Shri Dolarrai Hemani, Kolkata V. Income Tax Officer -ward 34(3), Kolkata, Kolkata

ITA 19/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4114 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 04-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 03-01-2014
• Court: TRIBUNAL
• Department Lawyers: SUDIPTA GUHA
• Keywords: Unexplained cash credit; Gift; Business income; Income from undisclosed sources; Additional evidence; Cost of acquisition
• Section: 143(3); 131; 68; 56

Judgement Text

1 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI S. S. VISWAN ETHRA RAVI, JM] I.T.A NO. 19/KOL/2014 ASSESSMENT YEAR: 2005-06 SRI DOLARRAI HEMANI (PAN:ABDPH6206R) VS. INCOME-TA X OFFICER, WD-34(3), KOLKATA ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 08.11.2016 DATE OF PRONOUNCEMENT: 02.12.2016 FOR THE APPELLANT: SHRI SUBHAS AGARWAL, ADVOCA TE FOR THE RESPONDENT: SHRI SUDIPTA GUHA, JCIT ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XX, KOLKATA VIDE APPEAL NO. 395/CIT(A)-XX/WD-34(3)/2007-08/KOL DATED 28.10. 2013. ASSESSMENT WAS FRAMED BY ITO, WARD-34(3), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2005-06 VIDE HIS ORDER DATED 26.1 2.2007. 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL I S AS TO WHETHER, THE LD CITA IS JUSTIFIED IN UPHOLDING THE ADDITION OF RS. 6,44,270- TREATING TH E SAME AS INCOME FROM UNDISCLOSED SOURCES AFTER REJECTING THE CLAIM OF LONG TERM CAPI TAL GAINS ON SALE OF SHARES OF M/S G.K.CONSULTANTS LTD, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASS ESSEE IS AN INDIVIDUAL HAVING BUSINESS INCOME FROM PARTNERSHIP FIRM. THE ASSESSEE FILED T HE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET DURING THE COURSE OF ASSESSMENT PROCEEDINGS B EFORE THE LD AO. THE LD AO OBSERVED THAT THE ASSESSEE HAD LONG TERM CAPITAL GAINS (LTCG ) ON STOCKS AND SECURITIES (INCLUDING UNITS OF MUTUAL FUNDS) AMOUNTING TO RS. 13,13,482/- BESIDES SHORT TERM CAPITAL GAIN (STCG) OF RS. 90,349/-. THE ASSESSEE CLAIMED LTCG OF RS. 13,13,482/- AS EXEMPT. THE LD AO OBSERVED THAT THE ASSESSEE HAD CAPITAL GAINS FRO M SHARES OF REPUTED COMPANIES SUCH AS 2 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 RELIANCE INDUSTRIES LTD, ICICI BANK, IOC, IBP ETC A ND ON UNITS OF MUTUAL FUNDS EXCEPT FROM SALE OF SHARES OF G.K.CONSULTANTS LTD. THE ASSESS EE CLAIMED TO HAVE PURCHASED 3000 SHARES OF G.K.CONSULTANTS LTD ON 6.6.2003 @ RS 3.77 PER SH ARE FOR RS. 11,310/- IN CASH. HE SOLD THESE SHARES ON 23.3.2005 FOR RS 218.50 PER SHARE I N THE SECONDARY MARKET THROUGH A RECOGNIZED STOCK BROKER MR RAJENDRA PRASAD SHAH, ME MBER OF CALCUTTA STOCK EXCHANGE LTD. THE LD AO OBSERVED THAT THE ASSESSEE HAD ENT ERED INTO TRANSACTIONS WITH MS. SATCO SECURITIES & FINANCIAL SERVICES LTD, MEMBER STOCK E XCHANGE, MUMBAI AND M/S C.D.EQUI SEARCH PVT LTD, MEMBER STOCK EXCHANGE , MUMBAI FOR SALE AND PURCHASE OF SHARES OF REPUTED COMPANIES. BUT IN RESPECT OF PURCHASE AND SALE OF SHARES OF G.K.CONSULTANTS LTD, THE ASSESSEE ENTERED INTO TRANSACTION WITH MR RAJEN DRA PRASAD.SHAH, MEMBER CALCUTTA STOCK EXCHANGE LTD (CSE). 2.2. THE LD AO MADE THE FOLLOWING OBSERVATIONS IN HIS ORDER:- A) THE PURCHASE OF 3000 SHARES OF G.K.CONSULTANTS L TD WAS DONE ON OFF-MARKET TRANSACTION. B) THE ASSESSEE FURNISHED THE CONTRACT NOTE FOR PUR CHASE AND SALE OF SHARES FROM THE STOCK BROKER. C) PURCHASE TRANSACTION WAS EFFECTED BY MAKING PAYM ENT IN CASH WHICH IS AGAINST THE STRICT RULES OF SEBI AND THE STOCK EXCHANGE. D) NO OTHER SHARES WERE EVER PURCHASED BY THE ASSES SEE BY MAKING PAYMENT IN CASH. E) THE ASSESSEE ENTERED INTO TRANSACTION WITH MR RA JENDRA PRASAD SHAH ONLY FOR PURCHASE AND SALE OF SHARES OF G.K.CONSULTANTS LTD AND APART FROM THIS, HE HAD NO TRANSACTION WITH MR RAJENDRA PRASAD SHAH. F) THE SHARES OF G.K.CONSULTANTS LTD WERE SENT FOR DEMATERIALIZATION BY ASSESSEE ONLY ON 18.2.2005 AND DEMAT REQUEST WAS CONFIRMED ON 18.3.2 005. THE ASSESSEE ALREADY HAD DEMAT ACCOUNT WITH CITI BANK, WHEREIN THE TRANSACTI ON OF SHARES OF REPUTED COMPANIES WERE RECORDED. BUT INSPITE OF HAVING OTHER DEMAT ACCOUN T THE ASSESSEE OPENED ANOTHER DEMAT ACCOUNT WITH CITI BANK WITH CLIENT ID 10398306 WHER EIN HE HAD ONLY TRANSACTION OF G.K.CONSULTANTS LTD IN THAT DEMAT ACCOUNT DURING TH E FINANCIAL YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06. 3 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 G) THE ASSESSEE WAS ASKED TO PRODUCE THE BROKER WIT H HIS BOOKS OF ACCOUNTS. THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE BROKER AND R EQUESTED THE LD AO TO CONTACT HIM ON THE ADDRESS MENTIONED IN THE CONTRACT NOTES. THE LD A O ISSUED SUMMONS U/S 131 OF THE ACT TO THE BROKER TO PRODUCE CERTAIN DETAILS AND HIS SAUDA BOOKS AND BOOKS OF ACCOUNTS. H) THE BROKER FILED A LETTER WITH DETAILS CONFIRMIN G THE TRANSACTIONS WITH THE ASSESSEE. I) THE CALCUTTA STOCK EXCHANGE LTD FOUND THE VERY C ONTRACT NOTE AND THE TRANSACTION TO BE FALSE. J) THE SHARE PRICE IN QUESTION WAS OBTAINED FROM TH E OFFICE OF DEPUTY REGISTRAR, MINISTRY OF CORPORATE AFFAIRS (MCA) , NEW DELHI, WHICH SHOWED T HAT THE PRICE OF SHARES OF G.K.CONSULTANTS LTD HOVERED AROUND RS 6.60 TO RS 8. 40 DURING THE RELEVANT PERIOD WHEREAS THE ASSESSEE CLAIMED TO HAVE SOLD THE SHARES AT RS 218.50 PER SHARE. K) HAVING AN OFF MARKET TRANSACTION FOR PURCHASE OF SHARES WAS IN VIOLATION OF THE ESTABLISHED RULE AND SEBI GUIDELINES. L) THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SHARES OF G.K.CONSULTANTS LTD WERE SENT FOR DEMATERIALIZATION ONLY IN FEB 2005 WHILE HE HAD PURCHASED THE SHARES IN JUNE 2003. TH ASSESSEE WAS ALSO ASKED TO FURNISH THE DETAILS AS T O WHEN THESE SHARES IN PHYSICAL FORM WERE TRANSFERRED IN HIS NAME AND EVIDENCES OF SUCH TRANS FER. M) THE ASSESSEE PRODUCED THE CONTRACT NOTE FOR SALE OF 3000 SHARES IN G.K.CONSULTANTS LTD ON 23.3.2005 VIDE TRADE NO. 1586 AT RS 218.90 PER S HARE, THE NET SALE PROCEEDS AFTER BROKERAGE WAS RS. 6,56,040/-. SECURITIES TRANSACTI ON TAX (STT) OF RS. 493/- WAS ALSO DEDUCTED BY THE BROKER. N) THE CONTRACT NOTE WAS SENT BY THE LD AO TO THE C ALCUTTA STOCK EXCHANGE FOR VERIFICATION OF THE TRANSACTION. THE CALCUTTA STOCK EXCHANGE LT D VIDE ITS LETTER NO. CSE/MSD/ITAX/0711/2670 DATED 12.11.2007 REPLIED THA T NO TRADE WAS DONE VIDE TRADE NO. 1586. THE ASSESSEE WAS SHOWN THE REPLY OF C SE AND SHOW CAUSED AS TO WHY THE LTCG OF RS. 6,44,170/- CLAIMED BY HIM ON SALE OF SH ARES OF G.K.CONSULTANTS LTD SHOULD NOT BE TREATED AS INCOME FROM UNDISCLOSED SOURCES, SINC E NO TRANSACTION WAS MADE VIDE TRADE NO. 1586 AS CONFIRMED BY CSE. 4 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 2.3. THE ASSESSEE REPLIED BOTH PURCHASE AND SALE O F SHARES TRANSACTION WERE CARRIED OUT THROUGH REGISTERED STOCK BROKER WITH CALCUTTA STOCK EXCHANGE LTD AT THE PRICES PREVAILING IN THE MARKET WHICH ARE DULY SUPPORTED BY THE CONTRACT NOTES ISSUED BY THE SAID STOCK BROKER ; STT HAS BEEN DULY SUFFERED ON THE SALE TRANSACTION ; PURCHASE TRANSACTION WAS EFFECTED THROUGH OFF MARKET AND HENCE NO STT COULD BE MADE L IABLE ; SINCE THE PURCHASE COST WAS LESS THAN RS 20,000/- PAYMENTS FOR THEM WERE MADE I N CASH AND THE SAID BROKER HAD DULY CONFIRMED THE TRANSACTIONS BEFORE THE LD AO AND ACC ORDINGLY PLEADED FOR ACCEPTANCE OF THE CLAIM OF EXEMPTION OF LTCG ON SALE OF SHARES OF G.K .CONSULTANTS LTD. 2.4. THE LD AO CONCLUDED THAT THE TRANSACTION AS A SHAM AND COLOURFUL TRANSACTION WHEREBY THE ASSESSEE ENTERED HIS UNDISCLOSED INCOME IN THE REGULAR CHANNELS TAKING THE BENEFIT OF FALSE LTCG IN COLLUSION AND WITH DIRECT HELP OF BROKER MR RAJENDRA PRASAD SHAH , WHO WITH THE HELP OF OTHER AGENTS, BY CIRCULAR AND ARTIFICIAL AND FALSE TRADING, ISSUED CONTRACT NOTES FOR TRANSACTIONS NEVER HAPPENED. THE FALSE G AINS WERE GIVEN THE COLOUR OF LTCG WHICH IS EXEMPT FROM TAX. ACCORDINGLY, HE TREATED T HE CLAIM OF LTCG AS UNDISCLOSED INCOME OF THE ASSESSEE. 2.5. BEFORE THE LD CITA, THE ASSESSEE SUBMITTED VA RIOUS DOCUMENTS IN SUPPORT OF HIS CLAIM WHICH WERE SUBJECTED TO REMAND PROCEEDINGS BY THE LD AO. THE ASSESSEE BEFORE THE LD CITA TRIED TO MEET EACH AND EVERY ALLEGATION RAI SED BY THE LD AO IN HIS ORDER. IT WAS ARGUED THAT BOTH THE BROKER M/S SATCO SECURITIES & FINANCIAL SERVICES LTD , MUMBAI AND C.D.EQUI SEARCH P LTD , MUMBAI WERE NOT DEALING IN SCRIP OF KOLKATA AND THAT IS WHY THE SHARES OF M/S G.K.CONSULTANTS LTD WERE PURCHASED FR OM MR RAJENDRA PRASAD SHAH , WHO WAS A MEMBER OF CALCUTTA STOCK EXCHANGE LTD AND WHO WAS DEALING IN THE SCRIPS OF KOLKATA. IT WAS ARGUED THAT THE LD AO HAD NOT RE FERRED TO ANY PARTICULAR RULE OF SEBI AND THE STOCK EXHANGE FROM WHICH IT COULD BE ESTABLISHE D THAT CASH PURCHASE OF SHARE WAS NOT ALLOWED. THEREFORE, THERE WAS NOTHING ILLEGAL IF TH E ASSESSEE HAD NO OTHER TRANSACTION WITH MR RAJENDRA PRASAD SHAH. HENCE IT WAS NOT REQUIRED TO EXPLAIN THE REASONS FOR CASH PURCHASE OF SHARES. AGAIN THERE WAS NOTHING ILLEGA L IF THE ASSESSEE HAD NO OTHER TRANSACTION WITH MR RAJENDRA PRASAD SHAH EXCEPTING THE TRANSACT ION RELATED TO PURCHASE AND SALE OF 5 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 SHARES OF G.K.CONSULTANTS LTD. IT WAS ALSO ARGUED THAT THE ASSESSEE WAS A REGULAR INVESTOR AND ABOUT 95% OF HIS SHAREHOLDING WERE IN DEMAT FOR M. ONLY 5% OF THE SHARES WERE HELD IN PHYSICAL FORM. THE SHARES OF G.K.CONSULTANTS LTD WERE RECEIVED IN PHYSICAL FORM IN THE NAME OF THE ASSESSEE AND WAS KEPT ALONG WITH OTHER SHARES IN PHYSICAL FORM AND HENCE ESCAPED ATTENTION OF THE ASSESSEE. THIS RESULTED INTO DELAY IN SENDING THOSE SHARES FOR DEMAT. THE XEROX COPIES OF TRANSFER LETTER OF SHA RES OF G.K.CONSULTANTS LTD ALONG WITH REQUEST LETTER WERE ENCLOSED BY THE ASSESSEE. FUR THER IT WAS STATED THAT THE ASSESSEE HAD THREE DEMAT ACCOUNTS ONE IN HIS NAME JOINTLY WITH HIS WIFE, ONE IN HIS NAME JOINTLY WITH HIS SON AND ONE IN HIS SINGLE NAME WITH CITIBANK AC COUNT NO. 10398306. SINCE THE SHARES OF M/S G.K.CONSULTANTS LTD WERE PURCHASED IN SINGLE NA ME, THEY WERE DEMATTED IN DEMAT ACCOUNT NUMBER 10398306 WITH CITIBANK. THE LD AO S CONTENTION THAT THIS DEMAT ACCOUNT WAS OPENED ONLY FOR THE SHARES OF G.K.CONSU LTANTS LTD WAS NOT CORRECT AS THE ASSESSEE WAS ALSO HOLDING SOME OTHER SHARES IN HIS SINGLE NAME AND HENCE THE ACCOUNT WAS OPENED IN SEPT 2003. THE SHARES OF RELIANCE INDUS TRIES LTD AND ORGANO LTD WERE DEMATERIALIZED INTO HIS ACCOUNT IN OCTOBER 2003 AND JANUARY 2004 RESPECTIVELY AND COPIES OF THESE DEMAT STATEMENTS WERE ALSO SUBMITTED BEFOR E THE LD AO. IT WAS FURTHER SUBMITTED THAT THE BROKER MR RAJENDRA PRASAD SHAH COMPLIED WI TH THE REQUIREMENT OF NOTICE U/S 131 OF THE ACT AND CONFIRMED BY HIS LETTER DATED 14.11.200 7 THAT THE SHARES OF G.K.CONSULTANTS LTD WERE PURCHASED AND SOLD BY THE ASSESSEE THROUGH HIM AND HE DELIVERED SUCH SHARES AND ALSO SOLD SUCH SHARES, AND PAYMENT WAS MADE BY ACCOUNT P AYEE CHEQUE DATED 24.3.2005 OF HDFC BANK. IN SUPPORT OF THIS, THE SHARE BROKER A LSO PRODUCED THE COPY OF THE BANK STATEMENT REFLECTING THE ABOVE TRANSACTION , COPY O F IT RETURNS FILED BY HIM WITH PAN AND OTHER EXPLANATIONS AND DETAILS. IT WAS ALSO ARGUE D THAT JUST BECAUSE THE BROKER HAD NOT PRODUCED HIS BOOKS OF ACCOUNTS IN RESPONSE TO NOTIC E U/S 131 OF THE ACT, HOW THE ASSESSEE COULD BE HELD RESPONSIBLE FOR THE SAME, ESPECIALLY WHEN HE HAD DULY CONFIRMED HAVING TRANSACTIONS WITH THE ASSESSEE AND THE VERACITY OF THE SAME. IT WAS ALSO ARGUED THAT THE CONFIRMATION FILED BY THE BROKER WAS SUBJECTED TO C ROSS VERIFICATION BY CALCUTTA STOCK EXCHANGE LTD BY THE LD AO WHO HAD STATED THAT TRADE NO. 1586 WAS NOT CARRIED ON. IN THIS REGARD, IT WAS ARGUED THAT APART FROM ISSUING A LET TER TO CALCUTTA STOCK EXCHANGE LTD IN RESPECT OF VERIFICATION OF SHARES OF G.K.CONSULTANT S LTD, THE LD AO TOOK NO FURTHER STEPS 6 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 WHEN THE STOCK EXCHANGE INFORMED THAT THERE WAS NO SUCH TRANSACTION IN IT. THE LD AO SHOULD HAVE ISSUED NOTICE U/S 131 OF THE ACT TO CAL CUTTA STOCK EXCHANGE LTD AND HE COULD HAVE WRITTEN LETTER TO SEBI FOR FURTHER INFORMATION . WITHOUT MAKING THESE REQUISITE ENQUIRIES, THE LD AO ERRED IN REACHING TO A CONCLUS ION THAT THE SHARE TRANSACTION WAS A COLOURFUL AND SHAM TRANSACTION AND THAT THE ASSESSE E HAD ONLY INTRODUCED HIS UNDISCLOSED INCOME IN THE REGULAR CHANNEL TAKING BENEFIT OF FAL SE LTCG WITH CONNIVANCE WITH THE BROKER AND OTHER AGENTS. IT WAS ALSO REITERATED THAT TH E BROKER HAD ISSUED THE CONTRACT NOTE IN PROPER FORM GIVING SETTLEMENT NUMBER, TRADE TIME, T RADE UMBER, AMOUNT OF STT (RS 493) AND OTHER DETAILS. THE SHARES WERE TRANSFERRED TO THE SHARE BROKERS ACCOUNT THROUGH THE ASSESSEES DEMAT ACCOUNT NO. 10398306 WITH CITIBANK . THE ASSESSEE ALSO RECEIVED THE PAYMENT FROM THE BROKER AFTER DEDUCTION OF STT . O NCE THE TRANSACTION IS ROUTED THROUGH A REGISTERED BROKER IN A RECOGNIZED STOCK EXCHANGE WI TH DUE SUFFERING OF STT AND WHICH ARE ALSO DULY COVERED BY THE REQUISITE DOCUMENTATION, T HE LTCG SO DERIVED THEREON COULD NOT BE DOUBTED WITH. IT WOULD BE THE RESPONSIBILITY O F THE BROKER TO ENSURE THAT THE TRANSACTION IS PROPERLY ROUTED AND STT WAS PAID AS PER STOCK EX CHANGE NORMS. IT WAS ALSO STATED THAT IN THE SECONDARY MARKET TRANSACTIONS, NO ONE KNOWS WHO IS THE BUYER AND WHO IS THE SELLER OF THE SHARES. THE ASSESSEE ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT OF HIS VARIOUS CONTENTIONS :- DECISION OF MUMBAI TRIBUNAL IN THE CASE OF MUKESH R MAROLA VS ACIT REPORTED IN (2006) 6 SOT 247 (MUM) DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS CARBO INDUSTRIAL HOLDINGS LTD REPORTED IN 244 ITR 422 (CAL) DECISION OF HONBLE CALCUTTTA HIGH COURT IN THE CAS E OF CIT VS EMERALD COMMERCIAL LTD REPORTED IN 250 ITR 539 (CAL) 2.6. THE LD CITA IGNORED ALL THE CONTENTIONS OF T HE ASSESSEE TOGETHER WITH THE CASE LAWS RELIED UPON BY THE ASSESSEE AND UPHELD THE ACTION O F THE LD AO BY REITERATING THE FINDINGS OF THE LD AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BE FORE US ON THE FOLLOWING GROUND NO.1 :- 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.6,44,270/- MADE BY THE AO BY WRONGLY TREATING THE SAID SUM AS INCOME FROM UNDISCLOSED SOURCES AFTER REJECTING THE CLAIM OF LONG TERM CAPITAL GAINS ON SALE OF SHARES OF M/S. G. K. CONSULTANTS LTD. 7 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 2.7. THE LD AR STATED THAT SINCE THE LD CITA HAD NOT MET ANY OF THE CONTENTIONS OF THE ASSESSEE RAISED BEFORE HIM IN HIS APPELLATE ORDER, HE TRIED TO MEET EACH AND EVERY ALLEGATION OF THE LD AO REGARDING THE SUBJECT MENTIONED ADDITI ON WITH SPECIFIC REFERENCE TO THE RELEVANT PAGES OF THE PAPER BOOK. HE ARGUED THAT THE LD AO HAD FACTUALLY ERRED IN STATING THAT THE PRICE OF THE SHARE OF G.K.CONSULTANTS LTD DURING TH E RELEVANT PERIOD AS PER THE DATA OBTAINED FROM MCA IN AS MUCH AS THE PRICE OF THE SHARE DURIN G OCTOBER AND NOVEMBER 2004 AS LISTED IN BOMBAY STOCK EXCHANGE (BSE) WAS RS. 6.60 AND RS 8.40 PER SHARE RESPECTIVELY. HE ARGUED THAT THE SHARES WERE TRADED IN CALCUTTA STOC K EXCHANGE AND THE SALE TRANSACTION HAD HAPPENED AS PER THE PREVAILING MARKET PRICES IN THE SECONDARY MARKET WHICH ARE DULY SUPPORTED BY THE SUFFICIENT DOCUMENTATION AS STATED SUPRA. HE ARGUED THAT IT IS NOT THE CASE OF THE LD AO THAT THE CONTRACT NOTE GIVEN BY THE RE GISTERED BROKER WAS FAKE OR THE CONTENTS MENTIONED THEREIN ARE FALSE. THE SHARES WERE DULY TRANSFERRED IN DEMAT FORM. NONE OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE AND THE BROKER WERE DISPUTED OR REBUTTED BY THE REVENUE EXCEPT THE FACT THAT CSE HAD STATED THAT TH ERE WAS NO TRANSACTION VIDE TRADE NO. 1586. HE ARGUED THAT THIS ALONE WOULD NOT JUSTIFY THE ACTION OF THE LD AO TO TREAT THE TRANSACTION AS SHAM AND BOGUS. HE ARGUED THAT THE C ONSIDERATION FOR THE SALE OF SHARES AT RS 218.50 PER SHARE HAD BEEN ROUTED THROUGH THE STOCK EXCHANGE ONLY BY ACCOUNT PAYEE CHEQUE AND HENCE IF ANY FURTHER ENQUIRY HAD BEEN CONDUCTED WITH THE CSE, THE LD AO COULD HAVE APPRECIATED THE CONTENTIONS OF THE ASSESSEE BETTER. HE PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF I TO VS RAJKUMAR AGARWAL IN ITA NO. 1330 (KOL) OF 2007 DATED 10.8.2007 AND DCIT VS SUNITA KH EMKA IN ITA NOS. 714 TO 718/KOL/2011 DATED 28.10.2015 IN SUPPORT OF HIS VAR IOUS CONTENTIONS , WHEREIN ON SIMILAR FACTS IN RESPECT OF SOME OTHER SCRIPS AND SOME OTHE R STOCK BROKER, THE DECISIONS WERE RENDERED IN FAVOUR OF THE ASSESSEE. 2.8. IN RESPONSE TO THIS, THE LD DR APART FROM REI TERATING THE FINDINGS OF THE LOWER AUTHORITIES STATED THAT THE SEBI HAD BLACKLISTED TH E BROKER AND MADE A GENERAL STATEMENT THAT THE SUBJECT MENTIONED TRANSACTION WAS PART OF A SCAM POPULARLY KNOWN IN KOLKATA AS PENNY STOCK SCAM. HE SOUGHT TIME FROM THE BENCH FOR PRODUCTION OF EVIDENCE IN THIS REGARD AND ACCORDINGLY THE CASE WAS ADJOURNED AND KEPT AS PART HEARD. BUT IN THE SUBSEQUENT 8 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 HEARING, HE COULD NOT PRODUCE ANY EVIDENCE IN THE F ORM OF SEBI ORDER WHEREIN THE CONCERNED BROKER WAS SUSPENDED OR THE CONCERNED SCR IP WAS SUSPENDED FROM TRADING EITHER FOR ARTIFICIAL PRICE RIGGING OR FOR ANY OTHER VIOLA TIONS AS ALLEGED BY THE LD DR. 2.9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK COMPRISING OF PAGES 1 TO 3 2 FILED BY THE ASSESSEE CONTAINING THE RELEVANT DOCUMENTS ON THE SUBJECT MENTIONED ISSUE. AT THE OUTSET, WE FIND THAT THE LD DR MADE A BALD STATEMENT THAT THE SUBJECT MENTIONED TR ANSACTION WAS PART OF PENNY STOCK SCAM THAT CROPPED UP IN KOLKATA IN CONNIVANCE WITH CSE , WHEREIN SOME BROKERS AND CERTAIN SCRIP WERE SUSPENDED BY SEBI, FOR WHICH HE SOUGHT TIME TO PRODUCE EVIDENCE IN THIS REGARD. IN THE SUBSEQUENT HEARING, THE LD DR DID NOT ADVANCE A NY ARGUMENT BY PRODUCING ANY EVIDENCE TO PROVE HIS BALD ALLEGATION ON THE SUBJECT MENTION ED TRANSACTION. IN THESE CIRCUMSTANCES, WE FIND THAT THE BALD ALLEGATION RAISED BY THE LD D R THAT THIS TRANSACTION IS PART OF THE SCAM IS HEREBY DISMISSED AND REJECTED AND WE PROCEED TO HEA R THIS CASE AND THE ISSUE BEFORE US BASED ON THE MATERIALS AVAILABLE ON RECORD. WE ALS O FIND THAT IT WAS NEVER THE CASE OF THE LOWER AUTHORITIES THAT THE SUBJECT MENTIONED TRANSA CTION WAS PART OF ANY SCAM THAT CROPPED UP IN KOLKATA. WE FIND THAT THE DOCUMENT RELIED UP ON BY THE REVENUE IN TERMS OF MCA DATA WHICH IS REFLECTED IN THE ANNUAL REPORT OF G.K.CONS ULTANTS LTD (BEING A LISTED COMPANY) THAT TRADING OF THAT SHARE HAD HAPPENED IN BSE IN OCT AN D NOV 2004 AT RS. 6.60 AND RS 8.40 RESPECTIVELY. APART FROM THESE TWO MONTHS, NO TRAD ING HAD HAPPENED IN BSE WITH RESPECT TO THE SUBJECT MENTIONED SCRIP. HENCE IT COULD BE SAF ELY CONCLUDED THAT THIS SCRIP WAS THINLY TRADED IN BSE AND ACCORDINGLY THE ASSESSEE BROUGHT THE SHARES FROM CSE WHERE IT WAS TRADED, THROUGH A REGISTERED SHARE BROKER IN KOLKA TA. WE ALSO FIND THAT THE ALLEGATION OF THE LD AO THAT NO OTHER SHARES WERE HELD IN THE DEMAT A CCOUNT OPENED WITH CITIBANK VIDE ACCOUNT NO. 10398306 IS FACTUALLY INCORRECT AS THE ASSESSEE WAS HOLDING THE SHARES OF OTHER TWO REPUTED COMPANIES NAMELY RELIANCE INDUSTRIES LT D AND ORGANO LTD ALSO IN THE SAID DEMAT ACCOUNT. 2.9.1. WE FIND THAT THE ASSESSEE HAD DULY SUBMITTED THE FOLLOWING DOCUMENTS :- 9 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 A) CONTRACT NOTE FOR PURCHASE OF SHARES IN OFF MARK ET FOR WHICH PAYMENT WAS MADE IN CASH. THIS IS NOT IN DISPUTE AS THE ISSUE BEFORE US IS ON LY ON THE TREATMENT OF SALE CONSIDERATION OF SALE OF SHARES AS TO WHETHER THE SAME IS TO BE CONS IDERED AS LTCG OR UNEXPLAINED CASH CREDIT. B) CONTRACT NOTE FOR SALE OF SHARES THROUGH A REGIS TERED STOCK BROKER WITH CSE. C) DEMAT ACCOUNT REFLECTING THE INFLOW OF SHARES IN DEMAT ACCOUNT AND OUTFLOW THEREON PURSUANT TO SALE, WHICH IS THE SUBJECT MATTER OF DI SPUTE BEFORE US. D) PAYMENT OF SALE CONSIDERATION RECEIVED BY THE AS SESSEE THROUGH ACCOUNT PAYEE CHEQUE. E) SHARES WERE DULY TRANSFERRED FROM THE DEMAT ACCO UNT OF THE ASSESSEE TO THE DEMAT ACCOUNT OF THE BROKER AND THEREAFTER TO THE ULTIMATE BUYER OF THE SHARES THROUGH A RECOGNIZED STOCK EXCHANGE. F) STT HAD BEEN DULY SUFFERED ON THE SALE TRANSACTI ON IN THE SUM OF RS. 493/-. G) THE BROKER HAD CONFIRMED THE PURCHASE AND SALE T RANSACTIONS BEFORE THE LD AO BY FURNISHING A LETTER IN WRITING IN RESPONSE TO SUMMO NS ISSUED TO HIM U/S 131 OF THE ACT. 2.9.2. WE FIND THAT JUST BECAUSE THE BROKER DOES NO T APPEAR BEFORE THE LD AO IN RESPONSE TO THE SUMMONS U/S 131 OF THE ACT , BUT HAD FURNISHED THE REQUISITE DETAILS CALLED FOR THEREON, IT CANNOT BE AUTOMATICALLY CONCLUDED THAT THE TRANSACT ION OF THE ASSESSEE WITH THAT BROKER AS BOGUS AND SHAM AND ASSESSEE CANNOT BE FAULTED WITH FOR THE SAME. THE STATUTE PROVIDES UNFETTERED POWERS TO THE LD AO FOR TAKING ACTION FO R NON-APPEARANCE OF A PERSON IN RESPONSE TO SUMMONS U/S 131 OF THE ACT WHICH COULD HAVE BEEN EXERCISED BY THE LD AO IN THE INSTANT CASE INSTEAD OF DRAWING AN ADVERSE INFERENCE ON THE TRANSACTIONS OF THE ASSESSEE. IN THIS REGARD, WE FIND THAT THE RELIANCE PLACED BY THE LD AR ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS CARGO INDUSTRIAL H OLDINGS LTD REPORTED IN (2001) 244 ITR 422 (CAL) IS VERY WELL FOUNDED WHEREIN IT WAS HELD THAT :- PERUSAL OF THE DETAILS FURNISHED REVEALED THAT THE PURCHASE AND SALE OF THE SHARES COULD NOT BE ACCEPTED AS HAVING BEEN TRANSACTED ON THE SAME D ATE. PAYMENT BY ACCOUNT PAYEE CHEQUES HAD NOT BEEN DISPUTED. MERELY BECAUSE SOME BROKER FAILED TO APPEAR, THE ASSESSEE SHOULD NOT BE PUNISHED FOR THE DEFAULT OF A BROKER, AND ALSO ON MERE SUSPICION THE ASSESSEES CLAIM SHOULD NOT BE DENIED. 10 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 SIMILARLY IN ANOTHER DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS EMERALD COMMERCIAL LTD REPORTED IN (2002) 120 TAXMA N 282 DATED 23.3.2001 , IT WAS HELD THAT :- ADMITTEDLY THE DETAILS OF PURCHASE AND SALE OF SHA RES WERE FURNISHED. THE PAYMENT AND RECEIPT WERE BY ACCOUNT PAYEE CHEQUE. THE IDENTIT Y OF SELLER AND PURCHASER WAS NOT IN DISPUTE. THE DISALLOWANCE WAS BASICALLY MADE ON TH E GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE BROKERS FOR VERIFICATION OF THE TRANSAC TION. FOLLOWING THE VIEW ON A SIMILAR ISSUE IN THE CASE OF CIT VS CARBO INDUSTRIAL HOLDINGS LTD (2000) 244 ITR 422 (CAL) , NON- PRODUCTION OF THE SHARE BROKER BY THE ASSESSEE DID NOT DISENTITLE IT FOR CLAIM OF LOSS IN A GENUINE TRANSACTION OF SHARES, THUS, THE TRIBUNALS FINDING WAS BASED ON MATERIAL AND NOT PERVERSE. THE FINDINGS OF THE ITO AND THE COMMISSI ONER (APPEALS) WERE BASED ON PRESUMPTION. 2.9.3. WE FIND THAT THE REVENUE HAD MADE A REMARK T HAT THE SUBJECT MENTIONED SHARES OF G.K.CONSULTANTS LTD WERE BOUGHT BY THE ASSESSEE IN OFF MARKET WHICH IS AGAINST THE RULES FRAMED BY SEBI AND OTHERS. WE FIND FROM THE BYE LA WS OF CSE PLACED ON RECORD IN THE PAPER BOOK , THAT THE SAID BYE LAWS (VIDE BYE LAW N O. 9) PERMIT PURCHASE AND SALE OF SHARES IN OFF MARKET. IN ANY CASE, THIS IS NOT RELEVANT IN AS MUCH AS THE ISSUE BEFORE US IS NOT ON THE PURCHASE OF SHARES BUT ONLY THE TREATMEN T OF SALE CONSIDERATION RECEIVED ON SALE OF THOSE SHARES. 2.9.4. WE FIND THAT ON VERIFICATION BY THE LD AO W ITH THE CALCUTTA STOCK EXCHANGE LTD REGARDING THE PURCHASE AND SALE OF SHARES OF G.K.CO NSULTANTS LTD BY THE ASSESSEE THROUGH THE BROKER MR RAJENDRA PRASAD SHAH, CSE HAD CONFIRM ED THE FACT THAT THE SHARE PURCHASE AND SALE TRANSACTIONS OF ASSESSEE HAD HAPPENED THRO UGH THE BROKER MR RAJENDRA PRASAD SHAH ON THE SAID DATE BUT HAD ONLY STATED THERE WAS NO T RADE VIDE TRADE NO. 1586. THIS ALONE WOULD NOT AUTOMATICALLY MAKE THE ENTIRE TRANSACTION AS SHAM AND BOGUS WHEN OTHER DOCUMENTS AS STATED SUPRA PROVE THE CONTRARY. 2.9.5. WE FIND THAT THE SIMILAR ISSUE HAD BEEN AD JUDICATED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT VS SUNITA KHEMKA IN IT A NOS. 714 TO 718/KOL/2011 DATED 28.10.2015 AND IN THE CASE OF ITO VS RAJKUMAR AGARW AL IN ITA NO. 1330 (KOL) OF 2007 DATED 10.8.2007 WHEREIN IT WAS HELD THAT WHEN PURCHASE AND SALE OF SHARES WERE SUPPORTED BY PROPER CONTRACT NOTES , DELIVERIES OF SHARES WER E RECEIVED THROUGH DEMAT ACCOUNTS 11 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 MAINTAINED WITH VARIOUS AGENCIES, THE SHARES WERE P URCHASED AND SOLD THROUGH RECOGNIZED BROKER AND THE SALE CONSIDERATIONS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES, THE TRANSACTIONS CANNOT BE TREATED AS BOGUS AND THE INCOME SO DISCL OSED WAS ASSESSABLE AS LTCG. WE FIND THAT IN THE INSTANT CASE, THE ADDITION HAS BEEN MAD E ONLY ON THE BASIS OF THE SUSPICION THAT THE DIFFERENCE IN PURCHASE AND SALE PRICE OF THESE SHARES IS UNUSUALLY HIGH. THE REVENUE HAD NOT BROUGHT ANY MATERIAL ON RECORD TO SUPPORT ITS F INDING THAT THERE HAS BEEN COLLUSION / CONNIVANCE BETWEEN THE BROKER AND THE ASSESSEE FOR THE INTRODUCTION OF ITS UNACCOUNTED MONEY. 2.9.6. IN VIEW OF THE AFORESAID FACTS AND FINDINGS AND THE JUDICIAL PRECEDENTS RELIED UPON , WE HAVE NO HESITATION IN DIRECTING THE LD AO TO ACC EPT THE CLAIM OF EXEMPTION OF LTCG OF THE ASSESSEE ARISING OUT OF SALE OF SHARES OF G.K.C ONSULTANTS LTD AND ACCORDINGLY ALLOW THE GROUND RAISED BY THE ASSESSEE IN THIS REGARD. 3. THE NEXT ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN UPHOLDING THE ADDITION MADE IN THE SUM OF RS. 4,34, 400/- BY DISBELIEVING THE GIFT RECEIVED BY THE ASSESSEE FROM HIS CO-BROTHER IN THE FACTS AN D CIRCUMSTANCES OF THE CASE. 3.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LD AO OBSERVED THAT THERE WAS A SUM OF RS. 4,34,400/- WHICH WAS CREDITED TO THE BANK ACCOUNT O F THE ASSESSEE, FOR WHICH ASSESSEE EXPLAINED THE SAME TO BE GIFT RECEIVED OF USD 10000 FROM ONE KIRTI S ZAVERI OF USA. THE ASSESSEE ALSO FILED A CONFIRMATION LETTER FROM THE SAID DONOR IN SUPPORT OF HIS CONTENTION WHICH WAS DULY NOTARIZED. THE LD AO OBSERVED THAT T HE DATE OF LETTER WAS 06.01.2005 WHEREAS IT WAS SAID TO BE SIGNED IN PRESENCE OF ONE NOTARY PUBLIC OF USA WHO PUT THE DATE AS 01.06.2005. BUT THE DATE PUT IN HIS OFFICIAL SE AL WAS 03.03.2006. THE LD AO CONCLUDED THAT THE VERACITY OF THE VERY LETTER IS DOUBTFUL. THE ASSESSEE APPEARED BEFORE THE LD AO AND TOLD THAT THE DONOR WAS HIS CO-BROTHER. THE LD AO OBSERVED THAT THE ASSESSEE COULD NOT FURNISH THE BANK STATEMENT, BALANCE SHEET, INCOME T AX PAYMENT DETAILS IN INDIA OR USA OR NATURE OF JOB / BUSINESS OF THE DONOR. HE CONCLUDE D THAT THE CREDITWORTHINESS OF THE DONOR TO GIVE THE GIFT WAS NOT PROVED BY THE ASSESSEE WITH N ECESSARY EVIDENCES. HE ALSO CONCLUDED 12 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 THAT NO EVIDENCE WAS FURNISHED THAT THE SAID PERSON FALLS WITHIN THE RELATIVE DEFINITION GIVEN IN SECTION 56 OF THE ACT. ACCORDINGLY, THE LD AO T REATED THE GIFT RECEIVED OF RS. 4,34,400/- AS INCOME FROM UNDISCLOSED SOURCES OF THE ASSESSEE. 3.2. BEFORE THE LD CITA, THE ASSESSEE FILED VARIOU S ADDITIONAL EVIDENCES IN SUPPORT OF HIS CLAIM OF GIFT FROM HIS CO-BROTHER SUCH AS IT RETURN S FILED IN USA BY THE DONOR, PROPERTY TAX ASSESSMENT, AFFIDAVIT BY DONORS WIFE SMT JYOTI KIR TI ZAVERI CONFIRMING THE GIFT GIVEN BY HER HUSBAND TO ASSESSEE. IT WAS ALSO SUBMITTED IN THE SAID CONFIRMATION BY HER THAT HER HUSBAND HAD GIVEN 10000 USD AS GIFT TO THE ASSESSEE VIDE CH EQUE NO. 1670 DATED 6.1.05 DRAWN ON RBC CENTURA BANK, GEORGIA, USA WHICH WAS DEPOSITED BY THE ASSESSEE INTO HIS CITIBANK (SB A/C NO. 5287912007). ALL THESE DOCUMENTS WERE SUBJECTED TO VERIFICATION BY THE LD AO IN THE REMAND PROCEEDINGS, WHEREIN, THE LD AO CO NCLUDED THAT THERE WAS NO PROPER EXPLANATION GIVEN BY THE ASSESSEE WITH REGARD TO TH E OCCASION TO GIVE THE GIFT BY THE DONOR AND ACCORDINGLY CONCLUDED AGAIN THAT IT WAS A BOGUS GIFT. IT WAS SUBMITTED BEFORE THE LD CITA THAT THE DONOR HAD SUFFICIENT CAPACITY TO GIVE THE GIFT OF 10000 USD TO THE ASSESSEE IN AS MUCH AS THE VALUE OF THE IMMOVABLE PROPERTY OF T HE DONOR WAS USD 506200 THEREBY PROVING THE CREDITWORTHINESS BEYOND DOUBT APART FRO M OTHER STATUTORY DOCUMENTS AS STATED SUPRA. WITH REGARD TO THE LETTER ISSUED BY THE DONO R DATED 6.1.2005, WHEREAS THE NOTARY PUBLIC USA HAD MENTIONED THE DATE AS 1.6.2005 AND T HE DATE PUT ON OFFICIAL SEAL WAS 3.3.2006, THE ASSESSEE CLARIFIED THAT THE DATE MENT IONED AS 1.6.2005 REPRESENTS THE AMERICAN DATE WHICH IS QUITE PREVALENT IN USA AND IS DIFFERE NT FROM THE INDIAN SYSTEM OF RECOGNIZING DATES AND THE SAME SHOULD BE READ AS 6 TH JAN 2005 AND NOT 1 ST JUNE 2005. THE DATE MENTIONED IN THE OFFICIAL SEAL AS 3.3.2006 REPRESEN TS THE EXPIRY DATE OF THE LICENCE OF THE NOTARY PUBLIC. HENCE THERE WAS NO DISCREPANCY WITH REGARD TO THE DATES WARRANTING DRAWING OF ANY ADVERSE INFERENCE ON THE SUBJECT MENTIONED D OCUMENT. THE ASSESSEE ALSO PLACED RELIANCE ON CERTAIN JUDGEMENTS IN HIS SUPPORT. THE LD CITA HOWEVER, BRUSHED ASIDE ALL THE ARGUMENTS OF THE ASSESSEE TOGETHER WITH THE CASE LA WS AND UPHELD THE ACTION OF THE LD AO ON THE GROUND THAT OCCASION TO GIVE THE GIFT WAS NOT P ROVED CONCLUSIVELY BY THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON T HE FOLLOWING GROUND NO.2 :- 13 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.4,34,000/- MADE BY TH E AO ON ACCOUNT OF GIFT RECEIVED BY THE ASSESSEE. 3.3. THE LD AR DREW THE ATTENTION OF THE BENCH TO THE VARIOUS DOCUMENTS THAT WERE ALREADY FILED BEFORE THE LOWER AUTHORITIES AND FURTHER ARGU ED THAT THE IDENTITY OF THE DONOR, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINES S OF THE DONOR HAVE BEEN PROVED BEYOND DOUBT IN THE VARIOUS DOCUMENTS RELIED UPON THEREON AND HENCE NO ADDITION COULD BE MADE U/S 68 OF THE ACT. MOREOVER, THERE WAS NO NEED TO PROVE THE OCCASION TO GIVE THE GIFT BETWEEN THE DONOR AND DONEE. HE ARGUED THAT THE GI FT RECEIVED FROM THE DONOR FALLS UNDER THE DEFINITION OF RELATIVE PROVIDED IN SECTION 5 6(2) OF THE ACT AND HENCE ON THAT COUNT ALSO, NO ADDITION COULD BE MADE. HE PLACED RELIANCE ON TH E CO-ORDINATE BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF UMA SANKAR AGARWAL VS DCIT IN ITA NOS. 449 & 450/ KOL/2012 DATED 5.9.2014 AND SUNIL KUMAR ROY VS DCIT IN ITA N O. 1879/KOL/2010 DATED 17.7.2014, IN SUPPORT OF HIS CONTENTIONS. IN RESPONSE TO TH IS, THE LD DR ARGUED THAT JUST BECAUSE THE MONIES HAVE BEEN ROUTED THROUGH REGULAR BANKING CHA NNELS BY WAY OF AMOUNT DEBITED IN THE BANK ACCOUNT OF THE DONOR IN USD AND CORRESPONDING AMOUNT GETTING CREDITED IN THE ACCOUNT OF THE DONEE (ASSESSEE HEREIN) DOES NOT PROVE THE G ENUINENESS OF THE TRANSACTION. 3.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE COMP RISING OF COPY OF PASSPORT OF KIRTI ZAVERI (DONOR) AND JYOTI ZAVERI (DONORS WIFE AND Y OUNGER SISTER OF WIFE OF ASSESSEE) VIDE PAGES 33 TO 34 OF PB ; BANK STATEMENT OF THE ASSESS EE FOR THE PERIOD FEBRUARY 2005 REFLECTING THE CREDIT OF GIFT AMOUNT VIDE PAGES 35 TO 36 OF PB; AFFIDAVIT OF JYOTI ZAVERI VIDE PAGE 37 OF PB; COPY OF JOINT US IT RETURN FOR THE Y EAR 2004 OF KIRTI ZAVERI AND JYOTI ZAVERI INCLUDING THEIR DETAILS OF ASSETS VIDE PAGES 38 TO 49 OF PB AND AFFIDAVIT OF KIRTI ZAVERI (DONOR) DULY NOTARIZED IN USA VIDE PAGE 50 O F PB. WE FIND THAT THE LD AO INITIALLY PROCEEDED TO DISBELIEVE THE DOCUMENTS SUBMITTED BY THE ASSESSEE BASED ON MISTAKEN UNDERSTANDING OF THE DATES IN THE CONFIRMATION / AF FIDAVIT AND LATER WHEN THOSE DISCREPANCIES WERE DULY ADDRESSED, PROCEEDED TO SHIFT HIS FOCUS O N THE GROUND THAT THE ASSESSEE COULD NOT CONCLUSIVELY PROVE THE OCCASION TO RECEIVE THE GIFT FROM HIS RELATIVE. ON PERUSAL OF THE 14 ITA NO.19/KOL/2014 DOLARRAI HEMANI, AY 2005-06 DOCUMENTS SUBMITTED IN THE PAPER BOOK, WE ARE CONVI NCED TO CONCLUDE THAT THE GIFT RECEIVED BY THE ASSESSEE FROM HIS CO-BROTHER IS GENUINE WHIC H ARE DULY SUPPORTED BY ALL THE REQUIRED DOCUMENTS IN THAT REGARD. WE HOLD THAT THE ASSESSE E HAD DULY PROVED THE IDENTITY OF THE DONOR, GENUINENESS OF THE TRANSACTION AND CREDITWOR THINESS OF THE DONOR IN THE INSTANT CASE. WE FIND THAT THE GIFT RECEIVED BY THE ASSESSEE FROM HIS RELATIVE ALSO FALLS UNDER THE EXCEPTION CLAUSE COVERED IN THE SAID DEFINITION IN SECTION 56 (2)(V) OF THE ACT. WE HOLD THAT WHEN ALL THE DOCUMENTS PROVE THE FACTUM OF GIFT BY THE ASSES SEE BEYOND ANY DOUBT, DISMISSING THOSE DOCUMENTS SUMMARILY ON THE GROUND THAT THERE WAS NO OCCASION TO GIVE THE GIFT WOULD, IN OUR CONSIDERED OPINION, IN THE FACTS AND CIRCUMSTAN CES OF THE CASE, BE UNJUST AND ACCORDINGLY WE HAVE NO HESITATION IN DIRECTING THE LD AO TO DEL ETE THE ADDITION MADE TOWARDS THE GIFT RECEIVED BY THE ASSESSEE. ACCORDINGLY, THE GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOWED. 4. THE GROUND NO. 3 RAISED BY THE ASSESSEE IS GENE RAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 02.12.201 6 SD/- SD/- (S.S. VISWANETHRA RAVI) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED :02 ND DECEMBER, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI DOLARRAI HEMANI, 209, PRIDE PURPLE SQUARE, AUNDH RAVET ROAD, KALEWADI PHATA, WAKAD, PUNE-411057. 2 RESPONDENT ITO, WARD-34(3), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .