Jalan Carbons & Chemiclas (p) Ltd., Kolkata V. DCIT, Cen. Cir 4(2), Kol., Kolkata

ITA 361/KOL/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8448 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 22-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: A K TIBREWAL
• Keywords: Capital asset; Loose papers; Fair market value; Revised return; Documents seized
• Section: 45(2); 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI S. S. GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.361/KOL/2017 ( / ASSESSMENT YEAR: 2011-12) JALAN CARBONS & CHEMICALS (P) LTD. 46C, CHOWRINGHEE ROAD, 16G, 16 TH FLOOR, KOLKATA 700 071. VS. DCIT, CENTRAL CIRCLE-4(2), KOLKATA AAYAKAR BHAWAN, POORVA 110, SHANTIPALLY, KOLKATA 700 107. ./ ./PAN/GIR NO.: AAACJ 8324 R (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI A.K. TIBREWAL & AMIT AGARWAL, AR RESPONDENT BY : SHRI SAURABH KUMAR, ADDL. CIT, SR. DR / DATE OF HEARING : 09/10/2018 /DATE OF PRONOUNCEMENT : 31/12/2018 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO ASSESSMENT YEAR 2011-12, IS DIRECTED AGAINST AN ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-15, KOLKATA IN APPEAL NO.402/CIT(A)-1 5/15-16/CIR-10/R&T/KOL DATED 05.10.2016, WHICH IN TURN ARISES OUT OF AN AS SESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 14.02.2014. 2. THE GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOL LOWS: 1) THAT THE LEARNED COMMISSIONER OF LNCOME TAX (AP PEALS) ERRED IN CONFIRMING THE ADDITION OF RS.13,40,331 MADE BY THE ASSESSING OFFI CER ALLEGING THAT THE APPELLANT ASSESSEE RECEIVED CASH OUT OF REGULAR BOOKS OF ACCO UNTS FROM M/S. CHOWDHURY HYDRO CARBON LIMITED BASED ON SOME NOTING IN LOOSE SHEET BEING COMPUTER PRINT OUTWITHOUT ANY INDEPENDENT VERIFICATION OF THE SAME. JALAN CARBONS & CHEMICALS (P) LTD. ITA NO.361/KOL/2017 ASSESSMENT YEAR: 2011-12 P PP PA AA AG GG GE EE E | || | 2 22 2 2) THAT THE LEARNED COMMISSIONER OF LNCOME TAX (APP EALS) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPE CT OF LONG TERM CAPITAL LOSS OF RS.1,04,40,635 SUFFERED BY THE ASSESSEE COMPANY ON SALE OF EQUITY SHARES OF ITS GROUP COMPANIES, ON THE ALLEGED GROUND THAT THE GROUP OF THE ASSESSEE IS GAINING BY COLLUSIVE TRANSACTIONS LEADING TO FICTITIOUS LOSS AS THE SHAR ES OF GROUP COMPANIES HAD BEEN SOLD AT A PRICE MUCH LOWER THAN ITS MARKET VALUE WITHOUT THE DYNAMICS OF MARKET FORCE. 3)THAT THE LEARNED COMMISSIONER OF LNCOME TAX (APPE ALS), WHILE CONFIRMING THE AFORESAID DISALLOWANCE OF RS.1,04,40,635, FAILED TO CONSIDER VARIOUS DOCUMENTS AND THE SUBMISSIONS OF THE APPELLANT COMPANY IGNORING THE JUDGEMENTS OF VARIOUS COURTS INCLUDING HON'BLE SUPREME COURT, HON'BLE JURISDICTIONAL CALCUTTA HIGH COURT AND THE JURISDICTIONAL KOLKATA BENCHES OF APPELLATE TRIBUNAL RELIED ON BY IT IN SU PPORT OF ITS CLAIM. 4) THAT THE LEARNED COMMISSIONER OF LNCOME TAX (APP EALS) ERRED IN CONFIRMING THE AFORESAID DISALLOWANCE OF RS.1,04,40,635 WRONGLY RE LYING ON THE CONCEPT OF FAIR MARKET VALUE OF THE TRANSACTIONS REFERRED TO IN SECTION 45 (2) AND SECTION 45(4) OF THE ACT WHICH HAS NO RELEVANCE TO THE FACTS OF THIS CASE RELATING TO TRANSFER OF SHARES ONACTUAL SALE THEREOF. 5) THAT THE LEARNED COMMISSIONER OF LNCOME TAX (APP EALS) ERRED IN CONFIRMING THEAFORESAID DISALLOWANCE OF RS.1,04,40,635 ON VARI OUS FINDINGS AND OBSERVATIONS WHICHARE CONTRARY TO LAW AND FACTS OF THE CASE AND ARE THEREFORE PERVERSE BASED ONIRRELEVANT CONSIDERATIONS, SURMISES, SUSPICIONS A ND CONJECTURES. 3. GROUND NO.1 RAISED BY THE ASSESSEE RELATES TO AD DITION OF RS.13,40,331/- ON ACCOUNT OF CASH RECEIVED OUT OF REGULAR BOOKS OF AC COUNTS. 4. THE BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSES SEE HAD FILED RETURN OF INCOME ON 30.09.2011 DECLARING TOTAL INCOME OF RS.77,29,76 0/-. LATER ON, A REVISED RETURN WAS FILED, DECLARING TOTAL INCOME TO THE TUNE OF RS .2,15,10,270/- ON 15.03.2013. THE REVISED RETURN WAS SELECTED FOR SCRUTINY BY THE DEPARTMENT AND NOTICE U/S 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE ON 0 9.09.13. DURING THE SCRUTINY PROCEEDINGS U/S 143(3) OF THE ACT, THE ASSESSING OF FICER NOTED FROM THE LOOSE SHEET INVENTORIES VIDE PAGE NO.5 TO THE JCCL-14 ( O NE OF THE BUNCHES CONTAINING LOOSE SHEETS INVENTORIED AND IMPOUNDED DURING SURVE Y), THAT THE ASSESSEE HAD COLLECTED CASH FROM A PARTY NAMED, CHOWDHURY HYDROC ARBAN PRIVATE LIMITED ON DIFFERENT DATES.THE EXTRACT OF THE SAID LOOSE SHEE TS INVENTORIED IS REPRODUCED BELOW FOR READY REFERENCE: JALAN CARBONS & CHEMICALS (P) LTD. ITA NO.361/KOL/2017 ASSESSMENT YEAR: 2011-12 P PP PA AA AG GG GE EE E | || | 3 33 3 DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO CLARIFY THE COLLECTION OF CASH FROM CHOUDHURY HYDROCARBON PVT. LTD. TO THE TUNE RS.13,40,331/-, ON DIFFERENT DATES WITH REFERENCE T O ITS REGULAR BOOKS OF ACCOUNTS. BUT THE ASSESSEE HAS FAILED TO SHOW ALL THOSE ENTRI ES IN RESPECT OF ABOVE CASH RECEIPTS AND ADMITTED THOSE TRANSACTIONS THAT THESE TRANSACTIONS WERE OUT OF REGULAR BOOKS OF ACCOUNTS AND NOT OFFERED FOR TAXATION. THE REFORE, THE ASSESSING OFFICER OBSERVED THAT THE SAID RECEIPTS OF RS.13,40,331/- M ENTIONED IN THE LOOSE SHEET AND NOT ACCOUNTED BY THE ASSESSEE THEREFORE, HE MADE AD DITION TO THE TUNE OF RS.13,40,331/-. 5 AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORD ER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE BEGINS BY POINT ING OUT THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NEVER TRIED TO CROSS-VERIFY THE ALLEGED CASH TRANSACTION BY DOING INDEPENDENT ENQUI RY. IN THE ABSENCE OF SAID ENQUIRY ADDITION CANNOT BE MADE ONLY ON THE BASIS O F LOOSE SHEETS. THE LOOSE SHEETS WHICH WERE TAKEN THE BASE FOR ADDITION BY TH E ASSESSING OFFICER HAVE NOT BEEN CORROBORATED BY ANY FURTHER EVIDENCE. THEREFOR E, THE ADDITION MADE BY THE ASSESSING OFFICER BASED ON THE LOOSE SHEETS SHOULD BE DELETED. JALAN CARBONS & CHEMICALS (P) LTD. ITA NO.361/KOL/2017 ASSESSMENT YEAR: 2011-12 P PP PA AA AG GG GE EE E | || | 4 44 4 7. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HA S PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREAD Y NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 8. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIV AL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTE THAT A S URVEY U/S 133A WAS CONDUCTED AT ASSESSEES PREMISES ON 19.02.2013. THEREAFTER, ASSE SSEE REVISED HIS RETURN OF INCOME AND DECLARED TOTAL INCOME OF RS.2,15,10,270/ -. DURING THE SURVEY PROCEEDINGS CERTAIN DOCUMENTS WERE IMPOUNDED FROM A SSESSEES PREMISES, CONTAINING LOOSE SHEETS AND SUCH IMPOUNDED DOCUMENT S REVEALED ASSESSEES TRANSACTION WITH M/S CHOUDHURY HYDROCARBON (P) LTD. THE DATE WISE AND BILL WISE DETAILS OF THE TRANSACTIONS WITH THIS PARTY IS MENT IONED IN THE LOOSE SHEETS. THESE LOOSE SHEETS MENTIONED DETAILS OF CHEQUE TO BE GI VEN TO PARTY AND CASH TO BE COLLECTED FROM THE PARTY.THE ASSESSING OFFICER NOT ED THAT CASH TO BE COLLECTED FROM THE PARTY WAS TO THE TUNE OF RS.13,40,331/-. AS THE AMOUNT OF RS.13,40,331/- WAS NEITHER OFFERED FOR TAXATION, NO R IT WAS REDUCED FROM THE PURCHASES MADE, THEREFORE THE ADDITION OF RS.13,40, 331/- WAS MADE BY THE ASSESSING OFFICER. IN APPELLATE PROCEEDINGS, ASSESS EE HAS DENIED THE RECEIPT OF ANY CASH FROM CHOUDHURY HYDROCARBON (P) LTD. 9. WE NOTE THAT THESE LOOSE SHEETS ARE ONLY DUMB D OCUMENTS WITHOUT ANY CORROBORATIVE EVIDENCE. ASSESSEE HAS SUBMITTED THAT ALL ITS PURCHASES FROM CHOUDHURY HYDROCARBON (P) LTD. WERE DULY RECORDED I N ITS BOOKS OF ACCOUNTS AND NO UNACCOUNTED MONEY IS RECEIVED. THE LOOSE SHEETS WHICH WERE TAKEN THE BASE FOR ADDITION BY THE ASSESSING OFFICER HAVE NOT BEEN CORROBORATED BY ANY FURTHER EVIDENCE. WE NOTE THAT NEITHER ASSESSING OFFICER NO R THE LD. CIT(A) HAS BROUGHT ANY COGENT EVIDENCE ON RECORD TO SHOW THAT THE RECE IPT TO THE TUNE OF RS.13,40,331/- IS OUT OF UNACCOUNTED MONEY. WE NOT E THAT NEITHER THE ASSESSING OFFICER NOR THE LD. CIT(A) HAS TRIED TO CROSS-VERIF Y THE ALLEGED TRANSACTION BY DOING INDEPENDENT ENQUIRY, HENCE, IN THE ABSENCE OF SAID ENQUIRY ADDITION SHOULD NOT BE MADE SOLELY ON THE BASIS OF LOOSE SHEETS. FOR THAT WE RELY ON THE JUDGMENT OF THE COORDINATE BENCH OF HYDERABAD IN THE CASE OF M. AJA BABU, HYDERABAD VS. JALAN CARBONS & CHEMICALS (P) LTD. ITA NO.361/KOL/2017 ASSESSMENT YEAR: 2011-12 P PP PA AA AG GG GE EE E | || | 5 55 5 DCIT, IN ITA NOS.1755, 1756 & 1757/HYD/2012, ORDER DATED 23.04.2014 WHEREIN IT WAS HELD THAT: 17. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIE S, PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THI S CASE, THE ADDITION WAS MADE BY THE AO BASED ON THE LOOSE PAPER AND THE SAME, IN OUR VIEW, CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE. AS HELD BY THE CIT(A) IN THE IMPUGNED ORD ER EXCEPT RELYING ON THE NOTINGS IN THE LOOSE SLIPS, NO ATTEMPT HAS BEEN MADE TO CORROB ORATE THE NOTINGS WITH INDEPENDENT EVIDENCE. THE PARTIES TO THE TRANSACTION PARTICULAR LY THE VENDOR HAS NOT EXAMINED. IN EVERY TRANSACTION THERE IS A CIRCLE CONCERNING TWO PARTIE S. IT IS NOT KNOWN WHETHER THE VENDOR HAS DISCLOSED THE CONSIDERATION AS NOTED IN THE DIARY. THEREFORE, MERELY ON THE BASIS OF PRESUMPTION AND SOME UNCORROBORATED NOTINGS ADDITIO NS CANNOT BE MADE. IN OUR OPINION, THE DELETION OF ADDITION BY THE CIT(A) IS JUSTIFIED AND NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). THE FOLLOWING CASES SUPPORT TH E ACTION OF THE CIT(A): 1. CIT VS. ANIL BHALLA [2010] 322 ITR 191 (DEL.) WHEREIN HELD THAT THE NOTINGS RECORDED ON THE LOOSE SHEET OF PAPER DO NOT REPRESENT ANY EX PENDITURE INCURRED BY THE ASSESSEE DIRECTOR AND THAT THE ENTRIES RELATED TO THE COMPAN Y IN AS MUCH AS THEASSESSEE COULD EXPLAIN FROM THE BOOKS OF THE COMPANY THATTHESE PRO JECTS WERE UNDERTAKEN BY IT, AND UPHELD THE DELETION OFTHE IMPUGNED ADDITION UNDER S . 69C, FINDINGS ARRIVED AT BY THETRIBUNAL ARE PURE FINDINGS OF FACTS AND THE SAME DO NOT WARRANTANY INTERFERENCE. 2. ACIT VS. J.P. MORGAN INDIA (P) LTD. [2011] 46 SO T 250 (MUM.) 3. CIT VS. DINESH JAIN HUF [2012] 211 TAXMAN 23 (DE LHI) 4. CIT VS. JAIPAL AGGARWAL [2013] 212 TAXMAN 1 (DEL HI) WHEREIN IT WAS HELD THAT DUMB DOCUMENTS SEIZED, IE FROM WHICHNOTHING COULD BE CLE ARLY UNDERSTOOD, CANNOT FORM A JUSTIFIEDBASE FOR MAKING ADDITIONS TO INCOME OF THE ASSESSEE. 17.1 IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THEADDITION MADE BY THE ASSESSING OFFICER BASED ON THE LOOSE PAPER,WHICH IS NOT A CONCLUSIVE EVIDENCE AND, THEREFORE, THE SAME IS NOTSUFFICIENT TO MAKE THE AD DITION. IN OUR OPINION, NO ADDITION CAN BEMADE ON THE BASIS OF DUMB DOCUMENTS/NOTE BOOK/LOO SE SLIPS INTHE ABSENCE OF ANY OTHER MATERIAL TO SHOW THAT THE ASSESSEE HASMADE INVESTME NTS IN LAND. NOTING ON THE NOTE BOOK/DIARY/LOOSESHEETS ARE REQUIRED TO BE SUPPORTED /CORROBORATED BY OTHEREVIDENCE AND ARE ALSO INCLUDE THE STATEMENT OF A PERSON WHOADMIT TEDLY IS A PARTY TO THE NOTING AND STATEMENT FROM ALL THEPERSONS WHOSE NAMES THERE ON THE NOTE BOOK/LOOSE SLIPS ANDTHEIR STATEMENTS TO BE RECORDED AND THEN SUCH STATEMENTUN DOUBTEDLY SHOULD BE CONFRONTED TO THE ASSESSEE AND HE HAS TOBE ALLOWED TO CROSS EXAMINE T HE PARTIES. THE VENDOR HAS NOTEXAMINED IN THIS CASE. THEREFORE, WE DO NOT FIND ANY INFIRMITY INTHE ORDER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TODELETE THE ADD ITION MADE ON THE BASIS OF LOOSE PAPER AND THEORDER OF THE CIT(A) IS HEREBY UPHELD DISMISS ING THE GROUNDSRAISED BY THE REVENUE ON THIS ISSUE. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF T HE COORDINATE BENCH IN THE CASE OF M. AJA BABU, HYDERABAD (SUPRA) ON IDENTICAL ISSU ES, WE DELETE THE ADDITION OF RS.13,40,331/- JALAN CARBONS & CHEMICALS (P) LTD. ITA NO.361/KOL/2017 ASSESSMENT YEAR: 2011-12 P PP PA AA AG GG GE EE E | || | 6 66 6 10. GROUND NO. 2 TO 5 RAISED BY THE ASSESSEE RELATE TO DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPECT OF LONG TERM CAPITAL L OSS OF RS.1,04,40,635/- SUFFERED BY THE ASSESSEE COMPANY ON SALE OF EQUITY SHARES OF ITS GROUP COMPANIES, ON THE ALLEGED GROUND THAT THE GROUP OF THE ASSESSEE IS GAINING BY COLLUSIVE TRANSACTIONS LEADING TO FICTITIOUS LOSS A S THE SHARES OF GROUP COMPANIES HAD BEEN SOLD AT A PRICE MUCH LOWER THAN ITS MARKET VALUE WITHOUT THE DYNAMICS OF MARKET FORCE. 11. THE FACTS OF THE CASE WHICH CAN BE STATED QUITE SHORTLY ARE AS FOLLOWS: IN THE ASSESSMENT ORDER LD ASSESSING OFFICER HAD POINTED O UT THAT ASSESSEE INCURRED LONG TERM CAPITAL LOSS OF RS.1,07,99,741/-, WHILE TRANSF ERRING THE SHARES OF INTERNATIONAL TAR REFINERS PVT. LTD TO YAANA APPARE LS PVT. LTD. THE ASSESSEE HAD SIMILARLY TRANSFERRED SHARES OF SOME OTHER GROUP CO MPANIES ALSO TO M/S YAANA APPARELS PVT. LTD, ALSO A GROUP COMPANY, AND HAD EA RNED CAPITAL GAIN OF RS.3,39,106/-. THE LD ASSESSING OFFICER HAS NOT QU ESTIONED THESE TRANSACTIONS. HOWEVER, IN THE ASSESSMENT ORDER, ASSESSING OFFICER HELD THAT THE LOSS ON SALE OF SHARES OF INTERNATIONAL TAR REFINERS PVT LTD, WAS O N ACCOUNT OF COLLUSIVE TRANSACTION. HENCE, HE HAS DISALLOWED THIS LONG TER M CAPITAL LOSS OF RS.1,07,99,741/-. WE NOTE THAT THERE IS MISTAKE IN THE COMPUTATION, WHICH IS THAT AO HAS USED THE FIGURE OF RS.1,04,40,634/- IN THE C OMPUTATION OF TOTAL INCOME WHEREAS THE DISALLOWANCE WAS OF RS.1,07,99,741/-. 12. AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESSIN G OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A).THE LD CIT(A ) HELD THAT THE GROUP OF THE ASSESSEE IS GAINING BY COLLUSIVE TRANSACTIONS LEADI NG TO FICTITIOUS LOSS AS THE SHARES OF GROUP COMPANIES HAD BEEN SOLD AT A PRICE MUCH LO WER THAN ITS MARKET VALUE WITHOUT THE DYNAMICS OF MARKET FORCE, THEREFORE, LD CIT(A) HAD CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER, TO THE TUNE OF RS.1,07,99,741/-. 13.AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE IS IN APPEAL BEFORE US. THE LD COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAND, LD DR RELIED ON THE STAND TAKEN BY THE ASSESSING OFFICER. JALAN CARBONS & CHEMICALS (P) LTD. ITA NO.361/KOL/2017 ASSESSMENT YEAR: 2011-12 P PP PA AA AG GG GE EE E | || | 7 77 7 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT IN THE ASSESSEE`S CASE UNDER CONSIDERA TION THE GROUP COMPANIES WERE GOING THROUGH A PROCESS OF INTERNAL CORPORATE RESTR UCTURING WHEREBY THE SHARES OF ITS VARIOUS GROUP COMPANIES WERE BEING TRANSFERRED TO YAANA APPARELS PVT. LTD, WHICH WAS BEING CONSTITUTED AS A HOLDING COMPANY FO R ITS VARIOUS OTHER GROUP COMPANIES. WE NOTE THAT THE SHARES OF M/S INTERNATI ONAL TAR REFINERS PVT. LTD, ALONGWITH SHARES OF THEIR OTHER GROUP COMPANIES, WE RE TRANSFERRED TO M/S YAANA APPARELS PVT LTD, FOR CONSIDERATION AS AGREED BETWE EN THE GROUP COMPANIES AND M/S YAANA APPARELS PVT LTD. HENCE, THE GENUINENESS OF THE TRANSACTIONS OF SHARE TRANSFER COULD NOT BE DOUBTED. THE ASSESSEE HAS SUB MITTED BEFORE THE AO, THE COPIES OF THE BILLS OF THE TRANSACTIONS AND OTHER D ETAILS. WE NOTE THAT LD AO HAD TAKEN THE DECISION ON SUSPICIOUS, SURMISE AND CONJE CTURES AND THERE IS NOTHING ON THE RECORD OF THE AO TO SUGGEST THAT THE ASSESSEE H AD RECEIVED ANY AMOUNT OVER AND ABOVE THE SALE CONSIDERATION ACTUALLY RECEIVED FROM M/S YAANA APPARELS PVT LTD. WE NOTE THAT HON`BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE VS. ITO (1981) 131 ITR 597 (SC) HELD THAT CAPITAL GAIN HAS TO BE COMPUTED ON THE BASIS OF THE PRICE BARGAINED. THE COORDINATE BENCH OF DELHI ITAT IN THE CASE OF HALDIRAM MANUFACTURING CO. PVT. LTD, ITA NO. 4909/DEL/2009, FOR A.Y. 2006-07, HELD THAT UNDER SECTION 48, THE STARTING POINT FOR COMPUTATIO N OF CAPITAL GAIN IS THE AMOUNT OF FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF CAPITAL ASSET. THE TERM FULL VALUE OF CONSIDERATION CANNO T BE EQUATED WITH THE MARKET VALUE OF THE ASSET. 15. WE NOTE THAT LEARNED DEPARTMENTAL REPRESENTATIV E EMPHASISES TIME AND AGAIN THAT THE INSTANT ISSUE OF BOGUS LTCG HAS RIGHTLY BE EN DECIDED AGAINST THE ASSESSEE IN ASSESSMENT AS WELL AS LOWER APPELLATE PROCEEDIN G, AND STATED BEFORE THE BENCH THAT IT IS PERTAINING TO ARTIFICIAL MANIPULATION OF SHARE PRICES. WE DO NOT AGREE WITH LD DR, SO FAR AS THE ASSESSEE`S FACTS ARE CONCERNED , WE NOTE THAT THEFULL VALUE OF CONSIDERATION REFERS TO PRICE BARGAINED FOR BY THE PARTIES AND IT CANNOT REFER TO ADEQUACY OF CONSIDERATION, AS HELD BY THE COORDINAT E BENCH OF ITAT, IN THE CASE OF RUPEE FINANCE & MANAGEMENT (P) LTD (2008) 22 SOT 174 (MUM). AT THE ASSESSMENT STAGE, THE ASSESSEE SUBMITTED RELEVANT D ETAILS BEFORE THE AO, AND THE JALAN CARBONS & CHEMICALS (P) LTD. ITA NO.361/KOL/2017 ASSESSMENT YEAR: 2011-12 P PP PA AA AG GG GE EE E | || | 8 88 8 AO FAILED TO BRING ANY EVIDENCE ON RECORD TO ESTABL ISH THAT DETAILS SO SUBMITTED ARE FALSE.WE NOTE THAT THE LD AO WAS NOT JUSTIFIED IN R EJECTING THE CLAIM OF THE ASSESSEE ON THE BASIS OF THEORY OF SURROUNDING CIRCUMSTANCES , HUMAN CONDUCT, AND PREPONDERANCE OF PROBABILITY WITHOUT BRINGING ON RE CORD ANY LEGAL EVIDENCE AGAINST THE ASSESSEE IN RESPECT OF THE MARKET VALUE OF THE SHARES VIS--VIS PRICE BARGAINED BY THE PARTIES. THAT IS, LD AO FAILED TO BRING ANY COGENT EVIDENCE ON RECORD TO SHOW THAT PRICE BARGAINED BY THE PARTIES TO COMPUTE CAPITAL GAIN IS NOT CORRECT. WE ALSO NOTE THAT THE LEARNED COMMISSIONER OF LNCOME TAX (APPEALS) WAS WRONG IN CONFIRMING THE AFORESAID DISALLOWANCE OFRS .1,07,99,741/- WRONGLY RELYING ON THE CONCEPT OF FAIR MARKET VALUE OF THE TRANSACTIONS REFERRED TO IN SECTION 45(2) AND SECTION 45(4) OF THE ACT WHICH HAS NO REL EVANCE TO THE FACTS OF THIS CASE RELATING TO TRANSFER OF SHARES ON ACTUAL SALE VALUE /PRICE BARGAINED. CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE AND THE MATERIAL ON RECORD, WE ARE UNABLE TO UPHOLD THE STAND OF THE REVENUE.HENCE, WE ARE INCLINED TO ACCEPT THE ARGUMENTS TENDERED BY COUNSEL OF THE ASSESSEE IN TH IS RESPECT. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION TO HOLD THAT THE IMPUG NED ADDITION SUSTAINED BY THE CIT(A), IS NOT JUSTIFIED IN THE FACTS AND CIRCUMSTA NCES OF THE CASE AND ACCORDINGLY ADDITION OF RS.1,07,99,741/-[ ( THAT IS, ADDITION S USTAINED BY LD CIT (A) RS.1,07,99,741] MADE ON THIS COUNT IS DIRECTED TO B E DELETED. 16. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.12.2018 . SD/- ( S. S. GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 31 /12/2018 ( RS, SR.PS ) / COPY OF THE ORDER FORWARDED TO : 1. /THE APPELLANT- JALAN CARBONS & CHEMICALS (P) LTD. 2. ! / THE RESPONDENT- DCIT, CENTRAL CIRCLE-4(2), KOLKAT A 3. ' ( ) / THE CIT(A), 4. ' / CIT JALAN CARBONS & CHEMICALS (P) LTD. ITA NO.361/KOL/2017 ASSESSMENT YEAR: 2011-12 P PP PA AA AG GG GE EE E | || | 9 99 9 TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 5. #$% &&'( , '( , / DR, ITAT, KOLKATA 6. %)*+ / GUARD FILE. !# &