SANAT KUMAR, NEW DELHI V. ACIT, CIRCLE - 36(1), NEW DELHI

ITA 1881/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0119 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 16-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K BANSAL SENIOR
• Assessee Lawyers: S K GUPTA
• Keywords: Income from undisclosed sources; Earning of tax free income; Application of stay; Question of law; Avoidance of tax; Accommodation entries; Onus to prove; Sham transactions; Borrowed satisfaction; Set aside
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1881/DEL./2018 (ASSESSMENT YEAR : 2014-15) AND STAY NO.233/DEL/2019 (IN ITA NO.1881/DEL./2018) (ASSESSMENT YEAR : 2014-15) SHRI SANAT KUMAR, VS. ACIT, CIRCLE 36 (1), 210, AMBER TOWER, NEW DELHI. COMMERCIAL COMPLEX, AZADPUR, DELHI 110 033. (PAN : AAQPJ3291A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. GUPTA, ADVOCATE REVENUE BY : SHRI N.K. BANSAL, SENIOR DR DATE OF HEARING : 06.06.2019 DATE OF ORDER : 14.06.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, SHRI SANAT KUMAR (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 01.11.2017 PASSED BY THE COMMI SSIONER OF ITA NO.1881/DEL./2018 2 INCOME-TAX (APPEALS)-12, NEW DELHI QUA THE ASSESSME NT YEAR 2014-15 ON THE GROUNDS INTER ALIA THAT :- 1. THE ORDER OF LD. COMMISSIONER OF INCOME TAX (A PPEALS), XII (LD. CIT (A)/LD.AO HAD GROSSLY ERRED IN FACTS AND IN LAW BY HOLDING THAT THE LONG TERM CAPITAL GAINS EARNED BY THE ASSESSEE AND CLAIMED AS EXEMPT U/S 10(38) OF THE ACT, IS AN UNDISCLOSED INCOME WHICH HAS BEEN TAXED U/S 68 READ WITH SECTIO N 115BBE(1) OF THE ACT @30%. 2. THAT THE LD. CIT(A) / LD. AO HAD GROSSLY ERRED I N FACTS AND IN LAW BY HOLDING THAT THE LTCG EARNED BY THE A SSESSEE IS BOGUS, BY TOTALLY IGNORING THE ROBUST DOCUMENTATION SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT AND AP PELLATE PROCEEDINGS. 3. THAT THE LD. CIT(A) / LD. AO HAD GROSSLY ERRED I N FACTS AND IN LAW BY EXTRAPOLATING THE STATEMENTS OF THIRD PARTIES IN THE PRESENT CASE WITHOUT PROVIDING AN OPPORTUNITY FOR C ROSS OBJECTION BY THE ASSESSEE AND ALSO HAD GROSSLY ERRED IN NOT M AKING ANY INDIVIDUAL EFFORTS BY ISSUING SUMMONS TO RECORD THE STATEMENTS OF ANY SEBI OFFICER AND ANY DIRECTOR OF THE COMPANY. 4. THAT THE LD. CIT(A) / LD. AO HAD GROSSLY ERRED I N SIMPLY TAXING AN EXEMPT TRANSACTION OF THE ASSESSEE ON THE BASIS OF A 'BORROWED SATISFACTION'. 5. THAT NEITHER THE LD. CIT(A) NOR THE LD. AO HAD B EEN ABLE TO PROVE BY BRINGING ANY DOCUMENT ON RECORD IN ORDE R TO ESTABLISH THEIR ALLEGATION THAT THE ASSESSEE HAD PU RCHASED THE EXEMPT LTCG FROM THE SHARE BROKER IN QUESTION. 6. WITHOUT PREJUDICE, THE PROVISIONS OF SECTION 68 ARE NOT APPLICABLE IN THE PRESENT CASE WHICH HAS BEEN APPLI ED BY THE LD. CIT(A) / LD. AO. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.24,29,600/- AFTER DECLARING DEDU CTIONS UNDER SECTION 6A (VI) OF THE INCOME-TAX ACT, 1961 (FOR SH ORT THE ACT) RS.1,00,000/-. ASSESSEE HAS ALSO SHOWN LONG TERM C APITAL GAIN ITA NO.1881/DEL./2018 3 (LTCG) OF RS.1,21,69,408/- AND CLAIMED THE SAME AS EXEMPT INCOME U/S 10(38) OF THE ACT ON ACCOUNT OF SALES OF SHARES OF M/S. CRESSANDA SOLUTION LTD.. 3. THE DIRECTORATE OF INVESTIGATION, CALCUTTA UNEAR THED AN ORGANIZED RACKET OF GENERATING BOGUS ENTRIES FOR LT CG WHICH IS EXEMPT FROM TAX. THE MODUS OPERANDI OF THE OPERATO RS WAS TO MAKE THE BENEFICIARY TO PURCHASE SOME SHARES OF PRE -DETERMINED PENNY STOCK COMPANY CONTROLLED BY THEM, THEN THESE SHARES ARE TRANSFERRED TO THE BENEFICIARY AT A NOMINAL PRICE M OSTLY OFF-LINE THROUGH PREFERENTIAL ALLOTMENT OR OFF-LINE SALE TO SAVE STT, BENEFICIARY USED TO HOLD THE SHARES FOR ONE YEAR AN D THEN CLAIMED THE LTCG U/S 10(38) OF THE ACT. THE OPERATORS USED TO RIG THE PRICES OF THE STOCK AND GRADUALLY ENHANCED ITS PRIC E MANY TIMES, OFTENLY 500 TO 1000 TIMES. 4. AO NOTICED THAT THE ASSESSEE IS ONE OF SUCH BENE FICIARIES WHO HAS TAKEN ENTRY OF RS.1,21,69,408/- DURING THE YEAR UNDER ASSESSMENT. INITIALLY, ASSESSEE PURCHASED 25,000 S HARES FOR AN AMOUNT OF RS.2,50,000/- ON 31.10.2011 AND SOLD THE SAME DURING THE PERIOD 27.06.2013 TO 23.09.2013 FOR SALE CONSID ERATION OF RS.1,21,69,408/-. AO FROM THE DETAILS SUPPLIED BY THE ASSESSEE NOTICED THAT THE ASSESSEE INDULGED IN BOGUS LTCG AN D CLAIMED THE AMOUNT OF RS.1,21,69,408/- AS EXEMPT U/S 10(38) OF THE ACT BY WAY ITA NO.1881/DEL./2018 4 OF PURCHASE AND SALE OF SHARES OF CRESSANDA SOLUTIO N LTD. THROUGH ITS BROKER, INDO JATALIA SECURITIES PVT. LTD. AFTE R ISSUING THE NOTICE TO THE ASSESSEE, AO INVESTIGATED THE MATTER AND CAL LED NECESSARY INFORMATION U/S 133 (6) OF THE ACT FROM PRINCIPAL O FFICER, BOMBAY STOCK EXCHANGE. AO EXAMINED THE GENUINENESS OF THE TRANSACTION AND REACHED THE CONCLUSION THAT THOUGH THE TRANSACT ION QUA THE LTCG CLAIMED BY THE ASSESSEE APPEARS REAL BUT IN FA CT ARE SHAM TRANSACTIONS AS THE ASSESSEE HAS ADOPTED A COLOURAB LE DEVICE TO EVADE THE TAX AND FOUND THE TRANSACTION BOGUS, SHAM AND NOTHING BUT A RACKET OF ACCOMMODATION ENTRY AND THEREBY MAD E AN ADDITION OF RS.1,21,69,408/-, AND THEREBY ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.1,45,99,000/-. 5. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE ADDITION BY DISMI SSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME U P BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDER CONTENDED INTER ALIA THAT THE AO AS WELL AS CIT (A) HAVE ITA NO.1881/DEL./2018 5 MADE/CONFIRMED THE ADDITION WITHOUT VERIFYING THE P URCHASE AND SALE OF THE TRANSACTION OF SHARES WITHOUT VERIFYING FROM THE THIRD PARTY; THAT NONE OF THE STATEMENT RECORDED BY THE I NVESTIGATING WING OF THE DEPARTMENT CONTAINS NAME OF THE ASSESSE E AS BENEFICIARY OF THE TRANSACTION ENTERED IN THE DOCUM ENTS AND ITS BROKERS THROUGH WHOM THE ASSESSEE HAD SOLD THE SHAR ES IN QUESTION; THAT THE ASSESSEE HAS NOT BEEN PROVIDED WITH OPPORT UNITY TO CROSS EXAMINE VARIOUS INDIVIDUALS WHOSE STATEMENTS HAVE B EEN RELIED UPON; THAT THE ENTIRE ALLEGATION MADE BY THE AO ARE BASED UPON HIS (AO) IMAGINATION; THAT THE AO HAS WRONGLY MADE THE ADDITION U/S 68 OF THE ACT WHICH IS NOT ATTRACTED; THAT WHEN THE PURCHASE OF SHARES IS GENUINE THEN SALE CANNOT BE QUESTIONED; T HAT THE ADDITION HAS BEEN MADE BY THE AO/CIT (A) ON THE BASIS OF WIL D ALLEGATION WITHOUT ANY EVIDENCE; THAT MOVEMENT IN PRICES OF SH ARES IS BASED ON SUPPLY AND DEMAND FACTOR OF A PARTICULAR SCRIPT AND RELIED UPON THE DECISIONS OF CIT VS. VISHAL HOLDING & CAPITAL PVT. LTD. IN ITA 1031/2010 AND CIT VS. MED SHAVE HEALTH CARE LTD.. 8. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVEN UE TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSES SEE CONTENDED THAT CRESSANDA SOLUTION LTD. HAS BEEN DULY INVESTIG ATED BY DEPARTMENT OF REVENUE INTELLIGENCE (DRI) AND FOUND THAT THE SAME IS A BOGUS COMPANY ENGAGED IN ARRANGING FOR BOGUS L TCG; THAT ITA NO.1881/DEL./2018 6 SINCE CERTAIN AMOUNTS OUT OF SALE OF SHARES IS CRED ITED IN THE BOOKS OF ACCOUNT BY THE ASSESSEE, SECTION 68 IS APPLICABL E AND RELIED UPON DECISIONS OF POOJA AJAMNI VS. ITO ITA NO.5714/DEL/2018 ORDER DATED 25.04.2019 AND UDIT KALRA VS. ITO ITA NO.67 17/DEL/2017 ORDER DATED 08.01.2019 . 9. UNDISPUTEDLY, ASSESSEE HAS PURCHASED 25,000 SHAR ES ON 24.11.2011 BY WAY OF ALLOTMENT FOR RS.2,50,000/-, W HICH WERE DEMATERIALIZED ON 12.06.2013 AND THEREAFTER ASSESSE E SOLD THE SHARES ON 25.06.2013 TO 19.09.2013 FOR RS.1,24,61,9 44/- AFTER DEDUCTING STT OF RS.12,461/- AND OTHER CHARGES OF R S.17,426/- AND THEREBY CLAIMED THE SAME AS EXEMPT U/S 10(38) OF TH E ACT. 10. FROM THE UNDISPUTED FACTS, ARGUMENTS ADDRESSED BY THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE AP PEAL, ORDER PASSED BY THE LOWER REVENUE AUTHORITIES AND CASE LA WS RELIED UPON, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS :- AS TO WHETHER LD. CIT (A) HAS ERRED IN FACTS AND L AW IN CONFIRMING THE DISALLOWANCE OF LONG TERM CAPITAL GA INS MADE BY THE AO, CLAIMED BY THE ASSESSEE U/S 10(38) OF THE ACT ON THE GROUND THAT SHARES WERE PURCHASED BY THE ASSESSEE BY MAKING PAYMENT THROUGH BANKING CHANNEL? 11. PERUSAL OF THE ASSESSMENT ORDER FRAMED BY THE A O APPARENTLY SHOWS THAT A THOROUGH INVESTIGATION HAS BEEN MADE B Y CALLING ITA NO.1881/DEL./2018 7 INFORMATION U/S 133(6) OF THE ACT FROM BOMBAY STOCK EXCHANGE AS TO WHETHER COMPANY, NAMELY, CRESSANDA SOLUTION LTD. WHOSE SHARES HAVE BEEN PURCHASED AND SOLD BY THE ASSESSEE TO CLAIM THE LTCG WAS SUSPENDED FOR TRADE WITHIN LAST THREE YEAR S. AO RECEIVED SPECIFIC REPLY FROM BOMBAY STOCK EXCHANGE THAT AS PER RECORD AVAILABLE WITH THE EXCHANGE, TRADING IN THE SECURITIES OF THE COMPANY, CRESSANDA SOLUTION LTD. WAS SUSPENDED W.E. F. FEBRUARY 18, 2013 ON ACCOUNT OF REDUCTION OF CAPITAL AND REV OKED W.E.F. MARCH 14, 2013. WHEN WE EXAMINE THIS FACT IN THE LIGHT OF THE DATE OF SHARES OF SALE BY THE ASSESSEE I.E. 25.06.2 013 TO 19.09.2013, IT BECOMES CLEAR THAT WORKING OF THE COMPANY WAS NO T ABOVE BOARD AND IT WAS MERELY PROVIDING ACCOMMODATION ENTRIES I N THE FORM OF BOGUS LTCG AND STCG IN ORDER TO EVADE THE TAXES. 12. THE CONTENTION OF THE ASSESSEE THAT HE HAS PURC HASED THE SHARES THROUGH BANKING CHANNEL AND AS SUCH, WHEN TH E PURCHASE IS GENUINE THEN SALE CANNOT BE QUESTIONED, IS NOT TENA BLE BECAUSE THE ENTIRE TRANSACTION OF SALE AND PURCHASE IS TO BE SE EN IN ENTIRETY IN THE LIGHT OF THE ATTENDING CIRCUMSTANCES PARTICULARLY W HEN SHARE OF RS.10 IS SOLD AFTER A PERIOD OF ONE YEAR AT 282 TIMES WHICH IS OTHERWISE IMPROBABLE IN THE ORDINARY COURSE OF BUSINESS. MOR E PARTICULARLY WHEN TRADING OF THE COMPANY WAS SUSPENDED BY BOMBAY STOCK EXCHANGE IN FEBRUARY 2013 AND REVOKED W.E.F. MARCH 2013. ITA NO.1881/DEL./2018 8 13. FURTHERMORE, WHEN DURING THE COURSE OF ARGUMENT , LD. AR FOR THE ASSESSEE WAS ASKED TO EXPLAIN THE BUSINESS OF CRESSANDA SOLUTION LTD., HE FEIGNS IGNORANCE BY STATING THAT ASSESSEE IS NEITHER PROMOTER NOR DIRECTOR OF THE SAID COMPANY AND HE IS UNABLE TO DISCLOSE THESE FACTS. WE ARE OF THE CONSIDERED VIE W THAT WHEN ASSESSEE IS THE BENEFICIARY TO THE MAXIMUM EXTENT, HE CANNOT BE ALLOWED TO STEP ASIDE THE QUESTIONS BECAUSE IN THE ORDINARY COURSE OF BUSINESS, NO ONE CAN BE EXPECTED TO INVEST THE A MOUNT IN A COMPANY HAVING NO PROFILE IN PUBLIC DOMAIN. FIRST OF ALL, ANYBODY WHO MAKES AN INVESTMENT IN THE COMPANY BY WAY OF PU RCHASE OF SHARES, HE USED TO PERUSE THE PROFILE AND GO THROUG H THE BALANCE SHEET OF THE COMPANY. 14. BUT LD. AR FOR THE ASSESSEE HAS ALSO SHOWN HIS HELPLESSNESS TO BRING ON RECORD THE BALANCE SHEET OF THE COMPANY WHICH FURTHER STRENGTHENS THE FINDINGS RETURNED BY THE AO AS WELL AS LD. CIT (A) THAT CRESSANDA SOLUTION LTD. WAS JUST PROVIDING ACC OMMODATION ENTRIES IN FORM OF FICTITIOUS LTCG CLAIM TO EVADE T HE TAXES. 15. WHEN WE EXAMINE PARA 9.1 OF THE LD. CIT (A) HE HAS GIVEN FACTUAL MATRIX OF THE SALE OF THE SHARES BY RECORDI NG THE FINDING THAT THE PRICES OF THE SHARES OF CRESSANDA SOLUTION LTD. WERE BELOW RS.1 PER SHARE TILL JANUARY 2013 BUT SUDDENLY ROSE TO RS .45 PER SHARE IN MAY 2013 ONWARDS. ASSESSEE PURCHASED THE SHARES @ RS.10 WHICH ITA NO.1881/DEL./2018 9 SHOT UPTO RS.476/- TO RS.503.90 PER SHARE IN JUNE A ND JULY 2013. THIS IMPROBABLE APPRECIATION IN THE PRICE OF THE SH ARE WHEN EXAMINED IN THE LIGHT OF THE FACT THAT THE ASSESSEE WAS NOT AWARE OF PROFILE OF CRESSANDA SOLUTION LTD., ITS FINANCIAL P ERFORMANCE, GROWTH, RISK FACTOR, ETC. AND IT MAKES THE ENTIRE T RANSACTION BOGUS AND INGENUINE. 16. THE CONTENTION OF THE LD. AR FOR THE ASSESSEE T HAT HE WAS NOT PROVIDED AN OPPORTUNITY OF CROSS EXAMINING THE WITN ESSES EXAMINED BY THE DRI IS NOT TENABLE BECAUSE ON THE B ASIS OF INVESTIGATION, AO HAS FURTHER CONDUCTED THE INVESTI GATION AND HE HAS CONFRONTED ASSESSEE WITH ALL THE EVIDENCE COLLE CTED BY HIM (AO). 17. MOREOVER, DRI, CALCUTTA HAS THOROUGHLY INVESTIG ATED 84 PENNY STOCK SHARES QUOTED ON BSE AND EXAMINED ON OA TH LARGE NUMBER OF BROKERS, DIRECTORS OF THE COMPANIES, PROM OTERS OF PENNY STOCK COMPANIES, THE ENTRY OPERATORS WHO MANA GED THE DUMMY COMPANIES INVOLVING IN PRICE RIGGING. INVEST IGATION CONDUCTED BY DRI WAS FURTHER SHARED WITH SEBI WHO H AS INVESTIGATED 11 CASES AND FOUND THE ALLEGATIONS TO BE CORRECT. SO, IN THESE CIRCUMSTANCES, MERELY BECAUSE OF THE FACT THAT THE INITIAL PURCHASE HAS BEEN MADE THROUGH BANKING CHANNEL BY T HE ASSESSEE, THE ENTIRE TRANSACTIONS WHICH ARE APPARENTLY APPEAR ED TO BE BOGUS ITA NO.1881/DEL./2018 10 PROVIDING 282 TIMES OF APPRECIATION TO THE ASSESSEE BY THE COMPANY WHOSE BALANCE SHEET AND PROFILE IS NOT AVAILABLE, C ANNOT BE HELD TO BE VALID ONE. 18. NO DOUBT, SHARES OF THESE PENNY STOCK COMPANIES ARE LISTED ON EXCHANGE BUT THEY ARE CONTROLLED BY ITS PROMOTER S WHO USED TO ARRANGE FOR BOGUS LTCG BY INDULGING INTO PRICE RIGG ING ETC. METEORIC RISE IN THE PRICES OF AN UNKNOWN COMPANY W HOSE TRADING IN SECURITIES WAS SUSPENDED ON 18.02.2013 AND SUBSE QUENTLY REVOKED ON 14.03.2013 BY THE BOMBAY STOCK EXCHANGE SHOWS THAT THE TRANSACTION ITSELF IS BOGUS HAVING BEEN PURCHAS ED THROUGH THE BROKERS WHO ARE DEALING IN SUCH DUMMY PURCHASES. I N THE GIVEN CIRCUMSTANCES, THE ASSESSEE HAS FAILED TO PROVE THA T HIS TRANSACTION WAS GENUINE AND HE HAS NOT INDULGED INTO ANY SUCH B OGUS PURCHASES. MOREOVER, WHEN SOME OF THE AMOUNT OUT O F THE SALE OF SHARES IS FOUND TO BE CREDITED IN THE BOOKS OF ACCO UNT OF THE ASSESSEE, SECTION 68 IS APPLICABLE. 19. FURTHERMORE, INVESTIGATION CONDUCTED BY THE DRI FOUND THAT ONE OF THE DIRECTORS OF CRESSANDA SOLUTION LTD., NA MELY, SHRI AJIT KUMAR TULSIYAN CONFESSED THAT SCRIP OF CRESSANDA SO LUTION LTD. HAS BEEN CONTROLLED AND MANAGED BY DEEPAK PATWARI W HICH FACT WAS DULY BROUGHT TO THE NOTICE OF THE ASSESSEE AND HE HAS NOT TRIED TO DISCREDIT THAT STATEMENT BY PRODUCING SHRI AJIT KUMAR TULSIYAN ITA NO.1881/DEL./2018 11 BEFORE THE AO DURING ASSESSMENT PROCEEDINGS PARTICU LARLY WHEN THE SAID STATEMENT WAS MADE PART OF THE SHOW-CAUSE NOTICE ISSUED TO THE ASSESSEE. 20. FOR ARGUMENT SAKE, EVEN IF THE PURCHASE OF THE ASSESSEE IS ASSUMED TO BE GENUINE, THE SALE OF SHARES AT ASTRON OMICAL PRICE WITH NO REAL BUYER IN THE MARKET ITSELF SHOWS THAT THE TRANSACTION WAS BOGUS, SHAM AND INGENUINE ONE. 21. THE CONTENTION OF THE LD. AR FOR THE ASSESSEE T HAT IT HAS DULY SATISFIED THE CONDITIONS LAID DOWN U/S 10(38) OF TH E ACT TO CLAIM THE LTCG OF RS.1,21,69,408/- FROM THE SALE OF SHARES OF CRESSANDA SOLUTION LTD. IS NOT TENABLE WHEN THIS COMPANY, CRE SSANDA SOLUTION LTD., IS PROVED TO BE IN THE AIR AND ASSES SEE IS NOT AWARE OF ITS PROFILE, GROWTH, RISK, ETC. EVEN METEORIC RISE IN THE PRICES OF THE SHARE IN THE GIVEN CIRCUMSTANCES ITSELF PROVES THAT IT WAS MERELY A BOGUS TRANSACTION TO CONVERT THE BLACK MONEY INTO W HITE MONEY. 22. THE CONTENTION OF THE LD. AR FOR THE ASSESSEE T HAT RISK APPETITE DETERMINES THE PROFIT IN SALE AND PURCHASE OF SHARES AND WHEN HE HAS INVESTED THE MONEY BY PURCHASING THE SH ARES OF CRESSANDA SOLUTION LTD. THROUGH BANKING CHANNEL ITS SALE CANNOT BE QUESTIONED, IS NOT TENABLE BECAUSE IT IS NOT A CASE OF RISK APPETITE TO DETERMINE THE PROFIT RATHER ENTIRE TRANSACTION IS I N THE PAPERS ONLY ITA NO.1881/DEL./2018 12 AND CRESSANDA SOLUTION LTD. HAS NO LEGS TO STAND TO MAKE 282 TIMES OF RETURN TO ITS INVESTORS. 23. THE CONTENTION OF THE LD. AR FOR THE ASSESSEE T HAT SUSPENSION OF TRADING ACTIVITIES OF CRESSANDA SOLUTION LTD. BY BSE IS BECAUSE OF REDUCTION IN CAPITAL AND NOT ON THE ALLEGATION O F PRICE RIGGING IS ALSO NOT TENABLE BECAUSE THE TRANSACTION HAS TO BE EXAMINED AS A WHOLE AND NOT ON THE BASIS OF ONE OR TWO SINGLE FAC TS. 24. THE CONTENTION OF THE LD. AR FOR THE ASSESSEE T HAT HIKE IN THE PRICES OF SHARES OF CRESSANDA SOLUTION LTD. WAS BEC AUSE OF THE AMALGAMATION OF M/S. SMARTCHAMP IT AND INFRA LTD. I S ALSO NOT TENABLE BECAUSE THIS IS THE COMMON MODUS OPERANDI O F PENNY STOCK COMPANIES IN ORDER TO PROVIDE IMPROBABLE CAPITAL GA IN TO THE INVESTORS. MOREOVER, IN THE ABSENCE OF PROFILE AND BALANCE SHEET OF CRESSANDA SOLUTION LTD., ITS FINANCIAL PERFORMANCE CANNOT BE GAUGED. ASSESSEE PREFERRED NOT TO THROW ANY LIGHT ON THE PROFILE AND FINANCIAL PERFORMANCE OF CRESSANDA SOLUTION LTD . TO PROVE THE GENUINENESS OF THE TRANSACTIONS. 25. WE ARE FURTHER OF THE VIEW THAT PRICE RIGGING O F THE SHARES CAN ONLY BE DETERMINE FROM THE CIRCUMSTANCES IN WHI CH SHARES HAVE BEEN PURCHASED IN PHYSICAL FORM AND THEN GET DEMATE RIALIZED JUST BEFORE THE SALE AT ASTRONOMICAL PRICE BECAUSE DIREC T EVIDENCE IN SUCH CIRCUMSTANCES IS USUALLY NOT AVAILABLE. ITA NO.1881/DEL./2018 13 26. COORDINATE BENCH OF THE TRIBUNAL IN CASE CITED AS POOJA AJMANI VS. ITO (SUPRA) IN THE IDENTICAL SET OF FACTS DISMISSED TH E APPEAL OF THE ASSESSEE BY RETURNING FOLLOWING FINDI NGS :- 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER. I FIND THAT AO AFTER A DETAILED ANALYSIS OF THE INVESTIGATION REPORT WITH THE MATERIALS AVAI LABLE ON RECORD IN THE CASE OF THE ASSESSEE AND ON FURTHER EXAMINATION OF THE FINANCIALS OF KAPPAC PHARMA LTD., PRICE & VOLUME OF THE SCRIP OF KAPPAC PHARMA LTD., CONCLUDED THAT THE MODUS OPERANDI ADOPTED BY THE ASSESSEE FOLLOWED THE PATTERN DISCOVERED BY THE INVESTIGATIO N WING DURING VARIOUS SEARCH AND SURVEY OPERATIONS. IT WAS HELD T HAT THAT THE TRANSACTIONS SHOWING LONG TERM CAPITAL GAIN, WHICH HAD BEEN CLAIMED BY THE ASSESSEE AS EXEMPT UNDER SECTION 10(38), WER E SHAM TRANSACTIONS. IT WAS HELD THAT IT WAS A CASE OF BOG US LONG-TERM CAPITAL GAIN OBTAINED THROUGH BROKERS AND THAT THE ASSESSEE HAD USED COLOURABLE DEVICE FOR AVOIDANCE OF TAX. THE RECEIP T OF RS.23,68,313/- WAS DEEMED TO BE INCOME UNDER SECTION 69A. THE ASSE SSEE HAS CONTENDED THAT 4,000 SHARES OF KAPPAC PHARMA LTD. P URCHASED FROM CORPORATE STOCK BROKING (P) LTD. AT A PRICE OF RS.1 3.09 PER SHARE IN PHYSICAL FORM. IT HAS ALSO BEEN SUBMITTED THAT OUT OF THE 4,000 SHARES, 3000 SHARED WERE SOLD ON 04/02/2014 FOR @RS.677 PER SHARE AND ANOTHER 500 WERE SOLD ON 18/02/2014 FOR A SUM OF @R S.691 PER SHARE. IT HAS ALSO BEEN SUBMITTED THAT THE ASSESSEE DID NO T INDULGE IN ANY MANIPULATION WHICH MAY HAVE BEEN DONE BY SOME BROKE R AND THAT THE APPELLANT WAS NOT GIVEN OPPORTUNITY FOR CROSS EXAMI NATION. IT HAS ALSO BEEN SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT CONSIDERING THE FACTS OF THE CASE AND ONLY ON THE BASIS OF PRESUMPTION AND PRESUPPOSITIONS. IT IS NOTICED THAT PRIMA FACIE, COPIES OF ALL DOCUMENTS HAVE BEEN SUBMITTED TO SUBSTANTIAT E THE GENUINENESS OF TRANSACTIONS RELATED TO PURCHASE AND SUBSEQUENT SALE OF SHARES LEADING TO LONG-TERM CAPITAL GAIN CLAIM BY THE APPE LLANT. I FIND THAT THESE DOCUMENTS WERE ALSO PLACED BEFORE THE ASSESSI NG OFFICER WHO, AFTER DETAILED EXAMINATION AND DISCUSSION AND GOING BEYOND THE SAID DOCUMENTS HAS ESTABLISHED THAT THE SAID DOCUMENTS W ERE A MERE MASK TO HIDE THE REAL NATURE OF TRANSACTIONS. BY ANALYSI NG THE BALANCE SHEET, PROFIT &LOSS ACCOUNT AND THE TRADE PATTERN OF KAPPA C PHARMA LTD. DURING THE PERIOD MARCH, 2010 TO MARCH 2014, THE AS SESSING OFFICER HAS POINTED OUT THAT THE SHARE PRICE OF THIS COMPAN Y WAS NEITHER AFFECTED BY THE MOVEMENT OF SENSEX NOR THE FINANCIA LS OF THE COMPANY JUSTIFIED SUCH EXTRAORDINARY JUMP IN THE PRICE OF I TS SHARES. IT IS NOTICED THAT APART FROM BEING BASED ON EVIDENCES GATHERED D URING SEARCH AND SURVEY OPERATIONS, ANALYSIS OF THE MATERIAL ON RECO RD AND ANALYSIS OF INFORMATION FROM VARIOUS SOURCES, THE FINDINGS OF T HE ASSESSING OFFICER ARE ALSO BASED ON STRONG SURROUNDING CIRCUMSTANCES, PREPONDERANCE OF PROBABILITY AND HUMAN CONDUCT IN THE LIGHT OF DETAI LED ANALYSIS OF THE MODUS OPERANDI ADOPTED BY BROKERS AND OPERATORS ENG AGED IN THE BUSINESS OF PROVIDING ENTRIES OF LONG TERM CAPITAL GAINS TO THE INTERESTED BENEFICIARIES WHICH HAS COME TO SURFACE AS A RESULT OF DEEP AND WIDE INVESTIGATION. INITIAL INVESTMENT IN A COMPANY OF U NKNOWN CREDENTIALS AND SUBSEQUENT JUMP IN THE SHARE PRICE OF SUCH A CO MPANY CANNOT BE ITA NO.1881/DEL./2018 14 AN ACCIDENT OR WINDFALL BUT WAS POSSIBLE, AS CLEARL Y BROUGHT ON RECORD BY THE ASSESSING OFFICER, BECAUSE OF THE MANIPULATI ONS IN THE PRICE OF SHARES IN A PRE-PLANNED MANNER BY THE INTERESTED BR OKER AND ENTRY OPERATORS. THE INSISTENCE OF THE ASSESSEE THAT THE TRANSACTIONS LEADING TO LONG-TERM CAPITAL GAINS ARE SUPPORTED BY DOCUMEN TS SUCH AS SALE AND PURCHASE INVOICES, BANK STATEMENTS ETC. CANNOT BE A CCEPTED IN VIEW OF THE FACT AND CIRCUMSTANCES OF THE CASE BROUGHT ON R ECORD BY THE ASSESSING OFFICER AFTER PROPER EXAMINATION OF THE M ATERIAL FACTS AND AFTER TAKING INTO ACCOUNT THE FINDINGS OF SEBI AND CORROBORATING EVIDENCES GATHERED BY THE DIRECTORATE OF INVESTIGAT ION, KOLKATA AGAINST A NETWORK OF BROKERS AND OPERATORS ENGAGED IN MANIP ULATION OF MARKET PRICE OF SHARES OF CERTAIN COMPANIES CONTROLLED AND MANAGED BY SUCH PERSONS WITH A PURPOSE TO PROVIDE ACCOMMODATION ENT RIES IN THE FORM OF LONG TERM CAPITAL GAINS. FURTHER, THE CONTENTION OF THE ASSESSEE THAT LONG TERM CAPITAL GAINS CANNOT BE TREATED AS BOGUS MERELY BECAUSE SOME INVESTIGATION WITH REGARD TO CERTAIN COMPANY A ND BROKER OR INVESTIGATION HAS BEEN CARRIED OUT BY THE DIRECTORA TE OF INVESTIGATION, KOLKATA ONLY PROVES THAT THE APPELLANT WANTS TO TAK E SHELTER UNDER SUCH DOCUMENTARY EVIDENCES WHICH THEMSELVES HAVE BEEN CR EATED AS MASKS TO COVER UP THE TRUE NATURE OF TRANSACTION. A GENUI NE TRANSACTION MUST BE PROVED TO BE GENUINE IN ALL RESPECT. THE ONUS WA S ON THE APPELLANT TO PROVE THAT THE TRANSACTION LEADING TO CLAIM OF LONG TERM CAPITAL GAINS WAS DISTINCTLY GENUINE TRANSACTION AND NOT BOGUS, P REMEDITATED TRANSACTION ARRANGED WITH A VIEW TO EVADE TAXES. TH E ONUS WAS ON THE ASSESSEE TO CONTRADICT THE FINDINGS THAT KAPPAC PHA RMA LTD. WAS A COMPANY WHOSE SCRIP WAS CAPABLE OF BEING TRADED AT HIGH PRICE AS IT WAS THE APPELLANT WHO HAD TRADED IN THE SHARES OF T HE THIS COMPANY WHICH RESULTED INTO CLAIM OF LONG TERM CAPITAL GAIN S WHICH IS EXEMPT UNDER SECTION 10(38). ONCE THE ASSESSEE WAS MADE AW ARE OF THE RESULT OF THE INVESTIGATION WHICH PROVED THAT TRADING OF S HARES LEADING TO LONG TERM CAPITAL GAINS WAS NOT GENUINE, AS PER SECTION 101 OF THE INDIAN EVIDENCE ACT, 1972, THE ONUS WAS ON THE ASSESSEE TO PROVE THAT SHE HAD EARNED GENUINE LONG TERM CAPITAL GAINS AS IT WAS TH E ASSESSEE WHO HAS MADE A CLAIM THAT SHE WAS ENGAGED IN GENUINE SHARE TRANSACTIONS. I FIND THAT IN THE CASE OF SHRI CHARAN SINGH VS. CHAN DRA BHAN SINGH (AIR 1988 SC 6370), THE HON'BLE SUPREME COURT HAVE CLARIFIED THAT THE BURDEN OF PROOF LIES ON THE PARTY WHO SUBSTANTI ALLY ASSERTS THE AFFIRMATIVE OF THE ISSUE AND NOT UPON THE PARTY WHO DENIES IT. IT HAS BEEN FURTHER HELD THAT THE PARTY CANNOT, ON FAILURE TO ESTABLISH A PRIMA FACIE CASE, TAKE ADVANTAGE OF THE WEAKNESS OF HIS A DVERSARY'S CASE. THE PARTY MUST SUCCEED BY THE STRENGTH OF HIS OWN RIGHT AND THE CLEARNESS OF HIS OWN PROOF. HE CANNOT BE HEARD TO SAY THAT IT WAS TOO DIFFICULT OR VIRTUALLY IMPOSSIBLE TO PROVE THE MATTER IN QUESTIO N. IN THE CASE UNDER CONSIDERATION, SINCE IT IS THE APPELLANT WHO HAD MA DE THE CLAIM THAT SHE HAD EARNED GENUINE LONG TERM CAPITAL GAIN, ALL THE FACTS WERE ESPECIALLY WITHIN HER KNOWLEDGE. SECTION 102 OF INDIAN EVIDENC E ACT MAKES IT CLEAR THAT INITIAL ONUS IS ON PERSON WHO SUBSTANTIA LLY ASSERTS A CLAIM. IF THE ONUS IS DISCHARGED BY HIM AND A CASE IS MADE OU T, THE ONUS SHIFTS ON TO DEPONENT. IT IS PERTINENT TO MENTION HERE THA T THE PHRASE 'BURDEN OF PROOF' IS USED IN TWO DISTINCT MEANINGS IN THE L AW OF EVIDENCE VIZ, 'THE BURDEN OF ESTABLISHING A CASE', AND 'THE BURDE N OF INTRODUCING EVIDENCE'. THE BURDEN OF ESTABLISHING A CASE REMAIN S THROUGHOUT TRIAL WHERE IT WAS ORIGINALLY PLACED, IT NEVER SHIFTS. TH E BURDEN OF EVIDENCE MAY SHIFT CONSTANTLY AS EVIDENCE IS INTRODUCED BY O NE SIDE OR THE OTHERS. IN THIS CASE, ONCE THE EVIDENCE THAT ASSESSEE HAS C LAIMED BOGUS LONG ITA NO.1881/DEL./2018 15 TERM CAPITAL GAIN WAS INTRODUCED BY THE ASSESSING O FFICER, THE BURDEN OF EVIDENCE SHIFTED TO THE ASSESSEE. DURING THE ASS ESSMENT PROCEEDING AND EVEN DURING THE ASSESSEE PROCEEDING, THE ASSESS EE HAS FAILED TO PRODUCE ANY EVIDENCE TO PROVE THAT THE LONG TERM CA PITAL GAIN CLAIMED BY HER WAS GENUINE. IN THE PRESENT CASE, IT IS SEEN THAT THE ASSESSEE HAS FAILED TO DISCHARGE HER BURDEN OF PROOF AND THE ASS ESSING OFFICER, ON THE OTHER HAND, HAS PROVED THAT THE CLAIM OF THE AP PELLANT WAS INCORRECT. THE ENQUIRY CONDUCTED BY SEBI WAS FURTHE R CORROBORATED BY THE INVESTIGATION CARRIED OUT BY THE DIRECTORATE OF INVESTIGATION, HAS BEEN THOROUGHLY ANALYSED BY THE ASSESSING OFFICER T O PROVE THAT THE ASSESSEE HAS INTRODUCED BOGUS LONG TERM CAPITAL GAI NS IN HER BOOKS OF ACCOUNT BY ROUTING HER UNACCOUNTED INCOME THROUGH A TAX EVASION SCHEME. THE STATEMENT OF BROKERS ENGAGED IN PROVIDI NG BOGUS LONG TERM CAPITAL GAINS CLEARLY PROVES THAT KAPPAC PHARM A LTD. IS ONE OF SUCH COMPANIES WHOSE SCRIPS HAVE BEEN MANIPULATED T O PROVIDE BOGUS LONG TERM CAPITAL GAINS. IT IS NOTED THAT ON SIMILA R FACTS AND CIRCUMSTANCES, HON'BLE ITAT A-BENCH, CHANDIGARH IN THE CASE OF SHRI ABHIMANYU SOIN VS ACIT, CIRCLE-7, LUDHIANA IN ITA NO.951/CHD./2016 VIDE ORDER DATED 18/04/2018, HAVE EXPRESSED THE VIEW THAT THE UNDISCLOSED INCOME IN THE GARB OF LON G TERM CAPITAL GAIN HAS TO BE ASSESSED AS UNEXPLAINED. THE HON'BLE ITAT HAVE HELD AS UNDER:- '14. THE RATIO LAID DOWN BY THE HON'BLE SUPREME COU RT IN THE CASE OF SUMATIDAYAL VS. CIT [1995] 214 1TR 801 = 20 02- TIOL-885-SC-IT-LB IS SQUARELY APPLICABLE IN THIS CA SE. THOUGH THE ASSESSEE HAS RECEIVED THE AMOUNTS BY THE WAY OF ACCOUNT PAYEE CHEQUES, THE ASSESSEE COULD NOWHERE P ROVE THE PURCHASE OF SHARES AS CLAIMED TO HAVE BEEN MADE ON 02/72/2008 IN CASH AND IT URNS ALSO NOT PROVED ABOU T THE AVAILABILITY OF THE FUNDS WITH THE ASSESSEE AS ON T HE DATE OF PURCHASE OF SHARES. THE ASSESSEE WAS NOT IN INDIA A S PER THE PASSPORT DETAILS AVAILABLE AS PER THE RECORD. THIS, COUPLED WITH THE FACT THAT THE TRANSFER OF MONEY IN CASH FROM LU DHIANA TO DELHI AND A PERSON REPRESENTING THE BROKER OPERATIN G AT KOLKATA HAS COLLECTED THE MONEY AT DELHI CANNOT BE ACCEPTED. THE TAX AUTHORITIES ARE ENTITLED TO LOOK INTO THE S URROUNDING CIRCUMSTANCES TO FIND OUT THE REALITIES AND THE MAT TER HAS TO BE CONSIDERED BY APPLYING TEST OF HUMAN PROBABILITIES AS ENUNCIATED BY THE HON'BLE SUPREME COURT. THE FACT T HAT INSPITE OF EARNING 3072% OF PROFITS, THE ASSESSEE NEVER VEN TURED TO INVOLVE HIMSELF IN ANY OTHER TRANSACTIONS WITH THE BROKER WHICH GAVE HIM EVEN MUCH LOWER PROFITS DURING THE PERIOD WHICH CANNOT BE A MERE COINCIDENCE OR LACK OF INTEREST OR ABSENCE OF ADVICE FROM THE FINANCIAL INSTITUTIONS AS DONE EARL IER. 15. IN VIEW OF THE DETAILED DISCUSSION ABOVE, AND KEEPING IN VIEW THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES AN D SPECIFIC PECULIARITY OF THE INSTANT CASE AND THE JUDGMENTS Q UOTED ABOVE, WE DECLINE TO INTERFERE IN THE ORDER OF THE LD. CIT (A). 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMI SSED. 5.1 ON THE ISSUE OF CIRCUMSTANTIAL EVIDENCE AND IN THE MATTERS RELATED TO THE DISCHARGE OF 'ONUS OF PROOF' AND THE RELEVANCE OF ITA NO.1881/DEL./2018 16 SURROUNDING CIRCUMSTANCES OF THE CASE, THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE [(1972) 82 IT R540], HAVE OBSERVED AS UNDER: '...THAT THOUGH AN APPELLANTS STATEMENT MUST BE CO NSIDERED REAL UNTIL IT ZVAS SHOWN THAT THERE WERE REASONS TO BELIEVE THAT THE APPELLANT WAS NOT THE REAL, IN A CASE WHERE THE PARTY RELIED ON SELF-SEWING RECITALS IN THE DOCUMENTS, IT WAS FO R THE PARTY TO ESTABLISH THE TRANSFER OF THOSE RECITALS, THE TAXIN G AUTHORITIES WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMST ANCES TO FIND OUT THE REALITY OF SUCH RECITALS. SCIENCE HAS NOT YET INVENTED ANY INSTRUMENT TO TEST THE RELIABILITY OF THE EVIDENCE PLACED BEFORE A COURT OR TRIBUNAL. THEREFORE, THE C OURTS AND THE TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THE M BY APPLYING THE TEST OF HUMAN PROBABILITY. HUMAN MINDS MAY DIFFER AS TO THE RELIABILITY OF PIECE OF EVIDENCE, BUT, IN THE SPHERE, THE DECISION OF THE FINAL FACT FINDING AUTH ORITY IS MADE CONCLUSIVE BY LAW. 5.2 I FURTHER FIND THAT THE ABOVE RATIO AS LAID DO WN BY THE HON'BLE SUPREME COURT HAS BEEN REITERATED AND APPLIED BY TH E HON'BLE APEX COURT IN THE CASE OF SUMATI DAYAL VS. CIT (214 ITR 801). IT IS ESSENTIAL ON THE PART OF THE ASSESSING OFFICER TO LOOK INTO T HE REAL NATURE OF TRANSACTION AND WHAT HAPPENS IN THE REAL WORD AND C ONTEXTUALIZE THE SAME TO SUCH TRANSACTIONS IN THE REAL MARKET SITUAT ION. FURTHER, IN THE CASE OF MCDOWELL &: CO. LTD.[(1985) 154 ITR 148 (SC )],THE HON'BLE SUPREME COURT HAVE OBSERVED AS UNDER: 'TAX PLANNING MAY BE LEGITIMATE PROVIDED IT IS WITH IN THE FRAMEWORK OF LAW. COLOURABLE DEVICES CANNOT BE PART OF TAX PLANNING AND IT IS WRONG TO ENCOURAGE OR ENTERTAIN THE BELIEF THAT IT IS HONOURABLE TO AVOID THE PAYMENT OF TAX B Y RESORTING TO DUBIOUS METHODS. IT IS THE OBLIGATION OF EVERY CITI ZEN TO PAY THE TAXES HONESTLY WITHOUT RESORTING TO SUBTERFUGES.' 5.3 EVERY PERSON IS ENTITLED TO SO ARRANGE HIS AFF AIRS AS TO AVOID TAXATION BUT THE ARRANGEMENT MUST BE REAL AND GENUI NE AND NOT A SHAM OR MAKE BELIEVE. 5.4 KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS, I AM OF THE VIEW THAT DOCUMENTS SUBMITTED AS EVIDENCES TO PROVE THE GENUINENESS OF TRANSACTION ARE THEMSELVES FOUND TO SERVE AS SMOKE SCREEN TO COVER UP THE TRUE NATURE OF THE TRANSACTIONS IN THE FACTS AN D CIRCUMSTANCES OF THE CASE AS IT IS REVEALED THAT PURCHASE AND SALE OF SH ARES ARE ARRANGED TRANSACTIONS TO CREATE BOGUS PROFIT IN THE GARB OF TAX EXEMPT LONG TERRA CAPITAL GAIN BY WELL ORGANISED NETWORK OF ENTRY PRO VIDERS WITH THE SOLE MOTIVE TO SELL SUCH ENTRIES TO ENABLE THE BENEFICIA RY TO ACCOUNT FOR THE UNDISCLOSED INCOME FOR A CONSIDERATION OR COMMISSIO N. I FURTHER FIND THAT THE SHARE TRANSACTIONS LEADING TO LONG TERM CA PITAL GAINS BY THE ASSESSEE ARE SHAM TRANSACTION ENTERED INTO FOR THE PURPOSE OF EVADING TAX. I NOTE THAT THE LANDMARK DECISION OF THE HONB LE SUPREME COURT IN THE CASE OF MCDOWELL AND COMPANY LIMITED, 154 ITR 1 48 IS SQUARELY APPLICABLE IN THIS CASE WHEREIN IT HAS BEEN HELD TH AT TAX PLANNING MAY BE LEGITIMATE PROVIDED IT IS WITHIN THE FRAMEWORK O F THE LAW AND ANY COLOURABLE DEVICES CANNOT BE PART OF TAX PLANNING A ND IT IS WRONG TO ITA NO.1881/DEL./2018 17 ENCOURAGE OR ENTERTAIN THE BELIEF THAT IT IS HONOUR ABLE TO AVOID THE PAYMENT OF TAX BY DUBIOUS METHODS. HOWEVER, THE CAS E LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE ARE ON DISTINGUISH ED FACTS, HENCE, NOT APPLICABLE IN THE INSTANT CASE. THE ASSESSEE HAS NO T RAISED ANY LEGAL GROUND AND ARGUED ONLY ON MERIT FOR WHICH ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM BEFORE THE LOWER REVENUE AUT HORITIES AS WELL AS BEFORE THIS BENCH. IN VIEW OF ABOVE DISCUSSIONS, I AM OF THE CONSIDERED OPINION THAT LD. CIT(A) HAS RIGHTLY CONFIRMED THE A DDITION IN DISPUTE, WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, TH EREFORE, I UPHOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE IN DISPUT E AND REJECT THE GROUNDS RAISED BY THE ASSESSEE. 27. SIMILARLY, COORDINATE BENCH OF THE TRIBUNAL IN CASE CITED AS UDIT KALRA VS. ITO (SUPRA) DISMISSED THE APPEAL FILED BY THE ASSESSEE WHO HAS CLAIMED DEDUCTION U/S 10(38) OF TH E ACT FOR RS.27,20,457/- IN THE IDENTICAL FACTS WHICH HAS BEE N CONFIRMED BY THE HONBLE DELHI HIGH COURT IN ITA 220/2019 ORDER DATE D 08.03.2019 BY RETURNING FOLLOWING FINDINGS :- THIS COURT HAS CONSIDERED THE SUBMISSIONS OF THE P ARTIES. ASIDE FROM THE FACT THAT THE FINDINGS IN THIS CASE ARE ENTIREL Y CONCURRENT - A.O., CIT(A) AND THE ITAT HAVE ALL CONSISTENTLY RENDERED ADVERSE FINDINGS - WHAT IS INTRIGUING IS THAT THE COMPANY (MIS KAPPAC PHARMA LTD.) HAD MEAGRE RESOURCES AND IN FACT REPORTED CONSISTENT LO SSES. IN THESE CIRCUMSTANCES, THE ASTRONOMICAL GROWTH OF THE VALUE OF COMPANY'S SHARES NATURALLY EXCITED THE SUSPICIONS OF THE REVE NUE. THE COMPANY WAS EVEN DIRECTED TO BE DELISTED FROM THE STOCK EXC HANGE. HAVING REGARD TO THESE CIRCUMSTANCES AND PRINCIPALLY ON TH E GROUND THAT THE FINDINGS ARE ENTIRELY OF FACT, THIS COURT IS OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE PRESENT A PPEAL. 28. WHEN WE EXAMINE FACTS AND CIRCUMSTANCES OF THIS CASE IN THE LIGHT OF THE ORDER PASSED BY THE COORDINATE BENCH O F THE TRIBUNAL, AFFIRMED BY HONBLE HIGH COURT DISCUSSED IN THE PRE CEDING PARA, NO DOUBT ASSESSEE HAS METICULOUSLY COMPLETED THE PA PER WORK BY ROUTING HIS ENTIRE INVESTMENT THROUGH BANKING CHANN EL BUT THE RESULTS THEREOF ARE ALTOGETHER BEYOND HUMAN PROBABI LITIES. BECAUSE ITA NO.1881/DEL./2018 18 NEITHER IN THE PAST NOR IN THE SUBSEQUENT YEARS, AS SESSEE HAS INDULGED INTO ANY SUCH INVESTMENT HAVING HUGE WINDF ALL. HAD THE ASSESSEE BEEN SO INTELLIGENT QUA THE INTRICACIES OF THE SHARE MARKET, HE WOULD HAVE DEFINITELY UNDERTAKEN SUCH RISK TAKIN G ACTIVITIES IN THE PAST OR FUTURE BY MAKING SUCH INVESTMENT IN THE UNKNOWN STOCK. SO, WE ARE OF THE CONSIDERED VIEW THAT WHAT APPEARS TO BE APPARENT IN MAKING INVESTMENT BY THE ASSESSEE IN UN KNOWN STOCK IS NOT REAL WHEN EXAMINED THE WHOLE TRANSACTION OF SAL E AND PURCHASE OF THE STOCK WITH HUGE WINDFALL TO THE ASSESSEE. 29. HONBLE APEX COURT IN CIT VS. DURGA PRASAD MORE 82 ITR 540 WHILE DECIDING THE IDENTICAL ISSUE WHETHER APPAREN T WAS NOT REAL AND IN THOSE CIRCUMSTANCES, TAXING AUTHORITIES WERE HELD ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF SUCH RECITALS/TRANSACTIONS BY RETURNING FOLLOWING FINDINGS:- HELD, REVERSING THE DECISION OF THE HIGH COURT, ( I) THAT IT COULD NOT BE SAID THAT THE FINDING OF THE TRIBUNAL AS TO THE UNREALITY OF THE TRUST PUT FORWARD WAS NOT BASED ON EVIDENCE OR WAS OTHERWISE VITIATED; (II) THAT THE TRIBUNAL DID NOT INTERPRET THE TWO D EEDS BUT MERELY FOUND ITSELF UNABLE TO ACCEPT THE CORRECTNESS OF TH E RECITALS IN THOSE DOCUMENTS: TO ACCEPT THOSE RECITALS OR NOT WAS WITH IN THE PROVINCE OF THE TRIBUNAL AND THE HIGH COURT COULD NOT INTERFERE WITH ITS CONCLUSION UNLESS IT WAS PERVERSE OR NOT SUPPORTED BY EVIDENCE OR WAS BASED ON IRRELEVANT EVIDENCE; (III) THAT THOUGH AN APPARENT STATEMENT MAST BE CON SIDERED REAL UNTIL IT WAS SHOWN THAT THERE WERE REASONS TO BELIE VE THAT THE APPARENT WAS NOT THE REAL, IN A CASE WHERE A PARTY RELIED ON SELF-SERVING RECITALS IN DOCUMENTS, IT WAS FOR THAT PARTY TO ESTABLISH TH E TRUTH OF THOSE RECITALS: THE TAXING AUTHORITIES WERE ENTITLED TO L OOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY O F SUCH RECITALS. ITA NO.1881/DEL./2018 19 30. SO, THE IRRESISTIBLE CONCLUSION IN THIS CASE IS METICULOUS PAPER WORK BY THE ASSESSEE IN MAKING INVESTMENT IN UNKNOWN STOCK BY THE ASSESSEE AND THEN SELLING THE SAME AS PER CONVENIENCE OF THE BROKER AND ENTRY OPERATOR BY RIGGING PRICES AT ASTRONOMICAL RATE SHOWS THAT THE TAX AUTHORITIES HAVE BEEN COMPE LLED TO EXAMINE THE ENTIRE TRANSACTIONS IN THE LIGHT OF THE SURROUN DING CIRCUMSTANCES AND HAS UNEARTHED THE BOGUS TRANSACTION OF PURCHASE AND SALE OF SHARES WHICH WAS NOT REAL AND ASSESSEE HAS FAILED T O DISPEL ALL THE QUARRIES RAISED BY THE AO TO ESTABLISH THAT THE TRA NSACTION IN QUESTION WAS REAL AND NOT BEYOND HUMAN PROBABILITIE S. 31. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE AND FO LLOWING THE DECISION RENDERED BY THE COORDINATE BENCH OF THE TR IBUNAL IN CASES CITED AS POOJA AJMANI VS. ITO (SUPRA) AND UDIT KALRA (SUPRA) SUBSEQUENTLY AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT PURCHASE AND SAL E OF SHARES OF UNKNOWN COMPANY, CRESSANDA SOLUTION LTD., HAVING NO PROFILE, FINANCIAL GROWTH, RISK FACTOR ETC. AVAILABLE WITH T HE ASSESSEE, WHOSE SHARES WERE PURCHASED @ RS.10 PER SHARE BY THE ASSE SSEE AND SOLD @ RS.476 TO RS.503.90 PER SHARE, IS MERELY A SHAM T RANSACTION CREDITED TO GET THE BOGUS PROFIT AT ASTRONOMICAL RA TE UNDER THE GARB ITA NO.1881/DEL./2018 20 OF LTCG IN CONNIVANCE WITH THE ENTRY PROVIDERS TO M AKE UNDISCLOSED INCOME AS DISCLOSED ONE BY EVADING THE TAX. 32. SO, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT (A) HAS PASSED A VALID AND REASONED ORDER ON THE BASIS OF L AW APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. CASE LAW S RELIED UPON BY THE LD. AR FOR THE ASSESSEE ARE NOT APPLICABLE TO T HE FACTS AND CIRCUMSTANCES OF THE CASE. CONSEQUENTLY, THE QUEST ION FRAMED IS ANSWERED IN THE NEGATIVE, HENCE THE APPEAL FILED BY THE ASSESSEE IS HEREBY DISMISSED. 33. IN VIEW OF THE FACT THAT APPEAL BEARING ITA NO.1881/DEL/2018, IN WHICH THE PRESENT STAY APPLICA TION WAS FILED, HAS SINCE BEEN DISPOSED OFF VIDE THIS COMPOSITE ORD ER, THE PRESENT STAY APPLICATION IS HEREBY DISMISSED HAVING BEEN BE COME INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF JUNE, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 14 TH DAY OF JUNE, 2019/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-12, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.