DINESHKUMAR JAGNNATH KHANDELWAL HUF, Nagpur V. ITO, WARD- 2(1), Nagpur

ITA 58/NAG/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1334 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 10-08-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 23-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Bogus Share capital; Share purchase agreement; Principle of natural justice; Accommodation entries
• Section: 54F; 234B; 68

Judgement Text

1 ITA NOS. 58 & 59/NAG/2015. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO S . 58 & 59 /NAG/201 5 . ASSESSMENT YEAR S : 2003 - 04 & 2004 - 05. DINESHKUMAR KHANDELWAL, HUF, THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 2(1), NAGPUR. PAN AAAHD5051N. APPELLANT. RESPONDENT. APPELLANT BY : NONE. RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 10 - 08 - 2016 DATE OF PRONOUNCEMENT : 24 TH AUGUST, 2016 O R D E R THESE ARE APPEALS BY THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF LEARNED CIT(APPEALS) PERTAINING TO ASSESSMENT YEARS 2003 - 04 AND 2004 - 05. 2. ITA NO. 58/NAG/2015: THE GROUNDS OF APPEAL READ AS UNDER : 1. THE ORDER PASSED BY LEARNED A.O. IS ILLEGAL, INCORRECT, BAD IN LAW AND WITHOUT NATURAL JUSTICE. 2. THE LEARNED A.O. ERRED IN DISALLOWING THE PURCHASE VALUE OF SHARES AMOUNTING TO RS.69,336/ - FROM SALE PROCEEDS OF SHARES. 3. THE LEARNED A.O. ERRED IN DISALLOWING THE BANK CHARGES AMOUN TING TO RS. 3601/ - FROM SALE PROCEEDS OF SHARES. 4. THE LEARNED A.O. ERRED IN DISALLOWING THE INVESTMENT OF LONG TERM CAPITAL GAIN CHARGES IN THE HOUSE PROPERTY U/S 54F AMOUNTING TO RS. 27,01,600/ - . 5. THE LEARNED A.O. ERRED IN CHARGING THE INTEREST U/S 234 B AND 234C OF THE INCOME TAX ACT. 2 ITA NOS. 58 & 59/NAG/2015. 3. BRIEF FACTS OF THE CASE ARE AS UNDER : THE ASSESSEE HAS EARNED LTCG ON PURCHASE AND SALE OF SHARES OF SUMA FINANCE AND INVESTMENT LTD. THE PURCHASE OF THE SHARES WAS EFFECTED THROUGH SHARES BROKERS M/S MKM FINSEC PRIV ATE LIMITED, A MEMBER OF DELHI STOCK EXCHANGE ASSOCIATION. DURING THE COURSE OF INVESTIGATION BY THE INVESTIGATION WING OF DEPARTMENT AT NEW DELHI IT WAS FOUND THAT SOME PERSONS IN DELHI WERE GIVING ACCOMMODATION ENTRIES TO VARIOUS PERSONS ALL OVER THE CO UNTRY AND SOME ASSESSEES OF NAGPUR CHARGE HAD ALSO BEEN TAKEN THE BENEFIT OF THESE ACCOMMODATION ENTRIES. THE ENQUIRY WAS COMPLETED IN THE CASE OF THIS ASSESSEE AND IT REVEALED THAT THE ASSESSEE AND OTHERS HAVE BROUGHT THEIR UNACCOUNTED MONEY IN THEIR BOOK S IN THE FORM OF LONG TERM CAPITAL GAINS ON SALE OF PENNY SHARES BY AVAILING THE SERVICES OF ENTRY OPERATORS IN DELHI. IT WAS FURTHER FOUND THAT THE PURCHASE AND SALE OF THESE SHARES ARE NOT THROUGH DEMAT ACCOUNTS AND THE BROKERS THROUGH WHOM THE SHARES WE RE PURCHASED AND SOLD ARE THE VERY ENTRY OPERATORS WHO ARE MENTIONED IN THE LIST OF THE INVESTIGATION WING. DURING THE YEAR UNDER ASSESSMENT ASSESSEE HAS SHOWN INCOME FROM CAPITAL GAIN AT NIL AS UNDER : SALE OF VALUE OF SHARE .. RS. 23,11,785/ - LESS : BANK CHARGES .. RS. 3,601/ - RS. 23,08,184/ - LESS : PURCHASE VALUE .. RS. 69,336/ - RS. 22,38,848/ - LESS : INVESTMENT IN PURCHASE OF HOUSE. RS. 27,01,600/ - CAPITAL GAIN. RS. NIL. 3 ITA NOS. 58 & 59/NAG/2015. THE ASSESSEE HAS SOLD SHARES OF SUMA FINANCE AND INVESTMENT LTD. ON 12 - 07 - 2002 FOR RS. 13,30,194/ - AND ON 10 - 09 - 2002 FOR RS.4,77,035/ - THROUGH SJ CAPITAL LTD., 439/A, GALI SADAWALIM POOTH KHURD, NEW DELHI AND ON 05 - 08 - 2002 FOR RS.5,04,556/ - THROUGH MKM FINSEC PVT. LTD. TOTAL RS. 23,11,785/ - . THE STATEMENTS OF SHRI MAHESH GARG, DIRECTOR OF SJ CAPITAL LTD. WAS RECORDED ON 10 - 09 - 2003 AND HE STATED THAT HE USED TO ISSUE ACCOMMODATION ENTRIES BY TAKING CASH INCLUDING COMMISSION. SHRI MAHESH BATRA, DIRECTOR, MKM FINSEC PVT. LTD. H AS ALSO STATED IN HIS STATEMENT THAT HIS COMPANY GIVES ACCOMMODATION ENTRIES BY ACCEPTING CASH AND NOMINAL COMMISSION. IN RESPONSE TO NOTICES U/S 143(2), SHRI ASHOK AGRAWAL, CA ATTENDED BEFORE THE AO AND EXPLAINED THE CASE. DURING THE COURSE OF HEARING TH E ASSESSEE FILED THE COPY OF BANK ACCOUNT, CAPITAL ACCOUNT AND COPIES OF SHARE CERTIFICATES. THEN ASSESSEES COUNSEL WAS SHOWN THE STATEMENT RECORDED OF THE D IRECTORS OF THE ABOVE SAID COMPANIES AND ASKED TO EXPLAIN THE REASON FOR NOT DISALLOWING THE CLAI M OF THE ASSESSEE. THE COUNSEL FOR THE ASSESSEE REITERATED THE SAME ARGUMENTS WHICH WERE ADVANCED BY HIM BEFORE THE INVESTIGATION AUTHORITIES AT NAGPUR AND IN HIS SUBMISSION HE HAS STATED THAT IT IS WELL SETTLED LAW THAT THE ACTIVITY OF A PERSON DECLARED AS BAD ACTIVITY IN LATER STAGE OF A BUSINESS NEVER AFFECT THIRD PARTIES. THE AO HELD THAT T HE ASSESSEES ARGUMENT CANNOT BE ACCEPTED. THE BROKERS THROUGH WHOM THE SALE AND PURCHASE OF THE SHARES WERE EFFECTED, IN THEIR STATEMENTS CLEARLY STATED THAT THEY ARE DOING THE ACCOMMODATION ENTRIES ONLY BY ACCEPTING CASH AND COMMISSION FROM THE PARTIES AND NO ACTUAL TRANSACTIONS WERE DONE. THE STATEMENT OF SHRI MAHESH BATRA, DIRECTOR, MKM FINSEC PVT. LTD. WAS RECORDED BY ADDL. DIRECTOIR (INVESTIGATION), NEW DE LHI AND ALSO THE STATEMENTS OF ASSOCIATES OF MKM FINSEC PVT. LTD. THEY ALL STATED THAT THEY HAVE 4 ITA NOS. 58 & 59/NAG/2015. ISSUED CHEQUES AFTER RECEIVING CASH INCLUDING COMMISSION AND THE PURCHASES OF SHARES ARE ALSO NOT GENUINE. A LETTER ISSUED TO SUPERIOR FINLEASE LTD. CALLING F OR INFORMATION, WHICH BY ITS LETTER DATED 28 - 07 - 2007 INITIATED THAT THE COMPANY IS NOT IN KNOWLEDGE OF THE SALES MADE BY THE SHAREHOLDES AND THAT THE TRANSACTIONS ARE ALSO NOT MADE THROUGH DEMAT ACCOUNT. THE ASSESSEE HAS CLAIMED BANK CHARGES OF RS.3,601/ - . ON PERUSAL OF BANK ACCOUNT IT WAS NOTICED THAT NO SUCH AMOUNT IS DEBITED IN THE BANK ACCOUNT AND THE ASSESSEES CLAIM IS, ACCORDINGLY, DISALLOWED. IT IS FURTHER STATED THAT THE ASSESSEE RECEIVED SALE PRICE OF THE SHARES SOLD BY HIM, ON THE FOLLOWING DATE S: DATE PARTICULARS BANK NAME AMOUNT. 06.08.2002 FROM MKM FINSEC PVT.LTD. PNB 5,00,000.00 09.08.2002 FROM SJK CAPITAL PNB 5,98,800.00 09.08.2002 FROM SJK CAPITAL PNB 3,99,200.00 27.08.2002 FROM SJK CAPITAL PNB 2,99,400.00 10.09.2002 FROM SJK CAPITAL PNB 4,99,000.00 TOTAL 22,96,400.00 THE ASSESSEE ALLEGED TO HAVE SPENT THE ABOVE AMOUNT ON PURCHASE OF HOUSE PROPERTY AS UNDER : DATE PARTICULARS CHQ. NO. AMOUNT. 06.06.2002 HOUSE PURCHASE 559159 430,001.00 24.09.2002 HOUSE PURCHASE 315487 1000,000.00 24.10.2002 STAMP DUTY PAID IN CASH 243,020.00 24.10.2002 REGISTRATION EXPENSES PAID 20, 380.00 25.10.2002 OTHER EXPENSES PAID OUT 8,199.00 25.10.2002 HOUSE PURCHASE 315489 1000,000.00 TOTAL RS. 27,01,600.00 5 ITA NOS. 58 & 59/NAG/2015. HOWEVER, THE AO OBSERVED THAT ON PERUSAL OF THE SALE DEED IT WAS FOUND THAT THE ASSESSEE HAS MADE PAYMENT OF RS.4,30,001/ - ON THE DATE OF AGREEMENT I.E. 22.05.2002 WHICH IS BEFORE THE SALE OF THE SHARES AND THE FINAL PAYMENT IS MADE ON 25.10.2002, WHICH IS AFTER 2 MONTHS OF SALE PROCEEDS RECEIVED. THE ASSESSEE DEPOSITED THE ALLEGED SALE PRICE OF THE SHARES IN HIS REGULAR ACCOUNT FOR EARNING INCOME THEREFROM AND NOT DEPOSITED THE SAME IN THE SPECIFIC ACCOUNT FOR THE CAPITAL GAINS AND UTILISED THE SAME FOR OTHER PURPOSES. THUS THERE IS NO PROOF WITH THE ASSESSEE TO SHOW THAT THE SAME AMOUNT OF SALE PROCEEDS WERE UTILISED FOR THE PURCHASE OF HOUSE PROPERTY. ON THIS GROUND ALSO, THE ASSESSEES CLAIM CANNOT BE ALLOWED. 4. UPON AS SESSEES APPEAL, LEARNED CIT(APPEALS) HELD AS UNDER : 6. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER, THE SUBMISSION OF THE AR OF THE APPELLANT AND THE MATERIAL ON RECORD. 6.1 ON CAREFUL EXAMINATION OF THE FACTS, IT IS SEEN THAT THE AO HAS CLEARLY BROUGHT OUT A CASE THAT THE APPELLANT HAS MANAGED ACCOMMODATION ENTRIES THROUGH THE HAWALA BROKERS UNDER GUISE OF SALE OF SHARES. THE PURCHASE OF SHARES WAS EFFECTED THROUGH THE BROKERS, M/S MKM FINSEC PRIVATE LIMITED, A MEMBER OF DELHI STOCK EXCHANGE ASSO CIATION AND THE INVESTIGATION CONDUCTED BY THE INVESTIGATION WING, DELHI AND NAGPUR REVEALED THAT THE APPELLANT IS ONE OF THE BENEFICIARIES OF SUCH ACCOMMODATION ENTRIES THROUGH THE HAWALA OPERATORS. THIS HAS BEEN DONE WITH THE MOTIVE TO CONVERT THE UNACCO UNTED MONEY INTO THE WHITE FUNDS AND, ACCORDINGLY, MADE THE CLAIM TO DERIVE BENEFIT U/S 54F OF THE ACT WITHOUT ANY TAX LIABILITY. 6.2 THE AR OF THE APPELLANT IN THE COURSE OF APPELLATE PROCEEDINGS HAS CONTENDED THAT THE AMOUNT OF SALE CONSIDERATION RECEIVE D ON SALE OF SHARES HAS BEEN UTILISED FOR THE PURPOSE OF PURCHASE OF A RESIDENTIAL HOUSE, THEREFORE THE DEDUCTION U/S 54F IS ALLOWABLE TO THE APPELLANT. 6.3 ON CAREFUL EXAMINATION OF THE FACTS, IT IS SEEN THAT THE APPELLANT HAS NOT SATISFIED THE BASIC COND ITIONS LAID DOWN U/S 54F OF THE ACT. TO CLAIM DEDUCTION U/S 54F CERTAIN CONDITIONS STIPULATED THEREIN ARE REQUIRED TO BE SATISFIED. IT, HOWEVER, IS SEEN THAT IN THE CASE OF THE PRESENT APPELLANT, THE APPELLANT HAS GROSSLY FAILED TO FURNISH THE DETAILS OF P URCHASE OR CONSTRUCTION OF A RESIDENTIAL HOUSE WITHIN THE STIPULATED PERIOD. THE APPELLANT HAS ALSO NOT BEEN ABLE TO DEMONSTRATE EITHER DURING THE 6 ITA NOS. 58 & 59/NAG/2015. ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS WHETHER THE AMOUNT NOT INVESTED IN THE RESIDENTIAL HOUSE WAS DEPOSITED IN THE SPECIFIED ASSET, AS STIPULATED U/S 54F OF THE ACT. 6.4 THUS, THE APPELLANT HAS GROSSLY FAILED TO SUBSTANTIATE HIS CLAIM FOR GRANT OF DEDUCTION U/S 54F OF THE ACT. THE APPELLANT HAS NOT FILED ANY SORT OF DOCUMENT IN SUPPORT OF HIS CLAIM FOR INVESTMENT IN A RESIDENTIAL HOUSE. THE APPELLANT HAS ALSO FAILED TO SUBSTANTIATE THE TRANSACTION OF PU RCHASE AND SALE OF THE SHARES WITHOUT ANY DOCUMENTARY EVIDENCES. I, THEREFORE, DECLINE TO INTERFERE WITH THE ORDER OF THE AO. THIS GROUND IS DISMISSED ACCORDINGLY, BOTH ON MERITS AND LEGALITY. 5. FURTHER LEARNED CIT(APPEALS) ALSO REJECTED THE ASSESSEES CL AIM OF DISALLOWANCE OF THE PURCHASE VALUE OF SHARES AMOUNTING TO RS.69,336/ - FROM THE SALE PROCEEDS AND ALSO BANK CHARGES AMOUNTING TO RS.3601/ - . 6. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 7. I HAVE HEARD THE LEARNED D.R. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, IN MY CONSI DERED OPINION, THE ISSUE CAN BE ADJUDICATED BY HEARING THE LEARNED D.R. AND PERUSING THE RECORDS. 8. UPON CAREFUL CONSIDERATION I FIND THAT THE LEARNED CIT(APPEALS) HAS PASSED AN ELABORATE AND WELL R EASONED ORDER. THE AO HAS CLEARLY BROUGHT ON RECORD THE ASSESSEES TRANSACTIONS WHICH ARE NOTHING BUT ACCOMMODATION ENTRIES THROUGH HAWALA OPERATORS. THIS HAS BEEN DONE WITH A MOTIVE TO CONVERT THE UNACCOUNTED MONEY INTO WHI T E FUNDS. 9. IDENTICAL ISSUE HAS BEEN CONSIDERED BY THIS ITAT IN ITA NO. 61/NAG/2013 IN THE CASE OF SHRI SANJAY BIMALCHAND JAIN VS. ITO VIDE ORDER DATED 18 - 07 - 2016 WHEREIN IT WAS HELD AS UNDER : 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE FACTS OF THE CASE CLEARLY IND ICATE THAT THE ASSESSEE HAS INDULGED IN PENNY STOCK TRANSACTION. THE ASSESSEE IS A SENIOR CITIZEN. ON PURPORTED ADVICE OF AN INCOME - TAX CONSULTANT, SHE PURCHASED SHARES OF TWO PENNY STOCK CALCUTTA BASED COMPANIES AT RS.5.50 PER SHARE AND RS.4/ - PER SHARE RESPECTIVELY IN 2003. BOTH THE COMPANIES HAD NO STANDING AND THE AO FOUND THEIR EXISTENCE OF DUBIOUS CHARACTERS. BOTH PURPORTEDLY MERGED WITH OTHER 7 ITA NOS. 58 & 59/NAG/2015. COMPANY, NAMELY, KHOOBSURAT LTD. AND THE ASSESSEE RECEIVED SHARES IN KHOOBSURAT LTD. IN LIEU OF HER SHARE S IN EARLIER COMPANIES. THE ASSESSEE WAS ABLE TO SELL THE SHARES AT THE PRICE OF RS.486.55 AND R.485.65 RESPECTIVELY IN 2005. THE PURCHASE BY THE ASSESSEE OF SHARES OF TWO UNKNOWN COMPANIES WHOSE DETAILS WERE NOT AT ALL KNOWN BY THE ASSESSEE CAN BY NO STRE TCH OF IMAGINATION BE SAID TO BE AN INVESTMENT TRANSACTION. THE COMPANY WHOSE SHARES ROSE FROM RS.5/ - TO RS.485/ - WITHIN EXTREMELY SHORT SPAN HAS NO WORTHWHILE POSITION AND BALANCE SHEET AND IS NOT AT ALL DIVIDEND PAYING COMPANY. THE BROKER COMPANY THROUGH WHICH THE SHARES WERE SOLD DID NOT RESPOND TO AOS LETTER REGARDING THE NAMES AND ADDRESS AND BANK ACCOUNT OF THE PERSON WHO PURCHASED THE SHARES SOLD BY THE ASSESSEE. IN THESE CIRCUMSTANCES IT IS A CLEAR CASE WHERE THE ASSESSEE HAD INDULGED IN BOGUS AND DUBIOUS SHARE TRANSACTION MEANT TO ACCOUNT FOR THE BOGUS AND UNDISCLOSED INCOME IN THE GARB OF LONG TERM CAPITAL GAIN. 7. IN THIS REGARD I MAY GAINFULLY REFER TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAJOR METALS LTD. VS. UNION OF INDIA AND OTHERS IN WRIT PETITION NO. 397 OF 2011 VIDE ORDER DATED 22 ND FEBRUARY, 2012. THE HONBLE JURISDICTIONAL HIGH COURT IN THIS CASE HAS HELD THAT A COMPANY CANNOT COMMAND DISPROPORTIONATE AND HUGE SHARE PREMIUM AND SUCH RECEIPT OF BOGUS SHARE APPLICATION MONEY EVEN THOUGH THROUGH BANKING CHANNEL CAN BE HELD TO BE ASSE SSEES UNDISCLOSED INCOME RECEIVED IN THE GARB OF UNJUSTIFIED SHARE APPLICATION MONEY. IN THE PRESENT CASE I FIND THAT THERE IS NO JUSTIFICATION WHATSOEVER THAT THE SHARES OF AN UNKNOWN COMPANY OF RS.5/ - CAN BE SOLD WITHIN TWO YEARS TIME AT RS.485/ - WITHOU T THERE BEING ANY REASON ON RECORD. THIS UNEXPLAINED SPURT IN THE VALUE OF UNKNOWN COMPANY SHARES IS BEYOND PREPONDERANCE OF PROBABILITY. IT HAS BEEN HELD BY HONBLE APEX COURT IN THE CASE OF DURGA PRASAD MOR AND SUMATI DAYAL THAT THE TEST OF HUMAN PROBA BILITIES HAVE ALSO TO BE APPLIED BY THE AUTHORITIES BELOW. IN THE CASE OF SUMATI DAYAL 214 ITR 801, IT WAS HELD THAT DURING THE YEAR 1970 - 71 (PERTAINING TO THE ASSESSMENT YEAR 1971 - 72) BETWEEN APRIL 6, 1970, AND MARCH 20, 1971, THE APPELLANT CLAIMS TO HAVE WON IN HORSE RACE A TOTAL AMOUNT OF RS.3,11,831/ - ON 13 OCCASIONS OUT OF WHICH TEN WINNINGS WERE FROM JACKPOTS AND THREE WERE FROM TREBLE EVENTS. SIMILARLY IN THE YEAR 1971 - 72, THE APPELLANT WON RACES ON TWO OCCASIONS AND BOTH TIMES THE WINNING WERE FROM A JACKPOT. THESE RECEIPTS WERE TESTED ON THE TOUCH STONE OF HUMAN PROBABILITY AND IT WAS FOUND THAT APPARENT WAS NOT REAL. THAT IT WAS CONTRARY TO STATISTIC AL THEORY AND EXPERIENCE OF THE FREQUENCIES AND PROBABILITIES. THE EXCEPTIONAL LUCK ENJOYED BY TH E ASSESSEE WAS HELD TO BE BEYOND PREPONDERANCE OF PROBABILITY. HENCE THE HONBLE APEX COURT HAS AFFIRMED THE VIEW THAT IT WOULD NOT BE UNREASONABLE TO INFER THAT THE APPELLANT HAD NOT REALLY PARTICIPATED IN ANY OF THE RACES EXCEPT TO THE 8 ITA NOS. 58 & 59/NAG/2015. EXTENT OF PURCHAS ING THE WINNING TICKETS AFTER THE EVENTS PRESUMABLY WITH UNACCOUNTED FUNDS. 8. WHEN THE PRESENT CASE IS EXAMINED ON THE TOUCH STONE OF ABOVE CASE LAW, IT IS CLEAR THAT THESE TRANSACTIONS OF THE ASSESSEE CAN BY NO STRETCH OF IMAGINATION BE CONSIDER ED AS INVESTMENT TRANSACTIONS. THEY ARE ONLY MAKE BELIEVE TRANSACTION. HENCE I DO NOT FIND ANY INFIRMITY IN THE REVENUE TAXING THE RECEIPT IN THIS REGARD. 9. THE ENTIRE AMOUNT OF THE SO CALLED RECEIPT OF SHARE SALES COULD WELL ALSO BE TREATED AS UNEXPLA INED CREDIT U/S 68 OF THE I.T. ACT AS IT HAS ALL THE INGREDIENTS OF ATTRACTING THE RIGOURS OF THE SAID SECTION. SECTION 68 OF THE I.T. ACT PROVIDES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE AO SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME - TAX AS INCOME OF THE ASSESSEE OF THAT YEAR. IN THE PRESENT CASE THE ASSESSEES EXPLANATION THAT THE SAID RECEIPT IS ON ACCOUNT OF INVESTMENT IN SHARES WHEREBY SHARE OF RS.5/ - OF UNKNOWN COMPANY HAS JUMPED TO RS.485/ - IN NO TIME HAS BEEN TOTALLY REJECTED BY THE AUTHORITIES BELOW. THE ASSESSEE HAS NOT AT ALL BEEN ABLE TO ADDUCE COGENT EVIDENCES IN THIS REGARD. THERE IS NO ECONOMIC OR FINANCIAL JUSTIFICATION FOR THE SALE PRICE OF THESE SHARES. THE SO CALLED PURCHASER OF THESE SHARES HAS NOT BEEN IDENTIFIED DESPITE EFFORTS OF THE AO. THE BROKER COMPANY THROUGH WHICH SHA RES WERE SOLD DID NOT RESPOND TO QUERIES IN THIS REGARD. HENCE THE FANTASTIC SALE PRICE REALISATION IS NOT AT ALL HUMANLY PROBABLY, AS THERE IS NO ECONOMIC OR FINANCIAL BASIS, THAT A SHARE OF LITTLE KNOWN COMPANY WOULD JUMP FROM RS. 5/ - TO 485/ - , IN THES E CIRCUMSTANCES, I DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY I AFFIRM THE SAME AND DECIDE THE ISSUE AGAINST THE ASSESSEE. 10. IN VIEW OF THE ABOVE DISCUSSION AND PRECEDENT I DO NOT FIND ANY INFIRMITY IN TH E ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY I UPHOLD THE SAME. 11. ITA NO. 59/NAG/2015: THE GROUNDS OF APPEAL READ AS UNDER : 1. THE ORDER PASSED BY THE LEARNED A.O. IS ILLEGAL, INCORRECT, BAD IN LAW AND WITHOUT NATURAL JUSTICE. 9 ITA NOS. 58 & 59/NAG/2015. 2. THE ADDITION MADE BY LEARNED AO READ WITH ORDER OF HONBLE CIT(A) IS INCORRECT, ILLEGAL, BAD IN LAW AND WITHOUT NATURAL JUSTICE. THUS, THE ADDITION OF RS.9,55,900/ - LEVIED BY AO IS TO BE DELETED. 3. THE LEARNED A.O. ERRED IN CHARGING THE INTEREST U/S 234B AND 234C OF THE INCOME TAX ACT. 12. THE FACTS OF THIS CASE ARE SIMILAR TO THE ONE DEALT WITH IN THE ABOVE SAID APPEAL FOR ASSESSMENT YEAR 2003 - 04. FOLLOWING THE SAME REASONING AS IN THE AFORESAID APPEAL, I UPHOLD THE ORDER OF LEARNED CIT(APPEALS).ACCORDINGLY THIS APPEAL IS ALSO DISMISSE D. 13. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF AUGUST,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 24 TH AUGUST, 2016. COPY FORWARDED TO : 1. DINESHKUMAR JAGANNATH KHANDELWAL, 33, BHARAT NAGAR, AMRAVATI ROAD, NAGPUR. 2. I.T.O., WARD - 2(1) , NAGPUR. 3. C.I.T. - I, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.