Mohini Goel, Delhi V. ITO, Ward- I(5), Faridabad

ITA 2024/DEL/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 9902 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 23-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Capital asset; Income from undisclosed sources; Principle of natural justice; Question of law; Accommodation entries; Scheme of amalgamation; Onus to prove; Sham transactions; Penny stocks; Borrowed satisfaction
• Section: 131; 68; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.2021/DEL/2018 ASSESSMENT YEAR : 2014-15 SHOUBIT GOEL (HUF), C/O. KAPIL GOEL, ADV., F- 26/124, SECTOR- 7, ROHINI, DELHI. VS. ITO, WARD- II(3), FARIDABAD. PAN : AAVHS2861J (APPELLANT) (RESPONDENT) ITA NO.2022/DEL/2018 ASSESSMENT YEAR : 2014-15 SHOBHIT GOEL, C/O. KAPIL GOEL, ADV., F- 26/124, SECTOR- 7, ROHINI, DELHI. VS. ITO, WARD- II(3), FARIDABAD. PAN : AICPG9748H (APPELLANT) (RESPONDENT) ITA NO.2023/DEL/2018 ASSESSMENT YEAR : 2014-15 OMWATI AGGARWAL, C/O. KAPIL GOEL, ADV., F- 26/124, SECTOR- 7, ROHINI, DELHI. VS. ITO, WARD- 2(5), FARIDABAD. PAN : AGTPA2312C (APPELLANT) (RESPONDENT) ITA NO.2024/DEL/2018 ASSESSMENT YEAR : 2014-15 MOHINI GOEL, C/O. KAPIL GOEL, ADV., F- 26/124, SECTOR- 7, ROHINI, DELHI. VS. ITO, WARD- 1(5), FARIDABAD. PAN : AYQPG2481B (APPELLANT) (RESPONDENT) 2 ITA NOS.2021 TO 2028/DEL/2018 ITA NO.2025/DEL/2018 ASSESSMENT YEAR : 2014-15 NAINA AGARWAL, C/O. KAPIL GOEL, ADV., F- 26/124, SECTOR- 7, ROHINI, DELHI. VS. ITO, WARD- II(1), FARIDABAD. PAN : APFPG6588K (APPELLANT) (RESPONDENT) ITA NO.2026/DEL/2018 ASSESSMENT YEAR : 2014-15 SHYAM SUNDER BANSAL, C/O. KAPIL GOEL, ADV., F- 26/124, SECTOR- 7, ROHINI, DELHI. VS. ITO, WARD- II(3), FARIDABAD. PAN : AIVPB4058L (APPELLANT) (RESPONDENT) ITA NO.2027/DEL/2018 ASSESSMENT YEAR : 2014-15 NAND KISHORE, C/O. KAPIL GOEL, ADV., F- 26/124, SECTOR- 7, ROHINI, DELHI. VS. ITO, WARD- II(1), FARIDABAD. PAN : ACFPK0906Q (APPELLANT) (RESPONDENT) ITA NO.2028/DEL/2018 ASSESSMENT YEAR : 2014-15 MAYANK GOEL, C/O. KAPIL GOEL, ADV., F- 26/124, SECTOR- 7, ROHINI, DELHI. VS. ITO, WARD- 1(5), FARIDABAD. PAN : AIXPG9560C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOEL, ADV. DEPARTMENT BY : SHRI ATIQ AHMED, SR.DR 3 ITA NOS.2021 TO 2028/DEL/2018 DATE OF HEARING : 31-07-2018 DATE OF PRONOUNCEMENT : 25-09-2018 O R D E R PER R. K. PANDA, AM : THE ABOVE BATCH OF EIGHT APPEALS FILED BY THE RESPE CTIVE ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE LD. CIT (A), FARIDABAD RELATING TO ASSESSMENT YEAR 2014-15. SINCE IDENTICAL GROUNDS H AVE BEEN TAKEN BY THE RESPECTIVE ASSESSEES IN THEIR APPEALS, THEREFORE, T HESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST I TAKE UP ITA NO.2021/DEL/2018 IN THE CASE OF SHOUBIT GOEL (HUF) AS THE LEAD CASE. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE (HUF) IS DERIVING INCOME FROM TRADING IN THE NAME AND STYLE OF M/S SHOBHIT GOEEL HUF AND INTEREST INCOME FROM BANK AND UNSECURED LOANS G IVEN TO DIFFERENT PARTIES. IT FILED ITS RETURN OF INCOME ON 31.12.2014 DECLARING TOTAL INCOME OF RS.4,43,870/-. THE ASSESSEE, IN THE SAID RETURN, HAS CLAIMED EXEMP TION OF RS.19,14,520/- U/S 10(38) OF THE I.T. ACT, 1961 ON ACCOUNT OF SALE OF SECURITIES. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY BY CASS ON THE B ASIS OF INFORMATION UPLOADED BY THE INVESTIGATION WING THAT SUSPICIOUS TRANSACTION RELATING TO LONG TERM CAPITAL GAIN ON SALE OF SHARES. AFTER EXAMIN ING THE INFORMATION AND WRITTEN SUBMISSIONS FILED BY THE ASSESSEE FROM TIME TO TIME AND TAKING INTO CONSIDERATION THE SWORN STATEMENTS RECORDED U/S 131 BEFORE THE INVESTIGATION 4 ITA NOS.2021 TO 2028/DEL/2018 WING, THE ASSESSING OFFICER PROCEEDED TO COMPLETE T HE ASSESSMENT. HE DISCUSSED ABOUT THE FEATURES OF PENNY STOCKS WHICH ARE AS UNDER :- 1. MOST OF THESE COMPANIES HAVE NO BUSINESS AT ALL. FEW OF THE COMPANIES WHICH HAVE SOME BUSINESS DO NOT HAVE THE CREDENTIALS TO J USTIFY THE SHARP RISE IN MARKET PRICE OF THEIR SHARE. 2. THE SHARP RISE IN MARKET PRICE OF THE SHARES OF THESE ENTITIES IS NOT SUPPORTED BY FUNDAMENTALS OF THE COMPANY OR ANY OTHER GENUINE FACTOR. 3. THE MARKET PRICE OF SHARES OF THESE COMPANIES RI SE TO VERY HIGH LEVEL WITHIN A SPAN OF 1 YEAR. 4. THE TRADING VOLUME OF SHARES DURING THE PERIOD, IN THIS MANIPULATIONS ARE DONE TO RAISE THE MARKET PRICE IS EXTREMELY THIN. 5. THE SHARES OF THESE COMPANIES ARE NOT AVAILABLE FOR BUY/SELL TO ANY PERSON OUTSIDE THE SYNDICATE OF BROKERS WHO ACT IN CONNIVA NCE TO RAMP UP THE PRICE OF THE PENNY STOCK AND PROVIDE EXIT OPTION TO THE BENEFICI ARY. 6. INITIAL ALLOTMENT OF SHARES TO BENEFICIARIES IS DONE THROUGH MULTIPLE ROUTES I) PREFERENTIAL ALLOTMENT OF SHARES, II) OFFLINE TRADI NG, III) ONLINE TRADING, IV) MERGER/AMALGAMATION OF PRIVATE COMPANY WITH THE LIS TED PENNY STOCK (THUS SHARE HOLDERS OF PRIVATE COMPANY BECOME SHARE HOLDERS OF LISTED PENNY STOCK COMPANY). 3. HE REFERRED TO THE INVESTIGATION CARRIED OUT BY THE DIRECTORATE OF INVESTIGATION WING OF KOLKATA TO UNEARTH THE ORGANI ZED RACKET OF GENERATING BOGUS ENTRIES OF LONG TERM CAPITAL GAINS WHICH IS E XEMPT FROM TAX. THE MODUS OPERANDI ADOPTED BY THE OPERATORS WAS TO MAKE THE B ENEFICIARY BUY SOME SHARES OF A PRE-DETERMINED PENNY STOCK COMPANY CONTROLLED BY THEM. THESE SHARES ARE TRANSFERRED TO THE BENEFICIARY AT A VERY NOMINAL PR ICE MOSTLY OFF-LINE THROUGH PREFERENTIAL ALLOTMENT OR OFF-LINE SALE TO SAVE STT . THE BENEFICIARY (AN INDIVIDUAL) HOLDS THE SHARE FOR MORE THAN ONE YEAR, THE STATUTORY PERIOD AFTER WHICH LTCG IS EXEMPT U/S 10(38) OF THE I.T. ACT. I N THE MEANTIME, THE OPERATORS RIG THE PRICE OF THE STOCK AND GRADUALLY RAISE ITS PRICE MANY TIMES, OFTEN 500 TO 1000 TIMES. THIS IS DONE THROUGH LOW VOLUME TRANSACTION INDULGED 5 ITA NOS.2021 TO 2028/DEL/2018 IN BY THE DUMMIES OF THE OPERATOR AT A PRE-DETERMIN ED PRICE. WHEN THE PRICE REACHES THE DESIRED LEVEL THE BENEFICIARY, WHO BOUG HT THE SHARES AT A NOMINAL PRICE, IS MADE TO SELL IT TO A DUMMY PAPER COMPANY OF THE OPERATOR. FOR THIS, UNACCOUNTED CASH IS PROVIDED BY THE BENEFICIARY WHI CH IS ROUTED THROUGH A FEW LAYERS OF PAPER COMPANIES BY THE OPERATOR AND FINAL LY IS PARKED WITH THE DUMMY PAPER COMPANY THAT WILL BUY THE SHARES. 4. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE PRICE OF THE SHARES OF THE PENNY STOCK COMPANIES ARE RIGGED AND ARE RAISED THR OUGH CIRCULAR TRADING. THIS IS MANAGED BY THE OPERATOR OF THE SCRIP. AN OPE RATOR IS A PERSON WHO IS MANAGING THE OVERALL AFFAIRS OF THE SCHEME AND HE I S THE ONE WHO CONTACTS THE ENTITIES WHO WISH TO TAKE ENTRY OF BOGUS LTCG/STCG IN THEIR BOOKS AND ARRANGES THE SAME THROUGH THE SCRIPTS OF PENNY STOC K COMPANIES. THE OPERATOR MANAGES MANY PAPER/BOGUS COMPANIES AND USES THEM TO DO CIRCULAR TRANSACTIONS TO RIG THE PRICE OF THE SHARES. THE SHARES OF THES E PENNY STOCK COMPANIES, ALTHOUGH LISTED ON EXCHANGE, ARE ALWAYS CLOSELY HEL D AND ARE CONTROLLED BY THE PROMOTER OF THE PENNY STOCK COMPANY AND THE OPERATO R WHO IS ARRANGING FOR THE BOGUS LTCG/LOSS. THIS IS DUE TO THE FACT THAT THE GENERAL PUBLIC IS NOT INTERESTED IN THESE SHARES AS THESE COMPANIES HAVE NO CREDENTIALS AND THIS HELPS THE OPERATOR TO KEEP A CONTROL AND THE PRICE MOVEME NT OF THE SHARES. 5. HE NOTED THAT THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) HAS IN THE RECENT PAST, PASSED SOME ORDERS ON THE ISSUE OF MANIPULATION OF SHARE MARKET 6 ITA NOS.2021 TO 2028/DEL/2018 FOR PROVIDING ACCOMMODATION ENTRIES. HE FURTHER NO TED THAT THE ASSESSEE IS ONE SUCH BENEFICIARY WHO HAS TAKEN THE ENTRY OF RS.23,1 8,118/- DURING THE IMPUGNED ASSESSMENT YEAR. FROM THE VARIOUS DETAILS FURNISHE D BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS INCLUDING COPIES O F COMPUTATION, BANK STATEMENTS AND THE DETAILS OF LONG TERM CAPITAL GAI N, HE NOTED THAT THE ASSESSEE PURCHASED AND SOLD THE SHARES OF M/S UNNO INDUSTRIE S LIMITED, THE DETAILS OF WHICH ARE AS UNDER :- SCRIP PURCHASED M/S PINNACLE VINTRADE LTD. CONVER TED INTO M/S UNNO INDUSTRIES LTD. NO. OF SHARES PURCHASED 72,800 (ORIGINALLY PURCHASE D 80 SHARES, ON 20.07.2012 BONUS ANNOUNCED 90:1 I.E. 7200 BONUS SHARES GIVEN. ON 18.01.2013 A SCHEME OF ARRANGEMENT HAS BEEN ORDERED BY HONBLE HIGH COURT OF BOMBAY AND ONE SHARE OF PINNACLE VINTRADE LTD. REPLACED BY TEN SHARES OF UNNO INDUSTRIES LTD. SO THAT 7280 SHARES CONVERTED TO 72,800 SHARES OF SUCCEEDING COMPANY). DATE OF PURCHASE 20.10.2011 AMOUNT PAID RS.1,00,000. (80 SHARES @ 1250/-) BROKER THROUGH WHOM PURCHASED UNIGLORY DEVELOPERS P RIVATE LIMITED, MUMBAI. NO. OF SHARES SOLD 72,800 DATE OF SALE (NSE) 22.04.2013 (65000 SHARES) AND 29 .04.2013 (7800 SHARES). BROKER HDFC SECURITIES AMOUNT RECEIVED RS.21,66,450/- (NET AFTER STT & BRO KERAGE). 6. HE NOTED THAT DURING THE COURSE OF PROCEEDINGS U /S 131 ON 02.06.2015 BEFORE THE INVESTIGATION WING AND SWORN DEPOSITIONS OF MR. AMIT DALMIA, SON OF SHRI JAI PARKASH DALMIA RECORDED DURING THE COUR SE OF SURVEY AT THE BUSINESS PREMISES OF M/S INTELLECT STOCK BROKING PVT. LTD. A T 95, SARAT BOSE ROAD, 3 RD FLOOR, KOLKATA 700026 HE HAS CONFIRMED ON OATH TH AT HE HAS PROVIDED AND 7 ITA NOS.2021 TO 2028/DEL/2018 ACCOMMODATED BOGUS LONG TERM CAPITAL GAIN ENTRIES. THE ASSESSING OFFICER REFERRED TO THE VARIOUS QUESTIONS PUT TO HIM AND AC CORDINGLY ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE DATED 05.12.2016 ASKING HIM TO EXPLAIN WHY THE EXEMPTION CLAIMED U/S 10(38) SHOULD NOT BE DISALLOW ED. IN THE SAID NOTICE, HE FURTHER REFERRED TO THE STATEMENTS RECORDED IN THE CASE OF SEVEN OTHER PERSONS WHO HAD STATED THAT M/S UNNO INDUSTRIES LTD. WAS EN GAGED IN PROVIDING BOGUS LONG TERM CAPITAL GAINS AND SHORT TERM CAPITAL GAIN S THROUGH PENNY STOCK. 7. THE ASSESSEE IN HIS REPLY DATED 13.12.2016 SUBMI TTED THAT THE COMMENTS GIVEN BY SHRI AMIT DALMIA AND OTHERS IN THE STATEME NTS ARE WRONG, FABRICATED AND DENIED. THEY MIGHT HAVE GIVEN THE STATEMENT TO AVOID THEIR OWN LIABILITIES. THE ASSESSEE REQUESTED FOR PROVIDING AN OPPORTUNITY TO CROSS EXAMINE THE PERSONS STATED IN THE LETTER ISSUED BY THE ASSESSIN G OFFICER. IT WAS ARGUED THAT THE DOCUMENTS REGARDING PURCHASE, SALES, STT PAID A ND PERIOD OF HOLDING ARE ALREADY GIVEN. THE ABSTRACT OF TRANSFER OF SHARES IN THE RECORDS OF REGISTRAR OF COMPANIES (ROC) SHOWING THAT THE SHARES EXISTED IN ASSESSEES NAME WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. TH E PROVISIONS OF SECTION 10(38) WAS ALSO BROUGHT TO THE NOTICE OF THE ASSESSING OFF ICER AND IT WAS ARGUED THAT ALL THE PROVISIONS OF SECTION 10(38) ARE DULY COMPLIED WITH I.E. :- 1. THERE IS TRANSFER OF LONG TERM ASSETS AS PER DET AIL GIVEN UNDER: - 80 SHARES OF PINNACLE VINTRADE PVT. LTD. WERE PUR CHASED ON 20.10.2011. - 7200 BONUS SHARES WERE ISSUED ON 23.03.2012. - 72800 SHARES OF UNNO INDUSTRIES ALLOTTED IN LIEU OF SHARES OF PINNACLE VINTRADE PVT. LTD. IN A SCHEME OF AMALGAMATION ON 1 2.02.2013. 8 ITA NOS.2021 TO 2028/DEL/2018 - 72800 SHARES OF UNNO INDUSTRIES SOLD ON 29.04.2 013. SINCE SHARES ALLOTTED IN THE SCHEME OF AMALGAMATIO N IS NOT A TRANSFER U/S 47(VI), PERIOD OF HOLDING WAS FROM 20.10.2011 TO 27 .05.2013 I.E. MORE THAN 1 YEAR AND HENCE WAS A LONG TERM CAPITAL ASSET U/S 2(42A). 2. TRANSACTION OF SALE OF EQUITY SHARES IS AFTER F INANCE (2) ACT, 2004. 3. STT HAS BEEN DULY PAID AS PER CONTRACT NOTES AL READY FILED. IN VIEW OF ABOVE LONG TERM CAPITAL GAIN HAS ARISEN AND IS DULY EXEMPT U/S 10(38) OF I.T. ACT AND MAY NOT BE DISALLOWED. 8. THE ASSESSING OFFICER SUPPLIED THE COPIES OF STA TEMENTS OF SHRI AMIT DALMIA RECORDED BY THE DDIT (INV.), KOLKATA TO THE ASSESSEE AND HE ALSO ASKED THE ASSESSEE TO ATTEND THE OFFICE OF DDIT (INV.), U NIT- 4(1), KOLKATA VIDE LETTER DATED 14.12.2016 FOR CROSS EXAMINATION OF THE PERSO N WHICH THE ASSESSEE DID NOT AVAIL. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND RELYING ON VARIOUS DECISIONS, THE ASSESSING OFFICER REJECTED T HE CLAIM OF EXEMPTION U/S 10(38) AND MADE ADDITION OF RS.19,14,520/- TO THE T OTAL INCOME OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 68 OF THE I.T . ACT. 9. SIMILAR ADDITIONS HAVE BEEN MADE BY THE ASSESSIN G OFFICER IN OTHER APPEALS, THE DETAILS OF WHICH ARE AS UNDER :- S.NO. NAME OF THE ASSESSEE ITA NOS. ADDITION (RS.) 1. SHOBHIT GOEL 2022/DEL/2018 20,66,450/- 2. OMWATI AGGARWAL 2023/DEL/2018 23,02,985/- 3. MOHINI GOEL 2024/DEL/2018 20,88,749/- 4. NAINA AGARWAL 2025/DEL/2018 22,64,521/- 5. SHYAM SUNDER BANSAL 2026/DEL/2018 22,97,500/- 6. NAND KISHORE 2027/DEL/2018 22,19,420/- 7. MAYANK GOEL 2028/DEL/2018 20,59,711/- 10. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. WHILE DOING SO, HE OBSERVED THAT THE ASSESSEE HAD P URCHASED 80 SHARES OF M/S 9 ITA NOS.2021 TO 2028/DEL/2018 PINNACLE VINTRADE LTD. OFFLINE (NOT THROUGH RECOGNI ZED STOCK EXCHANGE) FOR RS.1,00,000/- ON 20.10.2011 THROUGH BROKER, UNIGLOR Y DEVELOPERS PVT. LTD. AFTER GETTING BONUS SHARES IN THE RATIO OF 90:1 ON 20.07.2012 AND CONVERSION OF ONE SHARES OF M/S PINNACLE VINTRADE LTD. INTO 10 SH ARES OF M/S UNNO INDUSTRIES LTD. UNDER THE SCHEME OF AMALGAMATION BY THE ORDER OF HONBLE HIGH COURT OF BOMBAY, THE ASSESSEE RECEIVED 72,800 SHARES OF M/S UNNO INDUSTRIES LTD. THE ASSESSEE SOLD THESE SHARES OF M/S UNNO INDUSTRIES L TD. FOR RS.21,66,450/- ON 29.04.2013 THROUGH STOCK EXCHANGE WITH PAYMENT OF S TT AFTER GETTING THESE SHARES DEMATERIALIZED ON 28.04.2013. SURVEY OPERAT ION WAS CARRIED OUT BY THE INVESTIGATION WING, KOLKATA AT THE BUSINESS PREMISE S OF M/S INTELLECT STOCK BROKING & OTHERS. DURING THE ASSESSMENT PROCEEDING S, SHRI AMIT DALMIA HAS CLEARLY ADMITTED THAT HE WAS ENGAGED IN PROVIDING A CCOMMODATION ENTRIES IN THE FORM OF SHARE CAPITAL, SHARE PREMIUM, UNSECURED LOA N AND LTCG/STCG/STCL THROUGH VARIOUS JAMAKHARCHI COMPANIES AND MANAGED B Y HIM INCLUDING M/S UNNO INDUSTRIES LTD. THE SCRIP OF M/S UNNO INDUSTR IES LTD. IN WHICH THE ASSESSEE TRADED HAS BEEN SUSPENDED IN TRADING OF SE CURITIES W.E.F. JANUARY 7, 2015 BY THE SEBI AS A SURVEILLANCE MEASURES. A D ETAILED SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE BY THE ASSESSING OFFICER , IN RESPONSE TO WHICH, THE ASSESSEE MERELY REPEATED THE FACTS. THE ASSESSEE H AS FAILED TO GIVE ANY CONCRETE EVIDENCE OF HIS BONA-FIDE CLAIM DURING THE ASSESSME NT AS WELL AS THE APPELLATE PROCEEDINGS. THE ASSESSEE HAS FAILED TO COUNTER TH E OBSERVATIONS AND FACTS CITED 10 ITA NOS.2021 TO 2028/DEL/2018 BY THE ASSESSING OFFICER IN PARA 9 AND 10 OF THE AS SESSMENT ORDER. THE ASSESSING OFFICER ALSO PROVIDED THE ASSESSEE AN OPP ORTUNITY TO ATTEND THE OFFICE OF DDIT (INV.), UNIT- 4(1), KOLKATA VIDE LETTER DAT ED 14.12.2016. 11. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), TH E ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THAT ORDER PASSED BY LD AO DATED 23/12/2016 AN D FURTHER ORDER PASSED BY LD CIT A DATED 29/01/2018 ARE BAD IN LAW IN AS MUCH AS NOTICE U/S 143(2) ON BASIS OF CASS IS NOT IN ACCORDANCE WITH JURISDICTIO NAL CONDITIONS STIPULATED UNDER THE ACT. 2. THAT ORDER PASSED BY LD. AO DATED 23/12/2016 AND FURTHER ORDER PASSED BY LD CIT A DATED 29/01/2018 ARE BAD IN LAW IN AS MUCH AS ADDITION OF RS.19,14,520 IS MADE VIOLATING PRINCIPLES OF NATURAL JUSTICE AND ON BASIS OF VAGUE SHOW CAUSE NOTICE WHICH WAS CHALLENGED AND REPUDIATED BE FORE LD. AO FOR NOT CONFRONTING BACK MATERIAL REFERRED IN SHOW CAUSE NO TICE ISSUED. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, LD CIT-A ERRED IN SUSTAINING THE ACTION OF LD AO IN MAKING A DDITION OF RS 19,14,520 WITHOUT APPRECIATING THAT MANDATORY CBDT GUIDELINES 017 ISSUING SHOW CAUSE NOTICE HAS BEEN FLAGRANTLY VIOLATED AND VAGUE SHOW CAUSE NOTICE IS MADE BASIS OF ADDITION, THUS RESULTING IN INVALIDATING THE ENT IRE PROCEEDINGS. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LD CIT-A ERRED IN SUSTAINING THE ACTION OF LD AO IN MAKING A DDITION OF RS 19,14,520 WITHOUT APPRECIATING THAT BURDEN TO PROVE THAT TRAN SACTION IS BOGUS/SHAM HAS REMAINED UN-DISCHARGED FROM SIDE OF REVENUE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, BOTH LD CIT- A AND LD AO ERRED IN MAKING SUBJECT ADDITIONS WITHO UT APPRECIATING THAT THE MODUS OPERANDI RELIED EXTENSIVELY IN IMPUGNED ORDER S IS NEVER CO-RELATED EVEN REMOTELY TO THE FACTS OF THE PRESENT CASE AS THERE IS NO IOTA OF EVIDENCE BROUGHT ON RECORD WHICH CAN DISPLAY THAT ASSESSEE HEREIN HA S INDUCTED CERTAIN CASH AT THE TIME OF SALE TO CERTAIN INDENTIFIED BROKER/MIDD LEMAN/SYNDICATE MEMBER WHO HAS IN TURN INTRODUCED CERTAIN IDENTIFIED ARTIF ICIAL PAPER COMPANY FOR ALLEGED PARKING OF SAID CASH TO BUY THE SHARES SOLD BY THE ASSESSEE WHICH THEORETICAL TRAIL HAS REMAINED INCHOATE COMPLETELY NULLIFYING THE ENTIRE BASIS OF THE ADDITION. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, LD AO ERRED IN MAKING SUBJECT ADDITIONS WITHOUT APPRECIATING TH AT LAW GIVES DISCRETION TO THE ASSESSING OFFICER IN APPLYING DEEMING FICTIONS U/S 68 ETC WHICH DISCRETION HAS NOT BEEN JUDICIOUSLY EXERCISED IN FACTS ARE PRE SENT CASE AS ASSESSEE HAS NO ECONOMIC CAPACITY AND SOURCE TO GENERATE GIVEN AMOU NT OF UNACCOUNTED INCOME. FURTHER LAW REQUIRES THAT ADDITIONS UNDER S AID DEEMING FICTION CANNOT BE MADE SANS INCRIMINATING MATERIAL BROUGHT ON RECO RD WHICH IS COMPLETELY LACKING IN PRESENT CASE. 11 ITA NOS.2021 TO 2028/DEL/2018 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, LD CIT-A ERRED IN SUSTAINING THE ACTION OF LD AO IN MAKING A DDITION OF RS 19,14,520 /- WITHOUT APPRECIATING THAT BASIS OF FINDINGS OF THE LOWER AUTHORITIES IS 'SUSPICION' AND 'HUMAN PROBABILITIES' ONLY WHICH IS NEVER CONVERTED TO RELIABLE AND TRUSTWORTHY MATERIAL AND ENTIRE ASSESS MENT ORDER IS PASSED ON SOLE BASIS OF BORROWED SATISFACTION' AND WITHOUT A NY INDEPENDENT APPLICATION OF MIND. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, LD CIT-A ERRED IN SUSTAINING THE ACTION OF LD AO IN MAKING A DDITION OF RS 19,14,520 /- WITHOUT APPRECIATING THAT NO OPPORTUNITY IS GIVEN T O THE ASSESSEE TO BE CONFRONTED WITH BACK MATERIAL RELIED EXTENSIVELY IN IMPUGNED ORDERS LIKE INVESTIGATION WING REPORT ETC AND NO OPPORTUNITY TO CROSS EXAMINE THE REVENUE'S WITNESS WAS GIVEN DESPITE SPECIFIC WRITTE N REQUEST IN THIS REGARD MADE TO LD AO/CIT-A. 9. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, LD CIT-A ERRED IN SUSTAINING THE ACTION OF LD AO IN MAKING A DDITION OF RS 19,14,520/- WITHOUT APPRECIATING THAT SECTION 68 IS NOT APPLICA BLE TO SALE OF SHARES AS MENTIONED IN IMPUGNED ASSESSMENT ORDER AT LAST PAGE . 10. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT-A ERRED IN SUSTAINING THE ACTION OF LD AO IN MAKING A DDITION OF RS 19,14,520 WITHOUT APPRECIATING THAT IN IDENTICAL FACTS IN VAR IOUS ORDERS RELIEF HAS BEEN GRANTED TO ASSESSEE ACCEPTING LTCG (LONG TERM CAPIT AL GAINS) AS GENUINE. 1 L. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT-A ERRED IN SUSTAINING THE ACTION OF LD AO IN MAKING A DDITION OF RS 19,14,520 WITHOUT APPRECIATING SPIRIT OF LAW CONTAINED IN SEC TION 10(38) AND SECTION 43(5)(D) WHERE STATUTORY STATUS IS PROVIDED TO EVID ENCES GENERATED FROM STOCK EXCHANGE SYSTEM TREATING THE SAME TO BE IMPECCABLE AND ONLY FROM FINANCE ACT 2017 WITH PROSPECTIVE EFFECTIVE FROM AY 2018-2019, AMENDMENT IS MADE IN SECTION 10(38), PRIOR TO WHICH SUCH GAINS WOULD REM AIN EXEMPT. 12. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT-A ERRED IN SUSTAINING THE ACTION OF LD AO IN APPLYING SECTION 115BBE WHICH IS OUT RIGHTLY BAD IN LAW. 13. THAT THE APPELLANT CRAVES LEAVE TO ADD ADD/ALT ER ANY/ALL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 12. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OPPOS ED THE ORDER OF THE LD. CIT(A). HE SUBMITTED THAT THE ASSESSEE HAD REQUEST ED FOR THE CROSS EXAMINE OF THE PERSONS WHOSE STATEMENTS HAVE BEEN USED BY THE ASSESSING OFFICER FOR MAKING THE ADDITION. HOWEVER, SUCH REQUEST WAS IND IRECTLY TURNED DOWN BY THE ASSESSING OFFICER BY ASKING THE ASSESSEE TO GO TO O FFICE OF THE DDIT (INV.), KOLKATA AND CROSS-EXAMINE THE CONCERNED PERSONS BEF ORE THE DDIT, 12 ITA NOS.2021 TO 2028/DEL/2018 INVESTIGATION WING. HE SUBMITTED THAT THE ASSESSIN G OFFICER HAS INVOKED THE PROVISIONS OF SECTION 68 WHICH ARE NOT APPLICABLE T O THE FACTS OF THE PRESENT CASE BECAUSE THE SAID PROVISIONS ARE APPLICABLE WHERE AN Y SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR ANY PREVIO US YEAR AND THE ASSESSEE DOES NOT OFFER ANY EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 13. REFERRING TO THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PR.CIT VS. PREM PAL GANDHI VIDE ITA NO. 95/2017 ORDER DATED 16.02.2017, HE SUBMITTED THAT UNDER IDENTICAL CIRCU MSTANCES THE HON'BLE HIGH COURT IN THE SAID DECISION DISMISSED THE APPEAL FIL ED BY THE REVENUE, WHEREIN, THE TRIBUNAL HAD UPHELD THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.4,11,77,474/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF SHAM SHARES TRANSACTIONS. 14. REFERRING TO THE FOLLOWING DECISIONS, HE SUBMIT TED THAT UNDER IDENTICAL CIRCUMSTANCES THE VARIOUS BENCHES OF THE TRIBUNAL H AVE DELETED SUCH ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF GAINS F ROM PENNY STOCK :- (I) NAVNEET AGARWAL, LEGAL HEIR OF LATE KIRAN AGARW AL VS. ITO, ITA NO.2281/KOL/2017 ORDER DATED 20.07.2018. (II) SHRI VINAY KUMAR SOGANI VS. PR.CIT, ITA NO.444 /JP/2018 ORDER DATED 26.07.2018. (III) SMT. SHIKHA DHAWAN VS. ITO, ITA NO.3035/DEL/ 2018 ORDER DATED 27.06.2018. 13 ITA NOS.2021 TO 2028/DEL/2018 (IV) PRAKASH CHAND BHUTORIA VS. ITO, ITA NO.2394/KO L/2017 ORDER DATED 27.06.2018. (V) G.R. KALRA HUF VS. ITO, ITA NO.6564/DEL/2013 O RDER DATED 12.04.2017. 15. HE SUBMITTED THAT THE ASSESSING OFFICER IN THE INSTANT CASE HAS NOT BROUGHT ON RECORD ANY SPECIFIC TRANSACTIONS OR SPEC IFIC EVIDENCE TO NEGATE THE CLAIM OF THE ASSESSEE. THE PRINCIPLE OF NATURAL JU STICE HAS BEEN COMPLETELY VIOLATED. NOTHING HAS BEEN CONFRONTED TO THE ASSES SEE AND THERE IS NO EVIDENCE WHATSOEVER ON RECORD TO SHOW THAT THE ASSESSEES OW N MONEY HAS COME BACK TO IT IN ANY MANNER. DURING THE COURSE OF SURVEY OPER ATION AT THE BUSINESS PREMISES OF M/S INTELLECT STOCK BROKING AND OTHERS, SHRI AMIT DALMIA, WHOSE STATEMENT WAS THE BASIS OF ADDITION IN THE INSTANT CASE, HAS NOT SPECIFICALLY TAKEN THE NAME OF THE ASSESSEE. FURTHER, THE SCRIP OF M/ S UNNO INDUSTRIES LTD. IN WHICH THE ASSESSEE TRADED WAS SUSPENDED IN TRADING OF SECURITIES W.E.F. 07 TH JANUARY, 2015 ONLY WHEREAS THE PREVIOUS YEAR IN THE INSTANT CASE IS FOR THE PERIOD FROM 01.04.2013 TO 31.03.2014. HE ACCORDING LY SUBMITTED THAT DENIAL OF EXEMPTION U/S 10(38) AND INVOKING OF THE PROVISIONS OF SECTION 68 IS NOT JUSTIFIED IN THE INSTANT CASE ESPECIALLY WHEN THE S HARES WERE PURCHASED ON 28.10.2011 THROUGH BROKERS. THE SHARES WERE SOLD T HROUGH HDFC SECURITIES LTD. AND STT WAS PAID ON SUCH SALES AND ALL THESE F ACTS ARE NOT CONTROVERTED BY THE REVENUE. THEIR ACTION IS ONLY ON THE BASIS OF PRESUMPTION AND SURMISES WHICH IS NOT PERMISSIBLE IN INCOME-TAX PROCEEDINGS. REFERRING TO VARIOUS DECISIONS ENCLOSED IN THE PAPER BOOK, HE SUBMITTED THAT UNDER IDENTICAL 14 ITA NOS.2021 TO 2028/DEL/2018 CIRCUMSTANCES THE VARIOUS BENCHES OF THE TRIBUNAL H AVE DELETED SUCH ADDITION. THEREFORE, THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE BE ALLOWED. 16. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE LD. CIT(A). HE SUBMITTED THAT IT IS IMPOSSIBLE AND IMP ROBABLE THAT THE SHARES OF THE COMPANY, WHOSE BUSINESS IS NOT KNOWN TO THE GENERAL PUBLIC, WILL APPRECIATE 22 TIMES OVER A PERIOD OF LESS THAN 2 YEARS. HE SUBMI TTED THAT DURING THE COURSE OF INVESTIGATION AT THE BUSINESS PREMISES OF M/S INTEL LECT STOCK BROKING AND OTHERS, THE STATEMENT OF SHRI AMIT DALMIA WAS RECOR DED WHO HAD CLEARLY AND CATEGORICALLY STATED THAT HE IS ENGAGED IN PROVIDIN G ACCOMMODATION ENTRIES IN THE FORM OF SHARE CAPITAL, SHARE PREMIUM, UNSECURED LOAN AND LONG TERM CAPITAL GAINS THROUGH VARIOUS JK COMPANIES. VARIOUS OTHER PERSONS HAVE ALSO GIVEN SUCH TYPE OF STATEMENTS. THEREFORE, UNDER THE FACT S AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. CIT(A), WHICH IS VERY EL ABORATE, SHOULD BE UPHELD. HE ALSO RELIED ON THE FOLLOWING DECISIONS :- (I) SANJAY BIMALCHAND JAIN, L/H SHANTIDEVI BIMALCHA ND JAIN VS. PCIT (ITA NO.18/2017). (II) CHANDAN GUPTA VS. CIT, (2015) 54 TAXMANN.COM 10. (III) BALBIR CHAND MAINI VS. CIT, (2011) 12 TAXMAN N.COM 276. (IV) USHA CHANDRESH SHAH VS. ITO [2014-TIOL-1459-I TAT-MUM]. (V) RATNAKAR M. PUJARI VS. ITO [2016-TIOL-1746-ITA T-MUM]. 17. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND THE ASSES SEE IN THE INSTANT CASE HAS CLAIMED LONG TERM CAPITAL GAIN OF RS.19,14,520/- U/ S 10(38) ON ACCOUNT OF SALE 15 ITA NOS.2021 TO 2028/DEL/2018 OF 72,800 SHARES OF M/S UNNO INDUSTRIES LTD. IT MA Y BE PERTINENT TO MENTION HERE THAT THE ASSESSEE HAD PURCHASED 80 SHARES OF M /S PINNACLE VINTRADE LTD. ON 20.07.2012 ON WHICH BONUS WERE ANNOUNCED @ 90:1 I.E . 7200 BONUS SHARES WERE GIVEN. ON THE BASIS OF SCHEME OF ARRANGEMENT ORDERED BY THE HONBLE BOMBAY HIGH COURT ON 18.01.2013 ONE SHARE OF PINNAC LE VINTRADE LTD. WAS REPLACED BY 10 SHARES OF M/S UNNO INDUSTRIES LTD. ACCORDINGLY 7280 SHARES WERE CONVERTED INTO 72800 SHARES OF SUCCEEDING COMP ANY. I FIND THE ASSESSING OFFICER REJECTED THE CLAIM OF LONG TERM CAPITAL GAI N ON ACCOUNT OF SALE OF ABOVE SHARES ON THE GROUND THAT DURING THE COURSE OF SURV EY AT THE BUSINESS PREMISES OF M/S INTELLECT STOCK BROKING AND OTHERS, SHRI AMIT D ALMIA, IN HIS STATEMENT RECORDED U/S 131, HAD ADMITTED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. FURTHER, ACCORDING TO THE A SSESSING OFFICER, THE SCRIP OF M/S UNNO INDUSTRIES LTD., IN WHICH THE ASSESSEE TRADED, HAS BEEN SUSPENDED IN TRADING OF SECURITIES W.E.F. 07 TH JANUARY, 2015 BY SEBI AS SURVEILLANCE MEASURE. IT IS THE ALLEGATION OF THE ASSESSING OFF ICER THAT THE ASSESSEE FAILED TO GIVE ANY CONCRETE EVIDENCE OF HIS BONA-FIDE CLAIM D URING THE ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS. THE OPPORTUNITY OF CROSS -EXAMINATION GRANTED BY HIM WAS ALSO NOT AVAILED BY THE ASSESSEE. I FIND THE L D. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE REQUEST OF CROSS-EXAMINATION WAS NOT EFFEC TIVELY PROVIDED BY THE ASSESSING OFFICER SINCE THE ASSESSING OFFICER ASKED THE ASSESSEE GO TO KOLKATA 16 ITA NOS.2021 TO 2028/DEL/2018 AND AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION IN T HE OFFICE OF THE DDIT, INVESTIGATION WING. FURTHER, THE STATEMENTS SO REC ORDED FROM DIFFERENT PERSONS DO NOT GIVE ANY CASE SPECIFIC OR TRANSACTION SPECIF IC EVIDENCE RELATING TO THE ASSESSEE. NOTHING ADVERSE HAS BEEN GIVEN BY THOSE PERSONS AND NO SUCH ADVERSE MATERIAL WAS CONFRONTED TO THE ASSESSEE. THERE IS NO EVIDENCE WHATSOEVER ON RECORD TO SUGGEST THAT THE ASSESSEES OWN MONEY HAS COME BACK TO THE ASSESSEE. IT IS ALSO HIS SUBMISSION THAT THE ENTIRE ADDITION IS BASED ON PRESUMPTIONS AND SURMISES. SINCE THE TRANSACTIONS WERE THROUGH BANK ING CHANNELS AND THROUGH REGULAR BROKERS OF THE STOCK EXCHANGE AND WHEN THE TRANSACTIONS ARE FULLY SUPPORTED BY DOCUMENTARY EVIDENCES, THEREFORE, THE SAME CANNOT BE BRUSHED ASIDE MERELY ON SUSPICION AND SURMISES. 18. I FIND MERIT IN THE ABOVE ARGUMENT OF THE LD. C OUNSEL FOR THE ASSESSEE. IT IS AN ADMITTED FACT THAT THE SHARES WERE SOLD THROUGH NATIONAL STOCK EXCHANGE AND HDFC SECURITIES WAS THE BROKER, THE AMOUNTS WERE RE CEIVED AFTER PAYMENT OF STT AND BROKERAGE AND THE SHARES WERE SOLD THROUGH BANKING CHANNELS. NO CASE SPECIFIC OR TRANSACTION SPECIFIC INFORMATION W AS GIVEN BY THE PERSONS WHOSE STATEMENTS WERE RECORDED AND ARE THE BASIS OF ADDIT ION IN THE INSTANT CASE. 19. I FIND THE HONBLE PUNJAB & HARYANA HIGH COURT, WHICH IS THE JURISDICTIONAL HIGH COURT IN THE CASE OF THE ASSESS EE, IN THE CASE OF PREM PAL GANDHI (SUPRA) HAS OBSERVED AS UNDER :- 2. THE FOLLOWING QUESTIONS OF LAW HAVE BEEN RAISED :- 17 ITA NOS.2021 TO 2028/DEL/2018 (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE HONBLE INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN LAW IN U PHOLDING THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS. 4,11,77,474/- M ADE BY THE AO ON ACCOUNT OF SHAM SHARE TRANSACTIONS IGNORING AN IMPORTANT AS PECT THAT THE TRANSACTION OF SHARES SHOWING THEIR PURCHASE PRICE AT RS. 11,00 ,000/- AND SALE CONSIDERATION AT RS. 4,23,45,295/- WITHIN A PERIOD OF LESS THAN TWO YEARS/PURCHASES OF SHARES MADE IN CASH NOT CHEQUE T HAT TOO BEFORE SHARES GOT DEMATERIALIZED/WORTH OF THE COMPANY AT THE TIME OF PURCHASE/SALE OF SHARES NOT PROVED-ALL SUGGEST NON-GENUINENESS OF THE SAID TRANSACTION? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HONBLE INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN LAW IN U PHOLDING THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS. 4,11,77,474/- M ADE BY THE AO ON ACCOUNT OF SHAM SHARE TRANSACTIONS, WHEREAS THE CIT(A) HIMS ELF HAD HELD THAT THE ASSESSEE HAD NOT BEEN ABLE TO SUBSTANTIATE THE SOUR CE OF INVESTMENT OF RS. 11,00,000/- IN THE SAID SHARES PURCHASED DURING THE FINANCIAL YEAR 2005-06 AND THE AO WAS DIRECTED TO REOPEN THE CASE OF THE A SSESSEE FOR THE ASSESSMENT YEAR 2006-07 ON THIS ISSUE? (III) WHETHER THE HONBLE ITAT HAS ERRED IN IGNORIN G AN IMPORTANT ASPECT THAT IN SUCH CASES OF SHAM TRANSACTIONS OF SHARES SHOWIN G ABNORMAL HIKE IN THEIR VALUE, WHERE THE FACTS THEMSELVES SPEAK LOUD AND CL EAR, THE AO IS JUSTIFIED TO EVEN DRAW AN INFERENCE FROM THE ATTENDANT CIRCUMSTA NCES? (IV) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HONBLE INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN LAW IN U PHOLDING THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS. 12,59,000/- MAD E BY THE AO ON THE BASIS OF SEIZED DOCUMENT ON THE GROUNDS THAT THE ASSESSING O FFICER HAS NOT POINTED OUT AS TO HOW THE FIGURE OF RS. 12.59 LACS HAS BEEN WOR KED OUT IGNORING THE FACT THAT THE ASSESSEE HIMSELF IN HIS REPLY TO THE AO HA D TRIED TO EXPLAIN THE SOURCE OF THE RECEIPTS OF RS. 12,59,000/- INSTEAD OF CHALL ENGING THE WORKING OUT OF THE SAID FIGURE BY THE AO? 3. THE FIRST THREE QUESTIONS OF LAW RAISED IN THIS APPEAL ARE COVERED AGAINST THE APPELLANT BY AN ORDER AND JUDGEMENT OF A DIVISION B ENCH OF THIS COURT DATED 16.02.2017 IN ITA-18-2017 TITLED AS THE PR. COMMISS IONER OF INCOME TAX (CENTRAL), LUDHIANA VS SH. HITESH GANDHI, BHATTI COLONY, CHAND IGARH ROAD, NAWANSHAHAR. 4. THE ISSUE IN SHORT IS THIS: THE ASSESSEE PURCHAS ED SHARES OF A COMPANY DURING THE ASSESSMENT YEAR 2006-2007 AT ` 11/- AND SOLD TH E SAME IN THE ASSESSMENT YEAR 2008-2009 AT ` 400/- PER SHARE. IN THE ABOVE CASE, NAMELY, ITA-18-2017 ALSO THE ASSESSEE HAD PURCHASED AND SOLD THE SHARES IN THE S AME ASSESSMENT YEARS. THE ASSESSING OFFICER IN BOTH THE CASES ADDED THE APPRE CIATION TO THE ASSESSEES INCOME ON THE SUSPICION THAT THESE WERE FICTITIOUS TRANSAC TIONS AND THAT THE APPRECIATION ACTUALLY REPRESENTED THE ASSESSEES INCOME FROM UND ISCLOSED SOURCES. IN ITA-18-2017 ALSO THE CIT (APPEALS) AND THE TRIBUNAL HELD THAT T HE ASSESSING OFFICER HAD NOT PRODUCED ANY EVIDENCE WHATSOEVER IN SUPPORT OF THE SUSPICION. ON THE OTHER HAND, ALTHOUGH THE APPRECIATION IS VERY HIGH, THE SHARES WERE TRADED ON THE NATIONAL STOCK EXCHANGE AND THE PAYMENTS AND RECEIPTS WERE ROUTED THROUGH THE BANK. THERE WAS NO EVIDENCE TO INDICATE FOR INSTANCE THAT THIS WAS A C LOSELY HELD COMPANY AND THAT THE TRADING ON THE NATIONAL STOCK EXCHANGE WAS MANIPULA TED IN ANY MANNER. 5. IN THESE CIRCUMSTANCES, FOLLOWING THE JUDGEMENT IN ITA-18-2017, IT MUST BE HELD THAT THERE IS NO SUBSTANTIAL QUESTION OF LAW I N THE PRESENT APPEAL. 18 ITA NOS.2021 TO 2028/DEL/2018 6. QUESTION (IV) HAS BEEN DEALT WITH IN DETAIL BY THE CIT (APPEALS) AND THE TRIBUNAL. FIRSTLY, THE DOCUMENTS ON WHICH THE ASSES SING OFFICER RELIED UPON IN THE APPEAL WERE NOT PUT TO THE ASSESSEE DURING THE ASSE SSMENT PROCEEDINGS. THE CIT (APPEALS) NEVERTHELESS CONSIDERED THEM IN DETAIL AN D FOUND THAT THERE WAS NO CO- RELATION BETWEEN THE AMOUNTS SOUGHT TO BE ADDED AND THE ENTRIES IN THOSE DOCUMENTS. THIS WAS ON AN APPRECIATION OF FACTS. THERE IS NOTH ING TO INDICATE THAT THE SAME WAS PERVERSE OR IRRATIONAL. ACCORDINGLY, NO QUESTION OF LAW ARISES. 7. IN THE CIRCUMSTANCES, THE APPEAL IS DISMISSED. 20. I FIND THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SMT. SHIKHA DHAWAN (SUPRA) HAS DELETED SIMILAR ADDITION BY OBSE RVING AS UNDER :- 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE PLACED SUFFICIENT DOCUMENTARY EVIDENCES BEFORE THE AO WHICH ARE COPY OF THE SHARES CERTIFICATES WITH TRANSFER F ORM, COPY OF DEBIT NOTE ISSUED BY SHREEJI BROKING (P) LTD., COPY OF CASH RECEIPT OF S HREEJI BROKING (P) LTD., COPY OF THE ACCOUNT STATEMENT OF THE ASSESSEE IN THE BOOKS OF T HE BROKER, COPY OF LEDGER ACCOUNT OF INDUS PORTFOLIO (P) LTD., COPY OF EVIDENCE FOR PAYM ENT OF SECURITIES TRANSACTION TAX AND COPY OF THE BANK STATEMENT OF THE ASSESSEE TO S HOW THAT THE ASSESSEE HAD ENTERED INTO GENUINE TRANSACTION OF PURCHASE OF SHARE WHICH WERE LATER ON SOLD THROUGH THE BROKER ON RECOGNIZED STOCK EXCHANGE AFTER PAYMENT O F STT. THE CLAIM OF THE ASSESSEE FOR SALE OF SHARES HAS BEEN SUPPORTED BY THE DOCUME NTARY EVIDENCES WHICH HAVE NOT BEEN REBUTTED BY THE AUTHORITIES BELOW. WHATEVER IN QUIRY WAS CONDUCTED IN THE CASES OF OTHER PARTIES AND STATEMENT RECORDED OF SEVERAL PERSONS NAMELY SH. ANIL KHEMKA, SH. SANJAY VOHRA AND SH. BIDYOOT SARKAR AS REFERRED IN THE ASSESSMENT ORDER AND THE REPORT OF THE INVESTIGATION WING WERE NOT CONFRONTE D TO THE ASSESSEE AND ABOVE STATEMENTS WERE ALSO NOT SUBJECT TO CROSS-EXAMINATI ON ON BEHALF OF THE ASSESSEE. THEREFORE, SUCH EVIDENCES CANNOT BE READ IN EVIDENC E AGAINST THE ASSESSEE. THE ORDER OF THE SEBI WAS ALSO NOT CONFRONTED TO THE ASSESSEE . AO DID NOT MENTION ANY SUCH FACT IN ASSESSMENT ORDER. MORE SO IN THOSE REPORTS AND S TATEMENTS, THE NAME OF THE ASSESSEE HAS NOT BEEN REFERRED TO. LD. COUNSEL FOR THE ASSESSEE, THEREFORE, RIGHTLY CONTENDED THAT THE TWIN CONDITIONS OF SECTION 10(38 ) OF THE ACT HAVE BEEN SATISFIED IN THE PAGE | 24 ITA NO.3035/DEL/2018 CASE OF THE ASSE SSEE. THE ASSESSEE HAS BEEN ABLE TO PROVE THAT SHE HAS ENTERED INTO THE GENUINE TRAN SACTION OF PURCHASE AND SALE OF SHARES AND THE SALE CONSIDERATION IS RECEIVED FROM BROKER THROUGH BANKING CHANNEL. THE BROKERS HAVE NOT DENIED THE TRANSACTION WITH TH E ASSESSEE. THE ASSESSEE ROOTED THE TRANSACTION OF SALE OF SHARES THROUGH RECOGNIZE D STOCK EXCHANGE AFTER MAKING PAYMENT OF STT. IN SIMILAR CIRCUMSTANCES, ITAT SMC BENCH, DELHI IN THE CASE OF MEENU GOEL VS ITO (SUPRA) FOLLOWING THE DECISION OF JURISDICTIONAL HON'BLE P&H HIGH COURT IN THE CASE OF PR.CIT VS PREM PAL GANDHI (SUPRA) DELETED THE SIMILAR ADDITION. THEREFORE, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF ITAT, DELHI BENCH IN THE CASE OF MEENU GOEL VS ITO (SUPRA) FOLLOWED BY JUDGEMENT OF JURISDICTIONAL P&H HIGH COURT WHICH IS BINDING. THERE IS NO OTHER MATERIAL AVAILABLE ON RECORD TO REBUT THE CLAIM OF THE ASSES SEE OF EXEMPTION CLAIMED U/S 10(38) OF THE ACT. 19 ITA NOS.2021 TO 2028/DEL/2018 9. KEEPING IN VIEW OF THE ABOVE DISCUSSION AND THE MATERIAL ON RECORD, IN THE LIGHT OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M EENU GOEL VS ITO (SUPRA), I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.19,51,357/-. THE APPEAL OF THE ASSESSEE IS, ACCORDINGLY, ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. 21. I FIND THE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF PRAKASH CHAND BHUTORIA (SUPRA) HAS DEALT WITH IDENTICAL ISSUE WHE RE THE LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF SHARES OF M/S UNNO INDUSTRIES LTD. WAS DENIED BY THE ASSESSING OFFICER ON THE BASIS OF INVESTIGATION WIN G OF KOLKATA AND THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. ON FURTHER APPEAL BY THE ASSESSEE, THE TRIBUNAL DELETED THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 BY OBSERVING AS UNDER :- 8. A PERUSAL OF THE ORDER OF THE AO DEMONSTRATES T HAT THIS ADDITION WAS MADE MERELY ON 'SUSPICION' AND IN A ROUTINE AND MECHANIC AL MANNER. THIS IS CLEAR FROM THE FACT THAT THE AO REFERS TO SOME 'SHARP TRADING COMP NAY' AS ONE OF THE MAIN ,MANIPULATED COMPANY AND WHEREAS THE ASSESSEE SOLD SCRIPS IN UNNO INDUSTRIES LTD. THE AO REFERS TO VARIOUS ENQUIRIES MADE BY 'THE DIR ECTORS OF INCOME TAX' , KOLKATA ON PROJECT BASIS AND THAT THIS RESULTED INTO UNEART HING OF A HUGE SYNDICATE OF ENTRY OPERATORS AND SHARE BROKERS AND MONEY LENDERS INVOL VED IN PROVIDING OF BOGUS ACCOMMODATION ENTRIES. THE REPORT AS THE SO-CALLED PROJECT AND THE EVIDENCE COLLECTED BY THE DIT (INV.), KOLKATA ETC HAVE NOT BEEN BROUGH T ON RECORD. IT IS WELL SETTLED THAT ANY DOCUMENT RELIED UPON BY THE AO FOR MAKING AN AD DITION HAS TO BE SUPPLIED TO THE ASSESSEE AND AN OPPORTUNITY SHOULD BE PROVIDED TO T HE ASSESSEE TO REBUT THE SAME. IN THIS CASE, GENERAL STATEMENTS HAVE BEEN MADE BY THE AO AND THE ADDITION IS MADE BASED ON SUCH GENERALIZATIONS. THE ASSESSEE HAS NOT BEEN CONFRONTED WITH ANY OF THE EVIDENCE COLLECTED IN THE INVESTIGATION DONE BY THE DIT(INV.), KOLKATA. EVIDENCE COLLECTED FROM THIRD PARTIES CANNOT BE USED AGAINST THE ASSESSEE WITHOUT GIVING A COPY OF THE SAME TO THE ASSESSEE AND THEREAFTER GIVING H IM AN OPPORTUNITY TO REBUT THE SAME. 9. THE AO FURTHER RELIES ON THE SHOP INCREASE OF 3 1000% OF THE VALUE OF SHARES OVER THE PERIOD OF 2 YEARS. THOUGH THIS IS HIGHLY S USPICIOUS, IT CANNOT TAKE THE PLACE OF EVIDENCE. THE HON'BLE SUPREME COURT HAS STATED THAT SUSPICION HOWEVER STRONG CANNOT BE THE BASIS FOR MAKING AN ADDITION. THE EVI DENCE PRODUCED BY THE ASSESSEE LISTED ABOVE PROVES HIS CASE AND THE AO COULD NOT C ONTROVERT THE SAME BY BRINGING ON 20 ITA NOS.2021 TO 2028/DEL/2018 RECORD ANY EVIDENCE. THE EVIDENCE SAID TO HAVE BEEN COLLECTED BY THE DIT (INV.), KOLKATA AND THE REPORT IS NOT PRODUCED BEFORE THIS BENCH. 10. I NOW DISCUSS THE CASE LAW ON THE SUBJECT. THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT, KOLKATA-III VS. SMT. SHREYASHI GAN GULI REPORTED IN [2012] (9) TMI 1113 HELD AS FOLLOWS: '1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE ORDER OF THE LD.. TRIBUNAL IS PERVERSE IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH CREDIT UN DER SECTION 68 OF THE INCOME TAX ACT, 1961, BY IGNORING THE FACTS ON RECO RD. THE LD. TRIBUNAL AFTER CONSIDERING THE MATERIAL AND HEARING CAME TO A FACT FINDING WHICH IS AS FOLLOWS: THE ASSESSING OFFICER HAS DOUBTED THE TRANSACTION S INCE THE SELLING BROKER WAS SUBJECTED TO SEBI'S ACTION. HOWEVER, THE DEMAT ACCOUNT GIVEN THE STATEMENT OF TRANSACTIONS FROM 01.04.2004 TO 31.03.2005 I.E. RELEVANT FOR THE ASSESSMENT YEAR UNDER APPEAL (2005 -06) ARE BEFORE US. THERE CANNOT BE ANY DOUBT ABOUT THE TRANSACTION AS HAS BEEN OBSERVED BY THE ASSESSING OFFICER. THE TRANSACTIONS WERE AS PER NORMS UNDER CONTROLLED BY THE SECURITIES TRANSACTION TAX, BROKE RAGE SERVICE TAX AND CESS, WHICH WERE ALREADY PAID. THEY WERE COMPLI ED WITH. ALL THE TRANSACTIONS WERE THROUGH BANK. THERE IS NO IOTA OF EVIDENCE OVER THE ABOVE TRANSACTIONS AS IT WERE THROUGH DEMAT FORMAT. HENCE, WE AGREE WITH THE GIVEN FINDINGS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN ACCEPTING THE TRANSACTIONS AS GENUINE TOO. IN VIEW OF THE FACT FINDINGS WE CANNOT REAPPRECIATE , RECORDING IS SUCH, CANNOT BE SAID TO BE PERVERSE AS IT IS NOT FACT FINDING OF THE LD. TRIBUNAL ALONE. THE COMMISSIONER OF INCOME TAX CAME TO THE SAME FACT FI NDING. CONCURRENT FACT FINDING ITSELF MAKES THE STORY OF PERVERSITY, UNBEL IEVABLE.' THE 'D' BENCH OF THE KOLKATA TRIBUNAL IN THE CASE O F GAUTAM KUMAR PINCHA VS. ITO, IN I.T.A. NO. 569/KOL/2017 DATED 15.11.2017 AT PARA 19 ONWARDS HELD AS FOLLOWS: (I) M/S CLASSIC GROWERS LTD. VS. CIT [ITA NO. 129 O F 2012] (CAL HC) - IN THIS CASE THE LD AO FOUND THAT THE FORMAL EVIDENCES PRODUCED BY THE ASSESSEE TO SUPPORT HUGE LOSSES CLAIMED IN THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES WERE STAGE MANAGED. THE HON'BLE HIGH COURT HELD THAT THE OPINI ON OF THE AO THAT THE ASSESSEE GENERATED A SIZEABLE AMOUNT OF LOSS OUT OF PREARRAN GED TRANSACTIONS SO AS TO REDUCE THE QUANTUM OF INCOME LIABLE FOR TAX MIGHT HAVE BEE N THE VIEW EXPRESSED BY THE LD AO BUT HE MISERABLY FAILED TO SUBSTANTIATE THAT. THE H IGH COURT HELD THAT THE TRANSACTIONS WERE AT THE PREVAILING PRICE AND THEREFORE THE SUSP ICION OF THE AO WAS MISPLACED AND NOT SUBSTANTIATED. (II) CIT V. LAKSHMANGARH ESTATE & TRADING CO. LIMIT ED [2013] 40 TAXMANN.COM 439 (CAL) - IN THIS CASE THE HON'BLE CALCUTTA HIGH COUR T HELD THAT ON THE BASIS OF A SUSPICION HOWSOEVER STRONG IT IS NOT POSSIBLE TO RE CORD ANY FINDING OF FACT. AS A MATTER OF FACT SUSPICION CAN NEVER TAKE THE PLACE OF PROOF . IT WAS FURTHER HELD THAT IN ABSENCE 21 ITA NOS.2021 TO 2028/DEL/2018 OF ANY EVIDENCE ON RECORD, IT IS DIFFICULT IF NOT I MPOSSIBLE, TO HOLD THAT THE TRANSACTIONS OF BUYING OR SELLING OF SHARES WERE COLOURABLE TRAN SACTIONS OR WERE RESORTED TO WITH ULTERIOR MOTIVE. (III) CIT V. SHREYASHI GANGULI [ITA NO. 196 OF 2012 ] (CAL HC) - IN THIS CASE THE HON'BLE CALCUTTA HIGH COURT HELD THAT THE ASSESSING OFFICER DOUBTED THE TRANSACTIONS SINCE THE SELLING BROKER WAS SUBJECTED TO SEBI'S AC TION. HOWEVER THE TRANSACTIONS WERE AS PER NORMS AND SUFFERED STT, BROKERAGE, SERV ICE TAX, AND CESS. THERE IS NO IOTA OF EVIDENCE OVER THE TRANSACTIONS AS IT WERE R EFLECTED IN DEMAT ACCOUNT. THE APPEAL FILED BY THE REVENUE WAS DISMISSED. (IV) CIT V. RUNGTA PROPERTIES PRIVATE LIMITED [ITA NO. 105 OF 2016] (CAL HC) - IN THIS CASE THE HON'BLE CALCUTTA HIGH COURT AFFIRMED THE DECISION OF THIS TRIBUNAL , WHEREIN, THE TRIBUNAL ALLOWED THE APPEAL OF THE ASS ESSEE WHERE THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE IN RESPECT OF HIS T RANSACTIONS IN ALLEGED PENNY STOCKS. THE TRIBUNAL FOUND THAT THE AO DISALLOWED THE LOSS ON TRADING OF PENNY STOCK ON THE BASIS OF SOME INFORMATION RECEIVED BY HIM. HOWEVER, IT WAS ALSO FOUND THAT THE AO DID NOT DOUBT THE GENUINENESS OF THE DOCUMENTS SUBM ITTED BY THE ASSESSEE. THE TRIBUNAL HELD THAT THE AO'S CONCLUSIONS ARE MERELY BASED ON THE INFORMATION RECEIVED BY HIM. THE APPEAL FILED BY THE REVENUE WAS DISMISS ED. (V) CIT V. ANDAMAN TIMBERS INDUSTRIES LIMITED [ITA NO. 721 OF 2008] (CAL HC) - IN THIS CASE THE HON'BLE CALCUTTA HIGH COURT AFFIRMED THE DECISION OF THIS TRIBUNAL WHEREIN THE LOSS SUFFERED BY THE ASSESSEE WAS ALLOW ED SINCE THE AO FAILED TO BRING ON RECORD ANY EVIDENCE TO SUGGEST THAT THE SALE OF SHA RES BY THE ASSESSEE WERE NOT GENUINE. (VI) CIT V. BHAGWATI PRASAD AGARWAL [2009- TMI-3473 8 (CAL HC) IN ITA NO. 22 OF 2009 DATED 29.4.2009] - IN THIS CASE THE ASSESSEE C LAIMED EXEMPTION OF INCOME FROM LONG TERM CAPITAL GAINS. HOWEVER, THE AO, BASED ON THE INFORMATION RECEIVED BY HIM FROM CALCUTTA STOCK EXCHANGE FOUND THAT THE TRA NSACTIONS WERE NOT RECORDED THEREAT. HE THEREFORE HELD THAT THE TRANSACTIONS WE RE BOGUS. THE HON'BLE JURISDICTIONAL HIGH COURT, AFFIRMED THE DECISION OF THE TRIBUNAL WHEREIN IT WAS FOUND THAT THE CHAIN OF TRANSACTIONS ENTERED INTO BY THE ASSESSEE HAVE BEEN PROVED, ACCOUNTED FOR, DOCUMENTED AND SUPPORTED BY EVIDENCE . IT WAS ALSO FOUND THAT THE ASSESSEE PRODUCED THE CONTRACT NOTES, DETAILS OF DE MAT ACCOUNTS AND PRODUCED DOCUMENTS SHOWING ALL PAYMENTS WERE RECEIVED BY THE ASSESSEE THROUGH BANKS. ON THESE FACTS, THE APPEAL OF THE REVENUE WAS SUMMARIL Y DISMISSED BY HIGH COURT. 8.4. IN THE LIGHT OF THE DOCUMENTS STATED I.E. (I TO XIV) IN PARA 6(SUPRA) WE FIND THAT THERE IS ABSOLUTELY NO ADVERSE MATERIAL TO IMPLICAT E THE ASSESSEE TO HAVE ENTERED GAMUT OF UNFOUNDED/UNWARRANTED ALLEGATIONS LEVELED BY THE AO AGAINST THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION HAS NO LEGS TO STAN D AND THEREFORE HAS TO FALL. WE TAKE NOTE THAT THE LD. DR COULD NOT CONTROVERT THE FACTS SUPPORTED WITH MATERIAL EVIDENCES WHICH ARE ON RECORD AND COULD ONLY RELY O N THE ORDERS OF THE AO/CIT(A). WE NOTE THAT IN THE ABSENCE OF MATERIAL/EVIDENCE TH E ALLEGATIONS THAT THE ASSESSEE/BROKERS GOT INVOLVED IN PRICE RIGGING/MANI PULATION OF SHARES MUST THEREFORE ALSO FAIL. AT THE COST OF REPETITION, WE NOTE THAT THE ASSESSEE HAD FURNISHED ALL RELEVANT 22 ITA NOS.2021 TO 2028/DEL/2018 EVIDENCE IN THE FORM OF BILLS, CONTRACT NOTES, DEMA T STATEMENT AND BANK ACCOUNT TO PROVE THE GENUINENESS OF THE TRANSACTIONS RELEVANT TO THE PURCHASE AND SALE OF SHARES RESULTING IN LONG TERM CAPITAL GAIN. THESE EVIDENCE S WERE NEITHER FOUND BY THE AO NOR BY THE LD. CIT(A) TO BE FALSE OR FICTITIOUS OR BOGU S. THE FACTS OF THE CASE AND THE EVIDENCE IN SUPPORT OF THE EVIDENCE CLEARLY SUPPORT THE CLAIM OF THE ASSESSEE THAT THE TRANSACTIONS OF THE ASSESSEE WERE GENUINE AND THE A UTHORITIES BELOW WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE THAT INCOME FROM LTCG IS EXEMPTED U/S 10(38) OF THE ACT. FOR COMING TO SUCH A CONCLUSION WE RELY ON THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF M/S. ALIPINE INV ESTMENTS IN ITA NO.620 OF 2008 DATED 26TH AUGUST, 2008 WHEREIN THE HIGH COURT HELD AS FOLLOWS : 'IT APPEARS THAT THERE WAS LOSS AND THE WHOLE TRANS ACTIONS WERE SUPPORTED BY THE CONTRACT NOTES, BILLS AND WERE CARRIED OUT THRO UGH RECOGNIZED STOCK BROKER OF THE CALCUTTA STOCK EXCHANGE AND ALL THE BILLS WE RE RECEIVED FROM THE SHARE BROKER THROUGH ACCOUNT PAYEE WHICH ARE ALSO FILED I N ACCORDANCE WITH THE ASSESSMENT. IT APPEARS FROM THE FACTS AND MATERIALS PLACED BEFO RE THE TRIBUNAL AND AFTER EXAMINING THE SAME, THE TRIBUNAL ALLOWED THE APPEAL BY THE ASSESSEE. IN DOING SO THE TRIBUNAL HELD THAT THE TRANSACTIONS CANNOT BE BRUSHED ASIDE ON SUSPICION AND SURMISES. HOWEVER IT WAS HELD THAT TH E TRANSACTIONS OF THE SHARES ARE GENUINE. THEREFORE WE DO NOT FIND THAT T HERE IS ANY REASON TO HOLD THAT THERE IS NO SUBSTANTIAL QUESTION OF LAW HELD I N THIS MATTER. HENCE THE APPEAL BEING ITA NO.620 OF 2008 IS DISMISSED.' 8.5. WE NOTE THAT THE LD. AR CITED PLETHORA OF THE CASE LAWS TO BOLSTER HIS CLAIM WHICH ARE NOT BEING REPEATED AGAIN SINCE IT HAS ALR EADY BEEN INCORPORATED IN THE SUBMISSIONS OF THE LD. AR (SUPRA) AND HAVE BEEN DUL Y CONSIDERED BY US TO ARRIVE AT OUR CONCLUSION. THE LD. DR COULD NOT BRING TO OUR N OTICE ANY CASE LAWS TO SUPPORT THE IMPUGNED DECISION OF THE LD. CIT(A)/AO. IN THE AFOR ESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE LD. CIT(A) WAS NOT JUSTI FIED IN UPHOLDING THE ADDITION OF SALE PROCEEDS OF THE SHARES AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. WE, THEREFORE, DIRECT THE AO TO DELETE THE ADDITION. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED.' THE 'A' BENCH OF THE KOLKATA TRIBUNAL IN THE CASE O F ITO VS. SHALEEN KHEMANI IN I.T.A. NO. 1945/KOL/2014 DATED 18.10.2017 AT PARA 9 .1. TO 9.4 HELD AS FOLLOWS: 9.1 WE FURTHER FIND THAT THE TRANSACTION OF SALE O F SHARES BY THE ASSESSEE WAS DULY BACKED BY ALL EVIDENCES INCLUDING CONTRACT NOTES, D EMAT STATEMENT, BANK ACCOUNT REFLECTING THE TRANSACTIONS, THE STOCK BROKERS HAVE CONFIRMED THE TRANSACTIONS, THE STOCK EXCHANGE HAS CONFIRMED THE TRANSACTIONS, THE SHARES HAVE BEEN SOLD ON THE ONLINE PLATFORM OF THE STOCK EXCHANGE AND EACH TRAD E OF SALE OF SHARES WERE HAVING UNIQUE TRADE NO. AND TRADE TIME. IT IS NOT THE CASE THAT THE SHARES WHICH WERE SOLD ON THE DATE MENTIONED IN THE CONTRACT NOTE WERE NOT TR ADED PRICE ON THAT PARTICULAR DATE. THE LD AO DOUBTED THE TRANSACTIONS DUE TO THE HIGH RISE IN THE STOCK PRICE BUT FOR THAT, THE ASSESSEE COULD NOT BE BLAMED AND THERE WAS NO E VIDENCE TO PROVE THAT THE ASSESSEE OR ANY ONE ON HIS BEHALF WAS MANIPULATING THE STOCK PRICES. THE STOCK EXCHANGE AND 23 ITA NOS.2021 TO 2028/DEL/2018 SEBI ARE THE AUTHORITIES APPOINTED BY THE GOVERNMEN T OF INDIA TO ENSURE THAT THERE IS NO STOCK RIGGING OR MANIPULATION. THE LD AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THESE AGENCIES HAVE ALLEGED ANY STOCK MANIPULATION AGAINST THE ASSESSEE AND OR THE BROKERS AND OR THE COMPANY. IN ABSENCE O F ANY EVIDENCES IT CANNOT BE SAID THAT MERELY BECAUSE THE STOCK PRICE MOVED SHARPLY, THE ASSESSEE WAS TO BE BLAMED FOR BOGUS TRANSACTIONS. IT IS ALSO TO BE SEEN THAT IN T HIS CASE, THE SHARES WERE HELD BY THE DONORS FROM 2003 AND SOLD IN 2010 THUS THERE WAS A HOLDING PERIOD OF 7 YEARS AS PER SECTION 49 OF THE ACT AND IT CANNOT BE SAID TH AT THE ASSESSEE AND THE DONORS WERE MAKING SUCH PLANS FOR THE LAST 7 YEARS TO RIG THE S TOCK PRICE TO GENERATE BOGUS CAPITAL GAINS THAT TOO WITHOUT ANY EVIDENCES WHATSOEVER. 9.2 IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE AND / OR THE STOCK BROKER M/S P DIDWANIA & CO AND TOSHITH SECURITIES P LTD., BOTH R EGISTERED SHARE AND STOCK BROKERS WITH CALCUTTA STOCK EXCHANGE HAD CONFIRMED THE TRANSACTION AND HAVE ISSUED LEGALLY VALID CONTRACT NOTES UNDER THE LAW AND SUCH CONTRACT NOTES ARE AVAILABLE IN PAGES 41-52 OF THE PAPER BOOK. WE FIND THAT THE HON 'BLE CALCUTTA HIGH COURT IN THE CASE OF PR CIT VS RUNGTA PROPERTIES PRIVATE LIMITED ITAT NO 105 OF 2016 DATED 8TH MAY 2017 IN A SIMILAR ISSUE DISMISSED THE APPEAL OF THE DEPARTMENT BY MAKING THE FOLLOWING OBSERVATIONS: (11) ON THE LAST POINT, THE TRIBUNAL HELD THAT THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORDS ANY MATERIAL TO SHOW THAT THE TR ANSACTIONS IN SHARES OF THE COMPANY INVOLVED WERE FALSE OR FICTITIOUS. IT IS FI NDING OF THE ASSESSING OFFICER THAT THE SCRIPS OF THIS COMPANY WAS EXECUTED BY A B ROKER THROUGH CROSS DEALS AND THE BROKER WAS SUSPENDED FOR SOME TIME. IT IS A SSESSEE'S CONTENTION ON THE OTHER THAT EVEN THOUGH THERE ARE ALLEGATIONS AGAINS T THE BROKER, BUT FOR THAT REASON ALONE THE ASSESSEE CANNOT BE HELD LIABLE. ON THIS POINT THE TRIBUNAL HELD - 'AS A MATTER OF FACT THE AO DOUBTED THE INTEGRITY O F THE BROKER OR THE MANNER IN WHICH THE BROKER OPERATION AS PER THE STA TEMENT OF ONE OF THE DIRECTORS OF THE BROKER FIRM AND ALSO AO OBSERV ED THAT ASSESSEE HAD NOT FURNISHED ANY EXPLANATION IN RESPECT OF THE INTENTION OF SHOWING TRADING OF SHARES ONLY IN THREE PENNY STOCK S. AO RELIED THE LOSS OF RS.25,30,396/- ONLY ON THE BASIS OF INFORMA TION SUBMITTED BY THE STOCK FICTITIOUS. AO HAS ALSO NOT DOUBTED THE GENUI NENESS OF THE DOCUMENTS PLACED ON RECORD BY THE ASSESSEE. AO'S OB SERVATION AND CONCLUSION ARE MERELY BASED ON THE INFORMATION REPR ESENTATIVE. THEREFORE ON SUCH BASIS NO DISALLOWANCE CAN BE MADE AND ACCORDINGLY WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A), WH O HAS RIGHTLY ALLOWED THE CLAIM OF ASSESSEE. THUS GROUND NO. 1 OF THE REV ENUE IS DISMISSED.' WE AGREE WITH THE REASONING OF THE TRIBUNAL ON THIS POINT ALSO. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER. THE SU GGESTED QUESTIONS, IN OUR OPINION DO NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. 9.3. WE THEREFORE HOLD THAT THERE IS ABSOLUTELY NO ADVERSE MATERIAL TO IMPLICATE THE ASSESSEE TO THE ENTIRE GAMUT OF UNWARRANTED ALLEGAT IONS LEVELED BY THE LD AO AGAINST 24 ITA NOS.2021 TO 2028/DEL/2018 THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION, HAS NO LEGS TO STAND IN THE EYES OF LAW. WE FIND THAT THE LD DR COULD NOT CONTROVERT THE ARG UMENTS OF THE LD AR WITH CONTRARY MATERIAL EVIDENCES ON RECORD AND MERELY RELIED ON T HE ORDERS OF THE LD AO. WE FIND THAT THE ALLEGATION THAT THE ASSESSEE AND / OR BROK ERS GETTING INVO2LVED IN PRICE RIGGING OF SOICL SHARES FAILS. IT IS ALSO A MATTER OF RECORD THAT THE ASSESSEE FURNISHED ALL EVIDENCES IN THE FORM OF BILLS, CONTRACT NOTES, DEMAT STATEMENTS AND THE BANK ACCOUNTS TO PROVE THE GENUINENESS OF THE TRANSACTIO NS RELATING TO PURCHASE AND SALE OF SHARES RESULTING IN LTCG. THESE EVIDENCES WERE NEIT HER FOUND BY THE LD AO TO BE FALSE OR FABRICATED. THE FACTS OF THE CASE AND THE EVIDEN CES IN SUPPORT OF THE ASSESSEE'S CASE CLEARLY SUPPORT THE CLAIM OF THE ASSESSEE THAT THE TRANSACTIONS OF THE ASSESSEE WERE BONAFIDE AND GENUINE AND THEREFORE THE LD AO WAS NO T JUSTIFIED IN REJECTING THE ASSESSEE'S CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT. WE ALSO FIND THAT THE LD CITA RIGHTLY RELIED ON THE DECISION OF THE HON'BLE HIGH COURT AT CALCUTTA IN THE CASE OF ALPINE INVESTMENTS IN ITA NO. 620 OF 2008 DATED 26TH AUGUST 2008 WHEREIN THE HON'BLE COURT HELD AS FOLLOWS: 'IT APPEARS THAT THE SHARE LOSS AND THE WHOLE TRANS ACTIONS WERE SUPPORTED BY CONTRACT NOTES, BILLS AND WERE CARRIED OUT THROUGH RECOGNIZED STOCKBROKER OF THE CALCUTTA STOCK EXCHANGE AND ALL THE PAYMENTS MA DE TO THE STOCKBROKER AND ALL THE PAYMENTS RECEIVED FROM STOCKBROKER THRO UGH ACCOUNT PAYEE INSTRUMENTS, WHICH WERE ALSO FILED IN ACCORDANCE WI TH THE ASSESSMENT. IT APPEARS FROM THE FACTS AND MATERIALS PLACED BEFO RE THE TRIBUNAL AND AFTER EXAMINING THE SAME THE TRIBUNAL CAME TO THE CONCLUS ION AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. IN DOING SO, THE TRIB UNAL HELD THAT THE TRANSACTION FULLY SUPPORTED BY THE DOCUMENTARY EVIDENCES COULD NOT BE BRUSHED ASIDE ON SUSPICION AND SURMISES. HOWEVER, IT WAS HELD THAT T HE TRANSACTIONS OF SHARE ARE GENUINE. THEREFORE, WE DO NOT FIND THAT THERE I S ANY REASON TO HOLD THAT THERE IS ANY SUBSTANTIAL QUESTION OF LAW INVOLVED I N THIS MATTER. HENCE, THE APPEAL BEING ITA NO.620 OF 2008 IS DISMISSED.' 9.4. WE ALSO FIND THAT THE VARIOUS OTHER CASE LAWS OF HON'BLE JURISDICTIONAL HIGH COURT AND OTHER CASE LAWS ALSO RELIED UPON BY THE L D AR AND FINDINGS GIVEN THEREON WOULD APPLY TO THE FACTS OF THE INSTANT CASE. THE L D DR WAS NOT ABLE TO FURNISH ANY CONTRARY CASES TO THIS EFFECT. HENCE WE HOLD THAT T HE LD AO WAS NOT JUSTIFIED IN ASSESSING THE SALE PROCEEDS OF SHARES OF SOICL AS U NDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT AND THEREFORE WE UPHOLD THE ORDER OF THE LD CITA AND DISMISS THE APPEAL OF THE REVENUE. ACCORDINGLY THE GROUNDS RAIS ED BY THE REVENUE ARE DISMISSED.' APPLYING THE PROPOSITION OF LAW LAID DOWN IN ALL TH E ABOVE REFERRED CASES, THE FACTS OF THIS CASE, I FIND FORCE IN THE SUBMISSION OF THE AS SESSEE AND THERE ARE BACKED BY EVIDENCE. I ALSO FIND THAT THE REVENUE HAS NOT BASE D ITS FINDING ON IN ANY EVIDENCE. IN VIEW OF THE ABOVE DISCUSSION THE ADDITION MADE U/S 68 OF THE ACT IS HEREBY DELETED. 22. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTIC AL TO THE FACTS OF THE CASES DECIDED BY THE HONBLE PUNJAB & HARYANA HIGH COURT AND THE DELHI AND 25 ITA NOS.2021 TO 2028/DEL/2018 KOLKATA BENCHES OF THE TRIBUNAL, THEREFORE, RESPECT FULLY FOLLOWING THE ABOVE DECISIONS, I SET-ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE U/S 68 OF THE I .T. ACT. SO FAR AS THE DECISIONS RELIED ON BY LD. DR ARE CONCERNED, THEY A RE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE G ROUNDS RAISED BY THE ASSESSEE IN THE IMPUGNED APPEAL ARE ACCORDINGLY ALLOWED. 23. THE GROUNDS RAISED BY THE ASSESSEES IN OTHER AP PEALS I.E. IN ITA NO.2022 TO 2028/DEL/2018 ARE IDENTICAL TO THE FACTS OF THE PRESENT CASE. I HAVE ALREADY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. FOLLO WING SIMILAR REASONING, THE GROUNDS RAISED BY THE ASSESSEES IN THE ABOVE APPEAL S ARE ALSO ALLOWED. 24. IN THE RESULT, ALL THE ABOVE EIGHT APPEALS FILE D BY THE RESPECTIVE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH SEPTEMBER, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 25-09-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI