VIJAY U. UDANI, MUMBAI V. ITO 20(3)(4), MUMBAI

ITA 4140/MUM/2012

• Counselvise Citation: 414019914 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 22-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 12-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARMINDER KAUR
• Assessee Lawyers: KISHORE K PODDAR
• Keywords: Unexplained cash credit; Unexplained investment; Share purchase agreement; Additional evidence
• Section: 68; 69; 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE HONBLE S/SHRI D. MANMOHAN , VICE-PRESIDENT AND B.R.BASKARAN (AM) , . , . . , ! ./I.T.A. NO.4140/MUM/2012 ( '#$ % / ASSESSMENT YEAR : 2006-07) SH RI VI JAY U UDANI, A-11, ADITYA APARTMENT, OLD, NAGARDAS ROAD, ANDHERI (E), MUMBAI-400069 / VS. INCOME TAX OFFICER - 20(3)(4), 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400012 ( !&' / APPELLANT) .. ( ()&' / RESPONDENT) & ./ *+ ./PAN/GIR NO. : AALPU9479J !&' , / APPELLANT BY : SHRI K ISHORE K PODDAR ()&' - , /RESPONDENT BY : S MT. PARMINDER KAUR . / - 01 / DATE OF HEARING : 31.7.2014 2 %$ - 01 /DATE OF PRONOUNCEMENT : 20.8.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 23.3.2012 PASSED BY LD CIT(A)-31, MUMBAI AND IT REL ATES TO THE ASSESSMENT YEAR 2006-07. THE APPEAL IS BARRED BY LIMITATION BY 9 D AYS. THE ASSESSEE HAS MOVED A PETITION REQUESTING THE BENCH TO CONDONE THE DELA Y. WE HEARD THE PARTIES ON THIS PRELIMINARY ISSUE. THE LD D.R, AFTER GOING TH ROUGH THE PETITION FILED BY THE ASSESSEE, DID NOT RAISE ANY OBJECTION. HENCE, WE C ONDONE THE DELAY AND ADMIT THE APPEAL. I.T.A. NO.4140/MUM/2012 2 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.28,18,300/- MADE BY THE ASSESSING OF FICER U/S 68 OF THE ACT. 3. THE FACTS RELATING TO THE ISSUE UNDER CONSIDERAT ION ARE STATED IN BRIEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEALING IN D EPB LICENSES, COMMISSION AGENCY AND TRADING. HE IS HAVING TWO PROPRIETARY C ONCERNS NAMED M/S HALLMARK SYSTEMS AND M/S HMV CONSULTANCY. HE FILED HIS RET URN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME OF RS. 3,09,430/-. THE AO COMPLETED THE ASSESSMENT BY DETERMINING THE TOTAL I NCOME AT RS.37,72,120/-. THE ADDITIONS MADE BY THE AO, INTER ALIA, INCLUDED AN ADDITION OF RS.28,18,300/- RELATING TO UNEXPLAINED CASH DEPOSITS MADE IN THE B ANK ACCOUNTS MAINTAINED BY THE ASSESSEE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO NOTICED THAT THE ASSESSEE HAS MADE CASH DEPOSITS IN THE FOLLOWING BA NK ACCOUNTS MAINTAINED BY HIM:- (A) SHREE ARIHANG CO-OP BANK LTD A/C NO. CA-03 0687 - RS. 8,97,800/- (B) THE PROGRESSIVE CO-OP BANK LTD- O.D A/C NO .54 - RS. 60,000/- (C) THE PROGRESSIVE CO-OP BANK LTD CA NO.24 - RS.18,60,500/- ------------------- RS.28,18,300 ========= BEFORE THE AO, THE ASSESSEE DID NOT FURNISH ANY DET AIL TO EXPLAIN THE SOURCE OF ABOVE DEPOSITS AND HENCE THE ASSESSING OFFICER ASSE SSED THE SAME AS UNEXPLAINED CASH DEPOSITS (CASH CREDITS). 5. BEFORE LD CIT(A), THE ASSESSEE SUBMITTED THA T THE CASH DEPOSITS MADE IN THE BANK ACCOUNT CANNOT FALL WITHIN THE MEANING OF UNEXPLAINED CASH CREDITS AS CONTEMPLATED UNDER THE PROVISIONS OF SEC. 68 OF THE ACT. HE FURTHER CONTENDED I.T.A. NO.4140/MUM/2012 3 THAT THE ADDITION, IF ANY, COULD BE MADE U/S 69 OF THE ACT ONLY. ON MERITS, THE ASSESSEE CONTENDED THAT THE CASH DEPOSITS ARE FULLY EXPLAINED, SINCE THEY HAVE GONE FROM THE CASH BOOK AND THE SOURCES OF SUCH CAS H RECEIPTS SHOWN IN THE CASH BOOK ARE FULLY IDENTIFIABLE AND VERIFIABLE. W ITH REGARD TO THE SOURCES, THE ASSESSEE SUBMITTED THAT HE HAS SOLD SHARES HELD BY HIM IN A COMPANY NAMED M/S ORBIT POLYSTER TO VARIOUS PERSONS AND THE PROCE EDS THEREOF WAS USED TO MAKE DEPOSITS. SINCE THE ASSESSEE HAS FURNISHED NE W EVIDENCES AND EXPLANATIONS, THE LD CIT(A) CALLED FOR A REMAND REP ORT FROM THE AO. THE LD CIT(A) HAS EXTRACTED THE FOLLOWING PORTION OF THE R EMAND REPORT IN PARAGRAPH 5.2 OF HIS ORDER:- 5.2. AS DISCUSSED ABOVE, THE MATTER WAS REMANDED T O THE AO KEEPING IN VIEW THE ADDITIONAL EVIDENCES FILED BY THE AR. THE AO VIDE PARA-4 OF HIS LETTER DATED 17.03.2011 HAS SUBMITTED IN THIS REGAR D AS UNDER: 'AS REGARDS THE ADDITION OF RS. 28,18,300/- TOWARDS CASH DEPOSIT U/S.68, THE AO HAS MADE THIS ADDITION TREATING THE SAME BEING UNEXPLAINED CASH CREDIT. THE ASSESSEE HAS SUBMITTED THAT THE CASH DEPOSITS IN A BANK ACCOUNT CANNOT BE TERMED AS UNEX PLAINED CASH CREDIT. THE DEPOSIT IN THE BANK ACCOUNT IS A DEBIT ENTRY AND HENCE IF AT ALL ADDITION IS TO BE MADE IT CAN ONLY BE MADE U /S.69 OF THE ACT. THE DETAILS OF CASH DEPOSIT WERE ANALYZED. THE ASSESSEE SHOWN THE CASH DEPOSITS FROM SALE OF S HARES AND ACCORDINGLY HE WAS ASKED TO PRODUCE EVIDENCE OF PUR CHASES AND HOLDING OF SHARES. THE ASSESSEE HAS SUBMITTED THE L ETTER ISSUED FROM REGISTRAR OF ORBIT POLYSTER LTD FILED THE LETT ER WHICH STATES AS UNDER: THIS IS TO CERTIFY THAT MR.VIJAY UDAY KUMAR UDANI I S A REGISTERED SHARE HOLDER AS ON 31.03.2005 & HE WAS HOLDING 2,02 ,000 SHARE OF M/S.ORBIT POLYSTER AS ON 31.03.2005. THIS IS FURTHER TO CERTIFY THAT MR.VIJAY UDAY KUMAR UDANI STOOD AS REGISTERED SHARE HOLDER HOLDING 280850 EQUITY SHARE S AS ON 31ST MARCH,2006. PLEASE NOTE THAT THIS INFORMATION IS EXTRACTED FROM THE REGISTER OF THE SHARE HOLDER FOR THE ABOVE PERIOD. / I.T.A. NO.4140/MUM/2012 4 IN SUPPORT OF WHICH FOLLOWING EVIDENCES WERE PRODUC ED, WHICH ARE PLACED ON RECORD: 1. PURCHASE BILLS SHOWING PURCHASE OF SHARES FROM M/S. GLOBAL EQUIFINA. 2. BANK STATEMENT HIGHLIGHTING THE PAYMENTS MADE BY CH EQUE FOR SUCH PURCHASES. TO VERIFY AND TEST CHECK THE CASH RECEIPTS NOTICES U/S.133(6) WERE SENT TO THE FOLLOWING PERSONS. THE PERSONS HAVE REP LIED WITH CERTAIN REMARKS. THE REMARKS ARE DETAILED AS UNDER: S.NO. NAME OF THE PARTY NO. OF SHARES PURCHASED CASH GIVEN REMARKS 1 BALAJI S KADAM 4700 47000 CONFIRMED WITH REMARKS 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED. 2 GANESH B KADAM 3500 35000 CONFIRMED WITH REMARKS 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED. 3 GIRISH G SHRIRAM 2500 25000 CONFIRMED WITH REMARKS 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED. 4 KASHIRAM B IMANDAR 3750 3750 0 CONFIRMED WITH REMARKS 'SAID SHARES ARE NOT DEMATERIALIZATION, AS THE TRADING SUSPENDED BY AUTHORITY FOR NON- COMPLIANCE OF CERTAIN PROCEDURE. THE SAID PHYSICAL SHARES KEPT AT OFFICE FOR COMPLETE VARIOUS FORMALITIES. THE COMPANY WILL TRANSFER SAID SHARES WHEN TRANSFER TAKEN PLACE.' COPY ENCLOSED. 5 MAHESH M LAD 3750 37500 CONFIRMED WITH REMARKS 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED 6 MAHESH R KADAM 3750 37500 CONFIRMED WITH REMARKS 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED. 7 NAYAN N GALA 4000 40360 CONFIRMED WITH REMARKS ' SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED. 8 NAYANABEN N GALA 3500 36800 CONFIRMED WITH REMARKS 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE I.T.A. NO.4140/MUM/2012 5 SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED. 9 PRADEEP K SHINDE 3800 39300 CONFIRMED WITH REMARKS 'IT IS TO NOTE DEMATERIALIZATION OF SHARES DOES NOT TAKEN PLACE AS SHARES ARE STILL IN PHYSICAL FORM, COMPANY IS PROCESSING TOWARDS REGULARIZATION & WILL INTIMATE SAME WHEN & WHERE DEMATERIALIZATION OF SHARES 10 RAJESH S SONTAKE 4300 43000 CONFIRMED WITH REMARKS 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN 11 RAMCHANDRA N JADHAV 3000 32860 CONFIRMED WITH REMARKS 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED. 12 SACHIN V UPHALE 3500 36400 CONFIRMED WITH REMARK S 'SHARES IS NOT IN MY POSSESSION, AS I HAD ALREADY STATE SHARES ARE IN PHYSICAL FORM & GIVEN TO COMPANY FOR TRANSFER'. COPY ENCLOSED 13 CHILAND GODAMANI 6000 60000 CONFIRMED WITH REMARKS 'I HAVE NOT TRANSFERRED THESE SHARES & IN THE LAST YEAR I SOLD THE SAME BACK TO VIJAY UDANI AT SAME RATE AS THERE WAS NO MARKET FOR THE SAME & I HAVE FAMILY PROBLEM & I AM IN NEED OF MONEY.' COPY ENCLOSED. 14 SAMIR SHAIKH 10800 108000 CONFIRMED WITH REMARKS 'ALL THESE SHARES ARE IN PHYSICAL FORM ALONG WITH TRANSFER DEED I HAVE NOT SENT FOR TRANSFER BUT SUBSEQUENTLY I HAVE SOLD THESE BACK TO VIJAY UDANI AT THE SAME RATE IN AUGUST, 2008 AS THERE WAS NO MARKET PRICE & I WAS NEED OF FUND.' COPY ENCLOSED. 15 V GROW ENTERPRISES 16000 160000 CONFIRMED WITH REMARKS 'ALL SHARES ARE IN PHYSICAL FORM AND WERE LYING WITH ME TILL LAST YEAR. I SOLD BACK THESE SHARES TO MR.VIJAY UDANI AT THE SAME RATE RS.10/- ON 02.11.2009 AS I WAS IN NEED OF FUND.' COPY ENCLOSED. PERUSAL OF THE CONFIRMATION FROM PARTIES SHOWS THAT -ALL TRANSFERRED SHARES WERE IN PHYSICAL FORM, THE PURCHASERS HAVE NOT TRANSFERRED THE SHARES IN THEIR NAME 6. A PERUSAL OF REMAND REPORT SUBMITTED BY THE AO WOULD SHOW THAT THE ASSESSEE HAS CLAIMED TO HAVE SOLD THE SHARES TO SOM E PERSONS IN OFF-MARKET TRANSACTIONS AND THE SALE CONSIDERATION WAS ALSO RE CEIVED IN CASH. ALL THESE I.T.A. NO.4140/MUM/2012 6 PERSONS HAVE CLAIMED THAT THE SHARE CERTIFICATES AR E NOT IN THEIR POSSESSION AND THEY HAVE SEND THE SHARE CERTIFICATES TO THE COMPAN Y FOR TRANSFER. UNDER THESE SET OF FACTS, THE LD CIT(A) EXAMINED THIS ISSUE AND DECIDED THE SAME AGAINST THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS:- 5. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R, SUBMISSIONS OF THE AR AND THE CONTENTS OF THE REMAND REPORT OF THE AO AS DISCUSSED ABOVE. THE AO ON VERIFICATION OF THE DETAILS FILED BY THE APPELLANT AS CATEGORICALLY STATED IN THE REMAND REPORT DISCUSSED ABOVE THAT THE PARTIES FROM WHOM THE CASH SALES WERE REALIZED BY T HE APPELLANT FOR DEPOSITING THE SAME IN HIS BANK ACCOUNT HAVE CONFIR MED HAVING MADE THE PAYMENT IN CASH AGAINST THE SALE OF SHARES. HOW EVER AT THE SAME TIME HE HAS ALSO OBSERVED THAT UNDER GIVEN FACTS AN D CIRCUMSTANCES IT IS DIFFICULT TO CONFIGURE THE FACT OF TRANSACTION, AS THE TRANSACTION OF SALE IS NOT SUPPORTED BY TRANSFER OF SHARES IN THE NAME OF PURCHASES AND THE PAYMENT HAS NO BANK EVIDENCE TO SUPPORT AS THE TRA NSACTION IS DONE IN CASH. HOWEVER, I AM INCLINED TO DISAGREE WITH THE RELEVANT SUBMISSION OF THE AR AS WELL AS THE OBSERVATION OF THE AO (SIC.) IN AS MUCH AS THE APPELLANT IS NOT AN AUTHORIZED BROKER OR A SUB BRO KER FOR DEALING IN THE SHARES OF VARIOUS COMPANIES. SECONDLY, IT IS NOTICE D THAT THE ENTIRE ALLEGED SALES AND PURCHASES CLAIMED BY THE APPELLAN T ARE IN CASH WITHOUT HAVING CORRESPONDING EVIDENCES OF PURCHASE S AND SALES OR TRANSFER OF THE SHARES. THE SAME IS DULY CONFIRMED ON VERIFICATION OF THE TRANSACTION DISCLOSED BY THE APPELLANT AS PER THE E NQUIRY LETTERS ISSUED BY THE AO U/S. 133(6) OF THE ACT. ALL THESE PARTIES AS DISCUSSED IN THE REMAND REPORT HAVE CONFIRMED THEIR FAILURE TO FURNI SH NEITHER THE SHARES NOR THE COPIES OF TRANSFER FORMS LODGED FOR THE TRANSFER OF THESE SHARES. FURTHER, IT IS ALSO QUIET STRANGE THA T THE APPELLANT HAS SOLD CERTAIN EQUITY SHARES OF CERTAIN UNNAMED COMPANIES IN CASH TO ALL THESE PARTIES AND THEREAFTER THESE PARTIES HAVE AGAIN SOL D THE SAME SHARES TO THE APPELLANT AT THE SAME RATE I.E. AT THE RATE OF PURCHASE OF THE SHARES AFTER A CONSIDERABLE TIME. IT IS ALSO STRANGE THAT ALL THESE TRANSACTIONS OF PURCHASE AND SALES ARE CLAIMED TO HAVE BEEN MADE IN CASH. THE APPELLANT IN PROCESS HAS NO DOCUMENTARY EVIDENCES I N ITS POSSESSION. NEITHER THE DETAILS OF THE COMPANY OF WHICH THESE S HARES PERTAIN, NOR THE NAME OF THE BROKER THROUGH WHOM THE SHARES ARE TRANSACTED AS THE AR HAS CONTESTED THAT HE IS DEALING IN THESE SH ARES AS A SUB BROKER. MOREOVER, NO DETAILS OF PURCHASE BILLS AND SALES BILL OR THE DETAILS OF TRANSFER OF SHARE AND RELATED EVIDENCES ARE PLAC ED ON RECORD. THEREFORE, ON ACCOUNT OF THESE FACTS, I FIND THAT T HE CONTENTION OF THE AR THAT THE CASH DEPOSITED IN THE BANK ACCOUNT OF T HE APPELLANT ON VARIOUS DATES AS DISCUSSED IN THE ASSESSMENT ORDER ARE OUT OF THE CASH SALE OF THE SHARES TAKEN PLACE DURING THE RELEVANT ACCOUNTING YEAR. IN THE ABSENCE OF PROPER DOCUMENTARY EVIDENCES FURNISH ED ON RECORD EXPLAINING THE SUBMISSIONS OF THE AR, I FIND THAT T HE AO IS FULLY JUSTIFIED I.T.A. NO.4140/MUM/2012 7 IN CONSIDERING THE ENTIRE SUCH CASH DEPOSITS APPEAR ING IN THE BOOKS OF ACCOUNT OF THE APPELLANT OR BANK ACCOUNT OF THE APP ELLANT AS UNEXPLAINED CASH CREDITS U/S. 68 OF THE ACT. I ALSO FIND NO MER ITS IN THE SUBMISSION OF THE AR THAT THESE CASH DEPOSITS SHOULD HAVE BEEN CONSIDERED AS UNEXPLAINED INVESTMENT OF THE APPELLANT U/S. 69 OF THE ACT INSTEAD OF TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S. 6 8 OF THE ACT. IN THIS REGARD, IT MAY BE NOTED THAT THE APPELLANT HAS THRO UGHOUT CLAIMED THE SAME HAVING RECEIVED FROM VARIOUS PARTIES AND THE S AME IS DEPOSITED IN HIS BANK ACCOUNT AS DISCUSSED IN THE A SSESSMENT ORDER. THE SOURCE THEREOF AS DISCUSSED ABOVE REMAINS UNEXP LAINED. EVEN THE TRANSACTION OF SALE OF SHARES UNDER THE GIVEN FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE ARE FOUND UNEXPLAINED. THEREFORE, O N ACCOUNT OF THESE FACTS, I FIND THAT THE AO IS FULLY JUSTIFIED IN CON SIDERING THE ENTIRE SUCH CASH DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT AS HIS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. THE ENTIRE ADDITION MADE ON THIS ACCOUNT IS THEREFORE CONFIRMED. THE GROUND RAISED BY THE AP PELLANT IS THEREFORE REJECTED 7. AGGRIEVED BY THE ORDER PASSED BY LD CIT(A), T HE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 8. BEFORE US, THE LD. A.R REITERATED THE SUBMIS SIONS MADE BEFORE THE AO AS WELL AS THE LD CIT(A). HE SUBMITTED THAT THE ASSES SEE HAS PROVED THE FACT OF PURCHASE OF SHARES. HE FURTHER SUBMITTED THAT THE FACT OF SALE OF SHARES ALSO STANDS PROVIDED, SINCE THE BUYERS OF THE SHARES HAV E CONFIRMED THE TRANSACTION OF SALE. HE FURTHER SUBMITTED THAT THE ASSESSEE HA D RECEIVED THE SALE CONSIDERATION IN CASH, SINCE THEY WERE OFF-MARKET T RANSACTIONS, WHICH HAS BEEN USED TO MAKE THE IMPUGNED DEPOSITS. ACCORDINGLY HE SUBMITTED THAT THE ASSESSEE HAS SUBSTANTIATED HIS EXPLANATION THAT THE SALE PROCEEDS REALIZED ON SALE OF SHARES WERE USED TO MAKE THE IMPUGNED BANK DEPOSITS. ACCORDINGLY, THE LD A.R CONTENDED THAT THE LD CIT(A) WAS NOT JUSTIFI ED IN REJECTING THE SOURCES CLAIMED BY THE ASSESSEE. I.T.A. NO.4140/MUM/2012 8 9. ON THE CONTRARY, THE LD D.R SUBMITTED THAT T HE CLAIM OF SALE OF SHARES HAS NOT BEEN PROVED WITH THE COPY OF SHARE CERTIFICATES AND SHARE TRANSFER FORM. THE LD D.R FURTHER SUBMITTED THAT ALL THE PURCHASER S HAVE GIVEN IDENTICAL REPLY, WHICH CAN BE NOTICED FROM THE REMARKS COLUMN OF T HE TABLE FURNISHED BY THE AO IN THE REMAND REPORT. THE LD D.R SUBMITTED THAT THE TRANSACTION OF SALES IS NOT SUBSTANTIATED BY ANY SHARE BROKER NOTE ALSO. T HE LD D.R FURTHER SUBMITTED THAT THE SOME OF THE PERSONS HAVE SOLD BACK THE SHA RES TO THE ASSESSEE ITSELF AND THE REASONS GIVEN BY ALL OF THEM ARE THAT THEY HAD TO SELL THE SAID SHARES, SINCE IT DID NOT HAVE MARKET AND FURTHER THEY WERE IN NEED OF FUNDS. THE LD D.R SUBMITTED THAT A PRUDENT PERSON WILL NOT BUY SHARES WHICH DO NOT HAVE ANY MARKET VALUE AND THE PERSON WHO GOT RID OF SUCH KIN D OF SHARES WILL NOT BUY BACK THE SAME FROM THOSE SELLERS. ACCORDINGLY, THE LD D .R SUBMITTED THAT THE EXPLANATIONS FURNISHED BY THE ASSESSEE ARE BEYOND H UMAN PROBABILITIES AND ACCORDINGLY CONTENDED THAT THE ORDER OF LD CIT(A) S HOULD BE CONFIRMED. 10. IN THE REJOINDER, THE LD A.R SUBMITTED THAT THE SHARE OF THE ABOVE SAID COMPANY WAS DELISTED AND HENCE THE ASSESSEE WAS CON STRAINED TO SELL THE SHARES IN OFF MARKET. HE FURTHER SUBMITTED THAT THE FACT OF RECEIPT OF SALE CONSIDERATION IN CASH WOULD NOT DISPROVE THE SALE TRANSACTION. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAR EFULLY PERUSED THE RECORD. IN THIS APPEAL, THE ASSESSEE IS DISPUTING THE ADDITION OF RS.28,18,300/- RELATING TO THE DEPOSITS MADE INTO HIS BANK. THE ASSESSEE HAS EXPLAINED THE SOURCES TO BE THE SALE PROCEEDS REALIZED ON SALE OF SHARES. FROM THE TABLE EXTRACTED BY THE LD CIT(A) FROM THE REMAND REPORT, WE NOTICE THAT THE A SSESSEE HAS SOLD 76850 I.T.A. NO.4140/MUM/2012 9 SHARES TO 15 PERSONS AND RECEIVED CASH OF RS.7,76,2 20/-. THUS, IT IS SEEN THAT THE ASSESSEE HIMSELF HAS FURNISHED THE SOURCES ONLY TO THE EXTENT OF RS.7,76,220/- AND HE DID NOT EXPLAIN THE SOURCES FO R THE REMAINING AMOUNT OF RS.20.42 LAKHS. 12. EVEN WITH REGARD TO THE AMOUNT OF RS.7,76,22 0/-, IT IS SEEN THAT THE ASSESSEE HAS CLAIMED TO HAVE SOLD THE SHARES OFF-MA RKET BY RECEIVING CASH. HOWEVER, WHEN THE AO CONDUCTED ENQUIRIES WITH THE A LLEGED PURCHASERS, MOST OF THEM HAVE GIVEN A UNIFORM REPLY TO THE EFFECT THAT THE SHARE CERTIFICATES HAVE BEEN SENT TO THE CONCERNED COMPANY FOR NAME TRANSFE R. NONE OF THE PARTIES COULD FURNISH COPIES OF THE SHARE CERTIFICATES AND SHARE TRANSFER FORMS TO SUBSTANTIATE THEIR RESPECTIVE CLAIM. AS SUBMITTED BY LD D.R, SOME OF THE ALLEGED BUYERS OF THE SHARES HAVE ALSO STATED THAT THEY HAV E SOLD BACK THE SHARES TO THE ASSESSEE AT THE SAME RATE OF RS.10/- PER SHARE, AS THERE WAS NO MARKET AND FURTHER THEY WERE IN NEED OF MONEY. DURING THE COU RSE OF HEARING, THE LD A.R. SUBMITTED THAT THE ASSESSEE HAD TO DEAL IN THESE SH ARES IN OFF MARKET, SINCE THE SAID COMPANY, VIZ., M/S ORBIT POLYSTER LTD WAS DELI STED FROM STOCK EXCHANGE. ON CONSIDERATION THESE FACTS, WE FIND MERIT IN THE CON TENTION OF THE LD D.R THAT A PRUDENT PERSON WILL NOT BUY SHARES WHICH DO NOT HAV E ANY MARKET VALUE AND THE PERSON WHO GOT RID OF SUCH KIND OF SHARES WILL NOT BUY BACK THE SAME FROM THOSE SELLERS. IT IS WELL SETTLED PROPOSITION THAT THE E XPLANATIONS FURNISHED BY THE ASSESSEE MAY ALSO BE TESTED BY CONSIDERING HUMAN PR OBABILITIES AND HUMAN CONDUCT. IN THE INSTANT CASE, THE EXPLANATIONS OFF ERED BY THE ASSESSEE WITH REGARD TO SALE OF SHARES AND RE-PURCHASE OF SHARES OF COMPANY WHICH HAS BEEN DELISTED IS BEYOND THE COMPREHENSION OF HUMAN PROBA BILITIES. HENCE, WE ARE OF I.T.A. NO.4140/MUM/2012 10 THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN CONFIR MING THE ASSESSMENT OF THE AMOUNT OF RS.28,18,300/-. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20TH AUG, 2014 . 2 %$ . 3 4 5 6 20TH AUG, 2014 - 7/ 8 SD SD ( . / D. MANMOHAN ) ( . . , / B.R. BASKARAN ) / VICE- PRESIDENT / ACCOUNTANT MEMBER . / MUMBAI: 20TH AUG,2014. . ' . ./ SRL , SR. PS !'#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. !&' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. . =0 ( ! ) / THE CIT(A)- CONCERNED 4. . =0 / CIT CONCERNED 5. >?7 ('0'@# , !1 !@#$ , . / / DR, ITAT, MUMBAI CONCERNED 6. 7 / / GUARD FILE. A . / BY ORDER, TRUE COPY * (ASSTT. REGISTRAR) !1 !@#$ , . / /ITAT, MUMBAI