Sushila Suresh Chavan, Pune V. Income-tax Officer, Pune

ITA 1436/PUN/2011

• Counselvise Citation: 143624514 RSA 2011
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-10-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 17-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Capital asset; Income from undisclosed sources; Search and seizure; Share purchase agreement; Question of law; Accommodation entries; Penny stocks

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1436/PN/2011 (ASSTT.YEAR : 2003-04) SUSHILA SURESH CHAVAN, 399, RAVIWAR PETH, SONYA MARUTHI CHOWK, PUNE- 411002 PAN NO. ADWPC3173H .. APPELLANT VS. ITO, WARD-5(3), PUNE .. RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI SUHAS BORA REVENUE BY : SRI S.P. WALIMBE DATE OF HEARING : 30-12-2013 DATE OF PRONOUNCEMENT : 15-01-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDERS DATED 25-01-2011 OF THE CIT(A)-III, PUNE RELATING TO ASSE SSMENT YEAR 2003-04. 2. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE DID NOT PRESS GROUNDS OF APPEAL NO. 1, 2 AND 3 FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCORDINGLY, THE ABOVE GROUNDS ARE DISMISSED AS NOT PRESSED. GROUNDS OF APPEAL NO.5 BY THE ASSESSEE BEING GENERAL IN NATURE ARE DISMISSED. 3 GROUNDS OF APPEAL NO.4 BY THE ASSESSEE WHICH IS T HE SURVIVING GROUND READS AS UNDER ; 4. THE LD.CIT(A) ERRED IN HOLDING THAT THE ADDITIO N OF THE AO IN TREATING THE AMOUNT OF RS.10,38,600/- AS INCOME FROM UNDISCLOSED SOURCES WITHOUT APPRECIATING THE SUBMISSIONS OF THE APPELLANT THAT THE TRANSACTION OF SALE & 2 PURCHASE OF SHARES HAD ALL ESSENTIALS OF GENUINITY AND T HE ADDITION IS MADE BY THE AO ON THE BASIS OF SUSPICION AND SURMISES AND WITHO UT BRINGING ANY MATERIAL ON RECORD. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND IS A PARTNER IN M/S.CHIMANLAL BHUTMAL AND COMPANY. SH E FILED HER RETURN OF INCOME ON 25-11-2003 DECLARING TOTAL INCOME AT RS.2 ,52,380/-. IN THE SAID RETURN, THE ASSESSEE HAD SHOWN INCOME FROM CAPITAL GAIN ON ACCOUNT OF SALE OF SHARES OF DATABASE FINANCE LTD. AMOUNTING TO RS. 10,24,019/- AGAINST TOTAL SALE VALUE OF RS.10,38,600/-. THE ABOVE CAPI TAL GAIN WAS CLAIMED AS SET-OFF AGAINST CAPITAL LOSS ARRIVED AT SALE OF JEW ELLERY RESULTING IN NET LOSS AT RS.3,83,182/-. 5. IN THIS CASE, INFORMATION WAS RECEIVED FROM ADIT (INVESTIGATION-IV) THAT THERE ARE CERTAIN IRREGULARITIES IN SALE OF SH ARES OF THE SAID COMPANY. THE SALE OF SHARE IS AN ACCOMMODATION ENTRY AND REQ UIRED TO BE TAXED AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER A CCORDINGLY ISSUED NOTICE U/S.148. 5.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE STATEMENT OF THE ASSESSEE WAS RECORDED AND THE ASSESSING OFFICER REQ UESTED THE ASSESSEE TO PRODUCE THE PROOF OF GENUINITY OF TRANSACTION, SUCH AS ENVELOPE CONTAINING THE STAMP OF POSTAL AUTHORITY THROUGH WHICH THE SAI D SHARES WERE RECEIVED BY THE ASSESSEE, RECORD OF THE COMPANY SUBMITTED TO ROC IN WHICH ASSESSEES NAME APPEARS OR TO PRODUCE THE BROKER FR OM WHOM SHE HAS PURCHASED THE SAID SHARE. HOWEVER, THE ASSESSEE DI D NOT PRODUCE THE SAME. THE ASSESSING OFFICER, THEREFORE, CAME TO THE CONCL USION THAT THE SHARE TRANSACTION WAS NOTHING BUT AN ACCOMMODATION ENTRY TO BRING THE ASSESSEES UNACCOUNTED INCOME IN THE BOOKS OF ACCOUNT UNDER TH E SHADOW OF SALE OF 3 SHARE TRANSACTION. HE, THEREFORE, TREATED THE TOTA L SALE RECEIPTS OF RS.10,38,600/- AS INCOME FROM OTHER SOURCES. 6. BEFORE THE CIT(A) THE ASSESSEE VEHEMENTLY OPPOSE D THE ACTION OF THE ASSESSING OFFICER. IT WAS SUBMITTED THAT (A) THE A SSESSEE HAS PRODUCED THE EVIDENCE IN SUPPORT OF THE SALE AND PURCHASE OF SHA RES WHICH IS COMPLETE AND OF CONCRETE NATURE, (B) ENTIRE LONG TERM CAPI TAL GAIN IS FULLY PROVED AND GENUINE ON THE STRENGTH OF SUCH DOCUMENTARY EVI DENCE. (C) THE LEARNED AO DID NOT DISPUTE DOCUMENTARY EVIDENCE SUB MITTED BY THE APPELLANT AT ALL AND THERE IS NO FINDING OF THE A.O . THAT SAME WAS EITHER FAKE OR FORGED. (D) THE BROKER TO WHOM SHARES ARE SOL D ARE REGISTERED WITH SEBI AND THE STOCK EXCHANGE. (E) THE COMPANY WHOSE SHARES ARE SOLD ARE REGISTERED UNDER THE COMPANIES ACT. (F) PHOTOCOPY OF THE SHARE CERTIFICATES IN PHYSICAL FORMAT CLEARLY INDICATES THAT THE SHARE S WERE TRANSFERRED IN THE NAME OF THE APPELLANT. (G) LONG TERM CAPITAL GAIN IN RESPECT OF SALE OF SHARES IS ACCEPTED AS GENUINE U/S. 143(1). (H) THE SALE PROCEEDS OF THE SHARES HAVE BEEN RECEIVED BY A/C PAYEE CHEQUE. (I) THE LEARNED A.O. HAS FAILED TO ESTABLISH THAT IN LIEU OF THE SALE PROCEE DS OF RS.10,38,600/-, THE APPELLANT HAS SURREPTITIOUSLY INTRODUCED HER UNACCO UNTED MONEY IN THE BANK ACCOUNT AND THERE IS NO EVIDENCE ABOUT THE SAME IN THIS REGARD. THUS THERE IS NO COGENT MATERIAL OR EVIDENCE TO INDICATE THAT THE IMPUGNED SALE PROCEEDS REFLECT UNACCOUNTED INCOME OF THE APPELLANT. (J) THE LEARNED AO HAS MADE THE ADDITION MERELY ON THE BASIS OF SUSPICION AND S URMISES WITHOUT BRINGING ANY MATERIAL ON THE RECORD. IT WAS ACCORDINGLY SUB MITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. 4 6.1 HOWEVER, THE CIT(A) WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE NOTED THAT DURING THE SEARCH AND SEIZURE OPERATIONS CONDUCTED BY THE INVESTIGATION WING, MUMBAI IN THE MONTH OF JANUARY, 2006 IN THE OFFICE AND RESIDENTIAL PREMISES OF SEVE RAL STOCK BROKERS AND MANAGERS OF FINANCE COMPANIES AND SEVERAL OTHER PER SONS, IT WAS FOUND THAT THERE WAS A LARGE SCALE OF MANIPULATION IN THE PURCHASE AND SALE OF SHARES, IN PARTICULAR, THE SHARES OF M/S. DATABASE FINANCE LTD. AND M/S. FAST TRACK ENTERTAINMENT LTD. DURING THE ENQUIRIES BY T HE INVESTIGATION WING, STATEMENT OF ONE SHRI MILAN RAMNIKLAL PAREKH, MANAG ING DIRECTOR OF M/S. ACTION FINANCIAL SERVICES (I) PVT. LTD. SHARE BROKE RS THROUGH WHOM THE ASSESSEE CLAIMED TO HAVE SOLD THE SHARES OF DATABAS E FINANCE LTD. WAS RECORDED ON 20-01-2006. IN THE STATEMENT, HE HAS C LEARLY STATED THAT ONE OF THEIR EMPLOYEES HAS RECORDED OFF MARKET TRANSACTION S IN A FEW SCRIPS INCLUDING DATABASE AND FAST TRACT. IT WAS ALSO STA TED BY THE MANAGING DIRECTOR OF THE SAID COMPANY THAT THEY HAVE ISSUED BOGUS BILLS TO SOME PARTIES SHOWING DATE OF TRANSACTION AS DESIRED BY T HEM AND THE OPERATOR AND THEY ARE NOT GENUINE TRANSACTIONS. 6.2 THE LD.CIT(A) PROVIDED A COPY OF THE RELEVANT Q UESTIONS AND ANSWERS OF THE ABOVE STATEMENT TO THE ASSESSEE DURI NG THE APPEAL PROCEEDINGS. HE FURTHER NOTED THAT IN THE COURSE O F INVESTIGATIONS THE STATEMENT OF SHRI PRATHIK SHAH, WHO WAS ONE OF THE DIRECTORS OF DPS SHARES & SECURITIES, MUMBAI WAS ALSO RECORDED ON 28-03-200 6. IN THE SAID STATEMENT, SHRI PRATHIK SHAH HAD CATEGORICALLY STAT ED THAT IN THE CASE OF SHARES OF SOME COMPANIES INCLUDING FAST TRACK ENTER TAINMENT LTD. THEY WERE ISSUING OFF-MARKET PURCHASE BILLS TO THE NEEDY PEOPLE WHO APPROACHED THEM AND THOSE WERE NOT GENUINE. IT WAS ALSO STATE D THAT THEY WERE ONLY 5 ACCOMMODATION ENTRIES PROVIDED TO THE NEEDY PERSONS GIVEN BY THE BROKERS FOR A COMMISSION OF 2 PAISA PER SHARE. HE OBSERVED THAT SIMILAR STATEMENT WAS RECORDED FROM ANOTHER BROKER NAMELY SHRI NAREND RA RAMANLAL SHAH, ACCOUNTS OFFICER OF M/S. T.H. SECURITIES SHARES PVT . LTD. ON 19-03-2006. HE, THEREFORE, WAS OF THE OPINION THAT THE STATEMEN TS RECORDED OF THE PERSONS SEARCHED AND BROKERS REVEALED THAT THE SHAR ES OF THE ABOVE MENTIONED COMPANIES ARE SHOWN TO HAVE BEEN PURCHASE D BY SEVERAL PERSONS 12 MONTHS PRIOR TO THE DATE OF SALE OF SHARES TO FA CILITATE THE CONCERNED PERSONS TO CLAIM THAT THEY WERE HOLDING SHARES AS L ONG TERM CAPITAL ASSET SO THAT THE SALE CONSIDERATION ON SALE OF THESE SHARES COULD BE CLAIMED AS EXEMPT U/S.10(38) OF THE I.T. ACT. THESE PERSONS A RE CLAIMED TO HAVE PURCHASED SHARES, IN PHYSICAL FORM THROUGH SHARE BR OKERS WHO HAVE ISSUED BACK DATED CONTRACT NOTES, SHOWING THE DATE OF PURC HASE PRIOR TO THE ACTUAL DATE OF PURCHASES OF SHARES. IN OTHER WORDS, THE D ATE OF PURCHASE OF SHARES IS ANTE DATED OR MANIPULATED IN SUCH A WAY THAT THE PERIOD OF HOLDING PRIOR TO THE SALE WAS 12 MONTHS OR MORE. IN REALITY, THE RE WAS NO ACTUAL PURCHASE TRANSACTION AT ALL AS ON THE DATE OF PURCHASE SHOWN IN THE STATEMENT OF SHARE BROKERS AND ACTUAL TRANSFER OR DELIVERY OF SHARES H AD NOT TAKEN PLACE ON THE SAID DATE. THE PERSONS HAVE CONVERTED THE SHARES I N DEMAT FORM HARDLY A FEW DAYS/WEEKS BEFORE THE SALE. THE SALE IS SHOWN TO HAVE DONE BY THE PERSONS IN WHOSE FAVOUR ENTRY OF SALE OF SHARES IS TO BE GIVEN. THE SALE OF SHARES HAS ALSO BEEN ARRANGED BY BROKERS OF AN ARTI FICIALLY JACKED UP PRICE WHICH IS 70 TO 80 TIMES OF PURCHASE OF SHARES. IN THE ABOVE TRANSACTIONS THE EQUIVALENT AMOUNT OF SALE CONSIDERATION OF SHARES I NCLUDING COMMISSION IS PASSED ON TO THE CONCERNED BROKER BY CASH AND IN TU RN THE SALE CONSIDERATION IS PAID BY CHEQUE BY THE BROKER TO THE BENEFICIARY. THE PURPOSE BEHIND THE 6 ENTIRE ARRANGEMENT IS TO CONVERT UNACCOUNTED MONEY OF THE BENEFICIARIES AND TO BRING THE SAME INTO REGULAR BOOKS OF ACCOUNT S IN THE GARB OF EXEMPTED LONG TERM CAPITAL GAIN ON SALE OF SHARES. IN SHORT, THE WHOLE ARRANGEMENT OR SCHEME IS A MONEY LAUNDERING DEVICE. HE ACCORDINGLY HELD THAT THE SERIES OF TRANSACTIONS APPARENTLY CARRIED OUT THROUGH A FEW BROKERS ARE NOT THE REAL AND GENUINE TRANSACTIONS AND THE T RANSACTIONS ARE ONLY ACCOMMODATION ENTRIES. REJECTING THE VARIOUS EXPLA NATIONS GIVEN BY THE ASSESSEE AND DISTINGUISHING THE VARIOUS CASE LAWS C ITED BEFORE HIM THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICE R IN TREATING THE AMOUNT OF RS.10,38,600/- AS INCOME FROM UNDISCLOSED SOURCES. 6.3 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A). REFERRING TO PAGES 8 TO 11 OF THE PAPER BO OK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE VARIOUS DETAILS SUBMITTED BEFORE THE ASSESSING OFFICER ALONG WITH AN AFFIDAVI T DATED 15-12-2007. REFERRING TO PAGES 12 AND 13 OF THE PAPER BOOK HE D REW THE ATTENTION OF THE BENCH TO THE DETAILS GIVEN BEFORE THE ADIT (INVESTI GATION IV), PUNE. REFERRING TO PAGES 14 AND 15 OF THE PAPER BOOK HE D REW THE ATTENTION OF THE BENCH TO THE COPY OF THE CONTRACT NOTES FOR PURCHAS E OF SHARES. REFERRING TO PAGES 16 TO 18 OF THE PAPER BOOK HE DREW THE ATTENT ION OF THE BENCH TO THE CONTRACT NOTE DATED 22-10-2002 FOR SALE OF SHARES. REFERRING TO PAGES 19 TO 21 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE COPIES OF LETTERS FROM DATABASE FINANCE LTD. REGARDING TRANSF ER AND PHYSICAL DELIVERY OF SHARES. REFERRING TO PAGES 22 TO 33 OF THE PAPE R BOOK HE DREW THE 7 ATTENTION OF THE BENCH TO THE PHOTOCOPIES OF SHARE CERTIFICATES IN PHYSICAL FORM. REFERRING TO PAGE 34 AND 35 OF THE PAPER BOO K HE DREW THE ATTENTION OF THE BENCH TO THE PHOTOCOPY OF DEMAT ACCOUNT FOR DEMATTING THE SHARES. 7.1 REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. SURENDRA PEETY AND OTHERS VIDE ITA NO.1157 AND 1161/PN/2008 ORDER DATED 28-09-2012 HE SUBMITTED TH AT IN THAT CASE ALSO THE ASSESSEE HAS CLAIMED TO HAVE EARNED LONG TERM C APITAL GAIN FROM VARIOUS COMPANIES INCLUDING THE SHARES OF THE COMPANY DATAB ASE FINANCE LTD. REFERRING TO THE SAID ORDER OF THE TRIBUNAL HE SUBM ITTED THAT IN THAT CASE THE CIT(A) HAD ALLOWED THE CLAIM OF LONG TERM CAPITAL G AIN ON ACCOUNT OF SALE OF SHARE OF DATABASE FINANCE LTD. AND THE TRIBUNAL HAS DISMISSED THE APPEAL FILED BY THE REVENUE. REFERRING TO THE DECI SION OF THE HONBLE BOMBAY HIGH COURT (NAGPUR BENCH) IN THE CASE OF CIT VS. JAMNADEVI AGRAWAL AND OTHERS REPORTED IN 328 ITR 656 HE SUBMI TTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT WHEN THE ASSESSEE HAS ESTABLISHED THE GENUINENESS OF PURCHASE AND SALE OF SHARES BY PRODUCING DOCUMENTARY EVIDENCE AND DECLARE THE PURCHASE AND S ALE PRICE OF SHARES IN CONFORMITY WITH THE MARKET RATES PREVAILING ON THE RESPECTIVE DATES, THE FINDING OF THE TRIBUNAL THAT THE TRANSACTIONS WERE GENUINE IS A FINDING OF FACT BASED ON DOCUMENTARY EVIDENCE ON RECORD AND TH EREFORE NO SUBSTANTIAL QUESTION OF LAW ARISED FROM THE ORDER OF THE TRIBUN AL DELETING THE ADDITION U/S.68 OF THE I.T. ACT. HE SUBMITTED THAT UNDER SI MILAR FACTS AND CIRCUMSTANCES THE VARIOUS BENCHES OF THE TRIBUNAL H AVE ALLOWED THE CLAIM OF LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF SHA RES WHICH ARE KNOWN AS PENNY STOCKS. HE SUBMITTED THAT IN THE INSTANT CAS E THE ASSESSEE HAD PRODUCED SUBSTANTIAL EVIDENCE. THE BROKER HAS NOT TAKEN THE NAME OF THE 8 ASSESSEE ALTHOUGH HE HAS TAKEN THE NAME OF VARIOUS OTHER PERSONS. HE ACCORDINGLY SUBMITTED THAT IN VIEW OF THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SURENDRA PEETY AND OTHERS ( SUPRA) AND THE VARIOUS OTHER DECISIONS THE CLAIM OF THE ASSESSEE SHOULD BE ALLOWED AND THE ORDER OF THE CIT(A) BE SET-ASIDE. HE ALSO RELIED ON THE FOLL OWING DECISIONS : 1. SHRI AVINASH KANTILAL JAIN VS. ADDL.CIT ITA NO. 980/PN/2010 ORDER DATED 31-10-2012. 2. ITO VS. AJAY SHANTILAL LALWANI & OTHERS ITA NO.1 63/PN/2010 ORDER DATED 18-11-2011. 3. SACHIN N, MORAKHA VS. ITO ITA NO.1122/MUM/2012 ORDER DATED 01-06-2012 4. ACIT VS. SMT. LATA SONI ITA NO.77/JU/2010 ORDER DATED 19-01- 2012. 5. SHRI JAFFERALI K. RATTONSEY VS. DCIT ITA NO.506 8/MUM/2009 ORDER DATED 25-01-2012. 6. THE CIT, JAMSHEDPUR AND ARUN KUMAR AGARWAL (HUF) & OTHERS REPORTED IN 2012-TIOL-603-HC-JHARKHAND-IT. 8. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT IN THE CASE OF PUNJABI GROUP THE TRIBUNAL HAS RESTORED THE ISSUE TO THE FI LE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. IN THE CASE OF MUND ADA GROUP THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE REVENUE. TH EREFORE, THE ORDER OF THE CIT(A) HE UPHELD. 9. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDE R SUBMITTED THAT THE DECISION IN THE CASE OF MUNDADA GROUP IS NOT APPLIC ABLE TO THE FACTS OF THE PRESENT CASE AND THE SAME IS DISTINGUISHABLE. IN T HAT CASE, THE SHARES WERE DIRECTLY CREDITED TO THE DEMAT ACCOUNT. NO PHYSIC AL SHARES WERE PURCHASED. THE CLAIM OF OFF-MARKET TRANSACTION WAS STATED BEFORE THE TRIBUNAL FOR THE FIRST TIME. HE SUBMITTED THAT THE ABOVE DECISION HAS BEEN 9 DISCUSSED BY THE TRIBUNAL IN THE CASE OF SURENDRA P EETY GROUP. SO FAR AS THE DECISION IN THE CASE OF PUNJABI GROUP IS CONCER NED, HE SUBMITTED THAT THE SAID DECISION IN FACT SUPPORTS THE CASE OF THE ASSESSEE. IN THE CASE OF THE ASSESSEE, FROM DAY ONE HE WAS HOLDING THE SHARES IN PHYSICAL FORM. THEREFORE, THE SAID DECISION IS NOT APPLICABLE. HE ACCORDINGLY REITERATED THAT THE CLAIM OF LONG TERM CAPITAL GAIN DECLARED B Y THE ASSESSEE HAS TO BE ALLOWED. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE CIT(A) UPHE LD THE ACTION OF THE ASSESSING OFFICER IN TREATING THE INCOME FROM LONG TERM CAPITAL GAIN AS INCOME FROM UNDISCLOSED SOURCES ON ACCOUNT OF SALE OF SHARES OF DATABASE FINANCE LTD. ON THE GROUND THAT THE WHOLE ARRANGEME NT OR SCHEME IS A MONEY LAUNDERING DEVICE TO CONVERT THE UNACCOUNTED MONEY AND TO BRING THE SAME INTO THE REGULAR BOOKS OF ACCOUNT IN THE G ARB OF EXEMPTED LONG TERM CAPITAL GAIN ON SALE OF SHARES. WHILE DOING S O, HE HAS CONSIDERED THE MODUS OPERANDI ADOPTED BY THE BROKERS AND UNSCRUPUL OUS ASSESSEES. WE FIND THIS BENCH OF THE TRIBUNAL IN THE CASE OF SUR ENDRA PEETY AND OTHERS (SUPRA) (WHERE BOTH OF US ARE PARTIES) HAS CONSIDER ED THE ISSUE OF LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF SHARES OF VARIOU S COMPANIES INCLUDING THAT OF DATABASE FINANCE LTD. AFTER THOROUGHLY EXA MINING THE FACTS OF THE CASE WHICH ARE SIMILAR TO THAT OF THE PRESENT ASSES SEE AND CONSIDERING VARIOUS DECISIONS, THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF SHARES OF DATABA SE FINANCE LTD. HAS BEEN UPHELD AND THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED. THE 10 VARIOUS OTHER DECISIONS RELIED UPON BY THE LD. COUN SEL FOR THE ASSESSEE ALSO SUPPORTS THE CASE OF THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND RELYING ON THE DECISION OF THIS BENCH OF T HE TRIBUNAL IN THE CASE OF SURENDRA PEETY AND OTHERS (SUPRA) AND CONSIDERING T HE FACT THAT ASSESSEE HAS FILED THE RELEVANT DETAILS BEFORE THE ASSESSING OFF ICER WHICH HAVE NOT BEEN PROVED TO BE FALSE OR UNTRUE AND FURTHER CONSIDERIN G THE FACT THAT THE BROKER HAS NOT TAKEN THE NAME OF THE PRESENT ASSESSEE SPEC IFICALLY WE FIND NO REASON TO REJECT THE CLAIM OF LONG TERM CAPITAL GAI N AS CLAIMED BY THE ASSESSEE ON ACCOUNT OF SALE OF SHARES OF DATABASE F INANCE LTD. WE ACCORDINGLY SET-ASIDE THE ORDER OF THE CIT(A) AND D IRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF LONG TERM CAPITAL GAI N ON ACCOUNT OF SALE OF SHARES OF DATABASE FINANCE LTD. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 15-01-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMB ER PUNE, DATED : 15 TH JANUARY 2014 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-III, PUNE 4. THE CIT-III, PUNE 5. D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE