MOHINI GHANSHYAM SUKHWANI, Pune V. ITO, Pune

ITA 1515/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0924 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-12-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 29-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: RISHI V LODHA
• Keywords: Business income; Accommodation entries; Retraction
• Section: 132

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NOS.1513 & 1514/PN/2013 ASSESSMENT YEARS : 2003-04 & 2004-05 HEERANAND GHANSHYAM SUKHWANI, SYLVAN HEIGHTS B 603, OPP. SEASONS HOTEL, AUNDH, PUNE 411 007. PAN : AOHPS1208M . APPELLANT VS. THE INCOME TAX OFFICER, WARD 8(2), PUNE. . RESPONDENT ITA NO.1515/PN/2013 ASSESSMENT YEAR : 2003-04 MOHINI GHANSHYAM SUKHWANI, SYLVAN HEIGHTS B 603, OPP. SEASONS HOTEL, AUNDH, PUNE 411 007. PAN : AOHPS1207E . APPELLANT VS. THE INCOME TAX OFFICER, WARD 8(2), PUNE. . RESPONDENT / APPELLANT BY : SHRI RISHI V. LODHA / RESPONDENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 16.09.2015 / DATE OF PRONOUNCEMENT: 28.10.2015 % / ORDER PER PRADIP KUMAR KEDIA, AM : THESE ARE BUNCH OF THREE INTER CONNECTED APPEALS IN VOLVING SIMILAR ISSUES WITH SIMILAR FACTS, THEREFORE, THEY HAVE BEE N CLUBBED AND HEARD TOGETHER 2 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDE R FOR THE SAKE CONVENIENCE AND BREVITY. HEERANAND GHANSHYAM SUKHWANI IN ITA NO.1513/PN/2013 : A.Y. 2003-04 2. FIRST, WE MAY TAKE-UP THE APPEAL IN THE CASE OF HEERANAND GHANSHYAM SUKHWANI IN ITA NO.1513/PN/2013 WHICH IS DIRECTED A GAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-V, PUNE DATED 30.05.2013 RELATING TO ASSESSMENT YEAR 2003-04 PASSED UNDER SECTION 271(1) (C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 3. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL :- 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE & IN L AW, THE LEARNED CIT(A)-V, PUNE ERRED IN LAW AND ON FACTS IN LEVYING CONCEALME NT PENALTY OF RS.1,06,800/- ON THE APPELLANT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 2. ALTERNATIVELY AND WITHOUT PREJUDICE, THE LEARNED CIT(A)-V, PUNE ERRED IN LEVYING CONCEALMENT PENALTY @ 150% ON THE ALLEGED C ONCEALED PARTICULARS OF INCOME WHEN THE LAW PERMITS LEVY OF MINIMUM PENALTY OF 100%. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND T O THE GROUNDS OF APPEAL, BEFORE OR AT THE TIME OF HEARING. 4. THE APPEAL PERTAINS TO LEVY OF PENALTY UNDER SEC TION 271(1)(C) OF THE ACT AMOUNTING TO RS.1,06,800/- @ 150% OF THE TAX EVADED . 5. THE RELEVANT FACTS AS BRIEFLY STATED ARE THAT TH E ASSESSEE HAS CLAIMED LONG TERM CAPITAL GAINS OF RS.3,36,476/- ON ACCOUNT OF S ALE OF DATABASE FINANCE LTD. SHARES WHICH ARE AS UNDER :- DETAILS OF SHARE PURCHASE PURCHASE DETAILS SCRIP SR. NO. PURCHASE DATE PURCHASE FROM (BROKER) QTY PURCHASE RATE PURCHASE AMOUNT DEMAT DATE PAYMENT DETAILS 1 13.04.2001 G.R. PANDYA SHARE BROKING LTD. 400 12.35 4942 05.09.2002 CASH PAID ON 13.04.2001 3 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 DETAILS OF SHARE SALES SR. NO. DATE OF SALE SALE THROUGH (BROKER) QTY SALE RATE SALE AMOUNT DEMAT OUT DATE PAYMENT RECEIVED DETAILS 1 17.08.2002 ACTION FINANCE SERVICES (I.) LTD. 4000 85.35 341417.5 17.09.2002 CH. NO.530363 OF RS.341717.5 DT. 26.08.2002 6. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IS A MEMBER OF SUKHWANI GROUP WHICH WAS COVERED IN SEARCH ACTION U NDER SECTION 132 OF THE ACT ON 14.06.2006. DURING THE COURSE OF SEARCH ACT ION, SHRI GHANSHYAM J. SUKHWANI, FATHER OF THE ASSESSEE WAS CONFRONTED IN RESPECT OF SALE AND PURCHASE OF TRANSACTIONS IN RESPECT OF PENNY STOCK COMPANIES LIKE DATABASE FINANCE CO. SURYADEEP SALT LTD. AND FAST TRACT ENTE RTAINMENT LTD.. IN THE COURSE OF STATEMENT, SHRI GHANSHYAM J. SUKHWANI OFF ERED TO PAY TAX @ 30% IN CASE OF HIS WIFE, WHILE IN HIS OWN CASE, IT WAS CLA IMED THAT THE SAME WAS OFFERED AS BUSINESS INCOME. SHRI GHANSHYAM J. SUKH WANI FURTHER OFFERED TO PAY TAX INCLUDING HIMSELF AND FAMILY MEMBERS WHICH IS AS UNDER : NAME A.Y. AMOUNT RS. MR. GHANSHYAM J. SUKHWANI 03-04 8,27,475 MRS. DEEPA G. SUKHWANI 03-04 8,57,850 MR. HEERANAND G. SUKHWANI 03-04 3,36,475 MRS. MOHINI G. SUKHWANI 03-04 4,20,772 TOTAL 24,42,572 7. HOWEVER, SUBSEQUENTLY, SHRI GHANSHYAM J. SUKHWAN I RETRACTED THE ABOVE SWORN STATEMENT AND CLAIMED THAT CAPITAL GAIN S SHOWN BY HIM AS WELL AS HIS FAMILY MEMBERS WERE GENUINE AS IT WAS BACKED BY DOCUMENTS. THE ASSESSING OFFICER, HOWEVER, NOTICED THAT DETAILED E NQUIRY WAS CONDUCTED BY BOMBAY STOCK EXCHANGE AS WELL AS SEBI IN RESPECT OF THE SHARES AND PRICE MANIPULATION OF DATABASE FINANCE CO. LTD. AND SEBI HAS SUSPENDED THE BROKERS VIJAY BHAGWANDAS & CO., DPS SHARES & SECURI TIES PVT. LTD., T.H. VAKIL SHARES SECURITIES PVT. LTD., AND SEVERAL OTHE R ENTITIES FOR PRICE MANIPULATION. THE ASSESSING OFFICER ALSO NOTICED T HAT THE INCOME-TAX DEPARTMENT HAS ALSO CONDUCTED DETAILED INQUIRY IN R ESPECT OF PENNY STOCK 4 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 CAPITAL GAIN AND ACCORDINGLY THE ASSESSEE WAS ASKED TO PRODUCE THE BROKERS. THE ASSESSEE COULD NOT PRODUCE THE BROKERS AND MERE LY SUBMITTED THAT THE BROKERS WERE MUMBAI BASED AND THEY WERE NOT TRACEAB LE. 8. THEREAFTER, THE ASSESSING OFFICER ALSO NOTED THA T THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT OF SHRI GHANSHYAM J . SUKHWANI HAS EVIDENTIAL VALUE AND SUBSEQUENT RETRACTION WAS NOTHING BUT AN AFTERTHOUGHT. THE ASSESSING OFFICER FURTHER NOTICED THAT THE ONUS PLA CED UPON THE APPELLANT TO PROVE THE GENUINENESS OF THE TRANSACTION WAS NOT DI SCHARGED BY HIM. 9. IN THE BACKDROP OF THE ENQUIRIES CONDUCTED BY TH E INCOME TAX DEPARTMENT, THE ASSESSING OFFICER REQUIRED THE ASSE SSEE TO PROVE THE GENUINENESS OF THE CAPITAL GAINS VIDE HIS OFFICE LE TTER DATED 13.03.2008. THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE MUMBAI BROKE RS AS THE ASSESSEES WITNESS. IN RESPONSE, THE ASSESSEE MERELY FILED CO NTRACT NOTES IN SUPPORT OF PURCHASES AND SALES. THE ASSESSEE, HOWEVER, EXPRES SED HIS INABILITY TO PRODUCE THE MUMBAI BROKERS WHO SOLD THE SHARES OF THE ASSES SEE ON THE PLEA THAT THEY ARE NOT TRACEABLE. THE ASSESSING OFFICER OBSERVED THAT THE TRANSACTIONS ARE PECULIAR FOR THE FOLLOWING REASONS :- 1) THE ASSESSEES FATHER IS REGULARLY DEALING IN S HARES IN PUNE WHEREIN HE DEALS WITH 4-5 BROKERS. HOWEVER, THIS IS THE ONLY TRANSA CTION WITH THE MUMBAI BROKERS. 2) PAYMENT FOR THE PURCHASE OF SHARES HAS BEEN DON E IN CASH. 3) THE PURCHASE TRANSACTION IS NOT ROUTED THOUGHT B.S.E. BOLT SYSTEM. IT IS AN OFF MARKET DEAL. 4) SHARES HAVE COME TO THE DEMAT ACCOUNT ON 5-09-20 02 WHEREAS THE SHARE WAS PURCHASED ON 13-04-2001. 5) SHARES WERE SOLD ON 17-08-2002 WHEREAS AS PER TH E DETAILS FURNISHED SHARE CAME IN TO DEMAT ACCOUNT ONLY ON 05-09-2002. 6) SHARES WERE SOLD ON 17-08-2002 BUT THEY WERE TRA NSFERRED OUT FROM THE DEMAT ACCOUNT ONLY 17-09-2002, 7) THE MUMBAI BROKERS WHO WERE PART OF THE RING WHI CH USED TO MANIPULATE THE PRICE IN THIS SCRIP HAVE CATEGORICALLY ADMITTED THA T THEY/THEIR EMPLOYEES HAVE GIVEN ACCOMMODATION ENTRIES TO THE NEEDY AT THEIR REQUEST . 8) DURING THE PROBE BY INVESTIGATION WING BY INCOME TAX DEPARTMENT, MUMBAI ALL THE BROKERS IN THIS RING HAVE ADMITTED THAT THE PURCHASE TRANSACTIONS REGARDING THE SHARES OF DATABASE FINANCE LTD., WAS NOT GENUIN E. 5 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 9) THE FUNDAMENTALS OF THE COMPANY WERE NEGATIVE AN D THE COMPANY HAD INCOME OF NOT MORE THAN COUPLE OF LAKHS. HOWEVER, THERE WAS A HUGE PRICE FLUCTUATION. 10. IN THE LIGHT OF THE ABOVE OBSERVATIONS, THE ASS ESSING OFFICER OBSERVED THAT WHAT WAS STATED BY SHRI GHANSHYAM J. SUKHWANI, IN HIS STATEMENT UNDER SECTION 132(4) OF THE ACT ON THE DATE OF SEARCH ARE RELEVANT. SUCH STATEMENT HAS AN IMMENSE EVIDENTIARY VALUE. SUBSEQUENT RETRA CTION WHICH IS ONLY AN AFTERTHOUGHT AND DOES NOT HAVE ANY MERIT IN IT. TH E ASSESSING OFFICER OBSERVED THAT THE GENUINENESS OF THE TRANSACTIONS ITSELF IS IN QUESTION AND ACCORDINGLY HE CONCLUDED THAT THE CLAIM OF CAPITAL GAIN WAS NOT GE NUINE AND ACCORDINGLY HE TREATED THE CLAIM OF LONG TERM CAPITAL GAINS AS UN DISCLOSED INCOME OF THE ASSESSEE. HE, FURTHER, ELABORATED THAT IT IS EVIDE NT THAT THE CARTEL OF THE BROKERS HAVE MANIPULATED THE SHARE PRICE OF DATABASE FINANC E LIMITED AND HAVE GIVEN ACCOMMODATION ENTRIES TO THOSE PERSONS WHO WERE WIL LING TO EVADE TAXATION WRONGFULLY. THE ASSESSEE IS ONE OF THE BENEFICIARY OF THE ACCOMMODATION ENTRIES FOR THE SOLE PURPOSE OF SHOWING HUGE LONG T ERM CAPITAL GAINS TAXABLE AT CONCESSIONAL RATE. HE ACCORDINGLY ASSESSED THE UND ISCLOSED INCOME INCLUDING THE ESTIMATED COST INVOLVED IN OBTAINING SUCH ACCOM MODATION ENTRIES AND CALCULATED PENALTY AT RS.2,13,600/- BEING 300% OF T HE TAX SOUGHT TO BE EVADED. TO SUPPORT HIS ACTION, HE OBSERVED THAT THE PURCHAS ES ARE BOGUS AND ANTEDATED. THE ENTIRE SERIES OF ALLEGED TRANSACTION ARE PREMED ITATED AND METICULOUSLY PLANNED. 11. IN FIRST APPEAL, THE CIT(A) UPHELD THE ACTION O F LEVY OF PENALTY. HOWEVER, HE OBSERVED THAT INTEREST OF JUSTICE WILL BE MET IF THE PENALTY IMPOSED IS REDUCED AND SUBSTITUTED @ 150% AGAINST 300% OF T AX EVADED. ACCORDINGLY, HE REDUCED THE PENALTY TO150% OF THE TAX EVADED. 12. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IS IN FURTHER APPEAL BEFORE US. 13. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE FO R THE ASSESSEE CONTENDED THAT PENALTY IS NOT EXIGIBLE IN THE FACTS OF THE CA SE. HE OBSERVED THAT THE 6 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 TRANSACTIONS OF PURCHASE AND SALE ARE BACKED BY BRO KER NOTES. HE CONTENDED THAT THE SHARES WERE ACTUALLY DELIVERED IN HIS DEMA T ACCOUNT WHICH IS A REALITY. THE APPEAL HAS NOT BEEN PREFERRED BEFORE THE TRIBUN AL IN THE QUANTUM APPEAL ONLY TO AVOID THE PROTRACTED LITIGATION. HE, THERE FORE, PLEADED THAT THE PENALTY SUSTAINED BY THE CIT(A) SHOULD BE SET-ASIDE AND CAN CELLED. IN SUPPORT OF THE CONTENTIONS RAISED, THE ASSESSEE RELIED ON FOLLOWIN G CASE LAWS: (I) SMT. SMITA P. PATIL & ORS. VS. ACIT, (2014) 159 TTJ 0182 (PUNE); (II) ITO VS. AJAY SHANTILAL LALWANI & NEELESH SHANTILAL LALWANI, (2012) 145 TTJ 511 (PUNE); (III) DCIT VS. SMT. HANSA CHOUDHARY, (2012) 143 TTJ 76 (J D)(UO); (IV) SRI MOTI UDHARAM PUNJABI VS. ACIT, ITA NO.659/PN/20 11 AND OTHERS DATED 31.10.2012; (V) CIT VS. SHIVLAL DESAI & SONS, (1978) 114 ITR 377 (B OM); (VI) CIT VS. DEEKSHA HOLIDAYS LTD., (2010) 186 TAXMAN 18 3 (DEL); (VII) CIT VS. MURLIDHAR CHIRANJILAL, (1980) 121 ITR 528 ( BOM); (VIII) PRASHANT PRALHAD ASHTEKAR VS. ITO, ITA NO.881/PN/20 10 DATED 28.03.2012; (IX) SALMAN KHAN VS. ACIT, (2014) 40 CCH 0594 (MUM-TRIB) 14. IN THE ALTERNATIVE, THE PENALTY SHOULD BE REDUC ED TO MINIMUM BEING 100% OF THE TAX EVADED AS PROVIDED BY THE STATUTE. 15. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE, ON THE OTHER HAND, VEHEMENTLY RELIED UPON THE ORDERS OF THE AUTH ORITIES BELOW AND SUBMITTED THAT IT IS GROSS CASE FOR SUSTENANCE OF PENALTY. H E RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA ( P.) LTD. VS. CIT REPORTED IN (2013) 358 ITR 593 (SC) AND WHICH LAYS DOWN THAT IN THE ABSENCE OF BONA-FIDE AND PLAUSIBLE EXPLANATION OF THE ASSES SEE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT COULD BE LEVIED, NOTWITHSTANDI NG THE FACT THAT ASSESSEE MAY HAVE OFFERED THE INCOME FOR TAX TO BUY PEACE AND/OR AVOID LITIGATION. HE ALSO RELIED UPON ANOTHER DECISION OF HONBLE SUP REME COURT IN THE CASE OF UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS R EPORTED IN (2008) 306 ITR 277 (SC) TO SUPPORT HIS CONTENTION THAT PENALTY HAS BEEN RIGHTLY CONFIRMED BY THE CIT(A). 7 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS, ORDERS OF THE AUTHORITIES BELOW AND PERUSED THE CASE LAWS. WE FI ND THE SEQUENCE OF TRANSACTIONS AS VERY DISCONCERTING AND INTEGRUING. THE PURCHASE TRANSACTIONS IS NOT ROUTED THROUGH STOCK EXCHANGE. IT IS OFF MARK ET TRANSACTION WHERE SHARES HAVE BEEN ACQUIRED AGAINST PAYMENT OF CASH. THE IMPUGNED TRANSACTION IS THE ONLY TRANSACTION WITH THE MUMBAI BROKERS. AGAI N, THE SHARES WERE RECEIVED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON 05 .09.2002 AFTER A GAP OF NEARLY 1 YEARS FROM ITS PURCHASE ON 13.04.2001. THE SHARES WERE SOLD ON 17.08.2002 WHEREAS THE SHARES WERE RECEIVED IN DEMA T ACCOUNT ON 05.09.2002 TOWARDS PURCHASES, THESE WERE TRANSFERRED AGAINST S ALE ON 17.09.2002. THE PROBE BY THE INVESTIGATION WING OF INCOME TAX DEPAR TMENT, REVEALED BY THE PURCHASED TRANSACTIONS REGARDING THE SHARES OF DATA BASE FINANCE LTD., WAS NOT GENUINE. COUPLE WITH THIS, THE FUNDAMENTALS OF THE COMPANY WERE FOUND TO BE NEGATIVE AND THE COMPANY HAD NOT INCOME OF MORE THA N COUPLE OF LAKHS. HOWEVER, THERE IS A HUGE PRICE RISE. FROM THE ABOV E FACTS, IT IS CRYSTAL CLEAR THAT THE PURCHASE TRANSACTIONS HAVE BEEN CONCOCTED AND MANIPULATED TO DECLARE WRONGFUL LONG TERM CAPITAL GAINS. IN MAK DATA (P.) LTD. (SUPRA), THE HONBLE SUPREME COURT HELD ON FACTS THAT WHEN THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME AND NO EXPLANATION IS OFFERED FOR A LLEGED CONCEALMENT OF INCOME, THE IMPOSITION OF PENALTY JUSTIFIED. THE A SSESSING OFFICER HAS REPORTEDLY MADE DETAILED ENQUIRIES AND HIS ACTION I S BASED ON INCRIMINATING EVIDENCES. IN THE FACTS OF THE PRESENT CASE, WE AR E INCLINED TO AGREE WITH THE FINDINGS OF THE LOWER AUTHORITIES THAT THE CIRCUMST ANCES EXIST TO SAY THAT TRANSACTIONS ARE NOT BONA-FIDE PER SE . WE FIND OURSELVES IN COMPLETE AGREEMENT WITH THE ACTION OF THE LOWER AUTHORITIES FOR IMPOSITION OF PENALTY. THE DECISIONS CITED BY THE ASSESSEE DOES NOT SET OU T ANY PROPOSITION OF LAW AND ARE DISTINGUISHABLE ON FACTS. THE ITAT PUNE IN THE CASE OF SMITA PATIL (SUPRA) INTER ALIA ARRIVED AT A FINDING THAT ASSESSEE FAILED TO ESTAB LISH CLEAR CASE AGAINST THE ASSESSEE AND CONTRACT NOTES WERE F OUND TO BE GENUINE. THIS IS NOT SO IN THE PRESENT CASE. LIKEWISE, FACTS IN OTHE R CASES CITED ARE MATERIALLY DIFFERENT. INCISIVE CIRCUMSTANCES PITTED AGAINST T HE ASSESSEE IN THE PRESENT CASE POINTING OUT TO DISHONEST CONDUCT WERE ABSENT IN CA SES CITED BY THE ASSESSEE. HOWEVER, IN THE SAME VEIN, WE FIND THAT THE TRANSAC TIONS HAVE BEEN EXECUTED 8 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 THROUGH DEMAT ACCOUNT AND TRANSFER HAS TAKEN PLACE AGAINST THE SALE. THE SALE PART OF THE TRANSACTIONS HAS NOT BEEN DISPUTED PER-SE . IN VIEW OF THE ABOVE MITIGATING CIRCUMSTANCE, WE FEEL THAT THE ASSESSEE DESERVES BENEFIT OF DOUBT. ACCORDINGLY, WE CONCUR WITH THE ALTERNATIVE PLEA TA KEN BY THE ASSESSEE THAT THE QUANTUM OF PENALTY SHOULD BE REDUCED TO 100% OF THE TAX EVADED. IN OUR VIEW, DILUTION OF QUANTUM PENALTY IS JUSTIFIED. 17. IN THE RESULT, THE GROUNDS OF APPEAL OF THE ASS ESSEE IN ITA NO.1513/PN/2013 RELATING TO ASSESSMENT YEAR 2003-04 IS DISMISSED. HEERANAND GHANSHYAM SUKHWANI IN ITA NO.1514/PN/2013 : A.Y. 2004-05 18. THE RELEVANT GROUNDS OF APPEAL IN ITA NO.1514/P N/2013 CONCERNING A.Y. 2004-05 AGAINST THE ORDER OF CIT(A)-V, PUNE DA TED 30.05.2013 IS NOTED BELOW FOR READY REFERENCE :- 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE & IN L AW, THE LEARNED CIT(A)-V, PUNE ERRED IN LAW AND ON FACTS IN LEVYING CONCEALME NT PENALTY OF RS.2,27,500/- ON THE APPELLANT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 2. ALTERNATIVELY AND WITHOUT PREJUDICE, THE LEARNED CIT(A)-V, PUNE ERRED IN LEVYING CONCEALMENT PENALTY @ 150% ON THE ALLEGED C ONCEALED PARTICULARS OF INCOME WHEN THE LAW PERMITS LEVY OF MINIMUM PENALTY OF 100%. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND T O THE GROUNDS OF APPEAL, BEFORE OR AT THE TIME OF HEARING. 19. THE FACTS IN HEERANAND GHANSHYAM SUKHWANI IN IT A NO.1514/PN/2013 CONCERNING A.Y. 2004-05 ARE BROADLY SIMILAR TO THE EARLIER YEAR. THE RELEVANT DETAILS OF THE TRANSACTION INVOLVED IS NOTED BELOW FOR CONVENIENCE :- DETAILS OF SHARE PURCHASE OF SURYADEEP SALT LTD. (S SL) PURCHASE DETAILS SCRIP SR. NO. PURCHASE DATE BROKER NAME QTY PURCHASE RATE PURCHASE AMOUNT DEMAT DATE PAYMENT DETAILS 1 23/10/02 DRISHTI SECURITIES PVT. LTD. 10000 3.2 33,500 5/6/03 CHQ. NO.051962 DTD. 25/12/02 FOR RS.81,500/- 2 25/09/02 15000 48000 5/6/03 TOTAL 81,500 15000 SHARES WRITTEN OFF ON 01/04/2007. 9 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 DETAILS OF SHARE SALES SR. NO. DATE OF SALE SALE THROUGH (BROKER) QTY SALE RATE SALE AMOUNT DEMAT DATE PAYMENT RECEIVED DETAILS 1 6/1/04 DRISHTI SECURITIES PVT. LTD. 10000 69.84 6,98,457.13 CH. NO.298099 OF RS.698457/- DT. 14/01/2004 LONG TERM CAPITAL GAIN 666457.13 20. IN THIS ASSESSMENT YEAR ALSO, AS NOTED, THE FAC TS ARE BROADLY IDENTICAL AND THEREFORE NOT REPEATED. HOWEVER, THERE IS ONE IMPOR TANT VARIANCE. THE SHARES OF THE IMPUGNED SCRIP SURYADEEP SALT LTD. (SSL) IN QUE STION WERE TRANSFERRED IN THE DEMAT ACCOUNT OF THE ASSESSEE PRIOR TO ITS SALE UNLIKE IN THE EARLIER YEAR. THE TRANSFER TOWARDS PURCHASE BY THE SELLING BROKER WAS ALBEIT AFTER MORE THAN 7 MONTHS OF PURPORTED PURCHASE BY THE ASSESSEE. AS NOTED IN THE QUANTUM ORDER OF THE CIT(A), THE SHARES WERE CREDITED TO TH E DEMAT ACCOUNT OF THE ASSESSEE ON 5-6-2003. IT IS ALSO NOTED IN THIS YEA R THAT THE PURCHASE CONSIDERATIONS WERE PAID BY CHEQUE DATED 25/12/2002 ALBEIT DELAYED BY 2 TO 3 MONTHS OF THE PURCHASE AS AGAINST PURPORTED CASH PA YMENT FOR THE EARLIER YEAR. IN THE BACKDROP OF SUCH VARIANCES, THE TRANSACTION OF LONG TERM CAPITAL GAINS DECLARED BY THE ASSESSEE WAS TREATED AS SHORT TERM CAPITAL GAIN BY THE CIT(A) IN QUANTUM ORDER INSTEAD OF UNDISCLOSED INCOME TREA TED BY THE AO. THUS, PARTIAL RELIEF WAS GRANTED. 21. HAVING NOTED ABOVE VARIANCES, WE FIND THAT ASSE SSEE HAS MADE CHEQUE PAYMENTS AGAINST PURCHASE FOR WHICH DELIVERY HAS BE EN RECEIVED. LIKEWISE, DELIVERY HAS BEEN DULY GIVEN AGAINST SALE AND THE P AYMENT THEREOF HAS BEEN RECEIVED BY CHEQUE. THE CIT(A) HAS ACCEPTED THE PU RCHASE AND SALE TRANSACTION ALBEIT HOLDING THE SAME AS SHORT TERM C APITAL GAIN INSTEAD OF LONG TERM CAPITAL GAIN. IN THE CIRCUMSTANCES, IT IS DIF FICULT TO SAY THAT THE TRANSACTIONS DO NOT EXIST PER SE . IN THE TOTALITY OF CIRCUMSTANCES, WE FEEL THAT WHILE THE QUANTUM ADDITION HAS BEEN SUSTAINED ON A DIFFERENT FOOTING THAN WHAT WAS PROPOSED BY THE ASSESSING OFFICER, IMPOSITION O F PENALTY WOULD NOT BE JUSTIFIED ON THE BASIS OF UNPROVED FACTS. WE ALSO FIND THAT THE FACTS IN THIS CASE ARE BROADLY SIMILAR TO THE CASE IN PRASHANT PRALHAD ASHTEKAR VS. ITO IN ITA 10 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 NOS.881 882/PN/2010, ORDER DATED 28.03.2012 RELIE D UPON BY THE ASSESSEE, WHEREIN THE PENALTY WAS DELETED. WE, ACCORDINGLY, SET-ASIDE THE ORDER OF THE CIT(A) AND CANCEL THE PENALTY IMPOSED. 22. IN THE RESULT, THE APPEAL NO.1514/PN/2013 FILED BY THE ASSESSEE IS ALLOWED. MOHINI GHANSHYAM SUKHWANI IN ITA NO.1515/PN/2013: A.Y. 2003-04 23. THE RELEVANT GROUNDS OF APPEAL IN ITA NO.1515/P N/2013 CONCERNING A.Y. 2003-04 AGAINST THE ORDER OF CIT(A)-V, PUNE DA TED 30.05.2013 IS NOTED BELOW FOR READY REFERENCE. 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE & IN L AW, THE LEARNED CIT(A)-V, PUNE ERRED IN LAW AND ON FACTS IN LEVYING CONCEALME NT PENALTY OF RS.1,92,501/- ON THE APPELLANT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 2. ALTERNATIVELY AND WITHOUT PREJUDICE, THE LEARNED CIT(A)-V, PUNE ERRED IN LEVYING CONCEALMENT PENALTY @ 150% ON THE ALLEGED C ONCEALED PARTICULARS OF INCOME WHEN THE LAW PERMITS LEVY OF MINIMUM PENALTY OF 100%. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND T O THE GROUNDS OF APPEAL, BEFORE OR AT THE TIME OF HEARING. 24. THE FACTS IN MOHINI GHANSHYAM SUKHWANI IN ITA N O.1515/PN/2013 CONCERNING A.Y. 2003-04 ARE BROADLY SIMILAR TO THE CASE OF ANOTHER FAMILY MEMBER; HEERANAND GHANSHYAM SUKHWANI IN ITA NO.1514 /PN/2013. THE RELEVANT DETAILS OF THE TRANSACTION INVOLVED IS TAB ULATED BELOW FOR CONVENIENCE :- DETAILS OF SHARE OF DATABASE FINANCE OF MOHINI G. S UKHWANI PURCHASE DETAILS SCRIP SR. NO. PURCHASE DATE PURCHASE FROM (BROKER) QTY PURCHASE RATE PURCHASE AMOUNT DEMAT IN DATE 1 13/4/2001 G.R. PANDYA SHARE BROKING LTD. 5000 1.24 6205.5 7/8/2002 SR. NO. DATE OF SALE SALE THROUGH (BROKER) QTY SALE RATE SALE AMOUNT DEMAT OUT DATE 1 17/8/2002 ACTION FINANCE SERVICES (I.) LTD. 5000 85.4 426975 22/8/2002 11 ITA NOS.1513 & 1514/PN/2013 ITA NO.1515/PN/2013 25. THE FACTS ARE SIMILAR TO THE FACTS IN THE CASE OF HEERANAND GHANSHYAM SUKHWANI IN ITA NO.1514/PN/2013 RELATING TO ASSESSM ENT YEAR 2004-05. IN THIS CASE ALSO, LONG TERM CAPITAL GAIN DECLARED BY THE ASSESSEE HAS BEEN HELD TO BE SHORT TERM CAPITAL GAIN BY THE CIT(A), WHICH IS NOT IN THE QUANTUM PROCEEDINGS. THE QUANTUM ORDER OF THE CIT(A) HAS N OT BEEN DISPUTED BY THE REVENUE. 26. FOLLOWING THE PARITY OF REASONINGS IN ITA NO.15 14/PN/2013 SUPRA AND HAVING REGARD TO TOTALITY OF FACTS AND CIRCUMSTANCE S, WE ARE OF THE OPINION THAT THE ASSESSEE DESERVES TO RELIEF AS SOUGHT AS PER GR OUNDS OF APPEAL. ACCORDINGLY, WE SET-ASIDE THE ORDER OF THE CIT(A) A ND CANCEL THE PENALTY. 27. IN THE RESULT, THE APPEAL NO.1515/PN/2013 FILED BY THE ASSESSEE IS ALLOWED. 28. RESULTANTLY, ALL THE APPEALS OF THE RESPECTIVE ASSESSEE ARE DISPOSED OFF IN AFORESAID TERMS. ORDER PRONOUNCED ON THIS 28 TH DAY OF OCTOBER, 2015. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 28 TH OCTOBER, 2015. % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-V, PUNE; 4) THE CIT-V, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE