Shikha Dhawan, Gurgaon V. ITO, Ward- 4(2), Gurgaon

ITA 3035/DEL/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5768 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 01-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: PEEYUSH KAMAL
• Keywords: Unexplained cash credit; Capital asset; Income from undisclosed sources; Share purchase agreement; Principle of natural justice; Question of law; Cost of acquisition; Corroborative evidences; Accommodation entries; Onus to prove; Sham transactions
• Section: 40A(3); 131; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH.BHAVNESH SAINI, JUDICIAL MEMBER ITA NO.3035/DEL/2018 [ASSESSMENT YEAR: 2014-15] APPELLANT BY SH. GAUTAM JAIN & SH. PEEYUSH KAMAL, ADVOCATE RESPONDENT BY SH. S.L.ANURAGI, SR.DR DATE OF HEARING 11.06.2018 DATE OF PRONOUNCEMENT 27 . 06.2018 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD.CIT(A)- 1, GURGAON DATED 09.03.2018 FOR AY 2014-15 ON THE F OLLOWING GROUNDS:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) 1, GURGAON HAS FURTHER GROSSLY ERRED BOTH IN LAW AND, ON FACTS IN DENYING THE CLAIM OF EXEMPTION OF LONG TERM CAPITAL GAIN OF RS. 19,39,35 7/- ON SALE OF SHARES SOLD ON RECOGNIZED STOCK EXCHANGE AND, ELIGIBLE FOR EXEMPTION U/S 10(38) OF THE ACT AND BRINGING TO TAX AS UNEXPLAINED CREDIT U /S 68 OF THE ACT. 2. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ALSO ERRED BOTH IN LAW AND ON FACTS IN MAKING AN ADDITION OF R S. 19,51,357/- BEING SALE CONSIDERATION ON SALE OF SHARES LISTED ON RECO GNIZED STOCK EXCHANGE AS UNEXPLAINED CREDIT U/S 68 OF THE ACT. 2.1. THAT WHILE SUSTAINING THE AFORESAID ADDITION A ND DENYING THE EXEMPTION LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS FAILED TO APPRECIATE THAT, APPELLANT WAS OWNER OF EQUITY SHAR ES OF A LISTED COMPANY WHICH HAD BEEN HELD BY IT FOR A PERIOD EXCEEDING 12 MONTHS AND THE SAME WERE SOLD ON RECOGNIZED STOCK EXCHANGE AFTER PAYMEN T OF STT, RESULTING SMT. SHIKHA DHAWAN, C-101, CENTRE PARK, SECTOR-42, GURGAON. PAN-CCBPS1718L VS ITO, WARD-4(2), GURGAON. (APPELLANT) (RESPONDENT) ITA NO.3035/DEL/2018 PAGE | 2 INTO A LONG TERM CAPITAL GAIN AND THEREFORE THE LON G TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TERM 'C APITAL ASSET' WAS NOT INCLUDIBLE IN TOTAL INCOME OF THE ASSESSEE IN VIEW OF SECTION 10(38) OF THE ACT. 2.2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS FAILED TO APPRECIATE THE EVIDENCE TENDERED BY THE APPELLANT T O SUPPORT THE CLAIM OF SALE OF SHARES AND HENCE, FINDINGS MECHANICALLY REC ORDED ON BORROWED INFERENCE IN DISREGARD OF EVIDENCE AND BASED ON IRR ELEVANT AND EXTRANEOUS CONSIDERATIONS ARE MISCONCEIVED AND, MISPLACED. 2.3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS CONFIRMED THE ABOVE ADDITION AND DENIED EXEMPTION W ITHOUT CONFRONTING THE MATERIAL/INVESTIGATION TO APPELLANT AND ALSO PR OVIDING CROSS EXAMINATION OF THE PARTIES ON WHOSE STATEMENTS RELI ANCE HAS BEEN PLACED IN IMPUGNED ORDER OF ASSESSMENT AND THEREFORE ORDER SO MADE IS IN DISREGARD OF PRINCIPLES OF NATURAL JUSTICE IS VITIA TED. 2.4 THAT FURTHER MORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS SUSTAINED THE ADDITION ON MERE SPECULATION, GEN ERALIZED STATEMENTS, THEORETICAL ASSUMPTIONS AND ALLEGATIONS AND ASSERTI ONS, WITHOUT THERE BEING ANY SUPPORTING EVIDENCE AND IS THEREFORE NOT IN ACCORDANCE WITH LAW. 2.5 THAT LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS FAILED TO APPRECIATE THAT ONCE THE BROKER OF THE ASSESSEE M/S INDUS PORTFOLIO (P) LTD. HAD NEITHER DENIED AND NOR DISPUTED THE GENUINENESS OF TRANSACTION, THE CONCLUSION ARRIVED IN THE ORDER IS HIGHLY WHIMSICAL , ARBITRARY, ILLOGICAL AND WHOLLY UNTENABLE. 2.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) WHILE SUSTAINING THE ABOVE ADDITION HAS ARBITRARILY AND, MECHANICALLY REJECTED THE EXPLANATION AND EVIDENCE TENDERED BY THE APPELL ANT AND MADE THE ADDITION AND DENIED EXEMPTION BY DRAWING SUBJECTIVE , PREMEDITATED AND PRECONCEIVED INFERENCES THEREFORE THE SAME IS NOT S USTAINABLE. 2.7 THAT THE FINDING OF THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) THAT THE APPELLANT DID NOT DIVULGE THE NA ME OF THE PERSON WHO ADVISED HER TO BUY THE SHARES OF MIS. TURBO TECH EN GINEERING LTD. AND ITA NO.3035/DEL/2018 PAGE | 3 APPELLANT DID NOT HAVE BASIC KNOWLEDGE OF SHARE TRA DING ARE IRRELEVANT CONSIDERATIONS EITHER TO BRING TO TAX LONG TERM CAP ITAL GAIN UNDER SECTION 68 OF THE ACT OR DENY CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT AND THEREFORE, THE ADDITION MADE AND CONFIRMED IS INVAL ID. 2.8 THAT VARIOUS ADVERSE FINDINGS AND CONCLUSIONS RECORDED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE FA CTUALLY INCORRECT AND CONTRARY TO RECORD, LEGALLY MISCONCEIVED AND UNTENA BLE. 2.9 THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ERRED IN CONCLUDING WITHOUT ANY BASIS THAT ASSESSEE HAS INTR ODUCED HIS UNACCOUNTED INCOME IN THE FORM OF LONG TERM CAPITAL GAIN BY MANIPULATING THE PENNY STOCK. 3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ALSO ERRED BOTH IN LAW AND ON FACTS IN NOT ALLOWING DEPR ECIATION OF COST INCURRED ON PURCHASE OF SHARES AND SOLD BY THE APPELLANT IN THE NEXT YEAR. IT IS THEREFORE, PRAYED THAT IT BE HELD THAT EXEMPT ION DENIED AND ADDITION MADE AND SUSTAINED BY THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) MAY KINDLY BE DELETED AND APPEAL OF THE A PPELLANT BE ALLOWED. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. IN ALL THE GROU NDS OF APPEAL, THE ASSESSEE CHALLENGED THE ADDITION OF RS.19,51,357/- U/S 68 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). 3. BRIEF FACTS OF THE CASE ARE THAT RETURN DECLARIN G INCOME OF RS. 5,31,370/- WAS FILED ON 18.11.2014. IN THIS RETURN THE ASSESSE E HAD CLAIMED LONG TERM CAPITAL GAINS OF RS.19,39,557/- AS EXEMPT U/S 10(38 ) OF THE IT ACT. THE ASSESSING OFFICER REFERRED TO THE INVESTIGATION CAR RIED OUT BY THE DIRECTORATE OF INVESTIGATION, KOLKATA TO UNEARTH THE ORGANIZED RAC KET OF GENERATING BOGUS ENTRIES OF LONG TERM CAPITAL GAINS WHICH IS EXEMPT FROM TAX. AFTER DISCUSSING THE MODUS OF SUCH RACKET OF GENERATING OF BOGUS ENT RIES, THE ASSESSING OFFICER ITA NO.3035/DEL/2018 PAGE | 4 POINTED OUT THAT THE DIRECTORATE OF INVESTIGATION, KOLKATA INVESTIGATED TRANSACTIONS IN 84 PENNY STOCK SHARES QUOTED ON BSE AND EXAMINED ON OATH A LARGE NUMBER OF BROKERS, PROMOTERS AND ENTRY OPERAT ORS. AS A RESULT OF THIS INVESTIGATIONS, LARGE NUMBER OF INDIVIDUALS HAD BEE N IDENTIFIED WHO HAD TAKEN SUCH ACCOMMODATION ENTRIES AND A NUMBER OF SUCH IND IVIDUAL HAD SURRENDERED THE ACCOMMODATION ENTRY FOR TAXATION PURPOSES. THE ASSESSING OFFICER POINTED OUT THAT THE ASSESSEE WAS ALSO BENEFICIARY OF THE A CCOMMODATION ENTRIES. IN THIS REGARD THE ASSESSING OFFICER POINTED OUT THE F OLLOWING FACTS:- '8. THE ASSESSEE IS ONE SUCH BENEFICIARY WHO HAS TA KEN THE ENTRY OF RS. 19,39,357/- DURING THE ASSESSMENT YEAR 2014-15 UNDE R CONSIDERATION ALONG WITH OTHER SO MANY PERSONS. THUS THE FACTS OF THIS CASE, THEREFORE, SHOULD NOT BE VIEWED IN ISOLATION BUT AS ONE OF THE BENEFICIARY IN THE LARGER AFOREMENTIONED SCHEME. 8.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E AR OF THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS ENCLOSING COPIES OF C OMPUTATION BANK STATEMENTS AND FURNISHED THE DETAILS OF LONG TERM C APITAL GAIN. THE ASSESSEE PURCHASED THE 10,000 SHARES OF M/S TURBO T ECH ENGINEERING LTD. OFF MARKET ON 22.11.2011 FROM M/S SHREE JI BRO KING PVT. LTD., WHO WAS THE ORIGINAL ALLOTTEE OF THE SHARES FOR A TOTAL SALE CONSIDERATION OF RS.20,000/- -I.E. RS.2 PER SHARE. PAYMENT WAS MADE BY THE ASSESSEE TO M/S SHREE JI BRAKING PVT. LTD IN CASH ON 24.11.2011 AND THE SHARES WERE GOT TRANSFERRED IN HER NAME 28.11.2011. LATER ON OU T OF THESE 6000 SHARES WERE SOLD ON 30.07.2013 AND 31.07.2013 (500+5500=60 00) THROUGH THE BROKER M/S INDUS PORTFOLIO PVT. LTD, FOR A TOTAL SA LE CONSIDERATION OF RS. 19,53,372/-. 8.2. ON GOING THROUGH THE INFORMATION MADE AVAILABL E PRIMA FACIE IT IS FOUND THAT THE ASSESSEE INDULGED IN BOGUS LONG TERM CAPITAL GAIN AND ITA NO.3035/DEL/2018 PAGE | 5 CLAIMED THE ABOVE AMOUNT AS EXEMPT U/S. 10(38) OF T HE ACT, 1961. IT IS ALSO FOUND THAT THE ABOVE SCRIP M/S. TURBO TECH PVT . LIMITED, WHICH THE ASSESSEE PURCHASED, WAS INVOLVED IN PROVIDING BOGUS ACCOMMODATION ENTRIES IN THE SHAPE OF BOGUS LONG TERM CAPITAL GA INS. ' 3.1. ALL THESE FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSEE BY THE ASSESSING OFFICER IN THE SHOW CAUSE DATED 19/12/201 6 AND THE APPELLANT WAS ASKED TO EXPLAIN WHY TRANSACTIONS MAY NOT BE HELD T O BE ACCOMMODATION ENTRY. THE ASSESSING OFFICER ALSO REFERRED TO THE INVESTIG ATION CONDUCTED BY THE INVESTIGATION WING KOLKATA AND PARTICULARLY REFERRE D TO THE STATEMENTS OF SH.ANIL KUMAR KHEMKA RECORDED U/S 131 OF THE ACT WH EREIN IT WAS STATED BY THESE PERSONS THAT M/S TURBO TECH LTD WAS USED FOR THE PURPOSE OF PROVIDING ACCOMMODATION ENTRIES. AFTER CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER HELD THAT THE TRANSACTION WAS A ACCOMMODATION ENTRY AND IN THIS REGARD OBSERV ED AS UNDER:- '9.1 THE ASSESSEE SOLD THE SHARES ON 30.07.2013 & 3 1.07.2013 (500+5500=6000) THROUGH THE BROKER M/S INDUS PORTFO LIO PVT. LTD, FOR A TOTAL SALE CONSIDERATION OF RS.19,53,372/- FOR WHIC H THE SHARES WERE DEMATERIALIZED ONLY ON 11.06.2013. IT IS THUS EVIDE NT THAT JUST A FEW DAYS PRIOR TO THE DATE OF SALE, THESE SHARES ARE DEMATER IALIZED THOUGH THESE ARE SAID TO HAVE BEEN PURCHASED ON 22.11.2011. THE TRAN SACTION ENTERED INTO BY THE ASSESSEE DOES NOT AUTHENTICATE LONG TERM CAP ITAL GAIN IN VIEW OF THE FACT THAT THESE PHYSICAL SHARES WERE PURCHASED THRO UGH OFF MARKET AND THESE SHARES WERE DEMATERIALIZED ONLY JUST A FEW DA YS PRIOR TO THE DATE OF SALE. 10. THE ASSESSEE HAS SHOWN CREDIT OF RS.19,51,357/- IN HIS BANK ACCOUNT AS SALE PROCEEDS OF SHARES. AS IS EVIDENT FROM THE INVESTIGATION THE ACTUAL SOURCE OF THIS CREDIT IS THE UNACCOUNTED CASH OF TH E ASSESSEE. THE ASSESSEE ITA NO.3035/DEL/2018 PAGE | 6 WAS ASKED TO EXPLAIN THE SOURCE OF THIS CREDIT. THE EXPLANATION OFFERED THAT IT IS SALE PROCEEDS OF SHARES ARE FOUND TO BE NOT O NLY UNSATISFACTORY BUT FALSE. THE ASSESSEE HAS BEEN CONFRONTED WITH ALL TH E EVIDENCE GATHERED AND THE ISSUES MENTIONED IN THE FOREGOING PARAGRAPH S. THE EXPLANATION OF THE ASSESSEE IS GENERAL IN NATURE THAT AS THE TRANS ACTION IS THROUGH STOCK EXCHANGE AND THE PAYMENT IS BY CHEQUE, THE TRANSACT IONS SHOULD BE TREATED AS GENUINE. THE BACKGROUND OF THE SCHEME GI VEN IN THE BEGINNING OF THE 'ORDER CLEARLY SHOWS THAT BOTH THE REQUIREME NTS ARE IN BUILT IN THE SCHEME AND DOES NOT IPSO FACTO PROVE GENUINENESS OF TRANSACTION. THE SEBI AFTER THOROUGH INVESTIGATION HAS CERTIFIED THA T SUCH TRANSACTIONS ARE RIGGED AND ARE CARRIED OUT TO CONVERT BLACK MONEY I NTO WHITE. THAT BEING SO, THE CREDIT IN THE BANK ACCOUNT OF THE ASSESSEE CANNOT BE TREATED AS EXPLAINED AND IS THEREFORE, LIABLE TO BE ADDED UNDE R SECTION 68 OF THE ACT. THE EVIDENCE GATHERED HAS TO BE EVALUATED IN THE BA CKGROUND OF WHAT THE HON'BLE SUPREME COURT REFERRED TO AS THE TEST OF PR EPONDERANCE OF HUMAN PROBABILITY JUDGED ON THE BASIS OF SURROUNDING CIRC UMSTANCES. THAT THERE WAS A SCHEME IS NOT IN DOUBT AND THAT THE ASSESSEE IS A BENEFICIARY IS ALSO AN ADMITTED FACT. THE ONUS WAS THEREFORE, ON THE AS SESSEE TO PROVE THAT EITHER THERE WAS NO SUCH SCHEME AND EVEN IF THERE W AS ONE, THE BENEFIT TO THE ASSESSEE WAS AS A RESULT OF GENUINE TRANSACTION . THE ASSESSEE HAS MISERABLY FAILED TO DISCHARGE THIS ONUS AND THEREFO RE, THE ONLY INESCAPABLE CONCLUSION IS THAT LIKE THOUSAND OTHER INDIVIDUALS THE ASSESSEE HAS ALSO TAKEN ENTRY OF BOGUS LTCG BY PAYING UNACCOUNTED INC OME. 10.1. IT IS TRUE THAT IN CASES IN WHICH A RECEIPT I S SOUGHT TO BE TAXED AS INCOME, THE BURDEN LIES ON THE 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 WIT HIN EXEMPTION PROVIDED BY THE ACT, LIES UPON THE ASSESSEE. BUT, IN VIEW OF SE CTION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSES SEE FOR ANY PREVIOUS YEAR; THE SAME MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION O FFERED BY THE ASSESSEE ITA NO.3035/DEL/2018 PAGE | 7 ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPIN ION OF THE ASSESSING OFFICER, NOT SATISFACTORY. TO REITERATE, THE BURDEN OF PROOF, CAST UPON THE ASSESSEE TO PROVE THAT THE CLAIM OF LONG TERM CAPIT AL GAIN AS EXEMPT U/S 10(38), IS NOT DISCHARGED IN THE INSTANT CASE. ' 3.2. THE ASSESSING OFFICER REFERRED TO ALL THE AFOR ESAID FACTS AND HELD THAT LTCG AMOUNTING TO RS. 19,39,357/- WAS UNACCOUNTED I NCOME OF THE ASSESSEE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSES SEE U/S 68 OF THE IT ACT. THE ASSESSING OFFICER FURTHER HELD THAT THE TAX ON THESE ADDITIONS WOULD BE CHARGED AS PER SECTION 115BBE OF THE IT ACT. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD.C IT(A) AND FILED A WRITTEN SUBMISSION WHICH IS REPRODUCED IN THE APPELLATE ORD ER WHICH READS AS UNDER:- 1. WHILE ASSESSING THE INCOME OF THE APPELLANT, L D. AO COMPLETELY IGNORED THE FACTS OF THE CASE AND THE DOCUMENTS/EVI DENCES FILED BY THE APPELLANT. APPELLANT PURCHASED SHARES, GET THE SHAR ES DEMATERIALIZED, SOLD THE SHARES ON RECOGNIZED STOCK EXCHANGE, PAID STT AND RECEIVED AMOUNT THROUGH BANKING CHANNEL FROM THE BROKER. CO PY OF BILLS OF PURCHASE OF SHARES; COPY OF SHARE CERTIFICATES, COP Y OF SHARE TRANSFER FORM, COPY OF BANK STATEMENT, COPY OF DEMAT ACCOUNT, AND COPY OF ACCOUNT FROM THE BROKER M/S INDUS PORTFOLIO P. LTD ARE ENCLOSED HEREWITH. 2. LD. AD HAS MENTIONED SEVERAL PERSONS IN HIS ASS ESSMENT ORDER INCLUDING SH. ANIL KHEMKA, SH. SANJAY VOHRA, BIDYOO T SARKAR AND SH. NIKHIL JAIN ON WHICH INCOME TAX SURVEY WERE CONDUCT ED BY THE DEPARTMENT. IN THIS REGARD, IT IS TO SUBMIT THAT TH E APPELLANT HAS NO DIRECT OR INDIRECT RELATION WITH ANY OF THESE PER SONS OR WITH THE DIRECTOR/PROMOTORS OF THE COMPANY M/S TURBOTECH ENG INEERING LTD. OR ANY OF THEIR SUBSIDIARY OR ASSOCIATE COMPANIES OR CONCE RNS. APPELLANT NEVER DEALT WITH THEM AND THE LD. AO ALSO FAILS TO PROVID E ANY EVIDENCE WHICH ESTABLISHES ANY KIND OF RELATIONSHIP, BETWEEN THE A PPELLANT AND THESE ITA NO.3035/DEL/2018 PAGE | 8 PERSONS. BROKER OF THE APPELLANT IS M/S INDUS PORTF OLIO P. LTD AND THE LD AO COULD NOT MENTION ANY EVIDENCE OR MATERIAL WHICH SHOWS THAT MY BROKER IS INVOLVED IN ANY KIND OF MANIPULATION OF S HARES. LD. AO ALSO DIDN'T CONFRONT COPIES OF STATEMENT REC ORDED OF SH. ANIL KHEMKA, SH. SANJAY VOHRA, BIDYOOT SARKAR AND SH. NI KHIL JAIN TO THE APPELLANT DURING ASSESSMENT PROCEEDINGS AND ENCLOSE D COPIES OF THEIR STATEMENT IN THE ASSESSMENT ORDER ONLY. THIS IS DON E BY THE LD. AO IN CLEAR VIOLATION OF THE PROVISIONS OF LAW BY NOT CON FRONTING THE MATERIAL TO THE APPELLANT AND BY NOT GIVING ANY ADEQUATE OPPORT UNITY TO THE APPELLANT TO DEFEND HIS CASE. SINCE THE STATEMENTS WERE NOT C ONFRONTED TO THE APPELLANT, APPELLANT WAS DEPRIVED OF HER RIGHT TO C ROSS EXAMINE THE WITNESSES. ALSO WHATEVER THEY HAVE STATED IN THEIR STATEMENT IS NO GOSPEL TRUTH AND CANNOT BE APPLIED BLINDLY TO OUR CASE. 3. STATEMENTS OF FOUR PERSONS INCORPORATED BY THE L D. AO IN ASSESSMENT ORDER ARE INCOMPLETE. LD. AO HAS INCORPORATED ONLY A PART OF STATEMENT IN THE ASSESSMENT ORDER ACCORDING TO HIS CHOICE, WHICH IS AGAIN AGAINST THE BASIC PRINCIPLES OF LAW. 4. LD. AD HAS ALSO ENCLOSED COPY OF SOME ORDER OF SEBI. THIS ORDER ALSO WAS NEVER CONFRONTED TO THE APPELLANT DURING ASSESS MENT PROCEEDINGS. MOREOVER, THE ORDER WHICH IS NOT VERY LEGIBLE, SEEM S TO BE PASSED IN YEAR 2015, WHEREAS THE APPELLANT HAD PURCHASED THE SHARE S IN YEAR 2011 AND SOLD THEM IN YEAR 2013. IT WAS EVIDENT FROM THIS DO CUMENT ONLY THAT NO ACTION HAS BEEN TAKEN BY THE SEBI AGAINST THE COMPA NY DURING THE PERIOD WHEN THE APPELLANT HOLDS THE SHARES. 5. DOCUMENTS INCORPORATED BY THE LD. AD IN THE ASSE SSMENT ORDER AT PAGE 20 TO 22 ARE NOT AT ALL LEGIBLE. THEREFORE APPELLAN T IS NOT IN A POSITION TO COMMENT ON THESE DOCUMENTS. ITA NO.3035/DEL/2018 PAGE | 9 6. LD. AO HAS RAISED OBJECTION REGARDING THE CASH P URCHASE OF SHARES AND THAT SHARES WERE DEMATERIALIZE FEW DAYS BACK ONLY F ROM THE DATE OF SALE. IN THIS REGARD, IT IS TO SUBMIT THAT THERE IS NO LA W WHICH PROHIBITS THE PURCHASE OF SHARES IN CASH. APPELLANT FILED COPY OF BILLS OF PURCHASE, COPY OF SHARE CERTIFICATES AND TRANSFER FORMS ETC. BEFOR E LD. AO AND NO ADVERSE INFERENCE COULD BE DRAWN ONLY BECAUSE THE SHARES WE RE PURCHASED IN CASH. REGARDING DEMAT OF SHARES, IT IS TO SUBMIT T HAT IT IS THE OPTION OF THE BUYER OF SHARES TO KEEP THE SHARES EITHER IN DEMAT FORM OR IN PAPER FORM. MERELY BECAUSE THE SHARES WERE GET DEMAT BY THE APP ELLANT AT A LATER STAGE, NO ADVERSE INFERENCE COULD BE DRAWN. 7. LD. AO HAS NO EVIDENCE IN HIS FAVOUR TO PROVE T HAT THE TRANSACTION OF PURCHASE AND SALES OF SHARES IS BOGUS AND HE IS PRO CEEDING ONLY ON SUSPICION, CONJECTURES AND SURMISES. LD. AO HAS FAI LED TO PROVE ANY MATERIAL ON RECORD WHICH PROVES THAT THE TRANSACTIO N ON THE RECOGNISED STOCK EXCHANGE IS MANIPULATED AND BOGUS. 8. INCREASE AND DECREASE IN MARKET RATES OF SHARES ON STOCK EXCHANGE ALWAYS BASED ON MARKET FORCES AND ARE DETERMINED ON THE BASIS OF SO MANY FACTORS. IT IS NOT WITHIN THE POWER OF APPELLA NT TO MANIPULATE THE RATES OF SHARES ON STOCK EXCHANGE. MERELY BECAUSE T HERE IS, A SHARP INCREASE IN THE RATES OF SHARES, NO ADVERSE INFEREN CE COULD BE DRAWN ONLY ON THE BASIS OF MERE SUSPICION AND IN ABSENCE OF AN Y DIRECT OR COGENT EVIDENCE. 9. LD AO HAS ALLEGED IN HIS ASSESSMENT ORDER THAT THE APPELLANT WAS NOT PRODUCED BEFORE HIM FOR RECORDING OF STATEMENT. IN THIS REGARD, IT IS TO SUBMIT THAT THE APPELLANT HAD DELIVERED A BABY FEW TIME BACK ONLY AND SHE WAS NOT IN A POSITION TO APPEAR BEFORE THE LD. AO DUE TO HER MEDICAL CONDITION. WE HAD MADE THIS REQUEST BEFORE THE LD A O ALSO ALONG WITH MEDICAL CERTIFICATE AND REQUESTED HIM TO PASS THE A SSESSMENT ORDER ON THE BASIS OF DOCUMENTS/INFORMATION AVAILABLE ON RECORD. ITA NO.3035/DEL/2018 PAGE | 10 10. CASE LAWS RELIED UPON BY THE LD AO ARE DISTINGU ISHABLE ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEAL AND HENCE A RE NOT APPLICABLE. 11. APPELLANT'S CASE IS COVERED BY FOLLOWING JUDGEM ENTS : HITESH GANDHI, ITA NO. 180 OF 2017( P & H HIGH COUR T) PREM PAL GANDHI, ITA NO. 95 OF 2017 (P&H HIGH COURT ) CARBO INDUSTRIA! HOLDINGS LTD. 244 ITR 422 (CAL) HIMANI M VAKIL, 41 TAXMANN.COM 425 (GUJ) MUKESH RATILAL MAROLIA, ITA NO. 456 OF 2007 (BOMBAY HIGH COURT) SMT. JAMNADEVI AGRAWAL 328 ITR 656 (BOM) ASHISH INTERNATIONAL, ITA NO. 4299 OF 2009 (BOMBAY HIGH COURT) FARRAH MARKER, ITAT MUMBAI BENCH IN ITA NO. 3801/MU M/2011 SUNIL PRAKASH, ITAT MUMBAI BENCH IN ITA NO. 6494/MU M/2014 PARDEEP KUMAR AGGARWAL 159 ITD 54 (CHANDIGARH) SRI DOLARRAI HEMANI, ITAT KOLKATA BENCH IN ITA NO. 19/KOL/2014 INDRAVADAN JAIN HUF, ITAT MUMBAI BENCH IN ITA NO. 4 861/MUM/2014 KAMLA DEVI S DOSHI, ITAT MUMBAI BENCH IN ITA NO. 19 57/MUM/2015 SURYA PRAKASH TOSHNIWAL, ITAT KOLKATA BENCH IN ITA NO. 1213/KOL/2016 SUNITA JAIN, ITAT AHMEDABAD BENCH IN ITA NO. 501 & 502/AHD/2016 PRATIK SURYAKANT SHAH, 77 TAXMANN.COM 260 (AHMEDABA D-TRIB) COPY OF ALL THESE JUDGEMENTS ARE ENCLOSED HEREWITH. 12. LD. AD ALSO ERRED IN' MAKING ADDITION U/S 68 O F THE ACT, ALTHOUGH THE IMPUGNED ADDITION SHOULD NOT BE MADE UNDER THIS SEC TION. AS PER THE REQUIREMENT OF LAW, APPELLANT NEED NOT TO MAINTAIN ANY BOOKS OF ACCOUNTS AND IN ABSENCE OF BOOKS OF ACCOUNTS, NO ADDITION CO ULD BE MADE U/S 68 OF THE ACT. 13. THAT THE GOA NO.5 IS REGARDING ISSUANCE OF NOTI CE U/S 143(2), WHICH WAS ISSUED BY THE ITO, WARD-27(4), NEW DELHI. ITO, WARD-27(4), NEW DELHI ITA NO.3035/DEL/2018 PAGE | 11 HAS NO JURISDICTION OVER THE CASE OF THE APPELLANT AND HENCE NOTICE ISSUED WAS WITHOUT JURISDICTION AND INVALID. IN VIEW OF ABOVE SUBMISSION, IT IS PRAYED THAT ALL THE ADDITIONS MADE MAY KINDLY BE DELETED & THE APPEAL OF THE APPELLANT MAY KINDLY BE ALLOWED & OBLIGE. 5. LD.CIT(A) CONSIDERING THE EXPLANATION OF THE ASS ESSEE AND MATERIAL ON RECORD, NOT ONLY CONFIRMED THE ADDITION OF RS.19,39 ,357/- BUT ALSO ENHANCED THE SAME ADDITION TO 19,51,357/-. THUS, THE APPEAL OF THE ASSESSEE HAS BEEN DISMISSED WITH ENHANCEMENT. THE FINDINGS OF LD.CIT (A) IN PARA 3.5 TO 3.18 IS REPRODUCED AS UNDER:- 3.5. I HAVE CAREFULLY CONSIDERED THE APPELLANT'S S UBMISSIONS. BEFORE GOING TO THE MERITS OF THE ISSUE AT HAND IT MAY BE RELEVANT TO LOOK INTO THE GENERAL MODUS OPERANDI ADOPTED BY THE PERSONS WHO I NDULGE IN CONVERTING THEIR UNACCOUNTED CASH TO ACCOUNTED FORM THROUGH TH E ROUTE OF CAPITAL GAINS. WITH THE EXEMPTION REDUCTION IN TAX ON CAPIT AL GAINS ON SHARES, THERE IS RAMPANT PRACTICE OF ROUTING THE UNACCOUNTE D CASH IN THE FORM OF LONG TERM CAPITAL GAINS AND CLAIMING THE SAME AS EX EMPT/ CONCESSIONAL TAX RATE. THE GENERAL MODUS OPERANDI ADOPTED BY SUC H TYPE OF PERSONS IS AS UNDER: (I) WITH THE COLLUSION OF BROKER, SHARES ARE PURCHA SED OF AN UNKNOWN COMPANY WITH DUBIOUS BACKGROUND FOR MINISCULE CONSI DERATION. FOR THIS PURPOSE, THE BROKER ISSUES A FAKE BROKERAGE NO TE. (II) THE COMPANIES IN WHICH SHARES ARE TRADED ARE U SUALLY IN LEAGUE WITH THE BROKER AND THE BROKER UNDERTAKES OFF-MARKE T TRANSACTIONS TO ACCOMMODATE THE APPELLANT. (III) AFTER A YEAR, THE SHARES ARE SOLD BACK BY THE BUYER. (IV) IN THE MEANTIME, THE SHARES PRICES ARE RIGGED BY THE CONCERNED BROKER/COMPANY TO AN ABNORMALLY HIGH LEVEL. (V) THE SHARES ARE SOLD BY THE BUYER AND SALE CONSI DERATION IS RECEIVED. THE SALE CONSIDERATION IS IN FACT FIRST P AID BY THE BUYER IN ITA NO.3035/DEL/2018 PAGE | 12 CASH TO THE BROKER. THIS CASH CONSIDERATION WHICH I S- INTRODUCED IN A BANKING CHANNEL BY ROUTING THROUGH A NUMBER OF ACCO UNTS, FINALLY REACHES THE ACCOUNTS OF THE BROKER. WITH THIS AMOUN T, THE BROKER PAYS THE CONSIDERATION TO THE BUYER. (VI) THUS THE BUYER'S OWN CASH IS INTRODUCED AND CO MES BACK IN THE FORM OF LONG TERM CAPITAL GAIN THEREBY CLAIMING CON CESSIONAL TAX RATE. (VII) THE SCRIP INVESTED IS AN OBSCURE ONE IN MOST CASES. IT IS MERELY SHELL COMPANY WITH NO ACTIVITIES WHATSOEVER. (VIII) THE BUYER HIMSELF IS NORMALLY UNAWARE OF THE FINANCIAL PERFORMANCE OF THE COMPANY IN WHICH HE HAS INVESTED . (IX) THE SHARES ARE PURCHASED AT LOWER RATES AND SO LD AT HIGHER RATES THROUGH THE SERIES OF OFF-MARKET TRANSACTIONS CREAT ED BY THE BROKER WITH VESTED INTEREST. THE SHARE PRICES ARE ARTIFICI ALLY RIGGED THROUGH OFF MARKET TRANSACTIONS. THIS HIKE IS NOT SUPPORTED BY THE FUNDAMENTALS OF THE COMPANY. 3.6 TO FULLY APPRECIATE THE ISSUE AT HAND IT IS REL EVANT TO TAKE NOTICE OF THESE COMMONLY KNOWN NOTORIOUS FACTS ABOUT THE MODU S OPERANDI OF CONVERTING THE UNACCOUNTED FUNDS THROUGH WILLING DU BIOUS ENTITIES. REFERENCE IN THIS REGARD CAN ALSO BE MADE TO THE FO LLOWING DECISIONS:- (A) CWT V, ROHTAS INDUSTRIES LIMITED, 67 ITR 283 (S C), WHEREIN IT WAS HELD THAT- 'IN THE ABSENCE OF ANY DIRECT EVIDENCE, A JUDICIAL OR QUASI- JUDICIAL TRIBUNAL CAN BASE ITS CONCLUSIONS ON THE B ASIS OF WHAT ARE KNOWN AS NOTORIOUS FACTS BEARING IN MIND THE PR INCIPLES OF SECTION 144 OF THE EVIDENCE ACT.' (B) ATTAR SINGH GURMUKH SINGH V. ITD,'191 ITR 667 ( SC), WHEREIN, WHILE INTERPRETING THE PROVISIONS OF SECTION 40A(3) , IT WAS HELD THAT- 'IN INTERPRETING A TAXING STATUTE, THE COURT CANNOT BE OBLIVIOUS OF THE PROLIFERATION OF BLACK MONEY WHICH IS UNDER. CIRCULATION IN OUR COUNTRY.' ITA NO.3035/DEL/2018 PAGE | 13 3.7 IT MAY NOW BE RELEVANT TO REFER TO THE VARIOUS FACTS WHICH EMERGE FROM THE ASSESSMENT ORDER-AND THE SUBMISSION OF THE APPE LLANT WHICH ARE AS UNDER:- I) THE APPELLANT PURCHASED 10,000 SHARES OF M/S TUR BO TECH LTD FOR AN AMOUNT OF RS. 20,000/-. II) THE SHARES WERE PURCHASED IN OFF MARKET TRANSA CTION FROM M/S SHREE JI BROKING PVT LTD. III) THE SHARES WERE PURCHASED IN THE NAME OF THE APPELLANT ON 22.11.2011. IV) PAYMENT FOR THESE SHARES WAS CLAIMED TO HAVE BEEN MADE ON 24.11.2011 BY CASH I.E. TWO DAYS AFTER THE SHARES W ERE PURCHASED. V) THE SHARES WERE DEMATERIALISED JUST BEFORE THE SALE OF SHARES. VI) THE SHARES WERE SOLD ON IN JULY 2013 FOR AN AMO UNT OF RS. 19,53,372/-. 3.8 FURTHER, FROM THE DETAILS GATHERED BY THE AO DU RING THE COURSE OF ASSESSMENT PROCEEDINGS FOLLOWING FACTS EMERGE:- I) DURING THE COURSE OF PROCEEDINGS U/S 131(1) OF THE IT ACT BEFORE THE INVESTIGATION WING SH. ANIL KUMAR KHEMKA STATED THA T HIS BROKERAGE COMPANY WAS BEING USED FOR PROVIDING ACCOMMODATION ENTRIES IN VARIOUS SCRIPS AND M/S TURBO TECH LTD WAS ONCE SUCH SCRIP. II) THE FINANCIALS OF THE PENNY STOCK M/S TURBO TE CH LTD. AND MOVEMENT OF THE PRICE IS ABRUPT, UNREALISTIC AND NO T BASED UPON ANY REALISTIC PARAMETERS. THE HISTORY OF INVESTMENT IN SHARES MADE BY THE APPELLANT ALSO GENERALLY REVEALS THAT SHE HAS NOT B EEN DEALING IN SHARES ON A REGULAR BASIS. IT HAS ALSO BEEN FOUND THAT ENT RIES OF LTCG HAVE ALSO BEEN TAKEN BY OTHER MEMBERS OF THE FAMILY OF THE AP PELLANT. III) THE PURCHASE OF THESE SHARES WERE CLAIMED TO BE THROUGH OFF MARKET DEALS AND NOT THROUGH STOCK EXCHANGE AND THE SHARES WERE NOT ENTERED IN D'MAT ACCOUNT EVEN UPTO ONE WEEK BEFORE THEY WERE A CTUALLY SOLD AND THE SALE IS THROUGH STOCK EXCHANGE. THE APPELLANT FURNI SHED THE ACCOUNT COPY ITA NO.3035/DEL/2018 PAGE | 14 OF THE D'MAT ACCOUNT WHEREIN IT WAS OBSERVED THAT T HE SAID SHARES WERE D'MATERIALIZED ONLY A MONTH BEFORE THEY WERE ACTUAL LY SOLD. THE DATE OF DEMATERIALIZATION IS ONLY ON 11.06.2013 AND THE SHA RES WERE SOLD DURING THE PERIOD FROM 30.07.2013 TO 31.07.2013. IV) THE APPELLANT IS UNABLE TO FURNISH ANY OTHER PROOF FOR PURCHASE OF SHARES EXCEPT THE BILL ISSUED BY THE BROKER. V) THE RELEVANT COLUMS IN THE PURCHASE BILL I.E. OR DER NO., TRADE NO., AND TRADE TIME ARE LEFT BLANK. VI) NO PROOF/SOURCE OF PAYMENT FOR PURCHASE OF THE SE SHARES WAS BROUGHT ON RECORD. THE PAYMENT WAS CLAIMED TO HAVE BEEN MADE IN CASH. VII) THE PURCHASE OF THE SHARES CANNOT BE VERIFIED FROM THE CALCUTTA STOCK EXCHANGE SINCE THE VITAL COLUMS IN THE SAID B ROKER BILL SUCH AS ORDER NO, TRADE NO. & TRADE TIME WAS LEFT BLANK. 3.9 AS PER APPELLANT'S OWN VERSION, THE SHARES WERE PURCHASED M/S SHREE JI BROKING PVT LTD ON 22.11.2011 DIRECTLY IN CASH A ND NOT THROUGH RECOGNIZED STOCK EXCHANGE. MOREOVER, AS PER THE DOC UMENTS ON RECORD THE SHARES WERE PURCHASED IN THE NAME OF APPELLANT ON 22.11.2011 WHEREAS THE PAYMENT OF THE SAME AS MADE ONLY ON 24.11.2011. THUS AS PER THE FACTS ON RECORD THE SHARES WERE PURCHASED IN THE NA ME OF THE APPELLANT EVEN BEFORE THE PAYMENT WAS MADE. FURTHER, FROM ALL THE AFORESAID FACTS, IT IS EVIDENT THAT THE MEAGER INVESTMENT OF RS. 6,000 MADE BY THE APPELLANT ON 22.11.2011 WENT UP TO MORE THAN RS.19 LAKHS WITH IN A PERIOD OF 24 MONTHS. SUCH A STEEP RISE IN VALUE OF INVESTMENT IS NOT WITHIN THE REALM OF HUMAN PROBABILITY. IN THESE CIRCUMSTANCES, IT IS EV IDENT THAT THE TRANSACTION WAS AS AN ARRANGED AFFAIR BETWEEN THE A PPELLANT AND THE ACCOMMODATION ENTRIES PROVIDERS AND THIS FACT HAS B EEN DULY ADMITTED BY SH. ANIL KUMAR KHEMKA AND NIKHIL JAIN REFERRED TO A BOVE. FROM THE FACTS DISCUSSED ABOVE IT IS EVIDENT THAT M?S TURBO TECH L TD WAS BEING USED FOR THE PURPOSE OF PROVIDING ENTRY OF LONG TERM CAPITAL GAINS BY THE ENTRY PROVIDERS AND THE TRANSACTION OF SALE AND PURCHASE OF SHARES M/S TURBO TECH LTD WAS NOT GENUINE TRANSACTION. ITA NO.3035/DEL/2018 PAGE | 15 3.10 FROM THE FACTS ON RECORD IT IS ALSO EVIDENT TH AT THE APPELLANT IS NOT A REGULAR INVESTOR IN SHARES. HENCE, IT IS QUITE SURP RISING AS TO HOW SHE EARNED A PHENOMENAL RETURN OF ALMOST 50 TIMES WITHI N A SHORT SPAN OF PERIOD WHICH IS EXTREMELY UNUSUAL. THIS BEING THE C ASE, IT IS APPARENT THAT THE APPELLANT HAS ENTERED INTO A SHAM TRANSACTION W ITH THE FULL KNOWLEDGE OF IT, SO AS TO CONVERT UNACCOUNTED MONEY INTO ACCO UNTED MONEY IN THE GUISE OF CAPITAL GAINS. 3.11 THE APPARENT IS TRUE UNTIL AND UNLESS IT IS DI SPROVED. HERE IN THE INSTANT CASE, THE MANAGING DIRECTOR AND OTHER DIREC TOR SHRI NIKHIL JAIN & SHRI ANIL KUMAR KHEMKA ON 02.06.2015 & 30.03.2015 O F ABHINANDAN STOCK BROKING PVT. LTD. & DEVSHYAM STOCK BROKING PV T.LTD, HAD CATEGORICALLY STATED THAT THEY WERE INVOLVED IN PRO VIDING ACCOMMODATION ENTRIES REGARDING SALE AND PURCHASE OF SHARES THROU GH HIS COMPANIES. THEREFORE, HUMAN PROBABILITIES HAVE ALSO TO BE APPL IED TO COMPREHEND THE TRANSACTIONS AND TO SEE THE REAL INTENTION BEHIND E NTERING INTO THESE TRANSACTIONS. IN SIMILAR CIRCUMSTANCES, THE HONOURA BLE GAUHATI HIGH COURT OF CIT VS SANGHAMITRA BHARALI (361 ITR 481) HAD HEL D THAT THE CAPITAL GAINS ARE SHAM TRANSACTIONS ENTERED ONLY TO GIVE CO LOUR OF GENUINENESS AND THEREFORE, HELD THAT THE CAPITAL GAIN ARISING O UT OF THESE TRANSACTIONS CANNOT BE BELIEVED AS GENUINE AND UPHELD TAXING THE SAID AMOUNT AS UNACCOUNTED INCOME BROUGHT INTO BOOKS IN THE GUISE OF EXEMPTED CAPITAL GAINS. 3.12 THE ASSESSING OFFICER HAS REFERRED TO THE ISSU E OF THE ORGANIZED RACKET OF GENERATING BOGUS ENTRIES OF LONG TERM CAP ITAL GAINS WHICH IS EXEMPT FROM TAX AND HAS DISCUSSED THE MODUS OPERAND I OF THIS OPERATION IN PARA 7.1, PARA 7.2 AND PARA 7.3 OF THE ASSESSMEN T ORDER. THE ASSESSING OFFICER HAS HELD THAT THE FACTS IN THE APPELLANT'S CASE SHOW THAT THE AMOUNT OF CAPITAL GAINS GENERATED IN THE TRANSACTIO N WITHIN A SHORT SPAN ARE BEYOND HUMAN PROBABILITY. I AGREE WITH THIS OBS ERVATION OF THE ITA NO.3035/DEL/2018 PAGE | 16 ASSESSING OFFICER. THESE TYPES OF COMPANIES FUNCTIO N IN THE CAPITAL MARKET WHOSE SALE PRICE IS MANIPULATED TO ASTRONOMICAL HEI GHT ONLY TO CREATE THE ARTIFICIAL TRANSACTION IN THE FORM OF CAPITAL GAIN. SURROUNDING CIRCUMSTANCES DIFFER FROM THE NORMAL SHARE MARKET TRANSACTIONS IN WHICH THEY ARE ORDINARILY CARRIED OUT. TAKING ALL THE STEPS TOGETH ER, FINAL CONCLUSION DOES NOT ACCORD WITH THE HUMAN PROBABILITIES. THE HON'BL E SUPREME COURT IN THE CASE OF CIT V. DURGA PRASAD MORE 82 ITR 540 HELD AS UNDER: 'IT IS A STORY THAT DOES NOT ACCORD WITH HUMAN PROB ABILITIES. IT IS STRANGE THAT HIGH COURT FOUND FAULT WITH THE TRIBUN AL FOR NOT SWALLOWING THAT STORY. IF THAT STORY IS FOUND TO BE UNBEHEVABLE AS THE TRIBUNAL HAS FOUND AND IN OUR OPINION, RIGHTLY THAT THE DECISIONS REMAINS THAT THE CONSIDERATION FOR THE SALE PROCEED ED FROM THE ASSESSEE AND THEREFORE, IT MUST BE ASSUMED TO BE HI S MONEY. ' 3.13 GENERALLY, IT IS EXPECTED THAT APPARENT IS REA L BUT IT IS NOT SACROSANCT. IF FACTS AND CIRCUMSTANCES SO WARRANT THAT IT DOES NOT ACCORD WITH THE TEST OF HUMAN PROBABILITIES, TRANSACTIONS HAVE BEEN HELD TO BE NON-GENUINE. IT IS HIGHLY IMPROBABLE THAT SHARE PRICE OF A NON DESC RIPT COMPANY CAN GO UP BY ALMOST 50 TIMES, IN A SHORT SPAN OF TIME. THE TA XING AUTHORITIES ARE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DO CUMENTS PRODUCED BEFORE THEM. THEY ARE ENTITLED TO LOOK INTO THE SURROUNDIN G CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUM ENTS. MERE RECEIPT BY CHEQUE DOES NOT RENDER A TRANSACTION GENUINE. CAPIT AL GAIN TAX WAS CREATED TO OPERATE IN A REAL WORLD AND NOT THAT OF MAKE BELIEF. FACTS OF THE CASE ONLY LEAD TO THE INFERENCE THAT THESE TRANSACT IONS ARE NOT GENUINE. SIMILAR VIEW HAS BEEN HELD BY THE HON'BLE JURISDICT IONAL PUNJAB & HARYANA HIGH COURT IN THE CASE OF BALBIR CHAND MAIN I V/S CIT 340 ITR 161 (P&H) 247 CTR 468 (P&H) AND THE CASE OF SOM NAT H MAINI V/S CIT 306 ITR 484 (P&H). 3.14 REFERENCE IN THIS REGARD MAY ALSO BE MADE TO T HE FOLLOWING CASE LAWS.- ITA NO.3035/DEL/2018 PAGE | 17 I. SANJAY BIMAL CHAND JAIN L/H OF SHANTI DEVI BIMAL CHAND JAIN V/S CIT ITA NO. 18/2017 (MUMBAI HIGH COURT NAGPUR BENCH ) II. RATNAKAR M. PUJARI V/S ITD ITA NO. 995/MUM/2012 (RES) DATED 03/08/2016 III. KAMALCHAND NATHIMAL LUNIA V/S ITO IN ITA NO. 436/AHD./2013 (LTAT AHMEDABAD) IV. SH. SANJAY ASHOK JAIN IN ITA NO. 4185/MUM/2015 AND ITA NO. 4186/MUM/2015 (LTAT MUMBAI) V. SANTLAL GUPTA IN ITA NO. 2802 (MUM/20B (ITAT MUM BAI) KANTADEVI GUPTA IN ITA NO. 2829/MUML2016 VI. SUDHIR BALRAJ JUMANI HUF ITA NO. 1570/AHD/2012 (ITA AHD.) VII. DISHA N. DALWANI ITA NO. 6398/MUM/2012 ITAT MU MBAI. VIII ZAKRULLAH CHOUDHARY, PIMPRI V/S ACIT IN ITA NO . 669/PN/2012 DATED 18/02/2014. 3.15 KEEPING IN VIEW THE AFORESAID FACTUAL AND LEGA L POSITION, THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED. THESE G ROUNDS OF APPEAL ARE DISMISSED. 3.16 DURING THE COURSE OF APPELLATE PROCEEDINGS IT WAS NOTED THAT THE ACTUAL SALE PROCEEDS RECEIVED BY THE APPELLANT DURI NG THE YEAR WAS RS. 19,51,357/- AGAINST WHICH THE APPELLANT HAD CLAIMED COST OF ACQUISITIONS OF RS. 12,000/- AND SHOWN THE AMOUNT OF RS.19,39,35 7/- AS LTCG. IN VIEW OF THE FACT THAT THE TRANSACTION WAS ACCOMMODA TION ENTRY, THE WHOLE OF SALE PROCEEDS AMOUNTING TO RS. 19,51,357/- SHOUL D HAVE BEEN ADDED TO THE TOTAL INCOME OF THE APPELLANT. ACCORDINGLY, NOT ICE U/S 251 OF THE IT ACT DATED 26.02.2018 WAS ISSUED TO THE APPELLANT AND WA S ASKED TO EXPLAIN WHY THE PURCHASE COST OF RS. 12,000/- ALLOWED BY TH E AO AS DEDUCTION MAY NOT BE ADDED TO THE TOTAL INCOME AND THE INCOME MAY NOT BE ENHANCED ACCORDINGLY. NO REPLY HAS BEEN FILED BY THE APPELLA NT. ITA NO.3035/DEL/2018 PAGE | 18 3.17 WITH REGARD TO THE FACTS OF THIS ISSUE IT IS E VIDENT THAT THE APPELLANT HAS RECEIVED RS. 19,51,357/- AS ACCOMMODATION ENTRY DURING THE YEAR. ANY EXPENDITURE CLAIMED TO HAVE BEEN INCURRED IN TH E EARLIER YEARS IS THEREFORE NOT GENUINE AND CANNOT BE CLAIMED AND ALL OWED AS EXPENDITURE DURING THE CURRENT YEAR. THE ADDITION MADE BY AO I S ACCORDINGLY ENHANCED TO RS.19,51,357/-. 3.18. IN THE RESULT THE APPEAL OF THE APPELLANT IS DISMISSED WITH ENHANCEMENT AS ABOVE. 6. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT AN INQUIRY CON DUCTED IN THE CASES OF OTHER ASSESSEES AND STATEMENTS REFERRED TO BY THE A O IN THE ASSESSMENT ORDER HAVE NOT BEEN CONFRONTED TO THE ASSESSEE. THE ASSES SEE HAS NOT BEEN NAMED BY ANY OF THESE PERSONS FOR INDULGING IN TAKING ACCOMM ODATION ENTRIES. HE HAS, THEREFORE, SUBMITTED THAT SUCH EVIDENCE CANNOT BE R EAD IN EVIDENCE AGAINST THE ASSESSEE AND RELIED UPON THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF KISHAN CHAND CHELA RAM 125 ITR 713 (SC). HE HAS SUBMITTED THAT FOR CLAIMING EXEMPTION U/S 10(38) OF THE ACT, THE ASSES SEE SHALL HAVE TO PROVE TWIN CONDITIONS I.E. THE INCOME ARISE FROM THE TRANSFER OF LONG TERM CAPITAL ASSET AND BEING EQUITY SHARE IN A COMPANY WHERE THE TRANSFER OF SALE OF SUCH EQUITY SHARE IS ENTERED INTO ON OR AFTER THE DATE OF WHICH CHAPT ER-VII OF THE FINANCE ACT, 2004 COMES INTO FORCE AND SUCH TRANSACTION IS CHARG EABLE TO SECURITY TRANSACTION TAX UNDER THAT CHAPTER. IN THE CASE OF THE ASSESSEE, BOTH TWIN CONDITIONS ARE SATISFIED. HE HAS FILED COPY OF THE SHARES CERTIFICATE WITH TRANSFER FORM, COPY OF DEBIT NOTE ISSUED BY SHREEJI BROKING (P) LTD., COPY OF CASH RECEIPT OF SHREEJI BROKING (P) LTD., COPY OF LEDGER ACCOUNT OF INDUS PORTFOLIO (P) LTD., ITA NO.3035/DEL/2018 PAGE | 19 COPY OF FORM FOR EVIDENCE FOR PAYMENT OF SECURITIES TRANSACTION TAX ON TRANSACTION ENTERED IN A RECOGNIZED STOCK EXCHANGE AND COPY OF THE BANK STATEMENT OF THE ASSESSEE IN THE PAPER BOOK. HE HA S FURTHER SUBMITTED THAT ON IDENTICAL FACTS, ITAT SMC BENCH, DELHI IN THE CASE OF MEENU GOEL VS ITO IN ITA NO.6235/DEL/2017 FOR AY 2014-15 VIDE ORDER DATED 19.03.2018 RELYING UPON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PR.CIT VS PREM PAL GANDHI IN ITA NO.95-2017 VIDE ORDER DATED 18.01.2018, ALLOWED THE CLAIM OF THE ASSESSEE. THE FINDINGS OF THE TRIBUNA L IN PARA 6 TO 8 ARE REPRODUCED AS UNDER:- 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH ME, ESPECIALLY THE ORDERS OF THE REV ENUE AUTHORITIES AND THE CASE LAW CITED BY BOTH THE PARTIES. I NOTE THAT A SSESSEE HAS EARNED LONG TERM CAPITAL GAIN AMOUNTING TO RS. 18,46,600/- DURI NG THE FINANCIAL YEAR 2013-14 AND THE SAME HAS BEEN CLAIMED EXEMPT UNDER SECTION 10(38) OF INCOME TAX ACT, 1961. THE ASSESSEE HAD PURCHASED OF 45,000/- SHARES OF UNISYS SOFTWARE HOLDING INDUSTRIES LTD AMOUNTING RS . 9,38,600/- AT A PREMIUM OF RS. 20.85 PER SHARE IN PHYSICAL FORM. OU T OF THE AFORESAID 45000/- SHARES ASSESSEE SOLD OF 8000 SHARES ONLY I. E. 17.77%. THUS, THE MAJOR PART OF THE SHARES I.E. 82.33% ARE STILL IN T HE HAND OF THE ASSESSEE. IN MY VIEW THE THE ASSESSEE JUST WANTED TO ENTER IN TO THE TRANSACTION TO EARN EXEMPTED CAPITAL GAIN, BUT THE ASSESSEE DID N OT SELL ALL THE SHARE 45000 SHARES INSTEAD OF SALE OF A PART I.E. 8000 SH ARES ONLY WHEN THAT TIME WAS THE BEST PRICE EVER. ALL THE TRANSACTION W ERE MADE THROUGH ACCOUNT PAYEE CHEQUE / BANKING CHANNEL AND ASSESSEE HAD PURCHASED SHARE IN FINANCIAL YEAR 2009-10 AND SOLD THE SAME I N THE FINANCIAL YEAR 2013-14 RESULTING IN LONG TERM CAPITAL GAIN. THE AS SESSEE HAS SUBMITTED VARIOUS DOCUMENTARY EVIDENCES TO PROVE THE GENUINEN ESS OF THE TRANSACTION OF SALE AND PURCHASE OF SHARES WHICH IN CLUDES A COPY OF PURCHASE BILL DATED 22.02.2010; A COPY OF SHARE TRA NSFER FORM IN THE FAVOUR ITA NO.3035/DEL/2018 PAGE | 20 OF THE ASSESSEE; COPY OF BANK STATEMENT HIGHLIGHT ING THE PAYMENT MADE AGAINST THE SHARE PURCHASED; TRANSACTION STATEMENT OF THE STOCK BROKER I.E. PACE STOCK BROKING SERVICES (P) LTD., ACCOUNT; COPY OF BANK STATEMENT IN WHICH SALE PROCEED FROM THE SALE OF SHARES RECEI VED; COPY OF CALCULATION OF LONG TERM CAPITAL GAIN, WHICH WAS NOT FAULTED BY THE AO. HOWEVER, THE LOWER AUTHORITIES HAVE NOT CONSIDERED THE AFORESA ID DOCUMENTS AND REJECTED ALL THE CLAIMS MADE BY THE ASSESSEE BY RE LYING ON THE REPORT OF THE INVESTIGATION WING AND THEREBY MADE THE ADDITIO N, WHICH IS NOT SUSTAINABLE IN THE EYES OF LAW. I FURTHER FIND THAT THE AO HAS GIVEN DETAILED EXPLANATION IN THE ORDER REGARDING THE MODUS OPERAN DI OF BOGUS LTCG SCHEME BUT FAILED TO SUBSTANTIATE HOW THE ASSESSEE FELL IN THE PURVIEW OF THE SAME WITHOUT BRINGING ANY MATERIAL ON RECORD AN D PROVING THAT THE ASSESSSEE WAS DIRECTLY INVOLVED IN THE SO CALLED BO GUS TRANSACTION. I FURTHER NOTE THAT THE ADDITION IN DISPUTE MADE BY T HE AO AND UPHELD BY THE LD. CIT(A) U/S 68 AS UNEXPLAINED CREDIT INSTEAD OF LONG TERM CAPITAL GAIN AS CLAIMED BY THE ASSESSEE, HOWEVER, THE SOURC E IDENTITY AND GENUINENESS OF THE TRANSACTION HAVING BEEN ESTABLIS HED BY DOCUMENTARY EVIDENCES AND THERE IS NO CASE FOR MAKING ADDITION U/S 68 OF THE ACT, HENCE, THE SAME DESERVE TO BE DELETED. I NOTE THAT IN MOST OF THE CASE LAWS OF THE HONBLE HIGH COURTS REFERRED BY THE LD. DR T HE REASON ON THE BASIS OF ADDITION WAS CONFIRMED WAS THAT THE ASSESSEE HAD NOT TENDERED COGENT EVIDENCE WITH REGARD TO SHARE TRANSACTION, HOWEVER , IN THE PRESENT THE CASE ASSESSEE HAS SUBMITTED ALL THE DOCUMENTS / EVI DENCES, THEREFORE, THE CASE LAWS RELIED BY THE LD. DR ARE BASED ON DISTIN GUISHED FACTS AND CIRCUMSTANCES, HENCE, THE SAID CASE LAWS ARE NOT A PPLICABLE IN THE PRESENT CASE. HOWEVER, IN MY CONSIDERED OPINION, THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE VARIOUS DECISIONS OF THE ITAT AND T HE HONBLE HIGH COURTS INCLUDING THE RECENT DECISION DATED 18.1.2018 OF TH E HONBLE HIGH COURT I.E. HONBLE HIGH COURT OF PUNJAB & HARYANA IN TH E CASE OF PCIT (CENTRAL), LUDHIANA VS. PREM PAL GANDHI PASSED IN ITA NO. 95 O F 2017. DECISION DATED 18.1.2018 OF THE HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF PCIT (CENTRAL), LUDHIANA VS . PREM PAL ITA NO.3035/DEL/2018 PAGE | 21 GANDHI PASSED IN ITA NO. 95 OF 2017 WHEREIN IT HAS BEEN HELD AS UNDER:- 2. THE FOLLOWING QUESTIONS OF LAW HAVE BEEN RAISED :- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE HONBLE INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN UPHOLDING THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS. 4,11,77,474/- MADE BY THE AO ON ACCOUNT OF SHAM SHARE TRANSACTIONS IGNORING AN IMPORTANT ASPECT THAT THE TRANSACTION OF SHARES SHO WING THEIR PURCHASE PRICE AT RS. 11,00,000/- AND SALE CONSIDERATION AT RS. 4,23,45,295/- WITHIN A PERIOD OF LESS THAN TWO YEARS / PURCHASES OF SHARES MADE IN CASH NOT CHEQUE THAT TOO BEFORE SHARES GOT DEMATERIALIZED / WORTH OF THE COMPANY AT THE TIME O F PURCHASE / SALE OF SHARES NOT PROVED- ALL SUGGEST N ON- GENUINENESS OF THE SAID TRANSACTION? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE HONBLE INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN LAW IN UPHOLDING THE ORDER OF THE CIT(A) D ELETING THE ADDITION OF RS. 4,11,77,474/- MADE BY THE AO ON ACCOUNT OF SHAM SHARE TRANSACTIONS, WHEREAS THE CIT (A) HIMSELF HAD HELD THAT THE ASSESSEE HAD NOT BEEN ABL E TO SUBSTANTIATE THE SOURCE OF INVESTMENT OF RS. 11,00,000/- IN THE SAID SHARES PURCHASED DURING THE FINANCIAL YEAR 2005-06 AND THE AO WAS DIRECTED TO REOPEN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 ON THIS ISSUE? (III) WHETHER THE HONBLE ITAT HAS ERRED IN IGNORING AN IMPORTANT ASPECT THAT IN SUCH CASES OF SHAM TRANSACTIONS OF SHARES SHOWING ABNORMAL HIKE IN TH EIR VALUE, WHERE THE FACTS THEMSELVES SPEAK LOUD AND ITA NO.3035/DEL/2018 PAGE | 22 CLEAR, THE AO IS JUSTIFIED TO EVEN DRAW AN INFERENC E FROM THE ATTENDANT CIRCUMSTANCES? (IV) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE HONBLE INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN LAW IN UPHOLDING THE ORDER OF THE CIT(A) D ELETING THE ADDITION OF RS. 12,59,000/- MADE BY THE AO ON THE BASIS OF SEIZED DOCUMENT ON THE GROUNDS THAT THE AO HAS NOT POINTED OUT AS TO HOW THE FIGURES OF RS. 12 .59 LACS HAS BEEN WORKED OUT IGNORING THE FACT THAT THE ASSESSEE HIMSELF IN HIS REPLY TO THE AO HAD TRIED T O EXPLAIN THE SOURCE OF THE RECEIPTS OF RS. 12,59,000 /- INSTEAD OF CHALLENGING THE WORKING OUT OF THE SAID FIGURE BY THE AO? 3. THE FIRST THREE QUESTIONS OF LAW RAISED IN THIS APPEAL ARE COVERED AGAINST THE APPELLANT BY AN ORDER AND JUD GMENT OF A DIVISION BENCH OF THIS COURT DATED 16.02.2017 IN IT A-18-2017 TITLED AS THE PR. COMMISSIONER OF INCOME TAX (CENTR AL), LUDHIANA VS. SH. HITESH GANDHI, BHATTI COLONY, CHAN DIGARH ROAD, NAWANSHAHAR. 4. THE ISSUE IN SHORT IS THIS : THE ASSESSEE PURCHA SED SHARES OF A COMPANY DURING THE ASSESSMENT YEAR 2006 -07 AT RS. 11/- AND SOLD THE SAME IN THE ASSESSMENT YEAR 2 008-09 AT RS. 400/- PER SHARE. IN THE ABOVE CASE, NAMELY, ITA 18- 2017 ALSO THE ASSESSEE HAD PURCHASED AND SOLD THE S HARES IN THE SAME ASSESSMENT YEARS. THE AO IN BOTH THE CASES ADDED THE APPRECIATION TO THE ASSESSEES INCOME ON THE SU SPICION THAT THESE WERE FICTITIOUS TRANSACTIONS AND THAT TH E APPRECIATION ACTUALLY REPRESENTED THE ASSESSEES IN COME FROM UNDISCLOSED SOURCES. IN ITA-18-2017 ALSO THE CIT(A PPEALS) AND THE TRIBUNAL HELD THAT THE AO HAD NOT PRODUCED ANY EVIDENCE WHATSOEVER IN SUPPORT OF THE SUSPICION. ON THE OTHER ITA NO.3035/DEL/2018 PAGE | 23 HAND, ALTHOUGH THE APPRECIATION IS VERY HIGH, THE S HARES WERE TRADED ON THE NATIONAL STOCK EXCHANGE AND THE PAYME NTS AND RECEIPTS WERE ROUTED THROUGH THE BANK. THERE WAS NO EVIDENCE TO INDICATE FOR INSTANCE THAT THIS WAS A C LOSELY HELD COMPANY AND THAT THE TRADING ON THE NATIONAL STOCK EXCHANGE WAS MANIPULATED IN ANY MANNER. 5. IN THESE CIRCUMSTANCES, FOLLOWING THE JUDGMENT IN ITA- 18-2017, IT MUST BE HELD THAT THERE IS NO SUBSTANTI AL QUESTION OF LAW IN THE PRESENT APPEAL. 6. QUESTION (IV) HAS BEEN DEALT WITH IN DETAIL BY T HE CIT(A) AND THE TRIBUNAL. FIRSTLY, THE DOCUMENTS ON WHICH T HE AO RELIED UPON THE APPEAL WERE NOT PUT TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE CIT(A) NEVERTHELES S CONSIDERED THEM IN DETAIL AND FOUND THAT THERE WAS NO CO- RELATION BETWEEN THE AMOUNTS SOUGHT TO BE ADDED AND THE ENTRIES IN THOSE DOCUMENTS. THIS WAS ON AN APPRECIA TION OF FACTS. THERE IS NOTHING TO INDICATE THAT THE SAME WAS PERVERSE OR IRRATIONAL. ACCORDINGLY, NO QUESTION OF LAW ARIS ES. 7. IN THE CIRCUMSTANCES, THE APPEAL IS DISMISSED. 7. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE CASE AS EXPLAINED ABOVE AND RESPECTFULLY FOLLOWING THE PREC EDENT, AS AFORESAID, THE ADDITION AMOUNTING RS. 18,46,600/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) IS HEREBY DELETED AND GROUND RAIS ED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 6.1. HE HAS, THEREFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ABOVE DECISION. THE ASSESSEE ENTERED I NTO GENUINE TRANSACTION, THEREFORE, NO ADDITION U/S 68 OF THE ACT BE MADE AG AINST THE ASSESSEE. ITA NO.3035/DEL/2018 PAGE | 24 7. ON THE OTHER HAND, LD. SR. DR RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE PLACED SUFFICIENT DOCUMENTARY EVIDENCES BEFORE THE AO WHICH ARE COPY OF THE SHARES CERTIFICATES WITH TRAN SFER FORM, COPY OF DEBIT NOTE ISSUED BY SHREEJI BROKING (P) LTD., COPY OF CASH RE CEIPT OF SHREEJI BROKING (P) LTD., COPY OF THE ACCOUNT STATEMENT OF THE ASSESSE E IN THE BOOKS OF THE BROKER, COPY OF LEDGER ACCOUNT OF INDUS PORTFOLIO (P) LTD., COPY OF EVIDENCE FOR PAYMENT OF SECURITIES TRANSACTION TAX AND COPY OF THE BANK STATEMENT OF THE ASSESSEE TO SHOW THAT THE ASSESSEE HAD ENTERED INTO GENUINE TRA NSACTION OF PURCHASE OF SHARE WHICH WERE LATER ON SOLD THROUGH THE BROKER O N RECOGNIZED STOCK EXCHANGE AFTER PAYMENT OF STT. THE CLAIM OF THE AS SESSEE FOR SALE OF SHARES HAS BEEN SUPPORTED BY THE DOCUMENTARY EVIDENCES WHI CH HAVE NOT BEEN REBUTTED BY THE AUTHORITIES BELOW. WHATEVER INQUIR Y WAS CONDUCTED IN THE CASES OF OTHER PARTIES AND STATEMENT RECORDED OF SE VERAL PERSONS NAMELY SH. ANIL KHEMKA, SH. SANJAY VOHRA AND SH. BIDYOOT SARKA R AS REFERRED IN THE ASSESSMENT ORDER AND THE REPORT OF THE INVESTIGATIO N WING WERE NOT CONFRONTED TO THE ASSESSEE AND ABOVE STATEMENTS WERE ALSO NOT SUBJECT TO CROSS- EXAMINATION ON BEHALF OF THE ASSESSEE. THEREFORE, SUCH EVIDENCES CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. THE ORDER O F THE SEBI WAS ALSO NOT CONFRONTED TO THE ASSESSEE. AO DID NOT MENTION ANY SUCH FACT IN ASSESSMENT ORDER. MORE SO IN THOSE REPORTS AND STATEMENTS, TH E NAME OF THE ASSESSEE HAS NOT BEEN REFERRED TO. LD. COUNSEL FOR THE ASSESSEE , THEREFORE, RIGHTLY CONTENDED THAT THE TWIN CONDITIONS OF SECTION 10(38) OF THE A CT HAVE BEEN SATISFIED IN THE ITA NO.3035/DEL/2018 PAGE | 25 CASE OF THE ASSESSEE. THE ASSESSEE HAS BEEN ABLE T O PROVE THAT SHE HAS ENTERED INTO THE GENUINE TRANSACTION OF PURCHASE AND SALE O F SHARES AND THE SALE CONSIDERATION IS RECEIVED FROM BROKER THROUGH BANKI NG CHANNEL. THE BROKERS HAVE NOT DENIED THE TRANSACTION WITH THE ASSESSEE. THE ASSESSEE ROOTED THE TRANSACTION OF SALE OF SHARES THROUGH RECOGNIZED ST OCK EXCHANGE AFTER MAKING PAYMENT OF STT. IN SIMILAR CIRCUMSTANCES, ITAT SMC BENCH, DELHI IN THE CASE OF MEENU GOEL VS ITO (SUPRA) FOLLOWING THE DECISION OF JURISDICTIONAL HONBLE P&H HIGH COURT IN THE CASE OF PR.CIT VS PREM PAL GA NDHI (SUPRA) DELETED THE SIMILAR ADDITION. THEREFORE, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF ITAT, DELHI BENCH IN THE CASE OF MEENU GOEL VS ITO (SUPRA) FOLLOWED BY JUDGEMENT OF JURISDICTIONAL P&H HIGH CO URT WHICH IS BINDING. THERE IS NO OTHER MATERIAL AVAILABLE ON RECORD TO R EBUT THE CLAIM OF THE ASSESSEE OF EXEMPTION CLAIMED U/S 10(38) OF THE ACT. 9. KEEPING IN VIEW OF THE ABOVE DISCUSSION AND THE MATERIAL ON RECORD, IN THE LIGHT OF THE ORDER OF THE TRIBUNAL IN THE CASE OF MEENU GOEL VS ITO (SUPRA), I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND D ELETE THE ADDITION OF RS.19,51,357/-. THE APPEAL OF THE ASSESSEE IS, ACC ORDINGLY, ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATE:-27.06.2018 *AMIT KUMAR* ITA NO.3035/DEL/2018 PAGE | 26 COPY FORWARDED TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) CONCERNED 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI