ITO WD 3(1), THANE V. K NARESHCHANDRA (HUF), THANE

ITA 5154/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3436 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 05-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUBODH L RATNAPARKHI
• Keywords: Unexplained cash credit; Share purchase agreement; Corroborative evidences
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI . . , ! ' #'' '$ , % ! & BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 5154 / / 2011 A.Y. 2005-06 ITA NO. : 5154/MUM/2011 (ASSESSMENT YEAR: 2005-06) THE ITO, WARD 3[1], AAYAKAR BHAVAN, 5 TH FLOOR, MUMBAI -400 020 VS SHRI K. NARESHCHANDRA (HUF), 204/77, ARJUN, VASANT VIHAR, POKHRAN NO. 2, THANE .: PAN: AAEHK 0680 C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANOJ KUMAR RESPONDENT BY : SHRI SUBODH L. RATNAPARKHI ! /DATE OF HEARING : 03-06-2013 '# ! / DATE OF PRONOUNCEMENT : 12-06-2013 * O R D E R #'' '$ , : PER VIVEK VARMA, JM: THE APPEAL ARISES FROM THE ORDER OF CIT(A) I, MUMBAI, DATE D 31.03.2011, WHEREIN, THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A)-I, THANE ERRED IN DELETING THE ADDITION OF RS. 18,65,220/- M ADE U/S. 68 OF THE I.T. ACT BY HOLDING THAT THERE WAS NO SUFFICIENT EV IDENCE TO DISPROVE THE CLAIM FOR PURCHASE AND SALE OF EQUITY SHARES MADE B Y THE ASSESSEE, OVERLOOKING THE FACT THAT THE TRANSACTION WAS DENIE D BY DPS SECURITIES PVT. LTD. AND CORROBORATED BY EVIDENCE FROM BOMBAY STOCK EXCHANGE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A)-I, THANE ERRED IN OVERLOOKING THE FACT THAT BOMBAY STOCK EXC HANGE HAS CONFIRMED THE TRADE EXECUTED BY DPS SHARES & SECURI TIES LTD. WAS DURING THE PERIOD 15.06.2004 TO 21.06.2004 IN THE S CRIP ROBINSON WORLDWIDE LTD. FOR ITS CLIENT CODE A055 WHICH PERTA INS TO ASHOK AMBANI AND NOT THE ASSESSEE K. NARESHCHANDRA (HUF). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A)-I, THANE ERRED IN OVERLOOKING THE FACT THAT BOMBAY STOCK EXC HANGE HAS FURTHER % . . . 5154 / / 2011 SHRI K. NARESHCHANDRA (HUF). ITA NO. 5154/MUM/2011 2 CONFIRMED THAT DPS SHARES & SECURITIES LTD. HAS NOT DEALT IN THE SCRIP ROBINSON WORLDWIDE LTD AS ON 04.04.2003 WHERE AS TH E ASSESSEE HAS CLAIMED TO HAVE PURCHASED THE SHARES ON 04.04.2003. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) -1, THANE, MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 2. BASICALLY, THE APPEAL PERTAINS TO ONE SINGLE ISSUE, I.E. TH E DELETION OF RS. 18,65,220/-, AS UNEXPLAINED CASH CREDIT. 3. THE FACTS IN BRIEF ARE THAT IN THE ASSESSMENT PROCEE DINGS, THE AO REQUIRED THE ASSESSEE TO PRODUCE BALANCE SHEET FOR ASS ESSMENT YEAR 2004-05 ALONG WITH DETAILS OF DEMAT ACCOUNT FOR FINANCIAL YEA RS 2003- 04 & 2004-05 AND PAYMENTS MADE FOR PURCHASE OF SHARES AND THE ASSESSEE REQUEST TO CONVERT THE PHYSICAL SHARES TO DEMAT. 4. THESE DETAILS WERE PROVIDED VIDE LETTER DATED 14.06.200 7. THE ASSESSEE ALSO SUBMITTED THE CONTRACT NOTES FOR PURCHA SE & SALE OF THE SHARES DONE THROUGH DPS SHARES AND SECURITIES PVT. LTD ., MUMBAI. THE ASSESSEE ALSO SUBMITTED CONFIRMATION DATED 18.10.2007 , RECEIVED FROM ROBINSON IMPEX (I) LTD. (NAME CHANGES TO ROBINSON W ORLD WIDE TRADE LTD.) THAT THE ASSESSEE HELD 20,000 SHARES IN THAT COMPANY . 5. THE AO CONDUCTED DETAILED ENQUIRY FROM BSE, WHO RESPO NDED THAT THE DETAILS OF CONTRACT NOTES PERTAINING TO PURCHA SES, PERTAINED TO CLIENT CODE BELONGING TO ONE SHRI ASHOK AMBANI AND NOT T HE ASSESSEE. THE BSE ALSO CONFIRMED THAT NO TRADE WAS MADE PERTAINING TO THE SCRIP NAMED ROBINSON WORLDWIDE TRADE LTD. AS ON 04.04.2003. TO FU RTHER INVESTIGATE THE GENUINENESS OF THE CLAIM MADE BY THE ASSE SSEE, THE AO SENT A LETTER TO DPS SECURITIES, WHO RESPONDED THAT THE RE WERE NO PURCHASE CONTRACT NOTES, BUT THE ASSESSEE DID SELL ITS S TOCK THROUGH BSE IN VARIOUS SETTLEMENTS. 6. WHEN THESE ANOMALIES WERE CONFRONTED TO THE ASSESSE E, THE ASSESSEE VIDE LETTER DATED 04.12.2007, WHICH READS AS UNDER, THE ASSESSEE HAD PURCHASED 20,000 EQUITY SHARES OF ROBISON IMPLEX (I) LTD. ON 04.04.2003 THROUGH BROKER M/S. DPS SHAR ES SECURITIES PVT. % . . . 5154 / / 2011 SHRI K. NARESHCHANDRA (HUF). ITA NO. 5154/MUM/2011 3 LTD., MUMBAI FOR WHICH ASSESSEE HAS SUBMITTED COPY OF BILL DATED 05.04.2003 AND COPY OF CONTRACT NOTE DATED 04.04.20 03 ISSUED BY M/S. DPS SHARES SECURITIES PVT LTD., MUMBAI AND SUBMITTE D THE FOLLOWING DOCUMENTS IN SUPPORT OF HIS CLAIM 1. COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE IN THE B OOKS OF M/S. DPS SHARES SECURITIES PVT. LTD., MUMBAI REFLECTING PAYM ENT RECEIVED BY THE SAID COMPANY. 2. COPY OF SHARES CERTIFICATE ISSUED IN PHYSICAL FORM BY ROBINSON IMPLEX (I) LTD. DATED 30.04.2003 BEARING CERTIFICAT E NO. 75061 DIST NO. 1830701 TO 1850700 REGISTER FOLIO NO. T59. 3. CONFIRMATION DATED 18.10.2007 OBTAINED FROM ROBINSO N WORLD WIDE TRADE LIMITED (FORMERLY KNOWN AS ROBINSON IMPEX (I) LTD. CONFIRMING THAT THE ASSESSEE HELD 20,000 SHARES OF THE COMPANY ON 30.04.2003. 4. A COPY OF ORIGINAL CERTIFICATE OF THE COMPANY ISSUE D IN PHYSICAL FORM DULY DEFACED WITH STAMP SURRENDERED FOR DEMATERIAL IZATION WITH DETAILS OF DP M/S. SODHANI SECURITIES LIMITED NOTED THEREON. ASSESSEE SOLD 20,000 SHARES OF M/S. ROBINSON IMPEX (I) LTD ON VARIOUS DATES IN SUPPORT OF THE SAME ASSESSEE HAS SUBMITTED THE FOLLOWING DOCUMENTS 1. COPIES OF CONTRACT NOTES AND BILLS ISSUED BY M/S . DPS SHARES SECURITIES PVT LTD., MUMBAI 2. RECEIPT OF SALE CONSIDERATION BY ACCOUNT PAYEE C HEQUE FROM M/S. DPS SECURITIES PVT LTD, MUMBAI AND ITS CREDIT TO THE ASSESSEES BANK ACCOUNTS. 3. STATEMENT OF TRANSACTION DATED 07.07.2004 IN RES PECT OF ASSESSEES DEMAT ACCOUNT WITH DP M/S. SODHANI SECUR ITIES LIMITED WHICH REFLECT THE SALE AND SUBSEQUENT DEBIT OF 20,000 SHARES OF M/S ROBINSON IMPEX (I) LTD. 7. ON TAKING INTO ACCOUNT COMPLETE DETAILS, AS RECEIVED FRO M BSE AND DPS, THE AO CONCLUDED, THE UNDERSIGNED HAS CAREFULLY CONSIDERED THE FACTS OF THE CASE, LETTERS RECEIVED FROM THE BOMBAY STOCK EXCHANGE & DPS SHARE S SECURITIES PVT LTD AS ABOVE AND THE EXPLANATION OF THE ASSESSEE. O N THE BASIS OF INFORMATION GATHERED FROM BSE, IT IS VERY CLEAR THA T THOUGH THE SALE TRANSACTION OF THE SAID SHARES HAVE BEEN EXECUTED B Y THE TRADING MEMBER DPS SHARES SECURITIES PVT LTD, BUT IT WAS NO T IN THE NAME OF ASSESSEE BUT IN THE NAME OF SOME OTHER PERSON. IT I S THEREFORE PROVED THAT THE SO CALLED 20,000 SHARES OF M/S. ROBINSON I MPEX (I) LTD WERE NOT SOLD BY THE ASSESSEE THROUGH DPS SHARES SECURITIES PVT LTD AS CONFIRMED BY THE BSE ALSO. M/S. DPS SHARES SECURITIES PVT LTD., MUMBAI, IN THE IR LETTER DATED 23.07.2007 HAS CLEARLY CONFIRMED THAT NO TRANSACTIO N OF PURCHASE OF THE SHARES IN QUESTION WAS MATERIALIZED IN THE NAME OF ASSESSEE AND ONLY AN ACCOMMODATION BILL WAS ISSUED ON THE REQUEST OF THE ASSESSEE. IT IS ALSO CONFIRMED BY THEM THAT THEY HAVE NOT RECEIVED ANY PAYMENTS FOR ISSUING OF THE ACCOMMODATION BILL. THIS LETTER OF T HE SAID M/S. DPS SHARES SECURITIES LTD. PROVES THAT THE ASSESSEE HAD NOT PURCHASED ANY SHARES OF THE ROBINSONS IMPEX (I) LTD AS CLAIMED BY IT. WHEN THERE IS NO PURCHASE OF THE SHARES BY THE ASSESSEE, THE QUESTIO N OF SELLING IT BY HIM ALSO DOES NOT ARISE. ON THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AN D AS PROVED BEYOND DOUBT BY THE LETTERS RECEIVED FROM BSE AND T HE BROKER, M/S. DPS SHARES & SECURITIES PVT LTD AS DISCUSSED ABOVE THAT THE ASSESSEE HAD NOT SOLD THE 20,000 SHARES OF THE ROBINSON IMPE X (I) LTD AS CLAIMED % . . . 5154 / / 2011 SHRI K. NARESHCHANDRA (HUF). ITA NO. 5154/MUM/2011 4 BY IT. THEREFORE, AS THE ASSESSEE COULD NOT SATISFA CTORILY EXPLAIN THE NATURE AND THE SOURCE OF SUM OF RS. 18,65,220/- CRE DITED IN HIS BOOKS OF ACCOUNTS FOR THE PREVIOUS YEAR RELEVANT TO THE AY 2 005-06, THE SAID SUM OF RS. 18,65,220/- IS TREATED AS UNEXPLAINED CASH C REDIT U/S 68 OF THE ACT AND THE SAME IS BROUGHT TO TAX AS ASSESSEES IN COME OUT OF UNDISCLOSED AND UNEXPLAINED SOURCES. 8. THE AO, THEREFORE, ADDED THE SUM OF RS. 18,65,220/- TO THE INCOME OF THE ASSESSEE. 9. AGGRIEVED, THE ASSESSEE APPROACHED THE CIT(A), BEFORE WHOM COMPLETE DETAILS WERE PLACED, WHO AFTER CONSIDERING THE COM PLETE INFORMATION AVAILABLE, HELD, I HAVE CONSIDERED THE FINDINGS OF THE A.O. AS CONT AINED IN THE ASST. ORDER AS WELL AS THE WRITTEN SUBMISSIONS OF THE APP ELLANT AND EVIDENCES PRODUCED BEFORE ME. THE CONCERNED DOCUMENTS EVIDENC ING THE PURCHASE AND SALE OF SHARES BY THE APPELLANT, THE CONFIRMATI ON DT. 18.10.2007 FROM M/S. ROBINSON WORLDWIDE TRADE LTD. (FORMERLY K NOWN AS M/S. ROBINSON IMPEX (I) LTD.) AND THE STATEMENT OF DMAT HOLDING OF SHARES BY THE APPELLANT WITH DP : M/S. SODHANI SECURITIES LTD . HAVE BEEN EXAMINED. I HAVE ALSO GONE THROUGH THE DECISIONS RE LIED UPON BY THE APPELLANT. 5.1 THE APPELLANT HAS CLAIMED TO HAVE PURCHASED 20 ,000 EQUITY SHARES OF M/S. ROBINSON IMPEX (I) LTD. ON 04.04.03 THROUGH TH E BROKER M/S. D.P.S. SHARES AND SECURITIES PVT. LTD. THE SAID SHARES HAV E BEEN SENT FOR DEMATERIALIZATION AND DEMATERIALIZED SHARES HAVE BE EN CREDITED TO THE APPELLANTS DMAT ACCOUNT WITH DP : M/S. SODHANI SE CURITIES LTD. (UNDER NSDL). THE CONCERNED SHARES HAVE BEEN SOLD THROUGH THE SAME BROKER M/S. D.P.S. SHARES AND SECURITIES PVT. LTD. ON 3 DI FFERENT DATES, ALL IN JUNE 2004. ON SALE OF SHARES, THE DMAT ACCOUNT OF THE APPELLANT HAS BEEN DEBITED BY THE RELEVANT QUANTITY OF SHARES EIT HER ON THE SAME DATE OR THE IMMEDIATE SUBSEQUENT DATE. THE APPELLANT IN SUPPORT OF THE TRANSACTION HAS PRODUCED BEFORE THE A.O. AND BEFORE ME, THE BILLS AND CONTRACT NOTES FOR PURCHASE AND SALE OF SHARES, THE PHOTOCOPY OF PHYSICAL SHARE CERTIFICATE BEFORE AND AFTER DEMATER IALIZATION, WRITTEN CONFIRMATION FROM THE COMPANY M/S. ROBINSON IMPEX ( I) LTD. THAT THE APPELLANT WAS A SHARE HOLDER OF THE COMPANY ON 30.0 4.2003, THE DMAT STATEMENT WITH DEPOSITORY PARTICIPANT. NO DEFECT OR DEFICIENCY IN THE GENUINENESS OF THESE DOCUMENTS HAS BEEN POINTED OUT BY THE A.O. IN THE RESULT, THESE EVIDENCES CANNOT BE OVER LOOKED LIGHT LY. THE 20,000 EQUITY SHARES OF M/S. ROBINSON IMPEX (I) LTD. ARE FOUND CR EDITED TO THE DMAT ACCOUNT OF THE APPELLANT MAINTAINED WITH A DEPOSITA RY PARTICIPANT UNDER THE AUSPICES OF NATIONAL SECURITIES DEPOSITARY LTD. (NSDL). ON SALE OF SHARES ON 3 DIFFERENT DATES IN JUNE 2004, THE RELEV ANT QUANTITY OF SHARES HAVE BEEN DEBITED TO THE DMAT ACCOUNT OF TH E APPELLANT ON THE IMMEDIATE SUBSEQUENT DATE. EXAMINATION OF THE SALE BILLS AND THE DMAT STATEMENT OF THE APPELLANT REVEAL THE FOLLOWING. QUANTITY OF SHARES SOLD DATE OF SALE AS PER BILL DA TE OF DEBIT TO THE DMAT A/C. 6800 15.06.2004 16.06.2004 7100 16.06.2004 17.06.2004 6100 12.06.2004 22.06.2004 % . . . 5154 / / 2011 SHRI K. NARESHCHANDRA (HUF). ITA NO. 5154/MUM/2011 5 5.2 THE BROKER, M/S. D.P.S. SHARES AND SECURITIES PVT. LTD. HAS CLAIMED THAT HE HAS NOT PURCHASED SHARES FOR THE APPELLANT BUT HAS SOLD THE SHARES ON BEHALF OF THE APPELLANT, THOUGH BOTH PURC HASE AND SALE BILLS WERE ISSUED BY HIM. THE ID A.O. HAS BLINDLY RELIED ON THIS STATEMENT WITHOUT MAKING ANY FURTHER ENQUIRIES. THE ID A.O. A LSO DID NOT PERMIT THE APPELLANT TO CROSS EXAMINE THE SAID BROKER INSP ITE OF THE APPELLANT MAKING A SPECIFIC WRITTEN REQUEST FOR THE SAME WHIC H THE A.O. ADMITS IN PARA 21/PAGE NO. 10 OF THE ASST. ORDER. IN ABSENCE OF ANY CORROBORATIVE EVIDENCES IN RESPECT OF THE GENUINENESS OF SUCH A S TRANGE CLAIM MADE BY THE BROKER, THE SAME CANNOT BE RELIED UPON TO TA KE ANY DECISION ADVERSE TO THE INTEREST TO THE APPELLANT. ACCORDING TO ME, THE CLAIM OF THE BROKER CANNOT BE ACCEPTED AS ULTIMATELY THE APPELLA NT WAS FOUND TO HOLD THE RELEVANT SHARES IN HIS DMAT ACCOUNT WHICH IS BEYOND DISPUTE. 5.3 FURTHER, THE STOCK EXCHANGE HAS CONFIRMED THAT SALES WERE EXECUTED BY THE BROKER M/S. D.P.S. SHARES AND SECURITIES PVT. L TD. AS CLAIMED EXCEPT FOR THE ANOMALY THAT THE CODE OF THE CLIENT EXECUTI NG THE TRADE WAS THAT OF ONE SHRI. ASHOK AMBANI AND NOT THE APPELLANT. ER RORS IN SUBMISSION OF CLIENT CODE BY THE BROKERS DURING EXECUTION OF T RADES ARE COMMON AND A REGULAR FEATURE. THE LD A.O. HAS NOT CARRIED OUT ANY FURTHER ENQUIRIES BUT HAS RELIED UPON THIS INFORMATION TO TAKE AND AD VERSE VIEW. THE APPELLANT DURING ASST. PROCEEDINGS HAD REQUESTED TH E A.O. TO HAVE THIS ANOMALY SORTED OUT BY EXAMINING THE BROKER. HOWEVER , THIS WAS NOT DONE BY THE A.O. IN ABSENCE OF ANY FURTHER CONFIRMA TION, I DO NOT FEEL THAT THE SAME IS SUFFICIENT EVIDENCE OF ANY WRONG D OING ON THE PART OF THE APPELLANT. 5.4 THE APPELLANT IN THE COURSE OF ASST. PROCEEDIN GS HAS FILED A CONFIRMATION LETTER DT.18.10.2007 FROM THE COMPANY M/S. ROBINSON WORLDWIDE TRADE LTD. (FORMERLY KNOWN AS M/S. ROBINSON IMPEX (INDIA) LTD.) THAT THE APPELLANT HELD 20,000 EQUITY SHARES OF THE COMPANY ON 30.04.2003 UNDER FOLIO NOS. T-59, DIST. NOS. 1830701 TO 1850 700 ISSUED UNDER CERTIFICATE NO. 75061. THE SAID CERTIFICATE BY THE CONCERNED COMPANY THAT THE RELEVANT SHARES WERE IN FACT HELD BY THE A PPELLANT CANNOT BE IGNORED. 5.5 THE A.O. HAS MADE THE ADDITION U/S 68 OF THE I. T. ACT 1961 AS UNEXPLAINED CASH IN THE PRESENT CASE, THE SOURCE OF RECEIPT OF RS. 18,65,220/- IS FROM SALE OF 20,000 EQUITY SHARES OF M/S. ROBINSON IMPEX (I) LTD., THROUGH THE BROKERS M/S. D.P.S SHAR ES AND SECURITIES PVT. LTD. THE SAID BROKER HAS CONFIRMED THE TRANSACTION OF SALE, THE REQUISITE SHARES HAVE BEEN SOLD BY THE SAID BROKER ON THE BOM BAY STOCK EXCHANGE ON THE GIVEN DATES ALBEIT IN THE CLIENT CO DE OF A THIRD PERSON. THE AMOUNT CREDITED IN THE BOOKS OF THE APPELLANT I S RECEIVED FROM M/S. D.P.S. SHARES AND SECURITIES PVT. LTD. THROUGH BANK ING CHANNELS. THE EXISTENCE OF SHARES WITH THE APPELLANT IN VIEW OF T HE SAME BEING IN DEMATERIALIZED FORM IN THE DMAT ACCOUNT OF THE APP ELLANT CANNOT BE DENIED. THE SHARES HAVE BEEN DEBITED TO THE DMAT A CCOUNT OF THE APPELLANT AND HAVE THUS FLOWN THROUGH THE DMAT ACC OUNT ON RELEVANT DATES. IN VIEW OF THE ABOVE FACTS, IN MY OPINION AD DITION U/S 68 OF THE I.T. ACT 1961 IN THE CASE OF THE APPELLANT IS NOT J USTIFIED THE CIT(A), SUO MOTO , RELIED ON THE FOLLOWING DECISIONS: 5.6 THE HON. MUMBAI ITAT, IN THE CASE OF ACIT V S CLARIDGES INVESTMENTS & FINANCES PVT. LTD., 18 SOT 390 (MUM) IN A SIMILAR CASE PERTAINING TO SHARES TRANSACTIONS WHILE UPHOLDING T HE CLAIM OF THE APPELLANT HAS HELD THAT THE A.O. HAS ACTED UPON GR OSSLY INADEQUATE % . . . 5154 / / 2011 SHRI K. NARESHCHANDRA (HUF). ITA NO. 5154/MUM/2011 6 MATERIAL AND HIS CONCLUSIONS ARE IN THE REALM OF SU SPICION, CONJECTURES AND SURMISES. 5.6.1 SIMILARLY, THE HON. MUMBAI ITAT, IN THE CASE OF MUKESH R. MAROLIA VS ADDI. CIT, 6 SOT 247 (MUM) (2006) HAS HELD THAT WHATEVER MAY BE THE PROVOCATION TO THE A.O. TO JUMP TO A CONCLUS ION THAT THE TRANSACTION WERE BOGUS, AN ASSESSMENT HAS TO BE COM PLETED ON THE BASIS OF RECORDS AND MATERIALS AVAILABLE BEFORE THE A.O. PERSONAL KNOWLEDGE AND EXCITEMENT OF EVENTS, SHOULD NOT LEAD THE A.O. TO A STATE OF AFFAIRS WHERE SALIENT EVIDENCES ARE OVER LOOKED. 5.6.2 IN THE CASE OF CIT - VS - ANUPAM KAPOOR, 299 ITR 179 (P & H) (2008) , ON THE GIVEN FACTS IT WAS HELD THAT THERE WAS NO MATER IAL BEFORE THE A.O. WHICH COULD HAVE LEAD TO A CONCLUSION THAT THE TRAN SACTION WAS SIMPLY CITER A DEVICE TO CAMOUFLAGE ACTIVITIES, TO DEFRAUD THE REVENUE. NO SUCH PRESUMPTION COULD BE DRAWN BY THE A.O. MERELY ON SU RMISES AND CONJECTURES. 5.6.3 SIMILARLY, THE HON. MUMBAI ITAT, IN THE CASE OF ITO WARD 2(3) THANE VS SHRI PARESH R. GALA, ITA NO. 3634/M/07 DT. 11. 06.2009 WHILE UPHOLDING THE CLAIM OF THE APPELLANT HAS HELD THAT WHERE SHARES WERE SOLD THROUGH DMAT ACCOUNT THE SAME COULD NOT BE DI SPUTED. AND DELETED THE ADDITION. 10. AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 11. BEFORE US, THE DR HEAVILY PLACED RELIANCE ON THE ORDE R OF THE AO AND SUBMITTED THAT THOUGH THE SALE OF SHARES HAVE BEEN CONFIRMED AS GENUINE, BUT SINCE THE PURCHASE OF THE SAME HAS NOT BE EN EVIDENCED AND PROVED, IN SUCH A CIRCUMSTANCE POSITIVE INFERENCE COULD BE DRAWN THAT, THE SALE TOO COULD BE NOT GENUINE. HE ALSO ACCEPTED THAT SINCE THERE IS NO BROKER CONFIRMATION WITH REGARD TO PURCHASES AND ALSO NO BSE DETAILS AVAILABLE, THE PURCHASE COULD BE OFF MARKET. 12. SINCE, THE MAIN ARGUMENT RESTED ON UNCONFIRMED PURCH ASE OF 20,000 SHARES, ACCORDING TO THE DR, THE ENTIRE TRANSACTIO N COULD NOT BE HELD TO BE GENUINE. HE ALSO POINTED OUT THAT EVEN THE NAME OF THE ASSESSEE DOES NOT TALLY, BECAUSE SOME PLACES IT IS K NAR ESH CHANDRA (HUF) AND SOME PLACED IT IS K NARESHCHANDRA. THE DR, PLACED RELIANCE ON THE DECISION ARVIND M KARIYA, ITA NO. 7024/MUM/2010 (MUMBAI ITAT). 13. THE AR ON THE OTHER HAND SUBMITTED THAT THERE AR E NO ADVERSE REMARKS SO FAR AS THE SALE OF SHARES WERE CONSIDERED AN D THE PROCEEDS PERTAINING TO THAT SALE. HE ALSO REFERRED TO THE FACT THAT THE ASSESSEE % . . . 5154 / / 2011 SHRI K. NARESHCHANDRA (HUF). ITA NO. 5154/MUM/2011 7 WAS HOLDING SHARES PRIOR TO THIS SALE. WITH REGARD TO THE CONFUSION ON NAME, THE AR SUBMITTED THAT THE HUF NAME OF THE ASSESS EE WAS K NARESH CHANDRA (HUF) AND THERE IS NO AMBIGUITY ON THIS ASPECT. 14. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO GONE THROUGH THE DETAILS PLACED BEFORE US, AS WELL AS THE CASE LAWS CITED BY EITHER SIDE. 15. STRICTLY GOING THROUGH THE FACTS THAT THE ADDITION C AN BE MADE U/S 68 WHEN ALL THE INGREDIENTS OF THE PROVISION ARE NOT M ET / SATISFIED. THE UNDISPUTED FACTS ARE THAT ASSESSEE WAS HOLD ING 20,000 SHARES OF ROBINSON WORLD WIDE TRADE LTD., WHICH IT SOLD AND THE SALE PROCEEDS WERE ENTERED IN THE BOOKS OF ACCOUNT. THE FACT THAT THE ASSESSEE HELD SHARES OF THE ABOVE NAMED COMPANY HAS B EEN CONFIRMED BY THE COMPANY ITSELF. 16. THE FACT THAT THE ASSESSEE SOLD THE SHARES IN THRE E LOTS IS CONFIRMED BY THE BROKER, I.E. DPS. 17. THESE FACTS HAVE BEEN CONSIDERED BY THE CIT(A) IN PA RA 5.5 OF THE IMPUGNED ORDER (AS REPRODUCED EARLIER IN THIS ORDER). THE CIT(A) ALSO MADE OBSERVATIONS WITH REGARD TO ERRORS IN CLIENT CODES, WHICH ARE PREVALENT, AND CREEP INTO WHILE EXECUTION OF CONTRACT NOT ES. IT IS ALSO SEEN THAT THE CIT(A) LOOKED INTO THE CONDITIONS FOR MAKING AN ADDITION U/S 68, WHICH, IN HIS OPINION DID NOT EXIST. 18. FROM THE READING OF THE RELEVANT PARA, AND ALSO TAKIN G INTO CONSIDERATION THE RATIOS OF VARIOUS DECISIONS CITED BY EITHE R SIDE, WE ARE OF THE OPINION, THAT ADDITION U/S 68 CANNOT BE MADE. 19. IN THESE CIRCUMSTANCES, WE DO NOT FIND ANY REASON T O DISTURB THE DECISION TAKEN BY THE CIT(A) IN DELETING THE ADDITION OF RS. 18,65,220/- % . . . 5154 / / 2011 SHRI K. NARESHCHANDRA (HUF). ITA NO. 5154/MUM/2011 8 20. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JUNE, 2013. SD/- SD/- ( .. ) ( #'' '$ ) ! ! (P.M. JAGTAP) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 12 TH JUNE, 2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) % %( ( ) - I THANE / THE CIT (A)-1, THANE. 4) % %( II, THANE / THE CITII, THANE, 5) *+, - . , % ! - , / / THE D.R. A BENCH, MUMBAI. 6) ,0 1 COPY TO GUARD FILE. %23 / BY ORDER / / TRUE COPY / / [ 4 / 5 6 % ! - , / DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *895 . . * CHAVAN, SR. PS