Arsalan Ahmed, Kanpur V. Income Tax Officer- 3(1), Kanpur

ITA 471/LKW/2019

AI Insights

The case revolves around an appeal by Shri Arsalan Ahmed against the order of the Commissioner of Income Tax (Appeals), which confirmed the additions made by the Assessing Officer for the assessment year 2015-16. The primary issue was the claim of exemption under section 10(38) of the Income Tax Act on LTCG from the sale of shares of M/s CCL International, which were categorized as penny stocks. The Assessing Officer, after scrutiny, concluded that these gains were part of a tax evasion scheme and added the amounts as unexplained income under section 68 of the Act. The Tribunal, after considering the detailed submissions and the extensive investigation reports, upheld the lower authorities' decisions, dismissing the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113258 (ITAT-LUCKNOW)
• Duration Of Justice: 4 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-08-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 18-08-2019
• Other Referred Cases: M/s.NDR Promoters Pvt. Ltd. Vs. PCIT, PCIT (Central)-1 Vs. NRA Iron Steel Pvt. Ltd., Sanjay Bimal chand Jain vs. PCIT, CIT vs. Durga Prasad More, Kale Khan Mohammad Hanif.Vs Commissioner of Income-Tax, M. P. And Bhopal, Motilal Padampat Udyog Ltd. Vs. CIT, Udit Kaira vs. I.T.O, Dhakeswari Cotton Mills vs. CIT, M/s. CCL International
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Wrong claim; Accommodation entries; Retraction; Penny stocks; Bogus
• Section: 131; 68; 132; 250; 10(33); 10(33)

Judgement Text

I.T.A. No.471/Lkw/2019 Assessment year:2015-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘B’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.471/Lkw/2019 Assessment Year: 2015-16 Shri Arsalan Ahmed, 88/386, Burfkhana, Chamanganj, Kanpur. PAN:AGYPA9115C Vs. Income Tax Officer-3(1), Kanpur. (Appellant) (Respondent) O R D E R PER ANADEE NATH MISSHRA:A.M. (A) This appeal vide I.T.A. No.471/Lkw/2019 has been filed by the assessee for assessment year 2015-16 against impugned appellate order dated 19/06/2019 of learned Commissioner of Income Tax (Appeals) [learned “CIT(A)” for short]. (A.1) At the time of hearing before us on 16/08/2023, the assessee was neither present himself nor was represented by anyone. The Revenue was represented by Shri Sanjeev Krishna Sharma, Senior Departmental Representative. It was informed by learned Sr. D.R. that the notice of hearing has Appellant by None Respondent by Shri Sanjeev Krishna Sharma, Senior Departmental Representative (“Sr. DR" for short) I.T.A. No.471/Lkw/2019 Assessment year:2015-16 2 been served on 11/07/2023 on the mother of the assessee. The acknowledgement in original along with copy of forwarding letter of the Assessing Officer [Income Tax Officer-1(1)(1), Kanpur] was also filed by learned Sr. D.R. for Revenue. On earlier occasions, this appeal was fixed for hearing on 02/02/2022, 10/03/2022, 06/04/2022, 19/05/2022 and 07/06/2023 but the notices of hearings were returned back by postal authorities with the remark ‘left’. Eventually for the hearing fixed in Income Tax Appellate Tribunal (“ITAT” for short) on 16/08/2023, the learned Sr. D.R. was requested on 07/06/2023 to serve the notice of hearing on the assessee. As mentioned earlier, the notice of hearing, fixed for hearing on 16/08/2023, has been served on the assessee’s mother. Accordingly, we have decided to proceed with the hearing and dispose off this appeal. In the absence of any representation from assessee’s side, we heard the learned Sr. D.R. for Revenue. He relied on the order of learned CIT(A). Relevant part of the order of the learned CIT(A) is reproduced as under: “4. Brief facts of the cases: The assessee had filed its return of income on 28.03.2016 declaring total loss of Rs.14,22,930/-. The case was selected for scrutiny and notice u/s 143(2)/142(1) were issued and served upon the assessee. A.O. completed the assessment by making addition of Rs. 36,20,184/- (Rs.35,66,684/- on account of disallowance of exemption u/s 10(38) and on account of commission paid @ 3% Rs. 53,500/-). Aggrieved, appellant is in appeal before the undersigned. 5. Discussion & decision: Ground no. 1 to 11 pertains to addition on account of disallowance of claim u/s 10(38) of the Act. Appellant claimed exemption u/s 10(33) of the Act, in respect of Long Term Capital Gain (LTCG) accrued from sale of shares of following company. S.No. Name and code of the scrip A.Y. LTCG/LTCL Total 1. M/s CCL International 2015-16 Rs.35,66,684/- Rs.35,66,684/- Total - Rs.35,66,684/- I.T.A. No.471/Lkw/2019 Assessment year:2015-16 3 The AO noticed that above said huge LTCG was earned by the appellant during the previous year and he intended to examine the genuineness of above LTCG keeping in view the report of Pr. DIT (Investigation), Kolkata regarding 84 penny stock cases in which, unaccounted money of the beneficiary were routed through certain stock brokers/entry operators in the scrip of penny stock to generate the exempted income in the form of LTCG/STCG. During the assessment proceeding; the AO examined the issue very meticulously and concluded that claim of exemption u/s 10(38) of the Act by the appellant is nothing but unexplained credit u/s 68 of the Act and added Rs.5,66,684/-, as unexplained income of the appellant. 6. On the other hand, ld. A.R. of the appellant vide his submission dated 11.04.2018 has submitted that the assessee has sold shares of M/s. CCL International which the assessee had acquired during the year under consideration & shown Long term capital gain amounting to Rs. 35,66,684/-. Various case laws were also cited by the appellant in his favour. Therefore, it was submitted that, the addition made by the A.O. is unjustified and liable to be deleted. 7. The undersigned has carefully gone through the assessment order, written submission as well as verbal argument of the ld. A.R. of the appellant It is seen that the appellant has gained astronomical profits from sale of shares of M/s. CCL International Examination of financial statements like balance sheet & Profit & loss account, as reproduced by AO in assessment order reveal that this alleged company is not carrying any genuine business activities and do not possess any fixed assets and are disclosing Nil profits or running in losses for last 3 assessment years including the relevant assessment year under appeal. Astronomical increase in share price without any economic or financial prudence, show, share price of alleged companies are rigged, manipulated and non-genuine. Thus, it is concluded that alleged shares are "penny stock". 7.1 Considering the totality the factual matrix of the case, as mentioned by AO, following uncontroverted factual picture emerges: i. Investigation wing of Kolkata has carried out investigation in 84 scrips of Penny Stocks, which included scrips I.T.A. No.471/Lkw/2019 Assessment year:2015-16 4 of M/s. CCL International from which, appellant and his group companies have taken the entries of LTCG/STCG. ii. According to statement recorded on oath u/s 131 of the Act on by Investigation wing of the Revenue at Kolkata of key officials/Directors of different stock broking companies, where they admitted about their nexus with entry operators regarding pre-arranged bogus LTCG. It is clearly established that the share of M/s. CCL International has been used for accommodation entries for bogus LTCG. iii. Further, during the assessment proceeding, the AO very specifically analyzed the price movement of shares of these companies and found that contrary to the market trends (BSE Sensex), rates of above said companies moved at unexpectedly high end. The AO in his assessment order has mentioned it elaborately. AC also analyzed the basis and frequency of rising share price in market trend but he found that there was no change in the basic fundamentals of the company's balance sheet nor any new business opportunities were with these companies and even no any new step towards any business expansion or any other idea was there, which may attract the public to purchase of shares of these companies. iv. A.O. has elaborately discussed and demonstrated that, the higher quoted price of the Penny Stock's was the result of rigging of scrip through circular trading without any intrinsic value of the shares of such Penny stocks. v. Independent enquires of Stock Exchange Board of India (SEBI) has confirmed that, such scheme of Penny Stock's is prevalent for converting black money into white. vi. Numerous statements of the brokers/operators/Directors of the papers companies/ directors of penny stock companies have confessed and accepted in statements recorded on oath regarding the modus operandi adopted in the scam of bogus LTCG. The same is elaborated and reproduced by the AO in his assessment order. I.T.A. No.471/Lkw/2019 Assessment year:2015-16 5 vii. Many individuals/entities have admitted the bogus claim of LTCG/STCG without any enquiry by any authority and also withdrawn their claim by filing the revised returns there by accepting there wrong claim of exemption u/s 10(38) of the Act. This strengthens the case of revenue. viii. A search u/s 132 of the Act was conducted in the case of Shri Subodh Agarwal and Rich Udhyog group of cases on 28.04.2015, wherein the script of M/s Sulabh Engg. & Services Ltd. & M/s Nikky Global Finance Ltd. was involved. The search proceedings were challenged in writ petition no.458/459 of 2015 at Allahabad High Court. Hon'ble Allahabad High Court after perusing the satisfaction note and all the seized material dismissed the his writ petition and observed that this group is involved in 'clandestine activity of taking cash and making dubious transactions in cheque, thereby laundering the money'. 7.2 Thus, from the above detailed observations, it is evident that appellant was one of the beneficiary of such bogus Penny Stocks scheme for converting his black money into white without the payment of taxes in the garb of bogus claim of exemption u/s 10(38) of the Act. Appellant purchased shares through off market trade and could not substantiate the purchases of shares. Appellant has nothing except the paper work of contract note to explain his case. It is settled preposition of law that, if an, exemption is claimed by the appellant then it is for the appellant to prove that, such claim is genuine. AO has dealt with at length to successfully establish that, the cheque received for the sale of penny stocks shares are part and parcel of scam of bogus Penny Stock in the garb of exemption u/s 10(38) of the Act Also, A.O. has discussed at length the methodology adopted by the appellant artificially rigged the share price of Penny Stock through circular trading The astronomical increase in share price of the Penny Stock is against the proportional increase in share market and against the share at that relevant time. Various share broker/operator/director of paper entities/exit operator have accepted their wrong doing in the sworn statement recorded before statutory authorities, which is very relevant evidence against the appeliant. Independent investigation conducted by investigation directorate, Kolkata and SEBI have corroborated the findings of A.O., regarding the scam of bogus claim of LTCG/STCG. A.O. has recorded the finding of fact that exit provider or the purchasers of Penny Stock at such I.T.A. No.471/Lkw/2019 Assessment year:2015-16 6 astronomical prices are person without established credit capacity or creditworthiness. A.C. has also established the fact that exceptionally high share prices of Penny Stock are without any economic and financial basis. In the present fact of the case, undersigned is of the view that, the claim of appellant is non-genuine, concocted bogus and fabricated. Case laws cited by the ld. A.R. are on their own footings and distinguishable on facts as much as no detailed enquires were conducted in the case cited by the appellant, whereas, in present facts of the case, detailed enquires were conducted by the Investigation Wing of the department. All the inquiry, examination and investigation establish that company providing STCG/LTCG is merely a paper Company and indulged in creating bogus STCG/LTCG. Moreover, at every stage, appellant is unable to prove the genuineness of said STCG except reiterating that all paper relating to transaction are available on record. Further, undersigned finds the ratio laid down by Hon'ble Delhi High Court in the case of M/s.NDR Promoters Pvt. Ltd. Vs. PCIT ITA No. 49/2018 dated 17.01.2019 very relevant Para-13 & 14 of the said judgment is reproduced here-in- under: "13. As we perceive, there are two sets of judgments and cases, but these judgments and cases proceed on their own facts. In one set of cases, the assessee produced necessary documents/evidence to show and establish identity of the shareholders, bank account from which payment was made, the fact that payments were received thorough banking channels, filed Tome Tax necessary affidavits of the shareholders or confirmations of the directors of the shareholder companies, but thereafter no further inquiries were conducted. The second set of cases are those where there was evidence and material to show that the shareholder company was only a paper company having no source of income, but had made substantial and huge investments in the form of share application money. The assessing officer has referred to the bank statement, financial position of the recipient and beneficiary assessee and surrounding circumstances. The primary requirements, which should be satisfied in such cases is the identification of creditors/shareholder, creditworthiness of creditors/shareholder and genuineness of the transaction. These three requirements have to be tested not superficially but in depth having regard to the human probabilities and normal course of human conduct. I.T.A. No.471/Lkw/2019 Assessment year:2015-16 7 14. Certificate of incorporation, PAN number etc are relevant for purchase of identification, but have their limitation when there is evidence and material to show that the subscriber was a paper company and not a genuine investor. It is in this context, the Supreme Court in CIT Vs. Durga Prasad More [1971] 82 ITR 540 (SC) had observed: "Now we shall proceed to examine the validity of those grounds that appealed to the learned judges. It is true that the apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real In a case of the present kind a party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self- serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents." Hon'ble Supreme Court in its latest landmark judgement in the case of PCIT (Central)-1 Vs. NRA Iron Steel Pvt. Ltd. SLP (Civil) No. 29855 of 2018) dated 05.03.2019 has held the similar view. The relevant observation in para 11 to 14 is reproduced here in under: 11. The principles which emerge where sums of money are credited as Share Capital/Premium are: i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and credit-worthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. I.T.A. No.471/Lkw/2019 Assessment year:2015-16 8 ii. The Assessing Officer is duty bound to investigate the credit-worthiness of the creditor/ subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit- worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act. 12. In the present case, the A.O. had conducted detailed enquiry which revealed that: 1. There was no material on record to prove, or even remotely suggest, that the share application money was received from independent legal entities. The survey revealed that some of the investor companies were nonexistent, and had no office at the address mentioned by the assessee. a. The companies Hema Trading Co. Pvt. Ltd. and Eternity Multi Trade Pvt. Ltd. at Mumbai, were found to be non-existent at the address given, and the premises was owned by some other person, b. The companies at Kolkatta did not appear before the A.O. nor did they produce their bank statements to substantiate the source of the funds from which the alleged investments were made. c. The two companies at Guwahati: viz. Ispat Sheet Ltd. and Novelty Traders Ltd., were found to be nonexistent at the address provided. The genuineness of the transaction was found to be completely doubtful. The enquiries revealed that the investor companies had filed returns for a negligible taxable income, which would show that the investors did not have the financial capacity to invest funds I.T.A. No.471/Lkw/2019 Assessment year:2015-16 9 ranging between Rs. 90,00,000/-to Rs. 95,00,000/- in the Assessment Year 2009-10, for purchase of shares at such a high premium. For example: Neha Cassetes Pvt. Ltd. - Kolkatta has disclosed a taxable income of Rs.9,744/- for A.Y. 2009-10, but had purchased Shares worth Rs.90,00,000/- in the Assessee Company. Similarly Warner Multimedia Ltd. - Kolkatta filed a NIL return, but had purchased Shares worth Rs.95,00,000/- in the Assessee Company - Respondent. Another example is of Ganga Builders Ltd. Kolkatta which had filed a return for Rs.5,850 but invested in shares to the tune of Rs.90,00,000/- in the Assessee Company - Respondent, etc. iii. There was no explanation whatsoever offered as to why the investor companies had applied for shares of the Assessee Company at a high premium of Rs. 190 per share, even though the face value of the share was Rs. 10/- per share. iv. Furthermore, none of the so-called investor companies established the source of funds from which the high share premium was invested. v. The mere mention of the income tax file number of an investor was not sufficient to discharge the onus under Section 68 of the Act. 13. The lower appellate authorities appear to have ignored the detailed findings of the AO from the field enquiry and investigations carried out by his office. The authorities below have erroneously held that merely because the Respondent Company - Assessee had filed all the primary evidence, the onus on the Assessee stood discharged. I.T.A. No.471/Lkw/2019 Assessment year:2015-16 10 The lower appellate authorities failed to appreciate that the investor companies which had filed income tax returns with a meager or nil income had to explain how they had invested such huge sums of money in the Assessee Company - Respondent. Clearly the onus to establish the credit worthiness of the investor companies was not discharged. The entire transaction seemed bogus, and lacked credibility. The Court/Authorities below did not even advert to the field enquiry conducted by the AO which revealed that in several cases the investor companies were found to be non-existent, and the onus to establish the identity of the investor companies, was not charged by the assessee 14. The practice of conversion of un-accounted money through the cloak of Share Capital/Premium must be subjected to careful scrutiny. This would be. particularly so in the case of private placement of shares, where a higher onus is required to be placed on the Assessee since the information is within the personal knowledge of the Assessee. The Assessee is under a legal obligation to prove the receipt of share capital/premium to the satisfaction of the AO, failure of which, would justify addition of the said amount to the income of the Assessee." In the instant facts of the case ratio laid down by Hon'ble Supreme Court in its latest landmark judgement in the case of PCIT (Central)-1 Vs. NRA Iron Steel Pvt. Ltd.SLP (Civil) No. 29855 of 2018 dated 05.03.2019 and Hon'ble Delhi High Court in the case of M/s.NDR Promoters Pvt. Ltd. Vs. PCIT are squarely applicable. 7.3 Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT 82 ITR 543 has observed that if the purchases are not proved and the human probability of preponderance of the transaction is in favour of the revenue then the credits can be treated as unexplained. Further, in the case of Sanjay Bimal chand Jain vs. PCIT in ITA no. 18 of 2017, Hon'ble Bombay High Court has held that, "Bogus LTCG from Penny stocks: The assessee has not tendered cogent evidence to explain how the shares in an unknown company worth Rs.5 had jumped to Rs. 485 in no time. The fantastic sale price was not at all possible as there was no economic or financial basis to justify the price rise. The assessee had indulged in a dubious share transaction meant to I.T.A. No.471/Lkw/2019 Assessment year:2015-16 11 account for the undisclosed income in the garb of long term capital gain. The gain has accordingly to be assessed as undisclosed credit u/s 68 of the Act." 7.4 It is trite law that, In order to claim the exemption from payment of income tax, the assessee had to put before the Income Tax authorities proper materials which would enable them to come to a conclusion [35 ITR 312 (SC)]. It is also the principal of section 68 of the Act that, initial onus is on the appellant to established identity, credit capacity of the creditor and genuineness of transaction. In the present facts of the case, appellant has not produced any cogent evidence to discharge the onus casted on his. On the contrary AO has established the non-genuine nature of alleged transaction through various enquires conducted by SEBI and investigation wing of the department. Appellant has not placed any material before the undersigned to dislodge the findings recorded by the AO. Thus, the actions of the applicant to credit STCG are nothing, but a premeditated, contumacious conduct, surreptitiously done for specific reasons for converting unaccounted money of the appellant under the guise of long term share transactions, that too without paying the requisite tax on the same. This is clearly in the realm of tax evasion. On the other hand, from the above facts and surrounding circumstances, human conduct, preponderance of probabilities etc., the AO has clearly established that the impugned transaction is not made for an investment, i.e. the motive is not to derive income but to earn a profit that too by an arrangement one and it is manipulated transaction in collusion with the brokers to paint creditworthiness to the transaction and claim exemption u/s. 10(38). This is. in accordance with the ratio laid by the Hon'ble Apex Court in Sumati Dayal Vs Commissioner Of Income-Tax, 214 ITR 801(SC), that" the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. (See CIT v. Durga Prasad More [1971] 82 ITR 540 SC (at pages 545, 547). Further, the Hon'ble Apex Court in Kale Khan Mohammad Hanif.Vs Commissioner of Income-Tax, M. P. And Bhopal in 50 ITR 1 (SC) held that" it is well established that the Onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the I.T.A. No.471/Lkw/2019 Assessment year:2015-16 12 receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Income-tax Officer is entitled to treat it as taxable income. Govindarajulu Mudaliar y. Commissioner of Income-tax 34 ITR 807 SC. Various case laws cited by the appellant are on their own footings and are not applicable to the facts of the instant case because elaborate enquiries and statements on oath for brokers/sub brokers/entry providers/beneficiary are discussed by the AO in his assessment orders and that was not the case in the judgement cited by the ld. A.R. In the following judicial pronouncements credit entries received were treated, as unexplained and liable to be taxed u/s 68 of the Act, if the creditors were entities/persons involved in providing accommodation entries. i. CIT vs. Nova Promoters & Finlese (P) Ltd. [2013] 342 ITR 169 [Delhi], ii. CIT vs. D. K Garg [2017] 84 taxmann.com 257 [Delhi] iii. Mrs. Vidhya Reddy vs. ITO [2018] ITAT Chennai order in ITA No. 2016/chny/2017 dated 15.05.2018. iv. Income Tax Officer vs. Shamim M. Bharwani I.T.A. No.4906/Mum/2011 order dated 27/03/2015 Thus, it is concluded that, claim of the appellant about exempted STCG u/s 10(38) of the Act are non-genuine, concocted, fabricated, unsubstantiated and bogus. 7.5 On the issue of cross examination, undersigned is of the view that, statements of share brokers, operators, promoters & exit providers were shown and confronted to the appellant. Further, Hon'ble Supreme Court, in the well known Dhakeswari Cotton Mills (26 ITR 775 at 782) case, ruled that the Evidence Act may have no application to tax assessment proceedings. However, the court also clarified later, in Chuharmal vs CIT (172 ITR 250 at 255 SC), that when the taxing authorities are desirous of invoking the principles of the Evidence Act in proceedings before them, they are not prevented from doing so. All that is required is that whatever material they collect will have to be placed before the tax-paying assessee if adverse inference is going to be drawn – audi alteram partem is a well-known principle of natural justice. This principle is established by the judgment of the Supreme Court in Dhakeswari Cotton Mills Ltd. v. C.I.T. (26 I.T.R. 775, 783), and applied by that court in Kishinchand I.T.A. No.471/Lkw/2019 Assessment year:2015-16 13 Chellaram vs C.I.T. (125 I.T.R. 713), where an assessment based on the result of private inquiries conducted behind the back of the assessee was set aside because the evidence so gathered was not placed before the assessee. In Gunda Subbayya v. C.I.T.(7 I.T.R. 21, 28), Leach CJ said: "Information which the Income-Tax Officer has received may not always be accurate and it is only fair when he proposes to act on material which he has obtained from an outside source that he should give the assessee opportunity of showing, if he can, that the Income-Tax Officer has been misinformed; but the Income Tax obviously not bound to disclose the source of his information” In the case of P. S. Barkathali v. Directorate of Enforcement, New Delhi AIR KER 81, the Hon'ble High Court observed as under: "Even though the statement was subsequently retracted, the significance of admission in the first place cannot be under- mined. It is well established that mere bald retraction cannot take away the importance and evidentiary value of the original confession, specially in view of the fact that in this case, the deponent of the statement had provided the minute details relating to the transactions, It appears that the retraction statement was made purely to avoid clutches of law which had caught up with him and laid bare his nefarious activities." Further, jurisdictional Hon'ble Allahabad High Court in the case of Motilal Padampat Udyog Ltd. Vs. CIT 293 ITR 656 has laid down the correct preposition of law of cross examination and held as follows: "Right of cross-examination of persons from whom the Assessing Officer has collected the evidence is not required by law. The requirement of the statute for a valid assessment would be met if all the evidence collected which is to be used against the assessee while forming the assessment order is before the assessee and he is given opportunity to rebut the evidence. Further, in a recent judgment of Hon'ble High Court, Delhi published on 04.04.2019 in itatonline.com in the case of Udit Kaira vs. I.T.A. No.471/Lkw/2019 Assessment year:2015-16 14 ITO, it was held that "the astronomical growth of the value of the company share naturally excited the suspicion of revenue. The assessees's argument that he was denied the right to the cross examine the individuals who's statement laid to the enquiry and ultimate disallowance of long term capital gain claims is not relevant in the wake of finding of facts. The appeal of the appellant is accordingly dismissed." In the instant case all the incriminating statement has been shown to the appellant who has not challenged the content of the incriminating statement. Therefore it is concluded that, AO has followed the principal of natural justice by producing and confronting all the incriminating documents and statements recorded in favour of revenue to the appellant. 7.6 As regards to the grounds of appeal of the appellant related to addition of Rs. 53,500/- being unexplained commission paid @ 3%, it is noted that undersigned has recorded the categorical findings that transaction of LTCG is concocted and fabricated, hence commission paid in cash amount to Rs. 53,500/- being 3% of the value of transaction LTCG is to be treated as unexplained. Therefore, this ground is dismissed. 7.7 Therefore, in view of the above stated detailed discussion on the factual matrix of the case and the judicial pronouncements cited here-in-above, undersigned finds no reason to interfere with the addition made by Assessing Officer, which is hereby confirmed and grounds of appeal of the appellant are dismissed. 8. All other grounds of appeal are general in nature are treated as dismissed.” (B) The aforesaid impugned appellate order dated 19/06/2019 of learned CIT(A) has been perused by us carefully. We find that the learned CIT(A) has passed a detailed order giving due consideration to facts and circumstances, applicable law and relevant case laws. No material has been brought to our attention to take a view different from the view taken by learned CIT(A) in the aforesaid impugned appellate order dated 19/06/2019. Therefore, we decline to interfere with the impugned appellate order dated I.T.A. No.471/Lkw/2019 Assessment year:2015-16 15 19/06/2019 of learned CIT(A), and accordingly, we dismiss this appeal filed by the assessee. (C) In the result, the appeal of the assessee stands dismissed. (Order pronounced in the open court on 21/08/2023) Sd/. Sd/. (SUDHANSHU SRIVASTAVA) (ANADEE NATH MISSHRA) Judicial Member Accountant Member Dated:21/08/2023 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T., 5. CIT(A) Assistant Registrar