Sanjeev Jain, Saharanpur V. ITO, Saharanpur

ITA 3381/DEL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7340 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 29-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: SANJAY KUMAR CA SH AKASH GARG
• Keywords: Unexplained cash credit; Capital asset; Share purchase agreement; Principle of natural justice; Earning of tax free income; Source of fund; Question of law; Accommodation entries; Penny stocks
• Section: 143(3); 131; 68; 69; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE S H. R.K. PAND , ACCOUNTANT MEMBER AND MS . SUCHITRA KAMBLE , JUDICI A L MEMBER ITA NO. 3381 /DEL/201 7 ASSESSMENT YEAR: 20 13 - 14 SANJEEV JAIN PROP. M/S. S.K. JEWELLERS SARAFFA B AZAR SAHARANPUR 247001 PAN : ACFPJ6545C VS ITO WARD - 3(4) INCOME TAX OFFICE BUILDING, COURT ROAD, SAHARANPUR (APPELLANT) (RESPONDENT) APPELLANT BY S H . SANJAY KUMAR, CA SH. AKASH GARG, ADVOCATE RESPONDENT BY SH.S. S. RANA, CIT (DR) DATE OF HEARIN G: 17/12/2018 DATE OF PRONOUNCEMENT: 15 / 0 1/201 9 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20.03.2017 P A SSED BY THE CIT (A), MUZAFFARNAGAR RELATING TO A. Y. 20 13 - 14 . 2. FACTS OF THE CASE , I N BRIEF , ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN SARAFFA BUSINESS I. E. SALE AND PURCHASE OF GOLD AND SILVER 2 JEWELLERY AND BULLION ETC SINCE LAST MANY YEARS UNDER NAME AND STYLE OF M/S. S. K. JEWELLERS AT SARAFFA BAZAR, SAHARANPUR. HE FILED HI S RETURN OF INCOME ON 0 5.09.2013 DECLARING TOTAL INCOME AT RS.9,85,280/ - . DURING THE COURSE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED FROM THE BALANCE SHEET OF THE ASSESSEE THAT THE ASSESESEE HA S INTRODUCED CAPITAL OF APPROXIMATELY 2.40 CRORES OUT OF WHICH 2 , 36 , 97 , 10 1 WAS RECEIVED FROM SALE OF SHARES ON BSE AND PAYMENT WAS RECEIVED FROM THE BROKER M/S. GLOBE CAPITAL MARKET LIMITED. THE ASSESSING OFFICER OBSERVED FROM THE COMPUTATION OF INCOME FILED BY THE ASSESSEE THAT THE ASSESSEE H AS CALCULA TED THE LONG TERM CAPITAL GAIN ON SALE OF SHARES AND CLAIMED THE SAME AS EXEMPT FROM TAXATION U/S10(38) , THE DETAILS OF WHICH AS UNDER : - NAME OF COMPANY SALE PRICE PURCHASE PRICE TRANSFER EXPENSES EXEMPT U/S 10 (38) RS.2,37,03,710/ - 15,80,000/ - 2, 21,23,710/ - 3. ON FURTHER EXAMINATION OF THE SHARE SALE TRANSACTIONS MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER FOUND THAT THE ENTIRE SALE PROCEEDS WERE RECEIVED FROM SALE OF ONE SCRIP I.E. M/S. KYRA LANDSCAPES LIMITE D (EARLIER NAMED AS M/S. TCL TECHNOLOGIES LTD. WHEN THE SHARES WERE PURCHASED AND THEN AS M/S. ARICENT INFRASTRUCTURE LTD. AT THE TIME OF SALE) ONLY. T HE ASSESSEE WAS ASKED TO GIVE DETAILS REGARDING WHEN AND HOW THE SHARES WERE PURCHASED AND EVIDENCE IN T HIS RESPECT. T HE ASSESSEE SUBMITTED THAT HE HAS SOLD 1,58,033 SHARES DURING THE YEAR UNDER CONSIDERATION WHICH WERE ALLOTTED TO HIM ON 29.12.2010 BY TCS TECHNOLOGIES. THE AMOUNT OF RS.20.00 LACS WAS PAID TO TCL TECHNOLOGIES 3 THROUGH RTGS ON 21/12/2010 FROM HIS S.B. A/C NO. 100100140400 WITH SHIVALIK MERCANTILE COOPERATIVE BANK. THE COPY OF BANK ACCOUNT AND DUPLICATE SHARE CERTIFICATE S ALONGWITH DETAILS OF PURCHASE AND SALE OF THIS PARTICULAR SCRIP I.E. M/S. KYRA LANDSCAPES LIMITED WERE FILED BEFORE THE ASSES SING OFFICER FOR HIS PERUSAL. 4. THE ASSESSING OFFICER , ON VERIFICATION OF THE DETAILS FILED BEFORE HIM, FOUND THAT THE ASSESSEE HAD BEEN ALLOTTED 2 LACS SHARES OF THE COMPANY THROUGH PREFERENTIAL PLACEMENT ON 29/12/2010. AT THE TIME WHEN THE ASSESSEE B OUGHT THESE SHARES AT FACE VALUE OF RS.10 EACH, THE MARKET PRICE OF THE SCRIP WAS ONLY 50 PAISA EACH. THUS, THE ASSESSEE BOUGHT TH E SHARES AT 20 TIMES HIGHER THAN ITS OPEN MARKET PRI CE OR SAY AT A PREMIUM OF 2000%. HE ALSO OBSERVED THAT THESE SHARES WERE LOCKED IN FOR 1 YEAR (AS PER SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, FOR THE SHARES BEING PLACED PREFERENTIALLY) AND TRADING ON THE EXCHANGE COULD BE DONE STARING ONLY FROM 28/12/2011. HE FOUND THAT THE PRICE OF THE SCRIP KEPT RISING THROUGHOUT THE PERIOD WHEN THE SHARES WERE LOCKED UP FOR TRADING AND FURTHER FOR NEXT 3 MONTHS WHEN IT TOUCHED HEIGHTS OF APPROX. RS.125 EACH, I.E. A HUMONGOUS RISE OF OVER 25000% OVER A VERY SHORT PERIOD O F JUST 14 - 15 MONTHS. THESE FACTS ACCORDING TO THE ASSESSING OFFICER DEMANDED A DEEPER STUDY OF THE PRICE MOVEMENTS AND SHARE MARKET BEHAVIOUR OF THE ENTITIES INVOLVED IN TRADE AND OF THE SCRIP AS THE SHARE PRICE MOVEMENTS AND THE PROFIT EARNED BY THE BENEF ICIARIES WERE BEYOND HUMAN PROBABILITIES. HE, THEREFORE, CONDUCTED A DEEPER STUDY AS TO WHETHER THE TRANSACTIONS WERE GENUINE INVESTMENT TRANSACTIONS OR SHAM ONES AND COLOURABLE DEVICE ONLY TO CONVERT THE UNACCOUNTED CASH INTO TAX EXEMPT INCOME AND TO ASC ERTAIN AS TO WHETHER THE APPARENT WAS REAL. 5 . THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDING MADE ELABORATE ENQUIRIES ABOUT THE HISTORY OF THE COMPANY NAMEL Y M/S. KYRA 4 LANDSCAPES LIMITED AS C U LLED FROM MONEY CONTROL SITE AND OBSERVED TH AT THE VERY NATURE OF THE BUSINESS OF THE COMPANY IS DUBIOUS. IT STARTED AS A CHEMICAL COMPANY AND LATER ON ENTERED INTO TECHNOLOGY SPACE. WITHIN ONE YEAR IT ENTERED INTO REAL ESTATE BUSINESS. ACCORDING TO HIM T HOUGH A COMPANY CAN SURELY CHANGE AND KEEP CHANGING ITS OBJECT CLAUSE AND DO WHATEVER BUSINESS IT LIKES, HOWEVER , HE WAS ASTONISHED IN THIS CASE THAT A COMPANY RUNNING SINCE 199 1 HAS NOT EARNED ANY INCOME FROM OPERATIONS EVER AND STILL COMMANDED SUCH PREMIUM VALUATIONS. HE EXAMINED THE BALANCESHE ET OF THE COMPANY AND NOTED THAT THE REASONS OF THE ASTRONOMICAL PRICE RISE WERE LOCATED SOMEWHERE ELSE AND C ERTAINLY COULD NOT BE RELATED TO THE FUNDAMENTALS OR ANY HYPOTHETICAL PROMISING FUTURE OF THE COMPANY BY ANY STRETCH OF IMAGINATION. HE NOTED THAT THE COMPANY HAD ALLOTTED TOTAL OF 1,30,05,000 SHARES AT RS.10 EACH ON 29/12/2010 TO 48 ENTITIES ( MOSTLY INDIVIDUALS AND INCLUDING THE ASSESSEE SH. SANJEEV JAIN) THROUGH PREFERENTIAL PLACEMENT. ALL THESE SHARES WERE LOCKED IN FOR TRADING TILL 28/12/2011 . THE SHARES OF THE COMPANY WERE VERY SCARCELY TRADED IN T HE PAST BUT ALL OF A SUDDEN AFTER THE LOCK IN PERIOD FOR PREFERENTIALLY ALLOTTED SHARES ENDED, THE PRICE AND VOLUME BECAME DISPROPORTIONATE TO ITS REAL FINANCIAL POSITION. 6 . HE OBSERVED THAT DURIN G MOST OF THE PERIOD BETWEEN16/12/2010 TILL BEGINNING OF MARCH, 2012, THE TRADE VOLUME REMAINED VERY THIN. IN FACT FROM 17/06/2010 TILL 08/07/2011 THE TRADE VOLUME WAS ONLY 100 SHARES PER INSTANCE THAT TOO IN ONE TRADE PER INSTANCE (THERE WERE TOTAL 45 INS TANCES DURING THIS PERIOD). DUE TO ONLY DELIVERABLE ORDERS, DURING THIS PERIOD THE SCRIP KEPT CLOSING AT VERY NEAR TO THE UPPER CIRCUIT LIMITS OF 5% ON DAILY BASIS. BETWEEN 05/07/2011 T O 09/12/2011 THE VOLUME INCREASED A BIT (BUT REMAINED BELOW 2000 EXCE PT ON ONE DAY WHEN 10000 SHARES WERE TRADED) AND DURING THIS PERIOD ALSO THE TREND CONTINUED. BY THIS TIME I.E. WITHIN LESS THAN 12 MONTHS, THE SHARE PRICE HAD JUMPED BY APPROX. 8500 PERCENT. DURING THIS PERIOD ALSO THE SCRIP CLOSED CONSISTENTLY NEAR 5% AND 2% WHICH 5 WAS THE UPPER CIRCUIT LIMIT ON THOSE TRADING DAYS AS PER GUIDELINES OF THE EXCHANGE. SURPRISINGLY SUCH CONSISTENT CIRCUIT SHY CLOSING ENSURED THAT PRICE OF THE SCRIP KEPT INCREASING WITHOUT BEING NOTICED OR MONITORED BY THE MARKET REGULATORS. LATER ON, THE TRADING VOLUME INCREASED A BIT BUT THE NUMBER OF TRADES REMAINED LOW AND THE SCRIP KEPT HITTING UPPER CIRCUITS REACHING ASTRONOMICAL HEIGHTS WITHIN A SHORT PERIOD OF 7 MONTHS. THUS, CLEARLY AN ARTIFICIAL DEMAND WAS CREATED TO JACK UP THE SCR IP PRICE. 7 . HE , THEREFORE, WAS THE OPINION THAT PRICE RIGGING WAS DONE TO INCREASE THE SCRIP PRICE SIGNIFICANTLY . T HE ASSESSING OFFICER OBTAIN ED THE DATA PERTAINING TO THIS SCRIP FROM BSE AND ANALYSED THE DATA SO RECEIVED AND FOUND THAT THERE WERE VERY L IMITED PERSONS DEALING IN SHARES OF THE COMPANY AND MANY OF THEM WERE INVOLVED IN BOTH BUYING AND SELLING THE SAME DURING THIS NON - STOP CIRCUIT SHY UPWARD MOVEMENT. THE BROKING FIRMS INVOLVED WERE ALSO LIMITED AND SOME OF THEM WERE PRIMA FACIE INVOLVED WIT H THEIR CLIENTS IN THIS PRACTICE. THESE PARTIES AND THE BROKING FIRMS HAVE BEEN FOUND TO BE INVOLVED IN SUCH PRACTICES BY THE SEBI ON MANY PREVIOUS OCCASIONS. HE, THEREFORE, HELD THAT THE MOVEMENT WAS METICULOUSLY PLANNED AND CREATED AND NOT GENUINE. 8 . T HE ASSESSING OFFICER ANALYSED THE DATA PERTAINING TO THE ENTITIES INVOLVED IN THE TRADE OF THE SCRIP DURING THE AFOREMENTIONED PERIODS AND FOUND THAT THOSE ENTITIES , WHO WERE ALLOTTED SHARES ON PREFERENTIAL BASIS IN DECEMBER, 2010 , EXITED FROM TH E SCRIP FULLY ( OR WERE IN THE PROCESS OF FULL EXIT) STARTING FROM FEB - MAR, 2012 I.E. ONE YEAR AFTER THEY PURCHASED THE SHARES THEREBY MAKING THEM ELIGIBLE FOR CLAIMING EXEMPTION U/S10 ( 38) AND WHEN OPTIMUM LEVELS OF SHARE PRICE HAD BEEN ACHIEVED. 9 . THE ASSESSING OFFICER FURTHER NOTED THAT DURING A SURVEY OPERATION IN THE C ASE OF M/S. ESSAR INDIA LIMITED, ONE OF THE BUYERS SH. SAURABH 6 CHANDRAKANT NAGARSETH ACCEPTED THAT HE ALLOWED HIS DEMAT ACCOUNT TO BE USED FOR PROVIDING ACCOMMODATION ENTRIES FOR BOGUS LTCG/STC G . HIS STATEMENT RECORDED DURING SURVEY ACTION WAS REPRODUCED BY THE ASSESSING OFFICER IN THE BODY OF THE ASSESS MENT ORDER . HE ALSO ISSUED COMMISSION TO THE INVESTIGATION WING , THANE TO EXAMINE SOME OF THE BUYERS OF THE SCRIP TO ASCERTAIN WHETHER THE SE ENTI TIES HAD THE REQUIRED SOURCES TO BUY THE SCRIP. THE COMMISSIONED OFFICE REPORTED THAT THE BUYING PARTIES WERE EITHER BOGUS OR HAD NO EXPLANATION TO OFFER IN RESPECT OF THE SOURCE OF INVESTMENT MADE BY THEM. THE ASSESSING OFFICER , THEREFORE , CO NCLUDED THAT THE SHARE PRICE MOVEMENTS AND SALE PURCHASE TRANSACTIONS WERE NOT GENUINE AND WERE RESULT OF M ETI CULOUSLY PLANNED CIRCULAR TRADING AND THE ENTITIES INVOLVED IN THESE WERE PART OF THIS EXERCISE IN AN EFFORT TO CREATE DOCUMENTARY EVIDENCES FOR A PRE - PLANNED SCHEME FOR CONVERTING UNACCOUNTED MONEY INTO TAX EXEMPT INCOME. THE ASSESSING OFFICER , THEREAFTER , SUMMONED THE ASSESSEE U/S 131 OF THE IT ACT AND RECORDED HIS STATEMENT WH ICH HAS BEEN REPRODUCED IN THE BODY OF THE ASSESSMENT ORDER FROM PAGE 40 TO 50. 10 . THE ASSESSING OFFICER OBTAIN ED INFORMATION FROM SEBI RELATING TO THE SCRIP TRAD ED BY THE ASSESSEE. HE ALSO MADE ELABORATE ENQUIRIES FROM THE BANK ER S OF THE ASSESSEE AND T HE BANK ERS OF THE OTHER SHAREHOLDERS. THE ASSESSING OFFICER REFERRED TO THE MODUS O PERANDI TO GENERATE BOGUS LONG TERM CAPITAL GAIN AND THEREAFTER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE AMOUNT SHOULD NOT BE ADDED U/S 68 OF THE IT ACT AS HIS INCOME BEING UNEXPLAINED CASH CREDIT. 11. THE ASSESSEE SUBMITTED THAT HE HAS INVEST ED A SUM OF RS.20 LACS DURING THE IMPUGNED ASSESSMENT YEAR OUT OF HIS BANK ACCOUNT MAINTAINED WITH SHIVALIK MERCANTILE COOPERATIVE BANK ON 21.12.2010 BY APPLYING FOR THE ALLOTMENT OF 2 LACS EQUITY SHARES OF RS.10/ - EACH OF M/S. TCL TECHNOLOGIES LTD. (A LISTED COMP ANY) UNDER PREFERENTIAL ALLOTMENT SCHEME. THE S HARE SO 7 APPLIED, WERE ALLOTTED ON 24.12.2010 AND CREDITED TO HIS DMAT ACCOUNT IN DUE COURSE. SUCH PREFERENTIAL ALLOTMENT OF SHARES AND THE PRICE CHARGED IS BEIN G APPROVED AND REGULATED BY SEBI & STOCK EXCHANGE RIGHT FROM THE DETERMINATION OF PRICE TO THE ALLOTMENTS MADE BY THE LISTED COMPANY. THE SHARES SO ALLOTTED ON 24.12.2010 WERE UNDER LOCK - IN FOR A PERIOD FOR ONE YEAR AND THE SAME WERE SOLD ON VARIOUS DATES FROM 05.03.2012 TO 25.10.2012 FOR A PRICE RANGING FROM RS.98/ - TO RS. 160/ - THROUGH ONLINE TRADING AND PAYMENT FOR THE SALE PRICE AFTER DEDUCTING SECURITY TRANSA CTION TAX (S. T. T.), BROKERAGE AND OTHER INCIDENTAL CHARGES WAS RECEIVED IN HIS REGULAR AND REGISTERED BANK ACCOUNT WITH THE DEPOSITORY ON VARI OUS DATES. THE RATES AT WHICH SHARES HAVE BEEN SOLD A RE IN CONFORMITY WITH THE RATES PREVALENT AT THE STOCK EXCHANGE, WHICH IS WITHIN THE PURVIEW OF SEBI. IT WAS SUBMITTED THA T SEBI AND DEPOSITORY ARE THE WITNESS OF THE PRICES ON WHICH SHARES I N QUESTION HAD BEEN SOLD A ND THE ASSESSEE , IN HIS RETURN , DECLAR ED SUCH LTCG AND CLAIM ED EXEMPTION U/S 10 (38) BY FILING THE RETURN VOLUNTARILY U/S 139 (1) ON 05.09.2013. 1 2. HOWEVER, TH E ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESS EE AND OBSERVED THAT WHAT IS APPARENT IN THIS CASE IS NOT REAL . T HE RELEVANT OBSERVATION OF THE ASSESSING OFFICER AT PARA 3.8.4 OF THE ORDER AT PAGE 68 READS AS UNDER : - IN HIS REPLIES THE ASSESSEE HAS MAINLY CONTENDED THAT SINCE PURCHASE WAS MADE THROUG H PAYMENT BY RTGS AND SHARES WERE ALLOTTED TO HIM BY THE COMPANY, IT WAS A GENUINE TRANSACTION. SECONDLY, SALE WAS MADE ONLINE AFTER PAYING STT AT THE PREVALENT MARKET RATES, THEREFORE SALE TRANSACTIONS WERE ALSO GENUINE. THE CONTENTION OF THE ASSESSEE W AS EXAMINED. IT IS NOT THE CASE OF THIS OFFICE WHETHER PURCHASE OF SHARES THROUGH PREFERENTIAL PLACEMENT DID ACTUALLY TOOK PLACE OR SHARES WERE SOLD ON THE EXCHANGE AT THE PREVALENT MARKET RATES AFTER PAYING STT OR NOT. WHAT THIS OFFICE HAS COME TO CONCL UDE ON THE BASIS OF ABOVE ANALYSIS, DOCUMENTARY EVIDENCES, CIRCUMSTANTIAL EVIDENCES, HUMAN CONDUCT AND PREPONDERANCE OF PROBABILITIES IS THAT WHAT IS APPARENT IN THIS CASE IS NOT REAL, THAT THESE FINANCIAL TRANSACTIONS WERE SHAM 8 ONES AND THAT THIS ENTIRE E DIFICE WAS ONLY A COLOURABLE DEVICE USED TO EVADE TAX. 13. RELYING ON VARIOUS DECISIONS INCLUDING THE DECISION S OF HON BL E SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT REPORTED 214 ITR 801 AND THE DECISION IN THE CASE DURGA PRASAD MORE VS. CIT THE AS SESSING OFFICER H ELD THAT THE ASSESSEE HAS INTRODUCED/ CRE DITED HIS CAP ITAL OF RS.2,36,97,101/ - WHICH ATTRACTS THE PROVISION OF SECTION 68 OF THE IT ACT. THE RELEVANT OBSERVATION OF THE ASSESSING OFFICER AT PARA 3.8.10 AND 4 OF THE ORDER READS AS UNDER : - THE DETAILED ANALYSIS OF EVIDENCES AVAILABLE ON RECORD AND THE CASE LAWS QUOTED ABOVE PROVIDE ENOUGH SUPPORT AGAINST THE ARGUMENT OF THE ASSESSEE REGARDING ASSESSMENT BEING BASED ON MERE SUSPICION OR PRESUMPTION. FURTHER, THE CONTENTION OF THE ASSESSEE THAT SECTION 68 IS NOT APPLICABLE IN HIS CASE FOR THE BANK ACCOUNT IS NOT PART OF HIS BOOKS IS NOT TENABLE. THE ASSESSEE HAS INTRODUCED/ CREDITED CAPITAL OF RS.2,36,97,101/ - DURING THE YEAR IN HIS BOOKS THE SOURCE OF WHICH HE EXPLAINED AS PROCEEDS FROM T HESE SHARE SALE TRANSACTIONS. SINCE THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF THE SOURCE OF THIS CAPITAL INTRODUCED BEING SHARE SALE TRANSACTIONS HAS BEEN HELD TO BE NOT SATISFACTORY IN VIEW OF THE ELABORATE DISCUSSION MADE HEREIN, SECTION 68 IS SQUARELY APPLICABLE IN THIS CASE. THE CASE LAW QUOTED BY THE ASSESSEE PERTAINS TO A DIFFERENT ISSUE (I.E. AN INDIVIDUAL AND A FIRM BEING TWO SEPARATE IDENTITIES, THEIR BOOKS ARE ALSO TWO SEPARATE SETS OF ACCOUNT AND THEREFORE CREDIT IN THE BOOKS OF A P ARTNERSHIP FIRM WAS HELD NOT TO PARTAKE THE NATURE OF CREDIT IN THE BOOKS OF A PARTNER IN HIS CAPACITY OF INDIVIDUAL ASSESSEE AND IS THEREFORE NOT APPLICABLE IN THE PRESENT CASE. 4. THUS IN VIEW OF THE ELABORATE DISCUSSION MADE ABOVE, I HEREBY HOLD THE AM OUNT OF RS.2,36,97,101/ - INTRODUCED/ CREDITED BY THE ASSESSEE OUT OF THESE PURPORTED SHARE SALE RECEIPTS DURING THE FINANCIAL YEAR 2012 - 13 (A.Y.2013 - 14) IN HIS CAPITAL ACCOUNT AS HIS INCOME BEING UNEXPLAINED CASH CREDIT U/S68 OF THE INCOME TAX ACT (TAXABL E AT THE RATE OF 30% AS PROVIDED U/S115 B B E. 9 1 4 . THE ASSESSEE MADE ELABORATE SUBMISSION BEFORE THE CIT(A) . H OWEVER , THE LD. CIT (A) ALSO WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPH E LD THE ACTION OF THE ASSESSING OFFICER BY OBSERVI NG AS UNDER : - 9. THE FACTS OF THE CASE AS WELL AS SUBMISSION MADE BY THE APPELLANT HAVE BEEN GONE THROUGH. THE APPELLANT HAS SHOWN ADDITION OF RS.23697101/ - IN THE CAPITAL ACCOUNT. IT WAS EXPLAINED TO HAVE RECEIVED ON ACCOUNT OF LONG TERM CAPITAL GAIN F ROM SALE OF SHARES AND CLAIMED THE SAME AS EXEMPT U/S 10(38) OF THE ACT. THE APPELLANT HAS PURCHASED 2 LAC EQUITY SHARES OF TCL TECHNOLOGY LTD., A PUBLIC LIMITED COMPANY @ RS.10/ - FOR RS.2Q LAC ON 21 - 12 - 2010 THROUGH PREFERENTIAL ALLOTMENT SCHEME. NAME OF T GL TECHNOLOGY HAS BEEN CHANGED AS M/S KYRA LANDSCAPE LTD. THE APPELLANT HAS SOLD SUCH 158033 SHARES DURING THE YEAR UNDER CONSIDERATION FOR RS.23697101/ - . IT HAS BEEN NOTED BY THE AO WHEN THE APPELLANT PURCHASED THESE SHARES @ RS.10 - EACH, THE MARKET PRIC E OF THE SCRIPT V; F .S 50 PAISA EACH. THE PRICE OF THE SCRIPT JUMPED RS. 125/ - EACH SHARE AFTER MARCH, 2012. IT HAS BEEN NOTED BY THE AO THAT M/S TCL WHICH IS RUNNING SINCE 1994 HAS NOT EARNED ANY INCOME FROM OPERATIONS AND STILL COMMANDED SUCH HUGE PRICE I N THE MARKET. THE AO HAS REFERRED TO THE FINANCIAL RESULTS OF TCL FOR VARIOUS FINANCIAL YEARS BEFORE MAKING SUCH OBSERVATIONS. THE PRICE OF THE SCRIPT HAS INCREASED FROM RS.0.5 PER SHARE TO RS. 154.65 IN JUST 18 MONTHS FROM 16 - 12 - 2010 TO 17 - 07 - 2012. AS SOO N AS LOCK - IN PERIOD OF ONE YEAR FROM THE DATE OF PREFERENTIAL ALLOTMENT FINISHED BY FIRST WEEK OF MARCH, 2012, THERE WAS ABNORMAL INCREASE IN VOLUME AND PRICE OF THE SCRIPT, THUS, MAKING WAY FOR THE PREFERENTIAL SHARE HOLDERS TO MAKE EXIT BY TAKING AWAY HU GE EXEMPT LONG TERM CAPITAL GAIN. SUCH ABRUPT INCREASE WAS NOT IN ANY PROPORTION WITH THE CHANGES IN SENSEX INDEX. THESE FACTS LED THE AO TO CONCLUDE THAT PRICE OF THE SCRIPT HAS BEEN RIGGED. THE AO HAS ;AADE FURTHER ANALYSIS OF THE TRADING DATA OF THE SCR IPT BY OBSERVING THAT NUMBER OF PERSONS PURCHASING/DEALING IN THE SAID SCRIPT WAS LIMITED. MOST OF THE PURCHASING ENTITIES HAVE NOT FILED THEIR RETURNS OF INCOME OR FILED RETURNS SHOWING INCOME BELOW TAXABLE LIMITS, HAVING NO FINANCIAL CAPACITY TO MAKE SUC H HUGE INVESTMENTS IN THE PURCHASE OF THESE SCRIPTS. ONE OF SUCH PURCHASER, SH. SAURABH CHANDRAKANT NAGARSETH HAS BEEN EXAMINED UNDER OATH BY THE DDIT (INVESTIGATION), MUMBAI ON 09 - 06 - 2015 UNDER SECTION 131 OF THE ACT IN WHICH HE HAS ADMITTED THAT HE HAS B EEN USED AS A CONDUIT BY ONE SHARE BROKER, SH. VISHAL VIJAY SHAH. HE HAS SIGNED SOME DOCUMENTS AT HIS BEHEST AND OPENED A BANK ACCOUNT/DEMAT ACCOUNT FOR TRADING ACTIVITIES AND ALL THE TRADING ACTIVITIES HAVE BEEN DONE BY SH. VISHAL VIJAY SHAH IN HIS NAME M OSTLY IN PENNY STOCKS. HE HAS ADMITTED THAT HE HAS BEEN USED 10 TO PROVIDE ACCOMMODATION ENTRIES FOR BOGUS LONG TERM CAPITAL GAIN. THE AO HAS ISSUED COMMISSION TO THE INVESTIGATION UNIT AT THANE TO EXAMINE THE OTHER BUYERS OF TCL TECHNOLOGIES AND IT HAS BEEN FOUND THAT SOME OF SUCH PURCHASING PERSONS WERE NOT FOUND EXISTING AT THE GIVEN ADDRESSES OR IN SOME OTHER CASES DID NOT MAKE ANY COMPLIANCE. ALL SUCH TRANSACTIONS OF PURCHASE HAVE BEEN FOUND IN THE NATURE OF PROVIDING ACCOMMODATIONS TO BENEFIT THE PREFERE NTIAL SHARE HOLDERS. THE AO HAS RECORDED THE STATEMENT OF THE APPELLANT AND HAS FOUND MANY DISCREPANCIES IN THE SAME FOR THESE TRANSACTIONS. THE AO HAS CONFRONTED THE ABOVE ADVERSE FINDINGS TO THE APPELLANT ON 28 - 03 - 2016. THE AO HAS THUS REACHED TO THE CO NCLUSION THAT THE AMOUNT OF RS.23697101/ - REPRESENTS UNEXPLAINED CASH CREDIT AND TAXED THE SAME U/S 68 OF THE ACT. THE AO HAS RELIED UPON THE DECISION OF THE HON BLE ITAT, DELHI IN THE CASE HARISH WIN CHADDHA VS. DCIT ITA NO.3088, 3098, 3017/DEL/2.005, HON BLE APEX COURT IN THE CASE OF SUMATI DAYAL VS. CIT 214 ITR 801 (SC), DURGA PRASAD VS. CIT, ME DOWELL VS. CTO, CIT VS. MOHAN KALAN. THE AR DURING THE APPELLATE PROCEEDINGS HAS STATED THAT THE SHARES HAVE BEE N SOLD THROUG H THE STOCK EXCHANGE BY MAKING PAYME NT OF SECURITY TRANSACTION TAX. THE AR HAS RELIED UPON THE PAYMENTS MADE THROUGH THE BANKING CHANNELS, SALE AND PURCHASE OF SHARE DONE THROUGH DEMAT ACCOUNT AND CONTRACT NOTES OF THE BROKERS. THE AR HAS RELIED UPON DIFFERENT CASE LAWS OF HON BLE COURTS IN SUPPORT OF HIS SUBMISSION. THE DETAILED SUBMISSION OF THE APPELLANT HAS BEEN REPRODUCED AS ABOVE. THE FACTS OF THE CASE ALONG WITH SUBMISSION OF THE APPELLANT ON THE ABOVE GROUNDS OF APPEAL HAVE BEEN GONE THROUGH. IT IS NOTED THAT THE APPELLANT HAS PURCHA SED PREFERENTIAL SHARES OF TCL TECHNOLOGY ON 21 - 12 - 2010 @ RS.10/ - EACH AND THE SAME HAVE BEEN SOLD DURING ASSESSMENT YEAR 2012 - 13 @ VARYING FROM RS.98/ - TO RS.160/ - PER SHARE FOR A TOTAL CONSIDERATION OF RS.2.37 CRORE. IT HAS BEEN OBSERVED BY THE AO IN THE ASSESSMENT ORDER THAT PRICE OF SHARES OF TCL TECHNOLOGY HAVE INCREASED MANIFOLD TIME WITH EFFECT FROM MARCH, 2012 AS SOON AS THE MANDATORY LOCK - IN PERIOD OF ONE YEAR FROM THE DATE OF PURCHASE OF PREFERENTIAL SHARES HAD EXPIRED. SUCH ABNORMAL INCREASE IN T HE PRICE OF SHARES OF TCL TECHNOLOGY HAS BEEN MORE THAN 8500%. THIS WAS THE PERIOD WHICH HAS AVAILED BY THE APPELLANT TO BOOK EXEMPT LONG TERM CAPITAL GAIN. ON THE PERUSAL OF THE FINANCIAL RESULTS OF TCL TECHNOLOG Y IT IS NOTED THAT IT HAS SHOWN TOTAL INCOM E OF RS.24 LAC AND RS.86 LAC AS ON MARCH, 2011 AND MARCH, 2012 RESPECTIVELY IN THE SHAPE OF OTHER INCOME WITH NIL TURNOVER. EVEN AS ON MARCH, 2013 IT HAS SHOWN TOTAL TURNOVER OF RS.5.56 CRORE WITH OPERATING PROFIT OF RS.37 LAC. IN THE BALANCE SHEET ALSO TH E FUNDS HAVE ONLY BEEN PUT INTO LOANS AND ADVANCES. THEREFORE, THERE IS NO VISIBLE BUSINESS ACTIVITY - BEING DONE BY TCL TECHNOLOGY TO JUSTIFY SUCH ABNORMAL INCREASE IN THE PRICE OF SHARES. THE AO HAS GOT CONDUCTED ENQUIRIES IN THE CASES OF VARIOUS PERSONS 11 WHO HAVE PURCHASED THE ABOVE SHARES OF TCL TECHNOLOGY DURING THE PERIOD MARCH, 2012 TO SEPTEMBER, 2012 WHEN MOST OF THE TRADING HAS TAKEN PLACE AND IT HAS BEEN FOUND THAT MOST OF THE BUYERS EITHER HAVE NOT BEEN FOUND EXISTING AT THE GIVEN ADDRESSES GIVEN O R DO NOT HAVE THE MEANS TO MAKE SUCH LARGE INVESTMENTS IN THE PURCHASE OF SHARES OF TCL TECHNOLOGY. ON E SUCH PURCHASER, SH. SAURABH CHANDRAKANT HAS ADMITTED OF PROVIDING ACCOMMODATION ENTRIES IN THE SHAPE OF BOGUS LONG TERM CAPITAL GAIN. THEREFORE, FROM TH E FACTS AS DISCUSSED BY THE AO IN THE ASSESSMENT ORDER IN DETAIL IT IS NOTED THAT THE AO HAS BROUGHT ON RECORD MATERIAL TO SHOW THAT THE APPELLANT HAS ENTERED INTO A SHAM TRANSACTION BY INTRODUCING CREDIT IN ITS BOOKS OF ACCOUNT IN THE GARB OF BOGUS LONG T ERM CAPITAL GAIN(CLAIMED AS EXEMPT). THE ADVERSE FINDINGS HAVE BEEN CONFRONTED BY THE AO TO THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS. IN THIS CASE IT IS NOTED THAT KEEPING IN VIEW THE SURROUNDING CIRCUMSTANCES AND BY APPLYING THE TEST HUMAN PROBABIL ITIES, THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT REAL IN THIS CASE. RELIANCE IS PLACED ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CIT VS. DURGA PRASAD 82 ITR 540 (SC). THE ONUS WAS ON THE APPELLANT TO EXPLAIN THE SUM FOUND CREDITED IN ITS BOOKS OF ACCOUNT WITH SATISF ACT ORY DOCUMENTARY EVIDENCE. THE APPELLANT HAS NOT DISCHARGED THE ONUS CAST UPON HIM IN THIS REGARD. THE AO HAS SHIFTED THE ONUS ON THE APPELLANT BY CONFRONTING THE ADVERSE FINDINGS. THE AO HAS NOTED IN PARA 3.8.10 OF THE AS SESSMENT ORDER THAT THE SUM HAS BEEN CREDITED BY THE APPELLANT IN THE CAPITAL ACCOUNT FOR THE RELEVANT ACCOUNTING PERIOD AND THEREFORE, IT IS PART OF BOOKS OF ACCOUNT MAINTAINED BY THE APPELLANT. UNDER THE FACTS IT IS HELD THAT THE AO WAS JUSTIFIED TO MAKE ADDITION OF RS.2,36,97,101/ - ON ACCOUNT OF UNEXPLAINED SUM CREDITED IN THE BOOKS OF ACCOUNT OF THE APPELLANT U/S 68 OF THE ACT. THE SAME IS HEREBY CONFIRMED. GROUNDS OF APPEAL NOS.3 TO 7 ARE DISMISSED. 15. AGGRIEVED WITH SUCH ORDER OF CIT(A), THE ASSESSE E IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING FOLLOWING GROUNDS OF APPEAL : - 1 . BECAUSE THE 'CIT(A)' HAS ERRED IN LAW ON FACTS IN HOLDING THAT SELECTION OF CASE THROUGH CASS BEING BASED ON INSTRUCTIONS IS SU ED BY CBDT UNDER SECTION 119 OF THE INCOME TAX ACT, 1 961, HEREINAFTER REFERRED T: AS 'ACT', WAS VALID AND ON THAT BASIS UPHOLDING THE VALIDITY OF NOTICE ISSUED UNDER : ACTION 143(2) AND THE ASSESSMENT ORDER DATED 30.03.2016 PASSED BY THE ITO, WARD - 3T4 SAHARANPUR. 2. BECAUSE SELECTION OF CASE FOR SCRUTINY AS SE SS MENT, NOT BEING BASED ON THE OPINION EXPRESSED BY THE ASSESSING OFFICER IN DUE DISCHARGE OF HIS JUDICIAL AUTHORITY TO DO SO, IT DESERVED TO BE HELD THAT N O NOTI CE UN D ER SECT ION 143(2) HAD BEEN ISSUED AND THE ASSESSMENT ORDER DATED 30.03.2016 STATED T O HAVE BEEN PASSED UNDER SECTION 143(3) IS WHOLLY ILLEGAL. 3. BECAUSE OWING TO VITAL DEFICIENCY IN TH E PROCEEDINGS CAUSED BY NON - 12 '''ISSUANCE OF A VALID NOTICE UNDER SECTION 143(2) THE CIT(A)' SHOULD HAVE HELD THAT THE ADDITION OF RS.2,36,97,101/ - WHICH WAS T HE ONLY VARIATION BETWEEN THE RETUNED INCOME AND 'ASSESSED INCOME' WAS WHOLLY ILLEGAL AN D UNAUTHORIZED TOO. WITHOUT PREJUDICE TO THE AFORESAID 4. BECAUSE THE 'CIT(A)' HAS ERRED IN LAW A N D ON FACTS IN HOLDING THAT THE APPELLANT HAD NOT DISCHARGED THE ONUS C AST UPON HIM IN THE MATTER OF EXPLAINING THE 'SUM FOUND CREDITED IN ITS BOOKS OF ACCOUNT WITH SATISFACTORY DOCUMENTARY EVIDENCE' AND IN UPHOLDING THE ADDITION OF RS.2,36,17,101/ - THAT HAD BEEN MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS CON SI DERATION SECTION 68 OF THE ACT. 5 . BECAUSE ON A DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PARTICULARLY THE A ) OBSERVATIONS MADE IN THE APPELLATE ORDER - TO THE EFFECT THAT THE APPELLANT HAD PURCHASED 158033 SHARES IN TCL TECHNOLOGIES (NAME CHAN GED TO KAYRA LANDSCAPE LTD.) WHICH WERE SOLD FOR A NET CONSIDERATION OF RS.2,36,97,101; B ) SUCH CONSIDERATION STOOD FULLY SUPPOR T ED BY CONTRACT NOTES ISSUED BY THE BROKERS REGISTERED WITH SEBI; C ) SELLING PRICE ON WHICH CONSIDERATION FOR SALE OF SHARES HAD BEEN REALISED, MATCHED FULLY AND WAS IN FACT VERIFIABLE BY THE QUOTATION AT STOCK EXCHANGE; D ) THE TRANSACTION WAS IN PURVIEW OF SE BI T HE MARKET REGULATOR; AND E ) THE MOVEMENT OF SHARES WAS THROUGH D EMAT ACCOUNT; SHOULD HAVE HELD THAT PROVISIONS OF SECTION 68 WERE N OT APPLICABLE IN THE INSTANT CASE AND THE ADDITION MADE BY THE ASSESSING OFFICER WAS WHOLLY ILLEGAL AND UNJUSTIFIED. 6 . BECAUSE, ADVERSE INFERENCE IN THE MATTER C: REALIZATION OF SALE PROCEEDS WAS BASED ON EXTRANEOUS INFORMATION AND STATEMENTS AS REFERRED TO IN THE ORDERS PASSED BY THE AUTHORITIES BELOW AND SUCH INFORMATION COULD NOT HAVE CONSTITUTED MATERIAL FOR THE PURPOSES OF ASSESSMENT OF CONSIDERATION AMOUNTING TO RS.2,36,97,101/ - REALISED ON SALE OF SHARES IN TCL TECHNOLOGIES LTD (NAME CHANGED TO KAYRA L ANDSCAPE LTD.) AND TO TREAT THE SAME AS TAXABLE IN HE HANDS OF THE APPELLANT. - '7 BECAUSE THE CONSIDERATION (GROSS) AGGREG A TING RS.2,37,99,223/ - REALISED ON SALE OF SHARES THAT HAD BEEN HELD BY THE APPELLANT AS LONG TERM CAPITAL ASSET (IN THE FORM OF SHARE S) WAS SUBJECTED TO RECOVERIES MAD ? BY THE REGISTERED BROKER, WHICH INCLUDED SECURITY TRANSACTION TAX (STT) AS PAYABLE TO SEBI THE MARKET REGULATOR WITH REFERENCE TO SALE PRICE, THE SAME WAS LIABLE TO BE TREATED AS EXEMPT UNDER SECTION 10(38) OF THE ACT A ND THE AUTHORITIES BELOW HAVE GROSSLY ERRED UNDER LAW AS WELL AS ON FACTS IN TREATING THE SAME AS INCOME FRO M OTHER SOURCES SIMPLICITOR AND IN SUBJECTING THE SAME TO TAXATION. 8. BECAUSE THE TRANSACTIONS, APART FROM BEING VERIFIABLE FROM STOCK EXCHANGE, S TOOD VERIFIED FROM THE STATEMENTS OF THE BROKERS (WITH WHOM THE APPELLANT HAD DEALT) AND THE CONTRACT NOTES ISSUED BY THEM AND SUCH CONTRACT NOTES NOT BEING FOUND TO BE FALSE, FABRICATED OR NON - EXISTENT EVEN AFTER INDEPENDENT ENQUIRIES MADE BY THE ASSESSIN G OFFICER, THE CONSIDERATION REALISED BY THE APPELLANT COULD NOT HAVE BEEN TREATED DIFFERENTLY THAN WHAT HAD BEEN SHOWN BY IT. 13 9. BECAUSE IN ANY CASE, ADDITION MADE AND SUSTAINED BY THE AUTHORITIES BELOW IS WHOLLY VITIATED AS THE SAME IS SOLELY BASED ON EX TRANEOUS CONSIDERATION/PRESUMPTION OF BAD FAITH, WHICH IS NOT PERMISSIBLE IN LAW. 10. B ECAUSE THE CASE LAWS REFERRED TO AND RELIED UPON BY 'CIT(A)', WHILE UPHOLDING THE ADDITION OF RS.2,36,97,101/ - ARE WHOLLY DISTINGUISHABLE ON FACTS AND THE INFERENCE DRAW N ON THE BASIS OF SUCH CASE LAWS, CANNOT BE SUSTAINED EITHER ON FACTS OR IN LAW. 11. BECASE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 16. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGED THE ORDER OF T HE CIT(A). HE SUBMITTED THAT THE A SSESSEE INVESTED RS. 20 LAKH THROUGH RTGS ON 21.12.2010 FROM HIS S/B ACCOUNT MAINTAINED WITH SHIVALIK MERCANTILE CO - OPERATI VE BANK LTD. IN 2 LAKH EQUITY SHARES OF 10 EACH OF M/S TCL TECHNOLOGIES LTD. (A LISTED COMPANY) U NDER PREFERENTIAL ALLOTMENT SCHEME . THE SHARES WERE ALLOTTED ON 29.12.2010. THE SAID FACT STOOD DULY CONFIRMED AND ESTABLISHED DURING ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER FROM THE ASSESSEE S BANKER AND SO ALSO BY THE BANKER OF M/S TCL TECHNOLOG IES LTD. HE SUBMITTED THAT THE SHARES WERE CREDITED IN THE D - MAT ACCOUNT OF THE ASSESSEE WHICH WAS C ONFIRMED BY THE DEPOSITORY DURING ENQUIRY BY AO. OUT OF THE SHARES SO HELD IN D - MAT FORM , THE ASSESSEE SOLD 1,58,133 SHARES FROM MAY 2012 TO OCTOBER 2012 F OR A PRICE RANGING FROM RS. 98 TO RS. 160 THROUGH ONLINE TRADING THROUGH A REGISTERED STOCK BROKER NAMELY GLOBE CAPITAL MARKET LTD. AND PAYMENT FOR THE SALE PRICE AFTER DEDUCTING SECURITY TRANSACTION TAX, BROKERAGE AND OTHER INCIDENTAL CHARGES WERE RECEIVE D IN HIS BANK ACCOUNT WHICH WAS DULY C ONFIRMED BY THE BROKER IN THE STATEMENT RECORDED BY THE AO. HE SUBMITTED THAT N O DISCREPANCY WHATSOEVER IN ANY OF THE DOCUMENTS FURNISHED BY THE ASSESSEE RIGHT FROM THE PURCHASE OF SHARES TO SALE OF SHARES HAS BEEN POI NTED OUT BY THE ASSESSING OFFICER. R EFERRING TO THE Q.NO. 5 AND IT S ANSWER IN THE STATEMENT OF THE ASSESSEE AS REPRODUCED AT PAGE 40 OF ASSESSMENT ORDER HE SUBMITTED THAT IN THE PRESENT CASE INVESTMENT IN THE PREFERENTIAL ISSUE OF SHARES OF TCL TECHNOLOGIE S LTD., A LISTED COMPANY, WAS MADE BY THE ASSESSEE ON THE ADVICE 14 OF HIS CLOSE RELATIVE NAMELY SH. SRIPAL JAIN IN F.Y. 2010 - 11 FOR WHICH PAYMENT WAS MADE THROUGH HIS REGULAR BANK ACCOUNT WITH SHIVALIK MERCANTILE CO - OPERATIVE BANK ON 21.12.2010 OUT OF FUNDS AVAILABLE WITH THE ASSESSEE. CONSEQUENTLY, SHARES WERE ALLOTTED TO THE ASSESSEE ON 29.12.2010 AND CREDITED TO HIS DEMAT ACCOUNT WITH GLOBAL CAPITAL MARKET LTD. THUS, ACQUISITION AND HOLDING OF SHARES BY THE ASSESSEE IS BEYOND ANY DOUBT. REFERRING TO PAPER BOOK PAGES 190 AND 191 HE SUBMITTED THAT N OTICE U/S 131 WAS ISSUED AND STATEMENT OF SH. SACHIN JAIN AS FRANCHISE OF M/S GLOBE CAPITAL MARKET LTD. WAS RECORDED BY THE ASSESSING OFFICER ON 18.02.2016 WHEREIN HE CONFIRMED TO HAVE EXECUTED THE ORDER FOR SALE OF SHARES. IN RELATION TO ASSESSING OFFICER S OBSERVATION THAT SHARES PURCHASED AT A NOMINAL PRICE HAVE BEEN SOLD AT A VERY HIGH PRICE, ID. AR SUBMITTED FIRSTLY IT IS A MATTER OF RECORD THAT SHARES HAVE BEEN SOLD AT THE RATES, AS WERE PREVAILING ON THE STO CK EXCHANGE AT THE TIME OF SALE; SECONDLY PRICE OF SHARES IN THE SHARE MARKET ARE SENTIMENT DRIVEN; THIRDLY SHARE PRICES OF ALL THE SCRIP S ARE CLOSELY MONITORED BY THE STOCK EXCHANGE AND SEBI; AND LASTLY EVEN IF PRICES HAVE GONE UP ARTIFICIALLY (AS ALLEGED ) THERE IS NO MATERIAL TO HOLD THAT ASSESSEE WAS INVOLVED THEREIN. 15.1 IN RELATION TO STATEMENT OF SHRI SAURABH CHANDRAKANT NAGARSHETH DT. 09.06.2015, HE SUBMITTED THAT SAID STATEMENT DOES NOT REFER TO HIS DEALING IN THE SHARES OF M/S ARICENT INFRA LTD. O R TO THE ASSESSEE S TRANSACTION, THEREFORE, SAID STATEMENT IS NOT RELEVANT FOR DERIVING AN Y POSITIVE OR NEGATIVE INFERENCE AT ALL. IN ANY CASE, IN SPITE OF SPECIFIC REQUEST CROSS - EXAMINATION WAS NOT ALLOWED TO THE ASSESSEE. REFERRING TO VARIOUS DECISIONS H E SUBMITTED THAT NO N GRANTING OF CROSS EXAMINATION REQUEST BY THE ASSESSEE VIOLATES PRINCIPLES OF NATURAL JUSTICE AND ADDITION BASED ON SUCH MATERIAL RENDERS THE ADDITION VOID AND ILLEGAL. 15.2 R EFERRING TO PG. 121 - 199 OF THE PAPER BOOK BEING THE ENQUIRI ES AS WERE MADE BY THE ASSESSING OFFICER FROM VARIOUS ENTITIES I.E. ASSESSEE S BANKER, DEPOSITORY, BROKER AND EVEN THE BANKER OF THE TCL TECHNOLOGIES LTD. ETC. HE SUBMITTED THAT NOTHING ADVERSE WAS FOUND. THEREFORE, ON A DUE 15 CONSIDERATION OF OUTCOME OF INQ UIRY MADE, AO WAS WHOLLY UNJUSTIFIED IN DRAWING ADVERSE INFERENCE BASED ON SUSPICION AND CONJECTURES. SO FAR AS THE VARIOUS CASE LAWS RELIED UPON BY THE ASSESSING OFFICER TO DRIVE HOME HIS CONTENTION AT THE BACK OF PREPONDERANCE OF HUMAN PROBABILITY THAT IT COULD SAFELY AND RATHER INESCAPABLY BE CONCLUDED THAT THE APPELLANT S TRANSACTIONS IN SHARES WAS SHAM, PRE - ARRANGED AND BOGUS IS CONCERNED, ID. AR SUBMITTED THAT THE SAME ARE NOT APPLICABLE IN THE PRESENT CASE AND ARE DISTINGUISHABLE . HE ACCORDINGLY SU BMITTED THAT THE ONUS WHICH LAY UPON THE ASSESSEE UNDER SECTION 68 OF THE ACT TO PROVE THE GENUINENESS OF THE TRANSACTION, THE SOURCE OF THE SUMS RECEIVED AND IDENTITY OF THE PERSON FROM WHOM SUCH SUMS WERE RECEIVED STOOD DULY DISCHARGED AND THE ASSESSING OFFICER AND THE CIT(A) COULD NOT HAVE TERMED HIS EXPLANATION AS UNSATISFACTORY. 15.3 THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE FOLLOWING DECISIONS : - 1. CIT VS. MUKESH RATILAL MAROLIA, ITA NO.456 OF 2007 (BOMBAY) 2 . CIT VS. ARUN KUMAR AGGARWAL (HU F) & ORS, TAX APPEAL NO. 13 OF 2011. (JHARKHAND ) 3 . CIT - I VS. MAHESHCHANDRA G. VAKIL [2013] 40 TAXMANN.COM 326 (GUJARAT) 4 . CIT - I VS. HIMANI M. VAKIL [2014] 41 TADXDMANN.COM 425 (GUJARAT) 5 . DCIT VS. PREMPAL GANDHI ITA NO. 95/2017 ORDER DATED 16.02.2017 (P&H) 6 . SMT . SIKHA DHAWAN VS. ITO VIDE ITA NO.3035/DEL/2018 ORDER DATED 27.06.2018 7 . PRAKASH CHANDRA BHUTORIA VS. ITO VIDE ITA NO.2394/KOL/2017 ORDER DATED 27.06.2018 8 . CIT VS. SUBODH KUMAR JAIN, ITA NO. 474 OF 2009 (ALLAHABAD) 9 . CIT VS. SHYAM SUNDAR AGARWAL ITA NO.533 OF 2009 (ALLAHABAD) 10 . CIT VS. UDIT NARAIN AGRAWAL, ITA 560 OF 2009 (ALLAHABAD) 11 . CIT VS. NEERAJ KUMAR JAIN ITA NO.295 OF 2010 (ALLAHABAD) 16 12 . CIT VS. SMT. SUMITRA DEVI [2014] 49 TAXMANN.COM 37 (RAJASTHAN) 13 . CIT - 13 VS. SHYAM R. PAWAR [2015] 54 TAXMANN.COM 108 (BOMBAY) 14 . STATE OF KARNATAKA VS. SELVI J. JAYALILITHA & ORS. [2017] 392 ITR 97 (SC) 15 . PR. CIT 5 VS. LAXMAN INDUSTRIAL RESOURCES LTD., ITA NO.169 OF 2017 (DELHI) 16 . CIT VS. ANNAMALAIR MILLS [2017] 393 ITR 293 (SC) 17 . MS. AMITA BANSAL VS. CIT REPORTED IN [2017] 98 CCH 012 8 AIIHC (MUMBAI) 18 . ACIT 14 (3) VS. SHRI RAVINDER KUMAR TOSHNIWAL, ITA NO.5302/MUM/2008 (MUMBAI) 19 . ITAT HYDERABAD BENCH ITO VS. SMT. AARTI MITTAL [2014] (HYDERABAD) 20 . ITAT LUCKNOW BENCH IN THE CASE OF ITO VS. SHRI VIJAY KANODIA 21 . SMT. MANJU BKANSAL VS. ITO 1 (1) ITA NO.70/LKW/2011 (LUCKNOW) 22 . TEKCHAND RAMBHIYA HUF VS. ITO ITA NO. 960/MUM/2012 23 . DCIT VS. SUNITA KHEMKA ITA NO.714 TO 718/KOL/2011 24 . ACIT VS. PRADEEP KUMAR AGGARWAL REPORTED [2016] 159 ITD 54 (CHANDIGARH - TRIB.) 25 . HON BLE ITAT MUMBAI IN THE CASE OF FARRAH MA RKER VS. ITO [ MUMBAI ITAT ] 26 . ITO VS. INDRAVADAN JAIN HUF [2016] 47 CCH 0303 MUMTRIB 27 . ACIT VS. SHRI ZIAUDDIN A SIDDQUE, ITA NO.5182 & 5183/MUM/2011 28 . SHRI PRATIK SURYAKANT SHAH & ORS. VS. ITO ITA NO.810 TO 815 & 922 TO 926 /AHD/2015 29 . DOLARRAI HEMANI KOLKATA VS. I TO 30 . ACIT VS. VINEET SURESHCHANDRA AGARWAL [2017] 49 CCH 0003 AHD TRIB 31 . SHRI SUNIL P RAKASH VS. ACIT ITA NO.6494/MUM/2014 32 . SMT. SUNITA JAIN 7 ORS. VS. ITO ITA NO.501 & 502 /AHD/2016 33 . KAMLA DEVI S. DOSHI & ORS. VS. ITO & ORS. [ 2017] CCH 0053 MUM TRIB. 34 . CIT VS. R AJEEV SHARMA [ 2011] 336 ITR 678 35 . OBEETEE PVT. LTD. VS. DY. CIT (ITAT LUCKNOW BENCH) 36 . NANOOMAL GUPTA VS. ACIT (ITAT AGRA BENCH) 17 37 . PRAMOD JAIN & ORS. VS. DY. CIT ORS. (ITAT JAIPUR) 38 . MEENU GOEL VS. ITO (ITAT DELHI) 39 . DR. RAMPRASAD AGGARWAL VS. ITO VIDE ITA NO.4843 /M/2018 ORDER DATED 30.11.2018(MUMBAI D - BENCH) 40 . SOUBHIT GOEL (HUF) VS. ITO AND BATCH OF OTHER APPEALS VIDE ITA NO.2021/DEL/2018 - 2028/DEL/2018 ORDER DATED 25.09.2018 OF DELHI SMC BENCH. 1 6 . THE LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF TH E CIT(A). THE DR RELIED ON THE FOLLOWING DECISIONS : - 1. S ANJAY BIMALCHAND JAIN L/H SHANTIDEV BIMLACHAND VS. PCIT (ITA NO.18/2017 BOMBAY HIGH COU R T (NAGPUR BENCH) 2. ABHIMANYU SOIN VS. ACIT 2018 TIOL 733 ITAT CHD 3. CHAND AN GUPTA VS. CIT [201554 TAXMA N.COM 10 (PUNJAB & HARYANA)/[2015] 229 TAXMAN 173 4 . BALBIR CHAND MAIN I VS. CIT 340 ITR 161 5 . USHA CHANDRESH SHAH VS ITO [2014 TIOL 1459 ITAT MUM] 6 . RATNAKAR M PUJARI VS. ITO [2 - 16 TIOL 1746 ITAT MUM] 7 . ARVIND M KARIYA VS. ACI T (ITA NO.7024/MUM/2010) 8 . HON BLE IT AT MUMBAI IN THE CASE OF ITO VS. SHAMIM M. BHARWANI (2016) (69 TAXMANN.COM 65) 9 . MR. PANKAJ AGARWAL & SONS (HUF) VS. ITO AND BATCH OF OTHER APPEALS VIDE ITA NO.1413/CHNY/2018 1420 /CHNY/2018 ORDER DATED 06.12.2018 10 . SMT. M. K RAJESHWARI VS. ITO VIDE ITA NO. 1723/BANG./2018 ORDER DATED 12.10.2018 1 7 . THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDER SUBMITTED THAT THE VARIOUS DECISIONS RELIED ON BY THE LD. DR ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AND ARE DISTINGUISHABLE ON FACTS. 18 18. SO FAR AS THE DECISION IN THE CASE OF SANJAY BIMLACHAND JAIN (SUPRA) IS CONCERNED HE SUBMITTED THAT THIS IS A JUDGMENT DELIVERED BY SMC BENCH AND FACT WAS THAT PAYMENT FOR ACQUISITION OF SHARES WAS MADE IN CASH WHICH REMAINED UNSUBSTANTIATED AND FINALLY IT WAS HELD BY THE ITAT THAT IT WAS AN ADVENTURE IN THE NATURE OF TRADE. THEREFORE, SURPLUS WAS ASSESSABLE AS INCOME FROM BUSINESS AND PROFESSION UNDER SECTION 28 OF THE ACT. 18.1 . SO FAR AS THE DECISION IN THE CASE OF CHANDAN GUPTA (SUPRA) IS CONCERNED HE SUBMITTED T HAT IN THIS CASE THE FINDING OF FACT WAS THAT ALLEGED CLAIM OF SALE OF SHARES IS FALSE AND CONCOCTED, AS NO ACTUAL PURCHASE OF SHARES TOOK PLACE, WHICH IS NOT THE CASE HERE. 18.2 . SO FAR AS THE DECISION IN THE CASE OF BALBIR CHAND MAINI (SUPRA) IS CONCERN ED HE SUBMITTED THAT IN THIS CASE NOT ONLY PURCHASE OF SHARES REMAINED UNPROVED, SALE OF SHARES WAS ALSO HELD TO HAVE REMAINED UNPROVED AS SHARES CLAIMED TO HAVE BEEN SOLD THROUGH BROKER HAD NOT BEEN TRANSFERRED EVEN AT THE TIME OF MAKING ENQUIRY BY THE A SSESSING OFFICER AND THE SAME CONTINUED TO BE REGISTERED IN THE NAME OF THE ASSESSEE. 18.3 . SO FAR AS DECISION IN THE CASE OF USHA CHANDRESH SHAH (SUPRA) IS CONCERNED, HE SUBMITTED THAT IN THIS CASE, PAYMENT FOR PURCHASE OF SHARES WAS NOT MADE BY CHEQUE B UT CLAIMED TO HAVE BEEN ADJUSTED AGAINST SPECULATION PROFIT AND BALANCE AMOUNT IN CASH. FURTHER, PURCHASE OF SHARES COULD NOT BE CROSS VERIFIED BY THE ASSESSING OFFICER AND SHARES WERE D - MATED JUST PRIOR TO SALE THEREOF. THUS ONUS TO PRODUCE NECESSARY EV IDENCES TO CONNIVANCE THAT THE SHARES WERE PURCHASED AND SOLD AT PRICES CLAIMED WAS NOT DISCHARGED BY THE ASSESSEE. IT WAS UNDER SUCH CIRCUMSTANCES, APPEAL OF THE ASSESSEE WAS DISMISSED BY THE TRIBUNAL. 19 18.4 . SO FAR AS THE DECISION IN THE CASE OF RATNAKA R M. PUJARI (SUPRA) IS CONCERNED, HE SUBMITTED THAT IN THIS CASE APART FROM VARIOUS OTHER DISCREPANCIES, PURCHASE OF SHARES WAS MADE IN CASH, ASSESSEE WAS NOT A REGULAR INVESTOR IN SHARES AND PURCHASE OF SHARES WAS TREATED AS BOGUS EVEN IN EARLIER YEAR I.E . A.Y. 200 5 - 06 AND THE SAID FINDING HAS ATTAINED FINALITY. HOWEVER, IN THE PRESENT CASE, NO SUCH INFIRMITY HAS BEEN FOUND OR POINTED OUT BY THE ASSESSING OFFICER. 18. 5. SO FAR AS THE DECISION IN THE CASE OF SMT. M. K RAJESHWARI IS CONCERNED. HE SUBMITTED THAT THE ASSESSEE DID NOT PURCHASE SHARES DIRECTLY FROM THE STOCK MARKET AND HAS PURCHASED THE SAME OFF LINE AND THROUGH AN INTERMEDIARY. SIMILARLY IN THE CASE OF PANKAJ AGRAWALA AND SONS HUF (SUPRA) IS CONCERNED THE ASSESSEE NEVER CHALLENGED THE FINDIN GS GIVEN BY THE ASSESSING OFFICER AND SIMPLY CHALLENGED NON GRANTING OF OPPORTUNITY TO CROSS EXAMINE THE WITNESS. THEREFORE, THIS DECISION ALSO CANNOT RELIED UPON. THE VARIOUS OTHER DECISIONS RELIED ON BY THE LD. DR ARE ALSO DISTINGUISHABLE ON FACTS. HE ACCORDINGLY SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) BE DELETED. 19. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THE ASSESSEE IN THE INSTANT CASE HAS CLAIMED EXEMPTION OF RS.2,21,23,710./ - U/S 10 (38) OF THE IT ACT IN RESPECT OF LONG TERM CAPITAL GAIN ON SALE OF SHARES OF M/S. KYRA LANDSCAPES LIMITED WHICH WAS EARLIER KNOWN AS M/S. TCL TECHNOLOGY LIMITED. WE FIND THE ASSESSING OFFICER ON THE BASIS OF ELABORAT E ENQUIRIES MADE FROM THE BANK ER S OF THE ASSESSEE COMPANY, COMPANY ALLOTTING THE SHARES AND OTHER SHAREHOLDERS, SEBI AND THE REPORT OF THE INVESTIGATION WING ETC CAME TO THE CONCLUSION THAT THE AMOUNT OF RS.2,36,97,101/ - REPRESENTS UNEXPLAINED CASH CREDIT TO BE TAXED U/S 68 OF THE IT ACT 1961. WE FIND THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER, THE REASONS OF WHICH 20 ARE ALREADY REPRODUCED IN THE PRECEDING PARAGRAPH. IT IS THE SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE T HAT THE ASSESSEE HAS INVESTED AN AMOUNT OF RS. 20 LACS THROUGH RTGS ON 2 1 ST DECEMBER, 2010 FROM HIS SAVINGS BANK ACCOUNT MAINTAINED WITH SHIVALIK MERCANTILE COOPERATIVE BANK LTD. IN M/S. TCL TECHNOLOGY LIMITED AGAINST WHICH TWO LAC EQUITY SHARES OF RS.10 / - EACH UNDER PREFERENTIAL ALLOTMENT SCHEME WERE ALLOTTED ON 2 9 .12.201 0 . THE SHARES SO ALLOTTED WERE CREDITED IN THE DE - MA T ACCOUNT OF THE ASSESSEE IN DUE COURSE AND OUT OF SHARES SO HELD IN THE DE - MAT ACCOUNT, T HE ASSESSEE SOLD 1,58, 0 33 SHARES FROM MA Y , 2 012 TO OCTOBER, 2012 FOR A PRICE RANGING FROM RS. 98/ - TO RS. 160/ - THROUGH ONLINE TRADING THROUGH REGISTERED STOCK BROKER NAMELY M/S. GLOBE MARKET LIMITED. IT IS ALSO HIS SUBMISSION THAT THE PAYMENT OF THE SALE PRICE AFTER DEDUCTION TOWARDS STT, BROKERAGE AND OTHER INCIDENTAL CHARGES WERE CREDITED TO HIS BANK ACCOUNT AND NO DISCREPANCIES WHATSOEVER WERE FOUND B Y THE ASSESSING OFFICER IN RESPECT OF VARIOUS DOCUMENTS PRODUCED B EFORE HIM. THEREFORE, ACCORDING TO HIM MERELY ON THE BASIS OF SUSPICION AND SU RMI SE, N O ADDITION CAN BE MADE U/S 68 OF THE IT ACT. 2 0 . WE FIND SOME FORCE IN THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE . I T IS AN ADMITTED FACT THAT 2,00,000 EQUITY SHARES OF RS. 10/ - EACH OF M/S. TCL TECHNOLOGY LIMITED WERE PURCHASED BY TH E ASSESSEE FOR RS.20 LAC WHICH WERE PAID THROUGH RTGS ON 21.12.2010 FROM HIS SAVINGS BANK ACCOUNT MAINTAINED WITH SHIVALIK MERCANTILE CO - OPERATIVE BANK LIMITED. THE SHARES WERE DULY CREDITED TO THE D - MAT ACCOUNT OF THE ASSESSEE AND ON BEING ENQUIRED BY TH E ASSESSING OFFICER IT WAS DULY CONFIRMED BY THE DEPOSITORY THAT THE SALES ARE OUT OF THE SHARES SO HELD IN THE D - MAT ACCOUNT. WE FIND THE ASSESSEE HAS SOLD 1,58,033 SHARES FROM RS.98 TO RS.160/ - DURING THE PERIOD FROM MAY 2012 TO OCTOBER, 2012 TH ROUGH ON LINE TRADING THROUGH A REGISTERED STOCK BROKER NAMELY GLOBE CAPITAL MARKET LIMITED. TH ERE IS ALSO NO DISPUTE TO THE FACT THAT THE SALE PROCEEDS OF THE SHARES WERE CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE AFTER DEDUCTING STT, BROKERAGE 21 AND OTHER INCID ENTAL CHARGES. UNDER THESE CIRCUMSTANCES THE QUESTION THAT ARISES IS AS TO WHETHER THE PURCHASE AND SALE TRANSACTION ENTERED INTO BY THE ASSESSEE ID GENUINE OR NOT I N VIEW OF THE ASTRONOMICAL HIGH PRICES OF THE SH A RES OF A NON DESCRIPT COMPANY. 21 . WE FI ND MERIT IN T HE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE SHARES HAVE BEEN S OLD AT THE RATE AS PREVAILING ON THE STOCK EXCHANGE AT THE TIME OF SALE AND THE SHARE PRICES OF ALL THE SCRIP ARE CLOSELY MONITORED BY THE STOCK EXCHANGE AND SEBI. EVEN IF THE PRICES HAVE GONE UP ARTIFICIALLY AS ALLEGED BY THE REVENUE AUTHORITIES , HOWEVER , THERE IS NO MATERIAL TO HOLD THAT THE ASSESSEE WAS INVOLVED THEREIN. IT IS ALSO AN ADMITTED FACT THAT ALTHOUGH THE ASSESSING OFFICER HAD MADE ENQUIRIES FROM VARIOUS ENTITIES I.E. ASSESSEE S BANKER, DEPOSITORY, BROKER AND THE BANKER OF M/S. TCL TECHNOLOGIES LIMITED , H OWEVER, NOTHING ADVERSE HAVE BEEN FOUND . T HERE IS NO ADVERSE FINDING BY SEBI IN RELATION TO THE SCRIP IN QUESTION HAS BEEN GIVEN TO THE ASSESSING OFFICER . F URTHER IN RESPONSE TO NOTICE U/S 131 SH. SACHIN JAIN , FRENCHISE OF M/S. GLOBE CAPITAL MARKET LTD, APPEARED BEFORE THE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED WHEREIN HE HAS CONFIRMED TO HAVE EXECUTED THE ORDER FOR SALE OF SHARES. THERE FORE, MERELY ON THE BASIS OF PREPONDERANCE OF HUMAN PROBABILITIES THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE WITHOUT DISPROVING THE VARIOUS DOCUMENTS FILED BY THE ASSESSEE . 2 2 . W E FIND THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MUK ESH RATILAL MAROLIA, IN ITA NO.456/DEL /2007 ORDER DATED 07.09.2011 HAS OBSERVED AS UNDER : - 3 THE ASSESSEE WAS CARRYING ON BUSINESS OF MANUFACTURING HANDKERCHIEFS AS THE PROPRIETOR OF RUMAL MANUFACTURING COMPANY. IN THE ASSESSMENT YEAR IN QUESTION THE ASSE SSEE CLAIMED THAT HE HAD SOLD THE SHARES OF FOUR COMPANIES, NAMELY, M/S ALANG INDUSTRIAL GASES LTD., MOBILE TELECOMMUNICATION LTD., M/S 22 RASHEL AGROTECH LTD. AND M/S. SENTIL AGROTECH LTD, WHICH WERE PURCHASED DURING THE YEAR 1999 - 2000 AND 2000 - 2001. THE ENT IRE SALE CONSIDERATION AMOUNTING TO RS. 1,41,08,484/ - WA S UTILI Z ED FOR THE PURCHASE OF A FLAT AT COLABA, MUMBAI AND ACCORDINGLY BENEFI T OF SECTION 54E OF THE INCOME TAX ACT, 1961 WAS CLAIMED. 4 THE ASSESSING OFFICER HAS HELD THAT NEITHER THE PURCHASE NOR SALE OF SHARES WERE GENUINE AND THAT THE AMOUNT OF RS. 1,41,08,484/ - STATED TO HAVE BEEN RECEIVED BY ASSESSEE ON SALE OF SHARES WAS UNDISCLOSED INCOME AND ACCORDINGLY MA DE A DDITION UNDER SECTION 69 OF THE INCOME TAX ACT, 1961. THE APPEAL FILED BY THE ASSESS EE WAS DISMISSED BY CIT (A). 5 ON FURTHER AP PEAL, THE ITAT BY THE IMPUGNED ORDER ALLOWED THE CLAIM OF THE ASSESSEE BY RECORDING THAT THE PURCHASE OF SHARES DURING THE YEAR 1999 - 2000 AND 2000 - 2001 WERE DULY RECORDED IN THE BOOKS MAINTAINED BY THE ASSESSEE. THE ITAT HAS RECORDED A FINDING THAT THE SOURCE OF FUNDS FOR ACQUISITION OF THE SHARES WAS THE AGRICULTURAL INCOME WHICH WAS DULY OFFERED AND ASSESSED TO TAX IN THOSE ASSESSMENT YEARS. THE ASSESSEE HAS PRODUCED CERTIFICATES FROM THE AFORESAID FOUR COMPANI ES TO THE EFFECT THAT THE SHARES WERE IN - FACT TRANSFERRED TO THE NAME OF THE ASSESSEE. IN THESE CIRCUMSTANCES, THE DECISION OF THE ITAT IN HOLDING THAT THE ASSESSEE HAD PURCHASED SHARES OUT OF THE FUNDS DULY DISCLOSED BY THE ASSESSEE CANNOT BE FAULTED. 6 SIMILARLY, THE SALE OF THE SAID SHARES FOR RS. 1,41 , 08, 4 8 4 / - THROUGH TWO BROKERS NAMELY, M/S RICHMOND SECURITIES PVT. LTD AND M/S. SCORPIO MANAGEMENT CONSULTANTS PVT. LTD. CAN NOT BE DISPUTED BECAUSE THE FACT THAT THE ASSESSEE HAS RECEIVED THE SAID AMOUNT I S NOT IN DISPUTE. IT IS NEITHER THE CASE OF THE REVENUE THAT THE SHARES IN QUESTION ARE STILL LYING WITH THE ASSESSEE NOR IT IS THE CASE OF THE REVENUE THAT THE AMOUNTS RECEIVED BY THE ASSESSEE ON SALE OF THE SHARES IS MORE THAN WHAT IS DECLARED BY THE AS SESSEE. THOUGH THERE IS SOME DISCREPANCY IN THE STATEMENT OF THE DIRECTOR OF M/S. RICHMAND SECURITIES PVT LTD. REGARDING THE SALE TRANSACTION, THE TRIBUNAL RELYING ON THE STATEMENT OF THE EMPLOYEE OF M/S. RIMCHAND SECURITIES PVT. LTD. THAT THE SALE TRANSA CTION WAS GENUINE. 7 IN THESE CIRCUMSTANCES, THE DECISION OF THE ITAT IN HOLDING THAT THE PURCHASE AND SALE OF SHARES ARE GENUINE AND THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN HOLDING THAT THE AMOUNT OF RS. 1,41,08,484/ - REPRESENTED UNEXPLAINE D INVESTMENT UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 CANNOT BE FAULTED. 23 7 . IN THE RESULT, WE SEE NO MERIT IN THIS APPEAL AND THE SAME IS DISMI SSED WITH NO ORDER AS TO COSTS. 2 3 . WE FIND THE HON BLE JHARKAND HIGH COURT AT RANCHI IN THE CASE OF CI T VS. ARUN KUMAR AGARWAL (HUF) & ORS, TAX APPEAL NO. 13 OF 2011, SINCE REPORT IN [2013] DTR (JHARKHAND) 219 ORDER DATED 13.07.2012 OBSERVED AS UNDER : - 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE PARTIES AND WE ARE OF THE CONSIDE RED OPINION THAT THE LEARNED ASSESSING OFFICER WAS MUCH INFLUENCED BY THE ENQIURY REPORT WHICH MAY HAS BEEN BROUGHT ON RECORD BY THE EFFORTS OF THE ASSESSING OFFICER AND THAT ENQUIRY REPORT WAS PREPARED BY THE SEBI AND FROM THE OBSERVATIONS MADE BY THE ASS ESSING OFFICER HIMSELF, IT IS CLEAR THAT AFTER GETTING THAT ENQUIRY REPORT, THE SEBI PRIMA FADE FOUND INVOLVEMENT OF SOME OF THE SHARE BROKERS IN UNFAIR TRADE PRACTICES. EVEN IN A CASE WHERE THE SHARE BROKER WAS FOUND INVOLVED IN UNFAIR TRADE PRACTICE AND WAS INVOLVED IN LOWERING AND RISING OF THE SHARE PRICE, AND ANY PERSON, WHO HIMSELF IS NOT INVOLVED IN THAT TYPE OF TRANSACTION, IF PURCHASED THE SHARE FROM THAT BROKER INNOCENTLY AND BONAFIDELY AND IF HE SHOW HIS BONAFIDE IN TRANSACTION BY SHOWING RELEVAN T MATERIAL, FACTS AND CIRCUMSTANCES AND DOCUMENTS, THEN MERELY ON THE BASIS OF THE REASON THAT SHARE BROKER WAS INVOLVED IN DEALING IN THE SHARE OF A PARTICULAR COMPANY IN COLLUSION WITH OTHERS OR IN THE MANNER OF UNFAIR TRADE PRACTICES AGAINST THE NORMS O F S.E.B.I AND STOCK EXCHANGE, THEN MERELY BECAUSE OF THAT FACT A PERSON WHO BONAFIDELY ENTERED INTO SHARE TRANSACTION OF THAT COMPANY THROUGH SUCH BROKER THEN ONLY BY MERE ASSUMPTION SUCH TRANSACTIONS CANNOT BE HELD TO BE A SHAME TRANSACTION. FACT OF TINTE D BROKER MAY BE RELEVANT FOR SUSPICION BUT IT ALONE NECESSARILY DOES LEAD TO CONCLUSION OF ALL TRANSACTION OF THAT BROKER AS TINTED. IN SUCH CIRCUMSTANCES, FURTHER ENQUIRY IS NEEDED AND THAT IS FOR INDIVIDUAL CASE. SUCH FURTHER ENQUIRY WAS NOT CONDUCTED IN THAT CASE. 11 . AT THIS JUNCTURE, IT WOULD BE RELEVANT TO MENTION HERE THAT IT IS NOT DISPUTED BY THE REVENUE BEFORE US THAT THE SHARES OF THESE ASSESSEES WERE ALREADY SHOWN IN THE EARLIER BALANCE SHEET SUBMITTED BY THE ASSESSEES, AND THEREFORE, IN THAT SITUAT ION, HOW THE REVENUE CONDEMNED THE TRANSACTION EVEN ON THE GROUND OF STEEP RISE IN THE SHARES. IF WITHIN A PERIOD OF ONE YEAR, THE SHARE PRICE HAS RISEN FROM RS.5 TO 55 AND FROM 9 TO 160 AND ONE PERSON WAS HOLDING THE SHARES MUCH PRIOR TO THAT START OF RIS E OF THE SHARE, THEN HOW IT CAN BE INFERRED THAT SUCH PERSON ENTERED INTO SHAM TRANSACTION FEW YEARS AGO AND PREPARED FOR GETTING THE BENEFIT AFTER FEW YEARS WHEN THE SHARE WILL START RISING 24 STEEPLY. IN PRESENT CASE EVEN THERE WAS NO REASON FOR SUCH SUSPIC ION WHEN THE SHARES WERE PURCHASED YEARS BEFORE THE UNUSUAL FLUCTUATION IN THE SHARE PRICE. HERE IN THIS CASE, WE HAVE GIVEN EXAMPLE OF ONE OF THE TAX APPEAL WHEREIN THE SHARES WERE PURCHASED IN THE YEAR 2004 AND WERE SOLD IN THE YEAR 2006, WHICH IS SAID T O BE ONE OF THE CASE WHEREIN THE GAP IN THE PURCHASE AND SALE OF THE SHARES WAS NARROWEST. IN OTHER CASES AS WE HAVE NOTICED FROM THE VARIOUS ORDERS OF THE C.I.T(APPEALS) THAT, THE SHARES OF SOME OF THE COMPANIES WERE PURCHASED BY THE ASSESSEES EVEN FIVE Y EARS AGO FROM THE TIME OF SALE AND THOSE PURCHASERS WERE ALREADY DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE, THEN FROM ANY ANGLE, IT IS PROVED THAT THE ASSESSEE HAD HELD THE SHARES MUCH PRIOR TO 12 MONTHS OF THE SALE OF THE SHARES. 2 4 . WE FIND THE HO N BLE GUJARATA HIGH COURT IN THE CASE OF CIT - I VS. MAHESHCHANDRA G. VAKIL [201 3 ] 4 0 TAXMAN.COM 326 (GUJARAT) HAS OBSERVED AS UNDER : - 5. IN THE LIGHT OF THE ABOVE FINDINGS OF FACT RECORDED BY THE TRIBUNAL, IT IS NOT POSSIBLE TO STATE THAT THE VIEW ADOPTED BY THE TRIBUNAL IS, IN ANY MANNER, UNREASONABLE OR PERVERSE. BESIDES, THE LEARNED COUNSEL FOR THE APPELLANT IS NOT IN A POSITION TO SHOW THAT THE TRIBUNAL HAS PLACED RELIANCE UPON ANY IRRELEVANT MATERIAL OR THAT ANY RELEVANT MATERIAL HAS BEEN IGNORED, NOR IS HE ABLE TO POINT OUT ANY MATERIAL TO THE CONTRARY SO AS TO DISLODGE THE CONCURRENT FINDINGS OF FACT RECORDED BY THE TRIBUNAL. UNDER THE CIRCUMSTANCES, THE IMPUGNED ORDER BEING BASED UPON CONCURRENT FINDINGS OF FACT RECORDED BY THE TRIBUNAL UPON APPRECI ATION OF THE EVIDENCE OF RECORD, DOES NOT GIVE RISE TO ANY QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTION OF LAW SO AS TO WARRANT INTERFERENCE. THE APPEAL IS, ACCORDINGLY, DISMISSED. 2 5 . WE FIND THE HON BLE GUJARATA HIGH COURT IN THE CASE OF CIT - I V S. HIMAN M. VAKIL [2014] 41 TAXMAN.COM 425 (GUJARAT) HAS OBSERVED AS UNDER : - 4. AS CAN BE SEEN FROM THE IMPUGNED ORDER, THE TRIBUNAL, AFTER APPRECIATING THE EVIDENCE ON / RECORD, HAS FOUND THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE HAD EXPLAINED THAT THE PURCHASE TRANSACTIONS WERE MADE ON THE 'ONLINE TRADING SYSTEM' AND THESE TRANSACTIONS WERE GENUINE. EARLIER, THAT IS PRIOR TO 1 - 4 - 2005, IT WAS NOT COMPULSORY FOR THE CLIENT TO HAVE HIS OWN TRANSACTION RECORD UNDER SEBI GUIDELINES. THEREFORE, THE PURCHA SES EARLIER WERE MADE USING THE BROKER S CODE, AND IT WAS FOR THIS REASON THAT THE BROKER HAD USED THE 'SELF CODE'. SINCE THE SHARES WERE SOLD AFTER 1 - 4 - 2005, THE TRANSACTIONS WERE NOT UNDER THE BROKER'S CODE. AS REGARDS SERVICE - TAX AND STAMP CHARGES THE C ONTRACT NOTE OF THE BROKER CLEARLY MENTIONED THAT THE BROKERAGE WAS INCLUSIVE OF SERVICE TAX ETC. IN THE CASE OF THE SELLING BROKER THE SERVICE TAX SECURITIES TRANSACTION TAX AND EDUCATION CESS WERE SEPARATELY 25 MENTIONED. AS REGARDS THE POINT RAISED BY THE ASSESSING OFFICER THAT THERE WAS ABSENCE OF BROKER - CLIENT AGREEMENT, THE TRIBUNAL ACCEPTED THE SUBMISSION OF THE ASSESSEE THAT THE GENUINENESS OF THE TRANSACTIONS WAS ALREADY PROVED BY THE CONTRACT NOTES FOR SALE AND PURCHASE, THE BANK STATEMENT OF THE BRO KER, THE DEMAT ACCOUNT SHOWING TRANSFER IN AND OUT OF SHARES, AS ALSO ABSTRACT OF TRANSACTIONS FURNISHED BY THE CSE. THE TRIBUNAL, AFTER APPRECIATING THE EVIDENCE ON RECORD, CONCURRED WITH THE FINDINGS RECORDED BY THE COMMISSIONER (APPEALS) THAT THE ASSESS EE HAD FURNISHED COMPLETE DETAILS WHICH WERE NOT FOUND FALSE OR BOGUS BY THE ASSESSING OFFICER AND THAT IT WAS ONLY ON SUSPICION THAT THE ASSESSING OFFICER HAD TREATED THE CAPITAL GAIN DECLARED BY THE ASSESSEE AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. IN THE LIGHT OF THE AFORESAID FINDINGS OF FACT RECORDED BY IT, THE TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE. 5. IN THE LIGHT OF THE ABOVE FINDINGS OF FACT RECORDED BY THE TRIBUNAL, IT IS NOT POSSIBLE TO STATE THAT THE VIEW ADOPTED BY THE TRIB UNAL IS, IN ANY MANNER, UNREASONABLE OR PERVERSE. BESIDES, THE LEARNED COUNSEL FOR THE APPELLANT IS NOT IN A POSITION TO SHOW THAT THE TRIBUNAL HAS PLACED RELIANCE UPON ANY IRRELEVANT MATERIAL OR THAT ANY RELEVANT MATERIAL HAS BEEN IGNORED, NOR IS HE ABLE TO POINT OUT ANY MATERIAL TO THE CONTRARY SO AS TO DISLODGE THE CONCURRENT FINDINGS OF FACT RECORDED BY THE TRIBUNAL. UNDER THE CIRCUMSTANCES, THE IMPUGNED ORDER BEING BASED UPON CONCURRENT FINDINGS OF FACT RECORDED BY THE TRIBUNAL UPON APPRECIATION OF THE EVIDENCE OF RECORD, DOES NOT GIVE RISE TO ANY QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTION OF LAW SO AS TO WARRANT INTERFERENCE. THE APPEAL IS, ACCORDINGLY, DISMISSED. 2 6 . WE FIND THE HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PREM PAL GA NDHI (SUPRA) HAS OBSERVED AS UNDER : - 2. THE FOLLOWING QUESTIONS OF LAW HAVE BEEN RAISED: - (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN LAW IN UPHOLDING THE ORDER OF THE C1T(A) DELETING THE A DDITION 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 SHOWING THEIR PURCHASE PRICE AT RS.11,00,000/ - AND SALE CONSIDERATION AT RS. 4,23,45,295/ - WITHIN A PERIOD OF LE SS THAN TWO YEARS/PURCHASES OF SHARES MADE IN CASH NOT CHEQUE THAT TOO BEFORE SHARES GOT DEMATERIALIZED / WORTH OF THE COMPANY AT THE TIME OF PURCHASE./ SALE OF SHARES NOT PROVED ALL SUGGEST NON - GENUINENESS OF THE SAID TRANSACTION ? (II) WHETHER ON TH E FACTS AND CIRCUMSTANCES OF THE CASE, THE HON BLE INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN LAW IN UPHOLDING THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS.4,11,77,474/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHAM SHARE TRANSACTIONS, WHEREAS T HE CIT(A) HIMSELF HAD HELD THAT THE ASSESSEE HAD NOT BEEN ABLE TO SUBSTANTIATE THE SOURCE OF INVESTMENT OF RS.11,00,000/ - IN THE SAID SHARES PURCHASED DURING THE FINANCIAL YEAR 2005 - 06 AND THE ASSESSING OFFICER WAS DIRECTED TO REOPEN THE 26 CASE OF THE ASSESS EE FOR THE ASSESSMENT YEAR 2006 - 07 ON THIS ISSUE ? (III) WHETHER THE HON BLE ITAT HAS ERRED IN IGNORING AN IMPORTANT ASPECT THAT IN SUCH CASES OF SHAM TRANSACTION OF SHARES SHOWING ABNORMAL HIKE IN THEIR VALUE, WHERE THE FACTS THEMSELVES SPEAK LOUD AND CLE AR, THE ASSESSING OFFICER IS JUSTIFIED TO EVEN DRAW AN INFERENCE FROM THE ATTENDANT CIRCUMSTANCES ? (IV) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON BLE INCOME TAX APPELLATE TRIBUNAL HAS ERRED IN LAW IN UPHOLDING THE ORDER OF THE CIT (A) DELETING THE ADDITION OF RS. 12,59,000 MADE BY THE AO ON THE BASIS OF SEIZED DOCUMENT ON THE GROUNDS THAT THE ASSESSING OFFICER HAS NOT POINTED OUT AS TO HOW THE FIGURE OF RS. 12.59 LACS HAS WORKED OUT IGNORING THE FACT THAT THE ASSESSEE HIMSELF IN HI S REPLY TO THE ASSESSING OFFICER HAD TRIED TO EXPLAIN THE SOURCE OF THE RECEIPTS OF RS.12,59,000/ - INSTEAD OF CHALLENGING THE WORKING OUT OF THE SAID FIGURE BY THE ASSESSING OFFICER ? 3 . THE FIRST THREE QUESTIONS OF LAW RAISED IN THIS ..SPEED ARE COVERED AG AINST THE APPELLANT BY AN ORDER AND JUDGMENT OF A DIVISION BENCH OF THIS COURT DATED 16.02.2017 IN ITA - 18 - 2017 TITLED AS THE PR. COMMISSIONER OF INCOME TAX (CENTRAL), LUDHIANA SH. HITESH GANDHI, BHATTI COLONY, CHANDIGARH ROAD, NAWANSHAHAR. 4 . THE ISSUE IN SHO RT IS THIS: THE ASSESSEE PURCHASED SHARES OF A COMPANY DURING THE ASSESSMENT YEAR 2006 - 2007 AT ' 11/ - AND SOLD THT SAME IN THE ASSESSMENT YEAR 2008 - 2009 AT ' 400/ - PER SHARE. IN THE ABOVE CASE, NAMELY, ITA - 18 - 2017 ALSO THE ASSESSEE HAD PURCHASED AND SOLD T HE SHARES IN THE SAME ASSESSMENT YEARS. THE ASSESSING OFFICER IN BOTH THE CASES ADDED THE APPRECIATION TO THE ASSESSEES INCOME ON THE SUSPICION THAT THESE WERE FICTITIOUS TRANSACTIONS AND THAT THE APPRECIATION ACTUALLY REPRESENTED THE ASSESSEES INCOME FR OM UNDISCLOSED SOURCES. IN ITA - 18 - 2017 ALSO THE CIT (APPEALS) AND THE TRIBUNAL HELD THAT THE ASSESSING OFFICER HAD NOT PRODUCED ANY EVIDENCE WHATSOEVER IN SUPPORT OF THE SUSPICION. ON THE OTHER HAND, ALTHOUGH THE APPRECIATION IS VERY HIGH, THE SHARES WERE TRADED ON THE NATIONAL STOCK EXCHANGE AND THE PAYMENTS AND RECEIPTS WERE ROUTED THROUGH THE BANK. THERE WAS NO EVIDENCE TO INDICATE FOR INSTANCE THAT THIS WAS A CLOSELY HELD COMPANY AND THAT THE TRADING ON THE NATIONAL STOCK EXCHANGE WAS MANIPULATED IN ANY MANNER. 5 . QUESTION (IV) HAS BEEN DEALT WITH IN DETAIL BY THE CIT (APPEALS) AND THE TRIBUNAL. FIRSTLY, THE DOCUMENTS ON WHICH THE ASSESSING OFFICER RELIED UPON IN THE APPEAL WERE NOT PUT TO THE ASSESSEE DURING THE ASSESSEE DURING THE ASSESSEE PROCEEDINGS. THE CIT (APPEALS) NEVERTHELESS 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 APPRECIATION OF FACTS. THERE IS NOTHING TO INDICATE THAT THE SAME W AS PERVERSE OR IRRATIONAL. ACCORDINGLY, NO QUESTION OF LAW ARISES. 6 . IN THE RESULT CIRCUMSTANCES, THE APPEAL IS DISMISSED. 2 7 . WE FIND THE CO - ORDIANTE BENCH OF THE TRIBUNAL IN THE CASE OF SMT. SHIKHA DHAWAN (SUPRA) HAS DELETED SIMILAR ADDITION BY OBSERV ING AS UNDER : - 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE PLACED SUFFICIENT DOCUMENTARY E. .DEUCES BEFORE THE AO WHICH ARE COPY OF THE SHARES CERTIFICATES WITH TRANSFER FORM, COPY OF DEBIT NOTE ISSU ED BY SHREEJI BROKING (P) LTD., COPY OF CASH RECEIPT OF SHREEJI BROKING (P) LTD., COPY OF THE ACCOUNT STATEMENT OF THE ASSESSEE IN THE BOOKS OF THE BROKER, COPY OF LEDGER ACCOUNT OF INDUS PORTFOLIO (P) LTD., COPY OF EVIDENCE FOR PAYMENT OF SECURITIES TRANS ACTION TAX AND COPY OF THE BANK STATEMENT OF THE ASSESSEE TO SHOW THAT THE ASSESSEE HAD ENTERED INTO GENUINE TRANSACTION OF PURCHASE OF SHARE WHICH WERE LATER ON SOLD THROUGH THE BROKER ON RECOGNIZED STOCK EXCHANGE AFTER 27 PAYMENT OF STT. THE CLAIM OF THE AS SESSEE FOR SALE OF SHARES HAS BEEN SUPPORTED BY THE DOCUMENTARY EVIDENCES WHICH HAVE NOT BEEN REBUTTED BY THE AUTHORITIES BELOW. WHATEVER INQUIRY WAS CONDUCTED IN THE CASES OF OTHER PARTIES AND STATEMENT RECORDED OF SEVERAL PERSONS NAMELY SH. ANIL KHEMKA, SH. SANJAY VOHRA AND SH. BIDYOOT SARKAR AS REFERRED IN THE ASSESSMENT ORDER AND THE REPORT OF THE INVESTIGATION WING WERE NOT CONFRONTED TO THE ASSESSEE AND ABOVE STATEMENTS WERE ALSO NOT SUBJECT TO CROSS - EXAMINATION ON BEHALF OF THE ASSESSEE. THEREFORE, S UCH EVIDENCES CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. THE ORDER OF 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, THE NAME OF THE ASSESSEE HAS NOT BE EN REFERRED TO. LD. COUNSEL FOR THE ASSESSEE, THEREFORE, RIGHTLY CONTENDED THAT THE TWIN CONDITIONS OF SECTION 10(38) OF THE ACT HAVE BEEN SATISFIED IN THE PAGE I 24 IT A NO.3035/DEL/2018 CASE OF THE ASSESSEE. THE ASSESSEE HAS BEEN ABLE TO PROVE THAT SHE H AS ENTERED INTO THE GENUINE TRANSACTION OF PURCHASE AND SALE OF SHARES AND THE SALE CONSIDERATION IS RECEIVED FROM BROKER THROUGH BANKING CHANNEL. THE BROKERS HAVE NOT DENIED THE TRANSACTION WITH THE ASSESSEE. THE ASSESSEE ROOTED THE TRANSACTION OF SALE OF SHARES THROUGH RECOGNIZED STOCK 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 HON'BLE P& H HIGH COURT IN THE CASE OFPR.CIT W PREM PAL GANDHI(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 GAEL VS ITO (SUPRA) FOLLOWED BY JUDGMENT OF JURISDICTIONAL P&H HIGH COURT WHICH IS BINDING. THERE I S NO OTHER MATERIAL AVAILABLE ON RECORD TO REBUT 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 DELETE THE ADDITION OF RS. 19,51,357/ - . THE APPEAL OF THE ASSESSEE IS, ACCORDINGLY, ALLOWED. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 2 8 . WE FIND THE KOLKATA BENCH OF THE T RIBUNAL IN THE CASE OF PRAKASH CHAND BHUTORIA (SUPRA) HAS DEALT WITH IDENTICAL ISSUE WHERE THE LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF SHARES OF M/S UNNO INDUSTRIES LTD. WAS DENIED BY THE ASSESSING OFFICER ON THE BASIS OF REPORT OF THE INVESTIGATION W ING OF KOLKATA AND THE ID. C1T(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. ON FURTHER APPEAL BY THE ASSESSEE, THE TRIBUNAL DELETED THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 BY OBSERVING AS UNDER : - 8. A PERUSAL OF THE ORDER OF THE AO DEMONSTRAT E: THAT THIS ADDITION WAS MADE MERELY ON 'SUSPICION' AND IN A ROUTINE AND MECHANICAL MANNER. THIS IS CLEAR FROM THE FACT THAT THE AO REFERS TO SOME 'SHARP TRADING COMPANY' AS ONE OF THE MAIN ,MANIPULATED COMPANY AND WHEREAS THE ASSESSEE SOLA SCRIPS IN UNN O INDUSTRIES LTD. THE AO REFERS TO VARIOUS ENQUIRIES MADE BY 'THE DIRECTORS OF INCOME TAX' , KOLKATA ON PROJECT BASIS AND THAT THIS RESULTED INTO UNEARTHING OF A HUGE SYNDICATE OF ENTRY OPERATORS AND SHARE BROKERS AND MONEY LENDERS INVOLVED IN PROVIDING OF BOGUS ACCOMMODATION ENTRIES. THE REPORT AS THE SO - CALLED PROJECT AND THE EVIDENCE COLLECTED BY THE DIT (INV.), KOLKATA ETC HAVE NOT BEEN BROUGHT ON RECORD. IT IS WELL SETTLED THAT ANY DOCUMENT RELIED UPON BY THE AO FOR MAKING AN ADDITION HAS TO BE SUPPLIE D TO THE ASSESSEE AND AN OPPORTUNITY SHOULD BE PROVIDED TO THE ASSESSEE TO REBUT 28 THE SAME. IN THIS CASE, GENERAL STATEMENTS HAVE BEEN MADE BY THE AO AND THE ADDITION IS MADE BASED ON SUCH GENERALIZATIONS. THE ASSESSEE HAS NOT BEEN CONFRONTED WITH ANY OF TH E EVIDENCE COLLECTED IN THE INVESTIGATION DONE BY THE DIT(INV.), KOLKATA. EVIDENCE COLLECTED FROM THIRD PARTIES CANNOT BE USED AGAINST THE ASSESSEE WITHOUT GIVING A COPY OF THE SAME TO THE ASSESSEE AND THEREAFTER GIVING HIM AN OPPORTUNITY TO REBUT THE SAME . 9 . THE AO FURTHER RELIES ON THE SHOP INCREASE OF 31000% OF THE VALUE OF SHARES OVER THE PERIOD OF 2 YEARS. THOUGH THIS IS HIGHLY SUSPICIOUS, IT CANNOT TAKE THE PLACE OF EVIDENCE. THE HON'BLE SUPREME COURT HAS STATED THAT SUSPICION HOWEVER STRONG CANNOT BE T HE BASIS FOR MAKING AN ADDITION. THE EVIDENCE PRODUCED BY THE ASSESSEE LISTED ABOVE PROVES HIS CASE AND THE AO COULD NOT CONTROVERT THE SAME BY BRINGING ON RECORD ANY EVIDENCE. THE EVIDENCE SAID TO HAVE BEEN COLLECTED BY THE DIT (TNV.), KOLKATA AND THE REP ORT IS NOT PRODUCED BEFORE THIS BENCH. 10 . I NOW DISCUSS THE CASE LAW ON THE SUBJECT. THE H ON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT, KOLKATA - IIT VS. SMT. SHREYASHI GAR.:. - SPURTED IN [2012] (9) TMI 1113 HELD AS FOLLOWS: '1. WHETHER ON THE FACTS AND CIRC UMSTANCES OF THE CASE, THE ORDER OF THE LD. TRIBUNAL IS PERVERSE IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH .WHIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961, BY IGNORING THE FACTS ON RECORD. TH E ID. TRIBUNAL AFTER CONSIDERING THE MATE RIP AND HEARING CAME TO A FACT FINDING WHICH IS AS FOLLOWS: THE ASSESSING OFFICER HAS DOUBTED THE TRANSACTION SINCE THE SELLING BROKER WAS SUBJECTED TO SEBI S ACTION. HOWEVER, THE DEMAT ACCOUNT GIVEN THE STATEMEN T OF TRANSACTIONS FROM 01.04.2004 TO 31.03.2005 I.E. RELEVANT FOR THE ASSESSMENT YEAR UNDER APPEAL (2005 - 06) ARE BEFORE US. THERE CANNOT BE ANY DOUBT ABOUT THE TRANSACTION AS HAS BEEN OBSERVED BY THE ASSESSING OFFICER. THE TRANSACTIONS WERE AS PER NORMS UNDER CONTROLLED BY THE SECURITIES TRANSACTION TAX, BROKERAGE SERVICE TAX AND CESS, WHICH WERE ALREADY PAID. THEY WERE COMPLIED WITH. ALL THE TRANSACTIONS WERE THROUGH BANK. THERE IS NO IOTA OF EVIDENCE OVER THE ABOVE TRANSACTIONS AS IT WERE THROUGH DEM AT FORMAT. HENCE, WE AGREE WITH THE GIVEN FINDINGS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) IN ACCEPTING THE TRANSACTIONS AS GENUINE TOO. IN VIEW OF THE FACT FINDINGS WE CANNOT REAPPRECIATE, RECORDING IS SUCH, CANNOT BE SAID TO BE PERVERSE AS IT IS NOT FACT FINDING OF THE LD. TRIBUNAL ALONE. THE COMMISSIONER OF INCOME TAX CAME TO THE SAME FACT FINDING. CONCURRENT FACT FINDING ITSELF MAKES THE STORY OF PERVERSITY, UNBELIEVABLE. THE 'D' BENCH OF THE KOLKATA TRIBUNAL IN THE CASE OF GAUTAM KUMAR P INCHA VS. ITO, IN I.T.A. NO. 569/KOL/2017 DATED 15.11.2017 AT PARA 19 ONWARDS HELD AS FOLLOWS: ( I ) M/S CLASSIC GROWERS LTD. VS. CIT [ITA NO. 129 OF 2012] (CAT HC) - IN THIS CASE THE ID AO FOUND THAT THE FORMAL EVIDENCES PRODUCED BY THE ASSESSEE TO SUPPORT HUG E LOSSES CLAIMED IN THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES WERE STAGE MANAGED. THE HON'BLE HIGH COURT HELD THAT THE OPINION OF THE AO THAT THE ASSESSEE GENERATED A SIZEABLE AMOUNT OF LOSS OUT OF PREARRANGED TRANSACTIONS SO AS TO REDUCE THE QUANTUM OF INCOME LIABLE FOR TAX MIGHT HAVE BEEN THE VIEW EXPRESSED BY THE ID AO BUT HE MISERABLY FAILED TO SUBSTANTIATE THAT. THE HIGH COURT HELD THAT THE TRANSACTIONS WERE AT THE PREVAILING PRICE AND THEREFORE THE SUSPICION OF THE AO WAS MISPLACED AND NOT SUBST ANTIATED. 29 ( II ) CIT V. LAKSHMANGARH ESTATE & TRADING CO. LIMITED [2013] 40 TAXMANN.COM 439 (CAL) - IN THIS CASE THE HON'BLE CALCUTTA HIGH COURT HELD THAT ON THE BASIS OF A SUSPICION HOWSOEVER STRONG IT IS NOT POSSIBLE TO RECORD ANY FINDING OF FACT. AS A MATTER OF FACT SUSPICION CAN NEVER TAKE THE PLACE OF PROOF. IT WAS FURTHER HELD THAT IN ABSENCE OF ANY EVIDENCE ON RECORD, IT IS DIFFICULT IF NOT IMPOSSIBLE, TO HOLD THAT THE TRANSACTIONS OF BUYING OR SELLING OF SHARES WERE COLOURABLE TRAM., - OR WERE RESORTED TO WITH ULTERIOR MOTIVE. ( III ) CIT V. SHREYASHI GANGULI [ITA NO. 196 OF 2012 ] (CAL HC) - IN THIS CASE THE HON'BLE CALCUTTA HIGH COURT HELD THAT THE ASSESSING OFFICER DOUBTED THE TRANSACTIONS SINCE THE SELLING BROKER WAS SUBJECTED TO SEBI'S ACTION. HOWEVER THE TRA NSACTIONS WERE AS PER NORMS AND SUFFERED STT, BROKERAGE, SERVICE TAX AND CESS. THERE IS NO IOTA OF EVIDENCE OVER THE TRANSACTIONS AS IT WERE REFLECTED IN DEMAT ACCOUNT. THE APPEAL FILED BY THE REVENUE WAS DISMISSED. (V) CIT V. ANDAMAN TIMBERS INDUSTRIES LIMITED [ITA NO. 721 OF2008[ (CAL H C) - IN THIS CASE THE HON'BLE CALCUTTA HIGH COURT AFFIRMED T HE DECISION OF THIS TRIBUNAL WHEREIN THE LOSS SUFFERED BY THE ASSESSEE WAS ALLOWED SINCE THE AO FAILED TO BRING ON RECORD ANY EVIDENCE TO SUGGEST THAT THE SALE O F SHARES BY THE ASSESSEE WERE NOT GENUINE. (VI) CIT V. BHAGWATI PRASAD AGARWAL [2009 - TMI - 3473S (CAL HC) IN ITA NO. 22 OF 2009 DATED 29.4.2009] - IN THIS CASE THE ASSESSEE CLAIMED EXEMPTION OF INCOME FROM LONG TERM CAPITAL GAINS. HOWEVER, THE AO, BASED ON THE INFORMATION RECEIVED BY HIM FROM CALCUTTA STOCK EXCHANGE FOUND THAT THE TRANSACTIONS WERE NOT RECORDED THEREAT. HE THEREFORE HELD THAT THE TRANSACTIONS WERE BOGUS. THE HON'BLE JURISDICTIONAL HIGH COURT, AFFIRMED THE DECISION OF THE TRIBUNAL WHEREIN IT WAS FOUND THAT THE CHAIN OF TRANSACTIONS ENTERED INTO BY THE ASSESSEE HAVE BEEN PROVED, ACCOUNTED FOR, DOCUMENTED AND SUPPORTED BY EVIDENCE. IT WAS ALSO FOUND THAT THE ASSESSEE PRODUCED THE CONTRACT NOTES, DETAILS OF DEMAT ACCOUNTS AND PRODUCED DOCUMENTS S HOWING ALL PAYMENTS WERE RECEIVED BY THE ASSESSEE THROUGH BANKS. ON THESE FACTS, THE APPEAL OF THE REVENUE WAS SUMMARILY DISMISSED BY HIGH COURT. 8 . 4 . IN THE LIGHT OF THE DOCUMENTS STATED I.E. (I TO XIV) IN PARA 6(SUPRA) WE FIND THAT THERE IS ABSOLUTELY NO ADVE RSE MATERIAL TO IMPLICATE THE ASSESSEE TO HAVE ENTERED GAMUT OF UNFOUNDED/UNWARRANTED ALLEGATIONS LEVELED BY THE AO AGAINST THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION HAS NO LEGS TO STAND AND THEREFORE HAS TO FALL. WE TAKE NOTE THAT THE ID. DR COULD NOT CONTROVERT THE FACTS SUPPORTED WITH MATERIAL EVIDENCES WHICH ARE ON RECORD AND COULD ONLY RELY ON THE ORDERS OF THE AO/CIT(A). WE NOTE THAT IN THE ABSENCE OF MATERIAL/EVIDENCE THE ALLEGATIONS THAT THE ASSESSEE/BROKERS GOT INVOLVED IN PRICE RIGGING/MANIPUL ATION OF SHARES MUST THEREFORE ALSO FAIL. AT THE COST OF REPETITION, WE NOTE THAT THE ASSESSEE HAD FURNISHED ALL RELEVANT EVIDENCE IN THE FORM OF BILLS, CONTRACT NOTES, DEMAT STATEMENT AND BANK ACCOUNT TO PROVE THE GENUINENESS OF THE TRANSACTIONS RELEVANT TO PURCHASE AND SALE OF SHARES RESULTING IN LONG TERM CAPITAL GAIN. THESE EVIDENCES WERE NEITHER FOUND BY THE AO NOR BY THE ID. CIT(A) TO BE FALSE OR FICTITIOUS OR BOGUS. 7NE FACTS OF THE CASE AND THE EVIDENCE IN SUPPORT OF THE EVIDENCE CLEARLY SUPPORT THE A.AIM OF THE ASSESSEE THAT THE TRANSACTIONS OF THE ASSESSEE WERE GENUINE AND THE ANTE: R ITIES BELOW WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE THAT INCOME FROM LTCG IS EXEMPTED U/S 10(38) OF THE ACT. FOR COMING TO SUCH A CONCLUSION WE RELY O N THE DECISION OF THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF M/S. ALIPINE INVESTMENTS IN ITA NO.620 OF 2008 DATED 26 TH AUGUST, 2008 WEHREIN THE HIGH COURT HELD AS FOLLOWS : - IT APPEARS THAT THERE WAS LOSS AND THE WHOLE TRANSACTIONS WERE SUPPORTED BY THE 30 CONTRACT NOTES, BILLS AND WERE CARRIED OUT THROUGH RECOGNIZED STOCK BROKER OF THE CALCUTTA STOCK EXCHANGE AND ALL THE BILLS WERE RECEIVED FROM THE SHARE BROKER THROUGH ACCOUNT PAYEE WHICH ARE ALSO FILED IN ACCORDANCE WITH THE ASSESSMENT. IT APPE ARS FROM THE FACTS AND MATERIALS PLACED BEFORE THE TRIBUNAL AND AFTER EXAMINING THE SAME, THE TRIBUNAL ALLOWED THE APPEAL BY THE ASSESSEE. IN DOING SO THE TRIBUNAL HELD THAT THE TRANSACTIONS CANNOT BE BRUSHED ASIDE ON SUSPICION AND SURMISE. HOWEVER, IT WAS HELD THAT THE TRANSACTIONS OF THE SHARES ARE GENUINE. THEREFORE, WE DO NOT FIND THERE IS ANY REASON OF THE SHARES ARE GENUINE. THEREFORE, WE DO NOT FIND THAT THERE IS ANY REASON TO HOLD APPEAL BEING ITA NO. 620 OF 2008 IS DISMISSED. 8 . 5 . WE NOTE THAT T HE ID. AR CITED PLETHORA OF THE CASE LAWS TO BOLSTER HIS CLAIM WHICH ARE NOT BEING REPEATED AGAIN SINCE IT HAS ALREADY BEEN INCORPORATED IN THE SUBMISSIONS OF THE ID. AR (SUPRA) AND HAVE BEEN DULY CONSIDERED BY US TO ARRIVE AT OUR CONCLUSION. THE ID. DR CO ULD NOT BRING TO OUR NOTICE ANY CASE LAWS TO SUPPORT THE IMPUGNED DECISION OF THE ID. CIT(A)/AO. IN THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE ID. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF SALE PROCEEDS OF THE SHARES AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. WE, THEREFORE, DIRECT THE AO TO DELETE THE ADDITION. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ' THE 'A' BENCH OF THE KOLKATA TRIBUNAL IN THE CASE OF LTO VS. SHALEEN KHEMANI IN L.T.A. NO. I945/KOL/2014 DATED 18.10.2017 AT PARA 9.1. TO 9.4 HELD AS FOLLOWS: 9 . 1 WE FURTHER FIND THAT THE TRANSACTION OF SALE OF SHARES BY THE ASSESSEE WAS DULY BACKED BY ALL EVIDENCES INCLUDING CONTRACT NOTES, DEMAT STATEMENT, BANK ACCOUNT REFLECTING THE TRANSACTIONS , THE STOCK BROKERS HAVE CONFIRMED THE TRANSACTIONS, THE STOCK EXCHANGE HAS CONFIRMED THE TRANSACTIONS, THE SHARES HAVE BEEN SOLD ON THE ONLINE PLATFORM OF THE STOCK EXCHANGE AND EACH TRADE OF SALE OF SHARES WERE HAVING UNIQUE TRADE NO. AND TRADE TIME. IT IS NOT THE CASE THAT THE SHARES WHICH WERE SOLD ON THE DATE MENTIONED IN THE CONTRACT NOTE WERE NOT TRADED PRICE ON THAT PARTICULAR DATE. THE ID AO DOUBTED THE TRANSACTIONS DUE TO THE HIGH RISE IN THE STOCK PRICE BUT FOR THAT, THE ASSESSEE COULD NOT BE BLA MED AND THERE WAS NO EVIDENCE TO PROVE THAT THE ASSESSEE OR ANY ONE ON HIS BEHALF WAS MANIPULATING THE STOCK PRICES. THE STOCK EXCHANGE AND SEBI ARE THE AUTHORITIES APPOINTED BY THE GOVERNMENT OF INDIA TO ENSURE THAT THERE IS NO STOCK RIGGING OR MANIPULAT ION. THE ID AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THESE AGENCIES HAVE ALLEGED ANY STOCK ANY STOCK MANIPULATION AGAINST THE ASSESSEE AND OR THE BROKERS AND OR THE COMPANY. IN ABSENCE OF ANY EVIDENCE IT CANNOT BE SAID THAT MERELY BECAUSE T HE STOCK PRICE MOVED SHARPLY, THE ASSESSEE WAS TO BE BLAMED FOR BOGUS TRANSACTIONS. IT IS ALSO TO BE SEEN THAT IN THIS CAR - . THE SHARES WERE HELD BY THE DONORS FROM 2003 AND SOLD IN 2010 THUS THERE WAS A HOLDING PERIOD OF 7 YEARS AS PER SECTION 49 OF THE A CT AND IT CANNOT BE SAID THAT THE ASSESSEE AND THE DONORS WERE MAKING SUCH PLANS FOR THE LAST 7 YEARS TO RIG THE STOCK PRICE TO GENERATE BOGUS CAPITAL GAINS THAT TOO WITHOUT ANY EVIDENCES WHATSOEVER. 9 . 2 IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE AND / OR THE STOCK BROKER M/S P DIDWANIA & CO AND TOSHITH SECURITIES P LTD., BOTH REGISTERED SHARE AND STOCK BROKERS WITH CALCUTTA STOCK EXCHANGE HAD CONFIRMED THE TRANSACTION AND HAVE ISSUED LEGALLY VALID CONTRACT NOTES UNDER THE LAW AND SUCH CONTRACT NOTES ARE AV AILABLE IN PAGES 41 - 52 OF THE PAPER BOOK. WE FIND THAT THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF PR CIT VS RUNGTA PROPERTIES PRIVATE LIMITED ITAT NO 105 OF 2016 DATED 8TH MAY 2017 IN A SIMILAR ISSUE DISMISSED THE APPEAL OF THE DEPARTMENT BY 31 MAKING THE FOLLOWING OBSERVATIONS: (11) ON THE LAST POINT, THE TRIBUNAL HELD THAT THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORDS ANY MATERIAL TO SHOW THAT THE TRANSACTIONS IN SHARES OF THE COMPANY INVOLVED WERE FALSE OR FICTITIOUS. IT IS FINDING OF THE ASSESSING O FFICER THAT THE SCRIPS OF THIS COMPANY WAS EXECUTED BY A BROKER THROUGH CROSS DEALS AND THE BROKER WAS SUSPENDED FOR SOME TIME. IT IS ASSESSEE'S CONTENTION ON THE OTHER THAT EVEN THOUGH THERE ARE ALLEGATIONS AGAINST THE BROKER, BUT FOR THAT REASON ALONE TH E ASSESSEE CANNOT BE HELD LIABLE. ON THIS POINT THE TRIBUNAL HELD - 'AS A MATTER OF FACT THE AO DOUBTED THE INTEGRITY OF THE BROKER OR THE MANNER IN WHICH THE BROKER OPERATION AS PER THE STATEMENT OF ONE OF THE DIRECTORS OF THE BROKER FIRM AND ALSO AO OBSE RVED THAT ASSESSEE HAD NOT FURNISHED ANY EXPLANATION IN RESPECT OF THE INTENTION OF SHOWING TRADING OF SHARES ONLY IN THREE PENNY STOCKS. AO RELIED THE LOSS OF RS.25,30,396/ - ONLY ON THE BASIS OF INFORMATION SUBMITTED BY THE STOCK FICTITIOUS. AO HAS ALSO N OT DOUBTED THE GENUINENESS OF THE DOCUMENTS PLACED ON RECORD BY THE ASSESSEE. AO'S OBSERVATION AND CONCLUSION ARE MERELY BASED ON THE INFORMATION REPRESENTATIVE. THEREFORE ON SUCH BASIS NO DISALLOWANCE CAN BE MADE AND ACCORDINGLY WE FIND NO INFIRMITY IN TH E ORDER OF ID. C1T(A), WHO HAS RIGHTLY ALLOWED THE CLAIM OF ASSESSEE. THUS GROUND NO. 1 OF THE REVENUE IS DISMISSED. ' WE AGREE WITH THE REASONING OF THE TRIBUNAL ON THIS POINT ALSO. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER. THE SUGGE STED QUESTIONS, IN OUR OPINION DO NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. 9 . 3 . WE THEREFORE HOLD THAT THERE IS ABSOLUTELY NO ADVERSE MATERIAL TO IMPLICATE THE ASSESSEE TO THE ENTIRE GAMUT OF UNWARRANTED ALLEGATIONS LEVELED BY THE ID AO AGAINST THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION, HAS NO LEGS TO STAND IN THE EYES OF LAW. WE FIND THAT THE LD. DR COULD NOT CONTROVERT THE ARGUMENTS OF THE LD. AR WITH CONTRARY MATERIAL EVIDENCES ON RECORD AND MERELY RELIED ON THE ORDERS OF THE LD. ASSESSING OFFICER. WE FIND THAT THE ALLEGATION THAT THE ASSESSEE AND / OR BROKERS GETTING INVOLVED IN PRICE RIGGING OF SOICL SHARES FAILS. IT IS ALSO A MATTER OF RECORD THAT THE ASSESSEE FURNISHED ALL EVIDENCES IN THE FORM OF BILLS, CONTRACT NOTES, DEMAT STATEMENTS AND THE BAN K ACCOUNTS TO PROVE THE GENUINESS OF THE TRANSACTIONS RELATING TO PURCHASE AND SALE OF SHARES RESULTING IN LTCG. THESE EVIDENCES WERE NEITHER FOUND BY THE LD. ASSESSING OFFICER TO BE FALSE OR FABRICATED. THE FACTS OF THE CASE AND THE EVIDENCES IN SUPPORT OF THE ASSESSEE S CASE CLEARLY SUPPORT THE CLAIM OF THE ASSESSEE THAT THE TRANSACTIONS OF THE ASSESSEE WERE BONAFIDE AND GENUINE AND THEREFORE THE LD. ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE ASSESSEE S CLAIM OF EXEMPTION UNDER SECTION 10 (38) OF THE ACT. WE ALSO FIND THAT THE LD. CIT (A) RIGHTLY RELIED ON THE DECISION OF HON BLE HIGH COURT AT CALCUTTA IN THE CASE OF ALPINE INVESTMENTS IN ITA NO. 620 OF 2008 DATED 26 TH AUGUST 2008 WHEREIN THE HON BLE COURT HELD AS FOLLOWS : IT APPEARS FROM THE FACTS AND MATERIALS PLACED BEFORE THE TRIBUNAL AND AFTER EXAMINING THE SAME THE TRIBUNAL CAME TO THE CONCLUSION AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. IN DOING SO, THE TRIBUNAL HELD THAT THE TRANSACTION FULLY SUPPORTED BY THE DOCUMENTARY EVIDENCES COULD NOT BE BRUSHED ASIDE ON SUSPICION AND SURMISES. HOWEVER, IT WAS HELD THAT THE TRANSACTIONS OF SHARE ARE GENUINE. THEREFORE, WE DO NOT FIND THAT THERE IS ANY REASON TO HOLD THAT THERE IS ANY SUBSTANTIAL QUESTION OF LAW INVOLVED IN THIS MATTER. HENCE, THE APPEAL BEING ITA NO. 620 OF 2008 IS DISMISSED. ' 32 9 . 4 . WE ALSO FIND THAT THE VARIOUS OTHER CASE LAWS OF HON'BLE JURISDICTIONAL HIGH COURT AND OTHER CASE LAWS ALSO RELIED UPON BY THE ID AR AND FINDINGS GIVEN THEREON WOULD APPLY TO THE FACTS OF THE INSTANT CAS E. THE ID DR WAS NOT ABLE TO FURNISH ANY CONTRARY CASES TO THIS EFFECT. HENCE WE HOLD THAT THE ID AO WAS NOT JUSTIFIED IN ASSESSING THE SALE PROCEEDS OF SHARES OF SOICL AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT AND THEREFORE WE UPHOLD THE ORD ER OF THE ID CITA AND DISMISS THE APPEAL OF THE REVENUE. ACCORDINGLY THE GROUNDS REUSED BY THE REVENUE ARE DISMISSED.' APPLYING THE PROPOSITION OF LAW LAID DOWN IN ALL THE ABOVE REFERRED CASES, THE FACTS OF THIS CASE, I FIND FORCE IN THE SUBMISSION OF THE ASSESSEE AND THERE ARE BACKED BY EVIDENCE. I ALSO FIND THAT THE REVENUE HAS NOT BASED ITS FINDING ON IN ANY EVIDENCE. IN VIEW OF THE ABOVE DISCUSSION THE ADDITION MADE U/S 68 OF THE ACT IS HEREBY DELETED. 2 9 . THE VARIOUS OTHER DECISIONS RELIED ON THE LD . COUNSEL FOR THE ASSESSEE ALSO SUPPORT HIS CASE. UNDER THESE CIRCUMSTANCES AND IN VIEW OF OUR ABOVE DISCUSSION WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE A CT WHICH HAS BEEN SUSTAINED BY THE CIT(A) IS NOT JUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION . THE GROUND S RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 30 . IN THE RESULT, T HE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 15 . 0 1 .201 9 . SD/ - SD/ - ( SUCHITRA KAMBLE ) ( R. K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* DATE: - 15 . 01 .201 9 COPY FORWARDED TO: 1 . APPELLANT 2 . RE SPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 33 DATE OF DIC TATION 20.1 2 .2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 15.01.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 15.01.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE A SSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER