Smt. Avani Ajay Palan, Vadodara V. The Income Tax Officer, Ward-1(2)(4), Vadodara

ITA 542/AHD/2022

AI Insights

The case revolves around the appeal by Smt. Avani Ajay Palan against the order of the Commissioner of Income Tax (Appeals), Vadodara, which confirmed the addition of Rs. 95,43,251 as unexplained income under section 68 of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer, suspecting the transactions related to the sale of shares of M/s Sunrise Asian Ltd as bogus and part of a scheme to convert unaccounted money into white through bogus long-term capital gains. The Tribunal examined the evidence, including the documents and the nature of transactions, and found that the assessee had substantiated her claim of genuine transactions, thereby allowing the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135814 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-08-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 06-12-2022
• Other Referred Cases: Shri Charan Singh vs. Chandra Bhan Singh, ITO vs. M. Pirai Choodi, M/s Pebble Investment and Finance Ltd vs. ITO, CIT vs. Kuwer Fibers (P) Ltd, State of J&K vs. Bakshi Ghulam Mohd, Nath International Sales vs. UOI, T. Devasahaya Nadar vs. CIT, GTC Industries Ltd vs. ACIT, CIT vs. Durga Prasad More, Sumati Dayal vs. CIT, CIT vs. Arvinda Raju (TN), Pramod Jain vs. CIT, Mohan Lal Agarwal (HUF) vs. ITO Ward (1)(4), Vijayrattan Balkrishan Mittal vs. DCIT, Anraj Hiralal Shah (HUF) vs. ITO, Suman Poddar vs. ITO, CIT vs. Smt. Sanghamitra, CIT vs. Smt. Pooja Agrawal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MSSAUMYAPANDEYJAIN
• Assessee Lawyers: SHRIDEEPAKSHAH

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’B’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRITRSENTHILKUMAR,JUDICIALMEMBER आयकरअपीलसं ./ITANo.542/AHD/2022 धििाधरणवरध/Asstt.Year:2014-2015 Smt.AvaniAjayPalan, 30,ParshwanathNagarSociety, BehindAkotaAtithiGruh, Vadodara-390020. PAN:ACTPP2664E Vs. IncomeTaxOfficer, Ward-1(2)(4), Vadodara. (Applicant)(Respondent) Assesseeby:ShriDeepakShah,A.R Revenueby:MsSaumyaPandeyJain,Sr.D.R सुिवाईकीतारीख/DateofHearing:23/08/2023 घोरणाकीतारीख/DateofPronouncement:08/11/2023 आदेश/ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheAssesseeagainst theorderoftheLearnedCommissionerofIncometax(Appeals),Vadodara,arising inthematterofassessmentorderpassedunders.143(3)oftheIncomeTaxAct, 1961(here-in-afterreferredtoas"theAct")relevanttotheAssessmentYear 2014-2015. ITAno.542/AHD/2022 A.Y.2014-15 2 2.Theassesseehasraisedfollowingsgroundsofappeal: (1)ThattheLd.CIT(A)haserredonfactsandunderthelawinconfirmingtheadditionof Rs.95,43,251/-undersection68ofITActasagainstlongtermcapitalgainof Rs.95,43,251/-claimedasexemptbyappellantundersection10(38)ofITActinteralia because: (i)StatementofShriAnujAgrawal,DirectorofKorpSecuritiesLtdrecordedby DDIT(Inv),Kolkatadidnothaveanyevidentiaryvalueasthesamewererecorded intheabsenceoftheAppellant.. (ii)CopiesofrecordedstatementofShriAnujAgrawal,DirectorofKorpSecurities Ltdasmentionedatpages6-10oftheassessmentorderwerenotprovidedtothe Appellant. (iii)RecordedStatementofShriAnujAgrawal,DirectorofKorpSecuritiesLtdcould notberelieduponastheAOdidnotallowtheAppellanttocrossexamineShri AnujAgrawal,DirectorofKorpSecuritiesLtddespiteaspecificrequesthaving beenmadebytheAppellant. (iv)Documentaryevidenceshavebeenfiledbytheappellanttoprovelongterm capitalgainofRs.95,43,251/-onsaleofshareshaveneitherbeencontroverted nordisprovedbytheLd.CIT(A)/AO. (v)TheLd.CIT(A)/AOhadnotbroughtanythingonrecordtoprovethatthe Appellanthadroutedherownunaccountedmoneyinthegarboflongtermcapital gain. (2)ThattheLdA.O/CIThavealsowronglychallengedthemechanismofpurchaseof sharesacquiredbytheappellantwithoutbringinganymaterialonrecord. (3)ThattheHon'bleCIT(A)haserredinlawandonfactbyupholdingtheLd.AO'sorder whichwasbasedonthearbitraryandonsurmises,bydenyingclaimofLTCGon mechanicalandirrelevantfactorsandmoreovernoadversematerialonrecordto disapprovetheevidenceonrecord.OnonehandtheLdAOstatedthatpurchaseofshares werewasbogusandonotherhandtheLdAOwhiledenyingtheexemptedCapitalofRs. 95,43,251/-(Rs.99,43,251Rs.-4,00,000)U/s10(38)allowedthepurchasecostofRs. 4,00,000/-.HencetheorderpassedbytheLdAOisbasedonarbitraryandonsurmises andbasedonthestatementofthethirdpartyonly. (4)ThattheLdA.O/CIT(A)Provisionsofsections68ofIT.Actintermshadno applicationtothefactsofAppellant'scase. (5)Yourappellantmosthumblyreservestherighttoadd,amend,alterorsubstitutethe groundinthisappealonorbeforethetimeofhearing. 3.TheonlyeffectiveissueraisedbytheassesseeisthatthelearnedCIT(A) erredinconfirmingthedisallowanceofclaimofexemptedlongtermcapitalgain onsaleofsharesbyholdingthesameasbogus. ITAno.542/AHD/2022 A.Y.2014-15 3 4.Thefactsinbriefarethattheassesseeisanindividualanddeclaredincome fromsharestrading/partnershipfirm.Theassesseeduringtheyearclaimed exemptionoflong-termcapitalgainofRs.95,43,251/-onsaleofsharesofM/s SunriseAsianLtd.Thebriefhistoryisthattheassesseeinaprivateplacement appliedfor20000sharesofM/sSantoshimaTradelinkLtd@20pershareon19 th September2011.Accordingly,theassesseepaidanamountofRs.4LakhtoM/s SantoshimaTradelinkLtdvidechequedated19 th September2011.However,the sharesofM/sSantoshimaTradelinkLtd.,werenotlistedatthestockexchange. Therefore,anarrangementwasmadebetweentheassesseeandM/sSantoshima TradelinkLtd.Aspersucharrangement,thesharescertificateofM/sConart TradersLimitedfor20000shareswereissuedtotheassesseeon26 th November 2011whichwerepreviouslyheldbyM/sSantoshimaTradelinkLtd.Subsequently, theassesseeason15 th August2013dematerializesthesharesofConartTraders Ltd.ThereafterM/sConartTradersgotamalgamatedwithM/sSunriseAsianand accordingly20000sharesofM/sSunriseAsianwereissuedtotheassesseewhich werecreditedinherdemataccount.NowtheentiresharesofM/sSunriseAsian Ltdweresoldbytheassesseeduringtheyearunderconsiderationondifferent datesduringthemonthofJuly2013toaugust2013onBSEplatformforan amountaggregatingtoRs.99,43,251/-only.Thus,theassesseeearnedlongterm capitalgainofRs.95,43,251/-whichsheclaimedasexemptedincomeunder section10(38)oftheAct.Theassesseeinsupportofherclaimfurnishedcopyof shareapplicationform,copyofchequeissuedforpurchasedofshares,copyof sharecertificateissuedtoherbyConartTradersLtd,copyofamalgamation schemeapprovedbyHon’bleHighCourt,copyofdemataccount,copyofcontract noteforsaleofsharesandcopyofbankstatementshowingamountreceived throughbankingchannel. 5.However,theAOfoundthattheIncometaxInvestigationofKolkatahas carriedoutcountrywidesearchandsurveyproceedingsonseveralbrokersorsub- brokerstofindouttheracketofboguslong-termcapitalgain.TheDDITKolkata ITAno.542/AHD/2022 A.Y.2014-15 4 identified84companieswhoseshares/scriptwereutilizedbytheentry provider/brokertoprovideboguslongtermcapitalgainbyriggingtheirpriceat thestockexchangethroughsynchronizedtrading.ThescripofM/sSunriseAsian Ltdisincludedinthe84-scripidentifiedbytheDDIT-Kolkata.TheAOfoundthat theDDITduringsearchorsurveyproceedingrecordedstatementofseveral broker/sub-brokerswhoadmittedthattheyhaveprovidedbogusLTCGinthescrip ofSunriseAsianLtd.TheAOalsoinquiredabouttradedatafromBSEandfound thatthepriceofthescripti.e.SunriseAsianLtdwasabnormallyincreased manifoldintheyearunderconsiderationwithoutanybasisandafterpeakperiod rapidlydecreased.Beforethepeakperiod,therewereverylowtransactions,and thepricewassystematicallyincreased.Thereafter,ahugenumberoftransactions werecarriedoutintheimpugnedscript.TheAOfurtherfoundthatthemodus operandiexplainedbytheentryprovider/broker/sub-brokerregardingthescriptof SunriseAsianLtdareidenticaltothetransactionenteredbytheassessee.TheAO alsodoubtedtheacquisitionofsharesbytheassessee.Assuch,theAOfoundthat theassesseefailedtoexplainhowshegotthesharesofConartTraderLtdwhen sheappliedforthesharesofM/sSantoshimaTradelinkLtd.Thus,theAO consideringthefindingofDDITKolkataandmodusoperandioftheassesseeas wellconsideringtheprincipleofhumanprobability,surroundingcircumstantial evidenceheldthelong-termcapitalgainearnedbytheassesseeasbogusand disallowedthesame. 6.OnappealpreferredbytheAssessee,thelearnedCIT(A)alsoconfirmedthe findingoftheAO.TherelevantobservationofthelearnedCIT(A)isextractedas under: 20.IhavegonethroughthefactsofthecaseandassessmentorderoftheAO.Itis noticedthattheappellantinthiscasecouldnotsubstantiatethepurchaseofsharesasno proofastowhenandhowtheFormforthepurchaseof20,000sharesofSantoshima LeaseFinanceandInvestment(India)Ltd.wasfurnished.Furthernoproofastohowthe sharesofSantoshimaweredematerializedinthedemataccountoftheappellantas'Conart Trader'sLtd.'withsupportingdocuments.ThesharesofSantoshimaTradelinkswerenot listedinthestockexchange.Therefore,anarrangementwasmadebyissuingdebitnoteto ITAno.542/AHD/2022 A.Y.2014-15 5 ConartTrader'sLimitedbySantoshimaTradeLinksLimitedandthenameoftheassessee wasenteredinthesharecertificateofConartTrader'sallegedlyissuedtoSantoshima TradeLinksLtd.andlateron,thesamewasdematerializedintheassessee'sdemat account.Therefore,onaccountofmergerofConartTrader'sLtd.inSunriseAsianLimited, sincethecompanyM/sSantoshimaTradeLinksLtd.towhomtheassesseehasappliedfor theshareshavealsobeenmergedwithSunriseAsianLimited,thesharesofSunriseAsian Limitedoughttohavebeenissuedtotheassesseeonmerger.Thefactremainsthat SantoshimaLeaseFinanceandInvestment(India)Ltd./SantoshinaTradeLinksLtd., cannotissueorsellanysharesofConartTradersLtd.beingaseparateentityevenifthere ismergerasperHon'bleHighCourt'sorderandchangeofnameofcompany.Asperthe provisionsoftheCompaniesAct,suchtransactionofsharescannotbedone,andevenifit isdone,thesameisdoneviolatingtheprovisionsofCompaniesActandSEBIRuleandthe sameisillegalandassuch,saidtransactioncanbeheldtobeavoid.Itisalsonotoutof placetomentionherethattheshareswerepurchasedoffmarketandthesamewasdone withtheconnivanceofthepromotersofvariouscompanies.Thus,thepurchase transactionofthesharescouldnotbeestablished.Therefore,itisnotestablishedthatthe appellantheldthesharesofalistedcompanyonarecognizedstockexchangeforthesaid periodbeforetheirsale.Theseobservationswhenconsideredinthelightofabovefacts thattheappellantcouldnotfurnishanyverifiableproofforthepurchase/deliveryof sharesofM/sSunriseAsianLtd..castseriousdoubtsonthegenuinenessoftheclaimof purchasesofsuchshares. 21.Theappellantdidnotsubmitcopiesofthedocumentstosubstantiatethegenuineness oftransactionsrelatedtopurchaseandsubsequentsaleofshares,leadingtolong-term capitalgain,claimedbytheappellant.IfindthatthosedocumentswereplacedbeforeA.O, whoafterdetailedexaminationanddiscussionandgoingbeyondthesedocuments, establishedthatthesedocumentsaremeremaskstohidetherealnatureoftransactions. Thesesharesaretransferredtothebeneficiaryataverynominalpricemostlyoffline transaction,throughpreferentialallotment.Allthesearedoneoncommissionbasisand beneficiariesgetaccommodationentriesforLTCG,whichwasclaimedexempt. 21.Thefindingshavebeencorroborativewiththeresultsofinvestigationcarriedoutby theDirectorateofInvestigation,onlyprovesthatsuchdocumentaryevidenceshavebeen createdasmaskstocoverupthetruenatureoftransaction.Hereitispertinenttomention herethatnoindependentenquirybytheAOwasnecessaryasallegedbytheAOas completeenquiresdonebyInvestigationWingweredulyanalyzedbytheAO,whoacted independentlytoscrutinizethedetailsanddulyshow-causedtheappellanttojustifyher claimofexemptionu/s10(38)ofLTCGbuttheappellantcouldnotsubstantiateherreply. Agenuinetransactionmustbeprovedtobegenuineinallrespect.Theonuswasonthe appellanttoprovethatthetransactionleadingtoclaimofLTCGwasdistinctlygenuine transactionandnotbogus,premeditatedtransactionarrangedwithaviewtoevadetaxes bytheAO.TheonuswasontheappellanttocontradictthefindingsthatM/sSunriseAsian Ltd.wasacompanywhosescripswerecapableofbeingtradedathighpriceasitwasthe appellantwhohadtradedinthesharesofthethiscompanywhichresultedintoclaimof shorttermcapitalgains.Oncetheappellantwasmadeawareoftheresultofinvestigation, whichprovedthattradingofsharesleadingtoLTCGwasnotgenuine,theonuswasonthe appellanttoprovethatithasearnedgenuineLTCGundersection101oftheIndian EvidenceAct,1972asitistheappellantwhoisassertingaclaimthatitwasengagedin genuinesharetransactions.ItisrelevanttonoteherethatHon'bleSupremeCourtinthe caseofShriCharanSinghversusChandraBhanSinghAIR1988SC637hasclarifiedthat theburdenofproofreliesonthepartywhosubstantiallyassertstheaffirmativeofthe issueandnotuponthepartywhodeniesit.Ithasbeenfurtherheldthatthepartycannot, onfailuretoestablishaprimafaciecase,takeadvantageoftheweaknessofhis adversary'scase.Thepartymustsucceedbythestrengthofherownrightandthe ITAno.542/AHD/2022 A.Y.2014-15 6 clearnessofherownproof.Itcannotbeheardtosaythatitwastoodifficultorvirtually impossibletoprovethematterinquestion.Sinceinthiscasetheappellanthadmadethe claimthatithadearnedgenuineLTCG,allthefactswereespeciallywithinhisknowledge. Section102ofIndianEvidenceActmakesitclearthatinitialonusisonpersonwho substantiallyassertsaclaim.Iftheonusisdischargedbyitandacaseismadeout,the onusshiftsontodeponent.Inthiscase,oncetheevidencethatappellanthasclaimed bogusLTCGwasprovedbytheAO,theburdenofevidenceshiftedtotheappellant.During theassessmentproceedingandevenduringtheappellateproceeding,theappellanthas failedtoproduceanyevidencetoprovethatthelongtermcapitalgainclaimedbyitwas genuine. 22.Inthepresentcase,Ifindthattheappellanthasfailedtodischargeitsburdenofproof andtheAO,ontheotherhand,hasprovedthattheclaimoftheappellantwasincorrect. TheenquiryconductedbytheinvestigationcarriedoutbytheDirectorateofInvestigation, Kolkata,whichhasbeenthoroughlyanalyzedbasedonsurveyu/s133AonQ3.03.2015 andstatementonoathofMr.AnujAgarwalofM/sKorpsSecuritiesLtd.toprovethatthe appellanthasintroducedbogusLTCGinhisbankaccountbyroutingitsunaccounted incomethroughataxevasionschemeinvolvingsharesofM/sSunriseAsianLtd.Reliance isplaceduponthedecisionofHon'bleDelhiITATinthecaseofNokiaIndiaPvt.Ltd.vs. DCIT(2015)59taxmann.com212(Delhi).IthasbeenheldbytheHon'bleBenchinthe saidcasethatstatementsweredulyprovidedtoassesseeduringproceedingsbefore AssessingOfficer,however,assesseeneveraskedforcross-examination,hencethispleaof crossexaminationraisedatsuchalaterstageofproceedingswasnotjustified.Further relianceisplacedonthedecisionsofHon'bleSupremeCourtinthecaseofITOvs.M.Pirai Choodi(2012)20taxmann.com733(SC)/(2011)334ITR262andM/sPebbleInvestment andFinanceLtd.vs.ITO(2017-TIOL-238-SC-ITI),Hon'bleDelhiHighCourtinthecaseof CITvs.KuwerFibers(P)Ltd.(2017)77taxmann.com345(Delhi).Further,Ifindthatright tocross-examineasheldinvariousdecisions,isnotanabsoluterightanddependsnot onlythecircumstancesofthecasebutalsoonthestatuteconcerned.TheHon'ble SupremeCourthasheldinthecaseofStateofJ&Kvs.BakshiGulamMohd.AIR1967(SC) 122,andinthecaseofNathInternationalSalesvs.UOIAIR1992Del295thattherightof hearingdoesnotincludearighttocrossexamine.Therighttocrossexaminemustdepend uponthecircumstancesofeachcaseandalsoonthestatuteconcerned.InthecaseofT. DevasahayaNadarvs.CIT(1965)51ITR20(Mad)itwasheldthat"itisnotanuniversal rulethatanyevidenceuponwhichthedepartmentmayrelyshouldhavebeensubjectedto cross-examination.IftheAOrefusestoproduceaninformantforcrossexaminationbythe assesseetherecannotbeanyviolationofnaturaljustice.InthecaseofGTCIndustriesItd. VsACIT(1998)60TTJ(Bomb-Trib)308,itwasheldthatwherestatementandreportof thirdpartiesareonlythesecondaryandsubordinatematerialwhichwereusedtobuttress themainmatterconnectedwiththeamountofaddition,denialofopportunitytocross examinethirddidnotamounttoviolationofnaturaljustice.Eachcasehasgottobe decidedonthefactsandcircumstancesofthatcase.Therelevantfactorstobeconsidered aresurroundingcircumstances,objectivefacts,evidencesadduced,presumptionoffacts basedoncommonhumanexperienceinlifeandreasonableconclusions.Inthepresent case,asdiscussedabove,thereisoverwhelmingevidencesasdiscussedindetailsinthe orderthatthetransactionsonwhichadverseviewshavebeentakenareshamtransactions. 23.Asfarastheappellant'sdemandforcrossexaminationofthirdpartyisconcerned,itis tobestatedthatnowhereintheshowcausenotice,itwasallegedbytheAOthatthe appellanthastradedthroughthesepersons,whereasthestatementofthosepersons, whicharequotedintheshowcausenoticeisonlyoneofthemanydocumentaryevidences showingthatthescripofSunAsianisonlyapennystock,whichisusedforproviding accommodationentrytothebeneficiaries,byvarioussharebrokersandentryoperators throughoutthecountryandthestatementoftheabovepersons,areonlyatestimonyto ITAno.542/AHD/2022 A.Y.2014-15 7 thatoutofmanyindividualsinvolvedintheprocessofgivingaccommodationentries. Moreover,theInvestigationWingoftheDepartmentthroughsurveys,searchandseizure operationshasunearthedahugescandalofboguslongtermcapitalgainthroughBSE listedpennystocksinvolvingnumberofsharebrokers,entryoperatorsandtheirpaper companies/firmsandthebeneficiarieswhohasbroughttheirunaccountedcashtothe booksofaccountsbywayofboguslongtermcapitalgainthroughwayofboguslor investmentinthepennystocklikeSunAsian.Fromthenatureofinvestmentandgain earnedbytheappellantwithinaveryshortspanoftimefrominvestingthescripofSun Asianbyresortingtodubiousmethodofpurchases,asdescribedhereinabove, unambiguouslyprovedtheinvolvementofsomebrokers/entryoperatorsasadmittedin theirstatementrecordedofShriAnujAgarwalofM/sKorpsSecuritiesLtd.Asdiscussed above,thispersonisonlyatipofhugeiceberginthewidenetworkofproviding accommodationentrythroughvariouspennystocks.Inviewoftheabove,thereisno necessitytogivecrossexaminationofthispersontotheappellantand,therefore,the requestoftheappellantwasrightlyrejected. Further,relianceisplaceduponthedecisionofGTCIndustriesItd.V_{s}ACIT(1998)60 TTJ(Bomb-Trib)308,[1998]65ITD380(BOM),inwhichitwasheldthatwhere statementsofwitnesseswereonlysecondaryandofsubordinatematerialusedtobuttress mainmatterconnectedwithamountofadditions,ithadtobeheldthattherewasno denialofprinciplesofnaturaljustice,ifwitnesseswerenotallowedtobecross-examined byassessee. 25.Withrespecttothecircumstantialevidenceandinthemattersrelatedtothedischarge of'onusofproofandtherelevanceofsurroundingcircumstancesofthecase,therelevant observationsandfindingsofHon'bleSupremeCourtinthecaseofCITVs.DurgaPrasad More[1972]82ITR540,are "thatthoughanappellant'sstatementmustbeconsideredrealuntilitwasshown thattherewerereasonstobelievethattheappellantwasnotthereal,inacase wherethepartyreliedonself-servingrecitalsinthedocuments,itwasforthe partytoestablishthetransferofthoserecitals,thetaxingauthoritieswereentitled tolookintothesurroundingcircumstancestofindouttherealityofsuchrecitals. Sciencehasnotyetinventedanyinstrumenttotestthereliabilityoftheevidence placedbeforeaCourtorTribunal.Therefore,theCourtsandtheTribunalshaveto judgetheevidencebeforethembyapplyingthetestofhumanprobability.Human mindsmaydifferastothereliabilityofpieceofevidence,but,intheauthorityis madeconclusivebylaw.Deere,thedecisionofthefinalfactfinding 26.TheaboveratiolaiddownbytheHon'bleSupremeCourthasbeenreiteratedand appliedbytheHon'bleApexCourtinthecaseofSumatiDayalVCIT214ITR801(S.C).It isessentialonthepartoftheAOtolookintotherealnatureoftransactionandwhat happensintherealwordandcontextualizethesametosuchtransactionsinthereal marketsituation.Itispertinenttostatehere,thewisdomofHon'bleSupremeCourtinCIT VArvindaRaju(TN)(1979)120ITR46(S.C)whereinitwasheldthat- ******************************************************************* 35.Inviewofthefactsandcircumstancesborneoutoftheassessmentorderandlegal precedentsasdiscussedabove,Iamoftheviewthatdocumentssubmittedasevidences toprovethegenuinenessoftransactionarethemselvesfoundtoserveassmokescreento coverupthetruenatureofthetransactionsinthefactsandcircumstancesofthecaseas itisrevealedthatpurchaseandsaleofsharesarearrangedtransactionsmerelygivinga colourofauthenticitybycreatingafaçadeoftransactionstocreatebogusprofitinthe garbofLTCGbywell-organizednetworkofentryproviderswiththesolemotivetosell ITAno.542/AHD/2022 A.Y.2014-15 8 suchentriestoenablethebeneficiarytoaccountfortheundisclosedincomefora considerationorcommission.Itisrelevanttomentionherethatthepriceshaveincreased manyfoldtimesassoonastheperiodofoneyearhasexpiredsoastoavailthebenefitof exemptlongtermgain.Thereisnojustifiableindicatorsuchassomesignificantbusiness transactioninthecaseofM/sSunriseAsianLtd.tosubstantiatesuchabnormalriseinits scrips.Theonuswasontheappellanttoexplainthesourceandnatureoftheamount creditedinhisbankaccountonthisaccount.Theappellant,however,couldnotdischarge theonusastheexplanationfurnishedbyherhasbeenfoundtobeunsatisfactory.The SEBIhas,timeandagain,afterthoroughinvestigation,certifiedthatsuchtransactionsare riggedandarecarriedouttoconvertblackmoneyintowhite.Theappellantmiserably failedtodischargetheonustoprovethattherewasnosuchschemeofmanipulationof scripsforroutingunaccountedmoneyastaxexemptboguscapitalgains. 36.Inviewoftheabovediscussion,Iamoftheconsideredviewthatsharetransactions leadingtoLTCGbytheappellantareshamtransactionenteredintoforthepurposeof evadingtax.Accordingly,itisheldthhattheAOhasrightlydisallowedtheclaimofthe appellantandaddedthesaidamountofRs.95,43,251/-asincomeoftheappellantandthe sameisherebyconfirmed.Thus,groundofappealno.1isdismissed. 7.BeingaggrievedbytheorderofthelearnedCIT(A),theassesseeisin appealbeforeus. 8.ThelearnedARbeforeusfiledapaperbookrunningfrompages1to108 andcontendedthatthesharesofthecompanynamelyM/sConartTraderLtd wereacquiredbytheassesseethroughM/sSantoshimaTradelinkLtd.whichis evidentfromthedebitnote,sharescertificateandsharestransferformplacedon page36to39ofthepaperbook.ThelearnedARalsopointedoutthattheshares weresoldonthefloorofthestockexchangewherethebuyersarenotknown. ThelearnedARalsosubmittedthattheshareswerepurchasedthroughthe bankingchannelandthecostofthesharespurchasedwasalsoallowedbythe revenuewhilecalculatingtheincomeoftheassessee.Thus,asperthelearnedAR, thepurchaseofthesharecannotbedoubted. 9.Ontheotherhand,thelearnedDRvehementlysupportedtheorderofthe authoritiesbelow. 10.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Thefactsofthecasehavebeenelaborately ITAno.542/AHD/2022 A.Y.2014-15 9 discussedinthepreviousparagraphs.Therefore,wearenotinclinedtorepeatthe sameforthesakeofbrevityandconvenience.Attheoutset,wefindthe coordinatebenchoftheJaipurITATinthecaseofShriAshokAggarwalandSmt. RituAggrawalbearingITANo.124&188/JP/2020,involvingidenticalfactsand circumstancesasofthepresentassessee,hasdecidedtheissueinfavourofthe assessee.TherelevantfindingoftheJaipurITATisextractedasunder: 12.Wehaveconsideredtherivalsubmissionsaswellastherelevantmaterialonrecord. TheAOhasdoubtedthetransactionsofpurchaseandsaleofsharesbytheassesseeof M/s.SunriseAsianLtdbasedontheinvestigationcarriedoutbytheInvestigationWing, Kolkatawhereincertainpersonswerefoundindulgedinprovidingaccommodationentries, inter-aliabogusLongTermCapitalGainswhichisclaimedasexemptundersection10(38) oftheActbythebeneficiariesinordertofacilitatethebeneficiariestoconverttheirblack moneyintowhitewithoutpayingIncome-tax.TheAOhasnarratedthemodusoperandiof variousentryproviderswhichisageneralstatementsofarastheindulgenceofcertain personsinprovidingtheaccommodationentryofboguslongtermcapitalgainsaswellas othertransactions.However,inthesaidnarrationofmodusoperandi,thereisnothing againsttheparticulartransactionofpurchaseandsaleofsharesbytheassessee.TheAO hasspecificallymentionedthatduringthecourseofenquiryincertaincasesithascometo lightthatlargescalemanipulationhasbeendoneinthemarketpriceofsharesofcertain companieslistedonStockExchangebyagroupofpersonsworkingasasyndicateforthe purposeofprovidingentryoftaxexemptboguslongtermcapitalgainstolargenumberof beneficiariesinlieuofunaccountedcash.TheseobservationsoftheAOintheassessment ordercannotconstituteanytangiblematerialorevidencetoshowthatthetransactionof theassesseeisbogusbeinganaccommodationentry.TheAOintheshowcausenotice hasstatedthatinformationhasbeenreceivedfromtheInvestigationWing,Kolkatavide letterdated27.04.2015thatSunriseAsianLtdisengagedingivingentriesofbogusLTCG andfurther,enquiriesweremadeinthematteranditwasfoundthatBSEvidenoticeNo. 2016110726hasdeclaredSunriseAsianLtdtobesuspendedduetodirectionfromSEBI. Inreplytotheshow-cause,theassesseevideletterdated13.12.2016hasspecifically requestedforsuchinformation/documents/statementsanddetailsofenquirywhichhas beenconductedbytheAOasapparentfromhisreplyandthecontentsthereofreadas under: *********************** 13.Wehowever,findthatnosuchinformation/documents/statementswasmadeavailable totheassesseetherebyviolatingthebasicprincipleofconfrontingtheassesseewiththe documentswhichtheRevenuewishestorelyagainsttheassessee.Further,itisnotedthat intheassessmentordersopassed,theAOhasmadereferencetoastatementofShri VipulVidurBhattrecordedu/s132duringcertainsearchoperationsbytheInvestigation Wing,Mumbaiandhasreliedonthesameforholdingthetransactionasbogusbyavailing theaccommodationentryoflongtermcapitalgainandbeneficiaryofthebogusLTCG scam.Astheassesseewasagainnotconfrontedwithsuchstatementduringtheshow- causenoticeandhecametoknowofthesamefromperusaloftheassessmentorder,he raisedtheobjectionbeforetheldCIT(A)thatnosuchstatementofShriVipulVidurBhatt recordedu/s132wasmadeavailabletohimduringthecourseofassessmentproceedings andsecondly,hedeservesarighttocross-examineShriVipulVidurBhattwhosestatement isbeingusedagainsttheassessee.However,wefindthatevenduringtheappellate proceedings,theassesseewasnotmadeavailableanysuchstatementandeventheright ITAno.542/AHD/2022 A.Y.2014-15 10 ofcrossexaminationwasdeniedbytheldCIT(A)whoexercisestheco-terminuspowersas thatoftheAO.Thus,inviewofthedecisionofHon’blejurisdictionalHighCourtincaseof CITvsA.LLalpuriaConstruction(P)Ltd(supra)andthedecisionoftheHon’bleSupreme CourtincaseofCCEvs.AndamanTimberIndustries(supra),theassessmentbasedon statementofthirdpartywithoutgivinganopportunitytotheassesseeisnotsustainablein law.TheHon’bleSupremeCourtincaseofAndamanTimber(Supra)whiledealingwith theissuehasheldinpara5to8asunder:- *********************************** 14.Therefore,thestatementofathirdpartycannotbesolebasisoftheassessment withoutgivenanopportunityofcrossexaminationandconsequentlyitisaseriousflaw whichrenderstheorderanullity.EvenonperusalofsuchstatementofShriShriVipulVidur Bhatt,wefindthatitisageneralstatementofprovidingboguslongtermcapitalgain transactiontotheclientswithoutstatinganythingaboutthetransactionofallotmentof sharesbythecompanytotheassessee.TheAOhaseitherdiscussedthemodusoperandi ofentryprovidersandtheirstatementsbuthasnotmadeanyreferenceofanymaterialor documentaryevidencewhichrevealsthattheassesseehasindulgedinavailingthe accommodationentryofboguslongtermcapitalgain.Thereisnodisputethatoncethe assesseehasclaimedthelongtermcapitalgainfrompurchaseandsaleofshareswhichis exemptundersection10(38)oftheAct,theprimaryonusisontheassesseeto substantiatehisclaimbyproducingthesupportingevidence.Wefindthatinthecasein handthisisnotanisolatedtransactionofpurchaseandsaleofsharesbytheassesseeof M/s.SunriseAsianLtdbuttheassesseehasbeenregularlypurchasingandsellingthe sharesasitisevidentfromthedetailsoftheholdingofvarioussharesasreflectedinthe financialstatementsason31stMarch,2013asunder:- *********************** 15.Thusason31.03.2013,theassesseewasholdingthesharesofabout12companies whichincludesharesofM/s.SantoshimaTradelinksLtdworthRs31,68,000/-whichwere acquiredinthefinancialyear2011-12andsimilarlyreflectedinthebalancesheetason 31.03.2012.WefindthattheassesseehasdulyreflectedallthesesharesintheBalance Sheetason31.03.2012aswellas31.03.2013andthereturnofincomeforthe assessmentyear2012-13and2013-14wasalsofiledintimebeforethedateofsaleofthe sharesstartingSeptember2013onwardsinvariouslotstillMarch2014.Thusitisclear that158400sharesacquiredbytheassesseeon08.10.2011werereflectedintheBalance Sheetason31stMarch,2013.Wefurthernotethattheassesseeproducedthecopyof allotmentadviceofthesesharesissuedbythecompanyalongwiththebankstatement showingthepurchaseconsiderationpaidbytheassesseethroughchequewherebythe shareswereallottedoffacevalueofRs10/-atapremiumofRs10/-each.Thebank accountoftheassesseehasreflectedthepaymentofRs.31,68,000/-forpurchaseof shares.TheAOhasnotdisputedthatsubsequentlytherewereeventsofamalgamationof thecompanywithM/s.SunriseAsianLtd.pursuanttoschemeofamalgamationduly approvedbytheHon’bleHighCourtofMumbaiandconsequentlytheassesseewas allotted158,400sharesofM/sSunriseAsianLtdasagainst158,400sharesofM/s. SantoshimaTradelinksLtdoriginallyallottedbythecompany.Thesharesacquiredbythe assesseearedulyreflectedintheDemataccountoftheassessee.Oncethesharesare dematerializedandcreditedintheDemataccountoftheassessee,theholdingofthe sharesbytheassesseecannotbedisputed.TheAOhastreatedthetransactionofsaleof 158400sharesasbogusbeingaccommodationentrybuthasnotdoubtedtheholdingof thesesharesintheDemataccountoftheassessee.Oncetheassesseehasproducedall thesupportingevidenceswhichincludeallotmentadvice,bankstatementshowingthe paymentofpurchaseconsideration,Demataccountshowingholdingofsharesinthe Demataccount,saleofthesharesthroughStockExchangewhicharealsoreflectedinthe Demataccountoftheassesseeandreceiptofthesaleconsiderationinthebankaccountof theassesseeasitisevidentfromthebankaccountstatementoftheassessee,theninthe ITAno.542/AHD/2022 A.Y.2014-15 11 absenceofanycontrarymaterialorevidencebroughtonrecordbytheAO,thetransaction ofpurchaseandsaleofthesharesinquestioncannotbeheldasbogusmerelyonthe basisoftheinvestigationcarriedoutbytheDepartmentinsomeothercaseswheresome personswerefoundindulgedinprovidingaccommodationentry.TheAOintheentire assessmentorderhasnotmadereferencetosingledocumentaryevidencewhichcanbe saidtobeanincriminatingmaterialagainsttheassesseetoshowthattheassesseehas availedaccommodationentryofbogusLongTermCapitalGain.Therefore,themere suspicioncannotbeagroundfortreatingthetransactionasbogusintheabsenceofany evidenceormaterialonrecord. 16.Theld.D/RhasrelieduponthedecisionofHon’bleDelhiHighCourtincaseofSuman Poddarvs.ITO(supra)whereintheHon’bleHighCourthasconfirmedthefindingofthe Tribunalandfinallyobservedinpara8asunder:- ****************** ThusitisclearthatinthesaidcasetheTribunal’sfindingisbasedonthefactthatno evidenceofactualsaleexceptthecontractnotesissuedbythesharebrokerwasproduced bytheassessee.Inthosefacts,theHon’bleHighCourthasheldthatnoquestionoflaw arisesinthesaidcase.Onthecontrary,inthecaseinhandtheassesseeproducedallthe relevantdocumentaryevidencetoestablishthegenuinenessofthetransaction.Evenifthe AOdoubtedthetransaction,thentoestablishthatthetransactionisbogus,theAOis requiredtoproducethecontrarymaterialevidencesothattheevidenceproducedbythe assesseecanbecontroverted.Intheabsenceofsuchcontrarymaterialorevidence broughtonrecordbytheAOandtheevidenceproducedbytheassesseeisotherwise independentlyverifiablebeingthedocumentsintheshapeofallotmentadvice,bank statement,Demataccount,booksofaccountandcontractnotesforwhichtheassessee hasnocontrolorsay,therefore,thesaidevidencecannotbemanipulatedbytheassessee. Oncetheevidenceproducedbytheassesseeisnotpreparedorbeyondthescopeofany manipulationbytheassessee,thentheassesseehasdischargedhisonustoprovethe transactionofpurchaseandsaleofsharesandconsequentialcapitalgain.Aswehave alreadymentionedthatthisisnotanisolatedtransactionofpurchaseandsaleofsharesin singlescrip,buttheassesseehasbeenholdingthesharesof12companiesoutofwhich theAOhasdoubtedonlyonescrip.ThusthedecisionofHon’bleDelhiHighCourtwillnot helpthecaseofthedepartment. 17.Theld.D/RhasalsorelieduponthedecisionofHon’bleGuahatiHighCourtincaseof CITvsSmt.Sanghamitra(supra).Inthatcase,theAO,intheorderofassessment,noted thatthoughthesharesweresoldthroughbankaccountoftheassessee,purchaseof shareswerenotmadethroughthebankaccountoftheassessee.TheAOalsoobserved thatsincethereturnfortheasst.yr.2000-01relevanttotheyearofpurchase,wasfiled afterthedateofsaleandthatpurchaseofshareswasnotdonethroughthebankaccount oftheassessee,theactualeventofpurchaseofthesharesofassesseecouldnotbe verifiedand,therefore,itwasapparentlyanafterthoughtandamodusoperandiadopted toconverttheundisclosedincomeinto'capitalgain'.Thedirectorofthecompanywasalso summoned,butnosuchpersonwasfoundavailableattheaddressofthecompany obtainedfromGuwahatiStockExchangeandnocompanybynameofBirdhichand PannalalAgencywasinexistenceatthesaidgivenaddress.Thesharebrokerwasalso examinedundersection131andincourseofexamination,hestatedthatallrecordsof purchaseandsaleofshareswerelostandthus,theactualpurchaseandsaleofshares couldnotbeverified.TheAO,therefore,treatedthe'capitalgain'asbogusanddisallowed thelong-term'capitalgain',soughttobeexemptedunders.54oftheAct,tothetuneof Rs.15,33,160andaddedbackthesameasincomefromundisclosedsources'.Inthe contextofsaidfacts,itwasheldbytheHon’bleHighCourtthatwherenodocumentscould beproducedinsupportofpurchaseandsaleofsharesandthetransactioncouldnotbe verified,thatinsuchsituations,thegenuinenessofthetransactionhastobeexamined fromthesurroundingcircumstancesandhasheldasunder: ITAno.542/AHD/2022 A.Y.2014-15 12 ********************* 18.Onthecontrary,inthecaseinhandtheassesseeproducedalltherelevant documentaryevidencetoestablishthegenuinenessofthetransactionwhichareotherwise independentlyverifiablebeingthedocumentsintheshapeofallotmentadvice,bank statementsshowingpaymenttowardsthepurchaseandsalereceipts,Demataccount statementreflectingthepurchase,conversionandsubsequentsaleofshares,financial statementsandbooksofaccountandthereturnofincomerelevantfortheassessment yearpertainingtoyearofpurchaseandyearofsale,thecontractnotesreflectingthe transactionexecutedasperpriceprevailingonthestockexchange.Wethereforefindthat unlessthesedocumentaryevidenceareprovedotherwiseoranycontraryevidence broughtonrecord,theassesseehasdischargedhisonustoprovethetransactionof purchaseandsaleofsharesandconsequentialcapitalgain.ThusthedecisionofHon’ble GauhatiHighCourtwillnothelpthecaseofthedepartment. 19.ThereisanotherdecisionofthejurisdictionalHon’bleRajasthanHighCourtincaseof PramodJain(supra)relieduponbytheldA/RwheretheHon’bleHighCourthasreferred toitsearlierdecisionincaseofCITvs.Smt.PoojaAgrawal(supra)andhasaffirmedthe findingsoftheCoordinateBenchandheldthatnoquestionoflawarisesandhasdismissed theappealoftheRevenue.TherelevantfindingsoftheCoordinateBencharecontainedat para6to8asunder: ************************ 20.Thus,itisclearthattheTribunalinthesaidcasehasanalyzedanidenticalissue whereinthesharesallottedintheprivateplacement@Rs.10atparoffacevaluewhich weredematerializedandthereaftersoldbytheassesseeandaccordinglytheTribunalafter placingrelianceonthedecisionofHon’bleSupremeCourtincaseofCCEvs.Andaman TimberIndustries(supra)aswellasthedecisionofHon’blejurisdictionHighCourtincase ofCITvs.Smt.PoojaAgarwal(supra)hasheldthatwhentheAssessingOfficerhasnot broughtanymaterialonrecordtoshowthattheassesseehaspaidoverandabove purchaseconsiderationasclaimedandevidentfromthebankaccountthen,intheabsence ofanyevidenceitcannotbeheldthattheassesseehasintroducedhisownunaccounted moneybywayofboguslongtermcapitalgain.Similarinthecaseinhandtheassessee hasproducedtherelevantrecordtoshowtheallotmentofsharesbythecompanybyway ofprivateplacementoffacevalueofRs10/-atapremiumofRs10/-onpaymentof considerationbychequeandtherefore,itisnotacaseofpaymentofconsiderationincash. Butthetransactionisestablishedfromtheevidenceandrecordwhichcannotbe manipulatedasalltheentriesarepartofthebankaccountoftheassesseeandthe assesseedematerializedthesharesintheD-mataccountwhichisalsoanindependent materialandevidencecannotbemanipulated.Therefore,theholdingofthesharesbythe assesseecannotbedoubtedandthefindingoftheAOisbasedmerelyonthesuspicion andsurmiseswithoutanycogentmaterialtoshowthattheassesseehasintroductionhis unaccountedincomeintheshapeoflongtermcapitalgain.Theaforesaiddecisionofthe Hon’bleRajasthanHighCourtthussupportsthecaseoftheassesseeandbeingofthe jurisdictionalHighCourtisbindingonthisTribunal. 21.FurthertheAOhasdiscussedtheabnormalriseinthesharepriceofthesharesof SunriseAsianLtdwithoutanyunderlyingfundamentals.TheDelhiBenchesoftheTribunal incaseofMohanLalAgarwal(HUF)vsITOWard(1)(4)(ITA2767/DEL/2018orderdated 26-11-2018)haveheldthatCapitalgainscannotbetreatedasbogussolelyonthebasis thatthepriceoftheshareshasrisenmanifoldandthereasonforastronomicalriseisnot relatedtoanyfundamentalsofmarket.Ifthetransactionsaredulyprovedbytradingfrom stockexchangeandthedocumentationisproper,thegainscannotbeassessedas unexplainedcreditorasunexplainedmoney.Itwasfurtherobservedthatnowhereithas beenfoundthatassesseewasinanymannerfoundtobebeneficiaryofany accommodationentryunderanyinquiryorinvestigationandthereisnomaterialthatany ITAno.542/AHD/2022 A.Y.2014-15 13 actionhasbeentakenbytheSEBIagainstthecompanyandthecompanyhasbeenblack- listedorsuspendedfromtradingonaccountofpricemanipulation.Onceallthese transactionsaredulyprovedbytradingonstockexchange,thentoholdthesaleofshares asunexplainedandboguscannotbeupheld.Similarly,intheinstantcase,wefindthatthe AOhasnotbroughtonrecordanymaterialordocumentaryevidencetoshowthatthe assesseehasavailedaccommodationentryofboguslongtermcapitalgainsunderany enquiryorinvestigationrathertheassesseehasproducedallrelevantdocumentary evidenceinsupportofhispurchaseandsaletransactionthroughthestockexchangeand thereisnothingonrecordthatthetradinginthescriphasbeensuspendedbySEBIon accountofanypricemanipulation.Wethereforefindthattheassesseesatisfiesthe necessaryingredientsandconditionsassospecifiedinsection10(38)oftheAct,interms oftransferoflongtermcapitalassetbywayofsaleofequitysharesonwhichSTThas beenpaid,heshallthereforebeeligibleforexemptioninrespectofwholeoftheincomeso realizedontransferofsuchsharesastheprovisionsofsection10(38)talksaboutany incomearisingfromtransferofsuchlongtermcapitalassetwhichshallbeexemptfrom tax. 22.Further,theMumbaiBenchesoftheTribunalincaseofVijayrattanBalkrishanMittalvs. DCIT[2020]121taxmann.com100(Mumbai–Trib)hasagaindiscussedthisissuein threadbareinpara7to37asunder:- *************** 22.Intheaforesaiddecision,ithasbeenheldthatitisSEBIwhomonitorsandregulates thestockexchanges&stockmarketandwhentheirinvestigationdidnotrevealanyprice orvolumemanipulationbytheassesseeandthesetransactionsareinthenormalcourse throughproper&legalchannels.ThentheallegationsoftheITDepartmentfallflatand denialofdeductionu/s10(38)oftheActisarbitraryandadditionofsaleproceedsof sharesofPALu/s68isagainsttheprovisionsofAct.Inthecaseinhand,theld.AOhas referredtoSEBIenquiryagainstM/sSunriseAsianLtd.However,wenotethatthesaid enquirywasregardingfailuretocomplywithcertaindisclosurerequirementsandtherefore, thesubjectmatteroftheenquiryhasnoconnectionwiththetransactionofboguslong termcapitalgainandhasnobearinginjudgingthegenuinenessofthetransaction undertakenbytheassesseeorforthatmatter,thepriceandrealizationonsaleofshares soundertakenbytheassesseethroughthestockexchange.Further,ithasbeenheldin theaforesaidcasethatthefindingsofinvestigation&modusoperandiinothercases narratedbytheAOandalsoCIT(A)nowhereproveanyconnectionwiththeassesseenor theassessee'sinvolvementorconnectionorcollusionwiththebrokers,exitproviders, accommodationprovidersorcompaniesordirectionsetcandformakingtheaddition,itis necessarytobringonrecordevidencetoestablishingenuityintransactionsorany connectionoftheassesseeoritstransactionwithanyoftheallegedparties.Intheinstant case,aswehavediscussedearlier,thereisnofindingwhichprovesassessee’sconnection, involvementorcollusionwithsocalledaccommodationentryproviders.Furtherinthe aforesaidcase,theissueastowhetherthelegalevidenceproducedbytheassesseehasto guideourdecisioninthematterorthegeneralobservationsbasedonstatements, probabilities,humanbehavioranddiscoveryofthemodusoperandiadoptedinearning allegedbogusLTCGandSTCG,thathavesurfacedduringinvestigations,shouldguidethe authoritiesinarrivingataconclusionastowhethertheclaimisgenuineornothasbeen discussedatlength.AndreferringtolegalpropositionlaiddownbytheHon’bleSupreme Courtthattheburdenofprovingatransactiontobebogushastobestrictlydischargedby adducinglegalevidenceheldthatthemodusoperandi,generalisation,preponderanceof humanprobabilitiescannotbetheonlybasisforrejectingtheclaimoftheassesseeunless specificevidenceisbroughtonrecordtocontrovertthevalidityandcorrectnessofthe documentaryevidencesproduced,thesamecannotberejected.Weareincomplete agreementwiththesaidviewandintheinstantcase,wefindthatevidenceproducedby ITAno.542/AHD/2022 A.Y.2014-15 14 theassesseeinsupportofhisclaimofpurchaseandsaleofsharesonthestockexchange havenotbeenrefutedbyanyadversefindingsormaterialwhichcoulddemonstrate involvementoftheassesseeorcollusionwithsocalledaccommodationentryprovidersto obtainbogusLTCGassoallegedbytheauthoritiesbelow. 24.WealsofindthatwhileanalyzingsaleofsharesofsimilarscripofM/sSunriseAsianLtd andclaimofexemptionoflongtermcapitalgainsu/s10(38),theMumbaiBenchesofthe TribunalincaseofAnrajHiralalShah(HUF)vsITO(supra)hasupheldtheclaimofthe assessee’sclaimofexemptionundersection10(38)oftheActandtherelevantfindingsof theCoordinateBenchcontainedatPara8readasunder:- **************** 25.Inlightofabovediscussionsandintheentiretyoffactsandcircumstancesofthecase andfollowingthedecisionsoftheHon’blejurisdictionalHighCourtandofthatofthe CoordinateBenchesincasesreferredsupra,weareoftheconsideredviewthatthe assesseehasdischargedthenecessaryonuscastonhimintermsofclaimofexemptionof longtermcapitalgainsu/s10(38)oftheActbyestablishingthegenuinenessof transactionofpurchaseandsaleofsharesandsatisfyingtherequisiteconditionsspecified thereinandthegainssoarisingonsaleofsharesthereforehasbeenrightlyclaimedas exemptu/s10(38)oftheAct.Accordingly,inthefactsandcircumstancesofthecase,we set-asidetheorderoftheld.CIT(Appeals)andtheclaimoftheassesseeu/s10(38)is allowed.ThematteristhusdecidedinfavouroftheassesseeandagainsttheRevenue.In theresult,thegroundofappealsotakenbytheassesseeisallowed. 10.1TheabovefindingoftheJaipurITAThasalsobeenconfirmedbythe Hon’bleRajasthanHighCourtinITAppealNo.54of2021reportedin152 taxmann.com181byobservingasunder: 8.WeareoftheviewthatlearnedITAThaspassedtheorderonconsiderationofmaterial andrelevantfacts,logicalconclusionhasbeenarrivedatandthesamemustbeallowedto rest.Thereisnogrossviolationofprinciplesofnaturaljusticeorfailureofjustice,noerror hascreptintheorderimpugnedoflearnedITAT.TheCoordinateBenchofthiscourtin [D.B.ITAppealNo.22of2021dated6-4-2022titledasPr.CITv.SanjayChhabra,inthe similarfactsandcircumstanceshasalreadytakenaviewthatintheappealathandunder section260AoftheActnosubstantialquestionoflawarises. 9.Inthelightofabovediscussions,thepresentappealundersection260AoftheActdoes notcallforinterferenceandisherebydismissedasnosubstantialquestionoflawarises worthconsideration. 10.2Thus,respectfullyfollowingtheorderofthecoordinatebenchofJaipur ITATwhichwassubsequentlyconfirmedbytheHon’bleRajasthanHighCourt, involvingidenticalfactsandcircumstances,weherebysetasidethefindingofthe learnedCIT(A)anddirecttheAOtodeletetheadditionmadebyhim.Hencethe groundsofappealoftheassesseeareherebyallowed. ITAno.542/AHD/2022 A.Y.2014-15 15 11.Intheresult,theappealoftheassesseeisherebyallowed. OrderpronouncedintheCourton08/11/2023atAhmedabad. Sd/-Sd/- (TRSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated08/11/2023 Manish