Manish Jain, HUF, Kolkata V. ITO, Ward - 44(3) , Kolkata

ITA 2330/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2978 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-07-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 13-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Assessee Lawyers: A K TIBREWAL
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources; Share purchase agreement; Principle of natural justice; Opportunity of cross examination; Earning of tax free income; Question of law; Third party statement; Accommodation entries; Sham transactions; TDS; Set aside
• Section: 271(1)(c); 143(3); 205; 147; 68; 10

Judgement Text

1 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 , SMC , IN THE INCOME TAX APPELLATE TRIBUNAL SMCC BENCH: KOLKATA ( ) . . , ) [BEFORE SHRI A. T. VARKEY, JM] I.T.A. NO. 2330/KOL/2018 ASSESSMENT YEAR: 2014-15 MANISH JAIN, HUF (PAN: AAIHM3602A) VS. ITO, WARD 44(3), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 01.07.2019 DATE OF PRONOUNCEMENT 21.08.2019 FOR THE APPELLANT SHRI A. K. TIBREWAL & SHRI AMIT A GARWAL, FCA FOR THE RESPONDENT SHRI SANKAR HALDER, JCIT, SR. D R ORDER PER SHRI A.T.VARKEY, JM THIS IS APPEAL PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) 13, KOLKATA DATED 30.08.2018 FOR ASSESSMENT YEAR 2014-15. 2. THOUGH THE ASSESSEE HAS FILED AS MANY AS EIGHT G ROUND OF APPEAL, THE ASSESSEES SOLE GROUND OF APPEAL IS AS TO WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CITA WAS JUSTIFIED IN UPHOLDING THE ADDITION MADE BY TH E AO U/S 68 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) IN RESPECT O F SALE PROCEEDS OF SHARES OF KAILASH AUTO FINANCE LIMITED (KAFL) TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES AFTER REJECTING THE ASSESSEES CLAIM OF LONG TERM CAPITAL GAINS (LTCG) U/S. 10(38) OF THE ACT ON SALE OF THOSE SHARES. 3. THE BRIEF FACTS OF THE ISSUE AS HAS BEEN RECORDE D BY THE AO IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE CLAIMED LONG TERM CAPITAL GAI NS FROM SALE OF SHARES OF M/S. KAILASH AUTO FINANCE LIMITED (KAFL) WHICH IS EXEMPT U/S. 10 (38) OF THE ACT. THE AO NOTED THAT THE ASSESSEE HAD SOLD 32000 SHARES OF M/S. KAFL AT A PRICE OF RS.12,46,584/- ON 2 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 19.08.2013. ACCORDING TO AO, THE ASSESSEE FAILED T O SUBMIT THE EVIDENCE REGARDING THE PURCHASE OF THE ABOVE SAID SHARES. THUS, ACCORDING TO AO, THE GENUINITY OF PURCHASE OF SHARE WAS NOT PROVED. HOWEVER, THE AO RELYING ON T HE REPORT OF THE INVESTIGATION WING, KOLKATA AND AN ORDER BY SEBI ALLEGED THAT THE CLAIM OF ASSESSEE OF EXEMPT INCOME (LTCG) WAS BOGUS IN NATURE. THE AO FURTHER ALLEGED THAT T HE TRANSACTIONS IN THE SCRIP OF KAILASH AUTO FINANCE LTD. (KAFL) WERE BEING MANIPULATED BY ENTRY OPERATORS AND THE SHARE PRICES WERE HIKED ARTIFICIALLY TO EARN LTCG. SO, THE AO D ID NOT ACCEPT THE ASSESSEES CLAIM OF LTCG AND EXEMPTION THEREOF CLAIMED BY THE ASSESSEE. THEREAFTER, THE AO TREATED THE SAME AS CASH CREDIT U/S 68 OF THE ACT AND ADDED THE ENTI RE LTCG TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED INCOME. ON FIRST APPEAL, THE LD. CIT(A) DISMISSED THE GROUNDS RAISED BY THE ASSESSEE AGAINST HIS CLAIM OF EXEMPTION U/S 10(38) OF THE ACT AND HE ALSO CONFIRMED THE ADDITIONS MADE BY THE AO UNDER SECTION 68 OF THE AC T. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 4. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE TIME OF HEARING IT WAS BROUGHT TO MY NOTICE BY THE LD. AR THAT THIS TRIBUNAL IN THE FOLLOWING CASES HAVE DECIDED THAT THE SCRIPS OF KAFL ARE NOT BOGUS AND HELD THAT THE LTCG CLAIM OF THE ASSESSEE NEEDS TO BE ALLOWED: I) MANISH KUMAR BAID VS. ACIT, ITA NOS. 1236& 1237/ KOL/2017 DATED 18.08.2017 II) RUKMINI DEVI MANPRIA VS. DCIT, ITA NO.1724/KOL/ 2017 DATED 24.10.2018 III) JAGMOHAN AGARWAL VS. ACIT, ITA NO.604/KOL/2018 DATED 05.09.2018. IT WAS ALSO BROUGHT TO MY NOTICE THAT THE ASSESSEE HAD PURCHASED 32,000 EQUITY SHARES OF PANCHSHUL MARKETING LTD. ON 28.03.201`2 FROM BRIJDH ARA MERCANTILE PVT. LTD. M/S. PANCHSHUL MARKETING LTD. WAS MERGED WITH M/S. KAFL AND THERE WAS CHANGE OF MANAGEMENT AND CONTROL OF M/S. KAFL LTD. PURSUANT T O SCHEME TO ARRANGEMENT SANCTIONED BY THE HONBLE HIGH COURT AT ALLAHABAD. IT WAS FUR THER SUBMITTED THAT THE PURCHASE OF AFORESAID 32,000 EQUITY OF M/S. PANCHSHUL MARKETING LTD. WAS MADE BY ACCOUNT PAYEE CHEQUE OF ICICI BANK, VIDE CHEQUE NO. 945840. IT W AS ALSO SUBMITTED THAT SHARES OF M/S. KAFL WERE ALLOTTED TO THE ASSESSEE UPON MERGER OF M/S. PANCHSHUL MARKETING LTD. WITH M/S. KAFL PURSUANT TO SANCTION OF SCHEME OF ARRANG EMENT BY THE HONBLE ALLAHABAD HIGH 3 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 COURT AND 32000 EQUITY SHARES WERE ALLOTTED TO THE ASSESSEE IN LIEU OF SHAREHOLDING IN PANCHSHUL MARKETING LTD. IT WAS ALSO BROUGHT TO MY NOTICE BY THE LD. AR THAT AO WAS INFLUENCED BY AN INTERIM ORDER OF SEBI DATED 29.03. 2016, WHICH THE SEBI HAS WITHDRAWN BY LATER ORDER DATED 21.09.2017 BY VIRTUE OF IT ALL TH E RESTRICTIONS IMPOSED UPON BY THE EARLIER ORDER DATED 29.03.2016 HAS BEEN WITHDRAWN, SINCE SE BI COULD NOT FIND ANY INFIRMITY IN THE SCRIPS OF M/S. KAFL. SO HE PLEADED THAT THE CLAIM OF ASSESSEE FOR LTCG SHOULD BE ALLOWED. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE V EHEMENTLY OPPOSED THE CONTENTIONS OF THE ASSESSEE AND TOOK US THROUGH THE AOS ORDER AND LD. CIT(A) ORDER AND SUBMITTED THAT SCRIPS OF M/S. KAFL WAS ARTIFICIALLY RIGGED TO PROV IDE LTCG TO THE ASSESSEE WHICH CANNOT BE ALLOWED AND SUPPORTED THE IMPUGNED ORDER AND REL IED ON THE ORDER OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BINOD CHAND JAIN IN TAX A PPEAL NO.18 OF 2017 DOES NOT WANT ME TO INTERFERE. HE ALSO CONTENTED THAT IN THIS CASE P URCHASE OF THE STOCK OF PANCHSHUL MARKETING LTD. WAS NOT AN INVESTMENT DECISION. ASSE SSEE NEVER CAME OUT WITH ANY EXPLANATION AS TO WHY HE CHOOSE TO PURCHASE THIS CO MPANY'S SHARE IN LARGE NUMBER AND AT A TIME INVOLVING SUBSTANTIAL AMOUNT, AND HOW THAT COM PANY WAS AN INVESTMENT DESTINATION AND WHY. THE BEHAVIOUR OF THE ASSESSEE WITH SUCH ST OCK FROM THE DECISION OF IT'S PURCHASE AND THE SEQUENCE OF EVENTS THAT FOLLOWED TILL ITS S ALE CLEARLY SHOWS THAT IT WAS NOT AN INVESTMENT DECISION. RATHER, ASSESSEE'S BEHAVIOUR S HOWS THAT SUCH TRANSACTION WAS ENTERED INTO WITH A PRE-PLANNED AND PRE-ARRANGED MANNER WHE RE ASSESSEE WAS OVER CONFIDENT ABOUT MAKING HUGE GAIN FOR CERTAIN REASON WHICH ASSESSEE NEVER DISCLOSED. THE FANTASTIC RATE OF RETURN FROM SUCH TRANSACTION WITHIN THE SHORTEST PE RIOD OF TIME TO ENSURE THE GAIN AS LTCG WAS JUST UNBELIEVABLE, AND SAME THING HARDLY HAPPEN S IN REALITY ON A SINGLE ATTEMPT. SO THAT WAS BEYOND OF ANY HUMAN LOGIC AND POSSIBILITY AND F OR THE. HE ALSO CONTENDED THAT IN THE INSTANT CASE, THE BEHAVIOUR OF THE ASSESSEE REGARDI NG PURCHASE OF THIS STOCK FOUND TO BE A DUBIOUS. IT APPEARS THAT THE DECISION OF SUCH PURCH ASE WAS TRIGGERED BY CERTAIN INFORMATION IN THE POSSESSION OF THE ASSESSEE, OR SOME ARRANGEM ENT AND ASSESSEE JUST EXPLOITED SUCH SITUATION FOR MAKING HUGE GAIN. SO, THE INCOME ARIS ING OUT OF SUCH ACTION SHOULD BE CONSIDERED AS PROFIT OUT OF 'AN ADVENTURE IN THE NA TURE OF TRADE' AND NOT FROM AN INVESTMENT. THEREFORE, IT IS SUBMITTED THAT, IF THE APPEAL OF T HE ASSESSEE IS UPHELD BY THE HON'BLE BENCH 4 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 FOR ANY REASON, THIS ALTERNATIVE GROUND IS PUT UP F OR FAVOUR OF YOUR CONSIDERATION. THE AO CONSIDERED THE TRANSACTION AS BOGUS AND ADDED THE E NTIRE LTCG INCOME U/S 68, SO THERE WAS NO OCCASION AT THAT TIME TO TAKE AN ALTERNATE GROUN D FOR ADDITION. IN VIEW OF THAT, SUCH TRANSACTION AT BEST MAY BE CONSIDERED AS AN 'ADVENT URE IN THE NATURE OF TRADE'. ACCORDING TO HIM, IN THE CASE OF SANJAY BIMALCHAND JAIN[2018] 89 TAXMANN.COM 196 (BOMBAY), THE ASSESSEE PURCHASED LARGE NUMBER OF SHARES OF TWO PE NNY STOCK COMPANIES AT A NOMINAL RATE IN LARGE QUANTITY WHICH ASSESSEE CLAIMED AS AN INVE STMENT. CONSIDERING THE CIRCUMSTANCES OF THAT CASE THE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AND HELD THAT THE TRANSACTION WITH A PENNY STOCK OF AN INSIGNIFICANT COMPANY, ITS SUBSEQUENT THE MERGER WITH A NEW COMPANY, AND ULTIMATE SALE OF THE SHARES OF THE NEW COMPANY AT SUCH AN HIGHER PROFIT WITHIN A SHORT PERIOD OF TIME FALLS IN THE AMBIT OF AN ADVENTURE IN THE NATURE OF TRADE, AND SO, AO BROUGHT THE AFORESAID AMOUNT TO TAX UNDER THE HE AD 'BUSINESS INCOME'. ON APPEAL, THE COMMISSIONER (APPEALS), AS WELL AS, THE HON'BLE TRI BUNAL UPHELD THE DECISION OF THE ASSESSING OFFICER. IN VIEW OF THE ABOVE, IT IS SUBM ITTED THAT ASSESSEE'S DEALING WITH THIS STOCK MAY BE CONSIDERED AS 'AN ADVENTURE IN THE NAT URE OF TRADE' AND SO, PROFIT DERIVES FROM SUCH ACTIVITY MAY KINDLY BE CONSIDERED AS INCOME FR OM BUSINESS OR OTHER SOURCES. MOREOVER, THE LD. DR HAS RELIED ON 23 CASE LAWS IN FAVOUR OF REVENUE WHICH I WILL DISCUSS INFRA. 6. I NOTE THAT SIMILAR ISSUE AROSE IN MANISH KUMAR BA ID, (SUPRA) WHEREIN, THE TRIBUNAL ALLOWED THE CLAIM OF ASSESSEE IN RESPECT OF LTCG FR OM SALE OF SCRIPS OF M/S. KAFL HAS HELD AS UNDER: 6. WE HAVE HEARD BOTH THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND LOT OF FORCE IN THE ARGUMENTS OF TH E LD AR THAT THE LD AO WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE ON THE BASIS OF THEORY OF SURROUNDING CIRCUMSTANCES, HUMAN CONDUCT, AND PREPONDERANCE OF PROBABILITY WIT HOUT BRINGING ON RECORD ANY LEGAL EVIDENCE AGAINST THE ASSESSEE. WE RELY ON THE JUDGE MENT OF SPECIAL BENCH OF MUMBAI TRIBUNAL IN THE CASE OF GTC INDUSTRIES LTD. (SUPRA) FOR THIS PROPOSITION. THE VARIOUS FACETS OF THE ARGUMENTS OF THE LD AR SUPRA, WITH REGARD TO IMPLEADING THE ASSESSEE FOR DRAWING ADVERSE INFERENCES WHICH REMAIN UNPROVED BASED ON T HE EVIDENCES AVAILABLE ON RECORD, ARE NOT REITERATED FOR THE SAKE OF BREVITY. THE PRINCIP LES LAID DOWN IN VARIOUS CASE LAWS RELIED UPON BY THE LD AR ARE ALSO NOT REITERATED FOR THE S AKE OF BREVITY. WE FIND THAT THE AMALGAMATION OF CPAL WITH KAFL HAS BEEN APPROVED B Y THE ORDER OF HONBLE HIGH COURT. THE LD AO OUGHT NOT TO HAVE QUESTIONED THE VALIDITY OF THE AMALGAMATION SCHEME APPROVED BY THE HONBLE HIGH COURT IN MAY 2013 MERELY BASED ON A STATEMENT GIVEN BY A THIRD PARTY 5 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 WHICH HAS NOT BEEN SUBJECT TO CROSS EXAMINATION. MOROEVER, IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE AND / OR THE STOCK BROKER ASHITA STOCK BROKING LTD NAME IS NEITHER MENTIONED IN THE SAID STATEMENT AS A PERSON WHO HAD ALLEGEDLY DE ALT WITH SUSPICIOUS TRANSACTIONS NOR THEY HAD BEEN THE BENEFICIARIES OF THE TRANSACTIONS OF S HARES OF KAFL. HENCE WE HOLD THAT THERE IS ABSOLUTELY NO ADVERSE MATERIAL TO IMPLICATE THE ASSESSEE TO THE ENTIRE GAMUT OF UNWARRANTED ALLEGATIONS LEVELED BY THE LD AO AGAINS T THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION, HAS NO LEGS TO STAND IN THE EYES OF LAW. WE FIND THAT THE LD DR COULD NOT CONTROVERT THE AR GUMENTS OF THE LD AR WITH CONTRARY MATERIAL EVIDENCES ON RECORD AND MERELY RELIED ON T HE ORDERS OF THE LOWER AUTHORITIES APART FROM PLACING THE COPY OF SEBIS INTERIM ORDER SUPRA . WE FIND THAT THE SEBIS ORDERS RELIED ON BY THE LD AO AND REFERRED TO HIM AS DIRECT EVIDE NCE AGAINST THE ASSESSEE DID NOT CONTAIN THE NAME OF THE ASSESSEE AND/OR THE NAME OF ASHIKA STOCK BROKING LTD. THROUGH WHOM THE ASSESSEE SOLD THE SHARES OF KAFL AS A BENEFICIARY T O THE ALLEGED ACCOMMODATION ENTRIES PROVIDED BY THE RELATED ENTITIES / PROMOTERS / BROK ERS / ENTRY OPERATORS. IN THE INSTANT CASE, THE SHARES OF CPAL WERE PURCHASED BY THE ASSESSEE W AY BACK ON 20.12.2011 AND PURSUANT TO MERGER OF CPAL WITH KAFL, THE ASSESSEE WAS ALLOTTED EQUAL NUMBER OF SHARES IN KAFL, WHICH WAS SOLD BY THE ASSESSEE BY EXITING AT THE MO ST OPPORTUNE MOMENT BY MAKING GOOD PROFITS IN RODER TO HAVE A GOOD RETURN ON HIS INVES TMENT. WE FIND THAT THE ASSESSEE AND / OR THE BROKER ASHITA STOCK BROKING LTD WAS NOT THE PRI MARY ALLOTTEES OF SHARES EITHER IN CPAL OR IN KAFL AS COULD BE EVIDENT FROM THE SEBIS ORDE R. WE FIND THAT THE SEBI ORDER DID MENTION THE LIST OF 246 BENEFICIARIES OF PERSONS TR ADING IN SHARES OF KAFL, WHEREIN, THE ASSESSEE AND / OR ASHITA STOCK BROKING LTDS NAME I S NOT REFLECTED AT ALL. HENCE THE ALLEGATION THAT THE ASSESSEE AND / OR ASHITA STOCK BROKING LTD GETTING INVOLVED IN PRICE RIGGING OF KAFL SHARES FAILS. WE ALSO FIND THAT EV EN THE SEBIS ORDER HEAVILY RELIED UPON BY THE LD AO CLEARLY STATES THAT THE COMPANY KAFL H AD PERFORMED VERY WELL DURING THE YEAR UNDER APPEAL AND THE P/E RATIO HAD INCREASED SUBSTA NTIALLY. THUS WE HOLD THAT THE SAID ORDERS OF SEBI IS NO EVIDENCE AGAINST THE ASSESSEE, MUCH LESS TO SPEAK OF DIRECT EVIDENCE. THE ENQUIRY BY THE INVESTIGATION WING AND/OR THE ST ATEMENTS OF SEVERAL PERSONS RECORDED BY THE INVESTIGATION WING IN CONNECTION WITH THE ALLEG ED BOGUS TRANSACTIONS IN THE SHARES OF KAFL ALSO DID NOT IMPLICATE THE ASSESSEE AND/OR HIS BROKER. IT IS ALSO A MATTER OF RECORD THAT THE ASSESSEE FURNISHED ALL EVIDENCES IN THE FORM OF BILLS, CONTRACT NOTES, DEMAT STATEMENTS AND THE BANK ACCOUNTS TO PROVE THE GENUINENESS OF THE T RANSACTIONS RELATING TO PURCHASE AND SALE OF SHARES RESULTING IN LTCG. THESE EVIDENCES WERE N EITHER FOUND BY THE LD AO TO BE FALSE OR FABRICATED. THE FACTS OF THE CASE AND THE EVIDENCES IN SUPPORT OF THE ASSESSEES CASE CLEARLY SUPPORT THE CLAIM OF THE ASSESSEE THAT THE TRANSACT IONS OF THE ASSESSEE WERE BONAFIDE AND GENUINE AND THEREFORE THE LD AO WAS NOT JUSTIFIED I N REJECTING THE ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT. WE ALSO FIND THAT THE VARIOUS CASE LAWS OF HONBLE JURISDICTIONAL HIGH COURT RELIED UPON BY TH E LD AR AND FINDINGS GIVEN THEREON WOULD APPLY TO THE FACTS OF THE INSTANT CASE. THE LD DR WAS NOT ABLE TO FURNISH ANY CONTRARY CASES TO THIS EFFECT. HENCE WE HOLD THAT THE LD A O WAS NOT JUSTIFIED IN ASSESSING THE SALE PROCEEDS OF SHARES OF KAFL AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. WE ACCORDINGLY HOLD THAT THE REFRAMED QUESTION NO. 1 R AISED HEREINABOVE IS DECIDED IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. 7. COMING BACK TO THE INSTANT CASE, IT IS NOTED BY ME THAT THE ASSESSEE HAD PURCHASED 32,000 SHARES @ RS.1/- EACH OF M/S. PANCHSHUL MARKE TING LTD. ON 28.03.2012 (MERGED WITH M/S. KAILASH AUTO FINANCE LTD. [HEREINAFTER M/S. KA FL] ON 09.05.2013) FOR A CONSIDERATION OF RS.32,000/- FROM M/S. BRIJDHARA MERCANTILE PVT. LTD. M/S. PANCHSHUL MARKETING LTD. WAS MERGED WITH M/S. KAFL AND THERE WAS CHANGE OF M ANAGEMENT AND CONTROL OF M/S. 6 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 KAFL LTD. PURSUANT TO SCHEME TO ARRANGEMENT SANCTIO NED BY THE HONBLE HIGH COURT AT ALLAHABAD. IT IS ALSO NOTED THAT THE PURCHASE OF A FORESAID 32,000 EQUITY OF M/S. PANCHSHUL MARKETING LTD. WAS MADE BY ACCOUNT PAYEE CHEQUE OF ICICI BANK, VIDE CHEQUE NO. 945840. IT WAS ALSO NOTED THAT SHARES OF M/S. KAFL WERE ALLOTTED TO THE ASSESSEE UPON MERGER OF M/S. PANCHSHUL MARKETING LTD. WITH M/S. K AFL PURSUANT TO SANCTION OF SCHEME OF ARRANGEMENT BY THE HONBLE ALLAHABAD HIGH COURT AND 32000 EQUITY SHARES WERE ALLOTTED TO THE ASSESSEE IN LIEU OF SHAREHOLDING IN PANCHSHUL MARKETING LTD. IT IS CLARIFIED THAT OFF MARKET TRANSACTION HAS NOT BEEN PROHIBITED AND IF CARRIED OUT LEGALLY CANNOT BE HELD TO BE BOGUS ONLY ON THIS COUNT. IT IS FURTHER NOTE D THAT THE SAID SHARES WERE LATER SOLD AT A PRICE OF RS.12,46,584/- IN THE STOCK EXCHANGE OF BO MBAY, THROUGH SEBI REGISTERED STOCK BROKER SKP SECURITIES LTD. WHOSE SEBI REGD. NO. INB 010707538 VIDE CONTRACT NOTES ISSUED REGARDING SALE OF EQUITY SHARES OF M/.S. KAF L, WHICH ACCORDING TO ASSESSEE, RESULTED IN LONG TERM CAPITAL GAINS AFTER REMITTING STT AND SO THE ASSESSEE CLAIMED EXEMPTION U/S 10(38) OF THE ACT OF RS.12,46,584/-. IT IS NOTED T HAT THE ASSESSEE HAS PAID THE AMOUNT OF RS.32,000/- THROUGH ACCOUNT PAYEE CHEQUE TO M/S. BR IJDHARA MARCENTILE PVT. LTD (PURCHASE BILL AVAILABLE AT PAPER BOOK PAGES 24 AND COPY OF B ANK STATEMENT SHOWING PAYMENTS MADE FOR PURCHASE OF SHARES FOUND PLACED AT PAGE 22 OF P APER BOOK). THE SAID COMPANY (M/S. PANCHSHUL MARKETING LTD.) WAS LATER MERGED WITH M/S . KAILASH AUTO FINANCE LTD. AS PER THE ORDER OF THE HONBLE HIGH COURT OF ALLAHABAD DATED 09.05.2013 AND CONSEQUENT TO MERGER, THE ASSESSEE HAD RECEIVED 32,000 SHARES OF M/S. KAF L AND THE SHARES WERE DIRECTLY CREDITED TO ASSESSEES DEMAT ACCOUNT NO.1202180000023605. T HE ASSESSEE SOLD THE SAID SHARES DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEA R UNDER CONSIDERATION AND SUCH SALE WAS MADE IN THE BOMBAY STOCK EXCHANGE THROUGH M/S. SKP SECURITIES LTD., A REGISTERED SHARE AND STOCK BROKER (CONTRACT NOTE PLACED AT PAGES 28 TO 30 OF PAPER BOOK) AFTER DULY PAYING THE SECURITY TRANSACTION TAX (STT). THE SALE CONSID ERATION THE ASSESSEE RECEIVED BY ACCOUNT PAYEE CHEQUE IN ITS ICICI BANK ACCOUNT WHICH IS EVI DENT FROM THE BANK STATEMENT FILED BEFORE US AT PAGE 33-34 OF THE PAPER BOOK. THEREFOR E, THE LONG TERM CAPITAL EARNED IN THE PROCESS HAS BEEN CLAIMED AS EXEMPT INCOME UNDER SEC TION 10(38) OF THE ACT. I ALSO NOTE THAT IN SUPPORT OF THE ASSESSEES CONTENTION VARIOUS DOC UMENTS HAD BEEN FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS I.E. COPIES OF PURCHASE B ILLS, WHICH IS AVAILABLE IN PAPER BOOK 7 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 PAGE 24, COPY OF BANK STATEMENTS SHOWING PAYMENTS M ADE FOR PURCHASE OF SHARES, WHICH IS AVAILABLE IN PAPER BOOK PAGES 22, DEMAT ACCOUNT WIT H M/S. SKP SECURITIES LTD., COPIES OF CONTRACT NOTES IN RESPECT OF SALE OF SHARES, WHICH IS AVAILABLE AT PAGES 28-30 OF PAPER BOOK, COPY OF BANK STATEMENTS SHOWING RECEIPTS AGAINST SA LE OF SHARES, WHICH IS AVAILABLE AT PAGE 33-34 OF THE PAPER. 8. I NOTE THAT SHARES OF M/S. KAFL WERE SOLD BY ASS ESSEE THROUGH RECOGNIZED BROKER IN A RECOGNIZED STOCK EXCHANGE. THE DETAILS OF SUCH SA LE AND CONTRACT NOTE HAVE BEEN SUBMITTED BEFORE AO/LD. CIT(A). I TAKE NOTE THAT WH EN THE TRANSACTIONS HAPPENED IN THE STOCK EXCHANGE, THE SELLER WHO SELLS HIS SHARES ON THE STOCK EXCHANGE DOES NOT KNOW WHO PURCHASES SHARES. IT IS NOTED THAT THE SHARES ARE SOLD AND BOUGHT IN AN ELECTRONIC MODE ON THE COMPUTERS ON-LINE BY THE BROKERS AND THERE IS A LSO NO DIRECT CONTACT AT ANY LEVEL EVEN BETWEEN THE BROKERS. IT IS NOTED THAT AS AND WHE N ANY SHARES ARE OFFERED FOR SALE IN THE STOCK EXCHANGE PLATFORM, ANY ONE OF THE THOUSANDS O F BROKERS REGISTERED WITH THE STOCK EXCHANGE IS AT LIBERTY TO PURCHASE IT. AS FAR AS OUR UNDERSTANDING THE SELLING BROKER DOES NOT EVEN KNOW WHO IS THE PURCHASING BROKER. THIS IS HOW THE SEBI KEEPS A STRICT CONTROL OVER THE TRANSACTIONS TAKEN PLACE IN RECOGNIZED STO CK EXCHANGES. UNLESS THERE IS A EVIDENCE TO SHOW THAT THERE IS A BREACH IN THE AFORESAID PRO CESS WHICH FACT HAS BEEN UNEARTHED BY METICULOUS INVESTIGATION, I AM OF THE OPINION THAT THE UNSCRUPULOUS ACTIONS OF FEW PLAYERS EXPLOITING THE LOOPHOLES OF THE STOCK EXCHANGE, IF ANY, CANNOT BE THE BASIS TO PAINT THE ENTIRE SALE/PURCHASE OF A SCRIP LIKE THAT OF M/S. K AFL AS BOGUS WITHOUT BRINGING OUT ADVERSE MATERIAL SPECIFICALLY AGAINST THE ASSESSEE. 9. THE FACT OF HOLDING THE SHARES IN THE D-MAT ACCO UNT CANNOT BE DISPUTED. FURTHER, THE ASSESSING OFFICER HAS NOT EVEN DISPUTED THE EXISTEN CE OF THE D-MAT ACCOUNT AND SHARES CREDITED IN THE D-MAT ACCOUNT OF THE ASSESSEE. THER EFORE, ONCE, THE HOLDING OF SHARES IS D- MAT ACCOUNT CANNOT BE DISPUTED, THEN THE TRANSACTIO N CANNOT BE HELD AS BOGUS. THE AO HAS NOT DISPUTED THE SALE OF SHARES FROM THE D-MAT ACCO UNT OF THE ASSESSEE AND THE SALE CONSIDERATION WAS DIRECTLY CREDITED TO THE BANK ACC OUNT OF THE ASSESSEE, THEREFORE, ONCE THE ASSESSEE PRODUCED ALL RELEVANT EVIDENCE TO SUBSTANT IATE THE TRANSACTION OF PURCHASE, 8 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 DEMATERIALIZATION AND SALE OF SHARES THEN, IN THE A BSENCE OF ANY CONTRARY MATERIAL BROUGHT ON RECORD THE SAME CANNOT BE HELD AS BOGUS TRANSACTION MERELY ON THE BASIS OF REPORT OF INVESTIGATION WING, KOLKATA WHEREIN THERE IS A GENE RAL STATEMENT OF PROVIDING BOGUS LONG TERM CAPITAL GAIN TRANSACTION TO THE CLIENTS WITHOU T STATING ANYTHING ABOUT THE TRANSACTION OF ALLOTMENT OF SHARES BY THE COMPANY TO THE ASSESSEE. 10. THE MUMBAI SPECIAL OF THE TRIBUNAL IN CASE OF G TC INDUSTRIES VS. ACIT (SUPRA) HAD THE OCCASION TO CONSIDER THE ADDITION MADE BY THE A O ON THE BASIS OF SUSPICION AND SURMISES AND OBSERVED IN PAR 46 AS UNDER:- 46. IN SITUATIONS LIKE THIS CASE, ONE MAY FALL INT O REALM OF 'PREPONDERANCE OF PROBABILITY' WHERE THERE ARE MANY PROBABLE FACTORS, SOME IN FAVO UR OF THE ASSESSEE AND SOME MAY GO AGAINST THE ASSESSEE. BUT THE PROBABLE FACTORS HAVE TO BE WEIGHED ON MATERIAL FACTS SO COLLECTED. HERE IN THIS CASE THE MATERIAL FACTS STR ONGLY INDICATE A PROBABILITY THAT THE WHOLESALE BUYERS HAD COLLECTED THE PREMIUM MONEY FO R SPENDING IT ON ADVERTISEMENT AND OTHER EXPENSES AND IT WAS THEIR LIABILITY AS PER THEIR MU TUAL UNDERSTANDING WITH THE ASEESSEE. ANOTHER VERY STRONG PROBABLE FACTOR IS THAT THE ENT IRE SCHEME OF 'TWIN BRANDING' AND COLLECTION OF PREMIUM WAS SO DESIGNED THAT ASSESSEE COMPANY NE ED NOT INCUR ADVERTISEMENT EXPENSES AND THE RESPONSIBILITY FOR SALES PROMOTION AND ADVE RTISEMENT LIES WHOLLY UPON WHOLESALE BUYERS WHO WILL BORNE OUT THESE EXPENSES FROM ALLEG ED COLLECTION OF PREMIUM. THE PROBABLE FACTORS COULD HAVE GONE AGAINST THE ASSESSEE ONLY I F THERE WOULD HAVE BEEN SOME EVIDENCE FOUND FROM SEVERAL SEARCHES EITHER CONDUCTED BY DRI OR BY THE DEPARTMENT THAT ASSESSEE- COMPANY WAS BENEFICIARY OF ANY SUCH ACCOUNTS. AT LE AST SOMETHING WOULD HAVE BEEN UNEARTHED FROM SUCH GLOBAL LEVEL INVESTIGATION BY T WO CENTRAL GOVERNMENT AUTHORITIES. IN CASE OF CERTAIN DONATIONS GIVEN TO A CHURCH, ORIGINATING THROUGH THESE BENAMI BANK ACCOUNTS ON THE BEHEST OF ONE OF THE EMPLOYEES OF THE ASSESSEE COMPANY, DOES NOT IMPLICATE THAT GTC AS A CORPORATE ENTITY WAS HAVING THE CONTROL OF THESE BA NK ACCOUNTS COMPLETELY. WITHOUT GOING INTO THE AUTHENTICITY AND VERACITY OF THE STATEMENTS OF THE WITNESSES SMT. NIRMALA SUNDARAM, WE ARE OF THE OPINION THAT THIS ONE INCIDENT OF DONATI ON THROUGH BANK ACCOUNTS AT THE DIRECTION OF ONE OF THE EMPLOYEE OF THE COMPANY DOES NOT IMPLICA TE THAT THE ENTIRE PREMIUM COLLECTED ALL THROUGHOUT THE COUNTRY AND DEPOSITED IN BENAMI BANK ACCOUNTS ACTUALLY BELONGS TO THE ASSESSEE-COMPANY OR THE ASSESSEE-COMPANY HAD DIRECT CONTROL ON THESE BANK ACCOUNTS. ULTIMATELY, THE ENTIRE CASE OF THE REVENUE HINGES U PON THE PRESUMPTION THAT ASSESSEE IS BOUND TO HAVE SOME LARGE SHARE IN SO-CALLED SECRET MONEY IN THE FORM OF PREMIUM AND ITS CIRCULATION. HOWEVER, THIS PRESUMPTION OR SUSPICION HOW STRONG I T MAY APPEAR TO BE TRUE, BUT NEEDS TO BE CORROBORATED BY SOME EVIDENCE TO ESTABLISH A LINK T HAT GTC ACTUALLY HAD SOME KIND OF A SHARE IN SUCH SECRET MONEY. IT IS QUITE A TRITE LAW THAT SUSPICION HOWSOEVER STRONG MAY BE BUT CANNOT BE THE BASIS OF ADDITION EXCEPT FOR SOME MATERIAL E VIDENCE ON RECORD. THE THEORY OF 'PREPONDERANCE OF PROBABILITY' IS APPLIED TO WEIGH THE EVIDENCES OF EITHER SIDE AND DRAW A CONCLUSION IN FAVOUR OF A PARTY WHICH HAS MORE FAVO URABLE FACTORS IN HIS SIDE. THE CONCLUSIONS HAVE TO BE DRAWN ON THE BASIS OF CERTAIN ADMITTED F ACTS AND MATERIALS AND NOT ON THE BASIS OF PRESUMPTION OF FACTS THAT MIGHT GO AGAINST ASSESSEE . ONCE NOTHING HAS BEEN PROVED AGAINST THE ASSESSEE WITH AID OF ANY DIRECT MATERIAL ESPECIALLY WHEN VARIOUS ROUNDS OF INVESTIGATION HAVE BEEN CARRIED OUT, THEN NOTHING CAN BE IMPLICATED AG AINST THE ASSESSEE.' 9 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 11. THEREFORE, WHEN THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE HAS PAID OVER AND ABOVE THE PURCHASE CONSIDERATION AS CLAIMED AND EVIDENT FROM THE BANK ACCOUNT THEN, IN THE ABSENCE OF ANY EVIDENCE IT CANNOT BE HELD THAT THE ASSESSEE HAS INTRODUCED HIS OWN UNACCOUNTED MONEY B Y WAY OF BOGUS LONG TERM CAPITAL GAIN. THE HON'BLE RAJASTHAN HIGH COURT IN CASE OF CIT VS. SMT. POOJA AGRAWAL (SUPRA) HAS UPHELD THE FINDING OF THE TRIBUNAL ON THIS ISSUE IN PARA 12 AS UNDER:- '12. HOWEVER, COUNSEL FOR THE RESPONDENT HAS TAKEN US TO THE ORDER OF CIT(A) AND ALSO TO THE ORDER OF TRIBUNAL AND CONTENDED THAT IN VIEW OF THE FINDING REACHED, WHICH WAS DONE THROUGH STOCK EXCHANGE AND TAKING INTO CONSIDERATION THE RE VENUE TRANSACTIONS, THE ADDITION MADE WAS DELETED BY THE TRIBUNAL OBSERVING AS UNDER:- 'CONTENTION OF THE AR IS CONSIDERED. ONE OF THE MAI N REASONS FOR NOT ACCEPTING THE GENUINENESS OF THE TRANSACTIONS DECLARED BY THE APP ELLANT THAT AT THE TIME OF SURVEY THE APPELLANT IN HIS STATEMENT DENIED HAVING MADE ANY T RANSACTIONS IN SHARES. HOWEVER, SUBSEQUENTLY THE FACTS CAME ON RECORD THAT THE APPE LLANT HAD TRANSACTED NOT ONLY IN THE SHARES WHICH ARE DISPUTED BUT SHARES OF VARIOUS OTHER COMPANIES LIKE SATYAM COMPUTERS, HCL, IPC L, BPCL AND TATA TEA ETC. REGARDING THE TRANSACTION S IN QUESTION VARIOUS DETAILS LIKE COPY OF CONTRACT NOTE REGARDING PURCHASE AND SALE OF SHARES OF LIMTEX AND KONARK COMMERCE & IND. LTD., A SSESSEE'S ACCOUNT WITH P.K. AGARWAL & CO. SHARE BROKER, COMPANY'S MASTER DETAIL S FROM REGISTRAR OF COMPANIES, KOLKATA WERE FILED. COPY OF DEPOSITORY A/C OR DEMAT ACCOUNT WITH ALANKR IT ASSIGNMENT LTD., A SUBSIDIARY OF NSDL WAS ALSO FILED WHICH SHOWS THAT THE TRANSAC TIONS WERE MADE THROUGH DEMAT A/C. WHEN THE RELEVANT DOCUMENTS ARE AVAILABLE THE FACT OF TRANSACTIONS ENTERED INTO CANNOT BE DENIED SIMPLY ON THE GROUND THAT IN HIS S TATEMENT THE APPELLANT DENIED HAVING MADE ANY TRANSACTIONS IN SHARES. THE PAYMENT S AND RECEIPTS ARE MADE THROUGH A/C PAYEE CHEQUES AND THE TRANSACTIONS ARE ROUTED T HROUGH KOLKATA STOCK EXCHANGE. THERE IS NO EVIDENCE THAT THE CASH HAS GONE BACK IN APPELLANTS'S ACCOUNT. PRIMA FACIE THE TRANSACTION WHICH ARE SUPPORTED BY DOCUMENTS AP PEAR TO BE GENUINE TRANSACTIONS. THE AO HAS DISCUSSED MODUS OPERANDI IN SOME SHAM TR ANSACTIONS WHICH WERE DETECTED IN THE SEARCH CASE OF B.C. PUROHIT GROUP. THE AO HAS ALSO STATED IN THE ASSESSMENT ORDER ITSELF WHILE DISCUSSING THE MODUS OPERANDI THAT ACCOMMODATION ENTRIES OF LONG TERM CAPITAL GAIN WERE PURCHASED AS LONG TERM CAPITAL GAIN EITHER WAS EXEMPTED FROM TAX OR WAS TAXABLE AT A LOWER RATE. A S THE APPELLANT'S CASE IS OF SHORT TERM CAPITAL GAIN, IT DOES NOT EXACTLY FALL UNDER T HAT CATEGORY OF ACCOMMODATION TRANSACTIONS. FURTHER AS PER THE REPORT OF DCIT, CE NTRAL CIRCLE-3 SH. P.K. AGARWAL WAS FOUND TO BE AN ENTRY PROVIDER AS STATED BY SH. PAWAN PUROHIT OF B.C. PURIHIT AND CO. GROUP. THE AR MADE SUBMISSION BEFORE THE AO THA T THE FACT WAS NOT CORRECT AS IN THE STATEMENT OF SH. PAWAN PUROHIT THERE IS NO MENT ION OF SH. P. K. AGARWAL. IT WAS ALSO SUBMITTED THAT THERE WAS NO MENTION OF SH. P. K. AGARWAL IN THE ORDER OF SETTLEMENT COMMISSION IN THE CASE OF SH. SUSHIL KUM AR PUROHIT. COPY OF THE ORDER OF SETTLEMENT COMMISSION WAS SUBMITTED. THE AO HAS FAI LED TO COUNTER THE OBJECTIONS RAISED BY THE APPELLANT DURING THE ASSESSMENT PROCE EDINGS. SIMPLY MENTIONING THAT THESE FINDINGS ARE IN THE APPRAISAL REPORT AND APPR AISAL REPORT IS MADE BY THE INVESTING WING AFTER CONSIDERING ALL THE MATERIAL F ACTS AVAILABLE ON RECORD DOES NOT HELP MUCH. THE AO HAS FAILED TO PROVE THROUGH ANY I NDEPENDENT INQUIRY OR RELYING ON SOME MATERIAL THAT THE TRANSACTIONS MADE BY THE APP ELLANT THROUGH SHARE BROKER P.K. 10 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 AGARWAL WERE NON-GENUINE OR THERE WAS ANY ADVERSE M ENTION ABOUT THE TRANSACTION IN QUESTION IN STATEMENT OF SH. PAWAN PUROHIT. SIMPLY BECAUSE IN THE SHAM TRANSACTIONS BANK A/C WERE OPENED WITH HDFC BANK AND THE APPELLA NT HAS ALSO RECEIVED SHORT TERM CAPITAL GAIN IN HIS ACCOUNT WITH HDFC BANK DOE S NOT ESTABLISH THAT THE TRANSACTION MADE BY THE APPELLANT WERE NON GENUINE. CONSIDERING ALL THESE FACTS THE SHARE TRANSACTIONS MADE THROUGH SHRI P.K. AGARWAL C ANNOT BE HELD AS NON-GENUINE. CONSEQUENTLY DENYING THE CLAIM OF SHORT TERM CAPITA L GAIN (6 OF 6) [ ITA-385/2011] MADE BY THE APPELLANT BEFORE THE AO IS NOT APPROVED . THE AO IS THEREFORE, DIRECTED TO ACCEPT CLAIM OF SHORT TERM CAPITAL GAIN AS SHOWN BY THE APPELLANT.' 12. I NOTE THAT THE SALE OF SHARES OF M/S. KAFL WHI CH WAS DEMATERLIZED IN DEMAT ACCOUNT HAS TAKEN PLACE THROUGH RECOGNISED STOCK EX CHANGE AND ASSESSEE RECEIVED MONEY THROUGH BANKING CHANNEL. SO, ASSESSEE HAS EXPLAINED THE NATURE AND SOURCE OF THE MONEY WITH SUPPORTING DOCUMENTS AND THUS HAS DISCHARGED T HE ONUS CASTED UPON HIM BY PRODUCING THE RELEVANT DOCUMENTS MENTIONED IN PARA 6 (SUPRA), ACCORDINGLY, THE QUESTION OF TREATING THE SAID GAIN AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT CANNOT ARISE UNLESS THE AO IS ABLE TO FIND FAULT/INFIRMITY WITH THE SAME. I NO TE THAT THE SOURCE OF THE RECEIPT OF THE AMOUNT HAS BEEN EXPLAINED AND THE TRANSACTION IN RE SPECT OF WHICH THE SAID AMOUNT HAS BEEN RECEIVED BY ASSESSEE HAS NOT BEEN CANCELLED BY THE STOCK EXCHANGE/SEBI. SO, IT IS DIFFICULT TO COUNTENANCE THE ACTION OF AO/LD. CIT(A) IN THE AFOR ESAID FACTS AND CIRCUMSTANCES EXPLAINED ABOVE. 13. EVEN ASSUMING THAT THE BROKERS MAY HAVE DONE SO ME MANIPULATION THEN ALSO THE ASSESSEE CANNOT BE HELD LIABLE FOR THE ILLEGAL ACTI ON OF THE BROKERS WHEN THE ENTIRE TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS DULY RECORDED IN THE DEMAT ACCOUNTS WITH A GOVERNMENT DEPOSITORY AND TRADED ON THE STOCK EXCHANGE UNLESS SPECIFIC EVIDENCE EMERGES THAT THE ASSESSEE WAS IN HAND IN G LOVES WITH THE BROKER FOR COMMITTING THE UNSCRUPULOUS ACTIVITY TO LAUNDER HIS OWN MONEY IN T HE GUISE OF LTCG. 14. THERE IS ALSO NOTHING ON RECORD WHICH COULD SUG GEST THAT THE ASSESSEE GAVE HIS OWN CASH AND GOT CHEQUE FROM THE ALLEGED BROKERS/BUYERS . THE ASSESSMENT REFERS ALSO TO SOME THIRD PARTY STATEMENT OF SHRI SUNIL DOKANIA WHICH W AS ADMITTEDLY RECORDED BEHIND THE BACK OF THE ASSESSEE AND THE ASSESSEE HAS NEITHER BEEN A LLOWED TO CROSS EXAMINE THIS PERSON BY THE ASSESSEE NOR THE STATEMENT OF SHRI SUNIL DOKANI A FURNISHED TO ASSESSEE, SO THE STATEMENTS 11 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 EVEN IF ADVERSE AGAINST THE ASSESSEE CANNOT BE RELI ED UPON BY THE AO TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE (RELIANCE ON HONBLE SUPREME COURT DECISION IN ANDAMAN TIMBER (SUPRA) AND IN THE LIGHT OF THE DOCUMENTS TO SUBSTANTIATE THE CLAIM OF LTCG, WHICH HAS NOT BEEN FOUND FAULT WITH BY THE AO. 15. LET US LOOK AT CERTAIN JUDICIAL DECISIONS ON SI MILAR FACTS:- 16. THE CASE OF THE ASSESSEES IS SIMILAR TO THE DE CISION OF HONBLE BOMBAY HIGH COURT, NAGPUR BENCH IN CIT VS. SMT. JAMNADEVI AGRAWAL & OR S. DATED 23RD SEPTEMBER, 2010 REPORTED IN (2010) 328 ITR 656 WHEREIN IT WAS HELD THAT: 'THE FACT THAT THE ASSESSEES IN THE GROUP HAVE PURC HASED AND SOLD SHARES OF SIMILAR COMPANIES THROUGH THE SAME BROKER CANNOT BE A GROUN D TO HOLD THAT THE TRANSACTIONS ARE SHAM AND BOGUS, ESPECIALLY WHEN DOCUMENTARY ITA NOS. 93 TO 99/RPR/2014 & C.O. NOS. 12 TO 18/RPR/2014 . A.Y. 2004-05 10 PRODUCED TO ESTABLISH THE GENUINENESS OF THE CLAIM. FROM THE DOCUMENTS PRODUCED, IT IS SEEN THAT THE SHARES IN Q UESTION WERE IN FACT PURCHASED BY THE ASSESSEES ON THE RESPECTIVE DATES AND THE COMPANY H AS CONFIRMED TO HAVE HANDED OVER THE SHARES PURCHASED BY THE ASSESSEES. SIMILARLY, THE S ALE OF THE SHARES TO THE RESPECTIVE BUYERS IS ALSO ESTABLISHED BY PRODUCING DOCUMENTARY EVIDENCE. IT IS TRUE THAT SOME OF THE TRANSACTIONS WERE OFF-MARKET TRANSACTIONS. HOWEVER, THE PURCHASE AND SALE PRICE OF THE SHARES DECLARED BY THE ASSESSEES WERE IN CONFORMITY WITH THE MARKET RA TES PREVAILING ON THE RESPECTIVE DATES AS IS SEEN FROM THE DOCUMENTS FURNISHED BY THE ASSESSEES. THEREFORE, THE FACT THAT SOME OF THE TRANSACTIONS WERE OFF-MARKET TRANSACTIONS CANNOT BE A GROUND TO TREAT THE TRANSACTIONS AS SHAM TRANSACTIONS. THE STATEMENT OF THE BROKER P TH AT THE TRANSACTIONS WITH THE H GROUP WERE BOGUS HAS BEEN DEMONSTRATED TO BE WRONG BY PRODUCIN G DOCUMENTARY EVIDENCE TO THE EFFECT THAT THE SHARES SOLD BY THE ASSESSEES WERE IN CONSO NANCE WITH THE MARKET PRICE. ON PERUSAL OF THOSE DOCUMENTARY EVIDENCE, THE TRIBUNAL HAS ARRIVE D AT A FINDING OF FACT THAT THE TRANSACTIONS WERE GENUINE. NOTHING IS BROUGHT ON RECORD TO SHOW THAT THE FINDINGS RECORDED BY THE TRIBUNAL ARE CONTRARY TO THE DOCUMENTARY EVIDENCE ON RECORD. THE TRIBUNAL HAS FURTHER RECORDED A FINDING OF FACT THAT THE CASH CREDITS IN THE,BANK A CCOUNTS OF SOME OF THE BUYERS OF SHARES CANNOT BE LINKED TO THE ASSESSEES. MOREOVER, YN THE LIGHT OF THE DOCUMENTARY EVIDENCE ADDUCED TO SHOW THAT THE SHARES PURCHASED AND SOLD BY THE A SSESSEES WERE IN CONFORMITY WITH THE MARKET PRICE, THE TRIBUNAL RECORDED A FINDING OF FA CT THAT THE CASH CREDITS IN THE BUYERS' BANK ACCOUNTS CANNOT BE ATTRIBUTED TO THE ASSESSEES. NO FAULT CAN BE FOUND WITH THE ABOVE FINDING RECORDED BY THE TRIBUNAL. THEREFORE, THE DECISION O F THE TRIBUNAL IS BASED ON FINDING OF FACTS. NO SUBSTANTIAL QUESTION OF LAW ARISES FROM THE ORDE R OF THE TRIBUNAL.ASSTT. CIT VS. KAMAL KUMAR S. AGRAWAL (INDL.) & ORS. (2010) 41 DTR (NAG) (TRIB) 105: (2010) 133 TTJ (NAG) 818 AFFIRMED; SUMATI DAYAL VS. CIT (1995) 125 CTR (SC) 124: (1995) 80 TAXMAN 89 (SC) DISTINGUISHED. 12. THE HON'BLE HIGH COURT OF RAJASTHAN IN CIT VS. SMT. PUSHPA MALPANI - REPORTED IN (2011) 242 CTR (RAJ.) 559; (2011) 49 DTR 312 DISMIS SED THE APPEAL OF DEPARTMENT OBSERVING 'WHETHER OR NOT THERE WAS SALE OF SHARES AND RECEIP T OF CONSIDERATION THEREOF ON APPRECIATED VALUE IS ESSENTIALLY A QUESTION OF FACT. CIT(A) AND TRIBUNAL HAVE BOTH GIVEN REASONS IN SUPPORT OF THEIR FINDINGS AND HAVE FOUND THAT AT THE TIME O F TRANSACTIONS, THE BROKER IN QUESTION WAS NOT BANNED BY SEBI AND THAT ASSESSEE HAD PRODUCED COPIE S OF PURCHASE BILLS, CONTRACT NUMBER SHARE CERTIFICATE, APPLICATION FOR TRANSFER OF SHAR E CERTIFICATE TO DEMAT ACCOUNT ALONG WITH COPIES OF HOLDING STATEMENT IN DEMAT ACCOUNT, BALAN CE SHEET AS ON 31ST MARCH, 2003, SALE BILL, 12 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 BANK ACCOUNT, DEMAT ACCOUNT AND OFFICIAL REPORT AND QUOTATIONS, OF CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. ON 23RD JULY, 2003. THEREFORE, 'TH E PRESE/ITDPPEAL DOES NOT RAISE ANY QUESTION OF LAW, MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW. 17. THE HONBLE HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF ANUPAM KAPOOR 299 ITR 0179 HAS HELD AS UNDER:- THE TRIBUNAL ON THE BASIS OF THE MATERIAL ON RECOR D, HELD THAT PURCHASE CONTRACT NOTE, CONTRACT NOTE FOR SATES, DISTINCTIVE NUMBERS OF SHA RES PURCHASED AND SOLD, COPY OF SHARE CERTIFICATES AND THE QUOTATION OF SHARES ON THE DAT E OF PURCHASE AND SALE WERE SUFFICIENT MATERIAL TO SHOW THAT THE TRANSACTION WAS NOT BOGUS BUT A GENUINE TRANSACTION. THE PURCHASE OF SHARES WAS MADE ON 28TH APRIL, 1993 I.E.. ASST. YR. 1993-94 AND THAT ASSESSMENT WAS ACCEPTED BY THE DEPARTMENT AND THERE WAS NO CHALLEN GE TO THE PURCHASE OF SHARES IN THAT YEAR. IT WAS ALSO PLACED BEFORE THE RELEVANT AO AS WELL A S BEFORE THE TRIBUNAL THAT THE SALE PROCEEDS HAVE BEEN ACCOUNTED FOR IN THE ACCOUNTS OF THE ASSE SSEE AND WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUE. THE TRIBUNAL WAS RIGHT IN REJECTING T HE APPEAL OF THE REVENUE BY HOLDING THAT THE ASSESSEE WAS SIMPLY A SHAREHOLDER OF THE COMPAN Y. HE HAD MADE INVESTMENT IN A COMPANY IN WHICH HE WAS NEITHER A DIRECTOR NOR WAS HE IN CO NTROL OF THE COMPANY. THE ASSESSEE HAD TAKEN SHARES FROM THE MARKET, THE SHARES WERE LISTE D AND THE TRANSACTION 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 SIMPLICITIER A DEVICE TO CAMOUFLAGE ACTIVITIES, TO DEFRAUD THE REVENUE. NO SUCH PRESUMP TION COULD BE DRAWN BY THE AO MERELY ON SURMISES AND CONJECTURES. IN THE ABSENCE OF ANY COG ENT MATERIAL IN THIS REGARD, HAVING BEEN PLACED ON RECORD, THE AO COULD NOT HAVE REOPENED TH E ASSESSMENT. THE ASSESSEE HAD MADE AN INVESTMENT IN A COMPANY, EVIDENCE WHEREOF WAS WITH THE AO. --THEREFORE, THE AO COULD NOT HAVE ADDED INCOME, WHICH WAS RIGHTLY DELETED BY THE CIT(A) AS WELL AS THE TRIBUNAL. IT IS SETTLED LAW THAT SUSPICION, HOWSOEVER STRONG CANNOT TAKE THE PLACE OF LEGAL PROOF. CONSEQUENTLY, NO QUESTION OF LAW, MUCH LESS A SUBST ANTIAL QUESTION OF LAW, ARISES FOR ADJUDICATION. C. VASANTLAL & CO. VS. CIT (1962) 45 ITR 206 (SC), M.O. THOMAKUTTY VS. CIT (.1958) 34 ITR 501 (KER)) AND MUKAND SINGH VS. SALE S TAX TRIBUNAL (1998) 107 STC 300 (PUNJAB) RELIED ON; UMACHARAN SHAW &BROS. VS. CIT ( 1959) 37 ITR 271 (SC) APPLIED; JASPAL SINGH VS. CIT (2006) 205 CTR (P & H) 624 DISTINGUIS HED 18. THE CO-ORDINATE BENCH OF AHMEDABAD IN THE CASE OF SMT. SUNITA JALAN VS. ITO IN ITA NOS. 501 & 502/AHD/2016 DATED 09.03.2017 HAD TH E OCCASION TO CONSIDER A SIMILAR ISSUE WHICH WAS WHEREIN THE ASSESSMENT WAS FRAMED O N THE STRENGTH OF THE STATEMENT OF A BROKER. THE RELEVANT PART READS AS UNDER:- 14. THE ENTIRE ASSESSMENT IS BASED UPON THE STATEM ENT OF SHRI MUKESH CHOKSI. IT IS AN UNDISPUTED FACT THAT NEITHER A COPY OF THE STATEMEN T WAS SUPPLIED TO THE ASSESSEE NOR ANY OPPORTUNITY OF CROSS-EXAMINATION WAS GIVEN BY THE A SSESSING OFFICER/CIT(A). THE HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTR IES IN CIVIL APPEAL NO. 4228 OF 2006 WAS SEIZED WITH THE FOLLOWING ACTION OF THE TRIBUNA L:- 6. THE PLEA OF NO CROSS EXAMINATION GRANTED TO THE VARIOUS DEALERS WOULD NOT HELP THE APPELLANT CASE SINCE THE EXAMINATION OF THE DEA LERS WOULD NOT BRING OUT ANY MATERIAL WHICH WOULD NOT BE IN THE POSSESSION OF TH E APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX FACTORY PRICES REMAIN STATIC. SI NCE WE ARE NOT UPHOLDING AND APPLYING THE EX FACTORY PRICES, AS WE FIND THEM CON TRAVENED AND NOT NORMAL PRICE AS 13 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 ENVISAGED UNDER SECTION 4(1), WE FIND NO REASON TO DISTURB THE COMMISSIONERS ORDERS. 15. THE HONBLE APEX COURT HELD AS UNDER:- ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROS S-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THO SE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER 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 T HAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAI D TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNI TY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AF ORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE T RIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TR IBUNAL HAS SIMPLY STATED THAT CROSS- EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROU GHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EXFACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL T O HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOS E DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR T ESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS EXAMINATIO N. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAIN TAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETH ER THE GOODS WERE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES AT THE PRICE WHICH IS ME NTIONED IN THE PRICE LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EXAMINATION. THEREFO RE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUB JECT MATTER OF THE CROSS- EXAMINATION AND MAKE THE REMARKS AS MENTIONED ABOVE . WE MAY ALSO POINT OUT THAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN CIVIL APPEAL NO. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED REM ITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL O N MERITS GIVING ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF TH E TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MATERIAL WITH THE DEPARTM ENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESA ID TWO WITNESSES WAS THE ONLY BASIS OF ISSUING THE SHOW CAUSE. WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL. 16. ON THE STRENGTH OF THE AFOREMENTIONED DECISIO N OF THE HONBLE SUPREME COURT, THE ASSESSMENT ORDER HAS TO BE QUASHED. 17. EVEN ON FACTS OF THE CASE, THE ORDERS OF THE AU THORITIES BELOW CANNOT BE ACCEPTED. THERE IS NO DENYING THAT CONSIDERATION WAS PAID WHEN THE SHA RES WERE PURCHASED. THE SHARES WERE THEREAFTER SENT TO THE COMPANY FOR THE TRANSFER OF NAME. THE COMPANY TRANSFERRED THE SHARES IN THE NAME OF THE ASSESSEE. THERE IS NOTHING ON RECOR D WHICH COULD SUGGEST THAT THE SHARES WERE 14 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 NEVER TRANSFERRED IN THE NAME OF THE ASSESSEE. THER E IS ALSO NOTHING ON RECORD TO SUGGEST THAT THE SHARES WERE NEVER WITH THE ASSESSEE. ON THE CON TRARY, THE SHARES WERE THEREAFTER TRANSFERRED TO DEMAT ACCOUNT. THE DEMAT ACCOUNT WAS IN THE NAME OF THE ASSESSEE, FROM WHERE THE SHARES WERE SOLD. IN OUR UNDERSTANDING OF THE F ACTS, IF THE SHARES WERE OF SOME FICTITIOUS COMPANY WHICH WAS NOT LISTED IN THE BOMBAY STOCK EX CHANGE/NATIONAL STOCK EXCHANGE, THE SHARES COULD NEVER HAVE BEEN TRANSFERRED TO DEMAT A CCOUNT. SHRI MUKESH CHOKSI MAY HAVE BEEN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS PER SONS BUT SO FAR AS THE FACTS OF THE CASE IN HAND SUGGEST THAT THE TRANSACTIONS WERE GENUINE AND THEREFORE, NO ADVERSE INFERENCE SHOULD BE DRAWN. 18. IN THE LIGHT OF THE DECISIONS OF THE HONBLE S UPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES (SUPRA) AND CONSIDERING THE FACTS IN TOT ALITY, THE CLAIM OF THE ASSESSEE CANNOT BE DENIED ON THE BASIS OF PRESUMPTION AND SURMISES IN RESPECT OF PENNY STOCK BY DISREGARDING THE DIRECT EVIDENCES ON RECORD RELATING TO THE SALE/PUR CHASE TRANSACTIONS IN SHARES SUPPORTED BY BROKERS CONTRACT NOTES, CONFIRMATION OF RECEIPT OF SALE PROCEEDS THROUGH REGULAR BANKING CHANNELS AND THE DEMAT ACCOUNT. 19. ACCORDINGLY, WE DIRECT THE A.O. TO TREAT THE GA INS ARISING OUT OF THE SALE OF SHARES UNDER THE HEAD CAPITAL GAINS- SHORT TERM OR LONG TERM AS THE CASE MAY BE. THE OTHER GRIEVANCE OF THE ASSESSEE BECOMES INFRUCTUOUS. 19. THE CO-ORDINATE BENCH OF DELHI IN THE CASE OF M EENU GOEL VS. ITO, (2018) 94 TAXMANN.COM 158 (DEL. TRI) HAD THE OCCASION TO CONS IDER A SIMILAR ISSUE WHICH WAS WHEREIN THE ASSESSMENT WAS FRAMED ON THE STRENGTH OF THE ST ATEMENT OF A BROKER. THE RELEVANT PART READS AS UNDER:- 4. THE ISSUE IN SHORT IS THIS: THE ASSESSEE PURCH ASED SHARES OF A COMPANY DURING THE ASSESSMENT YEAR 2006-07 AT RS. 11/- AND SOLD THE SA ME IN THE ASSESSMENT YEAR 2008-09 AT RS. 400/- PER SHARE. IN THE ABOVE CASE, NAMELY, ITA 18- 2017 ALSO THE ASSESSEE HAD PURCHASED AND SOLD THE SHARES IN THE SAME ASSESSMENT YEARS. THE A O IN BOTH THE CASES ADDED THE APPRECIATION TO THE ASSESSEES' INCOME ON THE SUSPICION THAT THES E WERE FICTITIOUS TRANSACTIONS AND THAT THE APPRECIATION ACTUALLY REPRESENTED THE ASSESSEE'S IN COME FROM UNDISCLOSED SOURCES. IN ITA-18- 2017 ALSO THE CIT(APPEALS) AND THE TRIBUNAL HELD TH AT THE AO HAD NOT PRODUCED ANY EVIDENCE WHATSOEVER IN SUPPORT OF THE SUSPICION. ON THE OTHE R HAND, ALTHOUGH THE APPRECIATION IS VERY HIGH, THE SHARES WERE TRADED ON THE NATIONAL STOCK EXCHANGE AND THE PAYMENTS AND RECEIPT WERE ROUTED THROUGH THE BANK. THERE WAS NO EVIDENCE TO INDICATE FOR INSTANCE THAT THIS WAS A CLOSELY HELD COMPANY AND THAT THE TRADING ON THE NA TIONAL STOCK EXCHANGE WAS MANIPULATED IN ANY MANNER. 5. IN THESE CIRCUMSTANCES, FOLLOWING THE JUDGMENT I N ITA-18-2017, IT MUST BE HELD THAT THERE IS NO SUBSTANTIAL QUESTION OF LAW IN THE PRES ENT APPEAL. 6. QUESTION (IV) HAS BEEN DEALT WITH IN DETAIL BY T HE CIT(A) AND THE TRIBUNAL. FIRSTLY, THE DOCUMENTS ON WHICH THE AD RELIED UPON THE APPEA L WERE NOT PUT TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE CIT(A) NEVERTHELESS CON SIDERED THEM IN DETAIL AND FOUND THAT THERE WAS NO CO-RELATION BETWEEN THE AMOUNTS SOUGHT TO BE ADDED AND THE ENTRIES IN THOSE DOCUMENTS. THIS WAS ON AN APPRECIATION OF FACTS. TH ERE IS NOTHING TO INDICATE THAT THE SAME WAS PERVERSE OR IRRATIONAL. ACCORDINGLY, NO QUESTIO N OF LAW ARISES. 7. IN THE CIRCUMSTANCES, THE APPEAL IS DISMISSED.' 15 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 7. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE CASE AS EXPLAINED ABOVE AND RESPECTFULLY FOLLOWING THE PRECEDENT, AS AFORESAID, THE ADDITION AMOUNTING RS. 18,46,600/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) IS H EREBY DELETED AND GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 20. THE LD. D.R. HAD HEAVILY RELIED UPON THE DECISI ON OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BIMALCHAND JAIN IN TAX APPEAL NO. 18 OF 2017. I NOTE THAT IN THE CASE RELIED UPON BY THE LD. D.R, I FIND THAT THE FACTS ARE DIFF ERENT FROM THE FACTS OF THE CASE IN HAND. FIRSTLY, IN THAT CASE, THE PURCHASES WERE MADE BY T HE ASSESSEE IN CASH FOR ACQUISITION OF SHARES OF COMPANIES AND THE PURCHASE OF SHARES OF T HE COMPANIES WAS DONE THROUGH THE BROKER AND THE ADDRESS OF THE BROKER WAS INCIDENTAL LY THE ADDRESS OF THE COMPANY. THE PROFIT EARNED BY THE ASSESSEE WAS SHOWN AS CAPITAL GAINS W HICH WAS NOT ACCEPTED BY THE A.O. AND THE GAINS WERE TREATED AS BUSINESS PROFIT OF THE AS SESSEE BY TREATING THE SALES OF THE SHARES WITHIN THE AMBIT OF ADVENTURE IN NATURE OF TRADE. T HUS, IT CAN BE SEEN THAT IN THE DECISION RELIED UPON BY THE LD. DR, THE DISPUTE WAS WHETHER THE PROFIT EARNED ON SALE OF SHARES WAS CAPITAL GAINS OR BUSINESS PROFIT. 21. IT IS CLEAR FROM THE ABOVE THAT THE FACTS OF T HE CASE OF THE ASSESSEE ARE IDENTICAL WITH THE FACTS IN THE ABOVE CASE WHEREIN THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS DELETED THE ADDITION IN THE CASE OF SHRI MANISH BAID (SUPRA) IN RESPECT OF SALE OF SHARES OF M/S KAFL. I, THEREFORE, RESPECTFULLY FOLLOWING THE SAME AND THE FACTS IN THE INSTANT CASE AS TAKEN NOTE IN PARA 7 SUPRA AND DISCUSSIONS, IS INCLINED TO SET AS IDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO NOT TO TREAT THE LONG TERM CAPITAL ON SALE OF S HARES OF M/S KAFL AS BOGUS AND DELETE THE CONSEQUENTIAL ADDITION. 22. BEFORE I PART, I WOULD LIKE TO DISCUSS THE CASE LAW S RELIED UPON BY THE LD. DR. HE ALSO RELIED ON 23 JUDICIAL PRONOUNCEMENTS IN HIS SU PPORT. I NOTE THAT THE SAID JUDICIAL PRONOUNCEMENTS ARE ALL DISTINGUISHABLE ON FACTS AS WELL AS ON LAW. THE SAID DECISIONS ARE DEALT WITH HEREIN BELOW IN SERIATIM AS UNDER: 1. RATNAKAR M. PUJARI VS. ASSESSEE -ITA NO.995/MUM/201 2, ORDER DT. 3RD AUGUST, 2016 [AY 2006-07] -ITAT MUMBAI 16 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 IN THIS CASE THE ITAT, MUMBAI BENCH WERE CONSIDERIN G A CASE WHERE THE PURCHASES OF SHARES WERE TREATED AS BOGUS AND SHAM TRANSACTIO NS BY THE REVENUE IN THE IMMEDIATELY PRECEDING FINANCIAL YEAR 2005-06 AND TH E SAID FINDINGS OF THE AO WITH RESPECT TO BOGUS AND SHAM PURCHASES WERE NOT CHALLE NGED BY THE ASSESSEE. IN SUCH FACTS OF THE CASE THE TRIBUNAL HAD TREATED THE EXEM PT LONG TERM CAPITAL GAINS ARISING ON SALES OF SHARES AS BOGUS AND SHAM. HOWEVER, THER E IS NO SUCH FINDING OF FACT IN THE INSTANT CASE AND THUS THE FACTS IN THE INSTANT CASE ARE DISTINGUISHABLE. IT WAS BROUGHT TO MY NOTICE THAT THE AFORESAID ORDE R OF ITAT, MUMBAI, INTER-ALIA, HAD BEEN DISTINGUISHED BY CO-ORDINATE BENCHES OF THE TR IBUNAL IN THE FOLLOWING CASES: A. KAUSHALYA AGARWAL VS. ITO [ITA NO.194/KO/2018, O RDER DT. 03.06.2019 (KOL, ITAT)] B. MEENU GOEL VS. ITO [2018] 94 TAXMANN.COM 158 (DE L-TRIB) 2. RITU SANJAY MANTRY VS. ITO - ITA NO.2003/MUM/2017, ORDER DT. 9TH FEBRUARY, 2018 - ITAT MUMBAI IN THIS CASE IS THAT WAS REOPENED BY THE AO ON THE BASIS OF INFORMATION RECEIVED FROM OFFICE OF DGIT (C&IB), NEW DELHI THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRY FROM M/S. MAGASAGAR SECURITIES PVT. LTD. (A COMPAN Y IN THE MAHASAGAR SECURITIES PVT. LTD. GROUP SHARE SCAM CASE) OF RS.10,32,289/-. SUBSEQUENTLY THE ASSESSMENT WAS COMPLETED U/S. 147 R.W.S. 143(3) OF THE ACT AFTER M AKING AN ADDITION OF RS.10,39,289/- ON ACCOUNT OF BOGUS SHARE TRANSACTIO NS AND RS.20,786/- BEING COMMISSION PAID TO THE BROKER FOR ARRANGING ACCOMMO DATION ENTRIES IN THE FORM OF SHARE TRANSACTIONS. THE AO HAD GIVEN A FINDING THAT THE ASSESSEE HAD TAKEN ENTRIES FROM MAHASAGAR SECURITIES PVT. LTD. INVOLVED IN THE SHARES SCAM CASE FOR RS.10,39,289/- FOR BOGUS SPECULATION PROFIT DURING THE FINANCIAL YEAR 2007 -08. IT WAS FURTHER FOUND BY THE AO THAT THE ASSESSEE HAS PAID CASH OF EQUIVALENT AMOUNT AND RECEIVED BACK BY CHEQUE AND BOGUS CONTRACT NOTES AN D BILLS FOR THE TRANSACTIONS NOT ACTUALLY ROOTED THROUGH STOCK EXCHANGE. IT IS NOTE D THAT THE ITAT, MUMBAI HAD RELIED UPON AND FOLLOWED THE JUDGMENT OF HON'BLE BO MBAY HIGH COURT IN SANJAY BIMALCHAND JAIN V. PCIT, ORDER DATED 10.04.2017 (BO M.), BEING JUDGMENT OF JURISDICTIONAL HIGH COURT. HOWEVER, IN THIS CASE, THE AO OBSERVED THAT THE ASSESSEE 17 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 HAD TAKEN ENTRIES AND PAID CASH OF EQUIVALENT AMOUN T AND RECEIVED BACK BY CHEQUE. AND ON THE BASIS OF SUCH ADVERSE INFERENCE, THE TRI BUNAL CONFIRMED THE ADDITION MADE BY THE AO. HOWEVER, IN THE PRESENT CASE IN HAN D, THERE IS NO SUCH FINDING MADE BY THE AO. FURTHER. IT IS NOTED THAT THE ABOVEMENTIONED JUDGME NT OF ITAT, MUMBAI BENCH HAS BEEN CONSIDERED AND DISTINGUISHED BY THE ITAT, KOLK ATA BENCHES AND OTHER BENCHES OF THE TRIBUNAL, INTER-ALIA, IN THE FOLLOWING CASES : A. SATYANARAYAN SARIA VS. ITO [ITA NO.1224/KOIL2016 , ORDER DT. 28.06.2019 (KOL ITAT)] B. KAUSHALYA AGARWAL VS. ITO [ITA NO.194/KOIL2018, ORDER DT. 03.06.2019 (KOL, ITAT)] C. MEENU GOEL VS. ITO [2018] 94 TAXMANN.COM 158 (DE L-TRIB) REFERENCE IS ALSO MADE TO THE RECENT JUDGMENT DATED 01.07.2019 RENDERED BY THIS TRIBUNAL IN THE CASE OF APARNA MISRA VS. ITO (ITA N O. 161/KOL/2019) WHEREIN THE TRIBUNAL HAD RELIED UPON THE FOLLOWING JURISDICTION AL CALCUTTA HIGH COURT JUDGMENTS TO DECIDE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. I) M/S CLASSIC GROWERS LTD. VS. CIT [ITA NO. 129 O F 2012] II) CIT VS. LAKSHMANGARH ESTATE & TRADING CO. LIMIT ED [2013] 40 TAXMANN.COM 439 (CAL) III) CIT V. SHREYASHI GANGULI [ITA NO. 196 OF 2012 ] IV) CIT V. RUNGTA PROPERTIES PRIVATE LIMITED [ITA NO. 105 OF 2016] V) CIT V. ANDAMAN TIMBERS INDUSTRIES LIMITED [ITA NO. 721 OF 2008] VI) CIT V. BHAGWATI PRASAD AGARWAL [2009- TMI-3473 8-ITA NO. 22 OF 2009, ORDER DT. 29.4.09] 3) COMING TO THE CASE OF ITO VS. SHAMIM M. BHARWANI (2016) 69 TAXMANN.COM (MUM ITAT), ORDER DT. 27.03.2015 OF MUMBAI TRIABUNA L, THE BRIEF FACTS IN THIS CASE WAS THAT THE ASSESSEE PURCHASED 2500 SHARES OF EMR ALD COMMERCIAL LTD. (ECL). THE PURCHASE WAS IN CASH. ACCORDING TO THE AO SINCE THE PURCHASE WAS MADE IN CASH, THE SAME WAS NOT VERIFIABLE. FURTHER, THE A.O. FOUND TH AT SAID TRANSACTION WAS NOT THROUGH THE STOCK EXCHANGE. THE SHARES WERE IN A NO NDESCRIPT COMPANY, WITH NO 18 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 FINANCIAL AND/OR PHYSICAL ASSETS OF VALUE OR REPORT ED EARNINGS. THE SHARES, PURCHASED AT AN AVERAGE RATE OF RS. 21.70 PER SHARE IN MAY 20 04, WENT UP TO AS MUCH AS FROM RS. 465 TO RS. 489 IN JULY, 2005, I.E., JUST OVER Y EARS' TIME. EACH OF THESE INCIDENTS MATCHED WITH THAT WHICH COULD BE EXPECTED IN A CASE OF A TRANSACTION IN A PENNY STOCK, THE MODUS OPERANDI OF THE TRANSACTIONS IN WH ICH WAS ALSO LISTED BY THE AO. ACCORDINGLY, RELYING ON THE DECISIONS BY THE APEX C OURT IN THE CASE OF SUMATI DAYAL V. CIT [1995] 214 ITR 801/80 TAXMAN 89 (SC); DURGA PRASAD MORE V. CIT [1971] 182 ITR 540 (SC) AND MC. DOWELL & CO. LTD. V. CTO [ 1985] 154 ITR 148/22 TAXMAN 11 (SC), BESIDES BY THE TRIBUNAL IN THE CASE OF ASSTT. CIT V. SOM NATH MAINI [2006] 7 SOT 202 (CHD.), HE ASSESSED THE IMPU GNED CREDIT OF RS. 12.15 LACS AS UNEXPLAINED INCOME U/S. 68 OF THE ACT. THE TRIBUNAL CONFIRMED THE ADDITION OBSERVING THAT THE PURCHASE OF SHARES WAS OFF MARKE T PURCHASE NOT REPORTED IN THE STOCK EXCHANGE. FURTHER, IT WAS OBSERVED BY THE TRI BUNAL THAT THE PURCHASE WAS THROUGH A BACK DATE CONTRACT NOTE IN CASH AND, THER E WAS NO TRAIL. THUS IT IS NOTED THAT TRIBUNAL IN THIS CASE CONFIRMED THE ADDITION O N A FACTUAL FINDING THAT THE PURCHASE WAS THROUGH A BACK DATED CONTRACT NOTE IN CASH AND, THERE WAS NO TRAIL. THIS FACT IS NOT APPLICABLE IN THE PRESENT CASE. FURTHER, IT IS NOTED THAT THE ABOVEMENTIONED JUDGME NT OF TRIBUNAL, MUMBAI BENCH WAS CONSIDERED/DISTINGUISHED BY THE MUMBAI ITAT IN ITS FOLLOWING JUDGMENTS WHILE ALLOWING SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE: A. DCIT VS. ANIL KAINYA [ ITA NOS.4077 & 4078/MUM/2 013, ORDER DT. 22.03.16 MUM ITAT)] B. ANJALI PANDIT VS. ACIT [2017] 88 TAXMANN.COM 657 (MUMBAI - TRIB.) FURTHER, IT IS NOTED THAT LTHE SAID JUDGMENT HAS BE EN CONSIDERED/DISTINGUISHED BY THE KOLKATA AND OTHER BENCHES OF THE TRIBUNAL, INTER-AL IA, IN THE FOLLOWING CASES WHILE ALLOWING SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. A. KAUSHALYA AGARWAL VS. ITO [ITA NO.194/KOL/2018, ORDER DT. 03.06.2019 (KOL ITAT)] B. ANUPAMA GARG VS. ITO [ITA NO.5971/0EL/2018, ORDE R DT. 12.12.2018 (DEL, ITAT)] 19 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 C. RADHIKA GARG. VS. ITO [ITA NO.4738/0EL/2018, ORD ER DT. 01.01.2019 (DEL-TRIB) 4. COMING TO THE CASE OF VIDYA REDDY - ITA NO.126/CHNY /2017 - CHENNAI ITAT HAD DISALLOWED THE CLAIM OF EXEMPT LTCG AND HAD CON FIRMED THE ADDITION MADE ON THE GROUND THAT THE ASSESSEE HAS NOT PLACED ANY MAT ERIAL BEFORE THE LOWER AUTHORITIES TO PROVE THAT HER TRANSACTIONS ARE GENUINE. THE TR IBUNAL OBSERVED SHE HAS ALSO NOT PLACED ANY MATERIAL TO PROVE THAT HER CLAIM OF EXEM PTION U/S. 10(38) IS GENUINE AND VALID. HOWEVER, IN THE CASE OF THE ASSESSEE COMPAN Y ALL RELEVANT DOCUMENTS WERE FURNISHED TO SUPPORT PURCHASES AS WELL AS SALE OF S HARES. FURTHER, THE CHENNAI TRIBUNAL HAD RELIED UPON AND FOLLOWED THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN SANJAY BIMALCHAND JAIN VS. PCIT, ORDER DATED 10. 04.2017, WHICH JUDGMENT HAS BEEN CONSIDERED AND DISTINGUISHED BY KOLKATA AND OT HER BENCHES OF THE TRIBUNAL, INTER-ALIA, IN THE FOLLOWING CASES: A. SATYANARAYAN SARIA VS. ITO [ITA NO.1224/KOL/2016 , ORDER DT. 28.06.2019 (KOL ITAT)] B. KAUSHALYA AGARWAL VS. ITO [ITA NO.194/KOL/2018, ORDER DT. 03.06.2019 (KOL, ITAT)] C. MEENU GOEL VS. ITO [2018] 94 TAXMANN.COM 158 (DE L-TRIB) REFERENCE IS ALSO MADE TO THE RECENT JUDGMENT DATED 1ST JULY, 2019 RENDERED BY THE TRIBUNAL IN THE CASE OF APARNA MISRA VS. ITO [ITA N O.161/KOIL2019] WHEREIN THE TRIBUNAL HAD RELIED UPON THE JURISDICTIONAL CALCUTT A HIGH COURT JUDGMENTS, AS MENTIONED HEREINABOVE. 5. M. K. RAJESHWARI VS. ITO [2018] 99 TAXMANN.COM 339 THE BANGALORE TRIBUNAL NOTED THE ACTS IN THIS CASE AS THE ASSESSE E EARNED LONG-TERM CAPITAL GAIN ON SALE OF SHARES OF MARL AND CLAIMED EXEMPTION ON IT UNDER SECTION 10(38). THE ASSESSING OFFICER RELYING UPON THE REPORT OF THE IN VESTIGATION WING, SEBI REPORT AND FINDINGS/OBSERVATIONS OF THE SIT, CONCLUDED THAT EX EMPTION UNDER SECTION 10(38) CLAIMED BY THE ASSESSEE WAS NOT ACCEPTABLE AND THE ACT OF THE ASSESSEE IN PURCHASING THE PENNY STOCK SHARES AND SALE OF FEE WITHIN THE A MBIT OF ADVENTURE IN THE NATURE OF TRADE. CONSEQUENTLY, AMOUNT IN QUESTION WAS LIABLE TO BE TAXED UNDER THE HEAD 'BUSINESS INCOME'. THE TRIBUNAL CONFIRMED THE ADDIT ION BY OBSERVING THAT THE 20 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 DEPARTMENT HAD BROUGHT SUFFICIENT MATERIAL ON RECOR D TO DEMONSTRATE THAT UNACCOUNTED MONEY WAS INTRODUCED IN THE BOOKS OF AC COUNT THROUGH LONG-TERM CAPITAL GAIN BY ADOPTING SUCH METHOD. IT IS NOTED THAT IN THE AFORESAID CASE, THE TRIBUNA L CONFIRMED THE ADDITION ON A FACTUA1 FINDING THAT THE DEPARTMENT HAD BROUGHT SUFFICIENT MATERIAL ON RECORD TO DEMONSTRATE THAT UNACCOUNTED MONEY WAS INTRODUCED IN THE BOOKS OF ACCOUNT THROUGH LONG-TERM CAPITAL GAIN BY ADOPTING SUCH METHOD. THIS FACT IS NOT APPLICABLE IN THE PRESENT CASE. FURTHER, THE ABOVEMENTIONED JUDGMENT HAS BEEN CONSI DERED/DISTINGUISHED BY THIS TRIBUNAL, INTER-ALIA, IN THE FOLLOWING CASES WHILE ALLOWING SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE: A. KAUSHALYA AGARWAL VS. ITO [ITA NO.194/KOL/2018, ORDER DT. 03.06.2019 (KOI ITAT)] B. YOGESH DALMIA VS. ACIT [ITA NO.113/KOL/2018, ORD ER DT. 03.06.2019 (KOI ITAT)] C. NAVIN KUMAR KAJARIA VS. ACIT [ITA NO.1254-55/KOL /2018, ORDER DT. 03.04.2019 (KOL- TRIB) D. SOUMITRA CHOUDHURY VS. ACIT [ITA NO.256/KOL/2019 , ORDER DT. 15.03.2019 (KOL ITAT)] 6. COMING TO THE CASE OF ABHIMANYU SOIN [2018-TIOL-733 -ITAT-CHD THE CHANDIGARH BENCH OF TRIBUNAL HAD CONFIRMED THE ADDI TION MADE BY AO AFTER OBSERVING THAT '11. THE ASSESSEE HAS FAILED TO PROVE THAT THE PURC HASE AND SALE TRANSACTIONS ARE GENUINE AND COULD NOT EVEN FURNISH AND IOTA OF EVID ENCE REGARDING THE SALE OF SHARES .............. HOWEVER, IN THE CASE OF THE ASSESSE E COMPANY ALL RELEVANT DOCUMENTS WERE FURNISHED TO SUPPORT, AND PROVE BEYOND ALL DOU BTS, PURCHASES AND AS WELL AS SALE OF SHARES, WHICH WAS EVIDENTLY ABSENT IN THAT CASE, SO IS NOT APPLICABLE TO CASE IN HAND. 7. COMING TO THE CASE OF BALBIR CHAND MAINI VS. CIT (2011) 12 TAXMANN.COM 276 (P&H) THE HONBLE PUNJAB & HARYANA HIGH COURT HAD CONFIRMED T HE ADDITION MADE BY ASSESSING OFFICER ON THE BASIS OF FINDING O F FACT BY THE TRIBUNAL: 21 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 10. THE TRIBUNAL WHILE ADJUDICATING THE ISSUE AGAI NST THE ASSESSEE HAD RECORDED A FINDING OF FACT THAT THE TRANSACTION OF SALE AND PU RCHASE OF SHARES OF M/S. ANKUR INTERNATIONAL LTD., WAS NOT A GENUINE TRANSACTION, A PART WHERE OF RELEVANT TO THE PRESENT ISSUE, MENTIONED IN PARA NOS. 27 AND 28 OF THE ORDER, READS AS UNDER .... HOWEVER, IN THE CASE OF THE ASSESSEE COMPANY ALL RE LEVANT DOCUMENTS WERE FURNISHED TO SUPPORT, AND PROVE BEYOND ALL DOUBTS, PURCHASES AND AS WELL AS SALE OF SHARES. FURTHER THIS JUDGMENT HAS BEEN CONSIDERED AND DISTI NGUISHED BY THIS TRIBUNAL AND OTHER BENCHES OF THE TRIBUNAL, INTER-ALIA, IN THE F OLLOWING CASES WHILE ALLOWING SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE: A. KAUSHALYA AGARWAL VS. ITO [ITA NO.194/KOL/2018, ORDER DT. 03.06.2019 (KOL ITAT)] B. KAMAL SINGH KUNDALIA VS. ITO [ITA NO.2359/KOL/20 17, ORDER DT. 08.05.2019 (KOL ITAT)] C. MEENU GOEL VS. ITO [2018] 94 TAXMANN.COM 158 (DE L-TRIB) 8. COMING TO THE CASE OF CHANDAN GUPTA VS. CIT (2015) 54 TAXMANN.COM 10 (P&H ) THE HON'BLE PUNJAB & HARYANA HIGH COURT HAD CON FIRMED THE ADDITION MADE BY ASSESSING OFFICER ON THE BASIS OF FINDING O F FACT BY THE TRIBUNAL THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION OF SALE AND PURCHASE OF SHARES. THE RELEVANT OBSERVATION IS AS UNDER: ' ..... ON APPRECIATION OF THE EVIDENCE, THE TRIBUNAL HELD THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION OF SALE AN D PURCHASE OF SHARES. ONCE THE TRANSACTION OF PURCHASE AND SALE WAS FOUND TO BE BO GUS THEN THE SALE PROCEEDS HAD TO BE ADDED AS INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT BECAUSE THE MONEY RECEIVED ON THE BASIS OF BOGUS TRANSACTION HAD BEEN CREDITED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT WHICH REMAINED UNEXPLAINED. 9. IN VIEW OF THE FINDINGS OF FACT RECORDED BY THE AUTHORITIES BELOW WHICH COULD NOT BE DEMONSTRATED TO BE ERRONEOUS OR PERVERSE IN ANY MAN NER, NO INTERFERENCE IS CALLED FOR. ' HOWEVER, IN THE INSTANT CASE OF THE ASSESSEE COMPAN Y ALL RELEVANT DOCUMENTS WERE FURNISHED TO SUPPORT AND PROVE BEYOND ALL DOUBTS, P URCHASES AS WELL AS SALE OF SHARES. FURTHER THIS JUDGMENT HAS BEEN CONSIDERED AND DISTI NGUISHED BY THIS TRIBUNAL AND OTHER BENCHES OF THE TRIBUNAL, INTER-ALIA, IN THE F OLLOWING CASES WHILE ALLOWING SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE: 22 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 A. KAUSHALYA AGARWAL VS. ITO [ITA NO.194/KOL/2018, ORDER DT. 03.06.2019 (KOL, ITAT)] B. KAMAL SINGH KUNDALIA VS. ITO [ITA NO.2359/KOL/20 17, ORDER DT. 08.05.2019 (KOL ITAT)] C. MEENU GOEL VS. ITO [2018] 94 TAXMANN.COM 158 (DE L-TRIB) 9. COMING TO THE CASE OF CIT VS. SUNITA DHADDA (HONBL E SUPREME COURT JUDGMENT DATED 06.06.2018), IT IS NOTED THAT THIS JUDGMENT RELIED UPON BY THE DEPARTMENT HAS NO APPLICATION IN THE FACTS OF THE I NSTANT CASE. THE CONTENTION OF LD. DR THAT MATTER SHOULD BE SET ASIDE TO AO FOR SUPPLY ING THE ASSESSEE WITH INVESTIGATION WING REPORT AND STATEMENTS OF PARTIES RELIED UPON CANNOT BE APPLIED IN EACH AND EVERY CASE. THE ASSESSEE COMPANY HAD IN T HE CASE IN HAND DISCHARGED THE ONUS CASTED UPON IT TO PROVE THE CLAIM OF LTCG/STCL , THEN IT WAS THE BOUNDEN DUTY OF THE AO TO BRING OUT THE FALSITY/FABRICATION/WRON G DOING IF ANY ON THE PART OF ASSESSEE OR CONFRONT THE ASSESSEE WITH ANY MATERIAL WHICH IS ADVERSE AGAINST THE ASSESSEE AND TO PROCEED IN ACCORDANCE TO LAW I.E. I N CONFRONTING WITH PRINCIPLE OF NATURAL JUSTICE WITHOUT DOING SO, AND WHEN ASSESSEE PLACED ALL DOCUMENTARY EVIDENCES BEFORE THE AO/LD. CIT(A), THE ASSESSEE CA NNOT BE AGAIN SENT BACK BEFORE AO AND THE DECISION TO SEND BACK TO AO IS DECIDED W HEN PROPER OPPORTUNITY HAS NOT BEEN GIVEN BY AO DURING ASSESSMENT STAGE AND THAT I S NOT THE CASE HERE IN THE CASE IN HAND. 10. COMING TO THE FOLLOWING CASES. I NOTE THAT IN THESE CASES GIVEN BELOW MAHENDRA KUMAR BHANDARI VS. ITO [ORDER DT. 06.04.20 18] ARAVIND KUMAR, CHENNAI VS. ITO [ORDER DT. 08.11.201 8] VIKRAM DUGHAR, CHENNAI VS. ITO [ORDER DT. 13.11.201 8] SADHANA, BANGALORE VS. ITO [ORDER DT. 26.05.2017] ARUN KUMAR BHAIYA, NEW DELHI VS. ITO [ORDER DT. 30. 08.2018] NATTI SINGH HUF, JAIPUR VS. ACIT [ORDER DT. 31.10.2 018] VINOD J. SHARMA, THANE [ORDER DT. 28.10.2015] ALL THE MATTERS WERE SET ASIDE TO THE FILE OF THE A O FOR FRESH CONSIDERATION AND/OR TO CONFRONT THE ASSESSEE WITH THE ADVERSE MATERIALS US ED AGAINST HIM. THE MATTERS IN 23 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 EACH OF THE SAID CASES WERE SET ASIDE IN THE SPECIF IC FACTS AND CIRCUMSTANCES OF EACH OF THE CASES WERE SET ASIDE IN THE SPECIFIC FACTS AND CIRCUMSTANCES OF EACH OF THE CASES WHEREIN ALL FACTS WERE NOT AVAILABLE ON RECOR D AND/OR WHERE IN THE WORDS OF THE D/R THE AO HAS BOTCHED UP ENQUIRY. HOWEVER, IN THE CASE IN HAND THERE IS NO OCCASION FOR SETTING ASIDE THE MATTER IN AS MUCH AS THE ASSESSEE HAD FURNISHED ALL RELEVANT DOC UMENTS, MATERIALS AND/OR EVIDENCE TO SUPPORT ITS TRANSACTIONS OF PURCHASE AND AS WELL AS SALE OF SHARES AND THE AO HAD FAILED TO POINT OUT ANY DEFECT AND/OR LACUNA IN THE SAID DOCUMENTS, MATERIALS AND/OR EVIDENCE. FURTHER, THIS TRIBUNAL IN ITS ORDERS HAD DECIDED SI MILAR ISSUE IN FAVOUR OF THE ASSESSEE BY RELYING ON BINDING JUDICIAL PRONOUNCEMENTS. REF ERENCE IS ALSO MADE TO THE RECENT JUDGMENT DATED 1 ST JULY, 2019 RENDERED BY THE TRIBUNAL IN THE CASE OF APARNA MIWSRA, SUPRA WHEREIN THE TRIBUNAL HAD RELIED UPON THE FOLL OWING JURISDICTIONAL CALCUTTA HIGH COURT JUDGMENTS TO DECIDE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. I) M/S CLASSIC GROWERS LTD. VS. CIT [ITA NO. 129 OF 2012] II)CIT VS. LAKSHMANGARH ESTATE & TRADING CO. LIMITE D [2013] 40 TAXMANN.COM 439 (CAL) III) CIT V. SHREYASHI GANGULI [ITA NO. 196 OF 2012] IV) CIT V. RUNGTA PROPERTIES PRIVATE LIMITED [ITA N O. 105 OF 2016] V) CIT V. ANDAMAN TIMBERS INDUSTRIES LIMITED [ITA N O. 721 OF 2008] VI) CIT V. BHAGWATI PRASAD AGARWAL [2009- TMI-34738 -ITA NO. 22 OF 2009, ORDER DT. 29.4.09] 11. COMING TO THE CASES GIVEN BELOW PREM JAIN VS. ITO [ITAT, DELHI, ORDER DT. 22.03.201 8] SANJAY BIMALCHAND JAIN VS. PCIT [2018] 89 TAXMANN.C OM 196 (BOM) THE DECISIONS OF THESE CASES HAD BEEN RELIED UPON B Y D/R TO CONTEND THAT GAINS FROM SALE OF SHARES SHOULD BE ASSESSED AS 'BUSINESS INCO ME' AND NOT UNDER THE HEAD 'CAPITAL GAINS'. IT IS NOTED THAT THE LEARNED D/R I S TRYING TO PUT FORWARD A COMPLETELY NEW ARGUMENT WHICH DO NOT EMANATE OUT OF THE ORDERS OF THE LOWER AUTHORITIES AND ALSO FROM THE RECORDS OF THE CASE A ND THUS IS NOT PERMISSIBLE TO BE RAISED AS THIS STAGE. 24 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 EVEN OTHERWISE, THE ITAT, DELHI BENCH IN PREM JAIN (SUPRA) HAD HELD WHEN THE FACTS OF THE CASE WAS THAT THE ASSESSEE HAD CLAIMED THE I NCOME FROM SALE OF SHARES TO BE ASSESSED AT BUSINESS PROFITS AND NOT CAPITAL GAINS WHERE THERE WAS SHORT DURATION OF HOLDING OF SHARES AND LACK OF CLARITY IN ACCOUNT BO OKS, SALE AND PURCHASE OF SHARES. IN SUCH FACTS OF THE CASE, IT WAS HELD THAT PROFITS FR OM SALE OF SHARES WOULD AMOUNT TO BUSINESS INCOME AND NOT SHORT TERM CAPITAL GAIN. HO WEVER, NO SUCH CASE HAD BEEN MADE OUT BY THE ASSESSING OFFICER IN THE INSTANT CA SES. THE AFORESAID ORDER HAS BEEN CONSIDERED BY THIS TRI BUNAL WHILE DECIDING SIMILAR ISSUE IN FAVOUR OF AN ASSESSEE IN THE CASE OF KAUSHALYA A GARWAL VS. ITO (ITA NO. 194/KOL/2018, ORDER DATED 03.06.2019 (ITAT, KOL). MORE PARTICULARLY, THE JUDGMENT OF HONBLE BOMBAY H IGH COURT IN SANJAY BIMALCHAND JAIN V. PCIUT, ORDER DATED 10.04.2017 (B OM HC) HAD BEEN CONSIDERED AND DISTINGUISHED BY THIS TRIBUNAL AND OTHER BENCHE S OF THE TRIBUNAL, INTER-ALIA, IN THE FOLLOWING CASES: A. SATYANARAYAN SARIA VS. ITO [ITA NO.1224/KOL/2016 , ORDER DT. 28.06.2019 (KOL ITAT)] B. KAUSHALYA AGARWAL VS. ITO [ITA NO.194/KOL/2018, ORDER DT. 03.06.2019 (KOL, ITAT)] C. MEENU GOEL VS. ITO [2018] 94 TAXMANN.COM 158 (DE L-TRIB) 12. COMING TO THE CASES GIVEN BELOW: ACIT VS. MADHURI SUNIL KOTECHA [ITAT, PUNE, ORDER D T. 28.03.2018] CHARU AGARWAL, MEERUT VS. ITO [ITAT, DELHI, ORDER D T. 10.09.2018] DAYARAM KHANDELWAL VS. PCIT [MP HIGH COURT, ORDER D T. 01.03.2018] SOURABH KHANDELWAL VS. PCIT [MP HIGH COURT, ORDER D T. 01.03.2018] IT IS NOTED THAT IN ALL OF THESE CASES RELATES TO I MPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THE FACTS WHERE THE ASSESSE E HAD WITHDRAWN/SURRENDERED HIS/HER CLAIM OF EXEMPT L TCG U/S. 10(38) OF THE AC T AND PAID TAXES ON THE GAINS ARISING FROM SALE OF SHARES. ALL THESE JUDGMENTS AR E IRRELEVANT AND HAS NO APPLICATION TO THE FACTS OF THE INSTANT CASE BEFORE THE TRIBUN AL. 13. COMING TO THE CASE OF SEBI V. RAKHI TRADING P. LTD [CIVIL APPEAL NO.1969 OF 2011, JUDGMENT DATED 8TH FEBRUARY, 2018 (OF THE HON BLE SUPREME COURT ) IT IS NOTED 25 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 THAT THE HON'BLE SUPREME COURT WAS CONCERNED WITH A CASE WHERE SEBI HAD INITIATED ACTIONS AGAINST FEW TRADERS AND BROKERS FOR VIOLATI ON OF REGULATIONS 3(A), (B) AND (C) AND 4 (1), (2)(A) AND (B) OF THE SECURITIES AND EXC HANGE BOARD OF INDIA (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING T O SECURITIES MARKET) REGULATIONS, 2003 ('THE PFUTP REGULATIONS'). IN THE SAID CASE, T HE HON'BLE APEX COURT UPHELD THE ACTION INITIATED IN THE CASE OF TRADERS AS THE SAID TRADERS HAVE ADMITTED OF BEING INVOLVED IN SYNCHRONIZED TRADE TO MANIPULATE THE PR ICES OF SHARES. THERE IS NO SUCH ADMISSION BY THE ASSESSEE IN THE INSTANT CASE THAT IT HAS INVOLVED IN ANY PRICE MANIPULATION AND/OR ANY DUBIOUS TAX PLANNING. MOREO VER, THE HON'BLE APEX COURT HAD SET ASIDE THE ACTION INITIATED BY SEBI IN THE C ASE OF BROKERS AS THERE WAS NO EVIDENCE ON RECORD TO SHOW INVOLVEMENT OF THE SAID BROKERS. SIMILARLY IN THE INSTANT CASES THE DEPARTMENT HAD FAILED TO BRING ON RECORD ANY EVIDENCE WHATSOEVER TO SHOW THAT THE ASSESSEE WAS INVOLVED IN ANY PRICE MANIPUL ATIONS. THUS THE JUDGMENT OF THE HON'BLE SUPREME COURT IS CLEARLY DISTINGUISHABLE ON FACTS. THE SAID JUDGMENT HAD BEEN HELD TO BE DISTINGUISHABLE BY THE ITAT, KOLKAT A BENCHES IN THE FOLLOWING JUDGMENTS:- I. SUMAN SARAF V. ITO IN ITA NO.1395/KOL/2018, ORDE R DATED 05.10.2018. II. JIGNESH DESAI V. ITO IN ITA NO.1394/KOL/2018, O RDER DATED 05.10.2018. III. RISHAB JAIN V. ITO IN ITA NO.1392/KOL/2018, OR DER DATED 05.10.2018. IV. REKHA DEVI V. ITO IN ITA NO.1269/KOL/2018, ORDE R DATED 05.10.2018. V. SUNITA DEVI V. ITO IN ITA NO. 1268/KO1/2018, ORD ER DATED 05.10.2018. VI. JAGAT LAL JAIN V.ITO IN ITA NO.1226/KOL/2018, O RDER DATED 05.10.2018. VII. SNEHA CHOUDHARY V. ITO IN ITA NO.1218/KOL/2018 , ORDER DATED 05.10.2018. VIII. U.C.CHOUDHARY & ORS (HUF) V. ITO IN ITA NO.12 17/KOL/2018, ORDER DATED 05.10.2018. IX. VIRENDARA BARMECHA V. ITO IN ITA NO.1201/KOL/20 18, ORDER DATED 05.10.2018. X. TARUNA DEVI BARMECHA V. ITO IN ITA NO.1199/KOL/2 018, ORDER DT. 05.10.2018. XI. PREMLATA AGARWAL VS. ITO IN ITA NO.874/KOL/2018 , ORDER DT. 05.10.2018. XII. SUNIL KUMAR LADHA VS. ITO IN ITA NO.851/KOL/20 18, ORDER DT.05.10.2018. XIII. BALRAM GUPTA VS. ITO IN ITA NO.817/KOL/2018, ORDER DT.05.10.2018. 26 ITA NO. 2330/KOL/2018 MANISH JAIN, HUF, AY 2014-15 XIV. ALKA CHANGOIWALA VS. ITO IN ITA NO.634/KOL/201 8, ORDER DT.05.10.2018. XV. SANTOSH CHORARIA VS. ITO IN ITA NO.521/KOL/2018 , ORDER DT.05.10.2018. XVI. SONAL BAJAJ VS. ITO IN ITA NO.239/KOL/2018, OR DER DT.05.10.2018. XVII. SUDHA KHANDELWAL V. ITO IN ITA NO.86/KOL/2018 , ORDER DT. 05.10.2018. XVIII. BINA AGARWAL VS. ITO IN ITA NO.1403/KOL/2018 , ORDER DT.05.1 0.2018. XIX. HARISH JAIN VS. ITO IN ITA NO. 1404/KO1/2018, ORDER DT.05.10.2018. THUS, IT IS NOTED THAT AFORESAID DECISION OF THE HO NBLE SUPREME COURT, HONBLE BOMBAY HIGH COURT AND TRIBUNAL ARE DISTINGUISHABLE AND SO THE RATIO IS NOT APPLICABLE TO THE CASE/CASES IN HAND. 23. IN THE RESULT, THE APPEAL OF THE ASSESSEE AS DI SCUSSED AT PARA 21 (SUPRA) AND SO APPEAL OF THE ASSESSEE IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2019 SD/- (A. T. VARKEY) JUDICIAL MEMBER DATED: 21ST AUGUST, 2019 JD. (SR. PS) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT MANISH JAIN, HUF, 174, RABINDRA SARANI, KOLKATA-700 007. 2 RESPONDENT ITO, WARD-44(3), KOLKATA. 3 4 5 CIT(A) -13, KOLKATA. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES