Govardhan Tayal, Sendhwa V. The ITO Sendhwa, Sendhwa

ITA 245/Ind/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8710 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 08-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N AGRAWAL; PANKAJ MOGRA CAS
• Keywords: Share purchase agreement; Principle of natural justice; Opportunity of cross examination; Question of law; Accommodation entries; Penny stocks
• Section: 143(3); 143(1); 143(2); 73; 72; 13; 22; 131; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE HONBLE MANISH BORAD, ACCOUNTANT MEMBER AND BEFORE HONBLE MADHUMITA ROY, JUDICIAL MEMBER ITA NO.242/IND/2019 ASSESSMENT YEAR 2014-15 SHRI VRINDAVAN TAYAL C/O S V AGRAWAL & ASOCIATES : APPELLANT DADI DHAM, 24 JOY BUILDERS COLONY, NEAR RAFAEL TOWER, OLD PALASIA, INDORE (M.P.) PAN AASPT7552L V/S THE ITO SENDHWA (M.P.) : RESPONDENT ITA NO.245/IND/2019 ASSESSMENT YEAR 2014-15 SHRI GOVARDHAN TAYAL : APPELLANT C/O S V AGRAWAL & ASSOCIATES DADI DHAM, 24 JOY BUILDERS COLONY, NEAR RAFAEL TOWER, OLD PALASIA, INDORE (M.P.) PAN AASPT7551K V/S THE ITO SENDHWA (M.P.) : RESPONDENT SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 2 ITA NO.246/IND/2019 ASSESSMENT YEAR 2014-15 SHRI GOPAL TAYAL : APPELLANT C/O S. V. AGRAWAL & ASSOCIATES DADI DHAM, 24 JOY BUILDERS COLONY, NEAR RAFAEL TOWER, OLD PALASIA, INDORE (M.P.) PAN AASPT7550J V/S THE ITO SENDHWA (M.P.) : RESPONDENT ITA NO.247/IND/2019 ASSESSMENT YEAR 2014-15 SHRI GAURAV TAYAL : APPELLANT C/O S. V. AGRAWAL & ASSOCIATES DADI DHAM, 24 JOY BUILDERS COLONY, NEAR RAFAEL TOWER, OLD PALASIA, INDORE (M.P.) PAN AEIPT3181R V/S THE ITO SENDHWA (M.P.) : RESPONDENT ASSESSEE BY S/ SHRI S. N. AGRAWAL & PANKAJ MOGRA, CAS REVENUE BY SHRI HARSHIT BARI, SR.DR DATE OF HEARING 22 .0 6 .2021 DATE OF PRONOUNCEMENT 2 7 . 0 7 . 202 1 SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 3 O R D E R PER MADHUMITA ROY, JM:- THE BUNCH OF APPEALS FILED BY THE ASSESSEE(S) ARE D IRECTED AGAINST THE SEPARATE ORDERS OF DIFFERENT DATES PASSED BY TH E LD. CIT(A)-II, INDORE U/S 143(3) OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) CONFIRMING THE ADDITION MADE BY THE L D. A.O UPON DISALLOWING EXEMPTION U/S 10(38) OF THE ACT TOWARDS LONG TERM CAPITAL GAIN ON SALE OF SHARES TREATING IT AS BOGUS . SINCE ALL THE APPEALS RELATE TO THE SAME ISSUE ARISING OUT OF THE IDENTICAL SET OF FACTS, THESE ARE HEARD ANALOGOUSLY AND ARE BEING DI SPOSED BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, THE ITA NO. 242/IND/2019 IS TAKEN AS THE LEAD CASE. 2. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 09.02.2015 SH OWING TOTAL INCOME OF RS. 07,73,479/- WHICH WAS PROCEEDED UNDER SECTION 143(1) OF THE ACT. AS PER THE RETURN, THE ASSESSEE DERIVE S INCOME FROM BUSINESS (GINNING PRESSING, KHANDSARI UDYOG, AND SU GAR MILL), TRADING OF SHARES AND BANK INTEREST. 3. THE SAME WAS SELECTED FOR SCRUTINY THROUGH CASS A ND NOTICE UNDER SECTION 143(2) WAS ISSUED AND DULY SERVED UPO N THE ASSESSEE. UPON VERIFICATION OF THE COMPUTATION OF INCOME AND RETURN OF INCOME FILED BY THE ASSESSEE, IT WAS FOUND THAT THE ASSESS EE CLAIMED EXEMPT LONG-TERM CAPITAL GAIN ON PURCHASE/SALE OF SHARES A T RS. 26,72,311/-. SUCH CLAIM WAS, HOWEVER, REJECTED BY THE LD. AO TRE ATING IT AS BOGUS SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 4 WHICH WAS, IN TURN, CONFIRMED BY THE FIRST APPELLATE AUTHORITY. HENCE, THE INSTANT APPEAL BEFORE US. 4. THE FACTS CULLED OUT FROM THE RECORDS IS THIS TH AT THE ASSESSEE PURCHASED 350 EQUITY SHARES OF LIFELINE DRUGS & PHA RMA LIMITED (IN SHORT LDPL) THROUGH BROKER NAMELY SHRI VISHAL VIJ AY SHAH OF MUMBAI ON 23.03.2012 AT A CONSIDERATION OF RS. 15,8 00/- IN THE PREVIOUS YEAR RELEVANT TO THE A.Y. 2012-13. THE PU RCHASE OF SHARES WAS MADE BY THE APPELLANT THROUGH ACCOUNT PAYEE CHEQ UES AND THEN TRANSFERRED IN THE NAME OF APPELLANT WITH THE RESPEC TIVE COMPANY IN THE A.Y. 2013-14. THE COMPANY THEN ISSUED BONUS SH ARES TO THE APPELLANT IN THE RATIO 1:4, I.E. 1400 SHARES I.E. 3 50 EQUITY SHARE HELD EARLIER TOTALING TO 1050 EQUITY SHARES. OUT OF THE SAID 1050 EQUITY SHARES AS HELD BY THE APPELLANT 350 EQUITY SHARES WERE DEMATERIALIZED ON 05.10.2012 AND REMAINING 1400 SHARES WERE DEMATERIALIZED ON 22.10.2012. SUBSEQUE NTLY, SHARE OF FACE VALUE OF RS. 10/- EACH WAS SPLITTED INTO SHARE OF FACE VALUE OF RS. 1/- EACH ON 19.11.2013 TOTAL INTO 17500 SHARE IN PL ACE OF 1750 SHARES HELD EARLIER. FINALLY THESE SHARES WERE SOLD BY TH E APPELLANT THROUGH BROKER ANAND RATHI LTD. (BSE BROKER) DURING THE PER IOD BETWEEN 25.02.2014 TO 11.03.2014. THROUGH THESE TRANSACTIO NS THE APPELLANT CLAIMED TO HAVE EARNED LONG-TERM CAPITAL GAIN OF RS . 26,72,311/- WHICH WAS CLAIMED EXEMPT UNDER SECTION 10(38) OF THE ACT. 5. BEFORE THE REVENUE THE ASSESSEE SUBMITTED THE F OLLOWING DOCUMENTS IN ORDER TO JUSTIFY THE GENUINENESS OF LO NG-TERM CAPITAL SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 5 GAIN AS CLAIMED EXEMPT UNDER SECTION 10(38) OF THE ACT:- S. NO. PARTICULARS PAGE NO. 1. COPY OF PURCHASE NOTE DT. 23.03.2012 ISSUED BY V ISHAL VIJAY SHAH REGARDING PURCHASE OF 200 SHARES OF M/S. LIFEL INE DRUGS & PHARMA LIMITED FOR RS. 9,048/- 68 2. COPY OF LEDGER ACCOUNT OF THE APPELLANT IN THE B OOKS OF VISHAL VIJAY SHAH 69 3. COPY OF BANK STATEMENT OF THE APPELLANT WITH STA TE BANK OF INDIA WHEREIN THE AMOUNT PAID TOWARDS PURCHASE OF S HARES IS DULY REFLECTED 70 4 PHYSICAL COPY OF SHARE CERTIFICATE OF M/S LIFELIN E DRUGS & PHARMA LIMITED DULY TRANSFERRED I THE NAME OF THE A PPELLANT AS ON 15.06.2012 71-72 5 COPY OF LETTER DT. 21.06.2012 AS ISSUED BY M/S. P URVA SHAREGISTRY (INDIA) PVT. LTD. IN RESPECT OF TRANSFE R OF SHARES IN THE NAME OF THE APPELLANT 72 6 COPY OF SHARE CERTIFICATE AS ISSUED M/S LIGELINE DRUGS & PHARMA LIMITED REGARDING ISSUE OF 1400 BONUS SHARES IN THE NAME OF THE APPELLANT 73 7 COPY OF TRIAL BALANCE OF THE APPELLANT AS ON 31.0 3.2012 AND 31.03.2013 DULY REFLECTING THE INVESTMENT IN SHARES OF M/S LIFELINE DRUGS & PHARMA LIMITED SO AS TO PROVE THE HOLDING OF THESE SHARES IN THE BOOKS OF ACCOUNTS OF THE APPELL ANT 77-80 8 COPY OF D-MAT ACCOUNT OF THE APPELLANT WITH M/S A NAND RATHI SHARE AND STOCK BROKERS LTD. FOR THE PERIOD FROM19. 11.2018 IN RESPECT OF SHARES OF M/S LIFELINE DRUGS & PHARMA LI MITED 75-76 9 COPY OF SALE NOTE FOR SALE OF 15,000 SHARES OF M/ S LIFELINE DRUGS & PHARMA LIMITED 81-83 10 COPY OF BANK STATEMENT OF THE APPELLANT WHEREIN THE AMOUNT REALIZED FROM SALE OF SHARES IS DULY REFLECTED 70 6. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LD. COUNSEL APPEARING FOR THE ASSESSEE RELIED UPON THE WRITTEN N OTES FILED BEFORE US. THE LD. AR FURTHER SUBMITTED THAT THE COMPANY NAMELY M/S LIFELINE DRUGS & PHARMA LIMITED NOW KNOWN AS ARIHANT MULTI COMMERCIAL LTD. IS NOT A PAPER COMPANY NEITHER A SH ELL COMPANY. IN SUPPORT OF HIS CONTENTION HE HAS FILED THE STATEMEN T OF PROFIT AND LOSS ACCOUNT FOR THE RELEVANT ASSESSMENT YEAR AND THE BA LANCE SHEET OF THE SAID COMPANY BEFORE US. SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 6 7. AS REGARDS THE ALLEGATION IN RESPECT OF ARTIFICI AL RIGGING UP OF THE PRICE OF SHARES, IT WAS SUBMITTED THAT THE ID. A.O. DID NOT PROVIDE ANY DOCUMENTARY EVIDENCE OF A LIVE LINK AND DIRECT RELA TION TO SUCH ALLEGED RIGGING OF PRICES WITH THE APPELLANT. HENCE, NO ADV ERSE INFERENCE COULD BE DRAWN AGAINST THE APPELLANT IN THIS REGARD. 8. FURTHER THAT THE LONG TERM CAPITAL GAIN ON SALE OF SHARES IS IN COMPLIANCE WITH LAW IN ALL RESPECT AND IS ALSO ELIGIB LE FOR EXEMPTION U/S 10(38), THE ASSESSEE HAS GENUINELY DERIVED LONG TER M CAPITAL GAIN FROM SALE OF EQUITY SHARES THROUGH RECOGNIZED STOCK EXCHANGE AFTER DUE PAYMENT OF SECURITY TRANSACTION TAX. 9. APART FROM THAT IT WAS SUBMITTED BY THE LD. COUNS EL FOR THE ASSESSEE THAT THE ASSESSEE DULY DISCHARGED ITS ONUS BY FILING ALL THE NECESSARY DOCUMENTS IN SUPPORT OF THE GENUINENESS O F PURCHASE AND SALE OF THESE EQUITY SHARES OF M/S LIFELINE DRUGS & PHARMA LTD. THOUGH THE LD. AO RELIED UPON AN INVESTIGATION REPO RT WHICH WAS ADMITTEDLY CARRIED OUT IN CASE OF ANOTHER PERSON AN D THE ASSESSEE HEREINBEFORE US IS NO WAY CONNECTED WITH SUCH INVESTI GATION WING OF KOLKATA NEITHER ANY OPPORTUNITY OF CROSS-EXAMINATIO N HAS BEEN RENDERED TO THE ASSESSEE. HE HAS RELIED UPON THE J UDGMENT OF HONBLE APEX COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE REPORTED IN, 281 CTR 241 (SC) IN THIS REGARD. NO D OCUMENTARY PROOF HAS BEEN PROVIDED BY THE REVENUE TO SHOW THAT CASH WA S GIVEN BY THE APPELLANT FOR OBTAINING CHEQUES ON ACCOUNT OF SALE OF SHARES AND THEREFORE, IN THE ABSENCE OF ANY EVIDENCE CONTRARY TO THE EXEMPT LONG- TERM CAPITAL GAIN AS CLAIMED UNDER SECTION 10(38) B Y THE ASSESSEE SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 7 CANNOT BE TERMED AS BOGUS. IN SUPPORT OF HIS ARGUM ENT HE RELIED UPON A SYNOPSIS RENDERING INTO 49 PAGES ALONG WITH F OLLOWING JUDGMENTS:- S.NO. REFERENCE OF THE CASE LAW CITATION 1 SMT. SIMI VERMA VS. ITO ITA NO. 3387/DEL/2018 2. SMT. SUNITA KHEMKA VS. ACIT (2018) 53 CCH 0415 DEL. TRIB. 3. SHIKHA DHAWAN VS. ITO ITA NO. 3035/DEL/2018 4. SWATI LUTHRA ITA NO. 6480/DEL/2017 5. LALIT KUMAR AGGARWAL ITA NO. 3509/DEL/2018 IT WAS FURTHER SUBMITTED BY THE LD. AR THAT THE ISS UE IS SQUARELY COVERED BY THE JUDGMENT PASSED BY THE CO-ORDINATE B ENCH IN THE CASE OF RADHEYSHYAM KHANDELWAL VS. ACIT & OTHERS IN ITA N O. 07&08/IND/2019, 29&30/IND/2019 & 113/IND/2019 WHERE THE CLAIM OF LONG-TERM CAPITAL GAIN UNDER SECTION 10(38) OF T HE ACT ARISING OUT OF THE SALE OF SHARES OF M/S. TURBOTECH ENGINEERING LT D. IN THE IDENTICAL SITUATION WERE CONSIDERED AND ALLOWED IN FAVOUR OF THE ASSESSEE. HE, THEREFORE, PRAYED FOR DELETION OF ADDITION MADE BY THE REVENUE. 10. THE LD. AR RELIED UPON THE ORDER PASSED BY THE HONBLE DELHI BENCH OF ITAT IN THE MATTER OF ANOOP JAIN VS. ACIT, REPORTED IN 181 ITD 218 WHEREIN THE ISSUE OF LONG-TERM CAPITAL GAIN ON SALE OF SHARES OF THE SAME COMPANY NAMELY M/S LIFELINE DRUGS & PHA RMA LTD. HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. HE ULTIMAT ELY PRAYED FOR DELETION OF ADDITION MADE BY THE REVENUE SINCE THE REVENUE HAS FAILED SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 8 TO LAUNCH ANY CONTRARY EVIDENCE TO THE GENUINENESS OF THE TRANSACTION MADE BY THE APPELLANT. 11. ON THE OTHER HAND, THE LD. DR VEHEMENTLY ARGUED IN SUPPORT OF THE ORDER PASSED BY THE AUTHORITIES BELOW. HE IS FU RTHER RELIED UPON THE JUDGMENT PASSED BY THE HONBLE DELHI HIGH COURT IN THE FOLLOWING MATTERS:- 1. UDIT KALRA VS. ITO WARD-50(1) IN ITA NO. 220/2019 DATED 08.03.2019 (DELHI HC) 2. UDIT KALRA VS. ITO ITA NO. 6717/DEL/2017 DATED 0 8.01.2019 3. SUMAN PODDAR VS. ITO [2019] 112 TAXMANN.COM 330 (SC) 12. WE HAVE HEARD THE RIVAL SUBMISSION MADE BY THE RESPECTIVE PARTIES AND WE HAVE ALSO PERUSED THE RELEVANT MATER IALS AVAILABLE ON RECORD. IT APPEARS FROM THE ORDER PASSED BY THE LD . A.O THAT HE HAS BEEN GUIDED BY THE REPORT OF THE INVESTIGATION TEAM IN RESPECT OF BOGUS TRANSACTIONS OF CAPITAL GAIN. HOWEVER, NOTHING HAS BEEN BROUGHT ON RECORD BY REVENUE TO SHOW THAT THE PERSONS INVESTIGA TED, INCLUDING ENTRY OPERATORS OR STOCK BROKERS, HAVE NAMED THE AP PELLANT WAS IN COLLUSION WITH THEM. NO FINDING SPECIFICALLY AGAINS T THE APPELLANT HAS BEEN MADE IN THE INVESTIGATION TEAM REPORT AS APPEA RING ON RECORD AND THIS CANNOT BE ANY GROUND FOR HOLDING THE APPEL LANT GUILTY OR LINKED TO THE WRONG FACTS OF THE PERSONS INVESTIGAT ED. 13. APART FROM THAT IT APPEARS ON RECORD THAT ASSES SEE HAS NOT GIVEN THE OPPORTUNITY TO CROSS-EXAMINE THE PERSON BASED O N WHOSE STATEMENT THE ADDITION HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 9 THAT IT IS A SETTLED POSITION OF LAW THAT FINDING AS RECORDED IN ONE CASE CANNOT BE RELIED IN OTHER CASES UNTIL AND UNLESS TH E MATERIAL AS GATHERED AND TO BE USED AGAINST THE ASSESSEE IS NOT PROVIDED TO THE ASSESSEE AND AN OPPORTUNITY OF CROSS EXAMINATION IS NOT ALLOWED TO THE ASSESSEE. HENCE, MATERIAL AS COLLECTED BY THE INVES TIGATION WING OF KOLKATA WAS GENERAL IN NATURE AND CANNOT BE USED IN THE SPECIFIC CASE OF THE APPELLANT MORESO, WHEN THE NAME OF THE APPEL LANT WAS NEVER INCLUDED IN THEIR STATEMENTS. EVEN IF THE NAME OF T HE APPELLANT APPEARED IN THEIR STATEMENTS, IT COULD NOT HAVE BEE N USED AGAINST THE APPELLANT UNTIL AND UNLESS THE APPELLANT WAS ALLOWE D AN OPPORTUNITY TO CROSS EXAMINE THE PERSON WHOSE STATEMENT WAS REC ORDED DURING THE COURSE OF SURVEY/SEARCHES. HENCE, THE MATERIAL AS R ECEIVED BY THE ASSESSING OFFICER BEHIND THE BACK OF THE APPELLANT CANNOT BE USED AGAINST THE APPELLANT. IN THIS REGARD, WE HAVE BEE N ENLIGHTENED BY THE RATIO LAID DOWN IN THE JUDGMENT PASSED BY THE HONBL E SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE 28 1 CTR 241(SC) WHERE IT WAS HELD THAT THE DENIAL OF OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE WITNESS WHOSE STATEMENTS WERE MADE THE SOLE BASIS OF ASSESSMENT IS A SERIOUS FLAW RENDERING THE ORDER A NULLITY IN AS MUCH AS IT AMOUNTS TO VIOLATION OF PRINCIPLE OF NAT URAL JUSTICE. THE RELEVANT OBSERVATION IN THIS REGARD AS MADE BY THE HONBLE SUPREME COURT IS REPRODUCED HEREINBELOW:- '6. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO C ROSS-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 O RDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMIS SIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 10 AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHO RITY DID NOT GRANT THIS OPPORTUNITY 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 A N 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 TRIBUNAL IS C ONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TRIBUNAL HAS SIMPLY STATED T HAT CROSS-EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT B E IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WA NTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. 7. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR TESTIMONY F OR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION. THAT APART, THE A DJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN FACT, SOLD TO THE SAID D EALERS/WITNESSES AT THE PRICE WHICH IS MENTIONED IN THE PRICE LIST ITSELF COULD BE THE SUB JECT MATTER OF CROSS-EXAMINATION. THEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOS E AS TO WHAT COULD BE THE SUBJECT 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 C OURT IN CIVIL APPEAL NO . 2216 OF 2000, ORDER DATED 17.03.2015 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTI NG OR REJECTING THE SUBMISSIONS. 8. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF THE 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 AFORESAID TWO WITNE SSES WAS THE ONLY BASIS OF ISSUING THE SHOW CAUSE NOTICE. 14. SO FAR AS THE MERIT OF THE MATTER IS CONCERNED WE FIND THAT THE IDENTICAL ISSUE HAS ALREADY BEEN CONSIDERED BY THE DELHI BENCH OF ITAT IN THE CASE OF ANOOP JAIN (SUPRA) AS ALSO RELI ED UPON THE LD. AR. WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE THE HONBLE DELHI BENCH HAS BEEN PLEASED TO OBSERVE AS FOLLOWS:- 21. A CONSPECTUS READING OF ALL THESE RELEVANT PRO VISIONS OF THE ACT SHOW THAT INITIAL BURDEN IS UPON THE ASSESSEE TO JUSTIFY HIS RETURNED INCOME AND IF SOME EVIDENCES HAVE BEEN GATHERED BY THE ASSESSING OFFIC ER, IT IS THE DUTY OF THE ASSESSING OFFICER TO CONFRONT THOSE EVIDENCES TO TH E ASSESSEE AND SEEK EXPLANATION FROM HIM. 22. IN THE INSTANT CASE, IN JUSTIFICATION OF HIS RE TURN OF INCOME, THE ASSESSEE FURNISHED ALL THE NECESSARY DOCUMENTARY EVIDENCES T O DISCHARGE THE INITIAL BURDEN CAST UPON HIM. THE ASSESSING OFFICER SIMPLY RUBBISHED ALL THE SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 11 DOCUMENTARY EVIDENCES BY REFERRING TO THE GENERAL O BSERVATIONS AND MODUS OPERANDI OF THE ENTRY OPERATORS AND FURTHER SUPPORT ING HIS OBSERVATIONS BY REPORT OF THE INVESTIGATION WING. 23. IT WOULD NOT BE OUT OF PLACE TO MENTION HERE TH AT LDPL, NOW KNOWN AS ARIHANT MULTI COMMERCIAL LTD, IS NOT A PAPER COMPANY NOR A SHELL COMPANY. IN F.Y. 2013- 14, THE REVENUE FROM OPERATIONS WERE AT RS. 40,85,0 2,313/- AND TOTAL ASSETS WERE AT RS. 32,79,07,684/- WHICH INCLUDED INVESTMEN T, TRADE RECEIVABLES, CASH AND CASH EQUIVALENT, SHORT TERM LOANS AND ADVANCES AND TANGIBLE ASSETS. THE SHARE CAPITAL AND RESERVES AND SURPLUS WERE AT RS. 3,62,40,000/- AND RS. 17,65,16,912/- RESPECTIVELY. TRADE PAYABLES WER E AT RS. 10,80,74,165/-. 24. THESE FINANCIALS GO TO SHOW THAT LDPL IS NOT A SHELL COMPANY. SEBI HAS SUSPENDED TRADING IN SHARES OF LDPL W.E.F 28.08.201 5 WHEREAS THE ASSESSEE HAS SOLD SHARES FROM MAY 2014 TO DECEMBER 2014, MAN Y MONTHS BEFORE SUSPENSION OF THE SCRIP. IT IS NOT THE CASE OF THE ASSESSING OFFICER, NOR THERE IS ANY EVIDENCE ON RECORD TO SHOW THAT SEBI HAS DECLARED A LL TRANSACTIONS DONE IN SCRIP OF LDPL PRIOR TO THE SUSPENSION AS NULL AND VOID. I T IS A MATTER OF FACT THAT SEBI LOOKS INTO IRREGULAR MOVEMENTS IN SHARE PRICES AND WARNS INVESTORS AGAINST ANY SUCH UNUSUAL INCREASE IN SHARE PRICE. NO SUCH WARNI NG WAS ISSUED BY SEBI. THE ASSESSING OFFICER HAS FAILED TO PRODUCE ANY MATERIA L/EVIDENCE TO DISLODGE OR CONTROVERT THE GENUINENESS OF CONCLUSIVE DOCUMENTAR Y EVIDENCES PRODUCED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM CONSIDERING THE FA CT THAT HE IS A GENUINE INVESTOR AND IS FROM PAST MANY YEARS, AS EXPLAINED ELSEWHERE . 25. SURPRISINGLY, NEITHER THE ASSESSEE NOR HIS BROK ERS ARE NAMED AS ILLEGITIMATE BENEFICIARIES TO BOGUS LONG TERM CAPITAL GAIN IN AN Y OF THE ALLEGED STATEMENTS OF THE OPERATORS/BROKER OR REPORTS/ORDERS OF THE SEBI OR THE INVESTIGATION WING. IN OUR CONSIDERED VIEW, ADDITIONS MADE BY THE ASSESSIN G OFFICER AND CONFIRMED BY THE LD. CIT(A) ARE HEAVILY GUIDED BY SURMISES, CONJ ECTURES AND PRESUMPTIONS AND, THEREFORE, HAVE NO LEGS TO STAND ON. 26. IT WOULD NOT BE OUT OF PLACE TO REFER TO THE DE CISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ADAMINE CONSTRUCTION PVT LTD 9 9 TAXMANN 45 WHEREIN THE HON'BLE SUPREME COURT, WHILE DISMISSING THE APPEAL, MADE THE FOLLOWING OBSERVATIONS: 'WHAT IS EVIDENT IS THAT THE AO WENT BY ONLY THE RE PORT RECEIVED AND DID NOT MAKE THE NECESSARY FURTHER ENQUIRIES - SUCH AS INTO THE BANK ACCOUNTS OR OTHER PARTICULARS AVAILABLE WITH HIM BUT RATHER RECEIVED THE ENTIRE FINDINGS ON THE REPORT, WHICH CANNOT BE CONSIDERED AS PRIMARY MATER IAL. THE ASSESSEE HAD DISCHARGED THE ONUS INITIALLY CAST UPON IT BY PROVI DING THE BASIC DETAILS WHICH WERE NOT SUITABLY ENQUIRED INTO BY THE AO. THE ASSE SSEE HAD DISCHARGED THE ONUS INITIALLY CAST UPON IT BY PROVIDING THE BASIC DETAI LS WHICH WERE NOT SUITABLY ENQUIRED INTO BY THE AO.' SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 12 27. IN THE CASE OF ODEON BUILDERS PVT LTD 110 TAXMA NN.COM 64, THE HON'BLE SUPREME COURT WHILE DISMISSING THE REVIEW PETITION, HELD AS UNDER: 'HOWEVER, ON GOING THROUGH THE JUDGMENTS OF THE CIT , ITAT AND THE HIGH COURT, WE FIND THAT ON MERITS A DISALLOWANCE OF RS.19,39,6 0,866/- WAS BASED SOLELY ON THIRD PARTY INFORMATION, WHICH WAS NOT SUBJECTED TO ANY FURTHER SCRUTINY. THUS, THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE S TATING: 'THUS, THE ENTIRE DISALLOWANCE IN THIS CASE IS BASE D ON THIRD PARTY INFORMATION GATHERED BY THE INVESTIGATION WING OF THE DEPARTMEN T, WHICH HAVE NOT BEEN INDEPENDENTLY SUBJECTED TO FURTHER VERIFICATION BY THE AO WHO HAS NOT PROVIDED THE COPY OF SUCH STATEMENTS TO THE APPELLANT, THUS DENYING OPPORTUNITY OF CROSS EXAMINATION TO THE APPELLANT, WHO HAS PRIMA FACIE D ISCHARGED THE INITIAL BURDEN OF SUBSTANTIATING THE PURCHASES THROUGH VARIOUS DOC UMENTATION INCLUDING PURCHASE BILLS, TRANSPORTATION BILLS, CONFIRMED COP Y OF ACCOUNTS AND THE FACT OF PAYMENT THROUGH CHEQUES, & VAT REGISTRATION OF THE SELLERS & THEIR INCOME TAX RETURN. IN VIEW OF THE ABOVE DISCUSSION IN TOTALITY , THE PURCHASES MADE BY THE APPELLANT FROM M/S PADMESH REALTORS PVT. LTD. IS FO UND TO BE ACCEPTABLE AND THE CONSEQUENT DISALLOWANCE RESULTING IN ADDITION TO IN COME MADE FOR RS.19,39,60,866/-, IS DIRECTED TO BE DELETED.' 4. THE ITAT BY ITS JUDGMENT DATED 16TH MAY, 2014 RE LIED ON THE SELF-SAME REASONING AND DISMISSED THE APPEAL OF THE REVENUE. LIKEWISE, THE HIGH COURT BY THE IMPUGNED JUDGMENT DATED 5 TH JULY, 2017, AFFIRM ED THE JUDGMENTS OF THE CIT AND ITAT AS CONCURRENT FACTUAL FINDINGS, WHICH HAVE NOT BEEN SHOWN TO BE PERVERSE AND, THEREFORE, DISMISSED THE APPEAL STATI NG THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FROM THE IMPUGNED ORDER OF T HE ITAT. 5. IN THESE CIRCUMSTANCES, THE REVIEW PETITIONS ARE DISMISSED.' 28. ON IDENTICAL SET OF FACTS, THE COORDINATE BENCH IN THE CASE OF DEEPAK NAGAR 73 ITR [TRIB] 74 HAS ALLOWED THE APPEAL OF THE ASSESSE E. THE RELEVANT FINDINGS OF THE COORDINATE BENCH READ AS UNDER: '22. FOR THE SAKE OF REPETITION, THE ENTIRE ASSESSM ENT HAS BEEN FRAMED BY THE ASSESSING OFFICER WITHOUT CONDUCTING ANY ENQUIRY FR OM THE RELEVANT PARTIES OR INDEPENDENT SOURCE OR EVIDENCE BUT HAS MERELY RELIE D UPON THE STATEMENTS RECORDED BY THE INV WING AS WELL AS INFORMATION REC EIVED FROM THE INV WING. IT IS APPARENT FROM THE ASSESSMENT ORDER THAT THE ASSESSI NG OFFICER HAS NOT CONDUCTED ANY INDEPENDENT AND SEPARATE ENQUIRY IN THIS CASE O F THE ASSESSEE. EVEN THE STATEMENT RECORDED BY THE INV WING HAS NOT BEEN GOT CONFIRMED OR CORROBORATED BY THE PERSON DURING THE ASSESSMENT PROCEEDINGS. TH E ASSESSING OFFICER OUGHT TO HAVE CONDUCTED A SEPARATE AND INDEPENDENT ENQUIRY A ND ANY INFORMATION RECEIVED FROM THE INV WING IS REQUIRED TO BE CORROB ORATED AND REASSERTED/REAFFIRMED DURING THE ASSESSMENT PROCEED INGS BY EXAMINING THE CONCERNED PERSONS WHO CAN AFFIRM THE STATEMENTS ALR EADY RECORDED BY ANY OTHER AUTHORITY OF THE DEPARTMENT. 23. THERE IS NO DISPUTE THAT THE STATEMENT WHICH WA S RELIED UPON BY THE ASSESSING OFFICER WAS NOT RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 13 PROCEEDINGS BUT IT WAS PRE EXISTING STATEMENT RECOR DED BY THE INV WING AND THE SAME CANNOT BE THE SOLE BASIS OF ASSESSMENT WITHOUT CONDUCTING PROPER ENQUIRY AND EXAMINATION DURING THE ASSESSMENT PROCEEDINGS I TSELF. IN OUR HUMBLE OPINION, NEITHER THE ASSESSING OFFICER CONDUCTED ANY ENQUIRY NOR HAS BROUGHT ANY CLINCHING EVIDENCE TO DISPROVE THE EVIDENCES PRODUC ED BY THE ASSESSEE. 24. OUR ABOVE VIEW IS FORTIFIED BY THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF FAIR INVEST LTD 357 ITR 146. THE RELEVA NT FINDINGS OF THE HON'BLE JURISDICTIONAL HIGH COURT OF DELHI READ AS UNDER: '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE CIT(APPEALS) WOULD REVEAL THAT TH E ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED COPIES ISSUED BY THE REGISTRAR OF COMPANIES IN RELATION TO THE SHARE APPLICATION, AFFIDAVITS OF TH E DIRECTORS, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICA NT FOR COMPANY'S SHARES, CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE AS SESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF THE INVESTIGATION REPORT AND THE STATEMENT OF MR. MAHES H GARG. TO ELEVATE THE INFERENCE WHICH CAN BE DRAWN ON THE BASIS OF READIN G OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE SO WHE N THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE ASSESSING OFFICER OUGH T TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY, INVOKING HIS POWE RS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIRECTORS. NO EFF ORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIA L DISCLOSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING OFFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FACTS AND T HE STATEMENTS OF MR. MAHESH GARG THAT THE INCOME SOUGHT TO BE ADDED FELL WITHIN THE DESCRIPTION OF SECTION 68.' 25. CONSIDERING THE VORTEX OF EVIDENCES, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS CAST UPON HIM BY PROVISIONS OF SECTION 68 OF THE ACT AND AS MENTIONED ELSEWHERE, S UCH DISCHARGE OF ONUS IS PURELY A QUESTION OF FACT AND THEREFORE, THE JUDICI AL DECISIONS RELIED UPON BY THE LD. DR WOULD DO NO GOOD ON THE PECULIAR PLETHORA OF EVIDENCES IN RESPECT OF THE FACTS OF THE CASE IN HAND. WE, ACCORDINGLY, DIRECT THE ASSESSING OFFICER TO ACCEPT THE LTCG OF RS. 11,93,55,564/- DECLARED AS SUCH. 26. SINCE WE HAVE ACCEPTED THE GENUINENESS OF THE L TCG, WE DO NOT FIND ANY MERIT IN THE CONSEQUENTIAL ADDITION OF RS. 6,05,312 /- AND THE SAME IS ALSO DIRECTED TO BE DELETED.' 29. IN HIS WRITTEN SUBMISSIONS, THE LD. DR HAS REFE RRED TO VARIOUS JUDGMENTS AND HEAVILY RELIED UPON THE DECISION OF THE HON'BLE HIG H COURT OF DELHI IN THE CASE OF SUMAN PODDAR ITA NO. 841/2019 AND IN THE CASE OF UD IT KALRA ITA NO. 220/2019 AND SEVERAL OTHER DECISIONS OF THE COORDINATE BENCH . 30. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE O RDERS OF THE AUTHORITIES BELOW AND HAVE CAREFULLY PERUSED THE JUDICIAL DECISIONS R ELIED UPON BY THE LD. DR. WE FIND THAT IN ALL THOSE CASES, EITHER THE ASSESSEE E NTERED INTO SOLITARY TRANSACTION SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 14 RESULTING INTO LONG TERM CAPITAL GAIN OR PRIOR TO T HE SOLITARY TRANSACTION, THE ASSESSEE WAS NEITHER ENGAGED IN THE PURCHASE AND SA LE OF SHARES NOR SUBSEQUENT TO EARNING OF LONG TERM CAPITAL GAIN, TH E ASSESSEE WAS FOUND TO BE ENGAGED IN THE PURCHASE AND SALE OF SHARES. THESE F ACTS ARE CLEARLY DISTINGUISHABLE FROM THE FACTS OF THE CASE IN HAND. AS MENTIONED ELSEWHERE, THE ASSESSEE IS A HABITUAL INVESTOR HAVING PORTFOLIO OF INVESTMENT IN SHARES IN CRORES AND IS STILL HOLDING INVESTMENT IN SHARES IN SEVERA L CRORES AND IS CONSTANTLY ENGAGED IN INVESTING IN SHARES OF VARIOUS COMPANIES . 31. CONSIDERING THE VORTEX OF EVIDENCES, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS CAST UPON HIM BY PROVISIONS OF SECTION 68 OF THE ACT AND AS MENTIONED ELSEWHERE, S UCH DISCHARGE IS PURELY A QUESTION OF FACT. WE, ACCORDINGLY, DIRECT THE ASSES SING OFFICER TO ACCEPT THE LONG TERM CAPITAL GAIN OF RS. 5,70,91,750/- DECLARED AS SUCH. 32. SINCE WE HAVE ACCEPTED THE GENUINENESS OF LONG TERM CAPITAL GAIN, WE DO NOT FIND ANY MERIT IN THE CONSEQUENTIAL ADDITION OF RS. 11,43,835/- AND THE SAME IS ALSO DIRECTED TO BE DELETED. 33. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 6703/DEL/2019 IS ALLOWED. 15. BEFORE FINALIZING THE MATTER WE WOULD LIKE TO R EFER THE ORDER PASSED BY THE HONBLE DELHI ITAT IN THE CASE OF ANO OP JAIN (SUPRA). IT APPEARS THAT THE PURCHASE AND SALE OF SHARE OF THE SAME LIFELINE DRUGS & PHARMA LTD. COMPANY WAS CONSIDERED WHEREIN IT WAS HELD THAT THE LIFELINE DRUGS & PHARMA LTD. NOW KNOWN AS AR IHANT MULTI COMMERCIAL LTD. IS NOT A SHELL COMPANY. 16. IT IS EVIDENT FROM RECORDS THAT SEBI HAS SUSPEN DED TRADING IN SHARES OF LDPL W.E.F 28.08.2015 WHEREAS THE APPELLA NT BEFORE US SOLD THESE SHARES ON 25.02.2014 AND 11.03.2014 THROUGH T HE BROKER M/S. ANAND RATHI MANY MONTHS BEFORE SUSPENSION OF THIS S CRIP. IT IS AN ADMITTED POSITION THAT REVENUE HAS NEVER RECORDED S HOWING THAT SEBI HAS DECLARED ALL TRANSACTIONS DONE IN SCRIBE OF LDP L PRIOR TO THE SUSPENSION AS NULL AND VOID. SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 15 17. WE HAVE FURTHER CONSIDERED THE SUBMISSIONS MADE BY THE LD. DR AND THE JUDGMENT PASSED BY THE DELHI HIGH COURT IN THE MATTER OF UDIT KALRA VS. ITO AS RELIED UPON BY HIM. SO FAR A S UDIT KALRA IS CONCERNED IT APPEARS THAT THE CHALLENGES MADE IN TH E APPEAL BEFORE THE HONBLE DELHI HIGH COURT IN THAT CASE STOOD DIS MISSED IN LIMINE; NO QUESTION OF LAW WAS FOUND TO BE FORMULATED. APAR T FROM THAT THE SAID JUDGMENT IS DISTINGUISHABLE. IN THAT PARTICUL AR CASE THE SCRIPS OF THE COMPANY WERE DELISTED ON STOCK EXCHANGE, WHEREAS , IN THE INSTANT CASE SUSPENSION ORDER IN TRADING IN SECURITIES OF M /S TURBO TECH ENGINEERING LTD. HAS ULTIMATELY BEEN LIFTED BY THE ADJUDICATION ORDER DATED 25.11.2014 WHEREIN SEBI HAS FOUND NO IRREGULAR ITIES IN THE TRADING OF SUCH SCRIPS; NEITHER IT HAS BEEN FOUND T HAT THE DIRECTORS ARE INVOLVED IN ANY PRICE RIGGING. SUCH FACTS HAVE CAT EGORICALLY BEEN MENTIONED IN THE JUDGEMENT OF SWATI LUTHRA (SUPRA). THEREFORE, BOTH FACTUALLY AND MATERIALLY IT IS DISTINGUISHABLE FROM THE INSTANT CASE BEFORE US. IT IS RELEVANT TO MENTION THAT THE ORDE RS PASSED BY THE SEBI ARE ONLY OF THE YEAR 2015 AND NOT DURING THAT MATER IAL POINT OF TIME I.E. THE PERIOD BETWEEN 22.03.2012 AND 11.03.2014 W HEN THE APPELLANT WAS HOLDING THE SHARES OF THE COMPANY IN QUESTION. 18. THE LD. DR ALSO RELIED UPON THE JUDGMENT IN THE MATTER OF SUMAN PODDAR VS. ITO, REPORTED IN [2019] 112 TAXMAN N.COM 329 (DELHI). IN FACT, THE SAID JUDGMENT WAS SUBSEQUENTL Y CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE MATTER OF PCIT VS. SMT. KRISHNA DEVI REPORTED IN, ITA NO. 125 OF 2020 DATED 15.01.2 021 (DELHI). SINCE THERE WAS NO EVIDENCE PRODUCED BY THE LD. AO TO SHO W THAT THERE WAS AN AGREEMENT BETWEEN ASSESSEE AND ANY OTHER PARTY WH ICH ARE ALLEGED SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 16 TO BE INVOLVED IN PROVIDING ACCOMMODATION ENTRY, TH E APPEAL OF THE REVENUE WAS DISMISSED BY THE HONBLE COURT WITH THE FOLLOWING OBSERVATIONS: 11. ON A PERUSAL OF THE RECORD, IT IS EASILY DISCE RNIBLE THAT IN THE INSTANT CASE, THE AO HAD PROCEEDED PREDOMINANTLY ON THE BASIS OF THE ANALYSIS OF THE FINANCIALS OF M/S GOLD LINE INTERNATIONAL FINVEST LIMITED. HIS CO NCLUSION AND FINDINGS AGAINST THE RESPONDENT ARE CHIEFLY ON THE STRENGTH OF THE A STOUNDING 4849.2% JUMP IN SHARE PRICES OF THE AFORESAID COMPANY WITHIN A SPAN OF TWO YEARS, WHICH IS NOT SUPPORTED BY THE FINANCIALS. ON AN ANALYSIS OF THE DATA OBTAINED FROM THE WEBSITES, THE AO OBSERVES THAT THE QUANTUM LEAP IN THE SHARE PRICE IS NOT JUSTIFIED; THE TRADE PATTERN OF THE AFORESAID COMPA NY DID NOT MOVE ALONG WITH THE SENSEX; AND THE FINANCIALS OF THE COMPANY DID NOT S HOW ANY REASON FOR THE EXTRAORDINARY PERFORMANCE OF ITS STOCK. WE HAVE NOT HING ADVERSE TO COMMENT ON THE ABOVE ANALYSIS, BUT ARE CONCERNED WITH THE AXIO MATIC CONCLUSION DRAWN BY THE AO THAT THE RESPONDENT HAD ENTERED INTO AN AGRE EMENT TO CONVERT UNACCOUNTED MONEY BY CLAIMING FICTITIOUS LTCG, WHIC H IS EXEMPT UNDER SECTION 10(38), IN A PRE-PLANNED MANNER TO EVADE TAXES. THE AO EXTENSIVELY RELIED UPON THE SEARCH AND SURVEY OPERATIONS CONDUCTED BY THE I NVESTIGATION WING OF THE INCOME TAX DEPARTMENT IN KOLKATA, DELHI, MUMBAI AND AHMEDABAD ON PENNY STOCKS, WHICH SETS OUT THE MODUS OPERANDI ADOPTED I N THE BUSINESS OF PROVIDING ENTRIES OF BOGUS LTCG. HOWEVER, THE RELIANCE PLACED ON THE REPORT, WITHOUT FURTHER CORROBORATION ON THE BASIS OF COGENT MATERIAL, DOES NOT JUSTIFY HIS CONCLUSION THAT THE TRANSACTION IS BOGUS, SHAM AND NOTHING OTHER TH AN A RACKET OF ACCOMMODATION ENTRIES. WE DO NOTICE THAT THE AO MADE AN ATTEMPT T O DELVE INTO THE QUESTION OF INFUSION OF RESPONDENTS UNACCOUNTED MONEY, BUT HE DID NOT DIG DEEPER. NOTICES ISSUED UNDER SECTIONS 133(6)/131 OF THE ACT WERE IS SUED TO M/S GOLD LINE INTERNATIONAL FINVEST LIMITED, BUT NOTHING EMERGED FROM THIS EFFORT. THE PAYMENT FOR THE SHARES IN QUESTION WAS MADE BY SH. SALASAR TRADING COMPANY. NOTICE WAS ISSUED TO THIS ENTITY AS WELL, BUT WHEN THE NOT ICES WERE RETURNED UNSERVED, THE AO DID NOT TAKE THE MATTER ANY FURTHER. HE THER EAFTER SIMPLY PROCEEDED ON THE BASIS OF THE FINANCIALS OF THE COMPANY TO COME TO T HE CONCLUSION THAT THE TRANSACTIONS WERE ACCOMMODATION ENTRIES, AND THUS, FICTITIOUS. THE CONCLUSION DRAWN BY THE AO, THAT THERE WAS AN AGREEMENT TO CON VERT UNACCOUNTED MONEY BY TAKING FICTITIOUS LTCG IN A PRE-PLANNED MANNER, IS THEREFORE ENTIRELY UNSUPPORTED BY ANY MATERIAL ON RECORD. THIS FINDING IS THUS PUR ELY AN ASSUMPTION BASED ON CONJECTURE MADE BY THE AO. THIS FLAWED APPROACH FOR MS THE REASON FOR THE LEARNED ITAT TO INTERFERE WITH THE FINDINGS OF THE LOWER TAX AUTHORITIES. THE LEARNED ITAT AFTER CONSIDERING THE ENTIRE CONSPECTU S OF CASE AND THE EVIDENCE BROUGHT ON RECORD, HELD THAT THE RESPONDENT HAD SUC CESSFULLY DISCHARGED THE INITIAL ONUS CAST UPON IT UNDER THE PROVISIONS OF S ECTION 68 OF THE ACT. IT IS RECORDED THAT THERE IS NO DISPUTE THAT THE SHARES OF THE TWO COMPANIES WERE PURCHASED ONLINE, THE PAYMENTS HAVE BEEN MADE THROU GH BANKING CHANNEL, AND THE SHARES WERE DEMATERIALIZED AND THE SALES HAVE B EEN ROUTED FROM DE-MAT ACCOUNT AND THE CONSIDERATION HAS BEEN RECEIVED THR OUGH BANKING CHANNELS. THE ABOVE NOTED FACTORS, INCLUDING THE DEFICIENT ENQUIR Y CONDUCTED BY THE AO AND THE SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 17 LACK OF ANY INDEPENDENT SOURCE OR EVIDENCE TO SHOW THAT THERE WAS AN AGREEMENT BETWEEN THE RESPONDENT AND ANY OTHER PARTY, PREVAIL ED UPON THE ITAT TO TAKE A DIFFERENT VIEW. BEFORE US, MR. HOSSAIN HAS NOT BEEN ABLE TO POINT OUT ANY EVIDENCE WHATSOEVER TO ALLEGE THAT MONEY CHANGED HANDS BETWE EN THE RESPONDENT AND THE BROKER OR ANY OTHER PERSON, OR FURTHER THAT SOM E PERSON PROVIDED THE ENTRY TO CONVERT UNACCOUNTED MONEY FOR GETTING BENEFIT OF LT CG, AS ALLEGED. IN THE ABSENCE OF ANY SUCH MATERIAL THAT COULD SUPPORT THE CASE PUT FORTH BY THE APPELLANT, THE ADDITIONS CANNOT BE SUSTAINED. 12. MR. HOSSAINS SUBMISSIONS RELATING TO THE START LING SPIKE IN THE SHARE PRICE AND OTHER FACTORS MAY BE ENOUGH TO SHOW CIRCUMSTANC ES THAT MIGHT CREATE SUSPICION; HOWEVER THE COURT HAS TO DECIDE AN ISSUE ON THE BASIS OF EVIDENCE AND PROOF, AND NOT ON SUSPICION ALONE. THE THEORY OF HU MAN BEHAVIOR AND PREPONDERANCE OF PROBABILITIES CANNOT BE CITED AS A BASIS TO TURN A BLIND EYE TO THE EVIDENCE PRODUCED BY THE RESPONDENT. WITH REGAR D TO THE CLAIM THAT OBSERVATIONS MADE BY THE CIT(A) WERE IN CONFLICT WI TH THE IMPUGNED ORDER, WE MAY ONLY NOTE THAT THE SAID OBSERVATIONS ARE GENERA L IN NATURE AND LATER IN THE ORDER, THE CIT(A) ITSELF NOTES THAT THE BROKER DID NOT RESPOND TO THE NOTICES. BE THAT AS IT MAY, THE CIT(A) HAS ONLY APPROVED THE ORDER O F THE AO, FOLLOWING THE SAME REASONING, AND RELYING UPON THE REPORT OF THE INVES TIGATION WING. LASTLY, RELIANCE PLACED BY THE REVENUE ON SUMAN PODDAR V. ITO (SUPRA ) AND SUMATI DAYAL V. CIT (SUPRA) IS OF NO ASSISTANCE. UPON EXAMINING THE JUD GMENT OF SUMAN PODDAR (SUPRA) AT LENGTH, WE FIND THAT THE DECISION THEREI N WAS ARRIVED AT IN LIGHT OF THE PECULIAR FACTS AND CIRCUMSTANCES DEMONSTRATED BEFOR E THE ITAT AND THE COURT, SUCH AS, INTER ALIA, LACK OF EVIDENCE PRODUCED BY T HE ASSESSEE THEREIN TO SHOW ACTUAL SALE OF SHARES IN THAT CASE. ON SUCH BASIS, THE ITAT HAD RETURNED THE FINDING OF FACT AGAINST THE ASSESSEE, HOLDING THAT THE GENUINENESS OF SHARE TRANSACTION WAS NOT ESTABLISHED BY HIM. HOWEVER, TH IS IS QUITE DIFFERENT FROM THE FACTUAL MATRIX AT HAND. SIMILARLY, THE CASE OF SUMA TI DAYAL V. CIT (SUPRA) TOO TURNS ON ITS OWN SPECIFIC FACTS. THE ABOVE-STATED C ASES, THUS, ARE OF NO ASSISTANCE TO THE CASE SOUGHT TO BE CANVASSED BY THE REVENUE. 13. THE LEARNED ITAT, BEING THE LAST FACT-FINDING A UTHORITY, ON THE BASIS OF THE EVIDENCE BROUGHT ON RECORD, HAS RIGHTLY COME TO THE CONCLUSION THAT THE LOWER TAX AUTHORITIES ARE NOT ABLE TO SUSTAIN THE ADDITION WI THOUT ANY COGENT MATERIAL ON RECORD. WE THUS FIND NO PERVERSITY IN THE IMPUGNED ORDER. 14. IN THIS VIEW OF THE MATTER, NO QUESTION OF LAW, MUCH LESS A SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. 15. ACCORDINGLY, THE PRESENT APPEALS ARE DISMISSED. 19. WE HAVE FURTHER CONSIDERED THE JUDGMENT PASSED BY THE HONBLE DELHI BENCH IN THE MATTER OF SWATHI LUTHRA (SUPRA) WHERE THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT IN IDEN TICAL MATTER. SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 18 HOWEVER, WITHOUT GOING INTO THE FURTHER FACT OF THE MATTER WE WOULD LIKE TO RELY UPON THE JUDGMENT PASSED BY THE CO-ORD INATE BENCH IN THE CASE OF RADHEYSHYAM KHANDELWAL & ORS.(SUPRA) WHERE THE IDENTICAL ISSUES HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE W ITH FOLLOWING OBSERVATION:- 22. THUS, TAKING INTO CONSIDERATION THE ENTIRE ASP ECT OF THE MATTER IN THE ABSENCE OF ANY INDEPENDENT ENQUIRY MADE BY THE LD. A.O AS ALREADY OBSERVED BY US RESPECTFULLY RELYING UPON THE JUDGMENT PASSED BY HONBLE DELHI BENCH IN THE CASE OF SWATI LUTHRA VS ITO, WARD 51(5), DELHI (SUP RA) ON THE IDENTICAL FACTS KEEPING IN VIEW OF THE ORDERS PASSED BY SEBI, WE DO NOT HESITATE TO OBSERVE THAT HOLDING THE SAID M/S TURBO TECH ENGINEERING LTD AS A PENNY STOCK COMPANY BY THE AUTHORITIES BELOW WITHOUT ANY CORROBORATIVE EVI DENCE IS UNCALLED FOR AND UNJUSTIFIED. SUCH ACTION IS ERRONEOUS ARBITRARY WHI MSICAL AND SUFFERS FROM THE PRINCIPLE OF SURMISE AND CONJECTURE. THUS, THE DIS ALLOWANCE OF THE CLAIM MADE BY THE ASSESSEE TOWARDS THE LONG TERM CAPITAL GAIN TO THE TUNE OF RS.23,25,000/- IN OUR HUMBLE OPINION IS BAD IN LAW AND LIABLE TO B E QUASHED. WE ORDER ACCORDINGLY. CONSEQUENTIALLY THE ADDITION OF 3% OF BROKERAGE TO THE TUNE OF RS.69,750/-IS ALSO OF NO BASIS. THE SAID ADDITION MADE BY THE LEARNED AO IS ONLY ON THE BASIS OF PRESUMPTION. THUS, THE SAID AD DITION ON THE ALLEGED PAYMENT OF COMMISSION @3% IS ALSO WITHOUT ANY MERIT AND THU S DELETED. ASSESSEES APPEAL IS, THEREFORE, ALLOWED. THUS, CONSIDERING THE ENTIRE FACTS OF THE MATTER, T HE JUDGMENT PASSED BY THE DIFFERENT JUDICIAL FORUMS AS RELIED U PON BY THE LD. AR AND THE LD. DR AS WELL, THE PARTICULAR JUDGMENT PAS SED BY THE HONBLE DELHI BENCH DEALING WITH THE SCRIPS OF THE SAME COMP ANY NAMELY M/S. LIFELINE DRUGS & PHARMA LTD. ON THE IDENTICAL SET O F FACTS DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE, THE JUDGMENT PASSE D BY THE HONBLE DELHI HIGH COURT IN THE MATTER OF PCIT VS. SMT. KRI SHNA DEVI, WE WITH THE ABOVE OBSERVATION DO NOT HESITATE TO ALLOW THE CLAIM MADE BY THE APPELLANT TOWARDS LTCG TO THE TUNE OF RS. 26,72,311 /- IN THE ABSENCE OF CONTRARY EVIDENCE PRODUCED BY THE REVENUE ON REC ORD. THE APPEAL FILED BY THE ASSESSEE IS, THUS, ALLOWED. SHRI VRINDAVAN TAYAL ITA NO.242/IND/2019 & 245-247/IND/2019 19 ITA NOS. 245-247/IND/2019 (A.Y. 2014-15):- 20. THESE GROUNDS OF APPEALS ARE IDENTICAL TO THAT OF THE ISSUES ALREADY BEEN DEALT WITH BY US IN ITA NO.242/IND/2019 FOR A.Y. 2014- 15 AND IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES THE SAME SHALL APPLY MUTATIS MUTANDIS. HENCE, BOTH THE APPEALS PRE FERRED BY THE ASSESSEE ARE ALSO ALLOWED. 21. IN THE COMBINED RESULT, ALL THE CAPTIONED APPEA LS FILED BY DIFFERENT ASSESSEES ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 27.07.20 21 SD/- SD/- (MANISH BORAD) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER / DATED : 27 TH JULY, 2021 TANMAY COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE