BHIKAM CHAND MUTHA, Mumbai V. ITO 22(1)(3), Mumbai

ITA 2562/MUM/2022

AI Insights

The case revolves around the denial of exemption under section 10(38) of the Income Tax Act, 1961, concerning long-term capital gains from the sale of shares of Radford Global Ltd by Shri Bhikam Chand Mutha. The AO had reopened the assessment based on allegations from the Kolkata Investigation Wing that the shares were part of a penny stock scheme used to generate bogus long-term capital gains. The Tribunal examined the documentary evidence provided by the assessee, including purchase bills, bank statements, and demat statements, which substantiated the genuineness of the transactions. The Tribunal noted that the assessee's name did not appear in any SEBI orders related to price manipulation and that the shares were sold at prevailing market prices after being held for a substantial period.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302549 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 15-01-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 05-10-2022
• Other Referred Cases: CIT vs Jamnadevi Agarwal, Mukesh Ratilal Marolia vs Additional CIT, PCIT vs Laxman Industrial Resources Ltd, CIT vs Shyam S Pawar
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained cash credit; Unexplained expenditure; Income from undisclosed sources; Question of law; Capital Gains
• Section: 68; 69C; 143(1); 64; 48; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.2562/Mum/2022 (Assessment Year :2014-15) Shri Bhikam Chand Mutha Shop No.7 Himalaya Apartment 6 th Road, Santacruz East Mumbai- 400 053 Vs. Income Tax Officer Ward – 22(1)(3) Mumbai PAN/GIR No.AFVPM8386F (Appellant) .. (Respondent) Assessee by Shri Prakash Jhunjhunwala Revenue by Smt. Jayashree Thakur Date of Hearing 16/01/2023 Date of Pronouncement 30/01/2023 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No. 2562/Mum/2022 for A.Y.2014-15 arises out of the order by the ld. Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC) in appeal No.CIT(A), Mumbai- 34/10435/2017-18 dated 12/08/2022 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 28/12/2017 by the ld. Income Tax Officer – 22(1)(3), Mumbai (hereinafter referred to as ld. AO). ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 2 2. Though the assessee has raised several grounds before us, we find that the effective issue to be issued in this appeal is as to whether the ld. CIT(A) was justified in confirming the action of the ld.AO in denying the exemption claimed u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of Radford Global Ltd, in the facts and circumstances of the case. The inter connected issue involved therein is whether the ld. CIT(A) NFAC was justified in confirming the addition @ 3% of transaction amount of long term capital gain as unexplained expenditure u/s 69C of the Act in the facts and circumstances of the case. 3. We have heard the rival submissions and perused the materials available on record. The assessee is an individual engaged in investment in shares on long term basis. The assessee had made investments in various scrips including Radford Global Ltd. The evidence in the form of making investments in various scrips is enclosed in 37 of the paper book. He had filed his return of income for the Asst Year 2014-15 on 27/09/2014 declaring total income of Rs Nil. In the said return, the assessee claimed exemption u/s 10(38) of the Act in respect of long term capital gain derived from sale of shares of Radford Global Ltd. The said return was duly processed u/s 143(1) of the Act. This was later sought to be reopened u/s 147 of the Act on the ground that the claim of exemption u/s 10(38) of the Act claimed by the assessee was on account of penny stock shares dealt by assessee which was held to be bogus as per the investigation report of Kolkata Income Tax Department. The validity of reopening of assessment is not in challenge before us. The claim of exemption u/s 10(38) of the Act on sale of shares of Radford Global Ltd was sought to be examined by the ld. AO in the course of re- assessment proceedings. The assessee submitted that he purchased 10000 shares of Radford Global Ltd on 18/11/2011 @ Rs 10 per share for Rs 1,00,000/-. The shares were purchased by the assessee in off-market from M/s Atherton Glass Works Limited, No. 8, Trivelian Basin Street, ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 3 Sowcarpet, Chennai- 600079. The payment for the purchase of the said shares were made by the assessee vide Cheque No. 501339 of Janakalyan Bank for Rs 1,00,000/-. The cheque got cleared in the bank statement of the assessee on 24/11/2011. The receipt given by M/s Atherton Glass Works Limited for receipt of the cheque amount of Rs 1,00,000/- towards sale of shares made by it to the assessee is enclosed in page 27 of the paper book. This share was purchased by the assessee by seeing the paper advertisement given by M/s Atherton Glass Works Limited in Times of India. The evidence in this regard is enclosed in page 29 of the paper book. Later the face value per share of Radford Global Ltd was reduced from Rs 10 to Rs 2 per share pursuant to the special resolution passed by Radford Global Ltd in an Extra Ordinary General Meeting of its shareholders on 17/11/2013. It is pertinent to note that Radford Global Ltd had duly intimated the Bombay Stock Exchange (BSE) regarding the change in face value per share to Rs 2 per share and consequential increase in number of shares thereon. Accordingly, 10000 shares held by the assessee got converted into 50000 shares. It is not in dispute that the purchase of these shares were met out of accounted sources of the assessee and 50000 shares were duly dematted in the demat account maintained by the assessee. The said shares were held by the assessee for 17 months by the assessee and sold for Rs 73.73 ; Rs 77.36 and 79.90 per share on 08/04/2013, 10/04/2013 and 22/04/2013 respectively in Asst Year 2014-15 for an amount of Rs 38,60,875/-. The assessee furnished the following documents in support of his contentions before the lower authorities :- a) Purchase Bill dated 18/11/2011 b) Payment receipt dated 23/11/2011 given by the seller of shares to the assessee c) Advertisement published in newspaper by Seller which enabled assessee to approach the seller for purchase of shares d) Bank statement of assessee disclosing payment of purchase consideration for shares on 24/11/2011 ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 4 e) Share Certificate dated 30/11/2011 evidencing transfer of shares in assessee’s name f) Special resolution passed by Radford Global Ltd at an Extra Ordinary General Meeting of its shareholders for sub-division of shares g) Demat statement of the assessee showing the credit of 50000 shares on purchase and consequential sub-division of shares h) Balance Sheet of the assessee for Asst Years 2012-13 and 2013-14 evidencing the fact of assessee making various investments in various scrips including Radford Global Ltd i) ITR acknowledgement together with the computation of income and balance sheet of the assessee for Asst Year 2014-15 (ie the year under consideration) j) Sales Bills cum Contract Notes 08/04/2013 to 22/04/2013 k) Confirmation of stock broker M/s Motilal Oswal Securities Ltd enclosing the account statement of the assessee as appearing in its books for the period 01/04/2013 to 31/03/2014. This account statement clearly indicated the payment made by the said broker to the assessee on sale of shares. l) Bank statement evidencing receipt of sale consideration m) Demat statement of the assessee evidencing the reduction in number of shares of Radford Global Ltd held by the assessee after its sale n) Rate publication chart indicating the price of shares of Radford Global Ltd even after sale made by the assessee to prove the point that the sale has been made at prevailing market price by the assessee and also the fact that the said scrip is traded in stock exchange even after the sale made by the assessee o) CIN Master Data downloaded from the website of Ministry of Corporate Affairs (MCA) to prove the fact that Radford Global Ltd is shown as a listed company in Active Category in the records of MCA. 4. The ld. AO had relied on the findings of the investigation wing of Kolkata which are outlined in para 7 of his assessment order. The main grievance of the ld. AO is that rise in share price of Radford Global Ltd is devoid of commercial principle or market factors ; that transactions are based on mutual connivance on part of assessee and operators ; that assessee resorted to preconceived scheme to procure bogus long term capital gains and hence the transactions are not bonafide ; that SEBI also passed an Interim order dated 19/12/2014 holding that share prices were determined artificially by manipulations ; that these are close circuit transactions and are pre-structured; that assessee had failed to discharge ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 5 his onus cast on him ; that investigations prove that cash is routed through various accounts to provide these bogus long term capital gain entries. The ld. AO by making these observations proceeded to treat the sale proceeds of the shares as unexplained cash credit u/s 68 of the Act. Since the receipt of sale proceeds was treated as bogus, the ld. AO also proceeded to add estimated commission @ 3% for arranging the said bogus transaction as unexplained expenditure u/s 69C of the Act. 5. We find that each and every averment of the ld. AO were duly met by the assessee before the ld. CIT(A) in his written submissions filed before the ld. CIT(A). The ld. CIT(A) upheld the action of the ld. AO. 6. At the outset, we find that the documentary evidences submitted by the assessee were found to be genuine and no adverse inferences were drawn by the revenue on the same. The purchase transaction of shares made in off-market in Asst Year 2012-13 and assessee had made payment for the same by account payee cheque. We find that the assessee has made investment in various scrips of various companies including Radford Global Ltd. The entire investments made by the assessee has been duly disclosed in the Balance Sheet of the assessee , which fact is not disputed by the revenue. The sale transactions were carried out by the assessee in the secondary market through a registered share broker at the prevailing market prices. Payments were received by the assessee by account payee cheques from the stock exchange through the registered broker. Amounts received on sale of shares were duly subjected to levy of Securities Transaction Tax (STT) at the applicable rates. 6.1. We find that no enquiries were carried out by the revenue either on the broker or with the stock exchange with regard to transactions carried out by the assessee. The revenue had merely relied on the Kolkata investigation report without linking the assessee with the various allegations leveled in the said investigation report. ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 6 6.2. We find that the revenue had not proved with any cogent evidence on record that assessee was involved in converting his unaccounted income into exempt long term capital gains by conniving with the so called entry operators, promoters of Radford Global Ltd and brokers who were involved in artificial price rigging of shares. No evidence is brought on record to prove that assessee was directly involved in price manipulation of the shares dealt by him in connivance with the brokers and entry operators. 6.3. It is not in dispute that the assessee had made purchase of shares in off-market. Now the next issue that arises for our consideration is as to whether an off market purchase of shares could be taken as a ground to declare the entire transaction as sham. In our considered opinion, the transactions could not be treated as sham merely because they are done in off-market, if the assessee had discharged his onus of proving the fact that shares purchased by him were dematerialized in the Demat account and held by the assessee till the same were sold from the Demat account of the assessee. In the instant case, the assessee had furnished all the documentary evidences for proving its purchases made in off-market to be genuine. The transaction of holding the shares are reflected in Demat account and sale of shares are through Demat account. There is no dispute regarding the purchase price and sale price of shares. Our view is further fortified by the decision of Hon’ble Jurisdictional High Court in the case of CIT vs Jamnadevi Agarwal reported in 328 ITR 656 (Bom). 6.4. We find that independent enquiries were conducted by Securities and Exchange Board of India (SEBI in short) and SEBI had passed a separate order in respect of the said scrip in which assessee had dealt. In the said order, SEBI had listed out the names and PAN of various persons who were involved in artificial price rigging of shares and the list of beneficiaries. The assessee’s name or the broker through whom the assessee bought and sold the shares does not figure in the said list in the ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 7 order of SEBI. Hence even SEBI does not allege any involvement of the assessee herein with the manipulation of share prices. Infact SEBI had passed an interim order dated 19/12/2014 on Radford Global Ltd wherein it was preliminarily held that the share prices of the said scrip had been artificially rigged by manipulators. Later SEBI had passed a final order dated 20/09/2017 under sections 11,11(4) and 11B of the SEBI Act, 1992 in the matter of Radford Global Ltd, wherein all the 82 entities had been acquitted by SEBI by clearly giving a finding that those entities were not involved in artificial price rigging of shares. 6.5.We find that the assessee had held the shares in the instant case for 17 months and then sold the shares in the open market at prevailing market prices. The assessee bought the shares on 18/11/2011, which was prior to the investigation period carried out by SEBI as admittedly SEBI carried out investigation of this scrip for the period 28/01/2013 to 24/03/2014. We find that the assessee had sold the shares from 08/04/2013 to 22/04/2013 in the open market at the prices reflected in earlier part of the order and the said price remained in the same level even after the sale made by the assessee, which fact is evident from the rate chart enclosed by the assessee in page 23 of the paper book. We further find that from page 7 of the SEBI order, there is a categorical finding that 82 persons listed thereon were not involved in price manipulation and the relevant findings of SEBI order are reproduced hereunder:- 9. Upon completion of investigation by SEBI, investigation did not find any adverse evidence/adverse findings in respect of violation of provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations) in respect of following 82 entities (against whom directions were issued vide the intent orders as confirmed vide the above said confirmatory orders) warranting continuation of action under Section 118 / 11(4) of SEBI Act. However, investigation has found adverse findings against Radford which warrants Adjudication Proceedings. The details of the 82 entities are as follows: ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 8 Sr. No. PAN Name Sr. No. PAN Name 1 AABCM5771E Radford Global Limited 2 AACPJ4316L Surendra B. Jewrajka 3 AJNPB0702E Prakash Bhawarial 4. ACPPJ9853R Rajendra Mangilal Jain 5 AELPS8560A Manish Nareshchandra Shah 6. AAEPA1694C Renu Aggarwal 7 ACJPM4653L Rajeshkumar Maheshwari 8. AGMPM1488Q Renu Mittal 9 AMBPM9321 M Nitin Shivratan Murarka 10 ABAPA4548E Santosh Aggarwal 11 AACCG9982A Radford Investment Services Pvt. Ltd 12 AACCF7065J Esquire Enclave Private Limited 13 ATXPD7040B Roshan Dwarkani 14 AAECK3394G Kingfisher Propertis Private Limited 15 BCXPS0818J Suresh Kumar Saini 16 AAAPJ6765F Shailesh Mangilaljain 17 ABAPB8617M Aachalchand Balar 18 AEXPA1230M Shilpa Aggarwal 19 AEFPS6298M Brij Bhushan Singal 20 ACAFS8650G Sushant Investments 21 ANRPS7986B Neeraj Singal 22 AFAPT5888A Tanvi Bhavik Trevadia 23 ABHPS3711M Rity Singal 24 AOQPA9034E Tarun Aggarwal 25 ANRPS7987A Uma Singal 26 AAPPT1825P Yogesh Popatlal Thakkar 27 AEMPB6394Q Piyush Kumar Balar 28 AACCA3220D Amrit Sales Promotion Private Limited 29 AATPB8811B Abhishek Kumar Balar 30 AAJCA1784D Anjali Suppliers Private Limited 31 AADPZ8571G Afsar Zaidi 32 AAACB2131L Blue Circle Services Limited 33 AACPM4024E Amresh Anantrai Mody 34 AABCB2575P Burlington Finance Limited 35 AJSPM7935P Hasumati Anantrai Mody 36 AADCD7140G Devatma Distributors Private Limited 37 AAFHA0709M Anil Rajat Agarwal & Sons (HUF) 38 AADCD6028P Dhanraksha Vincom Private Limited 39 AACPJ3610K Ashok B Jiwrajka 40 AABCD8146J Divyadrishti Traders Private Limited 41 AAIPG4573G Rabita Mittal 42 AABCD8147K Divyadrishti Merchants Private ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 9 Limited 43 AAKPD3160A Bimal J Desasi 44 AAECK6244R Katyani Commodities Private Limited 45 ACDPT3428N Dalsukh Upmashi Trevadia 46 AACCL3868N Ladios Trading Private Limited 47 AAGPJ8756J Dilip B Jiwrajka 48 AACCL0133G Limestone Properties Private Limited 49 AADPM9919 M Dilip Chotala Imorzaria 50 AADCM4316K Manimudra Vincom Private Limited 51 AHEPG0025A G.M. Prasanna Kumar 52 AADCN6251G Natural Housing Private Limited 53 ADPPK9874N G.S. Anith Kumar 54 AAFCR2818B Radison Properties Private Limited 55 AAJPV4754H Harikishan Suderlal Vermani 56 AAGCR1715E Rangan Vincom Private Limited 57 AABPJ2835R Hitesh Mangilal Jain 58 AAECR9858C Ridhi Vincom Private Limited 59 AABPR9949J Hukamsingh B Rajpurohit 60 AAICS6023N Scope Vyapar Private Limited (Presently known as class commercial pvt. Ltd.) 61 ABWPT8000C Jyoti Anil Trevadia 62 AAPCS7850L Shivkhori Construction Private Limited 63 AHPPD4223L Jyotsna Jitendr Desai 64 AADCS5411K Symphony Merchants Pvt. Ltd. 65 AAAPL9611J Kalpita Luniya Suresh 66 AADCT8403C Topwell Properties Private Limited 67 AFFPP5207G Kamal Punwani Indur 68 AAACJ4848G Jayant Security & Finance Limited 69 AEYPM5850Q G M. Lingaraju 70 AAACT6383N Trimurthi Finvest Limited 71 AKJPB8572F Mayuri Darshan Bhanushali 72 AABCP6564C Purvi Finvest Limited 73 APFPM0496Q Mohan Mittal 74 AAACE6834D East West Finvest India Limited 75 ADSPA930IK Mohit Aggarwal 76 AADCE1236G East West Finvest India Limited 77 AJGPM2125D Mukesh Mittal 78 ASVPR5947G Taran Kumar Rungta 79 ACRPS0182J Naresh Nemchand Shah 80 AFAPN8764M Prem Lata Nahar 81 AAEPM5924H Ujwala Namdev Mane 82. ANFPK3652G Sunil Mohanlal Kansara 10. Considering the fact that there are no adverse findings against the aforementioned 82 entities with respect to their role in the manipulation of ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 10 the scrip of Radford, I am of the considered view that the directions issued against them vide interim orders dated December 19, 2014 and November 9, 2015 which were confirmed vide Orders dated October 12, 2015, March 18, 2016 and August 26, 2016 are liable to be revoked 11. In view of the foregoing, I, in exercise of the powers conferred upon mne under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11, 11(4) and 11B of the SEBI Act, hereby revoke the Confirmatory Orders dated October 12, 2015, March 18, 2016 and August 26, 2016 qua aforesaid 82 entities (paragraph 9 above) with immediate effect. 6.6. From the above order of SEBI, it is very clear that SEBI, based on its investigations and replies given by various parties, had ordered either to take action against certain parties or had discharged certain parties on the ground that they are not involved in the price manipulation. In any case, the assessee’s name or the broker, through whom assessee transacted had not figured in the said list either in the restraint list or in the discharged list. Hence it could be safely concluded that the assessee herein is merely a gullible investor, who had resorted to make investment in the shares of Radford Global Ltd based on market information and had sold the shares in the secondary market in prevailing market prices. 6.7. Hence the entire addition has been made merely by placing reliance on the Kolkata Investigation Wing report which are more general in nature and does not implicate the assessee herein in any manner whatsoever. We are unable to persuade ourselves to accept to the contentions of the ld. DR that Kolkata Investigation Wing had conducted a detailed enquiry with regard to the scrip dealt by the assessee herein and hence whomsoever had dealt in this scrip, would only result in bogus claim of long term capital gain exemption or bogus claim of short term capital loss. Merely because a particular scrip is identified as a penny stock by the income tax department, it does not mean all the transactions carried out in that scrip would be bogus. So many investors enter the ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 11 capital market just to make it a chance by investing their surplus monies. They also end up with making investment in certain scrips (read penny stocks) based on market information and try to exit at an appropriate time the moment they make their profits. In this process, they also burn their fingers by incurring huge losses without knowing the fact that the particular scrip invested is operated by certain interested parties with an ulterior motive and once their motives are achieved, the price falls like pack of cards and eventually make the gullible investors incur huge losses. In this background, the only logical recourse would be to place reliance on the orders passed by SEBI pointing out the malpractices by certain parties and taking action against them. Since assessee or his broker and even the said company (i.e Radford Global Ltd) is not one of the parties who had been proceeded against by SEBI, the transaction carried out by the assessee cannot be termed as bogus. 6.8. We hold that the entire addition has been made based on mere surmise, suspicion and conjecture and by making baseless allegations against the assessee herein. Now another issue that arises is as to whether the ld. AO merely on the basis of Kolkata investigation wing report could come to a conclusion that the transactions carried out by the assessee as bogus. In our considered opinion, the ld. AO is expected to conduct independent verification of the matter before reaching to the conclusion that the transactions of the assessee are bogus. More importantly, it is bounden duty of the ld. AO to prove that the evidences furnished by the assessee to support the purchase and sale of shares as bogus. This view of ours is further fortified by the decision of Hon’ble Delhi High Court in the case of PCIT vs Laxman Industrial Resources Ltd in ITA No. 169/2017 dated 14/03/2017. It is well settled that the suspicion however strong could not partake the character of legal evidence. Hence the greater onus is casted on the revenue to corroborate ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 12 the impugned addition by controverting the documentary evidences furnished by the assessee and by bringing on record cogent material to sustain the addition. No evidence has been brought on record to establish any link between the assessee herein and the directors of Radford Global Ltd or any other person named in the assessment order being involved in any price rigging and also the exit provider. This onus is admittedly not discharged by the revenue in the instant case. 6.9. We find that the Co-ordinate Bench of this Tribunal in the case of Mukesh Ratilal Marolia vs Additional CIT reported in 6 SOT 247 (Mum ITAT) dated 15/12/2005 had held that personal knowledge and excitement on events should not lead the ld. AO to a state of affairs where salient evidences are overlooked. When every transaction has been accounted, documented and supported, it would be very difficult to brush aside the contentions of the assessee that he had purchased shares and had sold shares and ultimately purchased a flat utilizing the sale proceeds of those shares and therefore, the co-ordinate bench chose to delete the impugned additions. We find that this tribunal decision was approved by the Hon’ble Jurisdictional High Court in ITA No. 456 of 2007 dated 07/09/2011. It is pertinent to note that the Special Leave Petition preferred by the Revenue against this decision before the Hon’ble Supreme Court has been dismissed vide SLP No. 20146 of 2012 dated 27/01/2014. 6.10. Further we find that the Hon’ble Jurisdictional High Court in the case of CIT vs Shyam S Pawar reported in 54 taxmann.com 108 (Bom), it was held that where Demat account and contract note showed details of share transaction and the ld.AO had not proved the said transaction as bogus, the long term capital gain earned on said transaction could not be treated ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 13 as unaccounted income u/s 68 of the Act. The relevant operative portion of the said judgement is reproduced below:- 5. We have perused the concurrent findings and on which heavy reliance is placed by Mr.Sureshkumar. While it is true that the Commissioner extensively referred to the correspondence and the contents of the report of the Investigation carried out in paras 20, 20.1, 20.2 and 21 of his order, what was important and vital for the purpose of the present case was whether the transactions in shares were genuine or sham and bogus. If the purchase and sale of shares are reflected in the Assessee's DMAT account, yet they are termed as arranged transactions and projected to be real, then, such conclusion which has been reached by the Commissioner and the Assessing Officer required a deeper scrutiny. It was also revealed during the course of inquiry by the Assessing Officer that the Calcutta Stock Exchange records showed that the shares were purchased for code numbers S003 and R121 of Sagar Trade Pvt Ltd. and Rockey Marketing Pvt. Ltd. respectively. Out of these two, only Rockey Marketing Pvt.Ltd. is listed in the appraisal report and it is stated to be involved in the modus-operandi. It is on this material that he holds that the transactions in sale and purchase of shares are doubtful and not genuine. In relation to Assessee's role in all this, all that the Commissioner observed is that the Assessee transacted through brokers at Calcutta, which itself raises doubt about the genuineness of the transactions and the financial result and performance of the Company was not such as would justify the increase in the share prices. Therefore, he reached the conclusion that certain operators and brokers devised the scheme to convert the unaccounted money of the Assessee to the accounted income and the present Assessee utilized the scheme. 6. It is in that regard that we find that Mr.Gopal's contentions are well founded. The Tribunal concluded that there was something more which was required, which would connect the present Assessee to the transactions and which are attributed to the Promoters/Directors of the two companies. The Tribunal referred to the entire material and found that the investigation stopped at a particular point and was not carried forward by the Revenue. There are 1,30,000 shares of Bolton Properties Ltd. purchased by the Assessee during the month of January 2003 and he continued to hold them till 31 March 2003. The present case related to 20,000 shares of Mantra Online Ltd for the total consideration of Rs.25,93,150/-. These shares were sold and how they were sold, on what dates and for what consideration and the sums received by cheques have been referred extensively by the Tribunal in para 10. A copy of the DMAT account, placed at pages 36 & 37 of the Appeal Paper Book before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were available and which gave details of the transactions. The contract note is a system generated and prescribed by the Stock Exchange. From this material, in para 11 the Tribunal concluded that this was not mere accommodation of cash and enabling it to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client Code has been referred to. But the Tribunal concluded that itself, is not ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 14 enough to prove that the transactions in the impugned shares were bogus/sham. The details received from Stock Exchange have been relied upon and for the purposes of faulting the Revenue in failing to discharge the basic onus. If the Tribunal proceeds on this line and concluded that inquiry was not carried forward and with a view to discharge the initial or basic onus, then such conclusion of the Tribunal cannot be termed as perverse. The conclusions as recorded in para 12 of the Tribunal's order are not vitiated by any error of law apparent on the face of the record either. 7. As a result of the above discussion, we do not find any substance in the contention of Mr.Sureshkumar that the Tribunal misdirected itself and in law. We hold that the Appeals do not raise any substantial question of law. They are accordingly dismissed. There would no order as to costs. 8. Even the additional question cannot be said to be substantial question of law, because it arises in the context of same transactions, dealings, same investigation and same charge or allegation of accommodation of unaccounted money being converted into accounted or regular as such. The relevant details pertaining to the shares were already on record. This question is also a fall out of the issue or question dealt with by the Tribunal and pertaining to the addition of Rs.25,93,150/-. Barring the figure of loss that is stated to have been taken, no distinguishable feature can be or could be placed on record. For the same reasons, even this additional question cannot be termed as substantial question of law. 6.11. Considering the totality of the facts and circumstances of the instant case and respectfully following the judicial precedents relied upon hereinabove, we are not inclined to accept to the stand of the ld. CIT(A) in sustaining the impugned additions on account of denial of exemption for long term capital gains u/s 10(38) of the Act and estimated commission @ 3% against the same. Accordingly, the grounds 2 to 4 raised by the assessee are allowed. 7. The Ground No.1 challenging the reopening of assessment was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly Ground No. 1 is dismissed as not pressed. ITA No. 2562/Mum/2022 Shri Bhikam Chand Mutha 15 8. In the result , the appeal of the assessee is partly allowed. Order pronounced on 30/01/2023 by way of proper mentioning in the notice board. Sd/- (SANDEEP SINGH KARHAIL) Sd/- (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 30/01/2023 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//