SARVANKUMAR B. KOTHARI, MUMBAI V. ASST CIT CIR 4(2), MUMBAI

ITA 3368/MUM/2012

• Counselvise Citation: 336819914 RSA 2012
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 08-06-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JANGRE
• Keywords: Bogus purchase; Transfer pricing; Share purchase agreement; Accommodation entries
• Section: 143(3); 153A; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS.3366 & 3367/M/2012 ASSESSMENT YEARS: 2004-05 & 2005-06 SHRI SUMATIKUMAR B. KOTHARI, 50/52, KOTHARI CHAMBERS, RAMWADI, KALABADEVI ROAD, MUMBAI 400 002. PAN: AABPK 8206D VS. ASST. CIT, CIRCLE 4(2), MUMBAI (APPELLANT) (RESPONDENT) ITA NOS.3364 & 3365/M/2012 ASSESSMENT YEARS: 2004-05 & 2005-06 SHRI GANPAT B. KOTHARI, 50/52, KOTHARI CHAMBERS, RAMWADI, KALABADEVI ROAD, MUMBAI 400 002. PAN: AGLPK7582N VS. ASST. CIT, CIRCLE 4(2), MUMBAI (APPELLANT) (RESPONDENT) ITA NOS.3368 & 3369/M/2012 ASSESSMENT YEARS: 2004-05 & 2005-06 SHRI SARVANKUMAR B. KOTHARI, 50/52, KOTHARI CHAMBERS, RAMWADI, KALABADEVI ROAD, MUMBAI 400 002. PAN: AACPK 3500H VS. ASST. CIT, CIRCLE 4(2), MUMBAI (APPELLANT) (RESPO NDENT) ITA NOS.3362 & 3363/M/2012 ASSESSMENT YEARS: 2004-05 & 2005-06 SHRI PRAVEENKUMAR B. KOTHARI, 50/52, KOTHARI CHAMBERS, RAMWADI, KALABADEVI ROAD, MUMBAI 400 002. VS. ASST. CIT, CIRCLE 4(2), MUMBAI ITA NOS.3366 & 3367/M/2012, ITA NOS.3364 & 3365/M/2 012, ITA NOS.3368 & 3369/M/201 & ITA NOS.3362 & 3363/M/2 012 SHRI SUMATIKUMAR B. KOTHARI, SHRI GANPAT B. KOTHARI , SHRI SARVANKUMAR B. KOTHARI & SHRI PRAVEENKUMAR B. KOTHA RI 2 PAN: AABPK 4790Q (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NEELKANTH KHANDELWAL, A.R. REVENUE BY : SHRI S.K. JANGRE, D.R. DATE OF HEARING : 30.06.2015 DATE OF PRONOUNCEMENT : 23.09.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY DI FFERENT BUT RELATED ASSESSEES AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2004-05 AND 2005-06. THE SOLE ISSUE RAISED IN ALL THE APPEALS R ELATES TO THE CONFIRMATION OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCO ME TAX ACT. FOR THE SAKE OF CONVENIENCE, THE FACTS HAVE BEEN TAKEN FROM ITA NO. 3366 IN THE CASE OF SUMATI B. KOTHARI. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AC TION WAS CONDUCTED BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT IN THE CASE OF SHRI GANPAT B. KOTHARI AND ENTITIES AND PERSONS CONNECTED WITH KOT HARI GROUP ON 10.01.07. AS THE ASSESSEE ALSO BELONGED TO THE SAID KOTHARI G ROUP, THE SEARCH ACTION WAS ALSO CARRIED OUT IN THE CASE OF THE ASSESSEE. THER EAFTER, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 15 3A OF THE I.T. ACT, DURING WHICH THE ASSESSEE AGREED/OFFERED AN INCOME OF RS.3 776500/- WHICH WAS CLAIMED AS TAX EXEMPT OF LONG TERM CAPITAL GAINS IN THE ORIGINAL RETURN OF INCOME. PENALTY PROCEEDINGS WERE ALSO INITIATED UN DER SECTION 271(1)(C) OF THE ACT. DURING THE PENALTY PROCEEDINGS, THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) NOTED THAT THE ASSESSEE HAD CLAIMED TO HAVE PURCHASED ITA NOS.3366 & 3367/M/2012, ITA NOS.3364 & 3365/M/2 012, ITA NOS.3368 & 3369/M/201 & ITA NOS.3362 & 3363/M/2 012 SHRI SUMATIKUMAR B. KOTHARI, SHRI GANPAT B. KOTHARI , SHRI SARVANKUMAR B. KOTHARI & SHRI PRAVEENKUMAR B. KOTHA RI 3 SHARES OF TWO SCRIPS NAMELY M/S. FAST TRACK ENT. LT D. AND M/S. SURYADEEP SALT REFINERY & CHEMICALS LTD. THE SECURITIES OF M/S. S URYADEEP SALT REFINERY & CHEMICALS LTD. WERE PURCHASED BY THE ASSESSEE FROM M/S. AAKANKSHA FINVEST, THE ENTITY WHICH WAS AFFILIATED TO M/S. GR PANDYA S HARE BROKING LTD. WHOSE PROPRIETOR WAS MR. NARENDRA R. SHAH. THE ASSESSEE PURCHASED THE SHARES OF M/S. FAST TRACK ENT. LTD. THROUGH BROKER M/S. VIJAY BHAGWANDAS & CO. THE SHARES WERE TRANSFERRED INTO THE DEMAT ACCOUNT OF T HE ASSESSEE. DURING THE COURSE OF SOME OTHER SEARCH ACTION, IT WAS FOUND BY THE INVESTIGATION WING THAT MR. NARENDRA R. SHAH USING THE NAME OF M/S. AAKANKS HA FINVEST HAD ISSUED BOGUS PURCHASE BILLS RELATING TO LONG TERM CAPITAL GAINS OF SHARES OF M/S. SURYADEEP SALT REFINERY & CHEMICALS LTD. A STATEME NT OF MR. NARENDRA R. SHAH WAS ALSO RECORDED IN THIS RESPECT. SIMILARLY, STATEMENT OF MR. VISHAL V. SHAH SON OF MR. VIJAY BHAGWANDAS SHAH WAS ALSO RECO RDED DURING WHICH HE CONFIRMED THAT THE ACCOMMODATION BILLS WERE ISSUED BY HIS FATHER LATE MR. VIJAY BHAGWANDAS SHAH. DURING THE ASSESSMENT PROCE EDINGS UNDER SECTION 143(3) READ WITH SECTION 153A, THE AO QUESTIONED TH E GENUINENESS OF THE PURCHASE AND SALE TRANSACTIONS OF THE M/S. FAST TRA CK ENT. LTD. AND M/S. SURYADEEP SALT REFINERY & CHEMICALS LTD. FROM THE A SSESSEE. THE ASSESSEE SUBMITTED ALL THE NECESSARY DETAILS REGARDING THE A BOVE SAID TRANSACTIONS VIZ. CONTRACT NOTE FOR PURCHASE OF SHARES, BANK STATEMEN T, DELIVERY BASED SHARE CERTIFICATES WHICH WERE FURTHER DEMATED IN THE DEMA T ACCOUNT, CONTRACT NOTE FOR SALE OF SHARES AND THE RECEIPT OF SALE CONSIDERATIO N THROUGH BANKING CHANNEL ETC. HOWEVER, THE AO WAS OF THE VIEW THAT IN VIEW O F THE STATEMENTS RECORDED OF THE CONCERNED PERSONS OF THE BROKERS WHO HAD ADM ITTED THAT THEY WERE INVOLVED IN PROVIDING BOGUS ACCOMMODATION ENTRIES I N RESPECT OF SHARES OF THE ABOVE COMPANIES, THE LONG TERM CAPITAL GAINS SHOWN BY THE ASSESSED ON THE SALE OF ABOVE SCRIPS WERE REQUIRED TO BE TREATED AS BOGU S. THE AO THEREFORE INSISTED THE ASSESSEE TO OFFER THE LONG TERM CAPITA L GAINS AS UNEXPLAINED INCOME ITA NOS.3366 & 3367/M/2012, ITA NOS.3364 & 3365/M/2 012, ITA NOS.3368 & 3369/M/201 & ITA NOS.3362 & 3363/M/2 012 SHRI SUMATIKUMAR B. KOTHARI, SHRI GANPAT B. KOTHARI , SHRI SARVANKUMAR B. KOTHARI & SHRI PRAVEENKUMAR B. KOTHA RI 4 OF THE ASSESSEE. THE ASSESSEE THEREAFTER VIDE LETT ER DATED 16.12.08 EXPLAINED TO THE AO THAT THE SHARE TRANSACTIONS IN QUESTION WERE GENUINE AND THAT THE ASSESSEE HAD SUBMITTED ALL THE REQUISITE DETAILS AS MENTIONED ABOVE. IT WAS ALSO SUBMITTED THAT NOTHING INCRIMINATING WAS FOUND DURI NG THE SEARCH ACTION AND NO ADDITION WAS WARRANTED UNDER SECTION 153A OF THE AC T. HOWEVER, SINCE THE AO WAS INSISTING THE ASSESSEE TO DECLARE THE ABOVE STA TED CAPITAL GAINS AS UNEXPLAINED INCOME; THAT SINCE THE MATTER WAS BEING CARRIED ON FOR A LONG TIME; THE ASSESSEE HAD TRIED HIS BEST TO PROVE THE GENUIN ENESS OF THE TRANSACTIONS; THE ASSESSEE HAS ALSO WRITTEN LETTERS TO M/S. SURYADEEP SALT REFINERY & CHEMICALS LTD. AS WELL AS TO THE M/S. FAST TRACK ENT. LTD. TO BRING ON RECORD THE FACTUAL POSITION WITH REGARD TO PURCHASE AND SALE OF SHARES OF THE AFORESAID FIRMS BUT NO RESPONSE HAS BEEN RECEIVED FROM THEM TILL DATE; THE ASSESSEE HAS NOT BEEN GETTING ANY COOPERATION FROM THE SAID COMPANIES; SI NCE THE TRANSACTIONS WERE ALREADY OVER; THE ASSESSEE WAS FEELING HELPLESS IN THE MATTER; THAT EVEN THE PROPRIETOR OF BOTH THE SHARE BROKER CONCERNS NAMELY OF M/S. VIJAY BHAGWANDAS & CO. AND M/S. AAKANKSHA FINVEST HAD ALREADY EXPIRE D, HENCE CONSIDERING THE OVERALL SITUATION AND TO END UP THE CONTINUOUS MENT AL PRESSURE AND STRESS AND TO AVOID LONG DRAWN LITIGATION, ON THE SUGGESTION OF A O, THE ASSESSEE AGREED TO OFFER THE ABOVE STATED CAPITAL GAINS TO TAX AS INCO ME FROM OTHER SOURCES; HOWEVER, WITH THE CLEAR UNDERSTANDING THAT SUCH TRE ATMENT WILL NOT BE CONSTRUED AS CONCEALMENT ON THE PART OF ASSESSEE AN D NO PENALTY SHALL BE IMPOSED FOR SUCH TREATMENT IN THE TOTAL INCOME OF T HE ASSESSEE FOR THE PURPOSE OF ASSESSMENT. THE ASSESSEE, THEREAFTER, PAID THE TAX ALONG WITH INTEREST. THE AO, HOWEVER, FURTHER OBSERVED THAT THE ASSESSEE MIG HT HAVE PAID COMMISSION FOR THE SERVICES OBTAINED FROM THE BROKERS FOR PROV IDING ACCOMMODATION ENTRIES. HE, THEREFORE, FURTHER ADDED A SUM OF RS. 168842/- BEING THE 5% OF THE GROSS AMOUNT/CAPITAL GAINS. THE AO ALSO NOTED THAT IN VIEW OF THE STATEMENT OF THE CONCERNED PERSONS OF THE BROKERS, IT WAS PROVED THAT THE ASSESSEE HAD ITA NOS.3366 & 3367/M/2012, ITA NOS.3364 & 3365/M/2 012, ITA NOS.3368 & 3369/M/201 & ITA NOS.3362 & 3363/M/2 012 SHRI SUMATIKUMAR B. KOTHARI, SHRI GANPAT B. KOTHARI , SHRI SARVANKUMAR B. KOTHARI & SHRI PRAVEENKUMAR B. KOTHA RI 5 CONCEALED HIS INCOME BY WRONGLY OFFERING THE UNEXPL AINED INCOME AS CAPITAL GAINS. HE, THEREFORE, LEVIED THE PENALTY AT THE RA TE OF 200%. 3. LD. CIT(A) UPHELD THE LEVY OF PENALTY, HOWEVER, REDUCED IT TO THE 100% OF THE TAX AMOUNT SOUGHT TO BE EVADED. AGGRIEVED B Y THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 4. THE LD. A.R. OF THE ASSESSEE, BEFORE US, HAS SUB MITTED THAT IN FACT NO ADDITION WAS WARRANTED IN THIS CASE EVEN ON MERITS. THE ORIGINAL ASSESSMENT HAD ALREADY BEEN COMPLETED IN THIS CASE. NO INCRIM INATING MATERIAL WAS FOUND AT THE PREMISES OF THE ASSESSEE DURING THE SEARCH A CTION. EVEN DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD EXPLAINED THAT IT HAD PURCHASED 1,50,000 SHARES ON 20.08.02 FROM M/S. AAKANKSHA FIN VEST WHOSE PROPRIETOR WAS MR. SAILESH SHETH. THE ASSESSEE DURING THE ASS ESSMENT PROCEEDINGS HAD FURNISHED THE BILLS AND CONTRACT NOTE FOR THE PURCH ASE OF SHARES OF M/S. SURYADEEP SALT REFINERY & CHEMICALS LTD. THE SHARE WAS PURCHASED THROUGH PAYMENT BY BANKING CHANNEL AND COPY OF THE BANK STA TEMENT WAS ALSO FURNISHED. THE ASSESSEE HAD RECEIVED DELIVERY OF P HYSICAL SHARE CERTIFICATE FROM M/S. SURYADEEP SALT REFINERY & CHEMICALS LTD. THE ASSESSEE HAD SENT THE SAID CERTIFICATE FOR DULY TRANSFER OF THE SHARE S IN THE NAME OF ASSESSEE AND THE SAID CERTIFICATE WAS RETURNED BY M/S. SURYADEEP SALT REFINERY & CHEMICALS LTD. AS DULY TRANSFERRED IN THE NAME OF ASSESSEE VI DE THEIR LETTER DATED 16.09.02. THE COPY OF THE SAID LETTER WAS ALSO FURNISHED TO T HE AO. THE SAID SHARES HAD BEEN DEMATED BY THE ASSESSEE AND THE SHARES HAD BEE N RECEIVED IN THE ELECTRONIC FORM IN HIS DEMAT STATEMENT, THE DP BEIN G M.R. SHARE BROKING PVT. LTD SHOWING CREDIT OF 1,50,000 SHARES OF SURYADEEP AND THE COPY OF THE SAME HAD BEEN SUBMITTED BY THE ASSESSEE. IN RESPECT OF SALE, THE ASSESSEE HAD SOLD 1,00,000 SHARES ON 1.3.2004 THROUGH MOTILAL OSWAL S ECURITIES LTD. AND THE CONTRACT-CUM-BILL FOR RS.24,02,000/- WAS PRODUCED B Y THE ASSESSEE. THE ITA NOS.3366 & 3367/M/2012, ITA NOS.3364 & 3365/M/2 012, ITA NOS.3368 & 3369/M/201 & ITA NOS.3362 & 3363/M/2 012 SHRI SUMATIKUMAR B. KOTHARI, SHRI GANPAT B. KOTHARI , SHRI SARVANKUMAR B. KOTHARI & SHRI PRAVEENKUMAR B. KOTHA RI 6 DEMAT STATEMENT SHOWED THE DEBIT OF 1,00,000 SHARES WHICH WAS ON ACCOUNT OF THE SAID SALE. THE ASSESSEE HAD RECEIVED PAYMENT O F RS.24,02,000 ON 8.3.2004 WHICH WAS REFLECTED IN THE BANK STATEMENT. THE LED GER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF BROKER MOTILAL OSWAL WAS KEPT AND T HE COPY OF THE SAME WAS ALSO SUBMITTED BY THE ASSESSEE. SIMILARLY, SALE OF BALANCE 50,000 SHARES OF SURYADEEP HAD TAKEN PLACE IN RESPECT OF WHICH THE A SSESSEE HAD KEPT THE INSTRUCTION SLIP AUTHORISING THE DP TO TRANSFER 50, 000 SHARES OF SURYADEEP TO MOTILAL OSWAL. THE ASSESSEE ALSO FURNISHED THE LED GER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF MOTILAL OSWAL. THE ASSESSEE HAD REC EIVED PAYMENT OF RS 9,74,500 FOR SALE OF THE SAID SHARES ON 10.3.2004. 5. THE LD. A.R. HAS FURTHER SUBMITTED THAT THE SHAR ES WERE PURCHASED FROM M/S. AAKANKSHA FINVEST WHEREAS THE SAME WERE SOLD T HROUGH M/S. MOTILAL OSWAL SECURITIES LTD. WHICH HAD NO DIRECT LINK WITH MR. NARENDRA R. SHAH. THE TRANSACTIONS WERE BETWEEN UNRELATED PARTIES AT ARMS LENGTH PRICE. THE STATEMENT, IF ANY, GIVEN BY MR. NARENDRA R. SHAH WA S NOT BINDING UPON THE ASSESSEE. THE NAME OF THE ASSESSEE WAS NOT SPECIFI CALLY MENTIONED IN HIS STATEMENT. EVEN THE SAID STATEMENT WAS RECORDED AF TER THE SEARCH ACTION ON THE ASSESSEE AND HENCE WAS NOT SUBJECT MATTER OF THE SE ARCH PROCEEDINGS. THE AO SIMPLY RELIED UPON THE STATEMENTS OF THE ABOVE STAT ED PERSONS WITHOUT ANY CORROBORATING MATERIAL EVIDENCE. MOREOVER, THE AO HAD NOT DENIED THE SALE TRANSACTIONS. IF THE ASSESSEES PURCHASE WAS BOGUS , THEN SALES MIGHT HAVE BEEN BOGUS. HOWEVER, THE AO HAD NOT DISPUTED THE TRANSF ER OF THE SHARES BY THE ASSESSEE. THE ASSESSEE HAD RIGHTLY OFFERED THE AMO UNT OF CAPITAL GAINS TO TAX. HOWEVER, SINCE THE AO WAS INSISTING FOR DECLARING T HE SAME AS INCOME FROM OTHER SOURCES AND SINCE THE ASSESSEE HAD ALREADY FU RNISHED THE EVIDENCES WHATEVER WERE AVAILABLE WITH HIM, THE ASSESSEE PER FORCE OFFERED THE SAID INCOME AS INCOME FROM OTHER SOURCES, BUT WITH A C LEAR STIPULATION MADE IN THE ITA NOS.3366 & 3367/M/2012, ITA NOS.3364 & 3365/M/2 012, ITA NOS.3368 & 3369/M/201 & ITA NOS.3362 & 3363/M/2 012 SHRI SUMATIKUMAR B. KOTHARI, SHRI GANPAT B. KOTHARI , SHRI SARVANKUMAR B. KOTHARI & SHRI PRAVEENKUMAR B. KOTHA RI 7 LETTER DATED 16.12.08 THAT THE INCOME WAS OFFERED T O THE TAXATION WITH THE CLEAR UNDERSTANDING THAT IT WOULD NOT BE TAKEN AS A CASE OF CONCEALMENT OF INCOME OR FOR LEVY OF PENALTY. THE LD. A.R. HAS FURTHER RELI ED UPON CATENA OF JUDGMENTS TO SUBMIT THAT IF NO INCRIMINATING MATERIAL WAS FOU ND DURING THE SEARCH ACTION AND THE ASSESSEE HAD ALREADY BEEN CONCLUDED, THEN T HE ADDITIONS WERE NOT WARRANTED. HE HAS, THEREFORE, SUBMITTED THAT ONLY BECAUSE DUE TO THE EXTREME MENTAL PRESSURE AND TO AVOID LONG DRAWN LITIGATION, THE ASSESSEE HAD OFFERED THE LONG TERM CAPITAL GAINS AS INCOME, HENCE UNDER THE CIRCUMSTANCES, IT CANNOT BE PRESUMED THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME OR HAD CONCEALED HIS INCOME. ON THE OTHER HAND, THE LD. D.R. HAS RELIED UPON THE FINDINGS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. IT IS APPARENT ON THE RECORD THAT IN THIS CASE, DURING THE SEARCH ACTION NO INCRIMINATING MATERIAL WAS FOUND. THE AO HAD MA DE ADDITIONS SOLELY ON THE BASIS OF THE STATEMENT OF MR. NARENDRA R. SHAH, DIRECTOR OF M/S. GR PANDYA SHARE BROKING LTD. AND OF MR. VISHAL V. SHAH SON OF MR. VIJAY BHAGWANDAS SHAH PROPRIETOR OF M/S. VIJAY BHAGWANDAS & CO. HOWEVER, THE SAID PERSONS HAVE NOT SPECIFICALLY STATED THAT THE SHARE PURCHASE TRANSACTIONS MADE BY THE ASSESSEE WERE BOGUS. THE ASSESSEE HAD SUBMITTED ALL THE REQUISITE DETAILS SUCH AS CONTRACT NOTE, BANK STATEMENT, DEMA T ACCOUNT AND OTHER EVIDENCE RELATING TO THE SHARE TRANSACTIONS. EVEN THE PURCHASE TRANSACTIONS AND SALE TRANSACTIONS WERE DONE THROUGH THE DIFFERENT B ROKERS WHO WERE NOT RELATED TO EACH OTHER. EVEN THE SALE TRANSACTIONS HAVE NOT BEEN DISPUTED BY THE LOWER AUTHORITIES. EVEN THE PROPRIETOR OF THE M/S. AAKANK SHA FINVEST AND M/S. VIJAY BHAGWANDAS & CO. HAD ALREADY EXPIRED, HENCE THE ASS ESSEE HAD ALREADY SUBMITTED THE REQUISITE DETAILS WHATSOEVER WAS SUPP OSED TO BE FURNISHED BY THE ITA NOS.3366 & 3367/M/2012, ITA NOS.3364 & 3365/M/2 012, ITA NOS.3368 & 3369/M/201 & ITA NOS.3362 & 3363/M/2 012 SHRI SUMATIKUMAR B. KOTHARI, SHRI GANPAT B. KOTHARI , SHRI SARVANKUMAR B. KOTHARI & SHRI PRAVEENKUMAR B. KOTHA RI 8 ASSESSEE. HENCE, THE ASSESSEE HAD A STRONG CASE ON MERITS. HOWEVER, SINCE THE AO INSISTED THE ASSESSEE TO BRING MORE EVIDENCE AND THE ASSESSEE WAS FEELING HELPLESS, HENCE, THE ASSESSEE VIDE HIS LETTER DATED 16.12.08 AGREED TO OFFER THE LONG TERM CAPITAL GAINS AS INCOME FROM OTHER SOURCE S, WITH THE CONDITION THAT HE WAS NOT ADMITTING ANY CONCEALMENT OF INCOME OR F URNISHING OF INACCURATE PARTICULARS OF INCOME. THE ADDITIONS IN THIS CASE HAVE BEEN MADE NOT BECAUSE THAT THE AO HAS DISPROVED THE CASE OF THE ASSESSEE. THE AO IN THIS CASE COULD NOT PROVE OR BRING ANY LACUNA OR FALSEHOOD IN THE E VIDENCES SUBMITTED BY THE ASSESSEE RELATING TO THE GENUINENESS OF THE TRANSAC TIONS. HOWEVER, THE ADDITIONS HAVE BEEN MADE BECAUSE THE ASSESSEE COULD NOT BRING MORE EVIDENCE AS WAS REQUIRED BY THE AO. IT IS NOT A CASE WHERE T HE AO HAD DISPROVED THE CONTENTIONS AND EVIDENCES PRODUCED BY THE ASSESSEE BUT ON THE BASIS THAT THE ASSESSEE WAS REQUIRED TO FURNISH MORE EVIDENCE. ME RELY BECAUSE THE ADDITIONS HAVE BEEN MADE BY THE AO AND THE ASSESSEE HAD NOT C ONTESTED THE SAME THAT ITSELF CANNOT BE HELD TO BE A JUSTIFIABLE GROUND TO HOLD THAT IT WAS A CASE OF CONCEALMENT OF INCOME. THE REVENUE COULD NOT PROVE THAT THE CLAIM PUT BY THE ASSESSEE WAS WRONG OR BOGUS. THE PENALTY PROCEEDING S ARE SEPARATE FROM QUANTUM ASSESSMENT PROCEEDINGS. IN THE CASE OF LEV Y OF PENALTY, IT SHOULD BE PROVED ON THE FILE THAT THE PARTICULARS FURNISHED B Y THE ASSESSEE WERE INACCURATE PARTICULARS OF INCOME OR THAT THERE WAS CONCEALMENT OF INCOME. EVERY CASE OF CONFIRMATION OF DISALLOWANCE CANNOT BE REGARDED AS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. EVEN IT CANNOT BE SAID THAT THIS CASE OF THE ASSESSEE WAS A CASE OF N O EVIDENCE AT ALL. THE ASSESSEE HAS SUBMITTED EVIDENCE IN THE SHAPE OF CON TRACT NOTE, PURCHASE BILLS, SALE BILLS, BANK STATEMENT, D-MAT ACCOUNT STATEMENT REFLECTING THE SALE OF SHARES ETC. THE EVIDENCE PRODUCED ON THE FILE BY THE ASSE SSEE HAS NOT BEEN PROVED WRONG OR FALSE. THE HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS. UPENDRA V. MITHANI ITA (L) NO.1860 OF 2009 DECIDED ON 05.08.2009, HAS ITA NOS.3366 & 3367/M/2012, ITA NOS.3364 & 3365/M/2 012, ITA NOS.3368 & 3369/M/201 & ITA NOS.3362 & 3363/M/2 012 SHRI SUMATIKUMAR B. KOTHARI, SHRI GANPAT B. KOTHARI , SHRI SARVANKUMAR B. KOTHARI & SHRI PRAVEENKUMAR B. KOTHA RI 9 OBSERVED IN THE MATTER OF LEVY OF PENALTY UNDER SEC TION 271(1)(C) OF THE ACT, THAT IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LE AD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEES CASE IS FALS E, THEN NO PENALTY CAN BE IMPOSED IN SUCH CASES. WHEN THE FACTS OF THE CASE IN HAND ARE CONSIDERED IN THE LIGHT OF THE DECISION OF THE HONBLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. UPENDRA V. MITHANI (SUPRA), THE LEVY OF PE NALTY CANNOT BE HELD TO BE JUSTIFIED IN THIS CASE. THE SAME IS ACCORDINGLY OR DERED TO BE DELETED. 7. SINCE THE FACTS AND THE ISSUE INVOLVED ALL THE APPEALS ARE IDENTICAL, HENCE IN VIEW OF OUR OBSERVATIONS MADE ABOVE, ALL THE ABOVE TITLED APPEALS OF THE ASSESSEES ARE HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.09.2015. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 23.09.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.