Sri Sunil Yadav , Howrah V. ITO, Ward - 48(4), Kolkata , Kolkata

ITA 1724/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8288 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-06-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 10-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER JCITSRDR
• Keywords: Business income; Share purchase agreement; Corroborative evidences; Penny stocks; Set aside
• Section: 143(3); 250; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.2527/KOL/2018 ASSESSMENT YEAR:2014-15 SHRI YOGESH KUMAR RANDAR, 99/1 NARKELDANGA MAIN ROAD, KOLKATA-700054 [ PAN NO.ADAPR 1466 Q ] / V/S . INCOME TAX OFFICER WARD-63(4), 169, AJC BOSE ROAD, BAMBOO VILLA CENTRAL REVENUE BUILDING, KOLKATA-14 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI ANIL KOCHAR, ADVOCATE /BY RESPONDENT SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 27-06-2019 ITA NO.263/KOL/2019 ASSESSMENT YEAR:2014-15 N.P.PATODIA & SONS (HUF) BB-23, SECTOR-I, SALT LAKE CITY, KOLKATA-700064 [ PAN NO.AABHN 2382 R ] / V/S . INCOME TAX OFFICER WARD-50(3), DS-III&III, UTTARAPAN COMPLEX, MANICKTALA CIVIC CENTRE, KOLKATA-54 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI RAJEEV KUMAR, ADVOCATE /BY RESPONDENT SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 27-06-2019 ITA NO.2195/KOL/2018 ASSESSMENT YEAR:2014-15 MALA CHOUDHARY 30, BENTINCK STREET, 3 RD FLOOR, KOLKATA-700001 [ PAN NO.ACSPC 0851 B ] / V/S . INCOME TAX OFFICER WARD-4(3), AAYAKAR BHAWAN, P-7, CHOWRINIGHEE SQUARE, PAGE 2 KOLKATA-69 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI AMIT AGARWAL, ADVOCATE /BY RESPONDENT SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 27-06-2019 ITA NO.2511/KOL/2018 ASSESSMENT YEAR:2015-16 SHRI ASHOK KR. AGRAWALLA FLAT NO.5D, 34/1 BONDEL ROAD, KOLKATA-700019 [ PAN NO.ACVPA 7413 J ] / V/S . INCOME TAX OFFICER WARD-22(4), 54/1, RAFI AHMED KIDWAI ROAD, 4 TH FL. KOLKATA-16 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SUMAL SURANA, ADVOCATE & SHRI ABHISHEK BANSAL, FCA /BY RESPONDENT SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 27-06-2019 ITA NO.2686/KOL/2018 ASSESSMENT YEAR:2014-15 BAKUL GHOSHDASTIDAR C/O S.N.GHOSH & ASSOCIATES, ADVOCATES SEBEN BROTHERSLODGE P.O. BUROSHIBTALA, P.S. CHINSURAH, DIST. HOOGHLY- 712105 [ PAN NO.AFRPG 5381 A ] / V/S . INCOME TAX OFFICER WARD-24(1), AAYKAR BHAWAN G.T.ROAD, KHADINA MORE, P.O.&P.S CHINSURAH,, DIST. HOOGHLY /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SARNATH GHOSH, ADVOCATE /BY RESPONDENT SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 27-06-2019 PAGE 3 ITA NO.182/KOL/2019 ASSESSMENT YEAR:2015-16 RANJIKA GUPTA BENEFIT TRUST, C/O SUBASH AGARWAL & ASSOCAITES, ADVOCATES SIDDHA GIBSON, 1, GIBSON LANE, SUITE 213, 2 ND FLOOR, KOLKATA-700069 [ PAN NO.AABTR 5909 A ] / V/S . INCOME TAX OFFICER WARD-36(1), AAYKAR BHAWAN, POORVA, 9 TH FLOOR, 110, SHANTIPALLY, KOLKATA- 110 /APPELLANT .. /RESPONDENT ITA NO.2524/KOL/2018 ASSESSMENT YEAR:2014-15 SMT. ANITA DIGGA GEETEA KATRA, 2 ND FLOOR, 1, MULLICK STREET, KOLKATA- 700007 [ PAN NO.ADEPD 7460 H ] / V/S . INCOME TAX OFFICER WARD-43(4), 3, GOVT. PLACE (WEST), KOLKATA- 01 /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI SUBASH AGARWAL, ADVOCATE /BY REVENUE SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 27-06-2019 ITA NO.2367 & 2368/KOL/2018 ASSESSMENT YEAR:2015-16 POOJA PANSARI PODDAR COURT, GATE NO.3, 2 ND FLOOR, 18, RABINDRA SARANI, KOLKATA-700001 [ PAN NO.AGRPP 1705 G ] PIYUSH PANSARI (HUF) PODOAR COURT, GATE NO. 3 2 ND FLOOR, 18, RABINDRA SARANI, KOLKATA-700001 [ PAN NO.AAIHP 4738 E ] / V/S . INCOME TAX OFFICER WARD-35(1), AAYKAR BHAWAN POORVA, 110, SHANTIPALLY, KOLKATA- 107 PAGE 4 /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI MANISH TIWARI, FCA /BY REVENUE SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 27-06-2019 ITA NO.1723 & 1724/KOL/2018 ASSESSMENT YEAR:2014-15 SMT. PREETI YADAV 27, SANAATAN MISTRY LANE, SALKIA, P.S. GOLABARI, HOWRAH-711106 [ PAN NO.AEMPY 8416 N ] SRI SUNIL YADAV 27, SANATAN MISTRY LANE, SALKIA, P.S. GOLABARI, HOWRAH-711106 [ PAN NO.ACAPY 3106 H ] / V/S . INCOME TAX OFFICER WARD-48(4), 3, GOVT. PLACE, KOLKATA-001 /APPELLANT .. /RESPONDENT ITA NO.2075/KOL/2018 ASSESSMENT YEAR:2014-15 M/S JAYCHAND LAL CHOPRA [HUF], 88, BLOCK-G, 4 TH FLOOR, RABINDRA NAGAR,A COMPLEX, COLLEGE ROAD, HOWRAH-711103 [ PAN NO.AABHJ 7560 B ] / V/S . DCIT, CIRCLE-47, 3, GOVT. PLACE (WEST), KOLKATA-01 /APPELLANT .. /RESPONDENT ITA NO.1515/KOL/2018 ASSESSMENT YEAR:2015-16 SHRI, VINOD KUMAR JAJOO 21, HEMANTA BASU SARANI, KOLKATA-700001 [ PAN NO.ACSPJ 4673 Q ] / V/S . INCOME TAX OFFICER WARD-36(4), AAYAKAR BHAWAN POORVA, R.NO.815 110, PAGE 5 SHANTIPALLY, E.M. BYEPASS, KOLKATA-107 /APPELLANT .. /RESPONDENT ITA NO.2069-2074/KOL/2018 ASSESSMENT YEAR:2014-15 SHRI BIRENDRA KR. CHOPRA 3A, SURENDRA MOHAN GHOSH SARANI, 1 ST FL., KOLKATA-001 [ PAN NO.ACPPC 0363 F ] M/S BIRENDRA KR. CHOPRA (HUF)88, BLOCK-G, 4 TH FLOOR, RABINDRA NAGAR COMPLEX, COLLEGE ROAD, HOWRAH-711103 [ PAN NO.AAAHC 8463 M ] SHRI RAVINDRA KUMAR CHOPRA, 3A, SURENDRA MOHAN GHOSH SARANI, 1 ST FLOOR, KOLKATA-700001 [ PAN NO.ACAPC 4647 H ] M/S RAVINDRA KR. CHOPRA (HUF), 88, BLOCK-G, 4 TH FLOOR, RABINDRA NAGAR COMPLEX, COLLEGE ROAD, HOWRAH-711103 [ PAN NO.AABHC 0183 M ] SHRI ABHINANDAN CHOPRA 88, BLOCK-G, 4 TH FLOOR, RABINDRA NAGAR COMPLEX, COLLEGE ROAD, HOWRAH- 711103 [ PAN NO.AFPPC 6666 L ] SHRI GAURAV CHOPRA 88, BLOCK-G, 4 TH FLOOR, RABINDRA NAGAR COMPLEX, COLLEGE ROAD, HOWRAH- / V/S . / V/S . / V/S . . / V/S . INCOME TAX OFFICER WARD-43(4), 3, GOVT. PLACE (WEST), KOLKATA- 01 INCOME TAX OFFICER WARD-46(3), KOLKATA INCOME TAX OFFICER WARD-36(1), AAYAKAR BHAWAN POORVA, 8 TH FLOOR, R.NO. 810, 110, SHANTIPALLY, E.M.BYPASS,KOLKATA- 107 INCOME TAX OFFICER WARD-46(3), 3, GOVT. PLACE (WEST), KOLKAKTA-700001 PAGE 6 711103 [ PAN NO.AITPC 1161 H ] /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI MIRAJ D SHAH, ADVOCATE /BY REVENUE SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 27-06-2019 /DATE OF PRONOUNCEMENT 27-06-2019 /O R D E R THESE ASSESSEES HAVE FILED THEIR INSTANT APPEALS INVOLVING DIFFERENT ASSESSMENT YEAR(S) AGAINST THE RESPECTIVE COMMISSIO NER OF INCOME-TAX (APPEALS) SEPARATE ORDER(S) AFFIRMING THE ASSESSING OFFICER( S) IDENTICAL ACTION TREATING VARYING SUMS OF LONG TERM CAPITAL GAINS (LTCG) / LONG/SHORT TERM CAPITAL LOSS (LTCL); AS THE CASE MAY BE AS INVOLVING UNEXPLAINED CASH CR EDITS U/S 68, INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. I HAVE HEARD THESE APPEAL(S) TOGETHER OF THE FAC T THAT THE SOLE IDENTICAL ISSUE RAISED IN THE INSTANT ENTIRE BATCH IS THAT OF GENUI NENESS OF ASSESSEES LTCG/LTCL, AS THE CASE MAY BE, DERIVED FROM SALE OF SHARES HELD I N VARIOUS SCRIPS. IT IS IN THIS IDENTICAL BACKDROP THAT I AM TREATING ITA NO.2527/KOL/2018 IN CASE OF SHRI YOGESH KUMAR RANDAR VS. ITO WD-63(4), KOLKATA FOR ASSESSMENT YEAR 2014-15 AS THE LEAD CASE. 3. BOTH THE LEARNED REPRESENTATIVE(S) TAKE ME TO CI T(A)S DETAILED DISCUSSION WHILST TREATING THE IMPUGNED STCL PRE-ARRANGED BOGU S LOSS IN THE INSTANT LEAD CASE VIDE THE FOLLOWING LOWER APPELLATE DISCUSSION:- 3. GROUNDS NO. 1 TO 9 OF THE APPEAL ARE DIRECTED A GAINST THE ACTION OF THE A.O. TO DISALLOW APPELLANT'S CLAIM OF LONG TERM CAPITAL GAI N/ SHORT TERM CAPITAL GAIN U/S 10(38) AND HOLD IT AS BOGUS LONG/SHORT TERM CAPITAL GAIN FOR RS.22,55,599/ -. THE A.O. HAS DISCUSSED THE FACTS OF THE CASE OF HIS ASS ESSMENT ORDER. IN NUT SHELL, THE APPELLANT ON 13.10.2011 PRIVATELY PURCHASED 80 SHAR ES OF M/ S PINNACLE VINTRADE LTD. FOR A TOTAL CONSIDERATION OF RS. 100,000/- FROM M/S UNIGLORY DEVELOPERS PVT. LTD. M/S PINNACLE VINTRADE LTD WAS AT A LATER DATE RENAMED A S M/ S UNNO INDUSTRIES AND THE PAGE 7 APPELLANT RECEIVED 72,800 SCRIPTS OF THE M/ S UNNO INDUSTRIES LTD. SUBSEQUENTLY, ON DIFFERENT DATES DURING F.Y. 2013-14, THE APPELLANT SOLD SHARES FOR RS. 21,61,082/ - AND THEREBY HAD A CAPITAL GAIN OF RS.20,59,571/- WHICH HE HAS CLAIMED TO BE TOTALLY EXEMPT UNDER THE PROVISIONS OF SECTION 10(38) OF TH E ACT. THE APPELLANT ALSO SHOWED STCG OF RS. 1,94,517/- ON SALE OF SHARES OF M/S TUR BOTECH ENGINEERS LTD. THE SALE WAS MADE THROUGH BROKER M/ S ASHIKA STOCK BROKING L TD. THE A.O. IN THE MEANWHILE HAD RECEIVED INFORMATION FROM DIT(INV.), KOLKATA TH AT: THEY HAVE INVESTIGATED AND IDENTIFIED 84 PENNY STOCK COMPANIES. SEARCH AND SUR VEY WERE ALSO CONDUCTED IN THE OFFICE PREMISES OF 32 SHARE BROKERS WHO ACCEPTED TH AT THEY WERE INVOLVED IN BOGUS LTCG / STCG SEAM. TWO SUCH PENNY STOCK COMPANY IDEN TIFIED BY THE DIT(INV.), KOLKATA ARE M/S UNNO INDUSTRIES LTD. AND M/S TURBOT ECH ENGINEERS LTD THE A.O. FOUND THAT THIS SCRIP HAS ALSO BEEN BANNED BY SEBI. BASIC TRADING PATTERN OF ALL THESE 84 PENNY STOCK SCRIPS REPRESENTED A BELL SHAPED TRA DING I.E. PRICES START AT A LOW RANGE AND RISES RAPIDLY, STAYS THERE FOR A WHILE AN D THEN DECREASES RAPIDLY. THIS MAKES A BELL SHAPED PATTERN. THE A.O. OF HIS ORDER HAS DEMONSTRATED THIS PHENOMENON OF M/ S UNNO INDUSTRIES LTD. WHICH FOLLOW BELL SHAP ED PATTERN. SUCH MOVEMENT OF SHARE IS NOT SUPPORTED BY ACTUAL FINANCIAL CREDENTI ALS AS THE COMPANY CONCERNED HAS ALMOST NO FIXED ASSET, NO TURNOVER, NO PROFITABILIT Y AND DO NOT PAY TAXES. HENCE, SUCH COMPANIES WERE DESIGNED ONLY FOR THE LIMITED PURPOS ES OF BOGUS LTCG/STCG TO WILLING ANY BENEFICIARY. THE A.O AFTER GIVING DUE O PPORTUNITY TO THE APPELLANT OF BEING HEARD HELD THAT THE INVESTMENT OF THE APPELLANT INC REASES BY ALMOST 21 TIMES WITHIN A SPAN OF 18 MONTHS IS NOTHING BUT BOOKING OF BOGUS L TCG. ACCORDINGLY, THE ENTIRE AMOUNT OF LTCG OF RS.20,61,082/- WAS ADDED BACK AS BOGUS LTCG TO THE INCOME OF THE APPELLANT. DURING THE APPELLATE PROCEEDINGS, TH E A/R OF THE APPELLANT APPEARED ON 05.06.2018 AND FILED A WRITTEN SUBMISSION ALONG WIT H SOME SUPPORTING DOCUMENTS. 3.1 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R WHEREIN THE ADDITION OF RS. 20,61,082/- HAS BEEN MADE BY THE A.O. ON ACCOUNT OF BOGUS LONG TERM CAPITAL GAIN. I FIND THAT THE A.O. AT THE TIME OF COMPLETION OF T HE ASSESSMENT PROCEEDINGS HAS FRAMED THE ASSESSMENT AFTER ANALYZING VARIOUS INFOR MATION RECEIVED FROM THE INVESTIGATION WING. SOME OF THE OBSERVATIONS WHICH COME TO LIGHT UPON EXAMINATION OF THE RECORDS OF THE APPELLANT ARE AS BELOW :- A. THERE IS A COMMON PATTERN IN THE TRADING OF SUCH SCRIPTS AND THE PATTERN IS THAT THEY REPRESENT A BELL SHAPE IN THEIR TRADING. B. FROM BALANCE SHEET OF THE LISTED PENNY STOCKS IT IS FOUND THAT THEY HAVE NO ACTUAL FINANCIAL CREDENTIALS TO SUPPORT THEIR SHARE MOVEMENT PATTERN. ALMOST ALL THE COMPANIES HAVE NO FIXED ASSETS, NO TURNOVER , NO PROFITABILITY, POOR EPS AND BOOK VALUE. THE A.O HAS ANALYSED THE FINANCIAL RESULT OF M/S UNNO INDUSTRIES FOR 5 YEARS FROM MARCH 2010 TO MARCH 201 4 ON PAGES 7 TO 9 OF HIS ASSESSMENT ORDER. C. NO SUCH EVENT OF GROWTH HAPPENED FOR WHICH INVES TMENT IN SHARES COULD HAVE JUMPED AROUND 21 TIMES IN A VERY SHORT SPAN OF TIME OF 18 MONTHS. D. IN THE WHOLE PROJECT TOTAL 84 LISTED PENNY STOCK COMPANIES WERE IDENTIFIED AND WORKED UPON. AFTER THAT, NUMBER OF SEARCH AND S URVEYS WERE CONDUCTED IN THE OFFICE PREMISES OF MORE THAN 32 SHARE BROKING E NTITIES WHO HAVE ACCEPTED THAT THEY WERE INVOLVED IN THE BOGUS LTCG J STCL SC AM. SURVEYS WERE ALSO PAGE 8 CONDUCTED IN THE OFFICE PREMISES OF MANY ACCOMMODAT ION ENTRY PROVIDERS AND THEIR STATEMENTS RECORDED. ALL HAVE ACCEPTED THEIR ROLE IN THE SEAM. E. OUT OF 84 LISTED PENNY STOCKS WHICH HAVE BEEN US ED FOR GENERATING BOGUS LTCG, M/S UNNO INDUSTRIES LTD. AND M/S TURBOTECH EN GINEERS WHICH HAD BEEN SOLD BY THE PRESENT ASSESSEE, IS ONE OF THEM. 3.2 A DEEPER EXAMINATION OF THE PAPER BOOK FILED BY THE APPELLANT GIVES A MUCH CLEAR PICTURE OF THE ENTIRE PROCESS BEING STAGED MANAGED. THE MOST VITAL ASPECT TO BE CONSIDERED IS WHAT PROMPTED HIM TO MAKE A DECISION FOR INVESTMENT IN THIS COMPANY. ON PERUSAL OF THE DETAILS OF INVESTMENT MADE BY THE APPELLANT, IT IS EVIDENT THAT THE APPELLANT MOSTLY MADE INVESTMENT IN RENOWNED COMPAN IES. THEREFORE, THE INVESTMENT MADE BY THE APPELLANT IN SUCH A COMPANY WHICH DOES NOT HAVE ANY CREDENTIALS, DOES NOT MATCH WITH THE NATURE OF INVESTMENT OF THE APPE LLANT. THE APPELLANT COULD NOT EXPLAIN AS TO HOW IT CAME TO KNOW THAT A MUMBAI BAS ED COMPANY, M/S UNIGLORY DEVELOPERS WAS HOLDING THE SHARES OF M/S PINNACLE V INTRADE AND WAS WILLING TO SELL IT. THE APPELLANT IS A SALARIED EMPLOYEE AND COULD NOT EXPLAIN HIS INVESTMENT BEHAVIOUR BEFORE THE A.O WHEN HIS STATEMENT UNDER O ATH U/S 131 WAS RECORDED. 3.3 I HAVE ALSO PERUSED ALL THE SUBMISSIONS MADE BY THE APPELLANT DURING THE COURSE OF APPEAL PROCEEDINGS ALONGWITH THE SUPPORTING EVIDENC ES. THE MAIN CONTENTION OF THE APPELLANT THAT ALL THE SUPPORTING EVIDENCES IN THE FORM OF BANK STATEMENT, CONTRACT NOTES, DELIVERY INSTRUCTION PROVES THE GENUINENESS OF THE TRANSACTIONS. IN MY VIEW, ALL THESE DOCUMENTS AS REFERRED TO BY THE APPELLANT ARE MERE DOCUMENTS AND NOT ANY EVIDENCE. THE WHOLE TRANSACTIONS ARE NOT NATURAL AT ALL. IN MY OPINION, PAYMENT MADE THROUGH BANKING CHANNEL DOES NOT CONSTITUTE THE TRA NSACTIONS TO BE GENUINE TRANSACTION SINCE THE BANKING DOCUMENTS ARE MERELY SELF SERVING RECITALS. NONE OF THE MATERIAL PRODUCED BY THE APPELLANT IS ENOUGH TO JUS TIFY THE HUGE GAINS AS CLAIMED UNDER THE HEAD CAPITAL GAINS. 3.4 IN A PENNY STOCK WHICH HAS NO BUSINESS ACTIVITY OR ANY PLAN OR INITIATIVE OR ANY PROSPECT FOR GROWTH, INVESTORS NORMALLY SELL OFF SU CH STOCK WHENEVER PRICE HAS APPRECIATED TO SOME EXTENT AND THERE IS TOTAL UNCER TAINTY TO HOLD SUCH STOCK FOR FABULOUS APPRECIATION WHEN THE INVESTMENT IS NOT BA CKED BY ANY FUNDAMENTAL OF THE COMPANY, ITS BUSINESS POLICY AND FUTURE PROSPECT. I N ABSENCE OF ANY SUCH FACT THE PERSON WHO IS SURE FOR HUGE APPRECIATION IN VALUE O F SUCH STOCK IS PROBABLY THE PERSON WHO KNOWS BEFOREHAND THAT ITS PRICE IS BEING MANIPU LATED IN A CONCERTED WAY AND HE IS PART OF SUCH SYSTEM. PRICE MOVEMENT AND VOLUME M OVEMENT OF THIS STOCK INDICATES SUCH FACT. THIS DEFIES ALL LOGIC OF HUMAN PROBABILI TY. IN THIS CONTEXT THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD M ORE (82 ITR 540) HAS HELD THAT THE SURROUNDING CIRCUMSTANCES MUST BE SEEN TO FIND OUT THE REALITY OF THE RECITALS MADE IN THE DOCUMENT. THIS PRINCIPLE WAS REAFFIRMED BY T HE HON'BLE SUPREME COURT IN 214 ITR801 WHERE IN IT WAS HELD THAT THE APPARENT CAN B E REJECTED WHERE THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT THE REA L FACT. 3.5 I AM OF THE OPINION THAT THE A.O. CORRECTLY HEL D THE TRANSACTIONS RELATING TO LONG TERM CAPITAL GAIN TO FALL IN THE REALM OF ' SUSPICIOUS ' AND ' DUBIOUS ' TRANSACTIONS. IN THE INSTANT CASE, THE A.O. COMPLETED THE ASSESSMENT VERY METICULOUSLY AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES. PAGE 9 3.6 I FIND ALL THE JUDGMENTS RELIED UPON BY THE APP ELLANT FALL FLAT IN THE FACE OF THE FACTS OF THE CASE AND THE PREPONDERANCE OF PROBABILITY AG AINST THE ASSESSEE. RECENTLY, THE BOMBAY HIGH COURT IN THE CASE OF SANJOY BIRNALCHAND JAIN VS. PR. CIT, VIDE AN ORDER DATED 10.04.2017 HELD THAT THE ASSESSEE HAD INDULGE D IN A DUBIOUS SHARE TRANSACTION MEANT TO ACCOUNT FOR THE UNDISCLOSED INCOME IN THE GARB OF LONG TERM CAPITAL GAIN SINCE THE ASSESSEE HAS NOT TENDERED COGENT EVIDENCE TO EXPLAIN HOW THE PRICE OF SHARES UNKNOWN COMPANY HAS JUMPED IN NO TIME. 3.7 IN VIEW OF THE ABOVE DISCUSSION, I FIND NO INFI RMITY IN THE ORDER OF THE AO AND I CONFIRM THE ACTION OR THE A.O. IN HOLDING THE LONG TERM CAPITAL GAINS OF RS.20,61.082/ TO BE BOGUS AND ALSO SHORT TERM CAPIT AL GAIN OF RS.1,94,517/- TO BE BOGUS. 4. I HAVE GIVEN MY THOUGHTFUL CONSIDERATION TO RIVA L CONTENTIONS. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS BOT H THE LOWER AUTHORITIES IDENTICAL ACTION HOLDING THE ASSESSEES STCL AS BOGUS SINCE D ERIVED FROM RIGGING OF THE SCRIP PRICES IN ISSUE AND INVOLVING ACCOMMODATION ENTRY I N COLLUSION WITH THE CONCERNED ENTRY OPERATORS. HON'BLE APEX COURTS DECISIONS IN SUMATI DAYAL VS. CIT (1995) 80 TAXMANN.89/214 ITR 801 (SC) AND CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC) ARE QUOTED BEFORE ME DURING THE COURSE OF HEAR ING AT THE REVENUES BEHEST. IT STRONGLY ARGUES THAT THE DEPARTMENT HAS DISALLOWED/ ADDED THE IMPUGNED STCL BASED ON CIRCUMSTANTIAL EVIDENCE UNEARTHED AFTER A SERIES OF SEARCH ACTIONS / INVESTIGATIONS UNDERTAKEN BY THE DDIT(INV). I FIND NO MERIT IN REV ENUES INSTANT ARGUMENTS. THE FACT REMAINS THAT THE ASSESSEE HAS DULY PLACED ON R ECORD THE RELEVANT CONTRACT NOTES, SHARE CERTIFICATE(S), DETAILED CORROBORATIVE DOCUME NTARY EVIDENCE INDICATING PURCHASE / SALE OF SHARES THROUGH REGISTERED BROKERS BY BANKIN G CHANNEL, DEMAT STATEMENTS ETC., THE REVENUES ONLY CASE AS PER ITS PLEADINGS AND BO TH THE LOWER AUTHORITIES UNANIMOUSLY CONCLUSION THAT THERE IS VERY STRONG CI RCUMSTANTIAL EVIDENCE AGAINST THE ASSESSEE SUGGESTING BOGUS STCL ACCOMMODATION ENTRIE S. I FIND THAT THERE IS NOT EVEN A SINGLE CASE WHICH COULD PIN-POINT ANY MAKING AGAINS T THESE ASSESSEES WHICH COULD BE TAKEN AS A REVENUE NEXUS. I MAKE IT CLEAR THAT THE CBDTS CIRCULAR DATED 10.03.2003 HAS ITSELF MADE IT CLEAR THAT MERE SEARCH STATEMENT S IN THE NATURE OF ADMISSION IN ABSENCE OF SUPPORTIVE MATERIAL DO NOT CARRY WEIGHT. I NOTICE THAT THIS TRIBUNALS CO- ORDINATE BENCHS DECISION IN ITA NO. 2474/KOL/2018 IN MAHAVIR JHANWAR VS. ITO DECIDED ON 01.02.2019 HAS TAKEN INTO CONSIDERATION IDENTICAL FACTS AND C IRCUMSTANCES PAGE 10 AS WELL AS LATEST DEVELOPMENTS ON LEGAL SIDE WHILST DELETING THE SIMILAR BOGUS LTCG ADDITION AS FOLLOWS:- 2. THE SOLE ISSUE THAT ARISES FOR MY ADJUDICATION I S WHETHER THE ASSESSING OFFICER WAS RIGHT IN REJECTING THE CLAIM OF THE ASSESSEE THAT H E HAD EARNED LONG TERM CAPITAL GAINS ON PURCHASE AND SALE OF THE SHARES OF M/S UNN O INDUSTRIES. THE AO BASED ON A GENERAL REPORT AND MODUS OPERANDI ADOPTED GENERALLY AND ON GENERAL OBSERVATIONS HAS CONCLUDED THAT THE ASSESSEE HAS CLAIMED BOGUS L ONG TERM CAPITAL GAIN. HE MADE AN ADDITION OF THE ENTIRE SALE PROCEEDS OF THE SHAR ES AS INCOME AND REJECTED THE CLAIM OF EXEMPTION MADE U/S 10(38) OF THE ACT. THE EVIDEN CE PRODUCED BY THE ASSESSEE IN SUPPORT OF THE GENUINENESS OF THE TRANSACTION WAS R EJECTED. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL AND TH E LD. CIT(A), KOLKATA, HAD UPHELD THE ADDITION. THE LD. CIT(A) HAS IN HIS ORDER RELIE D UPON CIRCUMSTANTIAL EVIDENCE AND HUMAN PROBABILITIES TO UPHOLD THE FINDINGS OF THE AO. HE ALSO RELIED ON THE SO CALLED RULES OF SUSPICIOUS TRANSACTION . NO DIRECT MATERIAL WAS FOUND TO CONTROVERT THE EVIDENCE FILED BY THE ASSESSEE, IN SUPPORT OF T HE GENUINENESS OF THE TRANSACTIONS. IN OTHER WORDS, THE OVERWHELMING EVIDENCE FILED BY THE ASSESSEE REMAINS UNCHALLENGED AND UNCONTROVERTED. THE ENTIRE CONCLUSIONS DRAWN BY THE REVENUE AUTHORITIES, ARE BASED ON A COMMON REPORT OF THE DIRECTOR OF INVESTI GATION, KOLKATA, WHICH WAS GENERAL IN NATURE AND NOT SPECIFIC TO ANY ASSESSEE. THE ASSESSEE WAS NOT CONFRONTED WITH ANY STATEMENT OR MATERIAL ALLEGED TO BE THE BA SIS OF THE REPORT OF THE INVESTIGATION WING OF THE DEPARTMENT AND WHICH WERE THE BASIS ON WHICH CONCLUSION WERE DRAWN AGAINST THE ASSESSEE. COPY OF THE REPORT WAS ALSO NOT GIVEN. 4. THE LD. D/R, SUBMITTED THAT THE TRANSACTION WAS NOT GENUINE. HE ARGUED THAT THE ENTIRE CAPITAL GAIN WAS STAGE MANAGED BY A FEW OPER ATORS AND INVESTORS. HE RELIED ON THE ORDER OF LD. ASSESSING OFFICER AND ARGUED THAT THE SAME BE UPHELD. HE RELIED ON THE ORDER OF THE CHENNAI A BENCH OF THE TRIBUNAL IN THE CASE OF M/S. PANKAJ AGARWAL & SONS (HUF) VS. ITO IN ITA NO. 1413 TO 142 0/CHNY/2018; ORDER DT. 06/12/2018, FOR THE PROPOSITION THAT SUCH CAPITAL G AINS HAVE TO BE BROUGHT TO TAX. HE ALSO RELIED ON THE JUDGMENT OF THE HONBLE BOMBAY H IGH COURT IN THE CASE OF SANJAY BIMALCHAND JAIN VS. PRINCIPAL COMMISSIONER OF INCOM E-TAX-1, NAGPUR; [2018] 89 TAXMANN.COM 196 (BOMBAY) AND THE DECISION OF THE SM T. M.K. RAJESHWARI VS. ITO; ITA NO.1723/BNG/2018; ASSESSMENT YEAR 2015-16, ORDE R DT. 12/10/2018. 5. AFTER HEARING BOTH SIDES, I FIND THAT IN A NUMBE R OF CASES THIS BENCH OF THE TRIBUNAL AND JURISDICTIONAL CALCUTTA HIGH COURT HAS CONSISTE NTLY HELD THAT, DECISION IN ALL SUCH CASES SHOULD BE BASED ON EVIDENCE AND NOT ON GENERA LISATION, HUMAN PROBABILITIES, SUSPICION, CONJECTURES AND SURMISES. IN ALL CASES A DDITIONS WERE DELETED. SOME OF THE CASES WERE, DETAILED FINDING HAVE BEEN GIVEN ON THI S ISSUE, ARE LISTED BELOW: - SL.NO. ITA NO.S NAME OF THE ASSESSEE DATE OF ORDER/JUDGMENT 1 ITA NO.714 TO 718/KOL/2011 ITAT, KOLKATA DICT VS. SUNITA KHEMKA 28.10.2015 2 214 ITR 244 CALCUTTA HIGH COURT CIT VS. CARBO IND USTRIAL HOLDINGS LTD. 3 250 ITR 539 CIT VS. EMERALD COMMERCIAL LTD. 23.03.2001 4 ITA NO.1236-1237/KOL/2017 PAGE 11 5 ITA NO.569/KOL/2017 GAUTAM PINCHA 15.11.2017 6 ITA NO.443/KOL/2017 KIRAN KOTHARI HUF 15.11.2017 7 ITA NO.2281/KOL/2017 NAVNEET AGARWAL VS. ITO 20.0 7.2018 8 ITA NO.456 OF 2007 BOMBAY HIGH COURT CIT VS. SHRI MUKESH RATILAL MAROLIA 18.01.2018 9. ITA NO.95 OF 2017 (O&M) PCIT VS. PREM PAL GANDHI 18.01.2018 10 ITA NO.1089/KOL/2018 SANJAY MEHTA 28.09.2018 6. REGARDING THE CASE LAWS RELIED UPON BY THE LD. DEPARTMENTAL REPRESENTATIVE, I FIND THAT, IN THE CASE OF M/S. PANKAJ AGARWAL & SON S (HUF)(SUPRA), THE ISSUE WAS DECIDED AGAINST THE ASSESSEE FOR THE REASON THAT, T HE ASSESSEE COULD NOT JUSTIFY HIS CLAIM AS GENUINE BY PRODUCING EVIDENCE AND WAS ONLY ARGUING FOR THE MATTER TO BE SET ASIDE TO THE LOWER AUTHORITIES ON THE GROUND OF NAT URAL JUSTICE. AS SIMILAR ARGUMENTS WERE NOT RAISED BEFORE THE LOWER AUTHORITIES BY THE ASSESSEE, THE ITAT REJECTED THESE ARGUMENTS. IN THE CASE ON HAND, ALL EVIDENCES WERE PRODUCED BY THE ASSESSEE. IN THE CASE OF SANJAY BIMALCHAND JAIN, LEGAL HEIR OF SANTI DEVI BIMALCHAND JAIN, THE HONBLE HIGH COURT UPHELD THE STAND OF THE REVENUE THAT THE TRANSACTION IN QUESTION IS AN ADVENTURE IN NATURE OF TRADE AND THE PROFIT O F THE TRANSACTIONS IS ASSESSABLE UNDER THE HEAD OF BUSINESS INCOME . IN THE CASE ON HAND, THE LD. ASSESSING OFFICER HAS NOT ASSESSED THIS AMOUNT AS BUSINESS INCOME. IN ANY EVENT, I AM BOUND TO FOLLOW THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN TH IS MATTER. I FIND THAT THE ASSESSEE HAS FILED ALL NECESSARY EVIDENCES IN SUPPORT OF THE TRANSACTIONS. SOME OF THESE EVIDENCES ARE (A) EVIDENCE OF PURCHASE OF SHARES, ( B) EVIDENCE OF PAYMENT FOR PURCHASE OF SHARES MADE BY WAY OF ACCOUNT PAYEE CHE QUE, COPY OF BANK STATEMENTS, (C) COPY OF BALANCE SHEET DISCLOSING INVESTMENTS, ( D) COPY OF DEMAT STATEMENT REFLECTING PURCHASE, (E) COPY OF MERGER ORDER PASSE D BY THE HIGH COURT , (F) COPY OF ALLOTMENT OF SHARES ON MERGER, (G) EVIDENCE OF SALE OF SHARES THROUGH THE STOCK EXCHANGE, (H) COPY OF DEMAT STATEMENT SHOWING THE S ALE OF SHARES, (I) COPY OF BANK STATEMENT REFLECTING SALE RECEIPTS, (J) COPY OF BRO KERS LEDGER, (K) COPY OF CONTRACT NOTES ETC. 7. THE PROPOSITION OF LAW LAID DOWN IN THESE CASE LAWS BY THE JURISDICTIONAL HIGH COURT AS WELL AS BY THE ITAT KOLKATA ON THESE ISSUE S ARE IN FAVOUR OF THE ASSESSEE. THESE ARE SQUARELY APPLICABLE TO THE FACTS OF THE C ASE. THE LD. DEPARTMENTAL REPRESENTATIVE, THOUGH NOT LEAVING HIS GROUND, COUL D NOT CONTROVERT THE CLAIM OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ISSUE IN QUES TION IS COVERED BY THE ABOVE CITED DECISIONS OF THE HONBLE JURISDICTIONAL CALCUTTA HI GH COURT AND THE ITAT. I AM BOUND TO FOLLOW THE SAME. 8. IN VIEW OF THE ABOVE DISCUSSION I DELETE THE AD DITION MADE U/S 68 OF THE ACT, ON ACCOUNT OF LONG TERM CAPITAL GAINS. 5. COUPLED WITH THIS, HON'BLE JURISDICTIONAL HIGH C OURTS OTHER DECISIONS IN CIT VS. RUNGTA PROPERTIES PVT. LTD. ITA NO.105 OF 2016, CIT VS. SHREYAHI GANGULY ITA NO. 196 OF 2012, M/S CLASSIC GROWERS LTD VS. CIT ITA NO . 129 OF 2012 ALSO HOLD SUCH TRANSACTIONS IN SCRIPS SUPPORTED BY THE CORRESPONDI NG RELEVANT EVIDENCE TO BE GENUINE. I ADOPT THE ABOVE EXTRACTED REASONING MUTATIS MUTANDIS THEREFORE TO DELETE THE PAGE 12 IMPUGNED STCL DISALLOWANCE / ADDITION OF RS.20,61,0 82/-. UNEXPLAINED COMMISSION EXPENDITURE DISALLOWANCE, IF ANY SHALL AUTOMATICALL Y FOLLOW SUIT AS A NECESSARY COROLLARY. NO OTHER ARGUMENT OR GROUND HAS BEEN AGI TATED BEFORE ME DURING THE COURSE OF HEARING. THIS LEAD CASE ITA NO.2527/KOL/2018 IS ALLOWED IN ABOVE TER MS. [ SAME ORDER TO FOLLOW IN ALL THE REMAINING EIGHTEEN APPEA L(S) ] IN ABSENCE OF ANY DISTINCTION BEING POINTED OUT AT REVENUES BEHEST. 6. ALL THESE ASSESSEES NINETEEN APPEALS ARE ALLOWE D IN ABOVE TERMS AS PER THE PRONOUNCEMENT MADE IN THE OPEN COURT ON THE DATE OF HEARING ITSELF I.E . 27 TH JUNE, 2019 . A COPY OF THE INSTANT COMMON ORDER BE PLACED IN T HE RESPECTIVE CASE FILE(S). SD/- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS ' - 27/06/2019 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI YOTGESH KR. RANDAR, 99/1 NARKELDANA GA MAIN ROAD, KOLAKTA-54/N.P .PATODIA & SONS(HUF), BB-23, SECTOR-1, SALT LAKE CITY, KOL KATA-A64, MALA CHOUDHARY, 30, BENTINCK ST, 3 RD FL. KOLKATA-00 1/SHRI ASHOK KR AGRAWALLA, FLAT NO.5D, 34/1, BONDEL RD, KO LKATA-19/BAKUL GHOSHDASTIDAR, C/O. S.N.GHOSH SEVEN BROTHERS ; LODGE P.O. BUROSHIBTALA P.S. CHINSURAH, DIST. HOOGHLY-712105/ RANJIKA AGUPTA BENEFIT TRUST, C/O SUBASH AGARWAL & ASSO CAITES, ADVOCATES SIDDHA GIBSON, 1, GIBSON LANE, SUITE 213 , 2 ND FL. KOLKATA-69/SMT. ANITA DIGGA, GEETA KATRA, 2 ND FL. 1, MULLICK ST, KOLKATA-07/POOJA PANSARI-PIYUSH PANSARI (HUF) PODDAR COURT, GATE NO.3, 2 ND FL, 18, RABINDRA SARANI,KOLKATA- 001/SMT. PREETI YADAV-SRI SUNIL YADAV, 27, SANATAN MISTRY LANE, SALKKIA, P.S. GOLABARI, HOWRAH-711106/ M/S JAYCHAND LA L CHOPRA (HUF) 88, BLOCK-G, 4 TH FL, RABINDRA NAGAR, COMPLEX , COLLEGE RD. HOWRAH-711103/SHRI VINOD KR. JAJOO, 21, HEMA NTA BASU SARANI, KOLKAT-001/SHRI BIRENDRA KR. CHOPRA, 3A, SUR ENDRA MOHAN GHOSH SARANI, 1 ST FL. KOLKTA-001/ M/S BIRENDRA K R. CHOPRA (HUF), 88, BLOCK-G, 4 TH FL. RABINDRA NAGAR COMPLEX , COLLEGE RD. HOWRAH-711103/RAVINDRA KR. CHOPRA, 3A, SU RENDRA MOHAN GHOSH SARANI, 1 ST FL. KOLKATA-01/ M/S RAVINDRA KR. CHOPRA HUF, 88, BLOCK-G, 4 TH FL. RABINDRA NAGAR COMPLEX, C OLLEGE RD. HOWRAH-711103/ABHINANDAN PAGE 13 CHOPRA-GAURAV C HOPRA, 88, BLOCK-G, 4 TH FL. RABINDRA NAGAR COMPLEX, COLLEG E RD. HOWRAH-711103 2. /RESPONDENT-ITO WD-63(4), 169, AJC BOSE RD, BAMBOO VILLA CENTRAL REVENUE BLDG. K OLKATA-14/ITO WD-50(3), DDS-III&III, UTTARAPAN COMPL EX, MANICKTALA CIVIC CENTRE, KOLKATA-54 ITO WD-4(3), A AYAKAR BHAWAN, P-7,CHOWRINGHEE SQ. KOL-69 ITO WD-22(4), 5 4/1, RAFI AHMED KIDWAI RD.,4 TH FL. KOL-16 ITO WD-24(1), AAYKAR BHAWAN, G.T. ROAD, KHADINA MORE, P.O.&P.S. CHINS URAH, DIST. HOOGHLY/ITO WED-36(1), AAYAKAR BHAWAN, POORVA, 9 TH FL, 110, SHANTIPALY, KOLAKTA-110/ITO WARD 43(4),3 GOVT. P LACE (WEST), KOLKATA-01 ITO WD-35(1), AAYKAR BHAWAN PO ORVA, 110, SHANTIPALLY, KOLKATA-107/ITO WD-48(4)/DCIT CI R-47, 3 GOVT. PLACE, KOLKATA-001/ITO WD- 36(4), AAYAKAR BHAWAN POORVA, R.NO.815 110, SHANTIPALLY, KOLKATA-107/ITO WD-43(4), 3, GOVT. PLACE (WEST), KOLKAT-01/ ITO WD-46(3), K OLKATA/ITO WE-36(1), AAYAKAR BHAWAN, POORVA, 8 TH FL. R.NO.810, 110, SHANTIPALLY, E.M. BYHPASS, KOLKATA-107/ITO WD-46(3), 3, GOVT. PLACE (WEST), KOLKATA-01 3. % ' / CONCERNED CIT 4. ' - / CIT (A) 5. ( ++% , % / DR, ITAT, KOLKATA 6. - / GUARD FILE. BY ORDER/ , /TRUE COPY/ / %,