D.C.I.T.-4(1), Agra V. Sh. Mukesh Kumar Agarwal, Agra

ITA 220/AGR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6968 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 03-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Business income; Depreciation; Income from undisclosed sources; Search and seizure; Share purchase agreement; Question of law; Tangible material; Wrong claim; Difference of opinion; Accommodation entries; Onus to prove; Reason to believe; Change of opinion; Borrowed satisfaction; Capital Gains
• Section: 143(3); 143(2); 191; 264; 147; 68; 148; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 220/AGRA/2010 ASSTT. YEAR : 1999-2000 D.C.I.T. 4 (1), VS. SH. MUKESH KUMAR AGARWAL, AGRA. D-15, KAMLA NAGAR, AGRA. (PAN ABKPA 0305 M) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI VINOD KUMAR, JR. D.R. FOR RESPONDENT : SHRI ANURAG SINHA, ADVOCATE. ORDER PER P.K. BANSAL, A.M. : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 09.03.2010 BY TAKING FOLLOWING EFFECTIVE GROUND OF APPEAL :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN QUASHING THE NOTICE U/S. 148 OF I.T. ACT BY CONSIDERING THE REAS ONS RECORDED AS HIGHLY VAGUE, IRRATIONAL AND ARBITRARY THOUGH THE BELIEF OF THE A O WAS AN HONEST AND REASONABLE BELIEF ON MATERIAL WHICH HE HAD RECEIVED FROM INVES TIGATION WING OF DEPARTMENT WHICH CLEARLY PROVE THE BOGUS AND FALSITY OF THE SH ARE TRANSACTION SHOWN BY THE ASSESSEE. 2. THAT THE LD. CIT(A)-II, AGRA HAS ERRED IN LAW A ND ON FACTS IN DELETING THE ENTIRE ADDITION OF RS.10,15,726/- MADE BY THE A O U/S. 68 OF I.T. ACT ON ACCOUNT OF UNEXPLAINED RECEIPT OF MONEY SHOWN AS SALE OF SH ARES IGNORING THE FACTS AND CIRCUMSTANCES OF THE CASE OBSERVATIONS AND FINDINGS OF THE AO AS WELL AS PRONOUNCEMENT AS DISCUSSED IN ASSESSMENT ORDER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSI NG OFFICER ON RECEIPT OF THE INFORMATION FROM THE INVESTIGATION WING THAT THE ASSESSEE HAS R ECEIVED THE FOLLOWING ACCOMMODATION ENTRIES FOR THE LONG-TERM CAPITAL GAINS, REOPENED THE ASSES SMENT : NAME OF THE ASSESSEE NAME OF SHARE CO. DATE OF SALE SALE AMOUNT SALE THROUGH BROKER 2 MUKESH KUMAR AGARWAL HARSH CAPITAL 18.05.98 90,853 YADAV & CO. MUKESH KUMAR AGARWAL HARSH CAPITAL 25.07.98 2,54,700 JRD MUKESH KUMAR AGARWAL OJASWI TRADERS 18.08.98 3,47,685 NAVRANG CAPITAL MUKESH KUMAR AGARWAL BARSIA HOLDING LTD. 02.09.98 3,22,488 NAVRANG CAPITAL TOTAL 10,15,726/- 3. ON THE BASIS OF SAID INFORMATION, THE ASSESSING OFFICER TREATED THE SALE CONSIDERATION OF RS.10,15,726/- AS INCOME FROM UNDISCLOSED SOURCES A ND ADDED TO THE INCOME OF THE ASSESSEE U/S. 68 OF THE INCOME-TAX ACT. THE ASSESSEE WENT IN APPE AL BEFORE THE CIT(A) AND CHALLENGED THE ASSESSMENT ORDER ON LEGALITY AS WELL AS ON MERIT. T HE CIT(A) HELD THAT THE PROCEEDINGS INITIATED U/S. 148 ARE INVALID. EVEN ON MERIT ALSO, THE ADDIT ION WAS DELETED. 4. GROUND NO.1 TAKEN BY THE REVENUE IS AGAINST THE QUASHING OF NOTICE U/S. 148. IT WAS CONTENDED BY THE LD. DR THAT THE ASSESSING OFFICER HAS RECEIVED INFORMATION FROM THE INVESTIGATION WING AND ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING, THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT THE AS SESSEE HAS TAKEN THE BOGUS ENTRIES FOR THE SHARE TRANSACTIONS AND ACCORDINGLY, THE ASSESSING OFFICER AFTER RECORDING THE REASONS DATED 30.03.2006, REOPENED THE ASSESSMENT. THE REASONS RECORDED WERE BONA FIDE ONE AND COUPLED WITH THE MATERIAL. THE TRIBUNAL CANNOT LOOK INTO THE SUFFICI ENCY OF REASONS. 5. THE LEARNED AR, ON THE OTHER HAND, VEHEMENTLY RE LIED ON THE ORDER OF THE CIT(A) AND CONTENDED THAT THE SATISFACTION RECORDED BY THE ASS ESSING OFFICER WAS A BORROWED SATISFACTION. THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND INDE PENDENTLY. THE INFORMATION RECEIVED FROM THE INVESTIGATION WING MAY BE THE SOURCE OF INFORMA TION, BUT THE ASSESSING OFFICER HAS TO APPLY HIS MIND THAT ON THE BASIS OF THIS INFORMATION, THE ASSESSEE HAS ESCAPED ASSESSMENT DURING THE 3 YEAR UNDER CONSIDERATION. AFTER RECORDING BONA FIDE REASONS, THE ASSESSING OFFICER CAN INITIATE THE PROCEEDINGS U/S. 147. THE INFORMATION RECEIVED FROM THE INVESTIGATION WING IS NOT BASED ON ANY MATERIAL BUT ON MERELY A SUSPICION. A SUSPICION , HOWSOEVER STRONG IT MAY BE, CANNOT TAKE PLACE OF ACTUALITY. THE ACT DOES NOT SAY ABOUT THE SUSPICION OF THE UNDER ASSESSMENT OR ESCAPEMENT OF ASSESSMENT. SECTION 147 TALKS OF THE REASON TO BELIEVE. THE REASONS TO BELIEVE MUST BE A BONA FIDE BELIEF AND MUST BE BASED ON THE RELEVANT MATERIAL. IN THIS CASE, THE ASSESSEE HAS, DURING THE COURSE OF ORIGINAL ASSESSMENT SUBMI TTED ALL THE EVIDENCE RELATING TO THE SALE AND PURCHASE OF THE SHARES AND ASSESSING OFFICER COMPLE TED THE ASSESSMENT U/S 143(3). THE INVESTIGATION WING HAS RELIED ON THE STATEMENT OF O NE SHRI ASHOK KUMAR GUPTA, DIRECTOR OF JRD STOCK BROKERS RECORDED U/S. 132(4), BUT THE STATEME NT WAS NEVER BROUGHT ON RECORD TO PROVE THAT IT STATES THAT THE SHARE BROKER HAS GIVEN ACCOMMODA TION ENTRIES TO THE ASSESSEE. EVEN THE COPY OF STATEMENT WAS NOT GIVEN TO THE ASSESSEE, WHAT TO TA LK OF THE CROSS EXAMINATION WITH SHRI ASHOK KUMAR GUPTA. 6. THE ASSESSING OFFICER WAS DUTY BOUND TO BRING TH E STATEMENT OF SHRI ASHOK KUMAR GUPTA ON RECORD AND VERIFY FROM SUCH STATEMENT WHET HER THE NAME OF THE ASSESSEE IS RECORDED OR NOT. NO DOUBT, THE SUFFICIENCY OF REASONS CANNOT BE LOOKED INTO BY THE TRIBUNAL, BUT WHETHER THE INFORMATION IS RELEVANT OR NOT HAS TO BE SEEN. IN T HIS REGARD, RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SHEO NATH SI NGH VS. AAC 82 ITR 147 (SC) AND ITO VS. LAKHMANI MEWAL DAS, 103 ITR 437 (SC). RELIANCE WAS ALSO PLACED ON THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. GULATI INDUSTRIAL FABRICATION (P) LTD., 217 CTR (DEL.) 494 AND THAT OF CIT VS. ATUL JAIN, 299ITR 383. OTHERWISE AL SO IT WAS CONTENDED THAT IT TANTAMOUNT TO CHANGE OF OPINION WHICH IS NOT PERMISSIBLE U/S 147. 4 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT IN THIS CASE, THE ASSESSING OFFICER HAS INITIATED THE PROCEEDINGS U/S. 148 ON T HE BASIS OF THE INFORMATION RECEIVED FROM THE INVESTIGATION WING. THE INVESTIGATION WING HAS MENT IONED THAT SHRI ASHOK KUMAR GUPTA, DIRECTOR OF JRD STOCK BROKERS HAS ADMITTED IN HIS S TATEMENT RECORDED U/S. 132(4) THAT HE WAS PROVIDING BOGUS ENTRIES TO THE BENEFICIARIES ON COM MISSION BASIS. THE ASSESSING OFFICER ON THIS BASIS, TOOK THE VIEW THAT THE ASSESSEE HAS TAKEN TH E BOGUS ENTRIES AND HAS SHOWN SALE PROCEEDS OF THE SHARES AND CLAIMED THEM AS LONG-TERM CAPITAL GA INS. THE COPY OF STATEMENT OF SHRI ASHOK KUMAR GUPTA WAS NOT BROUGHT ON RECORD TO VERIFY WHE THER THE STATEMENT INCLUDES THE NAME OF THE ASSESSEE OR NOT. THE ORIGINAL ASSESSMENT IN THIS CA SE WAS COMPLETED U/S. 143(3) AT A INCOME OF RS.1,32,454/- AND AGRICULTURAL INCOME OF RS.3,08,02 8/- ON 22.3.2002 ACCEPTING THE LONG TERM CAPITAL GAIN ON THE SALE OF SHARES. THE ASSESSMENT HAS BEEN REOPENED BY THE ASSESSING OFFICER BY RECORDING THE FOLLOWING REASONS DATED 30.03.2006 : DURING THE YEAR THE ASSESSEE HAS SHOWN/WORKED OUT CAPITAL GAIN ON SALE OF SHARES AS UNDER : NAME OF THE ASSESSEE NAME OF SHARE CO. DATE OF SALE SALE AMOUNT SALE THROUGH BROKER MUKESH KUMAR AGARWAL HARSH CAPITAL 18.05.98 90,853 YADAV & CO. MUKESH KUMAR AGARWAL HARSH CAPITAL 25.07.98 2,54,700 JRD MUKESH KUMAR AGARWAL OJASWI TRADERS 18.08.98 3,47,685 NAVRANG CAPITAL MUKESH KUMAR AGARWAL BARSIA HOLDING LTD. 02.09.98 3,22,488 NAVRANG CAPITAL THE INVESTIGATION WING HAS MADE DETAILED ENQUIRIES TO VERIFY THE CLAIM OF LONG TERM CAPITAL GAIN ON SALE OF SHARES IN MASS CASES AND CO ME TO THE CONCLUSION THAT M/S. NAVRANG CAPITAL MANAGEMENT LTD. & JRD STOCK BROKER LTD., SHARE BROKERS HAVE PROVIDED THE BOGUS ACCOMMODATION ENTRIES TO THE BEN EFICIARIES IN THE GARB OF SALE OF SHARES OF DIFFERENT COMPANIES. SHRI ASHOK KUMAR GUP TA, DIRECTOR OF JRD STOCK BROKER LTD. HAS ADMITTED IN HIS STATEMENT RECORDED U/S. 13 2 RECORDED U/S. 132(4) THAT HE IS 5 PROVIDING BOGUS ENTRIES TO THE BENEFICIARIES ON COM MISSION BASIS. THE ASSESSEE HAS TAKEN THE BOGUS ACCOMMODATION ENTRIES AND HAS SHOWN AS SA LE PROCEEDS OF SHARES AND ALSO CLAIM LONG TERM CAPITAL GAIN ON SALE OF SHARES. ENQ UIRIES FROM ABOVE COMPANIES WERE ALSO MADE TO VERIFY THE GENUINENESS OF TRANSACTION IN SEVERAL CASES OF CENTRAL CIRCLE/WARDS/OTHER CIRCLES OF AGRA BUT GENUINENESS OF TRANSACTION/SALE OF SHARES COULD NOT BE PROVED AND CONSEQUENTLY SALE PROCEEDS OF SHA RES CLAIMED BY THE ASSESSEES WERE FOUND NOT GENUINE AND TREATED AS BOGUS ACCOMMODATIO N ENTRY AND ADDED TO THE INCOME OF THE CONCERNED ASSESSEES. THE ADDITIONS SO MADE HAVE ALREADY BEEN CONFIRMED BY THE CIT(A). CONSIDERING THE ABOVE FACTS OF THE CASE I HAVE REAS ON TO BELIEVE THAT INCOME CHARGEABLE TO TAX AT RS.10,15,726/- HAS ESCAPED ASSESSMENT ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSE SSMENT FOR AY 1999-2000. THE FACTS WARRANT ISSUE OF NOTICE U/S. 148 TO ASSESS/REASSESS ABOVE INCOME. 8. CONSEQUENTLY NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED, ASKING THE ASSESSEE TO FILE THE RETURN WITHIN 30 DAYS. THE ASSESSEE FILED THE OBJECTIONS BEFORE THE AO. IN THE OBJECTIONS, THE ASSESSEE HAS OBJECTED THAT THE REOPENING WAS NOT VA LID ON THE FACTS OF THE CASE. NO NEW MATERIAL HAS BEEN BROUGHT ON RECORD. THE ASSESSEE HAS SUBMI TTED ALL THE INFORMATION AND THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO FILE THE RET URN OR TO DISCLOSE THE NECESSARY INFORMATION AND THUS IT WAS REQUESTED THAT THE PROCEEDINGS BE DROPP ED. WE NOTED THAT THE ORIGINAL ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED AFTER ACCEPT ING THE LONG TERM CAPITAL GAIN (LTCG) ON THE SALE OF SHARES 9. NOW THE QUESTION ARISE BEFORE US WHETHER THE INI TIATION OF PROCEEDINGS UNDER SECTION 147 ARE VALID OR NOT. WHETHER THE REASONS RECORDED ARE BONAFIDE OR NOT ON THE FACTS OF THE CASE. SECTION 147 LAYS DOWN AS UNDER :- 147. IF THE AO HAS REASON TO BELIEVE THAT ANY INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY A.Y., HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER THIS SECTION, OR RE COMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS T HE CASE MAY BE, FOR THE A.Y. CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTION S 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR). 6 PROVIDED THAT WHERE AN ASSESSMENT UNDER SUBSECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSM ENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON TH E PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTI CE ISSUED UNDER SUB SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YE AR. EXPLANATION 1.- PRODUCTION BEFORE THE ASSESSING OFF ICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DU E DILIGENCE HAVE BEEN DISCOVERED BY THE AO WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2- FOR THE PURPOSES OF THIS SECTION, TH E FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT NAMELY:- (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF AN Y OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DU RING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARG EABLE TO INCOME TAX. (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE A SSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN. (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT- (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RATE; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED. 10. FROM THE PLAIN READING OF THE AFORESAID SECTION , IT IS CLEAR THAT FOR APPLICABILITY OF SECTION 147, THE A.O. MUST HAVE REASON TO BELIEVE. THE WO RD REASON IN THE PHRASE REASON TO BELIEVE WOULD MEAN CAUSE OR JUSTIFICATION. IF THE ASSESSIN G OFFICER HAS A CAUSE OR JUSTIFICATION TO THINK OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE A REASON TO HAVE A REASON TO 7 BELIEVE THAT SUCH INCOME HAD ESCAPED ASSESSMENT. T HE WORDS REASON TO BELIEVE CANNOT MEAN THAT THE AO SHOULD HAVE FINALLY ASCERTAINED THE FAC TS BY LEGAL EVIDENCE. IT ONLY MEANS THAT THE AO FORMS A BELIEF FROM THE EXAMINATION HE MAKES AND INFORMATION THAT HE RECEIVES. IF HE DISCOVERS OR FINDS OR SATISFIES PRIMA-FACIE HIMSELF THAT THE TAXABLE INCOME HAS ESCAPED ASSESSMENT, IT WOULD AMOUNT TO SAYING THAT HE HAS R EASON TO BELIEVE THAT SUCH INCOME HAD ESCAPED ASSESSMENT. THE JUSTIFICATION FOR HIS BELI EF IS NOT TO BE JUDGED FROM THE STANDARDS OF PROOF REQUIRED FOR COMING TO A FINAL DECISION. HIS FORMATION OF THE BELIEF IS NOT A JUDICIAL DECISION, BUT AN ADMINISTRATIVE DECISION. THE DECIS ION TO INITIATE THE PROCEEDINGS IS NOT TO BE PRECEDED BY ANY JUDICIAL OR QUASI-JUDICIAL ENQUIRY. REASON TO BELIEVE HAS BEEN THE MATTER OF JUDICIAL SCRUTINY BY THE APEX COURT IN SEVERAL CASE S. IN THE CASE OF CALCUTTA DISCOUNT CO LTD V. ITO 41 ITR 191 (SC), IT WAS OBSERVED THAT IT IS THE DUTY OF THE ASSESSEE TO DISCLOSE ALL THE PRIMARY FACTS WHICH HAVE A BEARING ON THE LIABILITY OF INCOME EARNED BY THE ASSESSEE BEING SUBJECTED TO TAX. IT IS FOR THE AO TO DRAW INFEREN CES FROM THE FACTS AND APPLY THE LAW DETERMINING THE LIABILITY OF THE ASSESSEE. THE ASSESSEE CANNOT DRAW THE CONCLUSIONS DRAWN BY THE AO AND ONCE THE CONCLUSION IS DRAWN AND THE ASSESSMENT ORD ER FRAMED, THE AO CANNOT AT A LATER POINT OF TIME FORM A DIFFERENT OPINION BY GIVING A SECOND TH OUGHT TO THE FACTS DISCLOSED BY THE ASSESSEE, HOLDING THAT HE COMMITTED AN ERROR IN COMPUTING TAX ABLE INCOME AND REOPEN THE ASSESSMENT U/S 147. DISCOVERY OF NEW AND IMPORTANT MATTERS OR KNO WLEDGE OF FRESH FACTS WHICH WERE NOT PRESENT AT THE TIME OF ORIGINAL ASSESSMENT WOULD CO NSTITUTE A REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 1 47. OUR AFORESAID VIEW IS SUPPORTED BY THE FOLLOWING CASES DECIDED BY HONBLE APEX COURT : - I) PHOOL CHAND BAJRANG LAL V. ITO 203 ITR 456, 477; II) ALA FIRM V. CIT 189 ITR 285, 298; III) INDIAN AND EASTERN NEWSPAPER SOCIETY V. CIT 119 ITR 996, 1004; AND IV) ITO V. LAKHMANI MEWAL DASS 103 ITR 437, 445 8 11. IT IS ALSO UNDISPUTED FACT BEFORE US THAT IN TH IS CASE ASSESSMENT HAS BEEN REOPENED ON 30.03.2006. THE ASSESSEE HAS DULY DISCLOSED IN THE COMPUTATION OF THE RETURN THE PROFIT BEING EARNED ON THE SALE OF SHARES. SUBSEQUENTLY, THE AS SESSMENT PROCEEDINGS WAS STARTED AND THE A.O. HAS ASKED INFORMATION FROM THE ASSESSEE THROUGH NOT ICE UNDER SECTION 143(2) OF THE ACT WHICH WAS DULY COMPLIED WITH BY THE LD. A.R. OF THE ASSES SEE AND THE PROCEEDINGS WERE ULTIMATELY CULMINATED INTO AN ASSESSMENT PASSED UNDER SECTION 143(3) DATED 22.3.2002. IN THE ASSESSMENT ORDER, THE A.O. HAS DULY ACCEPTED THE PROFIT SHOWN BY THE ASSESSEE ON SALE OF SHARES. THE A.O. THUS DULY ACCEPTED THE CAPITAL GAIN SHOWN BY THE AS SESSEE ON SALE OF SHARES. THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE FOR THE SALE OF SHARES WERE ACCEPTED TO BE GENUINE AND THE A.O. HAS NOT TAKEN THE VIEW THAT THE TRANSACTIONS WERE BOGUS ACCOMMODATION ENTRIES. ALL THE INFORMATION SUCH AS VOUCHER IN RESPECT OF SALE AND PURCHASE OF SHARES, BANK STATEMENT IN WHICH THE PAYMENT OF PURCHASE OF SHARES AND PAYMENT OF SALE CONSIDERA TION RECEIVED WERE REFLECTED, COPIES OF SHARES WITH THEIR DISTINCTIVE NUMBERS, STATEMENT OF ACCOUNTS OF THE ASSESSEE WITH THE BROKER THROUGH WHOM SHARES WERE PURCHASED AND SOLD, WERE D ULY FILED BY THE ASSESSEE AND WERE EXAMINED BY THE A.O. WHILE FRAMING THE ORIGINAL ASS ESSMENT. THEREFORE, IT CANNOT BE SAID THAT ALL THESE INFORMATION WERE NOT AVAILABLE WITH THE A.O. AT THE TIME OF FRAMING OF THE ASSESSMENT, RATHER THE ASSESSEE HAS SUBMITTED ALL THESE INFORMA TION AND THE A.O. THEREUPON CAME TO THE CONCLUSION THAT THE TRANSACTION ENTERED INTO BY THE ASSESSEE WAS GENUINE ONE. 12. NOW THE QUESTION ARISE WHAT NEW INFORMATION IS AVAILABLE WITH THE A.O. ON THE BASIS OF WHICH HE REOPENED THE ASSESSMENT. THE ASSESSMENT H AS BEEN REOPENED AS APPEARED FROM THE REASONS THAT THE A.O. HAS RECEIVED THE INFORMATION FROM THE INVESTIGATION WING WHO MADE THE DETAILED ENQUIRY AND CAME TO THE CONCLUSION IN RESP ECT OF THE LTCG ON SALE OF SHARES IN MASS CASES THAT JRD, YADAV & CO. AND NAVRANG CAPITAL MAN AGEMENT LIMITED HAVE PROVIDED BOGUS ACCOMMODATION ENTRIES TO THE BENEFICIARIES IN THE G ARB OF SALE OF SHARES OF DIFFERENT COMPANIES 9 AND ACCORDINGLY HE WAS OF THE VIEW THAT THE ASSESSE E HAS ALSO TAKEN THE BOGUS ENTRIES AND LTCG SHOWN BY THE ASSESSEE ON SALE OF SHARES THROUGH THE SE BROKERS WAS NOT GENUINE. IN OTHER CASES ALSO SUCH ENTRIES WERE TREATED AS BOGUS ACCOMMODATI ON ENTRIES AND THE ADDITIONS WERE MADE. THUS, THE A.O. RECORDED THE REASONS ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING. THIS INFORMATION NOWHERE SPEAKS OF THE NAME OF THE ASSESSEE OR ENQUIRIES CONDUCTED BY INVESTIGATION WING DEPICTS THAT THESE PARTIES HAS G IVEN THE BOGUS ENTRIES TO THE ASSESSEE. 13. NOW THE QUESTION ARISES WHETHER, UNDER THESE FA CTS, THE REASONS RECORDED BY THE A.O. ARE BONAFIDE OR NOT. IN THIS REGARD, WE HAVE GONE THRO UGH THE VARIOUS CASE LAWS AS HAS BEEN RELIED BEFORE US. THE SAME ARE DISCUSSED AS UNDER :- (I) CIT VS. KELVINATOR OF INDIA LIMITED, 320 ITR 561 (S C) IN THIS CASE, A SHORT QUESTION WHICH ARISES FOR DE TERMINATION BY HONBLE SUPREME COURT IS, WHETHER THE CONCEPT OF CHANGE OF OPINION STAN DS OBLITERATED W.E.F. 01.04.1989 I.E. AFTER SUBSTITUTION OF SECTION 147 OF THE I.T. ACT, 1961 B Y THE DIRECT TAX LAWS (AMENDMENT) ACT,1987. AFTER DISCUSSING THE OLD PROVISIONS OF SECTION 147 AND THE SUBSTITUTED PROVISIONS OF SECTION 147, THE HONBLE SUPREME COURT HAS HELD THAT ONE HAS TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS REASON TO BELIEVE, FAILING WHICH, WE ARE AFRAID, SECTION 147 OF THE ACT WOULD GIVE ARBITRARY POWER TO THE A.O. TO REOPEN THE ASSESSMENTS ON THE BASIS OF MERE CHANGE OF OPINION, WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST ALSO KE EP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO REASSESS. THE A.O. HA S NO POWER TO REVIEW; HE HAS THE POWER TO REASSESS. REASSESSMENT HAS TO BE MADE ON FULFILLME NT OF CERTAIN PRE-CONDITIONS AND IF THE CONCEPT OF CHANGE OF OPINION IS REMOVED, THEN, IN THE GAR B OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF CHANGE OF OPINION AS AN IN-BUILT TEST TO CHECK ABUSE 10 OF POWER BY THE A.O. THEREFORE, AFTER 1 ST APRIL, 1989, THE A.O. HAS POWER TO REOPEN, PROVIDE D THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUS ION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. THE REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. THUS, WHERE THERE IS A CHANGE IN OPINION ON THE SAME FACTS, THE A.O. CANNOT REOPEN THE ASSESSMENT. (II) CIT VS. SFIL STOCK BROKING LIMITED, 325 ITR 28 5 (DEL) IN THIS CASE, THE A.O. REOPENED THE ASSESSMENT BY RECORDING FOLLOWING REASONS :- INFORMATION RECEIVED FROM DY. DIRECTOR OF IT (INV. ), 107, SUSHANT LOK, GURGAON VIDE HIS LETTER NO.DDIT (INV)/GGN/02-03/27 DT. 17 TH MARCH, 2003 RECEIVED IN MY OFFICE ON 25 TH MARCH, 2003 THAT ONE OF MY ASSESSEES M/S SFIL STOCK BROKING LIMITED HAD MADE BOGUS CLAIM OF LONG TERM CAPITAL GAINS SHOWN AS EARNED ON ACCOUNT OF SALE/PURCHASE OF SHARES TAKEN THROUGH BANK ACCOUNT NO.CA 3097, CORPORATION BANK, KAROL BAGH, NEW DELHI IN TH E NAME OF R.K. AGGARWAL & CO. BY OBTAINING ENTRIES FOR RS.6,00,000, RS.7,00,0 00 AND RS.7,70,000 ON 28 TH FEB., 1998, 28 TH FEBRUARY, 1998 AND 1 ST MARCH, 1998 RESPECTIVELY. HE HAS DIRECTED THE A.O. TO GET NOTICES ISSUED UNDER SECTI ON 148. SUBSEQUENTLY, I HAVE BEEN DIRECTED BY THE ADDL. CIT-R8, NEW DELHI VIDE H IS LETTER NO.ADDL. CIT R- 8/2002-03/572 DT. 26 TH AUG., 2003 TO INITIATE PROCEEDINGS UNDER S.148 IN RESPECT OF CASES PERTAINING TO THIS WARD. THUS, I HAVE SUFFICIENT INFORMATION IN MY POSSESSIO N TO ISSUE NOTICE UNDER S.148 IN THE CASE OF M/S SFIL STOCK BROKING LTD. ON THE BASIS OF REASONS RECORDED AS ABOVE. WHEN THE MATTER WENT BEFORE THE HONBLE HIGH COUR T, THE HONBLE HIGH COURT HELD, ON THE BASIS OF THE REASONS RECORDED BY THE A.O., THAT THE FIRST SENTENCE OF THE SO-CALLED REASONS RECORDED BY THE A.O. IS MERE INFORMATION RECEIVED F ROM THE DY. DIRECTOR OF IT (INV.). THE SECOND SENTENCE IS A DIRECTION GIVEN BY THE VERY SA ME DY. DIRECTOR TO ISSUE A NOTICE UNDER S.148 AND THE THIRD SENTENCE AGAIN COMPRISES OF A DIRECTI ON GIVEN BY THE ADDL. CIT TO INITIATE PROCEEDINGS UNDER S.148 IN RESPECT OF CASES PERTAIN ING TO THE RELEVANT WARD. THESE THREE SENTENCES ARE FOLLOWED BY THE FOLLOWING SENTENCE, W HICH IS THE CONCLUDING PORTION OF THE SO- CALLED REASONS: THUS, I HAVE SUFFICIENT INFORMATIO N IN MY POSSESSION TO ISSUE NOTICE UNDER S.148 11 IN THE CASE OF M/S SFIL STOCK BROKING LIMITED ON TH E BASIS OF REASONS RECORDED AS ABOVE. FROM THE ABOVE, IT IS CLEAR THAT THE A.O. REFERRED TO THE INFORMATION AND THE TWO DIRECTIONS AS REASONS ON THE BASIS OF WHICH HE WAS PROCEEDING T O ISSUE NOTICE UNDER S.148. THESE CANNOT BE THE REASON FOR PROCEEDING UNDER S.147/148. THE FIR ST PART IS ONLY INFORMATION AND THE SECOND AND THE THIRD PARTS OF THE BEGINNING PARA OF THE SO-CAL LED REASONS ARE MERE DIRECTIONS. FROM THE SO- CALLED REASONS, IT IS NOT AT ALL DISCERNIBLE AS TO WHETHER THE A.O. HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTLY ARRIVED AT A BELIEF T HAT, ON THE BASIS OF THE MATERIAL WHICH HE HAD BEFORE HIM, INCOME HAD ESCAPED ASSESSMENT. CONSEQU ENTLY, THE TRIBUNAL HAS ARRIVED AT THE CORRECT CONCLUSION ON FACTS. THERE IS NO SUBSTANTI AL QUESTION OF LAW WHICH ARISES FOR CONSIDERATION. ASSTT. CIT VS. RAJESH JHAVERI STOC K BROKERS (P) LTD. (2007) 291 ITR 500 (SC) RELIED ON. THUS, ON THE BASIS OF THIS JUDGMENT, THE ASSESSME NT CANNOT BE REOPENED MERELY ON THE BASIS OF THE INFORMATION RECEIVED FROM THE DDI AND ON THE DIRECTIONS OF THE SAID OFFICER THE A.O. HAS TO APPLY HIS MIND INDEPENDENTLY AND ARRIVE AT A BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT. (III) CIT VS. CORPORATION BANK LIMITED, 254 ITR 791 (SC) IN THIS CASE, THE FACTS WERE THAT THE ASSESSEE BAN KING COMPANY HAD TAKEN A SUM OF RS. 54,485 WHICH REPRESENTED INTEREST ON LOANS RECOVERY OF WHICH WAS DOUBTFUL, TO THE INTEREST SUSPENSE ACCOUNT. THE ASSESSEE HAD DISCLOSED THIS S UM AS UNREALIZED AMOUNT OF INTEREST IN THE BALANCE SHEET FILED BY IT ALONG WITH THE RETURN. IN THE ORIGINAL ASSESSMENT, THE ITO ACCEPTED THE RETURN AND HAD EXCLUDED THIS AMOUNT IN HIS ASSESSME NT ORDER. THEREAFTER, THE ASSESSMENT WAS REOPENED BY A NOTICE ISSUED U/S 147(1) OF THE ACT A ND THE SUM OF RS. 54,485 WAS BROUGHT TO TAX. THE APPELLATE TRIBUNAL HELD THAT THE REOPENING OF T HE ORIGINAL ASSESSMENT WAS NOT JUSTIFIED, AND ON A REFERENCE, THE HIGH COURT HELD THAT THE REOPEN ING OF THE ASSESSMENT U/S 147(A) WAS NOT VALID. ON APPEAL TO THE SUPREME COURT, THE HONBLE SUPREME COURT HELD, AFFIRMING THE DECISION OF THE 12 HIGH COURT, THAT SINCE THE ASSESSEE HAD FURNISHED P ARTICULARS PERTAINING TO THE SUM OF RS. 54,485, AS NOT RECOVERABLE AND HAD FILED STATEMENTS ALONG W ITH THE ORIGINAL RETURN DISCLOSING FULL DETAILS OF THE INTEREST SUSPENSE ACCOUNT, THERE WAS NO FAIL URE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY MATERIAL FACTS NECESSARY FOR THE ASSESSME NT AND SECTION 147(A) HAD NO MANNER OF APPLICATION AND WAS NOT ATTRACTED TO THE FACTS OF T HE CASE. (IV) IDEA CELLULAR VS. DCIT & OTHERS, 301 ITR 407 (BOM.) IN THIS CASE, IT WAS HELD THAT ONCE ALL THE MATERI AL WAS PLACED BEFORE THE A.O., IN CASE HE CHOOSES NOT TO DEAL WITH THE SEVERAL CONTENTIONS RA ISED BY THE PETITIONER IN HIS FINAL ASSESSMENT, IT COULD NOT BE SAID THAT HE HAD NOT APPLIED HIS MIND. EVEN THE EXPLANATION OF SECTION 147 WAS NOT APPLICABLE. (V) CIT & ANOTHER VS. FORAMER FRANCE, 264 ITR 566 ( SC) IN THIS CASE, THE HONBLE SUPREME COURT CONFIRMED THE ORDER OF THE ALLAHABAD HIGH COURT IN THE CASE OF FORAMER VS. CIT, 247 ITR 436 . HEAD NOTE OF THE ITR READS AS UNDER:- FROM THE DECISION OF THE HIGH COURT (SEE [2001] 2 47 ITR 436) THAT (I) SECTION 147 SUBSTITUTED IN THE INCOME-TAX ACT, 1961 , BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, HAD MADE A RADICAL DEPARTURE FROM THE ORIGINAL SECTION 147, INASMUCH AS CLAUSES (A) AND (B) HAD BEEN DELET ED AND UNDER THE PROVISO THERETO NOTICE FOR REASSESSMENT WOULD BE ILLEGAL IF ISSUED MORE THAN FOUR YEARS AFTER THE END OF THE ASSESSMENT YEAR, IF THE ORIGIN AL ASSESSMENT WERE MADE UNDER SECTION 143(3); (II) SECTION 153 RELATED TO THE PAS SING OF AN ORDER OF ASSESSMENT AND NOT TO THE ISSUING OF A REASSESSMENT NOTICE UND ER SECTION 147/148, (III) THE DIRECTION OR FINDING CONTEMPLATED BY SECTION 153(3) (II) HAD TO BE A FINDING IN RELATION TO THE PARTICULAR ASSESSEE AND THE PARTICU LAR YEAR AND TO BE A FINDING IT HAD TO BE DIRECTLY INVOLVED IN THE DISPOSAL OF THE CASE; (IV) ON THE FACTS, THE NOTICES ISSUED UNDER SECTION 148 ON NOVEMBER 20, 1998, TO T HE ASSESSEE FOR REOPENING THE ORIGINAL ASSESSMENTS FOR THE ASSESSMENT YEARS 1988- 89, 1989-90 AND 1990-91, ON THE BASIS OF THE APPELLATE TRIBUNALS DECISION REND ERED IN THE CASE OF BOUDIER CHRISTIAN RELATING TO THE ASSESSEES TECHNICIANS D EPUTED TO INDIA, THE INCOME OF THE ASSESSEE WAS TO BE TREATED AS FEE FOR TECHNICAL SERVICES AND NOT AS BUSINESS INCOME AS ASSESSED IN THE ORIGINAL ASSESSMENTS FOR THOSE ASSESSMENT YEARS, WERE WITHOUT JURISDICTION AS THEY WE BARRED BY LIMITATIO N IN VIEW OF THE PROVISO TO SECTION 147, AS AMENDED BY THE DIRECT TAX LAWS (AME NDMENT) ACT, 1987, AS THAT WAS THE PROVISION THAT WAS APPLICABLE ON NOVEMBER 2 0, 1998, WHEN THE REASSESSMENT NOTICES WERE ISSUED, AND ADMITTEDLY TH ERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MAT ERIAL FACTS FOR ASSESSMENT; (V) ON 13 THE FACTS, THE NOTICES WERE BAD AS THEY WERE ONLY O N THE BASIS OF A CHANGE OF OPINION AND THE LAW THAT AN ASSESSMENT COULD NOT BE REOPENED ON A CHANGE OF OPINION WAS THE SAME BEFORE AND AFTER AMENDMENT BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, OF SECTION 147, AND (VI) AS THE NOTICES WERE WITHOUT JURISDICTION, THE ASSESSEE SHOULD NOT BE RELEGATED TO THE ALTERNATIVE REMEDY, THE DEPARTMENT PREFERRED APPEALS TO THE SUPREME COURT. THE SUPREME COURT SAW NO REASON TO DIFFER AND DISMISSED THE APPEALS. DECISION OF THE ALLAHABAD HIGH COURT IN FORAMER VS. CIT [2001] 247 ITR 436 AFFIRMED. (VI). CIT VS. ATUL JAIN, 299 ITR 383 (DELHI): IN THIS CASE, HONBLE DELHI HIGH COURT HAS HELD AS UNDER : THERE MUST BE REASON TO BELIEVE WARRANTING THE IS SUANCE OF A NOTICE OF RE- ASSESSMENT BY THE ASSESSING OFFICER. IF THERE ARE N O REASONS, THEN THE ENTIRE FOUNDATION FOR INITIATING THE PROCEEDINGS IS BAD AND THE NOTIC E INITIATING PROCEEDINGS MUST BE QUASHED. MERE SATISFACTION OF THE ASSESSING OFFICER FOR THE ISSUANCE OF A NOTICE IS NOT ENOUGH, THERE MUST BE REASONS ON RECORD WHICH LED H IM TO BELIEVE THAT A NOTICE SHOULD BE ISSUED. AFTER A FOUNDATION BASED ON INFORMATION IS SET UP, THERE MUST STILL BE SOME REASONS WHICH WARRANT THE HOLDING OF A BELIEF SO AS TO NECE SSITATE THE ISSUANCE OF A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961. THE ASSESSEE PURCHASED SHARES AND SUBSEQUENTLY SOL D THESE SHARES AT A MUCH HIGHER VALUE. FOR THE ASSESSMENT YEAR 1997-98, THE ASSESSEES DISCLOSED LONG-TERM CAPITAL GAINS ARISING FROM THE TRANSACTION. ON THE BASIS OF THE INFORMATION RECEIVED BY THE DEPUTY DIRECTOR(INVESTIGATION), THE ASSESSING OFFIC ER ISSUED NOTICE UNDER SECTION 148. THE FILES WERE THEN PUT UP BEFORE THE COMMISSIONER AND IN RESPONSE TO THE QUESTION WHETHER THE COMMISSIONER WAS SATISFIED THAT INCOME HAD ESCAPED ASSESSMENT, HE WROTE YES. THEREAFTER, THE ASSESSING OFFICER REASSESSED THE INCOME AND CHARGED INTEREST AND LEVIED PENALTY. THE COMMISSIONER (APPEALS) ALLOWED RELIEF PARTLY BUT THE TRIBUNAL CONCLUDED THE ISSUE IN FAVOUR OF THE ASSESSEES. ON APPEAL : HELD, DISMISSING THE APPEALS, THAT THE ONLY INFORMATION W AS THAT THE ASSESSEE HAD TAKEN A BOGUS ENTRY OF CAPITAL GAINS BY PAYING CASH ALONG WITH SOME PREMIUM FOR TAKING A CHEQUE FOR THAT AMOUNT. THE INFORMATION DID NOT I NDICATE THE SOURCE OF THE CAPITAL GAINS WHICH IN THIS CASE WERE SHARES. THERE WAS NO INFORM ATION WHICH SHARES HAD BEEN TRANSFERRED AND WITH WHOM THE TRANSACTION HAD TAKEN PLACE. THE ASSESSING OFFICER DID NOT VERIFY THE CORRECTNESS OF THE INFORMATION RECEIVED BY HIM BUT MERELY ACCEPTED THE TRUTH OF THE VAGUE INFORMATION IN A MECHANICAL MANNER. THE A SSESSING OFFICER HAD NOT EVEN RECORDED HIS SATISFACTION ABOUT THE CORRECTNESS OR OTHERWISE OF THE INFORMATION FOR ISSUING A NOTICE UNDER SECTION 148. WHAT HAD BEEN RECORDED BY THE ASSESSING OFFICER AS HIS REASONS TO BELIEVE WAS NOTHING MORE THAN A REPORT GIVEN AS RECORDING OF REASONS TO BELIEVE FOR ISSUING A NOTICE. THE ASSESSING OFFICER HAD CLEARLY SUBSTITUTED FORM FOR SUBSTANCE AND THEREFORE THE ACTION OF THE ASSESSING OFFICER WAS NOT SUSTAINABLE. 14 14. IN VIEW OF THE AFORESAID CASES AND THE PROVISIO NS OF SECTION 147, THE LAW ON THE REOPENING IS VERY CLEAR. SECTION 147 AUTHORIZES THE A.O. TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX IF HE HAS REASON TO BELIEVE THAT THE INCOME FOR ANY A. Y. HAS ESCAPED ASSESSMENT. THE REASONS TO BELIEVE MUST BE BONAFIDE. THE A.O. MUST HAVE RELEV ANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED THE REQUISITE BELIEF. WHETHER TH E MATERIAL CONCLUSIVELY PROVES ESCAPEMENT CANNOT BE DECIDED AT THE STAGE OF FORMATION OF THE BELIEF. THIS SECTION ALSO DOES NOT AUTHORIZE THE A.O. TO REVIEW THE ASSESSMENT AT THE GRAB OF REOPEN ING. THE A.O. IN THE REASONS REFERRED TO THE ENQUIRIES CARRIED OUT IN MASS CASES BY THE INVESTIG ATION WING BUT DID NOT POINT OUT ANY ENQUIRY OR MATERIAL IN THE CASE OF THE ASSESSEE. THE DETAI LED ENQUIRY IN MASS CASES HAS BEEN MADE TO BE THE BASIS OF THE REASONS. THE REASONS NOWHERE SPEA KS OF THE MATERIAL COLLECTED DURING THE ENQUIRY RELATES TO THE ASSESSEE. THE ASSESSEE HAS DULY DISCLOSED THE CAPITAL GAIN EARNED BY HIM WHICH WAS DULY ENQUIRED OF BY THE A.O. WHILE FRAMIN G THE ASSESSMENT AND THE ASSESSEE HAS REPLIED TO ALL THE QUERIES RAISED BY THE A.O. THE A.O. COMPLETED THE ASSESSMENT, ACCEPTING THE CAPITAL GAIN SHOWN BY THE ASSESSEE IN THE ORIGINAL ASSESSMENT. ALL THE MATERIAL RELATING TO THE CAPITAL GAIN WAS BEFORE THE A.O. DURING THE COURSE OF ORIGINAL ASSESSMENT. MERELY THE A.O. HAS FRAMED THE ASSESSMENT NOT INCORPORATING THE QUERIES RAISED AND THE CONTENTION TAKEN BY THE ASSESSEE DOES NOT MEAN THAT THE A.O. HAS NOT APPLIE D HIS MIND. THIS IS A SETTLED LAW THAT AN ASSESSMENT COMPLETED CANNOT BE REVIEWED AT THE GARB OF REOPENING. WHAT THE A.O., IN OUR OPINION, TRIED TO DO IS, TO REVIEW THE ASSESSMENT W HICH HAS BEEN COMPLETED ON THE BASIS OF SOME MATERIAL. NO FRESH MATERIAL IS BEING BROUGHT ON RE CORD. THIS, IN OUR OPINION, IS NOT PERMISSIBLE UNDER THE LAW. ONLY ON THIS BASIS ITSELF THE ASSES SMENT FRAMED STANDS ANNULLED. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A) ON THIS BASIS AND Q UASH THE REASSESSMENT. 15 15. NOW COMING TO THE SECOND GROUND, WE HEARD THE R IVAL SUBMISSIONS AND NOTED THAT THE CIT(A) HAS GIVEN CATEGORICAL FINDING THAT THERE IS NO MATERIAL ON RECORD TO CONTROVERT THE ASSESSEES CLAIM OF LTCG. 16. ALTHOUGH THE LD. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE A.O., BUT COULD NOT ADDUCE ANY EVIDENCE WHICH MAY WARRANT OUR INTERFERENCE IN THE ORDER OF THE CIT(A) SO FAR IT RELATES TO THE DELETION OF THE ADDITION MADE BY THE A.O. WE AL SO NOTED THAT THE AO HAS INCORRECTLY OBSERVED THAT DURING THE A.Y.2001-02 SIMILAR TRANSA CTIONS WERE FOUND TO BE BOGUS IN THE CASE OF THE ASSESSEE AND CONFIRMED BY CIT(A). THE ASSESSEE FILED THE AFFIDAVIT ALONGWITH ASSESSMENT ORDER AND COMPUTATION OF INCOME WHICH WAS NOT CONTR OVERTED BY THE LD. DR EVEN AFTER GIVING THE SPECIFIC OPPORTUNITY TO HIM IN THIS REGARD. THE LD. DR EVEN DID NOT FILE ANY EVIDENCE CONTRARY TO THIS. EVEN OTHERWISE ALSO, WE NOTED, AS RELIED ON BY THE LD. A.R., THE CASE OF THE ASSESSEE IS DULY COVERED BY THE DECISION OF THIRD M EMBER IN THE CASE OF SMT. SUNITA OBEROI VS. ITO, 126 TTJ (AGRA)(TM) 745 AND THAT OF ITO VS. SMT . BIBI RANI BANSAL IN ITA NO.101/AGR/05 IN WHICH VIDE ORDER DATED 09.02.2010 IT WAS HELD AS UNDER:- 10. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW AS WELL AS THE ORDER OF M Y LD. COLLEAGUE MEMBERS. I NOTED THAT WHILE PASSING THE DISSENT ORDER THE LD. A.M. HAS MAINLY RELIED ON ITS SEPARATE ORDER PASSED IN THE CASE OF SHRI BAIJNATH AGARWAL (ITA NO.133/AGR/2005). I HAVE GONE THROUGH THE ORDER OF SHRI BAIJNATH AGARWAL AND NOTED THAT IN HIS DISSENT ORDER IN THAT CASE THE LD . A.M. HAS RELIED ON THE DECISION OF SHRI ASHOK KUMAR LAVANIA (ITA NO.112/AGR/2004). I HAVE GONE THROUGH THE DECISION OF SHRI ASHOK KUMAR LAVANIA IN ITA NO.112/ AGR/2004 WHICH WAS DECIDED BY THE BENCH CONSTITUTING OF SAME LD. J.M. AND LD. A.M. VIS--VIS THE FACTS OF THE CASE OF THE ASSESSEE. IN THAT CASE ALSO THE TRANSACTION OF SALES HAS NOT BEEN ACCEPTED BY THE A.O. AS HE DOUBTED THE SALE PRICES AND ALSO RELIED ON THE STATEMENT OF SHRI ASHOK GUPTA, DIRECTOR OF M/S. JRD STOCK BROKERS PVT. LTD. WHO STATED THAT AS A MATTER OF FACT THERE WAS NO ACTUAL PURCHASE AND SALE OF SHARES AS WAS REFLECTED IN THE CONTRACT NOTES ISSUED BY M/S. JRD STOCK BROKERS PVT. LTD. TO THE BENEFICIARIES. IN THAT CASE THE ASSESSEE CLAIM ED LONG TERM CAPITAL GAIN OF RS.25,14,770/- AND CLAIMED EXEMPTION UNDER SECTION 54EA OF THE ACT. THE LTCG WAS SHOWN ON ACCOUNT OF SALE OF SHARES THROUGH THE BROKERS. THE ASSESSEE SUBMITTED THE COPIES OF BILLS, SHARE CERTIFICATES, CONTRACT NOTES ETC. DURING THE 16 COURSE OF ASSESSMENT PROCEEDINGS ALONGWITH DETAILS OF DEMAND DRAFT THROUGH WHICH THE SALE PROCEEDS HAS BEEN RECEIVED. IT WAS ALSO POINTED OUT THAT THE PURCHASES WERE MADE THROUGH BROKING CONCERN M/S. JR D STOCK BROKERS PVT. LTD. THE A.O. NOTICED THAT THE SHARES WERE PURCHASED @ R S.4/- PER SHARE AND SOLD @ RS.65/- TO RS.84/- PER SHARE. THE A.O. WAS OF THE VIEW THAT THE TRANSACTIONS WERE NOT GENUINE AND ARE ONLY ACCOMMODATION ENTRIES. TH E BROKER POINTED OUT THAT HE WAS ENGAGED IN GIVING BOGUS ENTRIES FOR THE PURCHAS E AND SALE OF THE SHARES ON COMMISSION BASIS. WHEN THE MATTER TRAVELED TO THE TRIBUNAL, THE TRIBUNAL DELETED THE ADDITION BY OBSERVING AS UNDER :- (10) SO IN THE GIVEN CASE ALSO THE DEPARTMENT CANN OT TREAT THE LONG TERM CAPITAL GAINS AS ASSESSEES INCOME FROM OTHER SOURC ES. THERE IS NO DIRECT EVIDENCE. THE STATEMENTS OF THE BROKERS WERE RECOR DED AT THE BACK OF THE ASSESSEE. AN OPPORTUNITY OF CROSS-EXAMINATION MEAN S AND IMPLIES A CLEAR OPPORTUNITY AFTER PROVIDING COPIES OF SUCH ADVERSE STATEMENTS TO CROSS- EXAMINE. OTHERWISE ALSO THE STATEMENT OF SHRI ASHO K GUPTA IS TOO VAGUE TO BE OF ANY EVIDENTIARY VALUE. HE HAS NOWHERE STA TED THAT THE TRANSACTION OF THE ASSESSEE WAS BOGUS OR NOT GENUINE. HE HAS N O CORROBORATIVE EVIDENCE TO SHOW THAT THE CASH FOR DRAFTS WAS RECEI VED FROM THE ASSESSEE. IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE HIS ST ATEMENT CANNOT BE ACCEPTED AS TRUE ON HIS MERE IPSE DIXIT. SHRI MANO J AGARWAL WAS NOT PRODUCED FOR CROSS-EXAMINATION. FROM HIS STATEMENT NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. SHRI MANOJ AGAR WAL HANDED OVER A LETTER TO D.D.I. (INV) IN WHICH HE STATED THAT OUT OF THE TOTAL TRANSACTIONS, THE TRANSACTIONS AMOUNTING TO RS.100 CRORES WERE O NLY BOOK ENTRIES. SO IT FOLLOWS AS A NECESSARY COROLLARY THAT ENTIRE TRANSA CTIONS WERE NOT IN- GENUINE. HE HAS ALSO NOT NAMED THIS ASSESSEE. WIT H REGARD TO AGARWAL & COMPANY, THERE ARE NO ADVERSE COMMENTS IN THE ASSES SMENT ORDER AGAINST THE ASSESSEE. THE A.O. HAS NOT SAID ANYTHING ABOUT THE TRANSACTIONS ENTERED THROUGH THIS BROKER. WHEREAS THE ASSESSEE HAS PRODUCED : I) COPIES OF SALES AND PURCHASE BILLS; II) SHARE CERTIFICATES AND TRANSFER LETTERS; III) CONTRACT NOTES; IV) DULY TRANSFERRED SHARE CERTIFICATES RECEIVED FR OM THE COMPANIES; AND V) AFFIDAVIT. (11) THERE IS NO DOUBT, IN SUCH CASES, THE BROKERS BECOME THE WITNESSES OF THE DEPARTMENT. THE DEPARTMENT HAS GOT STATEMEN TS OF THESE BROKERS WHICH ARE USED AGAINST THE ASSESSEE. IRRESPECTIVE OF THE FACT THAT THE STATEMENTS WERE RECORDED AT THE BACK OF THE ASSESSE E AND THAT THE ASSESSEE WAS OR WAS NOT AFFORDED OPPORTUNITY FOR CROSS-EXAMI NATION, WHEN OVERWHELMING DOCUMENTARY EVIDENCES ARE PRODUCED BY THE ASSESSEE, THE BURDEN SHIFTS ON THE REVENUE TO EXPLAIN AWAY THEM. EVERY TIME THE STATEMENTS CANNOT HELP THE DEPARTMENT. HOW THE ABO VE MENTIONED EVIDENCES COULD BE IGNORED ? THE REVENUE HAS TO GI VE REASONS FOR 17 REJECTING THEM. THESE ARE IMPORTANT DOCUMENTS, SOM E OF THEM ARISE UNDER THE PROVISIONS OF THE COMPANIES ACT. THE BROKERS W ERE NEVER CONFRONTED WITH THE EVIDENCES PRODUCED BY THE ASSESSEE. THE A PPARENT HAS TO BE TREATED AS A REAL UNLESS PROVED OTHERWISE. LONG AG O HONBLE SUPREME COURT HAS LAID THIS LAW WHILE RENDERING THE CELEBRA TED DECISION IN THE CASE OF CIT VS. DAULAT RAM RAWATMAL (1964) 53 ITR 574 (S C). THE ASSESSEE HAS COUNTERED THE STATEMENTS OF BROKERS BY WAY OF H IS DULY SWORN-IN AFFIDAVIT. WE HAVE EXAMINED THE ENTIRE EVIDENCES P LACED IN THE PAPER BOOK OF THE ASSESSEE. (12) IN THE CASE OF ITO VS. SMT. KUSUMLATA REPORTED IN (2006) 105 TTJ (JD.) 265, COPY PLACED AT PAGE NO.4 OF ASSESSEES P APER BOOK (JUDGEMENTS RELIED), THE HONBLE JODHPUR BENCH HAS HELD AS UNDE R :- FOR MAKING ADDITION UNDER SECTION 69, THE DEPARTME NT IS REQUIRED TO PROVE TO THE HILT THAT THE IMPUGNED TRA NSACTIONS ARE BOGUS. THE BURDEN CAST ON THE DEPARTMENT IS VERY H IGH WHICH IS REQUIRED TO BE DISCHARGED CONCLUSIVELY IN THIS CASE ; THERE IS NO SUCH EVIDENCE. THE ASSESSEE HAS PURCHASED SHARES FROM M S. THESE PURCHASES ARE EVIDENCED FROM THE CONTRACT NOTE. TH E PAYMENT WAS MADE BY CHEQUE. THESE SHARES WERE TRANSFERRED IN T HE NAME OF THE ASSESSEE. THE ASSESSEE HELD THESE SHARES FOR MORE THAN ONE YEAR. SHE SOLD THESE SHARES TO J, A MEMBER OF STOCK EXCHA NGE. J IN HIS LETTER HAS CONFIRMED THAT TRANSACTION AND THE PAYME NT WAS MADE THROUGH CHEQUE. THE ASSESSEE HAS PROVIDED ALL THE REQUISITE EVIDENCES IN SUPPORT OF ALL TRANSACTIONS. SIMPLY B ECAUSE J COULD NOT PRODUCE HIS BOOKS OF ACCOUNT OR THE QUOTED RATE OF SHARES IN STOCK EXCHANGE BEING LESS OR THE TRANSACTIONS BEING NOT REPORTED BY J TO THE STOCK EXCHANGE, WOULD NOT MAKE A TRANSACTI ON BOGUS. THE STOCK EXCHANGE HAS INTIMATED THE A.O. THAT THEY ARE ONLY HAVING INFORMATION OF THE TRANSACTIONS BETWEEN TWO MEMBERS OF THE STOCK EXCHANGE AND NOT OTHERWISE. IN THE PRESENT CASE, T HE TRANSACTION WAS BETWEEN A MEMBER AND A NON-MEMBER AND THEREFORE , SUCH TRANSACTIONS WERE NOT REPORTED IN THE STOCK EXCHANG E. FURTHER, THE CREDIT IN THE BANK ACCOUNT OF J IS BY CLEARANCE. T HEREFORE, THE ALLEGATION OF THE A.O. THAT THE AMOUNT WAS DEPOSITE D IN CASH HAS NO BASIS. THE ASSESSEE HAS ACCEPTED HAVING INVESTED H ER FUNDS ON THE ADVICE OF HER FATHER-IN-LAW. THE BURDEN OF PROVING A TRANSACTION IS ALWAYS ON THE PERSON ASSERTING IT TO BE BOGUS AND T HIS BURDEN HAS TO BE STRICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE O F A CHARACTER, WHICH WOULD EITHER DIRECTLY PROVE THE FACT OF BOGUS NESS OR ESTABLISH CIRCUMSTANCES UNERRINGLY AND REASONABLY R AISING AN INFERENCE TO THAT EFFECT. THE ASSESSEE MADE PAYMEN T FOR THE PURCHASE FROM HER OWN SOURCES THROUGH BANKING CHANN EL. THE SHARES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE AND WERE HELD BY HER FOR MORE THAN ONE YEAR. THERE IS NO RELATIO NSHIP BETWEEN THE PARTY FROM WHOM THE ASSESSEE PURCHASED THE SHAR ES AND THE PARTY TO WHOM THESE WERE SOLD. THE SHARES WERE DEL IVERED AFTER ITS 18 SALE AND THE ASSESSEE DID NOT REMAIN IN POSSESSION OF THOSE SHARES. FROM THE ABOVE FACTS, IT IS ESTABLISHED THAT THE AS SESSEE ACQUIRED THE SHARES TO EARN PROFIT. THERE IS NO EVIDENCE EX CEPT SPECULATION THAT THIS PROFIT IS NOT FROM THE SALE OF SHARES. T HE A.O. HAS FAILED TO ESTABLISH HIS CASE AND TO DISCHARGE THE REQUISIT E BURDEN CAST ON HIM. THE AUTHORISED REPRESENTATIVE HAS FILED THE R EQUISITE QUOTATION OF 18 TH JULY, 1996 ALONG WITH THE REQUISITE PROOF OF TRANSACTIONS OF 9000 SHARES ALONG WITH TRANSFER OF SHARE CERTIFICATE. THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS CORRECTLY COME TO THE CONCLUSION THAT TH E ASSESSEE HAS DEALT IN THESE SHARES AND THESE TRANSACTIONS CANNOT BE HELD BOGUS. THE DELETION OF ADDITION OF RS.4,99,062/- IS CONFIR MED. (13) THE ABOVE DECISION CLEARLY HELPS THE CASE OF T HE ASSESSEE. (14) CREDENCE CANNOT BE GIVEN TO THE STATEMENTS OF THE PERSONS WHO THEMSELVES ADMIT AND HAVE DUBIOUS DEALINGS AS AGAIN ST THE DOCUMENTARY EVIDENCES PRODUCED BY THE ASSESSEE. (15) MOREOVER, WHEN PURCHASES HAVE NOT BEEN DOUBTED OR DISPUTED BY THE REVENUE IN THIS CASE, THE DECISION OF HONBLE P UNJAB & HARYANA COURT RELIED BY LEARNED A.R. IN THE CASE OF CIT VS. ANUPA M KAPOOR REPORTED IN (2008) 299 ITR 179 (P&H) IS VERY MUCH RELEVANT. TH E HELD PORTION OF THIS DECISION IS EXTRACTED HEREIN BELOW :- HELD, DISMISSING THE APPEALS, THAT THERE WAS NO MA TERIAL BEFORE THE ASSESSING OFFICER WHICH COULD HAVE LED T O A CONCLUSION THAT THE TRANSACTION WAS A DEVICE TO CAMOUFLAGE ACT IVITIES TO DEFRAUD THE REVENUE. NO SUCH PRESUMPTION COULD BE DRAWN BY THE ASSESSING OFFICER MERELY ON SURMISES AND CONJECTURE S. THE TRIBUNAL TOOK INTO CONSIDERATION THAT IT WAS ONLY O N THE BASIS OF A PRESUMPTION THAT THE ASSESSING OFFICER CONCLUDED TH AT THE ASSESSEE HAD PAID CASH AND PURCHASED THE CHEQUE. IN THE ABS ENCE OF ANY COGENT MATERIAL IN THIS REGARD, HAVING BEEN PLACED ON RECORD, THE ASSESSING OFFICER COULD NOT HAVE REOPENED THE ASSES SMENT. THE ASSESSEE HAD MADE AN INVESTMENT IN A COMPANY, EVIDE NCE WHEREOF WAS WITH THE ASSESSING OFFICER. THEREFORE, THE ASS ESSING OFFICER COULD NOT HAVE ADDED THE INCOME, WHICH WAS RIGHTLY DELETED BY THE COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL (16) THUS, THE SUM TOTAL OF THE FOREGOING DISCUSSIO NS GO TO, CUMULATIVELY, ESTABLISH THAT THE ASSESSEE HAS BEEN SUCCESSFUL IN PROVING THE LONG TERM CAPITAL GAIN EARNED BY HIM IN THIS CASE. HE HAS ALSO ESTABLISHED THAT HE IS EXEMPT FROM TAX QUA LONG TERM CAPITAL GA INS AS HAS BEEN CLAIMED. 19 11. IN MY OPINION, THIS CASE IS EQUALLY APPLICABLE IN THE CASE OF THE ASSESSEE. IN THE CASE OF THE ASSESSEE, PURCHASE OF THE SHARES HAS DULY BEEN PROVED AND THERE IS NO DISPUTE ON THE PURCHASE OF THE SHARES BEING M ADE BY THE ASSESSEE. THE SHARES WERE PURCHASED IN EARLIER YEAR. THE SHARES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE AS HAS BEEN CONFIRMED BY THE COMPAN Y WHEN ENQUIRED BY THE A.O. THE ASSESSEE HAS SUBMITTED BEFORE THE A.O., COPIES OF THE CONTRACT NOTES, COPIES OF THE SALES BILLS, STATEMENT OF ACCOUNT FROM THE BROK ER, OLD ADDRESS OF THE BROKER, NEW ADDRESS OF THE BROKER. THE IDENTITY OF THE BRO KER IS PROVED. PURCHASES WERE NOT DOUBTED BY THE A.O. THE DEMAND DRAFT FOR THE S ALE CONSIDERATION WAS ISSUED FROM THE ACCOUNT OF M/S. P.K. JAIN & ASSOCIATES I.E . BROKERS. THE MONEY HAS NOT BEEN DEPOSITED IN CASH IN THIS ACCOUNT BUT HAS COME TO THIS ACCOUNT BY WAY OF TRANSFER FROM THE ACCOUNT OF M/S. S.G. FINCAP LIMIT ED. THE LD. A.M. HAS DISTINGUISHED THE DECISION OF ASHOK KUMAR LAVANIA. ON THE BASIS OF THAT, IN ASHOK KUMAR LAVANIAS CASE PURCHASE OF THE SHARES W AS NOT IN DISPUTE. WHILE IN FACT IN ASSESSEES CASE THE PURCHASE OF SHARES IS A LSO NOT IN DISPUTE BUT RATHER THE COMPANY HAS DIRECTLY CONFIRMED TO THE A.O. THE PURC HASE OF THE SHARES BY THE ASSESSEE IN REPLY TO THE NOTICE ISSUED UNDER SECTIO N 133(6). THE LD. A.M. WAS ALSO THE PARTY TO THAT DECISION. I NOTED THAT IN THIS C ASE THE A.O. HAS DOUBTED THE SALE CONSIDERATION BECAUSE THE SHARE PRICE HAS INCREASED TREMENDOUSLY. I NOTED THAT IN THE CASE OF ASHOK KUMAR LAVANIA ALSO THE ASSESSE E HAS PURCHASED THE SHARE @ RS.4/- PER SHARE AND SOLD @ RS.65/- TO 84/- PER SHA RE. IN THAT CASE ALSO THE BROKER HAS NOT ACCEPTED THE TRANSACTION BUT ON THE BASIS OF THE EVIDENCE THE TRIBUNAL HAS ACCEPTED THE TRANSACTION TO BE GENUINE ONE AS THERE WAS NO CORROBORATIVE EVIDENCE TO SUPPORT THE STATEMENT OF THE BROKER. IN THIS CASE, I NOTED THAT THE STATEMENTS OF THE BROKER COULDNT BE GIVEN ANY CREDENCE AS HE HAS STATED DIFFERENTLY VIDE DIFFERENT LETTERS. EARLIER HE DENIED THE TRANSACTION BEING ENTERED INTO. SUBSEQUENTLY HE HAS ACCEPTED THAT HE HAS ISSUED THE DRAFT AFTER RECEIVING THE CASH. AGAIN HE SAID THAT THE CASH WA S ROUTED THROUGH SOME BOGUS ACCOUNT BUT HE ACCEPTED THAT THE DRAFT HAS BEEN MAD E FROM HIS ACCOUNT. SUBSEQUENTLY, AGAIN HE POINTED OUT THAT HE RECEIVED CASH OF RS.9,00,000/- AND RS.5,00,000/- WHILE HE HAS ISSUED DRAFT OF RS.5,99, 500/- AND RS.6,19,508/- RESPECTIVELY. WHAT HAPPENED TO THE BALANCE AMOUNT? NOTHING HAS BEEN BROUGHT ON RECORD OR STATED BY THE BROKER. THE ASSESSEE WA S NOT PROVIDED CROSS- EXAMINATION. THE STATEMENT HAS BEEN RECORDED AT TH E BACK OF THE ASSESSEE. THIS IS A SETTLED LAW THAT NO ADDITION CAN BE SUSTAINED ON THE BASIS OF THE STATEMENT RECORDED AT THE BACK OF THE ASSESSEE AND WITHOUT GI VING OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE PERSON WHO HAS GIVEN THE STATEMENT AT THE BACK OF THE ASSESSEE. I HAVE ALSO GONE THROUGH THE DECISIO N OF DELHI HIGH COURT IN THE CASE OF SMC SHARE BROKERS LIMITED, 288 ITR 345 (DEL HI) AND THAT OF KISHAN CHAND CHELLARAM, 125 ITR 713 (SC) AND THAT OF UMACH ARAN SHAW & BROS., 37 ITR 271 (SC). ALL THOSE DECISIONS LAY DOWN THE PRO POSITION OF THE LAW THAT STATEMENT RECORDED AT THE BACK OF THE ASSESSEE CANN OT BE USED AGAINST THE ASSESSEE UNTIL AND UNLESS THE ASSESSEE HAS BEEN GIV EN THE OPPORTUNITY TO CROSS EXAMINE THE PERSON. LD. D.R. WAS ASKED IN THE OPEN COURT WHETHER ANY OPPORTUNITY FOR CROSS EXAMINATION WAS PROVIDED TO T HE ASSESSEE IN RESPECT OF THE BROKER. THE LD. D.R. EXPRESSED HIS INABILITY AS TH E RECORD DOES NOT SHOW THAT ANY SUCH OPPORTUNITY WAS PROVIDED. IN ALMOST SIMILAR C IRCUMSTANCES, HONBLE 20 CALCUTTA HIGH COURT IN THE CASE OF EASTERN COMMERCI AL ENTERPRISES (210 ITR 103) OBSERVED AS UNDER :- AT THE EARLIER OCCASION HE CLAIMED ALL HIS SALES T O BE GENUINE BUT BEFORE THE ASSESSING OFFICER IN THE CASE OF THE ASS ESSEE, HE DISOWNED THE SALES SPECIFICALLY MADE TO THE ASSESSEE. THIS STAT EMENT CAN AT THE WORST SHOW THAT S IS NOT A TRUSTWORTHY WITNESS AND LITTLE VALUE CAN BE ATTACHED TO WHAT HE STATED EITHER IN HIS AFFIDAVIT OR IN HIS CR OSS EXAMINATION BY THE ASSESSING OFFICER. HIS CONDUCT NEUTRALIZES HIS VAL UE AS A WITNESS. A MAN INDULGED IN DOUBLE SPEAKING CANNOT BE SAID BY ANY M EANS A TRUTHFUL MAN AT ANY STAGE AND NO COURT CAN DECIDE ON WHICH OCCASION HE WAS TRUTHFUL. 12. FURTHER, AS NOTED, THE STATEMENT WAS RECORDED B Y THE DDI, INVESTIGATION WING, AGRA AND NOT BY THE ASSESSING OFFICER HIMSELF . THUS, THE TRUTHFULNESS OF THE STATEMENT REMAINED UNTESTED BY THE ASSESSING OFFICE R. ITAT, DELHI IN THE CASE OF RAJEEV AGARWAL (139 TAXMAN 170 (MAG.)) HAS OBSERVED AS UNDER :- THE MERE RELIANCE ON THE STATEMENT OF THIRD PARTIE S WHO WERE NEVER EXAMINED BY THE ASSESSING OFFICER HIMSELF CAN NOT BE HELD TO BE SUFFICIENT TO COME TO THE FINDING THAT THE TRANSACT ION WAS NOT GENUINE AND MORE SO WHEN THERE ARE OTHER MATERIAL AND EVIDENCES TO SUPPORT THE TRANSACTION. 13. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMC SHARE BROKERS LTD (288 ITR 345) ALSO OBSERVED AS UNDER :- THERE IS NO DOUBT THAT THE STATEMENT OF MANOJ AGAR WAL HAD EVIDENTIARY VALUE BUT WEIGHT COULD NOT BE GIVEN TO IT IN PROCEEDINGS AGAINST THE ASSESSEE WITHOUT IT BEING TESTED UNDER CROSS-EXAMINATION. IN THE ABSENCE OF STATEMENT BEING TESTED, IT CANNOT BE SAID THAT IT SHOULD BE BELIEVED COMPLETELY TO THE PREJUDICE OF ASSESSEE. 14. UNDER THESE FACTS, I AM OF THE OPINION THAT THE CASE OF THE ASSESSEE IS DULY COVERED BY THE DIVISION BENCH OF THIS TRIBUNAL IN T HE CASE OF ASHOK KUMAR LAVANIA IN ITA NO.112/AGR/2004 WHICH HAS BEEN DECI DED BY THE BENCH CONSTITUTING OF THE SAME VERY LEARNED MEMBERS. JUD ICIAL DISCIPLINE DEMANDS THAT ON THE SIMILAR FACTS THE BENCH IS BOUND TO FOLLOW I TS EARLIER DECISIONS. THE PRINCIPLES OF JUDICIAL DISCIPLINE REQUIRE THAT THE ORDER OF THE CO-ORDINATE BENCH HAS TO BE FOLLOWED. 15. I HAVE ALSO BEEN NOMINATED AS THIRD MEMBER IN T HE CASE OF SHRI BAIJNATH AGARWAL, ITA NO.133/AGR/2005 WHICH ALSO I DISPOSED OF WITH MY ORDER OF EVEN DATE. IN THAT CASE ALSO I HAVE HELD THAT THE ASSES SEES CASE IS DULY COVERED BY THE 21 DECISION OF THE DIVISION BENCH IN THE CASE OF SHRI ASHOK KUMAR LAVANIA IN ITA NO.112/AGR/2004. 16. I ALSO NOTED FROM THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A) THAT WHILE SCRUTINIZING THE EVIDENCE FILED BY THE ASSESS EE AND FRAMING THE ORDER, THEIR MINDS WERE INFLUENCED WITH THE OTHER CONSIDERATION THAT THE VALUE OF THE SHARES HAS TREMENDOUSLY INCREASED WHICH WAS ABNORMAL AND I NDICATES THAT THE ENTIRE TRANSACTION IS MANAGED ONE. THE PRICES HAVE INCREA SED IN 15 TO 16 MONTHS BY 16 TIMES. ALTHOUGH THE RATE OF RS.72/- WAS QUOTED ON 28.11.2000 IN M.P. STOCK EXCHANGE IS APPARENT FROM PAGE 11, PARA (III) OF TH E ASSESSMENT ORDER. IT WAS FURTHER OBSERVED THAT IN SUCH A SHORT PERIOD, SHARE OF NO OTHER REPUTED COMPANY HAS INCREASED SO MUCH AND THE SHARE MARKET HAS ALSO NOT SHOWN SUCH A RISE. IN MY OPINION, THE SHARE MARKET IS QUITE VOLATILE AND PRICES DO FLUCTUATE ABNORMALLY. IT IS SEEN THAT THE SHARES DEALT BY THE ASSESSEE WE RE QUOTED AT M.P. STOCK EXCHANGE AT ALMOST SIMILAR RATES AT WHICH THEY WERE SOLD. THE ASSESSEE IS ONLY A SMALL SHAREHOLDER OF THE COMPANY. HE IS NOT THE DI RECTOR OF THE COMPANY OR OF THE STOCK EXCHANGE. UNDER THESE CIRCUMSTANCES HOW HE C AN MANIPULATE THE PRICES IS BEYOND ONES COMPREHENSION. IT IS PERTINENT THAT T HE ISSUE OF ABNORMAL INCREASE IN PRICES OF THE SHARES HAS COME UP FOR CONSIDERATI ON BEFORE THE ITAT, AGRA BENCH IN THE CASES OF SMT. MEMO DEVI (ITA NO.396/AG /2004 REPORTED AS 7 DTR 158) WHEREIN THE CO-ORDINATE BENCH OBSERVED AS UNDE R :- THE ASSESSEE HAS NO RELATION WITH THE DIRECTORS OF THE COMPANY AND WAS IN NO WAY IN THE CAPACITY TO AFFECT THE MAR KET PRICE OF SHARES. THE INCREASE IN SHARE PRICES BY MORE THAN 25 TIMES TOO CANNOT BE THE BASIS TO ASSUME THAT THE TRANSACTION WAS BOGUS. ABNORMAL FL UCTUATION IN SHARE PRICES IS A NORMAL PHENOMENA THE LEARNED COUNSEL FOR THE ASSESSEE FILED A CHART SHOWING LOW AND HIGH PRICES OF SOME QUOTED SH ARES DURING THE 52 WEEKS AS PER ECONOMIC TIMES DATED 27.02.2007 FROM W HICH IT CAN BE SEEN THAT SOME SHARES INCREASED EVEN BY MORE THAN 100 TI MES. 17. IN ALMOST SIMILAR CIRCUMSTANCES THE HONBLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ANUPAM KAPOOR (299 ITR 179) HAS ALSO OBSERVED AS UNDER :- THE TRIBUNAL WAS RIGHT IN REJECTING THE APPEAL OF THE REVENUE BY HOLDING THAT THE ASSESSEE WAS SIMPLY A SHAREHOLDER OF THE COMPANY. HE HAD MADE THE INVESTMENT IN A COMPANY IN WHICH HE WA S NEITHER A DIRECTOR NOR WAS HE IN CONTROL OF THE COMPANY. THE ASSESSEE HAD TAKEN SHARES FROM THE MARKET, THE SHARES WERE LISTED AND THE TRANSACT ION TOOK PLACE THROUGH A REGISTERED BROKER OF THE STOCK EXCHANGE. THERE WAS NO MATERIAL BEFORE THE AO, WHICH COULD HAVE LEAD TO A CONCLUSION THAT THE TRANSACTION WAS SIMPLICITER A DEVICE TO CAMOUFLAGE ACTIVITIES TO DE FRAUD THE REVENUE. NO SUCH PRESUMPTION COULD BE DRAWN BY THE AO, MERELY O N SURMISES AND CONJECTURES. 22 18. IN THE STOCK EXCHANGE WHEN THE TRANSACTION IS E NTERED INTO, THE ASSESSEE IS NOT AWARE OF ABOUT THE BUYER OF THE SHARES. HE ENT ERS INTO TRANSACTION ONLY THROUGH A SHARE BROKER. THEREFORE, THE OBSERVATION OF THE A.O. THAT THE ASSESSEE COULD NOT IDENTIFY THE BUYER CANNOT BE THE BASIS OF REGARDING THE TRANSACTION TO BE NON-GENUINE ONE. I ALSO NOTED THAT THE A.O. HAS BE EN INFLUENCED WITH THE FACT THAT THE ASSESSEE HAS DELIVERED THE BLANK TRANSFER SHARE CERTIFICATES TO THE BROKER WHEN THE DELIVERY OF THE SHARES WERE GIVEN. SINCE THE D EAL HAS TO TAKE PLACE BETWEEN THE BROKERS, THE ASSESSEE HAS TO GIVE ONLY BLANK TR ANSFER SHARE CERTIFICATE TO THE BROKER WITHOUT MENTIONING THE NAME OF THE BUYER. T HERE IS NOTHING WRONG IN MY OPINION AND THIS IS A USUAL PRACTICE IN THE BUSINES S. FROM THE ENTIRE APPRECIATION OF THE EVIDENCE, I NOTED THAT THE ASSESSEE HAD ACQU IRED THE SHARES, THE PURCHASE MADE ON 15.07.1999 WAS DULY DECLARED BY THE ASSESSE E IN EARLIER YEARS WHICH STAND ACCEPTED BY THE REVENUE. THE SHARES WERE SOL D THROUGH STOCK BROKERS WHO WERE REGISTERED WITH THE STOCK EXCHANGE. SHARES WE RE SOLD AT THE PRICES QUOTED AT THE STOCK EXCHANGE AT THE RELEVANT TIME. THE PA YMENT OF SALE CONSIDERATION ALSO FLOWN FROM THE BANK ACCOUNT OF THE BROKER WHER E THE FUND CAME THROUGH CLEARING, NOT IN CASH. THE DECISION OF THE LOWER A UTHORITIES ARE INFLUENCED BY THE GENERAL OBSERVATION OF THE INVESTIGATION WING THA T AROSE A SUSPICION TURNED INTO CONCLUSIVE PROOF IN THE MINDS OF THE AUTHORITIES TH AT EVERYBODY WHO HAS SOLD THE SHARES AT A HIGH PRICE HAS CONVERTED HIS UNACCOUNTE D MONEY THROUGH ACCOMMODATION ENTRIES. THIS APPROACH DOES NOT HAVE ANY LEG TO STAND. HONBLE SUPREME COURT IN THE CASE OF UMACHARAN SHAW & BROS VS. CIT, 37 ITR 271 (SC) HAS CLEARLY LAID DOWN THAT SUSPICION HOWSOEVER STRO NG CANNOT TAKE PLACE OF PROOF. FROM THE ENTIRE APPRECIATION OF EVIDENCE, I NOTED T HAT ASSESSING OFFICER HAS FAILED TO ESTABLISH THAT THE ASSESSEE HAS INTRODUCED HIS O WN UNACCOUNTED MONEY IN THE SHAPE OF ALLEGED SALE PROCEEDS OF SHARES. HONBLE SUPREME COURT IN THE CASE OF KISHAN CHAND CHELLARAM VS. CIT REPORTED IN 125 ITR 713 (SC) HAS OBSERVED THAT THE AMOUNT CANNOT BE ASSESSED AS UNDISCLOSED INCOM E OF ASSESSEE IN THE ABSENCE OF POSITIVE MATERIAL BROUGHT BY THE REVENUE TO PROV E THAT THE AMOUNT IN FACT BELONGED TO ASSESSEE AS THE BURDEN LAY ON THE REVEN UE. 19. IN ALMOST SIMILAR CIRCUMSTANCES THE ITAT, DELHI C BENCH IN THE CASE OF ITO VS. NAVEEN GUPTA (5 SOT 94), COPY OF WHICH IS P LACED BY LD. A.R., HAS OBSERVED AS UNDER :- NEVERTHELESS, IT IS ALSO NOTEWORTHY THAT THE A.O. HAS FAILED TO ESTABLISH THAT IN LIEU OF THE AFORESAID SALE PROCEE DS, THE ASSESSEE HAS SURREPTITIOUSLY INTRODUCED HIS UNACCOUNTED MONEY IN THE BANK ACCOUNT. AFTER HAVING PERUSED THE ENTIRE MATERIAL THAT IS AV AILABLE ON RECORD, THERE IS NO AVERMENT, MUCH LESS ANY EVIDENCE, WITH THE REVEN UE IN THIS REGARD. WHILE THERE MAY BE ENOUGH GROUNDS WITH THE AO TO CA RRY OUT THE IMPUGNED VERIFICATION EXERCISE TO TEST THE EFFICACY OF THE TRANSACTIONS RESULTING IN LONG TERM MATERIAL GAINS IN THE HAND O F THE ASSESSEE BUT THERE IS NO COGENT MATERIAL OR EVIDENCE TO INDICATE THAT THE IMPUGNED SALE PROCEEDS REFLECTED UNACCOUNTED INCOME OF THE ASSESS EE. 23 20. IT WAS THE DUTY OF THE A.O. TO BRING ON RECORD SUFFICIENT EVIDENCES AND MATERIAL TO PROVE THAT THE DOCUMENTS FILED BY THE A SSESSEE WERE BOGUS, FALSE OR FABRICATED AND THE LONG TERM CAPITAL GAIN SHOWN BY HIM WAS ACTUALLY HIS INCOME FROM UNDISCLOSED SOURCES. THE ONLY MATERIAL TO SUP PORT SUCH CONCLUSION OF THE LOWER AUTHORITIES IS EITHER THE FINDINGS OF THE DDI IN GENERAL INVESTIGATIONS OR THE TWISTING STATEMENTS OF M/S P.K. JAIN & ASSOCIATES W HICH REMAIN UNTESTED BY THE A.O. HIMSELF. NONE OF THE JUDICIAL PRECEDENT SUPPO RTS THE CASE OF THE REVENUE. WHILE MAKING ADDITION AS INCOME FROM UNDISCLOSED SO URCES BURDEN ON THE DEPARTMENT IS VERY HEAVY TO ESTABLISH THAT THE ALLE GED RECEIPT WAS ACTUALLY INCOME OF THE ASSESSEE FROM THE UNDISCLOSED SOURCES. JODH PUR BENCH OF THE ITAT IN THE CASE OF ITO VS. SMT. KUSUMLATA (REPORTED IN 105 TTJ 265), COPY OF WHICH IS PLACED IN THE COMPILATION OF THE ASSESSEE, HELD AS UNDER :- 10. FOR MAKING ADDITION UNDER S.69 OF THE ACT, THE DEPARTMENT IS REQUIRED TO PROVE TO THE HILT THAT THE IMPUGNED TRA NSACTIONS ARE BOGUS. THE BURDEN CAST ON THE DEPARTMENT UNDER S.69C (SIC-69) OF THE ACT IS VERY HIGH WHICH IS REQUIRED TO BE DISCHARGED CONCLUSIVELY IN THIS CASE; THERE IS NO SUCH EVIDENCE. THE ASSESSEE HAS PURCHASED SHARES F ROM M/S MAHESHWARI SONS. THESE PURCHASES ARE EVIDENCED FROM THE CONTR ACT NOTE. THE PAYMENT WAS MADE BY CHEQUE. THESE SHARES WERE TRAN SFERRED IN THE NAME OF THE ASSESSEE. THE ASSESSEE HELD THESE SHARES FO R MORE THAN ONE YEAR. SHE SOLD THESE SHARES TO THE MEMBER OF STOCK EXCHAN GE SHRI J.K. JAIN. SHRI J.K. JAIN IN HIS LETTER DT. 22 ND DEC., 1999 HAS CONFIRMED THE TRANSACTION AND THE PAYMENT WAS MADE THROUGH CHEQUE. THE ASSES SEE HAS PROVIDED ALL THE REQUISITE EVIDENCES IN SUPPORT OF ALL TRANSACTI ONS. SIMPLY BECAUSE SHRI J.K. JAIN COULD NOT PRODUCE HIS BOOKS OF ACCOUNT OR THE QUOTED RATE OF SHARES IN DELHI STOCK EXCHANGE BEING LESS OR THE TR ANSACTIONS BEING NOT REPORTED BY SHRI J.K. JAIN TO THE STOCK EXCHANGE WO ULD NOT MAKE A TRANSACTION BOGUS. THE JAIPUR STOCK EXCHANGE HAS I NTIMATED THE AO THAT THEY ARE ONLY HAVING INFORMATION OF THE TRANSACTION S BETWEEN TWO MEMBERS OF THE STOCK EXCHANGE AND NOT OTHERWISE. IN THE PR ESENT CASE, THE TRANSACTION WAS BETWEEN A MEMBER AND A NON-MEMBER A ND THEREFORE, SUCH TRANSACTIONS WERE NOT REPORTED IN THE STOCK EXCHANG E. FURTHER, THE CREDIT IN THE BANK ACCOUNT OF SHRI J.K. JAIN IS BY CLEARANCE. THEREFORE, THE ALLEGATION OF THE AO THAT THE AMOUNT WAS DEPOSITED IN CASH HAS NO BASIS. THE ASSESSEE HAS ACCEPTED HAVING INVESTED HER FUNDS ON THE ADVICE OF HER FATHER-IN-LAW. THE BURDEN OF PROVING A TRANSACTION IS ALWAYS ON THE PERSON ASSERTING IT TO BE BOGUS AND THIS BURDEN HAS TO BE STRICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE OF A CHARACTER WHICH WOULD EITHER DIRECTLY PROVE THE FACT OF BOGUSNESS OR ESTABLISH CIRCUMSTANCES UN ERRINGLY AND REASONABLY RAISING AN INFERENCE TO THAT EFFECT. 21. I HAVE ALSO GONE THROUGH VARIOUS OTHER DECISION S ON SIMILAR ISSUE UNDER THE SIMILAR FACTS AND I NOTED THAT THIS TRIBUNAL HA D CONSISTENTLY ACCEPTED THE GENUINENESS OF THE SHARE TRANSACTION. THOSE CASES ARE AS UNDER :- ITO VS. SUNITA GUPTA - ITA NO.881/DEL/2004 (DELHI B ENCH SMC) 24 DILIP GARGH VS. ITO ITA NO.470/AGR/2004 GOPAL PRASAD AGARWAL VS. ACIT ITA NO.128/AGR/2004 22. I ALSO NOTED THAT THE CASE OF THE ASSESSEE IS D ULY COVERED BY THE DECISION OF THE THIRD MEMBER IN THE CASE OF SMT. SUNITA OBEROI VS. ITO (AGRA) (TM) ITA NO.273/AGR/2004 A.Y. 1995-96 DATED 07.08.2009, 30 D TR (AGRA) (TM) (TRIB.) 474 IN WHICH ON DIFFERENCE OF OPINION ON THE QUESTI ON UNDER THE SIMILAR CIRCUMSTANCES WHETHER THE ASSESSEE CAN BE SAID TO H AVE DISCHARGED HER BURDEN TO PROVE THE GENUINENESS OF THE TRANSACTION IN SHARES OF M/S. PRASIDH EXPORTS LIMITED AND M/S. K.L.P. FINANCE LIMITED OR THAT THE BURDEN HAD SHIFTED ON THE REVENUE THAT CAN BE HELD TO HAVE NOT DISCHARGED BY THEM, THE DECISION TO UPHOLD ACCEPTING OF ALLEGED PROFIT ON ALLEGED SHARE OF M/S . PRASIDH EXPORTS LIMITED AND M/S. K.L.P. FINANCE LIMITED AS INCOME FROM OTHER SO URCES INSTEAD OF ASSESSEE HAS CLAIMED THE CAPITAL GAIN IS A CORRECT DECISION OR N OT. THE HONBLE THIRD MEMBER HAS HELD AS UNDER :- THE ONLY REASON TO MAKE THE ADDITION IS THAT CONFI RMATION FROM THE SHARE BROKERS COULD NOT BE FILED BY THE ASSESSE E AND SUMMONS ISSUED TO THE SAID PERSONS WERE NOT SERVED AND RETURNED UNSER VED AND THE NAMES AND ADDRESSES OF THE BUYER TO WHOM THE ULTIMATELY SHARE S WERE SOLD THROUGH THE BROKER WERE NOT KNOWN TO THE ASSESSEE. THE ASS ESSEE WAS NOT IN A POSITION TO COMPEL THE SHARE BROKER FOR CONFIRMING THE TRANSACTION, SHE BEING NEITHER A DIRECTOR NOR HAVING LARGE SCALE DEA LINGS WITH THE BROKERS OVER THE YEARS SO AS TO SHOW THAT SHE WAS PERSONALL Y IN A POSITION TO COMPEL THEM ON ACCOUNT OF THE MAGNITUDE OF TRANSACT ION DONE THROUGH THEM. IT WAS HER FATHER WHO KNEW THE BROKERS AND S HE ACTED ON HIS ADVICE AND HAD NO CONTACT THEREAFTER. THE REASONING THAT SUMMONS ISSUED TO THE PARTIES CAME BACK UNSERVED CANNOT BY ITSELF BE HELD AGAINST THE ASSESSEE AS WHETHER THE SHARE BROKER CONTINUES THE BUSINESS OR DISCONTINUES THE SAME OR CHANGED THE ADDRESSES OR FOR THAT MATTER THE COM PANIES WHOSE SHARES WERE PURCHASED AND SOLD CHANGED THEIR PREMISES OR N AMES AS CHANGED BY VIRTUE OF BEING ACQUIRED BY SOME OTHER COMPANY THE ASSESSEE CANNOT BE HELD LIABLE TO STAY IN TOUCH FOR ALL TIMES TO COME. SIMILARLY, NO REASONS ARE THERE TO SHOW THAT SHRI PRAVEEN MITTAL WAS EVER IN A POSITION TO DECLARE THE TRANSACTIONS OF AN ACQUAINTANCE BROKER AS BOGUS TRA NSACTIONS NEITHER ANY EVIDENCE HAS BEEN LED NOR REASONS ADVANCED TO SUPPO RT HOW HE COULD BE CONSIDERED TO BE A RELIABLE PERSON SO AS TO IGNORE THE EVIDENCES AVAILABLE ON RECORD I.E. CONTRACT NOTES OF SALE AND OF THE SP ECIFIC SHARES OF SPECIFIC RATES ON SPECIFIC DATES. SHRI PRAVEEN MITTAL WAS T HE WITNESS OF THE DEPARTMENT, THE ONUS WAS THEREFORE ON THE DEPARTMEN T TO PRODUCE HIM AND MAKE HIM AVAILABLE FOR CROSS-EXAMINATION BY THE ASS ESSEE. SIMILARLY, THE EVIDENCE THAT THE COMPANIES WERE NOT IN EXISTENCE A T THE ADDRESS AVAILABLE WITH THE DEPARTMENT DOES NOT DETRACT FROM THE ASSES SEES CLAIM IN VIEW OF THE DOCUMENTS AVAILABLE ON RECORD. THE DISCREPANCY IN THE AMOUNTS TO THE EXPENDITURE OF RS.53,356 WAS BECAUSE OF CONSISTENT STATEMENT BY THE ASSESSEE THAT THE SHARE BROKER MADE A SHORT PAYMENT AND DISPUTED THE 25 REMAINING AMOUNT. THE DEPARTMENT HAS THUS PROCEEDE D ENTIRELY ON SUSPICION AND SURMISES IF SEEN IN THE LIGHT OF THE ORDERS OF THE TRIBUNAL. THE CLAIM OF THE ASSESSEE IN REGARD TO THE FIRST IS SUE IS TO BE ALLOWED. 23. THUS, IN VIEW OF THE AFORESAID DISCUSSIONS, THE DECISIONS OF THE THIRD MEMBER, THE DECISIONS OF THE COORDINATE BENCHES, TO TALITY OF THE FACTS AND CIRCUMSTANCES AND EVIDENCE ON RECORD, I AM OF THE C ONSIDERED VIEW THAT THE ACTION OF THE CIT(A) WAS NOT CORRECT IN CONFIRMING THE ASS ESSMENT OF RS.12,19,538/- AS THE INCOME FROM UNDISCLOSED SOURCES AS AGAINST THE SALE CONSIDERATION OF SHARES DECLARED BY THE ASSESSEE. THE CIT(A) WAS NOT JUSTI FIED IN REJECTING THE CLAIM OF LONG TERM CAPITAL GAIN OF THE ASSESSEE FROM SALE OF SHARES. I ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ASSESS THE INCOME DECLARED FROM THE SALE OF SHARES UNDER THE HEAD INCOME FROM LONG TERM CAPITAL GAIN. THUS, THE GROUNDS NO.1 & 2 OF ASSESSEES APPEAL SHOULD BE ALLOWED. GROUND NO.3 O F ASSESSEES APPEAL IS CONSEQUENTIAL IN NATURE, DOES NOT REQUIRE ANY ADJUD ICATION. SO FAR THE GROUND NO.1 OF REVENUES APPEAL IS CONCERNED, THE SAME SHO ULD STAND DISMISSED AS INFRUCTUOUS IN VIEW OF MY DECISION ON GROUNDS NO.1 & 2 OF ASSESSEES APPEAL. GROUND NO.2 IN REVENUES APPEAL IS ALSO CONSEQUENTI AL IN NATURE AND SHOULD STAND DISMISSED. 17. DECISION OF THIRD MEMBER HAS THE SAME SANCTITY AS THAT OF THE SPECIAL BENCH. WE ARE BOUND TO FOLLOW THE SAME. WE, ACCORDINGLY, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS.10,15,726 /- MADE UNDER SECTION 68 OF THE ACT TREATING THE CONSIDERATION RECEIVED ON SALE OF SHARES TO BE THE UNEXPLAINED CASH CREDIT. WE, ACCORDINGLY, DISMISS THE GROUND TAKEN BY THE REVENUE. 18. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF JUNE,2011. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH JUNE, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR