Appeal details
Counselvise Citation
[2019] 112 COUNSELVISE.COM (IT) 6741 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-02-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Next Hearing Date
25-02-2019
Assessment Year
2014-2015
Appeal Filed On
01-10-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.2235/KOL/2018 ASSESSMENT YEAR:2015-16 OMPRAKASH MUNDHRA C/O SUBASH AGARWAL & ASSOCIATES, ADVOCATES, SIDDHA GIBSON, 1, GIBSONS LANE, SUITE-213, 2 ND FLOOR, KOLKATA-69 [ PAN NO.AEQPM 0755 G ] / V/S . INCOME TAX OFFICER, WARD-3(4), KALIMPANG, TAXARI ROAD, KALIMPANG-734301 /APPELLANT .. /RESPONDENT ITA NO.2236/KOL/2018 ASSESSMENT YEAR:2015-16 SUMIT KUMAR AGARWAL C/O SUBASH AGARWAL & ASSOCIATES, ADVOCATES, SIDDHA GIBSON, 1, GIBSONS LANE, SUITE-213, 2 ND FLOOR, KOLKATA-69 [ PAN NO.AHXPA 2829 H ] / V/S . INCOME TAX OFFICER, WARD-2(2), HAREN MUKHERJEE ROAD, COLLEGE PARA, HAKIMPARA, SILIGURI- 734001 /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI SUBASH AGARWAL, ADVOCATE /BY RESPONDENT SHRI C.J. SINGH, JCIT-SR-DR /DATE OF HEARING 26-02-2019 ITA NO.2232/KOL/2018 ASSESSMENT YEAR:2014-15 ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 2 AMIT KUMAR JAIN 72, CANNING STREET, KOLKATA-700001 [ PAN NO.ACRPJ 0106 D ] / V/S . INCOME TAX OFFICER, WARD-34(2), 110, SHANTIPALLY, KOLKATA-107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI A.T. TIBREWAL, FCA /BY RESPONDENT SHRI C.J. SINGH, JCIT-SR-DR /DATE OF HEARING 25-02-2019 ITA NO.2060-2063/KOL/2018 ASSESSMENT YEAR:2014-15 SHRI VIKASH SINGH 31/1, ABHAY GUHA ROAD, LILUAH, HOWRAH-711204 [ PAN NO.BHCPS 7628 Q ] SMT. NIRMALA DEBI 31/1, ABHAY GUHA ROAD, LILUAH, HOWRAH-711204 [ PAN NO.APKPD 4413 M ] SMT. PRITI SINGH 31/1, ABHAY GUHA ROAD, LILUAHA, HOWRAH-711204 [ PAN NO.BZUPSS 2257 R ] SHRI SANJAY KUMAR SINGH 31/1, ABHAY GUHA ROAD, LILUAH, HOWRAH-711204 [ PAN NO.BHHPS 9056 H ] / V/S . INCOME TAX OFFICER, WARD-48(3), 3, GOVERNMENT PLACE (WEST), KOLKATA-001 INCOME TAX OFFICER, WARD-46(4), 3, GOVERNMENT PLACE (WEST), KOLKATA-001 INCOME TAX OFFICER, WARD-48(2), 3, GOVERNMENT PLACE (WEST), KOLKATA-001 INCOME TAX OFFICER, WARD-48(2), 3, GOVERNMENT PLACE (WEST), KOLKATA-001 /APPELLANT .. /RESPONDENT ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 3 / /BY ASSESSEE SHRI M.D. SHAH, ADVOCATE /BY REVENUE SHRI C.J. SINGH, JCIT-SR-DR /DATE OF HEARING 25-02-2019 ITA NO.1536-1537/KOL/2018 ASSESSMENT YEAR:2014-15 ANUPAM SARAOGI 22, BRABOURNE ROAD,, 1 ST FLOOR, KOLKATA-001 [ PAN NO.AYVPS 5557 P ] ANUPAM SARAOGI L/R OF LATE ANIL KUMAR SARAOGI, 22 BRABOURNE ROAD, 1 ST FLOOR, KOLKATA-001 [ PAN NO.ALMPS 8677 A ] / V/S . INCOME TAX OFFICER, WARD-34(2), AAYAKAR BHAWAN POORVA, 110, SHANTIPALLY, KOLKATA- 107 /APPELLANT .. /RESPONDENT / /BY ASSESSEE SHRI V.N. PUROHIT, FCA /BY REVENUE SHRI C.J. SINGH, JCIT-SR-DR /DATE OF HEARING 25-02-2019 ITA NO.1549/KOL/2018 ASSESSMENT YEAR:2014-15 SMT. ANNAPURNA DEVI MUNDHRA, G. JETHALIA, 161/1, M.G. ROAD, ROOM NO.30, KOLKATA-700007 [ PAN NO.AENPM 6348 A ] / V/S . INCOME TAX OFFICER, WARD-43(1), KOLKATA /APPELLANT .. /RESPONDENT ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 4 /BY APPELLANT SHRI GOVIND JETHALIA, ADVOCATE /BY RESPONDENT SHRI C.J. SINGH, JCIT, SR-DR /DATE OF HEARING 26-02-2019 ITA NO.2249/KOL/2018 ASSESSMENT YEAR:2013-14 RADHA KISHAN JHUNJHUNWALA, 103, M.G. ROAD, 1 ST FLOOR, KOLKATA-700007 [ PAN NO.ACUPJ 4346 E ] / V/S . INCOME TAX OFFICER, WARD-22(4),54/1 RAFI AHMAD KIDWAI ROAD, 4 TH FLOOR, KOLKATA-700 016 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI RAJEEVA, ADVOCATE /BY RESPONDENT SHRI C.J. SINGH, JCIT, SR-DR /DATE OF HEARING 27-02-2019 ITA NO.100/KOL/2019 ASSESSMENT YEAR:2014-15 AMIT BHUTORIA 3 RD FLOOR, 105, OLD CHINA BAZAR STREET, DALHOUSIE, KOLKATA-700001 [ PAN NO.ADRPB 6093 L ] / V/S . INCOME TAX OFFICER, WARD-34(2), AAYAKAR BHAWAN POORVA, E.M. BYPASS, 7 TH FLOOR, ROOM NO.710, 110, SHANTIPALLY, KOLKATA-107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI M.D. SAHA, ADVOCATE /BY RESPONDENT SHRI C.J. SINGH, JCIT, SR-DR /DATE OF HEARING 27-02-2019 ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 5 ITA NO.271/KOL/2019 ASSESSMENT YEAR:2015-16 REENA DAGA C/O S.N. GHOSH & ASSOCIATES, ADVOCATES SEBEN BROTHERS LODGE, P.O. BUROSHIBTALA, P.S. CHINSURAH, DIST. HOOGHLY- 712 105 [ PAN NO.AESPD 5051 N ] / V/S . INCOME TAX OFFICER, WARD-1(3), AAYAKAR BHAWAN KACHARI ROAD, COURT COMPOUND, P.O. & P.S. BURDWAN, DIST. PURBA BARDDHAMAN- 713101 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SOMNATH GHOSH, ADVOCATE /BY RESPONDENT SHRI C.J. SINGH, JCIT, SR-DR /DATE OF HEARING 27-02-2019 /DATE OF PRONOUNCEMENT 28-02-2019 /O R D E R THESE THIRTEEN ASSESSEES(S) HAVE FILED THEIR AS MA NY AS INSTANT APPEAL(S) FOR ASSESSMENT YEARS 2015-16, 2014-15 & 2013-14 AGAINST THE COMMISSIONER OF INCOME- TAX (APPEALS) SEPARATE ORDER(S) UPHOLDING THE ASSE SSING OFFICER(S) IDENTICAL ACTION TREATING THEIR RESPECTIVE LONG TERM CAPITAL GAINS ( LTCG) / LONG TERM CAPITAL LOSS (LTCL) APPEAL-WISE IN SERIATIM TO BE BOGUS UNEXPLAI NED CASH CREDITS U/S 68, INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. RELEVANT FIGURES DETAILS ARE AS FOLLOWS: SL NO. ITA NO. AY LTCG LTCL 1 2235/K/18 15-16 6,19,319 2 2236/K/18 15-16 12,27,101 3 2232/K/18 14-15 38,76,500 4 2060/K/18 14-15 17,33,070 5 2061/K/18 14-15 9,55,570 6 2062/K/18 14-15 15,12,400 ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 6 7 2063/K/18 14-15 1,25,803 8 1536/K/18 14-15 14,66,565 9 1537/K/18 14-15 9,92,178 10 1549/K/18 14-15 14,92,954 11 2249/K/18 13-14 3,51,337 12 100/K/19 14-15 28,54,550 13 271/K/19 15-16 19,63,350 HEARD ALL THE LEARNED REPRESENTATIVES AS WELL AS TH E REVENUE REITERATING THEIR RESPECTIVE STANDS AGAINST AND IN SUPPORT OF THE IMP UGNED BOGUS LTCG ADDITION(S) FOLLOWED BY DISALLOWANCES OF UNEXPLAINE D COMMISSION EXPENDITURE (IN SAME CASES) . CASE FILE(S) PERUSED. 2. IT EMERGES AT THE OUTSET THAT BOTH THE LOWER A UTHORITIES HAVE ADOPTED IDENTICAL LINE OF REASONING IN TREATING ALL THESE ASSESSEES LTCG/LOSSES DERIVED FROM TRANSFER OF SHARES IN VARIOUS ENTITIES TO BE BOGUS THEREBY TREA TING THE SAME AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. I THUS TAKE FIRST APPEAL ITA NO.2235/KOL/2018 NAMELY OMPRAKASH MUNDHRA TO BE THE LEAD CASE. 3. I FIND IN THIS LEAD CASE ITA NO.2235/KOL/2018 TH AT THE ASSESSEE HAD DECLARED HIS LTCG OF 6,19,319/- DERIVED FROM TRANSFER OF SHARES HELD IN JACKSON INVESTMENTS LTD. LEARNED DEPARTMENTAL REPRESENTATIVE INVITES MY ATTENTION TO A VOLUMINOUS EXERCISE UNDERTAKEN BY THE ASSESSING OFFICER INVOLV ING A LONG DRAWN PROCESS OF STOCK MARKET PRICES RIGGING IN COLLUSION WITH IN THE VARI OUS ENTITY OPERATORS. HE TAKES ME TO ASSESSMENT ORDER INDICATING THE ASSESSEE TO HAVE AL LEGEDLY INVESTED HER MONEY IN JACKSON INVESTMENTS LTD. NOT HAVING ANY SOUND FINAN CIAL POSITION OR BUSINESS ACTIVITY SO AS TO JUSTIFY THE LTCG IN ISSUE. CASE LAW SUMATI DAYAL VS. CIT 214 ITR 801 (SC) AND CIT VS. DURGA PRASAD MORE (1971) 82 ITR (SC) IS QUOTED IN SUPPORT TO PLEAD T HAT BOTH THE LOWER AUTHORITIES HAVE MADE IT CLEAR IN TH EIR RESPECTIVE ORDER(S) ABOUT THE ASSESSEE HAVING ACTED IN COLLUSION WITH VARIOUS ENT ITY OPERATORS FOR THE PURPOSE OF BOGUS LTCG IN ISSUE. ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 7 4. I HAVE GIVEN MY THOUGHTFUL CONSIDERATION TO RIVA L CONTENTIONS. THERE IS NO DISPUTE THAT ASSESSEE HAVING DERIVED HER LTCG ON TR ANSFER OF SHARES HELD IN M/S KAILASH AUTO FINANCE LTD. LEARNED DEPARTMENTAL REPR ESENTATIVE FAILS TO DISPUTE THAT VERY ISSUE STANDS ADJUDICATED IN ASSESSEES FAVOUR IN CO-ORDINATE BENCHS DECISION IN ITA NO.354KOL/2018 IN SANJEEV GOEL (HUF) VS. ITO DECIDED DATED 24.08. 2018 AS FOLLOWS:- 4. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSID ERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON R ECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: - 5. IN IDENTICAL CASES, THE SUBMISSION OF THE ASSESSEE , FINDINGS OF THE ASSESSING OFFICER, FINDINGS OF THE LD. CIT(A) AND THE CONCLUSIO N OF THE TRIBUNAL HAVE BEEN BROUGHT OUT AS UNDER:- 6. THE ADDITION WAS MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER:- I. THE INITIAL ALLOTMENT OF SHARES TO BENEFICIARIES IS GENERALLY DONE THROUGH PREFERENTIAL ALLOTMENT. II. THE MARKET PRICE OF SHARES OF THESE COMPANIES R ISE TO VERY HIGH LEVEL WITHIN A SPAN OF ONE YEAR. III. THE TRADING VOLUME OF SHARES DURING THE PERIOD , IN WHICH MANIPULATIONS ARE DONE TO RAISE THE MARKET PRICE, I S EXTREMELY THIN. IV. MOST OF THE PURPORTED INVESTORS ARE RETURNED TH EIR INITIAL INVESTMENT AMOUNT IN CASH. ONLY SMALL AMOUNT IS RETAINED BY TH E OPERATOR AS SECURITY. THUS, AN ENQUIRY WOULD REVEAL THAT MOST OF THE CAPI TAL RECEIPTS THROUGH PREFERENTIAL ALLOTMENT OR OTHER MEANS WOULD HAVE FO UND THEIR WAY OUT OF SYSTEM AS CASH. V. MOST OF THESE COMPANIES HAVE NO BUSINESS AT ALL. FEW OF THE COMPANIES WHICH HAVE SOME BUSINESS DO NOT HAVE THE CREDENTIAL S TO JUSTIFY THE SHARP RISE IN MARKET PRICE OF THEIR SHARES. VI. THE SHARP RISE IN MARKET PRICE OF THE SHARES OF THESE ENTITIES IS NOT SUPPORTED BY FUNDAMENTALS OF THE COMPANY OR ANY OTH ER GENUINE FACTORS. VII. AN ANALYSIS IN RESPECT OF PERSONS INVOLVED IN TRANSACTIONS APPARENTLY CARRIED OUT IN ORDER TO JACK UP THE SHARE PRICES HA S BEEN DONE IN RESPECT OF 84 COMPANIES. IT HAS BEEN NOTED THAT MANY COMMON PE RSONS/ENTITIES WERE INVOLVED IN TRADING IN MORE THAN 1 LTCG COMPAN IES DURING THE PERIOD WHEN THE SHARES WERE MADE TO RISE WHICH IMPL IES THAT THEY HAD CONTRIBUTED TO SUCH PRICE RISE. VIII. NAMES OF MOST OF THE LTCG COMPANIES ARE CHANG ED DURING THE PERIOD OF THE SCAM. IX. MOST OF THE COMPANIES SPLIT THE FACE VALUE OF S HARES [THIS IS PROBABLY DONE TO AVOID THE EYES OF MARKET ANALYSTS]. X. THE VOLUME OF TRADE JUMPS MANIFOLD IMMEDIATELY W HEN THE MARKET PRICES OF SHARES REACH AT OPTIMUM LEVEL SO AS TO RE SULT IN LTCG ASSURED TO THE BENEFICIARIES. THIS MAXIMUM IS REACHED AROUND T HE TIME WHEN THE INITIAL ALLOTTEES HAVE HELD THE SHARES FOR ONE YEAR OR LITTLE MORE AND THUS, ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 8 THEIR GAIN ON SALE OF SUCH SHARES WOULD BE ELIGIBLE FOR EXEMPTION FROM INCOME TAX. XI. AN ANALYSIS OF SHARE BUYERS OF SOME OF LTCG COM PANIES WAS DONE TO SEE IF THERE WERE COMMON PERSONS/ENTITIES INVOLVED IN BUYING THE BOGUS INFLATED SHARES. IT WAS NOTED THAT THERE WERE MANY COMMON BUYERS [WHICH WERE PAPER COMPANIES]. XII. THE PRICES OF THE SHARES FALL VERY SHARPLY AFT ER THE SHARES OF LTCG BENEFICIARIES HAVE BEEN OFF LOADED THROUGH THE PRE- ARRANGED TRANSACTIONS ON THE STOCK EXCHANGE FLOOR/PORTAL TO THE SHORT TER M LOSS SEEKERS OR DUMMY PAPER ENTITIES. XIII. THE SHARES OF THESE COMPANIES ARE NOT AVAILAB LE FOR BUY/SELL TO ANY PERSON OUTSIDE THE SYNDICATE. THIS IS GENERALLY ENS URED BY WAY OF SYNCHRONIZED TRADING BY THE OPERATORS AMONGST THEMS ELVES AND/OR BY UTILIZING THE MECHANISM OF UPPER/LOWER CIRCUIT OF T HE EXCHANGE. 7. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEA L. 8. THE FIRST APPELLATE AUTHORITY UPHELD THE ORDER OF THE ASSESSING OFFICER BY GIVING HIS FINDINGS AS FOLLOWS:- A) THE AO HAD PLACED ON RECORD THE ENTIRE GAMUT OF FINDING AND THERE IS NO FURTHER REQUIREMENT FOR ELABORATION. B) THERE IS DIRECT EVIDENCE TO CLEARLY INDICATE THA T THE ENTIRE TRANSACTION UNDERTAKEN BY THE ASSESSEE WAS MERELY AN ACCOMMODAT ION TAKEN FOR THE PURPOSE OF BOGUS LONG TERM CAPITAL GAINS TO CLAIM E XEMPT INCOME. THE AUTHORITIES SUCH AS SEBI HAVE AFTER INVESTIGATING S UCH ABNORMAL PRICE INCREASE OF CERTAIN STOCKS, SUSPENDED CERTAIN SCRIP S. C) THE SUBMISSIONS OF THE ASSESSEE POINTED OUT TOWA RDS ELABORATE DOCUMENTATION SUCH AS : I) APPLICATION OF SHARES. II) ALLOTMENT OF SHARES. III) SHARE CERTIFICATES IV) PAYMENT BY CHEQUES V) FILINGS BEFORE REGISTRAR OF COMPANIES. VI) PROOF OF AMALAGAMATION OF COMPANIES. VII) COPIES OF BANK STATEMENT, VIII) BANK CONTRACT NOTES. IX) DELIVERY INSTRUCTION TO THE BROKER ETC. D) THE ELABORATE PAPER BOOK IS FILED TO STRENGTHEN THE MATTER RELEVANT TO BOGUS CLAIM OF LTCG, AND THIS IS CLEARLY BEEN SCHEM ED AND PRE- PLANNED WITH MALA FIDE INTENTION. THEREFORE, ALL TH ESE DOCUMENTS ARE NOT EVIDENCE. E) THE TRANSACTIONS ARE UNNATURAL AND HIGHLY SUSPICIOU S. THERE ARE GRAVE DOUBTS IN THE STORY PROPOUNDED BY THE ASSESSEE BEFO RE THE AUTHORITIES BELOW. BANKING DOCUMENTS ARE MERE SELF-SERVING RECI TALS. ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 9 9. THEREAFTER HE REFERRED TO A NUMBER OF JUDGMENTS RE LATING TO HUMAN BEHAVIOR AND PREPONDERANCE OF HUMAN PROBABILITIES AND UPHELD THE AD DITION MADE BY THE ASSESSING OFFICER BY RELYING ON WHAT HE CALLS RULES OF SUSPICIOUS TRANSACTIONS. 10. THE ASSESSEE IN THIS CASE HAS FILED THE FOLLOWING E VIDENCE BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CONTENTIONS:- A) COPIES OF BILLS, EVIDENCING PURCHASE OF SHARES B) COPIES OF CONTRACT NOTES OF SALE OF SHARES C) BANK STATEMENT COPIES D) COPY OF LEDGER A/C OF BROKER E) DEMAT STATEMENT ETC. THE ASSESSING OFFICER HAS JUST RELIED ON GENERAL OBSE RVATIONS. NO EVIDENCE WAS CONTROVERTED BY THE ASSESSING OFFICER. 11. THE KOLKATA BENCH OF THE ITAT IN A NUMBER OF DECIS IONS HAVE, ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, DECIDED THE ISSUE IN F AVOUR OF THE ASSESSEE. WE LIST SOME OF THESE DECISIONS:- SHRI GAUTAM KUMAR PINCHA VS. ITO, ITA NO. 569/KOL/201 7, DT. 15/11/2017 ITO VS. SHRI SHALEEN KHEMANI, ITA NO. 1945/KOL/2014, DT. 18/10/2017 MAHENDRA KUMAR BAID VS. ACIT, CIRCLE-35; ITA NO. 123 7/KOL/2017; ORDER DT. 18/08/2017 KIRAN KOTHARI HUF VS. ITO, ITA NO. 443/KOL/2017, OR DER DT. 15/11/2017 THE HONBLE JURISDICTIONAL HIGH COURT ON SIMILAR FACT S, HAD IN THE FOLLOWING CASES, UPHELD THE CLAIM OF THE ASSESSEE:- CIT VS. SHREYASHI GANGULI (ITA NO. 196 OF 2012) (CAL HC) 2012 (9) TMI 1113 CIT VS. RUNGTA PROPERTIES PRIVATE LIMITED (ITA NO. 1 05 OF 2016) (CAL HC)DT. 08/05/2017 CIT VS. BHAGWATI PRASAD AGARWAL (2009 TMI-34738 (CAL HC) IN ITA NO. 22 OF 2009 DATED 29.04.2009 11. RECENTLY, THE KOLKATA C BENCH OF THE TRIBUNAL IN THE CASE OF NAVNEET AGARWAL,-VS- ITO, WARD-35(3), KOLKATA; I.T.A. NO . 2281/KOL/2017; ASSESSMENT YEAR: 2014-15, WHILE DEALING WITH IDENTICAL ISSUE OF SALE OF SHARE S OF M/S. CRESSENDA SOLUTIONS PVT. LTD., DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY RELYING UPON A PLETHORA OF JUDGMENTS OF VARIOUS COU RTS. IT HELD AS FOLLOWS:- 12. THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) HAVE REJECTED THESE EVIDENCES FILED BY THE ASSESSEE BY REFERRING TO MOD US OPERANDI OF PERSONS FOR EARNING LONG TERM CAPITAL GAINS WHICH HIS EXEMPT FROM INCOME TAX. ALL THESE OBSERVATIONS ARE GENERAL IN NATURE AND ARE APPLIED ACROSS THE BOARD TO ALL THE 60,000 OR MORE AS SESSEES WHO FALL IN THIS CATEGORY. SPECIFIC EVIDENCES PRODUCED BY THE ASS ESSEE ARE NOT CONTROVERTED BY THE REVENUE AUTHORITIES. NO EVIDENCE COLLECTED FROM THIRD PARTIES IS CONFRONTED TO THE ASSESSES. NO OPPOR TUNITY OF CROSS- EXAMINATION OF PERSONS, ON WHOSE STATEMENTS THE REVEN UE RELIES TO MAKE THE ADDITION, IS PROVIDED TO THE ASSESSEE. THE A DDITION IS MADE BASED ON A REPORT FROM THE INVESTIGATION WING. 13. THE ISSUE FOR CONSIDERATION BEFORE US IS WHETHER, IN SUCH CASES, THE LEGAL EVIDENCE PRODUCED BY THE ASSESSEE HAS TO GUID E OUR DECISION IN ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 10 THE MATTER OR THE GENERAL OBSERVATIONS BASED ON STAT EMENTS, PROBABILITIES, HUMAN BEHAVIOR AND DISCOVERY OF THE MODUS OPERANDI ADOPTED IN EARNING ALLEGED BOGUS LTCG AND STCG, THAT HAVE SURFACED DURING INVESTIGATIONS, SHOULD GUIDE THE AUTHORITIES IN ARRIVING AT A CONCLUSION AS TO WHETHER THE CLAIM IN GENUINE OR NOT. AN ALLEGED SCAM MIGHT HAVE TAKEN PLACE ON LTCG ETC. BUT IT HAS TO BE ESTABLISHED IN EACH CASE, BY THE PARTY ALLEGING SO, THAT THIS ASSESSEE IN QUESITON WAS PART OF THIS SCAM. THE CHAIN OF EVENTS AND THE LIVE LIN K OF THE ASSESEES ACTION GIVING HER INVOLVEMENT IN THE SCAM SHOULD BE ES TABLISHED. THE ALLEGATION IMPLY THAT CASH WAS PAID BY THE ASSESSEE AN D IN RETURN THE ASSESSEE RECEIVED LTCG, WHICH IS INCOME EXEMPT FROM I NCOME TAX, BY WAY OF CHEQUE THROUGH BANKING CHANNELS. THIS ALLEGATION THAT CASH HAD CHANGED HANDS, HAS TO BE PROVED WITH EVIDENCE, BY THE REVENUE. EVIDENCE GATHERED BY THE DIRECTOR INVESTIGATIONS OF FICE BY WAY OF STATEMENTS RECORDED ETC. HAS TO ALSO BE BROUGHT ON RE CORD IN EACH CASE, WHEN SUCH A STATEMENT, EVIDENCE ETC. IS RELIED UPON B Y THE REVENUE TO MAKE ANY ADDITIONS. OPPORTUNITY OF CROSS EXAMINATIO N HAS TO BE PROVIDED TO THE ASSESSEE, IF THE AO RELIES ON ANY STA TEMENTS OR THIRD PARTY AS EVIDENCE TO MAKE AN ADDITION. IF ANY MATER IAL OR EVIDENCE IS SOUGHT TO BE RELIED UPON BY THE AO, HE HAS TO CONFRONT THE ASSESSEE WITH SUCH MATERIAL. THE CLAIM OF THE ASSESSEE CANNOT BE RE JECTED BASED ON MERE CONJECTURES UNVERIFIED BY EVIDENCE UNDER THE PR ETENTIOUS GARB OF PREPONDERANCE OF HUMAN PROBABILITIES AND THEORY OF HUM AN BEHAVIOR BY THE DEPARTMENT. 14. IT IS WELL SETTLED THAT EVIDENCE COLLECTED FROM THIRD PARTIES CANNOT BE USED AGAINST AN ASSESSEE UNLESS THIS EVIDENCE IS PUT BEFORE HIM AND HE IS GIVEN AN OPPORTUNITY TO CONTROVERT THE EVIDENCE . IN THIS CASE, THE AO RELIES ONLY ON A REPORT AS THE BASIS FOR THE ADDI TION. THE EVIDENCE BASED ON WHICH THE DDIT REPORT IS PREPARED IS NOT BRO UGHT ON RECORD BY THE AO NOR IS IT PUT BEFORE THE ASSESSEE. THE SUBMI SSION OF THE ASSESSEE THAT SHE IS JUST AN INVESTOR AND AS SHE RECE IVED SOME TIPS AND SHE CHOSE TO INVEST BASED ON THESE MARKET TIPS AND HAD TAKEN A CALCULATED RISK AND HAD GAINED IN THE PROCESS AND THA T SHE IS NOT PARTY TO THE SCAM ETC., HAS TO BE CONTROVERTED BY THE REVEN UE WITH EVIDENCE. WHEN A PERSON CLAIMS THAT SHE HAS DONE THESE TRANSACTIO NS IN A BONA FIDE AND GENUINE MANNER AND WAS BENEFITTED, ONE CAN NOT REJECT THIS SUBMISSION BASED ON SURMISES AND CONJECTURES. AS THE REPORT OF INVESTIGATION WING SUGGESTS, THERE ARE MORE THAN 60,0 00 BENEFICIARIES OF LTCG. EACH CASE HAS TO BE ASSESSED BASED ON LEGAL PRINCIPLES OF LEGAL IMPORT LAID DOWN BY THE COURTS OF LAW. 15. IN OUR VIEW MODUS OPERANDI, GENERALISATION, PRE PONDERANCE OF HUMAN PROBABILITIES CANNOT BE THE ONLY BASIS FOR REJE CTING THE CLAIM OF THE ASSESSEE. UNLESS SPECIFIC EVIDENCE IS BROUGHT ON RECORD TO CONTROVERT THE VALIDITY AND CORRECTNESS OF THE DOCUM ENTARY EVIDENCES PRODUCED, THE SAME CANNOT BE REJECTED BY THE ASSESSEE . THE HON'BLE SUPREME COURT IN THE CASE OF OMAR SALAV MOHAMED SAI T REPORTED IN (1959) 37 ITR 151 (S C) HAD HELD THAT NO ADDITION CAN B E MADE ON THE ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 11 BASIS OF SURMISES, SUSPICION AND CONJECTURES. IN THE CASE OF CIT(CENTRAL), KOLKATA VS. DAULAT RAM RAWATMULL REPORT ED IN 87 ITR 349, THE HON'BLE SUPREME COURT HELD THAT, THE ONUS TO P ROVE THAT THE APPARENT IS NOT THE REAL IS ON THE PARTY WHO CLAIMS IT TO BE SO. THE BURDEN OF PROVING A TRANSACTION TO BE BOGUS HAS TO B E STRICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCES, WHICH WOULD DI RECTLY PROVE THE FACT OF BOGUSNESS OR ESTABLISH CIRCUMSTANCE UNERR INGLY AND REASONABLY RAISING AN INTERFERENCE TO THAT EFFECT. THE HON'BLE SUPREME COURT IN THE CASE OF UMACHARAN SHAH & BROS. VS. CIT 37 ITR 271 HELD THAT SUSPICION HOWEVER STRONG, CANNOT TAKE THE PLACE O F EVIDENCE. 16. WE FIND THAT THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) HAS BEEN GUIDED BY THE REPORT OF THE INVESTIGATION WING PREPAR ED WITH RESPECT TO BOGUS CAPITAL GAINS TRANSACTIONS. HOWEVER WE DO NOT FIND THAT, THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A), HAVE BRO UGHT OUT ANY PART OF THE INVESTIGATION WING REPORT IN WHICH THE ASSESSEE HAS BEEN INVESTIGATED AND /OR FOUND TO BE A PART OF ANY ARRA NGEMENT FOR THE PURPOSE OF GENERATING BOGUS LONG TERM CAPITAL GAINS . NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE PERSONS INVESTIGATE D, INCLUDING ENTRY OPERATORS OR STOCK BROKERS, HAVE NAMED THAT T HE ASSESSEE WAS IN COLLUSION WITH THEM. IN ABSENCE OF SUCH FINDING HOW I S IT POSSIBLE TO LINK THEIR WRONG DOINGS WITH THE ASSESSEE. IN FACT THE INVE STIGATION WING IS A SEPARATE DEPARTMENT WHICH HAS NOT BEEN ASSIGNED ASSESS MENT WORK AND HAS BEEN DELEGATED THE WORK OF ONLY MAKING INVEST IGATION. THE ACT HAS VESTED WIDEST POWERS ON THIS WING. IT IS THE DUTY OF THE INVESTIGATION WING TO CONDUCT PROPER AND DETAILED I NQUIRY IN ANY MATTER WHERE THERE IS ALLEGATION OF TAX EVASION AND AFTER MAKING PROPER INQUIRY AND COLLECTING PROPER EVIDENCES THE M ATTER SHOULD BE SENT TO THE ASSESSMENT WING TO ASSESS THE INCOME AS P ER LAW. WE FIND NO SUCH ACTION EXECUTED BY INVESTIGATION WING AGAINST T HE ASSESSEE. IN ABSENCE OF ANY FINDING SPECIFICALLY AGAINST THE ASSE SSEE IN THE INVESTIGATION WING REPORT, THE ASSESSEE CANNOT BE HEL D TO BE GUILTY OR LINKED TO THE WRONG ACTS OF THE PERSONS INVESTIGATED . IN THIS CASE, IN OUR VIEW, THE ASSESSING OFFICER AT BEST COULD HAVE CONSID ERED THE INVESTIGATION REPORT AS A STARTING POINT OF INVESTI GATION. THE REPORT ONLY INFORMED THE ASSESSING OFFICER THAT SOME PERSONS MAY HAVE MISUSED THE SCRIPT FOR THE PURPOSE OF COLLUSIVE TRANS ACTION. THE ASSESSING OFFICER WAS DUTY BOUND TO MAKE INQUIRY FR OM ALL CONCERNED PARTIES RELATING TO THE TRANSACTION AND THEN TO COLLE CT EVIDENCES THAT THE TRANSACTION ENTERED INTO BY THE ASSESSEE WAS ALSO A COLLUSIVE TRANSACTION. WE, HOWEVER, FIND THAT THE ASSESSING OFF ICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT THE TRAN SACTIONS ENTERED BY THE ASSESSEE WHICH ARE OTHERWISE SUPPORTED BY PROPER THIRD PARTY DOCUMENTS ARE COLLUSIVE TRANSACTIONS. 17. THE HONBLE SUPREME COURT WAY BACK IN THE CASE O F LALCHAND BHAGAT AMBICA RAM VS. CIT [1959] 37 ITR 288 (SC) HELD THAT AS SESSMENT COULD NOT BE BASED ON BACKGROUND OF SUSPICION AND IN ABSENCE OF ANY EVIDENCE TO SUPPORT THE SAME. THE HONBLE COURT HELD: ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 12 ADVERTING TO THE VARIOUS PROBABILITIES WHICH WEIGHED W ITH THE INCOME-TAX OFFICER WE MAY OBSERVE THAT THE NOTORI ETY FOR SMUGGLING FOOD GRAINS AND OTHER COMMODITIES TO BENGA L BY COUNTRY BOATS ACQUIRED BY SAHIBGUNJ AND THE NOTORIETY ACHIEVED BY DHULIAN AS A GREAT RECEIVING CENTRE FOR S UCH COMMODITIES WERE MERELY A BACKGROUND OF SUSPICION A ND THE APPELLANT COULD NOT BE TARRED WITH THE SAME BRUSH AS EVERY ARHATDAR AND GRAIN MERCHANT WHO MIGHT HAVE BEEN INDULGIN G IN SMUGGLING OPERATIONS, WITHOUT AN IOTA OF EVIDENCE IN THAT BEHALF. THE CANCELLATION OF THE FOOD GRAIN LICENCE AT NAWGACHIA AND THE PROSECUTION OF THE APPELLANT UNDER THE DEFENCE OF INDIA RULES WAS ALSO OF NO CONSEQUENCE IN ASMUCH AS THE APPELLANT WAS ACQUITTED OF THE OFFENCE WITH WHIC H IT HAD BEEN CHARGED AND ITS LICENCE ALSO WAS RESTORED. T HE MERE POSSIBILITY OF THE APPELLANT EARNING CONSIDERABLE AM OUNTS IN THE YEAR UNDER CONSIDERATION WAS A PURE CONJECTURE O N THE PART OF THE INCOME-TAX OFFICER AND THE FACT THAT THE AP PELLANT INDULGED IN SPECULATION (IN KALAI ACCOUNT) COULD NO T LEGITIMATELY LEAD TO THE INFERENCE THAT THE PROFIT IN A SINGLE TRANSACTION OR IN A CHAIN OF TRANSACTIONS COULD EXC EED THE AMOUNTS, INVOLVED IN THE HIGH DENOMINATION NOTES,---T HIS ALSO WAS A PURE CONJECTURE OR SURMISE ON THE PART OF THE I NCOME- TAX OFFICER. AS REGARDS THE DISCLOSED VOLUME OF BUSI NESS IN THE YEAR UNDER CONSIDERATION IN THE HEAD OFFICE AND IN B RANCHES THE INCOME-TAX OFFICER INDULGED IN SPECULATION WHEN HE TALKED OF THE POSSIBILITY OF THE APPELLANT EARNING A CONSIDE RABLE SUM AS AGAINST WHICH IT SHOWED A NET LOSS OF ABOUT RS. 45, 000. THE INCOME-TAX OFFICER INDICATED THE PROBABLE SOURCE OR SOURCES FROM WHICH THE APPELLANT COULD HAVE EARNED A LARGE AMOU NT IN THE SUM OF RS. 2,91,000 BUT THE CONCLUSION WHICH HE A RRIVED AT IN REGARD TO THE APPELLANT HAVING EARNED THIS LARG E AMOUNT DURING THE YEAR AND WHICH ACCORDING TO HIM REPRESENTED THE SECRETED PROFITS OF THE APPELLANT IN ITS BUSINESS WA S THE RESULT OF PURE CONJECTURES AND SURMISES ON HIS PART AND HAD NO FOUNDATION IN FACT AND WAS NOT PROVED AGAINST THE AP PELLANT ON THE RECORD OF THE PROCEEDINGS. IF THE CONCLUSION OF THE INCOME-TAX OFFICER WAS THUS EITHER PERVERSE OR VITIAT ED BY SUSPICIONS, CONJECTURES OR SURMISES, THE FINDING OF THE TRIBUNAL WAS EQUALLY PERVERSE OR VITIATED IF THE TRIBUNAL TOO K COUNT OF ALL THESE PROBABILITIES AND WITHOUT ANY RHYME OR REAS ON AND MERELY BY A RULE OF THUMB, AS IT WERE, CAME TO THE CO NCLUSION THAT THE POSSESSION OF 150 HIGH DENOMINATION NOTES OF R S. 1,000 EACH WAS SATISFACTORILY EXPLAINED BY THE APPEL LANT BUT NOT THAT OF THE BALANCE OF 141 HIGH DENOMINATION NOTES OF RS. 1,000 EACH. THE OBSERVATIONS OF THE HONBLE APEX COURT ARE EQUALL Y APPLICABLE TO THE CASE OF THE ASSESSEE. IN OUR VIEW THE ASSESSING OF FICER HAVING FAILED ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 13 TO BRING ON RECORD ANY MATERIAL TO PROVE THAT THE TRA NSACTION OF THE ASSESSEE WAS A COLLUSIVE TRANSACTION COULD NOT HAVE REJECTED THE EVIDENCES SUBMITTED BY THE ASSESSEE. IN FACT IN THIS CASE NOTHING HAS BEEN FOUND AGAINST THE ASSESSEE WITH AID OF ANY DIREC T EVIDENCES OR MATERIAL AGAINST THE ASSESSEE DESPITE THE MATTER BEI NG INVESTIGATED BY VARIOUS WINGS OF THE INCOME TAX DEPARTMENT HENCE I N OUR VIEW UNDER THESE CIRCUMSTANCES NOTHING CAN BE IMPLICATED A GAINST THE ASSESSEE. 18. WE NOW CONSIDER THE VARIOUS PROPOSITIONS OF LAW LAID DOWN BY THE COURTS OF LAW. THAT CROSS-EXAMINATION IS ONE PART OF THE PRINCIPLES OF NATURAL JUSTICE HAS BEEN LAID DOWN IN THE FOLLOWING J UDGMENTS: A) AYAAUBKHAN NOORKHAN PATHAN VS. THE STATE OF MAHARASHTR A AND ORS. 23. A CONSTITUTION BENCH OF THIS COURT IN STATE OF M .P. V. CHINTAMAN SADASHIVA VAISHAMPAYAN AIR 1961 SC 1623, HELD THAT THE RULES OF NATURAL JUSTICE, REQUIRE THAT A PARTY M UST BE GIVEN THE OPPORTUNITY TO ADDUCE ALL RELEVANT EVIDENCE UPON WHI CH HE RELIES, AND FURTHER THAT, THE EVIDENCE OF THE OPPOSITE PARTY S HOULD BE TAKEN IN HIS PRESENCE, AND THAT HE SHOULD BE GIVEN THE OPPORTUNITY OF CROSS-EXAMINING THE WITNESSES EXAMINED BY THAT PAR TY. NOT PROVIDING THE SAID OPPORTUNITY TO CROSS-EXAMINE WITN ESSES, WOULD VIOLATE THE PRINCIPLES OF NATURAL JUSTICE. (SEE ALS O: UNION OF INDIA V. T.R. VARMA, AIR 1957 SC 882; MEENGLAS TEA ESTATE V. W ORKMEN, AIR 1963 SC 1719; M/S. KESORAM COTTON MILLS LTD. V. GANGADHAR AND ORS. ,AIR 1964 SC 708; NEW INDIA ASSURANCE CO. L TD. V. NUSLI NEVILLE WADIA AND ANR. AIR 2008 SC 876; RACHPAL SINGH AND ORS. V. GURMIT SINGH AND ORS. AIR 2009 SC 2448; BIECCO LAWRIE AND ANR. V. STATE OF WEST BENGAL AND ANR. AIR 2010 SC 142; AN D STATE OF UTTAR PRADESH V. SAROJ KUMAR SINHA AIR 2010 SC 3131). 24. IN LAKSHMAN EXPORTS LTD. V. COLLECTOR OF CENTRA L EXCISE (2005) 10 SCC 634, THIS COURT, WHILE DEALING WITH A CASE UNDE R THE CENTRAL EXCISE ACT, 1944, CONSIDERED A SIMILAR ISSUE I.E. P ERMISSION WITH RESPECT TO THE CROSS-EXAMINATION OF A WITNESS. IN THE SAID CASE, THE ASSESSEE HAD SPECIFICALLY ASKED TO BE ALLOWED TO CRO SS-EXAMINE THE REPRESENTATIVES OF THE FIRMS CONCERN, TO ESTABLISH THA T THE GOODS IN QUESTION HAD BEEN ACCOUNTED FOR IN THEIR BOOKS OF ACC OUNTS, AND THAT EXCISE DUTY HAD BEEN PAID. THE COURT HELD THAT SUCH A REQUEST COULD NOT BE TURNED DOWN, AS THE DENIAL OF THE RIGHT TO CROSS- EXAMINE, WOULD AMOUNT TO A DENIAL OF THE RIGHT TO BE HEARD I.E. AUDI ALTERAM PARTEM. 28. THE MEANING OF PROVIDING A REASONABLE OPPORTUNIT Y TO SHOW CAUSE AGAINST AN ACTION PROPOSED TO BE TAKEN BY THE GOVERNMENT, IS THAT THE GOVERNMENT SERVANT IS AFFORDED A REASONAB LE OPPORTUNITY TO DEFEND HIMSELF AGAINST THE CHARGES, O N THE BASIS OF WHICH AN INQUIRY IS HELD. THE GOVERNMENT SERVANT SHOULD BE GIVEN AN OPPORTUNITY TO DENY HIS GUILT AND ESTABLISH HIS INN OCENCE. HE ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 14 CAN DO SO ONLY WHEN HE IS TOLD WHAT THE CHARGES AGAINST HIM ARE. HE CAN THEREFORE, DO SO BY CROSS-EXAMINING THE WITNE SSES PRODUCED AGAINST HIM. THE OBJECT OF SUPPLYING STATEMENTS IS TH AT, THE GOVERNMENT SERVANT WILL BE ABLE TO REFER TO THE PREV IOUS STATEMENTS OF THE WITNESSES PROPOSED TO BE EXAMINED AGAINST HIM. UNLESS THE SAID STATEMENTS ARE PROVIDED TO THE GOVER NMENT SERVANT, HE WILL NOT BE ABLE TO CONDUCT AN EFFECTIVE AND USEFUL CROSS-EXAMINATION. 29. IN RAJIV ARORA V. UNION OF INDIA AND ORS. AIR 20 09 SC 1100, THIS COURT HELD: EFFECTIVE CROSS-EXAMINATION COULD HAVE BE EN DONE AS REGARDS THE CORRECTNESS OR OTHERWISE OF THE REPORT, I F THE CONTENTS OF THEM WERE PROVED. THE PRINCIPLES ANALOGOUS TO THE PROVISIONS OF THE INDIAN EVIDENCE ACT AS ALSO THE PRINCIPLES OF NA TURAL JUSTICE DEMAND THAT THE MAKER OF THE REPORT SHOULD BE EXAMINED , SAVE AND EXCEPT IN CASES WHERE THE FACTS ARE ADMITTED OR T HE WITNESSES ARE NOT AVAILABLE FOR CROSS-EXAMINATION OR SIMILAR SITUATION. THE HIGH COURT IN ITS IMPUGNED JUDGMENT PROCEEDED TO CON SIDER THE ISSUE ON A TECHNICAL PLEA, NAMELY, NO PREJUDICE HAS B EEN CAUSED TO THE APPELLANT BY SUCH NON-EXAMINATION. IF THE BASIC P RINCIPLES OF LAW HAVE NOT BEEN COMPLIED WITH OR THERE HAS BEEN A GRO SS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE, THE HIGH COURT SHOULD HAVE EXERCISED ITS JURISDICTION OF JUDICIAL REVIEW. 30. THE AFORESAID DISCUSSION MAKES IT EVIDENT THAT, NOT ONLY SHOULD THE OPPORTUNITY OF CROSS-EXAMINATION BE MADE AVAILAB LE, BUT IT SHOULD BE ONE OF EFFECTIVE CROSS-EXAMINATION, SO AS TO MEET THE REQUIREMENT OF THE PRINCIPLES OF NATURAL JUSTICE. IN THE ABSENCE OF SUCH AN OPPORTUNITY, IT CANNOT BE HELD THAT THE MATTER HAS BEEN DECIDED IN ACCORDANCE WITH LAW, AS CROSS-EXAMINATION IS AN INTEGRAL PART AND PARCEL OF THE PRINCIPLES OF NATURA L JUSTICE. B) ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF C . EX., KOLKATA-II WHEREIN IT WAS HELD THAT: 4. WE HAVE HEARD MR. KAVIN GULATI, LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE, AND MR. K. RADHAKRISHNAN, LEARNED SENIOR COUNSEL WHO APPEARED FOR THE REVENUE. 5. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CRO SS-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATE MENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED OR DER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUST ICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE AS SESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTE D TO CROSS- EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT T HIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT T O NOTE THAT IN ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 15 THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORIT Y HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS S OUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED A ND THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICA TING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FI ND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TRIB UNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS CO ULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESS ION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FA CTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GU ESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMI NE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. 6. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED TH E TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANT ED TO AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE L IST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR T HE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES AT THE PRICE WHICH IS MENTIONED IN T HE PRICE LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EXAMINAT ION. THEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPP OSE AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS-EXAMINATION AND MAKE THE REMARKS AS MENTIONED ABOVE. WE MAY ALSO POINT OUT T HAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COUR T IN CIVIL APPEAL NO. 2216 OF 2000, ORDER DATED 17-3-2005 [200 5 (187) E.L.T. A33 (S.C.)] WAS PASSED REMITTING THE CASE BAC K TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIO NS. 7. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MATE RIAL WITH THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ONLY BASIS OF ISSUING THE SHOW CAUSE NOTICE. 19. ON SIMILAR FACTS WHERE THE REVENUE HAS ALLEGED THAT THE ASSESSEE HAS DECLARED BOGUS LTCG, IT WAS HELD AS FOLLOWS: A) THE CALCUTTA HIGH COURT IN THE CASE OF BLB CABLES & CONDUCTORS [ITA NO. 78 OF 2017] DATED 19.06.2018. T HE HIGH COURT HELD VIDE PARA 4.1: WE FIND THAT ALL THE TRANSACTIONS THROUGH THE BROKER WERE DULY RECORDED IN THE BOOKS OF THE ASSESSE E. THE BROKER HAS ALSO DECLARED IN ITS BOOKS OF ACCOUNTS AND OFFERED FOR TAXATION. IN OUR VIEW TO HOLD A TRANSACT ION AS BOGUS, THERE HAS TO BE SOME CONCRETE EVIDENCE WHERE TH E TRANSACTIONS CANNOT BE PROVED WITH THE SUPPORTIVE ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 16 EVIDENCE. HERE IN THE CASE THE TRANSACTIONS OF THE COMMODITY EXCHANGED HAVE NOT ONLY BEEN EXPLAINED BUT ALSO SUBSTANTIATED FROM THE CONFIRMATION OF THE PARTY . BOTH THE PARTIES ARE CONFIRMING THE TRANSACTIONS WHICH HAVE BEEN DULY SUPPORTED WITH THE BOOKS OF ACCOUNTS A ND BANK TRANSACTIONS. THE LD. AR HAS ALSO SUBMITTED THE BOARD RESOLUTION FOR THE TRADING OF COMMODITY TRANSACTION. THE BROKER WAS EXPELLED FROM THE COMMODI TY EXCHANGE CANNOT BE THE CRITERIA TO HOLD THE TRANSACTION AS BOGUS. IN VIEW OF ABOVE, WE REVERSE THE ORDER OF THE LOWER AUTHORITIES AND ALLOW THE COMMON GROUNDS OF ASSESSEE S APPEAL. [ QUOTED VERBATIM ] THIS IS ESSENTIALLY A FINDING OF THE TRIBUNAL ON FACT . NO MATERIAL HAS BEEN SHOWN TO US WHO WOULD NEGATE THE TRIBUNALS FINDING THAT OFF MARKET TRANSACTIONS ARE NOT PROHIBITED. AS REGARDS VERACITY OF THE TRANSACTIONS, THE TRIBUNAL HAS COME TO ITS CONCLUSION ON ANALYSIS OF RELEVANT MATERIALS. THAT BEING THE POSITION, TRIBUNAL HAVING ANALYZED THE SET OF FACTS IN COMING TO ITS FIN DING, WE DO NOT THINK THERE IS ANY SCOPE OF INTERFERENCE WI TH THE ORDER OF THE TRIBUNAL IN EXERCISE OF OUR JURISDICTIO N UNDER SECTION 260A OF THE INCOME TAX ACT, 1961. NO SUBSTAN TIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEA L AND THE STAY PETITION, ACCORDINGLY, SHALL STAND DISMISSED . B) THE JAIPUR ITAT IN THE CASE OF VIVEK AGARWAL [ITA NO. 292/JP/2017] ORDER DATED 06.04.2018 HELD AS UNDER VIDE PAGE 9 PARA 3: WE HOLD THAT THE ADDITION MADE BY THE AO IS MERELY BAS ED ON SUSPICION AND SURMISES WITHOUT ANY COGENT MATERIAL T O CONTROVERT THE EVIDENCE FILED BY THE ASSESSEE IN SUPP ORT OF THE CLAIM. FURTHER, THE AO HAS ALSO FAILED TO ESTABLISH THA T THE ASSESSEE HAS BROUGHT BACK HIS UNACCOUNTED INCOME IN THE SHAPE OF LONG TERM CAPITAL GAIN. HENCE WE DELETE THE ADDI TION MADE BY THE AO ON THIS ACCOUNT. C) THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CA SE OF PREM PAL GANDHI [ITA-95-2017 (O&M)] DATED 18.01.2018 AT VIDE PAGE 3 PARA 4 HELD AS UNDER: .. THE ASSESSING OFFICER IN BOTH THE CASES ADDED THE APPRECIATION TO THE ASSESSEES INCOME ON THE SUSPICI ON THAT THESE WERE FICTITIOUS TRANSACTIONS AND THAT THE APPRECIATIO N ACTUALLY REPRESENTED THE ASSESSEES INCOME FROM UNDISCLOSED SOURCES. IN ITA-18-2017 ALSO THE CIT (APPEALS) AND THE TRIBUNAL HE LD THAT THE ASSESSING OFFICER HAD NOT PRODUCED ANY EVIDENCE W HATSOEVER IN SUPPORT OF THE SUSPICION. ON THE OTHER HAND, ALTHOU GH THE APPRECIATION IS VERY HIGH, THE SHARES WERE TRADED ON T HE NATIONAL STOCK EXCHANGE AND THE PAYMENTS AND RECEIPTS WERE ROU TED THROUGH THE BANK. THERE WAS NO EVIDENCE TO INDICATE FOR INSTANCE ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 17 THAT THIS WAS A CLOSELY HELD COMPANY AND THAT THE TRADI NG ON THE NATIONAL STOCK EXCHANGE WAS MANIPULATED IN ANY MANNE R. THE COURT ALSO HELD THE FOLLOWING VIDE PAGE 3 PARA 5 T HE FOLLOWING: QUESTION (IV) HAS BEEN DEALT WITH IN DETAIL BY THE CI T (APPEALS) AND THE TRIBUNAL. FIRSTLY, THE DOCUMENTS ON WHICH THE ASSESSING OFFICER RELIED UPON IN THE APPEAL W ERE NOT PUT TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE CIT (APPEALS) NEVERTHELESS CONSIDERE D THEM IN DETAIL AND FOUND THAT THERE WAS NO CO-RELATION BETWEEN THE AMOUNTS SOUGHT TO BE ADDED AND THE ENTRIE S IN THOSE DOCUMENTS. THIS WAS ON AN APPRECIATION OF FA CTS. THERE IS NOTHING TO INDICATE THAT THE SAME WAS PERVER SE OR IRRATIONAL. ACCORDINGLY, NO QUESTION OF LAW ARIS ES. D) THE BENCH D OF KOLKATA ITAT IN THE CASE OF GAU TAM PINCHA [ITA NO.569/KOL/2017] ORDER DATED 15.11.2017 HELD A S UNDER VIDE PAGE 12 PARA 8.1: 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 IMPLICATE THE ASSESSEE TO HAVE ENTERED GAMUT OF UNFOUNDED/UNWARRANTED ALLEGATIONS LEVELED BY THE AO AGAINST THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION HAS NO LE GS TO STAND AND THEREFORE HAS TO FALL. WE TAKE NOTE THAT T HE LD. DR COULD NOT CONTROVERT THE FACTS SUPPORTED WITH MATERIA L EVIDENCES WHICH ARE ON RECORD AND COULD ONLY RELY ON THE ORDERS OF THE AO/CIT (A). WE NOTE THAT IN THE ABSENCE OF MATERIAL/E VIDENCE THE ALLEGATIONS THAT THE ASSESSEE/BROKERS GOT INVOLVED I N PRICE RIGGING/MANIPULATION OF SHARES MUST THEREFORE ALSO FA IL. AT THE COST OF REPETITION, WE NOTE THAT THE ASSESSEE HAD FUR NISHED ALL RELEVANT EVIDENCE IN THE FORM OF BILLS, CONTRACT NOT ES, DEMAT STATEMENT AND BANK ACCOUNT TO PROVE THE GENUINENESS OF THE TRANSACTIONS RELEVANT TO THE PURCHASE AND SALE OF SHAR ES RESULTING IN LONG TERM CAPITAL GAIN. THESE EVIDENCES WERE NEIT HER FOUND BY THE AO NOR BY THE LD. CIT (A) TO BE FALSE OR FICTITIO US OR BOGUS. THE FACTS OF THE CASE AND THE EVIDENCE IN SUPPORT OF THE E VIDENCE CLEARLY SUPPORT THE CLAIM OF THE ASSESSEE THAT THE TRAN SACTIONS OF THE ASSESSEE WERE GENUINE AND THE AUTHORITIES BELOW WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE THAT INCOME FROM LTCG IS EXEMPTED U/S 10(38) OF THE ACT. FURTHER IN PAGE 15 PARA 8.5 OF THE JUDGMENT, IT HELD: 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 ALREADY BEEN INCORPORATED IN THE SUBMISSIONS OF THE LD. AR (S UPRA) AND HAVE BEEN DULY CONSIDERED BY US TO ARRIVE AT OUR CON CLUSION. THE LD. DR COULD NOT BRING TO OUR NOTICE ANY CASE LAWS T O 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 ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 18 NOT JUSTIFIED IN UPHOLDING THE ADDITION OF SALE PROCE EDS OF THE SHARES AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 O F THE ACT. WE, THEREFORE, DIRECT THE AO TO DELETE THE ADDITION. E) THE BENCH D OF KOLKATA ITAT IN THE CASE OF KIRA N KOTHARI HUF [ ITA NO. 443/KOL/2017 ] ORDER DATED 15.11.2017 HELD VIDE PARA 9.3 HELD AS UNDER: .. WE FIND THAT THERE IS ABSOLUTELY NO ADVERSE MAT ERIAL TO IMPLICATE THE ASSESSEE TO THE ENTIRE GAMUT OF UNFOUNDED/UNWARRANTED ALLEGATIONS LEVELED BY THE AO AGAINST THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION HAS NO LE GS TO STAND AND THEREFORE HAS TO FALL. WE TAKE NOTE THAT T HE LD. DR COULD NOT CONTROVERT THE FACTS WHICH ARE SUPPORTED WI TH MATERIAL EVIDENCES FURNISHED BY THE ASSESSEE WHICH ARE ON RECORD AND COULD ONLY RELY ON THE ORDERS OF THE AO/CIT(A). WE N OTE THAT THE ALLEGATIONS THAT THE ASSESSEE/BROKERS GOT INVOLVED I N PRICE RIGGING/MANIPULATION OF SHARES MUST THEREFORE CONSEQU ENTLY FAIL. AT THE COST OF REPETITION, WE NOTE THAT THE ASSESSEE HAD FURNISHED ALL RELEVANT EVIDENCE IN THE FORM OF BILLS, CONTRACT NOTES, DEMAT STATEMENT AND BANK ACCOUNT TO PROVE THE GENUINENESS OF THE TRANSACTIONS RELEVANT TO THE PURCHASE AND SALE OF SHAR ES RESULTING IN LONG TERM CAPITAL GAIN. NEITHER THESE EVIDENCES W ERE FOUND BY THE AO NOR BY THE LD. CIT(A) TO BE FALSE OR FICTITIOU S OR BOGUS. THE FACTS OF THE CASE AND THE EVIDENCE IN SUPPORT OF THE E VIDENCE CLEARLY SUPPORT THE CLAIM OF THE ASSESSEE THAT THE TRAN SACTIONS OF THE ASSESSEE WERE GENUINE AND THE AUTHORITIES BELOW WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE EXEM PTED U/S 10(38) OF THE ACT ON THE BASIS OF SUSPICION, SURMISES AND CONJECTURES. IT IS TO BE KEPT IN MIND THAT SUSPICION HOW SO EVER STRONG, CANNOT PARTAKE THE CHARACTER OF LEGAL EVIDENC E. IT FURTHER HELD AS FOLLOWS: 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 ALREADY BEEN INCORPORATED IN THE SUBMISSIONS OF THE LD. AR (S UPRA) AND HAVE BEEN DULY CONSIDERED TO ARRIVE AT OUR CONCLUSIO N. THE LD. DR COULD NOT BRING TO OUR NOTICE ANY CASE LAWS TO SUPP ORT THE IMPUGNED DECISION OF THE LD. CIT(A)/AO. IN THE AFORE SAID FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE LD. CI T(A) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF SALE PROCE EDS OF THE SHARES AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 O F THE ACT. WE THEREFORE DIRECT THE AO TO DELETE THE ADDITION. F) THE BENCH A OF KOLKATA ITAT IN THE CASE OF SHAL EEN KHEMANI [ITA NO. 1945/KOL/2014] ORDER DATED 18.10.2017 HELD AS UNDER VIDE PAGE 24 PARA 9.3: WE THEREFORE HOLD THAT THERE IS ABSOLUTELY NO ADVERSE MATERIAL TO IMPLICATE THE ASSESSEE TO THE ENTIRE GAMUT OF UNWA RRANTED ALLEGATIONS LEVELED BY THE LD AO AGAINST THE ASSESSE E, WHICH IN OUR ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 19 CONSIDERED OPINION, HAS NO LEGS TO STAND IN THE EYES OF LAW. WE FIND THAT THE LD DR COULD NOT CONTROVERT THE ARGUMENTS OF THE LD AR WITH CONTRARY MATERIAL EVIDENCES ON RECORD AND MER ELY RELIED ON THE ORDERS OF THE LD AO. WE FIND THAT THE ALLEGATIO N THAT THE ASSESSEE AND / OR BROKERS GETTING INVOLVED IN PRICE RIGGING OF SOICL SHARES FAILS. IT IS ALSO A MATTER OF RECORD THA T THE ASSESSEE FURNISHED ALL EVIDENCES IN THE FORM OF BILLS, CONTRAC T NOTES, DEMAT STATEMENTS AND THE BANK ACCOUNTS TO PROVE THE GENUINE NESS OF THE TRANSACTIONS RELATING TO PURCHASE AND SALE OF SHAR ES RESULTING IN LTCG. THESE EVIDENCES WERE NEITHER FOUND BY THE LD AO TO BE FALSE OR FABRICATED. THE FACTS OF THE CASE AND THE EVI DENCES IN SUPPORT OF THE ASSESSEES CASE CLEARLY SUPPORT THE C LAIM OF THE ASSESSEE THAT THE TRANSACTIONS OF THE ASSESSEE WERE B ONAFIDE AND GENUINE AND THEREFORE THE LD AO WAS NOT JUSTIFIED IN REJECTING THE ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT. G) THE BENCH H OF MUMBAI ITAT IN THE CASE OF ARVIND KUMAR JAIN HUF [ITA NO.4682/MUM/2014] ORDER DATED 18.09.2 017 HELD AS UNDER VIDE PAGE 6 PARA 8: WE FOUND THAT AS FAR AS INITIATION OF INVESTIGAT ION OF BROKER IS CONCERNED, THE ASSESSEE IS NO WAY CONCERNED WITH T HE ACTIVITY OF THE BROKER. DETAILED FINDING HAS BEEN RECORDED BY CIT (A) TO THE EFFECT THAT ASSESSEE HAS MADE INVESTMENT IN SHARES WHICH WAS PURCHASED ON THE FLOOR OF STOCK EXCHANGE AND NOT FROM M/S BASANT PERIWAL AND CO. AGAINST PURCHASES PAYMENT HAS BEEN MADE BY ACCOUNT PAYEE CHEQUE, DELIVERY OF SHARES WER E TAKEN, CONTRACT OF SALE WAS ALSO COMPLETE AS PER THE CONTR ACT ACT, THEREFORE, THE ASSESSEE IS NOT CONCERNED WITH ANY WAY OF THE BROKER. NOWHERE THE AO HAS ALLEGED THAT THE TRANSACTIO N BY THE ASSESSEE WITH THESE PARTICULAR BROKER OR SHARE WAS BO GUS, MERELY BECAUSE THE INVESTIGATION WAS DONE BY SEBI AGAINST B ROKER OR HIS ACTIVITY, ASSESSEE CANNOT BE SAID TO HAVE ENTERED IN TO INGENUINE TRANSACTION, INSOFAR AS ASSESSEE IS NOT CONCERNED W ITH THE ACTIVITY OF THE BROKER AND HAVE NO CONTROL OVER THE SAME. WE FO UND THAT M/S BASANT PERIWAL AND CO. NEVER STATED ANY OF THE A UTHORITY THAT TRANSACTIONS IN M/S RAMKRISHNA FINCAP PVT. LTD. ON THE FLOOR OF THE STOCK EXCHANGE ARE INGENUINE OR MERE ACCOMMODATION ENTRIES. THE CIT (A) AFTER RELYING ON THE VARIOUS DECISION OF THE COORDINATE BENCH, WHEREIN ON SIMILAR FACTS AND CIRCUMSTANCES, ISSUE WAS DECIDED IN FAVOUR OF THE AS SESSEE, CAME TO THE CONCLUSION THAT TRANSACTION ENTERED BY THE ASS ESSEE WAS GENUINE. DETAILED FINDING RECORDED BY CIT (A) AT PA RA 3 TO 5 HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON RECORD. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF CIT (A). ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 20 H) THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CA SE OF VIVEK MEHTA [ITA NO. 894 OF 2010] ORDER DATED 14.11.2011 VIDE PAGE 2 PARA 3 HELD AS UNDER: ON THE BASIS OF THE DOCUMENTS PRODUCED BY THE ASSES SEE IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEAL) REC ORDED A FINDING OF FACT THAT THERE WAS A GENUINE TRANSACTIO N OF PURCHASE OF SHARES BY THE ASSESSEE ON 16.3.2001 AND SALE THE REOF ON 21.3.2002. THE TRANSACTIONS OF SALE AND PURCHASE WE RE AS PER THE VALUATION PREVALENT IN THE STOCKS EXCHANGE. SUC H FINDING OF FACT HAS BEEN RECORDED ON THE BASIS OF EVIDENCE PRO DUCED ON RECORD. THE TRIBUNAL HAS AFFIRMED SUCH FINDING. SUC H FINDING OF FACT IS SOUGHT TO BE DISPUTED IN THE PRESENT APPEAL . WE DO NOT FIND THAT THE FINDING OF FACT RECORDED BY THE COMMI SSIONER OF INCOME TAX IN APPEAL, GIVES GIVE RISE TO ANY QUESTI ON(S) OF LAW AS SOUGHT TO BE RAISED IN THE PRESENT APPEAL. HENCE , THE PRESENT APPEAL IS DISMISSED. I) THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BHAGWATI PRASAD AGARWAL IN I.T.A. NO. 22/KOL/2009 DA TED 29.04.2009 AT PARA 2 HELD AS FOLLOWS: THE TRIBUNAL FOUND THAT THE CHAIN OF TRANSACTION EN TERED INTO BY THE ASSESSEE HAVE BEEN PROVED, ACCOUNTED FOR, DO CUMENTED AND SUPPORTED BY EVIDENCE. THE ASSESSEE PRODUCED BE FORE THE COMMISSIONER OF INCOME TAX(APPEAL) THE CONTRACT NOT ES, DETAILS OF HIS DEMAT ACCOUNT AND, ALSO, PRODUCED DO CUMENTS SHOWING THAT ALL PAYMENTS WERE RECEIVED BY THE ASS ESSEE THROUGH BANK. J) THE HONBLE SUPREME COURT IN THE CASE OF PCIT VS. TEJU ROHITKUMAR KAPADIA ORDER DATED 04.05.2018 UPHELD THE FOLLOWING P ROPOSITION OF LAW LAID DOWN BY THE HONBLE GUJARAT HIGH COURT AS UNDER: IT CAN THUS BE SEEN THAT THE APPELLATE AUTHORITY AS WELL AS THE TRIBUNAL CAME TO CONCURRENT CONCLUSION THAT THE PUR CHASES ALREADY MADE BY THE ASSESSEE FROM RAJ IMPEX WERE DU LY SUPPORTED BY BILLS AND PAYMENTS WERE MADE BY ACCOUN T PAYEE CHEQUE. RAJ IMPACTS ALSO CONFIRMED THE TRANSACTIONS . THERE WAS NO EVIDENCE TO SHOW THAT THE AMOUNT WAS RECYCLED BA CK TO THE ASSESSEE. PARTICULARLY, WHEN IT WAS FOUND THAT THE ASSESSEE THE TRADER HAD ALSO SHOWN SALES OUT OF PURCHASES MADE F ROM RAJ IMPEX WHICH WERE ALSO ACCEPTED BY THE REVENUE, NO Q UESTION OF LAW ARISES. 20. APPLYING THE PROPOSITION OF LAW LAID DOWN IN THE ABOVE JUDGMENTS TO THE FACTS OF THIS CASE WE ARE BOUND TO CONSIDER AND RELY ON THE EVIDENCE PRODUCED BY THE ASSESSEE IN SUPPORT OF IT S CLAIM AND BASE OUR DECISION ON SUCH EVIDENCE AND NOT ON SUSPICION OR PREPONDERANCE OF PROBABILITIES. NO MATERIAL WAS BROUGHT ON RECORD BY THE AO TO CONTROVERT THE EVIDENCE FURNISHED BY THE ASSESSEE. UNDER THES E CIRCUMSTANCES, WE ACCEPT THE EVIDENCE FILED BY THE ASSESSEE AND ALLOW THE CLAIM THAT THE ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 21 INCOME IN QUESTION IS LONG TERM CAPITAL GAIN FROM S ALE OF SHARES AND HENCE EXEMPT FROM INCOME TAX. 12. CONSISTENT WITH THE VIEW TAKEN THEREIN, AS THE FACT S AND CIRCUMSTANCES OF THIS CASE ARE SAME AS THE FACTS AND CIRCUMSTANCES OF THE CASES OF NAVNEET AGARWAL (SUPRA), WE DELETE THE ADDITION MADE U/S 68 OF THE AC T, ON ACCOUNT OF SALE OF SHARES IN THE CASE OF BOTH THE ASSESSEES. THE CONSEQUENTIAL AD DITION U/S 69C IS ALSO DELETED. ACCORDINGLY BOTH THE APPEALS OF THE ASSESSEE ARE ALLO WED. 5. THE REVENUE FAILS TO INDICATE ANY SPECIFIC EVIDE NCE AGAINST THE ASSESSEE IN ABOVE TERMS QUA HIS LTCG DERIVED FROM TRANSFER OF SHARE IN JACKSON INVESTMENTS LTD. I THEREFORE ADOPT THE ABOVE EXTRACTED REASONING MUTATIS MUTANDIS TO DELETE THE IMPUGNED BOGUS LTCG ADDITION OF 37,07,717/-. THIS LEAD APPEAL ITA 2235/KOL/2018 IN CASE OF ASSESSEE OMPRAKASH MUNDHRA IS ALLOWED. 6. SAME ORDER TO FOLLOW IN ALL REMAINING TWELVE CAS ES AS WELL SINCE I NOTICE THAT THERE IS NO SPECIFIC EVIDENCE CO-RELATING THESE ASS ESSEES WITH ANY KIND OF RIGGING OF SHARE PRICE. ALL THESE IMPUGNED LTCG/LOSSES ADDITIO N(S) (SUPRA) ARE REVERSED IN THESE FACT AND CIRCUMSTANCES. NO OTHER ARGUMENT HAS BEEN RAISED BEFORE ME. 7. ALL THESE 13 APPEAL(S) ARE ALLOWED. A COPY OF TH IS INSTANT COMMON ORDER BE PLACED IS THE RESPECTIVE APPEAL(S). ORDER PRONOUNCED IN OPEN COURT ON 28/02/2019 SD/- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS # - 28/02/2019 ITA NO. 2235-2236, 2232, 2060-63, 1536-37, 1549, 22 49/K/18 100 & 271/K/2019 A.YS. 15-16, 14-15 & 13-1 4 PAGE 22 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-OMPRAKASH MUNDHRA/SUMIT KR. AGARWAL C/O S UBASH AGARWAL & ASSOCIATES, ADVOC ATES, SIDDHA GIBISON, 1, GIBSON LANE, SUITE-213, 2 ND FLOOR, KOLKATA-69/AMIT KR. JAIN, 72, CANNING STREET, KOLKATA-001/ SHRI VIKASH SINGH, SMT. NIRMALA DEBI, SMT. PRITI SINGH & SHRI SANJAY KR. SINGH 31/1, ABHAY GUHA ROAD, LILUAH, HOWRAH-711204 /ANUPAM SARAOGI , L/R LT. ANIL KUMAR SARAOGI, 22, BRABOUR NE ROAD, 1 ST FLOOR, KOLKATA-001/ SMT. ANNAPURNA DEVI M UNDHRA, G/JETHALIA, 161/1, M.G. ROAD R.NO.30, KOL-007/RADHA KISHAN JHUNJHUNWALA, 103, M.G. ROAD 1 ST FLOOR, KOLKATA-007/AMIT BHUTORIA, 3 RD FLOOR, 105 OLD CHINA BAZAR ST, DALHOUSIE, KOLKATA-001/REENA DAGA, C/O S.N.GHOSH & ASSOCIATES, ADVOCATES SEBEN BROTHRES LODGE, P.O. BUROSHIBTALA P.S. CHINSURAH, DIST. HOOGHLY-712105 2. /REVENUE-ITO WD-3(4), KALIMPONG TAXI ROAD, KALIMPON G-734301/ITO WARD-2(2), HAREN MUKH ERJEE ROAD, COLLEGE PARA, HAKIM PARA SILIGURI-734001/ITO W D-34(2), 110, SHANTIPALLY, KOLKATA-107/ ITO WD-48(2), 48(3) 4 6(4), 3 GOVERNMENT PLACE (WEST), KOL-001/ ITO WD-43(1), KOLK ATA/ITO WD-22(4), 54/1 RAFI AHMAD KIDWAI ROAD 4 TH FLOOR, KOLKATA-16/ITO WD-34(2) POORVA, E.M. BYPASS , 7 TH FLOOR, R.NO.710, 110, S HANTIPALLY, KOLKATA-107/ITO WD-1(3), AAYAKAR BHAWAN, KACHARI ROAD, COURT COMPOUND, P.O.& P.S. BURDWAN DIST. PURBA BA RDDHAMAN-713101 3. & ( / CONCERNED CIT 4. ( - / CIT (A) 5. ) ,,& , & / DR, ITAT, KOLKATA 6. . / GUARD FILE. BY ORDER/ , /TRUE COPY/ / &,
