. 23,25,000/- AMOUNTING TO RS. 69,750/- AS UNDISCLOSED COMMISSION INCOME' U/S 68 OF THE INCOME TAX ACT IS TOTALLY BASELESS AND WITHOUT ANY EVIDENCE. IT IS PURELY BASED IN THE LD AO'S ASSUMPTION. 12. IN THIS REGARD THE LD. AR RELIED UPON THE JUDGM ENT PASSED BY HONBLE ITAT PUNE BENCH PASSED IN THE MATTER OF SMT . SMITA P. PATIL [2015)55 TAXMAN.COM 346 (PUNE -T RIB.). 13. IN SUPPORT OF THE CASE MADE OUT BY THE ASSESSEE THE LD. AR RELIED UPON THE FOLLOWING JUDGMENTS :- (I) ITAT DELHI BENCH IN THE CASE OF SWATI LUTHRA (2020) 115 TAXMANN.COM 167 (DELHI TRIB.) (II) ITAT INDORE BENCH IN THE CASE OF ARZOO ANAND (2017) 3 ITJ ONLINE 181 (TRIB. INDORE) (III) DELHI HIGH COURT IN THE CASE OF SMT. KRISHNA DEVI ITA 125/220 (IV) ITAT DELHI BENCH IN THE CASE OF MEENU GOEL [2 018] 94 TAXMANN.COM 158 14. THE LD. DR RAISED OBJECTION OF THE CASH PURCHAS E OF SHARES RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 11 AND THAT THE SHARES WERE DEMATTED SUBSEQUENT TO SUC H PURCHASE. HE FURTHER RELIED UPON THE ORDER PASSED BY DELHI HI GH COURT IN THE MATTER OF UDIT KALRA VS ITO PASSED ON 8.3.2019 IN I TA NO.220/19. IN EFFECT HE RELIED UPON THE ORDER PASSED BY THE AU THORITIES BELOW. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS MADE BY THE RESPECTIVE PARTIES. WE HAVE ALSO PERUSED THE RELEVANT MATERIA LS AVAILABLE ON RECORD. IT APPEARS FROM THE ORDER PASSED BY THE LD . A.O THAT HE HAS BEEN GUIDED BY THE REPORT OF THE INVESTIGATION TEAM IN RESPECT OF BOGUS TRANSACTIONS OF CAPITAL GAIN. HOWEVER, NOTHIN G HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE PERSONS INVESTIG ATED, INCLUDING ENTRY OPERATORS OR STOCK BROKERS, HAVE NAMED THAT T HE APPELLANT WAS IN COLLUSION WITH THEM. NO FINDING SPECIFICALL Y AGAINST THE APPELLANT HAS BEEN MADE IN THE INVESTIGATION TEAM T HE REPORT WHEREOF IS AVAILABLE BEFORE US AND THIS CANNOT BE A NY GROUND FOR HOLDING THE APPELLANT GUILTY OR LINKED TO THE WRONG FACTS OF THE PERSONS INVESTIGATED. 16. IN THE INSTANT CASE, THE APPELLANT IS NOT CONNE CTED WITH M/S TURBO TECH ENGINEERING LTD. OR THEIR PROMOTERS, DIR ECTORS OR ANY RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 12 OTHER PERSON WHO EXERCISED ANY CONTROL OVER M/S TURBO TECH ENGINEERING LTD OR ANY SO-CALLED ENTRY OPERATOR. AS A MATTER OF FACT, NO ELEMENT IS AVAILABLE SHOWING THAT THE APPELLANT HAS INDULGED IN ANY SUCH QUESTIONABLE ACTIVITY OR HAS BEEN PART OF THE MODUS OPERANDI AS ALLEGED BY THE LD. A.O. 17. IT IS FURTHER APPARENT FROM PAGE 36 OF THE PAPE R BOOK FILED BEFORE US THAT THE APPELLANT EARNED LONG TERM CAPIT AL GAIN IN ICI CI BANK, TRANSACTIONS WHEREOF HAS NOT BEEN DOUBTED . 18. NO INDEPENDENT ENQUIRY FROM CONCERNED PARTIES T O TRANSACTION HAS ALSO BEEN MADE BY THE LD. A.O AS IT APPEARS FRO M THE RECORDS. 19. WE FIND THAT THIS SCRIPS OF M/S TURBO TECH ENGI NEERING PVT. LTD HAS BEEN HELD TO BE ANY PENNY STOCK SCRIPS AND PARTICULARLY ON THE BASIS OF THAT SCRIPS THE REVENUE HAS PROCEEDED AGAINST THE ASSESSEE AND ULTIMATELY DISALLOWED THE CLAIM MADE U /S 10(38) TOWARDS LONG TERM CAPITAL GAIN. HOWEVER IN THIS AS PECT WE HAVE CONSIDERED THE JUDGMENT PASSED BY THE HONBLE ITAT, DELHI BENCH IN THE CASE OF SWATI LUTHRA VS ITO REPORTED IN (2020) 115 TAXMANN.COM 167 (DELHI-TRIB) WHERE THE SCRIPS OF TH IS PARTICULAR RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 13 M/S. TURBO TECH ENGINEERING LTD. WAS THE ACTUAL SUB JECT MATTER. THE RELEVANT PORTION THEREOF IS AS FOLLOWS:- 4. THE BRIEF FACTS ARE THAT THE ASSESSEE FILED HER RETURN OF INCOME FOR THE AY 2014-15 ON 31.07.2014 DECLARING TOTAL INCOME OF RS. 16,01,720/-, WHEREIN SHE HAD DECLARED INCOME FROM SALARY, HOUSE PROPERTY AND OTHER SOURCES AND ALSO INCOME FROM INVESTING IN SHARES. THE ASSES SEE CLAIMED EXEMPT INCOME U/S 10 (38) OF THE ACT IN RESPECT OF LONG TE RM CAPITAL GAIN DERIVED FROM SALE OF LISTED COMPANYS SHARES OF COMPANIES M /S TURBO TECH ENGINEERING LTD. 4 (RS. 20, 55, 146/-) AND M/S ESTE EM BIO ORGANIC FOOD PROCESSING LTD. (RS. 23, 00, 616/-) WHERE SECURITIE S TRANSACTION TAX WAS DULY SUFFERED BY ASSESSEE. THE SALES OF SHARES WERE AFFECTED IN THE STOCK EXCHANGE THROUGH A REGISTERED SHARE BROKER AFTER PA YING STT. ACCORDINGLY, THE ASSESSEE HAD CLAIMED LONG TERM CAPITAL GAIN AS EXEMPT UNDER SECTION 10 (38) IN THE RETURN OF INCOME TO THE TUNE OF RS. 20,55,146- AND RS. 23,00,616/-. THE ASSESSEE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS HAD SUBMITTED ALL THE RELEVANT EVIDENCES FOR PURCHA SE OF SHARES MADE IN CASH BY THE ASSESSEE, ALONG WITH SALE CONTRACT NOTE S TOGETHER WITH BANK STATEMENTS AND DEMAT STATEMENTS BEFORE THE LD AO EV IDENCING THE ENTIRE TRANSACTION OF SALE OF SHARES BEING ROUTED THROUGH REGULAR DISCLOSED BANK STATEMENT OF THE ASSESSEE. THE AFORESAID DETAILS AN D DOCUMENTS AS SUBMITTED BY ASSESSEE BEFORE THE AUTHORITIES BELOW ARE TABULATED ALONG WITH PAGE NOS. OF PAPER BOOK AS SUBMITTED BEFORE US :- DETAILS OF LONG TERM CAPITAL GAIN CLAIMED AS EXEMPT UNDER SECTION 10(38) ON ACCOUNT OF SALE OF SCRIP OF M/S TURBOTECH ENGINEERI NG LTD. PARTICULARS SWATI LUTHRA SHRUTI LUTHRA NAMRATA S EHGAL LUTHRA ASHA LUTHRA DATE OF 27.12.2011 27.12.2011 27.12.2011 27.1 2.2011 INVESTMENT NO. OF SHARES RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 14 PURCHASED 10000 10000 10000 10000 PURCHASE PRICE PER SHARE RS. 2 PER RS. 2 PER RS. 2 PER RS. 2 PER SHARE TOTAL PURCHASE CONSIDERATION PAID RS. 20, 000/- RS. 20, 000/- RS. 20, 000/- RS. 20, 000/- DATE OF SHARES SOLD 23.07.2013 06.09.2013 19.10.2013 24.09.2013 (3000 SHARES), (10000 SHARES) (10000 SHARES) 03.09.2013 (3000 SHARES) AND 10.09.2013 (4000 SHARES ) SALE PRICE PER SHARE RS. 314.88, RS. 276.70 RS. 178. 85 RS. 18 2.60 RS. 151.25 PER SHARE PER SHARE PER SHARE AND RS.164.189 PER SHARE TOTAL SALE CONSIDERATION RS. 20,55,146/- RS. 27,67,036/RS.17,88, 463/ - - RS.18,25,780/- LONG TERM CAPITAL GAIN DECLARED RS. 20,35,146/- RS. 27,47,036/- RS.17,68,46 3/-RS.18,02, 780/- DOCUMENTARY EVIDENCES SUBMITTED BEFORE AO AND CIT(A): SHARE PURCHASE DOCUMENTS PG 15 TO 17 OF PB SINCE THE ISSUES INVO LVED IN ALL THE APPEALS ARE SHARE CERTIFICATE PG 18 OF PB IDENTICAL AND DOCUME NTS SUBMITTED ARE ALSO SAME, SHARE TRANSFER PG 19 TO 21 OF PB THUS, MS. SWATI L UTHRAS (ITA NO. 6480/DEL/2017) CASE MAY BE TAKEN AS LEAD CASE AND THE ISSUE M AY BE DECIDED ACCORDINGLY. FORM CONTRACT NOTE ISSUED BY DP PG 24 TO 27 OF PB ASSESSEES BANK STATEMENT PG 28 TO 29 OF PB DP STAT EMENT PG 30 TO 32 OF PB 6 RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 15 DETAILS OF LONG TERM CAPITAL GAIN CLAIMED AS EXEMP T UNDER SECTION 10(38) ON ACCOUNT OF SALE OF SCRIP OF M/S ESTEEM BIO ORGANIC FOOD PROCES SING LTD. PARTICULARS SWATI LUTHRA SHRUTI LUTHRA NAMRATA S EHGAL LUTHRA ASHA LUTHRA DATE OF INVESTMENT 20.02.2013 20.02.2013 20.02.2013 - NO. OF SHARES PURCHASED 6000 6000 6000 - PURCHASE PRICE PER SHARE RS. 25 PER SHARE RS. 25 PER SHARE RS. 25 PER SHARE TOTAL PURCHASE CONSIDERATION RS. 1,50,000/- RS. 1,50,000/- RS. 1,50 ,000/- - DATE OF SHARES SOLD 25.02.2014 14.03.2014 (26.03.2014 (2400 SHARES), 6000 SHARES) 4800 SHARES) 26.02.2014 (2400 SHARES) AND 03.03.2014 (1200 SHARES) SALE PRICE PER SHARE RS. 376.22, RS. 424.154 RS. 487.50 RS. 383.62 PER SHARE PER SHARE AND RS. 397.50 PER SHARE TOTAL SALE CONSIDERATION RS.23,00,616/- RS.25, 44, 924/ RS 23,39,976/- - LONG TERM CAPITAL GAIN DECLARED RS.21,50,616/- RS.23,94,924/- RS 22,19,976/ - - 7 DOCUMENTARY EVIDENCES SUBMITTED BEFORE AO AND CIT(A): IPO FORM PG 33 TO 40 OF PB SINCE THE ISSUES INVOL VED IN ALL THE APPEALS ARE I DENTICAL AND DOCUMENTS SUBMITTED ARE ALSO SAME , THUS, MS. SWATI LUTHRAS (ITA NO. 6480/DEL/2017 ) CASE MAY BE TAKEN AS LEAD CASE AND THE ISSUE M AY BE DECIDED ACCORDINGLY. ALLOTMENT ADVICE ALONG WITH SHARE RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 16 PRICE PG 41-42 OF PB PHOTOCOPY OF CHEQUE PAID PG 43 OF PB CONTRACT NOTE PG 45 TO 47 OF PB BANK STATEMENT OF ASSESSEE PG 48 TO 52 OF PB DP STATEMENT PG 53 OF PB 5. THE ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT ORDER DATED 14.12.2016 OBSERVED THAT THE SHARE PRICES OF BOTH T HE AFORESAID SCRIPS SKY ROCKETED WITHOUT HAVING ANY FINANCIAL STRENGTH. THE PARAMETERS WHICH ARE ESSENTIAL FOR INCREASE IN PRICE OF SHARES ARE NOT P RESENT. IN ABSENCE OF SOUND FINANCIAL RESULTS IT CAN BE CONCLUDED THAT TH E INCREASE IS DUE TO ARTIFICIAL INCREASE. THE TREND OBSERVED OF M/S ESTE EM BIO AND M/S TRUBOTECH AGAIN LEAD TO A CONCLUSION THAT PRICES OF THE SHARES WERE ARTIFICIALLY HIKED TO CREATE NON-GENUINE LTCG TO TH E BENEFICIARIES. THE ASSESSING OFFICER ALSO OBSERVED THAT STATEMENTS WER E ALSO RECORDED BY THE INVESTIGATION WING IN OTHER CASES OF VARIOUS BROKER S, OPERATORS AND ENTRY PROVIDERS, WHO ACCEPTED THAT BOTH M/S ESTEEM BIO AN D M/S TURBOTECH ARE PENNY STOCK COMPANIES AND THE SCRIPS HAVE BEEN USED TO PROVIDE BOGUS LTCG TO VARIOUS 8 BENEFICIARIES. RELIANCE WAS PLACE D ON VARIOUS STATEMENTS, LIKE OF SH, NIKHIL JAIN, SH. SANJAY VOR A, SH. RAKESH SOMANI, SH. ANIL KUMAR KHEMKA AND SH. BIDYOOT SARKAR, WHICH WERE ALL RECORDED BEFORE DDIT (INV), KOLKATA, WHEREIN, THE AFORESAID PERSONS HAD ADMITTED THAT THE SCRIP OF M/S ESTEEM BIO AND M/S TURBOTECH WERE USED TO PROVIDE BOGUS LTCG TO VARIOUS BENEFICIARIES. THEREAFTER, TH E ASSESSING OFFICER AFTER EXPLAINING THE MODUS OPERANDI OF BOGUS LTCG HELD TH AT THE TRANSACTIONS OF THE ASSESSEE WERE SHAM TRANSACTIONS AND THE LTCG SO DECLARED OF A SUM OF RS. 41,85,762/- WAS NOTHING BUT UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT TO BE TAXED @ 30% UNDER SECTION 115BB E OF THE INCOME TAX ACT, 1961 IN THE HANDS OF THE ASSESSEE. RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 17 6. IN THE FIRST APPEAL, THE LD. COMMISSIONER OF INC OME TAX (APPEALS) CONFIRMED THE ORDER OF THE AO BY OBSERVING THAT THE DOCUMENTS SUBMITTED AS EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSAC TION ARE MAKE BELIEVE DOCUMENTS TO COVER UP THE TRUE NATURE OF THE TRANSA CTIONS, AS IT IS REVEALED THAT THE PURCHASE AND SALE OF SHARES ARE ARRANGED T RANSACTIONS TO CREATE BOGUS PROFIT IN THE GARB OF LTCG BY WELL-ORGANIZED NETWORK OF ENTRY PROVIDERS WITH THE SOLE MOTIVE TO SELL SUCH ENTRIES TO ENABLE THE BENEFICIARY TO ACCOUNT FOR THE UNDISCLOSED INCOME FOR A CONSIDE RATION OR A COMMISSION. 7. BEFORE US, LD. COUNSEL FOR THE ASSESSEE, MR. SAL IL AGGARWAL SUBMITTED THAT THE ASSESSEE HAS FILED BEFORE THE AO AND CIT(A ) VARIOUS DOCUMENTARY EVIDENCES IN ORDER TO SUBSTANTIATE THE GENUINENESS OF THE LTCG SO DECLARED DURING THE IMPUGNED 9 ASSESSMENT YEAR AND NO DEFECT, ERROR OR ANY FLAW IN THESE EVIDENCES HAS BEEN POINTED BY THE AO AS WELL THE COMMISSIONER OF INCOME TAX (APPEALS) AND THUS, HE C ONTENDED THAT THE ENTIRE ADDITION NEEDS TO BE DELETED ON THE GROUND O F LACK OF INVESTIGATION/ ENQUIRY AND ALSO DUE TO FAILURE TO PROVIDE ANY FALL ACY IN THE DOCUMENTARY EVIDENCES SO SUBMITTED BY ASSESSEE AND ON THE AFORE SAID PROPOSITION RELIANCE WAS PLACED ON THE JUDGMENTS OF JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT VS FAIR FINVEST LTD. REPORTED IN 357 IT R 147 AND PCIT VS LAXMAN INDUSTRIAL RESOURCES LTD. REPORTED IN 397 IT R 106.THE SAID DOCUMENTS SO SUBMITTED BY ASSESSEE ARE TABULATED AS UNDER: FOR SCRIP OF M/S TURBOTECH ENGINEERING LTD. SHARE PURCHASE DOCUMENTS PG 15 TO 17 OF PB SHARE CERTIFICATE PG 18 OF PB SHARE TRANSFER FORM PG 19 TO 21 OF PB CONTRACT NOTE ISSUED BY DP PG 24 TO 27 OF PB ASSESSEES BANK STATEMENT PG 28 TO 29 OF PB DP STATEMENT PG 30 TO 32 OF PB FOR SCRIP OF M/S ESTEEM BIO ORGANIC FOOD PROCESSING LTD. RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 18 IPO FORM PG 33 TO 40 OF PB ALLOTMENT ADVICE ALONG WITH SHARE PRICE PG 41 TO 42 OF PB PHOTOCOPY OF CHEQUE PAID PG 43 OF PB 10 CONTRACT NOTE PG 45 TO 47 OF PB BANK STATEMENT OF ASSESSEE PG 48 TO 52 OF PB DP STATEMENT PG 53 OF PB 8. THE LD COUNSEL FURTHER SUBMITTED THAT THE REASON S GIVEN BY AO AS WELL AS THE COMMISSIONER OF INCOME TAX (APPEALS) THAT IN CREASE IN THE PRICE OF M/S ESTEEM AND M/S TURBOTECH WAS WITHOUT ANY BACKIN G OF THE FINANCIAL RESULTS IS IMMATERIAL AS THE ASSESSEE HAD SOLD THE SHARES ON RECOGNIZED STOCK EXCHANGE THROUGH A RECOGNIZED STOCK BROKER AN D THE PRICES OF SHARES DULY LISTED ON STOCK EXCHANGE ARE NOT IN CONTROL OF ASSESSEE AND NOR ANY SUCH ALLEGATION HAS SURFACED ON RECORD THAT THE ASS ESSEE IS INVOLVED IN PRICE MANIPULATION OF AFORESAID SCRIPS. HE FURTHER SUBMITTED THAT RELIANCE PLACED BY AO ON THE INTERIM ORDER OF SEBI, WHEREIN, TRADING IN SECURITIES OF M/S ESTEEM BIO AND M/S TURBOTECH WERE SUSPENDED TEM PORARILY IS MISCONCEIVED, AS VIDE ADJUDICATION ORDERS DATED 06. 09.2017 IN THE CASE OF M/S ESTEEM BIO AND 25.11.2014 IN THE CASE OF M/S TU RBOTECH, SEBI HAS FOUND NO IRREGULARITIES IN THE TRADING OF SUCH SCRI PS NOR IT HAS FOUND ITS DIRECTORS INVOLVED IN ANY PRICE RIGGING (SAID ORDER S WERE PLACED IN THE PAPER BOOK AT PAGES 3 TO 13 AND 14 TO 18 OF PB II ) AND THUS, THE RELIANCE PLACED BY AO ON INTERIM ORDER OF SEBI IS UNCALLED F OR AND UNJUSTIFIED. IT WAS FURTHER ARGUED THAT THE AO HAS RELIED ON VARIOU S STATEMENTS OF ALLEGED ENTRY OPERATORS WHICH HAVE SURFACED DIRECTLY IN THE ORDER OF ASSESSMENT AND WERE NEVER CONFRONTED BY LD AO DURING THE COURS E OF ASSESSMENT 11 PROCEEDINGS. FURTHER, IN THE FIRST APPEAL FILED BY ASSESSEE AGAINST THE SAID ORDER OF ASSESSMENT, THE SAID ISSUE OF CROSS EXAMIN ATION WAS RAISED BEFORE LD. CIT (A) WHICH WAS NEVER PROVIDED TO THE ASSESSEE. THUS, IT WAS RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 19 SUBMITTED THAT AS THE STATEMENTS OF ALLEGED ENTRY O PERATORS HAVE NEVER BEEN CONFRONTED TO THE ASSESSEE AND THEY HAVE ALSO NOT BEEN PRODUCED FOR CROSS EXAMINATION, EVEN THOUGH SPECIFIC REQUEST FOR THE SAME WAS MADE BY ASSESSEE BEFORE LD CIT (A), THE ASSESSMENT SO MADE AND ADDITION SO SUSTAINED IS VITIATED IN LAW AND ADDITION SO MADE I S LIABLE TO BE DELETED AS SUCH. RELIANCE WAS PLACED ON FOLLOWING JUDGMENTS IN SUPPORT OF THE AFORESAID PROPOSITION: (I) KISHINCHANDCHELLARAM VS. CIT. [1980] 125 ITR 71 3 (SC) (II) CIT VS ASHWANI GUPTA. 322 ITR 396 (DEL) (III) ANDAMAN TIMBER INDUSTRIES VS CCE (SC) REPORTE D IN 127 DTR 241. 9. LD. COUNSEL FURTHER RELIED ON VARIOUS CASE LAWS ON THE PROPOSITION THAT ONCE THE SHARES ARE SOLD THROUGH STOCK EXCHANGE AND SUFFICIENT DOCUMENTARY EVIDENCES HAVE BEEN PRODUCED IN ORDER T O SUPPORT THE GENUINENESS OF THE LTCG CLAIMED AS EXEMPT UNDER SEC TION 10(38), HENCE, ADDITION CANNOT BE MADE IN THE HANDS OF ASSESSEE WI THOUT REBUTTING THE DOCUMENTARY EVIDENCES AND WITHOUT CONDUCTING INVEST IGATION TO DISCARD THE SAID DOCUMENTS. THE CASE LAWS SO RELIED BY ASSE SSEE ARE TABULATED BELOW: PARTICULARS COPY OF JUDGMENT OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF PCIT VS PREM PAL GANDHI 12 IN ITA NO. 95/2017 DA TED 18.01.2018. COPY OF JUDGMENT OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF PCIT VS HITESH GANDHI IN ITA NO. 18/2017 DATED 1 6.02.2017. COPY OF JUDGMENT OF HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT V. SHYAM R. PAWAR REPORTED IN 229 TAXMAN 256 DATED 10. 12.2014. COPY OF JUDGMENT OF HONBLE BOMBAY HIGH COURT IN TH E CASE OF CIT CIT V. SMT. JAMNADEVI AGRAWAL REPORTED IN 328 ITR 656 DATE D 23.09.2010. RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 20 COPY OF JUDGMENT OF HONBLE GUJARAT HIGH COURT IN T HE CASE OF CIT VS. MAHESHCHANDRA G. VAKIL REPORTED IN 220 TAXMAN 166 ( MAGZ) DATED 25.09.2012. COPY OF JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SMT SUMITRA DEVI REPORTED IN 229 TAXMAN 67 DATED 24 .02.2014. COPY OF JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ANIRUDH NARAYAN AGRAWAL REPORTED IN 219 TAXMAN 126 DATED 16.01.2013. COPY OF ORDER OF HONBLE ITAT RAIPUR IN THE CASE OF DCIT VS RAKESH SARAOGI & SONS (HUF) IN ITA NO. 93 TO 99/RPR/2014 D ATED 16.04.2018. COPY OF ORDER OF HONBLE ITAT MUMBAI IN THE CASE OF ITO VS M/S ARVIND KUMAR JAIN (HUF) IN ITA NO. 4862/MUM/2014 DATED 18. 09.2017. COPY OF ORDER OF HONBLE ITAT JAIPUR IN THE CASE OF SH. PRAMOD JAIN VS ITO IN ITA NO. 368/JP/2017 DATED 31.01.2018. COPY OF OR DER OF HONBLE ITAT DELHI IN THE CASE OF SHOBHIT GOEL (HUF) IN ITA NO. 2021/DEL/2018 DATED 13 25.09.2018. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF SMT. SUNITA KHEMKA VS ACIT IN ITA NO. 389/DEL/2018 DATED 02.08.2018. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF CHANDER PRAKASH VS ITO IN ITA NO. 6880/DEL/2017 DATED 12.03.2018. COPY OF ORDER OF HONBLE ITAT KOLKATA IN THE CASE O F PRAKASH CHAND BHUTORIA VS ITO IN ITA NO. 2394/KOL/2017 DATED 27.0 6.2018. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF MUKTA GUPTA VS ITOIN ITA NO. 2766/DEL/2018 DATED 26.11.2018. COPY OF ORDER OF HONBLE ITAT KOLKATA IN THE CASE O F MAHAVIR JHANWAR VS ITO IN ITA NO. 2474/KOL/2018 DATED 01.02.2019. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF SH. RAJEV AGARWAL & SONS VS ITO IN ITA NO. 872/DEL/2018 DATED 21.01.201 9. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF SANJEEV JAIN VS ITO IN ITA NO. 3381/DEL/2017 DATED 15.01.2019. RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 21 COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF SMT. JYOTI GUPTA VS ITO IN ITA NO. 3510/DEL/2018 DATED 06.11.2018. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF VIDHI MALHOTRA VS ITO IN ITA NO. 93/DEL/2018 DATED 20.12.2018. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF SMT. SIMI VERMA VS ITO IN ITA NO. 3387/DEL/2018 DATED 06.11.2018. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF SMT. SHIKHA DHAWAN VS ITO IN ITA NO. 3035/DEL/2018 DATED 27.06.2018. COPY OF ORDER OF HONBLE ITAT DELHI IN THE CASE OF SH. AMITABH BANSAL VS ITO IN ITA NO. 7802/DEL/2018 DATED 11.02.2019. COPY OF ORDER OF HONBLE ITAT KOLKATA IN THE CASE O F MS. SWATI MALL VS ITO IN ITA NO. 2423/ KOL/2017 DATED 07.12.2018. 10. ON THE OTHER HAND, THE DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND FILED A WRITTEN NOTE DATED 14.05.2019, WHICH CO NTAINED LIST OF CASE LAWS TO BE RELIED BY REVENUE, WHEREIN, RELIANCE WAS PLACED ON JUDGMENT OF HONBLE HIGH COURT OF DELHI IN THE CASE OF UDIT KAL RA VS ITO IN ITA NO. 220/2019. 11. IN REJOINDER, THE LD COUNSEL SUBMITTED HIS ARGU MENTS, WHICH CAN BE SUMMARIZED AS BELOW: (I) THAT THE LD DR HAS FAILED TO REBUT THE CASE LAW S SO CITED BY ASSESSEE APPELLANT AND ALSO, THE SEBI ORDERS, WHE REIN, THE COMPANIES M/S ESTEEM BIO AND M/S TURBOTECH HAVE BEE N ABSOLVED AND NO WRONG DOINGS HAVE BEEN FOUND IN THE WORKING OF SAID COMPANIES. (II) THAT FURTHER, THE RELIANCE PLACED BY LD DR ON THE ORDER OF UDIT KALRA VS ITO (DELHI HIGH COURT) IN ITA NO. 220/2019 IS AGAIN MISPLACED, AS FIRST OF ALL NO QUESTION OF LAW WAS F ORMULATED BY HONBLE HIGH COURT OF DELHI IN THE SAID CASE AND TH US, THE SAME IS RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 22 ONLY DISMISSAL IN LIMINE AND ON THIS PROPOSITION RE LIANCE IS PLACED ON THE JUDGMENT OF HONBLE 15 SUPREME COURT IN THE CAS E OF CIT VS RASHTRADOOT (HUF) REPORTED IN 412 ITR 17. (III) THAT FURTHER, EVEN ON FACTS, THE SAID ORDER I N THE CASE OF UDIT KALRA VS ITO IS DISTINGUISHABLE. AS, THE INTERIM OR DER OF SEBI IN THE CASE OF BOTH THE COMPANIES HAVE BEEN COOLED DOWN BY SUBSEQUENT ORDERS OF SEBI. THUS, THE CASE OF UDIT KALRA VS ITO RELIED BY LD. DR IS CLEARLY DISTINGUISHABLE ON FACTS AND IS NOT APPL ICABLE TO THE FACTS OF ASSESSEE. RATHER THE CASE LAWS SO RELIED BY ASSE SSEE ARE DIRECTLY APPLICABLE TO THE FACTS OF ASSESSEE WHICH HAVE NOT BEEN REBUTTED BY LD DR. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . WE FIND THAT THE TRANSACTIONS OF THE ASSESSEE OF PURCHASE OF SHARES OF M/S ESTEEM BIO AND M/S TURBOTECH., HOLDING OF THE SHARES FOR MORE THAN ONE YEAR AND THE SALE OF SHARES THROUGH A REGISTERED SHARE BROKER IN A RE COGNIZED STOCK EXCHANGE AND PAYMENT OF SECURITIES TRANSACTION TAX THEREON, ALL WERE SUPPORTED BY DOCUMENTARY EVIDENCES WHICH WERE PLACE D BEFORE THE LOWER AUTHORITIES. THE REVENUE COULD NOT POINT OUT ANY SP ECIFIC DEFECT WITH REGARDS TO THE DOCUMENTS SO SUBMITTED BY ASSESSEE. IN OUR CONSIDERED VIEW, EFFECT OF A TRANSACTION WHICH IS SUPPORTED BY DOCUMENTARY EVIDENCES CANNOT BE BRUSHED ASIDE ON SUSPICION OR PROBABILITI ES WITHOUT POINTING OUT ANY DEFECT THEREIN. 13. IN THE INSTANT CASE, THE ASSESSING OFFICER HIMS ELF OBSERVED THAT THE MOVEMENT IN PRICE OF SHARES OF M/S ESTEEM BIO AND M /S 16 TURBOTECH WERE WITHOUT ANY BACKING OF FINANCIAL PERFORMANCE O F THE SAID COMPANIES. IN OUR CONSIDERED VIEW, THE ABOVE FACTOR AT BEST WA S A POINTER OR CAUSE FOR CAREFUL SCRUTINY OF THE TRANSACTION BY THE ASSESSIN G OFFICER BUT FROM IT CANNOT BE CONCLUDED THAT TRANSACTIONS WERE SHAM. IT IS A MATTER OF RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 23 COMMON KNOWLEDGE THAT PRICES OF SHARES IN THE SHARE MARKET DEPENDS UPON INNUMERABLE FACTORS AND PERCEPTION OF THE INVE STOR AND NOT ALONE ON THE FINANCIAL PERFORMANCE OF THE COMPANY. FURTHER, WE ALSO FIND FROM RECORD THAT LD. AO ALSO DIDN'T CONFRONT COPIES OF S TATEMENTS RECORDED BY INVESTIGATION WING, KOLKATA OF SH, NIKHIL JAIN, SH. SANJAY VORA, SH. RAKESH SOMANI, SH. ANIL KUMAR KHEMKA AND SH. BIDYOO T SARKAR TO THE APPELLANT DURING ASSESSMENT PROCEEDINGS AND MERELY EXTRACTED COPIES OF THEIR STATEMENT IN THE ASSESSMENT ORDER ONLY. THE L D. AO HAS NOT CONFRONTED ANY MATERIAL TO THE ASSESSEE NOR PROVIDE D ANY ADEQUATE OPPORTUNITY TO THE ASSESSEE TO DEFEND HER CASE. SIN CE THE STATEMENTS WERE NOT CONFRONTED TO THE ASSESSEE, SHE WAS DEPRIVED OF HER RIGHT TO CROSS EXAMINE THE WITNESSES. ALSO WHATEVER THEY HAVE STAT ED IN THEIR STATEMENT IS NO GOSPEL TRUTH AND CANNOT BE APPLIED BLINDLY TO ALL THE PERSONS WHO HAVE BROUGHT THE SCRIPS IN THE ENTIRE COUNTRY. THUS , UNDER THESE CIRCUMSTANCES, ATLEAST SOME INQUIRY SHOULD HAVE DON E FROM THESE PERSONS, WHETHER THEY HAVE PROVIDED ANY ENTRY TO THE ASSESSE E, IF THE REQUEST FOR CROSS EXAMINATION WAS NOT POSSIBLE AT THAT STAGE. C ROSS EXAMINATION OF A PERSON IN WHOSE BASIS ANY ADVERSE INFERENCE IS DRAW N, THEN IT CANNOT BE PRIMARY EVIDENCE OR MATERIAL TO NAIL THE ASSESSEE A ND SIMPLY BASED ON THE STATEMENT NO ADDITION CAN BE MADE. THIS HAS BEEN HE LD SO BY VARIOUS COURTS, AND ALSO BY HONBLE APEX COURT IN THE 17 CA SE OF M/S ANDAMAN TIIMBER INDUSTRIES VS. CCE (SC) REPORTED IN 127 DTR 241 HAS HELD AS FOLLOWS: ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROS S-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAU SE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 24 ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEM ENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS E XAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNI TY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFI CALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE . HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS T OTALLY UNTENABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATI ON OF THE SAID DEALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHI CH WOULD NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAI N AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WA NTED TO CROSS- EXAMINE THOSE DEALERS AND WHAT AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND 18 WANTED TO DISCREDIT THEIR TESTIMON Y FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS -EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIE D UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PR ICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES AT THE PRICE WHICH IS MENTIO NED IN THE PRICE LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EX AMINATION. THEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUP POSE AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS-EXAMINATIO N AND MAKE THE REMARKS AS MENTIONED ABOVE. WE MAY ALSO POINT OUT T HAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS C OURT IN CIVIL APPEAL NO. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 25 REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DI RECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTI NG OR REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE, WE ARE OF THE OPINI ON THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, TH ERE WAS NO MATERIAL WITH THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESAID TWO W ITNESSES WAS THE ONLY BASIS OF ISSUING THE SHOW CAUSE NOTICE WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED B Y THE TRIBUNAL AND ALLOW THIS APPEAL. 14. THAT THE LD DR DURING THE COURSE OF HEARING PLA CED HEAVY RELIANCE ON JUDGMENT OF HONBLE HIGH COURT OF DELHI IN THE CASE OF UDIT KALRA VS ITO IN ITA NO. 220/2019. RELEVANT EXTRACTS OF SAID JUDGMEN T ARE EXTRACTED AS BELOW: THE ASSESSEE IS AGGRIEVED BY THE CONCURRENT FINDI NGS OF THE TAX AUTHORITIES INCLUDING THE LOWER APPELLATE AUTHORI TIES REJECTING ITS CLAIM FOR A LONG TERM CAPITAL GAIN REPORTED BY IT, TO THE TUNE OF RS.13,33,956/- AND RS.14,34,501/- IN RESPECT OF 4,0 00 SHARES OF M/S KAPPAC PHARMA LTD. THE ASSESSEE HELD THOSE SHAR ES FOR APPROXIMATELY 19 MONTHS; THE ACQUISITION PRICE WAS RS.12/- PER SHARE WHEREAS THE MARKET PRICE OF THE SHARES AT THE TIME OF THEIR SALE, WAS RS.720/-. IT IS CONTENDED THAT THE ASSESS EE WAS NOT GRANTED FAIR OPPORTUNITY. MR. RAJESH MAHNA, LEARNED COUNSEL APPEARING FOR THE ASSESSEE RELIED UPON THE ORDERS OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, IN RESPECT OF THE SAME COMPANY I.E. M/S KAPPAC PHARMA LTD., AND POINTED OUT THAT THE TAX AUTHORITYS APPROACH IN TH IS CASE WAS ENTIRELY ERRONEOUS AND INCONSISTENT. THE MAIN THRUST OF THE ASSESSEES ARGUMENT IS THAT HE WAS DENIED THE RIGHT TO CROSS-EXAMINATION OF THE TWO INDIVIDUA LS WHOSE RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 26 STATEMENTS LED TO THE INQUIRY AND ULTIMATE DISALLOW ANCE OF THE LONG TERM CAPITAL GAIN CLAIM IN THE RETURNS WHICH ARE TH E SUBJECT MATTER OF THE PRESENT APPEAL. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF THE PA RTIES. ASIDE FROM THE FACT THAT THE FINDINGS IN THIS CASE ARE ENTIREL Y CONCURRENT A.O., CIT(A) AND THE ITAT HAVE ALL CONSISTENTLY RENDERED ADVERSE FINDINGS WHAT IS INTRIGUING IS THAT THE COMPANY (M/S KAPPA C PHARMA LTD.) HAD MEAGRE RESOURCES AND IN FACT REPORTED CONSISTEN T LOSSES. IN THESE CIRCUMSTANCES, THE ASTRONOMICAL GROWTH OF THE VALUE OF COMPANYS SHARES NATURALLY EXCITED THE SUSPICIONS O F THE REVENUE. THE COMPANY WAS EVEN DIRECTED TO BE DELISTED FROM T HE STOCK EXCHANGE. HAVING REGARD TO THESE CIRCUMSTANCES AND PRINCIPALLY ON THE GROUND THAT THE FINDINGS ARE ENTIRELY OF FACT, THIS COURT IS OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE PRESENT APPEAL. THIS APPEAL IS ACCORDINGLY DISMISSED. 15. ON GOING THROUGH THE AFORESAID JUDGMENT, WE FIN D THAT NO QUESTION OF LAW WAS FORMULATED BY HONBLE HIGH COURT OF DELHI I N THE SAID CASE AND THERE IS ONLY DISMISSAL OF APPEAL IN LIMINE AND THE HONBLE HIGH COURT FOUND THAT THE ISSUE INVOLVED IS A QUESTION OF FACT AS HELD BY HONBLE APEX COURT IN KUNHAYYAMMED VS STATE OF KERALA REPORTED I N 245 ITR 360 AND ALSO IN CIT VS. RASHTRADOOT (HUF) REPORTED IN 412 I TR . EVEN ON MERITS AND FACTS, THE SAID JUDGMENT IN THE CASE OF UDIT KALRA VS ITO (SUPRA) IS DISTINGUISHABLE AS IN THAT CASE THE SCRIPS OF THE C OMPANY WERE DELISTED ON STOCK EXCHANGE, WHEREAS, IN THE INSTANT CASE, THE I NTERIM ORDER OF SEBI IN THE CASES OF M/S ESTEEM BIO AND M/S TURBOTECH HAVE BEEN COOLED DOWN BY SUBSEQUENT ORDER OF SEBI PLACED BY ASSESSEES IN ITS PAPER BOOK. THUS, THE CASE OF UDIT KALRA VS ITO RELIED BY LD. DR IS C LEARLY DISTINGUISHABLE ON FACTS AND IS NOT APPLICABLE TO THE FACTS OF ASSESSE E. THUS, WE HOLD THAT THE RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 27 CASE OF ASSESSEE IS FACTUALLY AND MATERIALLY DISTIN GUISHABLE FROM THE FACTS OF THE CASE OF UDIT KALRA VS ITO SO RELIED BY LD DR . 16. WE FURTHER FIND THAT LD. AO HAS ALSO MENTIONED ABOUT SOME ORDER OF SEBI. THIS ORDER ALSO WAS NEVER CONFRONTED TO THE A PPELLANT DURING ASSESSMENT PROCEEDINGS. MOREOVER, THE SAID ORDER SE EMS TO BE PASSED IN YEAR 2015, WHEREAS THE APPELLANT HAD PURCHASED THE SHARES IN YEAR 2011 AND 2013 AND SOLD THEM IN YEAR 2014. IT WAS EVIDENT FROM THIS DOCUMENT ONLY THAT NO ACTION HAS BEEN TAKEN BY THE SEBI AGAI NST THE COMPANY DURING THE PERIOD WHEN THE APPELLANT HOLDS THE SHAR ES. THUS, EVEN OTHERWISE, WE FIND THAT THE ORDER OF SEBI SO RELIED BY LD. AO AND CIT (A) IS NOT APPLICABLE FOR THE TRANSACTIONS UNDER CONSIDERA TION. IN ANY CASE AS STATED ABOVE, THE SEBI IN ITS SUBSE QUENT DECISION HAS ABSOLVED MOST OF THE COMPANIES INCLUDING THE COMPAN IES WHOSE SCRIPS ARE UNDER SUSPICION, AS THEY WERE NOR FOUND TO BE RIGGI NG THE PRICE. THIS FACT ALONE VITIATES THE CASE OF REVENUE. 17. WE ALSO FIND THAT THE LD. AO HAS RAISED OBJECTI ON REGARDING THE CASH PURCHASE OF SHARES AND THAT SHARES WERE DEMATERIALI ZED FEW DAYS BACK ONLY FROM THE DATE OF SALE. THERE IS NO LAW WHICH P ROHIBITS THE PURCHASE OF SHARES IN CASH, HOWEVER IN THE PRESENT CASE, ASSESS EE HAD FILED COPIES OF BILLS OF PURCHASE, COPY OF SHARE CERTIFICATES AND T RANSFER FORMS ETC. BEFORE LD. AO AND NO ADVERSE INFERENCE COULD BE DRAWN ONLY BECAUSE THE SHARES WERE PURCHASED IN CASH. REGARDING DEMAT OF SHARES, WE HOLD THAT IT IS THE OPTION OF THE BUYER OF SHARES TO KEEP THE SHARES EI THER IN DEMAT FORM OR IN PAPER FORM. MERELY BECAUSE THE SHARES WERE DEMATTED AT A LATER STAGE, NO ADVERSE INFERENCE COULD BE DRAWN. THE LEARNED COUNS EL FOR THE ASSESSEE HAS TAKEN US THROUGH VARIOUS DOCUMENTS FILED IN THE PAPER BOOK AS REFERRED TO ABOVE WHICH SPECIFICALLY PROVE THE PURC HASE OF SHARES MADE BY ASSESSEE GENUINELY WHICH WERE ALSO SOLD GENUINELY. THE TRANSACTIONS WERE RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 28 CARRIED THROUGH DEMAT ACCOUNT AND BANKING CHANNEL O N WHICH STT HAS BEEN PAID BY ASSESSEE. THE REPORT OF THE SEBI WAS N OT ADVERSE IN NATURE AGAINST THE ASSESSEE BECAUSE NAME OF THE ASSESSEE D ID NOT APPEAR THEREIN FOR CONDUCTING DUBIOUS TRANSACTION. THE REPORT OF T HE INVESTIGATION WING AND OTHER MATERIAL WAS NEITHER CONFRONTED TO ASSESS EE NOR THERE WAS ANY INQUIRY FROM WHERE IT TRANSPIRED THAT ASSESSEE WAS BENEFICIARY OF ANY BOGUS LONG-TERM CAPITAL GAIN; THEREFORE, THE SAME C ANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. A SPECIFIC MATERIAL AGAINST 22 THE ASSESSEE SHOULD HAVE BEEN BROUGHT ON RECORD TO PUT ASSESSEE UNDER LIABILITY. HOWEVER, IN THE PRESENT CASE, THE ENTIRE DOCUMENTAR Y EVIDENCE ON RECORD HAS NOT BEEN DISPUTED BY THE AUTHORITIES BELOW AND THERE IS NO REBUTTAL TO THE EXPLANATION OF ASSESSEE. NO OTHER ADVERSE MATER IALS HAVE BEEN BROUGHT ON RECORD AGAINST THE ASSESSEE. FURTHER, NO PROPER ENQUIRY HAS BEEN CONDUCTED BY THE A.O. ON THE DOCUMENTARY EVIDENCES FILED BY ASSESSEE. WHATEVER STATEMENTS HAVE BEEN REFERRED TO IN THE OR DER WAS GENERAL IN NATURE WITH WHOM ASSESSEE DID NOT HAVE ANY TRANSACT ION. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE HOLD THAT ASSESSEE HAS ENTERED INTO GENUINE TRANSACTION OF SALE AND PU RCHASE OF SHARES AND THEREFORE, SATISFIED THE CONDITIONS OF SECTION 10(3 8) OF THE I.T. ACT. THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER THE SAME P ROVISION. WE ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIE S BELOW AND DELETE THE ADDITION OF RS. 41,85,762/-. APPEAL OF ASSESSEE IS ALLOWED. 20. WE HAVE FURTHER CONSIDERED THE JUDGEMENT PASSED IN THE MATTER OF UDIT KALRA (SUPRA) AS RELIED UPON BY THE LD. DR BEFORE US IN SUPPORT OF THE CASE MADE OUT BY THE REVENUE. IT APPEARS THAT THE CHALLENGES MADE IN THE APPEAL BEFORE THE HONBLE DE LHI HIGH COURT RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 29 IN THAT CASE STOOD DISMISSED IN LIMINE; NO QUESTION OF LAW WAS FOUND TO BE FORMULATED. APART FROM THAT THE SAID JUDGMENT IS DISTINGUISHABLE. IN THAT PARTICULAR CASE THE SCRIP S OF THE COMPANY WERE DELISTED ON STOCK EXCHANGE, WHEREAS, IN THE IN STANT CASE SUSPENSION ORDER IN TRADING IN SECURITIES OF M/S TU RBO TECH ENGINEERING LTD HAS ULTIMATELY BEEN LIFTED BY THE A DJUDICATION ORDER DATED 25.11.2014 WHEREIN SEBI HAS FOUND NO IRREGULA RITIES IN THE TRADING OF SUCH SCRIPS; NEITHER IT HAS FOUND ITS DI RECTORS INVOLVED IN ANY PRICE RIGGING. SUCH FACTS HAS CATEGORICALLY BE EN MENTIONED IN THE JUDGEMENT OF SWATI LUTHRA (SUPRA). THEREFORE, BOTH FACTUALLY AND MATERIALLY IT IS DISTINGUISHABLE FROM THE INSTANT C ASE BEFORE US. IT IS RELEVANT TO MENTION THAT THE ORDERS PASSED BY THE S EBI ARE ONLY OF THE YEAR 2015 AND NOT DURING THAT MATERIAL POINT OF TIME I.E. THE PERIOD BETWEEN 22.11.2011 AND 23.05.2013 WHEN THE A PPELLANT WAS HOLDING THE SHARES. MORESO, THE SUBSEQUENT ORDERS P ASSED BY THE SEBI ABSOLVING SOME COMPANIES INCLUDING M/S TURBO T ECH ENGINEERING PVT. LTD. WHOSE SCRIBES WERE UNDER SUSP ICION IN THE ABSENCE OF ANY FINDING OF RIGGING OF PRICE DILUTED THE ISSUE. 21. THE OBJECTION RELATING TO THE SHARES BEING DEMA TERIALISED AFTER RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 30 PURCHASE IS ALSO HAVING NO CONSEQUENCE. FROM THE SE RIES OF DOCUMENTS IT APPEARS THAT THE PRESCRIBED PROCEDURE HAD BEEN FOLLOWED BY THE ASSESSEE FROM THE STAGE OF PURCHASE TILL THE SHARES ARE DEMATTED OR UNTIL SALE OF THE SAME. MERELY BECA USE THE SHARES WERE DEMATTED AT A LATER STAGE NO ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE. IN FACT THERE IS HARDLY ANY C HANCE TO DOUBT OR SUSPECT THAT THE TRANSACTIONS IN PURCHASE OR SALE A RE NOT GENUINE. THESE IDENTICAL FACTS WERE ALSO AVAILABLE IN THE CA SE OF SWATI LUTHRA (SUPRA). IN THE INSTANT CASE THE ENTIRE TRANSACTION WAS CARRIED OUT THROUGH THE DEMAT ACCOUNT AND BANKING CHANNEL UPON WHICH STT HAS BEEN PAID BY THE ASSESSEE BEFORE US. IN ORDER T O HOLD THE TRANSACTION IS BOGUS AND / OR INGENUINE , THE ASSESSING OFFICER IS REQUIRED TO BRING IN COGENT/CLINCHING EVIDENCE TO P ROVE THE SAME. IT IS PERTINENT TO MENTION THAT NO OBSERVATION IS FORT HCOMING FROM THE ORDERS PASSED BY THE REVENUE POINTING OUT ANY MATER IAL DEFECT IN THE PROCEDURE FOLLOWED BY THE ASSESSEE IN SUCH PURC HASE AND SALE OF THE SHARES IN QUESTION. NEITHER ANY COGENT/CORRO BORATIVE EVIDENCE IS BROUGHT ON RECORD BY THE REVENUE TO HOL D OTHERWISE AND THEREFORE, THERE IS NO DOUBT THAT THE ASSESSING OFF ICER HAS MERELY RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 31 PROCEEDED TO ARRIVE AT HIS CONCLUSION THAT THE TRAN SACTION BEING BOGUS BASED ONLY ON MERE SURMISE AND CONJECTURE. 22. THUS, TAKING INTO CONSIDERATION THE ENTIRE ASPE CT OF THE MATTER IN THE ABSENCE OF ANY INDEPENDENT ENQUIRY MADE BY T HE LD. A.O AS ALREADY OBSERVED BY US RESPECTFULLY RELYING UPON TH E JUDGMENT PASSED BY HONBLE DELHI BENCH IN THE CASE OF SWATI LUTHRA VS ITO, WARD 51(5), DELHI (SUPRA) ON THE IDENTICAL FACTS KEEPING IN VIEW OF THE ORDERS PASSED BY SEBI, WE DO NOT HESITATE TO OB SERVE THAT HOLDING THE SAID M/S TURBO TECH ENGINEERING LTD AS A PENNY STOCK COMPANY BY THE AUTHORITIES BELOW WITHOUT ANY CORROB ORATIVE EVIDENCE IS UNCALLED FOR AND UNJUSTIFIED. SUCH ACT ION IS ERRONEOUS ARBITRARY WHIMSICAL AND SUFFERS FROM THE PRINCIPLE OF SURMISE AND CONJECTURE. THUS, THE DISALLOWANCE OF THE CLAIM MA DE BY THE ASSESSEE TOWARDS THE LONG TERM CAPITAL GAIN TO THE TUNE OF RS.23,25,000/- IN OUR HUMBLE OPINION IS BAD IN LAW AND LIABLE TO BE QUASHED. WE ORDER ACCORDINGLY. CONSEQUENTIALLY TH E ADDITION OF 3% OF BROKERAGE TO THE TUNE OF RS.69,750/-IS ALSO O F NO BASIS. THE SAID ADDITION MADE BY THE LEARNED AO IS ONLY ON THE BASIS OF PRESUMPTION. THUS, THE SAID ADDITION ON THE ALLEGED PAYMENT OF RADHEYSHYAM KHANDELWAL & ORS ITA NO.7,8,29,30,& 113/IND/2019 32 COMMISSION @3% IS ALSO WITHOUT ANY MERIT AND THUS D ELETED. ASSESSEES APPEAL IS, THEREFORE, ALLOWED. ITA NO. 08/IND/19, 29/IND/19, 30/IND/19 & 113/IND/1 9 (A.Y. 2014-15):- 23. THE IDENTICAL ISSUE INVOLVED IN THE CASE HAS AL READY BEEN DEALT WITH BY US IN ITA NO.07/IND/2019 FOR A.Y. 2014-15 A ND IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES THE SAME SHALL APPLY MUTATIS MUTANDIS . 24. IN THE RESULT, ALL THE CAPTIONED APPEALS FILED BY DIFFERENT ASSESSEES ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25 .06. 2021 SD/- SD/- (MANISH BORAD) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER / DATED : 25 TH JUNE, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE