Mahesh Kumar (HUF), CHENNAI V. ITO Non Corporate Ward 11(2), CHENNAI

ITA 2392/CHNY/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 6814 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 20-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R ANITAC I T
• Assessee Lawyers: T BANUSEKAR
• Keywords: Share purchase agreement; Principle of natural justice; Earning of tax free income; Wrong claim; Set aside; Capital Gains

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , , $ BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER AND SHRI S.JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NOS. 2563/CHNY/2017 & 2392/CHNY/2018 /ASSESSMENT YEARS: 2014-15 & 2014-15 SHRI MAHESH KUMAR (HUF), 76,JANI JAN KHAN ROAD, ROYAPETTAH,CHENNAI 600 014. VS. INCOME TAX OFFICER, NON-CORPORATE WARD-11(2), CHENNAI. [ PAN: AAEHM 1194 F ] ( & /APPELLANT) ( '(& /RESPONDENT) & ) / APPELLANT BY : MR.T.BANUSEKAR,ADVOCATE '(& ) /RESPONDENT BY : MS.R.ANITA,C.I.T, D.R ) /DATE OF HEARING : 10.12.2019 ) /DATE OF PRONOUNCEMENT : 16.12.2019 / O R D E R PER S.JAYARAMAN, ACCOUNTANT MEMBER : ITA NO.2563/CHNY/2017 IS THE QUANTUM APPEAL FILED B Y THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-13, CHENNAI DATED 12.07.2017 FOR THE ASSESSMENT YEAR 2014-15, A ND ITA NO.2392/CHNY/2018 IS THE PENALTY APPEAL FILED BY TH E ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS)-13, CHENNAI DATED 31.05.2 018 FOR THE ASSESSMENT ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 2 -: YEAR 2014-15 CONFIRMING THE LEVY OF PENALTY U/S.27 1(1)(C) OF THE ACT MADE BY LD. ASSESSING OFFICER. SINCE THE QUANTUM APPEAL AND THE PENALTY APPEAL ARE INTERLINKED, THEY ARE DISPOSED OF BY THIS COMMON OR DER FOR THE SAKE OF CONVENIENCE. 2. SHRI MAHENDRA KUMAR BHANDARI (HUF), THE ASSESSEE FI LED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 AND ADMITTE D LONG TERM CAPITAL GAINS OF RS.31,78,385/-, BUT CLAIMED IT AS AN EXEMPT INCO ME U/S. 10(38) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ASS ESSING OFFICER (AO) SELECTED THE CASE FOR SCRUTINY ON THE BASIS OF SUSPICIOUS SA LE TRANSACTION IN SHARES (PENNY STOCK) REPORT. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE PURCHASED 10,000 SHARES OF M/S.ESSAR INDIA LTD., @ RS.1/- PER SHARE. SUBSEQUENTLY, ONE SHARE WAS SPLIT INTO 10 SHARES AND THE ASSESSEES TOTAL HOLDING BECAME 1,00,000 SHARES. T HE ASSESSEE SOLD THE 1,00,000 SHARES DURING THE PERIOD RELEVANT TO ASSES SMENT YEAR FOR RS.31.80,831/-, CLAIMED THE PROFIT OF LONG TERM CAP ITAL GAINS OF RS. 31,70,831 AS AN EXEMPT INCOME. BASED ON THE INFORMATION RECE IVED FROM THE DIRECTORATE OF INVESTIGATION, KOLKATA, AND AFTER EXAMINING THE ASSESSEES EXPLANATION AND THE MATERIAL AVAILABLE ON RECORD, AND ALSO AFTER AN ALYZING THESE TRANSACTIONS, THE AO HELD, INTER ALIA, THAT THE LONG TERM CAPITAL GAINS CLAIMED BY THE ASSESSEE IS NOT GENUINE ONE AND IT IS ONLY REPRESEN TING THE UNDISCLOSED INCOME OF THE ASSESSEE. THEREFORE, THE AO DISALLOWED THE C LAIM OF ASSESSEE U/S.10(38) OF THE ACT AND ASSESSED RS.31,80,831/- AS AN UNEXPL AINED CREDIT U/S.68 OF THE ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 3 -: ACT AND ADDED TO THE SAME TO THE RETURNED INCOME OF ASSESSEE. FURTHER, THE AO DISALLOWED THE COMMISSION OF RS.95,425/- CLAIMED BY THE ASSESSEE HOLDING THAT THE COMMISSION IS CHARGED FOR PROVIDING ARRANG ED CAPITAL GAINS AND INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT( A). THE LD. CIT(A), DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED AG AINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL IN ITA NO.2563/CHNY/2017 . 3. CONSEQUENT TO THE DISPOSAL OF THE QUANTUM APPEA L BY THE LD.CIT(A), THE AO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF T HE ACT AND AFTER CONSIDERING THE ASSESSEES EXPLANATION ETC., THE AO LEVIED PENA LTY U/S.271(1)(C) OF THE ACT BY AN ORDER DATED 28.02.2018. AGGRIEVED AGAINST TH AT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A), DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED AGAINST THAT ORDER, THE ASSESS EE FILED THE APPEAL IN ITA NO.2392/CHNY/2018. ITA NO.2563/CHNY/2017 4. THERE WAS A DELAY OF 3 DAYS IN FILING OF THIS A PPEAL FOR WHICH THE ASSESSEE FILED AN AFFIDAVIT SUBMITTING THAT THE ASS ESSEE HANDED OVER THE APPEAL PAPERS TO THE CONSULTANT. WHILE THE APPEAL WAS READY, THE ASSESSEE SUFFERED FROM VIRAL FEVER WHICH WAS PREVALENT AT T HE TIME IN CHENNAI FROM 15.10.2017 TO 24.10.2017. THEREFORE, HE COULD NOT G O TO THE CONSULTANT OFFICE TO SIGN THE APPEAL PAPERS. IT WAS SUBMITTED THAT TH E DELAY WAS NOT DUE TO NEGLIGENCE AND BEYOND THE CONTROL OF THE ASSESSEE. THEREFORE, IT WAS A PRAYER ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 4 -: THAT THE DELAY OF 3 DAYS IN FILING OF THIS APPEAL M AY BE CONDONED AND THE APPEAL BE DECIDED ON MERITS. 4.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONDON ED THE DELAY. 5. IT WAS SUBMITTED BY LD.A.R THAT THE ASSESSEE IS A REGULAR INVESTOR IN SHARES AND MAKES PROFITS ON TRANSACTION OF SHARES B OTH LONG TERM CAPITAL GAINS AS WELL AS SHORT TERM CAPITAL GAINS, THEREBY ACCUMU LATES PROFITS AND REPORTED THE SAME TO THE DEPARTMENT. THE ASSESSEE HAS INVEST ED THE SHARES IN M/S.ESSAR INDIA LTD., AND GOT THE IMPUGNED GAIN BY SALE OF SHARES AT RECOGNIZED STOCK SHARE THROUGH RECOGNIZED STOCK BRO KER. THE LD.A.R SUBMITTED THAT THE LD.CIT(A) ERRED IN CONFIRMING SUCH ASSESSM ENT BY TREATING THE PURCHASE AND SALE OF SHARES BY THE ASSESSEE AS A PE NNY STOCK TRANSACTION. THE LD.AR SUBMITTED ON THE LINES OF GROUNDS OF APPE AL AND RELIED ON THE ORDER OF THIS TRIBUNAL IN THE CASE MR SUNIL KUMAR LALWANI VS ITO & OTHERS, NON CORPORATE CIRCLE 9(4), CHENNAI IN ITA NO 659 & 660 / CHNY/2018 DT. 09.01.2019. PER CONTRA, THE LD DR SUBMITTED THAT TH E ASSESSEE HAS CLAIMED DEDUCTION U/S 10 (38) BUT HE HAS NOT PROVED THE GEN UINENESS, THEREFORE, REITERATING THE FACTS AND CIRCUMSTANCES OF THIS CAS E FROM THE ORDERS OF THE LOWER AUTHORITIES, THE LD. DR SUPPORTED THOSE ORDER S AND PLEADED THAT THE APPEAL BE DECIDED ACCORDINGLY. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THE ASSESSEE HAS NOT BEEN GIVEN A FAIR OPPORTUNITY TO PROVE THE GENU INENESS BUT THE ASSESSMENT HAS BEEN MADE PRIMARILY, BASED ON THE EV IDENCES COLLECTED BY THE ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 5 -: REVENUE IN THE COURSE OF THE INVESTIGATION CONDUCTE D BY THEM ON THE BROKERS / SHARE BROKING ENTITIES ETC. THIS IS NOT PERMISSIBLE . THIS BEING SO, IN THE INTERESTS OF NATURAL JUSTICE, THE ISSUE OF THE GENU INENESS OF THE TRANSACTIONS REQUIRE RE-ADJUDICATION. SINCE, THE RIGHT TO EXEMPT ION MUST BE ESTABLISHED BY THOSE WHO SEEK IT, THE ONUS THEREFORE LIES ON THE A SSESSEE. IN ORDER TO CLAIM THE EXEMPTION FROM PAYMENT OF INCOME TAX, THE ASSES SEE HAD TO PUT BEFORE THE INCOME TAX AUTHORITIES PROPER MATERIALS WHICH W OULD ENABLE THEM TO COME TO A CONCLUSION. (35 ITR 312 (SC)).THUS, THE AO MUS T KEEP IN MIND THAT THE ONUS OF PROVING THE EXEMPTION RESTS ON THE ASSESSEE . IF THE AO DOES HAVE ANY EVIDENCE TO THE CONTRARY, IT IS TO BE PUT TO TH E ASSESSEE FOR HIS REBUTTAL. THE INTERNAL COMMUNICATIONS OF THE REVENUE ARE EVID ENCES FOR DRAWING AN OPINION ON POSSIBLE WRONG CLAIMS BUT THEY ARE NOT T HE FINAL EVIDENCE. THE RELEVANT PORTION OF THE ORDER OF THIS TRIBUNAL IN T HE CASE OF MR. SUNIL KUMAR LALWANI VS ITO & OTHERS, NON CORPORATE CIRCLE 9(4 ), CHENNAI IN ITA NO 659 & 660/ CHNY/2018 DT. 09.01.2019 IS EXTRACTED AS UND ER: 5. PER CONTRA, ID. A.R SUBMITTED THAT THE HON 'BLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS. M/S.LAXMAN INDUSTRIAL RESOURCES LTD., IN ITA N'O.169/2017, C.M.APPL.7385/2017 VIDE ORDER DATED 14.03.2017 HAS HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. THE ID. A.R ALSO PLACED BEFORE US THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI ARAVIND NANDLAL. KHATRI VS. INCOME TAX OFFICER, IN ITA NO.2035/CHNY/2038 FOR ASSESSMENT YEAR 2011-12 VIDE ORDER DATED 03.12.2018 WHEREIN THE CO-ORDINATE BENCH OF T HIS TRIBUNAL HAS HELD AS FOLLOWS:- '5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE A.O RECEIVED INFORMATION FROM INVESTIGATION WING OF THE DEPARTMENT AT KOLKAT A WITH REGARD TO INVESTMENT OF THE ASSESSEE IN PENNY STOCK COMPANY, NAMELY, M/S. CONCRETE CREDIT LIMITED. THE ASSESSEE ALSO ADMITTEDLY SOLD T HE SAID SHARES AND CLAIMED EXEMPTION UNDER SECTION 10(38) OF THE ACT DURING TH E YEAR WIDER CONSIDERATION. THEREFORE,, THE ASSESSING OFFICER HA S NOT DISPUTED THE SOURCE ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 6 -: FOR INVESTMENT. THE ASSESSING OFFICER DISALLOWED TH E CLAIM OF EXEMPTION ON THE GROUND THAT THE INVESTMENT WAS IN A PENNY STOCK COM PANY. FROM THE MATERIAL AVAILABLE ON RECORD IT APPEARS THAT A COPY OF INFOR MATION SAID TO BE RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT KO LKATA WAS NOT FURNISHED TO THE ASSESSEE. IT IS NOT BROUGHT ON RECORD THE RELAT IONSHIP OF THE ASSESSEE WITH THE PROMOTERS OF M/S CONCRETE CREDIT LIMITED. IT IS ALSO NOT BROUGHT ON RECORD THE ROLE OF THE ASSESSEE IN PROMOTING THE COMPANY, NAMELY, M/S CONCRETE CREDIT LIMITED, ISSUE OF PUBLIC SHARES, INFLATION O F PRICE OF SHARES, ETC. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDI NGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE A.O SHALL BRING ON RECORD THE ROLE OF THE ASSESSEE IN PROMOTING THE COMPANY AND RELATIONSHIP OF THE ASSESSEE WITH OTHER PROMOTERS, ROLE OF THE ASSESSEE IN INFLATING THE PRICE OF SHARES, ETC.. THE ASSESSING OFFICER SHALL ALSO FURNISH A COPY OF THE REPORT SAID TO BE RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AT KO LKATA TO THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WI TH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE.' 7. FURTHER, PERUSAL OF ASSESSEES CASE SHOWS THAT IT IS SIMILAR TO THE FACTS IN THE CASE OF SHRI HEERACHAND KANUNGA, A DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL MADE FOR ASSESS MENT YEARS 2010-11 & 2011-12 IN ITA NOS. 2786 & 2787/MDS/2017 DATED 03.0 5.2018 . THE RELEVANT PORTION FROM THAT ORDER IS EXTRACTED AS UN DER:- 9. A PERUSAL OF THE FACTS IN THE PRESENT CASE ADMIT TEDLY GIVEN ROOM FOR SUSPICION. HOWEVER, ASSESSMENTS ARE NOT TO BE DONE ON THE BASIS OF MERE SUSPICION. IT HAS TO BE SUPPORTED BY FACTS AND THE FACTS ARE UNFORTUNATELY NOT FORTHCOMING IN THE ASSESSMENT ORDER, IN THE ORD ER OF THE LD.CIT(A) NOR FROM THE SIDE OF THE ASSESSEE. THE MAIN FOUNDATION OF THE ASSESSMENT IN THE PRESENT CASE IS THE STATEMENT OF ONE SHRI ASHOK KUMAR KAYAN WHO HAS ADMITTED TO HAVE PROVIDED BOGUS LONG TERM CAPITAL G AINS TO HIS CLIENTS. THE SAID SHRI ASHOK KUMAR KAYAN ALSO ALLEGEDLY SEEM S TO HAVE PROVIDED THE ASSESSEES NAME AND PAN AS ONE OF THE BENEFICIARIES . HOWEVER, THIS STATEMENT GIVEN BY SHRI ASHOK KUMAR KAYAN CANNOT BE THE FOUNDATION FOR THE PURPOSE OF ASSESSMENT IN SO FAR AS SHRI ASHOK K UMAR KAYAN HAS NOT BEEN PROVIDED TO THE ASSESSEE FOR CROSS-EXAMINATION . IN THE ABSENCE OF OPPORTUNITY OF CROSS-EXAMINATION, THE STATEMENT REM AINS MERE INFORMATION AND SUCH INFORMATION CANNOT BE FOUNDATION FOR ASSES SMENT. 10. ADMITTEDLY, THE ASSESSEE HAS CLAIMED TO HAVE PU RCHASED 15000 SHARES FROM M/S.BPL @ RS.20/- PER SHARE TOTALING IN TO RS.3,00,000/-. THE ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 7 -: ASSESSEE CLAIMS TO HAVE PAID CASH FOR THE PURCHASE OF THESE SHARES. THE PRIMARY QUESTION WOULD BE AS TO WHERE THE PURCHASE WAS DONE? IF THE PURCHASE HAS BEEN DONE IN KOLKATA, HOW WAS THE CASH TRANSFERRED? WHEN DID THE ASSESSEE RECEIVED THE SHARE CERTIFICATES AN D THE SHARE TRANSFER FORMS? HOW DID THE ASSESSEE OVERCOME THE PROVISION S OF SEC.40A(3)? WAS THERE ADEQUATE CASH AVAILABILITY IN THE BOOKS OF TH E ASSESSEE ON 24.04.2008? DID THE ASSESSEE TRAVELLED TO KOLKATA? HOW WAS THE TRANSACTION DONE? WHO APPLIED FOR THE DEMATING OF THE SHARES? WHEN WERE THEY DEMATED? WHEN WERE THE SHARES TRANSFERRE D TO THE DEMAT ACCOUNT OF THE ASSESSEE? TO WHOM WERE THE SHARES SO LD DURING THE ASSESSMENT YEARS 2010-11 & 2011-12? WHEN WERE THE CHEQUES RECEIVED BY THE ASSESSEE? FROM WHOM DID THE ASSESSEE RECEIV ED THE CHEQUES? WAS THERE ANY CASH DEPOSIT IMMEDIATELY PRIOR TO THE ISS UING OF THE CHEQUE FROM THE BANK ACCOUNT OF THE PURCHASER OF THE SHARES OF THE ASSESSEE? 11. A PERUSAL OF THE ASSESSMENT ORDER AT PARA NO.7. 1 SHOWS THAT IN THE WRITTEN SUBMISSIONS, THE ASSESSEE STATES THAT HE HA S PURCHASED 15000 SHARES OF M/S.BPL FROM M/S.ABPL, KOLKATA. HOWEVER, IN PARA NO.8.3, IT IS MENTIONED THAT THE ASSESSEE IN GOOD FAITH HAS PURCH ASED THE SHARES OF M/S.BPL FROM A SUB-BROKER IN HIS FRIENDS CIRCLE. W HAT IS THE TRUE NATURE OF THE TRANSACTION? FROM WHOM DID THE ASSESSEE ACTUALL Y PURCHASE THE SHARES? DID THE ASSESSEE TAKE POSSESSION OF THE SHARES IN I TS PHYSICAL FORM? IN PARA NO.8.1 OF THE ASSESSMENT ORDER, IT IS MENTIONED THA T THE ASSESSEE IS AN INVESTOR AND HAS BEEN REGULARLY TRADING IN SHARES. IF THIS IS SO, DOES THE DEMAT ACCOUNT SHOW SUCH TRANSACTIONS BEING DONE BY THE ASSESSEE OR IS THIS THE ONLY ONE OF TRANSACTION. THUS, CLEARLY THE FAC TS REQUIRED FOR ADJUDICATING THE APPEALS ARE NOT FORTHCOMING. THERE IS NO EVIDE NCE WHATSOEVER TO SHOW THAT THE ASSESSEE HAS HELD THE SHARES FOR MORE THAN 12 MONTHS. THIS IS BECAUSE ASSUMING THAT THE DEMAT HAS BEEN DONE AND T HE SHARES OF M/S.BPL HAS COME INTO THE ASSESSEES DEMAT ACCOUNT AND HAS IMMEDIATELY FLOWN OUT. THEN THE FACTUM OF THE POSSESSION OF THE SHAR ES FOR MORE THAN 12 MONTHS HAVE TO BE PROVED BY THE ASSESSEE. THIS IS ALSO NOT FORTHCOMING. IN REPLY TO A SPECIFIC QUERY, AS THE DATE OF THE DE MAT OF SHARES, IT WAS SUBMITTED BY THE LD.AR THAT THE DEMAT WAS DONE ON V ARIOUS DATES. THEN THE QUESTION RISES AS TO WHY THERE IS SO MUCH OF DI FFERENCE IN THE DATES OF DEMATING WHEN 15000 SHARES HAVE BEEN PURCHASED TOGE THER ON 24.04.2008. NO DETAILS IN RESPECT OF M/S.BPL COMPA NY IS KNOWN, WHAT IS THE PRODUCT OF THE COMPANY WHICH HAD LEAD TO THE SH ARE VALUE OF THE COMPANY TO GO UP FROM RS.20/- TO RS.352/- IN A PERI OD OF TWO YEARS. THIS WOULD CLEARLY BE A CASE WHERE THE SHARE VALUE OF TH E COMPANY WAS HITTING THE CIRCUIT BREAKER OF THE STOCK EXCHANGE ON A DAIL Y BASIS AND OBVIOUSLY IT WOULD HAVE DRAWN ATTENTION. THIS BEING SO, AS THE FACTS ARE NOT COMING OUT OF THE ASSESSMENT ORDER NOR THE ORDER OF THE LD.CIT (A) NOR FROM THE SIDE OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE ISSUES IN THIS APPEAL MUST BE ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 8 -: RESTORED TO THE FILE OF THE AO FOR RE-ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE AND W E DO SO. 12. THE STATEMENT RECORDED BY THE REVENUE FROM SHRI ASHOK KUMAR KAYAN CANNOT BE USED AS AN EVIDENCE AGAINST THE ASS ESSEE IN SO FAR AS THE STATEMENT HAS NOT BEEN GIVEN TO THE ASSESSEE NOR HA S SHRI ASHOK KUMAR KAYAN BEEN PROVIDED TO THE ASSESSEE FOR CROSS-EXAMI NATION. HOWEVER, THE ASSESSEE SHALL PROVE THE TRANSACTION OF THE LONG TE RM CAPITAL GAINS IN RESPECT OF WHICH THE ASSESSEE HAS CLAIMED THE EXEMP TION U/S.10(38) BY PROVIDING ALL SUCH EVIDENCES AS REQUIRED BY THE AO TO SUBSTANTIATE THE CLAIM AS ALSO BY PRODUCING THE PERSONS THROUGH WHOM THE A SSESSEE HAS UNDERTAKEN THE TRANSACTION OF THE PURCHASE AND SALE OF THE SHARES WHICH WOULD INCLUDE THE SUB-BROKER, FRIEND AND THE BROKER THROUGH WHOM THE TRANSACTION HAS BEEN DONE, BEFORE THE AO FOR EXAMIN ATION. 13. IN THE RESULT, THE APPEALS FILED BY THE ASSESS EE IN ITA NOS.2786 & 2787/CHNY/2017 ARE PARTLY ALLOWED FOR STATISTICAL P URPOSES. 8. RESPECTFULLY FOLLOWING THE ABOVE ORDERS, ON THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE DEEM IT FIT TO REMIT THE ISSUE OF EXEMPTION IN THIS APPEAL BACK TO THE FILE OF THE ASSESSING OF FICER FOR RE-ADJUDICATION ON THE LINES INDICATED ABOVE. THEREFORE, THE ASSESSING OFFICER CONCERNED SHALL REQUIRE THE ASSESSEE; TO ESTABLISH WHO, WITH WHOM, HOW AND IN WHAT CIRCUMSTANCES THE IMPUGNED TRANSACTIONS WERE CARRIE D OUT ETC., TO PROVE THAT THE IMPUGNED TRANSACTIONS ARE ACTUAL, GENUINE ETC. THE ASSESSEE SHALL COMPLY WITH THE ASSESSING OFFICERS REQUIREMENTS AS PER LAW. THE ASSESSING OFFICER IS ALSO FREE TO CONDUCT APPROPRIA TE ENQUIRY AS DEEMED FIT. THE ASSESSING OFFICER SHALL ALSO BRING ON RECORD TH E ROLE OF THE ASSESSEE IN PROMOTING THE COMPANY AND RELATIONSHIP OF THE ASSES SEE WITH OTHER PROMOTERS, ROLE OF THE ASSESSEE IN INFLATING THE PR ICE OF SHARES, ETC. AS HAD BEEN HELD BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 9 -: KANHAIYALAL & SONS (HUF) V. ITO IN I.T.A. NO.1849/C HNY/2018, DATED 06.02.2019 REFERRED TO SUPRA. THE ASSESSING OFFICER SHALL FURNISH ADEQUATE OPPORTUNITY TO THE ASSESSEE ON THE MATERIAL ETC TO BE USED AGAINST HIM AND ON APPRECIATION OF ALL THE ASPECTS, THE ASSESSING O FFICER WOULD DECIDE THE MATTER IN ACCORDANCE WITH LAW. THUS, THE ISSUE OF E XEMPTION CLAIM U/S 10(38) IS RESTORED TO THE FILE OF THE ASSESSING OFF ICER FOR RE-ADJUDICATION ON THE LINES INDICATED ABOVE. 9. IN THE RESULT, THE QUANTUM APPEAL OF ASSESSEE I S TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2392/CHNY/2018 10. THERE WAS A DELAY OF 15 DAYS IN FILING OF THIS APPEAL FOR WHICH THE ASSESSEE FILED AN AFFIDAVIT SUBMITTING THAT ON RECE IPT OF ORDER OF THE LD.CIT(A), THE ASSESSEE HANDED OVER THE APPEAL PAPERS TO THE C ONSULTANT. WHILE THE MATTER WAS UNDER CONSIDERATION, THE ASSESSEE SUFFER ED FROM KNEE LIGAMENT STRAIN AND HE WAS ADVISED TO TAKE BED REST FOR A PE RIOD OF 20 DAYS. ON RECOVERY FROM MEDICAL AILMENTS, THE ASSESSEE APPROA CHED THE CONSULTANT AND ON DUE PROCESS, THE ASSESSEE FILED THIS APPEAL WITH A DELAY OF 15 DAYS. IT WAS SUBMITTED THAT THE DELAY WAS NOT DUE TO NEGLIGENCE AND BEYOND THE CONTROL OF THE ASSESSEE. THEREFORE, IT WAS A PRAYER THAT IF TH E DELAY IN FILING OF THIS APPEAL IS NOT CONDONED, IT WOULD CAUSE INJUSTICE TO THE AS SESSEE. HENCE, IT WAS PLEADED THAT IN THE INTEREST OF JUSTICE, THE DELAY BE CONDONED AND THE APPEAL BE DECIDED ON MERITS. ITA NO.2563 /CHNY/2017 2392/CHNY/2018 :- 10 -: 10.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONDO NED THE DELAY. 11. SINCE THE QUANTUM APPEAL IN RESPECT OF THE ISS UES RAISED IN THIS APPEAL IS BEING REMITTED BACK TO THE FILE OF AO FOR A FRESH E XAMINATION SUPRA, THE ASSESSEES APPEAL ON THE PENALTY ORDER PASSED U/S.2 71(1)(C) BECOMES INFRUCTUOUS AND HENCE, IT IS DISMISSED. 12. IN THE RESULT, THE PENALTY APPEAL OF ASSESSEE I S DISMISSED AS INFRUCTUOUS. 13. TO SUM UP, THE QUANTUM APPEAL OF ASSESSEE IN ITA NO.2563/CHNY/2017 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE PENALTY APPEAL OF ASSESSEE IN ITA NO.2392/CHNY/2018 IS DISMISSED. ORDER PRONOUNCED ON THE 16 TH DECEMBER, 2019 IN CHENNAI. SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 16 TH DECEMBER, 2019. K S SUNDARAM ) '12 32 /COPY TO: 1. & /APPELLANT 4. 4 /CIT 2. '(& /RESPONDENT 5. 2 ' /DR 3. 4 ( ) /CIT(A) 6. /GF