Kamal Kishore, HUF, V. Addl. CIT, Range-21,

ITA 1732/DEL/2005

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73958 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-01-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 08-04-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: NARENDRA CHILLAR
• Keywords: Unexplained cash credit; Share purchase agreement; Cost of acquisition
• Section: 54F; 133(6); 68; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH D, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI SHAMIM YAHIYA, ACCOUNTANT MEMBER ITA NO. 1732/DEL./2005 ASSTT. YEAR : 2001-02 MR. KAMAL KISHORE, HUF, VS. ADDL. C.I.T., RANGE-2 1, MIG, PLOT NO. 100, NEW DELHI. BLOCK A, POCKET 00, SECTOR-2, ROHINI, DELHI. (PAN: AADHK 3252 M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY WADHWA, C.A. & SHRI NARENDRA CHILLAR, ADVOCATE RESPONDENT BY : SHRI SAMEER SHARMA, CIT/DR DATE OF HEARING : 06.01.2014 DATE OF PRONOUNCEMENT OF ORDER : 09.01.2014 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT(A) XXII, NEW DELHI DATED 25.02.2005 FOR THE ASSESSMENT YEAR 2001-02. 2. EARLIER, THIS APPEAL WAS DISPOSED OF BY ITAT, DE LHI BENCH VIDE THEIR ORDER DATED 19.12.2008 AND THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED. IT WAS NOTED IN THE ORDER THAT THE FIRST GROUND OF APPEAL OF THE AS SESSEE REGARDING VALIDITY OF SERVICE OF NOTICE U/S. 143(2) WAS NOT PRESSED. ACCORDINGLY, THE SAME WAS REJECTED. WE MAY ITA NO.1732/DEL./2005 2 ALSO NOTE HERE THAT DURING THE COURSE OF ARGUMENTS THIS GROUND WAS NOT PRESSED BY THE ASSESSEES COUNSEL. 3. THE REMAINING GROUNDS OF APPEAL OF THE ASSESSEE LEFT FOR CONSIDERATION ARE AGAINST ADDITION OF RS.61,25,169/- MADE BY THE AO O N ACCOUNT OF UNEXPLAINED CASH CREDITS U/S. 68 OF THE IT ACT. THE TRIBUNAL VIDE OR DER DATED 19.12.2008 ALLOWED THIS GROUND OF APPEAL OF THE ASSESSEE IN FAVOUR OF THE A SSESSEE AND DIRECTED THE AO TO COMPUTE THE CAPITAL GAINS ON SALE OF SHARES AND GRA NT CONSEQUENTIAL BENEFIT U/S. 54F OF THE IT ACT. THE REVENUE PREFERRED APPEAL AGAINST THIS ORDER OF THE TRIBUNAL BEFORE THE HONBLE DELHI HIGH COURT IN INCOME-TAX A PPEAL NO. 1395 OF 2009 AND THE HONBLE HIGH COURT VIDE THEIR JUDGMENT DATED 30 .11.2010 SET ASIDE THE AFORESAID ORDER OF THE TRIBUNAL AND REMITTED THE CA SE BACK TO THE TRIBUNAL FOR FRESH ADJUDICATION OF THE APPEAL ON MERITS AND PASSING AP PROPRIATE REASONED ORDER. ACCORDINGLY, THE APPEAL WAS RE-FIXED FOR HEARING ON MERITS AFRESH ON THE AFORESAID GROUND OF APPEAL. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERED TH E MATERIAL AVAILABLE ON RECORD. 5. ON GROUND NO. 2 TO 4, AS NOTED ABOVE, THE ONLY I SSUE INVOLVED RELATES TO CONFIRMATION OF ADDITION OF RS.61,25,169/- U/S. 68 OF THE IT ACT. BRIEFLY, THE FACTS ITA NO.1732/DEL./2005 3 OF THE CASE ARE THAT THE ASSESSEE IS HUF AND FILED RETURN OF INCOME DECLARING INCOME OF RS.9,74,577/-. AT THE ASSESSMENT STAGE, I T WAS FOUND THAT THE ASSESSEE HAS DISCLOSED LONG-TERM CAPITAL GAIN ON SALE OF SHA RES AMOUNTING TO RS.57,65,420/-, OUT OF WHICH AN AMOUNT OF RS.49,43,250/- WAS CLAIME D AS EXEMPT U/S. 54 OF THE IT ACT ON THE GROUND THAT THE AMOUNT WAS UTILIZED FOR ACQUIRING RESIDENTIAL HOUSE PROPERTY. THE DETAILS OF PURCHASE AND SALES OF SHAR ES HAVE BEEN MENTIONED AT PAGE 3 OF THE APPELLATE ORDER. THE SAME IS REPRODUCED AS UNDER : DETAILS OF PURCHASE OF SHARES BY KAMAL KISHORE (HUF ) S. NO. DATE OF PURCHAS E NAME OF COMPANY NO. OF SHARE PURCHASE D DISTINCTIVE NO. AMOUNT (RS.) 1. 25.1.97 25.4.97 NIVEDAN FIN- INVEST-LEASE LTD. 25,500 01248501 TO 01274001 1,30,000/- 1,24,000/- 2. 7.8.99 SUPREME AGRO PRODUCT LTD. 5,000 795001 TO 800000 30,000/- 3. 27.4.99 EVEREST MARKETING LTD. 65,000 90490701TO 90500700 90520701 TO 90525700 90470701 TO 90480700 90480701 TO 90490700 90510701 TO 90520700 90500701 TO 90510700 90460701 TO 90470700 81,250/- 4. 26.8.99 RASHEL AGRO TECH LTD. 7,000 2293301 TO 2300300 28350/- 5. 24.8.99 RASHEL AGRO TECH LTD. 23,000 2300301 TO 2310000 2429101 TO 2439100 2439101 TO 2442400 93,150/- COST OF ACQUISITION 4,86,750/- ITA NO.1732/DEL./2005 4 DETAILS OF SALES OF SHARES BY KAMAL KISHORE (HUF) DATE OF SALE NAME OF THE COMPANY NO. OF SHARES SOLD SALE CONSIDERATION CAPITAL GAIN QUOTATION 15.5.2000 NIVEDAN FIN. INVESTMENT LEASE LTD. 8,000 7,84,000/- 6,57,000/- NOT AVAILABLE AS YET 28.8.2000 SUPREME AGRO PRODUCT LTD. 5,000 4,73,250/- 4,43,250/- M.P. STOCK EXCHANGE INDORE 17.11.2000 TO 13.11.2000 EVEREST MARKETING LTD. 65,000 17,02,837/- 16,21,587/- BOMBAY STOCK EXCHANGE 10.2.2001 TO 2.3.2001 RASHEL AGRO TECH. LTD. 7,000 7,69,632/- 7,41,282/- BOMBAY STOCK EXCHANGE 23.2.2001 TO 24.2.2001 -DO- 23,000 23,95,450/- 23,02,300 TOTAL 61,25,169/- 57,65,419/- 6. IT WOULD SHOW THAT THE SHARES WERE ACQUIRED IN T HE YEAR 1997 TO 1999 OF FOUR COMPANIES FOR A TOTAL CONSIDERATION OF RS.4,86 ,750/-. THESE SHARES HAVE BEEN SOLD DURING THE PERIOD FROM THE YEAR 2000 UPTO 24.0 2.2001 FOR A CONSIDERATION OF RS.61,25,169/- AND ACCORDINGLY, THE ASSESSEE HAS SH OWN CAPITAL GAINS OF RS.57,65,419/-. THE AO EXAMINED ALL THE TRANSACTION S AND FOUND VARIOUS DEFECTS IN THESE TRANSACTIONS AND DISBELIEVED THE PURCHASE AND SALES OF SHARES AND MADE ADDITION U/S. 68 OF THE IT ACT ON ACCOUNT OF UNEXPL AINED CASH CREDIT INTRODUCED IN THE BOOKS OF ACCOUNT BY WAY OF THESE SHARE TRANSACT IONS. THE ASSESSEE MADE DETAILED SUBMISSIONS BEFORE THE LD. CIT(A) AND PROD UCED THE DOCUMENTS IN SUPPORT ITA NO.1732/DEL./2005 5 OF THE CONTENTION THAT THE ADDITION IS WHOLLY UNJUS TIFIED, BUT THE LD. CIT(A) ALSO CONFIRMED THE ADDITION AND DISMISSED THE APPEAL OF THE ASSESSEE. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND HAVE TAKEN US TO THE FIND INGS OF THE AUTHORITIES BELOW AND THE EVIDENCES FILED IN THE PAPER BOOK IN ORDER TO S UBSTANTIATE THE CLAIM OF ASSESSEE THAT NONE OF THE TRANSACTIONS WERE BOGUS. HE HAS SU BMITTED THAT THE ASSESSEE HAS PURCHASED THE SHARES FOR A CONSIDERATION WHICH WERE SOLD THROUGH BROKERS AND ALL THE TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH BANK ING CHANNEL. THE ASSESSEE FILED CONFIRMATION FROM THE BROKERS ALONGWITH THE DETAILS OF SHARES CERTIFICATES, COPY OF BILLS AND CONTRACT NOTES OF THE BROKERS WERE ALSO F ILED. THE ASSESSEE HAS ALSO FILED MARKET PRICE AVAILABLE ON THE DATE OF PURCHASE AND SALE OF SHARES IN THE STOCK MARKETS WHERE THE SHARES WERE LISTED. THE ASSESSEE ALSO FILED CONFIRMATIONS FROM THE COMPANY DISCLOSING THAT THE SHARES ARE EXISTING IN THE NAME OF ASSESSEE AND ACTUAL DELIVERY WAS MADE BUT THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO TAKEN US TO ALL THE EVIDENCES FILED IN THE PAPER BOOK AND SUBMITTED THAT ALL THE OBJECTIONS OF THE AO WERE MET AND IT WAS ALSO EXPLAINED THAT NONE OF THE TRANSACTIONS WERE C ARRIED OUT THROUGH LUDHIANA STOCK EXCHANGE AS WAS NOTED BY THE AO. THEREFORE, THERE W AS NO BASIS TO MAKE ADDITIONS AGAINST THE ASSESSEE. HE HAS SUBMITTED THAT SINCE T HE ASSESSEE HAS BEEN ABLE TO ITA NO.1732/DEL./2005 6 EXPLAIN THE SOURCE OF THE CONSIDERATION RECEIVED TH ROUGH BROKER, THEREFORE, NO ADDITION U/S. 68 COULD BE MADE IN THE CASE OF ASSES SEE. HE HAS ALSO REFERRED TO VARIOUS REPLIES FILED BY THE ASSESSEE BEFORE THE AO IN WHICH THE ASSESSEE HAS ALSO MADE REQUEST TO THE AO TO SUMMON ALL THE BROKERS TH ROUGH WHOM THE TRANSACTIONS WERE CARRIED OUT TO PROVE THE GENUINE SALE CONSIDER ATION OF THE SHARE CERTIFICATES, BUT THE AO DID NOT SUMMON ANY OF THE BROKERS. THERE FORE, THE DOCUMENTS PRODUCED BY THE ASSESSEE SHOULD NOT HAVE BEEN DISBELIEVED BY THE AO. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON TH E DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. JAMNADEVI AGRAWAL & ORS., 328 ITR 656, IN WHICH IT WAS HELD AS UNDER : ASSESSEE HAVING ESTABLISHED THE GENUINENESS OF PUR CHASE AND SALE OF SHARES BY PRODUCING DOCUMENTARY EVIDENCE AND DEC LARING THE PURCHASE AND SALE PRICE OF SHARES IN CONFORMITY WIT H THE MARKET RATES PREVAILING ON THE RESPECTIVE DATES, THE FINDING OF THE TRIBUNAL THAT THE TRANSACTIONS WERE GENUINE IS A FINDING OF FACT BASE D ON DOCUMENTARY EVIDENCE ON RECORD AND, THEREFORE, NO SUBSTANTIAL Q UESTION OF LAW ARISES FROM THE ORDER OF THE TRIBUNAL DELETING THE ADDITION UNDER S. 68. 7.1 HE HAS ALSO RELIED UPON THE DECISION OF DELHI H IGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR KAKKAR, HUF, 171 TAXMAN 354, IN WHICH IT WAS HELD AS UNDER : AO HAVING NOT SUMMONED THE BROKER ON THE BASIS OF THE INFORMATION SUPPLIED BY THE ASSESSEE TO VERIFY THE TRANSACTION OF SALE OF SHARES BY THE ASSESSEE, THE GENUINENESS OF SAID TRANSACTION COULD NOT BE DISBELIEVED AND HE CLAIM OF SHORT-TERM CAPIT AL LOSS ON THE SALE OF SHARES COULD NOT BE REJECTED. ITA NO.1732/DEL./2005 7 7.2 HE HAS ALSO RELIED UPON FOLLOWING DECISIONS OF ITAT, AGRA AND DELHI BENCHES, COPIES OF WHICH ARE PLACED ON RECORD, IN W HICH ON THE IDENTICAL FACTS, THE ISSUE OF SALE CONSIDERATION OF SHARE CERTIFICATES H AVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE : (I). ORDER DATED 08.03.2013 OF ITAT, AGRA BENCH IN THE CASE OF SMT. H. DEBARA IN ITA NO. 49/AGRA/2013. (II). ORDER DATED 22.03.2013 OF ITAT, AGRA BENCH I N THE CASE OF ACIT VS. RAM PRAKASH GARG IN ITA NO. 238/AGRA/2011. (III). ORDER DATED 14.06.2013 OF ITAT, DELHI BENCH IN THE CASE OF ACIT . SEEMA TRIPATHI IN ITA NO. 3550, 3551 AND 2307/DEL/2 012. (IV). ORDER DAED 19.07.2013 OF ITAT, AGRA BENCH I N THE CASE OF SHRI VINOD KUMAR KATYAL VS. ITO IN ITA NO. 231/AGRA/2013 . 8. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AO CONDUCTED THE DETAI LED ENQUIRY BEFORE ARRIVING AT THE CONCLUSION THAT THE ASSESSEE HAS NOT CARRIED OU T ANY GENUINE SHARE TRANSACTIONS. THE ASSESSEE HAS NOT REBUTTED ANY OF THE POINTS RAI SED BY THE AO. THE LD. DR, HOWEVER, ADMITTED THAT NO TRANSACTIONS IN QUESTION WERE CARRIED OUT THROUGH LUDHIANA STOCK EXCHANGE. HE HAS RELIED UPON THE DEC ISION OF HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS CIT 214 ITR 80 1, IN WHICH IT WAS HELD THAT PREPONDERANCE OF PROBABILITY AND SURROUNDING CIRCUM STANCES SHALL ALSO HAVE TO BE ITA NO.1732/DEL./2005 8 CONSIDERED. THE LD. DR POINTED OUT THAT THE AO MADE ENQUIRIES U/S. 133(6) AND FOUND THAT THE ASSESSEE HAS ENTERED INTO BOGUS TRAN SACTION, THEREFORE, ALL THE TRANSACTIONS WERE DUBIOUS IN NATURE AND ADDITION HA S BEEN CORRECTLY MADE. 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND THE MAT ERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF ARGUMENTS HAS POINTED OUT THAT THE ASSESSEE PRODUCED ALL THE BOOKS OF ACC OUNTS AND DETAILS BEFORE THE AO WHICH IS CLEAR FROM THE REPLIES OF THE ASSESSEE ALS O. FROM THE MATERIAL ON RECORD, WE FIND THAT WHATEVER DETAILS WERE CALLED FOR BY TH E AO WERE SUBMITTED BY THE ASSESSEE AT ASSESSMENT STAGE. THE ASSESSEE ALSO PRO DUCED THE BOOKS OF ACCOUNT AND OTHER DETAILS OF THE SHARES IN QUESTION. THE AO HAS EXAMINED THE DETAILS SUBMITTED BY THE ASSESSEE AND ALSO CALLED FOR CERTAIN INFORMA TION FROM THE COMPANIES. THE ASSESSEE HAS FILED COMPLETE DETAILS OF ALL THE BROK ERS THROUGH WHOM THE TRANSACTIONS WERE CARRIED. MERELY BECAUSE THE ASSES SEE DID NOT PRODUCE THE BROKERS WOULD NOT BE A GROUND TO TAKE ADVERSE INFERENCE AGA INST THE ASSESSEE PARTICULARLY WHEN THE ASSESSEE HAS REQUESTED THE AO AT ASSESSMEN T STAGE TO SUMMON ALL THE BROKERS THROUGH WHOM TRANSACTIONS OF SHARE WERE CAR RIED OUT, BUT THE AO DID NOT SUMMON ANY OF THE BROKERS FOR EXAMINATION. THE LETT ERS OF ASSESSEE ARE FILED AT PAGES 72 AND 82 OF THE PAPER BOOK TO SUPPORT THE CO NTENTION OF THE ASSESSEE THAT THE ASSESSEE MADE A REQUEST TO THE AO AT ASSESSMENT STA GE TO SUMMON ALL THE BROKERS FOR EXAMINATION TO FIND OUT TRUTH. SINCE THE AO DID NOT SUMMON ANY OF THE BROKERS ITA NO.1732/DEL./2005 9 TO VERIFY THE TRANSACTIONS OF SALE OF SHARES, THERE FORE, THE AO COULD NOT HAVE DISBELIEVED THE GENUINENESS OF THE TRANSACTION IN T HE MATTER. THIS VIEW IS SUPPORTED BY THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK KUMAR KAKKAR, HUF (SUPRA).THE AO ALSO FOUND THAT THE SHARES OF M/ S. EVEREST MARKETING LTD. WERE NEITHER LISTED AT LUDHIANA STOCK EXCHANGE NOR WAS THERE ANY TRADING OF THE SCRIPT ON THE FLOOR OF LUDHIANA STOCK EXCHANGE. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, SUBMITTED THAT THESE SHARES WERE NOT LISTE D AT LUDHIANA STOCK EXCHANGE BECAUSE THEY WERE LISTED AT BOMBAY STOCK EXCHANGE. THE LD. DR ALSO ACCEPTED DURING THE COURSE OF ARGUMENTS THAT THESE SHARES WE RE NOT LISTED AT LUDHIANA STOCK EXCHANGE WOULD SUPPORT THE CLAIM OF ASSESSEE THAT T HE ASSESSEE ENTERED INTO GENUINE TRANSACTIONS OF SHARES. THE ASSESSEE PURCHA SED THESE SHARES THROUGH THE BROKERS M/S. ASHOK MAKKAR & CO AND THE CONTRACT NOT E AND BILLS OF THE BROKERS HAVE BEEN FILED. THE DELIVERY OF THE SHARES HAS BEE N CONFIRMED BY THE BROKERS ALSO. THE PAYMENTS HAVE BEEN RECEIVED THROUGH ACCOUNT PAY EE CHEQUES. THE QUOTATION OF BSE HAS ALSO JUSTIFIED THE PREVALENT MARKET RATE OF THE SHARES. THE TRANSACTIONS WERE PHYSICALLY CARRIED OUT AND SHARE CERTIFICATES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS REFERRED TO PB-3, WHICH IS A LETTER DATED 05.03.2004, IN WHICH M/S. E.COM. INFOTECH (I) LTD. CONFIRMED THAT THE SHARES WERE TRANSFERRED IN THE NAME OF THE COMPANY AND IT WAS ALSO EXPLAINED SHARE NUMBERS WERE CHANGED DUE TO CHANGE OF THE NAME OF T HE COMPANY AND FRESH CERTIFICATES WERE ISSUED TO THE EXISTING SHARE HOLD ERS. CONFIRMATIONS OF THE BROKER, ITA NO.1732/DEL./2005 10 BILLS, CONTRACT NOTES, ACCOUNTS ETC. ARE FILED FROM PAGES 5 TO 16 IN RESPECT OF THE TRANSACTIONS. THUS, THE ASSESSEE SUITABLY PROVED TH AT THE SALE CONSIDERATION WAS GENUINELY RECEIVED FROM THE BROKERS M/S. ASHOK MAKK AR & CO. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO POINTED OUT FROM THE REPL IES FILED BY THE AO THAT THE CLARIFICATION LETTER DATED 05.03.2004 WAS FILED BEF ORE THE AO, BUT IT WAS NOT TAKEN INTO CONSIDERATION BY THE AO. THE NEXT OBJECTION OF THE AO WAS ABOUT FINANCIAL PERFORMANCE OF E. COM INFOTECH (I) LTD. OVER LAST FOUR YEARS AND OBSERVED THAT THE SHARES OF SUCH COMPANY CANNOT CLAIM TO HAVE SUCH A GOOD PRICE SHOWN BY THE ASSESSEE. IT WAS POINTED OUT THAT MUMBAI STOCK EXCH ANGE HAVE CONFIRMED THE RATE OF SHARES ON THAT PARTICULAR DATE IN ORDER TO JUSTI FY ITS CLAIM OF SALE PRICES. THEREFORE, THERE WAS NOTHING WRONG IN THE EXPLANATI ON OF THE ASSESSEE. IT IS, THEREFORE, CLEAR THAT THE ASSESSEE PRODUCED SUFFICI ENT MATERIAL ON RECORD TO PROVE THAT THE ASSESSEE ENTERED INTO GENUINE PURCHASE AND SALE OF SHARES OF TRANSACTION OF M/S. EVEREST MARKETING LTD. (CHANGED TO M/S. E.COM INFOTECH (I) LTD. AND RECEIVED GENUINE SALE CONSIDERATION. THE SECOND COMPANY OF W HICH THE SHARES WERE DEALT WITH IS M/S. RASHEL AGRO TECH. LTD. SIMILARLY, IT I S ADMITTED FACT THAT THE SHARES OF THIS COMPANY WERE NOT LISTED AT LUDHIANA STOCK EXCH ANGE, AS WAS CONSIDERED BY THE AO, AND IT WAS LISTED AT BOMBAY STOCK EXCHANGE. EVIDENCES OF PURCHASE AND SALES OF ITS SHARES WERE FILED BEFORE THE AO IN THE FORM OF BILLS / CONTRACT NOTES ISSUED BY THE BROKER, STATEMENT OF ACCOUNT OF THE A SSESSEE IN THE BOOKS OF BROKER, QUOTATION OF THE SHARES AND LETTER FROM ABOVE COMPA NY TRANSFERRING THE SHARES IN ITA NO.1732/DEL./2005 11 THE NAME OF ASSESSEE. PAYMENT OF PURCHASE OF SHARES AND SALES WERE MADE THROUGH BANKING CHANNEL. THE CONFIRMATION OF THIS COMPANY I S FILED AT PAGE 17 OF THE PAPER BOOK AND AT PAGE 18, ANOTHER CERTIFICATE IS FILED T O EXPLAIN THAT DUE TO THE DIFFERENT ADDRESS EARLIER SOME WRONG INFORMATION WAS SUPPLIED . IT WAS CLARIFIED NOW THAT THE SHARES OF THIS COMPANY HAVE BEEN TRANSFERRED IN THE NAME OF ASSESSEE GIVING SHARE NUMBERS AND THAT THE DISCREPANCIES AROSE DUE TO DIF FERENT ADDRESS AND INCONVENIENCE CAUSED WAS REGRETTED. FROM PAGE 19 TO 34, ALL THE COPIES OF BILLS, CONTRACT NOTES AND CONFIRMATIONS HAVE BEEN FILED OF THE BROKER M/S. ASHOK MAKKAR & CO., M/S NARESH DUA & CO. AND S.K. SHARMA & CO. T HE DETAILS AND EVIDENCES ON RECORD CLEARLY PROVE THAT THE ASSESSEE GENUINELY ENTERED INTO PURCHASE AND SALES TRANSACTIONS OF SHARES OF M/S. RASHEL AGRO TECH. LT D AND GENUINELY RECEIVED THE SALE CONSIDERATION THROUGH BANKING CHANNEL. THE THI RD COMPANY IS NIVEDAN FIN. INVESTMENT LEASE LTD, WHOSE SHARES WERE PURCHASED B Y THE ASSESSEE AND THE CONFIRMATION OF THE COMPANY WITH BILLS AND CONTRACT NOTES OF THE BROKER M/S. SHIV PURI & CO. AND QUOTATION OF RATES AT GAUHATI STOCK EXCHANGE ARE FILED AT PAGES 35 TO 38 OF THE PAPER BOOK TO SUPPORT THE CONTENTION O F THE ASSESSEE THAT THE ASSESSEE GENUINELY ENTERED INTO THE TRANSACTION OF PURCHASE AND SALE OF SHARES THROUGH BROKER THROUGH BANKING CHANNEL. THE LAST COMPANY IS M/S. SUPREME AGRO PRODUCTS LTD WHOSE SHARES WERE PURCHASED BY THE ASSESSEE THR OUGH BROKER AND ALL THE BILLS, CONTRACT NOTES OF THE BROKER AND SALE CONSIDERATION RECEIVED THROUGH THE BROKER M/S. NARESH DUA & CO. ARE FILED IN THE PAPER BOOK F ROM PAGES 39 TO 49 AND THE ITA NO.1732/DEL./2005 12 RATES ARE APPROVED BY M.P. STOCK EXCHANGE INDORE AT WHICH THE SHARES WERE SOLD. ALL THE EVIDENCES ARE ON RECORD AND HAVE NOT BEEN D ISPUTED DURING THE COURSE OF ARGUMENTS. IT, THEREFORE, STANDS ESTABLISHED ON REC ORD THAT THE ASSESSEE PURCHASED SHARES OF FOUR COMPANIES IN EARLIER YEARS AND HAVE NOT BEEN DISPUTED BY THE REVENUE DEPARTMENT IN EARLIER ASSESSMENT YEARS. IT IS ALSO ADMITTED FACT THAT THE TRANSACTIONS WERE CARRIED OUT THROUGH BANKING CHANN EL AND RATES AT WHICH SHARES WERE SOLD HAVE BEEN SUPPORTED BY VARIOUS RATES QUOT ED AT DIFFERENT STOCK EXCHANGE AND THE ASSESSEE ACTED ON PHYSICAL DELIVERY OF THE SHARES. IF THE AO WANTED TO DISBELIEVE ALL THE DOCUMENTARY EVIDENCES, HE SHOULD HAVE SUMMONED ALL THE BROKERS THROUGH WHOM THE ASSESSEE HAS RECEIVED THE SALE CONSIDERATION OTHERWISE THE AO WOULD NOT BE JUSTIFIED IN CONSIDERING THESE SHARE TRANSACTIONS AS NOT GENUINE. IN VIEW OF THE FACTS AND CIRCUMSTANCES ABO VE AND THE DOCUMENTARY EVIDENCES ON RECORD, THE ASSESSEE HAS BEEN ABLE TO PROVE THE SOURCE OF SALE CONSIDERATION OF THE SHARES. THEREFORE, NO ADDITION U/S. 68 OF THE IT ACT COULD BE MADE AGAINST THE ASSESSEE. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE JUDGMENTS RELIED UPON BY THE LD. COUNSEL FOR THE AS SESSEE ABOVE AS WELL AS THE DECISIONS OF THE TRIBUNAL NOTED ABOVE IN WHICH IN T HE SIMILAR CIRCUMSTANCES THE POINT IN ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSE E. CONSIDERING THE ABOVE DISCUSSION, WE ARE OF THE VIEW THE ASSESSEE HAS BEE N ABLE TO PROVE THE NATURE OF SHARE TRANSACTIONS TO BE GENUINE AND HAS RECEIVED G ENUINE SALE CONSIDERATION OF THE SHARES THROUGH BROKER AND THUS, HAS BEEN ABLE TO PR OVE THE IDENTITY OF THE BROKERS ITA NO.1732/DEL./2005 13 AND SOURCE OF SALE CONSIDERATION OF THE SHARES AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER. THEREFORE, THE ADDITION IS WHOLLY UN JUSTIFIED. WE ACCORDINGLY SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.61,25,169/-. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SHAMIM YAHIYA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, NEW DELHI 6. GUARD FILE ASSTT. REGISTRAR TRUE COPY