The ITO, Ward-5(3)(1), Ahmedabad V. M/s. Iceworth Realty LLP, Mumbia

ITA 565/AHD/2020

AI Insights

The case involves appeals by the Revenue against M/s. Ice Worth Reality LLP concerning the assessment years 2012-13 and 2015-16. The primary issues revolved around the alleged bogus long-term capital gains claimed by the assessee through transactions in penny stocks and the unexplained cash credits in the form of unsecured loans. The Assessing Officer had made additions under sections 68 and 69C of the Income Tax Act, which were later deleted by the CIT(A). The Tribunal's decision was influenced by various judicial precedents and the lack of concrete evidence from the Revenue to substantiate the claims of bogus transactions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114294 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 22-01-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Not Found
• Assessee Lawyers: Not Found
• Keywords: Unexplained cash credit; Unexplained expenditure; Principle of natural justice; Opportunity of cross examination; Question of law; Corroborative evidences; Accommodation entries; Onus to prove; Revised return; Penny stocks; Reassessment proceedings; Set aside; Capital Gains
• Section: 131; 69C; 143(3); 133(6); 143(1); 251; 208; 113; 43; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member The Income-Tax Officer, Ward-5(3)(1), Ahmedabad (Appellant) Vs M/s. Ice Worth Reality LLP 5, 2 nd Floor, Shail, Nr. Swagat Restaurant, Opp. Madhusudan House, Navrangpura, Ahmedabad-380009 PAN: AAEFI8575N (Respondent) Assessee Represented: Shri Devendra Jain, A.R. & Shri Nimesh Chothani, A.R. Revenue Represented: Shri A.P. Singh, CIT Date of hearing : 23-01-2023 Date of pronouncement : 13-03-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- These two appeals are filed by the Revenue as against the separate Appellate orders both dated 24.09.2020 passed by the Commissioner of Income Tax (Appeals)-5, Ahmedabad arising out of the Assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating ITA Nos. 565 & 566/Ahd/2020 Assessment Years 2012-13 & 2015-16 I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 2 to the Assessment Year 2012-13 and Assessment order passed under section 143(3) relating to the Assessment Year 2015-16 respectively. ITA No. 566/Ahd/2020 for A.Y. 2015-16 2. The brief facts of the case the assesee is a LLP Firm engaged in the business of Civil Contractor. The assesee firm came into existence on conversion of Iceworth Realty (P) Ltd. Originally, the Iceworth Realty (P) Ltd had purchased 39,61,270 shares [8,23,770 on 05.10.2011 and 31,37,500 on 31.03.2012] of Conart Traders Pvt Ltd at Rs. 20/- per share for an aggregate amount of Rs. 7,92,25,400/-. Later on, by virtue of Hon'ble Mumbai High Court judgement on amalgamation of three companies viz. Conart Traders (P) Ltd, Santoshima Tradelink (P) Lad with listed company namely Sunrise Asian Ltd and the assessee got the same quantity of 39,61,270 shares of Sunrise Asian Ltd. The assessee purchased shares of Conart Traders (P) Ltd by account payee cheques and the same were demated on 31.12.2013 with demat account no. 00075678 with DJS Stock & Shares Ltd. Thereafter, they were transferred to demat account of with Aarya Equity (1) Pvt. Ltd of Mumbai on 14.11.2014. 2.1. The assessee sold shares of 12,15,840 at different rates and different dates through four registered brokers namely (a) Trade Bulls Securities (P.) Ltd., Ahmedabad; (b) BMA Wealth Creators (P.) Ltd., Kolkata; (c) Concept Securities Ltd., Surat and (d) Arya Equity (I) Pvt. Ltd., Mumbai. The assessee received gross sale consider ation of Rs.63,30,91,656/- from the above said four brokers by I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 3 cheques. The sale contracts are made through stock exchange and are subject to Securities Transaction Tax [STT]. The assessee was not promoter of the company of which shares have been purchased. Thus the assessee had shown Long Term Capital Gain [LTCG] of Rs.60,87,74,856/= after claiming proportionate cost of shares as under: Name of the company Sale Price Purchase Price LTCG Sunrise Asian Ltd. (1215840) 63,30,91,656 2,43,16,800 60,87,74,856 2.2. The assessee filed its Return of Income for the Asst year 2015- 16 claiming the above LTCG as exempt under section 10[38] of the Act. The Return was selected for complete scrutiny assessment on the ground of suspicious sale transactions in shares [penny stocks] and claim of exemption of LTCG under section 10[38] of the Act. Therefore the Assessing Officer issued show cause notice based on the report of the Investigation Wing, Kolkata and statement of Shri Vipul Vidhur Bhatt, Director of Sunrise Asian Ltd, why not to deny the benefit of LTCG u/s.10[38] of the Act and also propose to add commission charges at 5% namely Rs.3,04,38,743/= deemed to have paid to Shri Vipul Vidhur Bhatt, as the income of the assessee. 2.3. The assessee by its detailed reply letter dated 04-12-2017 explained that the shares which were held in physical form got dematerialized only on 31/12/2013 and sold the same at different rates and different dates through four registered brokers. It is further mentioned that the assessee’s name is nowhere indicated to I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 4 be forming part of any statement or Investigation report. The SCN carried the extracts of the Statement of Mr. Vipul Vidhur Bhatt, the assessee was unable to verify the veracity and correctness of the statements and its relevance as far as assessee concern and therefore requested to provide all statements and Investigation reports relied upon by the AO and also provide an opportunity to cross examine Mr. Vipul Vidhur Bhatt and relied upon various cases laws. 2.4. The Assessing Officer provided copies of the statements of Mr. Vipul Vidhur Bhatt relied upon in the Show Cause Notice. However the summons issued u/s.133[6] to Mr. Vipul Vidur Bhatt on 27-11- 2017 and 06-12-2017 wherein he did not appeared for cross examination. Thus the Ld AO concluded that the LTCG booked by the assessee in its books are pre-arranged and a method to evade taxes and disallowed the amount of Rs.60,87,74,856/= received as sale proceeds on sale of SAL shares as unexplained cash credit u/s.68 of the Act and taxed u/s.115BBE of the Act. The Ld AO also added commission charges at 5% namely Rs.3,04,38,743/- as the unexplained expenditure u/s. 69C of the Act and thereby demanded tax of Rs.29,33,12,750/-. 3. Aggrieved against the assessment order the assessee filed an appeal before the Ld. Commissioner of Income Tax (Appeals). The Ld CIT[A] after detailed discussion of the case and issues in hand, deleted both the additions made by the AO. For better clarity the relevant findings of the Ld CIT[A] is reproduced as below: I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 5 “.... The important details culled out from the documents on record are as under: S No. Particulars Details 1 Scrip Purchased Originally shares of Conart Traders (P) Ltd were purchased and the same was converted into Sunrise Asian Ltd. on account of amalgamation. 2 Purchase quantity 3961 270 shares 3 Date of purchase 05/10/2011 & 25/04/2012 4. Amount Paid Rs.7,92,25,400/- 5 Payment made for purchase Date Cheque No. Amount 01/10/2011 JV 1,64,75,400/- 31/03/2012 657808 Ap 1,35,00,000/- 31/03/2012 657810 1,18,00,000/- 31/03/2012 657811 1,17,00,000/- 31/03/2012 657812 52,00,000/- 31/03/2012 657816 80,50,000/- 31/03/2012 657809 1,25,00,000/- Total 7,92,25,400/- 6 Broker & Address for purchase Direct purchase 7 Date of entry in demat account 31/12/2013 (A/c. No.00075678 with DJS Stock & Shares Ltd.) (As per page 4 of the assessment order) 8 Sale quantity 12,15,840 shares 9 Date of sales Direct dates in A.Y.2015-16 10 Amount of sales Rs.63,30,91,656/- 11 Amount received through By cheques 12 Broker and address for sale As per submission on record The perusal of information in table above indicates that the shares were purchased in the year 2011 & 2012 for an amount of I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 6 Rs.7,92,25,400/- through cheque and the assessment year is 2012- 13 & 2013-14. Thereafter, the shares were dematerialized and credited to the account of appellant on 31/12/2013 for few months before they are sold on November 14 to March 15 through BOLT of recognized stock market. As per record the appellant was not promoter of the company of which shares have been purchased, hence the shares can be held in physical form which were dematerialized only on 31/12/2013. The payments for sale of shares have also been received through banking channel. Firstly, as per record of merger dtd. 22/03/2013, the appellant was shareholder in the merged company. As per information on record Bombay High Court has passed order based on application by the transferrer company i.e. Conart Traders (P) Ltd and such application is having the name of shareholder of 39,61,270 shares as per record. This record is forming part of evidences before Hon'ble Bombay High Court. Therefore, the appellant was definitely shareholder before 22/03/2013. A note regarding amalgamation of Conart Traders Ltd, Santoshima Tradelink (P) Ltd and Sunrise Asian Ltd. is reproduced as under: "The appellant urges that the abovesaid companies had filed a petition for amalgamation dated 15/12/2012 thereof as per provisions of companies act and the same was filed on 17/01/2013. Copy of the same is filed herewith. The appellant strongly urges that there is list of shareholders on Exhibit - B (page 127) and at the relevant time, the Iceworth Reality (P) Ltd. was shareholder holding shares of 3961270. The appellant urges that there is again reference of shareholder on page no.132 of the petition. The appellant further urges that there is also copy of audit report of Conart Traders Ltd. on page no. 253 & 265 of part-II of the petition wherein there is reference of shareholders in F.Y. 2011-12. The appellant urges that the amalgamation scheme petition was approved by the Hon'ble Mumbai High Court and the copy of the same lied in page no. 1.18 to 1.24 of paper book-1. The Hon'ble Mumbai High Court had approved the amalgamation scheme after taking into account of the affidavit filed by the Regional Director and report of official liquidator dated 15/03/2013. The appellant also urges that, in the process of amalgamation, a letter is issued to the concerned Assessing Officer of each company and their report is also considered. In case, no report is received from the Assessing Officer, it is assumed that the assessing officer has no objection to the amalgamation scheme. The appellant strongly defends that the acquisition of shares by Conart Traders Ltd I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 7 and the genuineness of the said company stands proved by the order of amalgamation of Hon'ble Mumbai High Court as discussed hereinabove." Secondly, only 12,15,840/- shares have been sold out of the total 39,61,270 shares. The major portion of investment is still standing in balance sheet as on 31/03/2015. The investment of the appellant in the impugned shares is proved beyond doubt. Therefore, no question can be raised on the timeline of the transaction. 5.2. It is also noticed that the Assessing Officer has not brought on record to prove that any of the evidences of share transactions filed by the Appellant are false or untrue. The AO has basically gone on the contents of Investigation report. However, the appellant was not made available the copy of statement or the witness of department for cross-examination earlier and the relevant gist of the facts about cross-examination are reproduced here in below from appellate order dtd. 24/09/2020 for A.Y.2012-13 in the case of assessee, as under. “The appellant also submitted that the statement of Vipul Vidur Bhatt ought not to be relied unless the copy of statement is confronted and an opportunity to cross examine him was allowed. The appellant relies on following decisions of Hon'ble Supreme Court wherein addition was made without giving an opportunity to cross examine to the party concerned are deleted. The appellant relied on the decision of Hon'ble Supreme Court in the case of Kishanchand Chelaram V/s. CIT (125 ITR 713) (SC). The appellant also explained that, on verification of the statement of Vipul Vidur Bhatt (statement obtained by appellant from the said person), it is found that he never mentioned about providing accommodation entries specifically to the appellant company. The appellant explained that, the same statement was used while making assessment in the A. Y. 2015-16 in the case of appellant company and an opportunity to cross examine him was allowed during the appeal proceedings and the same Vipul Vidur Bhatt categorically stated that he had not done any transactions for the appellant company. The appellant explained that there is no evidential value of any statement recorded u/s. 131 of the Act. The appellant further explained that there is no evidential value of any statement u/s. 132 (4) of the Act if the same is retracted by the I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 8 person concerned. The appellant further explained that the AO relied upon the statement of Vipul Vidur Bhatt who had retracted his statement and later on it is found that there is no reference of any transactions with Iceworth Reality (P) Ltd in his statement." This issue has cropped up through the judgments relied by the appellant. So the addition made was based merely on the self- serving contention in the form of statement without any further corroborative evidences which do not have any evidentiary value in the eyes of law. The facts emanating from the cross examination of Vipul Vidur Bhatt have not been considered by the A.O. In view of above facts of the case, it is amply clear that the facts of the case are squarely covered by the decision of Ahmedabad Tribunal in the case of Chartered Motors Pvt. Ltd. vs. ACIT in IT(SS)A No. 26/Ahd/ 2012 which has been upheld by Hon'ble Gujarat High Court. In another case of CIT vs. Mukesh R. Marolia in ITA No.456 of 2007, ITAT, Mumbai wherein the shares were not recorded on the floor of stock exchange but effected through off-market trade held to be valid and Hon'ble Bombay High Court while confirming the decision held that off-market trade is no unlawful activity. It is further seen that SLP filed by the department against the said decision has been dismissed by the Apex Court - CIT vs. Mukesh R. Marolia in SLP (Civil) No.20146/2012 (SC) dated 27.01.2014. When share purchase transactions were off-market transactions, the same cannot be held to be bogus even if any attempt is made to get details from stock exchanges. I hold that any evidence collected behind the back of appellant without considering the facts emerging during cross examination, the same cannot be used as evidence against the Appellant to make the impugned addition. Even in absence of the statement of cross examination, I find that the AO has not brought on record any other material collected through independent inquiries to show that the amount in question should be treated as undisclosed income of the Appellant when the Appellant furnished all the documents which were available to establish that the LTCG claimed by the Appellant was genuine. On the other hand, the shares are in the appellant's demat account from 31/12/2013 onwards which is credible and independent evidence, therefore, shares are held by the appellant for a period of more than 12 months from the date of cheque debited in its bank account in 2012. The appellant has been showing the amount as investment as per record. The relief to the appellant has I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 9 recently been given by Hon'ble Rajasthan High Court in the case of CIT vs. Pooja Agarwal: "Bogus capital gains from penny stocks: If the transaction is supported by documents like contract notes, demat statements etc and is routed through the stock exchange and if the payments are by account payee cheques and there is no evidence that the cash has gone back to the assessee's account, it has to be treated as a genuine transaction and cannot be assessed as unexplained credit." In view of above, the contention of LTCG is proved beyond doubt, hence accepted. 5.3. The second limb of the controversy is relating to technical ground such as the evidences have been collected behind back and not considering the facts of cross examination. For this proposition, reliance is placed on the following decisions of Hon'ble Gujarat High Court: (a) Decision of Hon'ble Gujarat High Court in the case of Heirs and Legal Representatives of Late Laxmanbhai S. Patel Vs. CIT (2008) 174 taxman 206 (Guj.) wherein it was held as under: "In the instant case, the finding was arrived at by the authorities below while denying an opportunity of cross-examining the important witness, namely 'R' and the legal effect of that finding was certainly a question of law which required to be reviewed by the Court. The legal effect of the statement recorded behind the back of the assesses and without furnishing the copy thereof to the assessee or without giving him an opportunity of cross examination, if the addition was made, the same was required to be delete on the ground of violation of the principles of natural justice." (b) Decision of Hon'ble Gujarat High Court in the case of CIT Vs. Indrajit Singh Suri (2013) 33 taxmann.com 281 (Guj.) wherein the Hon'ble High Court held as under: "Where additions were made on basis of statements of persons who were not allowed to be cross examined by assessee, additions were not sustainable." (c) Decision of Hon'ble Gujarat High Court in the case DCIT Vs. Mahendra Ambalal Patel Tax Appeal No. 462 of 1999 13th April, I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 10 2010 40 DTR (Guj.) 243 wherein the Hon'ble High Court held as under: "Though the AO has placed reliance upon the statements of Shri ManojVadodaria and Shri G.C. Patel for the purpose of taxing the amount in the hands of the assessee, despite specific request being made by the assessee for cross- examining both the said persons, the AO has not permitted the assessee to cross-examine them. In the circumstances, no reliance could be placed upon the statements of the said persons as the respondent assessee had no opportunity to cross-examine them. The statements made by the aforesaid persons would have no evidentiary value and as such, would not be admissible in evidence." (d) Decision of the Hon'ble Gujarat High Court in the case of CIT Vs. KantibhaiRevidas Patel Tax Appeal No. 910 of 2013 wherein it was held as under: "The Ld. A.O. had used this statement without allowing cross examinationof Vikas A. Shah which is against the principle of natural justice." (e) Hon'ble Supreme Court judgment in the case No. Civil appeal No.4228 of 2006 in the case of M/s. Andaman Timber Industries Vs. CCE, Kolkata dated 02.09.2015 has clear ratio to be followed by subordinate judicial officers. The operative portion of this un- published judgment is reproduced as under:- "As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the adjudicating authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the adjudicating authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No.2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 11 decide the appeal on merits giving its reasons for accepting or rejecting the submissions. In view of the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show cause notices. We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal." Further Departmental SLP was rejected by Hon'ble Supreme Court vide order dated 31.07.2017 in the case of CIT, Central Jaipur vs. Sunita Dhadda wherein the addition based on third party was deleted for want of cross-examination by the appellant. It is clarified that in a case of appellant, cross examination actually has gone in its favour but has not been considered objectively by the department. Also, the issue of cross examination of departmental witnesses has been raised by the appellant for addition u/s.69C, therefore, the discussion is relevant. 5.3.1. I observe an order of Hon'ble ITAT, Ahmedabad in the case of Chartered Motors Pvt. Ltd. vs. ACIT in IT(SS)A No.26/Ahd/2012, wherein also, the addition was made relying on the statement of Shri Mukesh Chokshi, without granting an opportunity of cross- examination and also ignoring the evidences placed on record by the appellant. The facts of this case are slightly different but observation of court are relevant. The relevant findings of the Hon'ble Tribunal is as under: "17. We find that in the instant case, the addition is made us. 68 of the Act on the ground of unexplained cash credit. As per the provisions of section 68, the initial onus lies upon the assessee to prove the nature and source of amount credited in his books of account. We find that this initial onus was discharged in the instant case by the assessee by furnishing documents like MOA, AOA, share application & board resolution, Certificate of Incorporation, Certificate of Commencement, acknowledgements of ITRs, audited accounts etc. of concerned companies. Thereafter, in our view, the onus shifted upon the Department and it was for the Department to I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 12 bring on record relevant material to show that why in spite of the above stated documents, the addition is still to be made in the hands of the assessee. In the instant case, the Department has endeavoured to discharge its burden on the basis of statements recorded by it of the persons mentioned above. 18. We find that the assessee requested for cross-objection of the maker of the statement. Further, we find that the Assessing Officer also made an attempt to allow the assessee opportunity to cross-examine the makers of the statement by issuing summons to them. However, the cross- examination could not take place because of failure on the part of the makers of the statements to appear on the appointed date. But strangely, thereafter, the Assessing Officer did not take any step to allow effective opportunity to the assessee to cross-examine the makers of the statements. The Assessing Officer did not pursue the matter further. Thus, we find that the assessee was not allowed any real opportunity to cross- examine the persons who made the statement at the back of the assessee. In our considered view, in the circumstances, the statement of those persons cannot be read against the assessee. Our above view finds support from the decision of the Hon'ble Jurisdictional High Court in the case of . (i) Heirs and Legal Representatives of Late Laxmanbhai S. Patel Vs. Commissioner of Income Tax (supra) (ii) CIT Vs. Indrajit Singh Suri (supra) (iii) DCIT Vs. Mahendra Ambalal Patel (supra) (iv) CIT Vs. KantibhaiRevidas Patel (supra) In view of the above settled position of law, we find force in the argument of the assessee that the statements of the persons mentioned above are not admissible evidence against the assessee. In absence of these statements, we find that no other material has been brought on record by the Revenue to show that why still the amount in question should be treated as income of the assessee when the assessee furnished all the documents which were available with it to discharge the onus which was upon it us. 68 of the Act. In the above circumstances, in our considered view, the addition was made solely based on the inadmissible and unreliable material and I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 13 therefore addition so made cannot be sustained. We, therefore, delete the addition of Rs 2,00,00,000/- made in the case of M/s Charted Motors Pvt. Ltd. as well as addition of Rs 70,00,000/- made in the case of M/s. Chartered Speed Private Limited. 19. In the result, both the appeals of the assessee are allowed." 5.3.2 Further I came across Hon'ble Gujarat High Court decision in Tax Appeal Nos.126 and 127 of 2015 in the case of Pr.CIT vs. Chartered Speed Pvt. Ltd. and Chartered Motors Pvt. Ltd., whereby the order of the Ahmedabad Tribunal in the case of Chartered Motors (supra) is confirmed. I have gone through the said order of the Hon'ble Gujarat High Court and the relevant findings is as under: "As recorded by the Tribunal, the Tribunal found that the initial burden was discharged by the assessee. In our view, once the Tribunal upon the appreciation of the material found and recorded the finding of the fact that the assessee had discharged initial burden, such a finding of fact would be outside the judicial scrutiny in the appeal before this Court unless the finding of fact is perverse to the record. It is an undisputed position that the statement of the person concerned which were recorded by the department, those persons were not made available for cross examination, may be for one reason or another inspite of the attempts made by the department. Therefore the Tribunal has rightly found that the statement of those person cannot be read against the assessee." In view of legal position as held by the Hon'ble ITAT and subsequently confirmed by the Hon'ble Gujarat High Court, it is a settled position that the Appellant should have been provided the opportunity to cross-examine the witness of the department. In instant case, the facts coming out of cross examination are not considered by the department, therefore, no valid addition can be made. 5.3.3 In view of above facts & ratio laid down by jurisdictional ITAT and jurisdictional High Court, the impugned addition made by the AO is found not justified and the same is hereby deleted. As the appellant has proved through independent evidences such as payment through bank account for purchase of shares that the I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 14 shares were held for more than 12 months therefore, is eligible for deduction u/s.10(38). How can all the transactions in any penny stock be held as non-genuine without appreciating the fact and the ratio laid down by various courts. In the circumstances the conditions to invoke provisions u/s.68 are not prevailing in this case. The addition of Rs.60,87,74,856/- made u/s.68 is hereby deleted. The ground no.4 is allowed. 5.4 The next issue (ground no.5) is addition of Rs.3,04,38,743/- under section 69C of the Act on account of commission treated as unexplained expenditure. As the findings of A.O. for making addition u/s.68 have not been confirmed and the transaction has been considered as genuine, no addition on account of notional commission can be made. The ratio for the issue of cross verification as discussed while dealing with addition u/s.68 are applicable in this case. In view of findings for applicability of section 68 in this order, the addition of Rs.3,04,38,743/- made u/s.69C is hereby deleted. The ground no.5 is allowed.” 4. Aggrieved against the appellate order, the Revenue is in appeal raising the following Grounds of Appeal: (1) The Ld. CIT(A) has erred in law and on facts in deleting the addition u/s.68 of the 1.T. Act amounting to Rs.60,87,74,856/- on account of unexplained cash credits. (2) The Ld. CIT(A) has erred in law and on facts in deleting the addition u/s.69C of the IT. Act amounting to Rs.3,04,38,743/-on account of unexplained expenditure. (3) The Ld. CIT(A) has erred in law and on facts in not appreciating the fact that the assessee had entered into share transaction in the Scrip- Santoshima Tradeline Ltd. later merged with Sunrise Asian Limited, a penny stock company which resulted in bogus entries of Long Term Capital Gain and thereby claimed as exempt u/s.10(38) of the I.T. Act. (4) On the facts and circumstances, the Ld. CIT(A) ought to have upheld the order u/a.143(3) of the I.T. Act passed by the Assessing Officer. I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 15 (5) It is therefore prayed that the order of the Ld. CIT(A) may be set aside and that of the order of the Assessing Officer be restored to the above extent. (6) It is further prayed that the present appeal comprises the issue of organized tax evasion scam involving claim of bogus long term capital gain through penny stocks for which the CBDT vide Circular No. 23 of 2019 dated 06.09.2019 read with O.M. dated 16 September 2019 exempted such cases from monetary limit for filing appeal, hence, the appeal be decided on merits. Though the tax effect in this case is above the monetary limits prescribed by the Board. 5. The Ld. CIT-DR Shri A.P. Singh appearing for the Revenue submitted that the Directorate of Investigation, Kolkata carried out a countrywide investigation to unearth the bogus operators, who used to provide bogus entries to facilitate beneficiaries in claiming bogus capital gains. These operators used to transfer shares to the beneficiaries at a very nominal price through preferential allotment or offline sale to save Securities Transaction Tax (STT). The beneficiaries after holding the share for one year or more used to sell the same and claim LTCG u/s. 10(38) of the Act. The Ld. D.R. further submitted that the Directorate of Investigation, Kolkata investigated transaction in 84 such cases and examined a large number of brokers, Directors of the companies. Further investigation revealed that in Kolkata some of the beneficiaries, who had obtained bogus entries voluntarily surrendered for taxation and some of them filed revised return. As per the A.O., the assessee in the present case is one of the beneficiaries, who has obtained bogus entry in connivance with one of such bogus operators. I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 16 5.1. Thus the Assessing Officer also brought on record, the statement recorded of Shri Vipul Vidhur Bhatt, Director of Sunrise Asian Ltd., which shares were being sold by the assessee. Thus the A.O. held that the script was a penny stock purchased at a very low price and then sold at superficial hike in price. Thus the Assessing Officer rightly made additions u/s. 68 of the Act and the same is liable to be upheld. Similarly, commission charges at 5% of Rs. 3,04,38,743/- added as unexplained expenditure u/s. 69C of the Act is also liable to be upheld and the Revenue appeal on these grounds are to be allowed in favour of the Department. 6. Per contra, Shri Devendra Jain Ld. Counsel for the assessee submitted before us the Assessing Officer made the additions without giving proper cross-examination of Shri Vipul Vidhur Bhatt Director of Sunrise Asian Ltd. The ld. A.O. blindly followed the Investigation Report of the Department had failed to consider that the purchase of shares were being done through banking channels, the shares were being dematerialized and sold at different rates on different dates through four registered brokers namely namely (a) Tradebulls Securities (P.) Ltd. Ahmedabad; (b) BMA Wealth Creators (P.) Ltd., Kolkata; (c) Concept Securities Ltd., Surat and (d) Arya Equity (I) Pvt. Ltd., Mumbai. 6.1. The Ld. A.R. further submitted that the sale consideration also received through banking channels after payments of Securities Transaction Tax [STT]. Without appreciating the above facts, the Assessing Officer is not correct in denying the claim of deduction u/s. 10(38) of the Act, whereas the ld. CIT(A) after considering the I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 17 Jurisdictional High Court Judgments namely Heirs and Legal Representatives of Late Laxmanbhai s. Patel, Indrajit Singh Suri, Mahendra Ambalal Patel and Chartered Motors Pvt. Ltd. wherein the additions made by the Assessing Officer based on third party statements without providing cross-examination of third person were liable to be deleted. The ld. CIT(A) also followed the Hon’ble Supreme Court Judgment in the case of M/s. Andaman Timber Industries to delete the above additions. Further the ld. A.R. submitted a list of 13 cases of Co-ordinate Benches of the Tribunal namely Ahmedabad Bench, Jaipur Bench, Mumbai Bench and Indore Bench on sale of very same Sunrise Asian Ltd. shares wherein the Co-ordinate Bench have consistently deleted the additions made the Assessing Officer u/s. 68 of the Act as follows: 1) ITO Vs. Devyani Dharmendra Shah [ITA No. 576/ Ahd/2020] (Ahd Trib.) 2) Sita Devi Agarwal Vs. ITO [ITA No. 56/JP/2022] (Jaipur Trib.) 3) Ashok Agarwal Vs. ACIT [ITA no. 124/JP/2020] (Jaipur Trib.) 4) ITO VS. Liberal Realtors LLP [ITA no.449, 450/Mum/2021] (Mumbai Trib.) 5) Shri Shripal Raj Lodha Vs. DCIT [ITA no. 619/Mum/2020] (Mumbai Trib.) 6) Narayan Ramchandra Rathi V. ITO [ITA No. 4811/MUM/2018] (Mumbai Trib.) 7) Arun S. Tripathi v. PCIT [ITA No. 2560/MUM/2018] (Mumbai Trib.) 8) Anraj H. Shah (HUF) V. ITO [ITA No. 4514/MUM/2018] (Mumbai Trib.) 9) Anjana Sandeep Rathi V. ACIT [ITA No. 4369/MUM/2018] (Mumbai) 10) Dipesh Ramesh Vardhan V. DCIT [ITA No. 7648/Mum/2019] (Mumbai) 11) Kumari Ayushi Nyati vs. ITO [ITA No.203/Ind/2019) (Indore Trib.) 12) Smt. Manorama Devi Sharma v. ITO ITA no. 39/Ind/2019] (Indore) 13) Shri Shiv Narayan Sharma v. ACIT [ITA no. 889/Ind/2018] (Indore) I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 18 6.2. The Ld. Counsel Mr. Devendra Jain further brought to our attention to the Jurisdictional High Court Judgment in penny stock cases namely PCIT vs. Jagat Pravinbhai Sarabhai [2022] 142 taxmann.com 247, PCIT Vs. Muktaben Nishantbhai Patel [R/TAX APPEAL NO. 294 of 2021 order dated 12.04.2022, PCIT Vs. Parasben Kasturchand Kochar [R/TAX APPEAL NO. 204 of 2020 order dated 17.09.2020] wherein the Hon’ble Jurisdictional High Court dismissed the Revenue appeals, wherein the assessee has proved that the transactions to be genuine and were being done through banking channels and suffered STT Tax thereon. 6.3. The Ld. Counsel drawn our attention to a very recent decision of the Mumbai Bench Tribunal dated 29.11.2022 in ITA No. 2349/Mum/2021 and Others in the case of DCIT vs. Shri Dilip B. Jiwrajka wherein the co-ordinate Bench has considered the Calcutta High Court Judgment in the case of Pr.CIT vs. Swati Bajaj [288 taxmann.com 403] and clearly distinguished the Calcutta High Court Judgment and justified in deleting the addition made by the A.O. u/s. 68 and u/s. 69C of the Act. 6.4. The Ld. Counsel further submitted the very same Sunrise Asian Ltd. shares were being held by Canara Bank, New Delhi, 6% of SAL shares during September 2015 and 11.26% shares SAL during March 2016 and June 2016 respectively. Thus the sale transaction of SAL Shares cannot be doubted as bogus and denying the exemption u/s. 10(38) of the Act. Therefore the Revenue appeal does not hold merits and liable to be dismissed. I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 19 7. We have given our thoughtful consideration and perused the materials available on record. It is seen from the Paper Book filed by the assessee, the assessee produced before the Assessing Officer the documentary evidences in respect of purchase of shares namely copy of allotment letter from Conart Traders Ltd., Ledger account of Conart Traders Ltd. and share certificate of SAL dated 24/05/2013, Copy of Audit Report for the Assessment Year 2013- 14 showing investment in shares of Conart Traders Ltd and bank statement reflecting payments made for purchase of SAL shares [at Page No. 333 to 364 of the Paper Book]. Similarly, the assessee also filed documentary evidences submitted before the Assessing Officer in respect of SAL of shares by producing the copy of the ledger account of the four share brokers, copy of the bank statement reflecting the amount received on sale of shares after making Securities Transaction Tax [at page no. 65 to 113 of the Paper Book]. The assessee also produced contract notes/bills issued by approved share brokers in respect of sale of shares [at Page nos. 114 to 216 of the Paper Book]. Thus the genuineness of investment in the shares of the assessee was substantiated by producing the above details by the assessee. Therefore the investment cannot be doubted as bogus investments made in penny stock. 7.1. In order to prove the purchase of shares, the assessee filed copy of the allotment letter, ledger account of Conart Tarders Ltd. physical share certificate, copy of the bank statement reflecting payments made for purchase of SAL shares. Similarly, for Sale of shares, the sale were being routed through demat account. Copy of the ledger account of four share brokers through whom sales were I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 20 made. Copy of the bank statement reflecting the sale consideration received after STT. Thus the Assessing Officer has no evidence that the purchase of sale of shares are done through cash and the entire transaction to be bogus. 7.2. We further see from records that the present sale of Sunrise Asian Ltd shares by the assessee is relating to 12,15,840 shares only, as against 39,61,270 shares held by the assessee. After the above sales, still the assessee is retaining 27,45,430 shares of SAL, thus the Ld AO is not justified that the sale of SAL Shares at such high prices in nothing but a Penny stock. If the assessee would have indulged the sale of SAL shares as a Penny stock, then it would not have retained 27,45,430 shares which is more than 2/3 rd of its holding of the SAL shares. Thus the findings of the Ld AO are found to be baseless with cogent materials on record, therefore the same is not sustainable in law. 7.3. This view of ours is supported by the Jurisdictional High Court in the case of PCIT Vs. Muktaben Nishantbhai Patel (cited supra) held as follows: In order to prove the Sale of shares of Sun & Shine Worldwide Ltd., assessee filed the following documents before the assessing officer, viz: Ledger Account of Tradebulls Securities Pvt. Ltd, Contract Notes of Tradebulls Securities Pvt Ltd and Bank Statement. In order to prove purchases of shares, assessee filed the following documents, viz: Contra confirmation of broker M/s. Corporate Commodity Broker Private Ltd, Share Certificate, Share Transfer Form, Debit Note and Cash Receipt. The payments were received through account payee cheque and transaction was done through recognized stock exchange. The inflow of shares is reflected by way of physical share certificate and demat account. The shares were transferred through demat account. There is no evidence that the cash was recycled back to the assessee. The assessing officer I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 21 has failed to bring any cogent evidence on record to show that these documents and evidences filed by the assessee are false. The assessee merely acted on the basis of such market information and happened to get phenomenal gain. It could have been otherwise as well. The rags to riches story in the stock market are galore. It has been submitted that the alleged, circumstantial evidence and material has led the Assessing Officer to believe that the real is not the apparent. In the absence of any link between the assessee and the alleged, admissions of the directors and brokers, human probability is being used as a vague and convenient medium for the department's conjectures. To draw an adverse inference without any admissible evidence on record, is bad in law. In the light of the discussions that have preceded and for the reasons alluded we are of the view that the addition made by the assessing officer and confirmed by the Ld. CIT(A) needs to be deleted. Accordingly, we delete the additions made by assessing officer in case of Smt. Muktaben N. Patel and Shri Nishant K. Patel in the assessment year 2014-15." 7.4. Similarly, the Jurisdictional High Court in the case of PCIT Vs. Parasben Kasturchand Kochar (cited supra) held as follows: “.. 2. We take notice of the fact that the issue in the present appeal is whether the assessee earned long term capital gain through transactions with bogus companies. In this regard, the finding of fact recorded by the Tribunal in paras 9, 10 and 11 reads thus:- "9. In our considered opinion, in such case assessee cannot be held that he earned Long Term Capital gain through bogus company when he has discharged his onus by placing all the relevant details and some of the shares also remained in the account of the Principal Commissioner Of vs Para the appellant after earning of the long term capital gain. 10. Learned A.R. contention is that no statement of the Investigation Wing was given to the assessee which has any reference against the assessee. 11. In support of its contention, learned A.R. also cited an order of Coordinate Bench in ITA No.62/Ahd/2018 in the matter of Mohan Polyfab Pvt. Ltd. Vs. ITO wherein ITAT has held that A.O. should I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 22 have granted an opportunity to cross examine the person on whose statement notice was issued to the assessee for bogus long term capital gain. But in this case, neither statement was supplying to the assessee nor cross examination was allowed by the learned A.O. Therefore, in our considered opinion, assessee has discharged his onus and no addition can be sustained in the hands of the assessee." 3. Thus, the Tribunal has recorded the finding of fact that the assessee discharged his onus of establishing that the transactions were fair and transparent and further, all the relevant details with regard to such transactions were furnished before the Income Tax authorities and the Tribunal also took notice of the fact that some of the shares also remained in the account of the appellant. 4. We take notice of the fact that the assessee has a Demat Account maintained with the ICICI Securities Ltd. and has also furnished the details of such bank transactions with regard to the purchase of the shares. In the last, the Tribunal took notice of the fact that the statements recorded by the investigation wing of the Revenue with regard to the Tax entry provided were informed to the assessee despite giving him opportunity to meet such an allegation. In the overall view of the matter, we believe that the proposed question cannot be termed as a substantial question of law for the purpose of maintaining the appeal under Section 260-A of the Act, 1961. 5. In the result, this appeal fails and is hereby dismissed. 7.5. Further the Co-ordinate Bench of the Mumbai Tribunal in the case of DCIT vs. Shri Dilip B. Jiwrajka (cited supra) distinguished the Calcutta High Court judgment held as follows: “... 51. Apart from the above, we have also taken suo-motto judicial notice of the judgment rendered by the Hon’ble Calcutta High Court in the case of Pr. CIT Vs Swati Bajaj (288 Taxman 403). Having carefully perused the same, it is noted that peculiar facts were involved before the Hon’ble Court wherein eighty-nine different appeals of different assessee’s were disposed off by the Tribunal in a single consolidated order without taking cognizance of the specific facts involved in each case (appeals preferred by different assessee’s). The relevant observations made by the Hon’ble High Court is as follows: I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 23 “40. Before we examine the contentions, we are tempted to point out that the exercise done by the tribunal was a bit perfunctory. There is absolutely no discussion of the factual position in any of the 89 appeals, the exception is in paragraph 4 with regard to the certain facts of the assessees case (SwatiBajaj). We are not very appreciative of the manner in which the bunch of appeals have been disposed of. The cardinal principles which courts and tribunal have followed consistently is that each assessment year is an individual unit and unless and until it is shown that there are distinguishing feature in a particular assessment year, the decision taken for the earlier years are to be followed to ensure consistency. While doing so the Courts/Tribunals are required to examine the facts and render a finding as to why the decision in the earlier assessment years should be adopted or not.” 52. Apart from the above, the Hon’ble Court noted that the assessee had never mentioned before the AO that, he wanted the copy of investigation report or the statements of the brokers/entry operators and therefore the assessee’s plea regarding non-availability of relevant material or denial of cross-examination claimed was rejected. The relevant observation of the Hon’ble High Court is as under: “...Nothing prevented the assessee from mentioning that unless and until the report is furnished and the statements are provided, they would not in a position to take part in the enquiry which is being conducted by the assessing officer in scrutiny assessment under Section 143(3) of the Act.” 53. In the instant case, a specific request was made for a copy of investigation report as well as copies of statements recorded of different persons. The assessee is noted to have rebutted whatever details were provided by the AO and had sought cross-examination as well. Hence, the facts involved in the present case are noted to be distinguishable from the above case. Further, in respect of the circumstantial evidences the Hon’ble Calcutta High Court has not disturbed the settled position of law that circumstantial evidences can be looked into only when direct evidences are not available (Para 69). In the instant case, direct irrefutable evidences were made available to the AO and, therefore, ignoring the direct evidences and jumping to circumstantial evidences is not justified even if one refers to the decision of Hon’ble Calcutta High Court. Moreover, as noted by us earlier, this issue at hand is squarely covered by the binding judgments of the Hon’ble jurisdictional High Court, in favour of the assessee, and, therefore following the judicial discipline, I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 24 the order of the Ld. CIT(A) does not require any interference since we have the benefit of guidance on this subject by the Hon‟ble jurisdictional High Court, which is binding upon us. 7.6. Similarly, the Co-ordinate Bench of this Tribunal in ITO Vs. Devyani Dharmendra Shah in ITA No.576/Ahd/2020 dated 15.06.2022 held as follows: “... 7. We have heard the rival contentions and perused the material on record. The Assessing Officer has not doubted the purchase of shares were through banking channels. While making the additions, the ld. Assessing Officer has not brought any material how the assessee has brought its own unaccounted money for the acquisition of the shares specially when the purchase of shares was not doubted and shares have been sold on Stock Exchange. Further, the ld. Assessing Officer has not brought on record statement of any persons through whom assessee’s own unaccounted money has been brought in. As stated above, the appellant has held the shares for over 3 years and it would be incorrect to treat sale of shares as bogus merely on the basis of suspicion and on account of fact that a substantial quantum of capital gains has been made by the assessee. In the present case, no material has been brought on record to suggest that purchase and sale of shares were bogus. The ld. Assessing Officer has not brought any material to support his finding that there has been collusion or connivance between the broker and the assessee for the introduction of his own unaccounted money. In the present case, despite the assessee’s specific request, no opportunity of cross examination was provided to the assessee on the basis of whose statements reliance has been placed to hold that the sale of shares was sham / bogus. It would be useful at this stage to refer to some judgments which have dealt with the issue before us: (i) In the case of PCIT vs. Smt. Krishna Devi, ITA No.125/2020, the Delhi High Court vide order dated January 27, 2021 held that the fact that there was an astounding jump in the share price within two years, which is not supported by the financials, does not justify the AO's conclusion that the assessee converted unaccounted money into fictitious exempt LTCG to evade taxes. The finding is unsupported by material on record & is purely an assumption based on conjecture. The relevant extract of the judgment is reproduced for ready reference: I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 25 12. Mr. Hossain’s submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent. ....... 13. The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order. (ii) The Lucknow ITAT in the case of Achal Gupta vs. ITO (ITAT Lucknow) I.T.A. No.501/Lkw/2019 held that the documents demonstrates that the assessee had purchased shares through Brokers for which the payment was made through banking channels. The assessee had sold shares through an authorized stock broker and payment was received through banking channels after deduction of STT. The AO has not doubted any of the documents. The only objection raised is that the scrip from which the assessee had earned Long Term Capital Gain has been held by the Investigation Wing of the Revenue to be a paper entity and that this scrip was being used for creating artificial capital gain. The objection was not found to be acceptable. (iii) The Mumbai ITAT in the case of Dipesh Ramesh Vardhan vs. DCIT (ITAT Mumbai) I.T.A. No.7648/Mum/2019 held that the AO has not discharged the onus of controverting the documentary evidences furnished by the assessee and by bringing on record any cogent material to sustain the addition. The allegation of price rigging / manipulation has been levied without establishing the vital link between the assessee and other entities. The whole basis of making additions is third party statement and no opportunity of cross- examination has been provided to the assessee to confront the said party. As against this, the assessee's position that the transactions were genuine and duly supported by various documentary evidences, could not be disturbed by the revenue. (iv) The Delhi ITAT in the case of Suresh Kumar Agarwal vs. ACIT, ITA No 8703/Del/2019 held that the assessee has produced contract notes, demat statements etc & discharged the onus of proving that he bought & sold the shares. The AO has only relied upon the report of I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 26 the investigation wing alleging the transaction to be bogus. The ITAT held that the AO ought to have examined a number of issues (which are enumerated in the order) and shown that the transaction is bogus. The capital gains are genuine and exempt from tax. (v) The Mumbai ITAT in the case of Vijayrattan Balkrishan Mittal vs. DCIT, ITA No.3311/Mum/2019 held that the fact that a scam has taken place in some penny stocks does not mean that all transactions in penny stocks can be regarded as bogus. In deciding whether the claim is genuine or not, the authorities have to be guided by the legal evidence and not on general observations based on statements, probabilities, human behavior, modus operandi etc. The AO has to show with evidence the chain of events and live link of the assessee's involvement in the scam including that he paid cash and in return received exempt LTCG gains. 7.1 . Notably in the case of Anjana Sandeep Rathi Vs ACIT (ITAT Mumbai) in ITA. No. 4369/MUM/2018, the ITAT Mumbai held that LTCG on sale of shares of M/s Sunrise Asian Limited was not bogus/ sham transaction. While adjudicating in favour of the assessee, observed as under: 5. We have heard the submissions made by rival sides and have perused the orders of authorities below. The assessee in appeal has assailed the findings of CIT (A) in disallowing benefit of section 10(38) of the Act on long term capital gain arising from sale of shares. The assessee during the relevant period had sold shares of M/s. Sunrise Asian Ltd. for a consideration of Rs.14,99,917/-. The authorities below held the sale transaction in aforementioned scripts as bogus and thus, made addition under section 68 of the Act. We find that similar disallowance was made in the case of Narayan R. Rathi (father-in-law of the present assesse/appellant) for the assessment year 2014-15. Narayan R. Rathi had also sold the shares of same company i.e. M/s. Sunrise Asian Ltd. The issue travelled to the Tribunal. The Co-ordinate Bench of the Tribunal in ITA No. 4811/Mum/2018 (supra) deleted the addition. The Tribunal while allowing the appeal of Narayan R. Rathi held that the principles of natural justice were violated, the benefit of cross examination was not afforded to the assessee, hence, the addition is unsustainable. The relevant extract of the finding of Tribunal are reproduced herein below:- “11. The authorities below have not doubted the documentary evidence produced by the assessee to prove the genuineness of the transaction of sale and purchase of the shares in question. Further, the authorities below have not pointed out any evidence on record to hold that the assessee has obtained bogus entries in connivance with entry operators and brokers etc., in order to claim bogus LTCG. As pointed out by the Ld. I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 27 counsel, the assessee was not given an opportunity to cross examine the witnesses whose statements were relied upon and on the basis of their statements it was concluded that the transaction in question was a part of penny stock scam. So, in view of the cases discussed in the foregoing paras, particularly the ratio laid down by the Hon’ble Supreme Court in the case of M/s Andaman Timber Industries (supra), we are of the considered view that the Ld. CIT (A) has wrongly confirmed the assessment order passed by the AO in violation of the principles of natural justice. Hence, the impugned order passed by the Ld CIT (A) suffers from legal infirmity. We, therefore, allow the sole ground of appeal of the assessee and set aside the impugned order passed by the Ld. CIT (A). Accordingly, we direct the AO to allow the claim of the assessee.” 6. The ld. Departmental Representative has failed to controvert the findings of Tribunal in the case of Shri Narayan R. Rathi whose case is on the same pedestal with identical set of facts. In fact a perusal of the assessment order in the case of assesse reveal that the Assessing Officer in para 8.3 has observed that 3000 shares were jointly held by the assesse and Narayan Ramachandra Rathi. The facts of present case are similar to the facts of case in the case of Narayan R. Rathi decided by the Co-ordinate Bench. No distinction in facts has been brought to our knowledge by the Department. Thus, for the parity of reasons, addition made under section 68 of the Act deserves to be deleted. Further, the Assessing Officer is directed to allow the benefit of section 10(38) of the Act to the assessee. 7. In the result, the appeal of the assessee is allowed. 7.2 In light of the above decisions, we are of the considered view that Ld. CIT(A) has not erred in law and in facts in allowing the assessee’s appeal. ” 8. It is appropriate to place on record the Hon'ble Supreme Court decisions in the case of Omar Salav Mohamed Sait reported in (1989) [37 ITR 151] (SC) where it is held that no addition can be made on the basis of surmises, suspicion and conjectures. In the case of CIT(Central), Kolkata vs. Daulat Ram Rawatmull reported in [87 ITR 349], the Hon'ble Apex Court held that, the onus to prove that the apparent is not the real is on the party who claims it to be I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 28 so. The burden of proving a transaction to be bogus has to be strictly discharged by adducing legal evidences, which would directly prove the fact of bogusness or establish circumstance unerringly and reasonably raising an interference to that effect. The Hon'ble Supreme Court in the case of Umacharan Shah & Bros. Vs. CIT [37 ITR 271] held that suspicion however strong, cannot take the place of evidence. 8.1. Respectfully following the above judgments of the Jurisdictional High Court and that of the Co-ordinate Benches of the Tribunal, we have no hesitation in confirming the order passed by ld. CIT(A) and deleting the additions made by the Assessing Officer u/s. 68 and u/s. 69C of the Act. Thus the grounds raised by the Revenue are devoid of merits and the same are liable to be rejected. 9. In the result, the appeal filed by the Revenue is hereby dismissed. ITA No. 565/Ahd/2019 for A.Y. 2012-13 10. For the Assessment Year 2012-13, the assessee filed its Return of Income declaring a loss of Rs. 27,114/-. The return was processed u/s. 143(1) on 21.02.2013 accepting the returned loss. Thereafter the assessment was reopened by issuing a notice u/s.148 to verify the unsecured loans of Rs. 7,92,25,400/- received from M/s. Dolex Commercial Pvt. Ltd. and Accute Consultancy Pvt. Ltd. based on certain information received from Investigation Wing. During the reassessment proceedings, the assessee filed I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 29 confirmation from loan creditors, bank statement reflecting the loan amount received in cheque and debit note, balance sheet, Profit and Loss account of the lenders, Income Tax Returns of the lenders, copy of the confirmation and bank statement as and when the payments were made in subsequent years were furnished by the assessee before the Assessing Officer. 10.1. During the reassessment proceedings, the Assessing Officer issued summons u/s. 133(6) to Dolex Commercial Pvt. Ltd. and Accute Consultancy Ltd. As per AO’s version, they have not replied to the notices. Therefore the Assessing Officer held that the assessee was not able to prove the genuineness, creditworthiness of the unsecured loans and added as unexplained cash credit u/s. 68 of the Act and demanded tax thereon. 11. Aggrieved against the reassessment order, the assessee filed an appeal before Ld. CIT(A) The ld. CIT(A) deleted the additions made by the Assessing Officer vide his detailed appellate order which reads as follows: “... The AO is of the opinion that the identity of creditors and genuineness of the transaction is not proved. The appellant has submitted date-wise trail of incoming of impugned funds and subsequently repayment of the same through banking channel. As can be seen from record, the appellant has submitted name/address/PAN/copy of bank statement/acknowledgement of ITR/Statement of Income and confirmation of ledger accounts. The appellant has repaid the entire loan. The appellant has emphasized following details on record: 1. Loan creditors confirmation. 2. Bank statements reflecting the loan amount received in cheques and other documentary evidences such as debit note etc. I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 30 3. Balance sheet, profit and loss account and schedule thereof the lender parties to prove their capacity. 4. Copy of income tax returns acknowledgement of the lenders. 5. Copy of confirmation and bank statement as and when the payments were made in the subsequent year. It is seen that the return of for Dolex Commercial (P) Ltd for A.Y.2012-13 has been filled on 28/09/2012 u/s.139(1) of I.T. Act, 1961. However, for --Acute Consultancy Ltd it has been claimed that it was trade advance which was paid through banking channel as per details below: DATE Cheque No. Amount Page No 1 .44 04/03/2015 RTGS 11,75,400/- 1.44 04/03/2015 RTGS 53.00.000/- 1.44 05/03/2015 RTGS 56.00.000/- 1.44 09/03/2015 RTGS 44,00,000/- 1.44 Total 1.64.75.400/- The appellant has filed paper book containing evidences to show the genuineness of transactions. In this background the appellant has tried to build up its case through submissions. The appellant has requested that both the depositor companies had sufficient capital and reserve to make advances and therefore, the creditworthiness are also proved. The appellant further explained that no cash was deposited prior to giving loans to the appellant company. The appellant further submitted that both the companies filed their return of income and are assessed to tax. The appellant explained that they were informed by the depositor companies regarding filing of reply / details in response to notice u/s. 133 (6) of the Act received by them. The appellant strongly urges that, notices u/s. 133 (6) of the Act were issued and served to them hence they are genuine creditors. The appellant emphasized that the observation of the AO regarding non- compliance of the said notice u/s. 133 (6) of the Act is incorrect. The appellant explained that, both the companies had replied to I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 31 the notice of 133 (6) of the Act and filed the details called for and had confirmed the transactions. Assuming but not admitting, in cases where the notice u/s. 133 (6) of the Act was served but the parties concerned had not replied, that is not a default of the assessee company and, therefore, no addition ought to be made merely because the lender companies did not reply to the notice u/s. 133 (6) of the Act. The appellant further explained that, in the old provisions of section 68 of the Act, they were not required to be proved the source of source. The appellant relied on the decision of Hon'ble Gujarat High Court in the case of DCIT Vis. Rohini Builders (2002) 256 ITR 360 (Guj.).The appellant further explained that the Assessing Officer did not make any inquiry with the Assessing Officer of the depositor companies. The appellant explained that, in such circumstances, the AO ought to have verified with the file of depositor companies as held by the Hon'ble Supreme Court in the case of CIT Vis. Orissa Corporation (P) Ltd (1986) 159 ITR 78) (SC). The appellant urges that no addition is justified merely on the base of inquiry conducted by the Investigation wing in some other cases unless material evidence is found in those cases or having paid undisclosed cash and obtained accommodation entries. The appellant strongly urges that, neither at the time of recording reasons nor at the time of assessment, any seized records is brought proving receipt of accommodation entries in lieu of cash. The appellant also submitted that the statement of Vipul Vidur Bhatt ought not to be relied unless the copy of statement is confronted and an opportunity to cross examine him was allowed. The appellant relies on following decisions of Hon'ble Supreme Court wherein addition was made without giving an opportunity to cross examine to the party concerned are deleted. The appellant relied on the decision of Hon'ble Supreme Court in the case of Kishanchand Chelaram Vis. CIT (125 ITR 713) (SC). ........................ I am aware about the ratio laid down by jurisdictional High Court in the case of CIT -Vs- RANCHHOD JIVABHAI NAKHAVA reported at 208 Taxmann 35; DCIT v. Rohini Builders (2002) 256 ITR 360; CIT vs. Dharamdev Finance Pvt. Ltd. 43 Taxmann 395 and other case laws supporting the case of the appellant as under: i) Murlidhar Lahorimal's CIT 280 ITR 512 (Guj) ii) CIT Vs. Pragati Co-op Bank Ltd. 278 ITR 170 (Guj.) I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 32 iii) CIT VS. Orissa Corporation Pvt. Ltd. 159 ITR 78 (SC) iv) CIT vs. Sanjay K. Thakkar Tax Appeal Nos.524 of 2004, 525 and 526 of 2004 and 579 to 583 of 2003 dated 12-9- 2005 (Guj. HC) v) ITO Vs Kalpar Credit & Mercantile Pvt. Ltd. in ITA No.421/Ahd/2008 (ITAT, Ahd.) I am not inclined to accept the findings of the A.O. Appellant can't be punished for default, if any, of related party (as vehemently argued in submission) as it has been held in CIT VS. CARBO IND HOLD LTD 244 ITR 0422 (Cal) such as "if share broker, even after issue of summons does not appear, for that reason, the claim of assessee should not be denied, especially in the cases when the existence of broker is not in dispute, nor the payment is in dispute. Merely because some broker failed to appear, assessee should not be punished for the default of a broker and on mere suspicion the claim of assessee should not be denied." The plethora of evidences on record cannot be ignored. In view of facts of the case and the ratio laid down by case laws (Supra), the addition made by the AO of Rs. 7,92,25,400/- u/s. 68 of the I. T. Act, 1961 is hereby deleted. The concerned ground of appeal is accordingly allowed.” 13. Aggrieved against this appellate order, the Revenue is in appeal before us raising the following Grounds of Appeal: (1) The Ld.CIT(A) has erred in law and on facts in deleting the addition u/s.68 of the I.T. Act amounting to Rs.7,92,25,400/- being loan received from Dolex Commercial (P) Ltd, and Acute Consultancy (P) Ltd. as unexplained cash credits despite the fact that the creditworthiness of the creditor was not proved. (2) The Ld. CIT(A) has erred in law and on facts in not appreciating the fact that the assessee had taken bogus accommodation entries in the form of unsecured loans duly entered in the books of account so as to evade or reduce the tax liability. (3) On the facts and circumstances, the Ld. CIT(A) ought to have upheld the order u/s. l43(3) of the I.T. Act passed by the Assessing Officer. I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 33 (4) It is therefore prayed that the order of the Ld. CIT(A) may be set aside and that of the order of the Assessing Officer be restored to the above extent. 14. The Ld. CIT-DR Shri A.P. Singh appearing for the Revenue submitted that the Ld. CIT(A) erred in deleted the addition made u/s. 68 being loan received from Dolex Commercial (P) Ltd, and Acute Consultancy (P) Ltd. despite the creditworthiness of the creditors were not proved. The Ld. CIT(A) also failed to appreciate the fact that the assessee had taken bogus accommodation entries in the form of unsecured loans, however duly entered in the books of account so as to evade or reduce the tax liability. In the above circumstances, the order passed by the Assessing Officer is required to be upheld and the additions made thereon is to be sustained. 15. Per contra the Ld. Counsel Shri Devendra Jain appearing for the assessee brought to our notice to the confirmation of accounts on sale of 8,23,770 equity shares of Conart Traders Ltd. at Rs. 20 per equity share, ledger account and allotment of equity shares by Conart Traders Ltd. and Income Tax Returns filed by Acute Consultancy (P) Ltd. for the Assessment Year 2012-13 along with Annual Reports at Page Nos. 30 to 53 of the Paper Book. Further confirmation of accounts, bank statements of the assessee is also placed on record at Page Nos. 54 to 56 of the Paper Book. Similarly, in the case of Dolex Commercial (P) Ltd. loan confirmation of accounts, bank statements, Income Tax Returns filed by Dolex Commercial (P) Ltd., the Annual Report, Balance sheet, Profit and Loss Account are also placed at Page Nos. 57 to 83 of the Paper I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 34 Book. The Assessee also produced the loan repayment details during the Financial Year 2018-19 with confirmation of accounts from Dolex Commercial (P) Ltd. Thus the Ld. Counsel pleaded as on 15.03.2019, the entire unsecured loan of Rs. 6,27,50,000/- was repaid to Dolex Commercial (P) Ltd. and there is no outstanding due to Dolex Commercial (P) Ltd. 15.1. The Ld. Counsel further submitted in response to the summons issued u/s. 133(6) by the Assessing Officer to Acute Consultancy (P) Ltd. vide its reply dated 15.12.2017 furnished the information of the sale of 8,23,770 equity shares of Conart Traders Ltd. to the assessee by enclosing the ledger account, loan confirmations, copy of debit note and acknowledgement of the Income Tax Return, the above details placed at Page Nos. 88 to 92 of the Paper book. However the A.O. having passed the assessment order on the very same day on 15.12.2017 has not taken note of the reply filed by Acute Consultancy (P) Ltd. and treated the transactions as bogus and made addition u/s. 68 of the Act. 15.2. Similarly, the Dolex Commercial (P) Ltd. vide its reply dated 15.12.2017 replied to the Assessing Officer enclosed the loan confirmation, copy of the ledger account, copy of the bank statements and copy of the Income Tax Returns for A.Y. 2012-13. Therefore the above additions made by the Assessing Officer is not sustainable in law and Ld. CIT(A) after going through the entire records deleted the above additions which does not require any interference. I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 35 15.3. In support of the same, the assessee relied upon the following case laws: 1. PCIT Vs. Ambe Tradecorp (P.) Ltd. [2022] 145 taxmann.com 27 (Gujarat); order dated 05.07.2022 2. CIT, Rajkot-1 Vs. Ayachi Chandrashekhar Narsangji [2014] 42 taxmann.com 251 (Gujarat); order dated 02.12.2013 3. JCIT(OSD) Vs. M/s. Shal Imar Housing & Finance Ltd. [I.T.A. No. 4079/Mum/2019; Order dated 01.06.2021] 4. Manibhadra Securities Services P. Ltd. Vs. ITO [ITA No.2507 and 1302/Ahd/2018; order dated 24.08.2022] 5. Shree Samruddhi Overseas Trading Co. Vs. DCIT/ACIT [I.T.A. Nos. 909 & 910/Ahd/2018; order dated 19.04.2021] 6. Rajhans Construction (P.) Ltd. Vs. ACIT [2022] 140 taxmann.com 370 (Surat-Trib.); order dated 14.03.2022] 7. CIT Vs. Ranchhod Jivabhai Nakhava [2012] 21 taxmann.com 159 (Guj.); order dated 20.03.2012 8. DCIT Vs. Rohini Builders [2003] 127 Taxman 523 (Gujarat); order dated 19.03.2001 16. We have given our thoughtful consideration and perused the materials available on record. The addition made by the Assessing Officer invoking Section 68 does not hold it good, since the assessee has filed the confirmation letter from the lenders, Bank statements, Income Tax Return and statement of total income of the various lenders. Thus the assessee has discharged its initial onus namely identity of the creditors, genuineness of the transactions and creditworthiness of the creditors. Further the Assessing Officer has disbelieved the same, but has no occasion about the repayment of loans by the assessee in subsequent assessment years. Thus the creditworthiness of the lender is proved. It is not the case of the Assessing Officer that cash was I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 36 deposited prior to giving loans to the assessee by the lender companies. It is a fact both the lender companies filed their respective Income Tax Return and assessed to tax, just because of the non-compliance of the notice and u/s. 133(6) does not make with the unsecured loans given by the creditors be treated as bogus. In fact both the creditors vide the respective letters dated 15.12.2017 replied to the Assessing Officer with the details namely loan confirmation accounts, bank statements, Income Tax Returns etc. Therefore the addition made by the Assessing Officer u/s. 68 of the Act is not sustainable in law. 16.1. Further the Hon’ble Jurisdictional High Court in the case of Ayachi Chandrashekhar Narsangji (cited supra) it was held as follows: Section 68, read with section 143, of the Income-tax Act, 1961 - Cash credit [Loans] -Assessment year 2006-07 - Assessing Officer framed assessment under section 143(3) wherein he made addition of Rs. 1.45 crore under section 68 on ground that loan taken from one ‘IA’ was not explained satisfactorily - On appeal, Commissioner (Appeals) was satisfied with respect to genuineness of transaction and creditworthiness of MA' and, therefore, deleted addition - It was found that total loan of Rs. 1.60 crore was advanced to assessee, out of which Rs.15 lakh was repaid - Therefore, an amount of Rs.1.45 crore remained outstanding to be paid to ‘IA’ - Balance loan amount was repaid by assessee in immediately next financial year - Whether when Department had accepted same, addition made by Assessing Officer was to be deleted - Held, yes [Para 6] [In favour of assessee] 16.2. In the case of CIT Vs. Shri Mahavir Crimpers, [2018] 95 taxmann.com 323 (Guj.) wherein it has been held as follows: "5. We have heard both the parties. There is no dispute so far as identity of the creditor party M/s. Raj Capital & Finance Pvt. Ltd. is concerned. There is further no quarrel that the Assessing Officer does not dispute the fact that the assessee has not availed any cash loan from the said entity. His only case is that the assessee has not been able to prove source along I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 37 with genuineness and creditworthiness of the above stated entity. It emanates from above extracted portion that the assessee has filed all relevant details along with assessment records of the said entity explaining source of the loans to the above entity's balance sheet indicating sufficient reserves, surplus and share premium as followed by repayment in succeeding assessment year. Learned Departmental Representative fails to rebut CIT (A)'s conclusion that the assessee has been having regular loan transactions with the said entity. We notice in this backdrop that Hon'ble Jurisdictional high court's decision in DCIT v. Rohini Builders, (2002) 256 ITR 360 (Guj) upholding tribunal's conclusion deleting Section 68 addition in view of identical details; squarely applies here. So in their lordships' latter decision in CIT v. Ayachi Chandrashekhar Narsangji (2014) 42 taxmann.com 251 (Guj) confirming this tribunal's another decision reversing Section 68 addition wherein the department head accepted repayment of loan in subsequent year to be correct. We take into account all these facts and judicial precedents to affirm CIT(A)'s findings under challenge deleting the impugned addition. This first substantive ground is accordingly declined." 16.3. In the case of CIT VIS RANCHHOD JIVABHAI NAKHAVA reported at 208 Taxmann.com 35 wherein it has been held as follows: "Once the Assessing Officer gets hold of the PAN of the lenders, it was his duty to ascertain from the Assessing Officer of those lenders, whether in their respective return they had shown existence of such amount of money and had further shown that those amounts of money had been lent to the assessee. If before verifying of such fact from the Assessing Officer of the lenders of the assessee, the Assessing Officer decides to examine the lenders and asks the assessee to further prove the genuineness and creditworthiness of the transaction, in our opinion, the Assessing Officer did not follow the principle laid down under Section 68 of the Income Tax Act. If on verification, it was found that those lenders did not I disclose in their income tax return the transaction or that they had not disclosed the aforesaid amount, the Assessing Officer could call for further explanation from the assessee to prove the genuineness of the transaction or creditworthiness of the same. However, without verifying such fact from the income tax return of the creditors, the action taken by the Assessing Officer in examining the lenders of the assessee was a wrong approach. Moreover, we find that those lenders have made inconsistent statement as pointed out by the Commissioner of Income Tax (Appeals) and in such circumstances we find that both the Commissioner of Income Tax (Appeals) and the Tribunal were justified in setting aside the deletion as the Assessing Officer, without taking step for verification of the Income Tax Return of the creditors, took unnecessary step of further examining those creditors. If the Assessing Officers of those creditors are satisfied with the I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 38 explanation given by the creditors as regards those transactions, the Assessing Officer in question has no justification to disbelieve the transactions reflected in the account of the creditors. In other words, the Assessing Officer had no authority to dispute the correctness of assessments of the creditors of the assessee when a co-ordinate Assessing Officer is satisfied with the transaction. We, thus, find that in the case before us the Tribunal below rightly set- aside the deletion made by the Assessing Officer, based on erroneous approach by wrongly shifting the burden again upon the assessee without verifying the Income Tax return of the creditors. The position, however, would have been different if those creditors were not income tax assessees or if they had not disclosed those transactions in their income tax returns or if such returns were not accepted by their Assessing Officers." 16.4. In the case of DCIT Vs. Rohini Builders, [2002] 256 ITR 360 (Guj.) wherein it has been held as follows: “Once primary documents are given, onus shifts from assessee to revenue. In absence of anything contradictory brought on the table, it wouldn't be fair to confirm addition u/s 68 of the Act. Gujarat High Court went on to the extent of confirming that even if creditors didn't turn up on issue of summons, even then, the transaction can't be termed as bogus because preliminary documents have been put forth by the assessee and nothing contradictory is observed by the revenue. It was contended by revenue that "creditworthiness" continues to remain unproved because a few alleged parties were i having a meagre income as against hefty deposits made. To this argument, the court held that assessee's duty is discharged once it shows the bank statement of the depositor. It is not assessee's look out to find out source to source, and get into the subject of how the creditor could afford that money. Source is what is required to be proved by the assessee, and the onus immediately gets discharged on submission of preliminary documents like a bank statement of the depositor. Also, if the revenue seriously felt that the source to source was bogus, in which case the resultant addition would fall in the hands of the depositors or investors u/s 69 of the Act. As far as assessee is concerned, he is required to prove that the alleged depositor or creditor, as the case be, had legitimate monies which were given to assessee through banking channel. How that monies were earned and whether or not the depositor is showing it in his personal return of income is beyond the scope of the assessee; if there are any doubts on the source to source then revenue can always approach the depositor." 16.5. In the case of ITO Vs. Shanti Enterprise, [2016] 71 taxmann.com 275 wherein it has been held as follows: I.T.A No.s 565 & 566/Ahd/2020 A.Y. 2012-13 & 2015-16 Page No ITO vs. M/s. Iceworth Reality LLP 39 ".....amounts were received by the assessee by account payee cheques and initial burden of proving the credits was discharged. It is held that the assessee need not prove the source of the credits and the fact that the explanation was not satisfactory would not automatically result in deeming amounts as income of the assessee...." 17. Respectfully following the above ratio of the judgments rendered by the Jurisdictional High Court, we have no hesitation in confirming the order of the Ld. CIT(A), who deleted the addition made by the Assessing Officer u/s. 68 of the Act. Thus the grounds raised by the Revenue in ITA Nos. 565/Ahd/2020 does not hold good on merits and the same is dismissed. 18. In the result, the appeal filed by the Revenue in ITA No.565 & 566/Ahd/2020 are hereby dismissed. Order pronounced in the open court on 13-03-2023 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 13/03/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद