Appeal Details
Counselvise Citation
173224514 RSA 2012
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 6 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-03-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
11-12-2014
Assessment Year
2003-2004
Appeal Filed On
27-08-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.1732/PN/2012 (ASSESSMENT YEAR : 2003-04) SMT. VISHAKHA VARNEKAR, (ALIAS VISHAKA PANKAJ BHUJBAL), ASHWATH, PLOT NO.8, SURVEY NO.1611A, MODI BAUG, SHIVAJINAGAR, PUNE-411 006 .. APPELLANT PAN NO.ACOPV2202R VS. DCIT, CIRCLE-3, PUNE .. RESPONDENT ITA.NO.615/PN/2009 (ASSESSMENT YEAR : 2003-04) SHRI VASANT D. VARNEKAR, FLAT NO.8, MADHUVRINDAVAN SOCIETY, 1194/1 & 2, MODERN COLLEGE ROAD, PUNE 411005 PAN NO.AAOPV3457G .. APPELLANT VS. DCIT, CIRCLE-3, PUNE .. RESPONDENT ASSESSEE BY : SHRI NARESH KUMAR REVENUE BY : SHRI A.K. MODI & SHRI B.C. MALAKAR DATE OF HEARING : 18-12-2014 DATE OF PRONOUNCEMENT : 18-03-2015 ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE RESPECTIVE ASSESSE ES ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 31-01-20 12 AND 06-02-2009 RESPECTIVELY OF THE CIT(A)-I, PUNE RELATING TO ASS ESSMENT YEAR 2003- 2 04. SINCE IDENTICAL ISSUES ARE INVOLVED IN BOTH TH E APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. ITA NO.615/PN/2009 WAS EARLIER DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 29-07-2010 FOR NON-APPEARANCE BY THE AS SESSEE BEFORE THE TRIBUNAL ON THE DATE OF HEARING. SUBSEQUENTLY, THE TRIBUNAL VIDE M.A.NO.72/PN/2014 ORDER DATED 21-08-2014 RECALLED I TS EARLIER ORDER. HENCE, ITA NO.615/PN/2009 IS A RECALLED MATTER. ITA NO.1732/PN/2012 : 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 22-12-2003 DECLAR ING TOTAL INCOME OF RS.1,60,02,380/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED THAT THE ASSESSEE HAS EARNED LONG TERM CA PITAL GAIN OF RS.1,58,01,880/- ON SALE OF 82500 SHARES OF RASHEL AGROTECH LTD. ON 24-09-2002. THE TOTAL CONSIDERATION WAS RS.1,68,20 ,574/-. IT WAS FURTHER SUBMITTED THAT THESE SHARES WERE SOLD THROU GH ONE SPS SHARE BROKERS PVT. LTD., OF MUMBAI AND THE AMOUNT WAS REC EIVED BY CHEQUE. ON BEING FURTHER QUESTIONED BY THE AO, IT WAS SUBMI TTED THAT THE SHARES WERE PURCHASED THROUGH ONE K.K.FINTRADE LTD. OF INDORE WHO IS A REGISTERED BROKER WITH THE MADHYA PRADESH STOCK E XCHANGE. THE AO OBSERVED FROM THE CONTRACT NOTE THAT K.K. FINTRA DE LTD. IS REGISTERED WITH MADHYA PRADESH STOCK EXCHANGE VIDE REGISTRATION NO. INBO70612433. HOWEVER, HE NOTED THAT THE ASSESSEE HAS NOT MADE ANY PAYMENT FOR THE PURCHASE OF THESE SHARES. 3 3.1 ON BEING FURTHER QUESTIONED BY THE AO, THE ASSE SSEE SUBMITTED THAT SHE HAD PURCHASED THE SHARES OF DIGITAL EQUIPM ENTS AND NIIT LTD. ON 16-04-2001 THROUGH K.K. FINTRADE LTD. FOR AN AMO UNT OF RS.18,79,895/- ON CREDIT. THESE SHARES WERE SOLD O N 18-04-2001 FOR RS.19,32,255/-. OUT OF SALE PROCEEDS, THE SHARES O F RASHEL AGROTECH LTD. WERE PURCHASE BY THIS BROKER ON CREDIT ON 18-0 4-2001 FOR RS.6,08,750/-. THEREAFTER, THE SHARES OF WIPRO AND INFOSYS WERE ALSO PURCHASED ON 10-05-2001 AND SOLD ON 11-05-2001 AND THE SALE CONSIDERATIONS WERE INVESTED IN THE PURCHASE OF RAS HEL AGROTECH LTD. ALL THESE INVESTMENTS WERE MADE IN CREDIT AND THE A SSESSEE DID NOT HAVE TO PAY A SINGLE RUPEE TO THE BROKER K.K. FINTR ADE LTD. 3.2 THE AO OBSERVED THAT THE ASSESSEE SOLD THESE SH ARES THROUGH SPS SHARE BROKERS PVT. LTD. MUMBAI AND THE SALE CON SIDERATION WAS RECEIVED IN HER BANK ACCOUNT. HOWEVER, THE ASSESSE E DID NOT FURNISH ANY EVIDENCE OR DETAILS ABOUT ANY PAYMENT MADE BY H ER FOR THE PURCHASE OF THESE SHARES. ALL THESE FACTS SHOW THA T THE ASSESSEE PURCHASED THE SHARES ON CREDIT BUT RECEIVED THE MON EY ON SALE OF THE SHARES. ACCORDING TO THE AO, THE BROKER K.K.FINTRA DE LTD. OF INDORE HAS PERHAPS FOR SOME ALTRUISTIC REASONS NEVER CARED TO ASK FOR ANY PAYMENTS FOR THE SHARES PURCHASED BY THEM ON BEHALF OF THE ASSESSEE. THE AO FURTHER NOTED THAT K.K.FINTRADE LTD. HAS NEV ER BEFORE IN THE PAST BROKERED ANY SHARE TRANSACTION WHATSOEVER FOR THE ASSESSEE. HE OBSERVED THAT THE ASSESSEE FILED HER INCOME FOR A.Y . 2002-03 DECLARING INCOME OF ABOUT RS.10.00 LAKHS. HOWEVER, AFTER HER MARRIAGE TO MR. 4 PANKAJ C. BHUJBAL, SON OF AN EMINENT POLITICIAN, TH ERE IS A SUDDEN TURN OF FORTUNE. IN THIS BACKGROUND, THE AO ASKED THE A SSESSEE TO FURNISH THE FOLLOWING DETAILS: (A) CONTRACT NOTES FOR PURCHASE AND SALE OF SHARES (B) COPY OF BANK ACCOUNTS FROM 01-04-02 TO 31-03-03 (C) PERSONAL BALANCE SHEET (D) DETAILS OF ASSETS AND LIABILITIES (AFTER TAKING THE APPROVAL OF THE ADDL.CIT, RANGE-3, PUNE) (E) DETAILS RELATED TO RASHEL AGROTECH LTD., (F) DETAILS OF DEMAT ACCOUNT AND (G) OTHER DETAILS FROM TIME TO TIME AS REQUIRED 3.3 AFTER THE ASSESSEE FURNISHED THE REQUISITE DETA ILS A COMMISSION U/S.131(1)(D) WAS ISSUED BY THE AO TO THE ASSISTANT DIRECTOR OF INCOME-TAX (INVESTIGATION), INDORE FOR INVESTIGATIN G THE FACTS RELATED TO THE PURCHASE OF THE SHARES OF RASHEL AGROTECH LT D. THROUGH K.K.FINTRADE LTD., SHARE BROKER OF INDORE. THE ADI T (INVESTIGATION), INDORE ISSUED SUMMONS TO K.K.FINTRADE LTD. ON THE A DDRESS MENTIONED. HOWEVER, IT WAS FOUND THAT NO ONE WITH THE NAME K.K. FINTRADE LTD. OR WITH ANY ASSOCIATION WITH K.K.FINT RADE LTD. WAS FOUND ON THE SAID ADDRESS. IT WAS FOUND THAT ONE S HRI SANTOSH DIXIT, S/O. GAURI SHANKAR DIXIT WAS RESIDING ON THE SAID A DDRESS FOR THE PAST ONE AND HALF YEARS AND WAS IN NO WAY RELATED TO K.K .FINTRADE LTD. THE ADIT (INVESTIGATION), INDORE ALSO WROTE TO THE MADH YA PRADESH STOCK EXCHANGE CALLING FOR THE DETAILS OF THE TRANSACTION S IN THE SHARES OF RASHEL AGROTECH LTD. ON THE DATES MENTIONED BY THE ASSESSEE. THE MADHYA PRADESH STOCK EXCHANGE VIDE ITS LETTER DATED 18-02-2006 REPORTED THAT K.K. FINTRADE LTD. IS NOT THEIR MEMBE R. AS PER THE DETAILS OF THE TRANSACTIONS IN THE SHARES OF RASHEL AGROTE CH LTD. ON 18-04- 5 2001 AND 11-05-2001, THE MADHYA PRADESH STOCK EXCHA NGE REPORTED THAT THERE WAS NO TRADING IN THE SHARES OF RASHEL A GROTECH LTD. ON 18- 04-2001. AS PER THE EXCHANGE RATES OF SHARES OF RA SHEL AGROTECH LTD. ON 11-05-2001, THE MADHYA PRADESH STOCK EXCHANGE RE PORTED THAT IT WAS RS.103/- PER SHARE. ACCORDING TO THE AO, THE R ATE QUOTED BY K.K.FINTRADE LTD. ON THE SAID DATE WAS RS.12.30 AND RS.12.80 WHICH IS VERY SURPRISING. THEREFORE, HE WAS OF THE OPINION THAT NOBODY WOULD SELL ANY SHARE TO THE ASSESSEE AT AN ABYSMALLY LOW PRICE OF RS.12 WHEN THE PRICE AVAILABLE IN THE MARKET IS AT RS.103/-. 3.4 THE AO CONFRONTED THE ABOVE FACTS TO THE ASSESS EE. THE ASSESSEE IN HER RESPONSE SUBMITTED THE FOLLOWING EV IDENCES IN SUPPORT OF HER CLAIM WHICH THE AO HAS SUMMARIZED AT PAGES 6 AND 7 OF THE ASSESSMENT ORDER AND WHICH READS AS UNDER : (I) LETTER DATED 30.12.2005 ISSUED BY K.K. FINTRADE L TD. VIDE THIS LETTER K.K. FINTRADE HAS CONFIRMED THE TRANSACTIONS WI TH THE ASSESSEE. IT HAS ALSO STATED ITS PRESENT ADDRESS AS '101, PARSHWANATH APA RTMENT, 1, KALANI NAGAR, INDORE'. THERE IS ONE MORE ADDRESS ON TH IS LETTER AND THAT IS, '209, RAJANI BUILDING, 569, M.G. ROAD, INDORE'. THE SAID K.K. FINTRADE LTD HAVE ALSO STATED THAT 'OUR COMPANY WAS OPERATING I N MADHVA PRADESH STOCK EXCHANGE UNDER FINANCIAL AGREEMENT WIT H M/S MAHESHWARI INVESTMENT & FINANCIAL SERVICES (INDORE) PV T, LTD UNDER SEBI REGISTRATION NO. INB 070612433.' II) LETTER DATED 13.01.2006 OF PRAMOD GARG & ASSOCIA TES, CHARTERED ACCOUNTANT. ACCORDING TO THIS LETTER, THE SAID CHARTERED ACCOUNTANTS HAVE CERTIFIED THAT THEY HAVE CONDUCTED AN AUDIT OF THE TRANSACTIONS OF K.K. FINTRADE LTD AND HAVE FOUND THAT THEIR TRANSACTIONS WITH MRS. VISHAKHA HAVE BEEN DULY RECORDED IN THEIR BOOKS OF ACCOUNTS. THEY HAVE FURTHER CONFIRMED THAT M /S. K.K. FINTRADE LTD WAS OPERATING IN MADHYA PRADESH STOCK EXCHANGE UN DER FINANCIAL AGREEMENT WITH M/S MAHESHWARI INVESTMENT & FINANCIAL S ERVICES (INDORE) PVT. LTD UNDER SEBI REGISTRATION NO. INB 07 0612433. III) CERTIFICATE DATED 30.12.2005 OF M/S. MAHESHWARI INVESTMENT & FINANCIAL SERVICES (INDORE) PVT. LTD. VIDE THIS CERTI FICATE M/S. MAHESHWARI INVESTMENT & FINANCIAL SERVICES (INDORE) PV T. LTD HAS CONFIRMED THAT, 'WE HAD ENTERED INTO AN 'OPERATIONA L ARRANGEMENT' WITH M/S K.K. FINTRADE LTD. 6, ABHINANDAN APARTMENT, 7 AHILYA MATA COLONY, INDORE 452003 IN THE YEAR 2001 UNDER WHICH THEY WERE 6 ALLOWED TO OPERATE UNDER OUR STOCK EXCHANGE REGISTRA TION AND ALSO TO ISSUE CONTRACT NOTES AND BILLS QUOTING OUR REGISTRATION NUMBER. ' 3.5 THE AO THEREAFTER MADE A PERSONAL VISIT TO INDO RE FOR FURTHER INVESTIGATION. ACCORDING TO THE AO THE RESULTS OF THE INVESTIGATION CONDUCTED ON 8-03-2006 AND 09-03-2006 ARE GLARING I N THE SENSE THAT NOT ONLY ALL THE EVIDENCES PRODUCED BY THE ASSESSEE WERE FOUND TO BE FAKE AND BOGUS BUT IT ALSO SHOWED THAT ASSESSEE HAD GONE TO THE EXTENT OF FORGING DOCUMENTS IN ORDER TO GUARD THE TAX EVAS ION MADE BY HER. THE AO HAS NARRATED THE FACTS AS UNEARTHED BY HIM A S A RESULT OF HIS INVESTIGATION IN PARA 7 AND 8 OF THE ORDER WHICH RE ADS AS UNDER : A) K.K. FINTRADE LTD.: THE TWO ADDRESSES MENTIONED BY K.K. FINTRADE LTD IN THEIR LETTER DATED 30.12.2005 ARE : '101, PARSHWANATH APARTMENT, 1, KALANI NAGAR, INDORE' AND, '209, RAJA NI BUILDING, 569, M.G. ROAD, INDORE'. ONCE AGAIN, NO ONE RELATED TO K .K. FINTRADE LTD WAS FOUND ON THESE ADDRESSES. IT WAS FOUND THAT ONE SHRI SA TYANARAYAN RATHI WAS RESIDING ON THE FIRST ADDRESS, I.E. THE 'PRESEN T ADDRESS' AT 101 PARSHWANATH APARTMENTS, 1, KALANI NAGAR, INDORE. HIS ST ATEMENT WAS RECORDED U/S. 131 OF THE ACT. IN HIS SWORN STATEMENT, S HRI RATHI HAS STATED THAT HE HAS BEEN-STAYING ON THE SAID ADDRESS SINCE OCTOBER 2003 AND THAT HE DOES NOT KNOW ANYTHING ABOUT THE EXISTENC E OF K.K. FINTRADE LTD. HE HAS ALSO STATED THAT HE HAS NEVER EVE N HEARD ANYTHING ABOUT K.K. FINTRADE LTD. A COPY OF HIS SWORN STATEMENT IS ENCLOSED AT ANNEXURE 1. ON THE SECOND ADDRESS, I.E. 209, RAJANI BUILDING, 569 , M.G. ROAD, INDORE, ALSO IT WAS FOUND THAT A CONCERN BY THE NAME 'SANCHAY FINVEST LTD.' WAS EXISTING AND NOT K.K. FINTRADE LTD. IT WAS A LSO FOUND THAT THE SAID PREMISE WAS CLOSED FOR PAST 6 MONTHS. THE INSPECTOR'S REPORT IS ATTACHED AS ANNEXURE 2 WITH THIS ORDER. THUS, IT IS CLEAR THAT ON THE SAID DATE, I.E. 30.12.20 05 K.K. FINTRADE LTD NEVER EXISTED ON THE SAID ADDRESS AS CAN BE CLEARLY SEEN FROM THE SWORN STATEMENT OF SHRI RATHI WHO HAS BEEN STAYING ON T HE SAID ADDRESS SINCE OCTOBER 2003. IN OTHER WORDS, IT WAS SHRI RATHI WHO WAS OCCUPYING THE SAID PREMISES AND NOT K.K. FINTRADE LTD WHO HAS ISSUED A CERTIFICATE STATING THAT IT WAS OCCUPYING THE SAID P REMISES. ON THE CONTRACT NOTE SUPPOSED TO HAVE BEEN I SSUED BY K.K. FINTRADE LTD, THERE ALSO IS AN ADDRESS STATING THE WHERE ABOUTS OF THIS CONCERN IN MUMBAI. THE SAID ADDRESS IS: 34. AARTI BUILDING, 85, TARDEO ROAD, MUMBAI 4000 34 7 A COMMISSION U/S. 131(1)(D) WAS ISSUED TO THE ASSTT. DIRECT OR OF INCOME TAX (INV) UNIT IV (3), MUMBAI TO LOCATE THE SAID K.K. FINTRADE LTD AND TO CONDUCT NECESSARY INQUIRY REGARDING ITS SHAR E TRANSACTION WITH THE ASSESSEE. THE OFFICER HAS REPORTED THAT K.K. FI NTRADE WAS NOT FOUND TO BE EXISTING ON THAT ADDRESS. THE SAID ADDRESS WA S OCCUPIED BY ONE C.R.B. RESOURCES PVT. LTD. IT WAS STATED BY C.R.B R ESOURCES PVT. LTD THAT THEY HAVE NEVER EVEN HEARD OF ANY K.K. FINTRAD E LTD AND THAT THEY HAVE ABSOLUTELY NO LINKS OR RELATIONS WITH K.K. FINTRA DE LTD. THE REPORT DATED 27.03.2006 RECEIVED FROM THE ADIT (INV) UNIT IV (3), MUMBAI ON 29.03.2006 IS KEPT AT ANNEXURE 3 TO THIS ORDER. IN VIEW OF THE ABOVE FACTS, IT BECOMES ABSOLUTELY CLEA R THAT THE SAID K.K. FINTRADE LTD IS A NON EXISTING ENTITY AND IS, CONSEQUEN TLY, NOT TRACEABLE. ALTERNATIVELY, IT CAN ALSO BE STATED THAT K.K. FINTR ADE LTD EXISTS IN THIN AIR AND OPERATES FROM OUT OF THE BLUE AND LEAVES NO T RAIL OR EVIDENCE OF ANY OF ITS TRANSACTIONS. FROM TIME TO TIME THE ASSESSEE HA S SUBMITTED THE SO CALLED EVIDENCES DURING THE ASSESSMENT PROCEEDING S WHICH ARE QUASI JUDICIAL IN NATURE. THE EVIDENCES FURNISHED BY T HE ASSESSEE HAVE BEEN FOUND TO BE ABSOLUTELY FALSE, FAKE AND BASELESS. B) CERTIFICATE ISSUED BY MAHESHWARI INVESTMENTS AND FIN ANCIAL SERVICES (INDORE) PVT. LTD.: A SUMMONS U/S 131 WAS ISSUED TO THE PRINCIPAL PERSON OF THIS COMPANY. IN RESPONSE TO THE SA ID SUMMONS ISSUED BY THE UNDERSIGNED TO MAHESHWARI INVESTMENTS AND F INANCIAL SERVICES PVT. LTD AS A WITNESS, SHRI DWARKADAS MAHESHWARI , DIRECTOR OF MAHESHWARI INVESTMENT AND FINANCIAL SERVICES DEPOSED ON OATH THAT THE SAID CERTIFICATE HAS NOT BEEN ISSUED BY HIM AT ALL. THE MOST STRIKING FEATURE OF HIS STATEMENT IS THAT THE CERTIFICATE SUPPOSE DLY ISSUED BY HIM AND PRODUCED BY THE ASSESSEE BEARS A SIGNATURE WHICH IS NO T HIS. THIS CAN BE VERIFIED WITH REFERENCE TO THE SIGNATURES PUT BY SHRI DWARKADAS MAHESHWARI IN HIS SWORN STATEMENT ON OATH BEFORE THE UN DERSIGNED. SHRI DWARKADAS MAHESHWARI HAS ALSO STATED THAT HE HAS NOT ALLOWED K.K. FINTRADE LTD TO TRANSACT ON ITS REGISTRATION NUMB ER ON THE STOCK EXCHANGE. ACCORDING TO HIM, HE HAS NOT TRANSFERRED HI S STOCK EXCHANGE REGISTRATION NUMBER TO K.K. FINTRADE LTD. THEREFORE, THE QUESTION OF K.K. FINTRADE TRANSACTING ON THE REGISTRATION NUMBER OF MAHESHWARI INVESTMENTS AND FINANCIAL SERVICES PVT. LTD DOES NOT AR ISE AT ALL. THUS, IT IS CLEAR THAT K.K. FINTRADE LTD HAS NOT AT AL L TRANSACTED FOR THE ASSESSEE. IN OTHER WORDS, THE SHARES STATED TO HAVE BEEN PU RCHASED BY THE ASSESSEE HAVE ACTUALLY NOT BEEN PURCHASED AT ALL. TH E STATEMENT OF SHRI DWARKADAS MAHESHWARI RECORDED U/S 131 ON 8 TH MARCH 2006 IS ANNEXED TO THIS ORDER AS ANNEXURE 4. C) LETTER ISSUED BY PROAMOD GARG AND ASSOCIATES, CHARTE RED ACCOUNTANTS, INDORE: SHRI PRAMOD GARG WAS ASKED TO CLA RIFY THE DETAILS OF AUDIT CARRIED OUT BY HIM IN THE CASE OF K.K. FINT RADE LTD. HOWEVER, WHEN ASKED TO CLARIFY THEIR POSITION IN RESPECT OF THE CERTIFICATE ISSUED BY THEM, SHRI PRAMOD GARG CA, WHO APPEARED PERSONALL Y BEFORE THE UNDERSIGNED STATED IN WRITING THAT THOUGH THE LETTER HEAD ON WHICH THE CERTIFICATE HAS BEEN ISSUED BELONGS TO HIM AND THOUGH THE SIGNATURE ALSO SEEMS TO BE HIS, -THE SAID CERTIFICATE HAS NOT BEEN ISSUED BY HIM. HE HAS FURTHER STATED THAT HE HAS NOT CONDUCTED ANY AUDIT OF K.K. FINTRADE LTD. IN VIEW OF THIS FACT, THE CERTIFICATE PRODUCED BY THE ASSESSEE SEEMS TO BE FORGED AND DOES HOLD GOOD AS EVIDENCE. THE HAND WRITTEN SUBMISSION OF SHRI PRAMOD GARG IS KEPT AT ANNEXURE 5 TO THIS ORDER. 8 3.6 THE AO THEREFORE CAME TO THE CONCLUSION THAT IN ORDER TO SUBSTANTIATE A FALSE CLAIM THE ASSESSEE HAS GONE AH EAD TO THE EXTENT OF FURNISHING A FALSE CERTIFICATE FROM A PERSON WHO IS NOT AT ALL A PARTY TO THE TRANSACTION PURPORTEDLY ENTERED INTO BY HER. TH E AO THEREFORE CONFRONTED THE ABOVE FACTS TO THE ASSESSEE AND ASKE D HER RESPONSE. DESPITE GIVEN 3 OPPORTUNITIES THE ASSESSEE DID NOT FURNISH ANYTHING. THE AO THEREFORE NOTED THE FOLLOWING FACTS AS PER P ARA 15 OF THE ASSESSMENT ORDER : A) K.K. FINTRADE LTD WAS NOT TRACEABLE ON ANY OF THE ADDRESSES PROVIDED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. NEITHER WAS IT TRACEABLE AT THE THREE ADDRESSES OF INDORE FURNI SHED BY THE ASSESSEE, NOR WAS IT TRACEABLE AT THE ADDRESS OF MUMBAI AS RECORDED ON THE CONTRACT NOTE SUPPOSED TO HAVE BEEN ISSUED BY IT IN THE FAVOUR OF THE ASSESSEE. B) ALL THE EVIDENCES PRODUCED BY HER FOR THE PURCH ASE OF SHARES OF RASHEL AGROTECH LTD WERE CONCLUSIVELY PROVED NOT ONLY TO BE WRONG BUT ALSO FAKE, BOGUS AND FORGED, C) THE M.P. STOCK EXCHANGE HAS STATED THAT THERE HAS BEEN NO-TRADING IN THE SCRIPS OF RASHEL AGROTECH LTD ON 18.04.2001, TH E DATE ON WHICH THE ASSESSEE HAS STATED TO HAVE PURCHASED THE SAID SHARES TH ROUGH K.K. FINTRADE LTD. IN FACT, THE STOCK EXCHANGE HAS ALSO IN FORMED THAT K.K. FINTRADE LTD IS NOT A MEMBER OF THE M.P. STOCK EXCHA NGE. THIS IS IN CONTRADICTION TO THE CLAIMS MADE AS PER THE CONTRACT NOTE OBTAINED AND PRODUCED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. D) DESPITE THREE OPPORTUNITIES PROVIDED TO HER, THE ASSESSEE COULD NOT PRODUCE ANY OF HER WITNESS FOR CROSS EXAMINATION E) DESPITE MANY OPPORTUNITIES PROVIDED, THE ASSESSEE COUL D NOT PRODUCE ANY OTHER EVIDENCE TO SHOW THAT SHE HAD ACTUA LLY PURCHASED THE SHARES OF RASHEL AGROTECH LTD ON THE DATES MENTIONE D BY HER IN HER RETURN OF INCOME. 3.7 AS AN INDEPENDENT EFFORT TO FIND THE FACTS, THE A O ISSUED SUMMONS U/S. 131 ON 26-12-2005 TO RASHEL AGROTECH L TD CALLING FOR DETAILS OF SHARE TRANSFER REGISTER AND COPIES O F SHARE TRANSFER 9 DEEDS PERTAINING TO THE ASSESSEE. THE AO NOTED THA T RASHEL AGROTECH LTD. SENT ONLY A LOOSE AND AN INCOMPLETE E XTRACT OF SELF GENERATED TRANSFER REGISTER WITHOUT ANY AUTHENTICAT ION AND ANY OTHER SUPPORTING DOCUMENT ON THE GROUND THAT THE DE TAILS CALLED FOR ARE IN THEIR INDORE OFFICE. THEY HAVE ALSO NOT COMMUNICATED ANY REASON WHATSOEVER FOR THEIR INABILITY TO SEND T HE REQUIRED DETAILS. THESE FACTS ACCORDING TO THE AO CLEARLY RE VEAL THE SITUATION THAT EVEN RASHEL AGROTECH LTD IS A PARTY TO THE FAC ADE OF SHARE TRANSACTIONS CREATED BY THE ASSESSEE. IN A NUTSHELL , NEITHER THE ASSESSEE NOR RASHEL AGROTECH HAS BEEN ABLE TO FURNI SH ANY ADEQUATE EVIDENCE DESPITE SO MANY OPPORTUNITIES AND SUCH A LONG TIME GRANTED. THE AO THEREFORE CAME TO THE CONCLUSI ON THAT THE PRIMARY EVIDENCE FOR THE PURCHASE OF SHARES PRODUCE D BY THE ASSESSEE HAVE BEEN FOUND TO BE ABSOLUTELY BOGUS. AL L THESE BEAR A TESTIMONY TO THE FACT THAT THE ASSESSEE HAS NOT PUR CHASED THE SHARES OF RASHEL AGROTECH LTD ON THE DATES THAT SHE HAS CLAIMED IN HER RETURN OF INCOME. 3.8 THE AO THEREFORE RELIED ON THE CIRCUMSTANTIAL E VIDENCES WHICH ACCORDING TO HIM ARE VERY IMPORTANT IN UNDERS TANDING THE NATURE OF OPERATIONS THAT THE ASSESSEE HAS ENTERED INTO FOR THE PURPOSE OF GETTING AWAY WITH A FALSE CLAIM OF LONG TERM CAPITAL GAINS. THE FOLLOWING FACTS ACCORDING TO THE AO SHOW THAT: A) THE ASSESSEE'S CLAIMS THAT SHE HAS PURCHASED SHARES OF RAS HEL AGROTECH THROUGH A STOCK BROKER IN INDORE ARE FALSE A ND BASELESS. 10 B) THE EVIDENCES GATHERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WERE PUT BEFORE THE ASSESSEE AND SHE WAS ASKED TO PROVE HER CASE BUT DESPITE NUMEROUS OPPORTUNITIES GIVEN, SHE COULD NOT PRO VE HER CASE. C) THE ASSESSEE WAS GIVEN OPPORTUNITIES TO CROSS EXAMINE HE R WITNESSES WHOSE STATEMENTS WERE RECORDED BY THE UNDERSIGNED. BUT IN SPITE OF THREE SUCH OPPORTUNITIES SHE COULD NOT DO SO. D) ON THE DATES THAT THE ASSESSEE HAS STATED TO HAVE MADE THE PURCHASES, THERE HAS BEEN NO TRADING IN THE SHARES OF RASHEL AGROT ECH ON THE STOCK EXCHANGE. INFACT, ON 11.05.2001 THOUGH THERE HAS B EEN A TRADING IN THE SHARES OF RASHEL AGROTECH ON THE M.P. STOCK EXCHANGE, THERE IS A YAWNING GAP IN THE RATES QUOTED BY THE M.P. STOCK EXCHANGE AND THAT STATED BY THE ASSESSEE VIDE HER CONTRACT NOTE. E) HENCE IT IS CLEAR THAT THE SHARES WERE NOT PURCHASED ON THE DATES AS CLAIMED BY THE ASSESSEE. F) THE EVIDENCES PRODUCED BY THE ASSESSEE ARE BOGUS. G) THE COMPANY WHOSE SHARES THE ASSESSEE HAS CLAIMED T O HAVE PURCHASED ENJOYS A DUBIOUS REPUTATION AND THIS FACT HAS BEEN NOTED BY THE SEBI AS WELL. H) IN FACT, THE ASSESSEE HAS TRIED TO SHOW A BACK DATED PURCHASE OF SHARES SIMPLY FOR THE REASON THAT SHE WANTED TO AVAIL THE BEN EFITS OF LONG TERM CAPITAL GAINS WHICH WAS LEGALLY NOT AVAILABLE TO HER. I) IT CAN ALSO BE INFERRED THAT SINCE THE PURCHASE OF SHARES HAS NOT TAKEN PLACE AT ALL, THE QUESTION OF THEIR SALES TAKING PLA CE DOES NOT ARISE. IN SUCH A SITUATION THE SALES HAVE TO BE TREATED AS BOGUS AS WELL . 3.9 RELYING ON VARIOUS DECISIONS THE AO HELD THAT T HERE WAS NO PURCHASE OF ANY SHARES BY THE ASSESSEE. THEREFORE, WHEN THE PURCHASES HAVE NOT TAKEN PLACE, THE QUESTION OF ANY SALES TAK ING PLACE DOES NOT ARISE AT ALL. THE ASSESSEE WAS NOT ABLE TO SUBSTAN TIATE HER CLAIM OF PURCHASES IN VIEW OF THE VARIOUS EVIDENCES. THEREF ORE, HE CAME TO THE CONCLUSION THAT THE ASSESSEE HAS CONNIVED WITH THE SHARE BROKER AND HAS OBTAINED ENTRIES TO SUIT HER CAUSE. THEREFORE , HE REJECTED THE CLAIM OF SALE OF SHARES MADE BY THE ASSESSEE AND HELD THA T SUCH SALE OF SHARES IS NOT AT ALL GENUINE. THE AMOUNTS INTRODUCED BY T HE ASSESSEE IN HER ACCOUNTS IN THE GARB OF SALE OF SHARES AMOUNTS TO U NEXPLAINED CASH 11 CREDIT U/S.68 OF THE I.T. ACT. THE AO ACCORDINGLY MADE ADDITION OF RS.1,68,20,574/- TO THE TOTAL INCOME OF THE ASSESSE E U/S.68 OF THE INCOME TAX ACT. 4. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE AO BY OBSERVING AS UNDER : 7.1 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE LAW AS ARE APPARENT FROM RECORDS. THE MOST IMPORTANT ISSUE BEI NG DISPUTED BY THE APPELLANT AND THE ASSESSING OFFICER, RELATES TO P URCHASE AND SALE OF 82500 SHARES OF RASHEL AGROTECH LTD., ALONG WITH IT S SOURCE AND THE ASSESSMENT OF THE SALE PROCEED OF RS.1,68,20,574/- GENERA TED FROM THE SALE OF AFORESAID SHARES. THE APPELLANT HAS CLAIMED TH E AFORESAID TRANSACTIONS AS GENUINE AND ASSESSABLE UNDER THE HEAD 'LON G TERM CAPITAL GAINS' AT RS.1,58,01,880/-, AFTER REDUCING TH E COST OF PURCHASE , OF RS. 10,18,694/-. THE AFORESAID PURCHASE WAS CLAIMED TO HAVE BEEN MET OUT OF THE INCOME GENERATED FROM PURCHASE AND SAL E OF CERTAIN SHARES WITH THE SAME BROKER FROM WHOM THE PURCHASES OF SH ARES OF RACHEL AGROTECH LTD. WAS CLAIMED TO HAVE BEEN MADE @ RS.12.50 PER SHARE APPROXIMATELY. THE APPELLANT, APPARENTLY SUBMIT TED EVIDENCES FOR THE ABOVE CLAIM IN THE FORM OF BILL AND CONTRAC T NOTES FROM K.K. FINTRADE LTD., SHOWING PURCHASE AND SALE OF SHARES LIK E DIGITAL EQUIPMENT, NIIT LTD. AND WIPRO LTD. ETC. GENERATING PROFIT OF RS.10,17,380/-, ALL OF WHICH WAS CLAIMED TO BE UTILIZ ED FOR PURCHASING 82500 SHARES OF RSSHEL AGROTECH LTD (REFER TO PARA 5.1 OF THIS ORDER FOR DETAILS). INFACT, THE PURCHASE OF RASHEL AGROTECH LTD. IS APPEARING IN THE SAME CONTRACT NOTE AND BILL IN WHICH THE SHARE TRANSAC TIONS GENERATING THE PROFIT TO SOURCE THE INVESTMENT ARE APPEARING. TH E ASSESSING OFFICER ALSO FOUND THAT THE PURCHASE OF RASHEL AGROTEC H SHARES WERE SHOWN AT RS.12.50 PER SHARE FROM M.P. STOCK EXCHANGE, WHEREAS NOT SO MUCH SHARES WERE TRANSACTED ON RECORDED DATES AND THE O VER RATE QUOTED WAS VARYING FROM RS.98 PER SHARE TO RS.105 PER SH ARE IN THAT PERIOD. IN ADDITION TO THE ABOVE, THE APPELLANT A LSO SUBMITTED A COPY OF LETTER PURPORTED TO HAVE BEEN WRITTEN BY RASHEL A GROTECH LTD. DATED 31.07.2001 RETURNING THE APPELLANT THE SHARE CERTIFI CATES AFTER TRANSFERRING THE SHARES IN THE NAME OF THE APPELLANT. HOWEVER, NO EVIDENCE ALONG WITH THE ABOVE FOR RECEIPT OF THE LE TTER ON 31.07.2001 OR COPIES OF THE SHARE CERTIFICATES INDICATING THE END ORSEMENT OF CHANGE OF OWNERSHIP WITH THE STAMP AND SEAL OF THE AU THORIZED PERSON OR THE COPY OF THE CONTRACT NOTE OR TRANSFER MEMO ET C. WERE SUBMITTED WHEREFROM IT COULD BE FOUND FROM WHOM THE SHARES WERE PURCHASED AND WHEN THE SHARES WERE ACTUALLY ENTERED IN THE NAME OF THE APPELLANT. THE APPELLANT ALSO ENCLOSED COPY OF APPLIC ATION FOR DEMATERIALIZATION DATED 28.08.2002, THE CREDIT OF 8 2500 SHARES IN THE DE-MAT ACCOUNT OF THE APPELLANT MAINTAINED WITH JAN ATA SAHAKARI BANK LTD., PUNE AND TRANSFER OUT OF 82500 SHARES ON SALE THR OUGH SPS SHARE BROKERS PVT. LTD., MUMBAI. THE APPELLANT ALSO HAS SUBMI TTED CONTRACT NOTE AND BILL FOR SALE OF 82500 SHARES AT BSE THROUGH SPS SHARE BROKERS PVT. LTD. ON 24.09.2002 AND RECEIPT OF SALE C ONSIDERATION OF RS.1,68,20,574/-. THE COPIES OF THESE EVIDENCES HAVE AL SO BEEN 12 SUBMITTED IN THE PAPER BOOK DURING APPEAL AND HAVE B EEN CAREFULLY PERUSED. 7.2 THERE IS NO DISPUTE TO THE FACT THAT THE CLAIM FO R ASSESSMENT OF THE AFORESAID TRANSACTION UNDER THE HEAD LONG TERM CAPITA L GAINS, WAS MADE BY THE APPELLANT IN HER RETURN OF INCOME AT A CONCESSIONAL RATE OF TAX AND THEREFORE, THE ONUS WAS ON THE APPELLANT TO P RODUCE EVIDENCES WHICH COULD SATISFY THE QUERY OF THE ASSESSING OFFICER. THERE IS NO DISPUTE ALSO THAT THE APPELLANT HAS ONLY SUBMITTED EVI DENCES WHICH ARE DESCRIBED ABOVE AND WAS UNABLE TO BUTTRESS ITS CLAIM ON THE ADVERSE FINDINGS MADE BY THE ASSESSING OFFICER AFTER ENQUIRY SPEC IALLY WHEN THE 'RELEVANT ADVERSE FINDINGS WERE MADE KNOWN TO THE APPELLANT TIME AND AGAIN AND OPPORTUNITIES WERE GRANTED TO SUPPLEMEN T THE EVIDENCES PRODUCED WHICH WERE FOUND TO BE UNRELIABLE . THEREFORE, EVEN IF IT IS ASSUMED THAT THE APPELLANT DISCHARGED THE INITIAL PRIMARY ONUS BY SUBMITTING BASIC DOCUMENTS DESCRIBED ABOVE, BUT WHEN THE ASSESSING OFFICER FOUND OUT THAT THE BROKER FROM WHOM T HE SHARES WERE CLAIMED TO HAVE BEEN PURCHASED WERE NOT EXISTING EVER AT THE ADDRESSES APPEARING IN THE CONTRACT NOTE AND THE BILLS RELIED UPON BY THE APPELLANT FOR THE PURCHASE OF THE SHARES AND SOURCE OF PURCHASE OF THOSE SHARES, THE ONUS HAS TO BE ASSUMED TO HAVE SHIFTED BA CK ON THE APPELLANT. AN ATTEMPT MADE DURING THE COURSE OF ASSESSME NT BY THE APPELLANT TO PRODUCE NEW EVIDENCES IN THE FORM OF NE W ADDRESSES OF THE K.K. FINTRADE LTD., CERTIFICATE FROM MAHESHWARI INVESTMENT AND FINANCIAL SERVICES (INDORE) PVT. LTD., PRAMOD GARG A ND ASSOCIATES, CHARTERED ACCOUNTANTS, ON BEING CONFRONTED WITH THE FINDING THAT THE BROKER K.K. FINTRADE LTD. IS NOT EXISTING ON THE ADDR ESSES APPEARING IN THE BILLS/CONTRACT NOTES, ALSO PROVED TO BE NOT ONLY B OGUS AND UNRELIABLE BUT EVEN FORGED. THESE ASPECTS ARE ABUNDANT LY CLEAR FROM THE DESCRIPTION OF FACTS AVAILABLE IN THE ASSESSMENT O RDER. THEREFORE, IT HAS TO BE ACCEPTED IN THE AVAILABLE MATERIALS AND FAC TS THAT THE APPELLANT COULD NOT DISCHARGE THE ONUS CAST ON IT SATI SFACTORILY. THE ISSUE, WHETHER THE PERSONS WHO ACCEPTED BEFORE THE ASSESSIN G OFFICER THAT THE EVIDENCES PRODUCED IN THEIR NAMES BY THE AP PELLANT WERE BOGUS AND FORGED, WERE THE EVIDENCES OF THE APPELLANT OR THE ASSESSING OFFICER AND WHOSE RESPONSIBILITY IT WAS TO GRANT THE OP PORTUNITY OF CROSS-EXAMINATION, IS NOT SO IMPORTANT IN MY OPINION I N THE FACTS OF THIS CASE. IN MY CONSIDERED OPINION, THE APPELLANT IS TRYIN G TO MISLEAD THE ISSUE WHICH IS RELEVANT FOR ADJUDICATION BY RAISING SUCH IRRELEVANT ISSUES. THE FACT IS THAT THE CLAIM FOR ASSESSMENT UNDER LTCG WAS MADE BY THE APPELLANT AND THEREFORE, THE ONUS WAS ON HER TO ESTABLISH THE SAME WITH RELEVANT DETAILS AND CREDIBLE EVIDENCES. WHA TEVER EVIDENCE THE APPELLANT HAS PRODUCED IN RESPECT OF PURCHASE OF SH ARES AND ITS SOURCE WERE FOUND TO BE NOT RELIABLE ON THE BASIS OF SU STAINED INVESTIGATION MADE BY THE ASSESSING OFFICER EITHER DIREC TLY OR THROUGH THE OFFICERS OF THE INVESTIGATION WING. THE ASSESSING OF FICER HAS CLEARLY BROUGHT THESE FACTS TO THE NOTICE OF' THE APPELLANT A ND HAS GIVEN HER OPPORTUNITY ON MANY OCCASIONS TO ESTABLISH HER CLAIM IN RESPECT OF THE GENUINITY OF PURCHASE, AND THE SOURCE OF PURCHASE. THE SE FACTS ARE APPARENT FROM THE ASSESSMENT ORDER AND ARE ALSO NOT IN D ISPUTE THAT THE APPELLANT WAS NOT CONFRONTED WITH THE FINDINGS MA DE BY THE ASSESSING OFFICER IN RESPECT OF THE EVIDENCES SUBMITTED BY HER FOR THE PURCHASE OF SHARES AND ITS SOURCE. THEREFORE, THE CLAIM THAT THE-.CROSS- EXAMINATION WAS NOT GRANTED IS IRRELEVANT. IT IS ALSO A TRITE LAW THAT LAW OF EVIDENCE IS NOT REQUIRED TO BE FOLLOWED VERY STRIC TLY IN CASES OF INCOME TAX PROCEEDINGS. WHAT IS IMPORTANT IS COMMUNICA TION OF ADVERSE FINDING AND OPPORTUNITY TO REBUT IT. THIS HAS BEEN CLEARLY DONE 13 BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICE R IS CORRECT IN MY OPINION TO HOLD THAT THE APPELLANT HAS FAILED TO PRODUCE THE EVIDENCES IN SUPPORT OF HER CLAIM. IN VIEW OF THE ABO VE, I AM CONVINCED THAT THE FINDING MADE BY THE ASSESSING OFFICER THAT THE PURCHASE OF IMPUGNED SHARES-AND ITS SOURCE HAS NOT BEEN ESTABLISHED T O BE GENUINE, IS CORRECT. 7.3 IT IS ALSO IMPORTANT TO REFER IN THIS MATTER THAT THIS IS ONLY THE SECOND YEAR OF APPELLANT'S ASSESSMENT. THE APPELLANT HAS N OT BEEN FILING RETURN REGULARLY FOR THE LAST MANY YEARS AS HAS BEEN AIMED IN THE SUBMISSIONS. THE FIRST RETURN WAS FILED ON 25.10.2002, A S A NEW CASE AND IN THIS RETURN, INCOME FROM SALARY, PROFESSION, AND CAPITAL GAINS WERE DECLARED. AS ALREADY DESCRIBED EARLIER IN PARA 5.1 OF THIS ORDER, THE INCOME FROM SALARY AND PROFESSION WERE NOMINAL AND WITHOUT ANY SUPPORTING DOCUMENTS. THE INCOME FROM CAPITAL GAINS WE RE SHOWN OF RS.10,17,380/-, ALL OF WHICH WAS CLAIMED TO HAVE BEEN UTILIZED FOR PURCHASING 82500 SHARES OF RASHEL AGROTECH LTD. ON AN A VERAGE PRICE OF APPROXIMATELY RS.12.5 PER SHARE WHEN THE MARKET P RICE WAS APPROXIMATELY NINE TIMES OF THIS PRICE. IT HAS ALSO BE EN DESCRIBED THAT IN ADDITION TO THE ABOVE, THE APPELLANT HAD SHARES AN D MUTUAL FUNDS OF RS.2,39,849/- IN HER PORTFOLIO AND THE SHARES OF DIFFE RENT COMPANIES AND MUTUAL FUNDS WERE RANGING FROM 25 TO 1500 OVER A PERIOD OF YEARS. MOST OF SUCH SHARES AND FUNDS WERE PURCHASED THROUGH LOC AL BROKERS/AGENTS AND WERE GENERALLY OF GOOD COMPANIES. T HE VERY FACT THAT THE APPELLANT HAS SHOWN PURCHASE OF 82500 SHARES O F RASHEL AGROTECH LTD. BY UTILIZING ALL OF ITS PROFIT EARNED OF RS.10,17,330/- THROUGH A BROKER SITUATED IN INDORE, GIVES CIRCUMSTANT IAL EVIDENCES INDICATIVE OF MANIPULATION. THERE IS NO LOGICAL REA SON AVAILABLE ON RECORD FOR THE APPELLANT TO CARRY OUT THE DISPUTED T RANSACTIONS WITH A BROKER SITUATED OUTSIDE THE PLACE OF RESIDENCE, IN PUN E AT A DISTANT LOCATION IN INDORE WITH WHOM THE APPELLANT HAD NO R EGULAR TRANSACTIONS IN THE PAST OR IN THE FUTURE. ALSO, NO REA SONABLE EXPLANATION EXISTS ON RECORD WHICH CAN SHOW HOW AN UNK NOWN BROKER WOULD TRANSACT WITH A CLIENT WITHOUT HAVING ANY FINA NCIAL SECURITY, AS IF HE WAS SURE THAT THE APPELLANT WOULD ONLY MAKE PROFIT AND COULD NOT MAKE ANY LOSS. NO EVIDENCE OF ANY SORT HAS ALSO BEEN SUBM ITTED WHETHER THE KYC NORMS WERE FOLLOWED BY THE SAID BROKE R. IT IS ALSO QUITE UNLIKELY THAT A PERSON LIKE APPELLANT, WHO IS N OT SO CONVERSANT IN THE STOCK TRADING/INVESTING WILL MAKE SUCH HUGE WINDFA LL PROFIT AND EVEN IF THE SAME IS ACCEPTED TO BE CORRECT, IT IS AGAI NST THE HUMAN PROBABILITY THAT SUCH A PERSON AFTER MAKING SO MUCH OF PROFIT FOR THE FIRST TIME, WOULD LIKE TO PLACE ENTIRE PROFIT IN MAK ING AN INVESTMENT IN ONE SHARE WHICH ITSELF IS NOT KNOWN FOR ITS INVESTMENT P OTENTIAL. FURTHERMORE, IT CAN BE SEEN THAT THOUGH THESE TRANSACT IONS OF PURCHASE AND PROFIT TO SOURCE THE PURCHASE OF SHARES OF RASHEL AG ROTECH LTD., AS PER THE BILLS/CONTRACT NOTES ARE DATED APRIL AND MAY 2001, BUT THE RETURN IN WHICH THESE TRANSACTIONS WERE DECLARED WAS FI LED ON 25.10.2002, WHICH COINCIDES WITH THE DATE OF DEMATER IALIZATION, I.E. 28.08.2002 AND DATE OF SALE ON 24.09.2002. THE ABOVE COINCIDENCES, IF IT IS SO, ARE FALLING WITHIN A PERIOD OF TWO MONTHS, W HICH SUPPORTS CIRCUMSTANTIALLY THE THEORY OF THE ASSESSING OFFICER OF MANIPULATION. OF COURSE, ALL THESE ASPECTS ARE CIRCUMSTANTIAL EVIDENCES AV AILABLE IN THIS CASE, WHICH POINT OUT TOWARDS THE MANIPULATION INFERR ED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ALSO RELIED UPO N VARIOUS OTHER CIRCUMSTANTIAL EVIDENCES, VIZ. FINDINGS OF INVE STIGATION UNIT, MUMBAI, PUNE ETC. IN RESPECT OF RAMPANT MANIPULATION S CARRIED OUT BY A CARTEL OF BROKERS, MANAGEMENTS OF CERTAIN SCRIPS AND PERSONS 14 INTERESTED IN CONVERTING THEIR BLACK MONEY INTO WHIT E MONEY, INCLUSION OF SHARES OF RASHEL AGROTECH LTD. IN SUCH ACTIVITY, FIN DING OF THE SEBI CONFIRMING THE ABOVE FACT AND VARIOUS PAPER CLIPPING S REPORTING THIS PRACTICE. THESE ALSO CONSTITUTE SIGNIFICANT AND RELEVAN T CIRCUMSTANTIAL EVIDENCES SUPPORTING THE FINDING OF THE ASSESSING OFFICE R. ALL THESE CIRCUMSTANTIAL EVIDENCES SUPPORTS ASSESSING OFFICER'S FINDIN G WHEREAS NONE SUPPORT THE CLAIM OF THE APPELLANT. 7.4 THE ASSESSING OFFICER HAS CARRIED OUT INVESTIGATIONS M AINLY IN RESPECT OF EVIDENCES PRODUCED BY THE APPELLANT IN SUPP ORT OF PURCHASE OF SHARES AND ITS SOURCE THROUGH TRANSACTIONS CARRIED OUT WITH K.K. FINTRADE LTD. AND THE LETTER SUBMITTED BY THE APPELL ANT DATED 31.07.2001 PURPORTED TO BE FROM RASHEL AGROTECH LTD. INDORE, FOR RECEIPT OF SHARES AFTER ENDORSEMENT OF APPELLANT'S NAME . SO FAR AS THE EVIDENCES PRODUCED BY THE APPELLANT FOR THE PURCHASE OF 82500 SHARES OF RASHEL AGROTECH LTD. AND THE SOURCE OF THIS INVESTME NT ARE CONCERNED, THESE HAVE BEEN DISCUSSED IN DETAIL AND FOUN D THAT THE EVIDENCES PRODUCED BY THE APPELLANT IN RESPECT OF THE ' ABOVE WERE NOT ONLY FOUND BY THE ASSESSING OFFICE TO BE BOGUS AND UNRE LIABLE BUT EVEN FORGED. IT IS ALSO A FACT THAT NO OTHER EVIDENCE COUL D BE ADVANCED BY THE APPELLANT IN SUPPORT OF HER CLAIM WHEN THESE FINDINGS WERE CONFRONTED AND REPEATED OPPORTUNITIES GRANTED. HOWEVER, IN RESPE CT OF THE LATTER, I.E. THE LETTER FROM RASHEL AGROTECH LTD. DATED 31.0 7.2001 FOR ENDORSEMENT IN THE NAME OF APPELLANT, IT CAN BE SEEN THAT THE ASSESSING OFFICER HAS ISSUED SUMMONS TO THE AFORESAID COMPANY TO PRODUCE RELEVANT EVIDENCES LIKE SHARE HOLDERS REGISTER, ENDORSEMENT CERTIFICATE ETC. FOR VERIFICATION BUT THE SAID COMP ANY HAD NOT PRODUCED THE RELEVANT DETAILS BEFORE THE ASSESSING OFFICER. IT C OULD ALSO BE POINTED OUT IN THIS RESPECT THAT THIS NON-COMPLIANCE TO THE SUMMONS ISSUED BY THE ASSESSING OFFICER, IN THE LIGHT OF THE FACT S AVAILABLE REGARDING THE COMPLICITY OF THE AFORESAID COMPANY IN THIS MANIPULATION, HAS ADDED STRENGTH TO THE FINDING OF UN RELIABILITY OF THIS PIECE OF EVIDENCE SUBMITTED BY THE APPELLANT. IT IS A LSO RELEVANT TO NOTE IN THIS RESPECT THAT THE APPELLANT ALSO, ON BEING CONF RONTED WITH THE ADVERSE FINDINGS ABOUT NON-SUBMISSION OF RELEVANT RECORD S FOR VERIFICATION, HAS NOT BEEN ABLE TO PRODUCE ANY OTHER DOCUMENT VIZ. COPY OF SHARE CERTIFICATES, DATE OF RECEIPT OF LETTER , DATE OF ENDORSEMENT, NAME OF PREVIOUS OWNER FROM WHOM SHARES WERE PURCHASED, CONTRACT NOTE, TRANSFER MEMO ETC. THEREFORE, IT CAN BE SEEN TH AT THE ONLY OTHER EVIDENCES WHICH THE ASSESSING OFFICER ACCEPTED ON THE FA CE OF IT TO BE CORRECT WERE RELATING TO DEMATERIALIZATION OF SHARES AND ITS SALE THROUGH BOMBAY STOCK EXCHANGE. HOWEVER, ALL THESE DE VELOPMENTS I.E., THE DEMATERIALIZATION AND THE SALE WERE FOUND TO HAV E HAPPENED ON 28.08.2002 AND 24,09.2002, I.E. WITHIN A GAP OF 30 DAYS. THEREFORE, THE ASSESSING OFFICER COULD CONCLUDE ON THE BASIS OF DIRECT E VIDENCES AVAILABLE WITH HIM ESTABLISHING THE PURCHASE OF SHARE A ND ITS SOURCE TO BE BOGUS AND THE RECEIPT FROM THE RASHEL AGROTECH LTD . AFTER ENDORSEMENT ON 31.07.2001 AS UNRELIABLE, THAT THE SALE AND THE DEMATERIALIZATION WERE STAGE MANAGED WITH A BACK DAT ED, UNRELIABLE AND FORGED DOCUMENTS FOR PURCHASE AND ITS SOURCE TO CLA IM LONG TERM CAPITAL GAINS, WHEREAS THE APPELLANT WAS ACTUALLY HELD TO HAVE INTRODUCED UNACCOUNTED CASH OF RS.1,68,20,574/-. THER EFORE, THE ASSESSING OFFICER ADDED THE AFORESAID SUM UNDER SECTION 68 OF THE I.T. ACT. I DO NOT FIND ANY INCONSISTENCY IN THE AFORESAID DECISION OF THE ASSESSING OFFICER. 15 7.5 THOUGH THE APPELLANT HAS AVERRED IN HER SUBMISSIONS THAT THE CLAIM OF THE LONG TERM CAPITAL GAINS IS SUPPORTED BY VARIOUS FACTS/EVIDENCES LIKE BROKER NOTE FOR PURCHASERS, PHYSIC AL DELIVERY ON PURCHASE OF SHARES BY BROKER, LODGING OF SHARES IN PHYSI CAL FORM TO THE COMPANY FOR ENDORSEMENT OF APPELLANT'S NAME, ACCEPTAN CE OF TRANSFER APPLICATION AND ENTRY OF APPELLANT'S NAME IN STATUTO RY REGISTERS MAINTAINED BY THE COMPANY, RETURN OF PHYSICAL SHARES TO THE APPELLANT, LODGING OF SHARES FOR DEMATERIALIZATION ON 22.08.2002, DEMATERIALIZATION ACCEPTANCE BY COMPANY AND ITS CRED IT IN THE DE-MAT ACCOUNT OF THE APPELLANT, SALE AND TRANSFER OF SHARES THROUGH SPS SHARE BROKERS PVT. LTD., EVIDENCED BY BROKER'S NOTE ETC., R ECEIPT OF SALE PROCEEDS BY CROSSED ACCOUNT PAYEE CHEQUE ETC., BUT IN REALITY IT CAN BE SEEN THAT THE ABOVE AVERMENT IS NOT SUPPORTED WITH CRE DIBLE EVIDENCES FOR ALL THESE STAGES STATED ABOVE. THE EVIDENCES WHICH WERE FOUND TO BE VERIFIABLE ON THE FACE OF IT WERE FROM THE STAGE THE SHARES WERE SUBMITTED FOR DEMATERIALIZATION ON 22.08.2002 AND UP TO THE STAGE OF SALE. WHAT HAPPENED BEFORE THAT PERIOD HAS NOT BEEN FOUND TO BE TRUE AS PER THE CLAIM OF THE APPELLANT. THEREFORE, NEITH ER THE PURCHASE, NOR THE SOURCE OF PURCHASE AND OTHER STAGES INVOLVED WERE F OUND TO BE TRUE AS PER THE CLAIM OF THE APPELLANT. SINCE THE O NUS WAS ON THE APPELLANT TO ESTABLISH ITS CLAIM, THE ASSESSING OFFICER WA S CORRECT IN CONCLUDING THAT THE SALE PROCEEDS CREDITED IN THE BAN K IS UNEXPLAINED UNDER SEC. 68 OF THE I.T. ACT. IN RESPECT OF ADDITIO NS MADE UNDER SEC. 68, IT IS A TRITE LAW THAT THE BURDEN IS ON ASSESSEE TO P ROVE THE SOURCE OF RECEIPT (ROSHAN DI HAITI VS. CIT (1977)107 ITR SC/ KA LE KHAN MOHAMMED HANIF VS. CIT (1963) 50 ITR 1 SC). IT IS A LSO AN ESTABLISHED PRINCIPLE THAT THE ASSESSEE IS REQUIRED TO NO T ONLY ESTABLISH THE IDENTITY AND CREDIT WORTHINESS OF THE CRE DITOR BUT ALSO THE GENUINENESS OF THE TRANSACTION. IN THE PRESENT CASE, THO UGH THE APPARENT RECEIPT IS ON SALE OF SHARES BUT THE GENUINIT Y OF PURCHASE AND THE ENTIRE TRANSACTIONS WAS FOUND TO BE NOT GENUINE A ND THEREFORE, ASSESSING OFFICER WAS CORRECT IN APPLYING SECTION 68. TH E HON'BLE SUPREME COURT IN THE CASE OF CIT VS. M. GANPATHY MUDL IAR (1964) 53 ITR 623 SC HAS HELD THAT IF AN ADDITION IS MADE UNDER SECTION 68 IT IS NOT NECESSARY FOR THE DEPARTMENT TO LOCATE THE EXACT SOURCE. THE HON'BLE GUWAHATI HIGH COURT IN THE CASE OF NEMICHAND KOTHARI VS. CIT (2003) 264 ITR 254 HAS HELD THAT A TRANSACTION CARRIE D OUT THROUGH CHEQUE IS NOT SACROSANCT AND OTHER MATERIAL FACTS HAS TO BE CONSIDERED. THEREFORE, THE FINDING OF THE ASSESSING OFFICER FOR ADD ITION UNDER SECTION 68 WAS FOUND TO BE CORRECT. 7.6 THE CLAIM OF THE APPELLANT THAT THE ASSESSING OFFI CER HAS COMPLETED THE ASSESSMENT ON ADVERSE PRESUMPTION LOOKS INCORRECT IN T HE FACTS AND CIRCUMSTANCES OF THIS CASE. NO DOUBT THE ASSESSING OFFI CER HAS REFERRED TO VARIOUS CIRCUMSTANTIAL EVIDENCES BUT NONE OF THEM WERE IRRELEVANT IN THE FACTS OF THIS CASE. THIS IS NOT A CASE WHERE THE FINDING OF THE ASSESSING OFFICER IS ONLY BASED ON CIRCUMSTANTIAL E VIDENCES. THE ASSESSING OFFICER HAS CARRIED OUT NECESSARY VERIFICATION A ND ENQUIRY AND HAS PROVED BEYOND DOUBT THAT THE EVIDENCES SUBMITT ED BY THE APPELLANT IN RESPECT OF PURCHASE AND SOURCE OF PURCHASE OF SHARES WERE BOGUS. THEREFORE, THE CIRCUMSTANTIAL EVIDENCES AR E ONLY TO FURTHER BUTTRESS THE AFORESAID FINDING OF THE ASSESSING OF FICER. IN THIS RESPECT IT MAY BE ALSO RELEVANT TO POINT OUT THAT THE SUPERIOR COURTS HAVE NEVER SAID THAT CIRCUMSTANTIAL EVIDENCES SHOULD BE IGNORED ALTOGETHER. ON THE CONTRARY, THE COURTS HAVE UPHELD A FINDING WHICH HAS BEEN FOUND TO BE BASED ON PREPONDERANCE OF CIRCUM STANTIAL EVIDENCES, ESPECIALLY WHEN IT IS NOT POSSIBLE TO FIND D IRECT EVIDENCES. IN 16 THE PRESENT CASE, THE DIRECT EVIDENCES AND ALL THE CI RCUMSTANTIAL EVIDENCES WERE AGAINST THE CONTENTION OF THE APPELLAN T. FURTHERMORE, THE ONUS WAS ON THE APPELLANT, THEREFORE THE RESPONSIBI LITY OF THE ASSESSING OFFICER WAS LEGALLY LIMITED TO ITS VERIFICATION . 7.7 NOW COMING TO THE OTHER ARGUMENTS RAISED BY TH E APPELLANT DURING APPEAL, IT IS SEEN THAT THE CLAIM OF THE APPE LLANT THAT THE FINANCIAL INVOLVEMENT OF THE BROKER WAS NOMINAL IS NO T ACCEPTABLE. WHAT IS IMPORTANT IS THE RISK THAT THE BROKER ENTAILS WHEN A TRANSACTION OF SALE AND PURCHASE ON BEHALF OF CLIENT I S CARRIED OUT. NO BROKER DOES THESE TRANSACTIONS WITHOUT HAVING ADEQUATE SECURITY WITH THEM. ON THE ARGUMENT MADE THAT THE APPELLANT COUL D NOT BE VESTED WITH THE RESPONSIBILITY TO KEEP TRACK OF THE BROKER A FTER THE TRANSACTION AND RECEIPT OF SHARES, IT IS TO BE STATED THAT THE AFOR ESAID CLAIM IS INCORRECT. IN-COMMERCIAL TERMS, IT MAY BE THEORETICA LLY SAID TO BE CORRECT BUT WHEN FACED WITH DISCHARGE OF RESPONSIBILIT Y IN A SCRUTINY ASSESSMENT, THE ONUS IS ON THE ASSESSEE TO ESTABLISH THAT THE B ROKER WAS GENUINE AND THE, TRANSACTIONS WERE GENUINELY CARRI ED OUT IN A NORMAL COURSE OF BUSINESS. THE CLAIM THAT THE INVESTIGAT ION OF THE ASSESSING OFFICER WAS LIMITED TO THE PERIOD OF 2003 WHE REAS THE TRANSACTIONS WERE CARRIED OUT IN 2001, ALSO LOOKS INCOR RECT. THE ASSESSING OFFICER HAS ASKED ABOUT THE WHEREABOUTS OF THE K .K. FINTRADE LTD. AT ALL THE GIVEN ADDRESSES AND IT WAS SLATED AT ALL THE PLACES THAT IT WAS NOT KNOWN THAT ANY CONCERN OF THIS NAME WAS EVER E XISTING. IN ANY CASE, THIS WAS THE RESPONSIBILITY OF THE APPELLANT TO P ROVIDE WITH CREDIBLE AND VERIFIABLE EVIDENCES AND IN THE ABSENCE OF THE SAME, SUCH ARGUMENTS CANNOT BE ENTERTAINED. SIMILARLY, THE CLAI M MADE THAT THE ASSESSING OFFICER SHOULD 'HAVE FURTHER VERIFIED A PARTIC ULAR RECORD OR COULD HAVE CARRIED OUT INVESTIGATION IN A PARTICULAR MANNER, ARE ALL IMMATERIAL IN THE FACTS OF THIS CASE. THE APPELLANT H AS NO RIGHT TO SUGGEST THE MANNER IN WHICH THE ENQUIRY IS REQUIRED TO BE CONDUCTED, SO LONG THE ASSESSING OFFICER IS ABLE TO DISCHARGE HIS RESPO NSIBILITY AND SUPPORT HIS FINDING PROPERLY. SIMILARLY ON THE FIND ING GIVEN BY THE ASSESSING OFFICER THAT THE PURCHASE RECORDED ON AN AVERA GE RATE OF RS.12.50 PER SHARE WAS EVEN IN THAT PERIOD MUCH BELOW THE MARKET PRICE OF RS.98 OR SO PER SHARE, THE APPELLANT HAS CONTE NDED THAT THIS VARIATION IN PRICE IS BECAUSE OF THE HIGHER SIZE OF TH E LOT, LOOKS UNACCEPTABLE. SUCH HUGE VARIATION IN PRICE IS NOT PO SSIBLE. INFACT, GENERALLY THE HIGHER LOTS ARE SOLD AT HIGHER PRICES TH AN THE NORMAL MARKET PRICE. THE AFORESAID CLAIM HAS ALSO NOT BEEN SUP PORTED WITH ANY EVIDENCE EXCEPT FOR THE CONTRACT NOTE/BILL OF K .K. FINTRADE WHICH WAS FOUND TO BE UNRELIABLE. ON THE DENIAL OF OPPORT UNITY OF BEING HEARD AND THE NATURAL JUSTICE, IT CAN BE SEEN THAT TH E SAME IS MAINLY RELATING TO CLAIM OF CROSS-EXAMINATION OF EVIDENCES R ELIED ON BY THE ASSESSING OFFICER AS A CONSEQUENCE OF VERIFICATION OF APP ELLANT'S EVIDENCES. THIS ISSUE HAS ALREADY BEEN DEALT IN DETAIL IN PARA 4 AND 4.1 OF THIS ORDER AND HELD THAT THE ABOVE CLAIM IS IRRELE VANT. THE EVIDENCES VERIFIED BY THE ASSESSING OFFICER WERE THE EVIDENCES OF THE APPELLANT AND THEREFORE THE RESPONSIBILITY OF THE ASSESSING OFFICE R ENDS WITH GRANT OF OPPORTUNITY WITH THE FINDING MADE ON ENQUI RY FOR FURTHER SUBMISSIONS, IF ANY. IN THIS CASE, THE ASSESSING OFFICER HAS DULY CONFRONTED THE ASSESSEE WITH THE ADVERSE FINDINGS AT TWO STAGES OF THE ENQUIRY. AT THE FIRST STAGE, THE APPELLANT PRODUCED SUPPLEMENTARY EVIDENCES BUT WHEN THE SAME WERE ALSO FOUND TO BE BOGU S AND FORGED, THE APPELLANT CHOSE TO NOT RESPOND ANY FURTHER ON BEI NG CONFRONTED WITH THE AFORESAID FACTS ON THREE OCCASIONS AND THEREFO RE, IT IS INCORRECT TO SAY THAT THE PROPER OPPORTUNITY WAS NOT GRANTED. 17 7.8 THE APPELLANT HAS ALSO PLACED RELIANCE HEAVIL Y ON THE JUDGMENT OF THE HON'BLE BOMBAY ITAT F' BENCHES GIVEN IN THE CASE OF MUKESH R. MAROLIYA VS. ADDL.CIT (2006) SOT 247 MUMBAI AND HAS C LAIMED THAT THE PURCHASE OF 82500 SHARES WERE THROUGH AN OFF-MARKE T DEAL. FROM THE PERUSAL OF THE RECORDS AVAILABLE INCLUDING THE ASSE SSMENT ORDER AND THE REPORT OF THE ASSESSING OFFICER QUOTED SUPRA ON THIS ISSUE, IT CAN BE SEEN THAT THIS CLAIM HAS BEEN MADE FOR THE FIRST TIME DURING APPEAL, APPARENTLY TO TAKE SHELTER UNDER THIS JUDGMEN T. HOWEVER, THE ASSESSING OFFICER HAS ALSO AVERRED THAT THIS CLAIM WAS NEVE R MADE BEFORE THE ASSESSING OFFICER AT ANY STAGE OF THE INVESTIG ATION AND THEREFORE, THE SAME IS NOT TRUE AND IS NOT ADMISSIBLE. ON CAREFUL CONSIDERATION, I CONCUR WITH THE VIEW OF THE ASSESSING OFFICER. THIS CLAIM HAS ALSO NOT BEEN MADE WITH ANY OTHER EVIDENCES UNDER RULE 46A AND THEREFORE, THE SAME CANNOT BE ENTERTAINED. WITHO UT PREJUDICE TO THE ABOVE, IT WAS ALSO FOUND ON VERIFICATION OF THE I MPUGNED PURCHASE CONTRACT NOTE AND THE BILL THAT THE PURCHASE OF SHARE S OF RASHEL AGROTECH LTD. AND THE PURCHASE AND SALE TRANSACTIONS RE SULTING THE PROFITS WHICH WERE CLAIMED TO HAVE BEEN UTILIZED FOR SOURCING THIS PURCHASE ARE PART OF THE SAME CONTRACT NOTE AND BILL. THE BILL AND THE CONTRACT NOTE BOTH REFER TO THE DATE, SETTLEMENT NUM BER, SETTLEMENT PERIOD, TRADE NUMBER ETC. WHICH ARE SO TYPICAL OF TR ANSACTIONS CARRIED OUT ON THE STOCK EXCHANGE. THEREFORE, THE SUBSEQUENT CLAIM OF PURCHASE THROUGH AN OFF-MARKET DEAL IS LOOKING COMPLE TELY INCORRECT. EVEN IF FOR THE SAKE OF ARGUMENT, THE ABOVE CLAIM IS ACCEPTED FOR VERIFICATION, THE APPELLANT IS DUTY BOUND TO SUBMIT EVIDENCES, IN THAT CASE TO PRODUCE THE IDENTITY AND CREDIT WORTHINESS OF THE PERSON POSSESSING THOSE SHARES AND THE GENUINITY OF THE SALE. IN OFF-MARKET TRADE, THE APPELLANT AS WELL AS THE SHARE BROKER HAS T O MAINTAIN THE RELEVANT DETAILS EVEN IF THE TRANSACTIONS ARE NOT ROUT ED THROUGH THE STOCK EXCHANGE. THE INCOME TAX ACT ALSO PLACES RESPO NSIBILITY IN THE HANDS OF THE CLAIMANT. IN VIEW OF THE ABOVE, IT IS NO T POSSIBLE TO ACCEPT THAT THE PURCHASE WERE THROUGH OFF-MARKET TRADE AND THE MATTER CANNOT END THERE. IN ANY CASE, SINCE THE BROKER THROU GH WHOM THE PURCHASE AND THE PROFIT TO SOURCE THE PURCHASE WERE C LAIMED TO HAVE BEEN MADE, WAS NOT AVAILABLE AT ANY OF THE ADDRESSES GI VEN AND ALL THE EVIDENCES PRODUCED WERE FOUND TO BE BOGUS AND FORGED, THE SITUATION REGARDING THE TAXABILITY OF THIS RECEIPT DOES NOT CHA NGE. NOW, COMING TO THE JUDGMENT OF MUKESH R. MAROLIYA, QUOTED SUPRA, I T IS NOTED THAT THIS JUDGMENT IS BY THE MUMBAI TRIBUNAL, WHICH IS NOT THE JURISDICTIONAL TRIBUNAL AND HENCE, HAS NO FORCE OF BINDING PRECEDEN T. FURTHERMORE, THIS JUDGMENT HAS BEEN GIVEN IN A CASE WHICH WAS REPRE SENTED BY SHRI. S.K. TULSIYAN AND ARE BASED ON FACTS WHICH ARE NOT SIMI LAR TO THE FACTS OF THIS CASE. THE FOREMOST BEING THAT THE TRANSACTIONS IN THE AFORESAID CASE OF PURCHASE AND SALE WERE ACCEPTEDLY THROUGH OFF -MARKET DEALS, WHICH IS NOT THE CASE HERE. THERE THE TRIBUNAL FURTH ER FOUND THAT THE DISALLOWANCE WAS MAINLY MADE ON THE BASIS THAT THE PURC HASE AND SALE MADE OUTSIDE EXCHANGE ARE NOT RELIABLE. FURTHERMORE, IN THE AFORESAID CASE, THE BROKERS AND SUB-BROKERS THROUGH WHOM THE DEA LS WERE CARRIED OUT HAVE CONFIRMED ABOUT THE CORRECTNESS OF T HE CLAIM AND THEREFORE, THE EVIDENCES GATHERED FROM OTHER PERSON S NOT DIRECTLY CONNECTED WITH THE DEAL WERE HELD TO BE IRRELEVANT. SIMILARLY, SINCE THE TRADE WERE OUTSIDE THE EXCHANGE, THE INFORMATION GAT HERED FROM THE EXCHANGE WAS HELD TO BE NOT APPLICABLE. FURTHERMORE, THERE THE PURCHASES WERE FROM KNOWN SOURCES OF FUND AND NOT LIKE IN THIS CASE WHERE THE SOURCE OF PURCHASE IS THROUGH A PROFIT GENER ATED THROUGH THE SAME BROKER IN THE SAME BILLS/CONTRACT NOTES FROM T HE SAME BROKER WHO WAS FOUND TO BE NOT AVAILABLE AT ANY ADDRESS. FUR THERMORE, THE 18 PURCHASE OF SHARES IN THE SAID CASE WAS CONTEMPORANEOUSLY FOUND ENTERED IN THE REGULAR BOOKS OF ACCOUNTS WHEREAS IN TH E PRESENT CASE, NO BOOKS WERE MAINTAINED AND IT WAS CLEARLY FOUND THA T THE RETURN OF A.Y. 2002-03 DISCLOSING THIS PURCHASE FOR THE FIRST TIME WAS FILED AFTER THE DEMATERIALIZATION AND SALE OF SHARES IN A.Y. 2003- 04 DURING A SHORT PERIOD OF 2 MONTHS. IN VIEW OF THE ABOVE, IT IS HELD THAT THE AFORESAID DECISION IS NOT APPLICABLE IN THE FACTS OF THIS CASE. 7.9 IN VIEW OF THE DISCUSSIONS MADE IN DETAIL IN THE FO REGOING PARAGRAPHS, I AM CONVINCED THAT THE FINDING OF THE A SSESSING OFFICER IS CORRECT IN THE FACTS OF THIS CASE AND THE LAW AND THE ADDITION MADE OF RS.1,68,20,574/- UNDER SECTION 68 OF THE I.T. ACT IS R EQUIRED TO BE UPHELD. SINCE, THE AFORESAID FINDING OF THE ASSESSING OF FICER HAS BEEN UPHELD, IT IS NOT CONSIDERED NECESSARY TO EXAMINE IN D ETAIL THE ALTERNATE FINDINGS RAISED BY THE ASSESSING OFFICER AND TH E RELEVANT GROUNDS RAISED BY THE APPELLANT. HOWEVER, AS ALREADY DISCUSSED EARLIER, THE ALTERNATE FINDINGS GIVEN BY THE ASSESSING O FFICER ALSO APPEARS LOGICAL AND CORRECT BUT ONLY WHEN IT COULD B E HELD THAT THE ADDITION UNDER SECTION 68 CANNOT BE UPHELD. SINCE, T HE ADDITION UNDER SECTION 68 HAS ALREADY BEEN UPHELD, THE OTHER FINDING S HAVE BECOME ACADEMIC IN NATURE. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE HON'BLE COMMISSIONER OF INCOME TAX APP EALS HAS ERRED IN CONFIRMING ORDER OF THE LEARNED ASSESSING OFFI CER ASSESSING TOTAL INCOME AT RS.1,70,21,073/- INSTEAD OF RETURNED INCOME OF RS.1,60,02,380/- ON THE GROUND OR GROUNDS AS STATED IN THE ASSESSMENT ORDER OR OTHERWISE. A. THE HON'BLE COMMISSIONER OF INCOME TAX APPEALS HAS ERRED IN CONFIRMING ORDER OF THE LEARNED ASSESSING OFFICER IN N OT CONSIDERING THE LONG TERM CAPITAL GAINS OF RS.1,58,01, 880/- AS RETURNED BY THE APPELLANT IN THE RETURN OF INCOME O N THE GROUND OR GROUNDS AS STATED IN THE ASSESSMENT ORDER OR OTHERWISE. B. THE HON'BLE COMMISSIONER OF INCOME TAX APPEALS H AS ERRED IN CONFIRMING ORDER OF THE LEARNED ASSESSING OFFICER ASSESSI NG RECEIPTS ON SALE OF SHARES TO THE EXTENT OF RS.1,68,20,5 74/- UNDER THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT WI THOUT CONSIDERING THE FACTS AND CIRCUMSTANCES. C. THE HON'BLE COMMISSIONER OF INCOME TAX APPEALS H AS ERRED IN CONFIRMING ORDER OF THE LEARNED ASSESSING OFFICER IN OB SERVING AND CONCLUDING RECEIPTS ON ACCOUNT OF SALE OF SHARES AS ALTE RNATIVELY TO BE TAXED AS SHORT TERM CAPITAL GAINS WITHOUT CONSIDERIN G THE FACTS AND CIRCUMSTANCES AND ALSO APPLYING THE PROVISIONS OF SEC TION 69 IN RESPECT OF THE AMOUNT OF RS.1,63,35,000/- ON ARBIT RARY BASIS. IT HAS BEEN FURTHER ERRED TO OBSERVE THAT THE SHORT TERM CAPITAL GAINS ON THE SALE OF THE SHARES WILL BE SALE CONSIDERATI ON (-) THE COST OF ACQUISITION I.E. RS. 4,85,574/- AND THE TOTAL TAXABLE INCOME ON ACCOUNT OF SHARE TRANSACTION WOULD BE RS. 1,68,20,5 74/-. (RS.1,63,35,000/- + RS. 41,85,574/- = RS. 1,68,20,574/ -) 19 THE IMPUGNED ADDITION MADE MAY PLEASE BE DELETED AND TO DIRECTED TO ASSESS THE LONG TERM CAPITAL GAINS AS DECLARE D BY THE APPELLANT. 2. YOUR APPELLANT CRAVES TO ADD, ALTER, OR AMEND A NY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING O F APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A). REFERRING TO PAGE 3 OF OLD PAPER BO OK NO.1 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT 50000 EQUIT Y SHARES OF RASHEL AGROTECH LTD. WERE PURCHASED ON 20-04-2001 AT A COS T OF RS.6,08,944/-. SIMILARLY, 32500 EQUITY SHARES OF R ASHEL AGROTECH LTD. WERE PURCHASED ON 11-05-2001 FOR A TOTAL COST OF RS .4,89,750/. REFERRING TO PAGE 9 OF THE SAID PAPER BOOK HE SUBMI TTED THAT THE ABOVE SHARES TOTALLING 82500 IN NUMBER WERE SOLD ON 24-09 -2002 FOR A CONSIDERATION OF RS.1,68,20,574/- RESULTING INTO CA PITAL GAIN OF RS.1,58,01,880/- AFTER BROKERAGE. REFERRING TO PAG ES 17 TO 19 OF THE SAID PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DR EW THE ATTENTION OF THE BENCH TO THE CONTRACT NOTES ISSUED BY M/S. K.K. FINTRADE LTD. REFERRING TO PAGE 26 THE PAPER BOOK HE DREW THE ATT ENTION OF THE BENCH TO THE CONFIRMATION BY M/S. K.K. FINTRADE LTD. HE SUBMITTED THAT ALTHOUGH THE ABOVE DETAILS WERE FURNISHED BEFORE TH E ASSESSING OFFICER, HOWEVER, HE DOUBTED THE GENUINENESS OF AL L THESE DOCUMENTS. REFERRING TO PAGES 27 TO 54 OF THE PAPER BOOK THE L D. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE CER TIFICATES AND DISTINCTIVE NUMBERS OF SHARES OF RASHAL AGROTECH LT D. WHICH WERE TRANSFERRED IN THE NAME OF THE ASSESSEE. HE SUBMITT ED THAT OUT OF 82500 SHARES THE DETAILS OF 76800 SHARE CERTIFICATES WERE FILED BEFORE THE 20 LOWER AUTHORITIES. REFERRING TO PAGES 56 & 57 OF T HE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE DEMAT ACCOUNT OF THE ASSESSEE MAINTAINED WITH JANAT A SAHAKARI BANK LTD., PUNE AND SUBMITTED THAT 82500 SHARES OF RASHE L AGROTECH LTD. WERE DEMATERIALISED ON 28-08-2002. REFERRING TO PA GES 59 & 60 OF THE PAPER BOOK HE SUBMITTED THAT 82500 SHARES OF RASHEL AGROTECH LTD. WERE SOLD THROUGH SPS SHARE BROKERS (P) LTD. WHICH HAS GONE THROUGH THE DEMAT ACCOUNT. HE SUBMITTED THAT THE SALES ARE NOT DISPUTED BY THE ASSESSING OFFICER AND THE MONEY WAS ALSO RECEIV ED BY CHEQUE WHICH THE ASSESSING OFFICER HAS NOTED AT PAGE 4 OF THE ASSESSMENT ORDER. HOWEVER, THE ASSESSING OFFICER DOUBTS THE G ENUINENESS OF THE TRANSACTION ON THE GROUND THAT NO PAYMENT HAS BEEN MADE FOR ACQUISITION OF THE SHARES. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RETURN OF INCOME FOR A.Y. 2002-03 WAS ACCE PTED BY THE ASSESSING OFFICER U/S.143(1). THE ASSESSEE IN THE SAID RETURN HAS SHOWN THE SALE/PURCHASE OF VARIOUS SHARES AND THE P ROFIT OF THE SAME HAS BEEN OFFERED TO TAX WHICH HAS BEEN ACCEPTED. 6.1 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT TAKEN ANY ACTION AGAINST THE ASSESS EE FOR THE A.Y. 2002-03. HE SUBMITTED THAT IN CASE THE REVENUE FIN DS THAT THE MONEY BELONGS TO SHRI BHUJBAL THEY COULD HAVE TAXED THE S AME IN THE HANDS OF SRI BHUJBAL. FOR THIS PROPOSITION HE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SMT. P .K.NOORJAHAN REPORTED IN 237 ITR 570. AS REGARDS THE ALLEGATION OF THE ASSESSING 21 OFFICER THAT THE BROKER M/S. K.K. FINTRADE LTD. WA S NOT TRACEABLE THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE STATEM ENT GIVEN BY SHRI DWARKADAS MAHESHWARI (COPY OF WHICH IS ENCLOSED ALO NG WITH THE ASSESSMENT ORDER) AND SUBMITTED THAT SHRI MAHESHWAR I IN HIS STATEMENT HAD ADMITTED VIDE REPLY TO QUESTION NO.8 THAT HE HA D WRITTEN TO SEBI AND MADHYA PRADESH STOCK EXCHANGE FOR TRANSFER OF H IS REGISTRATION NO. TO K.K. FINTRADE LTD. 6.2 REFERRING TO THE DECISION OF THE GAWAHATI BENCH OF THE TRIBUNAL IN THE CASE OF RAMESH KUMAR GOEL VS. ITO REPORTED I N 58 SOT 49 HE SUBMITTED THAT THE ASSESSEE IN THAT CASE HAS CLAIME D EXEMPTION U/S.54F ON ACCOUNT OF REINVESTMENT OF SALE PROCEEDS OF SHAR ES TOWARDS PURCHASE OF RESIDENTIAL UNIT. THE ASSESSING OFFICE R MADE DISALLOWANCE OF CLAIM OF CAPITAL GAIN AND EXEMPTION U/S.54F PRES UMING SALE OF SHARES TO BE BOGUS. IT WAS HELD THAT THE PURCHASE OF SHARES BY THE ASSESSEE WAS NOT DISPUTED BY THE AO. THE SALE PROC EEDS OF THE SHARES WERE RECEIVED BY WAY OF DEMAND DRAFT WHICH WERE DUL Y CREDITED TO THE ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER FAI LED TO MAKE OUT ANY IOTA OF EVIDENCE TO CONTRADICT ALL THESE FACTUAL AS PECTS AND PRESUMED THAT SALE PROCEEDS OF THE ASSESSEE IS BOGUS AND ADD ED THE SAME AS INCOME FROM UNDISCLOSED SOURCES. FOLLOWING THE D ECISION OF THE HONBLE SUPREME COURT IN THE CASE OF DHAKESWARI COT TON MILLS VS. CIT REPORTED IN 26 ITR 775 AND THE DECISION OF HON BLE CALCUTTA HIGH COURT IN THE CASE OF CARBO INDUSTRIAL HOLDINGS LTD. REPORTED IN 244 ITR 422 THE TRIBUNAL HELD THAT FINDING OF THE ASSES SING OFFICER THAT 22 ASSESSEE COULD NOT IDENTIFY BROKER OF SHARES CANNOT BE THE BASIS FOR TREATING THE TRANSACTION AS BOGUS. ACCORDINGLY, TH E APPEAL FILED BY THE ASSESSEE WAS ALLOWED. 6.3 REFERRING TO THE DECISION OF THE AGRA BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. BIBIRANI BANSAL REPORTED IN 133 TTJ (AGRA)TM) 394 HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECI SION HAS HELD THAT THE ASSESSEE COMPANY HAS SUBMITTED COPIES OF CONTRACT N OTES, BILLS, SHARE CERTIFICATES ALONG WITH DETAILS OF DEMAND DRAFTS IS SUED FROM THE ACCOUNT OF THE BROKER TO SUBSTANTIATE THE SALE OF S HARES MADE BY HER. THE ASSESSING OFFICER HAVING FAILED TO ESTABLISH TH AT THE ASSESSEE HAD INTRODUCED HER OWN UNACCOUNTED MONEY IN THE SHAPE O F SALE PROCEEDS OF SHARES, THE TRANSACTION OF SALE OF SHARES CANNOT BE TREATED AS NON- GENUINE FOR THE REASON THAT THE BROKER MADE CONTRAD ICTORY STATEMENTS AND THE ASSESSEE WAS NOT PROVIDED CROSS EXAMINATION . IT WAS ACCORDINGLY HELD BY THE TRIBUNAL THAT THE SALE CONS IDERATION DECLARED BY THE ASSESSEE IS ASSESSABLE AS CAPITAL GAIN AND NOT AS INCOME FROM UNDISCLOSED SOURCES. HE SUBMITTED THAT FROM THE S TATEMENT RECORDED FROM THE WITNESS OF THE ASSESSING OFFICER IT IS EST ABLISHED THAT M/S. K.K. FINTRADE LTD. EXISTS. 6.4 AS REGARDS THE ALLEGATION OF THE ASSESSING OFFI CER THAT THERE WAS NO TRANSACTION OF SHARES AS PER THE REPORT OF THE M ADHYA PRADESH STOCK EXCHANGE HE SUBMITTED THAT THESE ARE OFF-MARKET TRA NSACTIONS. ALTHOUGH IT WAS NOT STATED BEFORE THE ASSESSING OFF ICER, HOWEVER, IT WAS POINTED OUT BEFORE THE LD.CIT(A). AS REGARDS T HE OBSERVATION OF 23 THE ASSESSING OFFICER REGARDING THE ALLEGATION AGAI NST CHARTERED ACCOUNTANT SHRI PRAMOD GARG THAT SEBI HAD DEBARRED CERTAIN BROKERS FROM TRADING IN SHARES, THE LD. COUNSEL FOR THE ASS ESSEE DREW THE ATTENTION OF THE BENCH TO PARA NOS. 10 AND 11 OF TH E ORDER OF THE HONBLE JHARKHAND HIGH COURT IN THE CASE OF CIT VS. ARUN KUMAR AGRAWAL (HUF) REPORTED IN 26 TAXMANN.COM 113 WHICH READS AS UNDER: 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE PARTIES AND WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED ASSESSING OFFICER WAS MUCH INFLUENCED BY THE ENQIURY REP ORT WHICH MAY HAS BEEN BROUGHT ON RECORD BY THE EFFORTS OF THE ASSESSING OFFICER AND THAT ENQUIRY REPORT WAS PREPARED BY THE SEBI AND FROM THE OBSERVATIONS MADE BY THE ASSESSING OFFICER HIMSELF, IT IS C LEAR THAT AFTER GETTING THAT ENQUIRY REPORT, THE SEBI PRIMA F ACIE FOUND INVOLVEMENT OF SOME OF THE SHARE BROKERS IN UNFAIR TRA DE PRACTICES. EVEN IN A CASE WHERE THE SHARE BROKER WAS FOUND INVOLV ED IN UNFAIR TRADE PRACTICE AND WAS INVOLVED IN LOWERING AND RISIN G OF THE SHARE PRICE, AND ANY PERSON, WHO HIMSELF IS NOT INVOLVED IN THAT TYPE OF TRANSACTION, IF PURCHASED THE SHARE FROM THAT BROKER I NNOCENTLY AND BONAFIDELY AND IF HE SHOW HIS BONAFIDE IN TRANSACTION BY SHOWING RELEVANT MATERIAL, FACTS AND CIRCUMSTANCES AND DOCUME NTS, THEN MERELY ON THE BASIS OF THE REASON THAT SHARE BROKER WAS INVOLVED IN DEALING IN THE SHARE OF A PARTICULAR COMPANY IN COLL USION WITH OTHERS OR IN THE MANNER OF UNFAIR TRADE PRACTICES AGAINST THE N ORMS OF S.E.B.I AND STOCK EXCHANGE, THEN MERELY BECAUSE OF THAT FACT A P ERSON WHO BONAFIDELY ENTERED INTO SHARE TRANSACTION OF THAT COM PANY THROUGH SUCH BROKER THEN ONLY BY MERE ASSUMPTION SUCH TRANSACTIO NS CANNOT BE HELD TO BE A SHAM TRANSACTION. FACT OF TINTED BROK ER MAY BE RELEVANT FOR SUSPICION BUT IT ALONE NECESSARILY DOES LEAD TO CON CLUSION OF ALL TRANSACTION OF THAT BROKER AS TINTED. IN SUCH CIRCUMSTA NCES, FURTHER ENQUIRY IS NEEDED AND THAT IS FOR INDIVIDUAL CASE. SUC H FURTHER ENQUIRY WAS NOT CONDUCTED IN THAT CASE. 11. AT THIS JUNCTURE, IT WOULD BE RELEVANT TO MENTIO N HERE THAT IT IS NOT DISPUTED BY THE REVENUE BEFORE US THAT THE SHARES OF TH ESE ASSESSEES WERE ALREADY SHOWN IN THE EARLIER BALANCE SHEET SUBMI TTED BY THE ASSESSEES, AND THEREFORE, IN THAT SITUATION, HOW THE REV ENUE CONDEMNED THE TRANSACTION EVEN ON THE GROUND OF STEEP RISE IN THE SHARES. IF WITHIN A PERIOD OF ONE YEAR, THE SHARE PRIC E HAS RISEN FROM RS.5 TO 55 AND FROM 9 TO 160 AND ONE PERSON WAS HOLDIN G THE SHARES MUCH PRIOR TO THAT START OF RISE OF THE SHARE, THEN HO W IT CAN BE INFERRED THAT SUCH PERSON ENTERED INTO SHAM TRANSACTION FEW YEAR S AGO AND PREPARED FOR GETTING THE BENEFIT AFTER FEW YEARS WHE N THE SHARE WIII START RISING STEEPLY. IN PRESENT CASE EVEN THERE WAS NO R EASON FOR SUCH SUSPICION WHEN THE SHARES WERE PURCHASED YEARS BEFORE THE UNUSUAL FLUCTUATION IN THE SHARE PRICE. HERE IN THIS CASE, WE HAVE GIVEN EXAMPLE 24 OF ONE OF THE TAX APPEAL WHEREIN THE SHARES WERE PUR CHASED IN THE YEAR 2004 AND WERE SOLD IN THE YEAR 2006, WHICH IS SA ID TO BE ONE OF THE CASE WHEREIN THE GAP IN THE PURCHASE AND SALE OF T HE SHARES WAS NARROWEST. IN OTHER CASES AS WE HAVE NOTICED FROM THE V ARIOUS ORDERS OF THE C.I.T (APPEALS) THAT, THE SHARES OF SOME OF THE COMPANIES WERE PURCHASED BY THE ASSESSEES EVEN FIVE YEARS AGO FROM THE T IME OF SALE AND THOSE PURCHASERS WERE ALREADY DISCLOSED IN THE BALAN CE SHEET OF THE ASSESSEE, THEN FROM ANY ANGLE, IT IS PROVED THAT TH E ASSESSEES HAD HELD THE SHARES MUCH PRIOR TO 12 MONTHS OF THE SALE OF THE SHARES. IN VIEW OF THE ABOVE FINDINGS BY THE HONBLE HIGH C OURT HE SUBMITTED THAT THE PURCHASES CANNOT BE TREATED AS BOGUS. 6.5 HE SUBMITTED THAT THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MUKESH R. MAROLIA REPORTED IN 6 SOT 247 WAS BROUGHT TO THE NOTICE OF THE CIT(A). HOWEVER, THE LD.CIT(A ) DISTINGUISHED THE ABOVE DECISION AND REJECTED THE SAME ON THE GRO UND THAT THE DECISION OF THE TRIBUNAL WAS NOT OF THE JURISDICTIO NAL TRIBUNAL AND HAS NO FORCE AS BINDING PRECEDENT. FURTHER, THE TRANSA CTIONS OF PURCHASE AND SALE OF SHARES IN THAT CASE WERE ACCEPTED THROU GH OFF-MARKET DEALS. THE TRIBUNAL IN THE SAID DECISION HAS FOUND THAT TH E DISALLOWANCE WAS MAINLY MADE ON THE BASIS THAT THE PURCHASE AND SALE MADE OUTSIDE THE EXCHANGE ARE NOT RELIABLE. FURTHER, THE PURCHASE I N THAT CASE WAS FROM KNOWN SOURCES OF FUND WHEREAS IN THE INSTANT CASE T HE SOURCE OF PURCHASE IS THROUGH THE PROFIT GENERATED FROM SALE OF SHARES AND NOT BY PAYING ANY AMOUNT. FURTHER, THE PURCHASE OF SHARES IN THE SAID CASE WAS CONTEMPORANEOUSLY FOUND ENTERED IN THE REGULAR BOOKS OF ACCOUNT WHEREAS IN THE PRESENT CASE NO BOOKS WERE MAINTAINE D AND IT WAS CLEARLY FOUND THAT THE RETURN OF A.Y. 2002-03 DISCL OSING THESE PURCHASES FOR THE FIRST TIME WAS FILED AFTER THE DE MATERIALISATION AND SALE OF SHARES. HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HAS 25 ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITION OF RS.1,41,08,484/- ON SALE OF SHARES WHICH WAS ADDED BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT U/S.69. IN THAT CASE ALSO THE ASSESSEE HAD DEALT WITH THE SHARES OF RASHEL AGROTE CH LTD. APART FROM CERTAIN OTHER SHARES. REFERRING TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT VIDE ITA NO.456/2007 ORDER DATED 07-09-2 011 HE SUBMITTED THAT THE HONBLE HIGH COURT DISMISSED THE APPEAL FILED BY THE REVENUE BY OBSERVING AS UNDER : 5. ON FURTHER APPEAL, THE ITAT BY THE IMPUGNED OR DER ALLOWED THE CLAIM OF THE ASSESSEE BY RECORDING THAT THE PURCHA SE OF SHARES DURING THE YEAR 1999-2000 AND 2000-2001 WERE DULY R ECORDED IN THE BOOKS MAINTAINED BY THE ASSESSEE. THE ITAT HAS RECORDED A FINDING THAT THE SOURCE OF FUNDS FOR ACQUISITION OF THE SHARES W AS THE AGRICULTURAL INCOME WHICH WAS DULY OFFERED AND ASSESSED TO TAX IN THOSE ASSESSMENT YEARS. THE ASSESSEE HAS PRODUCED CERTIFICATES FROM THE AFORESAID FOUR COMPANIES TO THE EFFECT THAT THE SH ARES WERE IN-FACT TRANSFERRED TO THE NAME OF THE ASSESSEE. IN THESE CIRCUMST ANCES, THE DECISION OF THE ITAT IN HOLDING THAT THE ASSESSEE HAD P URCHASED SHARES OUT OF THE FUNDS DULY DISCLOSED BY THE ASSESSEE CANNOT BE FAULTED. 6 SIMILARLY, THE SALE OF THE SAID SHARES FOR RS. 1,41,0 8,484/- THROUGH TWO BROKERS NAMELY, M/S RICHMOND SECURITIES PVT. LTD. AND M/S. SCORPIO MANAGEMENT CONSULTANTS PVT. LTD. CANNOT BE DI SPUTED, BECAUSE THE FACT THAT THE ASSESSEE HAS RECEIVED THE SAID AMOUNT I S NOT IN DISPUTE. IT IS NEITHER THE CASE OF THE REVENUE THAT T HE SHARES IN QUESTION ARE STILL LYING WITH THE ASSESSEE NOR IT IS THE C ASE OF THE REVENUE THAT THE AMOUNTS RECEIVED BY THE ASSESSEE ON SALE OF THE SHARES IS MORE THAN WHAT IS DECLARED BY THE ASSESSEE. THOU GH THERE IS SOME DISCREPANCY IN THE STATEMENT OF THE DIRECTOR OF M /S. RICHMAND SECURITIES PVT. LTD. REGARDING THE SALE TRANSACTION, T HE TRIBUNAL RELYING ON THE STATEMENT OF THE EMPLOYEE OF M/S. RICHMAND SEC URITIES PVT. LTD. HELD THAT THE SALE TRANSACTION WAS GENUINE. 7 IN THESE CIRCUMSTANCES, THE DECISION OF THE ITAT IN H OLDING THAT THE PURCHASE AND SALE OF SHARES ARE GENUINE AND THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN HOLDING THAT THE AMOUNT OF RS. 1,41,08,484/- REPRESENTED UNEXPLAINED INVESTMENT UNDE R SECTION 69 OF THE INCOME TAX ACT, 1961 CANNOT BE FAULTED. HE SUBMITTED THAT THE CASE OF THE ASSESSEE ALSO SQU ARELY FITS INTO THE CASE OF MUKESH R. MAROLIA. HERE ALSO, THE SHARES A RE OFF-MARKET TRANSACTIONS AND THE SOURCE OF ACQUISITION OF SHARE S IS OUT OF THE PROFIT 26 ON SALE OF SHARES DURING A.Y. 2002-03 WHICH HAS BEE N OFFERED TO TAX AND ACCEPTED BY THE DEPARTMENT. THE COMPANY RASHEL AGROTECH LTD. HAS ALREADY CONFIRMED ABOUT THE TRANSFER OF SHARES IN THE NAME OF THE ASSESSEE. THEREFORE UNDER THE FACTS AND CIRCUMSTAN CES OF THE CASE THE CAPITAL GAIN DECLARED BY THE ASSESSEE CANNOT BE DEN IED. 6.6 SO FAR AS THE ADDITION U/S.68 IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION U/S.68 CANNOT BE MADE WHEN THE MONEY WAS GIVEN IN SHAPE OF CHEQUE FROM A BANK ACCO UNT OF THE BROKER AND THE SAME HAS NOT BEEN CHALLENGED. REFER RING TO THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF MEENADEVI N. GUPTA VS. ACIT REPORTED IN 60 SOT 51 H E SUBMITTED THAT IN THAT CASE THE ASSESSEE HAS FILED THE RETURN OF INCOME SHOWING CAPITAL GAIN ARISING OUT OF PURCHASE AND SALE OF SH ARES DONE THROUGH THE SHARE BROKER. THE ASSESSEE FURNISHED THE PURCHASE AND SALE BILLS OF SHARE TRANSACTION. SINCE THE ASSESSEES BROKERS DE NIED THE TRANSACTIONS THE ASSESSING OFFICER CONCLUDED THAT THE SHARE TRAN SACTION WAS NOT GENUINE AND THEREFORE TAXED IT AS INCOME FROM UNDI SCLOSED SOURCES. THE LD.CIT(A) CONFIRMED THE ADDITION AND ON FURTHER APPEAL THE TRIBUNAL HELD THAT THE SHARES WERE IN RESPECT OF A LISTED COMPANY AND TRANSACTION WAS THROUGH DEMAT ACCOUNT AS PER RECOGN ISED STOCK EXCHANGE QUOTED PRICE, THEREFORE, THERE WAS NO REA SON TO HOLD SUCH NATURE OF TRANSACTION AS NON-GENUINE. ACCORDINGLY THE ADDITION MADE U/S.68 WAS DELETED. REFERRING TO THE DECISION OF T HE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HARSH ENGINEERING V. ADDL.C IT AND VICE VERSA 27 VIDE ITA NOS. 720/PN/2010 AND 697/PN/2011 FOR THE B LOCK PERIOD 01- 04-1987 TO 25-03-1998 ORDER DATED 03-05-2012 HE SUB MITTED THAT THE TRIBUNAL IN THE SAID DECISION, FOLLOWING VARIOUS OT HER DECISIONS HAS HELD THAT UNLESS THERE ARE PURCHASES THERE CANNOT B E SALE. HE ALSO RELIED ON THE FOLLOWING DECISIONS : 1. CIT VS. HIMANI M. VAKIL (2014) 41 TAXMANN.COM 42 5 (GUJARAT 2. DALPAT SINGH CHOUDHARY VS. ACIT (2012) 143 TTJ (J D) 500 3. RAMESH KUMAR GOEL VS. ITO (2013) 58 SOT 49 (GUWAHA TI) 4. DY.CIT VS SHRI PINAKIN L. SHAH AND VICE VERSA IT A NOS. 3030/MUM/2008 AND ITA NOS. 3543/MUM/2008 ORDER DATED 14-07-2009 5. MRS. RAJNIDEVI A. CHOWDHARY VS. ITO - ITA NO.6455/ M/07 6. CIT VS. SUDEEP GOENKA (2013) CCH 243 AIIHC 7. AJAY SHANTILAL LALWANI VS. ITO, JALGAON VIDE ITA NO.163/PN/2010 8. MOTI UDHAMRAM PANJABI VS. ACIT, PUNE VIDE ITA NO.650/PN/2011 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT THE RETURN OF INCOME FOR THE A.Y. 2002-03 WAS PROCESSED U/S.143(1 ) AND THERE WAS NO SCRUTINY ASSESSMENT. THEREFORE, THE SAME CANNOT BE TAKEN AS A BASIS. HE SUBMITTED THAT THE ASSESSING OFFICER CON DUCTED ALL POSSIBLE ENQUIRIES AND FINALLY CONCLUSIVELY PROVED THAT THE TRANSACTIONS ARE BOGUS. THE EXISTENCE OF M/S. K.K.FINTRADE LTD. WAS DOUBTED AND BECAUSE OF ITS UNAVAILABILITY THE ASSESSING OFFICER COULD NOT EXAMINE THE GENUINENESS OF THE PURCHASES. HE SUBMITTED THA T FOR PROVING THE PURCHASE OF SHARES WHETHER FROM THE EXCHANGE OR OFF -MARKET THE SELLER MUST BE AN AUTHORISED PERSON. HERE THE SELLER IS NE ITHER A BROKER NOR AN AUTHORISED PERSON TO SELL THE SHARES. REFERRING TO VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE HE S UBMITTED THAT IN ALL 28 THOSE CASES THE SELLERS WERE EXISTING. IN ALL THOS E CASES THE PAYMENTS WERE GIVEN FROM THE ACCOUNT OF THE PURCHASER TO THE BROKERS ACCOUNT. REFERRING TO THE DECISION OF THE MUMBAI BENCH OF TH E TRIBUNAL IN THE CASE OF ARVIND KARIYA VS. ACIT (COPY OF WHICH WAS F ILED DURING THE COURSE OF HEARING) HE SUBMITTED THAT THE TRIBUNAL I N THE SAID DECISION, FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT (1995) 125 CTR (SC) 124 AND CIT VS. D URGA PRASAD MORE 1973 CTR (SC) 500 HAS UPHELD THE ORDER OF THE CIT(A) CONFIRMING THE ADDITION MADE BY THE AO U/S.68 BY TR EATING THE LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF SHARES AS UNEXPLAINED CASH CREDIT. REFERRING TO THE DECISION OF THE PUNE BEN CH OF THE TRIBUNAL IN THE CASE OF MUNDADA GROUP OF CASES HE SUBMITTED THA T HERE ALSO THE PROFIT FROM SHARE TRANSACTIONS CLAIMED AS LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN WAS REJECTED BY THE AO TREA TING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. THE TRIBUNAL UP HELD THE QUANTUM ADDITION. FURTHER, EVEN IN PENALTY PROCEEDINGS ALS O THE PENALTY WAS CONFIRMED. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UPHELD. 8. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDE R SUBMITTED THAT IF THE AO HAD ANY DOUBT REGARDING THE GENUINENESS O F THE PURCHASE OF THE SHARES IN THE A.Y. 2002-03 HE COULD HAVE REOPEN ED THE ASSESSMENT WHICH WAS COMPLETED U/S.143(1). HOWEVER, THE SAME HAS NOT BEEN DONE. IN OTHER WORDS, THE PURCHASE OF SHARES IN TH E PRECEDING YEAR HAS BEEN ACCEPTED. SINCE THE SALE TRANSACTION IN THE S UBSEQUENT YEAR HAS 29 COME THROUGH THE BANK ACCOUNT OF THE ASSESSEE AND T HE SHARES WERE TRANSFERRED FROM THE DEMAT ACCOUNT OF THE ASSESSEE, THEREFORE, THE LONG TERM CAPITAL GAIN DECLARED BY THE ASSESSEE SHOULD B E ALLOWED. 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAV E ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. IN THIS CAS E, THE ASSESSEE CLAIMED LONG TERM CAPITAL GAIN OF RS.1,58,01,880/- ON ACCOU NT OF SALE OF 82500 EQUITY SHARES OF RASHEL AGROTECH LTD. THE ASSESSEE ALSO CLAIMED THAT THE SHARES WERE PURCHASED DURING A.Y. 2002-03 OUT O F THE PROFITS DECLARED ON ACCOUNT OF SALE OF SHARES OF DIGITAL EQ UIPMENTS, INFOSYS TECHNOLOGIES, NIIT LTD. AND WIPRO LTD. THE ASSESSI NG OFFICER DISBELIEVED THE PURCHASE OF SHARES OF RASHEL AGROTE CH LTD. ON THE FOLLOWING GROUNDS : (A) THE CLAIM OF THE ASSESSEE THAT SHE HAS PURCHASE D THE SHARES OF RASHEL AGROTECH LTD. THROUGH M/S. K.K. FI NTRADE LTD., A STOCK BROKER IN INDORE IS FALSE AND BASELESS SINC E SAID BROKER WAS NOT EXISTING EVER AT THE ADDRESSES APPEARING IN THE CONTRACT NOTE AND THE BILLS. (B) DESPITE NUMBER OF OPPORTUNITIES GIVEN DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT JU STIFY HER CASE BY PRODUCING ANY OTHER EVIDENCE TO SHOW THAT S HE HAD ACTUALLY PURCHASED THE SHARES. (C) DESPITE GIVEN OPPORTUNITIES TO CROSS EXAMINE HE R WITNESSES WHOSE STATEMENTS WERE RECORDED BY THE ASS ESSING OFFICER THE ASSESSEE DID NOT AVAIL OF THE OPPORTUNI TY. (D) THERE WAS NO TRADING IN THE SHARES OF RASHEL AG ROTECH LTD. ON THE STOCK EXCHANGE ON THE DATES THE ASSESSE E STATED TO HAVE MADE THE PURCHASES. (E) EVIDENCES PRODUCED BY THE ASSESSEE ARE BOGUS. 30 (F) THE COMPANY WHOSE SHARES WERE CLAIMED TO HAVE B EEN PURCHASED BY THE ASSESSEE ENJOYS A DUBIOUS REPUTATI ON WHICH FACT HAS ALREADY BEEN NOTED BY THE SEBI ALSO. (G) THE ASSESSEE HAS TRIED TO SHOW A BACK DATED PUR CHASE OF SHARES TO AVAIL OF THE BENEFITS OF LONG TERM CAPITA L GAIN WHICH SHE WAS NOT LEGALLY ENTITLED TO. 9.1 SINCE THE ASSESSING OFFICER TREATED THE PURCHAS ES AS BOGUS, THEREFORE, HE HELD THAT THE SALE OF SHARES ALSO HAV E TO BE TREATED AS BOGUS. WE FIND IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE F AILED TO PRODUCE THE EVIDENCES IN SUPPORT OF HER CLAIM BEFORE THE ASSESS ING OFFICER AS WELL AS BEFORE HIM. FURTHER, ACCORDING TO THE LD.CIT(A) IT IS ONLY THE SECOND YEAR OF ASSESSEES ASSESSMENT. SHE WAS NOT FILING HER RETURN REGULARLY FOR LAST SO MANY YEARS. IN THE IMMEDIATE LY PRECEDING ASSESSMENT YEAR SHE HAD SHOWN CAPITAL GAIN OF RS.10 ,17,380/- WHICH HAS JUMPED TO SUCH A HUGE AMOUNT DURING THE IMPUGNE D ASSESSMENT YEAR. THERE IS NO LOGICAL REASON AVAILABLE ON RECO RD FOR THE REASON TO CARRY OUT THE DISPUTED TRANSACTIONS WITH A BROKER S ITUATED OUTSIDE THE PLACE OF HER RESIDENCE. ACCORDING TO HIM NO REASON ABLE EXPLANATION EXISTS ON RECORD WHICH CAN SHOW HOW AN UNKNOWN BROK ER WOULD TRANSACT WITH A CLIENT WITHOUT HAVING ANY FINANCIAL SECURITY AS IF HE WAS SURE THAT THE CLIENT WOULD ONLY MAKE PROFIT AND COU LD NOT MAKE ANY LOSS. FURTHER, ACCORDING TO THE LD.CIT(A) NO EVIDE NCE WAS SUBMITTED WHERE THE KYC NORMS WERE FOLLOWED BY THE SAID BROKE R. AN INDEPENDENT INVESTIGATION CARRIED OUT BY THE ASSESS ING OFFICER IN RESPECT OF EVIDENCE PRODUCED BY THE ASSESSEE IN RES PECT OF PURCHASE OF 31 SHARES AND ITS SOURCE THEREOF, THE TRANSACTIONS CAR RIED OUT WITH K.K. FINTRADE LTD. WERE FOUND NOT ONLY TO BE BOGUS AND U NRELIABLE BUT EVEN FORGED. DISTINGUISHING VARIOUS DECISIONS CITED BEF ORE HIM THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICE R IN MAKING THE ADDITION OF RS.1,68,20,574/- U/S.68 OF THE I.T. ACT . 9.2 IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SHE HAD ENTERED INTO CERTAIN PURCHASE AND SALE OF SHARE S DURING A.Y. 2002- 03 AND AN AMOUNT OF RS.10,17,380/- WAS DECLARED AS SHORT TERM CAPITAL GAIN WHICH WAS OFFERED TO TAX AND WHICH HAS BEEN AC CEPTED BY THE DEPARTMENT. ALONG WITH THE STATEMENTS OF INCOME FO R THE A.Y. 2002- 03 THE ASSESSEE HAS GIVEN THE DETAILS OF PURCHASE A ND SALE OF SHARES FOR THAT YEAR WHEREIN IT WAS CLEARLY MENTIONED THAT THE CAPITAL GAIN OF RS.10,17,380/- WAS INVESTED IN PURCHASE OF 82500 EQ UITY SHARES OF RASHEL AGROTECH LTD. THE DEPARTMENT HAS NOT INITIA TED ANY PROCEEDINGS EITHER U/S.147 OR U/S.263 FOR THE A.Y. 2003-03. FURTHER, THE COMPANY RASHEL AGROTECH LTD. HAS ALSO CONFIRM ED THE TRANSFER OF 82500 SHARES IN THE NAME OF THE ASSESSEE IN THEIR B OOKS OF ACCOUNTS. THE SHARES WERE TRANSFERRED TO THE DEMAT ACCOUNT ON 28-08-2002. SIMILARLY, THE SHARES WERE SOLD THROUGH THE DEMAT A CCOUNT ON 23-09- 2002. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSE E THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MUKESH RATHILAL MAROLIA ( SUPRA) WHERE UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE HONBLE BOMBAY HIGH COURT UPHELD THE DECISION OF THE TRIBUNAL ALLOWING THE CLAIM OF LONG TERM CAPITAL GAIN DECLARED BY THE ASSESSEE AS AGAIN ST UNEXPLAINED 32 INVESTMENT U/S.69 TREATED BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A). 9.3 FROM THE RETURN OF INCOME FOR A.Y. 2002-03, THE DETAILS OF WHICH ARE FILED IN THE PAPER BOOK AT PAGES 1 AND 2, WE FIND THE ASSESSEE DURING A.Y. 2002-03 HAS DECLARED SHORT TERM CAPITAL GAIN OF RS.10,17,380/- AND CLAIMED THAT THE ENTIRE CAPITAL GAIN WAS INVESTED IN PURCHASE OF 82500 EQUITY SHARES OF RASHEL AGROTECH LTD. SUCH DETAILS AS APPEARING IN PAGE 3 OF THE PAPER BOOK ARE AS UND ER : STATEMENT OF CAPITAL GAINS SHORT TERM EARNED IN F .Y. 2001-2002 NO. NAME OF THE COMPANY PURCHASE SALE CAPITAL GAIN DATE QTY AMOUNT DATE QTY AMOUNT SHORT TERM 01. DIGITAL EQUIPMENTS 16-04-01 3,600 8,48,367 18-04- 01 3,000 11,70,825 3,22,457 02. INFOSIS TECHNOLOGIES 10-05-01 1,300 48,93,265 11-05- 01 1,300 50,82,445 1,89,180 03. NIIT LTD. 16-04-01 2,500 10,31,527 18-04- 01 2,500 14,10,025 3,78,498 04. WIPRO LTD. 10-05-01 2,000 31,26,700 11-05- 01 2,000 32,53,945 1,27,245 TOTAL 8,800 98,99,860 8,800 1,09,17,240 10,17,38 0 NOTE : ENTIRE CAPITAL GAINS OF RS.10,17,380/- WERE INVESTED IN PURCHASE OF EQUITY SHARES IN RASHEL AGROTECH LTD. (AS FOLLOWS) 50,000 EQUITY SHARES PURCHASED ON 20-04-2001 RS.6, 08,944 32,500 EQUITY SHARES PURCHASED ON 11-05-2001 RS.4, 09,750 ---------------- TOTAL : RS.10,18,694 --------------- ENTIRE SHARES 82,500 WERE HELD ON 31-03-2002 SD/- (MISS V.V. VARNEKAR) 9.4 ALTHOUGH THE ASSESSING OFFICER MADE SCRUTINY AS SESSMENT FOR A.Y. 2003-04 DISBELIEVING THE PURCHASE OF SHARES OF RASHEL AGROTECH LTD., HOWEVER, THE FACT REMAINS THAT PROFIT DECLARE D BY THE ASSESSEE ON ACCOUNT OF SALE OF SHARES OF DIFFERENT COMPANIES TH ROUGH THE SAID 33 BROKER NAMELY K.K. FINTRADE LTD. WAS ACCEPTED BY TH E DEPARTMENT DURING A.Y. 2002-03 AND NO REMEDIAL MEASURES U/S. 1 47 OR 263 HAVE BEEN INITIATED AGAINST THE ASSESSEE. THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT WHEN THE PROFIT EARNED BY THE ASSESSEE ON ACCOUNT OF SALE OF SHARES THROUGH THE SAME BROKER IS ACCEPTED IN ONE YEAR HOW THE PURCHASE OF SHARES THROUGH THE SAID BROKER AND ALSO SALE OF SHARES IN SUBSEQUENT Y EAR THROUGH SAME BROKER CAN BE DOUBTED. FROM THE VARIOUS DETAILS FU RNISHED BY THE ASSESSEE IN THE PAPER BOOK, WE FIND THE ASSESSEE HA S FURNISHED A CERTIFICATE FROM RASHEL AGROTECH LTD. VIDE CERTIFIC ATE DATED 31-07- 2001 REGARDING TRANSFER OF SHARES OF RASHEL AGROTEC H LTD. TO THE NAME OF THE ASSESSEE. THE DEMAT ACCOUNT MAINTAINED BY T HE ASSESSEE WITH JANATA SAHAKARI BANK LTD., PUNE VIDE ACCOUNT NO. NS DL DPID- IN300280 SHOWS THE DEMATERIALISATION OF 82500 EQUIT Y SHARES ON 28- 08-2002. THE ASSESSEE HAS SOLD THE SHARES THROUGH THE DEMAT ACCOUNT ON 23-09-2002, A COPY OF WHICH IS PLACED AT PAGE 59 OF THE PAPER BOOK. THE MONEY HAS COME TO THE ACCOUNT OF THE ASSESSEE B Y CHEQUE. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HARSH ENG INEERING VS. ADDL.CIT (SUPRA) FOLLOWING VARIOUS DECISIONS HAS HE LD THAT UNLESS THERE ARE PURCHASES THERE CANNOT BE SALE. SINCE IN THE INSTANT CASE THE SALE HAS BEEN EFFECTED THROUGH THE DEMAT ACCOUNT AN D THE MONEY HAS COME BY CHEQUE THROUGH NORMAL BANKING CHANNEL, THER EFORE, IT IS OBVIOUS THAT THERE HAS TO BE PURCHASE FOR SALE OF T HE ABOVE SHARES. THE ASSESSEE IN THE A.Y. 2002-03 HAS ALREADY DECLARED S UCH PURCHASE OF 82500 EQUITY SHARES OF RASHEL AGROTECH LTD. AND THE RETURN FOR THE 34 A.Y. 2002-03 REMAINS UNDISTURBED. UNDER THESE CIRC UMSTANCES, WE FAIL TO UNDERSTAND AS TO HOW THE PURCHASE OF THE SH ARES CAN BE DOUBTED NOW WITHOUT DISTURBING THE ASSESSMENT ORDER FOR A.Y . 2002-03 WHERE SUCH PURCHASE DETAILS WERE GIVEN. 9.5 WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. MUKESH R. MAROLIA (SUPRA) DISMISSED THE APPEAL FILE D BY THE DEPARTMENT WHERE THE TRIBUNAL UNDER IDENTICAL FACTS AND CIRCUMSTANCES HAS HELD THAT PURCHASE ARE RECORDED IN THE BOOKS MA INTAINED BY THE ASSESSEE, THE SOURCE OF ACQUISITION OF SHARES WAS A GRICULTURAL INCOME WHICH WAS DULY OFFERED AND ASSESSED TO TAX IN THOSE ASSESSMENT YEARS AND THE ASSESSEE PRODUCED CERTIFICATES FROM THE COM PANIES TO THE EFFECT THAT THE SHARE WERE IN FACT TRANSFERRED TO THE NAME OF THE ASSESSEE. IT WAS ACCORDINGLY HELD BY THE TRIBUNAL THAT THE ASSES SING OFFICER WAS NOT JUSTIFIED IN HOLDING THAT THE PROFIT ON SALE OF SUCH SHARES REPRESENTED UNEXPLAINED INVESTMENT U/S.69 OF THE I. T. ACT. THE OPERATIVE PART OF THE DECISION OF HONBLE HIGH COUR T IS ALREADY REPRODUCED AT PARA 6.5 OF THE IMPUGNED ORDER. TO A VOID REPETITION WE ARE NOT REPRODUCING THE SAME AGAIN. 9.6 SIMILARLY, WE FIND THE PUNE BENCH OF THE TRIBUN AL IN THE CASE OF AJAY SHANTILAL LALWANI VS. ITO AND VICE VERSA VIDE ORDER DATED 18-11- 2011 HAS DECIDED AN IDENTICAL ISSUE. IN THAT CASE, THE ASSESSING OFFICER DENIED CLAIM OF EXEMPTION U/S.10(38) OF THE I.T. AC T IN RESPECT OF LONG TERM CAPITAL GAIN MAINLY ON THE BASIS THAT THERE WA S A SUBSTANTIAL DELAY IN TRANSFERRING THE SHARES INTO DEMAT ACCOUNT FROM THE DATE OF 35 PURCHASE, THE TRANSACTIONS STATED TO HAVE BEEN MENT IONED ON THE CONTRACT NOTES WERE NOT ROUTED THROUGH THE KOLKATA STOCK EXCHANGE, THE ASSESSEE WAS UNABLE TO GIVE ANY SATISFACTORY EX PLANATION ABOUT THE GENUINENESS OF THE CONTRACT NOTES ISSUED BY THE SHA RE BROKER AND ACQUISITION OR DELIVERY OF SHARES AND SUFFICIENT PR OOF REGARDING THE POSSESSION OF SHARES AS ON THE DATE OF PURCHASE WAS NOT THERE. IN APPEAL THE LD.CIT(A) WHILE ACCEPTING THE FINDING OF THE ASSESSING OFFICER THAT THERE IS NO SUFFICIENT AND VALID EVIDE NCE AVAILABLE WITH THE ASSESSEE TO PROVE THAT THE SHARES WERE ACTUALLY ACQ UIRED FOLLOWED BY DELIVERY IN THE RELEVANT FINANCIAL YEAR, HOWEVER, A LLOWED SHORT TERM CAPITAL GAIN TREATING THE DATES OF ACQUISITION OF T HE SHARES AS ON THE DATE OF TRANSFER OF SHARE TO THE ASSESSEES DEMAT ACCOUN T ON THE UNDISPUTED SALE OF THOSE SHARES. ON FURTHER APPEAL BY THE REV ENUE AS WELL AS THE ASSESSEE THE TRIBUNAL DISMISSED THE APPEAL FILED BY THE REVENUE AND ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING AS UNDER : 8. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT SOME MATERIAL FACTS ARE UNDISPUTED THAT (I) SHARES PURCHASED WERE T RANSFERRED INTO D-MAT A/C. MAINTAINED BY THE ASSESSEE WITH HDFC BANK AN D THE SHARES WERE SOLD ON THE DATES MENTIONED IN THE TABLE REPRODUCED HEREINABOVE. THE ONLY DISPUTE IS REGARDING THE DATE AND MODE OF ACQUISITION OF THOSE SHARES IN QUESTION. THE ASSESSEE WAS NO T ABLE TO PROVE TO THE SATISFACTION OF THE AUTHORITIES BELOW THA T THE SAID SHARES WERE ACTUALLY PURCHASED ON VARIOUS DATES DURING THE F. Y. 2004-05. THE ASSESSEE HAS TRIED TO MEET OUT OBJECTIONS RAISED BY THE A .O IN THIS REGARD. THE A.O NOTED THAT THE SHARES WERE CREDITED IN D-MAT A/C. ON 12.4.2005, AFTER LAPSE OF MORE THAN 20 TO 24 MONTHS FROM THE DATE OF PURCHASE CONTRACT NOTE I.E. 4.4.2003 AND 25.11.2005. THE SUBMISSION OF THE ASSESSEE IN THIS REGARD REMAINED THAT THE ASSESSEE H AD PURCHASED THE SHARES OUTSIDE STOCK EXCHANGE DIRECTLY FR OM THE BROKER IN PHYSICAL FORM. THE ASSESSEE WAS HAVING NO D-MAT A/C. WHEN THE SHARES WERE PURCHASED. D-MAT A/C. WAS OPENED ON 30 TH NOVEMBER 2004 IN THE F.Y. 2004-05. THE DATE OF PURCHASE OF SHA RES IS 25.11.2003 AND NOT 25.11.2005. THE SAID DATE FALLS IN THE A.Y. 2006-07. IT WAS EXPLAINED THAT SHARES WERE KEPT IN THE PHYSICAL FORM T ILL THE SHARES WERE HELD BY THE ASSESSEE. WHEN THE ASSESSEE HAD DECIDED TO SELL THE SHARES, HE HAD SENT THE SHARES TO D.P. (STOCK HOLDING CO RPORATION OF 36 INDIA LTD.) FOR DEMATERIALIZATION. ASSESSEE HAD SUBMIT TED A COPY OF D- MAT A/C. STATEMENT RECEIVED FROM THE D.P IN HIS FIRST SUBMISSION DATED 19.6.2008. THE D-MAT A/C. STATEMENTS REVEALED THAT THE SHARES D-MAT REQUEST WAS RECEIVED BY THE D.P. FROM THE ASSESSEE , AND AFTER SOME DAYS, D-MAT WAS CONFIRMED BY THE D.P. IT PROVES THAT THE SHARES WERE IN THE POSSESSION OF THE ASSESSEE BEFORE DEMATERIALI ZATION, EXPLAINED THE ASSESSEE. THE FACT THAT INVESTMENT IN PUR CHASE OF SHARES DISCLOSED IN THE PRECEDING YEARS RETURN IS VERY WELL A CCEPTED BY THE DEPARTMENT. THE ASSESSEE ALL ALONG DISPLAYED THE CHARA CTERISTICS OF AN INVESTOR AND THERE WAS NOTHING ON RECORD TO SUGGEST THA T THE ASSESSEE HAD EVER INDULGED IN ANY MANIPULATION IN THE MARKE T. IT WAS SUBMITTED THAT WHILE COMPARING THE DATE OF PURCHASE O F SHARES IN PHYSICAL FORM OF THE ASSESSEE IN THE GIVEN DATA WITH THE DATE OF CREDIT IN D-MAT A/C., THE A.O ERRED IN TOTALLY IGNORING TH E FACT THAT AT THE TIME OF PURCHASE OF AFORESAID COMPANIES SHARES, ASSESSEE WAS NO T HAVING D-MAT A/C. AND HENCE SHARES WERE PURCHASED IN PHYSICAL FORM WHICH WERE TRANSFERRED INTO D-MAT A/C. OPENED SUBSEQUENTLY. IT WAS SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, COPIES O F SHARE CERTIFICATES HELD BY THE ASSESSEE IN PHYSICAL FORM WERE A LSO PROVIDED TO THE A.O, WHICH CONTAINED COMPLETE RELEVANT DETAILS SUCH AS ADDRESS OF LATEST OFFICE OF THE COMPANY, SIGNATURE OF THE AUTHOR IZED SIGNATORY ALONG WITH TWO DIRECTORS SIGNATURES, VALUE OF SHARES WI TH PAID UP AMOUNT OF SHARES PURCHASED IN EACH COMPANY, DATE OF ISSU E OF CERTIFICATE, SERIAL NO., REGISTERED FOLIO, NUMBER OF SHARES WITH THEIR DISTINCTIVE NOS., DATE OF TRANSFER OF SHARES IN THE NAME OF ASSESSEE (REFLECTED ON THE BACK SIDE OF THE CERTIFICATE) AND ALSO COPIES OF CONTRACT NOTE ALONG WITH BILLS ISSUED BY SHARE BROKER S .B. BHUTRA & CO. 9. IT WAS FURTHER SUBMITTED THAT DATE OF ALLEGED NON -EXECUTION OF 70 SCRIPTS OF 23.11.2008 RELIED UPON BY THE A.O IN TH E ASSESSMENT ORDER, FALLS IN A.Y. 2009-10. SIMILARLY, THE A.O HA D NOT BEEN VIGILANT TO MENTION CORRECT NAME OF THE COMPANY IN THE ASSESSMENT ORDER. THE NAME OF THE COMPANY IS SHIV OM INVESTMENTS AND CONSULT ANCY LTD. AND NOT SHIV COMMUNICATIONS AS MENTIONED IN THE ASSESSMEN T ORDER. THE A.O HAS THUS PROCEEDED ON THE BASIS NOT ONLY MISLEAD ING BUT INCORRECT FACTS. 10. REGARDING DENIAL OF STOCK EXCHANGE THAT S.B. BU THRA & CO., HAD NOT EXECUTED ANY TRADE ON 2.4.2003 IN OASIS CINE COM MUNICATION LTD. AND ALSO ON 23.11.2008 (CORRECT DATE IS 25.11.2003) I N SHIV OM COMMUNICATIONS IN ONLINE TRADING SYSTEMS OF THE EXCHAN GE, THE SUBMISSION OF THE ASSESSEE REMAINED THAT THE WORDS USED ON LINE TRADING SYSTEM OF THE EXCHANGE ARE VERY IMPORTANT A S THE ASSESSEE HAS ALSO STATED THE SAME CLEARLY TO THE A.O IN HIS STATEM ENT THAT THE TRANSACTION IS NOT DONE BY HIM IN THE ONLINE SYSTEM O F THE EXCHANGE, BUT THE SHARES WERE PURCHASED OUTSIDE THE MARKET THROUG H THE BROKER. IT WAS SUBMITTED THAT THE A.O HAD ASKED THE COMPANY TO CONFIRM THE SHARE TRANSACTIONS. IN CASE OF SHIV OM INVESTMENTS AND C ONSULTANCY LTD, THE COMPANY VIDE ITS LETTER DATED 29.11.2008 AD DRESSED TO THE COMPANY HAD CONFIRMED IN BLACK AND WHITE THAT THE SAID SHARES HAVE BEEN TRANSFERRED ON THE GIVEN DATE. IT WAS SUBMITTED THAT IT IS FOR THE ASSESSEE TO HOLD THE SHARES IN PHYSICAL FORM OR DEMATERI ALIZED FORM. THE ASSESSEE COULD NOT BE PENALIZED EITHER FOR NOT OPEN ING D-MAT A/C. WHEN HE HAD PURCHASED SHARES IN THE PHYSICAL FORM. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT DURING THE INSPECTION OF R ECORDS ALLOWED BY A.O. (AFTER COMPLETION OF ASSESSMENT AND FOR THE PURPOSE OF PREPARATION OF FIRST APPEAL), IT WAS NOTICED THAT TH E BROKER M/S. S.B. 37 BUTHRA & CO. IN THEIR LETTER DT. 10.11.2008 HAD IN FORMED THE A.O THAT THEY HAD TRANSACTIONS WITH SHRI AJAY LALWANI DURING F .Y. 2003-04 AS PER LEDGER ACCOUNT FURNISHED WITH THE SAID LETTER. F ROM THE COPY OF THE LEDGER A/C. EXTRACT RECEIVED FROM THE SAID BROKER, I T WOULD BE SEEN THAT THE NAMES OF BOTH THE COMPANIES THAT RELEVANT DETAIL S I.E. QUANTITIES OF SHARES AND THE AMOUNT OF PURCHASES ARE DULY REFLECTED. IT WAS SUBMITTED THAT THE ASSESSEE IS ASSESSED TO TAX SINCE A.Y. 1 991-92 HAVING SUBSTANTIAL INCOME OUT OF WHICH, HE HAD PURCHA SED SHARES; THE CONTRACT NOTE AND BILL ISSUED BY THE BROKER IS FULL AN D COMPLETE SUPPORTING EVIDENCE FOR PURCHASE OF SHARES. 11. IN CASE OF OASIS CINE COMMUNICATIONS LTD., IT WAS SUB MITTED THAT SHARES WERE PURCHASED ON 4.4.2003, BUT GOT TRANSFE RRED IN THE NAME OF ASSESSEE ON 23.4.2004. THE DELAY WAS DUE TO SOME PROCEDURE UNDERGONE AS THE SHARE CERTIFICATES WERE RECEIVED AFTE R TRANSFER IN THE NAME OF ASSESSEE BEARING ISSUE DATE OF 16.3.2004. IT W AS SUBMITTED THAT THE SHARES PURCHASED ARE RECORDED IN THE BOOKS OF ACCOUNT AND SHOWN IN THE BALANCE SHEET AS ON 31 ST MARCH 2004. THE COPY OF THE BALANCE SHEET WAS SUBMITTED ALONG WITH THE RETURN OF INCOME FOR THE A.Y. 2004-05. ALSO, THE ASSESSEE HAD RECEIVED THE CONTR ACT NOTES AND BROKERS BILL IN THE SAID YEAR ONLY WITHOUT ANY DELAY . THE D.PS DATA ALSO SHOWS THAT THE ASSESSEE HAD SENT THE SHARES IN PHYSICAL FORM BY SUBMITTING THE ORIGINAL SHARE CERTIFICATE TO THE D.P FOR DEMATERIALIZATION. 12. FROM ABOVE DISCUSSION, WE FIND THAT THE ASSESSEE HAD A DDRESSED THE DOUBTS RAISED ON THE DECLARED DATES OF PURCHASES OF ABOVE SHARES. THE LD. D.R. HAS NOT BEEN ABLE TO REBUT THE ABOVE EX PLANATION OF THE ASSESSEE BEFORE US. ADMITTEDLY, IN THE PRESENT CASE BEFOR E US; THE ASSESSEE HAD PURCHASED THE SHARES OUTSIDE STOCK EXCHANGE DI RECTLY FROM THE BROKER IN PHYSICAL FORM THOUGH D-MAT A/C WA S OPENED ON BELATED DATE WITH THIS EXPLANATION THAT AT THE TIME OF PURCHASE OF SHARES, HE WAS NOT HAVING D-MAT A/C. AND ON OPENING OF D-MAT A/C., THE SHARES WERE TRANSFERRED TO THE SAME. BEFORE THE A.O COPIES OF THE SHARE CERTIFICATES HELD BY ASSESSEE IN PHYSICAL FORM WERE PROVIDED WHICH CONTAINED COMPLETE RELEVANT DETAILS SUCH AS ADDR ESS OF REGISTERED OFFICE OF THE COMPANY, SIGNATURES OF THE AU THORIZED SIGNATORY ALONG WITH 2 DIRECTORS SIGNATURE, VALUE OF SHARES WITH PAID UP AMOUNT OF SHARES PURCHASED IN EACH COMPANY, DATE OF ISSUE OF CERTIFICATE, CERTIFICATE NO., REGISTERED FOLIO, NUMB ER OF SHARES WITH THEIR DISTINCTIVE NUMBERS, DATE OF TRANSFER OF SHARES IN THE NAME OF ASSESSEE AND ALSO COPIES OF CONTRACT NOTES ALONG WITH BILL S ISSUED BY SHARE BROKER S.B. BUTHRA & COMPANY. THE ASSESSEE ALSO FU RNISHED RETURNS OF INCOME ALONG WITH BALANCE SHEET FOR THE A .YS. 2004-05 AND 2005-06 DURING WHICH PERIOD, ASSESSEE CLAIMED TO HAVE P URCHASED THOSE SHARES IN QUESTION, COPY OF CONTRACT NOTES ISSUED BY THE BROKER AND CONFIRMATIONS GIVEN BY SHIV OM INVESTMENTS AND CON SULTANCY LTD. AND BY BROKER. WE ARE THUS OF THE VIEW THAT MERELY BECAUSE THERE WAS SUBSTANTIAL DELAY IN TRANSFERRING THE SHARES INTO D-MAT A/C. FROM THE DATE OF PURCHASE AND THE TRANSACTIONS NOT ROUTED THROU GH CALCUTTA STOCK EXCHANGE , THE A.O WAS NOT JUSTIFIED IN DOUBTI NG THE DECLARED DATE OF PURCHASE OF THE SHARES IGNORING THE ABOVE EVID ENCES. IN THE CASE OF CIT VS. SMT. JAMNADEVI AGRAWAL & ORS., ITA NO. 40 OF 2010 (BOMBAY HIGH COURT NAGPUR BENCH), COPY SUPPLIED, T HE PROPERTY BROKER HAD STATED THE SHARE TRANSACTIONS AS SHAM AND BOG US. HOWEVER, THE PURCHASE AND SALE PRICE OF THE SHARES DECLARED BY T HE ASSESSEE WERE IN CONFORMITY WITH THE MARKET SALES PREVAILING O N THE RESPECTIVE 38 DATES, THE RELATED COMPANY HAD CONFIRMED TO HAVE H ANDED OVER THE SHARES PURCHASED BY THE ASSESSEE, SALE OF THE SHARES TO THE R ESPECTIVE BUYERS WAS ALSO SUPPORTED BY THE DOCUMENTS, THE HONBLE HIGH COURT HAS BEEN PLEASED TO UPHOLD THE FINDING OF THE TRIBU NAL THAT TRANSACTIONS WERE GENUINE. LIKEWISE IN THE CASE OF ACI T VS. KAMAL KUMAR S. AGRAWAL (IND.) & ORS (SUPRA) THAT NAGPUR BE NCH OF THE TRIBUNAL HAS ALSO HELD THAT THE FACT THAT THERE WERE DIFFERENCE IN THE INFORMATION AS PER CONTRACT NOTES AND THAT RECEIVED F ROM THE STOCK EXCHANGE IS NOT MATERIAL AS ADMITTEDLY SOME OFF MARKE T TRANSACTIONS WERE NOT REPORTED TO THE STOCK EXCHANGE, THEREFORE SU CH TRANSACTIONS CANNOT BE TREATED AS SHAM MERELY ON ACCOUNT OF SOME D ISCREPANCIES AND THE SALE PROCEEDS OF SHARES CANNOT BE TAXED UNDER SECTION 68 OF THE ACT. SIMILARLY, THE KOLKATA BENCH VS. ITO (SUPR A) HAS HELD THAT IN OFF MARKET TRANSACTIONS I N SHARES, ANY ENQUIRY FROM TH E STOCK EXCHANGE WILL NOT YIELD RESULT IN FAVOUR OF REVENUE, REVENUE HAS TO SEE WHETHER THE SALE HAS BEEN EFFECTED OR NOT AS PER TH E ACCEPTANCE AND ADMISSION OF THE RESPECTIVE STOCK BROKER. UNDER TH ESE CIRCUMSTANCES, WE SET ASIDE THE FIRST APPELLATE ORDER TO THIS EXTENT THAT SHARES IN QUESTION WERE NOT PURCHASED ON THE DECLARED D ATES AND DIRECT THE A.O TO ALLOW THE CLAIMED EXEMPTION U/S. 1 0(38) OF THE ACT ON THE LONG TERM CAPITAL GAIN SHOWN BY THE ASSESSEE ON THO SE SHARES. THE GROUNDS OF THE APPEALS PREFERRED BY THE ASSESSEE AGAI NST THE DENIAL OF THE DEEMED EXEMPTION U/S. 10(38) OF THE AC T ON LONG TERM CAPITAL GAIN ON SALE OF THE ABOVE SHARES ARE THUS ALLOW ED. 13. LIKEWISE IN VIEW OF OUR DISCUSSION, WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER WHEREBY THE LD CIT(A) HAS RIGHTLY ACCEPTED THE COST OF PURCHASE/ACQUISITION OF SHARES AS STATED BY TH E ASSESSEE. THE SAME IS UPHELD. THE GROUNDS OF THE APPEALS PREFERR ED BY THE REVENUE ARE THUS REJECTED. CONSEQUENTLY, APPEALS PRE FERRED BY THE REVENUE ARE DISMISSED AND THOSE PREFERRED BY THE ASSESSEE A RE ALLOWED. 9.7 SINCE THE FACTS OF THE INSTANT CASE ARE IDENTIC AL TO THE FACTS OF THE CASES DECIDED BY THE HONBLE HIGH COURT AS WELL AS THE PUNE BENCH OF THE TRIBUNAL CITED (SUPRA), THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS WE ALLOW THE CLAIM OF LONG TERM CAPITAL G AIN DECLARED BY THE ASSESSEE. GROUNDS RAISED BY THE ASSESSEE ARE ACCOR DINGLY ALLOWED. ITA NO.615/PN/2009 : 10. GROUND RAISED BY THE ASSESSEE ARE AS UNDER : 1] THE LEARNED C.I.T (APPEALS) ERRED IN DISMISSING THE APPEAL OF THE ASSESSEE AND CONFIRMING THE ORDER PASSED THE LEARNED ASSE SSING OFFICER. 2] THE LEARNED ASSESSING OFFICER ERRED IN ASSESSING THE TOTAL INCOME AT RS. 3,68, 71,853/- INSTEAD OF RETURNED INCOME OF R S. 3,28,46,340/- 39 ON THE GROUND OR GROUNDS AS STATED IN THE ASSESSMENT ORDER OR OTHERWISE. 3] THE LEARNED ASSESSING OFFICER ERRED IN NOT ASSESSING T HE INCOME OF RS.3,23,29,876/- AS LONG TERM CAPITAL GAINS AS RETURNED BY THE APPELLANT IN THE RETURN OF INCOME ON THE GROUND OR GROUNDS AS STATED IN THE ASSESSMENT ORDER OR OTHERWISE. 4] THE LEARNED ASSESSING OFFICER ERRED IN MAKING THE ADDITION OF RS.3,63,94,400/- UNDER THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT WHEN ON THE FACTS AND CIRCUMSTANCES OF THE APPELLA NT'S CASE THE SAID PROVISIONS ARE NEITHER APPLICABLE NOR ATTRACTED O N THE GROUND OR GROUNDS AS STATED IN THE ASSESSMENT ORDER OR OTHERWISE. 5] THE LEARNED ASSESSING OFFICER IN PARA 29 OF THE A SSESSMENT ORDER ERRED TO OBSERVE THAT THE AMOUNT OF RS. 5,63,150/- WI LL HAVE TO BE TAKEN AS SHORT TERM CAPITAL GAINS ON THE REASON OR REA SONS FOR THIS PURPOSE AS STATED IN THE SAID PARA OR OTHERWISE. 6] THE LEARNED ASSESSING OFFICER IN PARA 30 OF THE A SSESSMENT ORDER ERRED TO OBSERVE THAT THE PROVISIONS OF SECTION 69 ARE APPLICABLE IN RESPECT OF THE AMOUNT OF RS. 3,58,31,250/- ON THE REA SON OR REASONS FOR THIS PURPOSE AS STATED IN THE SAID PARA OR OTHERWISE. THE LEARNED ASSESSING OFFICER FURTHER ERRED TO OBSERVE THAT THE SHOR T TERM CAPITAL GAINS ON THE SALE OF THE SHARES WILL BE SALE CONSIDERATI ON (-) THE COST OF ACQUISITION I.E., RS. 5,63,150/- AND THE TOTAL TAXABL E INCOME ON ACCOUNT OF SHARE TRANSACTION WOULD BE RS. 3,63,94,400/-. (RS. 3,58,31,250/-+ RS.5,63,150/-- RS. 3,63,94,400/-). 7] THE LEARNED ASSESSING OFFICER ERRED IN MAKING TH E ADDITION IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND FA IR PLAY IN AS MUCH AS THE APPELLANT WAS DENIED THE OPPORTUNITY OF CROSS EX AMINING THE VARIOUS PERSONS WHOSE STATEMENT WERE RECORDED BEHIND THE BACK OF THE APPELLANT. THE LEARNED ASSESSING OFFICER FURTHER ER RED IN STATING THAT THE APPELLANT DESPITE OPPORTUNITY BEING GIVEN H AD NOT AVAILED THE OPPORTUNITY OF SUCH CROSS-EXAMINATION. THE APPELLANT THEREFORE SUBMITS THAT THE IMPUGNED ADDITION IS ILLEGAL AND BAD IN LAW. ON THIS GROUND ALONE, THE ADDITION MADE BY THE ASSESSING OFFIC ER IS ALLOWABLE TO BE QUASHED. 8] I) THE LEARNED ASSESSING OFFICER ERRED TO H OLD THAT THERE WAS NO PURCHASE OF SHARES BY THE APPELLANT ON THE GROUND OR GROUNDS AS STATED IN THE ASSESSMENT ORDER OR OTHERWISE WHEN IN FACT EV IDENCE PUT FORWARD BY THE APPELLANT CLEARLY ESTABLISHES SUCH PURCHASES . II) THE LEARNED ASSESSING OFFICER ERRED IN MAKING THE FALSE ALLEGATION ON THE APPELLANT THAT THE EVIDENCE PRODUCED BY THE APPELLANT WAS A FORGED EVIDENCE ON THE GROUND OR GROUNDS AS STATED I N THE ASSESSMENT ORDER OR OTHERWISE. THE APPELLANT HEREBY STRONGLY OB JECTS TO THE SAME AND PRAY YOUR HONOUR TO ISSUE APPROPRIATE DIRECTIONS TO THE ASSESSING OFFICER. III) THE LEARNED ASSESSING OFFICER FAILED TO APPRECIA TE THAT THERE CANNOT BE ANY SALE WITHOUT PURCHASE AN SINCE THE SA LE IS SUPPORTED BY THE UNDISPUTED EVIDENCE THE FINDING OF THE ASSESSING OFFICE R THAT THERE WAS NO PURCHASE IS TOTALLY ERRONEOUS. 40 IV) THE LEARNED ASSESSING OFFICER FAILED TO APPRECI ATE THAT THE RECORDS PRODUCED BY THE COMPANY CLEARLY ESTABLISHES THAT SH ARES WERE TRANSFERRED IN THE NAME OF THE APPELLANT BY THE SAID COMPANY AND THEREFORE IT CANNOT BE SAID THAT NO SHARES WERE PURC HASED BY THE APPELLANT. V) THE LEARNED ASSESSING OFFICER FAILED TO APPRECIATE THAT WHEN SHARES WERE PURCHASED BY THE APPELLANT THERE WAS SUFFICIEN T CREDIT BALANCE OF THE APPELLANT IN THE BOOKS OF THE BROKER ON ACCOUNT OF SALES OF VARIOUS OTHER SHARES. VI) IN ANY EVENT EVEN WHILE PRESUMING THAT SHARES WE RE PURCHASED ON CREDIT IT CANNOT BE SAID THAT THE APPELLANT WAS NOT THE OWNER OF THE SHARES PARTICULARLY WHEN SHARE WERE REGISTERED IN THE N AME OF THE APPELLANT IN THE RECORDS OF THE COMPANY. VII) THE LEARNED ASSESSING OFFICER ERRED IN RE LYING ON THE SEVERAL HIGH COURT AND SUPREME COURT JUDGMENTS WHICH ARE NO T APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE . VIII) THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALT ER, MODIFY AND OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL WHICH A RE WITHOUT PREJUDICE TO ONE ANOTHER. 10.1 AFTER HEARING BOTH THE SIDES, WE FIND THE GROU NDS RAISED BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS IN ITA NO.173 2/PN/2012. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAIS ED BY THE ASSESSEE HAVE BEEN ALLOWED. FOLLOWING THE SAME REASONING, T HE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, THE APPEALS FILED BY THE RESPECT IVE ASSESSEES ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 18-03-2015. SD/- SD/- (SUSHMA CHOWLA) ( R.K. PAN DA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED 18 TH MARCH, 2015 41 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE DR B BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, INCOME TAX APPELLATE T RIBUNAL, PUNE
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