Neetaa Suneel Shah, CHENNAI V. ITO Non Corporate Ward 5(2), CHENNAI

ITA 1524/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6559 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 14-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DV SUBHA RAO JCIT D R
• Assessee Lawyers: M KARUNAKARAN
• Keywords: Unexplained cash credit; Share purchase agreement; Opportunity of being heard; Principle of natural justice; Penny stocks; Set aside; Capital Gains
• Section: 201; 147; 68; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & S HRI RAMIT KOCHAR , ACCOUNTANT MEMBER ./ I.T.A.NO.1524/CHNY/2019 / ASSESSMENT YEAR : 2012-13 SMT.NEETAA SUNEEL SHAH, 178,OLD NO.88,NSC BOSE ROAD, SOWCARPET,CHENNAI 600 079. VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 5(2), CHENNAI. [PAN AAQPS 8436 E] ( / APPELLANT) ( ! /RESPONDENT) / APPELLANT BY : SHRI M.KARUNAKARAN, ADVOCATE !' /RESPONDENT BY : SHRI DV SUBHA RAO, JCIT D.R & / DATE OF HEARING : 23 - 10 - 201 9 & / DATE OF PRONOUNCEMENT : 23 - 10 - 201 9 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, CHENNA I IN ITA NO.128/C.I.T(A)-5/2017-18 DATED 30.04.2019 FOR THE ASSESSMENT YEAR 2012-13. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS:- ITA NO.1524/CHNY/2019 :- 2 -: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT CONSIDERING THE GROUNDS RAISED AGAINST THE RE-OPENING OF THE AS SESSMENT ITSELF U/S.148. 2. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER HAS RE-OPENED THE ASSESSMENT ON THE WRONG IMPRESSION THAT THE APPELLA NT HAD NOT ADMITTED CAPITAL GAINS ON SALE OF THE SHARES AT ALL IN HER R ETURN OF INCOME WHEREAS THE APPELLANT HAD ADMITTED THE CAPITAL GAINS AND CL AMED EXEMPTION U/S.10(38) OF THE ACT. 3. THE APPELLANT FURTHER SUBMITS THAT THE ASSESSING OFFICER HAS NOT RECORDED ANY REASON TO HOLD THAT ANY INCOME HAS ESCAPED ASSESSME NT AND HIS MERE STATEMENT THAT HE HAS RECEIVED INFORMATION FROM THE DIT(INV) KOLKATA THAT THE APPELLANT HAD SOLD SHARES OF M/S. MULTIPLUS RES OURCES LTD. IN THE FINANCIAL YEAR 2011-2012 RELEVANT TO THE ASSESSMENT YEAR 2013 2014 CANNOT BE CONSIDERED AS ESCAPEMENT OF INCOME TO INV OKE THE PROVISIONS OF SECTION 147 OF THE ACT. 4. THE APPELLANT THEREFORE PRAYS THAT THE RE-ASSESS MENT MAY BE CANCELLED IN LIMINE ON THIS GROUND ALONE. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.89,11,200/- AS UNEXPLAINED CREDIT UN DER SECTION 68 WHEN IT REPRESENTED THE LONG TERM CAPITAL GAINS EXEMPT U/S. 10(83) OF THE ACT. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS.89,11,200/- AS UNEXPLAINED CREDIT UN DER SECTION 68 WHEN IT REPRESENTED THE LONG TERM CAPITAL GAINS EXEMPT U/S. 10(38) OF THE ACT. 7. THE APPELLANT SUBMITS THAT THE AMOUNT DULY REFL ECTED IN THE BANK ACCOUNT REPRESENTING SALE OF SHARES CANNOT BE CONSIDERED AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT. 8. THE ASSESSING OFFICER ERRED IN DENYING EXEMPTIO N ON THE LONG TERM CAPITAL GAINS SALE OF 50000 SHARES OF M/S. MULTIPLUS RESOUR CES LTD. CLAIMED U/S.10(38) OF THE ACT ON IRRELEVANT CONSIDERATIONS. 9. THE APPELLANT SUBMITS THAT SHE HAS SATISFIED AL L THE CONDITIONS LAID DOWN IN SECTION 10(38) OF THE ACT BY ADDUCING EVIDENCE TO S HOW THAT THE SHARES WERE SOLD THROUGH DEMAT, HELD FOR MORE THAN 12 MONT HS AND THE SHARES WERE LISTED IN THE STOCK EXCHANGE AND SHARE TRANSAC TION TAX WAS ALSO PAID. THE ASSESSING OFFICER IS THEREFORE NOT CORRECT IN L AW IN DENYING THE EXEMPTION CLAIMED U/S.10(38) OF THE ACT. ITA NO.1524/CHNY/2019 :- 3 -: 10. THE AUTHORITIES BELOW ERRED IN DOUBTING THE PUR CHASE OF SHARES SIMPLY BECAUSE THEY WERE OFF MARKET COMPLETELY IGNORING TH E FACT THAT THE PURCHASE OF SHARES WAS SUPPORTED BY DEBIT NOTES, PA YMENT OF SALE CONSIDERATION THROUGH BANKING CHANNEL, SUBSEQUENT D E-MAT, CONTRACT NOTE AND BANKING STATEMENTS. 11. THE AUTHORITIES BELOW ERRED IN HOLDING THAT THE SHARES SOLD ARE PENNY STOCKS BASED ON THE GENERAL STATEMENT AND INVESTIGA TION CONDUCTED IN OTHER CASES WITHOUT ANY REFERENCE TO THE APPELLANT IN THE DOCUMENTS RELIED ON ESPECIALLY WHEN THE APPELLANT WAS A REGULAR INVE STOR IN SHARES. 12. THE ASSESSING OFFICER DENIED THE PRINCIPLE OF N ATURAL JUSTICE AND FAIR PLAY BY NOT PROVIDING THE DOCUMENTS RELIED ON BY HIM IN THE ASSESSMENT TO THE APPELLANT FOR ANY REBUTTAL. 13. THE ASSESSING OFFICERS OBSERVATION THAT THERE WAS NO INFRACTION OF ANY PRINCIPLE OF NATURAL JUSTICE BY THE ABSENCE OF FORM AL OPPORTUNITY OF ORAL CROSS EXAMINATION AND THAT NEITHER CROSS EXAMINATIO N NOR THE OPPORTUNITY TO LEAD EVIDENCE IS AN INTEGRAL PART OF ALL QUASI J UDICIAL ADJUDICATIONS IS AGAINST THE PRINCIPLES OF TAXATION, FAIR LAY AND NA TURAL JUSTICE. 14. THE APPELLANT SUBMITS THAT IT IS NOT THE CASE O F THE AUTHORITIES BELOW THAT UNACCOUNTED MONEY EXCHANGED BETWEEN THE APPELLANT A ND THE ALLEGED SHARE BROKERS IN THE TRANSACTIONS TO SUSPECT THE TR ANSACTION AND TO TREAT THE SAME AS SAME AS HELD BY THE BOMBAY HIGH COURT I N THE CASE OF C.I.T VS. LAVANYA LAND P LTD. (83 TAXMANN.COM161) 15. THE APPELLANT SUBMITS THAT SHE HAS RELIED ON VA RIOUS CASE LAWS IN SUPPORT OF THE DECISION AND THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) OUGHT TO HAVE FOLLOWED THE DECISION FAVOURABLE TO THE TAX PAYER WHEN THERE ARE CONTRADICTORY DECISIONS AS PER THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CASE OF VEGETABLE PRODUCTS LTD., 16. THE APPELLANT THEREFORE PRAY THAT THE RE-ASSESS MENT MADE UNDER SECTION 148 MAY BE CANCELLED AS AB INITIO VOID AND THE ADDI TION OF RS.89,11,200 BEING THE SALE CONSIDERATION OF SHARES UNDER SECTIO N 68 MAY BE DELETED AND THE CAPITAL GAINS ARISING FROM THE SALE OF SHAR ES OF M/S. MULTIPLUS RESOURCES LTD. MAY BE ALLOWED EXEMPTION U/S.10 (38) OF THE ACT AND RENDER JUSTICE. ITA NO.1524/CHNY/2019 :- 4 -: 3. SHRI M.KARUNAKARAN REPRESENTED ON BEHALF OF THE ASSESSEE, AND SHRI DV SUBHA RAO REPRESENTED ON BEHALF OF THE REVENUE. 4. IT WAS SUBMITTED BY LD.AR THAT RE-OPENING OF AS SESSMENT IS INVALID IN SO FAR AS THE ASSESSING OFFICER HAS MENT IONED THE REASONS THAT THE ASSESSEE HAS NOT DISCLOSED CAPITAL GAINS. IT WAS A SUBMISSION THAT ASSESSEE HAS DISCLOSED THE LONG TERM CAPITAL G AINS, BUT HAS CLAIMED EXEMPTION U/S.10(38) OF THE ACT. IT WAS SU BMITTED THAT THE REASONS RECORDED WERE INVALID. IT WAS A FURTHER SU BMISSION THAT ASSESSEE HAD OBJECTED TO THE REOPENING OF ASSESSMEN T IN THE COURSE OF ASSESSMENT ITSELF AND THE SAME HAS NOT BEEN CONSIDE RED BY THE ASSESSING OFFICER. IT WAS ALSO A SUBMISSION THAT EV EN IN THE APPEAL BEFORE THE LD.CIT(A), THOUGH THE GROUND AGAINST THE REOPENING HAD BEEN RAISED, LD.CIT(A) HAD NOT ADJUDICATED THE SAME . IT WAS SUBMITTED BY LD.AR THAT THE RE-OPENING ITSELF WAS LIABLE TO B E QUASHED ON MERITS. THE LD.AR FURTHER SUBMITTED THAT THE ISSUE WAS IN R ESPECT OF AN ALLEGED PENNY STOCK. IT WAS SUBMITTED THAT THE ASSESSING OF FICER HAS NOT PROVIDED THE DETAILS OF THE EVIDENCES AVAILABLE WIT H HIM FOR THE PURPOSE OF MAKING DISALLOWANCE. IT WAS A PRAYER THA T THE ASSESSEES CLAIM OF DEDUCTION U/S.10(38) OF THE ACT BE ACCEPTE D. 5. IN REPLY, LD.DR SUBMITTED THAT THE ASSESSING OF FICER HAS CONSIDERED THE OBJECTIONS OF THE ASSESSEE WHILE COM PLETING THE ASSESSMENT IN SO FAR AS THE ARGUMENTS OF ASSESSEE H AVE NOT BEEN ITA NO.1524/CHNY/2019 :- 5 -: FOUND FAVOUR WITH BY THE ASSESSING OFFICER. THE LD. DR DREW OUR ATTENTION TO THE ORDER OF LD.CIT(A) IN PARA 6.2 TO SUBMIT THAT LD.CIT(A) HAD REJECTED THE ASSESSEES ARGUMENT IN RESPECT OF REOPENING. IT WAS ALSO SUBMITTED BY LD.DR THAT REOPENING OF ASSESSMEN T ARE VALID AND THE VALID REASONS HAD BEEN RECORDED. LD.DR SUBMITTE D THAT THE DETAILS OF THE CAPITAL GAINS TRANSACTIONS HAD NOT BEEN PROV IDED BY THE ASSESSEE AND IT WAS ONLY ON THE BASIS OF THE INFORM ATION RECEIVED FROM INVESTIGATION WING, INCOME-TAX DEPARTMENT, KOLKATTA OFFICE THAT THE ASSESSEE HAD INVOLVED HERSELF IN THE BOGUS CAPITAL GAINS TRANSACTIONS, WHICH HAD LED TO THE REOPENING. IT WAS A PRAYER THA T THE REVENUE HAD NO OBJECTION, IF THE ISSUE IN THE APPEAL PERTAINING TO CLAIM OF DEDUCTION U/S.10(38) OF THE ACT WAS RESTORED TO THE FILE OF T HE AO FOR RE- ADJUDICATION IN LINE WITH THE DECISION OF CO-ORDINA TE BENCH OF THIS TRIBUNAL IN THE CASE OF HEERACHAND KANUNGA IN ITA N O.767 & 768/CHNY/2019 DATED 03.05.2018. THE LD.DR SUBMITTED THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF DI LIP KUMAR REPORTED IN 2018-TIOL-302-SC-CUS-CB WAS LIABLE TO BE CONSIDERED WHEREIN THE CONSTITUTION BENCH OF SUPREME COURT HAD CATEGORICAL LY HELD THAT IF AN EXEMPTION HAS BEEN CLAIMED BY THE ASSESSEE, IT IS F OR THE ASSESSEE TO PROVE THE ELIGIBILITY TO CLAIM THE EXEMPTION. ITA NO.1524/CHNY/2019 :- 6 -: 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN RESPECT OF ASSESSE ES STAND THAT THE RE- OPENING IS INVALID IN SO FAR AS THE ASSESSING OFFI CER HAS RECORDED THAT THE ASSESSEE HAS NOT DISCLOSED THE CAPITAL GAINS ON SALE OF THE SHARES AT ALL IN HER RETURN OF INCOME, BUT IN FACT, THE AS SESSEE HAS OFFERED THE CAPITAL GAINS ON WHICH CLAIMED EXEMPTION U/S.10(38) OF THE ACT. THE REASONS RECORDED BY THE ASSESSING OFFICER ARE EXTRA CTED HEREIN BELOW: IN THIS CASE INFORMATION RELATING TO BOGUS LTCG WA S RECEIVED FROM DIT(INV), KOTKATTA, WHEREIN IT IS NOTICED THAT THE ASSESSEE DURING THE F.Y 2011-12 RELEVANT TO A.Y 2012-13 SOLD SHARES OF M/S.MULTIPLUS RESOURCES LIMITED TO THE TUNE OF RS.89,11,200/- AND IT IS SEEN THAT THE ASSESSEE HAS NOT ADMITTED T HE INCOME IN HER RETURN OF INCOME. HENCE, I HAVE REASONS TO BELI EVE THAT THERE IS ESCAPEMENT OF INCOME FOR THE ASSESSMENT YEAR 201 2-13 CHARGEABLE TO TAX. A PERUSAL OF THE REASONS SHOWS THAT THE WORDS USED BY THE ASSESSING OFFICER ARE THAT THE ASSESSEE HAS NOT ADMITTED THE INCOME IN HER RET URN OF INCOME. A PERUSAL OF THE RETURN OF INCOME FILED BY THE ASSE SSEE SHOWS THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S.1 0(38) OF THE ACT IN RESPECT OF LONG TERM CAPITAL GAINS GENERATED BY THE ASSESSEE IN RESPECT OF SALE OF THE SHARES OF M/S.MULTIPLUS RESO URCES LIMITED. THUS, IT IS VERY CLEAR THAT THERE IS NO ERROR IN THE REAS ONS RECORDED BY THE ASSESSING OFFICER. IN ANY CASE, THE REOPENING HAS B EEN DONE ON THE BASIS OF AN INFORMATION RECEIVED BY ASSESSING OFFIC ER FROM DIT(INV), ITA NO.1524/CHNY/2019 :- 7 -: KOLKATTA REFERRING TO THE TRANSACTIONS DONE BY THE ASSESSEE. AT THE TIME OF RECORDING REASONS FOR REOPENING OF ASSESSME NT, IT IS NOT NECESSARY THAT THERE SHOULD BE FINALITY OF FINDING IN RESPECT OF REASONS. ALL THAT IS REQUIRED IS THE CLARITY OF THE REASONS. CHALLENGE TO REOPENING WOULD NOT SURVIVE IN RESPECT OF THE SUFFICIENCY OF THE REASONS. IT IS TO BE APPRECIATED THAT THE COURT CANNOT EXAMINE THE SU FFICIENCY OF REASONS ON THE BASIS OF WHICH THE RE-ASSESSMENT IS INITIATED. HOWEVER, THE EXISTENCE OR OTHERWISE OF SUCH REASONS TO BELIE VE IS CERTAINLY OPEN VERIFICATION. IN THE PRESENT CASE, THERE ARE REASON S RECORDED AND SUCH REASONS HAD BEEN RECORDED ON THE BASIS OF FRESH EVI DENCES, WHICH HAS COME TO THE POSSESSION OF THE ASSESSING OFFICER AFT ER THE RETURN HAS BEEN FILED. THIS BEING SO, THE RE-OPENING OF THE A SSESSMENT STANDS UPHELD. 7. IN RESPECT OF THE ARGUMENT RAISED BY THE LD.AR THAT THE OBJECTIONS OF THE ASSESSEE HAS NOT BEEN DISPOSED OF . IT IS NOTICED THAT IN THE LETTER DATED 02.11.2017 TO THE ASSESSING OFF ICER IN PRA-12, THE ASSESSEE HAS STATED AS FOLLOWS:- 12. THE ASSESSEE HEREBY CONFIRMS RECEIPT OF YOUR L ETTER DATED 07.03.2017 PROVIDING REASONS FOR REOPENING THE ASSE SSMENT. THE ASSESSEE DOTH HEREBY OBJECTS TO THE REOPENING OF TH E ASSESSMENT INASMUCH AS NO SPECIFIC REASONS AGAINST THE ASSESSE E HAS BEEN POINTED OUT NOR ANY DETAILS THEREOF HAS BEEN FURNIS HED TO THE ASSESSEE ITA NO.1524/CHNY/2019 :- 8 -: AND HENCE IT IS REQUESTED THAT THE PROCEEDINGS INIT IATED U/S.148 MAY KINDLY BE DROPPED. THIS IS NOT AN OBJECTION, BUT IS A SUBMISSION IN TH E COURSE OF ASSESSMENT. IN FACT, THE REASONS RECORDED ITSELF C LEARLY GIVE ALL THE DETAILS AS TO WHY THE REOPENING HAS BEEN DONE. HOW EVER, SO AS TO GRANT THE ASSESSEE ANOTHER OPPORTUNITY TO RAISE ALL OBJECTIONS THAT SHE DESIRES IN RESPECT OF RE-OPENING, FOLLOWING THE PRI NCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVEN SHAFTS (INDIA) LTD. VS. ITO REPORTED IN (2003) 259 ITR 19(SC), THE ISSUES IN THE APPEAL RE RESTORED TO THE FILE OF ASSESSING OFFICER FOR RE-ADJUDICATION. THE ASSESSEE IS AT LIBERTY TO RAISE ALL SUCH OBJECT IONS THAT SHE FEELS ARE NECESSARY AND APPROPRIATE IN RESPECT OF REOPENING A ND THE ASSESSING OFFICER SHALL CONSIDER SUCH OBJECTIONS AND ADJUDICA TE ON THE SAME BEFORE COMPLETING THE SET ASIDE PROCEEDINGS. THE A SSESSING OFFICER SHALL ALSO KEEP IN MIND THE PRINCIPLES LAID DOWN BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI HEERACHA ND KANUNGA FOR ASSESSMENT YEARS 2010-11 & 2011-12 IN ITA NOS.2786 & 2787/MDS/2017 VIDE ORDER DATED 03.05.2018 WHEREIN THE TRIBUNAL HAS BEEN HELD AS FOLLOWS:- 9. A PERUSAL OF THE FACTS IN THE PRESENT CASE ADM ITTEDLY GIVEN ROOM FOR SUSPICION. HOWEVER, ASSESSMENTS ARE NOT TO BE DONE ON THE BASIS OF MERE SUSPICION. IT HAS T O BE SUPPORTED BY FACTS AND THE FACTS ARE UNFORTUNATELY NOT FORTHCOMING IN THE ASSESSMENT ORDER, IN THE ORDER O F THE LD.CIT(A) NOR FROM THE SIDE OF THE ASSESSEE. THE M AIN ITA NO.1524/CHNY/2019 :- 9 -: FOUNDATION OF THE ASSESSMENT IN THE PRESENT CASE IS THE STATEMENT OF ONE SHRI ASHOK KUMAR KAYAN WHO HAS ADMITTED TO HAVE PROVIDED BOGUS LONG TERM CAPITAL G AINS TO HIS CLIENTS. THE SAID SHRI ASHOK KUMAR KAYAN AL SO ALLEGEDLY SEEMS TO HAVE PROVIDED THE ASSESSEES NAM E AND PAN AS ONE OF THE BENEFICIARIES. HOWEVER, THIS STATEMENT GIVEN BY SHRI ASHOK KUMAR KAYAN CANNOT BE THE FOUNDATION FOR THE PURPOSE OF ASSESSMENT IN SO FAR AS SHRI ASHOK KUMAR KAYAN HAS NOT BEEN PROVIDED TO THE ASSESSEE FOR CROSS-EXAMINATION. IN THE ABSENCE OF OPPORTUNITY OF CROSS-EXAMINATION, THE STATEMENT REM AINS MERE INFORMATION AND SUCH INFORMATION CANNOT BE FOUNDATION FOR ASSESSMENT. 10. ADMITTEDLY, THE ASSESSEE HAS CLAIMED TO HAVE PURCHASED 15000 SHARES FROM M/S.BPL @ RS.20/- PER SHARE TOTALING INTO RS.3,00,000/-. THE ASSESSEE CLA IMS TO HAVE PAID CASH FOR THE PURCHASE OF THESE SHARES. T HE PRIMARY QUESTION WOULD BE AS TO WHERE THE PURCHASE WAS DONE? IF THE PURCHASE HAS BEEN DONE IN KOLKATA, HOW WAS THE CASH TRANSFERRED? WHEN DID THE ASSESSEE RECEIVE D THE SHARE CERTIFICATES AND THE SHARE TRANSFER FORMS? H OW DID THE ASSESSEE OVERCOME THE PROVISIONS OF SEC.40A(3)? WAS THERE ADEQUATE CASH AVAILABILITY IN THE BOOKS O F THE ASSESSEE ON 24.04.2008? DID THE ASSESSEE TRAVELLED TO KOLKATA? HOW WAS THE TRANSACTION DONE? WHO APPLIE D FOR THE DEMATING OF THE SHARES? WHEN WERE THEY DEMATED ? WHEN WERE THE SHARES TRANSFERRED TO THE DEMAT ACCOU NT OF THE ASSESSEE? TO WHOM WERE THE SHARES SOLD DURIN G THE ASSESSMENT YEARS 2010-11 & 2011-12? WHEN WERE THE CHEQUES RECEIVED BY THE ASSESSEE? FROM WHOM DI D THE ASSESSEE RECEIVED THE CHEQUES? WAS THERE ANY CA SH DEPOSIT IMMEDIATELY PRIOR TO THE ISSUING OF THE CHE QUE FROM THE BANK ACCOUNT OF THE PURCHASER OF THE SHARE S OF THE ASSESSEE? 11. A PERUSAL OF THE ASSESSMENT ORDER AT PARA NO.7. 1 SHOWS THAT IN THE WRITTEN SUBMISSIONS, THE ASSESSEE STATES THAT HE HAS PURCHASED 15000 SHARES OF M/S.BP L FROM M/S.ABPL, KOLKATA. HOWEVER, IN PARA NO.8.3, I T IS MENTIONED THAT THE ASSESSEE IN GOOD FAITH HAS PURCH ASED THE SHARES OF M/S.BPL FROM A SUB-BROKER IN HIS FRIE NDS CIRCLE. WHAT IS THE TRUE NATURE OF THE TRANSACTION ? FROM WHOM DID THE ASSESSEE ACTUALLY PURCHASE THE SHARES? DID THE ASSESSEE TAKE POSSESSION OF THE SHARES IN ITS P HYSICAL FORM? IN PARA NO.8.1 OF THE ASSESSMENT ORDER, IT I S MENTIONED THAT THE ASSESSEE IS AN INVESTOR AND HAS BEEN REGULARLY TRADING IN SHARES. IF THIS IS SO, DOES T HE DEMAT ACCOUNT SHOW SUCH TRANSACTIONS BEING DONE BY THE ASSESSEE OR IS THIS THE ONLY ONE OF TRANSACTION. T HUS, CLEARLY THE FACTS REQUIRED FOR ADJUDICATING THE APP EALS ARE ITA NO.1524/CHNY/2019 :- 10 -: NOT FORTHCOMING. THERE IS NO EVIDENCE WHATSOEVER T O SHOW THAT THE ASSESSEE HAS HELD THE SHARES FOR MORE THAN 12 MONTHS. THIS IS BECAUSE ASSUMING THAT THE DEMAT HAS BEEN DONE AND THE SHARES OF M/S.BPL HAS COME INTO T HE ASSESSEES DEMAT ACCOUNT AND HAS IMMEDIATELY FLOWN OUT. THEN THE FACTUM OF THE POSSESSION OF THE SHARES FOR MORE THAN 12 MONTHS HAVE TO BE PROVED BY THE ASSESSEE. THIS IS ALSO NOT FORTHCOMING. IN REPLY TO A SPECIFIC QU ERY, AS THE DATE OF THE DEMAT OF SHARES, IT WAS SUBMITTED B Y THE LD.AR THAT THE DEMAT WAS DONE ON VARIOUS DATES. TH EN THE QUESTION RISES AS TO WHY THERE IS SO MUCH OF DIFFERENCE IN THE DATES OF DEMATING WHEN 15000 SHAR ES HAVE BEEN PURCHASED TOGETHER ON 24.04.2008. NO DET AILS IN RESPECT OF M/S.BPL COMPANY IS KNOWN, WHAT IS THE PRODUCT OF THE COMPANY WHICH HAD LEAD TO THE SHARE VALUE OF THE COMPANY TO GO UP FROM RS.20/- TO RS.352/- IN A PERIOD OF TWO YEARS. THIS WOULD CLEARLY BE A CASE W HERE THE SHARE VALUE OF THE COMPANY WAS HITTING THE CIRC UIT BREAKER OF THE STOCK EXCHANGE ON A DAILY BASIS AND OBVIOUSLY IT WOULD HAVE DRAWN ATTENTION. THIS BEIN G SO, AS THE FACTS ARE NOT COMING OUT OF THE ASSESSMENT O RDER NOR THE ORDER OF THE LD.CIT(A) NOR FROM THE SIDE OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE ISSUES IN THI S APPEAL MUST BE RESTORED TO THE FILE OF THE AO FOR RE-ADJUD ICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE AND WE DO SO. 12. THE STATEMENT RECORDED BY THE REVENUE FROM SHRI ASHOK KUMAR KAYAN CANNOT BE USED AS AN EVIDENCE AGAINST THE ASSESSEE IN SO FAR AS THE STATEMENT HAS NOT BEEN GIVEN TO THE ASSESSEE NOR HAS SHRI ASHOK KUMAR KAYAN BEEN PROVIDED TO THE ASSESSEE FOR CROSS- EXAMINATION. HOWEVER, THE ASSESSEE SHALL PROVE THE TRANSACTION OF THE LONG TERM CAPITAL GAINS IN RESPE CT OF WHICH THE ASSESSEE HAS CLAIMED THE EXEMPTION U/S.10 (38) BY PROVIDING ALL SUCH EVIDENCES AS REQUIRED BY THE AO TO SUBSTANTIATE THE CLAIM AS ALSO BY PRODUCING THE PER SONS THROUGH WHOM THE ASSESSEE HAS UNDERTAKEN THE TRANSACTION OF THE PURCHASE AND SALE OF THE SHARES WHICH WOULD INCLUDE THE SUB-BROKER, FRIEND AND THE BROKER THROUGH WHOM THE TRANSACTION HAS BEEN DONE, BEFORE THE AO FOR EXAMINATION. AS ALSO THE PRINCIPLES LAID DOWN BY THE HONBLE CON STITUTION BENCH OF THE SUPREME COURT IN THE CASE OF DILIP KUMAR AND CO ., REFERRED TO ITA NO.1524/CHNY/2019 :- 11 -: SUPRA WHEREIN THE HONBLE CONSTITUTION BENCH OF THE SUPREME COURT HAS CATEGORICALLY HELD THAT THE BURDEN OF PROVING APPLICABILITY WOULD BE ON THE ASSESSEE TO SHOW THAT HIS/HER CASE COMES WITHIN THE PARAMETERS OF THE EXEMPTION CLAUSE OR EXEMPTION NOT IFICATION . WITH THIS DIRECTION, THE ISSUES IN THIS APPEAL ARE RESTO RED TO THE FILE OF ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTIN G THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 23 RD OCTOBER, 2019, AT CHENNAI. SD/- SD/- ( ) ( ) (RAMIT KOCHAR) ' /ACCOUNTANT MEMBER (GEORGE MATHAN) ( ' / JUDICIAL MEMBER / CHENNAI * / DATED: 23 RD OCTOBER , 2019. K S SUNDARAM !,- .- / COPY TO: 1 . / APPELLANT 4. / / CIT 2. !' / RESPONDENT 5. - !2 / DR 3. / () / CIT(A) 6. / GF