Smt. Sarita Gupta, Kanpur V. Income Tax Officer-3(4), Kanpur

ITA 503/LKW/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7959 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 09-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Question of law; Accommodation entries; Condonation of delay; Bogus
• Section: 68; 250; 20

Judgement Text

I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW (THROUGH VIRTUAL HEARING) BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 SMT. SARITA GUPTA, K-168, GOPAL NAGAR, KIDWAI NAGAR, KANPUR. PAN:AFXPG0883K VS. INCOME TAX OFFICER - 3(4), KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A)-I, KANPUR DATED 26/06/2019 PERTAINING TO ASS ESSMENT YEAR 2015- 2016. 2. LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THERE IS A DELAY OF FIVE DAYS IN FILING THE APPEAL WHICH HAPPENED DUE TO CONFUSION AS TO THE DATE OF SERVICE OF NOTICE. IT WAS SUBMITTED THAT CIT(A) SENT THE ORDER BY MAIL ON 06/07/2019 WHEREAS THE PH YSICAL COPY O0F THE SAME WAS RECEIVED BY THE ASSESSEE ON 24/07/2019. T HE ASSESSEE MISTOOK THE DATE OF SERVICE AS 24/07/2019 INSTEAD OF 06/07/ 2019 AND THAT IS WHY IT APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY SHRI AJAY KUMAR, D.R. DATE OF HEARING 06 / 01 /20 21 DATE OF PRONOUNCEMENT 18 / 01 /20 21 I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 2 HAS CAUSED A DELAY OF FIVE DAYS WHICH MAY BE CONDON ED. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT A COPY OF AFFIDAVIT DULY SIGNED AND NOTARIZED ALONG WITH THE COPY OF PETITION FOR CONDO NATION OF DELAY IS PLACED ON RECORD AND PRAYED THAT THE DELAY MAY BE CONDONED AND THE APPEAL MAY BE ADMITTED. LEARNED D. R. HAD NO OBJECTION TO THE CONDONATION OF DELAY THEREFORE, FINDING THE CAUSE OF DELAY TO BE GENUINE , LEARNED A.R. WAS DIRECTED TO PROCEED WITH HIS ARGUMENTS ON MERITS. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE IS DULY COVERED IN FAVOUR OF THE ASSESSEE BY CONSOLIDATED OF THE TRIBUNAL IN THE CASE OF OTHER FAMILY MEMBERS OF THE ASSESSEE VIDE ORDER DATED 16/12/2020 WHEREIN THE SIMILAR ISSUE WAS DECI DED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. 4. LEARNED D. R. SUBMITTED THAT THE ASSESSEE DID NO T REPRESENT BEFORE THE CIT(A) AND THEREFORE, THE APPEAL MAY BE SET ASI DE TO THE OFFICE OF LEARNED CIT(A). LEARNED COUNSEL FOR THE ASSESSEE I N REJOINDER SUBMITTED THAT LEARNED CIT(A) HAS PASSED THE ORDER ON MERIT A ND IN EARLIER CASES ALSO, SIMILAR ARGUMENT WAS TAKEN BY LEARNED D. R. LEARNED COUNSEL FOR THE ASSESSEE PRAYED THAT THE APPEAL OF THE ASSESSEE MAY BE DECIDED FOLLOWING THE EARLIER TRIBUNAL ORDER. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED A LONG TERM CAPITAL GAIN ON THE SALE OF EQU ITY SHARES OF CCL INTERNATIONAL LTD. WHICH THE ASSESSING OFFICER, REL YING ON THE REPORT OF INVESTIGATION WING OF KOLKATA, HELD TO BE BOGUS AND MADE THE ADDITION U/S 68 OF THE ACT. THE ASSESSEE HAD PURCHASED 25,000 S HARES FROM SUKTARA TRADE LINK PRIVATE LIMITED, A COPY OF BILL IS PLACE D AT PAGE 5 OF THE PAPER I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 3 BOOK. THE PURCHASE CONSIDERATION WAS PAID AT RS.8, 25,000/- AND THE PAYMENT WAS MADE THROUGH RTGS FROM THE IDBI BANK OF THE ASSES SEE. THE PAYMENT OF RS.8,25,000/- IS REFLECTED ON 29/11/2013 AND IS EVI DENCED FROM PAGE 4 OF THE PAPER BOOK. THE SHARES OF CCL INTERNATIONAL LTD. GO T CREDITED TO DEMAT ACCOUNT OF THE ASSESSEE ON 02/12/2013 WHICH IS EVIDENT FROM PAGE 11 OF THE PAPER BOOK WHERE A COPY OF DEMAT STATEMENT OF THE ASSESSEE IS PLACED. PAGE 17 OF THE PAPER BOOK, WHICH AGAIN IS A COPY OF DEMAT STATEMEN T, REFLECTS THAT THE ASSESSEE SOLD 25,000 SHARES OF CCL INTERNATIONAL LT D. IN FIVE TRENCHES OF 5,000 ON EACH DATE STARTING FROM 9 TH DECEMBER, 2014 TO 19 TH JANUARY, 2015. THE SALE OF SUCH SHARES IS CORROBORATED BY CONTRACT NOTES IS SUED BY SEBI REGISTERED BROKER M/S EDELWEISS FINANCIAL ADVISORS LTD., A COP Y OF CONTRACT NOTE IS PLACED AT PAGES 6 TO 10 OF THE PAPER BOOK. THESE CONTRACT NO TES SHOW THE ORDER TIME, TRADE NUMBER AND TRADE TIME OF THE SHARES SOLD AND ALSO SHOW THAT SECURITY TRANSACTION TAX AND SERVICE TAX WAS ALSO PAID BY TH E ASSESSEE. THE SALE PROCEEDS OF SUCH SHARES WAS CREDITED TO THE BANK AC COUNT OF THE ASSESSEE. A COPY OF BANK ACCOUNT WHERE THE PROCEEDS ARE REFLECT ED IS PLACED IN PAPER BOOK PAGES 24 TO 25. THE COPY OF DEMAT STATEMENT OF ASS ESSEE REFLECTS VARIOUS OTHER SHARES ALSO WHICH THE ASSESSEE WAS HOLDING. ALL THE SE DOCUMENTARY EVIDENCES, WHICH WERE BEFORE THE ASSESSING OFFICER, SHOW THAT ASSESSEE DID EARN LONG TERM CAPITAL GAIN ON THE SALE OF EQUITY SHARES OF CCL IN TERNATIONAL LTD. LUCKNOW BENCH OF THE TRIBUNAL IN THE CONSOLIDATED ORDER DAT ED 16/12/2020 HAS DECIDED SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT GROUND NOS. 1 TO 4 WERE NOT PASSED BY LEARNED A. R. AS HE REQUESTED TO PASS THE ORDER ON MERITS AND THEREFORE, SAME ARE DISMISS ED AS NOT PRESSED. GROUND NOS. 5 TO 8 RELATES TO THE ADDITION UNDER DISPUTE REGARDING DENIAL OF EXEMPTION OF LONG TERM CAPITAL GAIN. GROUND NO. 9 AND 10 ARE REGARDING ADDITION U/ S 69 OF THE ACT WHICH THE ASSESSING OFFICER HAD MADE ON THE BASIS THAT ASSESSEE MUST HAVE PAID SOME COMMISSION FOR I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 4 ARRANGEMENT OF BOGUS CAPITAL GAIN. THE FACTS IN BRI EF ARE THAT ASSESSEE SOLD SHARES OF CCL INTERNATIONAL LTD. AND EARNED LONG TERM CAPITAL GAIN. IN SUPPORT OF LONG TERM CAP ITAL GAIN THE ASSESSEE FILED BEFORE ASSESSING OFFICER THE FOLLOWI NG DOCUMENTS (WHICH IS PART OF THE PAPER BOOK): S.NO. NATURE OF DOCUMENTS PAPER BOOK PAGE NO 1. COPY OF BANK ACCOUNT OF FEDERAL BANK. 15-16 2. COPY OF BILL SUKTARA TRADE LINK FILED 17 3. COPY OF CONTRACT NOTE ISSUED BY BROKER EDLWISE FINANCIAL ADNSONS LTD. 18-24 4. COPY OF BANK ACCOUNT OF ACHAL GUPTA 2 5-31 5. COPY OF TRANSACTION STATEMENT ISSUED FROM NATIONAL SECURITIES DEPOSITARY LTD. 32-46 6.1 THE ABOVE DOCUMENTS CLEARLY DEMONSTRATES THAT ASSESSEE HAD PURCHASED SHARES THROUGH BROKERS FOR W HICH THE PAYMENT WAS MADE THROUGH BANKING CHANNELS. THE ASSE SSEE HAD SOLD SHARES THROUGH AUTHORIZED STOCK BROKER AND PAYMENT WAS RECEIVED THROUGH BAKING CHANNELS AFTER DEDUCTIO N OF STT. ON PAGE 16 WHICH IS A COPY OF BANK ACCOUNT OF ASSES SEE THERE IS EVIDENCE OF PAYMENTS TO SUKTARA TRADE LINK AMOUN TING TO RS.8,25,000/- FOR PURCHASE OF 25000 EQUITY SHARES O F CCL LTD. THE BILL OF BROKER OF SUKTARA TRADE LINK IS AT PAGE 17. THE EVIDENCE OF SALE OF SUCH SHARES THROUGH EDELWISE FI NANCIAL ADVISORS LTD SHOWING DEDUCTION OF SERVICE TAX AND S ECURITIES TRANSACTION TAX IS PLACED AT P.B. 18 TO 23. PAPER B OOK PAGES 32 SHOWS THAT SHARES OF CCL INTERNATIONAL LTD. WERE IN THE DEMAT ACCOUNT OF ASSESSEE AND THE FACT OF THESE SHA RES HAVING BEEN TRANSFERRED TO THE ACCOUNT OF BROKERS M /S EDELWISE FINANCIAL ADVISORS ON ACCOUNT OF SALE IS A LSO APPARENT FROM THIS PAPER. THE TRANSACTION STATEMENT PLACED I N PAPER I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 5 BOOK ALSO PROVES THAT ASSESSEE WAS HOLDING A NUMBER OF SCRIPS. ALL THE DOCUMENTS CLEARLY DEMONSTRATE THAT ASSESSEE DID EARN LONG TERM CAPITAL GAIN AND MOREOVER THE AS SESSING OFFICER HAS NOT DOUBTED ANY OF THE ABOVE DOCUMENTS. THE ONLY OBJECTION RAISED BY THE AUTHORITIES BELOW IS T HAT THE SCRIP FROM WHICH THE ASSESSEE HAD EARNED LONG TERM CAPITA L GAIN HAS BEEN HELD BY THE INVESTIGATION WING OF THE REVE NUE TO BE A PAPER ENTITY AND WHICH HAS FURTHER HELD THAT THIS SCRIP WAS BEING USED FOR CREATING ARTIFICIAL CAPITAL GAIN. W E FIND THAT HON'BLE TRIBUNAL IN THE CASE OF REESHU GOEL HAS EXA MINED THIS ASPECT AND AFTER RECORDING DETAILED FINDINGS HAS HE LD THIS SCRIP TO BE A GENUINE SCRIP AND HAS HELD THAT THE SCRIP I S NOT A PAPER ENTITY. THE DETAILED FINDINGS OF THE TRIBUNA L, AS CONTAINED FROM PARA 16 ARE REPRODUCED BELOW: 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDERS AS WELL AS MATERIAL REFERRED TO BEFORE US. A S STATED ABOVE, THE ASSESSEE HAS APPLIED FOR 50,000 SHARES OF M/S. AAR INFRASTRUCTURE LTD. FOR FACE VAL UE OF RS.10 AND PAID CONSIDERATION OF RS.5 LACS VIDE CHEQ UE NO.169799 DATED 13.01.2011. THE SAID PURCHASE HAS BEEN RECORDED IN THE ACCOUNTS OF THE EARLIER YEAR A ND IS ALSO REFLECTED FROM THE COPY OF BANK STATEMENT PLAC E AT PAPER BOOK AT PAGES 25. THE PURCHASES MADE IN THE EARLIER YEARS HAVE BEEN ACCEPTED AS ONLY NET LTCG H AS BEEN TAXED BY THE ASSESSING OFFICER. THE ASSESSEE W AS ALLOTTED SHARES OF M/S. AAR INFRASTRUCTURE LTD. AND IMMEDIATELY THEREAFTER, THE ASSESSEE HAD DEMATERIAL ISED THE SHARES ON 26.02.2011 WHICH IS EVIDENT FROM THE COPY OF DEMAT ACCOUNT ENCLOSED AT PAGES 27 TO 28 OF THE PAPER BOOK. LATER, M/S. AAR INFRASTRUCTURE GOT AMALGAMATED WITH M/S. CCL INTERNATIONAL LTD. AND ACCORDING TO AMALGAMATION SCHEME, THE ASSESSEE RECEIVED 1,25,000 SHARES OF M/S. CCL INTERNATIONAL LTD. IN THE PROPORTION OF 250 EQUITY SHARES RS.2 PER SHA RE AND RS.100 EQUITY SHARE OF RS.10 PER SHARE. THE SHA RES WHICH WERE ALLOTTED ON 17.02.2011 HAVE BEEN SOLD AF TER PERIOD OF MORE THAN 18 TO 20 MONTHS, I.E., ON 29.08.2012 TO 10.10.2012. THE SAID SHARES HAVE BEEN I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 6 SOLD THROUGH STOCK BROKER M/S. INDIANIVESH SECURITI ES PVT. LTD. 17. BEFORE US THE LD. COUNSEL HAS IN HIS BRIEF NOTE HAS STATED THAT FOLLOWING DOCUMENTS AND STATEMENTS WERE FILED BEFORE THE AUTHORITIES BELOW: (A) ALL THE TRANSACTIONS WERE SUPPORTED BY PROPER CONTRACTS NOTES AND DELIVERY OF SHARES WAS MADE THROUGH DE-MAT ACCOUNT WITH STOCK BROKER, M/S INDIANIVESH SECURITIES PVT. LTD. (WHO IS THE MEMBER OF BSE AND REGISTERED WITH SEBI). THE SHARES WERE SOLD IN THE OPEN MARKET. THE APPELLANT HAS FULFILLED ALL TH E CONDITION U/S 10(38) OF THE INCOME TAX ACT, 1961. T HE APPELLANT HAS ALREADY FILED NATIONAL SECURITY DEPOS ITORY LIMITED GENERATED DEMAT ACCOUNT AND THE BROKER STATEMENT RELATING TO THE SALE OF SHARE IN OUR PAPE R BOOK, ALSO RELEVANT DEMAT STATEMENT HIGHLIGHTING TH E SHARES PURCHASED HAS ALREADY BEEN SUBMITTED BEFORE THE LD. AO. (B) THE APPELLANT HAS EARNED LONG TERM CAPITAL GAIN THROUGH GENUINE PURCHASE AND SALE OF SHARES OF THE LISTED COMPANIES IN NORMAL COURSE. THERE WAS NO DEFAULT ON THE PART OF THE APPELLANT. MOREOVER, THE APPELLANT HAS EARNED THE INCOME STRICTLY FOLLOWING THE NORMS AND GUIDELINES OF SEBI. IF M/S CCL INTERNATIO NAL HAS BEEN IDENTIFIED AS BSE LISTED PENNY STOCK, THE APPELLANT IS NOT EVEN REMOTELY CONNECTED WITH THESE COMPANIES. SHE WAS NOT AT ALL IN A POSITION TO INFL UENCE THE PURCHASE AND SALE PRICES OF THEIR SHARES. HARDS HIP CANNOT BE BROUGHT ON THE APPELLANT, IF DEFAULT IS M ADE BY COMPANY WHICH IS LISTED IN THE BSE. C) IN SUPPORT OF THE GENUINENESS OF THE TRANSACTION THE APPELLANT PRODUCED THE FOLLOWING AT THE TIME OF ASSESSMENT PROCEEDING: A) COPY OF ALLOTMENT LETTER ISSUED BY M/S AAR INFRASTRUCTURES LIMITED. (PAGE 25) B) COPY OF BANK STATEMENT REFLECTING THE PAYMENT MADE FOR THE PURCHASE OF 50000 EQUITY SHARES. (PAGE 26) I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 7 C) COPY OF DEMAT ACCOUNT OF THE APPELLANT. (PAGE 27) D) COPY OF STATEMENT OF BROKER REFLECTING THE CREDIT OF 50000 EQUITY SHARE THROUGH PREFERENTIAL ALLOTMENT. (PAGE 28) E) COPY OF ORDER OF DELHI HIGH COURT, DATED 08.10.2011 IN THE MATTER OF AMALGAMATION OF M/S AAR INFRASTRUCTURE LIMITED INTO M/S CCL INTERNATIONAL LIMITED. (PAGE 29-44) F) COPY OF CONTACTS NOTES REFLECTING THE SALE PROCEEDS. (PAGE 45-50) G) COPY OF TRANSACTION STATEMENT REFLECTING THE INCREASE IN THE NUMBER OF SHARES. (PAGE 51) H) COPY OF BANK STATEMENT OF THE APPELLANT REFLECTING THE AMOUNT RECEIVED ON SALE OF SHARES. (PAGE 54). 18. THE ENTIRE PREMISE OF THE ASSESSING OFFICER FOR TREATING THE ENTIRE TRANSACTION TO BE A BOGUS LONG TERM CAPITAL GAIN AND MAKING ADDITION U/S. 68 IS THAT, F IRSTLY, M/S. CCL INTERNATIONAL LTD. DID NOT HAVE MUCH FINAN CIAL WORTH TO JUSTIFY SUCH A PRICE RISE; SECONDLY, THE S EBI HAD SUSPENDED THE TRADE OF THE SHARE FOR A BRIEF PE RIOD; THIRDLY, HE HAS POINTED OUT THE HISTORY OF PRICE RI SE BETWEEN 06.02.2010 TO 25.11.2014 AND THEN HAS DRAWN ADVERSE INFERENCE THAT PRICE OF THESE SHARES WERE MANIPULATED AND RIGGED IN THE STOCK EXCHANGE WHICH WAS SOLELY TO PROVIDE ACCOMMODATION ENTRIES TO THE VARIOUS PARTIES; AND LASTLY, HE HAS ALSO REFERRED T O CERTAIN INQUIRY REPORT OF INVESTIGATION WING KOLKAT A DURING THE COURSE OF WHICH CERTAIN BROKERS HAVE ADMITTED THAT THEY HAD PROVIDED ACCOMMODATION ENTRI ES IN THE SCRIP OF M/S. CCL INTERNATIONAL. BUT NOWHERE IN THE ENTIRE ASSESSMENT ORDER, THERE IS ANY REFERENCE TO ANY MATERIAL OR EVIDENCE THAT ASSESSEE OR ASSESSEE' S BROKER HAVE BEEN FOUND TO BE INDULGED IN ANY KIND O F ACCOMMODATION ENTRY IN THIS SCRIP. NO INQUIRY WHATSOEVER HAS BEEN MADE FROM THE BROKER OF THE ASSESSEE. FURTHER, DURING THE PERIOD IN WHICH ASSES SEE HAD PURCHASED THE SHARES AND HAD SOLD THEM WHETHER THE SEBI HAD SUSPENDED THE TRADING HAS NOT BEEN I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 8 MENTIONED, IN FACT, ASSESSING OFFICER HIMSELF MENTI ONS THAT THERE WAS BRIEF SUSPENSION IN THE YEAR 2010, WHEREAS THE ASSESSEE HAS PURCHASED SHARES IN THE YE AR 2011 AND SOLD THEM IN THE YEAR 2012. COMING TO THE FINANCIALS, AS CULLED OUT FROM THE RECORDS, THE REV ENUE FROM THE OPERATION OF M/S. CCL INTERNATIONAL LTD. F ROM MARCH, 2010 TO MARCH, 2012 WAS BETWEEN RS. 55.25 CRORE TO RS. 79 CRORE. THUS, IT CANNOT BE HELD THAT IT WAS MERE A PAPER ENTITY. FROM A BARE PERUSAL OF THE HIS TORY OF LISTING AND TRADING OF SHARES AND THE QUOTE OF BOMBAY STOCK EXCHANGE AS QUOTED IN THE ASSESSMENT ORDER, IT CLEARLY REFLECTS THAT AS ON 06.02.2010, T HE CLOSING PRICE WAS RS. 50 AND THERE WAS A STEADY INCREASE AND WITHIN THE PERIOD OF 4 YEARS THE PRICE HAD REACHED UP TO RS.609 ON 25.11.2014. NOWHERE, IT HAS BEEN POINTED OUT THAT THE RISE WAS BEYOND THE CAP L AID DOWN BY THE SEBI, BECAUSE THE PRICE OF THE SCRIP CA NNOT RISE BEYOND THE CAP PRESCRIBED BY THE SEBI. IF THE SHARES HAVE BEEN PURCHASED AND SOLD FROM THE STOCK EXCHANGE ON A QUOTED PRICE WITH PROPER CONTRACT NUMBER, TRADE TIME AND AFTER PAYING STT, THEN IT IS VERY DIFFICULT TO ASSUME THAT THE SALE PROCEEDS RECEIVED FROM SALE OF SUCH SHARES IS BOGUS, ESPECIALLY WHEN PURCH ASE OF SHARES ARE NOT IN DISPUTE. THIS INTER ALIA MEANS ASSESSEE WAS IN POSSESSION OF SHARES WHICH WERE ALS O DEMATERIALISED. TO PROVE THAT SUCH A TRANSACTION WA S IN THE NATURE OF BOGUS OR COLOURABLE TRANSACTION, THER E HAS TO BE SOME INQUIRY OR MATERIAL TO NAIL THE ASSESSEE THAT SHE WAS SOME KIND OF A BENEFICIARY IN SOME ACCOMMODATION ENTRY OPERATION. NO DEFECT HAS BEEN POINTED OUT IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE NOR HAS THE BROKER OF THE ASSESSEE BEEN INQUIRED UPON. SIMPLY RELYING UPON THE GENERAL MODU S OPERANDI AND STATEMENT OF SOME BROKERS RECORDED BY THE KOLKATA INVESTIGATION WING DOES NOT MEAN THAT A LL THE TRANSACTIONS UNDERTAKEN OF THE SCRIP M/S. CCL INTERNATIONAL LTD. THROUGH THE COUNTRY BY MILLIONS OF SUBSCRIBERS ARE BOGUS. THUS, IN ABSENCE OF ANY MATE RIAL OR EVIDENCE AGAINST THE ASSESSEE, WE DO NOT FIND AN Y REASON AS TO WHY THE CLAIM OF LONG TERM CAPITAL GAI N FROM SALE OF SUCH SHARE SHOULD BE DENIED. I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 9 CONSEQUENTLY, THE ADDITION ON ACCOUNT OF COMMISSION IS ALSO DELETED. ACCORDINGLY, WE DELETE THE ADDITION M ADE BY THE ASSESSING OFFICER. 6.2 THE ABOVE FINDINGS OF THE TRIBUNAL CLEARLY DEMO NSTRATE THAT THE TRIBUNAL HAS HELD THE SCRIP OF CCL INTERNA TIONAL LTD. TO BE A GENUINE SCRIP AND HAS THEREFORE, ALLOWED TH E APPEAL OF THE ASSESSEE. 6.3 AS REGARDS THE RELIANCE PLACED BY LEARNED D. R. ON THE ORDER OF UDIT KALRA (SUPRA), WE FIND THAT THE ABOVE CASE LAW HAS BEEN HELD TO BE DISTINGUISHABLE BY HON'BLE DELH I TRIBUNAL IN THE CASE OF KARUNA GARG IN I.T.A. NO.1069/LKW/20 19 AND FURTHER IN THE CASE OF SWATI LUTHRA VS. INCOME TAX OFFICER IN I.T.A. NO.6480/LKW/2019, DATED 28/06/2019. IN THES E TWO CASES THE HON'BLE TRIBUNAL HAS AGAIN ALLOWED RELIEF TO THE ASSESSEE THOUGH FROM A DIFFERENT SCRIP BUT IN THE D ECISIONS THEY HAVE HELD THAT THE JUDGMENT OF HON'BLE DELHI H IGH COURT IN UDIT KALRA WAS DISTINGUISHABLE AS IN THAT CASE THE HON'BLE HIGH COURT HAS ONLY DISMISSED THE APPEAL AS THE HON 'BLE HIGH COURT FOUND THAT THE ISSUE INVOLVED WAS ONLY A QUES TION OF FACT. IN THIS RESPECT, PARA 28 OF THE TRIBUNAL ORD ER IN THE CASE OF KARUNA GARG IS RELEVANT WHICH IS REPRODUCED BELO W: 28. THE DR HEAVILY RELIED UPON THE JUDGMENT OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF UDIT KAL RA VS. ITO IN ITA NO.220/2019. WE HAVE CAREFULLY PERUSED T HE ORDER OF THE HON'BLE HIGH COURT AND ON GOING THROUG H THE SAID JUDGMENT WE FIND THAT NO QUESTION OF LAW W AS FORMULATED BY THE HON'BLE HIGH COURT OF DELHI IN TH E SAID CASE AND THERE IS ONLY DISMISSAL OF APPEAL IN LIMINE AS THE HON'BLE HIGH COURT FOUND THAT THE ISSUE INVO LVED IS A QUESTION OF FACT. 6.4 SIMILARLY IN THE CASE OF SWATI LUTHRA (SUPRA), THE HON'BLE TRIBUNAL WHILE DEALING WITH THE CASE LAW OF UDIT KALRA VIDE PARA 14 HAS HELD AS UNDER: 14. THAT THE LD DR DURING THE COURSE OF HEARING PLACED HEAVY RELIANCE ON JUDGMENT OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF UDIT KALRA VS ITO IN ITA I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 10 NO. 220/2019. RELEVANT EXTRACTS OF SAID JUDGMENT AR E EXTRACTED AS BELOW: 'THE ASSESSEE IS AGGRIEVED BY THE CONCURRENT FINDINGS OF THE TAX AUTHORITIES - INCLUDING THE LOWER APPELLATE AUTHORITIES REJECTING ITS CLAIM FOR A LONG TERM CAPITAL GAIN REPORTED BY IT, TO THE TUNE OF RS.13,33,956/- AND RS.14,34,501/- IN RESPECT OF 4,000 SHARES OF M/S KAPPAC PHARMA LTD. THE ASSESSEE HELD THOSE SHARES FOR APPROXIMATELY 19 MONTHS; THE ACQUISITION PRICE WAS RS.12/- PER SHARE WHEREAS THE MARKET PRICE OF THE SHARES AT THE TIME OF THEIR SALE, WAS RS.720/-. IT IS CONTENDED THAT THE ASSESSEE WAS NOT GRANTED FAIR OPPORTUNITY. MR. RAJESH MAHNA, LEARNED COUNSEL APPEARING FOR THE ASSESSEE RELIED UPON THE ORDERS OF THE CO- ORDINATE BENCH OF THE TRIBUNAL, IN RESPECT OF THE SAME COMPANY I.E. M/S KAPPAC PHARMA LTD., AND POINTED OUT THAT THE TAX AUTHORITY'S APPROACH IN THIS CASE WAS ENTIRELY ERRONEOUS AND INCONSISTENT. THE MAIN THRUST OF THE ASSESSEE'S ARGUMENT IS THAT HE WAS DENIED THE RIGHT TO CROSS-EXAMINATION OF THE TWO INDIVIDUALS WHOSE STATEMENTS LED TO THE INQUIRY AND ULTIMATE DISALLOWANCE OF THE LONG TERM CAPITAL GAIN CLAIM IN THE RETURNS WHICH ARE THE SUBJECT MATTER OF THE PRESENT APPEAL. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF THE PARTIES. ASIDE FROM THE FACT THAT THE FINDINGS IN THIS CASE ARE ENTIRELY CONCURRENT - A.O., CIT(A) AND THE ITAT HAVE ALL CONSISTENTLY RENDERED ADVERSE FINDINGS - WHAT IS INTRIGUING IS THAT THE COMPANY (M/S KAPPAC PHARMA LTD.) HAD MEAGRE RESOURCES AND IN FACT REPORTED CONSISTENT LOSSES. IN THESE CIRCUMSTANCES, THE ASTRONOMICAL GROWTH OF THE VALUE OF COMPANY'S SHARES NATURALLY EXCITED THE SUSPICIONS OF THE REVENUE. THE COMPANY WAS EVEN DIRECTED TO BE DELISTED FROM THE STOCK I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 11 EXCHANGE. HAVING REGARD TO THESE CIRCUMSTANCES AND PRINCIPALLY ON THE GROUND THAT THE FINDINGS ARE ENTIRELY OF FACT, THIS COURT IS OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE PRESENT APPEAL. THIS APPEAL IS ACCORDINGLY DISMISSED.' 15. ON GOING THROUGH THE AFORESAID JUDGMENT, WE FIN D THAT NO QUESTION OF LAW WAS FORMULATED BY HON'BLE H IGH COURT OF DELHI IN THE SAID CASE AND THERE IS ONLY DISMISSAL OF APPEAL IN LIMINE AND THE HON'BLE HIGH COURT FOUND THAT THE ISSUE INVOLVED IS A QUESTION OF FACT AS HELD BY HON'BLE APEX COURT IN KUNHAYYAMMED VS STATE OF KERALA REPORTED IN 245 ITR 360 AND ALSO IN CIT V S. RASHTRADOOT (HUF) REPORTED IN 412 ITR 17. EVEN ON MERITS AND FACTS, THE SAID JUDGMENT IN THE CASE OF UDIT KALRA VS ITO (SUPRA) IS DISTINGUISHABLE AS IN THAT CASE THE SCRIPS OF THE COMPANY WERE DELISTED ON STOCK EXCHANGE, WHEREAS, IN THE INSTANT CASE, THE INTERIM ORDER OF SEBI IN THE CASES OF M/S ESTEEM BIO AND M/ S TURBOTECH HAVE BEEN COOLED DOWN BY SUBSEQUENT ORDER OF SEBI PLACED BY ASSESSEES IN ITS PAPER BOOK. THUS , THE CASE OF UDIT KALRA VS ITO RELIED BY LD. DR IS CLEAR LY DISTINGUISHABLE ON FACTS AND IS NOT APPLICABLE TO T HE FACTS OF ASSESSEE. THUS, WE HOLD THAT THE CASE OF ASSESSEE IS FACTUALLY AND MATERIALLY DISTINGUISHABL E FROM THE FACTS OF THE CASE OF UDIT KALRA VS ITO SO RELIE D BY LD DR. THEREFORE, THE CASE LAW RELIED UPON BY LEARNED D. R . IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PR ESENT CASE AS THAT CASE WAS DECIDED BY HON'BLE HIGH COURT ON T HE BASIS OF FACTS AND CIRCUMSTANCES OF THAT CASE. THEREFORE , THE PRESENT CASE IS FULLY COVERED BY THE DECISION OF HO N'BLE DELHI TRIBUNAL IN REESHU GOEL (SUPRA) WHEREIN THE SAME SC RIP FROM WHICH THE ASSESSEE HAD OBTAINED LONG TERM CAPITAL G AIN HAS BEEN HELD TO BE GENUINE. THEREFORE, FOLLOWING THE SAME, WE HOLD THAT THE SCRIP OF CCL INTERNATIONAL LTD. IS GE NUINE AND NOT A PENNY STOCK AND PAPER ENTITY. I.T.A. NO.503/LKW/2019 ASSESSMENT YEAR:2015-16 12 7. IN VIEW OF THE ABOVE JUDICIAL PRECEDENTS AND KEE PING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, GROUN D NO. 5 TO 8, THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 501 IS ALLOWED. GROUND NOS. 9 AND 10, ARE ALSO ALLOWED IN VIEW OF O UR FINDINGS THAT THE TRANSACTION WAS NOT BOGUS. 6. RESPECTFULLY FOLLOWING THE ABOVE TRIBUNAL ORDER, WE ALLOW GROUND NO. 5 TO 8 OF THE APPEAL. REST OF THE GROUNDS WERE NOT ARGUED AND THEREFORE, THESE ARE DISMISSED AS NOT PRESSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 18/01/2021) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:18/01/2021 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW