Sh. Dalpat Singh Choudhary, RAJSAMAND V. ACIT, UDAIPUR

ITA 201/JODH/2009

• Counselvise Citation: 20123314 RSA 2009
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Question of law; Accommodation entries; Onus to prove
• Section: 153A; 234B; 68; 132; 154

Judgement Text

1 ITA 201(4)-09 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 201, 202/JODH/2009 ASSTT. YEAR : 2002-03 & 2006-07. SHRI DALPAT SINGH CHOUDHARY, VS. THE ACIT, CENTRA L CIRCLE-2, S/O SHRI SHANKAR LAL CHOUDHARY, UDAIPUR. KANKROLI, RAJSAMAND. ITA NO. 446/JODH/2009 ASSTT. YEAR : 2002-03. THE DCIT, CENTRAL CIRCLE-2, VS. SHRI DALPAT SING H CHOUDHARY UDAIPUR. RAJSAMAND. (APPELLANTS) (RESPONDENTS) C.O. NO. 84/JODH/2009 ( ARISING OUT OF ITA NO. /JODH/2009 ) ASSTT. YEAR : 2004-05. THE ACIT, CIRCLE-2, VS. SHRI DALPAT SINGH CHOUD HARY UDAIPUR. RAJSAMAND. (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI DEPARTMENT BY :SHRI SUNIL MATHUR DATE OF HEARING : 28.11.2011. DATE OF PRONOUNCEMENT : 30.11.2011. ORDER DATED : 30.11.2011 PER R.K. GUPTA, J.M. CROSS OBJECTION NO. 84/JODH/2009 WHICH IS AGAINST IN NOT HOLDING THAT THE ASSESSMENT MADE ON 28.12.2007 WAS BARRED BY LIMITAT ION, WAS NOT PRESSED. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 2 2. THE APPEAL IN ITA NO. 446 AND 202/JODH/2009 RELA TING TO ASSESSMENT YEAR 2002- 03 ARE BY DEPARTMENT AND ASSESSEE. THE APPEAL FILE D BY ASSESSEE IS AGAINST THE ORDER OF LD. CIT (A) DATED 10.2.2009 BY WHICH THE ISSUE IN R ESPECT TO ADDITION OF RS. 18,47,560/- ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF SHA RES WAS REJECTED, WHEREAS THE DEPARTMENT IS IN APPEAL AGAINST THE ORDER OF LD. CI T (A) DATED 21.5.2009 PASSED BY LD. CIT (A0 UNDER SECTION 154 FOR THE SAME ASSESSMENT Y EAR I.E. 2002-03. 3. THE LD. COUNSEL OF THE ASSESSEE STATED THAT IF T HE APPEAL OF THE DEPARTMENT IS TAKEN UP THEN APPEAL OF THE ASSESSEE MAY BE TREATED AS IN FRUCTUOUS. HOWEVER, THE LD. CIT D/R HAS STATED THAT SINCE THE DEPARTMENT IS AGAINST THE ORDER PASSED UNDER SECTION 154 AND ASSESSEE HAS ALREADY FILED APPEAL AGAINST THE ORIGI NAL ORDER OF LD. CIT (A) DATED 10.2.2009, THEREFORE, APPEAL OF THE ASSESSEE MAY BE TAKEN FIRST AND IF THE APPEAL OF THE ASSESSEE IS TAKEN, THEN APPEAL OF THE DEPARTMENT MA Y BE TREATED AS INFRUCTUOUS AS THE ISSUES INVOLVED ARE THE SAME. WE WILL TAKE THE APP EAL OF THE ASSESSEE. 4. THE LD. COUNSEL OF THE ASSESSEE STATED THAT ASSE SSEE PURCHASED SHARES OF M/S. ELITE CAPITAL & MANAGEMENT SERVICE PVT. LTD. THROUGH BROK ER M/S. SARAF TRADING & PORTFOLIO PVT. LTD. ON 10.4.2000. TOTAL SHARES PURCHASED ARE 61,700 FOR RS. 92,550/-. THESE SHRES WERE SHOWN IN THE BALANCE SHEET ON 31.3.2001. BALAN CE SHEET OF THE ASSESSEE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. THESE SHARES WE RE GOT TRANSFERRED TO THE DEMAT ACCOUNT. ATTENTION OF THE BENCH WAS DRAWN AT PAGES 228 TO 230 OF THE PAPER BOOK WHERE PURCHASE OF SHARES AND CERTIFICATE OF DEMAT ACCOUNT ARE PLACED. THEREAFTER THE ASSESSEE SOLD 20,000 SHARES VIDE BILL DATED 20.8.2001 AT RS. 5,77,900/- AND 41,700 SHARES VIDE BILL DATED 23.8.2001 FOR RS. 12,69,668/- TOTALING TO RS. 18,47,568/- THROUGH BROKER M/S. MKM FINSE PVT. LTD. THE ENTIRE SALE CONSIDERATION AS DISCLOSED WERE ROUTED THROUGH 3 BANKING CHANNEL. THE ASSESSING OFFICER DURING THE A SSESSMENT PROCEEDINGS WANTED TO ASCERTAIN THE FACTUAL ASPECT OF THE CASE. THE ASSES SING OFFICER AT PAGE 2 OF HIS ORDER HAS NOTED THAT SHRI MAHESH BATRA OF M/S.MKM FINSE PVT. LTD. HAS ADMITTED DURING THE RECORDING OF STATEMENT UNDER SECTION 132(4) THAT HE WAS INVOLVED IN ISSUING ACCOMMODATION ENTRIES TO VARIOUS PARTIES. AS PER A SSESSING OFFICERS ORDER, THE ASSESSEE WAS CONFRONTED TO THIS FACT AND THEREAFTER THE EXPL ANATION OF THE ASSESSEE WAS SOUGHT. DETAILED SUBMISSIONS WERE FILED AND IT WAS SUBMITTE D THAT THE ASSESSEE HAS PURCHASED SHARES THROUGH A DIFFERENT BROKER AND HAS BEEN SHOW N IN THE BALANCE SHEET OF EARLIER YEAR. THE PAYMENT HAS BEEN ROUTED THROUGH PROPER BANKING CHANNEL. THE SHARES HAVE BEEN TRANSFERRED IN DEMAT ACCOUNT. THEREFORE, GENUINENE SS OF TRANSACTION CANNOT BE DOUBTED. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED. T HEREFORE, HE HELD THAT THE CREDIT OF RS. 18,47,560/- IS NOTHING BUT THE ASSESSEES OWN UNDIS CLOSED FUNDS WHICH HAVE BEEN ROUTED THROUGH BANKING CHANNEL OF THE ACCOMMODATION ENTRIE S PROVIDED BY THE BROKER. ACCORDINGLY HE MADE THE IMPUGNED ADDITION OF RS. 18 ,47,560/-. THE ASSESSING OFFICER MADE A FURTHER ADDITION OF RS. 18,475/- @ 1% AS COM MISSION PAID BY ASSESSEE. IN THIS WAY TOTAL ADDITION WAS MADE BY ASSESSING OFFICER AT RS. 18,66,035/-. THE LD. CIT (A) CONFIRMED THIS ADDITION BY AGREEING WITH THE FINDIN G OF ASSESSING OFFICER. THE ISSUE HAS BEEN DISCUSSED BY LD. CIT (A) AT PAGES 15 TO 27 OF HIS ORDER. 5. THE ASSESSEE FILED APPLICATION UNDER SECTION 154 BEFORE LD. CIT (A) AGAINST HIS ORDER. THE LD. CIT (A) AFTER EXAMINING THE ISSUE F OUND THAT A MISTAKE HAS BEEN CREPT IN HIS ORDER, ACCORDINGLY HE DELETED THE ADDITION BY P ASSING ORDER UNDER SECTION 154. 6. NOW, AS STATED ABOVE, BOTH ARE IN APPEAL HERE BE FORE THE TRIBUNAL. 4 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORIGINAL O RDER OF LD. CIT (A) WHEREBY ADDITION HAS BEEN CONFIRMED AND THE DEPARTMENT IS I N APPEAL AGAINST THE ORDER PASSED UNDER SECTION 154 BY WHICH ADDITION HAS BEEN DELETE D BY LD. CIT (A). 8. THE CONTENTION RAISED BEFORE THE LOWER AUTHORITI ES WERE REITERATED HERE BEFORE THE TRIBUNAL. RELIANCE HAS BEEN PLACED BY LD. A/R IN 16 DTR 114, 105 TTJ 265, 49 DTR 149 (RAJ.) AND A DECISION OF JAIPUR BENCH, COPIES OF AL L THESE DECISIONS ARE PLACED ON RECORD. IT WAS FURTHER SUBMITTED BY LD. A/R THAT ASSESSING OFFICER HAS MADE AN ADDITION ON THE BASIS OF STATEMENT OF THE BROKER WHICH WAS GIVEN IN A ROUTINE MANNER AND NO WHERE THE NAME OF THE ASSESSEE IS APPEARING IN THE STATEMENT AS THIS FACT IS CLEARLY BORNE OUT FROM THE ORDER OF ASSESSING OFFICER THAT THE NAME OF THE ASSESSEE WAS NOT MENTIONED BY THE BROKER. THE BROKER MAY BE ISSUING BOGUS ACCOMMODAT ION BILLS IN CERTAIN CASES AND THIS STATEMENT CANNOT BE APPLIED IN EVERY CASE. THERE M AY BE GENUINE TRANSACTIONS AND ASSESSEE HAS MADE GENUINE TRANSACTION. ASSESSEE HA S PURCHASED SHARES THROUGH A DIFFERENT STOCK BROKER. THE COMPANY OF WHICH THE S HARES HAVE BEEN PURCHASED IS A LISTED COMPANY AND THE SHARES HAVE BEEN TRANSFERRED TO DEM AT ACCOUNT. THEREFORE, THE STATEMENT CANNOT BE GENERALIZED IN EVERY CASE. 9. ON THE OTHER HAND, THE LD. CIT D/R INVITED THE A TTENTION OF THE BENCH AT PAGE 3 OF ORDER OF ASSESSING OFFICER WHERE CONFESSIONAL STATE MENT OF SHRI MAHESH BATRA IS DISCUSSED. THE STATEMENT OF SHRI MAHESH BATRA WAS C ONFRONTED TO THE ASSESSEE. FROM THE STATEMENT OF SHRI MAHESH BATRA IT IS CLEARLY BORNE OUT THAT SHRI MAHESH BATRA USED TO ISSUE ACCOMMODATION ENTRIES UNDER THE GARB OF SALE OF SHARES AND, THEREFORE, ASSESSING OFFICER HAS MADE ADDITION RIGHTLY IN THE HANDS OF T HE ASSESSEE. ACCORDINGLY, THE LD. CIT 5 (A) WAS JUSTIFIED IN CONFIRMING THE ADDITION WHILE PASSING ORIGINAL ORDER AND HE WAS NOT JUSTIFIED IN RECTIFYING THE ORDER UNDER SECTION 154 WHEREBY ADDITION HAS BEEN DELETED. 10. IN REPLY, THE LD. COUNSEL OF THE ASSESSEE REITE RATED THE CONTENTIONS RAISED EARLIER. IT WAS FURTHER SUBMITTED THAT PURCHASES MADE BY ASSESS EE HAS NOT BEEN DOUBTED WHICH ARE THROUGH DIFFERENT BROKER. THEREFORE, THERE IS NO E VIDENCE AT ALL THAT ASSESSEE HAS INVESTED HIS OWN MONEY UNDER THE GARB OF SALE OF SHARES. NO INDEPENDENT ENQUIRY HAS BEEN MADE EITHER FROM THE COMPANY OF WHICH SHARES WERE PURCHA SED, COPY OF ACCOUNT OF SHARES TRANSFERRED TO DEMAT ACCOUNT AND CONFIRMATION FROM THE BROKER HAS BEEN PLACED ON RECORD. ATTENTION OF THE BENCH WAS DRAWN ON PAGES 231 TO 23 6 OF THE PAPER BOOK. 11. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING OTHER MATE RIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN HIS APPEAL. IT IS SEEN THAT ASSESSEE PURCHASED SHARES OF M/S. ELITE CAPITAL & MANAGEMENT SERVICES PVT. LTD. OF 61,700 S HARES FOR A CONSIDERATION OF RS. 92,550/-. THESE SHARES WERE PURCHASED BETWEEN 10 TH APRIL, 2000 TO 17 TH MAY, 2000. THE PAYMENTS WERE MADE IN CASH, COPY OF LEDGER ACCOUNT IS PLACED AT PAGE 228. THE COPY OF CERTIFICATE CONFIRMING THE SALE OF SHARES TO ASSESS EE IS PLACED AT PAGE 229 OF THE PAPER BOOK. COPY OF ACCOUNT OF M/S. ELITE CAPITAL & MANA GEMENT SERVICES PVT. LTD. CERTIFYING THAT 61,700 SHARES HAVE BEEN DEMATED IN THE NAME OF THE ASSESSEE IS PLACED AT PAGE 320 OF THE PAPER BOOK. THEREAFTER THE ASSESSEE SOLD SHARE S NUMBERING 20,000 ON 28.8.2001 THROUGH M/S. MKM FINSE PVT. LTD., COPY OF WHICH IS PLACED AT PAGE 231 OF THE PAPER BOOK. THEREAFTER ASSESSEE SOLD FURTHER 41,700 SHARE S, COPY OF THE SAME IS PLACED AT PAGE 232. THESE SHARES WERE SOLD VIDE BILL DATED 24.8.2 001. PAYMENTS HAVE BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE. THE CERTIFICATE FROM M/S. STOCK HOLDING CORPORATION LTD. 6 THROUGH WHOM THE SHARES ARE DELIVERED ARE PLACED AT PAGES 235 AND 236 OF THE PAPER BOOK. AFTER GOING THROUGH DETAILS, IT IS CLEARLY S EEN THAT ASSESSEE PURCHASED SHARES IN EARLIER YEAR. THEY WERE SHOWN IN THE BALANCE SHEET WHICH WAS FILED ALONG WITH THE RETURN OF INCOME. THE PAYMENTS WERE MADE THROUGH BOOKS OF ACCOUNT WHICH HAS NOT BEEN DOUBTED. THE SHARES BELONG TO A LISTED COMPANY WHIC H IS ALSO NOT IN DOUBT. THE COMPANY ITSELF HAS ISSUED CERTIFICATE THAT ALL THESE SHARES HAVE BEEN DEMATED, COPY OF THE SAME IS PLACED ON RECORD. ONCE THE PURCHASE OF SHARES IS N OT DOUBTED, THEN IN OUR CONSIDERED VIEW, THE SALE OF SAME SHARES SHOULD NOT HAVE BEEN DOUBTED. IF ASSESSEE HAS INVESTED HIS OWN MONEY UNDER THE GARB OF FICTITIOUS SALE OF SHAR ES THEN WHERE THE ACTUAL SHARES PURCHASED BY ASSESSEE WHICH WERE DULY DEMATED HAVE GONE. THIS FACT HAS NOT BEEN CONSIDERED EITHER BY ASSESSING OFFICER OR BY LD. CI T (A) WHO ORIGINALLY REJECTED THE CLAIM OF THE ASSESSEE. WHEN THIS FACT WAS BROUGHT TO THE NOTICE OF LD. CIT (A) BY FILING MISCELLANEOUS APPLICATION UNDER SECTION 154 THAT TH E ASSESSEE HAS PURCHASED THE SHARES OF LISTED COMPANY AND THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY, RATHER HE HAS NOTED WRONG FACT, THEN LD. CIT (A) REALIZED THIS MI STAKE AND RECTIFIED HIS ORDER UNDER SECTION 154 BY ALLOWING THE CLAIM OF ASSESSEE. ONL Y ON THE BASIS OF STATEMENT OF SHRI MAHESH BATRA, THE ASSESSING OFFICER HAS DRAWN ADVER SE INFERENCE IN CASE OF ASSESSEE. IT MAY BE TRUE THAT SHRI MAHESH BATRA MAY HAVE INDULGE D IN ISSUING ACCOMMODATION ENTRIES BUT IT CAN ALSO BE POSSIBLE THAT SHRI MAHESH BATRA MAY ALSO BE DOING GENUINE TRANSACTION. IT IS NOT A CASE THAT HE IS ONLY PROVIDING BOGUS EN TRIES. STATEMENT OF SHRI MAHESH BATRA IS NOT AVAILABLE ON RECORD. THE LD. COUNSEL OF THE ASSESSEE HAS STATED THAT THE STATEMENT OF SHRI MAHESH BATRA HAS NOT BEEN PROVIDED TO THEM. TH E DEPARTMENT HAS NOT FILED COPY OF THE STATEMENT OF SHRI BATRA. THEREFORE, IN OUR VIE W, SINCE THE PURCHASE OF SHARES IS 7 GENUINE, THE SALE OF THE SAME SHARES SHOULD HAVE BE EN TREATED AS GENUINE. SIMILAR ISSUE CAME BEFORE THE VARIOUS BENCHES OF THE TRIBUNAL AND TIME AND AGAIN THE BENCHES HAVE DECIDED THAT WITHOUT BRINGING ANY COGENT MATERIAL O N RECORD, THE CLAIM OF ASSESSEE CANNOT BE DENIED IN REGARD TO SALE OF SHARES. 12. ONE OF THE DECISIONS DECIDED IN CASE OF BAIJNAT H AGARWAL, 43 DTR 149 BY AGRA BENCH OF THE TRIBUNAL. IN THIS CASE ALSO IN SIMILA R MANNER THE ADDITION WAS MADE BY TREATING THE SALE OF SHARES AS NOT GENUINE. THE TR IBUNAL HELD THAT PURCHASE OF SHARES WERE FOUND GENUINE AND THEY HAVE BEEN SOLD THROUGH PROPE R BANKING CHANNEL. THEREFORE, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST ASSESSEE. A CCORDINGLY, THE ADDITION MADE UNDER SECTION 68 WAS DELETED AND THE ASSESSING OFFICER WA S DIRECTED TO ACCEPT THE CAPITAL GAIN SHOWN BY ASSESSEE. 13. SIMILAR VIEW HAS BEEN EXPRESSED IN CASE OF SMT. BIBI RANI BANSAL, 43 DTR 279 (AGRA). IN CASE OF SMT. KUSUMLATA, 105 TTJ 265, TH E JODHPUR BENCH OF THE TRIBUNAL HAS DECIDED THE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE WHEREIN IT HAS BEEN HELD THAT THE BURDEN OF PROVING THE TRANSACTION IS ALWAYS ON THE PERSON ASSERTING THE TRANSACTION TO BE BOGUS AND THIS BURDEN HAS TO BE STRICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE OF CHARACTER, WHICH WOULD EITHER DIRECTLY PROVE THE FA CT OF BOGUS OR ESTABLISH THE CIRCUMSTANCES UNERRINGLY AND REASONABLY RAISING AN INFERENCE TO THAT EFFECT. THE ASSESSEE MADE PAYMENT FOR THE PURCHASE FOR THE YEAR ON SOURC E THROUGH BANKING CHANNEL. THE SHARES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE AND WERE HELD BY HER FOR MORE THAN ONE YEAR. THERE IS NO RELATIONSHIP BETWEEN THE PAR TIES FROM WHOM THE ASSESSEE HAS PURCHASED THE SHARES AND THE PARTY TO WHOM THESE SH ARES WERE SOLD. THE SHARES WERE DELIVERED AFTER ITS SALE AND THE ASSESSEE DID NOT R EMAIN IN POSSESSION OF THOSE SHARES. 8 14. FROM THE ABOVE FACTS, IT IS ESTABLISHED THAT TH E ASSESSEE ACQUIRED THE SHARES TO EARN PROFIT. THERE IS NO EVIDENCE EXCEPT SPECULATION TH AT THIS PROFIT IS NOT FROM THE SALE OF SHARES. THE ASSESSING OFFICER HAS FAILED TO ESTABL ISH HIS CASE AND TO DISCHARGE THE REQUISITE BURDEN LAY UPON HIM. ACCORDINGLY THE ISSU E WAS DECIDED IN FAVOUR OF THE ASSESSEE. 15. SIMILAR FACTS ARE INVOLVED IN THE PRESENT CASE. IN THE CASE IN HAND, THE SHARES WERE ALSO PURCHASED MORE THEN ONE YEAR BEFORE THE DATE O F SALE. THE ASSESSEE IS NOT POSSESSING THOSE SHARES AND THEY HAVE BEEN TRANSFERRED IN THE NAME OF THE BUYER THROUGH DEMAT ACCOUNT. THE PAYMENT HAD BEEN RECEIVED THROUGH PRO PER BANKING CHANNEL. THERE IS NO RECORD THAT THE ASSESSEE HAD PAID HIS OWN MONEY IN CASH FOR ISSUING CHEQUE IN HIS NAME. AS STATED ABOVE, THE PURCHASE IS NOT IN DOUBT. THER EFORE, IN OUR CONSIDERED VIEW, ASSESSEE HAS DISCHARGED HIS ONUS BY FILING ALL DETAILS WHERE AS THE ASSESSING OFFICER HAS FAILED TO DISCHARGE HIS ONUS TO PROVE THAT ASSESSEE HAD INVES TED HIS OWN MONEY EXCEPT RELYING ON STATEMENT OF A THIRD PERSON WHO HAS GIVEN A GENERAL STATEMENT THAT HE WAS ISSUING ACCOMMODATION ENTRIES TO SOME PERSONS. NO NAME OF T HE ASSESSEE IS GIVEN BY SHRI MAHESH BATRA WHILE RECORDING HIS STATEMENT UNDER SE CTION 132(4). SIMILAR VIEW HAS BEEN EXPRESSED IN CASE OF CHANDRESH KUMAR MAHESHWARI, 16 DTR 114. 16. THE HONBLE RAJASTHAN HIGH COURT IN CASE OF SMT . PUSHPA MALPANI, 49 DTR 312 (RAJ.) HAS HELD THAT THE CIT (A) AND THE TRIBUNAL H AVING ACCEPTED THE GENUINENESS OF SALE OF SHARES BY ASSESSEE IN VIEW OF THE FACT THAT ASSE SSEE HAS FURNISHED SEVERAL RELEVANT DOCUMENTS TO PROVE THE TRANSACTION AND DIRECTED THE ASSESSING OFFICER TO TREAT THE SALE CONSIDERATION AS LONG TERM CAPITAL GAIN INSTEAD OF INCOME FROM OTHER SOURCES, NO SUBSTANTIAL QUESTION OF LAW ARISES. IN THIS CASE ALSO THE ASSESSING OFFICER MADE ADDITION 9 ON THE BASIS OF CERTAIN ADMISSION BY BROKER. THE L D. CIT (A) AFTER EXAMINING THE ISSUE IN DETAIL FOUND THAT THE ASSESSEE HAS PURCHASED SHARES WILL IN ADVANCE AND THEREAFTER THEY WERE SOLD IN SUBSEQUENT YEAR THROUGH PROPER BANKING CHANNEL. ALL THE DETAILS RELATING TO PURCHASE OF SHARES AND SALE OF SHARES WERE FILED AN D EXAMINED AND THEN ONLY THE ADDITION WAS DELETED WHICH HAS BEEN AFFIRMED BY THE HONBLE HIGH COURT AS STATED ABOVE. SIMILAR VIEW HAS BEEN EXPRESSED BY THE JAIPUR BENCH OF THE TRIBUNAL IN CASE OF SHRI SANJAY RATHORE IN ITA NO. 110 & 111/JP/2009 VIDE ORDER DAT ED 29.10.2010. IN THIS ORDER, BOTH THE PRESENT MEMBERS ARE PARTY TO THE SAID ORDER. I N THIS CASE ALSO THE ASSESSING OFFICER REJECTED THE CASE BASED ON A GENERAL STATEMENT GIVE BY SHRI B.C. PUROHIT. THE STATEMENT WAS GIVEN SOMETIME IN THE YEAR OF 2005-06 WHEREAS T HE TRANSACTION RELATED TO ASSESSMENT YEARS 2003-04 AND 04-05. THE ASSESSING OFFICER DRA WING ADVERSE INFERENCE ON THE BASIS OF A GENERAL STATEMENT OF SHRI B.C. PUROHIT MADE TH E ADDITION. THE LD. CIT (A) DELETED THOSE ADDITIONS AND ON SECOND APPEAL BY DEPARTMENT, THE ORDER OF LD. CIT (A) WAS CONFIRMED. THE ISSUE WAS EXAMINED AT GREAT LENGTH AND THEN ONLY THE ORDER OF LD. CIT (A) WAS CONFIRMED. HERE ALSO, THE FACTS ARE SIMILAR. A GENERAL STATEMENT GIVEN BY SHRI BATRA WAS RELIED UPON BY ASSESSING OFFICER AND IT DID NOT BORNE OUT THAT WHERE THE STATEMENT WAS RECORDED AND IN WHAT CONNECTION THE STATEMENT W AS RECORDED AND HOW IT WAS RELATED TO THE ASSESSEES CASE. THEREFORE, IN OUR VIEW, TH IS STATEMENT GIVEN BY SHRI BATRA SHOULD NOT HAVE BEEN CONSIDERED BY ASSESSING OFFICER AGAIN ST THE SO MUCH DETAILS FILED BEFORE HIM WHICH WERE NOT EXAMINED BY MAKING ENQUIRY FROM THE RESPECTIVE PARTY. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE ALLOW THE APPEAL OF THE ASSESSEE BY DELETING THE IMPUGNED ADDITION MADE AND DIRECT THE ASSESSING OFF ICER TO ACCEPT THE CAPITAL GAIN SHOWN ON ACCOUNT OF SALE OF SHARES. 10 17. THE APPEAL OF THE ASSESSEE IS ALLOWED AND THE A PPEAL OF THE DEPARTMENT IS DISMISSED AS SAME HAS BECOME INFRUCTUOUS IN NATURE. 18. NOW WE WILL TAKE UP REMAINING APPEAL BY ASSESSE E FOR ASSESSMENT YEAR 2006-07 IN ITA NO. 201/JODH/2009. 19. GROUND NO. 3 WHICH IS AGAINST INITIATION OF PRO CEEDINGS UNDER SECTION 132 AND THEREAFTER PASSING ASSESSMENT UNDER SECTION 153A WA S NOT PRESSED. THE SAME IS DISMISSED AS NOT PRESSED. 20. GROUND NO. 4 IS AGAINST CHARGING INTEREST UNDER SECTION 234A, 234B AND 234C IS CONSEQUENTIAL IN NATURE. THE WILL ALLOW CONSEQUENT IAL RELIEF TO THE ASSESSEE, IF ANY. 21. GROUND NO. 1 IS AGAINST CONFIRMING ADDITION OF RS. 2,95,241/- OUT OF TOTAL ADDITION OF RS. 4,09,007/-. 22. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON THE ASSESSEE ON 23.1.2006. STATEMENT OF THE ASSESSEE WAS ALSO RECORDED. THERE AFTER RETURN WAS FILED AND NOTICE WAS ISSUED FOR COMPLETING THE ASSESSMENT. TOTAL JEWELLE RY WEIGHING 3274.85 GRAMS WAS FOUND. THE ASSESSING OFFICER TREATED 1000 GRAM IN THE NAME OF ASSESSEE AND REMAINING JEWELLERY WAS TREATED IN THE NAME OF OTHER FAMILY M EMBERS. BY GIVING BENEFIT OF JEWELLERY OF 500 GRAMS AS PER BOARDS CIRCULAR, THE REMAINING JEWELLERY WAS TREATED AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AND THE AD DITION OF RS. 4,09,007/- WAS MADE. THE LD. CIT (A) ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE IN PART AS HE SUSTAINED ADDITION OF RS. 2,95,241/- OUT OF TOTAL ADDITION MA DE BY ASSESSING OFFICER. THE LD. CIT (A) RECASTED THE JEWELLERY IN THE HANDS OF FAMILY M EMBERS AND THEN BY TAKING INTO CONSIDERATION THE WILL OF THE FATHER, ALLOWED A REL IEF OF 700 GRAMS IN THE HANDS OF THE 11 ASSESSEE INSTEAD OF 500 GRAMS GIVEN BY ASSESSING OF FICER. THEREFORE, HE GAVE PART RELIEF TO THE ASSESSEE. 23. NOW THE ASSESSEE IS IN APPEAL HERE BEFORE THE T RIBUNAL. 24. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED I N PART IN THIS GROUND. THIS IS A CASE OF JEWELLERY FOUND RELATING TO MANY PERSONS IN THE FAM ILY. IF TOTALITY AND CIRCUMSTANCES OF THE CASE IS TAKEN INTO CONSIDERATION, THEN IT CAN B E SAID THAT ADDITION SUSTAINED AT RS. 2,95,241/- WAS ON HIGHER SIDE. THE CLAIM OF THE AS SESSEE IS THAT HE HAS RECEIVED 798 GRAMS FROM HIS FATHER THROUGH WILL, EVIDENCE OF THE SAME HAS BEEN FILED. IT IS FURTHER CLAIMED THAT ASSESSEES WIFE RECEIVED 300-400 GRAMS GOLD ON THE OCCASION OF MARRIAGE AND THEREAFTER CERTAIN JEWELLERY WERE RECEIVED ON A CCOUNT OF BIRTHDAY FROM NEAR RELATIVES AND FRIENDS. IF ALL THESE FACTS ARE TAKEN INTO CON SIDERATION, THEN WE ARE OF THE VIEW THAT THE ADDITION OF RS. 1,50,000/- IS SUSTAINED AND THE REM AINING ADDITION IS DELETED, THAT WILL MEET THE ENDS OF JUSTICE. WE ORDER ACCORDINGLY. 25. REMAINING ISSUE IS AGAINST SUSTAINING ADDITION OF RS. 81,340/- ON ACCOUNT OF EXCESS STOCK. 26. THE ASSESSEE IS PROPRIETOR OF A TRADING CONCERN . EXCESS STOCK OF RS. 81,340/- WAS WORKED OUT BY ASSESSING OFFICER BY DISCUSSING HIS V IEW AT PAGES 4 & 5 OF HIS ORDER. THE ASSESSING OFFICER OBSERVED THAT EXCESS STOCK AMOUNT ING TO RS. 81,340/- WAS ALLEGEDLY FOUND DURING SEARCH. THE EXPLANATION OF THE ASSESS EE WAS NOT ACCEPTED THAT STOCK OF ABOUT RS. 20 LACS WAS FOUND. IT CAN BE A MISTAKE I N COUNTING THE STOCK. IT WAS ALSO STATED THAT IN THE STOCK, GROSS PROFIT WAS ALSO INCLUDED. HOWEVER, ASSESSING OFFICER WAS NOT 12 SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. TH E LD. CIT (A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 27. AFTER CONSIDERING THE ORDERS OF THE ASSESSING O FFICER AND LD. CIT (A) AND SUBMISSIONS ON BEHALF OF THE PARTIES, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROUND. IF GP RATIO IS TAKEN INTO CONSIDERATION I. E. ON THE BASIS OF GP DECLARED BY ASSESSEE IT COMES TO RS. 43,140/-. THEREFORE, STRA IGHTAWAY THIS AMOUNT HAS TO BE REDUCED FROM THE VALUE OF UNDISCLOSED STOCK. THE REMAINING AMOUNT IS RS. 38,200/-. WE FIND WEIGHT IN THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE THAT THERE WAS A STOCK OF RS. 20 LACS AND IT IS QUITE POSSIBLE THAT THIS DIFFERENCE MAY BE ON ACCOUNT OF VALUATION OF HUGE STOCK AND IT IS A MINOR DIFFERENCE, THEREFORE, SHOU LD BE IGNORED. WE ARE IN AGREEMENT WITH THE CONTENTION OF LD. A/R THAT DIFFERENCE OF S TOCK OF RS. 38,200/- OUT OF TOTAL RS. 20 LACS IS NEGLIGIBLE. THEREFORE, IN OUR VIEW, THE ASS ESSING OFFICER AND LD. CIT (A) SHOULD HAVE ACCEPTED THE EXPLANATION OF THE ASSESSEE. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DELETE THIS ADDITION. 28. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR A SSESSMENT YEAR 2002-03 IS ALLOWED AND APPEAL OF THE DEPARTMENT FOR THE SAME ASSESSMEN T YEAR IS DISMISSED, APPEAL OF THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07 IS ALLOW ED IN PART AND CROSS OBJECTION OF THE ASSESSEE FOR ASSESSMENT YEAR 2004-05 IS DISMISSED. 29. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 .11.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, 13 COPY FORWARDED TO :- SHRI DALPAT SINGH CHOUDHARY, RAJSAMAND. THE ACIT/DCIT, CENTRAL CIRCLE-2, UDAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 201(4)/JODH/2009) BY ORDER, AR ITAT JODHPUR.