Smt. Prabhaben Prakashbhai Patel (Gami), Surat V. The Income Tax Officer, Ward-2(3)(3), Surat

ITA 3497/AHD/2015

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2924 (ITAT-SURAT)
• Duration Of Justice: 5 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 15-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Gift; Income from undisclosed sources; Cost of acquisition; Accommodation entries
• Section: 143(1); 13; 148; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO.3497/AHD/2015 (AY 2007-08) (H EARING IN VIRTUAL COURT) SMT.PRABHABEN PRAKASHBHAI PATEL(GAMI), 33, INTERCITY TOWNSHIP, NR. KIRAN MOTORS, PUNA KUMBHARIYA ROAD, SURAT. PAN : ADLPP 8556 E VS THE INCOME TAX OFFICER, WARD-2(3)(3), SURAT. APPLICANT RESPONDENT ASSESSEE BY SHRI MANISH J.SHAH AR REVENUE BY MS. ANUPAMA SINGLA SR.DR DATE OF HEARING 16.03.2021 DATE OF PRONOUNCEMENT 14 .0 6 .2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD.COMMISSIONER OF INCOME TAX(APPEALS)-1, SURAT DATED 23.10.2015, WHICH IN TURN ARISES AGAINST THE ASSESSMENT ORDER DATED 30.01.2015 PASSED UNDER SECTION 144 R.W.S. 147 OF THE ACT FOR THE ASSESSMENT YEAR (AY) 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE C.I.T.(APPEALS) HAS ERRED IN UPHOLDING THE NOTICE OF REOPENING U/S.148 WHILE HE OUGHT TO HAVE HELD THAT THE REOPENING IS BAD IN LAW AND THE SAME IS WITHOUT JURISDICTION. 2. THE CIT(APPEALS) HAS ERRED IN LAW IN CONFIRMING THE DISALLOWANCE OF RS.12,37,886/-. ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ALLEGED TO ENGAGE IN THE JOB WORK OF DIAMONDS. THE ASSESSEE FILED RETURN OF INCOME FOR A.Y. 2007-08 ON 29.10.2017 DECLARING INCOME OF RS.3,62,840/-. INITIALLY, THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND WAS ACCEPTED. SUBSEQUENTLY, THE CASE OF ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT. NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 26.03.2014, WHICH WAS SERVED ON 29.03.2014. IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE REPLIED ON 09.04.2014 STATING THEREIN THAT ORIGINAL RETURN FILED ON 29.10.2007 MAY BE TREATED AS RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSING OFFICER (AO) RECORDED THAT REASONS RECORDED WERE PROVIDED TO THE ASSESSEE ON 29.05.2014. THE ASSESSEE RAISED OBJECTION AGAINST THE REOPENING VIDE LETTER DATED 30.06.2014 AGAIN REOPENED. OBJECTION OF ASSESSEE WAS DISPOSED OF BY SPEAKING ORDER ON 23.09.2014. 3. THE AO IN THE REASONS RECORDED THAT INFORMATION WAS RECEIVED FROM CHIEF COMMISSIONER OF INCOME TAX (CCIT)(CENRAL-1, MUMBAI) THAT ASSESSEE IS ONE OF THE BENEFICIARIES WHO HAVE TAKEN ACCOMMODATION ENTRY FROM MAHASAGAR GROUP FOR THE A.Y. 2007-08. THE PERSON WHO WAS MANAGING VARIOUS COMPANIES MANAGED AND CONTROLLED BY MUKESH CHOKSI. THE INVESTIGATION WING OF MUMBAI MADE A SEARCH ACTION, WHEREIN MUKESH CHOKSI IN THE ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 3 STATEMENT RECORDED UNDER SECTION 132 ADMITTED THAT HE AND HIS GROUP WERE ENGAGED IN FRAUDULENT BILLING ACTIVITIES FOR PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF SPECULATION PROFITS LESS LOSS, SHORT TERM CAPITAL GAIN, LONG TERM CAPITAL GAIN, PROFIT/LOSS IN COMMODITY TRADING, INTRODUCTION OF SHARE CAPITAL, SHARE APPLICATION MONEY OR MONEY IN THE FORM OF GIFT. AS PER INFORMATION, THE ASSESSEE HAS RECEIVED ACCOMMODATION ENTRY OF RS.24,36,530/-. THE SAID INFORMATION WAS NOT KNOWN TO THE DEPARTMENT AT THE TIME OF ORIGINAL ASSESSMENT. THUS, THE INCOME TO THE TUNE OF RS.24,36,530/- HAD ESCAPED ASSESSMENT ON ACCOUNT OF ACCOMMODATION ENTRIES RECEIVED BY THE ASSESSEE. AS NOTED ABOVE, THE AO AFTER DISPOSING OF OBJECTION AGAINST THE REOPENING ISSUED VARIOUS QUESTIONNAIRES TO THE ASSESSEE AS RECORDED IN PARA 2 OF THE ASSESSMENT ORDER. THE AO NOTED THAT THE ASSESSEE HAS PROVIDED PARTIAL DETAILS OF ACTIVITIES UNDERTAKING BY ASSESSEE, HOWEVER, NO COMPLETE DETAILS ABOUT THE TAX FREE CAPITAL GAIN WAS PROVIDED. FROM THE RECORD OF THE ASSESSEE, THE AO NOTED THAT ASSESSEE PURCHASED 13,000/- OF COMPANY NAMELY TALENT INFOWAY FOR RS.44,548/- THROUGH ACCOMMODATION BILL ISSUED BY ALLIANCE INTERMEDIARIES AND NETWORK PRIVATE LIMITED IN THE MONTH OF JULY 2005. THE SAME SHARES WERE SOLD BY ASSESSEE IN THE MONTH OF FEBRUARY 2007 FOR A CONSIDERATION OF RS.24,80,975/-. THE ASSESSEE MADE HER AFFAIR IN SUCH A THAT THE SHARES WERE SOLD AFTER ONE YEAR TO SHOW LONG TERM CAPITAL GAIN ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 4 (LCG) TO AVOID THE PAYMENT OF TAX. THE LD.AO ISSUED A DETAILED SHOW CAUSE NOTICE AS RECORDED IN PARA 4.2 VIDE SHOW CAUSE NOTICE DATED 20.01.2015. THE AO IN THE SHOW CAUSE NOTICE NOTED THAT ON VERIFICATION OF COMPUTATION OF INCOME, THE ASSESSEE HAS SHOWN SALE CONSIDERATION OF SAID SHARES OF AT RS.12,37,886/- WHEREAS AS PER INFORMATION RECEIVED BY DEPARTMENT, THE SALE CONSIDERATION IS OF RS.24,80,975/-. THE ASSESSEE WAS ASKED TO EXPLAIN SUCH DISCREPANCIES. THE AO NOTED THAT NO FURTHER REPLY WAS FURNISHED DESPITE FIXING THE DATE OF HEARING ON VARIOUS DATES. THE AO ON THE BASIS OF DETAILS FURNISHED BY ASSESSEE AND ON THE BASIS OF INFORMATION CCIT (INVESTIGATION) MUMBAI, TREATED THE SALE CONSIDERATION AS RS.24,80,975/- AS UNACCOUNTED INCOME OF ASSESSEE. IN THE ASSESSMENT ORDER, DATED 31.02.2015 PASSED UNDER SECTION 144 R.W.W 147 OF THE ACT. 4. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE CHALLENGED THE VALIDITY OF REOPENING AS WELL AS ADDITION OF RS.24,80,975/-. THE LD.CIT(A) UPHELD THE VALIDITY OF REOPENING. HOWEVER, ON MERIT, THE LD.CIT(A) HELD THAT THE LD.AO ERRONEOUSLY ADDED RS.24,80,975/- AS THE ASSESSEE FURNISHED THE EVIDENCE OF ACTUAL RECEIPT OF RS.12,37,886/-, THUS, THE LD.CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESSEE AND UPHELD THE ADDITION TO THE EXTENT OF RS.12,37,886/-. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 5 5. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. SR. DEPARTMENTAL REPRESENTATIVE (SR.DR) FOR THE REVENUE AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. GROUND NO.1 RELATES TO VALIDITY OF REOPENING UNDER SECTION 148 OF THE ACT. THE LD.AR OF THE ASSESSEE SUBMITS THAT AO REOPENED THE CASE OF ASSESSEE UNDER SECTION 147, SOLELY ON THE BASIS OF STATEMENT OF THIRD PERSON NAMELY MUKESH CHOKSHI. THE COPY OF STATEMENT OF MUKESH CHOKSI WAS NOT PROVIDED TO THE ASSESSEE. BEFORE MAKING REOPENING, THE AO HAS NOT MADE ANY INDEPENDENT ENQUIRY; NOTICE UNDER SECTION 148 IS ISSUED ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING, MUMBAI. THE ENTIRE EXERCISE CONDUCTED BY THE AO WAS BASED ON PURE GUISE AND SUSPICION. FROM INVESTIGATION WING A GENERAL INFORMATION WAS RECEIVED. THERE WAS NEITHER SPECIFIC INFORMATION NOR ANY RELIABLE RELEVANT MATERIAL AGAINST THE ASSESSEE IN THE SAID INFORMATION RECEIVED BY THE AO. THEREFORE, THE REASONS RECORDED BY THE AO WERE COMPLETELY INVALID, BAD IN LAW. REOPENING IS LIABLE TO BE HELD AS INVALID AND CONSEQUENTIAL ACTION MADE THEREAFTER IS LIABLE TO BE DECLARED AS SUCH. IN SUPPORT OF HIS SUBMISSION, THE LD.AR OF THE ASSESSEE RELIED UPON THE DECISION OF THE TRIBUNAL IN PRATIK SURYAKANT SHAH VS ITO 77 TAXMANN.COM 260. THE LD.AR OF THE ASSESSEE SUBMITS THAT THE CASE OF ASSESSEE IN THAT CASE WAS ALSO REOPENED ON THE BASIS OF INFORMATION MUKESH CHOSKHI AND ASSESSEE ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 6 IN THAT CASE TOO ALLEGEDLY PURCHASED SHARES OF TALENT IFOWAY FROM M.SAGAR SECURITIES PRIVATE LIMITED AND WAS SOLD THROUGH ALLIANCE INTERMEDIARIES AND NETWORK PRIVATE LIMITED. 6. ON THE OTHER HAND, THE LD.SR.DR FOR THE REVENUE SUPPORTED THE ORDER OF LOWER AUTHORITIES. THE LD.SR.DR SUBMITS THAT INVESTIGATION WING CARRIED OUT A SEARCH ACTION OF MAHASAGAR GROUP WHICH WAS MANAGED BY MUKESH CHOKSHI, ADMITTED FOR PROVIDING ACCOMMODATION ENTRIES. THE ASSESSEE IS ONE OF THE BENEFICIARIES OF SUCH ACCOMMODATION ENTRIES PROVIDED BY MUKESH CHOKSHI AND ITS GROUP. THE INFORMATION ABOUT THAT ASSESSEE IS ONE OF THE BENEFICIARIES WERE SENT TO THE AO. THE AO ON THE BASIS OF SUCH INFORMATION MADE REOPENED THE CASE OF ASSESSEE. DURING THE ASSESSMENT, THE AO PROVIDED FULL OPPORTUNITY TO THE ASSESSEE. THE OBJECTION OF ASSESSEE WAS DULY CONSIDERED AND DECIDED BY THE AO BY WAY OF A SPEAKING ORDER. TO SUPPORT HIS SUBMISSION, THE LD.AR FOR THE ASSESSEE RELIED UPON THE DECISION OF JURISDICTIONAL HIGH COURT IN AASPAS MULTIMEDIA LTD., VS DCIT [2017] 83 TAXMANN.COM 83 (GUJARAT) AND THE DECISION OF HON SUPREME COURT IN ITO VS. LAKHMANI MEWAL DAS [1976] 103 ITR 434 (SC) AND RAYMOND WOOLLEN MILLS LTD., VS. ITO [1999] 236 ITR 34 (SC). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. WE HAVE ALSO DELIBERATED ON THE ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 7 VARIOUS CASE LAWS CITED BY BOTH THE PARTIES DURING THE HEARING OF THE CASE. WE FIND THAT AFTER REOPENING UNDER SECTION 147 OF THE ACT, NOTICE UNDER SECTION 148 OF THE ACT DATED 26.03.2014 WAS DULY SERVED UPON THE ASSESSEE ON 29.03.2014. IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE FILED HER REPLY STATING THEREIN THAT RETURN FILED ORIGINALLY ON 29310.2007 MAY BE TREATED AS RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE DEMANDED REASONS RECORDED. THE REASONS RECORDED WERE PROVIDED TO THE ASSESSEE ON 29.05.2014. THE ASSESSEE RAISED CERTAIN OBJECTIONS ON 30.06.2014. THE OBJECTION OF ASSESSEE WERE DISPOSED OF IN A SPEAKING ORDER ON 23.09.2014. ALL THESE FACTS ARE NOT DISPUTED BY THE LD.AR OF THE ASSESSEE. WE FURTHER FIND THAT AFTER DISPOSING OF OBJECTION, THE LD.AO PROCEEDED TO COMPLETE THE REASSESSMENT. THE AO NOTED THAT DESPITE REPEATED NOTICES, THE ASSESSEE NEITHER FURNISHED COMPLETE DETAILS NOT ATTENDED THE PROCEEDINGS BEFORE THE AO. THE LD.AR OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE REASONS RECORDED ARE NOT VALID AS THERE WAS NOT SUFFICIENT MATERIAL AND SPECIFIC INFORMATION AGAINST THE ASSESSEE AND STRONGLY RELIED UPON THE DECISION OF TRIBUNAL IN PRATIK SURYAKANT SHAH (SUPRA). IN THE SAID CASE, THE CO-ORDINATE BENCH OF TRIBUNAL HAS NOT GIVEN FINDING ON VALIDITY OF REOPENING RATHER THE ASSESSEE WAS GRANTED RELIEF ON MERIT, SO WE WILL CONSIDER THE SAID DECISION AT THE TIME OF DISCUSSION ON MERIT. THE LD.SR.DR ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 8 FOR THE REVENUE RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN AASPAS MULTIMEDIA LTD., VS. DCIT (SUPRA) WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT WHERE THE REOPENING (REASSESSMENT) WAS MADE ON THE BASIS OF INFORMATION RECEIVED FROM PR.DIT (INVESTIGATION), AND THAT THE ASSESSEE WAS ONE OF THE BENEFICIARIES OF ACCOMMODATION ENTRIES BY WAY OF SHARE APPLICATION PROVIDED BY THIRD PARTY, THE REOPENING WAS JUSTIFIED. FURTHER, THE HONBLE SUPREME COURT IN RAYMOND WOOLLEN MILLS LTD., VS. ITO HELD THAT AT THE TIME OF REOPENING PRIMA FACIE MATERIAL ON THE BASIS OF WHICH DEPARTMENT COULD REOPEN THE CASE IS SUFFICIENT. FURTHER, SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THAT STAGE. CONSIDERING THE DECISION HONBLE JURISDICTIONAL HIGH COURT AND OF THE APEX COURT (SUPRA) WE ARE OF THE VIEW THAT THE LD.AO WAS HAVING SUFFICIENT PRIMA FACIE MATERIAL FOR REOPENING, THUS, THE GROUND NO.1 RAISED BY ASSESSEE IS DISMISSED. 8. GROUND NO.2 RELATES TO ADDITION OF RS.12,37,886/-. THE LD.AR FOR THE ASSESSEE SUBMITS THAT DURING THE ASSESSMENT THE ASSESSEE FURNISHED COMPLETE DETAILS OF TRANSACTION. THE LD.AR FOR THE ASSESSEE SUBMITS THAT ASSESSEE PURCHASED SHARES IN PHYSICAL FORM ON 11.07.2015 FROM A REGISTERED BROKER ALLIANCE INTERMEDIARIES AND NETWORK LTD. THE ASSESSEE HAS NOT MADE ANY OTHER TRANSACTION OF PURCHASE AND SALE OF TALENT INFOWAY LTD SHARES. ON ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 9 PAYMENT OF CONSIDERATION OF RS. 44,549/- THROUGH BANKING CHANNEL, THE ASSESSEE RECEIVED SHARE ON 13.09.2015. THE SHARES WERE DEMATERIALISED ON 17.01.2017. FURTHER, THE SHARES WERE SOLD ON 20.02.2007. THE ASSESSEE SOLD THE SHARE FOR A CONSIDERATION OF RS.12,37,886/-. THE ASSESSEE SOLD THE SHARE THROUGH STOCK EXCHANGE. THERE WAS NO REASON TO TREAT THE TRANSACTION AS A BOGUS. THE LD.AR SUBMITS THAT DURING THE ASSESSMENT, THE ASSESSEE DEMANDED CROSS EXAMINATION OF MUKESH CHOKSHI AND JAYESH SAMPATH, WHOSE STATEMENT WAS ALLEGEDLY RECORDED BY INVESTIGATION WING. THE STATEMENT OF MUKESH CHOKSHI IS COMPLETELY INCORRECT. AS PER INFORMATION OF CCIT( INVESTIGATION), THE ASSESSEE IS BENEFICIARY OF RS.24,80,975/-. NO TRANSACTION OF SUCH HUGE AMOUNT WAS EVER TRANSACTED BY ASSESSEE. THE ASSESSEE MAINTAINS ALL THE BOOKS OF ACCOUNTS AS RECORDED IN THE TRANSACTION IN DUE COURSE OF HER BUSINESS. THERE IS NOTHING OUT OF BOOKS. THE ASSESSEE CLAIM CAPITAL GAIN OF RS.11,93,337/- AGAINST THE SALE VALUE OF SHARES AT RS.12,37,886/- AFTER DEDUCTING THE COST OF ACQUISITION OFRS.44,549/-. THOUGH THE LD. CIT(A) ACCEPTED THE TRANSACTION OF RS.12,37,886/-, HOWEVER, THE LD.CIT(A) UPHELD THE ADDITION OF REMAINING AMOUNT. THE LD.AR SUBMITS THAT THE TRANSACTIONS OF ASSESSEE ARE GENUINE AND THE LONG TERM CAPITAL GAIN CANNOT BE TREATED AS IN GENUINE. THE INVESTMENT OF THE ASSESSEE WAS NOT DOUBTED BY THE REVENUE. TO SUPPORT HIS SUBMISSION, THE LD.AR RELIED UPON ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 10 THE DECISION OF HON GUJARAT HIGH COURT IN CIT VS RAMNIWAS RAMJIVAN KASAT [2017] 82 TAXMANN.CON 458 (GUJARAT), DECISION OF TRIBUNAL IN ACIT VS. EL DORADO BIOTECH (P) LTD.,[2021] 123 TAXMANN.COM 265 (AHMEDABAD TRI), PRATIK SURYAKANT SHAH VS ITO [2017] 77 TAXMANN.COM 260 (AHD- TRI), MUMBAI TRIBUNAL IN SUNIL PRAKASH VS ACIT (ITA NO.6494/MUM/2014 DATED 08.03.2017) AND ANDAMAN TIMBER INDUSTRIES VS COMMISSIONER OF CENTRAL EXCISE (2016) 15 SCC 785. 9. ON THE OTHER HAND, THE LD. SR. DR FOR THE REVENUE SUPPORTED THE ORDER OF LD. CIT(A). THE LD. SR. DR FOR THE REVENUE FURTHER SUBMITS THAT THE ASSESSEE PURCHASED THE SHARE FROM THE ENTITY, NAMELY ALLIANCE INTERMEDIARIES AND NETWORK PRIVATE LIMITED, WHICH WAS MANAGED BY MUKESH CHOKSHI. MUKESH CHOKSHI WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES; HE ADMITTED IN HIS STATEMENT RECORDED UNDER SECTION 132 OF SUCH ACCOMMODATION ENTRIES AND DISCLOSED THE NAME OF THE VARIOUS COMPANIES WHICH WERE MANAGED BY HIM. THE ASSESSEE IS ONE OF THE BENEFICIARIES WHO MADE TRANSACTION THROUGH THE COMPANIES MANAGED BY MUKESH CHOKSHI. THE ASSESSEE PURCHASED THE SHARES IN THE MONTH OF JULY 2005 FOR A CONSIDERATION OF RS.44,548/-. THE SAID SHARES WERE SOLD AFTER A SPAN OF 18 MONTHS FOR AN ASTONISHING VALUE OF RS.12,37,886/-. SUCH MAGIC IS ONLY POSSIBLE THROUGH ACCOMMODATION ENTRIES. SUCH ACCOMMODATION ENTRIES ARE ALWAYS SUPPORTED ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 11 BY AUTHENTICATED DOCUMENTARY EVIDENCE TO AVOID THE DEDUCTION. THE LD. SR. DR FOR THE REVENUE PRAYED FOR UPHOLDING THE ADDITION. TO SUPPORT HER SUBMISSION, THE LD. SENIOR DR FOR THE REVENUE RELIED UPON THE DECISION OF APEX COURT IN DHAKESWARI COTTON MILLS LTD., VS. CIT [1954] 26 ITR 775 (SC). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO DELIBERATED ON VARIOUS CASE LAWS RELIED BY THE PARTIES. WE FIND THAT THE ASSESSEE HAD PURCHASED 13000 SHARES OF TALENT INFOWAY LTD THROUGH ALLIANCE INTERMEDIARIES AND NETWORK PRIVATE LIMITED. THE CONSIDERATION WAS PAID THROUGH BANKING CHANNEL, WHICH IS OTHERWISE IS NOT IN DISPUTE. THE SHARES OF TALENT INFOWAY LTD WERE LISTED IN THE BOMBAY STOCK EXCHANGE AT THAT POINT OF TIME. INITIALLY THOSE SHARES WERE PURCHASED IN PHYSICAL FORM. THE SHARES WERE TRANSFERRED BY THE COMPANY IN THE NAME OF THE PURCHASER. THEREAFTER, THE SHARES WERE TRANSFERRED IN THE DEMAT ACCOUNT. THE ASSESSEE SOLD THE SHARE IN DEMAT ACCOUNT. THE AO HAS NOT MADE ANY INVESTIGATION FROM STOCK EXCHANGE ABOUT THE PURCHASE AND SALE OR THE VALUE OF THE SHARE AT THE TIME OF SALE OF THE SHARES. ALL THESE FACTS ARE NOT DISPUTED BY THE AO. IT IS NOT THE CASE OF THE REVENUE THAT THE SALE CONSIDERATION ON SALE OF THE SHARES IS LESS OR MORE THAN WHAT IS DECLARED BY THE ASSESSEE. THE LD AR FOR THE ASSESSEE VEHEMENTLY RELIED ON THE DECISION OF ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 12 AHMADABAD TRIBUNAL IN PRATIK SURYAKANT SHAH VS ITO (SUPRA), WHEREIN THE COORDINATE BENCH WHILE CONSIDERING THE SIMILAR ISSUE HELD THAT WHERE ASSESSEE PURCHASED SHARES OF A COMPANY THROUGH STOCK EXCHANGE AND TRANSFERRED IT TO DEMAT ACCOUNT AND LATER ON SOLD IT FROM SAID DEMAT ACCOUNT, SUCH TRANSACTION COULD NOT BE TAKEN AS BOGUS MERELY ON BASIS OF STATEMENT OF STOCK BROKER SO AS TO DENY LTCG EXEMPTION. IT WAS ALSO HELD THAT MUKESH CHOKSI MAY BE PROVIDING ACCOMMODATION ENTRY TO VARIOUS PERSONS BUT THE FACTS OF THIS CASE SUGGEST THAT TRANSACTION IN THAT CASE WERE GENUINE AND NO ADVERSE INTERFERENCE WERE CALLED FOR. FURTHER MUMBAI TRIBUNAL IN SUNIL PAREKH VS ITO (SUPRA) ON SIMILAR SET OF FACT THAT WHEN THE TRANSACTION WERE MADE THROUGH THE STOCK EXCHANGE AND THE SHARES WERE TRANSFERRED THROUGH DEMAT ACCOUNT THERE WAS NO JUSTIFICATION TO TAX THE ENTIRE SALE PROCEED TO TREAT THE TRANSACTION AT THE HAND OF THE ASSESSEE. IT WAS ALSO OBSERVED BY THE COORDINATE BENCH THAT IN THE STATEMENT OF MUKESH CHOKSHI HAD NOT STATED THAT ENTIRE TRANSACTION UNDERTAKEN BY HIS GROUP ARE NOT GENUINE. NOW ADVERTING TO THE FACTS OF THIS CASE, WE FIND THAT THE FACTS OF THE CASE IN HAND ARE SIMILAR AS OF FACTS IN PRATIK SURYAKANT SHAH VS ITO (SUPRA). FURTHER, WE FIND THAT THE AO MADE ADDITIONS SOLELY ON THE BASIS OF INFORMATION RECEIVED FROM CCIT (INVESTIGATION), AND EVEN WITHOUT MAKING ANY FURTHER INVESTIGATION ABOUT THE TRANSACTION SHOWN BY THE ASSESSEE. THUS, IN VIEW OF ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 13 THE ABOVE FACTUAL AND LEGAL DISCUSSIONS AND RESPECTFULLY FOLLOWING THE DECISIONS OF COORDINATE BENCH OF TRIBUNAL AS NOTED ABOVE (SUPRA), WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTIFIED TREATING THE LONG TERM CAPITAL GAIN AS BOGUS SOLELY ON THE BASIS OF INFORMATION, WHEN THE TRANSACTION IS SUPPORTED WITH SUFFICIENT EVIDENCE. 11. THE CASE LAW RELIED BY THE LD. DR FOR THE REVENUE IN DHAKESWARI COTTON MILLS LTD., VS. CIT (SUPRA) IS NOT HELPFUL TO THE REVENUE QUA THE FACTS OF THE PRESENT CASE. IN THE SAID THE HONBLE APEX COURT HELD THAT ASSESSING OFFICER IN NOT FETTERED BY THE TECHNICAL RULE OF EVIDENCE AND PLEADINGS AND HE IS NOT ENTITLED TO ACCEPT THE EVIDENCE JUST LIKE COURT OF LAW. AT THE SAME TIME THE HONBLE COURT HELD THAT THE AO (ITO) IS NOT ENTITLED TO MAKE PURE GUESS AND MAKE THE ASSESSMENT WITHOUT REFERENCE TO ANY EVIDENCE OR ANY OR ANY MATERIAL AT ALL AND THAT THERE MUST BE SOMETHING MORE THAN BARE SUSPICIOUS TO SUPPORT THE ASSESSMENT. 12. IN THE RESULT THE GROUND NO.2 OF THE APPEAL IS ALLOWED. 13. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER ANNOUNCED ON 14 TH JUNE, 2021 BY PLACING RESULT ON THE NOTICE BOARD. SD/- SD/- ( DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED:14/06/2021 / SGR ITA NO.3497/AHD/2015 SMT. PRABHABENPRAKASHBHAI PATEL (GAMI)(AY 2007-08) 14 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE TRUE COPY/ BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, ITAT, SURAT