Smt. Sarika Patwari, Kolkata V. DCIT, CC-2(2), Kolkata, Kolkata

ITA 1830/KOL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4043 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-08-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 10-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Assessee Lawyers: ASHOK TULSIYAN
• Keywords: Income from undisclosed sources; Opportunity of cross examination; Tangible material; Corroborative evidences; Accommodation entries; Penny stocks; Capital Gains
• Section: 133A; 201; 131; 68

Judgement Text

1 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] ITA NO.1828/KOL/2017 (AY: 2014-15) SMT. BHAGWATI DEVI PATWARI (PAN:AEYPP3705K) 3, ROWDON STREET, 6 TH FLOOR, BANYAN TREE, KOL-17. VS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), KOLKATA. ITA NO.1829/KOL/2017\ (AY: 2014-15) SMT. PRIYANKA PATWARI (PAN: ALSPK8179K) 3, ROWDON STREET, 6 TH FLOOR, BANYAN TREE, KOL-17. VS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), KOLKATA. ITA NO.1830/KOL/2017 (AY: 2014-15) SMT. SARIKA PATWARI (PAN: ABAPL2442E) 3, ROWDON STREET, 6 TH FLOOR, BANYAN TREE, KOL-17. VS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), KOLKATA. ITA NO.1831/KOL/2017 (AY: 2014-15) SHRI SANJIB PATWARI (PAN: AFRPP9205L) 3, ROWDON STREET, 6 TH FLOOR, BANYAN TREE, KOL-17. VS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), KOLKATA. ITA NO.1832/KOL/2017 (AY: 2014-15) SHRI SANJAY KUMAR PATWARI (PAN: AFPPP9576G) 3, ROWDON STREET, 6 TH FLOOR, BANYAN TREE, KOL-17. VS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), KOLKATA. ITA NO.1833/KOL/2017 (AY: 2014-15) SHRI SUNIL KUMAR PATWARI (PAN: AFVPP3401L) 3, ROWDON STREET, 6 TH FLOOR, BANYAN TREE, KOL-17. VS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), KOLKATA. ITA NO.1834/KOL/2017 (AY: 2014-15) SHRI SAJJAN KUMAR PATWARI (PAN: AEYPP3705K) 3, ROWDON STREET, 6 TH FLOOR, BANYAN TREE, KOL-17. VS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), KOLKATA. ITA NO.2118/KOL/2017 (AY: 2014-15) SAJJAN KUMAR PATWARI (HUF) (PAN:AAFHS3391K 3, ROWDON STREET, 6 TH FLOOR, BANYAN TREE, KOL-17. VS DEPUTY COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-2(2), KOLKATA. APPELLANTS RESPONDENTS DATE OF HEARING DATE OF PRONOUNCEMENT 01.08.2019 23.08.2019 FOR THE APPELLANTS SHRI ASHOK TULSIYAN, FCA FOR THE RESPONDENT SHRI ROBIN CHOUDHURY, ADDL. CIT , SR. DR 2 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. ORDER PER SHRI A.T.VARKEY, JM ALL THESE EIGHT (8) CAPTIONED APPEALS ARE PREFERRED BY EIGHT ASSESSEES/APPELLANTS AGAINST THE SEPARATE ORDERS OF LD. CIT(A) 20 KOLKAT A FOR AY 2014-15. THE FIRST SEVEN APPEALS IN THE CAPTIONED APPEALS ARE AGAINST THE O RDER DATED 05.07.2017 AND LAST APPEAL IS AGAINST THE ORDER DATED 27.07.2017. SINCE THE ASSES SEES/APPELLENTS ARE FROM THE SAME GROUP AND TRANSACTIONS IN QUESTION ARE IDENTICAL IN NATUR E AND GROUNDS ARE COMMON AND FACTS ARE SIMILAR IN ALL CASES, FOR THE SAKE OF CONVENIENCE W E DISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED ORDER. SINCE FACTS NARRATED THEREIN B EING IDENTICAL AND THEY HAVE BEEN TAKEN IN TO CONSIDERATION FOR DECIDING ALL THESE APPEALS. WE ARE TAKING THE APPEAL OF THE APPELLANT IN I.T.A. NO. 1828/KOL/2017 IN THE CASE OF SMT. BHAGWA TI DEVI PATWARI AS THE LEAD CASE AND THE RESULT OF WHICH WILL BE FOLLOWED FOR OTHER SEVE N APPEALS ALSO. 2. THE SOLITARY ISSUE INVOLVED IN THE APPEAL RELATE S TO THE ACTION OF THE LD. CIT(A) IN CONFIRMING ADDITION OF RS.2,01,67,214/- MADE BY THE AO OUT OF THE TOTAL PROCEEDS OF RS.14,36,04,042/- RECEIVED BY THE APPELLANT ON SALE OF SHARES. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL WHO HA D FILED HER RETURN OF INCOME FOR AY 2014- 15 DECLARING TOTAL INCOME OF RS.23,29,684/-. IN THE RETURN OF INCOME, THE APPELLANT HAD DECLARED LONG TERM CAPITAL GAIN OF RS.13,03,49,090/ - DERIVED ON SALE OF VARIOUS LISTED SHARES WHICH WAS CLAIMED EXEMPT U/S 10(38) OF THE ACT. SUR VEY OPERATION U/S 133A WAS CONDUCTED UPON RASHMI GROUP ON 22.01.2016 TO WHICH THE APPELL ANT BELONGS. THEREAFTER, THE CASE OF THE APPELLANT WAS SELECTED FOR SCRUTINY. IN THE COU RSE OF ASSESSMENT THE APPELLANT FURNISHED SCRIP WISE BREAK-UP OF THE LONG TERM CAPITAL GAIN E ARNED DURING THE YEAR AND WHICH WAS CLAIMED EXEMPT U/S 10(38). VIDE SCN DATED 14.03.201 6, THE AO SET OUT THE GENERAL BACKGROUND OF INVESTIGATION CONDUCTED BY THE INVEST IGATION WING AT KOLKATA IN 84 SCRIPS WHICH LED TO SUSPICION THAT LONG TERM CAPITAL GAIN DERIVED BY ASSESSEES IN SUCH SCRIPS WAS PRE-ARRANGED AND/OR BOGUS. HE THEREFORE REQUIRED TH E APPELLANT TO EXPLAIN AS TO WHY THE LONG TERM CAPITAL GAIN DERIVED ON SALE OF VARIOUS LISTED SHARES SHOULD NOT BE TREATED TO BE BOGUS IN NATURE. IN RESPONSE THE APPELLANT FURNISHED HER EXP LANATION ON 22.03.2016 WHEREIN SHE 3 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. FURNISHED ALL THE RELEVANT DOCUMENTARY EVIDENCES TO SUBSTANTIATE HER TRANSACTIONS CONDUCTED IN THESE LISTED SHARES. SHE FURTHER EXPLAINED THAT SHE WAS REGULARLY INVESTING IN SHARES OF BOTH LISTED AND UNLISTED COMPANIES AND THAT ALL THE LISTED SHARES WERE SOLD ON THE FLOOR OF THE STOCK EXCHANGE AT PREVAILING MARKET PRICES THROUGH REGISTERED STOCK BROKER. THE APPELLANT FURTHER SUBMITTED THAT THERE WAS NO INCRIMINATING M ATERIAL FOUND IN SURVEY PROCEEDING WHICH WOULD IN ANY MANNER PROVE THAT THE GAINS DERIVED BY HER ON SALE OF LONG-TERM LISTED SHARES WAS BOGUS. AFTER EXAMINING THE CONTENTIONS PUT FORT H BY THE APPELLANT, THE AO NOTED THAT SUBSEQUENT TO THE SURVEY OPERATION, THE SURVEY TEAM HAD PREPARED CASH TRAILS IN RESPECT OF APPELLANTS TRANSACTIONS INVOLVING SALE OF SHARES. IT WAS NOTED THERE FROM THAT IN SOME INSTANCES CASH WAS DEPOSITED IN COMPANIES INVOLVED IN PROVIDING ACCOMMODATION ENTRIES AND THEREAFTER THROUGH SEVERAL LAYERS, SUCH CASH CA ME THROUGH BANKING CHANNELS INTO THE COFFERS OF THE APPELLANT ON ACCOUNT OF SALE OF SHAR ES. THE AO REPRODUCED THE CASH TRAIL PREPARED BY THE SURVEY TEAM AT PAGES 6 TO 12 OF THE ASSESSMENT ORDER. FROM THE SAID CASH TRAIL, THE AO INFERRED THAT AN AMOUNT OF RS.10 CROR ES WAS TRANSFERRED TO ONE M/S REACHSMARTDEALTRADEPVT LTD THROUGH CASH DEPOSITS IN VARIOUS COMPANIES IN THE MONTH OF FEBRUARY 2014 WHICH WAS ULTIMATELY PASSED ON TO THE INDIVIDUALS BELONGING TO THE RASHMI GROUP WHICH INTER ALIA INCLUDED THE APPELLANT. THE AO NOTED THAT DURING THE MONTH OF FEBRUARY 2014, ALL THE INDIVIDUALS BELONGING TO RAS HMI GROUP TAKEN TOGETHER HAD RECEIVED PROCEEDS ON SALE OF LISTED SHARES AGGREGATING TO RS .8,36,72,553/- FROM THEIR REGISTERED STOCK BROKER, OUT OF WHICH RS.2,01,67,214/- PERTAINED TO THE APPELLANT. ACCORDING TO AO ALTHOUGH THE APPELLANTS EXPLANATION THAT SHE WAS IN NO MANN ER INVOLVED IN DERIVING UNSCRUPULOUS GAINS FROM RIGGED TRANSACTIONS IN PENNY STOCKS HAD SUBSTANCE; BUT HE HELD THAT THE CASH TRAIL OF FEBRUARY 2014 SHOWED THAT THE APPELLANT HAD MANA GED TO BRING BACK UNACCOUNTED MONIES TO THE TUNE OF RS.2,01,67,214/- THROUGH HER BROKER , M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED. THE AO THEREFORE HELD THAT NO ADV ERSE VIEW WAS BEING TAKEN REGARDING THE APPELLANTS TRANSACTIONS IN LISTED SHARES (WHIC H YIELDED CAPITAL GAIN OF RS.13,03,49,090/-) BUT THE CASH TRAIL UNEARTHED IN COURSE OF SURVEY SH OWED THAT DURING THE PERIOD 08.02.2014 TO 28.02.2014 THE APPELLANT HAD BROUGHT BACK HER UNACC OUNTED MONIES TO THE TUNE OF RS.2,01,67,214/- THROUGH BANKING CHANNELS AND HENCE ADDED THE SAME U/S 68 OF THE ACT. ON 4 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. APPEAL THE LD. CIT(A) CONFIRMED THE ORDER OF THE AO . BEING AGGRIEVED BY THE APPELLATE ORDER OF LD. CIT(A), THE APPELLANT IS NOW IN APPEAL BEFOR E US. 3. ASSAILING THE ACTION OF THE LD. CIT(A), THE LD. AR OF THE APPELLANT SUBMITTED THAT THE APPELLANT WAS A REGULAR INVESTOR IN SHARES & SECURI TIES OF DIFFERENT COMPANIES. HE INVITED OUR ATTENTION TO HER BALANCE SHEET FOR THE THREE YE ARS WHICH APPEARED AT PAGES 219 TO 228 OF PAPERBOOK TO SHOW THAT SHE CONSISTENTLY HELD SUBSTA NTIAL INVESTMENTS IN SHARES OF DIFFERENT COMPANIES. HE FURTHER SUBMITTED THAT APPELLANT HAD SOLD SEVERAL LISTED SCRIPS DURING THE RELEVANT YEARS FROM WHICH SHE DERIVED PROCEEDS OF R S.14,36,04,042/- YIELDING CAPITAL GAIN OF RS.13,03,49,090/-. IT WAS THE LD. ARS CONTENTIO N THAT THE AO HAD NOWHERE DISPUTED THE GENUINENESS OF THE CAPITAL GAINS OR FOR THAT MATTER THE GENUINENESS OF THE TRANSACTIONS IN THE SHARES OF LISTED SECURITIES. HE BROUGHT TO OUR NOTI CE THAT ALL THE LISTED SHARES WERE SOLD THROUGH THE SAME STOCK BROKER ON SEVERAL DATES ON T HE ELECTRONIC PLATFORM OF THE STOCK EXCHANGE. IT WAS POINTED OUT THAT THE ENTIRE SALE P ROCEEDS OF RS.14,36,04,042/- WAS RECEIVED FROM THE SAME BROKER VIZ. M/S EUREKA STOCK AND SHAR E BROKING SERVICES LIMITED. THE LD. AR THUS CONTENDED THAT WHEN THE AO HAD ACCEPTED THE GENUINENESS OF THE RECEIPTS TO THE EXTENT OF RS.12,34,36,828/-, THERE WAS NO REASON FO R THE AO TO DOUBT THE GENUINENESS OF THE MONIES RECEIVED FROM THE BROKER DURING THE MONTH OF FEBRUARY 2014. EXPLAINING THE MODUS OPERANDI THROUGH WHICH THE LISTED SHARES WERE TRANS ACTED ON THE FLOOR OF STOCK EXCHANGE, THE LD. AR SUBMITTED THAT IT WAS NOT POSSIBLE FOR THE A PPELLANT TO KNOW THE COUNTER PARTY WHO PURCHASED THE SHARES SOLD BY HER AND ALSO THE SOURC E OF FUNDS OF THE PURCHASER. HE THEREFORE SUBMITTED THAT THE CASE MADE OUT BY THE AO THAT THE COUNTER PARTY WHO HAD PURCHASED THE SHARES DURING FEBRUARY 2014 ACTED AT THE BEHEST OF THE APPELLANT TO ROUTE HER UNACCOUNTED MONIES WAS NOT PRACTICALLY POSSIBLE. HE CLAIMED THA T THE INTERFERENCE DRAWN WAS BASED SOLELY ON FIGMENT OF AOS IMAGINATION. HE FURTHER C ONTENDED THAT THE ALLEGED CASH TRAIL REPRODUCED BY THE AO AT PAGES 6 TO 12 OF HIS ORDER WAS BASED SOLELY ON SURMISES AND CONJECTURES. THE LD. AR SUBMITTED THAT THE LOWER AU THORITIES HAD NEITHER PROVIDED THE BASIS OR THE BANK STATEMENTS OF THE INTERMEDIARY PARTIES TO THE APPELLANT IN SUPPORT OF THE ALLEGED CASH TRAIL. HE FURTHER CONTENDED THAT NOTHING WAS B ROUGHT ON RECORD EITHER BY THE SURVEY TEAM OR THE AO OR THE LD. CIT(A) WHICH IN ANY MANNE R PROVED THAT THE SO-CALLED CASH 5 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. DEPOSITS ALLEGED TO HAVE BEEN UNEARTHED WERE PROVID ED BY THE APPELLANT AND/OR HER FAMILY MEMBERS. HE ALSO POINTED OUT THAT THE ALLEGED STATE MENTS U/S 131 REFERRED TO BY THE AO DID NOT CONTAIN ANY REFERENCE TO THE APPELLANT OR THE G ROUP TO WHICH SHE BELONGED AND HENCE WERE IRRELEVANT IN THE FACTS OF THE APPELLANTS CAS E. HE FURTHER CONTENDED THAT SUCH STATEMENTS COLLECTED AT THE BACK OF THE APPELLANT W ITHOUT PROVIDING HER OPPORTUNITY OF CROSS EXAMINATION RENDERED THE IMPUGNED ASSESSMENT BAD IN LAW. 4. PER CONTRA THE LD. DR APPEARING ON BEHALF OF THE REVENUE SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. HE PLACED ON OUR RECORD A COPY O F THE STATEMENT RECORDED AT THE TIME OF SURVEY CONDUCTED ON THE APPELLANTS STOCK BROKER, M /S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED ON 30.03.2015 AND CONTENDED THAT E VEN THE BROKER HAD ADMITTED TO PROVIDING ACCOMMODATION ENTRIES IN FORM OF BOGUS LT CG TO VARIOUS ASSESSEES WHICH PROVED BEYOND DOUBT THAT THE PROCEEDS OF RS.2,01,67 ,214/- RECEIVED BY THE APPELLANT ON SALE OF SHARES WAS IN-GENUINE. HE THUS CONTENDED THAT TH ERE WAS NO NEED TO INTERFERE WITH THE ORDER OF LOWER AUTHORITIES. HE FURTHER SUBMITTED TH AT THE CHART OF CASH TRAIL REPRODUCED BY THE AO WAS SUFFICIENT EVIDENCE TO ESTABLISH THAT THE PR OCEEDS TO THE EXTENT OF RS.2,01,67,214/- RECEIVED BY THE APPELLANT FROM HER BROKER, M/S EURE KA STOCK AND SHARE BROKING SERVICES LIMITED WAS ACTUALLY HER OWN UNACCOUNTED MONEY. ACC ORDING TO LD. DR, THE AO WAS UNDER NO OBLIGATION TO SHARE THE DETAILS OF THE CASH TRAI L. HE FURTHER SUBMITTED THAT THE STATEMENTS U/S 131 HAD BEEN PROVIDED TO THE APPELLANT AND THAT IT WAS THE APPELLANT WHO DID NOT AVAIL THE OPPORTUNITY TO CROSS EXAMINE THE THIRD PARTIES. REFERRING TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ITO VS M.PIRAICHOODI ( 334 ITR 262), THE LD. DR CONTENDED THAT IN CASE THE APPELLANT DESIRED TO KNOW THE BASI S OF CASH TRAIL, SUPPORTING BANK STATEMENTS ETC. AND ALSO AVAIL THE OPPORTUNITY TO CROSS EXAMIN E, THEN THE MATTERS BE RESTORED TO THE FILE OF THE AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH PART IES AND PERUSED THE CASE RECORDS. IN THE PRESENT CASE, THE AO NOTED THAT DURING THE YEAR UNDER CONSIDERATION THE APPELLANT HAD DISPOSED HER EXISTING INVESTMENTS IN SHARES OF VARI OUS BODY CORPORATES ON SEVERAL DATES. EXCEPT THE SALE PROCEEDS RECEIVED IN THE MONTH OF F EBRUARY 2014, THE AO ACCEPTED THE 6 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. GENUINENESS OF ALL TRANSACTIONS CONDUCTED BY THE AP PELLANT IN LISTED SHARES DURING THE RELEVANT YEAR AFTER CONDUCTING THOROUGH ENQUIRIES A ND INVESTIGATION. IT WAS ONLY IN RESPECT OF THE SALE PROCEEDS AGGREGATING RS.2,01,67,214/- RECE IVED DURING THE PERIOD 08.02.2014 TO 28.02.2014,THE AO HELD THAT THE SAME REPRESENTED UN ACCOUNTED INCOME OF THE APPELLANT AND ACCORDINGLY ASSESSED U/S 68 OF THE ACT. 6. IN THIS REGARD WE NOTE THAT IN THE IMPUGNED ORDE R THE RELEVANT FINDINGS OF THE AO WERE AS FOLLOWS: THE EXPLANATION GIVEN BY THE A/R IN HIS SUBMISSION REGARDING THE INVOLVEMENT OF THE ASSESSEE IN MAKING GAINS FROM RIGGED TRANSACTION IN PENNY STOCK S WAS CONSIDERED. THE EXPLANATION APPEARS TO BE HAVING SUBSTANCE . THE CHART OF CASH TRAIL MENTIONED ABOVE UNEARTHED IN POST-SURVEY OPERATION OF RASHMI GROUP IS QUITE INDICATIVE OF THE FACT THA T OR RATHER CONFIRMS THE BELIEF THAT THE UNACCOUNTED MONEY OF THE ASSESSEE WAS ROUTE BACK IN THEIR BANK ACCOUNTS THROUGH VARIOUS JAMAKHARCHI COMPANIES WHERE CASH DEPOSIT HAS BEEN FOUND. HENCE BY THIS WAY THE ASSESSEE WAS SUCCESSFUL IN BRINGING BACK THEIR UNACCOUNTED INCOM E TO THE BANK ACCOUNTS. FROM THE RECORDS IT CAN BE SEEN THAT IN THE MONTH OF FEBRUARY 2014 FROM 08.02.14 TO 28.02.14 THE ASSESSEE HAD MANAGED TO BRING FUNDS AMOUNTING TO RS . 2,01,67,214/- FROM EUREKA STOCK & SHARE BROKING SERVICES LTD TO HIS BANK ACCOUNT AS DETAILE D UNDER: DATE AMOUNT(RS.) 08-FEB-14 42,85,656 14-FEB-14 25,07,467 15-FEB-14 36,27,737 18-FEB-14 25,71,223 21-FEB-14 9,44,151 22-FEB-14 19,63,151 25-FEB-14 7,57,330 26-FEB-14 25,63,835 27-FEB-14 9,46,664 201,67,214 THUS, GIVING THE BENEFIT OF DOUBT TO THE ASSESSEE, NO ADVERSE VIEW IS TAKEN REGARDING INVOLVEMENT OF THE ASSESSEE IN THE RACKET OF PENNY STOCK TRANSACTI ONS . HOWEVER, THE CASH TRAIL UNEARTHED AFTER THE POST-SURVEY OPERATIONS IN CASE OF OWN GROUP OF THE ASSESSEE IS RELIED UPON. THUS BASED ON THE CHART OF CASH TRAIL AS DISCUSSED IN FOREGOING PARAGRAPH THE AMOUNT OF RS. 47,73,056/- RECEIVED BY THE ASSESSEE FROM EUREKA STOCK & SHARE BROKING SERVICES LTD DURING THE PERIOD FROM 08.02.14 TO 7 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. 28.02.14 IS TREATED AS HIS OWN UNACCOUNTED CASH BRO UGHT INTO BOOKS THROUGH BANKING CHANNELS. AS SUCH, THIS AMOUNT IS ADDED TO HIS TOTAL INCOME AS U NEXPLAINED CREDIT U/S 68. (EMPHASIS SUPPLIED) 7. IT IS RELEVANT TO NOTE FROM ABOVE THAT HAVING EX AMINED THE APPELLANTS SHARE TRANSACTIONS THROUGHOUT THE YEAR THE AO DID NOT FIN D ANY INFIRMITY OR FALSITY IN ANY TRANSACTIONS EXCEPT THE ONES AGAINST WHICH THE PROC EEDS WERE RECEIVED DURING THE PERIOD 08.02.2014 TO 28.02.2014. BEFORE US, THE LD. DR JUS TIFIED THE ORDERS OF THE LOWER AUTHORITIES BY PLACING RELIANCE ON THE STATEMENT OF MR. RAKESH SOMANIWHICH WAS RECORDED IN THE COURSE OF SURVEY CONDUCTED AGAINST M/S EUREKA STOCK AND SH ARE BROKING SERVICES LIMITEDON 30.03.2015. ACCORDING TO THE LD. DR, MR. RAKESH SOM ANI, DIRECTOR OF M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED IN HIS SWORN STA TEMENT HAD ADMITTED OF PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF BOGUS LONG TER M CAPITAL GAIN. THE LD. DR THEREFORE CLAIMED THAT IF THE STATEMENT OF MR. RAKESH SOMANI WAS READ IN CONJUNCTION WITH THE CASH TRAIL PREPARED BY THE AO THEN THE UNMISTAKABLE CONC LUSION THAT CAN BE DRAWN IS THAT THE PROCEEDS RECEIVED DURING THE PERIOD 08.02.2014 TO 2 8.02.2014 TOTALING RS.2,01,67,214/- REPRESENTED APPELLANTS UNDISCLOSED INCOME. ALTHOUG H THE ARGUMENT OF THE LD. DR APPEARED CONVINCING AT FIRST BLUSH, BUT HAVING CONSIDERED TH E FACTS OF THE CASE IN TOTALITY AND MATERIAL ON RECORD WE ARE CONVINCED THAT THESE FACTS AS NARR ATED BY THE LD. DR BY THEMSELVES WERE NOT SUFFICIENT TO ESTABLISH THAT THE PROCEEDS RECEI VED BY THE APPELLANT ON SALE OF SHARES ONLY DURING THE MONTH OF FEBRUARY 2014 REPRESENTED UNACC OUNTED INCOME OF THE APPELLANT. AS RIGHTLY POINTED OUT BY THE LD. AR, IT IS NOTED FROM THE ANSWER GIVEN BY THE BROKER IN REPLY TO Q NO. 7 & 25 THAT HE HAD ADMITTED THAT M/S EUREKA S TOCK AND SHARE BROKING SERVICES LIMITED INDEED HAD GENUINE CLIENTELE TO WHOM THEY R ENDERING SHARE BROKING SERVICES. THE RELEVANT QUESTION AND ANSWER OF MR. RAKESH SOMANIS STATEMENT IS EXTRACTED BELOW: Q NO. 7 PLEASE EXPLAIN THE BUSINESS ACTIVITY OF M/S EUREKA STOCK AND SHARE BROKING SERVICES LTD ANS: EUREKA STOCK AND SHARE BROKING SERVICES LTD IS SEBI REGISTERED STOCK BROKER, DEPOSITORY PARTICIPANT OF NSDL AND CDSL. THE MEMBER SHIP NUMBER OF BSE IS 906, NSE IS 00684 AND MCX-SX IS 36100. THE REGISTRATION NUMBER IN NSDL IS IN3022105 AND CDSL IS 12055800 Q NO. 25 PLEASE STATE WHETHER EVER YOU MET ANY DIRE CTOR OF DIFFERENT JAMAKHARCHI / SHELL COMPANIES WHICH ARE REGISTERED UNDER YOUR BRO KER HOUSE THROUGH DIFFERENT SUB-BROKER ANS: NORMALLY NO SIR, THERE ARE SOME GENUINE CORPOR ATE CLIENTS ALSO. I MET SOME PERSONS AS DIRECTORS OF GENUINE CLIENTS. 8 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. 8. THE LD. AR THEREAFTER TOOK US THROUGH THE ENTIRE STATEMENT OF MR. SOMANITO SHOW THAT NEITHER DID MR. SOMANI AT ANY TIME IDENTIFIED THE A PPELLANT OR ANY MEMBERS OF THE RASHMI GROUP AS BENEFICIARIES OF ALLEGED BOGUS LONG TERM CAPITAL GAIN NOR HE ADMITTED OF PROVIDING ACCOMMODATION ENTRIES TO THE APPELLANT OR TO RASHM I GROUP. HE FURTHER POINTED OUT THAT IN ANSWER TO Q NO. 30 OF HIS STATEMENT REQUIRING HIM T O PROVIDE THE DETAILS OF SCRIPS, PRICES OF WHICH WERE MANIPULATED FOR PROVIDING ALLEGED BOGUS LONG TERM CAPITAL GAIN, MR. RAKESH SOMANI HAD SPECIFICALLY NAMED FOUR SCRIPS ONLY VIZ. ,(I) ESTEEM BIO, (II) GBL INFRA, (III) MISHKA FINANCE&(IV) PARAG SHIPPING. IT IS NOTED THA T THE APPELLANT DID NOT TRANSACT IN ANY OF THE AFORESAID FOUR SCRIPS AND THEREFORE WE FIND MER IT IN THE LD. ARS CONTENTION THAT THERE WAS NEITHER ANY DIRECT OR INDIRECT EVIDENCE WHICH W OULD IN ANY MANNER ESTABLISH THAT M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED BEI NG THE BROKER THROUGH WHICH ALL SHARE TRANSACTIONS OF THE APPELLANT IN LISTED SHARES HAD TAKEN PLACE, WAS ENGAGED IN ROUTING ALLEGED UNACCOUNTED INCOME OF THE APPELLANT AS CLAIMED BY T HE AO. THE MERE FACT THAT MR. RAKESH SOMANI IN HIS STATEMENT RECORDED IN COURSE OF SURVE Y, WHICH WAS INDEPENDENTLY CONDUCTED AND DID NOT HAVE ANY CONNECTION WITH THE ENQUIRY AG AINST THE APPELLANT, HAD ADMITTED OF GRANTING ACCOMMODATION ENTRIES IN SOME INSTANCES, B Y ITSELF WAS NOT CLINCHING EVIDENCE TO HOLD THAT THE APPELLANTS TRANSACTIONS DURING THE M ONTH OF FEBRUARY 2014 WERE INTENDED TO FACILITATE ROUTING OF UNACCOUNTED INCOME. WE FIND T HAT THE MANNER AND MODE OF APPELLANTS SHARE TRANSACTIONS AND THE DOCUMENTATION MAINTAINED IN RESPECT OF SHARE TRANSACTIONS CONDUCTED THROUGH M/S EUREKA STOCK AND SHARE BROKIN G SERVICES LIMITED THROUGHOUT THE FY 2013-14 REMAINED IDENTICAL AND THEREFORE IF THE AO WAS TO DISBELIEVE THE TRANSACTIONS ONLY FOR THE MONTH OF FEBRUARY 2014, THEN HEAVY BUR DEN WAS ON HIS SHOULDER TO BRING ON RECORD CLINCHING AND COGENT EVIDENCE TO SUPPORT HIS FINDING. IN FACT WE FIND THAT THOUGH BEFORE US THE LD. DR HEAVILY RELIED ON THE STATEMEN T OF MR. RAKESH SOMANI, THE SAID PERSON OR ANY REPRESENTATIVE OF M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED THROUGH WHOM THE SHARE TRANSACTIONS WERE CONDUCTED WAS NEVE R EXAMINED BY THE LOWER AUTHORITIES. WE FURTHER NOTE THAT NOWHERE IN THE ASSESSMENT ORDE R THE AO HAD MADE REFERENCE EITHER TO THE STATEMENT OF MR. RAKESH SOMANI OR TO THE SURVEY OPERATIONS CONDUCTED AGAINST M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED THR OUGH WHOM THE APPELLANT HAD 9 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. CONDUCTED HER SHARE TRANSACTIONS. ON THE CONTRARY W E FIND THAT IN THE SCN DATED 21.11.2016, THE AO HAD DIRECTED THE APPELLANT TO FURNISH HER EX PLANATION WITH REGARD TO ALLEGED SCHEME OF PROVIDING BOGUS CAPITAL MARKET TRANSACTION ENTRI ES BY SHRI D. B. SHAH AND SHRI DEEPAK BANSAL. EXCEPT THESE TWO PERSONS WHO WERE ALLEGEDLY PROVIDING BOGUS ACCOMMODATION ENTRIES THE AO HAD NOT REFERRED TO STATEMENT OF ANY OTHER PERSON FOR COMING TO FINDING THAT APPELLANTS TRANSACTIONS DURING THE MONTH OF FEBRUA RY 2014. WE ALSO NOTE THAT AFTER CONSIDERING THE APPELLANTS REPLY TO THE SHOW CAUSE DATED 21.11.2016, THE AO DID NOT THEREAFTER PURSUE THE SAID QUERY AND ACCEPTED THE A PPELLANTS EXPLANATION THAT SHE WAS NOT IN ANY WAY INVOLVED IN THE ALLEGED RACKET OF PENNY STO CK TRANSACTIONS OPERATED BY THE SAID TWO PERSONS. IN THE LIGHT OF THE FOREGOING FACTS THEREF ORE WE NOTE THAT THE AOS ORDER IS COMPLETELY SILENT & BEREFT OF ANY SPECIFIC DATA OR TANGIBLE MATERIAL CORRELATING ANY PARTICULAR SALE OF SHARE OR INVESTMENT BY THE APPELLANT WITH A CCOMMODATION ENTRIES ALLEGED TO BE PROVIDED BY MR. RAKESH SOMANI. WE THEREFORE HOLD TH AT THE RELIANCE PLACED BY THE LD. DR ON THE ALLEGED STATEMENT OF MR. RAKESH SOMANI RECOR DED U/S 133A WAS MISPLACED AND UNTENABLE ON FACTS AS WELL AS IN LAW. 9. WE HOWEVER ARE CONSCIOUS OF THE FACT THAT THE IS SUE TO BE ADJUDICATED IN THE PRESENT APPEAL IS WHETHER THE AMOUNTS DEPOSITED IN THE APPE LLANTS BANK ACCOUNT BY WAY OF PROCEEDS REALIZED FROM SALE OF INVESTMENTS WAS ASSESSABLE AS HER UNDISCLOSED INCOME U/S 68 OF THE ACT. ON PERUSAL OF THE IMPUGNED ASSESSMENT ORDER IT IS NOTED THAT THE SOLE BASIS OF THE AO FOR JUSTIFYING THE IMPUGNED ADDITION WAS THE CASH T RAIL PREPARED AND EXTRACTED BY HIM IN THE ORDER. WE HOWEVER NOTE THAT IN RESPONSE TO SHOW CAU SE ISSUED BY THE AO, THE APPELLANT HAD FURNISHED ALL THE TRANSACTIONAL DOCUMENTS SUBSTANTI ATING THAT THE PROCEEDS IN QUESTION WERE THE PAYMENTS RECEIVED ON SALE OF LISTED SHARES THRO UGH REGISTERED BROKER ON THE OPEN PLATFORM OF BOMBAY STOCK EXCHANGE. IT IS NOTED THAT THE APPELLANT HAD FURNISHED VARIOUS DOCUMENTS DURING THE COURSE OF ASSESSMENT PROCEEDIN GS I.E. COPIES OF PURCHASE BILLS, COPY OF BANK STATEMENTS SHOWING PAYMENTS MADE FOR PURCHASE OF SHARES, DEMAT ACCOUNT STATEMENT, TRANSACTION STATEMENT FROM BSE, COPIES OF CONTRACT NOTES IN RESPECT OF SALE OF SHARES, COPY OF BANK STATEMENTS SHOWING RECEIPTS AGAINST SALE OF SH ARES ETC. FROM THE DOCUMENTS AS WERE FURNISHED BEFORE THE LOWER AUTHORITIES IN SUPPORT O F THE SALE OF SHARES, WE THEREFORE FIND THAT 10 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. THE PAYMENTS RECEIVED DURING THE MONTH OF FEBRUARY 2014,AGAINST THE LISTED SHARES SOLD ON OPEN PLATFORM OF BSE, WAS THROUGH BANKING CHANNEL A ND EVEN AS PER THE AOS OWN OBSERVATION THE SOURCE AS WELL AS SOURCE OF SOURCE FOR RECEIPT OF SALE CONSIDERATION WERE FOUND THROUGH BANKING ROUTE ONLY. AS NOTED EARLIER, THE AO ACCEPTED THESE TRANSACTIONAL DATA AND DID NOT FIND ANY INFIRMITY OR FALSITY IN T HE APPELLANTS TRANSACTIONS INVOLVING PURCHASE & SALE OF LISTED SHARES. ACCORDING TO AO I N SOME INSTANCES HOWEVER, CASH DEPOSIT TRAILS WERE FOUND IN THE ACCOUNTS OF CERTAIN ENTITI ES AT THE END OF TRAIL OF TRANSACTIONS, WHICH IN HIS OPINION PROVED THE CHARGE THAT PROCEEDS THOU GH RECEIVED IN CHEQUES ISSUED BY THE BROKER BUT ULTIMATE SOURCE OF THE PAYMENT WAS THE A PPELLANTS UNDISCLOSED INCOME. ON SCRUTINY OF THE CASH FLOW CHARTS EXTRACTED AT PAGES 6 TO 12 OF THE IMPUGNED ASSESSMENT ORDER, IT IS NOTED THAT THE IMMEDIATE SOURCE FOR PA YMENTS RECEIVED ON SALE OF SHARES WAS ALWAYS THE FUNDS AVAILABLE IN THE BANK ACCOUNTS OF THE SHARE PURCHASERS. FROM THE FUND FLOW CHARTS WE FIND THAT IN EACH CASE NOT ONLY THE AO WA S ABLE TO IDENTIFY THE COUNTER-BROKER WHO HAD PURCHASED THE SHARES FROM THE BSE PLATFORM BUT HE WAS ALSO ABLE TO IDENTIFY THE ACTUAL PURCHASER WITH ITS NAME, PAN & PARTICULARS OF ITS B ANK ACCOUNT. IN OTHER WORDS, THE AO WAS ABLE TO ESTABLISH THE IDENTITY OF THE PERSONS WHO H AD ACQUIRED THE SHARES, WHICH WERE SOLD BY THE APPELLANT ON THE OPEN PLATFORM OF THE STOCK EXC HANGE. IT IS FURTHER NOTED FROM THE FLOW CHART THAT NOT ONLY THE AO WAS ABLE TO IDENTIFY THE PERSON WHO PAID THE PRICE BUT THE AO WAS FURTHER ABLE TO TRACE THE PERSON FROM WHOM THE REQUISITE FUNDS WERE RECEIVED BY THE SHARE PURCHASER OUT OF WHICH THE PAYMENTS WERE MADE TO THE COUNTER-BROKER. THESE CHARTS THUS PROVED THAT THE AO HIMSELF WAS ABLE IDENTIFY T HE SOURCE AS WELL AS SOURCE OF SOURCE. BOTH THE SOURCES OF PAYMENTS RECEIVED AS PER AOS C HARTS WERE WITHIN THE BANKING CIRCLE ONLY. IT IS NOTED THAT THE AO WAS ABLE TO EXTEND TH E PAYMENT TRAIL UPTO FOUR TO SIX LAYERS. .AT THE END OF TRANSACTION TRAIL HE ALLEGEDLY FOUND CAS H DEPOSITS TOTALING ONLY RS.3,58,90,000/- (PAGES 6 TO 12 OF ASSESSMENT ORDER) AS OPPOSED TO R S.10 CRORES AS CLAIMED IN THE ASSESSMENT ORDER. WE THUS FIND THAT EVEN THOUGH THE AO HAS MAD E ALLEGATION OF LAUNDERING APPELLANT GROUPS UNACCOUNTED INCOME TO THE EXTENT OF RS.10 C RORES YET THE AO WAS ABLE TO IDENTIFY THE ALLEGED CASH TRAIL OF RS.3,58,90,000/- ONLY. TH E FOREGOING FACTS THEREFORE GOES ON TO PROVE THAT THE AOS HYPOTHESIS THAT THE APPELLANT G ROUP RESORTED TO AVAILING ACCOMMODATION 11 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. ENTRIES IN THE FORM OF SALE PROCEEDS OF SHARES IS N OT SUPPORTED BY THE MATERIAL WHICH HE HIMSELF GATHERED. 10. WE FURTHER NOTE THAT THE AO ASSESSED THE SALE P ROCEEDS REALIZED BY THE APPELLANT ONLY IN THE MONTH OF FEBRUARY 2014. FROM THE TRANSACTION AL DATA ON RECORD WE FIND THAT DURING THE MONTH OF FEBRUARY 2014 THE APPELLANT HAD SOLD 1 ,60,000 SHARES OF KAILASH AUTO FINANCE LIMITED FOR RS.60,57,453/- AND 1,47,000 SHARES OF M/S LIFELINE DRUGS LTD FOR RS.2,69,28,185/-. IT IS ONLY IN RESPECT OF THE SHAR ES SOLD IN THE MONTH OF FEBRUARY 2014, THE AO HAS ALLEGED THE SAME TO BE SHAM. WE HOWEVER NOTE THAT DURING THE FY 2013-14 THE APPELLANT SOLD 6,50,000 SHARES OF KAILASH AUTO FINA NCE LTD AND REALIZED RS.2,53,35,910/-. THESE SHARES WERE SOLD DURING THE PERIOD NOVEMBER 2 013 TO MARCH 2014 SIMILARLY DURING FY 2013-14, THE APPELLANT SOLD 1,99,000 SHARES OF M /S LIFELINE DRUGS LTD FOR RS.3,49,26,010/- DURING THE PERIOD JANUARY 2014 TO MARCH 2014. ALL THE SHARES WERE SOLD ONLY THROUGH M/S EUREKA STOCK AND SHARE BROKING SER VICES LIMITED. THE NATURE OF TRANSACTIONAL DOCUMENTS EVIDENCING SALE OF ALL THE SHARES WERE SAME AND IDENTICAL AND BARRING THE SALE TRANSACTIONS CONDUCTED IN THE MONT H OF FEBRUARY 2014, THE AO DID NOT FIND ANY INFIRMITY OR FALSITY IN THE SHARE TRANSACTIONS. RATHER WE NOTE THAT IN THE IMPUGNED ORDER THE AO AFTER VERIFYING THE SUPPORTING EVIDENCES REC ORDED A FINDING THAT THE EXPLANATION FURNISHED BY THE APPELLANT SUBSTANTIATING THE GENUI NENESS OF THE APPELLANTS TRANSACTIONS INVOLVING PURCHASE & SALE OF VARIOUS LISTED SHARES HAD SUBSTANCE AND ALSO STATED THAT THE APPELLANT WAS NOT INVOLVED IN THE ALLEGED RACKET OF PENNY STOCK TRANSACTIONS. EVEN WITH REGARD TO TRANSACTIONS IN THE MONTH OF FEBRUARY 201 4, THE ADVERSE INFERENCE WAS DRAWN ONLY BECAUSE AS PER THE TRANSACTION TRAIL PREPARED BY HI M, HE HAD ALLEGEDLY FOUND CASH DEPOSITS OF ONLY RS.3,58,90,000/- IN SOME BANK ACCOUNTS WHICH I N HIS OPINION CONSTITUTED THE ULTIMATE SOURCE FOR PAYMENTS RECEIVED BY THE APPELLANT GROUP . THESE FACTS CONSIDERED CUMULATIVELY MERIT IN THE LD. ARS CONTENTION THAT THE AOS REAS ONING JUSTIFYING THE IMPUGNED ADDITION WERE NOT ONLY CONTRADICTORY BUT ALSO SUFFERED FROM FACTUAL INFIRMITIES AND INCONSISTENCIES. 11. IT IS NOT IN DISPUTE THAT THE APPELLANT HELD SH ARES OF VARIOUS LISTED COMPANIES WHICH WERE ACQUIRED BY PAYING VALUABLE CONSIDERATION. THE SHARES TRANSFERRED DURING THE YEAR WERE 12 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. ACQUIRED BY THE APPELLANT IN THE PRIOR YEARS OUT OF THE DECLARED & ACCOUNTED SOURCE. IN THE PAST ASSESSMENTS, THE AO HAD ACCEPTED THAT THE INVE STMENTS HELD WERE ACQUIRED BY THE APPELLANT OUT OF HER OWN FUNDS AND ACCEPTED TO BE G ENUINE. ADMITTEDLY THE SHARES WERE SOLD THROUGH REGISTERED SHARE BROKERS ON THE OPEN PLATFO RM OF BSE WHERE THE SELLERS AND BUYERS ARE ANONYMOUS. AGAINST THE SHARES TRANSFERRED DURIN G THE RELEVANT YEAR, THE APPELLANT HAD RECEIVED ITS MONETARY VALUE WHICH WAS PAID BY UNREL ATED PARTIES. AS NOTED EARLIER, IN THE IMPUGNED ORDER THE AO HIMSELF AGREED WITH THE EXPLA NATION FURNISHED BY THE APPELLANT SUBSTANTIATING THE GENUINENESS OF THE APPELLANTS T RANSACTIONS INVOLVING PURCHASE & SALE OF VARIOUS LISTED SHARES AND STATED THAT THE APPELLANT WAS NOT INVOLVED IN THE ALLEGED RACKET OF PENNY STOCK TRANSACTIONS. IN VIEW OF THE FOREGOING THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE MANNER & MODE IN WHICH SHARE PURCHASERS AR RANGED REQUISITE FUNDS TO MEET COST OF PURCHASE WAS NOT DETERMINATIVE IN DECIDING WHETHER THE APPELLANTS SHARE TRANSACTIONS WERE GENUINE. FROM WHAT SOURCES AND ON WHAT TERMS THE PU RCHASERS ARRANGED THE REQUISITE FUNDS FOR PURCHASE OF SHARES WAS ENTIRELY AT THE DISCRETI ON OF THE PURCHASERS AND OVER WHICH THE APPELLANT DID NOT HAVE ANY SAY. 12. EVEN IF ONE ACCEPTS THAT THE AOS PROPOSITION A T FACE VALUE AND ASSUME THAT IN SOME INSTANCES HE HAD FOUND THAT THERE WERE DEPOSITS IN CASH IN THE FEW ACCOUNTS AT THE END OF TRANSACTIONS TRAIL; IN OUR CONSIDERED VIEW SUCH FA CT BY ITSELF DID NOT CONCLUSIVELY PROVE THE AOS FINDING THAT THE MONIES DEPOSITED IN THESE ACC OUNTS REPRESENTED UNACCOUNTED INCOME OF THE APPELLANT OR THAT THE CASH DEPOSITS WERE ARR ANGED BY THE APPELLANT OR THAT MONEY RECEIVED BY THE APPELLANT WAS IN FACT THE SAME CASH AS WAS DEPOSITED IN SOME ACCOUNT WHICH DID NOT HAVE DIRECT NEXUS WITH APPELLANTS TRANSACT IONS. EVEN THOUGH IN THE FLOW CHARTS EXTRACTED AT PAGES 6 TO 12 OF ASSESSMENT ORDER, THE AO LISTED OUT NAMES OF FEW PROPRIETARY CONCERNS IN WHOSE ACCOUNTS THE CASH WAS ALLEGEDLY D EPOSITED; WE FIND THAT NOWHERE IN THE ASSESSMENT ORDER THE AO WAS ABLE TO IDENTIFY THE PE RSONS TO WHOM THESE PROPRIETARY CONCERNS BELONGED. WE ALSO FIND THAT THAT NO STATEM ENT OFANY OF THE SO-CALLED PROPRIETORS OF BANK ACCOUNTS WHERE CASH WAS FOUND DEPOSITED, WAS R ECORDED BY THE AO OR BY THE SURVEY TEAM NOR ANY CREDIBLE EVIDENCE WAS GATHERED WHICH S HOWED THAT ANY OF SUCH PERSONS HAD ADMITTED THAT THE CASH DEPOSITED IN THE BANK ACCOUN TS WAS PROVIDED BY THE APPELLANT OR THAT 13 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. THE CASH WAS DEPOSITED FOR THE ULTIMATE BENEFIT OF THE APPELLANT. IN FACT ANALYSIS OF THE FUND FLOW CHART SHOWED THAT IT DID NOT EVEN CONCLUSIVELY PROVE THAT THE CASH DEPOSITED IN SEVERAL ACCOUNTS BY ITSELF CONSTITUTED THE SOLE SOURCE FOR THE AMOUNT WHICH THE APPELLANT ULTIMATELY RECEIVED AS PROCEEDS FOR SALE OF SHARES. EVEN AT TH E TIME OF HEARING THE REVENUE WAS UNABLE TO PROVIDE ANY CORRELATION OR PRESENT THE COPIES OF THE RELEVANT BANK STATEMENTS TO SUBSTANTIATE THE FLOW CHART PREPARED BY THE AO. 13. FOREGOING FINDING MAY BE ILLUSTRATED WITH ONE S PECIFIC INSTANCE OF RS.42,90,000/- WHICH THE ONE OF THE PERSONS OF RASHMI GROUP RECE IVED FROM THE SHARE BROKER, M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED ON SALE OF SHARES. ON PAGE 11 OF THE ASSESSMENT ORDER THE AO DEPICTED IN THE CHART FORM THE MANNER IN WHICH PAYMENT WAS EFFECTED TO THE APPELLANT. ACCORDING TO LD. AO THE ENTIRE SUM OF RS .42,90,000/- HAD A CORRESPONDING CASH DEPOSITED IN A PROPRIETARY CONCERN M/S KUSUM TRADER S. HOWEVER FROM THE CASH FLOW CHART EXTRACTED IN THE ORDER WE NOTE THAT BY AOS OWN ADM ISSION AFTER CASH OF RS.42,90,000/- WAS DEPOSITED IN THE ACCOUNT OF M/S KUSUM TRADERS; SUM OF RS.42.90 LACS LACS WAS PAID TO REACHMART CONSTRUCTION PVT LTD (RCPL). AFTER RECE IVING RS.42.90 LACS, RCPL IN TURN PAID RS.263 LACS TO M/S REACHSMART DEALTRADEPVT LTD (RDPL) WHICH HAD PAID RS.10 CRORES TO M/S HORIZON CONSULTANTS PVT LTD (HCPL). THEREA FTER M/S HORIZON CONSULTANTS PVT LTD HAD UTILIZED THE SUM OF RS.10 CRORES TO PURCHASE TH E SEVERAL LISTED SHARES WHICH WERE SOLD BY THE PERSONS BELONGING TO THE RASHMI GROUP FROM THE FLOOR OF THE STOCK EXCHANGE. SIMILAR FLOW CHARTS HAVE BEEN PREPARED ON OTHER PAGES 6 TO 10&12 OF THE ASSESSMENT ORDER. IF ONE ANALYZES ALL THE FLOW CHARTS TOGETHER, THEN IT IS A PPARENT THAT IN EACH CASE THE IMMEDIATE SOURCE OF RECEIPT OF MONIES IN THE APPELLANTS HAND WAS M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED WHO WAS THE BROKER AND THE SOURCE OF SOURCE WAS M/S HCPL, THE COUNTER PARTY BROKER. THE TRANSACTION BETWEEN THE A PPELLANT AND M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED AND THE TRANSACTION BETWEEN M/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED AND HCPL WAS ADMITTEDLY TH ROUGH BANKING CHANNEL. HCPL RECEIVED THE MONIES FROM RDPL WHO IN TURN HAD RECEI VED IT THROUGH PROPER BANKING CHANNEL FROM SEVERAL ENTITIES. ALL FUND FLOW CHARTS CONSIDE RED TOGETHER, WE FIND THAT THE AGGREGATE SUM OF CASH DEPOSITS TOTALED ONLY RS.3,58,90,000/- AS OPPOSED TO RS.10,00,00,000/- AS 14 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. CLAIMED IN THE ASSESSMENT ORDER. WE ALSO FIND THAT NO CREDIBLE OR TANGIBLE MATERIAL WAS GATHERED WHICH SHOWED THAT SUCH CASH DEPOSITS OF RS .3,58,90,000/- CONSTITUTED THE SOLE AND THE ONLY SOURCE FOR THE AMOUNTS RECEIVED BY THE APP ELLANT WHICH MAY RAISE A SUSPICION. NO DATE-WISE OR BENEFICIARY-WISE LINK BETWEEN THE PAYM ENTS RECEIVED AND PAID BY SUCCESSIVE PARTIES HAS BEEN SET OUT IN THE SO-CALLED CASH TRAI L CHARTS. WE ALSO FIND THAT THE FIGURES OF CASH DEPOSITS FOUND IN THE ACCOUNTS OF PROPRIETORSH IP CONCERNS FOUND BY THE AO AND TRANSFERRED TO THE BODIES CORPORATE DO NOT CORRELAT E IN THE FACTS OF THE GIVEN CASE. IN THE FOREGOING INSTANCE ALTHOUGH THE CASH DEPOSITED WAS RS.42.90 LACS BUT THE SUM PAID THEREAFTER BY RCPL WAS RS.263 LACS, WHICH CLEARLY P ROVE THAT THE SOURCE OF PAYMENT BY RCPL COULD NOT HAVE ONLY BEEN THE CASH DEPOSIT IN T HE ACCOUNT OF M/S KUSUM TRADERS. NO EXPLANATION IS AVAILABLE WITH REGARD TO THE SOURCE OR THE BALANCE SUM OF RS.220 LACS. FURTHER MERELY BECAUSE AT THE FIFTH LAYER THERE WAS DEPOSIT OF CASH BY ITSELF DID NOT LEAD TO CONCLUSION THAT IT WAS ONLY THE CASH DEPOSIT WHICH WAS THE ULTIMATE AND THE SOLE SOURCE FOR PAYMENT RECEIVED. WE HAVE TO BEAR IN MIND THAT THE APPELLANT HAD SOLD THE SHARES THROUGH A REGISTERED STOCK BROKER ON THE OPEN PLATFORM OF BOM BAY STOCK EXCHANGE WHERE THE BUYERS AND COUNTER-BROKERS ARE ANONYMOUS. WE THEREFORE FIN D MERIT IN THE APPELLANTS CLAIM THAT IT WAS NOT POSSIBLE FOR HER TO EXAMINE THE SOURCE OF F UNDS FROM WHICH THE PURCHASER OF THE SHARES HAD RAISED THE REQUISITE SUM. MOREOVER EVEN THE FACTS BROUGHT ON RECORD BY THE AO DID NOT CONCLUSIVELY PROVE THAT IT WAS ONLY THE CAS H DEPOSITED IN THE ACCOUNT OF M/S KUSUM TRADERS WAS THE ACTUAL SOURCE FOR THE AMOUNT PAID B YM/S EUREKA STOCK AND SHARE BROKING SERVICES LIMITED TO THE APPELLANT. IT IS ALSO APPAR ENT FROM THE ORDERS OF LOWER AUTHORITIES THAT NO COGENT MATERIAL WAS BROUGHT ON RECORD WHICH IN A NY MANNER SHOWED THAT EITHER THE SURVEY TEAM OR THE AO HAD IDENTIFIED THE PERSONS TO WHOM THE ENTITIES/CONCERNS BELONGED AND IN WHOSE ACCOUNTS THE CASH WAS ALLEGEDLY DEPOSI TED. IT IS IMPERATIVE TO TAKE NOTE OF THE FACT THAT NEITHER ANY OF THE PROPRIETORS OF BANK AC COUNTS WHERE CASH WAS DEPOSITED WERE PERSONALLY EXAMINED BY THE AO NOR ANY INDEPENDENT E NQUIRIES WERE MADE FROM THEM TO VERIFY THE TRUE & CORRECT FACTS OF THE CASE. THUS, MERELY BECAUSE WHILE TRACING THE SUCCESSIVE LAYERS OF TRANSACTIONS, THE AO FOUND SOME CASH DEPO SITS IN THE ACCOUNTS OF UNRELATED PARTIES; IN OUR CONSIDERED VIEW, ON SUCH FACT ALONE THE AO C OULD NOT RECORD A CONCLUSIVE FINDING THAT THE CASH SO DEPOSITED REPRESENTED APPELLANTS UNDIS CLOSED INCOME WHICH WAS ROUTED THROUGH 15 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. SEVERAL ACCOUNTS. IN OUR CONSIDERED OPINION THEREFO RE, THE SO-CALLED EVIDENCES IN THE FORM OF CASH TRAIL OF TRANSACTIONS DID NOT CONCLUSIVELY PRO VE THE AOS ALLEGED FINDINGS THAT THE PROCEEDS REALIZED BY THE APPELLANT FROM SALE OF SHA RES COULD BE CONSIDERED AS APPELLANTS UNDISCLOSED INCOME. THIS FINDING IS FURTHER FORTIFI ED FROM THE FACT THAT EVEN THROUGH THE AGGREGATE OF THE ADDITIONS MADE U/S 68 IN THESE GRO UP OF CASES IS RS. 6,46,63,639/-, THE ALLEGED CASH DEPOSITS AS PER THE TRAIL FOUND WAS ON LY RS.3,58,90,000/- WHICH IN ITSELF SHOWS THAT THE SAID DEPOSITS WERE NOT SUFFICIENT TO LEAD TO CONCLUSION THAT SALE PROCEEDS REPRESENTED APPELLANTS UNDISCLOSED INCOME INTRODUCED IN THE FO RM OF SALE PROCEEDS. 14. WE FIND THE ENTIRE ASSESSMENT SUBSTANTIALLY PRO CEEDED ON THE AOS SUSPICION THAT THE APPELLANT HAD INDULGED IN LAUNDERING HER UNACCOUNTE D INCOME DURING THE MONTH OF FEBRUARY 2014. THE SUPREME COURT IN THE CASE OF UMA CHARAN S HAW & BROS VS CIT (37 ITR 271) HAS HELD THAT, HOWSOEVER GRAVE THE SUSPICION THE AO MAY ENTERTAIN, THE SUSPICION CANNOT TAKE PLACE PROOF. THE SUSPICION ON THE AOS PART CA N CERTAINLY PROMPT HIM TO CONDUCT ENQUIRY & INVESTIGATION BUT ULTIMATE FINDING OF THE AUTHORITY MUST BE BASED ON THE MATERIAL & EVIDENCES GATHERED AND WHICH HAVE LIVE & DIRECT N EXUS WITH THE FINDING RECORDED BY THE AUTHORITY AFTER OBJECTIVE CONSIDERATION OF FACTS & EVIDENCES GATHERED. IF THE MATERIAL OR EVIDENCE GATHERED DOES NOT HAVE ANY PROXIMATE CAUSE WITH THE FINDING ULTIMATELY REACHED THEN THE FINDING OF THE AUTHORITY HAS TO BE HELD TO BE PERVERSE AND UNSUSTAINABLE. IN THE PRESENT CASE EVEN THOUGH THE LD. DR HAS BROUGHT ON RECORD A STATEMENT RECORDED FROM APPELLANTS BROKER AND THE AO HAS PREPARED CASH TRA IL, WE HOWEVER FIND THAT THE LD. DR WAS UNABLE TO PIN POINT ANY SPECIFIC CORRELATION BETWEE N THE APPELLANTS TRANSACTIONS WITH THE STATEMENT OF THE BROKER. THERE IS NO MATERIAL ON RE CORD FROM WHICH ONE CAN ARRIVE AT THE LOGICAL INFERENCE THAT THE APPELLANTS BROKER HAD A DMITTED OF PROVIDING ACCOMMODATION ENTRIES TO THE APPELLANT. NOTHING INCRIMINATING OR ADVERSE WAS FOUND BY THE SURVEY TEAM FROM THE PREMISES OF THE APPELLANT WHICH WOULD IN A NY MANNER SUGGEST THAT THE APPELLANT WAS THE BENEFICIARY OF THE ACCOMMODATION ENTRIES PR OVIDED BY HER STOCK BROKER. EVEN THE SO-CALLED CASH TRAIL PREPARED BY THE AO HAS BEEN FO UND TO BE FACTUALLY UNTENABLE, AND THE TRAIL DID NOT IN ANY MANNER ESTABLISH, THAT THE PRO CEEDS RECEIVED BY THE APPELLANT ON SALE OF SHARES DURING FEBRUARY 2014 COULD BE CONSIDERED TO BE HER UNEXPLAINED INCOME. ON THE 16 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. CONTRARY THE MATERIAL, WHICH THE APPELLANT HAS PLAC ED ON RECORD, SHOWS THAT THE APPELLANT HAD FURNISHED ALL THE TRANSACTIONAL DOCUMENTS I.E. COPI ES OF PURCHASE BILLS, COPY OF BANK STATEMENTS SHOWING PAYMENTS MADE FOR PURCHASE OF SH ARES, DEMAT ACCOUNT STATEMENT, TRANSACTION STATEMENT FROM BSE, COPIES OF CONTRACT NOTES IN RESPECT OF SALE OF SHARES, COPY OF BANK STATEMENTS SHOWING RECEIPTS AGAINST SALE OF SH ARES ETC., SUBSTANTIATING THAT THE PROCEEDS IN QUESTION WERE THE PAYMENTS RECEIVED ON SALE OF L ISTED SHARES THROUGH REGISTERED BROKER ON THE OPEN PLATFORM OF BOMBAY STOCK EXCHANGE. ALL THE PAYMENTS RECEIVED DURING THE MONTH OF FEBRUARY 2014 AGAINST THE SALE OF SHARES WAS REC EIVED THROUGH BANKING CHANNEL FROM REGISTERED STOCK BROKER AND EVEN AS PER THE AOS OW N OBSERVATION THE SOURCE AS WELL AS SOURCE OF SOURCE FOR RECEIPT OF SALE CONSIDERATION WERE FOUND THROUGH PROPER BANKING CHANNEL. IN FACT THE APPELLANTS TRANSACTIONS IN TH E SAME SHARES CONDUCTED THROUGH THE SAME BROKER, IN MONTHS OTHER THAN FEBRUARY 2014, HAS BEE N ACCEPTED TO BE GENUINE BY THE AO AND NO ADVERSE INFERENCE HAS BEEN DRAWN. IT IS RELEVANT TO REITERATE AT THIS JUNCTURE THAT THE AO HAS RECORDED A FINDING OF FACT ACCEPTING THE EXPLAN ATION FURNISHED BY THE APPELLANT SUBSTANTIATING THE GENUINENESS OF THE APPELLANTS T RANSACTIONS INVOLVING PURCHASE & SALE OF VARIOUS LISTED SHARES AND THAT THE APPELLANT WAS NO T INVOLVED IN THE ALLEGED RACKET OF PENNY STOCK TRANSACTIONS. 15. FOR THE REASONS DISCUSSED IN THE FOREGOING, WE THEREFORE DO NOT FIND THAT THE CONCLUSIONS DRAWN BY THE AO MAKING THE IMPUGNED ADD ITION OF RS.2,01,67,214/- TO BE FACTUALLY AS WELL AS LEGALLY SUSTAINABLE. WE THEREF ORE DIRECT THE AO TO DELETE THE ADDITION OF RS.2,01,67,214/- MADE ON THE GROUND OF BEING UNEXPL AINED INCOME OF THE APPELLANT. 16. IN ITA NOS. 1829 TO 1834/KOL/2017 AND ITA NO. 2 118/KOL/2017, WE NOTE THAT THE FACTS AND THE GROUNDS RAISED BY THE RESPECTIVE APPE LLENTS/ASSESSEES ARE IDENTICAL AND THE IMPUGNED ORDER IS ALSO IDENTICAL AND, THEREFORE, TH E RESULT AS WELL AS THE RATIO OF THE ORDER PASSED IN THE LEAD CASE (I.E. ITA NO. 1828/KOL/201 7) WILL FOLLOW AND, THEREFORE, WE GIVE RELIEF OF RS. 1,73,06,528/-, RS.63,08,365/-, RS.1,1 7,62,580/-, RS.7,53,334/-, RS.20,79,908/-, RS.47,73,056/- AND RS. 15,12,654/- RESPECTIVELY IN RESPECT OF THE INCOME TAX APPEAL CITED SUPRA. 17 ITA NOS. 1828-1834/KOL/2017 & , ITA NO. 2118/KOL/2017, AY 2014-15. 17. IN THE RESULT, ALL APPEALS OF THE APPELLANT ASS ESSEES ARE ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 23RD AUGUST, 2019 SD/- SD/- (DR. A. L. SAINI (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23RD AUGUST, 2019 JD. (SR. PS) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT ASSESSEES. 2 RESPONDENT DCIT, CENTRAL CIRCLE-2(2), KOLKATA. 3 4 5 CIT(A) 20, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES