ITO, Agra V. Smt. Pallavi Garg, Agra

ITA 192/AGR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7078 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-03-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 06-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: MAHESH AGARWAL
• Keywords: Income from undisclosed sources; Share purchase agreement; Accommodation entries; Assessment record; Onus to prove; Set aside; Capital Gains
• Section: 142(1); 143(2); 54EC; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 192/AGRA/2009 ASSTT. YEAR : 2002-03 INCOME-TAX OFFICER, VS. SMT. PALLAVI GARG, 1(3), AGRA. 41 RING ROAD, AGRA. (PAN : ABVPG 5718 P) C.O. NO. 34/AGRA/2009 (IN ITA NO. 192/AGRA/2009) ASSTT. YEAR : 2002-03 SMT. PALLAVI GARG, VS. INCOME-TAX OFFICER, 41 RING ROAD, AGRA. 1(3), AGRA. (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI A.K. SHARMA, JR. D.R. FOR ASSESSEE : SHRI MAHESH AGARWAL, C.A. ORDER PER P.K. BANSAL, A.M. : THE APPEAL HAS BEEN FILED BY THE REVENUE AND THE C ROSS-OBJECTION BY ASSESSEE AGAINST THE ORDER DATED 17.02.2009 OF CIT(A)-I, AGRA. THE CROSS OBJECTION CHALLENGING THE VALIDITY OF PROCEEDINGS U/S. 147 HAS NOT BEEN PRESSED BY THE LE ARNED AR OF THE ASSSESSEE. THE SAME, THEREFORE, STANDS DISMISSED AS NOT PRESSED. THE ONL Y EFFECTIVE GROUND RAISED IN APPEAL BY REVENUE READS AS UNDER : 1. THAT THE CIT(APPEALS)-I, AGRA HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.11,26,023/- MADE ON ACCOUNT OF UNEXP LAINED RECEIPTS SHOWN AS RECEIPT ON SALE OF SHARES WITHOUT PROPERLY APPRECIA TING THE FACTS OF THE CASE. (B). IN DOING SO THE CIT(APPEALS)-I, AGRA HAS ERRE D IN LAW AND ON FACTS AS THE ASSESSEE FAILED TO DISCHARGE HIS ONUS OF PRO VING THE CLAIMED SHARE TRANSACTION AS GENUINE AS DISCUSSED IN THE ASSESSME NT ORDER. 2 2. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSING OFFICER RECEIVED INFORMATION FROM ADDL. DIT(INV), AGRA THAT ONE M/S NORTH INDIA SECUR ITIES PVT. LTD DELHI HAD PROVIDED BOGUS ENTRIES OF SALE PROCEEDS OF SHARES TO THE ASSESSES THROUGH THE STATE BANK OF BIKANER & JAIPUR, DELHI. THE ADDL. DIT(INV), AGRA HAD PROVIDED A LIST OF BENEFICIARIES OF PAYMENTS FROM THE SAID BROKER WHICH LIST CONTAI NED THE NAME OF THE ASSESSEE ALSO. THE SAID LIST SHOWED ENTRIES OF DIFFERENT AMOUNTS, TOTALING TO RS. 11,03,945/-, RELATING TO THE DEMAND DRAFTS ISSUED F ROM STATE BANK OF BIKANER & JAIPUR, DELHI BY M/S NORTH INDIA SECURITIES PVT. LTD DELHI. SAID DRAFTS WERE DEPOSITED IN ASSESSEES SB A/C NO. 26819 WITH CANARA BANK BELANGANJ, AGRA. IN VIEW OF THIS INFORM ATION THE AO TOOK ACTION U/S 147 OF THE ACT AFTER RECORDING THE REASONS AND ISSUED NOTICES U/S 142(1) & 143(2) REQUIRING THE ASSESSEE TO FURNISH VARIOUS DETAILS RELATING THE SHARE TRANSACTIONS, ALLEGED TO HAVE BEEN MADE FOR EARNING IMPUGNED CAPITAL GAINS. 3. IN RESPONSE, THE ASSESSEE FILED NECESSARY DETAIL S RELATING TO HER SHARE TRANSACTIONS VIDE WRITTEN SUBMISSIONS DATED 03.12.2007. IT WAS SUBMITTED THAT SHE PURCHASED 10,000 SHARES OF M/S GOYAL ACHAL SAMPATTI VIKAS AND NIYOJAN LTD. ON 02.12.1999 @ 10/ - PER SHARE FOR 1,00,000/-. THE SHARE MONEY WAS SENT VIDE DD 046583 DATED 02.12.1999 OF CANARA BANK PAYABLE AT DELHI. THESE SHARES WERE ALLOTTED TO THE ASSESSEE IN PREFERENTIAL ALLOTMENT DIRECTLY BY THE COMPANY. THE DISTINCTIVE NUMBERS OF THE SHARE CERTIFICATES WERE 6065301 TO 6075300. COPIES OF SHA RE APPLICATION, ALLOTMENT ADVICE AND COPIES OF SHAR E CERTIFICATES WERE FILED BEFORE THE ASSESSING OFFICE R. COMPLETE IDENTITY OF THE COMPANY GOYAL ACHAL SAMPATTI VIKAS AND NIYOJAN LTD. INCLUDING NAME, ADD RESS OF THE REGISTERED OFFICE, REGISTRATION NO., AU DITED BALANCE SHEET, NAMES AND ADDRESS OF THE DIRECTORS E TC. WAS ALSO FILED. THE ASSESSEE CLAIMED TO HAVE SOLD THESE SHARES THROUGH THE BROKER M/S NORTH INDIA SEC URITIES PVT. LTD., DELHI AND RECEIVED THE DRAFTS AGGREGATING TO RS.11,03,945/- AS SALE PROCEEDS OF S HARES. THE CAPITAL GAIN EARNED BY ASSESSEE WAS CLAI MED EXEMPT U/S 54EC OF THE ACT, AS THE ENTIRE AMOUNT WAS INVESTED IN THE ELIGIBLE S ECURITIES. HOWEVER, THE AO DID NOT ACCEPT THE CLAIM OF THE ASSESSEE OF CAPITAL GAIN AND ASSESSED THE ENTIRE AMOUNT OF RS.11,03,945/- PLUS RS.22078/- AS COMMISSION PAID, AGGREGATING TO RS.11,26,023/-, AS INCOME FROM UNDISCLOSED SOURCES. 3 4. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE, VIDE WRITTEN SUBMISSIONS DATED 14.01.2009, REITERATED THE ARGUMENTS ADVANCED BEFORE THE AO AND ALSO SUBMI TTED PHOTOCOPIES OF ALL DOCUMENTS FILED IN THE ASSESSMENT PROCEEDINGS. RELIANCE WAS ALSO PLACED ON VARIOUS JUDGMENTS OF VARIOUS BENCHES OF ITAT. THE CIT(A) ALSO WROTE A LETTER DATED 19.09.2008 TO THE AO TO FURNISH ALL MATERIALS, DOCUMENTS AND OTHER EVIDENCES RECEIVED BY HIM FROM THE INVESTIGATION WI NG AND ALSO COLLECTED BY HIM IN SUPPORT OF THE BOGU S LONG TERM CAPITAL GAINS. HE ALSO WROTE LETTER ON TH E SAME DAY TO THE ADDL. DIT (INV.), AGRA ASKING HIM TO FURNISH ALL RELEVANT MATERIAL / EVIDENCES / STATEME NTS / BANK ACCOUNT EXTRACTS ETC. AVAILABLE, PERTAIN ING SPECIFICALLY TO THE ASSESSEE. IN RESPONSE TO THE A FORESAID LETTER, THE AO, VIDE LETTER DATED 23.09.20 08, STATED AS UNDER AS THE CASE WAS RECEIVED ON TRANSFER FROM ITO 4 (3), AGRA VIDE THIS OFFICE LETTER DATED 19.09.2008 (COPY ENCLOSED FOR READY REFERENCE), HE WAS REQUESTED TO FURNISH THE INFORMATION REQUIRED SO THAT THE SAME MAY BE SUBMIT TED TO YOU. BUT INSTEAD OF RECEIVING THE LETTER, THE ITO 4(3) HAS SENT 4 COPIES OF THE ANNEXURES (PAGES 6,7,10 & 18), WHICH ARE BEING SENT HEREWITH. IT IS HUMBLY REQUESTED THA T IN CASE ANY FURTHER INFORMATION IS REQUIRED, THE ITO - 4(3), MAY KINDLY BE ASKED TO FU RNISH THE SAME. 5. THE ADDL. DIT(INV)-1, AGRA ALSO RESPONDED THE LE TTER OF CIT(A) AS UNDER : AS DESIRED, THE REQUISITE INFORMATION / MATERIAL / EVIDENCE / STATEMENT OF BANK ACCOUNT EXTRACT ETC. IN RESPECT OF THE FOLLOWING BROKERS IN THE SPIRAL BINDING (RAPPED & SEALED ) ARE BEING SENT TO YOU WHICH MAY KINDLY BE RETURNED TO THIS OFFICE AFTER DOING THE NEEDFUL AT YOUR END. THE CIT(A) AFTER CONSIDERING THE ARGUMENTS OF THE A SSESSEE, MATERIAL ON RECORD, VARIOUS DECISIONS CITED BEFORE HIM AND ALSO THE REPLIES / MATERIAL G IVEN BY ASSESSING OFFICER ADDL. DIT(INV) DURING THE APPELLATE PROCEEDINGS, DELETED THE ADDITION BY OBSE RVING AS UNDER :- 3.3 I HAVE CONSIDERED THE RIVAL CONTENTIONS AN D PERUSED THE MATERIAL ON RECORD AND FIND AS UNDER IN THE ASSESSMENT RECORDS, THERE IS NO MATERI AL OTHER THAN A LIST SHOWING LONG TERM CAPITAL GAINS ON SALE OF SHARES SHOWN BY VARIO US INDIVIDUALS INCLUDING THE APPELLANT 4 THROUGH SHARE BROKER NORTH INDIA SECURITIES PVT. LT D., DELHI, MANY OF WHOM (13 OUT OF 40) HAVE APPARENTLY SURRENDERED THE SAID AMOUNT FOR TAX BEFORE THE INVESTIGATING WING. THE MATERIAL FURNISHED BY OFFICE OF THE ADIT(INV)-1, AGRA INCLUDES A SPIRAL BOUND BOOK IN THE NAME OF NORTH INDIA SECURITIES P. LTD C ONTAINING 87 PAGES WHICH COMPRISES OF BANK STATEMENTS OF NORTH INDIA SECURITIES P. LT D, M/S J.N.PROMOTERS PVT. LTD., M/S B.T.TECHNET PVT. LTD., AND M/S BOLANI AXIM INDIA PV T. LTD., LIST OF BENEFICIARIES AND PERSONS SURRENDERED. HOWEVER, THERE IS NO MATERIAL EITHER BY WAY OF ANY CONFESSIONAL STATEMENT BY THE BROKER M/S NORTH INDIA SECURITIES P. LTD THAT IT HAD BEEN GIVING ACCOMMODATION ENTRIES OF BOGUS CAPITAL GAINS TO VAR IOUS BENEFICIARIES INCLUDING THE APPELLANT OR ANY FINDING OF THE INVESTIGATING WING AS TO DEPOSITS OF UNEXPLAINED CASH IN THE BANK ACCOUNTS OF THE BROKER OUT OF WHICH DDS / CHEQUES WERE ISSUED TO VARIOUS BENEFICIARIES, INCLUDING APPELLANT, SPECIALLY. NO ADVERSE / INCRIMINATING MATERIAL IS AVAILABLE IMPLICATING THE COMPANIES CAPITAL TRADE L INKS LTD AND GOYAL ACHAL SAMPATTI VIKAS EVAM NIYOJAN NIGAM LTD IN THESE TRANSACTIONS. THEREFORE, IN VIEW OF THE DOCUMENTARY EVIDENCES FURNISHED BY THE APPELLANT BE FORE THE AO AS WELL AS IN THE COURSE OF APPELLATE PROCEEDINGS, WHICH HAVE NOT BEEN REFUT ED BY THE AO WITH ANY EVIDENCE OR COGENT MATERIAL TO THE CONTRARY, EITHER ON THE BASI S OF INQUIRES CARRIED OUT BY HIMSELF OR ON THE BASIS OF EVIDENCES GATHERED AND FORWARDED BY THE INVESTIGATING WING, THE FINDING OF THE THAT THE IMPUGNED AMOUNT OF RS.11,26,023/- R EPRESENTS THE APPELLANTS INCOME FROM UNDISCLOSED SOURCES IS NOT SUSTAINABLE AND HE NCE DELETED. 6. THE LEARNED DR STRONGLY RELIED ON THE ORDER OF A SSESSING OFFICER AND SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING ADDITION WITHOUT APPR ECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSI NG OFFICER. COMPLETE DETAILS AS REQUIRED BY THE ASSESS ING OFFICER REGARDING PURCHASE AND SALE TRANSACTION S OF SHARES WERE NOT FURNISHED BY ASSESSEE IN SUPPORT OF HIS CLAIM OF CAPITAL GAINS EARNED ON SHARE TRANSAC TIONS. ABNORMAL INCREASE IN THE PRICE OF SHARES WAS NOT PA LATABLE AND WAS A SUFFICIENT REASON TO DOUBT THE SH ARE TRANSACTIONS. DURING THE INVESTIGATION, THE BROKER WAS FOUND ENGAGED IN GIVING ACCOMMODATION ENTRIES. IN VIEW OF THESE FACTS, THE LD. CIT(A) HAS ERRED IN DE LETING THE ADDITION AND THE ORDER OF CIT(A) IS LIAB LE TO BE SET ASIDE. 7. THE LEARNED AR, ON THE OTHER HAND, RELYING UPON THE ORDER OF CIT(A) CONTENDED THAT ALL THE RELEVANT DOCUMENTS AND EVIDENCES AS WERE IN HIS POS SESSION AND CONTROL WERE SUBMITTED. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER VARIOUS DOCU MENTS SUCH AS SHARE APPLICATION, ALLOTMENT LETTER AND SHARE CERTIFICATES TO PROVE THAT THE SHARES WERE AL LOTTED TO HER IN PREFERENTIAL ISSUE OF THE COMPANY M/S 5 GOYAL ACHAL SAMPATTI VIKAS EVAM NIYOJAN NIGAM LTD. COPY OF THE BALANCE SHEET FOR THE PREVIOUS YEAR WAS ALSO FILED SHOWING THE INVESTMENT IN SAID SHARE S. AS REGARDS THE SALE OF SHARES PHOTOCOPIES OF CON TRACT NOTE, SALE BILL, AND STATEMENT OF ACCOUNT FROM THE BROKER M/S NORTH INDIA SECURITIES LTD WERE FILED. T HE ASSESSING OFFICER HAS FAILED TO PROVE THAT ALL THES E DOCUMENTS / EVIDENCES WERE FALSE, FORGED AND FABRICATED. THE IMPUGNED SHARES WERE ACQUIRED IN T HE PREVIOUS YEAR AND WERE ALSO DISCLOSED IN THE BALANCE SHEET OF EARLIER YEAR. AO HAS NOT MADE ANY INDEPENDENT ENQUIRY EITHER FROM THE COMPANY OR THE BROKER. THE ONLY MATERIAL IS THE INFORMATION FROM THE DDI(INV.) WING, AGRA WHICH ALSO DOES NOT SPECIFICALLY PROVE THAT THE ASSESSEE DID NOT ENTER INTO SHARE TRANSACTION BUT TOOK AN ACCOMMODATION EN TRY FROM THE BROKER. THE BROKER WAS ALSO NOT TESTED BY THE ASSESSING OFFICER. FURTHER, EVEN DURING THE APPELLATE PROCEEDINGS, IN RESPONSE TO THE LETTER OF THE CIT(A), NO NEW MATERIAL, FACT OR EVIDENCE WAS BROUGHT FORWARD EITHER BY THE AO OR BY THE ADDL. DD I (INV) WING TO CONCLUSIVELY ESTABLISH THAT THE SHA RE TRANSACTION OF THE ASSESSEE WAS NOT GENUINE AND HE HAD OBTAINED DEMAND DRAFTS BY FIRST PAYING IN CASH. AS A MATTER OF FACT, THE LETTER OF THE AO TO THE CIT(A ) FULLY ESTABLISH THAT HE DID NOT MAKE ANY ENQUIRY AT ALL AND BASED HIS ASSESSMENT SIMPLY ON THE GENERAL INFO RMATION RECEIVED. HE HAS RELIED ON THE FOLLOWING DECISIONS OF AGRA BENCH OF TRIBUNAL : (I). BAIJNATH AGARWAL REPORTED IN 40 SOT 475 (AGRA TRIBUNAL 3RD MEMBER). (II). SEMA GARG, RAM PRAKASH GARG AND SRI RAJESH GA RG (ITA NO. 252, 253, 254/AG/2005) DECIDED BY THIS BENCH ON 31 ST MARCH 2009 IT WAS FURTHER SUBMITTED THAT ASSESSMENT IS BASED E NTIRELY ON ASSUMPTIONS, PRESUMPTIONS AND SUSPICION OF THE ASSESSING OFFICER WITHOUT BRINGING ON RECORD AN Y EVIDENCE TO PROVE THAT THE DRAFTS WERE OBTAINED B Y FIRST PAYING CASH TO THE BROKER. ON THE STRENGTH O F THESE ARGUMENTS, THE LD. AR REQUESTED TO DISMISS THE APPEAL OF THE REVENUE. 6 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE ORDERS OF TAX AUTHORITIES BELOW INCLUDING THE ORDER S OF ITAT RELIED BEFORE US. WE FIND NO MATERIAL ON RECORD TO SUBSTANTIATE THE STAND TAKEN BY THE ASSESSING OFFICER THAT THERE WAS NO ACTUAL PURCHASE AND SALE OF SHARES BY THE ASSESSEE AND THE MONEY, WHATSOEVER, SHOWN TO HAVE BEEN RECEIVED AS SALE CONSIDERATION OF SHARES WAS A SSESSEES UNACCOUNTED MONEY. IT IS SETTLED PRINCIPLE OF LAW THAT THE PERSON WHO ALLEGES IS LIA BLE TO DISCHARGE HIS ONUS TO PROVE THE ALLEGATION. IN THE PRESENT CASE, WE FIND NO EVIDENCE OR MATERIA L ON RECORD TO PROVE THE ALLEGATION OF AO THAT THE MONEY RECEIVED BY ASSESSEE AS SALE CONSIDERATIO N OF SHARES, ACTUALLY FLOWED FROM HER AND WERE ASSESSEES UNACCOUNTED MONEY. THE REVENUE HAS UTTERLY FAILED TO DISCHARGE THIS BURDEN BY BRINGING ANY EVIDENCE ON RECORD. OUR THIS VIEW IS F ORTIFIED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KISHAN CHAND CHELLA RAM, 125 I TR 713 (SC), WHEREIN IT HAS BEEN HELD THAT THE BURDEN IS ON THE DEPARTMENT TO PROVE THAT THE M ONEY BELONGS TO THE ASSESSEE BY BRINGING PROPER EVIDENCE ON RECORD AND THE ASSESSEE COULD NO T BE EXPECTED TO CALL THE CONCERNED PERSONS IN EVIDENCE TO HELP THE DEPARTMENT TO DISCHARGE THE BURDEN THAT LAY UPON IT. ON THE CONTRARY, THE SHARES IN QUESTION WERE ACQUIRED IN THE PREVIOUS YE AR AND WERE ALSO DISCLOSED IN THE BALANCE SHEET OF EARLIER YEAR. WE FURTHER NOTED THAT IN SUPPORT OF HER CLAIM REGARDING ACQUISITION AND SAL E OF SHARES, THE ASSESSEE HAD FURNISHED ALL THE RELEVANT DOCUMEN TARY EVIDENCES IN THE SHAPE OF APPLICATION MADE IN THE PREFERENTIAL ISSUE OF THE COMPANY, ALLO TMENT LETTERS, COPIES OF SHARE CERTIFICATES, CONTRACT NOTES AND SALE BILLS OF THE BROKER, COPY OF THE BALANCE SHEET FOR THE PREVIOUS YEAR SH OWING THE INVESTMENT IN SAID SHARES, AND STATEMENT OF ACCOUNT FROM THE BROKER M/S NORTH INDIA SECURITIES LTD. TH E ASSESSING OFFICER HAS FAILED TO PROVE THAT ALL THES E DOCUMENTS / EVIDENCES WERE FALSE, FORGED AND FABRICATED. THE ASSESSEE HAD PAID THE APPLICATION MONEY FOR PU RCHASE OF SHARES BY ACCOUNT PAYEE DRAFTS AND ALSO RECEIVED THE SALE PROCEEDS THROUGH ACCOUNT PAYEE DRAFTS FROM THE BROKER AND DEPOSITED THE SAME IN HIS BANK ACCOUNT. THE PHOTOCO PIES OF SHARE CERTIFICATES WERE ALSO 7 SUBMITTED SHOWING THESE SHARES TO HAVE BEEN ALLOTTE D DIRECTLY BY COMPANY TO THE ASSESSEE IN THEIR PREFERENTIAL ISSUE OF SHARES WHICH WERE LATER ON SO LD THROUGH THE BROKER. ALL THESE DOCUMENTARY EVIDENCES SUBMITTED BY ASSESSEE ARE NOT PROVED TO B E UNAUTHENTIC OR FABRICATED OR FORGED TO DISPROVE THE SHARE TRANSACTIONS. THUS, THE ONUS THA T LAY ON THE ASSESSEE, IN OUR OPINION, STOOD DISCHARGED AND THE OBSERVATION OF ASSESSING OFFICE R SUGGESTS THAT NO SHARE TRANSACTION WAS DONE BY THE BROKER AND THE BILLS / CONTRACT NOTES ETC. ISSU ED BY THE BROKER WERE NOTHING BUT A DEVICE TO CHANN ELISE THE UNDISCLOSED MONEY OF THE ASSESSEE IN THE SHAPE OF SALE CONSIDERATION ON ACCOUNT OF SALE OF SHARES OF THE ASSESSEE, IS NOT FOUND TENABLE AT ALL. 9. A PERUSAL OF IMPUGNED ORDER OF THE CIT(A) REVEAL S THAT AFTER EXAMINATION OF RECORD, THE CIT(A) NOTED THAT THE ASSESSEE HAS ALSO SHOWN TO HAVE PUR CHASED 5000 SHARES OF CAPITAL TRADE LINKS LTD ON 31.05.2000 THROUGH THE BROKER M/S PRAMOD KUMAR & CO ., NEW DELHI FOR WHICH PAYMENT WAS MADE THROUGH THE SAVINGS BANK ACCOUNT. THESE SHARES TOO WERE SOLD DURING THE YEAR UNDER CONSIDERATION THROUGH THE SAME BROKER, M/S. NORTH INDIA SECURITIE S LTD. THE ASSESSEE HAD ALSO DECLARED CAPITAL GAINS ON THE SALE OF THESE SHARES IN THE SIMILAR FACTS AND C IRCUMSTANCES. HOWEVER, TRANSACTION IN THESE SHARES MADE THROUGH THE SAME BROKER DOES NOT FIND ANY MENTION E ITHER IN THE REASONS RECORDED U/S 148 OR IN THE ASSESSMENT ORDER, MEANING THEREBY THAT THE ASSESSIN G OFFICER ACCEPTED THE TRANSACTION OF THESE SHARES AS GENUINE AND ACCEPTED THE LONG TERM CAPITAL GAIN EAR NED THEREON. IN PRESENCE OF THESE FACTS, IN OUR OPI NION, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN PARTLY A CCEPTING AND PARTLY DISBELIEVING DEALINGS OF SHARES FROM THE SAME BROKER IN THE IDENTICAL FACTS AND CIRCUMST ANCES. WE ALSO NOTED THAT AO HAS NOT MADE ANY INDEPENDENT ENQUIRY EITHER FROM THE COMPANY OR THE BROKER. THE ONLY MATERIAL IS THE INFORMATION FROM THE DDI(INV.) WING, AGRA WHICH ALSO DOES NOT SPECIF ICALLY PROVE THAT THE ASSESSEE DID NOT ENTER INTO S HARE TRANSACTION BUT TOOK AN ACCOMMODATION ENTRY FROM TH E BROKER. THE BROKER WAS ALSO NOT TESTED BY THE ASSESSING OFFICER. FURTHER, EVEN DURING THE APPELL ATE PROCEEDINGS, IN RESPONSE TO THE LETTER OF THE C IT(A), NO NEW MATERIAL, FACT OR EVIDENCE WAS BROUGHT FORW ARD EITHER BY THE AO OR BY THE ADDL. DDI (INV) WING 8 TO CONCLUSIVELY ESTABLISH THAT THE SHARE TRANSACTIO N OF THE ASSESSEE WAS NOT GENUINE AND HE HAD OBTAIN ED DEMAND DRAFTS IN LIEU OF CASH PAYMENT. 10. AS REGARDS THE OBSERVATION OF ASSESSING OFFICER REGARDING TREMENDOUS INCREASE IN THE PRICE OF SHARES, WHICH LED HIM TO DOUBT THE IMPUGNE D SHARE TRANSACTIONS, WE FIND THAT FLUCTUATION IN SHARE PRICE IS A NATURAL PHENOMENA AND IT CANNOT BE MADE BASIS FOR DOUBTING THE TRANSACTION OF PURCHASE AND SALE OF SHARES UNTIL SOME CONTRARY MAT ERIAL IS BROUGHT ON RECORD, WHICH IS LACKING IN THE PRESENT CASE. MOREOVER, THE INCREASE IN SHARE PRICES BY MORE THAN 25 TIMES OF ITS PURCHASE VALUE HAS NOT BEEN TAKEN AS ABNORMAL BY ITAT AGRA B ENCH IN THE CASE OF MEMO DEVI, 7 DTR 158. THIS DECISION HAS BEEN CONSIDERED BY THE AGRA BENCH OF TRIBUNAL IN THE CASE OF SEEMA BY THIRD MEMBER IN THE CASE OF BAIJNATH AGARWAL VS. AC IT 40 SOT 475(AGRA TRIBUNAL THIRD MEMBER) IN THE SIMILAR CIRCUMSTANCES FOR DOUBTING T HE SHARE TRANSACTIONS. THE DECISION IN THE CASE OF MEMO DEVI (SUPRA) HAS ALSO BEEN CONSIDERED BY THE TRIBUNAL IN THE COMMON ORDER DATED 31 ST MARCH, 2009 IN THE CASE OF SEEMA GARG & OTHERS (SU PRA), COPY FILED ON RECORD. THEREFORE, THIS ALLEGATION OF THE REVENUE, IN OUR OPINION, IS NOT SUSTAINABLE FOR DOUBTING THE SHARE TRANSACTION MADE BY ASSESSEE. 11. WE HAVE GONE THROUGH THE ORDER OF THIRD MEMBER IN THE CASE OF BAIJNATH AGARWAL (SUPRA), WHEREIN THE THIRD MEMBER, UNDER PARA 15, OBSERVED A S FOLLOWS - 15. IT WAS THE DUTY OF THE AO TO BRING ON RECORD SUFFICIENT EVIDENCE AND MATERIAL TO PROVE THAT THE DOCUMENTS FILED BY THE ASSESSEE WERE BOGUS, FAL SE OR FABRICATED AND THE LONG TERM CAPITAL GAIN SHOWN BY HIM WAS ACTUALLY HIS INCOME FROM UNDI SCLOSED SOURCES. THE ONLY MATERIAL TO SUPPORT SUCH CONCLUSION OF THE LOWER AUTHORITIES IS EITHER THE FINDING OF THE DDI IN GENERAL INVESTIGATION OR OBSERVATION THAT THE ASSESSEE COUL D NOT PROVE THE TRANSACTION TO BE GENUINE. THIS IS SETTLED LAW IN VIEW OF THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF CIT VS DAULAT RAM RAWATMULL 1972 CTR (SC) 411 THAT APPARENT IS REAL. ONUS IS ON THE PERSON WHO ALLEGES APPARENT IS NOT REAL. NONE OF THE JUDICIAL PRECEDENTS SUPPOR T THE CASE OF THE REVENUE. WHILE MAKING ADDITION AS INCOME FROM UNDISCLOSED SOURCES BURDEN ON THE DEPARTMENT IS VERY HEAVY TO ESTABLISH THAT THE ALLEGED RECEIPT WAS ACTUALLY INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 9 12. IN THE CASE OF SEMA GARG, RAM PRAKASH GARG AND SRI RAJESH GARG (ITA NO. 252, 253, 254/AG/2005) DECIDED BY THIS BENCH ON 31 ST MARCH 2009, ONE OF THE ASSESSEE SHRI RAJESH GARG H AD ALSO ACQUIRED 10,000 SHARES OF THE SAME COMPANY M/S GOYA L ACHAL SAMPATTI VIKAS EVAM NIYOJAN NIGAM LTD. ON 02.02.2000 IN THE SIMILAR MANNER IE IN PREFERENT IAL ALLOTMENT AND HAD SOLD THE SAME ON 15.02.2001 A ND 26.02.2001 THROUGH THE SAME BROKER, I.E., M/S NORTH INDIA SECURITIES PVT. LTD., DELHI. IN THAT CASE AL SO THE AO HAD NOT ACCEPTED THE CLAIM OF LONG TERM CAPITAL GAIN AND ASSESSED THE SALE PROCEEDS AS INCOME FROM UNDISCLOSED SOURCES. AFTER CONSIDERING ENTIRE MATER IAL ON RECORD THIS BENCH OF ITAT HAS HELD AS UNDER : 21. FROM THE ENTIRE APPRECIATION OF EVIDENCE WE NOTE THAT THE ASSESSEE HAD ACQUIRED THE SHARES IN THE PREFERENTIAL ALLOTMENT DIRECTLY FROM THE COM PANIES. THE PURCHASE WAS ALSO DECLARED IN THE BALANCE SHEET FOR EARLIER YEAR WHICH STANDS ACCEPTE D BY THE DEPARTMENT. THESE SHARES WERE SOLD THROUGH THE STOCK BROKERS WHO WERE REGISTERED WITH THE SEBI AND STOCK EXCHANGE. SHARES WERE SOLD AT THE PRICES THAT WERE QUOTED THE STOCK EXCHA NGE AT THE RELEVANT TIME THE BROKERS TOO CONFIRMED THE TRANSACTIONS DIRECTLY TO THE AO IN RE SPONSE TO THE NOTICE U/S 133(6). PAYMENT OF SALE CONSIDERATION ALSO FLOWED FROM THE BANK ACCOUN TS OF THE BROKERS WHERE FUNDS CAME THROUGH CLEARING AND NOT IN CASH. ALL THESE VITAL FACTS AND EVIDENCES HAVE BEEN COMPLETELY BRUSHED ASIDE BY THE ASSESSING OFFICER AND THE CIT(A). AS A MATT ER OF FACT DECISIONS OF THE LOWER AUTHORITIES SEEMS BADLY AFFECTED BY THE GENERAL OBSERVATIONS OF THE INVESTIGATING WING THAT AROSE A SUSPICION, TURNED INTO CONCLUSIVE PROOF IN THE MINDS OF THE AU THORITIES THAT EVERYBODY WHO DEALT IN THE SHARES THAT REGISTERED HIGH INCREASE IN PRICE WAS CONVERTI NG HIS UNACCOUNTED MONEY INTO WHITE BY TAKING SUCH ALLEGED ACCOMMODATION ENTRIES. THIS APPROACH C ANNOT BE APPROVED. AS HELD BY THE HONBLE APEX COURT IN THE CASE OF UMACHARAN SHAW & BROS VS CIT (37 ITR 271), SUSPICION WHO SO EVER STRONG CANNOT TAKE THE PLACE OF PROOF. THIS ORDER OF THE AGRA BENCH HAS BEEN APPROVED BY T HE HONBLE ALLAHABAD HIGH COURT VIDE ITS ORDER DATED 15 TH FEBRUARY 2011. 13. THE RELIANCE PLACED BY THE AO ON VARIOUS PRECED ENTS, THE PITH AND SUBSTANCE OF WHICH IS THAT THE TAXING AUTHORITIES CANNOT PUT BLINKERS TO THE HARD REALITIES OF LIFE, THEY HAVE TO LIFT THE VEIL PUT U P BY THE TAX EVADERS AND THAT THE COLOURABLE DEVICES FOR TAX PLA NNING CAN NOT BE APPROVED, IS ALSO MISPLACED IN TH E FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IT IS NOTEWORTHY THAT THESE PRINCIPLES CANNOT BE APPLIED IN GENERALITY WITHOUT MAKING PROPER ENQUIRY AND BRINGI NG ON RECORD COGENT MATERIAL TO DISREGARD THE CLAIM OF THE ASSESSEE. SO FAR AS THE SHARE TRANSACTION OF THE ASSESSEE IS CONCERNED, THERE WAS NOTHING HIDDE N 10 WHICH REQUIRED THRASHING. THERE WAS ALSO NO TAX PLA NNING FOR WHICH ANY COLOURABLE DEVICE OR COLLUSION COULD HAVE BEEN USED. IT WAS A SIMPLE SHARE TRANSAC TION AT THE MOST APPROPRIATE TIME FOR WHICH SUBSTAN TIAL EVIDENCES WERE LAID BY ASSESSEE ON RECORD. THE ONUS LIES ON THE DEPARTMENT TO PROVE THAT THE SALE CONSIDERATION OF SHARES CLAIMED BY THE ASSESSEE WAS ACTUALLY HIS UNACCOUNTED MONEY CONVERTED UNDER THE GUISE OF SHARE TRANSACTION. WHILE MAKING ADDITION AS INCOME FROM UNDISCLOSED SOURCES, THE BURDEN ON T HE DEPARTMENT IS VERY HEAVY TO ESTABLISH TO THE HILT T HAT THE ALLEGED RECEIPT WAS ACTUALLY INCOME OF THE ASSESSEE FROM THE UNDISCLOSED SOURCES. IN VIEW OF ABOVE DISCUSSION, WE FIND THAT THE ORDER OF THE CIT (A) IS A WELL REASONED ORDER AND DOES NOT CALL FOR ANY INTERFERENCE. 14. IN THE RESULT, THE APPEAL FILED BY REVENUE AND CROSS OBJECTION FILED BY ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.04.11. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 8 TH APRIL, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY