Bhagwatiben Vinodkumar Surani, Ahmedabad V. The ITO, Ward-5(2)(1)., Ahmedabad

ITA 1309/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3410 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 21-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A DHYANI
• Keywords: Unexplained cash credit; Income from undisclosed sources; Share purchase agreement; Principle of natural justice; Earning of tax free income; Corroborative evidences; Accommodation entries; Onus to prove; Penny stocks; Capital Gains
• Section: 133(6); 13; 22; 68

Judgement Text

, , . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NO.1309/AHD/2018 ( / ASSESSMENT YEAR : 2014-15) BHAGWATIBEN VINODKUMAR SURANI C-20, OM NIKETAN APARTMENT JAWAHAR BUS STOP VASNA, AHMEDABAD / VS. THE INCOME TAX OFFICER WARD-5(2)(1) AHMEDABAD-380 015 ./ ./PAN/GIR NO. : AWDPS 9147 D ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : -NONE- / RESPONDENT BY : SHRI R.A. DHYANI, ADDL.CIT /DATE OF HEARING 04/03/2020 / DATE OF PRONOUNCEMENT 05 / 0 3 /20 20 / O R D E R PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)5, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)- 5/ITO.WD.5(2)(1)/262/2016-17 DATED 12/03/2018 ARIS ING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'THE ACT') DATED 26/12/2016 RELEVAN T TO ASSESSMENT YEAR (AY) 2014-15. ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 2 - 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 15,06,889/- MADE BY THE ASSESSING O FFICER TREATING THE LONG TERM CAPITAL GAIN ON SALE OF SHARES OF ALANG GASES LTD. INCLUDING COST THEREOF AS ALLEGED UNEXPLAINED CASH CREDITS U/S.68 OF THE I.T. ACT, 19 61 AND THEREBY ERRED IN DISALLOWING EXEMPTIONS CLAIMED BY THE APPELLANT U/S .L0(38) OF THE I.T. ACT, 1961. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ABOVE ADDITION MADE BY THE ASSESSING OFFICER AS INC OME FROM OTHER SOURCES ONLY ON THE BASIS OF THE INVESTIGATION CARRIED OUT BY DGIT (INV) KOLKOTA AND SEBI THAT SCRIP OF ALANG IND. GASES LTD. IS PENNY STOCK INDULGED IN PROVIDING BOGUS LONG TERM CAPITAL GAIN OF WHICH APPELLANT IS ONE OF THE BENEF ICIARIES. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN COMPLETING THE A SSESSMENT WITHOUT PROVIDING COPY OF THE STATEMENTS, MATERIAL ETC. RELIED UPON BY HIM HENCE THE SAME BEING AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND LAW REQUIRES TO BE CANCELLED. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN NOT GRANTING AN OPPORTUNITY FOR CROSS EXAMINATION OF THE PERSONS MAKING THE STATEMENT ON THE BASIS OF WHICH ADDITION HAS BEEN MADE. HENCE THE ASSESSMENT SO MADE BEING AGAINST THE PRIN CIPLES OF NATURAL JUSTICE AND LAW IS ILLEGAL AND VOID AB INITIO. 3. TODAY, THE CASE WAS FIXED FOR HEARING BUT NONE A PPEARED ON BEHALF OF ASSESSEE NOR ANY ADJOURNMENT APPLICATION HAS BEEN FILED ON RECORD. 4. FROM THE RECORDS, WE OBSERVE THAT REQUIRED NOTIC E WAS SENT TO THE ASSESSEE BY REGISTERED POST WHICH WAS DULY SERVED U PON THE ASSESSEE AND IN THIS RESPECT ACKNOWLEDGMENT FROM THE DEPARTMENT OF POSTS HAS ALREADY BEEN PLACED ON RECORD WHICH SHOWS THAT EVEN IN SPITE OF SERVICE OF NOTICE, THE ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 3 - ASSESSEE OR HIS REPRESENTATIVE HAS NOT COME BEFORE THIS COURT FOR ATTENDING THE HEARING WHICH GOES TO SHOW THAT ASSESSEE IS NOT INTERESTED IN PURSUING WITH HER PRESENT APPEAL. HOWEVER, LD.DR PRESENT IN THE COURT IS READY TO THE ARGUMENTS, THEREFORE WE PROCEED TO DECIDE THE APPEA L ON MERITS EX-PARTE QUA THE ASSESSEE, AFTER HEARING THE LD.DR. 5. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FI LED HER RETURN OF INCOME ON 22/03/2015 DECLARING TOTAL INCOME OF RS.2,45,560 /-. THE CASE WAS SELECTED FOR SCRUTINY AND SERVING A STATUTORY NOTIC E AND AFTER SEEKING REPLY OF THE ASSESSEE, ASSESSMENT ORDER U/S.143(3) R.W.S.14 7 OF THE ACT WAS FRAMED ON 26/12/2016 THEREBY MAKING ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S.68 OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE CASE OF BOTH T HE PARTIES, DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREINABOVE. ALT HOUGH ASSESSEE HAS RAISED FOUR GROUNDS BUT ALL THE FOUR GROUNDS RAISED BY THE ASSESSEE ARE INTER- CONNECTED, INTER-RELATED AND RELATES TO CHALLENGING THE ORDER OF LD.CIT(A) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S.68 OF THE ACT. ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 4 - 6. WE HAVE HEARD THE LD.DR AND PERUSED THE MATER IAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY THE REVENUE AUTHORITIE S. IN THE INSTANT CASE, WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE IMPUGNED CASH CREDITS BUT EVEN IN SPITE OF AVAILING NUMEROUS OPPORTUNITIES, THE ASSESSEE COULD NOT EXPL AIN THE IMPUGNED CASH CREDIT. THUS, ADDITIONS WERE MADE BY THE ASSESSIN G OFFICER. AFTER CONSIDERING THE SUBMISSIONS AS WELL AS THE FACTS OF THE PRESENT CASE, WE FIND THAT THE CIT(A) HAS DECIDED THESE ISSUES IN PARAGRA PH NO. 4 OF HIS ORDER. HOWEVER, OPERATIVE PORTION IS CONTAINED IN PARAGRAP H NOS.4.3 TO 4.11 WHICH ARE REPRODUCED HEREUNDER: DECISION: 4.3. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER AND SUBMISSION FILED BY THE APPELLANT. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE AO HAS OBSERVED THAT ON DURING THE FINANCIAL YEAR UNDER CONSIDERATION, T HE ASSESSEE HAS CLAIMED EXEMPTION OF LONG TERM CAPITAL GAIN FOR RS. 14,78,2 89/- U/S. 10(38) OF THE ACT IN RESPECT OF SALE OF SHARE OF ALANG INDUSTRIES GASES LIMITED. THE ASSESSEE CLAIMED THAT 28600 SHARES OF ALANG INDUSTRIES GASES LTD. HA VE BEEN PURCHASED ON 1.4.2012 @1/- PER SHARE. THE APPELLANT HAS OBTAINED SHARE CERTIFICATES IN PH YSICAL FORM AND SAME WAS DEMATERIALIZED LATER ON BY HIM AND THEN SUCH SHARES WERE SOLD IN THE MARKET. THE APPELLANT HAS CLAIMED THAT AS SALE WAS SUBJECT MATT ER OF STT AND THE SHARES WERE SOLD THROUGH SEBI REGISTERED BROKERS. THE APPELLANT HAS MAINLY ARGUED THAT ENTIRE TRANSACTIONS ARE SUPPORTED BY DOCUMENTARY EVIDENCES LIKE PURCHASE BILL, PAYMENT, SALE BILL, CONSIDERATION RECEIVED THROUGH CHEQUE, D EMAT STATEMENT ETC HENCE SUCH AMOUNT CANNOT BE SUBJECT MATTER OF ADDITION RELYING UPON FINDINGS OF THE KOLKATA INVESTIGATION DIRECTORATE AND SEBI AS WELL AS OTHER INFORMATION INCLUDING STATEMENTS OF VARIOUS PERSONS INCLUDING OPERATORS, ENTRY PROVI DERS AND STOCK BROKERS. 4.4. ON CAREFUL CONSIDERATION OF ENTIRE FACTS, IT IS OBSERVED THAT KOLKATA INVESTIGATION DIRECTORATE HAD UNDERTAKEN INVESTIGAT ION INTO 84 PENNY STOCKS (TURBO TECH BEING ONE OF IT) AND HAS GIVEN DETAILED FINDIN GS INDICATING BOGUS LTCG/STCL ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 5 - ENTRIES CLAIMED BY LARGE NUMBER OF BENEFICIARIES. T HE MODUS OPERAND! INVOLVING OPERATORS, INTERMEDIARIES AND THE BENEFICIARIES HAS BEEN DETAILED IN THE INVESTIGATION REPORT PREPARED AND DISSEMINATED BY THE KOLKATA DIR ECTORATE. SIMILAR INVESTIGATIONS WERE ALSO CONDUCTED BY THE DIRECTORATE OF INVESTIGA TION AT MUMBAI AND AHMEDABAD. THESE BEING CIRCUMSTANTIAL EVIDENCES ARE MOST RELEV ANT FOR DECIDING THE ISSUE WHETHER APPELLANT HAS EARNED GENUINE CAPITAL GAIN O R BOGUS CAPITAL GAIN. 4.5. BEFORE DEALING WITH THE FACTS OF APPELLANT'S C ASE, IT IS IMPORTANT TO DISCUSS ISSUE OF PENNY STOCK AND ITS MODUS OPERENDI OF TRANSACTIO NS. IF A PERSON WHO IS HAVING UNACCOUNTED INCOME WHO WANTS TO CONVERT THIS INCOME INTO WHITE THEN HE APPROACHES AN ENTRY OPERATOR. THE ENTRY OPERATOR MA INTAINS ACCOUNTS OF NUMEROUS PERSONS AND LEGAL ENTITIES AND IS IN CONSTANT TOUCH WITH THE PERSONS WHO ARE ENGAGED IN MANAGING AN ENTRY GIVING PENNY STOCK COM PANY. A PENNY STOCK COMPANY IS THAT COMPANY WHOSE SHARES ARE LISTED ON A STOCK EXCHANGE LIKE BSE AND HAS VERY LOW MARKET CAPITALIZATION AND ARE TRADED AT A VERY LOW PRICE. MORE OFTEN ENTRY GIVING PENNY OPERATOR COMPANIES DO NOT DO ANY REAL BUSINES S ACTIVITY. THE UNIQUE FEATURE OF ENTRY GIVING PENNY STOCK COMPANY IS TREMENDOUS J UMP AND SLUMP IN THE SHARE PRICES IN A SHORT SPAN OF TIME. IN FACT IN A TYPICA L TECHNICAL ANALYSIS ONE MAY FIND THAT THE FLUCTUATION IN SHARE PRICES OF ENTRY GIVING COM PANY RUNS INTO THOUSANDS OF PERCENTAGE. ONCE THE PERSON A' HAVING UNACCOUNTED I NCOME CONTACTS THE PERSON 'E'(ENTRY OPERATOR) THE PERSON 'E' GIVES PERSON 'A' TO INVEST CERTAIN AMOUNT IN A COMPANY AT A VERY LOW PRICE. THIS PURCHASE MAY HAPP EN THROUGH EITHER STOCK EXCHANGE OR PREFERENTIAL ALLOTMENT WHEREIN SHARES O F 'P' (AN ENTRY GIVING PENNY STOCK COMPANY) WILL BE BOUGHT BY 'A'. IT MAY ALSO HAPPEN THAT 'E' WILL ASK A' TO BUY SHARES OF SOME OTHER PRIVATE LIMITED COMPANY WHICH WILL BE SUBSEQUENTLY MERGED WITH COMPANY 'P' AND BY VIRTUE OF THIS MERGER THE SHARES OF 'P' WILL AUTOMATICALLY COME TO 'A'. ONCE THE SHARES OF 'P' WILL GET CREDITED TO AC COUNT OF 'A' THEN THE ENTRY OPERATOR 'E' ALONG WITH THE SHARE BROKERS WILL JACK UP THE P RICES OF SHARES OF 'P'. AS SUCH COMMON INVESTORS ARE NOT INTERESTED IN 'P' HENCE TH E SHARES OF THIS COMPANY IS EXTREMELY STERILE WITHOUT MUCH VOLATILITY. THROUGH CIRCULAR TRADING THE SHARES OF 'P' IS INCREASED. ONCE THE PRICES OF THE SHARES ARE RIGGED TO AN OPTIMUM AMOUNT, ENTRY OPERATOR ASKS THE BENEFICIARY TO DELIVER THE UNACCO UNTED CASH. THIS MAY BE DELIVERED IN PARTS AS WELL AS IN ONE GO. ONCE THE UNACCOUNTED CASH IS DELIVERED BY THE BENEFICIARY 'A', THE SAME IS THEN ROUTED BY THE OPE RATOR TO THE BOOKS OF COUNTER- PARTIES (PURCHASERS), THROUGH A MAZE OF VARIOUS OTH ER PAPER COMPANIES, WHICH ULTIMATELY BUY THE SHARES BELONGING TO THE BENEFICI ARY AT HIGH PRICES. WHEN THE CORRESPONDING AMOUNT REACHES INTO THE ACCOUNT OF TH ESE COUNTER PARTIES, EITHER BY WAY OF CHEQUE OR RTGS, THE OPERATOR INSTRUCTS THE B ENEFICIARY TO PLACE A OPTION FOR THE SHARES IN A PARTICULAR LOT SIZE ON A PARTICULAR DATE AND TIME. ACCORDING SAME IS BEING CONVEYED TO THE COUNTER PARTIES OR THE PERSON OPERATING THE TERMINAL BEHALF ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 6 - COUNTER PARTIES AND ON THE GIVEN DATE AND TIME TRAN SACTION, I.E. PURCHASE OF SC | FROM THE BENEFICIARY THROUGH STOCK EXCHANGE, IS EXE CUTED. 4.6. IN THIS WAY, THE SHARES OF THE BENEFICIARIE S ARE BOUGHT BY THE DUMMY CONCER (COUNTER PARTIES) AND THE UNACCOUNTED MONEY OF THE BENEFICIARY IS ROUTED TO THE BOOKS THE BENEFICIARY AS A BOGUS ENTRY OF LTCG AFTE R ONE YEAR ENTRY OPERATOR ASK THE PERSON A' TO SELL THESE SHARES OF 'P' AND GET THE CAPITAL GAIN. THIS CAPITAL GAIN ARISES THROUGH STOCK MARKETS AND AFTER ONE YEAR HEN CE THIS GAIN IS AN EXEMPT INCOME OF PERSON 'X'. THIS THE ONE WAY OF DOING TRA NSACTIONS IN PENNY STOCK AND TRANSFERRING UNACCOUNTED MONEY AND OBTAINING LONG T ERM CAPITAL GAIN OR LOSS AS THE CASE MAY BE. EVEN IN SOME OF THE CASES, THE SHARES OF THE PENNY STOCK COMPANIES ARE ACQUIRED BY THE BENEFICIARIES OF LTCG AT VERY L OW PRICES THROUGH THE ROUTE OF PREFERENTIAL ALLOTMENT (PRIVATE PLACEMENT) AND OF M ARKET TRANSACTION. THESE SHARES HAVE A LOCK-IN PERIOD OF 1 YEAR AS PER SECURITIES A ND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS 2009.LT IS ALSO OBSERVED THAT IN SOME OF THE CASES ALL THE TRANSACTIONS ARE BACK DAT ED MEANS PURCHASES ARE SHOWN TO BE MADE IN CASH ONE YEAR PRIOR TO SALE EVEN THOUGH ACTUAL PURCHASE HAS NOT HAPPENED. AS COMPANIES ARE ALSO INVOLVED IN SUCH TR ANSACTIONS, BACK DATED LETTER IS GIVEN TO ASSESSEE FOR ALLOTMENT OF SHARES AND TRANS FER OF PHYSICAL SHARES ONE YEAR PRIOR TO SALE OF SHARES BUT IN FACT NO SUCH ACT HAS BEEN CARRIED OUT. THESE ACTIVITIES ARE CARRIED OUT ONLY AT THE TIME OF DEMATERIALIZATI ON OF SHARES MEANING THEREBY ASSESSEE IS GIVEN PHYSICAL SHARES WHEN ASSESSEE GIV ES SUCH SHARES FOR DEMATERIALIZATION BUT PAPERS ARE ARTIFICIALLY CREAT ED SUCH THAT SHARES WERE PURCHASED BY ASSESSEE ONE YEAR PRIOR TO DEMATERIALIZATION AND SHARES WERE HELD BY HIM. BY ADOPTING THESE VARIOUS METHODS, ASSESSEE OBTAINS BO GUS LONG TERM CAPITAL. 4.7. IT CAN BE SEEN FROM FINANCIAL DATA OF THE COMP ANY WHICH IS AVAILABLE AT PUBLIC DOMAIN; NO PRUDENT PERSON WILL INVEST IN SUCH COMPA NIES. WHEN THERE ARE LARGE NUMBER OF FUNDAMENTAL COMPANIES ARE AVAILABLE IN TH E MARKET, WHY APPELLANT HAS CHOSEN TO INVEST IN THESE TYPES OF SHARES CLEARLY P ROVE THAT APPELLANT WISHES TO OBTAIN EXEMPT CAPITAL GAIN BY OBTAINING ACCOMMODATI VE ENTRIES. IT IS AN ESTABLISHED LAW THAT INCOME TAX PROCEEDINGS FALL IN THE DOMAIN OF PREPONDERANCE OF PROBABILITIES, MEANING THAT THE ACTION OF ASSESSEE IS CONSIDERED TO BE RATIONAL AND WELL INFORM FALLING IN THE DOMAIN WHERE PROBABLE CH OICE ARE EXERCISED. IN SUMATI DAYAL CASE HON'BLE SUPREME COURT HAS HELD AS UNDER:- 'IT IS NO DOUBT TRUE THAT IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME, THE BURDEN LIES ON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION AND IF A RECEIPT IS IN THE NATURE OF INCO ME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN EXEMPTION PROVI DED BY THE ACT LIES UPON THE ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 7 - ASSESSEE. [SEE. PARIMISETTI SEETHARAMAMMA (SUPRA) A T P. 5361. BUT, IN VIEW OF SECTION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDI TED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR THE SAME MAY BE CHARGED TO IN COME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION O FFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACTORY. IN SUCH CASE THERE IS PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY, AND IF HE FAILS TO REBUT, THE SAID EVIDENCE BEING UN-REBUTTED, CAN BE USED AGAINST HIM BY HOLDING THAT IT WAS A RECEIPT OF AN INCOME NATURE. WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE THE DEPARTMENT CANN OT, HOWEVER, ACT UNREASONABLY. ' THE FINANCIAL ANALYSIS MADE HEREIN ABOVE CLEARLY PR OVE THAT THE DECISION OF INVESTMENT IN NONDESCRIPT PENNY STOCK IS HIGHLY UNL IKELY FOR A PRUDENT INVESTOR AND ALSO THAT THE QUANTUM JUMP IN STOCK PRICES OF ALANG INDUSTRIAL GASES LTD. 4.8. THE AO HAS ALSO REFERRED TO SEBI REPORT WHEREI N SEBI DATED 19 TH DECEMBER, 2014 HAS FOUND VARIOUS PERSONS AS FRAUDULENT IN THE IR MARKET PRACTICES AND RESTRAINED THEM FROM FURTHER TRADING. THE SCRIP IN WHICH APPELLANT HAS MADE THE TRANSACTION IS LISTED IN PENNY STOCK BY SEBI AND NO PRUDENT PERSON WOULD INVEST IN SUCH TYPE OF SHARES. AS DISCUSSED HEREIN ABOVE , TRANSACTIONS OF SHARES WERE NOT GOVERNED BY MARKET PRACTICES AND PAYMENT WAS MADE I N CASH WHICH PROVE THAT TRANSACTIONS ARE NON-GENUINE AND APPELLANT HAS RESO RTED TO PRECONCEIVED SCHEME TO PROCURE LONG TERM CAPITAL GAIN BY WAY OF PRICE DIFF ERENCE IN SHARE TRANSACTIONS WHICH IS NOT SUPPORT BY MARKET. 4.9. THE STATEMENT OF SHRISANJAY DHIRAJLAL VORA, TH E REGIONAL DIRECTOR (EAST ZONE) OF M/S.ANAND RATHI SHARES & STOCK BROKERS LTD. RECORDE D ON 8.4.2015 REVEALS THE MODUS OPERANDI ADOPTED TO AVAIL BOGUS SHORT TERM CA PITAL LOSS. 4.10. WITH REGARD TO OBSERVATION OF APPELLANT THAT ENTIRE TRANSACTIONS ARE SUPPORTED BY VARIOUS DOCUMENTARY EVIDENCES, IT IS OBSERVED TH AT SHARES IN WHICH APPELLANT HAS CARRIED OUT TRANSACTION IS PENNY STOCK, BROKERS HAV E ALSO CONFIRMED THAT THERE ARE MANIPULATIVE TRANSACTIONS IN ABOVE SCRIP WHICH IS F URTHER SUPPORTED BY SEBI ORDER RELIED BY AO, ENTIRE CIRCUMSTANTIAL EVIDENCES CLEAR LY SUGGEST THAT APPELLANT HAS OBTAINED ACCOMMODATION ENTRIES. THIS ISSUE AND MODU S OPERANDI IN SIMILAR TRANSACTION IS DISCUSSED BY MUMBAI ITAT IN THE CASE OF ITO VS SHAMIM BHARWANI 69 TAXMANN.COM 65 AS UNDER: '4.1 AS SHALL BE EVIDENT FROM THE FOREGOING NARRATION OF EVENTS, THE PRIMARY FACTS (AND FIGURES) OF THE CASE ARE NOT IN DISPUTE, WHICH (DISPUTE) ARISES PRINCIPALLY ON ACCOUNT OF THE DIFFERENT INFERENCES DRAWN FROM THE SAME SET OF PRIMARY FACTS BY THE TWO REVENUE AUTHORITIES. THE ISSUE IS, THUS, ESSENT IALLY FACTUAL, REVOLVING OR CENTERING ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 8 - AROUND AS TO WHICH OF THE TWO INFERENTIAL FINDINGS ARE MAINTAINABLE IN LAW, I.E., IN VIEW OF THE SURROUNDING FACTS AND CIRCUMSTANCES OF THE CASE. THE REVENUE'S PRINCIPAL AND THE ONLY CHARGE IS QUA THE GENUINENESS OF THE T RANSACTION/S, AND WHICH HAS BEEN ACCEDED TO BY THE FIRST APPELLATE AUTHORITY IN VIEW OF THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE IN SUPPORT OF HIS CLAIMS. THAT GENUINENESS COULD VALIDLY BE TESTED ON THE GROUND OR PRINCIPLE OF PREPONDERANCE OF HUMAN PROBABILITIES, WHICH COULD THUS FORM A VALID GROUND OR PARAMETER FOR DET ERMINING THE GENUINENESS, STANDS SINCE SETTLED BY THE APEX COURT IN SUMATI DAYAL (SU PRA), RELIED UPON BY THE REVENUE, WHEREIN THE APEX COURT, IN DECLARING THE TRANSACTIO N AS NON-GENUINE, DISCARDED A HOST OF DOCUMENTARY EVIDENCES FILED OR RELIED UPON BY THE ASSESSEE-APPELLANT. THAT DOCUMENTARY EVIDENCES ARE NOT BY THEMSELVES CONCLUS IVE, AND THE TRUTH OF THE MATTER OR THE DOCUMENTS COULD BE DETERMINED ON THE BASIS OF OR ON THE ANVIL OF THE SURROUNDING FACTS AND CIRCUMSTANCES OF THE CASE IS WELL SETTLED, AND FOR WHICH THE REVENUE RELIES ON THE DECISION IN THE CASE OF DURGA PRASAD MORE (SUPRA). WHAT IS RELEVANT, MORE SO WHERE THE GENUINENESS OF THE TRAN SACTION IS IN ISSUE, IS THE TRUTH OF THE DOCUMENT/S FURNISHED IN SUBSTANTIATION, AS WELL AS THE SUBSTANCE OF THE TRANSACTION AND NOT ITS FORM, AND WHICH IS TO BE DE TERMINED ON THE BASIS OF AND ON THE CONSPECTUS OF THE ENTIRETY OF THE FACTS AND CIR CUMSTANCES OF THE CASE. THE ISSUE BEFORE US IS WHETHER THE DOCUMENTS FURNIS HED BY THE ASSESSEE, INCLUDING AVERMENTS MADE BY HIM, OR EVEN HIS BROKER, SATISFY THE TEST OF PREPONDERANCE OF HUMAN PROBABILITIES. IN OUR VIEW IF THE ASSESSEE HA S REASONABLY EXPLAINED THE 'INTRIGUING FACTS AND CIRCUMSTANCES AS POINTED BY THE AO, AND ON THE STRENGTH OF WHICH THE GENUINENESS IS ASSAILED BY HIM, AND WHICH FURTHER AGREE WITH THAT OBSERVED IN THE .CASE OF A PENNY STOCK COMPANY, NO CASE FOR TREATING THE TRANSACTION AS NOT GENUINE SHALL ARISE. THE ONUS U/S.68 THOUGH IS ON THE ASSESSEE, SO THAT HIS EXPLANATION WOULD, HOWEVER, REQUIRE BEING SUBSTANTI ATED OR PROVED. THE CASE LAW IN THE MATTER IS LEGION, AND TOWARD WHICH WE MAY, IF O NLY FOR THE SAKE OF COMPLETENESS OF OUR ORDER, ADVERT TO THE SOME OF THE CELEBRATED DECISIONS BY THE APEX COURT IN THE MATTER: A. GOVINDARAJULU MUDALIAR V. CIT [1958] 34 ITR 807 (SC); SREELEKHA BANERJEE V. CIT [1963] 49 ITR 112 (SC); KALE KHAN MOHAMMAD HANIT V. CIT [1963] 50 ITR 1 (SC ); DURGA PRASAD MORE (SUPRA); CIT V. BIJU PATNAIK [1986] 160 ITR 674/26 TAXMAN 32 4 (SC); SUMATI DAYAL (SUPRA); AND CIT V. P. MOHANAKALA [2007] 291 ITR 278/161 TAXMAN 169 (SC) WE MAY FURTHER CLARIFY THAT IN PROCEEDING WITH THE MATTER, WE HAVE CIRCUMSCRIBED THE ENTIRE MATERIAL ON RECORD. 4.2 THE ASSESSEE, TO BEGIN WITH, HAS NOWHERE EXPLAI NED AS WHY THE SHARES WERE PURCHASED IN CASH, THE SOURCE OF WHICH IS ASCRIBED TO CASH-IN-HAND, AND NOT TO ANY ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 9 - CONTEMPORANEOUS EVIDENCE, AS CASH WITHDRAWN FROM BA NK ON THAT OR NEARBY DATES. HOW WAS THE CASH, ONE MAY ASK, TRANSMITTED FROM MUM BAI, WHERE THE ASSESSEE IS RESIDENT, TO KOLKATA, WHERE THE PURCHASE STANDS MAD E, AND THE BROKER, TO WHOM IT IS PAID, LOCATED? 4.3 THEN, AGAIN, WHY WAS THE TRANSACTION NOT CARRIED TH ROUGH A RECOGNIZED STOCK EXCHANGE (SE), MANDATORY IN LAW, EVEN AS IT WAS DON E THROUGH ITS REGISTERED MEMBER. THIS BECOMES RELEVANT AND SIGNIFICANT FOR M ORE THAN ONE REASON. FIRSTLY, IT PROVES THE TIME OF THE TRANSACTION, WHICH IS OF ESS ENCE INASMUCH AS IT DETERMINES THE HOLDING PERIOD OF THE SHARES/ASSET, WITH REFERENCE TO WHICH, WHERE OVER 12 MONTHS, EXEMPTION FROM TAX TO GAINS ARISING ON TRANSFER IS GRANTED BY LAW PER S.L0(38) READ WITH OTHER RELEVANT DEFINING PROVISIONS OF THE ACT. THE FIRST APPELLATE AUTHORITY HAS IN THIS REGARD MENTIONED THE SETTLEMENT NUMBER OF THE TRANSACTION AS D-2005326. THE SAME, EVEN AS STATED BY THE A.O. (REFER PARA 4.8 OF THE ASSESSMENT ORDER), IS THE NUMBER OF THE CONTRACT NOTE ISSUED BY THE BROKER. T HE SETTLEMENT, WHERE THE TRANSACTION IS CARRIED THROUGH THE SE, WHICH IS ADM ITTEDLY NOT THE CASE, IS BETWEEN THE BROKERS OR THE MEMBERS OF THE SE AND, ACCORDING LY, ONLY A NET AMOUNT IS PAYABLE OR RECEIVABLE BY A PARTICULAR BROKER FOR A PARTICUL AR PERIOD, CALLED THE SETTLEMENT PERIOD, WHICH EXTENDS TO GENERALLY ONE WEEK OR A FO RTNIGHT, AND WHICH IS TO OR FROM THE SE, WHICH AGGREGATES THE FINANCIAL IMPACT, I.E. , THE NET RESULT OF ALL THE TRANSACTIONS AMONGST ALL THE BROKERS FOR THE SETTLE MENT PERIOD, ACTING AS A COLLECTING/DISBURSING AGENCY. A SINGLE AMOUNT IS TH US EITHER PAYABLE OR RECEIVABLE BY EACH BROKER TO OR FROM THE SE FOR A PARTICULAR PERI OD, WHICH IS AGAIN NUMBERED (I.E., AS SETTLEMENT NUMBER), AND SERVES TO SETTLE THE FIN ANCIAL OBLIGATIONS TO OR CLAIMS ON ALL THE OTHER MEMBERS OF THE EXCHANGE, I.E., OF EAC H BROKER, FOR THAT PERIOD. THIS IS OF COURSE ACCOMPANIED BY GIVING AND TAKING DELIVERY OF THE SHARES, EITHER IN PHYSICAL FORM OR BY ISSUING OR ACCEPTING DELIVERY, WHICH IN EITHER CASE IS REMITTED BY THE MEMBER TO HIS CLIENTS, FOR ON BEHALF OF THE WHOM HE ACTS, CHARGING A FEE CALLED BROKERAGE/COMMISSION, FOR HIS SERVICES. THE WHOLE P URPORT OF THE FORGOING NOTE ON THE TRADING PROCESS IS TO CLARIFY THAT THE SETTLEME NT ONLY SIGNIFIES A SETTLEMENT BETWEEN THE BROKERS, CARRIED OUT THROUGH THE EXCHAN GE ACTING AS A NODAL AGENCY, SO THAT THE PURCHASE TRANSACTION/S UNDER REFERENCE MAY NOT BE SO CONSTRUED INASMUCH THE SAME IS ADMITTEDLY OFF THE MARKET (EXCHANGE), W HICH STANDS ESTABLISHED BY THE REVENUE THROUGH THE COMMUNICATION PER ITS LETTER TO THE AO IN RESPONSE TO A NOTICE U/S. 133(6) BY THE CALCUTTA STOCK EXCHANGE. THIS AS PECT IS IN FACT NOT DISPUTED BY THE ASSESSEE. THE SAME MAY NOT NECESSARILY IMPLY THAT T HE TRANSACTION IS NOT GENUINE OR NOT UNDERTAKEN AT THE RELEVANT TIME, BUT THEN THE S AME WOULD HAVE TO BE SHOWN WITH REFERENCE TO SOME CORROBORATIVE, EXTERNAL EVID ENCE. THE CONTRACT NOTE/BILL BY THE BROKER IS ONLY AN 'INTERNAL VOUCHER', I.E., BY PERSON WHO IS A PARTY TO THE TRANSACTION AND, THUS, ACTING IN COHESION, IF NOT I FT COLLUSION. IT IS AFTER ALL A DOCUMENT GENERATED BY HIM, SO THAT ITS TRUTH, IN THE CONTEXT OF PAPER COMPANIES, THE 'SELLING' OF 'GAINS' AND 'LOSSES' IN WHICH THE BROKERS, AS OPERA TORS, PLAY A SIGNIFICANT ROLE, CANNOT THEREFORE BE DECIDED WITH REFERENCE THERETO OR THE STATEMENT BY THE BROKER, A RELATED PARTY. THIS, HOWEVER, WOULD BE SO ONLY WHERE THERE ARE STRONG FACTORS OR CIRCUMSTANCES WHICH CAUSE SERIOUS DOUBT ABOUT THE T RANSACTION. FOR EXAMPLE, HOW ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 10 - ONE MAY ASK, WERE THE SHARES TRANSMITTED TO THE ASS ESSEE, LOCATED AT MUMBAI, WHO WOULD HAVE SIGNED THE TRANSFER FORM? THE BROKER OR THE ASSESSEE NOWHERE STATES THE REASO N FOR CARRYING OUT THE TRANSACTION IN THE MANNER DONE, I.E., OFF THE MARKE T, WHICH IS NOT ORDINARILY PERMISSIBLE, AND IS SUBJECT TO SOME LEGAL CONSTRAIN TS UNDER SECURITIES CONTRACTS (REGULATION) ACT, 1956. RATHER, HOW COULD HE DEAL W ITH THE ASSESSEE, WHO IS NOT HIS CLIENT! THEN, AGAIN, WHY WAS IT PAID FOR IN CASH, F OR WHICH THERE IS NO EVIDENCE, AND NEITHER HAS THE BROKER BEEN SHOWN TO ACCEPT CASH IN THE ORDINARY COURSE OF HIS BUSINESS. WHY, FOR THE PERSONS TRADING THEREIN, THI S WOULD BE AN IMPEDIMENT TO CLAIM THE COST OF SHARES TRADED IN, IN VIEW OF THE NON OB STANTE CLAUSE OF S. 40A(3). THE BROKERS ARE IN FACT REQUIRED TO MAINTAIN SEPARA TE BANK ACCOUNT FOR THE FUNDS RECEIVED FROM OR ON BEHALF OF THE CLIENTS, SO THAT THE SAME DO NOT MERGE WITH THAT OF THE BROKER HIMSELF. WHAT IS EQUALLY IMPORTANT IS TH E DATE ON WHICH THE SHARES WERE DEMATERIALIZED. THIS IS AS NO TRANSACTION COULD BE CARRIED OUT IN LISTED SHARES, I.E., IN THE PHYSICAL FORM, WHERE THE SHARES STAND DEMATERIA LIZED BY THE COMPANY. WHY WERE THE SHARES SENT FOR DEMATERIALIZATION ONLY IN MAY 2 005, I.E., AFTER A DELAY OF OVER A YEAR, HAVING BEEN DEMATERIALIZED ONLY ON 12.07.2005 (PB PG.10), I.E., DAYS PRIOR TO THEIR SALE ON 22.07.2005. THAT IS, ASSUMING THAT TH E SHARES WERE ACTUALLY PURCHASED AND DELIVERED TO THE ASSESSEE IN MAY, 2004. RATHER, AS IT WOULD APPEAR TO US, THE DEMATERIALIZATION OF THE SHARES COINCIDES WITH THE SPIRALING PRICE OF THE SCRIP, SO THAT AN ORCHESTRATION OF THE 'EVENTS' IS APPARENT. THE S HARES, EVEN ASSUMING A VALID PURCHASE, THUS, WOULD BE CLOSE TO THE DATE/S OF DEM ATERIALIZATION. THE ASSESSEE STATES OF HAVING REPORTED ITS PURCHASE (OF SHARES) ON 06.05.2004, PER HIS BALANCE- SHEET AS AT 31.03.2005, ENCLOSING IT ALONG WITH HIS RETURN OF INCOME FOR A.Y.2005-06 (PB PGS. 15, 16). THE RETURN OF INCOME, HOWEVER, IS FILED ONLY ON 28.10.2005, WHICH IS EVEN SUBSEQUENT TO THE SALE OF SHARES ON 12.07.2 005, SO THAT THE SAID REPORTING OF THE TRANSACTION, WHICH OF COURSE DOES NOT BEAR THE DATE OF PURCHASE, IS TO NO MOMENT. THE ASSESSEE RELIES ON A COMMUNICATION FROM THE COMPANY DATED 17.05.2004 (PB PG. 2) TO SHOW THAT THE SHARES WERE LODGED FOR TRANSFER WITH THE COMPANY IMMEDIATELY UPON PURCHASE ON 06.05.2004, EV IDENCING, THUS, THE VALIDITY OF THE PURCHASE DATE. IN THIS REGARD, WE MAY FIRSTLY C LARIFY THAT PROVING PURCHASE AS GENUINE; THE REVENUE DOUBTING THE PRICE RISE AND, T HUS THE GAIN, WOULD THEREFORE ONLY MAKE OUT A CASE FOR THE EXCLUSION OF A PART (R S. 54,250/-) OF THE IMPUGNED SUM OF RS. 12.15 LACS, WHICH REPRESENTS THE ENTIRE SALE PROCEEDS OF THE SHARES. IT NEEDS TO BE APPRECIATED THAT WHAT IS ESSENTIALLY UNDER CL OUD, AND BEING SERIOUSLY DOUBTED AS TO THE GENUINENESS, IS THE GAIN STATED TO ARISE ON THE TRANSACTION. IT IS THE GAIN WHICH IS ABNORMAL, I.E., BOTH QUA THE SCRIP; ITS' T RADING AND, THUS, ITS QUANTUM, AND UNEXPLAINED, BESIDES BEING TAX EXEMPT, AND WHICH IS INDEPENDENT OF ITS PURCHASE. THE PURCHASE OF SHARES OF A LITTLE KNOWN COMPANY OF THE FACE VALUE OF RS. 10/- EACH AT RS. 21-22 WOULD EVEN OTHERWISE HARDLY RAISE ANY EYEBROW OR DOUBT. THE PURCHASE GETS DOUBTED EXAMINED ONLY FOR THE REASON THAT IT R EPRESENTS A PART OF THE OVERALL TRANSACTION, WHICH IS CONSIDERED BY THE REVENUE AS AN ARTIFICE. IN OTHER WORDS, PROVING THE PURCHASE WOULD BY ITSELF NOT PROVE THE TRANSACTION OF GAIN, WHICH STANDS ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 11 - IMPUGNED AND, FURTHER, BEING AT A MINOR SUM HAS LIT TLE BEARING IN THE MATTER. IN FACT, THE A.O. STATES PRECISELY THIS (REFER PARA 4.9(A) O F HIS ORDER), THAT EVEN ASSUMING THE PURCHASE AS GENUINE, THE SALES, GIVEN THE HIGH RATE S FOR SUCH PENNY STOCKS, WITH NO REAL BUYERS, ARE BOGUS. COMING TO THE ASSESSEE'S CO NTENTION ON MERITS, THE LETTER DATED 17.05.2004 SUPRA INSPIRES LITTLE CONFIDENCE. IT DOES NOT SPECIFY THE NAME OF THE AUTHORIZED SIGNATORY, THE SIGN BEING OTHERWISE NOT VISIBLE. IT BEARS NO SERIAL NUMBER, EVEN AS IT REPRESENTS A COMMUNICATION, WHICH A COMP ANY OR ITS SECRETARIAL DEPARTMENT IS REQUIRED TO MAKE IN THE REGULAR COURS E OF ITS BUSINESS. IT FURTHER DOES NOT BEAR ANY INDICATION OF THE MANNER IN WHICH IT I S CONVEYED TO THE ASSESSEE, I.E., BY HAND, PER POST -ORDINARY OR REGISTERED; PER COUR IER, ETC., WHICH IS, AGAIN, A NORM, BESIDES ESTABLISHING ITS DATE. SUCH REMITTANCES ARE GENERALLY THROUGH REGISTERED POST, SO THAT IT WOULD CONSTITUTE EVIDENCE WITH THE COMPA NY FOR HAVING DELIVERED THE SHARES, WHICH ARE EVEN OTHERWISE VALUABLE DOCUMENTS . THE INCIDENTAL QUESTION THAT ARISES IS THE DATE WHEN THE SHARES WERE DEMATERIALI ZED BY THE COMPANY. THIS IS AS IT CLEARLY SHOWS THAT THE SHARES, ISSUED ONLY ON 31.03 .2004, BEING REMITTED TO THE TRANSFEREE IN THE PHYSICAL FORM ON 17.05.2004, WERE NOT CONVERTED INTO THE D-MAT FORM TILL THEN. THIS IS RELEVANT AS THE TRADING ON THE EXCHANGE, WHICH ONLY WOULD MAKE THE SHARE A LISTED SHARE, GAIN ON WHICH IS EXE MPT U/S.L0(38), COULD AS PER THE GUIDELINES ONLY BE IN THE D-MAT FORM. NO WONDER, TH E TRADING ON THE EXCHANGE IN THE SAID SCRIP COMMENCES ONLY ON 03.03.2005. 'HOW COULD , IN THAT CASE, IT BE SAID THAT THE ASSESSEE HAS TRANSFERRED/SOLD A LISTED SHARE AF TER HOLDING IT FOR A PERIOD OF A YEAR (OR MORE)? THE ASSESSEE SPEAKS OF HAVING DEPOSITED STT, BUT, THEN, THE QUESTION IS WHETHER THE SAID PAYMENT WOULD MAKE A NON-GENUINE T RANSACTION, GENUINE. 4.4 FURTHER ON, WHY, AND ON WHAT BASIS, THE ASSESSEE, A TEACHER BY PROFESSION AS WELL AS A PARTNER IN A PARTNERSHIP, WITH NO DOCUMEN TED OR REPORTED EXPERIENCE IN TRADING IN SHARES OR INVESTMENT THEREIN - HIS BALAN CE SHEET AS ON 31.03.2005 REFLECTING NO INVESTMENT IN SHARES EXCEPT THE 2500 SHARES IN ECL (BESIDES ANOTHER FOR A MEAGER AMOUNT OF RS. 2100), PICK THE SAID SHA RES, I.E., SELECTED THE SAID SCRIP FOR INVESTMENT, AND WHICH IN FACT STOOD ISSUED ONLY DAYS EARLIER ON 31.03.2004. THE COMPANY REPORTEDLY HAS NO STANDING EITHER IN THE IN DUSTRY OR IN THE MARKET (I.E., FOR THE GOODS OR SERVICES IT PRESUMABLY DEALS IN), OR E VEN IN THE TRADING CIRCLES, I.E., FOR SHARES. THAT APART, NO MATERIAL TO ESTABLISH ITS BU SINESS ACTIVITY, VIZ. IT'S ANNUAL REPORTS, OR OF THE COMPANIES UNDER THE SAME MANAGEM ENT/INDUSTRY,-ETC., TO EXHIBIT ITS CREDENTIALS IN ANY MANNER, STANDS ADDUCED BY TH E ASSESSEE AT ANY STAGE OF THE PROCEEDINGS. CONTINUING FURTHER, HOW AND ON WHAT BA SIS, A SHARE TRADING IN THE RANGE OF RS. 217- TO RS. 22/- IN MAY 2005, WITNESS A RISE TO RS. 465 TO RS. 490 INSIDE A COUPLE OF MONTHS - THE ASSESSEE'S SALE, AT RS. 487/ - APIECE, BEING ON 22.07.2005. THIS IS AMAZING BY ANY STANDARD, AND WHICH HAS NOT BEEN EXPLAINED IN ANY MANNER, I.E., ASSUMING IT TO BE NOT A CASE OF PRICE MANIPUL ATION, WHICH IS THE MODUS OPERANDI ADOPTED FOR REFLECTING PRICES ON THE SE. WHO, ONE M AY ASK, ARE THE PURCHASERS OF SUCH SHARES, I.E., IN A NONDESCRIPT COMPANY AT SUCH HIGH PRICES; NO INFORMATION QUA WHICH STANDS FURNISHED AT ANY STAGE, EVEN AS IT IS THEY WHO HAVE APPARENTLY BOUGHT THE SHARES, SUPPLYING THE CREDIT TO THE ASSESSEE, W HICH IS BEING QUESTIONED AND EXAMINED AS TO ITS GENUINENESS U/S. 68 OF THE ACT. ALL THIS DEFINITELY CASTS SERIOUS ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 12 - DOUBTS ON THE GENUINENESS OF THE SALE PRICE AND, TH US, THE ENSUING GAIN. THIS, IN FACT, IS A CLASSICAL FEATURE OF A PENNY STOCK, THE PRICE ZOOMING FOR NO APPARENT, ECONOMIC OR EVEN TECHNICAL, REASONS. ONE COULD UNDE RSTAND WHERE THE SAME IS IN SYMPATHY WITH THE MARKET SENTIMENT OR SOME INDUSTRY -WISE FAVORABLE DEVELOPMENT, EVEN AS THE SHARE OSTENSIBLY TRADES, I.E., GOING BY THE MARKET QUOTE, AT OVER 22 TIMES ITS PRICE OBTAINING TWO MONTHS EARLIER, IMPLYING, B Y CORRESPONDENCE, A JUMP IN THE MARKET INDEX TO THE SAME OR SIMILAR EXTENT, I.E., 2 200%, OVER THE SAME PERIOD, WHICH IS BOTH UNHEARD OF - WORK AS IT DOES TO, A GROWTH R ATE OF 13200% P.A., AND, OF COURSE, NOT SHOWN. THERE IS AGAIN NO WHISPER AND, C ONSEQUENTLY, NO INFORMATION ON RECORD OF THE PARTICULAR INDUSTRY/S IN WHICH, IF AN Y, THE SAID COMPANY OPERATES, OR ITS FINANCIALS, MUCH LESS FUTURE PROSPECTS, THE INFORMA TION ON ALL OF WHICH GETS FACTORED INTO AND CAPTURED IN WHAT IS CALLED 'PRICE 1 , REPRESENTING AN EQUILIBRIUM OF THE SUPPLY AND DEMAND FORCES. IN FACT, EACH OF THE OTHER INCID ENCES, I.E., FOR A PENNY STOCK COMPANY, ARE EXHIBITED IN THE PRESENT CASE, AS POIN TED OUT BY THE AO PER PARAS 4.8 AND 4.9 OF HIS ORDER, AS UNDER: (A) THE SCRIP IS A PENNY STOCK, PURCHASED AT A LOW PRICE, WHICH IS OVER A PERIOD OF TIME RAMPED UP BY OPERATORS ACTING IN BENAMI NAMES OR NAME LENDERS. THE PURCHASES ARE OFF MARKET PURCHASES, AND NOT REPORTE D ON THE EXCHANGE; (B) PURCHASE/S IS BACK DATED, I.E., PER A BACK DATE D CONTRACT NOTE, PAID FOR IN CASH, SO THAT THERE IS NO TRAIL; (C) THE PURCHASES ARE IN THE PHYSICAL FORM, AND DEM ATERIALIZED ONLY SUBSEQUENTLY; GENERALLY LONG AFTER THE PURCHASE DATE, BEING BACK DATED AND, FURTHER, CLOSE TO THE DATE OF SALE; AND (D) THE INVESTEE IS A PENNY STOCK COMPANY, WITH NO CREDENTIALS, AND THE SALE RATES ARTIFICIALLY HIKED, WITH NO REAL BUYERS, SO THAT IN FERENCE OF THE SALES BEING BOGUS, IS UNMISTAKABLE. 4.5 THE ASSESSEE WAS SHOW CAUSED ON ALL THESE PARAMETER S, SEVEN IN NUMBER, LISTED AT PARA 4.11 (PAGE 7) OF THE ASSESSMENT ORDER, TO N O SATISFACTORY REPLY BY THE ASSESSEE AND, IN FACT, AT ANY STAGE. THERE IS IN F ACT NO REPLY TO THE AO (REFER PARA 4.14 (I) OF THE ASSESSMENT ORDER), WHOSE SATISFACTI ON THE LAW MANDATES, SO THAT THE PURVIEW OF THE APPELLATE AUTHORITY IS AS TO WHETHER THE AO IN BEING NOT SATISFIED HAD ACTED REASONABLY, I.E., GIVEN THE ASSESSEE'S EXPLAN ATION, INCLUDING THE MATERIALS/EVIDENCES FURNISHED IN SUPPORT, OR NOT. T HE AO, ACCORDINGLY, TREATED THE IMPUGNED TRANSACTION AS NOT SATISFACTORILY EXPLAINE D, AND ADDED THE SAME U/S.68 OF THE ACT. RELIANCE WAS PLACED BY HIM ON THE DECISION S BY THE TRIBUNAL IN THE CASE OF SOM NATH MAIM (SUPRA), ALSO REPRODUCING THERE-FROM, AS WELL AS IN THE CASE OF DY. CIT V. HOUSING DEVELOPMENT & FINANCE CORP. LTD. [20 06] 98 IIP 319 (MUM.), RENDERED APPLYING THE FIRST PRINCIPLES AND THE LEGA L PROPOSITIONS ENUNCIATED BY THE APEX COURT PER THE DECISIONS CITED BY THE AO (SUPRA ). THE TRIBUNAL IN THE CASE OF ZIAUDDIN A. SIDDIQUE [IT APPEAL NOS. 4699 & 4700 (M UM.) OF 2011, DATED 25-4- ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 13 - 2014] ISSUED A FINDING OF FACT, OF COURSE ON THE BA SIS OF THE MATERIAL ON RECORD, AS TO CIRCULAR TRADING, IN CASE OF A PENNY STOCK COMPANY, ELTROL LTD., EXPOSING OR VALIDATING THE MODUS OPERANDI AS STATED TO BE ADOPTED IN THE C ASE OF SUCH STOCKS - THE PRICE, DE-HORS ANY FUNDAMENTALS OR OTHER FACTORS, OF PAPER COMPANIES BEING RAKED UP ON THE EXCHANGE, SO AS TO YIELD 'GAIN', AND THEN AGAIN , EQUALLY WITHOUT BASIS, GROUNDED TO YIELD 'LOSS', BOTH OF WHICH, I.E., 'GAIN' AND 'L OSS', FIND READY 'CUSTOMERS' OR 'TAKERS'. THE PURPOSE IS TO EVADE TAX OR TO YIELD SOME TAX BE NEFIT. TRUE, THIS HAS NOT BEEN ESTABLISHED IN THE PRESENT CASE, BUT THE FEATURES A RE STRIKINGLY SAME, WITH THE IMPUGNED TRANSACTION BEARING THE SAME INCIDENTS, SO THAT ODDS ARE LOADED HEAVILY AGAINST THE GENUINENESS OF THE TRANSACTION. THE ONU S TO ESTABLISH THE SAME, IT IS TO BE BORNE IN MIND, IS ON THE ASSESSEE. THE ID. CIT ( A) HAS DISMISSED THE SAME AS MERELY SUSPICIONS. WE ARE, HOWEVER, UNABLE TO, FOR THE REASONS AFORE-STATED, PERSUADE OURSELVES TO AGREE WITH HIM, EACH OF THE S EVERAL INCIDENTS AND, THEREFORE, THE QUESTIONS ARISING, THAT IMPUGN THE GENUINENESS IN THE PRESENT CASE, ARE BASED ON ADMITTED AND UNDISPUTED FACTS. THE ISSUE, AS CLARIF IED AT THE BEGINNING OF THE DISCUSSION, BEING THE VALIDITY OF THE INFERENTIAL F INDINGS THERE BEING A DIFFERENCE BETWEEN THE TWO REVENUE AUTHORITIES. WE FIND THE OB SERVATIONS BY THE AO AS VALID AND RELEVANT, TO NO SATISFACTORY ANSWER OR EXPLANAT ION BY THE ASSESSEE, I.E., TO THE QUESTIONS, INCIDENTS OR THE PHENOMENON OBSERVED. DI SMISSING THE SAME AS MERE SUSPICIONS, AS DOES THE ID. CIT (A), IS, TO OUR MIN D, GLOSSING OVER THE MANY ATTENDANT FACTS AND INCIDENTS, THE MOST VITAL, AND ON WHICH W E OBSERVE COMPLETE SILENCE OR ABSENCE OF ANY EXPLANATION, IS THE ABSENCE OF ANY C REDENTIALS OF THE INVESTEE- COMPANY. THE ID. CIT (A) PICKS UP ONE INCIDENT OR A SPECT OF THE TRANSACTION AT A TIME TO NOTE OF IT BEING BACKED BY DOCUMENTARY EVIDENCE/ S AND, THEREFORE, GENUINE. THE APPROACH IS FALLACIOUS. FIRSTLY, DOCUMENTARY EVIDEN CES, IN THE FACE OF UNUSUAL EVENTS, AS PREVAILING IN THE INSTANT CASE, AND WITHOUT ANY CORROBORATIVE OR CIRCUMSTANTIAL EVIDENCE/S, CANNOT BE REGARDED AS CONCLUSIVE. TWO, THE PREPONDERANCE OF PROBABILITIES ONLY DENOTES THE SIMULTANEOUS EXISTEN CE OF SEVERAL 'FACTS', EACH PROBABLE IN ITSELF, ALBEIT LOW, SO AS TO CAST A SER IOUS DOUBT ON THE TRUTH OF THE REPORTED 'FACTS', WHICH TOGETHER MAKE UP FOR A BIZA RRE STATEMENT, LEADING TO THE INFERENCE OF COLLUSIVENESS OR A DEVICE SET UP TO CO NCEAL THE TRUTH, I.E., IN THE ABSENCE OF CREDIBLE AND INDEPENDENT EVIDENCES. FOR A SCRIP TO TRADE AT NEARLY 50 TIMES ITS' FACE VALUE, ONLY A FEW MONTHS AFTER ITS ISSUE, ONLY IMPLIES, IF NOT PRICE MANIPULATION, TRAIL BLAZING PERFORMANCE AND/OR GREAT BUSINESS PRO SPECTS (WITH OF COURSE PROVEN MANAGEMENT RECORD, SO AS TO BE ABLE TO TRANSLATE TH AT INTO REALITY), WHILE EVEN AS MUCH AS THE COMPANY'S BUSINESS OR INDUSTRY OR FUTUR E PROGRAM (ALL OF WHICH WOULD BE IN PUBLIC DOMAIN), IS CONSPICUOUS BY ITS ABSENCE , I.E., EVEN YEARS AFTER THE TRANSACTION/S. THE COMPANY IS, BY ALL COUNTS, A PAP ER COMPANY, AND ITS SHARE TRANSACTIONS, MANAGED. WE, ACCORDINGLY, REVERSING T HE FINDINGS OF THE FIRST APPELLATE AUTHORITY, CONFIRM THE ASSESSMENT OF THE IMPUGNED S UM U/S.68 OF THE ACT. WE DECIDE ACCORDINGLY. 4.6 THE ASSESSEE HAS RELIED ON SEVERAL CASE LAWS. AS WO ULD BE APPARENT FROM THE FORGOING, ABUNDANT CASE LAW HAS BEEN RELIED UPON BY THE BOTH SIDES. THE ISSUE IS NOT OF THE APPLICATION OF ANY PARTICULAR CASE LAW. THE LEGAL PROPOSITIONS BEING WELL ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 14 - SETTLED, EACH CASE RESTS ON ITS OWN FACTS. OUR DECI SION, LIKEWISE, AND AS WOULD ALSO BE APPARENT, IS GUIDED SOLELY BY THE FACTS AND CIRCUMS TANCES OF THE INSTANT CASE, INCLUDING THE ASSESSEE'S EXPLANATION IN RESPECT THE REOF. THE RELIANCE ON CASE LAW, THE FACTS OF NONE OF WHICH WERE GONE THROUGH AT THE TIM E OF HEARING, EVEN AS THE ISSUE IS PRINCIPALLY FACTUAL, WOULD THUS BE OF NO ASSISTANCE TO THE ASSESSEE'S CASE. WE MAY THOUGH CLARIFY THAT THE REVENUE HAVING INVOKED THE PROVISION OF S. 68, THE BURDEN TO PROVE THE CREDIT TRANSACTION/S AND, THUS, ITS GENUI NENESS IS ON THE ASSESSEE. IT IS THEREFORE NOT NECESSARY OR INCUMBENT ON THE REVENUE TO, I.E., FOR THE PURPOSE OF APPLICATION OF SEC.68, TO EITHER DISPROVE OR EXHIBI T THE TRANSACTION AS SHAM OR BOGUS, AND ITS OBLIGATION ONLY EXTENDS TO SHOW THAT THE GE NUINENESS OF THE IMPUGNED CREDIT TRANSACTION IS DOUBTFUL OR HAS NOT BEEN SATISFACTOR ILY PROVED BY THE ASSESSEE. 5. IN THE RESULT, THE REVENUE'S APPEAL IS ALLOWED.' IT IS ALSO OBSERVED THAT IN THE RECENT DECISION HON 'BLE AHMEDABAD ITAT IN THE CASE OF PAVANKUMAR M. SANGHAVI V/S ITO 81 TAXMANN.COM 308 H AS HELD THAT WHEN ASSESSEE RECEIVED UNSECURED LOAN BUT COULD NOT PRODUCE LENDE RS FOR VERIFICATION AND THESE LENDERS WERE FOUND TO BE SHELL COMPANIES, SAID LOAN TRANSAC TIONS COULD NOT BE SAID TO BE GENUINE MERELY BECAUSE ASSESSEE FILED LOAN CONFIRMATIONS CO PIES OF LEDGER ACCOUNTS AND OTHER SUPPORTING EVIDENCES. THE RELEVANT OBSERVATION OF T HE ITAT IS ALSO REPRODUCED HEREIN BELOW: '8 AS I PROCEED TO DEAL WITH GENUINENESS ASPECT, IT IS IMPORTANT TO BEAR IN MIND THE FACT THAT WHAT IS GENUINE AND WHAT IS NOT GENUINE I S A MATTER OF PERCEPTION BASED ON FACTS OF THE CASE VIS-A-VIS THE GROUND REALITIES. T HE FACTS OF THE CASE CANNOT BE CONSIDERED IN ISOLATION WITH THE GROUND REALTIES. I T WILL, THEREFORE, BE USEFUL TO UNDERSTAND AS TO HOW THE SHELL ENTITIES, WHICH THE LOAN CREDITORS ARE ALLEGED TO BE, TYPICALLY FUNCTION, AND THEN COMPARE THESE CHARACTE RISTICS WITH THE FACTS OF THE CASE AND IN THE LIGHT OF WELL SETTLED LEGAL PRINCIPLES. A SHELL ENTITY IS GENERALLY AN ENTITY WITHOUT ANY SIGNIFICANT TRADING, MANUFACTURING OR S ERVICE ACTIVITY, OR WITH HIGH VOLUME LOW MARGIN TRANSACTIONS- TO GIVE IT COLOR OF A NORMAL BUSINESS ENTITY, USED AS A VEHICLE FOR VARIOUS FINANCIAL MANEUVERS. A SHELL ENTITY, BY ITSELF, IS NOT AN ILLEGAL ENTITY BUT IT IS THEIR ACT OF ABATEMENT OF, AND BEI NG PART OF, FINANCIAL MANEUVERINGS TO LEGITIMIZE ILLICIT MONIES AND EVADE TAXES, THAT TAK ES IT ACTIONS BEYOND WHAT IS LEGALLY PERMISSIBLE. THESE ENTITIES HAVE EVERY SEMBLANCE OF A GENUINE BUSINESS- ITS LEGAL OWNERSHIP BY PERSONS IN EXISTENCE, STATUTORY DOCUME NTATION AS NECESSARY FOR A LEGITIMATE BUSINESS AND A DOCUMENTATION TRAIL AS A LEGITIMATE TRANSACTION WOULD NORMALLY FOLLOW. THE ONLY THING WHICH SETS IT APART FROM A GENUINE BUSINESS ENTITY IS LACK OF GENUINENESS IN ITS ACTUAL OPERATIONS. THE O PERATIONS CARRIED OUT BY THESE ENTITIES, ARE ONLY TO FACILITATE FINANCIAL MANEUVER INGS FOR THE BENEFIT OF ITS CLIENTS, OR, WITH THAT PREDOMINANT UNDERLYING OBJECTIVE, TO GIVE THE COLOR OF GENUINENESS TO THESE ENTITIES. THESE SHELL ENTITIES, WHICH ARE ROUTINELY USED TO LAUNDER UNACCOUNTED MONIES, ARE A FACT OF LIFE, AND AS MUCH A PART OF T HE UNDERBELLY OF THE FINANCIAL WORLD, AS MANY OTHER EVILS. EVEN A LAYMAN, MUCH LESS A MEM BER OF THIS SPECIALIZED TRIBUNAL, CANNOT BE OBLIVIOUS OF THESE GROUND REALITIES.' ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 15 - 4.11. THE SEQUENCE OF FACTS AND THE MODUS OPERAND! ADOPTED BY THE APPELLANT SHOWS THAT THE ENTIRE TRANSACTION MADE BY HIM WAS N OTHING BUT ACCOMMODATION ENTRIES TAKEN BY HIM TO CAMOUFLAGE HIS UNDISCLOSED INCOME UNDER THE GARB OF CAPITAL GAINS, INCOME FROM WHICH IS EXEMPT INCOME. THIS IS NOTHING BUT A COLORFUL DEVICE ADOPTED TO AVOID PAYMENT OF TAX WHICH IS NOT PERMIS SIBLE AS PER LAW, IN VIEW OF THE DECISION OF THE MC DOWELL & CO. LTD. VS. CTO 154 ITR 148 (SC). THE HON. SUPREME COURT HAS HELD THAT 'THE TAXING AUTHORITY I S ENTITLED AND IS INDEED BOUND TO DETERMINE THE TRUE LEGAL RELATION RESULTING FROM TR ANSACTION. IF THE PARTIES HAVE CHOSEN TO CONCEAL BY A DEVICE THE LEGAL RELATION, I T IS OPEN TO THE TAXING AUTHORITIES TO UNRAVEL THE DEVICE AND TO DETERMINE THE TRUE CHA RACTER OF THE RELATIONSHIP. ' MOREOVER, THE HON'BLE HIGH COURT OF DELHI IN A RECE NT DECISION IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S. ABHINANDAN INVES TMENT LTD.,DATED 19.11.2015 (ITA 130/2001) HAS CATEGORICALLY EXPLAINED THE PRIN CIPLE LAID DOWN BY THE SUPREME COURT IN THE CASE OF MC DOWELL & CO AND THE SAME IS FULLY APPLICABLE TO THE FACTS OF PENNY STOCK CASES. IN PRESENT CASE APPELLANT HAS DEALT IN PENNY STOCK, WHICH IS SIMILAR TO SHELL COMPANIES FOR WHICH VARIOUS INVESTIGATIONS WERE ALR EADY CARRIED OUT BY CALCUTTA INVESTIGATION WING AND SEBI ORDER REFERRED SUPRA HE NCE LONG TERM CAPITAL IN PRESENT CASE IS ALSO AN ACCOMMODATIVE ENTRY AND AO IS CORRE CT IN TREATING SUCH SALE VALUE AS INCOME FROM OTHER SOURCES. IN VIEW OF THE JUDICIAL PRONOUNCEMENTS REFERRED HEREIN ABOVE AND THE CIRCUMSTANTIAL EVIDENCES, I AM INCLIN ED TO AGREE WITH THE AO IN HOLDING THE TRANSACTIONS AS NON-GENUINE AND THIS GR OUND OF APPEAL IS, THEREFORE, DISMISSED. 8. AFTER HAVING GONE THROUGH THE FACTS OF THE CASE, WE FIND THAT THIS CASE PERTAINS TO THE ADDITIONS MADE BY ASSESSING OFFICER ON ACCOUNT OF DETAILED ENQUIRIES BEING CARRIED OUT BY KOLKATA INVESTIGATIO N DIRECTORATE WITH REGARD TO 84 PENNY STOCKS COMPANY AS WELL AS SEBI. THE MODUS OPERANDI INVOLVING OPERATORS, INTERMEDIARIES AND THE BENEFICIARIES HAV E ALREADY BEEN DETAILED IN THE INVESTIGATION REPORT PREPARED AND DISSEMINATED BY THE KOLKATA INVESTIGATION DIRECTORATE. SIMILAR INVESTIGATIONS WERE ALSO CONDUCTED BY THE DIRECTORATE OF INVESTIGATION AT MUMBAI AND AHMEDAB AD. AFTER THOROUGH ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 16 - INVESTIGATION, THE ASSESSING OFFICER CONCLUDED IN H IS ORDER AT PARAGRAPH NOS.4.8 AND 4.9. THE RELEVANT PARTICULARS ARE EXTR ACTED HEREUNDER: (A) THE SCRIP IS A PENNY STOCK, PURCHASED AT A LOW PRICE, WHICH IS OVER A PERIOD OF TIME RAMPED UP BY OPERATORS ACTING IN BENAMI NAMES OR NAME LENDERS. THE PURCHASES ARE OFF MARKET PURCHASES, AND NOT REPORTE D ON THE EXCHANGE; (B) PURCHASE/S IS BACK DATED, I.E., PER A BACK DATE D CONTRACT NOTE, PAID FOR IN CASH, SO THAT THERE IS NO TRAIL; (C) THE PURCHASES ARE IN THE PHYSICAL FORM, AND DEM ATERIALIZED ONLY SUBSEQUENTLY; GENERALLY LONG AFTER THE PURCHASE DATE, BEING BACK DATED AND, FURTHER, CLOSE TO THE DATE OF SALE; AND (D) THE INVESTEE IS A PENNY STOCK COMPANY, WITH NO CREDENTIALS, AND THE SALE RATES ARTIFICIALLY HIKED, WITH NO REAL BUYERS, SO THAT IN FERENCE OF THE SALES BEING BOGUS, IS UNMISTAKABLE. 8.1. EVEN BEFORE US, NO NEW FACTS OR CIRCUMSTANC ES HAVE BEEN PLACED ON RECORD AND THE ORDERS PASSED BY THE REVENUE AUTHORI TIES HAVE ALSO GONE UNREBUTTED, THEREFORE, WE FIND NO REASON TO INTERF ERE INTO OR TO DEVIATE FROM SUCH FINDINGS OF THE AUTHORITIES BELOW AND WE UPHOL D THE FINDINGS OF THE LD.CIT(A) AND REJECT THE GROUND RAISED BY THE ASSES SEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE COURT ON 05 - 03 - 2020 AT AHMEDABAD SD/- SD/- ( AMARJIT SINGH) ( SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 05/ 03 /2020 ' . . , . ( . ./ T.C. NAIR, SR. PS ITA NO.1309AHD/2018 BHAGWATIBEN VINODKUMAR SURANI VS. ITO ASST.YEAR 2014-15 - 17 - ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-5, AHMEDABAD 5. -./ ((*+ , *+ , ) / DR, ITAT, AHMEDABAD 6. /12 / GUARD FILE. / BY ORDER, - ( //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 4.3.20 (DICTATION-PAD 7-PA GES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..4.3.20/5.3.20 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.6.3.20 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6.3.20 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER