Shri Kamal Kumar Bansal, Kolkata V. ITO, Ward - 35(3), Kolkata, Kolkata

ITA 2484/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5859 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 19-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S JHAJHARIA; SUJOY SEN ADVOCA
• Assessee Lawyers: PASS KOLKATA
• Keywords: Unexplained cash credit; Capital asset; Gift; Share purchase agreement; Source of fund; Cost of acquisition; Onus to prove
• Section: 143(3); 133(6); 68; 54

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.2484/KOL/2017 ASSESSMENT YEAR:2014-15 SHRI KAMAL KUMAR BANSAL, C/O SALARPURIA JAJODIA & CO., 7, C.R. AVENUE, KOLKATA-72 [ PAN NO.AECPB 6322 E ] / V/S . INCOME TAX OFFICER, WARD-35(3), AAYAKR BHAWAN, POORVA, 110, SHANTIPALLY, E.M. BY- PASS, KOLKATA-107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S. JHAJHARIA, FCA & SHRI SUJOY SEN, ADVOCATE /BY RESPONDENT SHRI S. DASGUPTA, ADDL. CIT-DR /DATE OF HEARING 14-06-2018 /DATE OF PRONOUNCEMENT 20-07-2018 /O R D E R PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-10, KOLKATA PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT) ON 16.10.2017 FOR THE ASSESSMENT YEAR 2014-15 . 2. FACTS IN BRIEF ARE THAT ASSESSEE IS AN INDIVIDUA L AND IS IN THE BUSINESS OF SHARE TRADING, FILM RIGHT, COMMISSION, INTEREST ON LOAN A ND RENTAL INCOME. ASSESSEE FILED RETURN OF INCOME ON 26.11.2014 DISCLOSING TOTAL INC OME OF 13,55,100/-. THE ASSESSING OFFICER PASSED ORDER U/S. 143(3) OF THE A CT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT 3,31,84,733/- INTER ALIA DISALLOWING THE CLAIM OF B USINESS LOSS OF ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 2 91,08,192/- AND MAKING AN ADDITION OF BOGUS SUNDRY CREDITORS OF 31,13,200/- AND AN ADDITION U/S 68 OF 1,64,81,148/. 3. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL . THE LD FIRST APPELLATE AUTHORITY GRANTED PART RELIEF. FURTHER, AGGRIEVED A SSESSEE IS BEFORE US 4. WE HAVE HEARD SHRI S. JHAJHORIA ALONG WITH SHRI SUJOY SEN, THE LD. COUNSELS FOR THE ASSESSEE AND SHRI S. DASGUPTA, THE LD ADDL. CIT -DR ON BEHALF OF THE REVENUE. ON CAREFUL CONSIDERATION OF ALL THE FACTS AND CIRCUMST ANCES OF THE CASE, ON PERUSAL OF PAPERS ON RECORD AND CASE LAW CITED, WE HOLD AS FOL LOWS:- 5. GROUND NO.1 IS GENERAL IN NATURE. 6. GROUND NO.2 IS AGAINST DISALLOWANCE OF BUSINESS LOSS OF 91,08,921/- WHICH CONSISTS OF TRADING LOSS OF 66,99,200/- AND BUSINESS EXPENSE OF 30,09,721/-. THE ASSESSING OFFICER DISCUSSED THIS ISSUE AT PAGES 2 T O 3 IN PARA-5 OF HIS ORDER. THE AO DISBELIEVED THE CONTENTION OF THE ASSESSEE THAT IT HAD SOLD 3,20,000 UNQUOTED SHARES OF RDB TWO THOUSAND PLUS LTD (I.E. NAME OF THE COMPANY ) @ 29.25 PER SHARE FOR THE TOTAL CONSIDERATION OF 93.60 LAKH. THESE SHARES WERE PURCHASED AT A TOTAL COST OF 1,54,59,200/- @ 48.31 PER SHARE. THE SHARES IN QUES TION WERE PURCHASED FROM RDB TWO THOUSAND PLUS LTD. ON 17.08.2011. THESE SHARES WERE SOLD ON 10.10.2013 TO TWO PARTIES NAMELY M/S KRIPA AGENTS PVT LTD. AND M/S SK UPS FILMS PVT. LTD. A TOTAL NO. OF 1,60,000 SHARES EACH WERE SOLD TO BOTH THESE COM PANIES FOR THE SALE CONSIDERATION OF 46.80 LAKH EACH. THE ADDRESS OF RDB TWO THOUSAND PL US LTD., M/S KRIPA AGENTS PVT. LTD AND M/S SKUPS FILMS PVT LTD. WAS THE SAME I.E. 45, LENIN SARANI, KOLKATA-13. AS THESE SHARES WERE UNQUOTED SHARES, THE ASSESSEE WAS ASKED BY THE AO TO PRODUCE EVIDENCE. THE AO HELD THAT ASSESSEE FAILED TO PRODU CE EVIDENCE. AT PAGE 4 OF HIS ORDER, THE AO STATES THAT, FROM THE DOCUMENT SUBMIT TED BY ASSESSEE IT IS SEEN THAT KAMAL KUMAR BANSAL, THE ASSESSEE, IS A DIRECTOR OF M/S RDB TWO THOUSAND PLUS LTD. FROM WHOM THE SHARES WERE PURCHASED AND ALSO IN THE TWO COMPANIES TO WHOM THE SHARES WERE SOLD. HE CONCLUDED THAT IT IS EVIDENT T HAT THE ASSESSEE IS INVOLVED IN ALL CASES AS PURCHASER AND SELLER AND THUS THERE IS A P OSSIBILITY OF MANIPULATION OF THE LOSS. HE FURTHER STATED THAT IN THE COMPUTATION OF INCOME , THE ASSESSEE CLAIMED THAT HE HAD ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 3 INCURRED EXPENDITURE OF 30,90,721/- IN THE BUSINESS OF SHARES. HE HELD THAT ASSESSEE HAS FAILED TO SATISFY THE GENUINENESS OF THESE EXPE NSES AND HENCE THE SAME IS NOT ALLOWABLE. THUS, HE DISALLOWED THE CLAIM OF ASSESSE E THAT IT HAD INCURRED BUSINESS LOSS OF 60,99,200/- AND ALSO THAT IT HAD INCURRED EXPENDITU RE RELATING TO SHARE TRADING BUSINESS TO 30,09,721/-. 7. ON APPEAL, LD. CIT(A) ACCEPTED THE DOCUMENTATION PRODUCED BY THE ASSESSEE IN SUPPORT OF THESE TRANSACTIONS. THE CONTENTIONS OF T HE ASSESSEE ARE AT PAGE 9 PARA 4 OF THE ORDER OF CIT(A), THEY ARE EXTRACTED FOR READY R EFERENCE :- 4. ON THE CONTRARY, IN APPEAL, THE APPELLANT / LD AR FOR THE APPELLANT HAS INTER-ALIA MADE OUT THE FOLLOWING CLAIMS: A. THE LD AO HAS DEALT WITH THE MATTER ON PROBABILITY RATHER THAN ACTUAL FACTS. ALL NECESSARY PAPERS HAS BEEN SUBMITTED TO THE LD. AO. B. THE COMPANYS ACT PERMITS THE SALE OF SUCH UNQUOTED SHARES, AND THERE WAS NO ILLEGALITY IN THE MATTER. C. THE LD AO APPEARS TO BE MORE CONCERNED ON THE ISSUE OF OFFICE ADDRESS, LOCATION OF THE BUYERS, INSTEAD OF OTHER FACTUAL EV IDENCES. D. THE SALE OF SHARES WAS ON ACCOUNT OF THE OUTSTANDIN G LOANS IN THE BOOKS OF THE APPELLANT-ASSESSEE, WHICH WERE REQUIRED TO BE S QUARED OFF. E. THERE IS NO BAR ON SELLING SHARES ON LOSS ANYWHERE IN THE INCOME TAX ACT, 1961. F. THE PURCHASERS OF THE SAID SHARES (M/S KRIPA GENTS P LTD & M/S SKUPS FILMS P LTD) HAD ALREADY ADVANCED SUBSTANTIAL AMOUN T TOWARDS PURCHASE OF SHARES AND SINCE 2012 THEY HAVE NO CHARGED ANY INTE REST ON THIS ADVANCE. G. SINCE THE ASSESSEE HAS ENJOYED THE INTEREST FREE AD VANCE FOR NEAR ABOUT 3 YEARS, IT COMES TO A BUSINESS SENSE THAT THE SHARES FOR WHICH ADVANCES WERE RECEIVED SHOULD BE DEALT IN PRICE BRACKET AND INCOM E TAX DEPARTMENT HAS NEVER INTERFERED WHEN A BUYER AND SELLER BOTH CONFI RMED THE TRANSACTIONS INDEPENDENTLY TO THE LD AO AS REPLIED U/S. 133(6) . H. THERE WAS NO REASON TO DISALLOW THE EXPENDITURE AS CLAIMED BY THE APPELLANT EITHER, BY THE LD AO. 8. THE LD CIT(A) AT PAGE 10 PARA-7 HELD AS UNDER:- 7. I ALSO FIND THAT ALL THE SUBMISSIONS MADE BY TH E APPELLANT DURING THE COURSE OF THE APPEAL POINT TOWARDS THE ELABORATE DOCUMENTA TION, MEANING THEREBY THAT THE APPELLANT HAS PRODUCED PAPERS RELATING TO APPLI CATION FOR THE SHARES, THE ALLOTMENT OF THE SHARES, THE SHARE CERTIFICATES, PA YMENTS BY CHEQUE AND THE NECESSARY PAPERS FILED BEFORE THE REGISTRAR OF COMP ANIES, WHERE THE NAME OF THE ASSESSEE HAS BEEN REFLECTED AS A SHAREHOLDER. T HE APPELLANT HAS ALSO FILED PROOF OF AMALGAMATION OF THE COMPANIES WHEREIN THE SHAREHOLDING HAS CHANGED HANDS. IT IS ALSO THE CONTENTION OF THE APP ELLANT THAT IT HAS PROVIDED COPIES OF THE BANK STATEMENT, BANK CONTRACT NOTES A ND DELIVERY INSTRUCTIONS TO ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 4 THE BROKER BY WAY OF PROOF THAT ALL THESE TRANSACTI ONS WERE GENUINE. HOWEVER, IN MY CONSIDERED VIEW OF THE MATTER, IT IS PRECISEL Y THIS ELABORATE PAPER WORK THAT STRENGTHENS THE MATTER RELATING TO THE BOGUS B ENEFIT OF THE LTCG, WHICH CLEARLY HAS BEEN SCHEMED, PREPLANNED AND EXECUTED W ITH MALAFIDE INTELLIGENCE AND PRECISION. THEREFORE ALL THESE PAPERS ARE MERE DOCUMENTS AND NOT ANY EVIDENCE. THE WHOLE GAMUT OF TRANSACTIONS ARE UNNAT URAL AND HIGHLY SUSPICIOUS, AND THEREFORE THE RULES OF SUSPSICIOUS TRANSACTIONS OUGHT TO APPLY IN THE INSTANT CASE. THERE ARE GRAVE DOUBTS IN THE STORY PROPOUNDED BY THE ASSESSEE BEFORE THE AUTHORITIES B ELOW. NONE OF THE MATERIAL PRODUCED BEFORE THE LD. AO BY THE ASSESSEE-APPELLAN T ARE ENOUGH TO JUSTIFY THE HUMONGOUS GAINS ACCRUING TO THE ASSESSEE BY WAY OF CAPITAL GAINS. IN MY CONSIDERED VIEW THE BANKING DOCUMENTS ARE MERE SELF SERVING RECITALS . THE LAW IN THE MATTER OF SELF-SERVING RECITALS HAS BEEN LONG ESTABLISHED BY THE HON'BLE APEX COURT. IN THE CASE OF CIT VS P. MOHANKALA 291 ITR 297 , THE HON'BLE SUPREME COURT HELD THAT THE MONEY CAME BY WAY OF BANK CHEQUE AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSACTIONS WA S NOT BY ITSELF OF ANY CONSEQUENCES . THE BURDEN OF PROOF IS ON THE ASSESSEE IN THE MA TTER OF JUSTIFICATION OF RECEIPTS WHICH ARE OF SUSPICIOUS A ND DUBIOUS NATURE. IN THE CASE OF CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC) , THEIR LORDSHIPS LAYING DOWN THE SIGNIFICANCE OF HUMAN PROBABILITIES HELD A S UNDER:- IN A CASE WHERE A PARTY RELIED ON SELF-SERVING REC ITALS IN DOCUMENTS, IT WAS FOR THAT PARTY TO ESTABLISH THE TRUTH OF THESE RECITALS: THE TAXING AUTHORITIES WERE ENTITLED TO LOOK INTO THE SURROUND ING CIRCUMSTANCES TO FIND OUT THE REALITY OF SUCH RECITALS. SIMILARLY IN THE CASE OF SUMATI DAYAL VS. CIT (199 5) 214 ITR 801 (SC), THEIR LORDSHIPS HELD AS UNDER: IN VIEW OF SECTION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR, THE SA ME MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATUR E AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SA TISFACTORY. IN SUCH A CASE, THERE IS PRIMA FACIE, EVIDENCE AGAINST THE AS SESSEE VIZ. THE RECEIPT OF MONEY, AND IF HE FAILS TO REBUT, THE SAID EVID ENCE BEING UN-REBUTTED, CAN BE USED AGAINST HIM BY HOLDING THAT ITW4AS A RE CEIPT OF AN INCOME NATURE. IN THE CASE OF SAJJAN DAS & SONS VS. CIT (2003) 264 ITR 435 (DELHI), THEIR LORDSHIPS OF THE HIGH COURT OF DELHI, WHILE CONSIDE RING A CASE IN WHICH GIFTS WERE RECEIVED BY THE ASSESSEE THROUGH BANKING CHANN ELS LAID IMPORTANCE ON THE CAPACITY OF THE DONOR FOR MAKING THE GIFT AND HIS I DENTITY AS WELL AS IMPORTANCE OF RELATIONSHIP BETWEEN THE DONOR AND DONE IN DETER MINATION OF GENUINENESS OF GIFT HELD AS UNDER:- THAT A MERE IDENTIFICATION OF THE DONOR AND SHOWING THE MOVEMENT OF THE GIFT AMOUNT THROUGH BANKING CHANNELS WAS NOT SUFFIC IENT TO PROVE THE GENUINENESS OF THE GIFT. SINCE THE CLAIM OF THE GIF T WAS MADE BY THE ASSESSEE, THE ONUS LAY ON HIM NOT ONLY TO ESTABLISH THE IDENTITY OF THE ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 5 PERSON MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAK E A GIFT AND THAT IT HAD ACTUALLY BEEN RECEIVED AS A GIFT FROM THE DONOR . IN MY CONSIDERED VIEW WHEREVER DOCUMENTS ARE RELIED UPON THEY SHOULD PASS THE TEST OF NORMAL BEHAVIOR OF THE ASSESSEE IN THE COURSE OF BUSINESS VIZ., HUMAN CONDUCT, PREPONDERANCE OF PROBABILITY AND SURROUNDI NG CIRCUMSTANCES. IN MY CONSIDERED VIEW, EVEN IF DOCUMENTARY EVIDENCE IS PR ODUCED, THE SAME MUST PASS THE TEST OF HUMAN PROBABILITIES AND SURROUNDIN G CIRCUMSTANCES IF THEY DO NOT, THEN ADDITION JUSTIFIED. RELIANCE ON SUCH MATT ERS IS PLACED ON THE CASE OF SMT. PHOOLWATI DEVI 314 ITR (AT) 1 (DEL.) 12. I AM IN AGREEMENT WITH THE LD. AO THAT THE TRAN SACTIONS RELATING TO THE CLAIM OF LTCG AS MADE BY THE LD AO COME WITHIN THE AMBIT OF SUSPICIOUS TRANSACTIONS: AND THEREFORE THE RULES OF SUSPICIOUS TRANSACTIONS WOULD APPLY TO THE CASE. PAYMENT THROUGH BANKS, PERFORMANCE THR OUGH STOCK EXCHANGE AND OTHER SUCH FEATURES ARE ONLY APPARENT FEATURES. THE REAL FEATURES ARE THE MANIPULATED AND ABNORMAL PRICE OF OFF LOAD AND THE SUDDEN DIP THEREAFTER. THEREFORE, I HAVE TO REACH THE INEVITABLE CONCLUSIO N THAT THE TRANSACTIONS AS DISCUSSED BY THE LD. AO FALL IN THE REALM OF SUSPICIOUS AND DUBIOUS TRANSACTIONS. THE LD. AO HAS THEREFORE NECESSARILY TO CONSIDER THE SURROUNDING CIRCUMSTANCES, WHICH HE INDEED HAS DONE IN A VERY M ETICULOUS AND CAREFUL MANNER. IN THE CASE OF WIN CADHA VS. CIT (INTERNATIONAL TAXATION) IN ITA NO.3088 & 3017/DEL/2005 , THE HON'BLE DELHI ITAT B BENCH HAS OBSERVED, ON 31.12.2010 AS UNDER:- SUSPICIOUS AND DIBIOUS TRANSACTION HOW TO BE DEALT WITH : 6.11. THE TAX LIABILITY IN THE CASE OF SUSPICIOUS T RANSACTIONS, IS TO BE ASSESSED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD, SURROUNDING CIRCUMSTANCES, HUMAN CONDUCT, PREPONDERANCE OF PROB ABILITIES AND NATURE OF INCRIMINATING INFORMATION/EVIDENCE AVAILA BLE WITH AO. 6.12 IN THE CASE OF SUMATI DAYALA V. CIT (1995) 80 TAXMAN 89 (SC), THE HON'BLE SUPREME COURT HAS DEALT WITH THE RELEVANCE OF HUMAN CONDUCT, PREPONDERANCE OF PROBABILITIES AND SURROUNDING CIRC UMSTANCE BURDEN OF PROOF AND IT SHIFTING ON THE DEPARTMENT IN THE CASE OF SUSPICIOUS CIRCUMSTANCES, BY FOLLOWING OBSERVATIONS: IT IS NO DOUBT, TRUE THAT IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME, THE BURDEN LIES ON TH E DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION AND IF A RECEIPT IS IN THE NATURE OF INCOME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN EXEMPTION PROVIDED BY THE A CT LIES UPON THE ASSESSEE. BUT IN VIEW OF SECTION 68, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVI OUS YEAR, THE SAME MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPIN ION OF THE ASSESSING OFFICER, NOT SATISFACTORY. IN SUCH CASE T HERE IS PRIMA ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 6 FACIE EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECE IPT OF MONEY, AND IF HE FAILS TO REBUT THE SAME, THE SAID EVIDENC E BEING UN-REBUT, CAN BE USED AGAINST HIM BY HOLDING THAT IT IS A REC EIPT OF AN INCOME NATURE. WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE DEPARTMENT CANNOT, HOWEVER, ACT UNREASONABLY. HAVING REGARD TO THE CONDUCT OF THE APPELLANT A S DISCLOSED IN HER SWORN STATEMENT AS WELL AS OTHER MATERIAL ON THE RECORD, AN INFERENCE COULD REASONABLY BE DRAWN THAT THE WINNIN G TICKETS WERE PURCHASED BY THE APPELLANT AFTER THE EVENT. TH E MAJORITY OPINION AFTER CONSIDERING SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES HAD RIGHTL Y CONCLUDED THAT THE APPELLANTS CLAIM ABOUT THE AMOUNT BEING H ER WINNING FROM RACES, WAS NOT GENUINE. IT COULD NOT BE SAID T HAT THE EXPLANATION OFFERED BY THE APPELLANT IN RESPECT OF THE SAID AMOUNTS HAD BEEN REJECTED UNREASONABLY AND THAT THE FINDING THAT THE SAID AMOUNTS WERE INCOME OF THE APPELLANT FROM OTHER SOURCES WAS NOT BASED ON EVIDENCE. CIRCUMSTANTIAL EVIDENCEE HOW TO BE USED 6.13 IT WOULD, AT THIS STAGE, BE RELEVANT TO CONSID ER THE ADMISSIBILITY AND USE OF CIRCUMSTANTIAL EVIDENCE IN INCOME TAX PROCEEDINGS. CIRCUMSTANTIAL EVIDENCE IS EVIDENCE OF THE CIRCUMSTANCES, AS OPPOSED TO DIRECT EVIDENCE. IT MAY CONSIST OF EVIDENCE AFFORDED BY THE BEARING ON THE FACT TO BE PROVED, OF OTHER AND SUBSIDIARY FACTS WHICH ARE RELIED ON AS INCONSISTEN T WITH ANY RESULT OTHER THAN THE TRUTH OF THE PRINCIPAL FACT. IT IS EVIDENCE OF VARIOUS FACTS, OTHER THAN THE FACT IN ISSUE WHICH ARE SO ASSOCIATED WITH THE FACT IN I SSUE, THAT TAKEN TOGETHER, THEY FORM A CHAIN OF CIRCUMSTANCES LEADING TO AN INFEREN CE OR PRESUMPTION OF THE EXISTENCE OF THE PRINCIPAL FACT. IN THE APPRECIATIO N OF CIRCUMSTANTIAL EVIDENCE, THE RELEVANT ASPECTS, AS LAID DOWN FROM TIME TO TIM E ARE (1) THE CIRCUMSTANCES ALLEGED MUST BE ESTABLISHED B Y SUCH EVIDENCE, AS IN THE CASE OF OTHER EVIDENCE. (2) THE CIRCUMSTANCES PROVED MUST BE OF A CONCLUSIV E NATURE AND NOT TOTALLY INCONSISTENT WITH THE CIRCUMSTANCES OR CONT RADICTORY TO OTHER EVIDENCE. (3) ALTHOUGH THERE SHOULD BE NO MISSING LINKS IN TH E CASE OF , YET IT IS NOT ESSENTIAL THAT EVERY ONE OF THE LINKS MUST APPEAR O N THE SURFACE OF THE EVIDENCE ADDUCED; SOME OF THESE LINKS MAY HAVE TO B E INFERRED FROM THE PROVED FACTS;\ (4) IN DRAWING THOSE INFERENCES OR PRESUMPTIONS, TH E AUTHORITIES MUST HAVE REGARD TO THE COMMON COURSE OF NATURAL EVENTS, TO HUMAN CONDUCT AND THEIR RELATION TO THE FACTS OF THE PARTICULAR C ASE. (5) THE CIRCUMSTANTIAL EVIDENCE CAN WITH EQUAL FACI LITY,, BE RESORTED TO IN PROOF OF A FACT IN ISSUE WHICH ARISES IN PROCEEDING S FOR THE ASSESSMENT OF TAXES BOTH DIRECT AND INDIRECT, CIRCUMSTANTIAL EVID ENCE CAN BE MADE USE OF IN ORDER TO PROVE OR DISPROVE A FACT ALLEGED OR IN ISSUE. IN FACT, INN WHATEVER PROCEEDINGS OR CONTEXT INFERENCES ARE REQU IRED TO BE DRAWN ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 7 FROM THE EVIDENCE OR MATERIALS AVAILABLE OR LACKING , CIRCUMSTANTIAL EVIDENCE HAS ITS PLACE TO ASSIST THE PROCESS OF ARR IVING AT THE TRUTH. 6.14. IT WILL ALSO BE WORTHWHILE TO CONSIDER THE NA TURE OF BURDEN OF PROOF ON THE AO FOR PROVING A FACT OR CIRCUMSTANCES IN THE INCOM E TAX PROCEEDINGS. THE QUESTIONS RAISED ABOUT THE TAX LIABILITY BY THE AO ARE TO BE ANSWERED BY THE ASSESSEE BY FURNISHING REASONABLE AND PLAUSIBLE EXP LANATIONS. IF ASSESSEE IS NOT FORTHCOMING WITH PROPER OR COMPLETE FACTS OR HIS ST ATEMENT OR EXPLANATION IS CONTRADICTORY, DRAWING OF SUITABLE INFERENCES AND E STIMATION OF FACTS IS INEVITABLE. COURTS GENERALLY WILL NOT INTERFERE WIT H SUCH ESTIMATE OF FACTS, UNLESS THE INFERENCES OR ESTIMATES ARE PERVERSE OR CAPRICIOUS. 6.15 THE ASSESSEES TECHNICAL CONTENTIONS ABOUT ADM ISSIBILITY AND RELIANCE ON MATERIAL AVAILABLE ON THE AOS RECORD ARE IN THE NA TURE OF CONTENTIONS CHALLENGING CRIMINAL OR CIVIL LIABILITIES IN A COUR T OF LAW. WE ARE DEALING WITH A PROCESS OF ADJUDICATION OF ASSESSEE TAX LIABILITY I .E. ASSESSMENT UNDER INCOME TAX ACT RATHER THAN CONDUCTING CRIMINAL OR CIVIL CO URT PROCEEDINGS. AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF SS GADGIL (SUPRA) NO LIS IS INVOLVED IN ADJUDICATION OF TAX LIABILITY. THE ASSESSEES CO NTENTION THAT THERE WAS NO NEW MATERIAL BEFORE THE AO AFTER THE CIT(A)S SETTING A SIDE ORDER CANNOT BE ACCEPTED. NEW INFORMATION AND MATERIAL DID INDEED C OME ON RECORD. IN OUR VIEW, IN A SENSITIVE MATTE LIKE THIS, EVEN A SINGLE CLUE OR REVELATION CAN BE OF GREAT IMPORTANCE. TO REVERSE THE ORDER OF THE AO ON THIS TECHNICAL PLEA WILL AMOUNT TO TAKING A LOPSIDED VIEW OF THE PROCEEDINGS . BESIDES, THE JPC HAS UNDERLINED THE IMPORTANCE OF REPORTS OF INVESTIGATI ON AGENCIES LIKE CBI, DRI, ED WHOSE WERE IN THE OFFING, AS THE RELEVANT INVEST IGATIONS WERE IN PROCESS. IN VIEW OF THESE OBSERVATIONS, WE DO NOT ACCEDE TO THE ASSESSEES PLEAS IN THIS BEHALF. THE ASSESSEES CONTENTION AND OBJECTIONS IN THIS BEHALF THAT THE MATERIAL AVAILABLE ON RECORD WAS NOT ADMISSIBLE AS EVIDENCE AND THAT IT CANNOT BE RELIED ON BY THE AO, ARE DEVOID OF ANY MERIT AND ARE REJEC TED OUTRIGHT. IN VIEW OF THE ABOVE DISCUSSION, I FIND NO INFIRMIT Y IN THE ORDERS OF THE LD.AO, AND I CONFIRM THE SAME. GROUND NO. 1 IS ACCORDINGLY DISMISSED . THUS HE CONFIRMED THE ADDITION BY APPLYING THE THEO RY OF PREPONDERANCE OF PROBABILITY, HUMAN CONDUCT AND SURROUNDING CIRCUMST ANCES. AGGRIEVED, THE ASSESSEE IS BEFORE US. 8. ON CONSIDERING RIVAL CONTENTIONS, WE FIND THAT T HERE IS NO DISPUTE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF SHARE TRADING FOR A N UMBER OF YEARS, BOTH PRIOR TO THIS IMPUGNED ASSESSMENT YEAR, AS WELL AS IN THE SUCCEED ING ASSESSMENT YEARS. THE TWO COMPANIES WHICH HAVE PURCHASED THE SHARES I.E. M/S KRIPA AGENTS PVT. LTD., AND ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 8 SKUPS FILMS PVT. LTD., HAD ADVANCED A SUM OF 1,42,46,700/- TO THE ASSESSEE DURING THE FINANCIAL YEAR 2012-13 RELEVANT TO AY 2013-14. THESE TWO CONCERNS HAVE NOT CHARGED ANY INTEREST ON THIS ADVANCE FROM THE ASSES SEE. THIS FACT IS REFLECTED IN THE BALANCE-SHEET OF THE TWO COMPANIES. THE ASSESSEE IN THIS CASE HAD ENTERED AN AGREEMENT OF SALE OF THESE SHARES DURING THE FINANC IAL YEAR 2012-13, RELEVANT TO AY 2013-14, BY AN AGREEMENT DATED 12.08.2012. THE BOOK VALUE OF THESE SHARES AS ON THE DATE OF AGREEMENT WAS AROUND 29/- PER SHARE. HENCE IN ACCORDANCE WITH BOOK VALUE, THE TRANSACTIONS OF SALE SHARES WAS DONE. THE VALUA TION REPORT OF THE BOOK VALUE IS FILED BEFORE US. IT WAS SUBMITTED THAT THE SALE PRO CEEDS OF THESE SHARES WERE ADJUSTED AGAINST THE LOAN ADVANCED TO THE ASSESSEE BY THESE TWO PURCHASING COMPANIES. THE LD. CIT(A) RECORDS THAT THE ENTIRE TRANSACTION IS PROPE RLY DOCUMENTED. NEITHER THE AO NOR THE LD. CIT(A) HAVE DISPUTED THE CLAIM OF THE ASSES SEE THAT THE PRICE AT WHICH THE ASSESSEE SOLD THE SHARE IS COMMENSURATE WITH THE BO OK VALUE OF THE SHARES. THE DOCUMENTATION PRODUCED PROVES THAT THE TRANSACTION OF SALE HAS TAKEN PLACE DURING THE YEAR. LD. DR BEFORE US COULD NOT CONTROVERT THE SUB MISSION MADE BY ASSESSEE ON THE BOOK VALUE ARRIVED AT FOR THE PURPOSE OF THE SALE. THE SHARES IN QUESTION WERE PART OF THE STOCK-IN-TRADE OF THE ASSESSEE. THIS CLOSING ST OCK DISCLOSED BY THE ASSESSEE HAS NOT BEEN DISTURBED. THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE HAVE NOT BEEN REJECTED. THE BUYERS OF THE SHARES HAVE RECORDED TH E PURCHASE OF THE SHARES AND HAVE RESPONDED TO DIRECT ENQUIRY MADE BY THE AO U/S 133( 6) OF THE ACT AND CONFIRMED THE TRANSACTIONS. THE SHARES ARE REFLECTED IN THEIR BAL ANCE-SHEET. THE FACTUM OF TRANSFER OF SHARES CANNOT BE DISPUTED, IN VIEW OF EVIDENCE FILE D BY THE ASSESSEE. ALL THE COMPANIES ARE LEGAL ENTITIES AND TRANSACTIONS WITH THESE COMPANIES CANNOT BE HELD AS NON-GENUINE, SIMPLY BECAUSE THEY ARE GROUP COMPANIE S OR AS CERTAIN DIRECTORS ARE COMMON. DOCUMENTARY EVIDENCE AND FACTS CANNOT BE IG NORED AND THE THEORY OF HUMAN CONDUCT, PREPONDERANCE OF PROBABILITY ETC. CANNOT B E RELIED UPON, TO REJECT THE CLAIM OF THE ASSESSEE ON THE GROUND OF THAT THESE ARE SUSPICIOUS CIRCUMSTANCES . THE PURCHASE OF THE SHARE HAS BEEN ACCEPTED BY THE REVENUE. THE FACT THAT BOTH THE COMPANIES HAVE EARLIER ADVANCED AMOUNT TO THE ASSESSEE IS ACCEPTED BY THE REVENUE. WHILE SO, THERE IS NO REASON AS TO WHY SALE TRANSACTION IS TO BE DISBE LIEVED ADMITTEDLY ON THE GROUND OF SUSPICIOUS CIRCUMSTANCES . THE CONCLUSIONS OF THE A O AND THE LD. CIT(A) ARE BASED ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 9 ON, CONJECTURE AND SURMISES. IT IS WELL SETTLED THA T NO ADDITION CAN BE MADE OF SUSPICION HOWEVER AS STRONG HELD BY THE HON'BLE SUP REME COURT IN THE CASE OF UMARCHARAN SHAH & BROS VS. CIT 37 ITR 271 (SC). IN VIEW OF THE ABOVE DISCUSSION, THE LOSS ON SALE OF SHARES IN QUESTION AS CLAIMED B Y THE ASSESSEE HAS TO BE ALLOWED. WE DIRECT THE ASSESSING OFFICER ACCORDINGLY. 9. IN THE RESULT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. 10. WE NOW CONSIDER THE DISALLOWANCE OF EXPENSE. AS ALREADY STATED, THE ACCEPTED FACT IS THAT THE ASSESSEE IS ENGAGED IN SHARE TRADI NG BUSINESS. THE DISALLOWANCE IN THIS CASE HAS BEEN MADE IN AN ARBITRARY MANNER. NO PROPE R REASON IS ASSIGNED. WHEN THE ASSESSEE IS IN THE BUSINESS OF SHARE TRADING, THE E XPENDITURE RELATABLE TO SUCH BUSINESS IS ALLOWABLE UNDER THE ACT. EVEN IF THERE IS NO BUS INESS ACTIVITY DURING THE YEAR, THE EXPENDITURE IS STILL ALLOWABLE AS HELD BY THE HON'B LE CALCUTTA HIGH COURT IN THE CASE OF GANGA PROPERTIES LTD 199 ITR 94 (CAL) AND THE HON'BLE DELHI HIGH COURT IN THE CASE OF KESHA APPLIANCES PVT LTD VS. ITO (2018) 63 ITR (TRIB) 294 (DEL). HENCE, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE EXPENSE OF 31,09,721/-. IN THE RESULT, GROUND NO.2 OF THE ASSESSEE IS ALLOWED. 11. GROUND NO 3 IS DIRECTED AGAINST DISALLOWANCE OF COST PRICE OF 26,77,500/-. THE ASSESSING OFFICER DEALT THIS ISSUE AT PAGE 4 PARA-9 OF HIS ORDER. THE ASSESSEE HAD DECLARED SHORT TERM CAPITAL GAINS OF 20,57,500/- ON SALE OF UNQUOTED SHARES OF THE COMPANY M/S TURTLE IN MOTION. THE ASSESSEE HAS PURC HASED 7,650 NUMBER OF THESE SHARES ON 02.04.2013 FOR AN AMOUNT OF 26,77,500/-. THE SHARE WAS PURCHASED FROM MR. S.R. BANSAL, WHO IS THE WIFE OF THE ASSESSEE. F URTHER 9000 OF THESE UNQUOTED SHARES OF M/S TURTLE IN MOTION WERE PURCHASED BY TH E ASSESSEE FROM M/S KAY ENTERPRISES, HUF FOR 36.40 LAKH. THE TOTAL SHARE PURCHASED IN THIS CASE WAS FOR AN AMOUNT OF 63,17,500/-. THESE SHARES WERE SOLD TO M/S RDB TWO THOUSAND PLUS LTD. ON 02.07.2013 FOR 83,77,500/-. THE ASSESSEE FILED THE LEDGER COPY, BA NK STATEMENTS AND COPIES OF SHARE CERTIFICATE AS EVIDENCE OF SALE AND THE PURCHASE OF SHARES EVIDENCE THE TRANSFER OF THE SHARES IN THE RECORDS OF COMPAN Y M/S TURTLE IN MOTION WERE FILED. TO A QUERY THE ASSESSEE EXPLAINED THAT HE HAD SOLD IMMOVABLE PROPERTY TO HIS WIFE AND ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 10 THE PURCHASE COST OF SHARE HAD BEEN ADJUSTED AGAINS T THE SALE PROCEED OF THE PROPERTY. THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF TH E TRANSACTIONS. HE ACCEPTED THE SALE VALUE OF THE UNQUOTED SHARE AS 83,77,500/-. HE CAME TO THE CONCLUSION THAT THE SOURCE OF PURCHASE OF SHARE FORM S.R BANSAL WAS NOT EXPLAINED. HENCE THE EXPENSE OF 26,77,200/- WAS DISALLOWED AND ADDED BACK. ON APPEA L THE LD. CIT(A) DID NOT PASS A SPEAKING ORDER. WE FIND THAT THE ASSESSEE HAS SUBMI TTED COPIES OF THE BILLS EVIDENCING THE FACT THAT THE SHARES WERE SOLD BY SHRI S.R. BAN SAL. COPIES OF SHARE CERTIFICATE EVIDENCING TRANSFER OF SHARE FROM SHRI S.R. BANSAL TO THE ASSESSEE WERE FILED. BOTH THE PARTIES ARE INCOME TAX ASSESSEES AND HAVE REPORTED THESE TRANSACTIONS. IF THE PURCHASES OF THE SHARES ARE NOT TO BE BELIEVED, THEN THE INCO ME ARISING OUT OF THE SALE OF SUCH SHARES CANNOT BE TAXED IN THE HANDS OF ASSESSEE. IT MAY HAVE TO BE TAXED IN THE HANDS OF SMT. SAROJ RANI BANSAL. THE ASSUMPTION THAT MRS. SAROJ RANI BANSAL COULD HAVE GIFTED THESE SHARES TO MR. K.K. BANSAL I.E. TRANSFE RRED WITHOUT CONSIDERATION, CANNOT BE UPHELD. THUS, IF THE SALE IS BELIEVED, THE PURCHASE IS ALSO TO BE BELIEVED. HENCE, THE DISALLOWANCE OF THE PURCHASES COST OF SHARES ARE WR ONG. IN ANY EVENT, OF THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE, THE SOURCE OF FUNDS ARE NOT IN DOUBT. HENCE, WE DELETE THE ADDITION ON THE SOURCE OF FUND IS PRO VED AND AS THE ASSUMPTION MADE BY THE AO IS WRONG AND ALLOW GROUND NO.3 OF THE ASSES SEE. 12. GROUND NO.4 IS ON THE ISSUE OF COMPUTATION OF C APITAL GAINS ON SALE OF SHARE OF TURTLE IN MOTION. THE ASSESSEE CLAIMED THAT THESE S HARES WERE RECEIVED FROM HIS FATHER SHRI R.D. BANSAL BY WAY OF GIFT. SHRI R.D. BANSAL H ELD THE SHARE IN QUESTION AND WERE ACQUIRED BY THE ASSESSEE BY WAY OF GIFT. RELIANCE W AS PLACED ON THE PROVISION OF SECTION 49(1) OF THE ACT AND IT WAS CLAIMED THAT IN DEXATION OF COST HAS TO BE GIVEN WITH REFERENCE TO AY 1991-92 I.E. FROM THE PERIOD F OR WHICH THE SHARES WERE HELD BY THE FATHER OF ASSESSEE. WHEN AN AMOUNT IS RECEIVED BY WAY OF GIFT/INHERITANCE THE COST OF PREVIOUS OWNER IS THE COST OF ACQUISITION BY THE ASSESSEE AND THE INDEXATION IS ALSO TO BE GIVEN FORM THE DATE ON WHICH THE PREVIOUS OWN ER ACQUIRED THE CAPITAL ASSETS. 13. WE FIND THIS ISSUE IS COVERED IN FAVOUR OF ASSE SSEE AND AGAINST THE REVENUE BY THE FOLLOWING:- ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 11 A) DCIT V. MANJUTA J. SHAH (2009) 318 ITR 417 (AT) 417 (MUM) (SB) B) SMT. MINA DEOGUM V. ITO (2008) 117 TTJ 121 (KOL) RESPECTFULLY FOLLOWING THE PROPOSITION OF LAW LAID DOWN IN THESE CASES WE DIRECT THE AO TO GRANT INDEXATION OF COST FROM THE AY 1991-92. HENCE, GROUND NO.4 IS ALLOWED. 14. GROUND NO.5 IS DIRECTED AGAINST THE ADDITION OF 1,64,84,148/- MADE BY THE AO U/S 68 OF THE ACT. 15. THE ASSESSEE SOLD ONE RESIDENTIAL FLAT TO HIS D AUGHTER SMT. VAISHALI BANSAL PRASAD AND WIFE SMT. SAROJ RANI BANSAL, JOINTLY FOR A CONSIDERATION OF 2,25,21,193/- .THE ASSESSING OFFICER RECORDS THAT THE ASSESSEE HA S NOT PROVED THAT THE TRANSACTION IS BONA FIDE . HE HELD THAT IT IS IMPORTANT TO ASCERTAIN WITH RE ASONABLE CERTAINTY, THAT ALL THE TERMS OF THE CONTRACT BETWEEN THE PARTIES, WAS FULFILLED, SINCE THE TRANSFER WAS TO CLOSE RELATIVES. HE HELD THAT BONA FIDE EVIDENCE, TO THE EFFECT THAT THE TRANSFEREE HAD TAKEN POSSESSION OF THE PROPERTY, IN PART PERFORMAN CE OF THE CONTRACT, IS NOT FILED BY THE ASSESSEE. HE HELD THAT THE SALE OF PROPERTY TO HIS DAUGHTER AND WIFE IS DEFINITELY A SUSPICIOUS TRANSACTION OF DUBIOUS NATURE. HE ADDED THE SALE CONSIDERATION U/S.68 OF THE ACT. 16. THE ASSESSING OFFICER ACKNOWLEDGES THAT THE SAL E CONSIDERATION WAS MADE BY CROSS ACCOUNT PAYEE CHEQUE FROM TO THE BANK ACCOUNT OF THE DAUGHTER OF THE ASSESSEE. HE WAS OF THE VIEW THAT PAYMENT BY CHEQUES DO NOT P ROVE THE GENUINENESS OF THE TRANSACTIONS. HE ALSO HELD THAT NOTICE ISSUED U/S 1 33(6) OF THE ACT TO THE DAUGHTER WAS RETURNED BACK. LEARNED CIT(A) AGREES WITH THE FINDI NGS OF AO AND UPHELD THE ADDITION MADE U/S. 68 OF THE ACT. 17. AGGRIEVED, ASSESSEE IS BEFORE US. THE LD. COUNS EL FOR THE ASSESSEE SUBMITS THAT THERE IS NO BAR UNDER THE INCOME TAX ACT TO TRANSFE R PROPERTY TO CLOSE RELATIVES. THE TRANSFER HAS TAKEN PLACE AT THE MARKET VALUE AND TH E CONSIDERATION WAS PAID BY WAY OF CROSS ACCOUNT PAYEE CHEQUE. TAX WAS DEDUCTED AT SOU RCE ON THIS SALE CONSIDERATION AS ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 12 REQUIRED BY LAW. THE SOURCE OF THE MONEY IS NOT DOU BTED. THE IDENTITY OF THE PERSON AND THE CREDITWORTHINESS OF THE BUYER WERE NOT DOUB TED. 18. BOTH THE BUYERS AND SHRI S.R. BANSAL, IN RESPON SE TO SPECIFIC NOTICE ISSUED TO THEM U/S 133(6) OF THE ACT, HAVE CONFIRMED THE TRAN SACTIONS. COPIES OF THE LETTER FIELD BY THEM BEFORE THE AO ARE PLACE AT PAGE 144 TO PAGE 148 OF THE PAPER BOOK. THE ASSESSEE HAS DISCHARGED HIS BURDEN OF PROOF, BY FIL LING THE FOLLOWING DOCUMENTS:- (I) DETAILS OF PAYMENTS / ADJUSTMENTS ON ACCOUNT O F LOAN / ADVANCE OF PG 146) (II) COPY OF AGREEMENT (PG 132-138) (III) COPY OF BALANCE SHEET AND PROFIT & LOSS ACCO UNT (PG 146-148) (IV) COPY OF INCOME TAX ACKNOWLEDGEMENTS. (EVIDENC ING IT JURISDICTION) (PG 145) (V) COPY OF BANK STATEMENT EVIDENCING PAYMENTS MAD E. (PG 139-142) IT WAS ARGUED THAT THE CONCLUSION OF LD. CIT(A) THA T THE TRANSACTION WAS A TOOL FOR CLAIMING DEDUCTION U/S 54 OF THE ACT WAS, PUTTING T HE CART BEFORE THE HORSE. 19. LD. DR RELIED ON THE ORDER OF AO AS WELL AS CIT (A) AND PRAYED THAT THE SAME BE UPHELD. 20. AFTER HEARING RIVAL CONTENTIONS WE ARE UNABLE T O UPHOLD THE ACTION OF THE AO, WHEREIN AN ADDITION HAS BEEN MADE U/S. 68 OF THE AC T. NEITHER THE AO NOR THE CIT(A) DOUBTED THE SOURCE OF FUNDS, THE CAPACITY AND THE CREDITWORTHINESS OF THE PERSONS WHO HAVE GIVEN THE AMOUNT TO THE ASSESSEE. THE IDENTIT Y OF THE PERSONS IS PROVED. WHEN THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTION IS NOT DOUBTED, NO ADDITION CAN BE MADE U/S. 68 OF THE ACT. IF THE AO IS OF THE OPINION THAT THERE WAS NO SALE OF PROPERTY, IT DOES NOT LEAD TO A CONCLUSION THAT CREDIT IS AN UNEXPLAINED CREDIT. IN SUCH AN EVENT, THE TRANSACTION WOULD BE EITHER A LO AN OR GIFT. IN EITHER CASE IT IS NOT TAXABLE AS INCOME. ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 13 21. BE THAT AS IT MAY, THERE IS NO BAR ON AN INDIVI DUAL IN MAKING A SALE OF ANY PROPERTY TO HIS CLOSE RELATIVES. THERE IS NO ALLEGA TION THAT THE TRANSFER HAS NOT TAKEN PLACE AT MARKET RATES. THE DOCUMENT FILED BY THE AS SESSEE, I.E. COPY OF THE AGREEMENTS, DETAILS OF PAYMENTS, ADJUSTMENTS OF LOAN, BALANCE-S HEET AND PROFIT AND LOSS ACCOUNT, INCOME TAX DETAILS OF ALL THE PARTIES, HAVE NOT BE EN REBUTTED BY THE REVENUE AUTHORITIES. THE ENTIRE ADDITION WAS MADE ON MERE SURMISE AND CO NJECTURE. THE PURCHASERS OF THE PROPERTY HAVE CONFIRMED THE TRANSACTIONS, IN REPLY TO NOTICE ISSUED U/S. 133(6) OF THE ACT. THE REVENUE AUTHORITIES HAVE NOT BROUGHT OUT A NY CONTRARY EVIDENCE ON RECORD TO REBUT THE EVIDENCE FILED BY THE ASSESSEE. WHEN THE PARTIES TO THE CONTRACT HAVE CONFIRMED THAT THE POSSESSION OF THE PROPERTY HAS B EEN HANDED OVER, A CONTRARY VIEW CANNOT BE TAKEN ON THIS FACT WITHOUT EVIDENCE. THE HON'BLE SUPREME COURT IN THE CASE OF LALCHAND BHGAT AMBICA RAM VS. CIT (1999) 37 ITR 288 (SC) HAD REFERRED TO ANOTHER JUDGMENT OF THE HON'BLE SUPREME COURT IN TH E CASE OF M/S OMAN SAHOW MOHAMED SAIT (1959) 37 ITR 151 (SC) AND HELD THAT NO ADDITION C AN BE MADE ON THE BASIS OF SURMISES, SUSPICION AND CONJECTURES. IN TH E CASE OF UMACHARAN SHAH & BROS VS. CIT 37 ITR 271 (SC) IT WAS HELD THAT SUSPICION HOWEVER STRONG CANNOT TAKE THE PLACE OF PROOF. THUS, WE DELETE THE ENTIRE ADDITION MADE U/S 68 OF THE ACT AS UNWARRANTED. IN THE RESULT, GROUND NO.5 IS ALLOWED. 22. NEXT GROUND IN RESPECT OF ADDITION OF 31,13,200/- MADE BY THE AO ON THE GROUND THAT SAME IS BOGUS LIABILITY. 23. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT T HE LIABILITY IN QUESTION PERTAINS TO THE MOTHER OF ASSESSEE, SMT. SARAN KUMAI BANSAL. SU BSEQUENT TO HER DEMISE, THE LIABILITY DEVOLVED ON HER HUSBAND, SHRI R.D. BANSAL . ON THE DEATH OF SHRI R.D. BANSAL, THE LIABILITIES ALONG WITH ASSETS DEVOLVED UPON TO ASSESSEE BY WAY OF INHERITANCE. THE ISSUE IS WHETHER SUCH LIABILITY COULD BE ADDED U/S. 41(1) OF THE ACT, ON THE GROUND THAT THERE IS REMISSION OR CESSATION OF THE SAME. THE UN DISPUTED FACT IS THAT ALL LIABILITIES CONTINUE TO BE REFLECTED IN THE BOOKS OF ACCOUNT OF ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT ASSESSEE HAD CLAIMED A DEDUCTION IN IT S BOOKS OF ACCOUNT IN THE EARLIER ASSESSMENT YEAR OF THESE AMOUNTS. UNDER THE CIRCUMS TANCES SEC. 41(1) OF THE ACT ITA NO.2484/KOL/2017 A.Y. 2014-15 SH KAMAL KR.BANSAL VS. ITO WD-35(3) KOL. PAGE 14 CANNOT BE INVOKED BY THE AO AS HELD IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD (1991) 236 ITR 518 (SC). IT WAS HELD BY THE HON'BLE SUPREME COURT THAT IN ABSENCE OF DECLARATION BY THE ASSESSEE THAT IT DOES NOT INTEND TO HONOUR ITS LIABILITIES, PROVISION OF SEC. 41() CANNOT BE INVOKED. 24. IN THE RESULT, THIS ADDITION U/S 41(1) OF THE ACT IS HEREBY DELETED. GROUND NO.6 IS ALLOWED. 25. GROUND NO. 7 AND 8 ARE NOT PRESSED BY THE ASSES SEE DUE TO SMALLNESS OF AMOUNT. HENCE, THESE GROUNDS ARE DISMISSED WITH AN OBSERVATION THAT THIS WOULD NOT BE TAKEN AS A PRECEDENT. THESE ISSUES MAY BE CONTES TED BY THE ASSESSEE IN PENALTY PROCEEDINGS. 22. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 20/07/2018 SD/- SD/- (% ') ( ') (S.S.VISWANETHRA RAVI) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP-SR.PS ) - 20/07/2018 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI KAMAL KR. BANSAL, C/O SALARPURIA JA JODIA & CO. 7, C.R. AVENU E, KOLKATA-72 2. /RESPONDENT-ITO WARD-35(3) AAYAKAR BHAWAN, POORVA,1 10, SHANTIPALLY E.M. BY-PASS, K OLKATA-107 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . %%, , , / DR, ITAT, KOLKATA 6. 2 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO ,,