Shri Ashish D. Jaiswal, Sabarkantha V. The Income Tax Officer, S.K. Ward-4, Modasa

ITA 543/AHD/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6810 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DIVYAKANT PARIKH
• Keywords: Unexplained cash credit; Income from undisclosed sources; Share purchase agreement; Period of limitation; Accommodation entries
• Section: 69; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER 1. ./ITA NO.543/AHD/2015 AY 2007-08 2. ./ITA NO.544/AHD/2015 AY 2007-08 3. ./ITA NO.545/AHD/2015 AY 2007-08 1. ASHISH D. JAISWAL 58, GITANJALI SOCIETY MALPUR ROAD AT & POST : MODASA DIST. SABARKANTH 383430 PAN:AFZPJ-8565-M 2. JIGNABEN D.JAISWAL -ADDRESS AS ABOVE- PAN: AFZPJ-8566-J 3. PINAL D. JAISWAL -ADDRESS AS ABIVE- PAN: AFZPJ-8564-L / VS. 1-3. THE INCOME TAX OFFICER WARD-4 MODASA ( / APPELLANTS ) .. ( / RESPONDENT ) / APPELLANTS BY : SHRI DIVYAKANT PARIKH, AR / RESPONDENT BY : SHRI JAYANT JHAVERI, SR.DR / DATE OF HEARING 12/12/2018 / DATE OF PRONOUNCEMENT 01 /01/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE THREE DIFFERENT ASSESSEES AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)2, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL(S) NO.CIT(A)-2/ITO, S.K. WD-4/MODASA/150, 147, 149/13- 14 IDENTICALLY ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 2 - DATED 05/01/2015 ARISING IN THE ASSESSMENT ORDERS P ASSED UNDER S.143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961(HERE-IN-AFTER REFERRED TO AS 'THE ACT') ALL DATED 30/12/2013 RELEVANT TO ASSESSMENT Y EAR (AY) 2007-08. 2. FIRST, WE TAKE UP THE ASSESSEES APPEAL IN ITA N O.544/AHD/2015 IN THE CASE OF PINAL D. JAISWAL AS LEAD CASE. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED COMMISSIONER OF APPEALS-II HAS ERRED I N FACTS AND IN LAW, IN CONFIRMED ADDITION AMOUNT OF RS.5,26 ,461/- AS A INCOME FROM OTHER SOURCES, WHICH LEARNED INCOME TAX OFFICER HAS ADDED AS A UNEXPLAINED CREDIT U/S.68 OF INCOME TAX ACT. THE LEARNED INCOME TAX OFFICER HAS ALSO NOT GRANTED LONG TERM CAPITAL GAIN U/S.10(38) OF I.T. ACT. 2. THE ASSESSMENT MADE U/S.143(3) R.W.S. 147 IS INVALI D, AS IT WAS MADE BEYOND THE PERIOD OF LIMITATION LAID DOWN IN S ECTION 153 OF THE ACT. 4. THE FIRST ISSUE RAISED BY THE ASSESSEE IS THAT T HE LD. CIT(A) ERRED IN TREATING THE LONG TERM CAPITAL GAIN (LTCG) AS INCOM E FROM OTHER SOURCES AMOUNTING TO RS. 5,26,461/- ONLY, CONSEQUEN TLY, DENYING THE EXEMPTIONS CLAIMED U/S 10(38) OF THE ACT. 5. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DECLARED HIS INCOME UNDER THE HEAD OTHER SOURCES BESIDES THE LTCG. THE ASSESSEE HAS SHOWN LTCG INCOME OF RS. 5,26,461/ - ON THE SALE OF SHARES M/S TALENT INFOWAY LIMITED WHICH WAS CLAIMED AS EXEMPT U/S ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 3 - 10(38) OF THE ACT. THE TRANSACTION FOR THE SALE OF SHARES WAS CARRIED OUT THROUGH MAHASAGAR GROUP OF COMPANIES. 5.1. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE IMPUGNED LTCG INCOME WAS NOT FROM THE GENUINE TRANSACTION. IT IS BECAUSE THERE WAS A SEARCH CARRIED OUT BY THE DEPARTMENT IN THE C ASE OF MAHASAGAR GROUP OF COMPANIES WHICH WERE REPRESENTED BY MUKESH M.CHOKSHI AS DIRECTOR INCLUDING THE TALENT INFOWAY LIMITED. IN THE STATEMENT OF MUKESH M.CHOKSHI, IT WAS ADMITTED THAT IT IS PROVID ING ACCOMMODATING ENTRIES IN THE FORM OF LTCG AND SHARE PREMIUM THROU GH VARIOUS COMPANIES CONTROLLED AND MANAGED BY HIM. 5.2. THE NAME OF THE ASSESSEE IN THE LIST OF THE BE NEFICIARY WAS ALSO APPEARING. ACCORDINGLY, THE AO SOUGHT AN EXPLANATIO N FROM THE ASSESSEE. 6. THE ASSESSEE IN COMPLIANCE TO IT SUBMITTED THAT SHARES WERE PURCHASED ON 15/04/2004 PHYSICALLY FROM THE GROUP O F MAHASAGAR COMPANIES. THE ASSESSEE IN SUPPORT HIS CLAIM FILED THE COPY OF THE CONTRACT NOTE AND BILLS. SUBSEQUENTLY, THESE SHARE S WERE TRANSFERRED INTO DMAT ACCOUNT AND SOLD THROUGH THE AUTHORIZED MEMBER OF THE STOCK EXCHANGE AFTER MAKING THE PAYMENT OF STT. THE ASSE SSEE IN SUPPORT OF HIS CLAIM FILED THE NECESSARY DOCUMENTS AND ACCORDI NGLY CLAIMED SUCH CAPITAL GAIN IS ELIGIBLE FOR DEDUCTION U/S 10(38) O F THE ACT. 6.1. HOWEVER, THE ASSESSING OFFICER DISAGREED WITH THE SUBMISSION OF THE ASSESSEE BY OBSERVING THAT HAD THE PURCHASE OF SHARES BEEN GENUINE; ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 4 - THEN THE ASSESSEE WOULD HAVE DEMATERIALIZED THE SAM E IN THE YEAR 2004. ACCORDINGLY, THE AO TRANSPIRED THAT THE SHARES WERE PURCHASED IN MAY 2006 WHEN THESE WERE DEMATERIALIZED IN THE MONTH OF MAY-2006. AS PER SEBI GUIDELINES, THE DELIVERY SHOULD BE WITHIN ONE WEEK IF THE TRANSACTION IS MADE THROUGH STOCK EXCHANGE. ACCORDI NGLY, THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF THE PURCHASE OF SHARES. THUS, THE ASSESSING OFFICER DENIED THE BENEFIT CLAIMED U/S 10 (38) OF THE ACT AS CLAIMED BY THE ASSESSEE. THUS THE AO TREATED THE CA PITAL GAIN INCOME AS INCOME FROM UNDISCLOSED SOURCES. 7. THE AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO TH E LD. CIT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THERE WAS NO CROSS- EXAMINATION OPPORTUNITY PROVIDED AGAINST THE STATEM ENT OF MUKESH M. CHOKSHI RECORDED U/S 132(4) OF THE ACT. THE ASSESS EE ALSO CLAIMED THAT HIS NAME IS NOT APPEARING IN THE LIST OF THE BENEFI CIARY AS PROVIDED BY SHRI MUKESH M. CHOKSHI. 7.1. HOWEVER, THE LD. CIT(A) OBSERVED THAT THE CROS S-EXAMINATION OPPORTUNITY WOULD NOT RESULT IN THE NEW FINDINGS. THE ASSESSEE HAS NOT MADE ANY REQUEST BEFORE THE ASSESSING OFFICER FOR C ROSS-EXAMINATION OPPORTUNITY. 8. THE CONTRACT NOTE ISSUED BY THE STOCK EXCHANGE I S BOGUS. THEREFORE, THE CAPITAL GAIN INCOME AS CLAIMED EXEMP T U/S 10(38) OF THE ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 5 - ACT IS NOT ELIGIBLE FOR SUCH AN EXEMPTION. ACCORDIN GLY, THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 9. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 10. THE LD.AR BEFORE US SUBMITTED THAT IN THE IDENT ICAL FACTS AND CIRCUMSTANCES, THE HONBLE ITAT IN THE CASE OF KETU LKUMAR D. JAISWAL VS. ITO IN ITA NO. 546/AHD/2015 VIDE ORDER DATED 28 /09/2017 HAD DECIDED THE ISSUE IN FAVOR OF THE ASSESSEE. ACCORD INGLY, THE LD. AR REQUESTED BEFORE US TO ALLOW HIS GROUND OF APPEAL. 11. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT TH E BROKER THROUGH WHOM THE ASSESSEE TRANSFERRED SHARES WAS NOT HOLDIN G THE VALID CERTIFICATE FROM THE STOCK EXCHANGE. AS SUCH, THE BROKER WAS D EBARRED FROM THE STOCK EXCHANGE. THE LD. DR VEHEMENTLY SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW. 12. WE HAVE HEARD THE LD. REPRESENTATIVES APPEARING FOR THE RESPECTIVE PARTIES. WE HAVE PERUSED THE RELEVANT M ATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE NOTE THAT IN THE IDENTICA L FACTS AND CIRCUMSTANCES, THE HONBLE ITAT AHMEDABAD IN THE CA SE OF KETULKUMAR D.JAISWAL VS. ITO IN ITA NO.546/AHD/2015 FOR AY 200 7-08 VIDE ORDER DATED 28/09/2017 HAS DECIDED THE ISSUE IN FAVOR OF THE ASSESSEE BY OBSERVING AS UNDER:- ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 6 - 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IM PUGNED ORDER. LEARNED AR STATED THAT THE ASSESSEE, IN HIS REPLY, TO THE SHOW-CAUSE NOTICE BEARING NO.ITO/SK/WD.4/SC-F. NO.4 0/2013-14 DATED 12/12/2013, REQUESTED FOR CROSS EXAMINATION O F SHRI MUKESH CHOKSHI AND SAME IS MENTIONED IN THE PAPER BOOK AT PAGE NO.2. SAME WAS GRANTED BY THE LD. AO. 4.2 LD. AR ALSO CITED A JUDGMENT OF OUR COORDINATE BENCH IN ITA NO.810/AHD/2015 FOR ASST. YEAR 2006-07, IN THE CASE OF SHRI PRATIK SURYAKANT SHAH, WHERE HONBLE BENCH IS HELD AS UNDER: 17. FOR THE SAKE OF THE COMPLETENESS OF THE ADJUDI CATION, EVEN ON FACTS OF THE CASE, THE ORDERS OF THE AUTHORITIES BELOW CA NNOT BE ACCEPTED. THERE IS NO DENYING THAT CONSIDERATION WAS PAID WHE N THE SHARES WERE PURCHASED. THE SHARES WERE THEREAFTER SENT TO THE C OMPANY FOR THE TRANSFER OF NAME. THE COMPANY TRANSFERRED THE SHARE S IN THE NAME OF THE ASSESSEE. THERE IS NOTHING ON RECORD WHICH COULD SU GGEST THAT THE SHARES WERE NEVER TRANSFERRED IN THE NAME OF THE AS SESSEE. THERE IS ALSO NOTHING ON RECORD TO SUGGEST THAT THE SHARES WERE N EVER WITH THE ASSESSEE. ON THE CONTRARY, THE SHARES WERE THEREAFT ER TRANSFERRED TO DEMAT ACCOUNT. THE DEMAT ACCOUNT WAS IN THE NAME OF THE ASSESSEE, FROM WHERE THE SHARES WERE SOLD. IN OUR UNDERSTANDI NG OF THE FACTS, IF THE SHARES WERE OF SOME FICTITIOUS COMPANY WHICH WA S NOT LISTED IN THE BOMBAY STOCK EXCHANGE/NATIONAL STOCK EXCHANGE, THE SHARES COULD NEVER HAVE BEEN TRANSFERRED TO DEMAT ACCOUNT. SHRI MUKESH CHOKSI MAY HAVE BEEN PROVIDING ACCOMMODATION ENTRIES TO VARIOU S PERSONS BUT SO FAR AS THE FACTS OF THE CASE IN HAND SUGGEST THAT T HE TRANSACTIONS WERE GENUINE AND THEREFORE, NO ADVERSE INFERENCE SHOULD BE DRAWN. IN THE LIGHT OF THE DECISIONS OF THE HON'BLE SUPREM E COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES (SUPRA) AND CONSIDERING T HE FACTS IN TOTALITY THE CLAIM OF THE ASSESSEE CANNOT BE DENIED ON THE B ASIS OF PRESUMPTION AND SURMISES IN RESPECT OF PENNY STOCK BY DISREGARD ING THE DIRECT EVIDENCES ON RECORD RELATING TO THE SALE/PURCHASE T RANSACTIONS IN SHARES SUPPORTED BY BROKER'S CONTRACT NOTES, CONFIRMATION OF RECEIPT OF SALE PROCEEDS THROUGH REGULAR BANKING CHANNELS AND THE D EMAT ACCOUNT. 19. AS MENTIONED ELSEWHERE AND AS AGREED BY THE REP RESENTATIVES OF BOTH THE SIDES; SINCE THE FACTS ARE COMMON IN ALL T HE IMPUGNED APPEALS, ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 7 - ALL THE APPEALS BY THE ASSESSEES ARE ALLOWED. THE A SSESSING OFFICER IS DIRECTED TO TREAT THE SURPLUS AS LONG TERM CAPITAL GAINS AND ALLOW THE EXEMPTION A CLAIMED BY THE ASSESSEES. 20. IN THE RESULT, ALL THE APPEALS FILED BY TH E ASSESSEES ARE ALLOWED. 4.3 LEARNED AR ALSO CITED AN ORDER OF MUMBAI BENCH IN ITA NO.7859/M/2011 FOR ASST. YEAR 2003-04, IN THE MATTE R OF SHRI JATIN P. AJMERA VS. ITO, RELEVANT PARA IS REPRODUCED HERE UNDER: 3. BEFORE THE LD. C1T(A), IT HAD BEEN CONTENDED TH AT THE 14200 SHARES OF BUNIYAD CHEMICALS LTD WERE PURCHASED IN CASH FOR RS.8,520/- ON 05/06/2001 THROUGH SUB-BROKER M/S.GOLD STAR FINVEST PVT. LTD AND THEY WERE TRANSFERRED IN NAME OF ASSESSEE IN THE COMPANI ES RECORDS ON 30/06/2001 AND THEN SOLD THROUGH THE SAME SUB-BROKE R M/S. GOLD STAR FINVEST PVT. LTD. ON 27/01/2003 FOR RS.12,00,610/- I.E. AFTER HOLDING THEM FOR MORE THAN 1 YEAR. THE SHARES PURCHASED AND SOLD WERE BACKED BY THE CONTRACT NOTES ISSUED BY SUB-BROKER M/S. GOL D STAR LINVEST PVT. LTD. WHO WAS REGISTERED MEMBER OF STOCK EXCHANGE AN D HAVING SEBI REGISTRATION NUMBER AND THAT THE SALE PROCEEDS WERE RECEIVED THROUGH CHEQUES ONLY. IT HAD ALSO BEEN CONTENDED THAT THE S HARES WERE OF LISTED COMPANIES AND TRADED AT THE RATES APPEARING IN NEWS PAPERS AND THE ASSESSEE HAD NO DOUBTS ON THE GENUINENESS AS THE SH ARES WERE RECEIVED BY ASSESSEE IN PHYSICAL FORM AND EVEN THE SALE PROC EEDS WERE RECEIVED BY CHEQUES. IT WAS THEREFORE CLAIMED BY THE ASSESSE E THAT THE TRANSACTIONS ARE GENUINE TRANSACTIONS ONLY. IT IS F URTHER CONTENDED THAT U/S 14(2)SCRA, IF THE PURCHASER AND SELLER DOES NOT HAVE KNOWLEDGE ABOUT THE RULES AND REGULATIONS OF SHARE TRADING TR ANSACTIONS, HIS INTEREST ARE PROTECTED AND SHOULD NOT BE FOUND FAUL T WITH ANY ACT OF COMMISSION OR OMISSION BY THE MEMBER OF THE STOCK E XCHANGE THROUGH WHOM THE SAID PERSON BUYS OR SELLS THE SHARES. THE REASONS AS TO WHY THE TRANSACTIONS WERE NOT REFLECTING IN THE STOCK E XCHANGE WERE BEST KNOWN TO THE BROKER ON WHOM ASSESSEE BELIEVED AS TH EY WERE REGISTERED BROKER AND ASSESSEE HAD NO CONTROL ON THE MANNER OF TRANSACTIONS WHICH THE BROKER ENTERED INTO. THE LD. CIT(A) HOWEV ER WAS NOT SATISFIED WITH THE CONTENTIONS RAISED BY THE ASSESSEE AND HEL D THAT THE TRANSACTIONS WERE NOT GENUINE. HE THEREFORE CONFIRM ED THE ADDITIONS MADE BY THE AO. THE ASSESSEE IS THUS IN APPEAL BEFO RE US. ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 8 - 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORD. THE LD. AR AT THE OUTSET HAS STATED THAT TH E CASE OF THE ASSESSEE IS COVERED BY A SERIES OF TRIBUNAL DECISIONS IN VAR IOUS CASES WHEREIN ON SIMILAR STATEMENT OF SHRI MUKESH CHOKSHI, THE CASES WERE REOPENED AND ADDITIONS WERE MADE. IN ALL THESE CASES, THE TRIBUN AL HAS DECIDED THE ISSUE OF LONG TERM CAPITAL GAIN IN FAVOUR OF THE AS SESSEE AS THE SAID STATEMENT OF SHRI MUKESH CHOKSHI WAS A GENERAL STAT EMENT AND COULD NOT BE CORROBORATED BY ANY MATERIAL EVIDENCE. HE RE LIED UPON THE FOLLOWING DECISIONS IN THIS RESPECT: 1. KATARIA KETAN ISHWARLAL VS. ITO ITA NO.4304/M /2007 DECIDED ON 30/04/2010. 2. ACIT VS. SHRI RAVINDRAKUMAR TOSHNIWAL ITA NO.5302/M/2008 DECIDED ON 24/02/2010. 3. ITO VS. TRUPTIC SHAH ITA NO.1442/M/2010 DECIDE D ON 29/04/2011. 4. SMT. MANJULABEN L. SHAH VS. ITO ITA NO.3112/M/ 2014 DECIDED ON 31/10/2014 5. WE FIND THAT THE FACTS OF THE ABOVE STATED CASES WERE ALL MOST IDENTICAL TO THAT OF THE ASSESSEE. IN THE CASE OF KATARIA KETAN ISHWARLAL VS. ITO (SUPRA), THE TRANSACTIONS WERE CARRIED OUT THROUGH THE SAME BROKER I.E. M/S. GOLD STAR FINVEST PVT. LTD. THE TR IBUNAL ALLOWED THE APPEAL OF THE ASSESSEE OBSERVING AS UNDER: '6.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FROM THE COPY OF THE SHARE CERTIFICATE, DEMAT ACCOUNT, SHARE TRANSFER FORM FILED IN THE PAPER BOOK, WE FIND THE ASSESSEE HAS P URCHASED 9500 SHARES OF KUSHAL SOFTWARE LTD. FROM M/S. HANDFUL IN VESTORS PVT. LTD. WE FIND THE ASSESSING OFFICER TREATED THE SALE OF SUCH SHARES BY THE ASSESSEE THROUGH M/S. GOLD STAR FINVEST PVT. LTD. AS BOGUS ON THE GROUND THAT MR. CHOKSI AND HIS BROKING COMPANY WERE ENGAGED IN GIVING FALSE SHARE TRANSACTION BILL S. HOWEVER, FROM THE COPY OF THE STATEMENT OF MR. CHOKSI, A COP Y OF WHICH IS FILED IN THE PAPER BOOK, WE FIND MR. CHOKSI HAS NOT SPECIFICALLY MENTIONED THE NAME OF THE ASSESSEE FOR OBTAINING BE NEFIT ON SALE OF SUCH BOGUS SHARES. THE LEARNED DR ALSO COULD NOT POINT OUT FROM THE STATEMENT OF SHRI CHOKSI THAT HE HAS TAKEN THE NAME OF ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 9 - THE ASSESSEE FOR OBTAINING ANY BENEFIT ON ISSUE OF SUCH BOGUS BILLS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND CONSIDERING THE FACT THAT THE ASSESSEE HAD PURCHASE D THE SHARES WHICH WERE DULY TRANSFERRED TO THE DEMAT ACCOUNT, A ND, IN ABSENCE OF ANY ALLEGATION AGAINST THE ASSESSEE BY M R. CHOKSI IT CANNOT BE SAID THAT THE SALE OF THE SHARES IS BOGUS . IN THIS VIEW OF THE MATTER, WE HOLD THAT THE SALE TRANSACTION ENTER ED INTO BY THE ASSESSEE IS GENUINE TRANSACTION. SINCE THE ASSESSIN G OFFICER HAS NOT DISPUTED REGARDING THE PURCHASE OF HOUSE PROPER TY AND SINCE THE ASSESSEE FULFILS THE CONDITIONS FOR TREATING TH E PROFIT ON SALE OF SUCH SHARES AS LONG TERM CAPITAL GAIN AND FULFILLED THE CONDITIONS FOR ALLOWABILITY OF DEDUCTION U/S. 54F, THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICE R TO ALLOW THE CLAIM OF THE ASSESSEE. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED.' 6. FURTHER IN THE CASE OF 'ACIT VS. SHRI RAV INDRAKUMAR TOSHNIWAL' (SUPRA), THE SHARE PROFIT WAS EARNED FROM THE SALE OF SHARES OF 'M/S BUNIYAD CHEMICALS LTD. I.E. THE SAME ENTITY AS IN THE CASE OF THE ASSESSEE. THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE OBSERVING AS UNDER: 11. HAVING HEARD BOTH THE PARTIES AND HAVING CONSI DERED THEIR RIVAL CONTENTIONS, WE FIND THAT THE AO HAS TREATED THE SAID TRANSACTIONS AS BOGUS TRANSACTIONS ON THE GROUND TH AT- A) THE SALE TRANSACTIONS WERE NOT ON THE FLOOR OF T HE ASEL BUT WERE OFF MARKET TRANSACTIONS; B) THE ADDRESS OF THE M/S BUNIYAD CHEMICAL LTD. AND M/S TALENT INFOWAY LTD. WAS THE SAME AND THE CONTACT PERSON FOR M/S BUNIYAD CHEMICAL LTD. ON THE FLOOR OF ASEL WAS SHRI MUKESH CHOKSHI. C) MR. MUKESH CHOKSHI HAD STATED THAT THE SALE PROCEEDS HAVE BEEN PAID TO THE ASSESSEE THROUGH THE FUNDS PROVIDED BY THE ASSESSEE. 12. AS REGARDS POINT (A) ABOVE, WE FIND THAT THE IS SUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF MUKE SH R. MAROLIA WHEREIN IT HAS BEEN HELD THAT OFF MARKET TRANSACTIO N IS NOT A ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 10 - UNLAWFUL ACTIVITY AND THERE IS NO RELEVANCE IN SEEK ING DETAILS OF SHARE TRANSACTION FROM STOCK EXCHANGE WHEN THE SALE WAS NOT ON STOCK EXCHANGE AND RELYING UPON IT FOR MAKING ADDIT ION. 13. AS REGARDS POINTS (B) & (C) ABOVE, WE FIND THAT THE ASSESSEE HAS FILED RELEVANT DOCUMENTARY EVIDENCE BEFORE THE AO BUT THE AO HAS FAILED TO CONSIDER THE SAME. THE CIT[A] IN H IS ORDER HAS CONSIDERED THE SAID EVIDENCE AND HAS COME TO THE CO NCLUSION THAT THE SHARE TRANSACTIONS ARE GENUINE. HOWEVER, AS HEL D BY THE TRIBUNAL IN THE CASE OF RAJINIDEVI A. CHOWDHARY [CI TED SUPRA], WHICH IS ON SIMILAR SET OF FACTS, THE AO COULD HAVE VERIFIED FROM THE REGISTRAR OF COMPANIES AS TO WHETHER THE SHARES HAVE BEEN TRANSFERRED AND THE NAMES OF THE SHAREHOLDERS IN WH OSE NAMES SHARES HAVE BEEN TRANSFERRED. THE DECISION OF THE T RIBUNAL IN THE CASE OF RAJINIDEVI A. CHOWDHARY HAS ALSO BEEN UPHEL D BY THE JURISDICTIONAL HIGH COURT AS TAKEN NOTE OF BY THIS TRIBUNAL IN THE CASE OF SHRI PINAKIN L. SHAH [CITED SUPRA], TO WHIC H ONE OF US I.E. THE JUDICIAL MEMBER, IS A PARTY. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT[A] AND THE SAME IS UPHELD. 14 IN THE RESULT, REVENUE'S APPEAL IS DISMISS ED.' 7. THE FACTS OF THE CASE IN HAND BEING IDENTICAL AN D THERE BEING NO DIRECT OR MATERIAL EVIDENCE AGAINST THE ASSESSEE TO HOLD THAT THE SHARE TRANSACTIONS WERE NOT GENUINE, WE RESPECTFULLY FOLL OWING THE ABOVE DECISIONS OF THE TRIBUNAL, HOLD THAT ADDITIONS MADE BY THE AO U/S.68 ARE NOT WARRANTED AND ARE ACCORDINGLY DELETED. SINCE WE HAVE SET-ASIDE THE FINDINGS OF THE LOWER AUTHORITIES THAT THE TRANSACT IONS IN QUESTION WERE NOT GENUINE, HENCE THE CONSEQUENTIAL ADDITIONS MADE BY THE AO U/S 69 OBSERVING THAT THE ASSESSEE MIGHT HAVE PAID COMMISS ION FOR THE BOGUS TRANSACTIONS HAVE NO LEGS TO STAND. THE SAME ARE AL SO ACCORDINGLY ORDERED TO BE DELETED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE I S ALLOWED. ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 11 - 12.1. AS THE FACTS IN THE CASE ON HAND ARE IDENTICA L TO THE FACTS OF THE CASE AS DISCUSSED ABOVE, THEREFORE WE DO NOT WANT T O TAKE ANY DIFFERENT VIEW THAN TAKEN BY THE COORDINATE BENCH IN THE CASE AS DISCUSSED ABOVE. 12.2. WE ALSO NOTE THAT THE LD. DR HAS NOT BROUGHT ANYTHING ON RECORD SUGGESTING THAT THE BROKER WAS DEBARRED FROM THE ST OCK EXCHANGE. WE ALSO NOTE THAT THIS ISSUE WAS NOT AGITATED BEFORE T HE AUTHORITIES BELOW. THEREFORE, THE ARGUMENT RAISED BY THE LD. DR FOR TH E REVENUE IS NOT TENABLE. WE ALSO NOTE THAT THE SAME BROKER WAS INV OLVED IN THE CASE OF KETUL D JAISWAL (SUPRA) WHICH HAS BEEN DECIDED IN FAVOR OF THE ASSESSEE BY THE TRIBUNAL. 12.3. AFTER CONSIDERING THE FACTS IN TOTALITY AN D AFTER HAVING RELIANCE IN THE CASE OF KETULKUMAR D.JAISWAR (SUPRA), WE HOLD T HAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10(38) OF THE ACT IN THE GIVEN FACTS AND CIRCUMSTANCES. HENCE, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.544/ AHD/2015 FOR AY 2007-08 IN THE CASE OF PINAL D.JAISWAL IS ALLOWED. COMING TO ITA NOS.543/AHD/2015 & 545/AHD/2015 FOR A Y 2007-08 IN THE CASE OF ASHISH D.JAISWAL AND JIGNA D.JAISWAL RESPECTIVELY. 14. BOTH THE SIDES CONSENTED THAT IDENTICAL ISSUES ARE INVOLVED IN THESE TWO APPEALS TOO. THUS, FOR PARITY OF REASONS NOTED ABOVE, OUR VIEW IN ITA ITA NOS.543,544 & 545/AHD/2015 ASHISH D.JAISWAL & 2 OTHERS VS. ITO ASST .YEAR - 2007-08 - 12 - NO.544/AHD/2015 FOR AY 2007-08 ABOVE SHALL APPLY MUTATIS MUTANDIS TO BOTH THE APPEALS CAPTIONED ABOVE. AS A RESULT, BOT H THE APPEALS OF THE ASSESSEES IN ITA NOS.543 & 545/AHD/2015 FOR AY 2007 -08 ARE ALLOWED . 15. IN THE COMBINED RESULT, ALL THE THREE APPEALS OF THE ASSESSEES ARE ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 01 /01/2019 SD/- SD/- (MS.MADHUMITA ROY) (WASEEM AH MED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 01 /01/2019 '.. , .%.. / T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. &'( ) / CONCERNED CIT 4. ) ( ) / THE CIT(A)-2, AHMEDABAD 5. ,- . %%'( , '( , & / DR, ITAT, AHMEDABAD 6. . 12 3 / GUARD FILE. / BY ORDER, , % //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !' #, / ITAT, AHMEDABAD 1. DATE OF DICTATION 24.12.18 (DICTATION PAD 13- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27.12.18 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.4.1.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 4.1.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER