NEETA ASHOK SHAH, MUMBAI V. ITO 25(3)(1), MUMBAI

ITA 4319/MUM/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0436 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 22-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTI LAKSHMI NAYAKLD
• Assessee Lawyers: N M PORWAL LD
• Keywords: Bogus purchase; Unexplained cash credit; Capital asset; Gift; Income from undisclosed sources; Principle of natural justice; Valuation report; Accommodation entries; Tax effect; Capital Gains
• Section: 143(3); 142(1); 133(6); 143(2); 148; 68

Judgement Text

ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.4319/MUM/2016 ( / ASSESSMENT YEAR : 2010-11 ) SMT. NEETA ASHOK SHAH B-601, HARMONY APARTMENTS ASHOK C. ROAD, OPP. DAMODARWADI KANDIVALI (EAST), MUMBAI- 400 101 / VS. I TO - 33(2)(4) ROOM NO.610, 6 TH FLOOR C-12, PRATYAKSHKAR BHAVAN BANDRA (EAST), MUMBAI- 400 051 %& ./ ./PAN/GIR NO. ARKPS-1661-E ( &( /APPELLANT ) : ( )*&( / RESPONDENT ) ASSESSEE BY : SH. N.M. PORWAL-LD.AR REVENUE BY : MS. JYOTI LAKSHMI NAYAK- LD. DR / DATE OF HEARING : 06/02/2020 / DATE OF PRONOUNCEMENT : 05/05/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1.1 AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEA R [IN SHORT REFERRED TO AS AY] 2010-11 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX (APPEALS)-45, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], DATED 18/03/2016 ON FOLLOWING GROUNDS: - 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS - 45, MUMBAI IS ERRONEOUS, UNJUSTIFIED, UNWARRANTED, BAD IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 2 2. THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS- 45, MUMBAI ERRED IN SUSTAINING THE ADDITION OF RS.33,37,726/- U/S 68 OF THE INCOME TAX ACT, 1961 MADE BY THE AO ON THE BASIS OF 'SUSPICION, SURMISES AND CONJECTURES BEING ENTIRE SALE CONSIDERATION OF SHARES AS INCOME FROM UNDISCLOSED SOURCES. 3. THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS- 45, MUMBAI FAILED TO UNDERSTAND THAT THE SHARES WERE SOLD THROUGH A REPU TED STOCK BROKING COMPANY VIZ. M/S JOINDRE CAPITAL SERVICES LTD. AND SHARES WERE D ELIVERED BY THE APPELLANT FROM HER D-MAT ACCOUNT AND PAYMENT AGAINST SALE OF SHARE S WAS RECEIVED FROM THE SAID BROKING COMPANY. 4. WITHOUT PREJUDICE TO GROUND NO. 2 & 3 ABOVE, THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS - 45, MUMBAI ERRED IN LAW IN HO LDING THAT TO CLAIM EXEMPTION U/S 10(38), THE STT IS REQUIRED TO BE PAID ON BOTH THE ARMS OF THE TRANSACTION I.E. PURCHASE AND SALE OF SHARES. 5. THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS - 45, MUMBAI FAILED TO APPRECIATE THAT THE STATEMENT RECORDED OF SHRI MUKE SH CHOKSHI IS A GENERAL STATEMENT AND THE NAME OF THE APPELLANT HAS NOT BEE N MENTIONED SPECIFICALLY IN THE SAID STATEMENTS AND NO OPPORTUNITY OF CROSS EXAMINA TION HAS BEEN PROVIDED AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF KISHANCHAND CHELLARAM V. CIT[1980] 125 ITR 713 (SC). 6. THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS - 45, MUMBAI ERRED IN SUSTAINING THE ADDITION OF RS. 17,40,000/- U/S 68 O F THE INCOME TAX ACT, 1961 MADE BY THE AO ON THE BASIS OF SUSPICION, SURMISES AND C ONJECTURES. ON ACCOUNT OF SALE OF JEWELLERY DESPITE THE FACT THAT THAT PURCHASING PAR TIES CONFIRMED THE PURCHASE OF JEWELLERY AND PAYMENT WAS RECEIVED BY ACCOUNT PAYEE CHEQUES & BANK DRAFTS. 7. THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS- 45, MUMBAI FAILED TO UNDERSTAND THAT THE DELAY IN RECEIPT OF PAYMENT AGA INST SALE OF JEWELLERY WAS BEYOND THE CONTROL OF THE APPELLANT AND SAME SHOULD NOT HA VE BEEN MADE THE BASIS FOR SUSTAINING THE SAID ADDITION. IT IS PRAYED THAT ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS -45, MUMBAI BE QUASHED AND ADDITIONS MADE OF RS. 33,37,7 26/- U/S 68 ON ACCOUNT OF SALE OF SHARES AND RS.17,40,000/- U/S 68 ON ACCOUNT OF SALE OF JEWELLERY BE DELETED SO AS TO MEET THE ENDS OF JUSTICE. AS EVIDENT, THE ASSESSEE IS CONTESTING THE ADDITION OF RS.33.37 LACS U/S 68 AND ANOTHER ADDITION OF RS.17.40 LACS ON ACCOUNT OF SALE OF JEWELLERY WHICH HAS BEEN CONFIRMED BY LD. FIRST APPELLATE AUT HORITY. 1.2 WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS A ND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DOCUMENTS PLA CED IN THE PAPER- BOOK. THE LD. AR SUBMITTED THAT THE FACTUAL MATRIX OF GAIN ON SHARES STOOD COVERED IN ASSESSEES FAVOR BY VARIOUS DECISI ONS OF THIS TRIBUNAL. ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 3 IN PARTICULAR, RELIANCE HAS BEEN PLACED ON THE DECI SION RENDERED IN THE CASE OF ASSESSEES HUSBAND I.E. SHRI ASHOK T. SHAH VIDE ITA NO.4318/MUM/2016 ORDER DATED 06/05/2019 FOR THE SUBMISSIONS THAT SIMILAR ISSUE OF LONG-TERM CAPITAL GAIN ON SHARES S TOOD COVERED IN ASSESSEES FAVOR. THE COPY OF THE ORDER HAS BEEN PL ACED ON RECORD. IT HAS BEEN SUBMITTED THAT FACTS ARE PARI-MATERIA THE SAME FOR THIS ASSESSEE. AU CONTRAIRE, LD. DR POINTED OUT VARIOUS DISCREPANCIES IN THE FINANCIAL STATEMENTS OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE MISERABLY FAILED TO PROVE THAT THE SHARES WERE HELD AS LONG-TERM CAPITAL ASSETS. THE LD. DR ALSO ASSAILED THE DOCUMENTARY EV IDENCES SUBMITTED BY THE ASSESSEE IN SUPPORT OF SALE OF JEWELLERY TRA NSACTIONS AND PLEADED FOR CONFIRMATION OF IMPUGNED ORDER. THE LD. AR CONT ROVERTED THE SAME BY SUBMITTING THAT THE SHARE TRANSACTIONS WERE WELL DOCUMENTED AND FINANCIAL STATEMENTS WERE NOT PART OF ASSESSMENT RE CORDS WHICH IS EVIDENT FROM THE FACT THAT LD.AO DISREGARDED THE BA LANCE SHEETS OF THE ASSESSEE AS SUBMITTED DURING THE COURSE OF ASSESSME NT PROCEEDINGS. 1.3 WE HAVE CAREFULLY CONSIDERED ALL THE SUBMISSION S PUT FORTH BEFORE US. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEA L WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. ADDITION U/S 68 FOR RS.33.37 LACS ON ACCOUNT OF SAL E OF SHARES 2.1 BRIEFLY STATED, THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED FOR YEAR UNDER CONSIDERATION U/S 143(3) R.W.S. 147 ON 01/03/2013 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.53. 97 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS. 3.20 LACS FILED BY THE ASSESSEE ON 17/05/2011 WHICH WAS PROCESSED U/S 143( 1). IN THE RETURN ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 4 OF INCOME, THE ASSESSEE HAD REFLECTED LONG-TERM CAP ITAL GAINS OF RS.28.94 LACS ON SALE OF 200 SHARES OF A SCRIP NAME LY MMTC AND THE GAINS WERE CLAIMED TO BE EXEMPT U/S 10(38). 2.2 THE ASSESSEE WAS SUBJECTED TO REASSESSMENT PROC EEDINGS PURSUANT TO RECEIPT OF CERTAIN INFORMATION THAT DUR ING SEARCH & SEIZURE OPERATIONS CARRIED OUT BY THE DEPARTMENT ON 25/11/2 009 IN THE CASE OF M/S MAHASAGAR SECURITIES PRIVATE LIMITED & ITS GROUP CONCERNS, IT TRANSPIRED THAT THE ASSESSEE STOOD BENEFICIARY OF BOGUS CAPITAL GAINS ON SALE OF 200 SHARES OF A SCRIP NAMELY MMTC FOR RS.28.94 LACS. IT WAS ALLEGED THAT THE ASSESSEE OBTAINED BOGUS PURCHASE B ILLS TO ACQUIRE THE SHARES OF MMTC FOR RS.4.43 LACS. DURING THE COURSE OF SEARCH PROCEEDINGS, STATEMENT OF SHRI MUKESH CHOKSHI, WHO WAS STATED TO BE MANAGING ALL THE GROUP ENTITIES, WAS RECORDED WHERE IN HE ADMITTED TO HAVE INDULGED IN BOGUS BILLING ACTIVITIES. ACCORDIN GLY, NOTICE U/S 148 WAS ISSUED ON 10/10/2011 TO THE ASSESSEE WHICH WAS FOLL OWED BY STATUTORY NOTICES U/S 143(2) & 142(1) WHEREIN THE ASSESSEE WA S ASKED TO FURNISH THE REQUISITE DETAILS AND OTHER DOCUMENTARY EVIDENC ES TO SUBSTANTIATE THE SHARE TRANSACTIONS. THE REASONS LEADING TO REOP ENING WERE DULY COMMUNICATED TO THE ASSESSEE. 2.3 UPON PERUSAL OF DETAILS FILED BY THE ASSESSEE, IT WAS FOUND THAT THE ASSESSEE EARNED LONG-TERM CAPITAL GAINS OF RS.28.94 LACS AND CLAIMED THE SAME TO BE EXEMPT. THE DETAILS OF THE T RANSACTIONS WERE AS FOLLOWS: - ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 5 NO. SCRIP NAME QUANTITY SALE VALUE PURCHASE VALUE GAIN 1. MMTC (SOLD DURING APRIL, 2009) 200 33.37 LACS 4.43 LACS 28.94 LACS THE GAINS WERE CLAIMED TO BE EXEMPT U/S 10(38) WHIL E FILING THE RETURN OF INCOME. 2.4 IN RESPONSE TO NOTICES, THE ASSESSEE FURNISHED COPIES OF CONTRACT NOTES IN SUPPORT OF THE FACT THAT THE SHARES WERE P URCHASED THROUGH M/S ALLIANCE INTERMEDIARIES & NETWORK PVT. LTD. [AINPL] DURING AY 2008-09 WHICH WERE STATED TO BE SOLD DURING APRIL, 2009. TH E ASSESSEE SUBMITTED BROKER NOTE AND HOLDING LETTER FROM M/S AINPL. HOWE VER, THE ASSESSEE, IN THE OPINION OF LD. AO, FAILED TO BRING ON RECORD ANY PROOF TO ESTABLISH THAT THE SHARES WERE HELD FOR MORE THAN 12 MONTHS. IT WAS NOTED THAT THE SHARES WERE STATED TO BE PURCHASED FROM M/S AINPL W HEREAS THE SAME WERE SOLD THROUGH ANOTHER BROKER NAMELY M/S JOINDER CAPITAL SERVICES LTD. (JCSL). IN ORDER TO VERIFY THE FACT THAT THE P URCHASE TRANSACTIONS WERE ROUTED THROUGH BOMBAY STOCK EXCHANGE LTD. (BSE ), THE COPIES OF CONTACT NOTES WERE FORWARDED TO BSE TO CONFIRM THE SAID FACT. IN REPLY, IT WAS SUBMITTED BY BSE THAT M/S AINPL WAS NEITHER A R EGISTERED TRADING MEMBER NOR A REGISTERED TRADE-BROKER AFFILIATED TO ANY TRADING MEMBER OF THE EXCHANGE. 2.5 ALTHOUGH THE ASSESSEE REITERATED THAT THE TRANS ACTIONS WERE GENUINE, HOWEVER, DISREGARDING THE SAME, LD. AO CON CLUDED THAT THE ASSESSEE FAILED TO PROVE THE HOLDING PERIOD OF THE SHARES AND THE EVIDENCES SUBMITTED IN SUPPORT OF PURCHASES WERE BO GUS. THE BALANCE ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 6 SHEET SUBMITTED BY THE ASSESSEE WAS DISREGARDED UPO N NOTICING THAT THE SAME DID NOT FORM PART OF RETURN OF INCOME FILED BY THE ASSESSEE. IT WAS ALSO NOTED THAT THE ALTHOUGH THE PURCHASE WERE STAT ED TO BE MADE DURING AUGUST, 2007, HOWEVER, THE BANK STATEMENT OF CORRES PONDING PERIOD DID NOT SHOW ANY SUCH PAYMENT. 2.6 IN THE ABOVE BACKGROUND, THE ENTIRE TRANSACTION WAS TERMED AS AN ACCOMMODATION ROUTE THROUGH WHICH THE UNACCOUNTED M ONEY OF THE ASSESSEE WAS CONVERTED INTO ACCOUNTED MONEY IN THE GARB OF LONG-TERM CAPITAL GAINS (LTCG).THEREFORE, THE SALE AMOUNT OF RS.33.37 LACS WAS TREATED AS UNEXPLAINED CASH CREDIT U/S 68 AND ADDED TO THE INCOME OF THE ASSESSEE. 3.1 THE LD. CIT(A), WHILE GOING THROUGH FACTUAL MAT RIX, NOTED THAT M/S AINPL WAS NOT A SUB-BROKER DURING THE PERIOD 2007-2 009 AND IT HAD NOT TRANSACTED THROUGH ANY STOCK EXCHANGE. THE SAID ENT ITY, AS PER VARIOUS DECISION OF TRIBUNAL, WAS ACCEPTED TO BE AN ENTITY ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. FURTHER THE PROVISIONS OF SE C. 10(38) AS INTRODUCED FROM AY 2005-06 MANDATED THAT THE TRANSA CTIONS SHOULD HAVE BEEN CHARGEABLE TO SECURITIES TRANSACTIONS TAX (STT ) WHICH WOULD GO AGAINST THE ARGUMENT OF THE ASSESSEE THAT THE PURCH ASE OF SHARES WAS THROUGH OFF-MARKET PURCHASES AND THEREFORE, THE TRA NSACTIONS HAD TO ATTRACT STT. SINCE M/S AINPL WAS NEITHER BROKER NOR A SUB-BROKER, THE QUESTION OF STT BEING PAID TO THE EXCHANGE AND ULTI MATELY TO THE TREASURY WOULD BE RULED OUT. THEREFORE, THE STATED ADDITION WAS TO BE CONFIRMED. ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 7 3.2 IT WAS ALSO NOTED THAT THE SHARES WERE DE-MATTE D ONLY ONE OR TWO DAYS BEFORE THEY WERE SOLD. THE PURCHASE AMOUNT WAS FULLY PAID AFTER THE SALE OF THESE SHARES. THEREFORE, THE WHOLE TRAN SACTIONS REEKS OF ARRANGEMENT MADE FOR ACCOMMODATION ENTRIES. IN THE ABOVE BACKGROUND, THE ADDITION WAS CONFIRMED. AGGRIEVED, THE ASSESSEE IS UNDER FURTHER APPEAL BEF ORE US. 4. UPON DUE CONSIDERATION, WE CONCUR WITH THE SUBMI SSIONS OF LD. AR THAT FACTS IN THE CASE OF ASSESSEES HUSBAND I.E. S HRI ASHOK T. SHAH, WERE PARI-MATERIA THE SAME. THE SAID ASSESSEE, EARN ED GAIN ON SALE OF SHARES OF MMTC ON IDENTICAL SET OF FACTS. THE COORD INATE BENCH OF THE TRIBUNAL, VIDE ITA NO.4318/MUM/2016 ORDER DATED 06/ 05/2019, ALLOWED ASSESSEES APPEAL BY OBSERVING AS UNDER: - 6.1 PROCEEDING FURTHER ON MERITS, THE FACTUAL MATRI X IS LIKE THAT THE ASSESSEE HAS PURCHASED THE STATED SCRIPS DURING AYS 2006-07 AND 2007-08 FROM M/S AINPL WHICH IS EVIDENCED BY BROKER BILL, CONTRACT NOTES, LEDGER EXTRACTS ETC. AND THE DELIVERY OF THE SHARES IS STATED TO BE TAKEN IN ASS ESSEES DEMAT ACCOUNT. THE PAYMENT OF PURCHASE OF SCRIPS HAS BEEN MADE THROUGH BANKING CHANNELS AS EVIDENT FROM ASSESSEES BANK STATEMENTS, LEDGER CONFIRMATIO N ETC. UPON PERUSAL OF FINANCIAL STATEMENTS, WE FIND THAT THE INVESTMENT IN THE SCRI PS WAS DULY REFLECTED BY THE ASSESSEE IN ITS BALANCE SHEET AS ON 31/03/2006 & 31/03/2007, WHICH IS UN- CONTROVERTED FACT. THE SALE OF SCRIPS DURING IMPUGN ED AY HAS TAKEN PLACE IN STOCK EXCHANGE THROUGH AN INDEPENDENT BROKER NAMELY M/S JCSL AND THE DELIVERY OF THE SHARES HAVE BEEN GIVEN FROM THE ASSESSEES DEMAT AC COUNT AND THE SALE CONSIDERATION HAS BEEN RECEIVED THROUGH BANKING CHA NNELS. THE ASSESSEE IS IN POSSESSION OF BROKER BILLS & CONTRACT NOTES IN RESP ECT TO PURCHASE AS WELL AS SALE OF THESE SCRIPS. THERE IS CREDIT AND DEBIT OF SHARES I N ASSESSEES DEMAT ACCOUNT. THE SCRIPS ARE OF REPUTED CORPORATE ENTITIES LIKE IFCI, INDIAN BANK & JAI CORP. NOTHING ON RECORD ESTABLISHES THAT THE BROKER NAMELY M/S JCSL WAS, IN ANY MANNER, CONNECTED WITH THE TAINTED GROUP. THEREFORE, THERE COULD BE N O OCCASION TO TREAT THE SALE TRANSACTIONS AS BOGUS TRANSACTION. AS A NATURAL COROLLARY, SINCE THERE COULD BE NO SALE OF SCRIPS WITHOUT ACTUAL PURCHASE OF SCRIPS, T HE PURCHASE TRANSACTIONS COULD NOT BE TERMED AS BOGUS TRANSACTIONS. 6.2 THE LD. AO, IN THE PROCESS OF MAKING ADDITIONS, HAS HEAVILY RELIED UPON THE STATEMENT OF SHRI MUKESH CHOKSHI WITHOUT BRINGING ON RECORD ANY COGENT MATERIAL TO ESTABLISH THAT THE SALE TRANSACTIONS CARRIED OUT BY THE ASSESSEE THOUGH M/S JCSL WERE BOGUS TRANSACTIONS. IN FACT, THE LOWER AUTHORITIES, IN OUR OPINION, HA S MISSED OUT THE FACT THAT THE SALE TRANSACTIONS HAD TAKEN P LACE THROUGH AN INDEPENDENT ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 8 BROKER NAMELY M/S JCSL AND NOT THROUGH M/S AINPL . ANOTHER ASPECT IS THAT ADDITIONS HAVE BEEN MADE MERELY BY RELYING UPON THI RD PARTY STATEMENTS WHICH WERE NEVER CONFRONTED TO THE ASSESSEE IN VIOLATION OF PR INCIPLE OF NATURAL JUSTICE. 6.3 THE ASSESSEE, IN OUR OPINION, DISCHARGED THE PR IMARY ONUS OF PROVING THE STATED TRANSACTIONS BY SUBMITTING PURCHASES BILLS, CONTRACT NOTES OF PURCHASE OF SHARES, HOLDING LETTER FROM THE BROKER, BANK PASS B OOK EVIDENCING PAYMENT THROUGH BANKING CHANNELS TOWARDS PURCHASE OF SHARES, COPY O F LEDGER ACCOUNT IN THE BOOKS OF SHARE BROKER, SALES BILLS AND SALE CONTRACT NOT ES ISSUED BY M/S JCSL , COPY OF LEDGER ACCOUNT IN THE BOOKS OF M/S JSCL , DELIVERY POSITION AND GLOBAL NET POSITION DEMAT REPORT, BANK PASS BOOK EVIDENCING RECEIPT OF SALE CONSIDERATION THROUGH BANKING CHANNELS. 6.4 IT IS TRITE LAW THAT THE ADDITIONS COULD NOT BE MADE MERELY ON THE BASIS OF DOUBTS, CONJECTURES OR SURMISES. KEEPING IN VIEW TH E TOTALITY OF FACTS & CIRCUMSTANCES, WE ARE INCLINED TO DELETE THE IMPUGN ED ADDITIONS OF RS.28,02,666/-. THIS GROUND STAND ALLOWED. SIMILAR ARE THE FACTS IN SHARE TRANSACTIONS CARRIED OUT BY PRESENT ASSESSEE. WE FIND THAT THE SALE TRANSACTIONS HAVE T AKEN PLACE THROUGH AN INDEPENDENT BROKER AND THE SALE PROCEEDS HAVE BE EN RECEIVED THROUGH BANKING CHANNELS. THE SALE COULD NOT TAKE P LACE WITHOUT MAKING PURCHASES THEREOF. THE PURCHASES WERE SUPPORTED BY CONTRACT NOTES, HOLDING LETTER AND THE PAYMENT WAS THROUGH BANKING CHANNELS. THE SHARES WERE CREDITED IN THE DEMAT ACCOUNT OF THE AS SESSEE. THIS IS FURTHER FORTIFIED BY THE FACT THAT THE STATED PURCH ASE TRANSACTIONS WERE DOUBTED BY LD.AO IN AY 2008-09 AND THE PURCHASE VAL UE OF SHARES OF MMTC WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNE XPLAINED CASH CREDIT. HOWEVER, UPON FURTHER APPEAL, LD. CIT(A) DE LETED THE SAME BY OBSERVING THAT THE ASSESSEE HAD DISCHARGED THE ONUS BY PRODUCING THE BROKERS NOTE AND AO HAD NOT FOUND ANY REASON TO DOU BT THE SAME. NOTHING WAS BROUGHT ON RECORD TO SHOW THAT THESE WE RE FALSE OR UNTRUE. THE REVENUES APPEAL, AGAINST THE SAME, HAS ALREADY BEEN DISMISSED BY THE TRIBUNAL VIDE ITA NO.7463/MUM/2014 ORDER DATED 20/06/2016 ON ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 9 ACCOUNT OF LOW TAX EFFECT. THEREFORE, THE MATTER OF PURCHASE OF SHARES HAS ALREADY ATTAINED FINALITY IN ASSESSEES FAVOR A ND HENCE, THE PURCHASE TRANSACTIONS WERE TO BE ACCEPTED AS GENUINE AND CAR RIED OUT IN AY 2008- 09 ONLY. UNDER THESE CIRCUMSTANCES, WHEN THE PURCHA SE OF SHARES WAS TO BE ACCEPTED AS GENUINE THEN THE SALE THEREOF COU LD ALSO NOT BE DOUBTED. RESPECTFULLY FOLLOWING THE RATIO OF ABOVE DECISION AND ON THE GIVEN FACTS AND CIRCUMSTANCES, THE IMPUGNED ADDITION STAND DELE TED. GROUNDS RAISED, IN THIS REGARD, STANDS ALLOWED. ADDITION OF RS.17.40 LACS ON ACCOUNT OF SALE OF JEW ELLERY 5.1 IT TRANSPIRED THAT THE ASSESSEE REFLECTED LONG- TERM CAPITAL GAINS (LTCG) ON SALE OF OLD JEWELLERY FOR RS.1.60 LACS. T HE JEWELLERY WAS STATED TO BE ACQUIRED IN FINANCIAL YEAR 1986-87 AT COST OF RS.3.50 LACS. THE INDEXED COST OF THE SAME WAS WORKED OUT TO BE R S.15.80 LACS AGAINST SALE PRICE OF RS.17.40 LACS, THEREBY GIVING RISE TO LTCG OF RS.1.60 LACS. THE SAME WAS OFFERED TO TAX IN THE RE TURN OF INCOME. 5.2 DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE EXP LAINED THAT THE ASSESSEE SOLD OLD SCRAP OF JEWELRY AND ORNAMENTS TH ROUGH ITS RELATIVES. IT WAS ALSO SUBMITTED THAT THE PAYMENT OF JEWELLERY WA S NOT RECEIVED DURING THE YEAR BUT RECEIVABLES WERE SHOWN IN THE B ALANCE SHEET AS SUNDRY DEBTORS . THE FINAL PAYMENT WAS STATED TO BE RECEIVED DURIN G MAY, 2011. HOWEVER, UPON PERUSAL OF ASSESSEES SUBM ISSIONS, LD. AO HELD THAT THE ASSESSEE COULD NOT ESTABLISH THE FACT THAT IT WAS IN POSSESSION OF JEWELLERY OF THIS WORTH. NO WEALTH TA X RETURN WAS EVER FILED AND NO VALUATION REPORT WAS FILED BY THE ASSESSEE I N SUPPORT OF ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 10 POSSESSION OF JEWELLERY. THE COPIES OF PURCHASE BIL LS WERE NOT PROVIDED. THEREFORE, THE AFORESAID CLAIM WAS REJECTED AND ENT IRE SALE CONSIDERATION OF RS.17.40 LACS WAS BROUGHT TO TAX AS UNEXPLAINED CASH CREDIT. 6. DURING APPELLATE PROCEEDINGS, THE ASSESSEE SUBMI TTED THE NAME AND ADDRESSES OF THE PERSONS TO WHOM THE JEWELLERY / ORNAMENTS WERE SOLD. THE SUBMISSIONS WERE SUBJECTED TO REMAND PROC EEDINGS. CONFIRMATORY NOTICES U/S 133(6) WERE ISSUED TO ALL THESE PARTIES, HOWEVER, THE SAME WERE RETURNED BACK UNDELIVERED. T HE ASSESSEE COULD ONLY PRODUCE CONFIRMED COPIES OF ITR ETC. OF THE PE RSONS TO WHOM THE JEWELLERY WAS SOLD. THEREFORE, AFTER DUE CONSIDERAT ION, THE ACTION OF LD. AO WAS UPHELD BY LD. CIT(A). AGGRIEVED, THE ASSESSE E IS UNDER FURTHER APPEAL BEFORE US. 7. IT HAS BEEN PLEADED THAT THE JEWELLERY WAS ACQUI RED BY THE ASSESSEE BY WAY OF CUSTOMARY GIFTS ON THE OCCASION OF HER MARRIAGE IN 1982 AND BIRTH OF HER FIRST CHILD PRIOR TO 1986 AND ACCORDINGLY, THE JEWELLERY WOULD CONSTITUTE STREEDHAN FOR THE ASSESSEE. THE SAID EXPLANATION WOULD EXPLAIN NON-FURNISHING OF PURCHAS ES BILLS WITH RESPECT TO JEWELLERY. KEEPING IN VIEW THE STATUS OF THE ASS ESSEE, THE SAID EXPLANATION COULD NOT BE ALTOGETHER BRUSHED ASIDE S INCE THE ASSESSEE, BEING A LADY, AS PER THE CUSTOMS, WOULD CERTAINLY A CQUIRE JEWELLERY IN GIFTS ON THE OCCASION OF MARRIAGE AND ON THE OCCASI ON OF THE BIRTH OF A CHILD. THE SAID FACT COULD BE FORTIFIED WITH INSTRU CTION NO.1916 DATED 11/05/1994 ISSUED BY CBDT WHICH RECOGNIZES A FACT T HAT A MARRIED LADY OF REPUTED FAMILY COULD BE EXPECTED TO OWN 500 GRAM S OF ORNAMENTS AND THEREFORE THE SAME NEED NOT BE SEIZED. THIS IS COUP LED WITH THE FACT THAT ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 11 THE SALE CONSIDERATION HAS BEEN RECEIVED BY THE ASS ESSEE THROUGH BANKING CHANNELS IN SUBSEQUENT FINANCIAL YEARS. NOT HING ON RECORD WOULD SHOW THAT THE SAID RECEIPTS HAVE FLOWN BACK T O THE PURCHASER OF JEWELLERY. THE ASSESSEE HAS PLACED ON RECORD FINANC IAL STATEMENTS OF THE THREE PURCHASERS ALONG WITH COPIES OF THEIR COM PUTATION OF INCOME & INCOME TAX RETURNS. IN THEIR RESPECTIVE BALANCE SHE ETS, THESE PURCHASE TRANSACTIONS HAVE BEEN RECOGNIZED BY THE THREE PURC HASERS AND CONFIRMATION OF ACCOUNT HAS ALSO BEEN PLACED ON REC ORD. THEREFORE, KEEPING IN VIEW THE FACT OF THE CASE, THE CLAIM OF THE ASSESSEE WAS TO BE ACCEPTED. THEREFORE, WE ARE INCLINED TO DELETE THE IMPUGNED ADDITIONS AND ALLOW GROUNDS RAISED BY THE ASSESSEE, IN THIS R EGARD. 8. RESULTANTLY, THE APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED THROUGH CIRCULATION IN NOTICE BOAR D UNDER RULE 34(4) OF THE INCOME TAX APPELLATE TRIBUNAL RULES 1963 ON 05/05/2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 05/05/2020 SR.PS, JAISY VARGHESE ITA NO.4319/MUM/2016 NEETA ASHOK SHAH ASSESSMENT YEAR :2010-11 12 !'! / COPY OF THE ORDER FORWARDED TO : 1. &( / THE APPELLANT 2. )*&( / THE RESPONDENT 3. 1 ( ) / THE CIT(A) 4. 1 / CIT CONCERNED 5. 23),4 , 4 , / DR, ITAT, MUMBAI 6. 3567 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.