Kumar Agarwal, New Delhi V. ACIT, Central Circle- 19 , New Delhi

ITA 5280/DEL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1377 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 07-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Income from undisclosed sources; Search and seizure; Document seized; Question of law; Documents seized; Capital Gains
• Section: 153A; 234B; 260A; 143(2); 139(1); 13; 153; 22; 153C; 132; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI R.K.PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER I.T.A NO.5278/DEL/2018 (ASSESSMENT YEAR-2011-12) SH. RAJ GOPAL AGARWAL, A-58, MADHUBAN, PREET VIHAR, NEW DELHI-110 092. PANACXPA 3779R VS. ASST. CIT, CENTRAL CIRCLE-19, NEW DELHI. (APPELLANT) (RESPONDENT) I.T.A NO.5853/DEL/2018 (ASSESSMENT YEAR-2011-12) SHRI GOPAL AGARWAL, A-58, MADHUBAN, PREET VIHAR, NEW DELHI-110 092 PANACXPA 3778Q VS. ASST. CIT, CENTRAL CIRCLE-19, NEW DELHI. (APPELLANT) (RESPONDENT) I.T.A NO.5280/DEL/2018 (ASSESSMENT YEAR-2011-12) SH. SHIV KUMAR AGARWAL, A-58, MADHUBAN, PREET VIHAR, NEW DELHI-110 092. PANACMPA 9618G VS. ASST. CIT, CENTRAL CIRCLE-19, NEW DELHI. (APPELLANT) (RESPONDENT) 2 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO I.T.A NO.5284/DEL/2018 (ASSESSMENT YEAR-2011-12) MAMTA AGARWAL, A-58, MADHUBAN, PREET VIHAR, NEW DELHI-110 092 PANACXPA 3775D VS. ASST. CIT, CENTRAL CIRCLE-19, NEW DELHI. (APPELLANT) (RESPONDENT) I.T.A NO.5858/DEL/2018 (ASSESSMENT YEAR-2011-12) MS. KAVITA AGARWAL, A-58, MADHUBAN, PREET VIHAR, NEW DELHI-110 092 PANACXPA 3774C VS. ASST. CIT, CENTRAL CIRCLE-19, NEW DELHI. (APPELLANT) (RESPONDENT) I.T.A NO.5288/DEL/2018 (ASSESSMENT YEAR-2011-12) SUMAN AGARWAL, A-58, MADHUBAN, PREET VIHAR, NEW DELHI-110 092 PANACXPA 3776A VS. ASST. CIT, CENTRAL CIRCLE-19, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY SH. GAUTAM JAIN, ADV. RESPONDENT BY SH. H. K. CHOUDHARY, SR. DR DATE OF HEARING 28.06.2021 DATE OF PRONOUNCEMENT 30.06.2021 3 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO ORDER PER BENCH: THE CAPTIONED SIX APPEALS FILED BY THE RESP ECTIVE ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 27, NEW DELH I {CIT (A)}. SINCE COMMON ISSUES HAVE BEEN RAISED IN ALL THESE A PPEALS, THEREFORE, THEY WERE HEARD TOGETHER AND ARE BEING D ISPOSED OF BY THIS COMMON ORDER. 2.0 ITA NO. 5853/DEL/2018 FOR ASSESSMENT YEAR (A. Y.) 2011-12 IN THE CASE OF SHRI GOPAL AGARWAL IS TAKEN A S THE LEAD CASE. FACTS OF THE CASE, IN BRIEF, ARE THAT SEARCH & SEIZ URE AND SURVEY OPERATIONS UNDER SECTION 132/133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) WERE CONDUCTED ON 8. 7.2015 AND SUBSEQUENT DATES IN THE CASE OF ASSESSEE ALONG WITH THE OTHER CASE OF THE M/S KR PULP & PAPERS LTD GROUP AT VARIOUS RE SIDENTIAL AND BUSINESS PREMISES. IN RESPONSE TO NOTICE ISSUED U/ S 153A OF THE INCOME TAX ACT, 1961 ISSUED TO THE ASSESSEE ON 26 TH SEPTEMBER, 2016, THE ASSESSEE FILED THE RETURN OF INCOME ON 2 ND MARCH, 2017 4 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO DECLARING TOTAL INCOME AT RS.11,80,380/-. THE ASSE SSING OFFICER (AO) INTER ALIA HAS OBSERVED THAT THE ASSESSEE HAS CLAIMED LONG TE RM CAPITAL GAIN OF RS. 9,52,494/- AS EXEMPT U/S 10(38) OF THE ACT. HE HAS NOTED THAT MR. MADHO GOPAL AGARWAL, MANAGING DIR ECTOR OF THE GROUP HAD ADMITTED RS. 25 CRORES ON BEHALF OF ENTIR E GROUP ON ACCOUNT OF LONG TERM CAPITAL GAIN EARNED BY THE VAR IOUS FAMILY MEMBERS. HE FURTHER NOTED THAT THE ASSESSEE IS THE BROTHER OF SHRI MADHO GOPAL AGARWAL BUT HE HAS NOT CONSIDERED THE LO NG TERM CAPITAL GAIN OF RS. 9,52,494/- IN HIS RETURN FILED U/S 153A OF THE ACT. THEREFORE, THE CASE WAS ASSESS ED AT AN INCOME OF RS. 35,30,874/- BY DENYING THE CLAIM OF EXEMPTIO N U/S 10(38) OF THE ACT VIDE ORDER PASSED U/S 153A/143(3) OF THE AC T. 2.1 BEFORE THE LD. CIT (A), THE ASSESSEE, APART F ROM CHALLENGING THE ADDITION ON MERIT, CHALLENGED THE A SSUMPTION OF JURISDICTION U/S 153A OF THE ACT. IT WAS SUBMITTED THAT ADDITION MADE WAS WITHOUT JURISDICTION SINCE IT WAS NOT BASED O N ANY INCRIMINATING MATERIAL FOUND AS RESULT OF SEARCH ON THE ASSESSEE, AND, THEREFORE, THE ASSESSING OFFICER HAD NO POWER T O ASSUME 5 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO JURISDICTION UNDER THE PROVISIONS OF SECTION 153A O F THE ACT. IT WAS SUBMITTED BEFORE THE LD. CIT (A) THAT ON 1.8.2011, THE ASSESSEE HAD FILED A RETURN U/S 139(1) OF THE ACT DECLARING INCO ME OF RS. 11,80,381/- FOR THE INSTANT ASSESSMENT YEAR, WHEREIN HE HAD CLAIMED EXEMPTION OF RS. 9,52,493.73/- U/S 10(38) OF THE ACT. THIS EXEMPTION REPRESENTED LONG TERM CAPITAL GAIN ON SAL E OF SHARES OF M/S KGN INDUSTRIES LTD. THE ORIGINAL RETURN STOOD ACCEPTED AS SUCH. THE AO, WHILE DENYING THE EXEMPTION IN THE IM PUGNED ORDER, HAS NOT REFERRED TO ANY INCRIMINATING MATERIAL AS A RESULT OF SEARCH ON THE ASSESSEE. IT WAS FURTHER SUBMITTED BEFORE THE LD. CIT (A) THAT THE OFFER LETTER DATED 31.7.2015 SUBMITTED BY SHRI MADHO GOPAL AGARWAL WAS SUBMITTED DURING THE POST SEARCH PROCEED INGS. IT WAS ALSO SUBMITTED THAT NO ENQUIRY WAS MADE EITHER IN RE SPECT OF THE INVESTMENT IN SHARES OR IN RESPECT OF LONG TERM CAP ITAL GAIN EARNED ON DISINVESTMENT OF SHARES. IT WAS FURTHER SUBMITTE D BEFORE THE LD. CIT (A) THAT THE STATEMENT OF SHRI MADHO GOPAL AGAR WAL, WHO HAPPENS TO BE BROTHER OF THE ASSESSEE, COULD NOT BE THE SOLE GROUND TO DRAW ANY ADVERSE INFERENCE AGAINST THE ASSESSEE. IN SUPPORT OF 6 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO THE AFORESAID CONTENTIONS, THE ASSESSEE RELIED ON T HE JUDGMENT IN THE CASE OF KABUL CHAWLA REPORTED IN 380 ITR 573 AND PR. CIT V. MEETA GUTGUTIA 395 ITR 526 ALONG WITH SEVERAL OTHER DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT AS WELL AS OT HER HONBLE HIGH COURTS. 2.2 HOWEVER, THE LD. CIT (A) UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UNDER: 6.4 SO FAR AS THE SECOND ADDITION OF RS.9,52,494/-, ON ACCOUNT OF DISALLOWANCE U/S 10(38) OF I T. ACT, IS CONCERNE D, I HAVE CONSIDERED THE FACTS OF THE ISSUE, BASIS OF ADDITIO N MADE BY AO AND SUBMISSIONS OF APPELLANT. AS IT IS REFLECTED FR OM ASSESSMENT ORDER, A SEARCH AND SEIZURE OPERATION WA S CONDUCTED BY THE INVESTIGATION WING OF THE DEPARTME NT IN THE CASES OF M/S K. R, PULP AND PAPERS LTD. GROUP AND D URING THE SEARCHES, THE APPELLANT'S CASE WAS ALSO COVERED U/S T32(1) OF I.T. ACT. IT IS ALSO CLEAR FROM THE FACTS THAT THE ADDITION HAS BEEN MADE ON ACCOUNT OF DISCLOSURE MADE BY THE MANAGING DIRECTOR OF THE GROUP NAMELY, SH. MADHO GOPAL AGARWAL AMOUNT ING TO RS.25.00 CRORES ON BEHALF OF ENTIRE GROUP ON ACCOUN T OF LONG TERM CAPITAL GAIN IN THE HANDS OF VARIOUS FAMILY ME MBERS. HOWEVER, DURING THE FILING OF RETURN OF INCOME, VAR IOUS MEMBERS OF THE GROUP DISCLOSED THE LONG TERM CAPITAL GAIN A ND DID NOT CLAIM THE EXEMPTION U/S 10(38) OF I. T. ACT AND PAI D THE TAXES ON THAT, BUT THE APPELLANT SH. SHRI GOPAL AGARWAL, DID NOT PAY THE TAXES ON THE LONG TERM CAPITAL GAIN OF RS.9,52,494/ - FOR THE YEAR UNDER CONSIDERATION RATHER CLAIMED EXEMPTION U/S 10 (38) OF THE I.T. ACT. HOWEVER, NEITHER DURING THE ASSESSMENT PR OCEEDINGS NOR APPELLATE PROCEEDINGS, APPELLANT COULD GIVE ANY SATISFACTORY REASON FOR NOT DISCLOSING THE AFORESAID LONG TERM C APITAL GAIN AS 7 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO TAXABLE IN HIS HANDS. DESPITE OF DISCLOSURE MADE DU RING THE SEARCH PROCEEDINGS AND LONG TERM CAPITAL GAIN SHOWN AS TAXABLE IN THE HANDS OF VARIOUS PERSONS OF GROUP WH ILE FILING THEIR RETURNS OF INCOME, APPELLANT HAS FAILED TO DI SCLOSE THE LONG TERM CAPITAL GAIN OF HIS PART. THE STAND TAKEN BY A PPELLANT IS SELF CONTRADICTORY. SINCE THE DISCLOSURE WAS MADE DURING THE SEARCH PROCEEDINGS AND ADMISSION HAS BEEN MADE BY T HE GROUP ENTITIES THERE IS NO REASON FOR NOT DISCLOSING THE SAID LONG TERM CAPITAL GAIN OF RS. 9,52,494/-/- IN THE CASE OF APP ELLANT. I, THEREFORE, CONFIRM THE ADDITION MADE BY HIM AND DIS MISS THE GROUNDS TAKEN BY APPELLANT ON THIS ACCOUNT. 2.3 AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL AND HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)- 27, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE INITIATION OF PROCEEDINGS U/S 153A OF THE ACT A ND, FRAMING OF ASSESSMENT U/S 153A/143(3) OF THE ACT SINCE NO INCR IMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH CONDUCTED ON THE APPELLANT AND THEREFORE, BOTH THE NOTICE ISSUED AND , ASSESSMENT FRAMED WERE WITHOUT JURISDICTION AND, DESERVED TO B E QUASHED AS SUCH. 1.1 THAT ADDITION MADE AND UPHELD ARE WITHOUT JURIS DICTION SINCE IT IS NOT BASED ON ANY MATERIAL FOUND AS A RE SULT OF SEARCH ON THE APPELLANT, AS HAVE BEEN ALSO HELD BY THE JUD GMENTS OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAB UL CHAWLA REPORTED IN 380 ITR 573 AND PR. CIT VS. MEETA GUTGU TIA REPORTED IN 395 ITR 526. 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO COMPREHEND THAT IN A CASE OF CONCLUDE D ASSESSMENT I.E. WHEN NO NOTICE U/S 143(2) OF THE AC T HAS BEEN ISSUED AND SERVED PRIOR TO SEARCH ON 08.07.2015 U/S 132(1) OF THE ACT, THE PROVISION OF SECTION 153A OF THE ACT C OULD NOT BE APPLIED IN A CASE WHERE NO INCRIMINATING EVIDENCE O R MATERIAL 8 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO HAD BEEN FOUND IN SEARCH, THE ADDITIONS MADE WERE B EYOND THE SCOPE OF SECTION 153A OF THE ACT. 2 THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -27, NEW DELHI, HAS ERRED BOTH IN LAW AND ON FACTS IN NO T DISPOSING OFF THE GROUND OF APPEAL RAISED BY APPELLANT THAT A PPROVAL OBTAINED U/S 153D OF THE ACT WAS A MECHANICAL AND, INVALID APPROVAL HAVING BEEN GRANTED WITHOUT DUE APPLICATIO N OF MIND TO THE FACTS OF THE ASSESSEE COMPANY, AND THEREFORE ORDER OF ASSESSMENT MADE U/S 153A/143(3) IS INVALID AND NOT IN ACCORDANCE WITH LAW. 3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN NOT A LLOWING EXEMPTION OF LONG TERM CAPITAL GAIN OF RS. 9,52,494/- ON SALE OF SHARES DULY SOLD ON RECOGNIZE D STOCK EXCHANGE UNDER SECTION 10(38) OF THE ACT. 3.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT EQUITY SHARES OF A LI STED COMPANY WHICH HAD BEEN HELD BY ASSESSEE FOR A PERIOD EXCEED ING 12 MONTHS AND THE SAME WERE SOLD ON RECOGNIZED STOCK E XCHANGE AFTER PAYMENT OF STT, RESULTING INTO A LONG TERM CA PITAL GAIN AND THEREFORE THE LONG TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TERM CAPITAL ASSET IS NOT INCLUD IBLE IN TOTAL INCOME OF THE ASSESSEE IN VIEW OF SECTION 10(38) OF THE ACT. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT THERE IS NO ESTOPPEL AGAINST STATUTE AND SURRENDER ALONE IN ABSENCE OF ANY INCRIMINATING MATERIAL DETECTED AS A RESULT OF SEARCH AND SUBSEQUENT ASSES SMENT PROCEEDINGS OR OTHERWISE TO ALLEGE THAT APPELLANT W AS INELIGIBLE FOR CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT, THE INCLUSION OF THE LONG TERM CAPITAL GAIN IS ILLEGAL, INVALID AND UNTENABLE. 3.3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO SURRENDE R BY APPELLANT AND IN ABSENCE THEREOF OF NO ADVERSE INFE RENCE MAY PLEASE BE DRAWN AGAINST APPELLANT. 9 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 3.4 THAT THE SURRENDER BY MADHO GOPAL AGARWAL I.E. THE BROTHER OF THE APPELLANT, UNDER NO CIRCUMSTANCE CAN BE TREATED AS INCRIMINATING MATERIAL AGAINST THE APPELLANT. 3.5 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT ONCE THE BROKER OF AP PELLANT HAD NEITHER DENIED AND NOR DISPUTED THE GENUINENESS OF TRANSACTION, THE CONCLUSION ARRIVED IN THE ORDER IS HIGHLY WHIMS ICAL, ARBITRARY, ILLOGICAL AND WHOLLY UNTENABLE. 3.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS SUSTAINED THE ADDITION ARBITRARILY AND MECHANIC ALLY REJECTED THE EXPLANATION AND EVIDENCE TENDERED BY THE APPELL ANT AND SUSTAINED THE ADDITION DENYING EXEMPTION BY DRAWING SUBJECTIVE, PREMEDITATED AND PRECONCEIVED INFERENCE S THEREFORE THE SAME IS NOT SUSTAINABLE. 3.7 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO SUSTAIN ADDITION WITHOUT ANY BASIS TH AT ASSESSEE HAS INTRODUCED HIS UNACCOUNTED INCOME IN THE FORM O F LONG TERM CAPITAL GAIN BY MANIPULATING THE PRICE OF SHARE. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEVY OF INTEREST OF RS. 36315/- UNDER SECTION 234A OF THE ACT AND INTEREST OF RS. 5,88,305/- U/S 234B OF THE ACT WHICH ARE NOT LEVIABLE ON THE FACTS AND CIRCUMSTANC ES OF THE CASE OF THE APPELLANT. 3.0 THUS, ALL THE AFORESAID GROUNDS ESSENTIALLY RELATE TO THE VALIDITY OF DISALLOWANCE OF RS. 9,52 ,494/- BY DENYING THE CLAIM OF EXEMPTION U/S 10(38) OF THE ACT. THE LD. AUTHORISED REPRESENTATIVE (AR) CONTENDED TH AT THE DISALLOWANCE MADE AND UPHELD WAS WITHOUT JURISDICTION SINCE IT WAS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH 10 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO ON THE ASSESSEE. HE SUBMITTED THAT THE ADDITION ON ACCOUNT OF DISALLOWANCE U/S 10(38) OF THE ACT HAS BEEN MADE AND SUSTAINED BY THE LD. CIT (A) ONLY ON THE BASIS OF DISCLOSURE MAD E BY THE MANAGING DIRECTOR OF THE GROUP NAMELY SHRI MADHO GO PAL AGARWAL AMOUNTING TO RS. 25 CRORE. HE FURTHER SUBMITTED TH AT DURING THE POST SEARCH PROCEEDINGS, SHRI MADHO GOPAL AGARWAL, VIDE LETTER DATED 31.07.2015 HAD SUBMITTED AS UNDER: SUB: INVESTIGATION PROCEEDINGS UNDER THE INCOME TA X ACT, 1961. M/S K.R. PULP & PAPERS LTD. (GROUP). DATE OF SEARCH 08.07.2015. THIS HAS REFERENCE TO SEARCH IN GROUP AT VARIOUS PR EMISES. WE HEREBY REITERATE THAT WE HAVE BEEN DOING PROPER BUS INESS AND ALL THE TRANSACTIONS ARE DULY RECORDED AND DISCLOSE D IN VARIOUS RECORDS MAINTAINED BY US. HOWEVER WE OFFER A SUM OF RS. 25.00 CRORES (TWENTY FIVE CRORES) AS ADDITIONAL INCOME ON BEHALF OF THE ENTIRE GROUP FOR OUR MENTAL PEACE. THIS ADDITIO NAL INCOME OF RS. 25.00 CRORES SHALL INCLUDE INCOME ON ACCOUNT OF LONG TERM CAPITAL GAINS IN THE HANDS OF VARIOUS FAMILY MEMBER S, OTHER ASSETS INCLUDING CASH IN HAND AND VARIOUS OTHER DIS CREPANCIES, OMISSIONS AND COMMISSIONS. THE DETAILS OF THE ADDITIONAL INCOME AND THE ASSESS MENT YEAR WILL BE SUBMITTED AFTER GOING THROUGH THE SEIZED DO CUMENTS AND RECORDS. THE ABOVE ADDITIONAL INCOME IS BEING OFFERED IS SUB JECT TO THE CONSIDERATION THAT NO PENAL ACTION WILL BE TAKEN / INITIATED. 11 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 3.1 THE LD. AR ALSO SUBMITTED THAT THE ASSESSEE ALONG WITH OTHER GROUP ASSESSEE HAD PAID TAXES IN RE SPECT OF LONG TERM CAPITAL GAIN EARNED/CLAIMED AS EXEMPT U/S 10(3 8) OF THE ACT AGGREGATING TO RS. 19.02 CRORES IN ASSESSMENT YEAR 2014-15 AND 2015-16 IN RESPECT OF TWO SCRIPS M/S KAPPAC PHARMA L TD. AND M/S SWIFT IT INFRASTRUCTURES & SERVICES LTD, WHICH WERE D IFFERENT FROM THE SCRIP IN THE INSTANT YEAR, NAMELY M/S KGN INDUS TRIES LTD. THE LD. AR ALSO SUBMITTED THAT IN ABSENCE OF ANY INCRIM INATING MATERIAL VIS-A-VIS THE DISALLOWANCE U/S 10(38) OF THE ACT, THE ADDITIO N WAS UNCALLED FOR IN LIGHT OF THE FOLLOWING JUDGMENTS: I) CIT V. KABUL CHAWLA 380 ITR 573 (DEL) II) PR. CIT VS. MEETA GUTGUTIA 395 ITR 526 (DEL) III) PCIT V. ANAND KUMAR JAIN (HUF) 432 ITR 384 (D EL) IV) CIT V. BEST INFRASTRUCTURE LTD. 397 ITR 82 (DE L) V) CIT V. HARJEEV AGARWAL 290 CTR 263 (DEL) VI) PR CIT VS SMC POWER GENERATION LTD. ITA 406/2019 (DEL) DATED 23.07.2019 VII) 378 ITR 84 (BOM) CIT VS. SINHGAD TECHNICAL ED UCATION SOCIETY UPHELD BY APEX COURT IN THE CASE OF CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY REPORTED IN 397 ITR 344 12 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 4.0 THE LD. CIT-DR, ON THE OTHER HAND, RELIED UPO N THE ORDERS OF THE LOWER AUTHORITIES. 5.0 WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE B Y BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT (A) AS WELL AS THE PAPER BOOK FILED ON BEHA LF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE DISAL LOWANCE MADE BY THE ASSESSING OFFICER IS NOT BASED ON ANY INCRIM INATING MATERIAL FOUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF THE ASSESSEE. THE ASSESSING OFFICER, ONLY ON THE BASIS OF THE DISCLOSURE MADE BY THE MANAGING DIRECTOR OF THE GROUP SHRI MA DHO GOPAL AGARWAL AMOUNTING TO RS. 25 CRORES, MADE THE IMPUGNE D DISALLOWANCE OF RS. 9,25,494/- ON SALE OF SHARES DU LY SOLD ON RECOGNIZED STOCK EXCHANGE U/S 10(38) OF THE ACT. 5.1 THE HONBLE DELHI HIGH COURT IN THE CASE OF P CIT V. ANAND KUMAR JAIN (HUF) (SUPRA) IN AN IDENTICAL MATT ER HAS HELD 13 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO THAT SUCH A STATEMENT DOES NOT CONSTITUTE INCRIMINA TING MATERIAL FOUND AS A RESULT OF SEARCH. IT HAS BEEN HELD THERE IN AS UNDER: 7. THE PRELIMINARY QUESTION UNDER CONSIDERATION B EFORE US IS WHETHER A STATEMENT UNDER SECTION 132(4) CONSTITUTE S INCRIMINATING MATERIAL FOR CARRYING OUT ASSESSMENT UNDER S. 153(A) OF THE ACT. A READING OF THE IMPUGNED ORDER REVEALS THAT THE STATEMENT OF MR. JINDAL RECORDED UNDER SECTION 132(4) FORMS THE FOUNDATION OF THE ASSESSMENT CARRIED OUT UNDER SECTION 153A OF THE ACT. THAT STATEMENT ALONE CANNOT JUSTIF Y THE ADDITIONS MADE BY THE AO. EVEN IF WE ACCEPT THE ARG UMENT OF THE REVENUE THAT THE FAILURE TO CROSS-EXAMINE THE W ITNESS DID NOT PREJUDICE THE ASSESSEE, YET, WE DISCERN FROM TH E RECORD THAT APART FROM THE STATEMENT OF MR. JINDAL, REVENUE HAS FAILED TO PRODUCE ANY CORROBORATIVE MATERIAL TO JUSTIFY THE A DDITIONS. ON THE CONTRARY WE ALSO NOTE THAT DURING THE COURSE OF THE SEARCH, IN THE STATEMENT MADE BY THE ASSESSEE, HE DENIED HA VING KNOWN MR. JINDAL. SINCE THERE WAS INSUFFICIENT MATE RIAL TO SUPPORT THE ADDITIONS, THE ITAT DELETED THE SAME. T HIS FINDING OF FACT, BASED ON EVIDENCE CALLS FOR NO INTERFERENCE, AS WE CANNOT RE-APPRECIATE EVIDENCE WHILE EXERCISING JURISDICTIO N UNDER SECTION 260A OF THE ACT. 8. NEXT, WE FIND THAT, THE ASSESSMENT HAS BEEN FRAM ED UNDER SECTION 153A, CONSEQUENT TO THE SEARCH ACTION. THE SCOPE AND AMBIT OF SECTION 153A IS WELL DEFINED. THIS COURT, IN CIT V. KABUL 14 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO CHAWLA, [1] CONCERNING THE SCOPE OF ASSESSMENT UNDE R SECTION 153A, HAS LAID OUT AND SUMMARIZED THE LEGAL POSITIO N AFTER TAKING INTO ACCOUNT THE EARLIER DECISIONS OF THIS C OURT AS WELL AS THE DECISIONS OF OTHER HIGH COURTS AND TRIBUNALS. I N THE SAID CASE, IT WAS HELD THAT THE EXISTENCE OF INCRIMINATI NG MATERIAL FOUND DURING THE COURSE OF THE SEARCH IS A SINE QUA NON FOR MAKING ADDITIONS PURSUANT TO A SEARCH AND SEIZURE O PERATION. IN THE EVENT NO INCRIMINATING MATERIAL IS FOUND DUR ING SEARCH, NO ADDITION COULD BE MADE IN RESPECT OF THE ASSESSMENT S THAT HAD BECOME FINAL. REVENUES CASE IS HINGED ON THE STATE MENT OF MR. JINDAL, WHICH ACCORDING TO THEM IS THE INCRIMINATIN G MATERIAL DISCOVERED DURING THE SEARCH ACTION. THIS STATEMENT CERTAINLY HAS THE EVIDENTIARY VALUE AND RELEVANCE AS CONTEMPL ATED UNDER THE EXPLANATION TO SECTION 132(4) OF THE ACT. HOWEV ER, THIS STATEMENT CANNOT, ON A STANDALONE BASIS, WITHOUT RE FERENCE TO ANY OTHER MATERIAL DISCOVERED DURING SEARCH AND SEI ZURE OPERATIONS, EMPOWER THE AO TO FRAME THE BLOCK ASSES SMENT. THIS COURT IN PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI V. BEST INFRASTRUCTURE(INDIA) P. LTD.,[2] HAS INTER-AL IA HELD THAT: 10. NOW, COMING TO THE ASPECT VIZ THE INVOCATION OF SECTION 153A ON THE BASIS OF THE STATEMENT RECORDED IN SEARCH AC TION AGAINST A THIRD PERSON. WE MAY NOTE THAT THE AO HAS USED TH IS STATEMENT ON OATH RECORDED IN THE COURSE OF SEARCH CONDUCTED IN 15 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO THE CASE OF A THIRD PARTY (I.E., SEARCH OF PRADEEP KUMAR JINDAL) FOR MAKING THE ADDITIONS IN THE HANDS OF THE ASSESS EE. AS PER THE MANDATE OF SECTION 153C, IF THIS STATEMENT WAS TO BE CONSTRUED AS AN INCRIMINATING MATERIAL BELONGING TO OR PERTAINING TO A PERSON OTHER THAN PERSON SEARCHED ( AS REFERRED TO IN SECTION 153A), THEN THE ONLY LEGAL RECOURSE A VAILABLE TO THE DEPARTMENT WAS TO PROCEED IN TERMS OF SECTION 153C OF THE ACT BY HANDING OVER THE SAME TO THE AO WHO HAS JURISDIC TION OVER SUCH PERSON. HERE, THE ASSESSMENT HAS BEEN FRAMED U NDER SECTION 153A ON THE BASIS OF ALLEGED INCRIMINATING MATERIAL (BEING THE STATEMENT RECORDED UNDER 132(4) OF THE A CT). AS NOTED ABOVE, THE ASSESSEE HAD NO OPPORTUNITY TO CROSS-EXA MINE THE SAID WITNESS, BUT THAT APART, THE MANDATORY PROCEDU RE UNDER SECTION 153C HAS NOT BEEN FOLLOWED. ON THIS COUNT A LONE, WE FIND NO PERVERSITY IN THE VIEW TAKEN BY THE ITAT. T HEREFORE, WE DO NOT FIND ANY SUBSTANTIAL QUESTION OF LAW THAT RE QUIRES OUR CONSIDERATION. 5.2 THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. BEST INFRASTRUCTURE (INDIA) (P) LTD. (SU PRA) HAS HELD THAT STATEMENTS RECORDED U/S 132(4) OF THE INCOME TAX AC T DO NOT BY THEMSELVES CONSTITUTE INCRIMINATING MATERIAL. THE R ELEVANT OBSERVATION OF THE HON'BLE HIGH COURT READS AS UNDE R:- 16 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO '38. FIFTHLY, STATEMENTS RECORDED UNDER SECTION 132 (4) OF THE ACT OF THE ACT DO NOT BY THEMSELVES CONSTITUTE INCR IMINATING MATERIAL AS HAS BEEN EXPLAINED BY THIS COURT IN COM MISSIONER OF INCOME TAX V. HARJEEV AGGARWAL (SUPRA). LASTLY, AS ALREADY POINTED OUT HEREINBEFORE, THE FACTS IN THE PRESENT CASE ARE DIFFERENT FROM THE FACTS ITA NO.7374/DEL/2017 ITA NO.7567/DEL/2017 IN SMT. DAYAWANTI GUPTA V. CIT (SU PRA) WHERE THE ADMISSION BY THE ASSESSEES THEMSELVES ON CRITICAL ASPECTS, OF FAILURE TO MAINTAIN ACCOUNTS AND ADMISS ION THAT THE SEIZED DOCUMENTS REFLECTED TRANSACTIONS OF UNACCOUN TED SALES AND PURCHASES, IS NON- EXISTENT IN THE PRESENT CASE . IN THE SAID CASE, THERE WAS A FACTUAL FINDING TO THE EFFECT THA T THE ASSESSEES WERE HABITUAL OFFENDERS, INDULGING IN CLA NDESTINE OPERATIONS WHEREAS THERE IS NOTHING IN THE PRESENT CASE, WHATSOEVER, TO SUGGEST THAT ANY STATEMENT MADE BY M R. ANU AGGARWAL OR MR. HARJEET SINGH CONTAINED ANY SUCH AD MISSION. 39. FOR ALL THE AFOREMENTIONED REASONS, THE COURT I S OF THE VIEW THAT THE ITAT WAS FULLY JUSTIFIED IN CONCLUDING THA T THE ASSUMPTION OF JURISDICTION UNDER SECTION 153A OF TH E ACT QUA THE ASSESSEES HEREIN WAS NOT JUSTIFIED IN LAW.' 17 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 5.3 ALSO THE HONBLE DELHI HIGH COURT IN THE CA SE OF PR. CIT VS. SMC POWER GENERATION IN ITA 406/2019 (DEL) DATED 23.07.2019 HAS OBSERVED AS UNDER: 3. THE QUESTION SOUGHT TO BE RAISED BY THE REVENU E IS WHETHER THE ITAT WAS JUSTIFIED IN QUASHING THE ASSESSMENT O RDER FRAMED UNDER SECTION 153A OF THE INCOME TAX ACT, 1961 (ACT ) ON THE GROUND THAT THERE IS NO INCRIMINATING MATERIAL FOUN D QUA THE ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY IN THE COURSE OF THE SEARCH? . 10. THE REQUIREMENT THAT THE INCRIMINATING MATERIAL TO HAVE THE CO-RELATION TO THE PARTICULAR ADDITION SOUGHT TO BE MADE IS A LOGIC THAT WILL HOLD GOOD NOT ONLY FOR SECTION 153 C OF T HE ACT BUT IN RELATION TO SECTION 153A OF THE ACT AS WELL. CONSEQ UENTLY, THIS COURT DOES NOT FIND ANY ERROR HAVING BEEN COMMITTED BY THE ITAT IN ACCEPTING THE PLEA OF THE ASSESSEE THAT THE RE IS NO INCRIMINATING DOCUMENT WHICH WAS SEIZED IN THE COUR SE OF SEARCH RELATING TO THE ADDITION SOUGHT TO BE MADE O N ACCOUNT OF THE SHARE CAPITAL. THEREFORE, THE JURISDICTIONAL RE QUIREMENT OF SECTION 153 A OF THE ACT WAS NOT SATISFIED. 11. NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPE AL IS ACCORDINGLY DISMISSED. 18 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 5.4 IN LIGHT OF THE AFORESAID, IT IS APPARENT TH AT THE IMPUGNED DISALLOWANCE IS NOT BASED ON ANY INCRIMINAT ING MATERIAL FOUND AS A RESULT OF SEARCH. THE LD. CIT (A) HAS CO NFIRMED THE ADDITION ON THE GROUND THAT THERE IS NO EXPLANATION AS TO THE CONTRADICTORY STAND IN AS MUCH AS SURRENDER WAS MADE IN ASSESSMENT YEARS 2014-15 AND 2015-16 BUT NOT IN THE INSTANT YEAR. THE LD. AR HAS EXPLAINED THAT THE SCRIPS IN ASSESSM ENT YEAR 2014- 15 AND 2015-16 WERE M/S KAPPAC PHARMA LTD. AND M/S S WIFT IT INFRASTRUCTURES & SERVICES LTD., WHICH IS DIFFERENT FROM THE SCRIP IN THE INSTANT YEAR, NAMELY M/S KGN INDUSTRIES LTD. 5.5 THE LD. DR HAS NOT BEEN ABLE TO REBUT THE ABOVE FACTUAL SUBMISSION AND ALSO NOT HIGHLIGHTED A NY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH DESPITE COPIES OF PANCHNAMAS HAVING BEEN AGAIN PLACED ON RECORD BY THE LD. AR. 5.6 IN VIEW OF THE ABOVE, WE HOLD THAT THE LD. CI T (A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN ASSUMING JURISDICTION U/S 153A OF THE I.T. ACT. ACCORDINGLY, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND AS UP HELD BY THE 19 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO LD. CIT (A) IN THE 153A ASSESSMENT PROCEEDINGS BEIN G VOID AB INITIO IS DELETED. 5.7 SINCE THE ASSESSEE SUCCEEDS ON THIS LEGAL GRO UND, THE GROUNDS RAISED ON MERITS ARE NOT ADJUDICATED HA VING BECOME ACADEMIC IN NATURE. 6.0 IN THE RESULT, ITA 5853/DEL/2018 STANDS ALLOW ED. 7.0 ITA NO. 5278/DEL/2018, ITA NO. 5288/DEL/2018, ITA NO. 5284/DEL/2018, ITA NO. 5858/DEL/2018 AND IT A NO. 5280/DEL/2018: WE FIND THAT IDENTICAL GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN ALL THESE APPEALS CHALLENGING THE D ISALLOWANCES MADE BY THE ASSESSING OFFICER WHICH HAS BEEN UPHELD BY THE LD. CIT (A). FOR THE SAKE OF COMPLETENESS, THE RESPECTI VE GROUNDS ARE BEING REPRODUCED HERE IN UNDER: GROUNDS OF APPEAL IN ITA NO.5278/DEL/2018 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-27, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN UPH OLDING THE INITIATION OF PROCEEDINGS U/S 153 A OF THE ACT AND, FRAMING OF ASSESSMENT U/S 153A/143(3) OF THE ACT SINCE NO INCR IMINATING 20 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO MATERIAL WAS FOUND AS A RESULT OF SEARCH CONDUCTED ON THE APPELLANT AND THEREFORE, BOTH THE NOTICE ISSUED AND, ASSESSME NT FRAMED WERE WITHOUT JURISDICTION AND, DESERVED TO BE QUASHED AS SUCH. 1.1 THAT ADDITION MADE AND UPHELD ARE WITHOUT JURISDI CTION SINCE IT IS NOT BASED ON ANY MATERIAL FOUND AS A RESULT O F SEARCH ON THE APPELLANT, AS HAVE BEEN ALSO HELD BY THE JUDGMENTS OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPO RTED IN 380 ITR 573 AND PR. CIT VS. MEETA GUTGUTIA REPORTED IN 395 ITR 526. 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO COMPREHEND THAT IN A CASE OF CONCLUDED AS SESSMENT I.E. WHEN NO NOTICE U/S 143(2) OF THE ACT HAS BEEN ISSUE D AND SERVED PRIOR TO SEARCH ON 08.07.2015 U/S 132(1) OF THE ACT , THE PROVISION OF SECTION 153 A OF THE ACT COULD NOT BE APPLIED IN A CASE WHERE NO INCRIMINATING EVIDENCE OR MATERIAL HAD BEEN FOUND I N SEARCH, THE ADDITIONS MADE WERE BEYOND THE SCOPE OF SECTION 153 A OF THE ACT. 2. THAT SINCE APPROVAL OBTAINED U/S 153D OF THE AC T WAS A MECHANICAL AND, INVALID APPROVAL HAVING BEEN GRANTE D WITHOUT DUE APPLICATION OF MIND TO THE FACTS OF THE ASSESSEE CO MPANY, ORDER OF ASSESSMENT MADE U/S 153A/143(3) IS INVALID AND NOT IN ACCORDANCE WITH LAW. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN NOT ALLOW ING EXEMPTION OF LONG TERM CAPITAL GAIN OF RS. 9,64,481/- ON SALE OF SHARES DULY SOLD ON RECOGNIZED STOCK EXCHANGE UNDER SECTION 10(38) O F THE ACT. 3. 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT EQUITY SHARES OF A LISTED COMPANY WHICH HAD BEEN HELD BY ASSESSEE FOR A PERIOD EXCEEDING 12 MON THS AND THE SAME WERE SOLD ON RECOGNIZED STOCK EXCHANGE AFTER P AYMENT OF STT, RESULTING INTO A LONG TERM CAPITAL GAIN AND THEREFO RE THE LONG TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TERM CAPITAL 21 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO ASSET IS NOT INCLUDIBLE IN TOTAL INCOME OF THE ASS ESSEE IN VIEW OF SECTION 10(38) OF THE ACT. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS FAILED TO APPRECIATE THAT THERE IS NO ESTOPPEL AGAI NST STATUTE AND SURRENDER ALONE IN ABSENCE OF ANY INCRIMINATING MAT ERIAL DETECTED AS A RESULT OF SEARCH AND SUBSEQUENT ASSESSMENT PROCEE DINGS OR OTHERWISE TO ALLEGE THAT APPELLANT WAS INELIGIBLE F OR CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT, THE INCL USION OF THE LONG TERM CAPITAL GAIN IS ILLEGAL, INVALID AND UNTENABLE . 3.3 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO SURRENDER BY APPELLANT AND IN ABSENCE THEREOF OF NO ADVERSE INFERENCE MAY PLEASE BE DRAWN AGAINST APPELLANT. 3.4 THAT THE SURRENDER BY MADHO GOPAL AGARWA L I.E. THE FATHER OF THE APPELLANT, UNDER NO CIRCUMSTANCE CAN BE TREATED AS INCRIMINATING MATERIAL AGAINST THE APPELLANT. 3.5 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT ONCE THE BROKER OF APPELL ANT HAD NEITHER DENIED AND NOR DISPUTED THE GENUINENESS OF TRANSACT ION, THE CONCLUSION ARRIVED IN THE ORDER IS HIGHLY WHIMSICAL , ARBITRARY, ILLOGICAL AND WHOLLY UNTENABLE. 3.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS SUSTAINED THE ADDITION ARBITRARILY AND MECHANICALLY REJECTED THE EXPLANATION AND EVIDENCE TENDERED BY THE APPELLANT AND SUSTAINED THE ADDITION DENYING EXEMPTION BY DRAWING SUBJECTIV E, PREMEDITATED AND PRECONCEIVED INFERENCES THEREFORE THE SAME IS N OT SUSTAINABLE. 3.7 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO SUSTAIN ADDITION WITHOUT ANY BASIS THAT A SSESSEE HAS INTRODUCED HIS UNACCOUNTED INCOME IN THE FORM OF LO NG TERM CAPITAL GAIN BY MANIPULATING THE PRICE OF SHARE. 22 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 4. THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEV Y OF INTEREST OF RS. 16608/- UNDER SECTION 234A OF THE ACT AND INTEREST OF RS. 269046/- U/S 234B OF THE ACT WHICH ARE NOT LEVIABLE ON THE F ACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT. IT IS THEREFORE, PRAYED THAT IT BE HELD THAT ORDER FRAMED IS WITHOUT JURISDICTION AND DESERVES TO BE QUASHED AS SUCH. IT BE FURTHER HELD THAT ADDITIONS SO MADE AND UPHELD BY THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ALONGWITH INTE REST LEVIED BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. GROUNDS OF APPEAL IN ITA NO.5280/DEL/2018 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-27, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN UPH OLDING THE INITIATION OF PROCEEDINGS U/S 153 A OF THE ACT AND, FRAMING OF ASSESSMENT U/S 153A/143(3) OF THE ACT SINCE NO INCR IMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH CONDUCTED ON THE APPELLANT AND THEREFORE, BOTH THE NOTICE ISSUED AND, ASSESSME NT FRAMED WERE WITHOUT JURISDICTION AND, DESERVED TO BE QUASHED AS SUCH. 1.1 THAT ADDITION MADE AND UPHELD ARE WITHOUT J URISDICTION SINCE IT IS NOT BASED ON ANY MATERIAL FOUND AS A RESULT OF S EARCH ON THE APPELLANT, AS HAVE BEEN ALSO HELD BY THE JUDGMENTS OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPO RTED IN 380 ITR 573 AND PR. CIT VS. MEETA GUTGUTIA REPORTED IN 395 ITR 526. 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO COMPREHEND THAT IN A CASE OF CONCLUDED AS SESSMENT I.E. WHEN NO NOTICE U/S 143(2) OF THE ACT HAS BEEN ISSUE D AND SERVED PRIOR TO SEARCH ON 08.07.2015 U/S 132(1) OF THE ACT , THE PROVISION OF SECTION 153 A OF THE ACT COULD NOT BE APPLIED IN A CASE WHERE NO INCRIMINATING EVIDENCE OR MATERIAL HAD BEEN FOUND I N SEARCH, THE ADDITIONS MADE WERE BEYOND THE SCOPE OF SECTION 153 A OF THE ACT. 23 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 2. THAT SINCE APPROVAL OBTAINED U/S 153D OF THE ACT WAS A MECHANICAL AND, INVALID APPROVAL HAVING BEEN GRANTE D WITHOUT DUE APPLICATION OF MIND TO THE FACTS OF THE ASSESSEE CO MPANY, ORDER OF ASSESSMENT MADE U/S 153A/143(3) IS INVALID AND NOT IN ACCORDANCE WITH LAW. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN NOT ALLOW ING EXEMPTION OF LONG TERM CAPITAL GAIN OF RS. 3,61,496/- ON SALE OF SHARES DULY SOLD ON RECOGNIZED STOCK EXCHANGE UNDER SECTION 10(38) O F THE ACT. 3. 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT EQUITY SHARES OF A LISTED COMPANY WHICH HAD BEEN HELD BY ASSESSEE FOR A PERIOD EXCEEDING 12 MON THS AND THE SAME WERE SOLD ON RECOGNIZED STOCK EXCHANGE AFTER P AYMENT OF STT, RESULTING INTO A LONG TERM CAPITAL GAIN AND THEREFO RE THE LONG TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TERM CAPITAL ASSET IS NOT INCLUDIBLE IN TOTAL INCOME OF THE ASS ESSEE IN VIEW OF SECTION 10(38) OF THE ACT. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS FAILED TO APPRECIATE THAT THERE IS NO ESTOPPEL AGAI NST STATUTE AND SURRENDER ALONE IN ABSENCE OF ANY INCRIMINATING MAT ERIAL DETECTED AS A RESULT OF SEARCH AND SUBSEQUENT ASSESSMENT PROCEE DINGS OR OTHERWISE TO ALLEGE THAT APPELLANT WAS INELIGIBLE F OR CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT, THE INCL USION OF THE LONG TERM CAPITAL GAIN IS ILLEGAL, INVALID AND UNTENABLE . 3.3 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO SURRENDER BY APPELLANT AND IN ABSENCE THEREOF OF NO ADVERSE INFERENCE MAY PLEASE BE DRAWN AGAINST APPELLANT. 24 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 3.4 THAT THE SURRENDER BY MADHO GOPAL AGARWA L I.E. THE FATHER OF THE APPELLANT, UNDER NO CIRCUMSTANCE CAN BE TREATED AS INCRIMINATING MATERIAL AGAINST THE APPELLANT. 3.5 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT ONCE THE BROKER OF APPELL ANT HAD NEITHER DENIED AND NOR DISPUTED THE GENUINENESS OF TRANSACT ION, THE CONCLUSION ARRIVED IN THE ORDER IS HIGHLY WHIMSICAL , ARBITRARY, ILLOGICAL AND WHOLLY UNTENABLE. 3.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS SUSTAINED THE ADDITION ARBITRARILY AND MECHANICALLY REJECTED THE EXPLANATION AND EVIDENCE TENDERED BY THE APPELLANT AND SUSTAINED THE ADDITION DENYING EXEMPTION BY DRAWING SUBJECTIV E, PREMEDITATED AND PRECONCEIVED INFERENCES THEREFORE THE SAME IS N OT SUSTAINABLE. 3.7 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO SUSTAIN ADDITION WITHOUT ANY BASIS THAT A SSESSEE HAS INTRODUCED HIS UNACCOUNTED INCOME IN THE FORM OF LO NG TERM CAPITAL GAIN BY MANIPULATING THE PRICE OF SHARE. 4. THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEV Y OF INTEREST OF RS. 4175/- UNDER SECTION 234A OF THE ACT AND INTEREST O F RS.67,633/- U/S 234B OF THE ACT WHICH ARE NOT LEVIABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT. IT IS THEREFORE, PRAYED THAT IT BE HELD THAT ORDER FRAMED IS WITHOUT JURISDICTION AND DESERVES TO BE QUASHED AS SUCH. IT BE FURTHER HELD THAT ADDITIONS SO MADE AND UPHELD BY THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ALONGWITH INTE REST LEVIED BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. 25 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO GROUNDS OF APPEAL IN ITA NO.5284/DEL/2018 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-27, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN UPH OLDING THE INITIATION OF PROCEEDINGS U/S 153 A OF THE ACT AND, FRAMING OF ASSESSMENT U/S 153A/143(3) OF THE ACT SINCE NO INCR IMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH CONDUCTED ON THE APPELLANT AND THEREFORE, BOTH THE NOTICE ISSUED AND, ASSESSME NT FRAMED WERE WITHOUT JURISDICTION AND, DESERVED TO BE QUASHED AS SUCH. 1.1 THAT ADDITION MADE AND UPHELD ARE WITHOUT J URISDICTION SINCE IT IS NOT BASED ON ANY MATERIAL FOUND AS A RESULT OF S EARCH ON THE APPELLANT, AS HAVE BEEN ALSO HELD BY THE JUDGMENTS OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPO RTED IN 380 ITR 573 AND PR. CIT VS. MEETA GUTGUTIA REPORTED IN 395 ITR 526. 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO COMPREHEND THAT IN A CASE OF CONCLUDED AS SESSMENT I.E. WHEN NO NOTICE U/S 143(2) OF THE ACT HAS BEEN ISSUE D AND SERVED PRIOR TO SEARCH ON 08.07.2015 U/S 132(1) OF THE ACT , THE PROVISION OF SECTION 153 A OF THE ACT COULD NOT BE APPLIED IN A CASE WHERE NO INCRIMINATING EVIDENCE OR MATERIAL HAD BEEN FOUND I N SEARCH, THE ADDITIONS MADE WERE BEYOND THE SCOPE OF SECTION 153 A OF THE ACT. 2. THAT SINCE APPROVAL OBTAINED U/S 153D OF THE ACT WAS A MECHANICAL AND, INVALID APPROVAL HAVING BEEN GRANTE D WITHOUT DUE APPLICATION OF MIND TO THE FACTS OF THE ASSESSEE CO MPANY, ORDER OF ASSESSMENT MADE U/S 153A/143(3) IS INVALID AND NOT IN ACCORDANCE WITH LAW. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN NOT ALLOW ING EXEMPTION OF LONG TERM CAPITAL GAIN OF RS. 24,11,178/- ON SALE O F SHARES DULY SOLD ON RECOGNIZED STOCK EXCHANGE UNDER SECTION 10(38) O F THE ACT. 26 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 3. 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT EQUITY SHARES OF A LISTED COMPANY WHICH HAD BEEN HELD BY ASSESSEE FOR A PERIOD EXCEEDING 12 MON THS AND THE SAME WERE SOLD ON RECOGNIZED STOCK EXCHANGE AFTER P AYMENT OF STT, RESULTING INTO A LONG TERM CAPITAL GAIN AND THEREFO RE THE LONG TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TERM CAPITAL ASSET IS NOT INCLUDIBLE IN TOTAL INCOME OF THE ASS ESSEE IN VIEW OF SECTION 10(38) OF THE ACT. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS FAILED TO APPRECIATE THAT THERE IS NO ESTOPPEL AGAI NST STATUTE AND SURRENDER ALONE IN ABSENCE OF ANY INCRIMINATING MAT ERIAL DETECTED AS A RESULT OF SEARCH AND SUBSEQUENT ASSESSMENT PROCEE DINGS OR OTHERWISE TO ALLEGE THAT APPELLANT WAS INELIGIBLE F OR CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT, THE INCL USION OF THE LONG TERM CAPITAL GAIN IS ILLEGAL, INVALID AND UNTENABLE . 3.3 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO SURRENDER BY APPELLANT AND IN ABSENCE THEREOF OF NO ADVERSE INFERENCE MAY PLEASE BE DRAWN AGAINST APPELLANT. 3.4 THAT THE SURRENDER BY MADHO GOPAL AGARWA L I.E. THE FATHER OF THE APPELLANT, UNDER NO CIRCUMSTANCE CAN BE TREATED AS INCRIMINATING MATERIAL AGAINST THE APPELLANT. 3.5 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT ONCE THE BROKER OF APPELL ANT HAD NEITHER DENIED AND NOR DISPUTED THE GENUINENESS OF TRANSACT ION, THE CONCLUSION ARRIVED IN THE ORDER IS HIGHLY WHIMSICAL , ARBITRARY, ILLOGICAL AND WHOLLY UNTENABLE. 3.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS SUSTAINED THE ADDITION ARBITRARILY AND MECHANICALLY REJECTED THE EXPLANATION AND EVIDENCE TENDERED BY THE APPELLANT AND SUSTAINED 27 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO THE ADDITION DENYING EXEMPTION BY DRAWING SUBJECTIV E, PREMEDITATED AND PRECONCEIVED INFERENCES THEREFORE THE SAME IS N OT SUSTAINABLE. 3.7 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO SUSTAIN ADDITION WITHOUT ANY BASIS THAT A SSESSEE HAS INTRODUCED HIS UNACCOUNTED INCOME IN THE FORM OF LO NG TERM CAPITAL GAIN BY MANIPULATING THE PRICE OF SHARE. 4. THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEV Y OF INTEREST OF RS. 14,322/- UNDER SECTION 234A OF THE ACT AND INTEREST OF RS.5,80,052,/- U/S 234B OF THE ACT WHICH ARE NOT LEVIABLE ON THE F ACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT. IT IS THEREFORE, PRAYED THAT IT BE HELD THAT ORDER FRAMED IS WITHOUT JURISDICTION AND DESERVES TO BE QUASHED AS SUCH. IT BE FURTHER HELD THAT ADDITIONS SO MADE AND UPHELD BY THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ALONGWITH INTE REST LEVIED BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. GROUNDS OF APPEAL IN ITA NO.5858/DEL/2018 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-27, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN UPH OLDING THE INITIATION OF PROCEEDINGS U/S 153 A OF THE ACT AND, FRAMING OF ASSESSMENT U/S 153A/143(3) OF THE ACT SINCE NO INCR IMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH CONDUCTED ON THE APPELLANT AND THEREFORE, BOTH THE NOTICE ISSUED AND, ASSESSME NT FRAMED WERE WITHOUT JURISDICTION AND, DESERVED TO BE QUASHED AS SUCH. 1.1 THAT ADDITION MADE AND UPHELD ARE WITHOUT J URISDICTION SINCE IT IS NOT BASED ON ANY MATERIAL FOUND AS A RESULT OF S EARCH ON THE APPELLANT, AS HAVE BEEN ALSO HELD BY THE JUDGMENTS OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPO RTED IN 380 ITR 573 AND PR. CIT VS. MEETA GUTGUTIA REPORTED IN 395 ITR 526. 28 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO COMPREHEND THAT IN A CASE OF CONCLUDED AS SESSMENT I.E. WHEN NO NOTICE U/S 143(2) OF THE ACT HAS BEEN ISSUE D AND SERVED PRIOR TO SEARCH ON 08.07.2015 U/S 132(1) OF THE ACT , THE PROVISION OF SECTION 153 A OF THE ACT COULD NOT BE APPLIED IN A CASE WHERE NO INCRIMINATING EVIDENCE OR MATERIAL HAD BEEN FOUND I N SEARCH, THE ADDITIONS MADE WERE BEYOND THE SCOPE OF SECTION 153 A OF THE ACT. 2. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-27, NEW DELHI, HAS ERRED BOTH IN LAW AND ON FACTS IN NOT DI SPOSING OFF THE GROUND OF APPEAL RAISED BY APPELLANT THAT APPROVAL OBTAINED U/S 153D OF THE ACT WAS A MECHANICAL AND, INVALID APPRO VAL HAVING BEEN GRANTED WITHOUT DUE APPLICATION OF MIND TO THE FACT S OF THE ASSESSEE COMPANY, ORDER OF ASSESSMENT MADE U/S 153A/143(3) I S INVALID AND NOT IN ACCORDANCE WITH LAW. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN NOT ALLOW ING EXEMPTION OF LONG TERM CAPITAL GAIN OF RS.37,79,449/- ON SALE OF SHARES DULY SOLD ON RECOGNIZED STOCK EXCHANGE UNDER SECTION 10(38) O F THE ACT. 3. 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT EQUITY SHARES OF A LISTED COMPANY WHICH HAD BEEN HELD BY ASSESSEE FOR A PERIOD EXCEEDING 12 MON THS AND THE SAME WERE SOLD ON RECOGNIZED STOCK EXCHANGE AFTER P AYMENT OF STT, RESULTING INTO A LONG TERM CAPITAL GAIN AND THEREFO RE THE LONG TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TERM CAPITAL ASSET IS NOT INCLUDIBLE IN TOTAL INCOME OF THE ASS ESSEE IN VIEW OF SECTION 10(38) OF THE ACT. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS FAILED TO APPRECIATE THAT THERE IS NO ESTOPPEL AGAI NST STATUTE AND SURRENDER ALONE IN ABSENCE OF ANY INCRIMINATING MAT ERIAL DETECTED AS A RESULT OF SEARCH AND SUBSEQUENT ASSESSMENT PROCEE DINGS OR OTHERWISE TO ALLEGE THAT APPELLANT WAS INELIGIBLE F OR CLAIM OF 29 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO EXEMPTION UNDER SECTION 10(38) OF THE ACT, THE INCL USION OF THE LONG TERM CAPITAL GAIN IS ILLEGAL, INVALID AND UNTENABLE . 3.3 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO SURRENDER BY APPELLANT AND IN ABSENCE THEREOF OF NO ADVERSE INFERENCE MAY PLEASE BE DRAWN AGAINST APPELLANT. 3.4 THAT THE SURRENDER BY MADHO GOPAL AGARWA L I.E. THE FATHER OF THE APPELLANT, UNDER NO CIRCUMSTANCE CAN BE TREATED AS INCRIMINATING MATERIAL AGAINST THE APPELLANT. 3.5 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT ONCE THE BROKER OF APPELL ANT HAD NEITHER DENIED AND NOR DISPUTED THE GENUINENESS OF TRANSACT ION, THE CONCLUSION ARRIVED IN THE ORDER IS HIGHLY WHIMSICAL , ARBITRARY, ILLOGICAL AND WHOLLY UNTENABLE. 3.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS SUSTAINED THE ADDITION ARBITRARILY AND MECHANICALLY REJECTED THE EXPLANATION AND EVIDENCE TENDERED BY THE APPELLANT AND SUSTAINED THE ADDITION DENYING EXEMPTION BY DRAWING SUBJECTIV E, PREMEDITATED AND PRECONCEIVED INFERENCES THEREFORE THE SAME IS N OT SUSTAINABLE. 3.7 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO SUSTAIN ADDITION WITHOUT ANY BASIS THAT A SSESSEE HAS INTRODUCED HIS UNACCOUNTED INCOME IN THE FORM OF LO NG TERM CAPITAL GAIN BY MANIPULATING THE PRICE OF SHARE. 4. THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEV Y OF INTEREST OF RS. 68,545/- UNDER SECTION 234A OF THE ACT AND INTEREST OF RS.9,25,357/- U/S 234B OF THE ACT WHICH ARE NOT LEVIABLE ON THE F ACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT. 30 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO IT IS THEREFORE, PRAYED THAT IT BE HELD THAT ORDER FRAMED IS WITHOUT JURISDICTION AND DESERVES TO BE QUASHED AS SUCH. IT BE FURTHER HELD THAT ADDITIONS SO MADE AND UPHELD BY THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ALONGWITH INTE REST LEVIED BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. GROUNDS OF APPEAL IN ITA NO.5288/DEL/2018 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-27, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN UPH OLDING THE INITIATION OF PROCEEDINGS U/S 153 A OF THE ACT AND, FRAMING OF ASSESSMENT U/S 153A/143(3) OF THE ACT SINCE NO INCR IMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH CONDUCTED ON THE APPELLANT AND THEREFORE, BOTH THE NOTICE ISSUED AND, ASSESSME NT FRAMED WERE WITHOUT JURISDICTION AND, DESERVED TO BE QUASHED AS SUCH. 1.1 THAT ADDITION MADE AND UPHELD ARE WITHOU T JURISDICTION SINCE IT IS NOT BASED ON ANY MATERIAL FOUND AS A RESULT O F SEARCH ON THE APPELLANT, AS HAVE BEEN ALSO HELD BY THE JUDGMENTS OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPO RTED IN 380 ITR 573 AND PR. CIT VS. MEETA GUTGUTIA REPORTED IN 395 ITR 526. 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO COMPREHEND THAT IN A CASE OF CONCLUDED AS SESSMENT I.E. WHEN NO NOTICE U/S 143(2) OF THE ACT HAS BEEN ISSUE D AND SERVED PRIOR TO SEARCH ON 08.07.2015 U/S 132(1) OF THE ACT , THE PROVISION OF SECTION 153 A OF THE ACT COULD NOT BE APPLIED IN A CASE WHERE NO INCRIMINATING EVIDENCE OR MATERIAL HAD BEEN FOUND I N SEARCH, THE ADDITIONS MADE WERE BEYOND THE SCOPE OF SECTION 153 A OF THE ACT. 2. THAT SINCE APPROVAL OBTAINED U/S 153D OF TH E ACT WAS A MECHANICAL AND, INVALID APPROVAL HAVING BEEN GRANTE D WITHOUT DUE APPLICATION OF MIND TO THE FACTS OF THE ASSESSEE CO MPANY, ORDER OF ASSESSMENT MADE U/S 153A/143(3) IS INVALID AND NOT IN ACCORDANCE WITH LAW. 31 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 3. THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN NOT ALLOW ING EXEMPTION OF LONG TERM CAPITAL GAIN OF RS.19,18,852/- ON SALE OF SHARES DULY SOLD ON RECOGNIZED STOCK EXCHANGE UNDER SECTION 10(38) O F THE ACT. 3. 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT EQUITY SHARES OF A LISTED COMPANY WHICH HAD BEEN HELD BY ASSESSEE FOR A PERIOD EXCEEDING 12 MON THS AND THE SAME WERE SOLD ON RECOGNIZED STOCK EXCHANGE AFTER P AYMENT OF STT, RESULTING INTO A LONG TERM CAPITAL GAIN AND THEREFO RE THE LONG TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TERM CAPITAL ASSET IS NOT INCLUDIBLE IN TOTAL INCOME OF THE ASS ESSEE IN VIEW OF SECTION 10(38) OF THE ACT. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS FAILED TO APPRECIATE THAT THERE IS NO ESTOPPEL AGAI NST STATUTE AND SURRENDER ALONE IN ABSENCE OF ANY INCRIMINATING MAT ERIAL DETECTED AS A RESULT OF SEARCH AND SUBSEQUENT ASSESSMENT PROCEE DINGS OR OTHERWISE TO ALLEGE THAT APPELLANT WAS INELIGIBLE F OR CLAIM OF EXEMPTION UNDER SECTION 10(38) OF THE ACT, THE INCL USION OF THE LONG TERM CAPITAL GAIN IS ILLEGAL, INVALID AND UNTENABLE . 3.3 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO SURRENDER BY APPELLANT AND IN ABSENCE THEREOF OF NO ADVERSE INFERENCE MAY PLEASE BE DRAWN AGAINST APPELLANT. 3.4 THAT THE SURRENDER BY MADHO GOPAL AGARWA L I.E. THE FATHER OF THE APPELLANT, UNDER NO CIRCUMSTANCE CAN BE TREATED AS INCRIMINATING MATERIAL AGAINST THE APPELLANT. 3.5 THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO APPRECIATE THAT ONCE THE BROKER OF APPELL ANT HAD NEITHER DENIED AND NOR DISPUTED THE GENUINENESS OF TRANSACT ION, THE CONCLUSION ARRIVED IN THE ORDER IS HIGHLY WHIMSICAL , ARBITRARY, ILLOGICAL AND WHOLLY UNTENABLE. 32 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO 3.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS SUSTAINED THE ADDITION ARBITRARILY AND MECHANICALLY REJECTED THE EXPLANATION AND EVIDENCE TENDERED BY THE APPELLANT AND SUSTAINED THE ADDITION DENYING EXEMPTION BY DRAWING SUBJECTIV E, PREMEDITATED AND PRECONCEIVED INFERENCES THEREFORE THE SAME IS N OT SUSTAINABLE. 3.7 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO SUSTAIN ADDITION WITHOUT ANY BASIS THAT A SSESSEE HAS INTRODUCED HIS UNACCOUNTED INCOME IN THE FORM OF LO NG TERM CAPITAL GAIN BY MANIPULATING THE PRICE OF SHARE. 4. THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEV Y OF INTEREST OF RS. 33868/- UNDER SECTION 234A OF THE ACT AND INTEREST OF RS.457,187/- U/S 234B OF THE ACT WHICH ARE NOT LEVIABLE ON THE F ACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT. IT IS THEREFORE, PRAYED THAT IT BE HELD THAT ORDER FRAMED IS WITHOUT JURISDICTION AND DESERVES TO BE QUASHED AS SUCH. IT BE FURTHER HELD THAT ADDITIONS SO MADE AND UPHELD BY THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ALONGWITH INTE REST LEVIED BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. 8.0 WE FIND THE GROUNDS RAISED BY THE ASSESSEES I N ITA NOS. 5853/DEL/2018, 5278/DEL/2018, 5288/DEL/2018, 5284/DEL/2018, 5858/DEL/2018 AND 5280/DEL/2018 AS REPRODUCED ABOVE ARE IDENTICAL TO THE GROUNDS RAISE D IN THE CASE OF SHRI GOPAL AGARWAL IN ITA NO. 5853/DEL/2018. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE ASS ESSEE HAVE BEEN 33 ITA NOS.5280, 5853,5278, 5284, 5858 & 5288/D EL/2018 GOPAL AGARWAL & ORS. VS . ITO ALLOWED IN PARA 5 ABOVE. FOLLOWING SIMILAR REASONING , THE GROUNDS RAISED BY THE ASSESSEES IN ITA NOS. 5853/DEL/2018, 5278/DEL/2018, 5288/DEL/2018, 5284/DEL/2018, 5858/D EL/2018 AND 5280/DEL/2018 ARE ALSO ALLOWED. 9.0 IN THE FINAL RESULT, ITA NOS. 5853/DEL/2018, 5278/DEL/2018, 5288/DEL/2018, 5284/DEL/2018, 5858/D EL/2018 AND 5280/DEL/2018 ARE ALLOWED. ORDER PRONOUNCED ON 30/06/2021. SD/- SD/- (R.K.PANDA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/06/2021 *DRAGON* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT DEHRADUN