MRS. LAXMIDEVI S MALI , Mumbai V. ITO 21 (2)(2), Mumbai

ITA 4721/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2410 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 15-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Unexplained cash credit; Opportunity of being heard; Corroborative evidences; Accommodation entries; Set aside
• Section: 133(6); 113; 43; 131; 68

Judgement Text

1 ITA 4721/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) I.T.A. NO.4721/MUM/2019 (ASSESSMENT YEAR 2014-15) MRS. LAXMIDEVI S MALI 21, ASHISH INDUSTRIAL ESTATE GOKHALE ROAD (SOUTH), DADAR (W) MUMBAI 400 025 PAN : AAHPM6077A VS INCOME - TAX OFFICER - 21(2)(2), MUMBAI APPELLANT RESPONDENT APPELLANT BY SHRI GIRISH DAVE (AR) RESPONDENT BY S MT. SMITA VERMA ( DR) DATE OF HEARING 23-03-2021 DATE OF PRONOUNCEMENT 1 8 - 0 6 - 2021 O R D E R PER : SAKTIJIT DEY (JM): THIS IS AN APPEAL BY THE ASSESSEE AGAINST ORDER DA TED 14-06-2019 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-33, MUMBAI FOR THE ASSESSMENT YEAR 2014-15. 2. THE BASIC GRIEVANCE OF THE ASSESSEE IS AGAINST T HE ADDITION OF RS.19,39,532/- UNDER SECTION 68 OF THE ACT. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVI DUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED HER RETURN OF INCOME ON 29-11-2014 DECLARING TOTAL 2 ITA 4721/MUM/2019 INCOME OFRS.4,70,600/-. IN COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE, DURING THE YEAR HA D SOLD SHARES OF GFL FINANCIALS. HE FURTHER FOUND, THE GAIN DERIVED FROM SALE OF SUC H SHARE WAS TREATED AS LONG TERM CAPITAL GAIN AND CLAIMED TO BE EXEMPT UNDER SE CTION 10(38) OF THE INCOME TAX ACT, 1961. TO VERIFY THE GENUINENESS OF THE CAP ITAL GAIN DERIVED FROM SALE OF SHARES OF GFL FINANCIALS, THE ASSESSING OFFICER ISS UED SUMMONS UNDER SECTION 131 OF THE ACT TO THE ASSESSEE. IN THE STATEMENT RECORD ED, THE ASSESSEE STATED THAT SHE WAS IGNORANT ABOUT THE SHARE TRANSACTION AND IT WAS ENTIRELY MANAGED BY HER SON, SHRI ASHOK SAMARTH KUMAR MALI. BASED ON SUCH S TATEMENT OF THE ASSESSEE, THE ASSESSING OFFICER ISSUED SUMMONS UNDER SECTION 131 OF THE ACT TO ASSESSEES SON AND EXAMINED HIM ON OATH. IN THE STATEMENT RECO RDED, ASSESSEES SON ADMITTED THAT HE HANDLED THE SHARE TRANSACTION OF T HE ASSESSEE. FURTHER, WITH REFERENCE TO SALE OF SHARES OF GFL FINANCIALS, ASSE SSEES SON SUBMITTED THAT THE SHARES WERE PURCHASED THROUGH A BROKER, VIZ. PRAGAT I SHARES & STOCK SERVICES, BOTH, BY HIM AND HIS MOTHER AND WERE SOLD THROUGH N IRMAL BANG SECURITIES PVT LTD. EXPLAINING THE REASON FOR PURCHASES OF SHARES OF GFL FINANCIALS, IT WAS STATED THAT WHEN THE SHARE PRICES REDUCED TO AROUND RS.17 FROM RS.118/-, HE PURCHASED THE SHARES IN HIS NAME AS WELL AS IN THE NAME OF HI S MOTHER. FURTHER EXPLAINING THE REASONS FOR SALE OF SHARES, HE STATED THAT SINC E THE PRICE OF SHARES STARTED FALLING, HE SOLD A PART OF HIS MOTHERS SHARES IN G FL FINANCIALS AT THE PRICE OF RS.42/- PER SHARE. THE ASSESSING OFFICER, HOWEVER, WAS NOT CONVINCED WITH THE STATEMENT OF ASSESSEES SON. HE OBSERVED, AS PER TH E REPORT RECEIVED FROM INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA, GF L FINANCIALS IS A PENNY STOCK COMPANY AND THE PRICE OF SHARES WAS ARTIFICIALLY IN CREASED THROUGH RIGGING. AFTER RELYING UPON VARIOUS JUDICIAL PRECEDENTS, THE ASSES SING OFFICER TREATED THE AMOUNT 3 ITA 4721/MUM/2019 RECEIVED TOWARDS SALE CONSIDERATION OF SHARES OF GF L FINANCIALS AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AND ADDED B ACK TO THE INCOME OF THE ASSESSEE. THOUGH, THE ASSESSEE CONTESTED THE ADDITI ON BEFORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS); HOWEVER, SHE WAS UNSUCCESSFUL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED, THE ASSESSEE HAD PURCHASED 23,600 SHARES OF GFL FINANCIALS, EACH HAV ING FACE VALUE OF RS.5/- PER SHARE, AT A COST OF RS.16.91 PER SHARE ON 02-04-201 2. HE SUBMITTED, THE SHARES WERE PURCHASED THROUGH A BROKER, VIZ. PRAGATI SHARE S & STOCK SERVICES AND PAYMENT WAS MADE THROUGH ACCOUNT PAYEE CHEQUE. HE S UBMITTED, THEREAFTER, THE SHARES OF GFL FINANCIALS WERE SPLIT INTO RS.2/- PER SHARE AND ASSESSEE BECAME OWNER OF 59,000 SHARES WHICH WAS REFLECTED IN THE B ALANCE-SHEET. HE SUBMITTED, OUT OF THE 59,000 SHARES, ASSESSEE SOLD 42,500 SHAR ES IN THE CURRENT YEAR THROUGH ANOTHER BROKER, VIZ. NIRMAL BANK SECURITIES PVT LTD AND ALSO RECEIVED PAYMENT THROUGH ACCOUNT PAYEE CHEQUE. HE SUBMITTED, THE ENT IRE SHARE TRANSACTION RELATING TO PURCHASE AND SALE OF SHARES WERE THROUG H BANKING CHANNEL AND REFLECTED IN ASSESSEES DEMAT ACCOUNT. IN THIS CONT EXT, HE DREW OUR ATTENTION TO THE COPIES OF THE CONTRACT NOTE, DEMAT ACCOUNT, BAN K STATEMENT, ETC. FURTHER, HE SUBMITTED, THE PURCHASE AND SALE OF SHARES WERE ALS O CONFIRMED BY THE RESPECTIVE BROKERS. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE COPIES OF CONFIRMATION RECEIVED FROM THE BROKERS. HE SUBMITTED, THE ASSESS EE HAD PURCHASED THE SHARES AT AROUND RS.17/- PER SHARE AND SOLD AT THE COST OF RS.42/- PER SHARE. THEREFORE, THERE IS INCREASE OF ONLY RS.25 PER SHARE, WHICH, U NDER ANY CIRCUMSTANCES CANNOT BE CONSIDERED AS AN ARTIFICIAL OR EXCEPTIONALLY HIG H INCREASE IN VALUE. HE SUBMITTED, THE ASSESSEE IS STILL HOLDING 11,000 SHA RES OF GFL FINANCIALS. HE SUBMITTED, RELYING UPON SOME INVESTIGATION REPORT W HICH WAS NOT CONFRONTED TO 4 ITA 4721/MUM/2019 THE ASSESSEE IN COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER, ON MERE PRESUMPTION AND SURMISES HAS TREATED THE SHARE TRAN SACTION AS NON GENUINE AND ADDED BACK UNDER SECTION 68 OF THE ACT. HE SUBMITTE D, RESULT OF ENQUIRY CONDUCTED BY THE ASSESSING OFFICER WITH THE BROKERS WAS NEVER CONFRONTED TO THE ASSESSEE. HE SUBMITTED, ONLY AFTER COMPLETION OF AS SESSMENT, THE ASSESSEE COULD GET A COPY OF THE REPORT BY FILING APPLICATION UNDE R THE RTI ACT. HE SUBMITTED, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) SIMPLY RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER WHILE UPHOLDI NG THE ADDITION MADE. HE SUBMITTED, IN THE REPORT RECEIVED FROM THE INVESTIG ATION WING OF THE DEPARTMENT, THERE IS NO REFERENCE TO GFL FINANCIALS. FURTHER, H E SUBMITTED, NEITHER THE ASSESSING OFFICER NOR LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) HAS CONDUCTED ANY INDEPENDENT ENQUIRY WITH GFL FINANCIA LS TO ASCERTAIN THE GENUINENESS OF THE SHARE TRANSACTION. HE SUBMITTED, WHEN THE ENTIRE SHARE TRANSACTIONS WERE DONE IN A TRANSPARENT MANNER AND ALL SUPPORTING EVIDENCES HAVE BEEN FURNISHED BY THE ASSESSEE TO PROVE THE GE NUINENESS OF THE SHARE TRANSACTION, THE ASSESSING OFFICER AND LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) WERE UNJUSTIFIED IN TREATING THE AMOUNT R ECEIVED FROM SALE OF SHARES AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT . HE SUBMITTED, WHEN THE ASSESSEE HAS SATISFIED ALL THE INGREDIENTS OF SECTI ON 68 OF THE ACT BY ESTABLISHING IDENTITY, GENUINENESS AND CREDITWORTHINESS, NO ADDI TION COULD HAVE BEEN MADE UNDER THE SAID PROVISION. IN SUPPORT OF SUCH CONTEN TION, LEARNED COUNSEL RELIED UPON THE FOLLOWING DECISIONS:- 1. CIT VS SHYAM R PAWAR (2015 54 TAXMANN.COM 108 ( BOM) 2. KAMLESH MUNDRA VS ITO, WD.19(2)(3) ITA NO.6248/ MUM/2012 5 ITA 4721/MUM/2019 3. ITO,WD.2, NIZAMABAD VS SMT. AARTI MITTAL (2014) 41 TAXMANN.COM 118 (HYDERABAD.TRIB) 4. ARCELI REALTY LIMITED VS ITO (ITAT MUMBAI) 5. CIT, JAMSHEDPUR VS ARUN KUMAR AGRAWAL,HUF (2012) 26 TAXMANN.COM 113 (JHARKHAND) (2012) 210 T AXMAN 405 (JHARKHAND) 6. PR.CIT-5 VS JATIN INVESTMENTS PVT LTD ITA NOS 43 /2016 & 44/2016 (DEL HC) 7. SHRI SUNIL PRAKASH VS ACIT-15(2), MUMBAI ITA 6494/MUM/2014 (ITAT MUMBAI E BENCH) 8. SMT. SUNITA JAIN VS INCOME-TAX OFFICER,WARD 10(3 ), AHMEDABAD ITA NOS.501& 502/AHD/2016 (ITAT AHMEDABAD SMC BENC H 9. VASANTRAJ BIRAWAT VS ASSISTANT COMMISSIONER OF INCOME TAX (2015) 61 TAXMANN.COM 295 (MUMBAI-TRIB)/(2015) 39 I TR (T) 450 (MUMBAI-TRIB) 10. (2017) 77 TAXMANN.COM 260 (AHMEDABAD TRIB) PRATIK SURYAKANT SHAH VS ITO, WARD 10(3), AHMEDAB AD 12. (2015) 55 TAXMANN.COM 346 (PUNE-TRIB) SMT. SMITA P PATIL VS ACIT 5. STRONGLY RELYING UPON THE OBSERVATIONS OF THE AS SESSING OFFICER AND LEARNED COMMISSIONER OF INCOME TAX (APPEALS), LEARNED DEPAR TMENTAL REPRESENTATIVE SUBMITTED, THE ASSESSEE HERSELF WAS COMPLETELY IGNO RANT ABOUT THE SHARE TRANSACTION CONDUCTED IN HER NAME. SHE SUBMITTED, AS PER ASSESSEES OWN ADMISSION, THE ENTIRE SHARE TRANSACTION WAS MANAGED BY HER SON. SHE SUBMITTED, THE ASSESSING OFFICER HAD RECEIVED SPECIFIC INFORMA TION FROM THE INVESTIGATION 6 ITA 4721/MUM/2019 WING OF THE DEPARTMENT AT KOLKATA THAT GFL FINANCIA LS IS A PENNY STOCK COMPANY AND PRICE OF ITS SHARES HAVE BEEN INCREASED THROUGH RIGGING TO PROVIDE ACCOMMODATION ENTRIES TO VARIOUS PERSONS / ENTITIES . SHE SUBMITTED, IN COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER, THOUG H, TRIED TO ASCERTAIN THE GENUINENESS OF THE SHARE TRANSACTION BY CONDUCTING ENQUIRIES WITH THE PURCHASERS OF SHARES FROM THE ASSESSEE; HOWEVER, EXCEPT TWO IN DIVIDUALS, NO RESPONSE WAS RECEIVED FROM THE OTHER ENTITIES. THUS, SHE SUBMITT ED, THE ENQUIRY CONDUCTED BY THE ASSESSING OFFICER CLEARLY SHOWS THAT THE SHARE TRANSACTION WAS NON GENUINE. DRAWING OUR ATTENTION TO CERTAIN OBSERVATIONS OF LE ARNED COMMISSIONER OF INCOME TAX (APPEALS), LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED, THE FACT THAT THE BROKER FROM WHOM THE ASSESSEE CLAIMED TO HAVE PURCH ASED THE SHARES ON 02-04- 2012 KEPT THE SHARES IN ITS POOL ACCOUNT AND TRANSF ERRED TO THE DEMAT ACCOUNT OF THE ASSESSEE ONLY ON 16-04-2013 MAKES THE TRANSACTI ON SUSPICIOUS. FURTHER, SHE SUBMITTED, THE CHEQUE ISSUED BY THE ASSESSEE TOWARD S PURCHASE OF SHARES WAS ALSO ENCASHED WITH SUBSTANTIAL DELAY. SHE SUBMITTED , LOOKING AT THE STANDING OF GFL FINANCIALS, THE SUBSTANTIAL INCREASE IN THE PRI CE OF SHARES WITHIN A SHORT SPAN OF 18 MONTHS ALSO MAKES THE CLAIM OF THE ASSESSEE D OUBTFUL. THUS, SHE SUBMITTED, THE FACTS ON RECORD CLEARLY PROVE THAT THE ASSESSEE HAS BEEN USED AS AN INTERMEDIARY TO PROVIDE SAFE EXIT TO SOME ENTITIES BY SELLING THE SHARES AT A HIGH PRICE. THUS, SHE SUBMITTED, THE ASSESSING OFFICER W AS JUSTIFIED IN REJECTING ASSESSEES CLAIM OF LONG TERM CAPITAL GAIN AND MAKI NG ADDITION UNDER SECTION 68 OF THE ACT. IN SUPPORT OF HER CONTENTIONS, LEARNED DEP ARTMENTAL REPRESENTATIVE RELIED UPON THE FOLLOWING DECISIONS:- 1. SANJAY BIMALCHAND VS ITO, WD.4(2), NAGPUR BOMBAY HIGH COURT, NAGPUR BENCH ITA NO.18/2017 DATED 10-04-2017 7 ITA 4721/MUM/2019 2. ITO NON CORPORATE CIRCLE-6 VS SMT. THARAKUMARI MADRAS HIGH COURT DATED 11-02-2019 TAX CASE APPEAL NO.128 OF 2019 AND C.M.P. NO.335 3 OF 2019 3. COMMISSIONER OF INCOME-TAX CHENNAI VS MRS MANIS H D JAIN (HUF) IN THE HIGH COURT OF MADRAS TCA NO.223 OF 2020 ORDER DATED 16/12/2020 4. UDIT KALRA VS ITO,WD.50-(1), DELHI (DELHI HIGH COURT) ITA 220/2019 & CM NO.10774/2019 DT 08-03-2019 5. SUMAN PODDAR VS ITO, DELHI ITA 842/019 IN THE HIGH COURT OF DELHI DT 17-09-2 019 6. SUMAR PODDAR VS ITO,DELHI SPECIAL LEAVE TO APPEAL (C) NO.26864/2019 IN THE SUPREME COURT OF INDIA DATED 22-11-2019 7. RATNAKAR M PUJARI VS ITO WARD 25(3)(3), MUMBAI ITA NO.995/MUM/2012 ITAT,D-BENCH 8. SHAMIM IMTIAZ HINGORA VS ITO (ITAT PUNE) APPEAL NO 1875/PUN/2018 DT. 01-03-2019 9. SHAMIM M BHARWANI, MUMBAI VS DEPARTMENT OF INCO ME-TAX ITA 4906/MUM/2011 DATED 27 MARCH, 2015 10. POOJA AJMANI VS ITO (ITAT DELHI) ITA 5714/DEL/2018 IN THE HIGH COURT OF DELHI APRIL 25, 2019 11. SHRI SANAT KUMAR VS ACIT, CIRCLE 36(1), DELHI ITA NO.1881/DEL/2018 8 ITA 4721/MUM/2019 12. SHRI SANDEEP BHARGAVA VS ACIT, CIR.60(1), NEW DELHI ITA NO.420/DEL/2019 DT 20-08-2019 13. SHRI SATISH KISHORE, SHRI NAWAL KISHORE VS ITO WD.47(2) & 47(4), DELHI ITAT DELHI G BENCH ITA NO.1705/DEL/2019 DT 06-0 9-2019 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS IN THE LIGH T OF DECISIONS RELIED UPON AND PERUSED MATERIALS ON RECORD. ADMITTEDLY, THE D ISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE GENUINENESS OF LONG TERM CAPITAL GA IN DERIVED FROM SALE OF SHARES OF GFL FINANCIALS. IT IS EVIDENT, THE ASSESSEE, IN HER STATEMENT RECORDED UNDER SECTION 131 OF THE ACT HAS VERY CLEARLY EXPRESSED H ER IGNORANCE ABOUT THE SHARE TRANSACTION CARRIED ON BY HER AND HAS STATED THAT I T IS MANAGED BY HER SON. THOUGH, IN THE STATEMENT RECORDED UNDER SECTION 131 OF THE ACT ASSESSEES SON HAD ADMITTED OF HAVING PURCHASED THE SHARES OF GFL FINANCIALS IN HIS AS WELL AS IN HIS MOTHERS NAME AND HAS CLAIMED THAT THE SHARE TR ANSACTION IS GENUINE; HOWEVER, THE ASSESSING OFFICER HAS DISBELIEVED SUCH CLAIM. THE PRIMARY REASON FOR DISBELIEVING THE CLAIM, AS APPEARS FROM THE ASSESSM ENT ORDER IS, BASED ON A REPORT RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTM ENT AT KOLKATA. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO REFER RED TO THE VERY SAME REPORT OF THE INVESTIGATION WING. HOWEVER, IT IS THE SPECI FIC ARGUMENT OF LEARNED COUNSEL FOR THE ASSESSEE THAT NEITHER THE ASSESSING OFFICER NOR LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CONDUCTED ANY INDEPENDENT ENQUIRY TO GET TO THE ROOT OF THE MATTER AND HAS SIMPLY RELIED UPON THE REPORT OF THE INVESTIGATION WING. TO DEMONSTRATE THAT THE SHARE TRANSACTION IS GENUINE, LEARNED COUNSEL FOR THE ASSESSEE HAS DREW OUR ATTENTION TO THE COPIES OF TH E CONTRACT NOTE, DEMAT ACCOUNT, BANK STATEMENT, CONFIRMATION RECEIVED FROM THE BROKERS THROUGH WHOM THE ASSESSEE HAD PURCHASED AND SOLD THE SHARES, ETC . 9 ITA 4721/MUM/2019 7. UNDISPUTEDLY, THE ASSESSEE HAD PURCHASED THE SHA RES AT THE COST OF ABOUT RS.17 PER SHARE ON 02-04-2012 AND HAS SOLD A PART O F SUCH SHARES IN AUGUST/SEPTEMBER, 2013 AT RS.42/- PER SHARE. THUS, THERE IS DEFINITELY SUBSTANTIAL INCREASE IN COST OF SHARES WITHIN A SHORT SPAN OF T IME. HOWEVER, THE CRUCIAL FACT WHICH REQUIRES EXAMINATION IS, WHAT IS THE INVESTIG ATION/ENQUIRY CONDUCTED BY THE INVESTIGATION WING AT KOLKATA IN RESPECT OF GFL FIN ANCIALS LTD AND WHETHER THERE IS ANY REFERENCE, AT ALL, TO GFL FINANCIALS IN THE REP ORT FURNISHED BY THE INVESTIGATION WING, KOLKATA. FROM THE EXTRACTED PORTION OF THE AF ORESAID REPORT IN THE ASSESSMENT ORDER, NOTHING SPECIFIC IS FORTHCOMING. HOWEVER, WE ARE UNABLE TO RECORD ANY CONCLUSIVE FINDING AS ENTIRE REPORT OF T HE INVESTIGATION WING, KOLKATA IS NOT AVAILABLE ON RECORD. IT ALSO APPEARS, NEITHER T HE ASSESSING OFFICER NOR LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CONDUCTED ANY INDEPENDENT ENQUIRY WITH GFL FINANCIALS AT THEIR OWN LEVEL TO ASCERTAIN THE GENUINENESS OF THE TRANSACTION. 8. AT THE SAME TIME, IT IS A FACT THAT THE ASSESSIN G OFFICER HAS CONDUCTED ENQUIRIES WITH THE BROKERS THROUGH WHOM THE ASSESSE E HAD PURCHASED AND SOLD SHARES. THOUGH, BOTH THE BROKERS HAVE CONFIRMED OF HAVING CARRIED OUT THE TRANSACTION WITH THE ASSESSEE; HOWEVER, IT IS EVIDE NT THAT MOST OF THE ENTITIES WHO PURCHASED SHARES OF GFL FINANCIALS SOLD BY THE ASSE SSEE DID NOT RESPOND TO THE NOTICES ISSUED UNDER SECTION 133(6) SEEKING CERTAIN INFORMATION. FURTHER, AS OBSERVED BY ASSESSING OFFICER, SOME OF THE NOTICES ISSUED UNDER SECTION 133(6) HAVE RETURNED BACK UNSERVED. IT IS ALSO A FACT THAT THOUGH THE ASSESSEE HAD PURCHASED THE SHARES FROM PRAGATI SHARES & STOCK SE RVICES ON 02-04-2012; HOWEVER, THEY WERE NOT IMMEDIATELY TRANSFERRED TO A SSESSEES DEMAT ACCOUNT, BUT WERE KEPT IN THE POOL ACCOUNT OF THE BROKER AND WAS TRANSFERRED TO ASSESSEES 10 ITA 4721/MUM/2019 DEMAT ACCOUNT AFTER MORE THAN A YEAR ON 16-04-2013. IT IS ALSO SURPRISING THAT THE CHEQUE ISSUED BY THE ASSESSEE TOWARDS PURCHASE OF S HARES ON 02-0-4-2012 WAS ENCASHED ONLY ON 16-04-2013, I.E. AFTER MORE THAN A YEAR FROM THE DATE OF PURCHASE. IT HAS FURTHER BEEN OBSERVED BY LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) THAT EVEN ON THE DATE ON WHICH THE SHARES WERE SPLIT, I.E. ON 09-03- 2013, THE SHARES WERE NOT CREDITED TO THE DEMAT ACC OUNT OF THE ASSESSEE. ALL THESE FACTS CERTAINLY RAISE SOME AMOUNT OF DOUBT AN D SUSPICION REGARDING THE SHARE TRANSACTION. HOWEVER, IT IS TRITE THAT DOUBT AND SUSPICION HOWSOEVER STRONG, CANNOT TAKE THE PLACE OF EVIDENCE. THEREFORE, MEREL Y BASED ON DOUBT AND SUSPICION, NO ADDITION CAN BE MADE. NONETHELESS, IN OUR CONSIDERED OPINION, THE ASSESSEE MUST ALSO COME CLEAN ON FACTS AND PROVE TH E GENUINENESS OF THE TRANSACTION BY PROPERLY EXPLAINING THE DOUBTS RAISE D BY THE DEPARTMENTAL AUTHORITIES WITH REGARD TO THE BELATED CREDIT OF TH E SHARES TO HER DEMAT ACCOUNT AND ENCASHMENT OF CHEQUE AFTER MORE THAN A YEAR OF TRANSACTION. 9. AS IT APPEARS, THE DOUBTS RAISED BY THE DEPARTME NTAL AUTHORITIES IN THEIR RESPECTIVE ORDERS, MAY NOT HAVE BEEN PUT FORWARD TO THE ASSESSEE SEEKING CLARIFICATION. IT IS ALSO A FACT THAT ENQUIRY WHICH WAS REQUIRED TO BE DONE BY THE DEPARTMENTAL AUTHORITIES TO GO TO THE ROOT OF THE M ATTER AND ASCERTAIN THE GENUINENESS OF THE SHARES OF GFL FINANCIALS, HAVE N OT BEEN DONE. THUS, IN OUR VIEW, THE ENTIRE ISSUE RELATING TO THE GENUINENESS OF SHARE TRANSACTION INVOLVING THE SHARES OF GFL FINANCIALS REQUIRES FRESH CONSIDE RATION AT THE END OF THE ASSESSING OFFICER. AS REGARDS THE DECISIONS RELIED UPON BY LEARNED COUNSELS APPEARING FOR THE PARTIES, THOUGH, THERE CANNOT BE ANY DISPUTE REGARDING THE PRINCIPLE/RATIO LAID THEREIN; HOWEVER, THEY HAVE TO BE APPLIED ONLY AFTER FULL FACTS ARE BROUGHT ON RECORD. SINCE, IN THE FACTS OF THE P RESENT CASE WE ARE OF THE VIEW 11 ITA 4721/MUM/2019 THAT THE FACTS RELATING TO THE DISPUTED ISSUE HAVE NOT BEEN FULLY BROUGHT ON RECORD, WE CANNOT APPLY THE RATIO LAID DOWN IN THE DECISION S RELIED UPON IN VACUUM. ACCORDINGLY, WE DEEM IT APPROPRIATE TO SET ASIDE TH E IMPUGNED ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORE TH E ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION KEEPING IN VIEW OUR OBSERVATIONS HEREINABOVE. NEEDLESS TO OBSERVE, THE ASSESSING OFF ICER MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE D ECIDING THE ISSUE. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18/06/2021. SD/- SD/- (MANOJ KUMAR AGGARWAL) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 18/06/2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI