Appeal Details
Counselvise Citation
[2021] 107 COUNSELVISE.COM (IT) 5646 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
3 year(s) 4 month(s) 5 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-09-2021
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
23-06-2021
Assessment Year
2014-2015
Appeal Filed On
15-05-2018
Judgement Text
, - IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH - BENCH A BEFORE S/SHRI N.K. SAINI, VICE-PRESIDENT AND RAJPAL YADAV, VICE-PRESIDENT SR. NO. ITA NO. & ASSTT.YEAR APPELLANT RESPONDENT 1-3 ITA NOS.708, 710, 711 /CHD/2018 A.YS.2011-12, 2013-14 AND 2014-15 SHRI SANJAY SINGAL DCIT, CENT.CIR.1 CHANDIGARH 4-6 714, 716 AND 717/CHD/2018 A.YS. 2011-12, 2013-14 AND 2014-15 SMT.AARTI SINGAL -DO- 7-8 718 AND 719/CHD/2018 A.YS.2013-14 AND A.Y.2014-15 SHRI ANIKET SINGHAL -DO- 9 705/CHD/2018 A.Y.2014-15 SHRI SANJAY SINGHAL (HUF) ALL ARE HAVING COMMON ADDRESS AT : 3-INDL. AREA, PHASE-1 CHANDIGARH . -DO- ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI S.K. TULSIYAN, ADVOCATE WITH SHRI ASHWANI KUMAR, CA SMT. ABHA AGRAWAL, CA MS.BHOOMIYA VERMA, ADV SHRI ADITYA KUMAR, CA SHRI BHAVNESH JINDAL, CA REVENUE BY : SHRI G.C. SRINIVASTAVA, SPL.COUNSEL / DATE OF HEARING : 23/06/2021 / DATE OF PRONOUNCEMENT: 20/09/2021 / O R D E R PER BENCH: THIS IS A BUNCH OF NINE APPEALS FILED BY FOUR ASSE SSEES AGAINST COMMON ORDER OF THE LD.CIT(A)-3, GURGAON DA TED 31.3.2018. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 2 2. IT IS PERTINENT TO NOTE THAT THE LD.CIT(A) HAS D ECIDED EIGHTEEN APPEALS BY THE IMPUGNED ORDER IN THE FOLLOWING CASE S: I) SHRI SANJAY SINGHAL ASSTT.YEARS 2008-09, 2010-11 TO 2014-15 II) SMT.AARTI SINGHAL ASSTT.YEAR 2008-09, 2010-11, 2011-12 TO 2014-15 III) SHRI ANIKET SINGHAL ASSTT.YEAR 2013-14 & 2014-15 IV) SHRI SANJAY SINGHAL (HUF) ASSTT.YEAR 2011-12 TO 2014-15 3. THOUGH WE WILL REFER THE FACTS IN DETAIL, BUT AT THIS STAGE, IT IS IMPORTANT TO NOTE THAT SEARCH UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT BY THE DEPARTMENT AT THE BUSINESS PREMISES OF THE ASSESSEE-GROUP I.E. BHUSAN POWER & STEEL GROUP (BSPL FOR SHORT) ALONG WITH RESIDENTIAL/ BUSINESS PREMISES OF ITS DI RECTORS AND OTHER RELATED ENTITIES/ PERSONS ON 3.3.2010 AND 21.2.2014 FOR A.Y.2014-15. THE SECOND PROVISO TO SECTION 153A CONTEMPLATES THA T ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YE AR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SECTION I.E. SECTION 153A(1) PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A AS THE CAS E MAY BE, SHALL ABATE. IT IS FURTHER OBSERVED THAT APART FROM PRE SENT NINE APPEALS, EIGHT MORE APPEALS I.E. ITA NOS.706, 707, 709/CHD/2018 F ILED BY SHRI SANJAY SINGHAL FOR THE ASSTT.YEAR 2008-09, 2010-11, 2012-1 3; AND ITA NO.712, 713 & 715/CHD/2018 ALSO FILED BY SMT.AARTI SINGHAL FOR THE ASSTT.YEAR 2008-09, 2010-11, 2012-13. SIMILARLY, THE ASSESSEE , SHRI SANJAY SINGHAL IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 3 HUF HAS ALSO FILED APPEALS AGAINST REOPENING OF THE ASSESSMENT IN THE ASSTT.YEAR 2011-12 AND 2013-14. 4. THESE APPEALS PERTAIN TO UNABATED YEARS I.E. IN THESE YEARS ASSESSMENT/REASSESSMENT WERE NOT PENDING ON THE DAT E OF SEARCH. SIMILARLY, IN THE CASE OF SHRI SANJAY SINGHAL HUF A SSESSMENTS WERE REOPENED. THEREFORE, FOR THE FACILITY OF ADJUDICAT ION, THE TRIBUNAL HAS SEGREGATED THESE APPEALS FROM THE PRESENT-ONE, AND DECIDED THE APPEALS OF SHRI SANJAY SINGHAL AND SMT.AARTI SNGHAL VIDE OR DER DATED 7.2.2020. SIMILARLY, IN THE CASE OF SHRI SANJAY SINGHAL HUF W ERE DECIDED ON 19.6.2020. THE DEPARTMENT HAD FILED MISC.APPLICATI ON IN ALL THESE APPEALS, WHICH ALSO STANDS DISMISSED BY THE TRIBUNA L. THUS, OUT OF 18 APPEALS DECIDED BY THE LD.FIRST APPELLATE AUTHORITY BY THE COMMON ORDER, EIGHT APPEALS WERE DECIDED BY THE TRIBUNAL. 5. ADVERTING BACK TO THE FACTS OF THE PRESENT APPEA LS, WE FIND THAT ALL THE APPELLANTS HAVE TAKEN ALMOST IDENTICALLY WORDED GROUNDS OF APPEAL EXCEPT VARIATION IN THE QUANTUM OF AMOUNTS MENTIONE D IN THOSE GROUNDS. IT IS ALSO WORTH TO NOTE THAT AT THE TIME OF HEARIN G, THE LD.COUNSEL FOR THE ASSESSEE HAS FILED GIST OF ARGUMENTS ALONG WITH DET AILED ARGUMENTS IN A COMPILATION, RUNNING INTO 17 PAGES DATED 18.6.2021. HE HAS TABULATED THE AMOUNTS IN DISPUTE IN EACH APPEAL EXHIBITING AS TO HOW THE GROUNDS ARE COMMON. THEREFORE FOR THE FACILITY OF REFERENC E, WE TAKE NOTE GROUNDS OF APPEAL FROM ITA NO.708/CHD/2018 FOR THE ASSTT.YAR 2011-12 IN THE CASE OF SHRI SANJAY SINGHAL, AND THEREAFTER, WE TAKE NOTE OF DETAILS OF ADDITION COMPILED IN THE TABULATED FORM BY THE L D.COUNSEL FOR THE ASSESSEE. THEY READ AS UNDER: IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 4 GROUNDS: 1. THAT ORDER DATED 31.03.2018 PASSED U/S 25 0(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE 'ACT') BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, GURGAON IS AGAINST LAW AND FACTS O N THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD . ASSESSING OFFICER IN INITIATING PROCEEDINGS U/S 153A OF THE ACT DESPITE THE FACT THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH U/S 132 CONDUCTED ON 21-02-2014 WHEREBY THE ORDER PASSED IS WITHOUT JURISDICTION, BAD IN LAW AND VOID AB-INITIO. 2. THAT THE LD COMMISSIONER OF INCOME TAX (A PPEALS)-3, GURGAON GRAVELY ERRED IN UPHOLDING THE ACTION OF THE LD. AS SESSING OFFICER IN MAKING AN ADDITION OF RS.56,12,10,020/- REPRESENTING THE S ALE PROCEEDS OF LISTED EQUITY SHARES HELD BY THE APPELLANT FOR MORE THAN 1 2 MONTHS BY INVOKING THE PROVISIONS OF SEC. 68 OF THE ACT BY IGNORING TH E RELEVANT SPECIFIC FACTS AND CIRCUMSTANCES OF THE CASE AND BY RELYING ON EXT RANEOUS ARGUMENTS AND EVIDENCES, INCLUDING IN PARTICULAR, CIRCUMSTANTIAL EVIDENCE, WHICH HAS NO BEARING AND APPLICABILITY TO THE CASE. 3. THAT THE LD COMMISSIONER OF INCOME TAX (AP PEALS}-3, GURGAON WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. ASSES SING OFFICER IN TREATING THE TRANSACTIONS RELATING TO PURCHASE AND SALE OF EQUIT Y SHARES AS INGENUINE TRANSACTIONS. 4. THAT THE LD COMMISSIONER OF INCOME TAX (AP PEALS)-3, GURGAON FURTHER GRAVELY ERRED IN UPHOLDING THE ACTION OF TH E ID. ASSESSING OFFICER IN MAKING AN ADDITION OF RS.3,53,37,680/- ON ACCOUNT O F ALLEGED COMMISSION EXPENSES PAID BY THE APPELLANT FOR ARRANGING THE AL LEGED ENTRIES IN RESPECT OF LONG TERM CAPITAL GAINS BY INVOKING THE PROVISIO NS OF SEC. 69C OF THE ACT ON SHEER PRESUMPTIVE BASIS. 5. THAT THE LD. COMMISSIONER OF INCOME TAX (A PPEALS)-3, GURGAON WHILE ADJUDICATING THE APPEAL, HAS DISMISSED VARIOU S GROUNDS OF APPEAL RAISED BY THE APPELLANT BY RELYING ON STATEMENTS OF VARIOUS PERSONS AND DATA WITHOUT AFFORDING ANY OPPORTUNITY TO CROSS EXA MINE SUCH PERSONS THEREBY IGNORING THE BASIC PRINCIPLES OF NATURAL JU STICE DESPITE THE FACT THAT A SPECIFIC GROUND WAS RAISED TO THIS EFFECT. ADDITIONS: SANJAY SINGAL PARTICULARS A.Y. 2011- 12 A.Y. 2013-14 A.Y. 2014-15 TOTAL IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 5 TOTAL SALE PROCEEDS U/S 68 (ON A/C OF ALLEGED BOGUS LTCG) 6.5% OF LTCG U/S 69C TOWARDS ALLEGED COMMISSION EXPENSES 561,210,020 35,337,680 92,916,613 5,517,492 598,599,451 38,128,964 1,252,726,084 78,984,136 SUB-TOTAL - SS - (A) 596,547,700 98,434,105 636,728,415 1,331,710,220 SMT. AARTI SINGAL PARTICULARS A.Y. 2011-12 A.Y. 2013-14 A.Y. 2014-15 TOTAL TOTAL SALE PROCEEDS U/S 68 835,373,595 130,872,875 637,938,975 1,604,185,445 (ON A/C OF ALLEGED BOGUS LTCG} 6.5% OF LTCG U/S 69C TOWARDS ALLEGED COMMISSION EXPENSES 52,579,573 7,813,248 40,568,540 100,961,361 SUB-TOTAL - ARS - (B) 887,953,168 138,686,123 678,507,515 1,705,146,806 ANIKET SINGAL PARTICULARS A.Y. 2011- 12 A.Y. 2013-14 A.Y. 2014-15 TOTAL TOTAL SALE PROCEEDS U/S 68 (ON A/C OF ALLEGED BOGUS LTCG) 6.5% OF LTCG U/S 69C TOWARDS ALLEGED COMMISSION EXPENSES - 466,845,231 29,954,940. 1,162,207,39 7 73,668,055 1,629,052,628 103,622,995 SUB-TOTAL -ANS-(C) - 496,800,171 1,235,875,452 1,732,675,623 PARTICULARS A.Y. 2011-12 A.Y. 2013-14 A.Y. 2014-15 TOTAL TOTAL SALE PROCEEDS U/S 68 (ON A/C OF ALLEGED BOGUS LTCG) 6.5% OF LTCG U/S 69C TOWARDS ALLEGED COMMISSION EXPENSES NA NA NA NA 581,711,166 36,933,225 581,711,166 36,933,225 SUB-TOTAL -SS(HUF)-(D) 618,644,391 618,644,391 IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 6 6. BEFORE WE ADVERT TO THE GROUNDS OF APPEAL TAKEN BY THE APPELLANTS, IT IS PERTINENT TO NOTE THAT THE DEPARTMENT HAS FIL ED AN APPLICATION UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULE S, 1963 UNDER THE SIGNATURE OF SHRI G.C. SRIVASTAVA, SPECIAL COUNSEL FOR THE REVENUE. THE APPLICATION READ AS UNDER: MAY IT PLEASE YOUR HONOURS, BASED ON CERTAIN INFORMATION RECEIVED FROM CBT, THE DIRECTORATE OF ENFORCEMENT (ED) HAS CONDUCTED DETAILED ENQUIRIES, IN THE CASES OF THE ASSESSES WHOSE APPEALS ARE PENDING BEFORE HON'BLE I TAT AS MENTIONED ABOVE, UNDER PREVENTION OF MONEY LAUNDERING ACT, AN D HAS FILED CRIMINAL CHARGES AGAINST MEMBERS OF THE GROUP. DURING SUCH I NVESTIGATIONS, STATEMENTS OF ALL THOSE AGENCIES/ENTITIES WHO WERE INVOLVED IN PROVIDING BOGUS LONG TERM CAPITAL GAINS TO THE ASSESSES, INCL UDING THE STATEMENT OF SRI SANJAY SINGHAL, WERE RECORDED. THE COPIES OF SU CH STATEMENTS ARE MADE AVAILABLE TO THE ASSESSING OFFICER NOW, I HAVE BEEN INSTRUCTED TO FILE COPIES OF THESE STATEMENTS AND OTHER DOCUMENTS BEFORE YOUR HONOURS AS ADDITIONAL EVIDENCE WITH A PRAYER FOR THE ADMISSION OF THE SAM E. A BRIEF SUBMISSION ON THE REASONS FOR FILING THE AD DITIONAL EVIDENCE AND THEIR RELEVANCE TO THE PRESENT CASE IS AS UNDER: 1. CRUCIAL DOCUMENTS HAVE BEEN RECEIVED FROM THE ENFORCEMENT DIRECTORATE (ED) IN THE CASES OF M/S. BHUSHAN GROUP WHEREIN A F IR HAS BEEN FILED BY ED AGAINST THE COMPANIES IN THE BHUSHAN GROUP, INCL UDING BHUSHAN POWER AND STEEL MANAGED BY SH. SANJAY SINGAL. (PAGE 1 OF THE ANNEXURE) 2. THE FIR, UNDER THE INDIAN PENAL CODE, 1860 AND PREVENTION OF CORRUPTION ACT, 1988, ALLEGES CRIMINAL CONSPIRACY, CHEATING, FALSIFICATION OF ACCOUNTS, CRIMINAL MISCONDUCT AND USE OF FORGED DOCUMENTS. 3. DURING THE COURSE OF INVESTIGATION BY ED, STATE MENTS OF SRI SANJAY SINGAL WERE RECORDED WHERE HE REITERATED HIS EARLIER ADMIS SION THAT THE LTCG CLAIMED TO HAVE BEEN EARNED BY HIM AND HIS FAMILY M EMBERS WAS A MERE ACCOMMODATION ENTRY. 4. IN THE BACKDROP OF THIS FACTUAL MATRIX, WE PRAY FOR ADMISSION OF THE ADDITIONAL EVIDENCE, WHICH INCLUDES STATEMENTS OF S H. SANJAY SINGAL AND IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 7 OTHER CONNECTED PARTIES TO THE PRESENT CASE OF AVAI LING BOGUS LTCG RECORDED BY ED UNDER PMLA ACT, 2002: I. SH. SANJAY SINGAL, IN HIS STATEMENT DT. 07.10. 2016, BEFORE THE ENFORCEMENT AUTHORITIES ADMITTED THAT SH. R.P. GOYAL, DIRECTOR SUPERVISED THE UNACCOUNTED CASH TRANSACTIONS ON HIS INSTRUCTIONS, WHICH WERE NOT SHOWN IN THE BOOKS. IT WAS DULY ACKNOWLEDGED THAT THIS CASH WAS RECEIVED BACK IN THE FORM OF PURCHASE OF SHARES THROUGH VARIOUS DUMMY CO MPANIES, OR FOR MINUTE CASH EXPENSES. (PAGES 7-14 OF THE ANNEXURE) II. SH. SANJAY SINGAL, IN HIS STATEMENT 03.10.201 9, ADMITTED THE MODUS OPERANDI EMPLOYED FOR ROUTING OF FUNDS BY BPSL TO V ARIOUS PARTIES ON ACCOUNT OF PURCHASE OF GOODS, WITHOUT ANY ACTUAL MO VEMENT OF GOODS. (PAGES 15-20 OF THE ANNEXURE) IN. THAT FOUR COMPANIES, I.E., JASMINE STEEL TRAD ING, MARSH STEEL TRADING, DIYAJOTI STEEL AND VISION STEEL, WERE MANAGED BY HI M AND HIS FAMILY MEMBERS AS A PART OF BHUSHAN GROUP AND ALL THE DIRE CTORS IN THESE COMPANIES WERE EMPLOYEES OF BPSL WORKING UNDER THE DIRECTIONS OF SH. SANJAY SINGAL. IV. IT IS DULY ADMITTED THAT THE FUNDS INVESTED B Y SANJAY SINGAL, SANJAY SINGAL HUF, AARTI SINGAL AND ANIKET SINGAL WERE EAR NED BY LTCG FROM SALE OF SHARES OF VARIOUS ENTITIES. V. ADMITTANCE THAT BPSL HAD PAID MONEY TO PARTIES BY RTGS AS CAPITAL ADVANCE, WHICH WERE ALL CONTROLLED BY ENTRY OPERATO RS, WHO ROUTED THE PAYMENTS THROUGH A WEB OF SHELL COMPANIES BACK TO T HE ABOVE-MENTIONED 4 COMPANIES MANAGED BY BHUSHAN GROUP. VI. SH. SANJAY SINGAL AGREED WITH THE CONTENTS OF THE STATEMENT OF SH. R.K.KEDIA (BROKER) DT. 17.09,2019 (PAGES 21-23 OFTH EANNEXURE) WHEREIN HE HAD EXPLAINED IN DETAIL THE MODUS OPERANDI ADOPTED BY SINGALS TO AVAIL BOGUS LTCG. VII. THE STATEMENTS OF OTHER CO-CONSPIRATORS LIK E SH IRISH CHANDRA SHAH, PRAVEEN KUMAR JAIN (PINTU), J.P.PUROHIT, PRAVEEN KU MAR AGRAWAL, ALKESH SHIN MA AND OTHERS WERE ALSO RECORDED BY ED WHO NOT ONLY REITERATE WHAT WAS STATED BY THEM EARLIER BUT ALSO THROW A GREAT D EAL OF LIGHT ON THE BOGUS NATURE OF THESE TRANSACTIONS. (PAGES 31-68 OF THE A NNEXURE) 5. THESE PIECES OF EVIDENCE COULD NOT BE FILED EAR LIER AS EITHER THESE DID NOT EXIST AT THE RELEVANT TIME, OR IT WAS NOT IN POSSES SION OF THE INCOME TAX DEPARTMENT. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 8 6. NONETHELESS, THESE PIECES OF EVIDENCE HAVE A DI RECT BEARING ON THE MERITS OF THE CASE AS THESE RELATE TO THOSE VERY ISSUES WH ICH ARE THE SUBJECT MATTER OF PRESENT APPEALS. 7. THE LIST OF DOCUMENTS PRAYED FOR ADMISSION AS ADDITIONAL EVIDENCE IS CONTAINED IN A SEPARATE ANNEXURE/PAPER-BOOK (68 PAG ES). IT IS, THEREFORE PRAYED THAT THESE DOCUMENTS MAY KI NDLY BE ADMITTED AS ADDITIONAL EVIDENCE IN THE AFORESAID CASES, AND THE SE MAY BE CONSIDERED AT THE TIME OF HEARING OF THE APPEALS ON MERITS. THIS IS BEING FILED IN DIGITAL MODE AND PHYSICAL COPY WOULD ALSO BE MADE AVAILABLE IF REQUIRED. REVENUE SHALL BE OBLIGED FOR THE ACT OF KINDNESS. THANKING YOUR HONOURS SD/- (G.C. SRIVASTAVA) ADVOCATE SPECIAL COUNSEL FOR REVENUE. 7. QUA THIS APPLICATION, WE HAVE HEARD THE LD.SENIO R COUNSEL FOR THE REVENUE AS WELL AS THE LD.COUNSEL FOR THE ASSESSEE. IT IS PERTINENT TO NOTE HERE THAT HEARINGS OF THESE APPEALS WERE COMMENCED ON 21.6.2021. THE LD.COUNSEL FOR THE ASSESSEE HAS CONCLUDED HIS ARGUM ENTS ON 21.6.2021. AFTER CONCLUSION OF THE ARGUMENTS OF THE LD.COUNSEL FOR THE ASSESSEE, THE LD.SENIOR COUNSEL FOR THE REVENUE BROUGHT TO OUR NO TICE AN APPLICATION OF THE DEPARTMENT FOR ADMISSION OF ADDITIONAL EVIDENCE . THE LD.COUNSEL FOR THE ASSESSEE RAISED A STRONG OBJECTION ABOUT ADMISS ION OF THIS ADDITIONAL EVIDENCE. THE STAND OF THE LD.COUNSEL FOR THE ASSE SSEE IS THAT THE ISSUES INVOLVED IN THESE APPEALS ARE DIRECTLY COVERED BY O RDERS OF THE ITAT IN THE CASE OF OTHER FAMILY MEMBERS I.E. FATHER OF SHR I SANJAY SINGHAL (APPELLANT NO.1). THE DEPARTMENT HAS FILED AN APPL ICATION BEFORE THE HONBLE PRESIDENT, ITAT UNDER SECTION 255(3) OF THE INCOME TAX ACT, 1961 FOR CONSTITUTION OF A SPECIAL BENCH IN THE AFO RESAID MATTER, AND THE HONBLE PRESIDENT HAS CALLED FOR COMMENTS OF THE BE NCH. AFTER THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 9 COMMENTS OF THE BENCH, THE HONBLE PRESIDENT HAS HE ARD BOTH THE PARTIES, AND THEREAFTER DECLINED THE PRAYER OF THE REVENUE FOR CONSTITUTION OF A SPECIAL BENCH. HE ALLEGED THAT I N ORDER TO CREATE A DISTINCTION BETWEEN THE CASES ALREADY DECIDED VIS- -VIS THE PRESENT APPELLANT, THE REVENUE HAS FILED AN APPLICATION DAT ED 7.6.2021 FOR PERMISSION TO ADMIT ADDITIONAL EVIDENCE. HEARING W AS FIXED ON 8.6.2021 BEFORE THE HONBLE PRESIDENT. ACCORDING TO LD.COUN SEL FOR THE ASSESSEE, THIS WAS AN EFFORT BEFORE HONBLE PRESIDENT TO ACCE PT A DISPARITY ON FACTS AND, THEREFORE, THESE APPEALS BE REFERRED TO SPECIA L BENCH, BUT HONBLE PRESIDENT REJECTED SUCH EFFORT. IN SUPPORT OF ITS A PPLICATION, THE REVENUE HAS PLEADED THAT INCOME TAX DEPARTMENT HAS CARRIED OUT SEARCH OPERATION AT THE PREMISES OF BROKERS, SHRI RK KEDIA AND SHRI SHRISH SHAH AND THEIR STATEMENTS WERE RECORDED UNDER SECTI ON 132(4) OF THE ACT WHICH HAVE BEEN USED BY THE REVENUE, WHILE DENYING CLAIM OF THE ASSESSEE FOR THE LONG TERM CAPITAL GAIN. SIMULTANE OUSLY, CBI HAS REGISTERED CASE AS WELL AS THE ED HAS RECORDED STAT EMENT OF SHRI RK KEDIA UNDER SECTION 50 OF THE PREVENTION OF MONEY L AUNDERING ACT, 2002 (PMLA). THEREFORE, IT IS NECESSARY TO TAKE ON RECORD DISCLOSURE MADE BY THE PERSONS BEFORE THE ED AND OTHER PROSECU TING AGENCIES. WITH REGARD TO THE POSITION WHETHER THE REVENUE CAN PRODUCE ADDITIONAL EVIDENCE AT THE SECOND APPELLATE STAGE, MORE SO, IN THE CAPACITY OF A RESPONDENT, HE RELIED UPON THE DECISION OF SPECIAL BENCH IN THE CASE OF LG ELECTRONICS INDIA P.LTD. IN ITA NO.5140/DEL/2011 . HE ALSO RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE C ASE OF JYOTSNA SURI VS. ITAT & ORS., 9 SCC 211. HE FURTHER RELIED UPON JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF HL MALHOTRA VS. DCIT, ITA IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 10 NO.211/2020 DATED 22.12.2020. HE PLACED ON RECORD COPIES OF THESE DECISIONS. 8. SINCE INTERLOCUTORY APPLICATION WAS PRESSED AFTE R CONCLUSION OF THE ARGUMENTS OF THE LD.COUSNEL FOR THE ASSESSEE, THERE FORE, AT THE TIME OF HEARING WE PERMITTED BOTH THE PARTIES TO GIVE THEIR SUBMISSIONS IN WRITING ON THE ADMISSION OF ADDITIONAL EVIDENCE AS WELL AS CONSIDERATION OF THEM ON MERIT AFTER ADMITTING, IF TAKEN ON RECOR D. IN OTHER WORDS, WE HAVE INVITED THE ARGUMENTS OF THE LD.COUNSEL FOR TH E ASSESSEE AS WELL AS REVENUE ON MERIT OF THIS MATERIAL, BUT SUBJECT TO C ONDITION THAT IN CASE APPLICATION OF THE REVENUE FOR ADMISSION OF ADDITIO NAL EVIDENCE IS REJECTED, THEN NO SUCH SUBMISSIONS WOULD BE CONSIDE RED. THEREAFTER, AFTER CONCLUSION OF HEARING AN OPPORTUNITY WAS PROV IDED TO BOTH THE SIDES TO FILE WRITTEN SUBMISSIONS AND LD.COUNSEL FOR THE REVENUE FILED WRITTEN SUBMISSION DATED 29.6.2021, AND THE LD.COUNSEL FOR THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS ON 2.7.2021. SINCE WE HAVE TAK EN COGNIZANCE OF THE REVENUES APPLICATION IN VERBATIM, WE THEREFORE DEE M IT APPROPRIATE TO TAKE OF OBJECTIONS FILED BY THE ASSESSEE AS WELL. T HE OBJECTION READS AS UNDER: 1. THAT THE RESPONDENTS HAVE PREFERRED AN APPLIC ATION UNDER RULE 29 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 (ITAT RULES) FOR THE ADMISSION OF ADDITIONAL EVIDENCE BEING 'CERTAIN INF ORMATION' RECEIVED FROM THE CBI AND THE DIRECTORATE OF ENFORCEMENT (ED) THA T ARE IN THE NATURE OF A) THE ECIR/FIR FILED BY THE CBI AGAINST THE APPELLANT S, SH. SANJAY SINGHAL AND HIS WIFE AND B) THE VARIOUS STATEMENTS OF SH. S ANJAY SINGHAL, SH. R.K. KEDIA, SH. SHIRISH CHANDRA SHAH, SH. JADISH PRASAD PUROHIT AND OTHERS THIRD PARTIES THAT HAVE BEEN RECORDED BY THE ED UNDER THE PROVISIONS OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002 (PMLA). 2. THE SPECIAL COUNSEL FOR THE RESPONDENTS IS SEE KING THE ADMITTANCE OF THE AFORESAID DOCUMENTS/STATEMENTS (MATERIAL) AS ADDITI ONAL EVIDENCE TO BE FILED BEFORE THIS HON'BLE BENCH BY ALLEGING THAT SUCH MAT ERIAL HAVE A DIRECT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 11 BEARING ON THE MERITS OF THE CASE, AS THEY RELATE T O THE VERY ISSUE OF BOGUS LTCG WHICH IS THE SUBJECT MATTER OF THE PRESENT ITA T APPEALS. 3. THE APPELLANTS RAISE THEIR VEHEMENT OBJECTION TOWARDS THE ADMITTANCE OF SUCH MATERIAL FIRSTLY ON THE GROUND OF DELAY, SINCE THE PRESENT APPEALS HAVE BEEN PENDING SINCE THE YEAR 2018, AND ALL THE MATER IAL THAT THE SPECIAL COUNSEL IS SEEKING TO ADMIT AS ADDITIONAL EVIDENCE IS DATED EITHER IN THE YEAR 2016 OR THE YEAR 2019, THEREFORE, THE SAME WAS IN T HE KNOWLEDGE AND POSSESSION OF DEPARTMENT AND IF INDEED WERE SOUGHT TO BE USED BY THE DEPARTMENT IN A BONA FIDE MANNER, WOULD HAVE BEEN B ROUGHT ON RECORD MUCH SOONER THAN JUNE 2021, WHEN THE AFORESAID MATT ERS (PERTAINING TO THE ABATED AYS) HAD BEEN LISTED FOR FINAL ARGUMENTS AND DISPOSAL. 4. THE APPELLANTS ALSO OBJECT TO THE ADMITTANCE O F SUCH MATERIAL ON THE GROUND THAT THE SPECIAL COUNSEL FOR THE RESPONDENTS HAD NOT DISCLOSED THE DATE OF RECEIPT OF THE SAID INFORMATION FROM THE ED IN HIS APPLICATION. THE SAME THUS CASTS FURTHER DOUBT ON THE INTENT OF THE DEPARTMENT THAT IS SEEMINGLY TRYING TO STALL/DELAY THE HEARING OF THIS CASE ON MERITS BY CREATING HURDLE AFTER HURDLE, FIRST WITH THE APPLICATION FOR THE CONSTITUTION OF THE SPECIAL BENCH, AND NOW WITH THE APPLICATION FOR THE FILING OF ADDITIONAL EVIDENCE. 5. THE APPELLANTS SUBMIT THAT THE APPLICATION OF T HE DEPARTMENT U/S 255(3) FOR THE CONSTITUTION OF A SPECIAL BENCH IN THE AFOR ESAID MATTERS HAD BEEN HEARD BY THIS HON'BLE BENCH IN THE MONTH OF MAY 202 1, UPON WHICH, THIS HON'BLE BENCH POSTED THE MATTER BEFORE THE HON'BLE PRESIDENT OF THE ITAT WITH THEIR COMMENTS. THE HON'BLE PRESIDENT, ITAT TH EN POSTED THE MATTER FOR HEARING ON THE 8TH OF JUNE 2021. ALL OF A SUDDEN ON 7TH JUNE 2021, THE SPECIAL COUNSEL OF THE DEPARTMENT FILES THE PRESENT APPLICATION FOR ADMITTANCE OF ADDITIONAL EVIDENCE, JUST ONE DAY BEF ORE THE DATE OF HEARING. NO SUCH MENTION OF THIS APPLICATION IS EVEN MADE BE FORE THE HON'BLE PRESIDENT DURING THE COURSE OF THE HEARING DATED 8T H JUNE 2021. THE DEPARTMENT IS THEREFORE BLOWING HOT AND COLD/AP PROBATING AND REPROBATING AT THE SAME TIME, SINCE EVEN BEFORE THE HEARING COULD HAVE BEEN CONCLUDED BEFORE THE HON'BLE PRESIDENT ITAT VIS-A-V IS THEIR APPLICATION FOR THE CONSTITUTION OF THE SPECIAL BENCH IN WHICH THEY HAVE OBJECTED TO THE HEARING OF THE SAID MATTER BEFORE THIS HON'BLE TRIB UNAL BY AVERRING A NON- UNIFORM APPROACH TAKEN BY THE ITATS FOR CERTAIN QUE STIONS OF LAW WHICH WOULD HAVE A CASCADING IMPACT FOR THE ABATED AYS, T HE PRESENT APPLICATION FOR THE ADMITTANCE OF ADDITIONAL EVIDENCE HAD BEEN FILED THAT HAS NOTHING TO DO WITH THE ISSUE OF THE SPECIAL BENCH AND HAS EVER YTHING TO DO WITH THE CASE ON MERITS. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 12 THERE IS THUS A LACK OF CLARITY IN HOW THE DEPARTME NT IS SEEKING TO APPROACH THIS MATTER. THE SAME THEREFORE CASTS HUGE DOUBT ON THE BONA FIDES OF THIS VERY APPLICATION, AND THE INTENT BEHIND ITS UTILISA TION, THAT SEEMS MORE IN THE NATURE OF A DELAY TACTIC, SINCE NO EXPLANATION ON T HE 'DELAY' IN FILING THIS ADDITIONAL EVIDENCE HAS BEEN BROUGHT ON RECORD BY T HE SPECIAL COUNSEL. 6. ON JURISDICTION, THE APPELLANTS SUBMITS THAT R ULE 29 OF THE ITAT RULES, 1963 HAS BEEN ERRONEOUSLY INVOKED BY THE SPECIAL CO UNSEL SINCE THE SAID RULES ONLY PERMITS, AT THE DISCRETION OF THE ITAT, THE ADMISSION OF ADDITIONAL EVIDENCE IN ONLY TWO SITUATIONS: A. IF THE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PR ODUCED OR ANY WITNESS TO BE EXAMINED OR AN AFFIDAVIT TO BE FILED TO ENABLE I T TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE (OR) B. IF THE INCOME TAX AUTHORITIES HAVE DECIDED THE C ASE WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EV IDENCE EITHER ON THE POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM, THEN TH E TRIBUNAL, FOR REASONS TO BE RECORDED, MAY ALLOW SUCH DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED OR AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED. THUS THE FILING OF ADDITIONAL EVIDENCE BEFORE THE I TAT IS NOT A MATTER OF RIGHT OF EITHER PARTY, SINCE RULE 29 STARTS WITH THE WORD INGS 'THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAR - UNLESS SUCH ADDIT IONAL EVIDENCES FIT UNDER EITHER ONE OF THE TWO SITUATIONS PRESCRIBED ABOVE, 7. FURTHERMORE, WHEN THE DEPARTMENT IS SEEKING TO FILE ADDITIONAL EVIDENCE IT CAN ONLY DO SO UNDER THE SITUATION NO.L PRESCRIB ED ABOVE SINCE SITUATION NO.2 PERTAINS TO THE ASSESSEE ONLY. SITUATION NO.L IS SPECIFICALLY WORDED TO MEAN THAT IT IS THE ITAT THAT MUST 'REQUIRE' SUCH A DDITIONAL EVIDENCE THAT COULD BE IN THE NATURE OF A DOCUMENT TO BE PRODUCED OR A WITNESS TO BE EXAMINED OR AN AFFIDAVIT TO BE FILED - IN ORDER TO ENABLE THE ITAT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE. HERE, TH IS HON'BLE BENCH, NEVER SOUGHT THE PRESENT ADDITIONAL EVIDENCE (THAT HAS BE EN RECORDED BY THE ED UNDER A DIFFERENT STATUE ALTOGETHER) TO BE CAUSED T O BE PRODUCED BY THE DEPARTMENT. THEREFORE A SUO MOTO FILING OF ADDITION AL EVIDENCE BY THE DEPARTMENT WHEN THE MATTER HAS BEEN LISTED FOR FINA L ADJUDICATION AND DISPOSAL IS BEREFT OF JURISDICTION SINCE THE SAME H AS NOT OCCURRED PURSUANT TO A DIRECTION OF THIS HON'BLE BENCH ON THE GROUNDS TH AT SUCH ADDITIONAL EVIDENCE IS REQUIRED TO ENABLE THE PASSING OF THE O RDERS IN THE PRESENT APPEALS OR FOR ANY OTHER SUBSTANTIAL CAUSE. 8. THUS THE PRESENT APPLICATION IS BOUND TO BE DI SMISSED ON THE GROUNDS OF JURISDICTION ALONE SINCE THE SPECIAL COUNSEL HAS BE EN UNABLE TO SUBSTANTIATE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 13 HOW THE DEPARTMENT IS EVEN COVERED UNDER RULE 29 TO ENABLE THE FILING OF SUCH ADDITIONAL EVIDENCE. THE ADMISSIBILITY OF THE SAME IS THUS A SECONDARY QUESTION THAT ONLY ARISES WHEN THE DEPARTMENT CAN A DEQUATELY SHOW UNDER WHICH OF THE TWO SITUATIONS (SPECIFIED UNDER RULE 2 9) IT FALLS UNDER. SINCE NEITHER OF THE SITUATIONS PRESCRIBED UNDER RULE 29 APPLIES TO THE DEPARTMENT IN THE PRESENT CASE SINCE SITUATION NO, I ARISES ON LY AT THE DIRECTION OF THE TRIBUNAL AND SITUATION NO.2 APPLIES ONLY TO AN ASSE SSEE (IF THE ASSESSEE IS ABLE TO SHOW THAT SUFFICIENT OPPORTUNITY HAD NOT BE EN PROVIDED BY THE LOWER AUTHORITIES) - THEN THE PRESENT APPLICATION HAS BEE N FILED WITHOUT JURISDICTION, RENDERING THE SAME TO BE NULL AND VOID IN LAW. 9. WITHOUT PREJUDICE TO THE ABOVE, ON THE MERITS OF THIS APPLICATION AND THE ADDITIONAL EVIDENCE CONTAINED THEREIN, THE APPELLAN TS SUBMIT THAT THE ADDITIONAL EVIDENCE THAT HAS BEEN SOUGHT TO BE ADMI TTED BY THE SPECIAL COUNSEL ALL PERTAIN TO THE STATEMENTS RECORDED UNDE R SEC.50 OF THE PMLA, 2002, BY THE ED. THE SPECIAL COUNSEL IS THUS SEEKIN G TO USE EVIDENCES RECORDED UNDER A DIFFERENT STATUTE BY A DIFFERENT A UTHORITY IN A CRISSCROSS MANNER, BY ALLEGING THAT THE SAID INFORMATION HAS A DIRECT BEARING ON THE MERITS OF THE PRESENT APPEALS FILED UNDER THE INCOM E TAX ACT, 1961. 10. IN REBUTTAL, THE APPELLANTS FIRSTLY SUBMIT THAT THE INCOME TAX ACT, 1961 AND THE PMLA, 2002 ARE TWO DIFFERENT SETS OF LEGISL ATION. THE AIMS AND OBJECTIVES OF THE SAID LEGISLATIONS ARE QUITE DIFFE RENT AND DISTINCT. UNDER THE INCOME TAX ACT, THE PROCEDURE FOR THE GATHERING/REC ORDING ADMISSIBLE EVIDENCE TO FASTEN ADDITIONAL LIABILITY UNTO THE AS SESSEE IS GOVERNED BY SEC.I42 OF THE ACT WHICH IS THE 'INQUIRY' BEFORE AN ASSESSMENT IS MADE U/S 143(3). 11. SEC. 142 PROVIDES THE FOUNDATIONAL FRAMEWORK OF THE INDEPENDENT INVESTIGATION AND ENQUIRY THAT THE A.O. OUGHT TO CO NDUCT BEFORE AN ORDER OF ASSESSMENT IS PASSED QUA THE ASSESSEE U/S 143(3) OF THE ACT. SEC. 142 IMBIBES WITHIN ITSELF THE PRINCIPLE(S) TO THE NATURAL JUSTI CE THAT MUST BE FOLLOWED BY THE A.O. IN ELABORATION, THE DETAILS OF THE INBUILT PROCEDUR E U/S 142 ARE ITERATED AS BELOW: SEC.142(1) OF THE ACT EMPOWERS THE A.O. TO CALL FOR INFORMATION/MATERIAL FROM THE ASSESSEE. SEC.142(2) PROVIDES THAT FOR THE PURPOSE OF OBTAINING SUCH FULL INFORMATION IN RESPECT OF INCOME OR LOSS OF AN Y PERSON, THE A.O. MAY MAKE SUCH ENQUIRY AS HE CONSIDERS NECESSARY. IN OTH ER WORDS, SEC.142(2) EMPOWERS THE A.O. TO MAKE SUCH ENQUIRY TO OBTAIN ON RECORD SUCH ORAL AND/OR DOCUMENTARY EVIDENCE AS HE/SHE CONSIDERS NEC ESSARY FOR THE PURPOSE OF SUCH ASSESSMENT. SEC. 142(3) MANDATES THAT THE I NFORMATION/EVIDENCE COLLECTED PURSUANT TO THE ENQUIRY CONDUCTED U/S 142 (2) WHICH IS PROPOSED TO IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 14 BE UTILIZED DURING THE ASSESSMENT, SHALL FIRST BE P UT TO THE ASSESSEE TO PROVIDE HIM/HER WITH AN OPPORTUNITY OF BEING HEARD BEFORE T HE SAME IS UTILIZED BY THE A.O. TO MAKE AN ADDITION/DISALLOWANCE U/S 143(3). S EC.L42(3) UTILIZES THE WORD 'SHALL' THEREFORE RENDERING THE SAME TO BE BY NO MEANS DISCRETIONARY. THUS THE MANDATORY INTERMEDIARY STEP PRESCRIBED U/S 142(2) CANNOT BE GIVEN A GO PAST, IN ORDER TO UTILISE SUCH INFORMATION/EVI DENCES ADVERSELY AGAINST THE ASSESSEE WITHOUT THE LATTER'S REBUTTAL. THE SAM E IF DONE, IS A DIRECT VIOLATION OF THE PROCEDURE OF ENQUIRY PRESCRIBED U/ S 142 THAT INHERENTLY ENCOMPASSES THE PRINCIPLE(S) OF NATURAL JUSTICE. THUS, IN THE CASE AT HAND, THE PRESENT APPLICATION TOWARDS ADMITTING SUCH ADDITIONAL EVIDENCE THAT HAS BEEN RECORDED UNDER TH E PMLA, 2002 HAS BEEN PREFERRED BY THE DEPARTMENT IN COMPLETE IGNORANCE O F THE SPECIFIC PROCEDURE LAID DOWN UNDER SEC. 142 OF THE ACT TO CONSIDER EVI DENCE AS ADMISSIBLE EVIDENCE FOR THE PURPOSE OF MAKING AN ASSESSMENT UN DER SEC. 143(3). RELIANCE IN THIS REGARD IS MADE TO THE DECISION OF THE COORDINATE BENCH OF THE KOLKATA ITAT IN THE DECISION OF IN M/S. SPML INFRA LTD. VS. DCIT, ITA NO. 1228/KOL/2018 THAT HAS HELD AS FOLLOWS: '14. TO CONCLUDE: WE NOTE THAT NONE OF THE STATEMEN TS WERE RECORDED BY THE ASSESSING OFFICER OF THE ASSESSEE COMPANY, A ND NO OPPORTUNITY FOR CROSS EXAMINATION HAS BEEN PROVIDED TO THE ASSE SSES COMPANY. THE MANDATE OF LAW TO CONDUCT ENQUIRY BY THE ASSESSING OFFICER ON DUE INFORMATION COMING TO HIM TO VERIFY AUTHENTICITY OF INFORMATION WAS NOT DONE AS PER SECTION 142 OF THE ACT. THEREFORE, MERE RECEIPT OF UNSUBSTANTIATED STATEMENT RECORDED BY SOME OTHER OF FICER IN SOME OTHER PROCEEDINGS MORE PARTICULARLY HAVING NO BEARI NG ON THE TRANSACTION WITH THE ASSESSEE DOES NOT CREATE ANY M ATERIAL EVIDENCE AGAINST THE ASSESSES THIS IS BECAUSE SECTION 142(2) MANDATES ANY SUCH MATERIAL ADVERSE TO THE FACTS OF ASSESSEE COLLECTED BY AO U/S 142(1) HAS TO BE NECESSARILY PUT TO THE ASSESSEE U/S 142(3 ) BEFORE UTILIZING THE SAME FOR ASSESSMENT SO AS TO CONSTITUTE AS RELIABLE MATERIAL EVIDENCE THROUGH THE PROCESS OF ASSESSMENT U/S 143(3) OF THE ACT,' [EMPHASIS SUPPLIED] 12. IN THE PRESENT APPEALS THE A.O. HAS ALREADY REL IED ON CERTAIN EVIDENCES OBTAINED FROM THIRD PARTIES (IN THE NATURE OF STATE MENTS AND/OR DOCUMENTS) - THE RELIANCE UPON WHICH THE APPELLANTS HAVE ARGUED CANNOT BE MADE FOR THE PURPOSE OF A 143(3') ASSESSMENT SINCE THE SAME HAD NOT BEEN PUT TO THEM PER THE STATUTORY PROCEDURE PRESCRIBED UNDER SEC.L42(2) . NOW, BY WAY OF THIS PRESENT APPLICATION, THE SPECIAL COUNSEL HAS ATTEMP TED TO BRING ON RECORD FURTHER MATERIAL THAT HAS REMAINED UNTESTED ON THE ANVIL OF SEC. 142(3) BY SEEKING TO EQUATE THE STATEMENTS RECORDED BY THE ED UNDER THE PMLA, 2002 AS ADDITIONAL EVIDENCE THAT CAN ALSO BE VALIDLY UTI LISED FOR THE PURPOSE OF SUSTAINING AN ADDITION THAT HAS ALREADY BEEN MADE U NDER THE INCOME TAX ACT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 15 BY THE A.O, ON THE BASIS OF SEPARATE THIRD PARTY MA TERIAL/STATEMENTS, WITHOUT SUBJECTING SUCH THE LATTER TO THE RIGOURS OF SEC. 1 42. IN OTHER WORDS, IT IS ALREADY THE APPELLANTS' CASE THAT THE INITIAL THIRD PARTY MATERIAL/STATEMENTS THAT THE A.O. HAS RELIED UPON T O MAKE THE IMPUGNED ASSESSMENT ORDERS U/S 153A/143(3)-HAS NOT BEEN SUBJ ECT TO THE PROCEDURE OF ENQUIRY PRESCRIBED U/S 142 OF THE ACT, SINCE THE A. O. HAS SOUGHT TO UTILISE THOSE SOLELY ON 'BORROWED SATISFACTION' TO MAKE THE ASSESSMENT US/ I43(3)/L 53A. NOW, IN A FURTHER ATTEMPT AT DEVIATING THE PRO CEDURAL FETTERS PRESCRIBED U/S 142, THE SPECIAL COUNSEL HAS FILED SUCH ADDITIO NAL EVIDENCE, BY COMPLETELY IGNORING THAT THE VERY SAME RIGOURS OF S EC. 142 WILL ALSO APPLY TO SUCH ADDITIONAL EVIDENCE THAT HAS BEEN RECORDED BY A SEPARATE GOVERNMENTAL DEPARTMENT (THE ED) UNDER A SEPARATE STATUTE (THE P MLA). 13. THE APPELLANTS THUS SUBMIT THAT WITHOUT FULFILL ING THE MANDATE OF SEC. 142, THE EVIDENCE CANNOT BE CONSIDERED AS ADMISSIBL E EVIDENCE ON RECORD, IN ORDER TO FASTEN LIABILITY UNTO THE ASSESSEE U/S 143 (3). THIS IS MORE SO BECAUSE THE ADDITIONAL EVIDENCE SEEKING TO BE ADMITTED VIDE THE PRESENT APPLICATIONS ARE STATEMENTS THAT HAVE ALL BE RECORDED U/S 50 OF THE PMLA, 2002 POST THE COMPLETION/FINALISATION OF THE SEARCH ASSESSMENTS U /S 153A/143(3) IN THE CASE OF ALL THE APPELLANTS, THAT WERE ASSESSED TO TAX VI DE THE IMPUGNED ASSESSMENT ORDERS (ALL) DATED 28.03.2016. THUS WHEN THE ADDITI ONAL EVIDENCE, ESPECIALLY THE STATEMENTS OF SANJAY SINGHAL SPECIFIED THEREIN (THAT HAVE BEEN RECORDED ON 07.10.2016 AND 03.10.2019 BY THE ED) HAVE ALL BE EN RECORDED POST THE FINALISATION OF THE SEARCH ASSESSMENTS IN THE CASE OF ALL THE APPELLANTS - THEN SUCH EVIDENCE THAT WAS NOT ON THE RECORD OF THE A.O . DURING THE COURSE OF THE SEARCH ASSESSMENTS, CANNOT NOW BE UTILISED AS ADMIS SIBLE EVIDENCE IN ORDER TO FASTEN LIABILITY AGAINST THE APPELLANTS UNDER TH E INCOME TAX ACT, ESPECIALLY SINCE SUCH MATERIAL THAT HAS BEEN RECORD ED POST THE COMPLETION OF THE SEARCH, CANNOT POSSIBLY BE SUBJECT TO THE RIGOU RS OF SEC.142 OF THE ACT. IN OTHER WORDS, STATEMENTS THAT HAVE BEEN RECORDED BY THE ED UNDER THE PMLA, CANNOT BE UTILISED IN THE FORM OF EVIDENCE FO R THE PURPOSE OF THE INCOME TAX ACT AT THE STAGE OF THE APPELLATE AUTHOR ITY (I.E., THE ITAT) UNLESS THE SAME HAD PASSED THROUGH THE FETTERS OF SEC.142 AT THE TIME OF THE SEARCH ASSESSMENT, WHICH IT HASN'T AND NOW CANNOT. IN SUPP ORT RELIANCE IS CRAVED ON THE DECISION OFR.K. SAYAL (2000) 113 TAXMAN 40 (CHA NDIGARH) (MAG.), ITA T CHANDIGARH) THAT HAS CLEARLY HELD THAT EVIDENCE COL LECTED POST THE COMPLETION OF THE BLOCK ASSESSMENT CANNOT BE ADMITT ED UNDER RULE 29, FOR THE FOLLOWING REASONS: A. THE HON'BLE BENCH HAS HELD THAT IF SUCH EVIDENCE WERE TO BE CONSIDERED AS 'ADDITIONAL EVIDENCE' THEN, HAVING RE GARD TO THE PROVISIONS OF THE INCOME TAX ACT, THE TRIBUNAL WILL HAVE TO RESTORE THE MATTER TO ASSESSING OFFICER, FOR THE REASONS MENTIO NED BY LEARNED IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 16 DEPARTMENTAL REPRESENTATIVE I.E., TO ENABLE THE ASS ESSES TO MEET THE NEW FACTS AS NOW FOUND BY ASSESSING OFFICER. SEE PA RA 3.4. B. THE HON'BLE BENCH ALSO HELD THAT PLEA OF THE D.R . THAT THE SAID EVIDENCE IS ONLY TO STRENGTHEN THE CASE OF A.O. LOO KS ATTRACTIVE ON THE FACE OF IT, BUT IF SEEN CLOSELY IT IS NOTHING BUT A N ATTEMPT TO IMPROVE UPON THE CASE OF A.O. BY BRINGING ON RECORD FURTHER EVIDENCE WHICH THE A.O. COULD NOT COLLECT AND EXAMINE WITHIN THE P ERIOD OF LIMITATION SPECIFIED FOR BLOCK ASSESSMENT. SEE PARA 3.3. C. THE HON'BLE BENCH THUS HELD THAT AN ATTEMPT IS B EING MADE TO INDIRECTLY DO WHAT CANNOT BE DONE DIRECTLY AND THAT ALLOWING SUCH ADDITIONAL EVIDENCE IN AN ACT THAT BYPASSES THE RIG OURS OF THE STATUTE - CANNOT BE DONE. SEE PARA 3.4. 14. THE APPELLANTS FURTHER SUBMIT THAT THE DECISION S RELIED UPON BY THE DR TO ADMIT SUCH ADDITIONAL EVIDENCE AT THIS STAGE OF THE PROCEEDINGS CAN BE DISTINGUISHED (AS DONE IN THE PARAGRAPHS BELOW) AND THUS DO NOT SUPPORT THE CASE OF THE DEPARTMENT: A. IN THE CASE OF TEXT HUNDRED INDIA PVT. LTD., ITA 2077, 2061 & 2065/2010 (DELHI H.C., DECISION DATED 14.01.2011) T HE APPLICATION FOR THE FILING OF ADDITIONAL EVIDENCE HAD BEEN MOVE D BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE T HESE RECORDS BEFORE THE LOWER AUTHORITIES DUE TO NON- RETRIEVABI LITY OF E-MAIL ON THE DATE BECAUSE OF TECHNOLOGICAL DIFFICULTIES. SEE PAR A 15. B. IN THE SAID CASE THE HON'BLE BENCH HAS CLEARLY H ELD THAT THE QUESTION OF ADMITTING ADDITIONAL EVIDENCE ARISES WH EN ON EXAMINING THE EVIDENCE AS IT STANDS, SOME INHERENT LACUNA OR DEFECT BECOMES APPARENT TO THE APPELLATE COURT COMING IN ITS WAY T O PRONOUNCE JUDGMENT, AND ONLY THEN CAN THE EXPRESSION 'TO ENAB LE IT TO PRONOUNCE JUDGMENT' BE INVOKED. THE PROVISION DOES NOT APPLY WHERE WITH EXISTING EVIDENCE ON RECORD THE APPELLATE COURT CAN PRONOUNCE A SATISFACTORY JUDGMENT. SEE PARA 14. C. PER THE HON'BLE BENCH, THE TRIBUNAL LOOKED INTO THE ENTIRE MATTER AND ARRIVED AT A CONCLUSION THAT THE ADDITIONAL EVI DENCE WAS NECESSARY FOR DECIDING THE ISSUE AT HAND. IT IS THU S CLEAR THAT THE TRIBUNAL FOUND THE REQUIREMENT OF THE SAID EVIDENCE FOR PROPER ADJUDICATION OF THE MATTER AND IN THE INTEREST OF T HE SUBSTANTIAL CAUSE. SEE PARA 15. D. IN THE CASE OF L.G. ELECTRONICS INDIA PVT. LTD. VS. ITO, ITA 5140/DEL/2011 (SPECIAL BENCH, DECISION DATED JANUAR Y 2013) THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 17 D.R. THEREIN SOUGHT PERMISSION TO FILE ADDITIONAL E VIDENCE BEING COPIES OF ORDERS PASSED BY TPO IN THE ASSESSEE'S OW N CASE FOR A.Y 2008-09 ALONG WITH WRITTEN SUBMISSIONS OF THE ASSES SEE BEFORE THE TPO AND STATEMENTS OF EMPLOYEES OF THE ASSESSEE. SE E PARA 8.1. E. PER THE HON'BLE BENCH, THE DEPARTMENT WAS SEEKIN G TO INVOKE RULE 29 FOR FILING CERTAIN MATERIAL THAT WAS ALREADY IN THE KNOWLEDGE OF THE ASSESSEE THEREIN, AND THEREFORE, TECHNICALLY THE SA ME WAS HELD TO BE NOT IN THE NATURE OF ADDITIONAL EVIDENCE SINCE THE SAME COMPRISED SOLELY OF ORDERS OF THE TPO IN THE ASSESSEE'S OWN C ASE, THE SUBMISSIONS MADE BY THE ASSESSEE, AND THE STATEMENT S OF THE ASSESSEE'S EMPLOYEES AS RECORDED BY THE REVENUE. PER THE HON'B LE BENCH, THE SAID MATERIAL WAS, THEREFORE, NOTHING BUT A CORROBO RATION OF THE MATERIAL THAT WAS EXISTING OTHERWISE, AND THE SAME WAS THEREFORE ADMISSIBLE UNDER RULE 29. SEE PARA 8.6- THUS THIS APPLICATION HAS BEEN FILED, AFTER ASSESSI NG THE LINE OF ARGUMENT SOUGHT TO BE TAKEN BY THE APPELLANTS, IN A N ATTEMPT TO BETTER THE DEPARTMENT'S CASE BY NOW UTILISING EVIDENCES RE CORDED UNDER A DIFFERENT STATUTE TO PREJUDICE THE BENCH INTO SUSTA IN ADDITIONS MADE UNDER THE INCOME TAX ACT. THE RELIANCE ON SUCH ADDI TIONAL EVIDENCE WAS IMPERATIVE TO THE CASE OF THE SPECIAL COUNSEL, WHO AT THE TIME OF THE HEARING HAD ALSO BASED HIS FINAL ARGUMENTS PRIM ARILY ON THE CONTENTS OF THIS ADDITIONAL EVIDENCE. 15. ON THE UTILISATION OF STATEMENTS RECORDED UNDER SEC.50(2) OF THE PMLA, 2002 IN A PROCEEDINGS INITIATED UNDER THE INCOME TA X ACT, 1961, THE APPELLANTS FURTHER SUBMIT THAT THE SAME IS ALSO IMP ERMISSIBLE IN LIGHT OF SEC.71 OF THE PMLA, WHICH STATES THAT THE PMLA AS A STATUTE OPERATES AS A SELF-CONTAINED CODE AND A STAND-ALONE LAW. THEREFOR E STATEMENTS RECORDED U/S 50(2) OF THE PMLA HAVE DIRECT ADMISSIBILITY AS EVIDENCE ONLY VIS-A-VIS THE PROVISIONS OF THE PMLA. THE SAME CAN IN NO MANNER B E EXTENDED TO BE CONSIDERED AS ADMISSIBLE EVIDENCE UNDER THE INCOME TAX ACT, BY BYPASSING THE MANDATE OF SEC.142 THAT ENCOMPASSES THE PRINCIP LES OF NATURAL JUSTICE. 16. IT IS ALSO SUBMITTED THAT SEC.65 OF THE PMLA, 2 002 STATES THAT THE PROVISIONS OF THE CRIMINAL PROCEDURE CODE, 1973 (CR PC) SHALL APPLY IN SO FAR AS THEY ARE NOT INCONSISTENT WITH THE PROVISION S OF THE PMLA VIS-A-VIS ARREST, SEARCH AND SEIZURE, ATTACHMENT, CONFISCATIO N, INVESTIGATION AND PROSECUTION AND ALL OTHER PROCEEDINGS UNDER THE ACT . 17. THUS EVEN IF A STATEMENT RECORDED U/S 50 OF THE PMLA IS NOT EQUATED TO A STATEMENT RECORDED UNDER SEC. 161 R/W 162 OF THE CR PC, IT IS OBVIOUS THAT IN ORDER TO SUSTAIN A CONVICTION UNDER THE PMLA A CRIM INAL TRIAL ENSUES TO PROSECUTE THE ACCUSED. THIS IS IN LINE WITH THE PRO TECTION AWARDED TO AN IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 18 INDIVIDUAL UNDER ART.20 IN RESPECT OF THE CONVICTIO N OF OFFENCES, WHERE ART.20(3) SPECIFIES THAT NO PERSON ACCUSED OF ANY O FFENCE SHALL BE COMPELLED TO BE A WITNESS AGAINST HIMSELF. THUS A MERE STATEMENT RECORDED U/S 50(2) OF THE PML A IS NOT 'EVIDENCE* IN ITSELF EVEN FOR THE PURPOSE OF PROSECUTING THE ACCU SED UNDER THE PMLA, LET ALONE UNDER THE INCOME TAX ACT, THAT HAS ITS OWN SE PARATE PROCEDURE IN PLACE FOR COLLECTING AND ADMITTING EVIDENCE U/S 142 BEFORE THE SAME CAN BE ADDUCED AND UTILISED BY THE A.O. TO MAKE AN IMPUGNE D ADDITION U/S 143(3) OF THE ACT. 18. FURTHER, AS PER THE DECISION OF THE HON'BLE S.C . IN THE CASE OF KTMS MOHAMED & ORS. VS. UOI, (1992) 3 SCC178, THE HON'BL E S.C. HAS CLEARLY HELD THAT STATEMENTS RECORDED BY THE ED CANNOT BE T ERMED TO BE STATEMENTS THAT ARE RECORDED DURING THE COURSE OF A JUDICIAL P ROCEEDINGS TO ENABLE THEIR UTILISATION IN INCOME TAX ACT PROCEEDINGS. THIS IS BECAUSE THE STATEMENTS RECORDED BY THE ED DO NOT HAVE THE PROCEDURAL SAFEG UARDS THAT EXIST UNDER THE CRPC WHEN THE STATEMENT IS RECORDED BEFORE A MA GISTRATE. THUS ANY CONFESSION MADE BEFORE THE ED CANNOT BE SUO MOTU CO NSIDERED AS EVIDENCE TO FASTEN LIABILITY UNDER THE INCOME TAX ACT, ESPEC IALLY WHEN SUCH STATEMENTS HAVE BEEN RETRACTED. THE RELEVANT EXCERPTS OF THE S AID DECISION ARE QUOTED HEREUNDER: '28. COMING TO THE FERA, IT IS A SPECIAL LAW WHICH PRESCRIBES A SPECIAL PROCEDURE FOR INVESTIGATION OF BREACHES OF FOREIGN EXCHANGE REGULATIONS. VIDE SHANTI PRASAD JAIN V. THE DIRECTO R OF ENFORCEMENT [1963J2SCR297. THE PROCEEDINGS UNDER THE FERA ARE Q UASI-CRIMINAL IN CHARACTER. IT IS PELLUCID THAT THE AMBIT, SCOPE AND INTENDMENT OF THESE TWO ACTS ARE ENTIRELY DIFFERENT AND DISSIMILA R. 29. THEREFORE, THE SIGNIFICANCE OF A STATEMENT RECO RDED UNDER THE PROVISIONS OF FERA DURING THE INVESTIGATION OR PROC EEDING UNDER SAID ACT SO AS TO BRING THEM WITHIN THE MEANING OF JUDIC IAL PROCEEDING MUST BE EXAMINED ONLY QUO THE PROVISIONS OF THE FER A BUT NOT WITH REFERENCE TO THE PROVISIONS OF ANY OTHER ALIEN ACT OR ACTS SUCH AS I. T. ACT. 30. IF IT IS TO BE APPROVED AND HELD THAT THE AUTHO RITIES UNDER THE I.T. ACT CAN LAUNCH A PROSECUTION FOR PERJURY ON THE BAS IS OF A STATEMENT RECORDED BY THE ENFORCEMENT OFFICER THEN ON THE SAM E ANALOGY THE ENFORCEMENT AUTHORITY CAN ALSO IN A GIVEN SITUATION LAUNCH A FOR PERJURY ON THE BASIS OF ANY INCULPATORY STATEMENT R ECORDED BY THE INCOME-TAX AUTHORITY IF REPUDIATED SUBSEQUENTLY BEF ORE THE ENFORCEMENT AUTHORITY. IN OUR OPINION, SUCH A COURS E CANNOT BE AND SHOULD NOT BE LEGALLY PERMITTED. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 19 31. LEAVE APART, EVEN IF THE OFFICERS OF THE ENFORC EMENT INTEND TO TAKE ACTION AGAINST THE DEPONENT OF A STATEMENT ON THE B ASIS OF HIS INCULPATORY STATEMENT WHICH HAS BEEN SUBSEQUENTLY R EPUDIATED, THE OFFICER CONCERNED MUST TAKE BOTH THE STATEMENTS TOG ETHER, GIVE A FINDING ABOUT THE NATURE OF THE REPUDIATION AND THE N ACT UPON THE EARLIER INCULPATORY ONE. IF ON THE OTHER HAND, THE OFFICER CONCERNED BISECT THE TWO STATEMENTS AND MAKE USE OF THE INCUL PATORY STATEMENT ALONE CONVENIENTLY BYPASSING THE OTHER SUCH A STAND CANNOT BE A LEGALLY PERMISSIBLE BECAUSE ADMISSIBILITY, RELIABIL ITY AND THE EVIDENTIARY VALUE OF THE STATEMENT OF THE INCULPATO RY STATEMENT DEPEND ON THE BENCHMARK OF THE PROVISIONS OF THE EVIDENCE ACT AND THE GENERAL CRIMINAL LAW. ' [EMPHASIS SUPPLIED] 19. THE APPELLANTS SUBMIT THAT THE CASE OF KTMS MOH AMED & ORS. (SUPRA) HAS DIRECT APPLICABILITY TO THE CASE AT HAND, MORE SO BECAUSE THE STATEMENT OF SANJAY SINGHAL THAT HAD BEEN RECORDED BY THE E.D. H AS BEEN RETRACTED BY HIM, VIDE RETRACTION LETTER DATED 20.12.2019 FROM T IHAR JAIL. IN THE SAID STATEMENT, SH. SANJAY SINGHAL HAS EMPHASISED THAT H E WAS PRESSURISED BY THE ED OFFICERS, AND WAS GIVEN NO SUCH OPPORTUNITY TO R EAD AND/OR UNDERSTAND THE PAPERS SIGNED AND/OR STATEMENTS RECORDED AND SI GNED, ALL OF WHICH WAS TAKEN UNDER THE THREAT AND PRESSURE OF ARREST. IN F ACT, SH. SANJAY SINGHAL ALSO STATES THAT WHEN HE REFUSED TO SIGN ANY FURTHER DOC UMENTS/STATEMENTS, THEY ARRESTED HIM ON 22.11.2019. HE HAS ALSO EMPHASISED ON THE PRESSURE AND TRAUMA OF THE ENTIRE INCIDENCE. THIS RETRACTION HAS NOT BEEN BROUGHT TO THE NOTICE OF THIS HON'BLE BENCH BY THE DEPARTMENT WHILE MAKING THE PRESENT APPLICATION FOR ADMISSION OF THE STATEMENTS OF SANJAY SINGHAL AS ADDITIONAL EVIDENCE . AS HELD IN THE DECISION OF KTMS MOHAMED & ORS. (SUPRA), INCULPATORY STATEME NTS THAT HAVE BEEN SUBSEQUENTLY REPUDIATED CANNOT BE UTILISED ACROSS D IFFERENT PROCEEDINGS EMANATING UNDER DIFFERENT STATUTES. THE HON'BLE S.C . HAS ALSO HELD THAT A STATEMENT THAT HAS BEEN SUBSEQUENTLY RETRACTED CANN OT BE UTILISED IN ITS ORIGINAL FORM, BY GIVING A GO BY TO THE RETRACTION BROUGHT ON RECORD. THEREFORE THE VERY RELIANCE ON THE STATEMENTS OF SA NJAY SINGHAL AS 'EVIDENCE' IN ITSELF, LET ALSO AS ADMISSIBLE ADDITIONAL EVIDEN CE BEFORE THIS HON'BLE TRIBUNAL FOR THE PURPOSE OF SUSTAINING AN ADDITION MADE UNDER THE INCOME TAX ACT, 1961 IS IMPERMISSIBLE IN LAW. 20. FOR THE AFORESAID REASONS, THE APPELLANTS PRAY THAT THE PRESENT APPLICATION FOR THE ADMISSION OF ADDITIONAL EVIDENC E MAY BE PLEASED TO BE REJECTED BY THIS HON'BLE BENCH FOR BEING BEREFT OF JURISDICTION, AND EVEN OTHERWISE, BEREFT OF ANY MERITS IN SUPPORT OF THEIR ADMISSIBILITY UNDER LAW. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 20 9. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GO NE THROUGH THE RECORD CAREFULLY. RULE 29 OF THE INCOME TAX (APPEL LATE TRIBUNAL) RULES, 1963 HAS DIRECT BEARING ON THE CONTROVERSY, THEREFO RE, IT IS IMPERATIVE UPON US TO TAKE NOTE OF THIS RULE AS UNDER: '29. PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE T RIBUNAL- THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDI TIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL, BUT IF THE TRIBUNAL REQUIRES ANY DOCUMENTS TO BE PRODUCED OR ANY WITNESS TO BE E XAMINED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS O R FOR ANY OTHER SUBSTANTIAL CAUSE, OR, IF THE INCOME-TAX AUTHORITIE S HAVE DECIDED THE CASE 'WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITHER ON POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM, THE TRIBUNAL, FOR REASONS TO BE RECORDED, MAY ALLOW SUC H DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED OR AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED.' 10. A PERUSAL OF THE ABOVE RULE WOULD INDICATE THAT PARTIES OF THE APPEAL I.E. EITHER APPELLANT OR RESPONDENTS ARE NOT ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFO RE THE TRIBUNAL. HOWEVER, IN CASE ANY EVIDENCE IS REQUIRED BY THE TR IBUNAL, IN THE INTEREST OF JUSTICE, THEN SUCH OPPORTUNITY COULD BE GIVEN TO THE PARTIES. IN OTHER WORDS, FOR JUST DECISION OF ANY APPEAL, IF SOME MAT ERIAL IS REQUIRED BY THE TRIBUNAL, THEN THAT MATERIAL COULD BE TAKEN UP ON T HE RECORD. AS OBSERVED BY THE SPECIAL BENCH OF ITAT IN THE CASE O F LG ELECTRONICS (SUPRA) ADDITIONAL EVIDENCE CAN BE PERMITTED IF THE EVIDENCE DOES NOT RAISE ANY NEW AREA OF DISPUTE, IF THE EVIDENCE HAS RELEVANCE TO THE ISSUE. A PERUSAL OF THE APPLICATION FILED BY THE REVENUE W OULD REVEAL THAT THE REVENUE INTENDS TO PLACE ON RECORD COPIES OF THE ST ATEMENT RECORDED BY THE ED I.E. INCLUDING THE STATEMENT OF THE ASSESSEE AS WELL AS SHRI R.K. KEDIA, PRAVEEN KUMAR JAIN AND SHRI SIRISH CHANDRAKA NT SHAH. WE HAVE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 21 TAKEN INTO CONSIDERATION THE MATERIAL SOUGHT TO BE PLACED ON RECORD BY THE REVENUE VIS--VIS SCOPE OF RULE 29 OF THE ITAT RULES. IT IS PERTINENT TO OBSERVE THAT THE INCOME TAX ACT PROVID ES A COMPLETE FRAME WORK FOR SCRUTINISING THE RETURN AND PASSING ASSESS MENT ORDER. THE ACT ITSELF CONTEMPLATES CERTAIN SAFEGUARDS FOR PROTECTI NG RIGHTS OF THE ASSESSEE I.E. RETURN COULD BE SCRUTINIZED WITHIN TH E TIME FRAME BY ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. IF THE TIME LIMIT IS EXPIRED, THEN ONLY ON THE BASIS OF NEW INFORMATION COMES TO THE POSSESSION OF THE AO THAT INCOME HAS ESCAPED, HE CO ULD REOPEN THE ASSESSMENT BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT. SIMILARLY, DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, SECTION 142 OF THE ACT CONTEMPLATES POWER OF THE AO FOR COLLECTING THE INFORMATION AND OTHER MATERIAL FROM THE ASSESSEE. IN THE PRESENT A PPEALS, ASSESSMENTS WERE FRAMED LONG BACK; APPEALS WERE PENDING IN THE TRIBUNAL SINCE 2018. EVIDENCE WAS ALLEGED TO BE PLACED ON RECORD WERE STATEMENTS RECORDED WAY BACK IN 2016 AND 2019. BY PLACING SUC H STATEMENT ON RECORD, A NEW LINE OF DISCOVERY OF FACTS REQUIRED T O BE UNEARTHED. ALL THESE PERSONS WOULD BE REQUIRED TO BE CALLED UPON A ND CROSS-EXAMINATION IS REQUIRED TO BE MADE. IT IS ALSO PERTINENT TO NO TE THAT THESE ARE THE STATEMENTS RECORDED UNDER PMLA AFTER CONCLUSION OF THE ASSESSMENT ORDER. THEY CANNOT BE BROUGHT ON RECORD TO FULFILL ANY LACUNAE, IF ANY, LEFT IN THE ASSESSMENT ORDER. SPECIAL BENCH OF THE ITAT IN THE CASE OF LG ELECTRONICS (SUPRA) HAS OBSERVED THAT EVIDENCE W OULD HAVE DIRECT BEARING, AND DID NOT RAISE ANY AREA OF NEW DISPUTE. THESE STATEMENTS THEMSELVES HAVE BEEN RECORDED AFTER FINALISATION OF THE ASSESSMENT ORDER. THEY WOULD OPEN UP A NEW SET OF INQUIRY. IN OTHER WORDS, AN ATTEMPT IS IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 22 BEING MADE INDIRECTLY TO BRING SOME MATERIAL IN ORD ER TO IMPROVE THE CASE OF REVENUE WHICH CANNOT BE DONE DIRECTLY. EVEN OTHERWISE, THE CRIMINAL TRIALS IN PURSUANCE OF THOSE STATEMENTS HA VE YET TO BE FINALIZED. IT IS ALSO PERTINENT TO NOTE THAT NO APPEAL IS BEIN G PROVIDED AGAINST THE ASSESSMENT TO THE REVENUE. THE RIGHT OF APPEAL HAS BEEN PROVIDED TO THE ASSESSEE ONLY. NOW, AN ATTEMPT IS BEING MADE BY TH E LD.COUNSEL FOR THE REVENUE TO IMPROVE THE ASSESSMENT ORDER BY BRINGING ON RECORD NEW SET OF EVIDENCE WHICH WILL OPEN A NEW SET OF INQUIRY. IF THESE EVIDENCES ARE TAKEN INTO ACCOUNT, THE MATTER HAS TO BE REMITTED B ACK TO THE AO AND THE AO WOULD BE DIRECTED TO CONSIDER MATERIALS AFRESH W HICH COULD NEVER HAVE BEEN CONSIDERED UNDER THE SCOPE OF BLOCK ASSES SMENT UNDER SECTION 153A OF THE ACT. THE LD.AO WILL GET NEW EXTENDED L IMITATION WHICH OTHERWISE IS NOT AVAILABLE TO HIM. AS OBSERVED EARL IER, THESE STATEMENTS WERE RECORDED BY THE INVESTIGATING AGENCIES. THEIR RELIABILITY OR ADMISSIBILITY HAS TO BE DETERMINED BY JUDICIAL ADJU DICATING BODY. THE PROCESS HAS NOT BEEN COMPLETED WITH REGARD TO THE S TATEMENT SOUGHT TO BE PLACED ON RECORD. THEREFORE, THE TRIBUNAL DOES NOT FEEL, IN ANY MANNER THAT THESE ARE THE MATERIALS, WHICH SHOULD HAVE BEE N PLACED ON RECORD FOR JUST DECISION OF THE APPEALS, RATHER WE ARE OF FIRM VIEW THAT PERMITTING TO PLACE ON RECORD SUCH MATERIAL WOULD CAUSE PREJUDICE TO THE ASSESSEE. AS FAR AS CASE LAW RELIED UPON BY THE LD.COUNSEL FOR T HE REVENUE IS CONCERNED, THEY ONLY POSTULATE THAT ITAT HAS THE PO WER TO PERMIT REVENUE TO PRODUCE ADDITIONAL EVIDENCE IN THE CAPAC ITY OF RESPONDENT ALSO. THERE IS NO DISPUTE WITH REGARD TO THE ABOVE PROPOSITION. IN GIVEN CASE TRIBUNAL CAN FEEL THAT CERTAIN DETAILS POSSESS ED BY THE REVENUE ARE NECESSARY FOR JUST DECISION OF THE APPEAL THEN, IT CAN DIRECT THE REVENUE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 23 FOR PRODUCTION OF THOSE DETAILS. THUS, THESE CASES ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT APPEALS. IT IS ALSO PERTI NENT TO MENTION THAT THE ASSESSEE HAS DULY DEMONSTRATED IN THE REPLY EXTRACT ED ABOVE AS TO WHY THESE EVIDENCES SHOULD NOT BE TAKEN ON RECORD. WE HAVE GONE THROUGH THE REPLY AND EMPHASIZING MORE PARTICULARLY ON PARA NO.15 TO 18 DEMONSTRATING THE EVENTUAL VALUE OF THESE STATEMENT . WE ARE SATISFIED THAT BY WAY OF THIS APPLICATION A FATUOUS ATTEMPT I S BEING MADE TO CREATE ARTIFICIAL DISTINCTION BETWEEN THESE APPEALS VIS-S- VIS THE EARLIER ORDERS OF THE ITAT ON THE SAME POINT. IN SUBSTANCE THESE ARE NOT THE EVIDENCE REQUIRED BY THE ITAT FOR JUST DECISION OF THE APPEA LS. IN VIEW OF THE ABOVE DISCUSSION, THE APPLICATION OF THE REVENUE IS REJECTED. NOW WE TAKE THE APPEALS FOR ADJUDICATION: 11. FOR THE FACILITY OF REFERENCE, WE ARE TAKING TH E FACTS FROM THE APPEAL OF SHRI SANJAY SINGAL MAINLY AND ANY VARIATI ON ON FACTS WOULD COME TO OUR NOTICE, WE WILL NOTE THEM. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND A KEY PERSON OF THE GROUP KNOW N AS BSPL GROUP. THE BRIEF FACTS AS ALLEGED BY THE REVENUE ARE AS UN DER: 12. THERE WERE SEARCH AND SURVEY OPERATIONS UNDER S ECTION 132/133A OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT AT THE OFFICE PREMISES OF SHRI SHRISH CHANDRAKANT SHAH (FOR SHORT SCS) LOCATE D AT DIFFERENT PLACES AND THE PARTIES/ ENTITIES CONNECTED TO HIM DATED 9T H APRIL 2013 BY THE DIRECTORATE OF INVESTIGATION, AHMEDABAD INCOME TAX. DURING THE SEARCH AND SURVEY PROCEEDINGS, VARIOUS DOCUMENTS WERE FOUN D. STATEMENTS OF SHRI SCS AND OTHER PERSONS CONNECTED TO HIM (SHRI S CS) WERE RECORDED UNDER SECTION 132(4), 131(IA) OF THE ACT. BASED ON THE ABOVE, IT WAS IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 24 REVEALED TO THE AO THAT SHRI SCS IS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF SHARE CAPITAL, SHARE PREMIUM, UNSECURED LOAN AND LONG-TERM CAPITAL GAIN AGAINST T HE PAYMENT OF COMMISSION. FOR THIS PURPOSE, SCS WAS CONTROLLING A ND MANAGING 212 COMPANIES USED FOR LAYERING THE FUNDS INCLUDING THE COMPANY NAMELY M/S PIL WHICH WAS ALSO SUBJECT TO SEARCH OPERATION. IT WAS ALSO DISCOVERED DURING THE SEARCH THAT SHRI SCS HAS GENE RATED LONG-TERM CAPITAL GAIN OF RS. 560 CRORES USING THE SHARES OF PIL BY WAY OF ACCOMMODATION ENTRIES. ONE OF THE BENEFICIARIES OF BOGUS LONG TERM CAPITAL WAS THE GROUP OF THE ASSESSEE OF SUCH BOGUS LTCG. THE NAMES OF PERSONS OF BSPL GROUP BEING THE BENEFICIARIES OF LT CG ARE AS UNDER: I. SHRI SANJAY SINGAL II. SMT. ARTI SINGAL III. SHRI ANIKET SINGAL IV. SANJAY SINGAL HUF 13. THE ASSESSEE GROUP HAS PURCHASED THE SHARES OF PIL ON PREFERENTIAL ALLOTMENT BASIS IN THE YEAR 2008 DATED 04-08-2008 @ 2.25 PER SHARE HAVING FACE VALUE OF RS. 1 PER SHARE AND PREMIUM OF RS. 1.25 PER SHARE. THESE SHARES WERE SOLD IN THE YEAR 2010-11 AND 2011 -12 AT AN AVERAGE PRICE OF RS. 65 PER SHARE. THUS IT WAS ALLEGED T HAT SHRI SCS HAS CONVERTED THE UNACCOUNTED MONEY OF VARIOUS PARTIES/ BENEFICIARIES BY PROVIDING LONG-TERM CAPITAL GAIN TO THEM WHICH WAS EXEMPTED UNDER SECTION 10(38) OF THE ACT BY MANIPULATING IN THE PR ICE OF THE SHARES OF PIL. ALL THESE FACTS NARRATED ABOVE WERE DULY ADMIT TED BY SHRI SCS IN THE STATEMENT FURNISHED UNDER SECTION 132(4)/131-IA OF THE ACT WHICH WAS RECORDED AT DIFFERENT POINT OF TIME. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 25 14. THE STATEMENT OF SHRI OM PRAKASH ANANDILAL KHAN DEWAL (OPK), THE DIRECTOR OF PIL, WAS ALSO RECORDED UNDER SECTIO N 132(4) OF THE ACT WHEREIN HE HAD ADMITTED THAT PIL WAS A PAPER COMPAN Y, HAVING NO BUSINESS AND WAS USED BY SHRI SCS FOR GENERATING BO GUS LONG-TERM CAPITAL GAIN TO EXTEND THE BENEFIT TO THE PARTIES. THE STATEMENT OF SHRI OPK WAS ALSO CONFIRMED BY SHRI SCS. 15. IN THE COURSE OF SEARCH AT THE PREMISE OF SCS, AMONG OTHER DOCUMENTS, TWO DOCUMENTS IN THE FORM OF MS EXCEL FI LE NAMELY CASH & CHEQUE SHEET AND KEDIA-2 WERE FOUND. CASH & CHEQUE SHEET 16. THE CASH & CHEQUE SHEET CONTAINS DATE-WISE DETA ILS OF RECEIPTS OF CASH FROM THE BENEFICIARIES AND CHEQUE PAYMENT OF A CCOMMODATION ENTRIES TO THEM IN CODED-FORM. THERE WAS ALSO THE N AME OF CASH COURIER (AANGDIA) IN THE REMARK COLUMN BY WHOM SHRI SCS REC EIVED THE CASH AMOUNT. THE NAME OF THE ASSESSEE AND HIS ASSOCIATES WAS ALSO APPEARING IN THIS SHEET IN CODED FORM. 17. AGAINST THE RECEIPT OF CASH FROM THE ASSESSEE, THE NAME OF CASH COURIER (AANGDIA), SHRI PINTU ALIAS CHINTAN (PRAVEE N KUMAR JAIN) WAS APPEARING. THIS FACT WAS ALSO CORROBORATED IN THE I NDEPENDENT SEARCH AND SEIZURE OPERATION CARRIED OUT UNDER SECTION 132 OF THE ACT BY THE DIRECTORATE OF INVESTIGATION, MUMBAI IN CASE OF SHR I PRAVEEN KUMAR JAIN. DURING SEARCH, THE BOOKS AND OTHER RECORDS WE RE FOUND AND IMPOUNDED. ON COMPARISON OF THESE IMPOUNDED DOCUMEN TS WITH THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 26 CASH AND CHEQUE SHEET MAINTAINED BY SCS, IT WAS NOT ICED BY THE AO THAT THE ENTRIES OF THE ASSESSEE GROUP WERE MATCHING. SH RI PRAVEEN KUMAR JAIN IN HIS STATEMENT ADMITTED TO HAVE RECEIVED THE CASH FROM SHRI RK KEDIA WHO IS THE BROKER OF THE ASSESSEE ON BEHALF O F SHRI SCS. KEDIA-2 18. LIKEWISE, A MS EXCEL FILE RECOVERED FROM THE CO MPUTER OF SCS. THE NAME OF THE MS EXCEL FILE WAS NEW ACCOUNT. TH E MS EXCEL FILE WAS CONTAINING THE DETAILS OF THE DIFFERENT BROKERS THROUGH WHOM SHRI SCS HAS PROVIDED BOGUS LONG-TERM CAPITAL GAIN TO TH E BENEFICIARIES. ONE OF THE EXCEL SHEET OF MS EXCEL FILE WAS CONTAINING THE NAME KEDIA-2 WHICH WAS RELATED TO A BROKER NAMELY RK KEDIA BASED IN DELHI. THIS SHEET CONTAINS THE DETAILS AS GIVEN UNDER: I. THE TRADING OF SHARES OF THE COMPANY NAMELY PIL ON A PARTICULAR DATE ALONG WITH THE NUMBER OF SHARES AND THE RATE PER SHARE. II. THE COMMISSION CHARGED BY SHRI SCS ON SUCH BOGUS TRANSACTION. III. CASH RECEIVED FROM THE BENEFICIARIES AGAINST THE SA LE OF SHARES HELD BY SUCH BENEFICIARIES. IV. THE AANGADIA CHARGES PAID. ETC 19. ON VERIFICATION BY THE DIRECTORATE OF INVESTIGA TION TEAM FROM BSE ABOUT THE TRADING OF PIL SHARES, IT WAS FOUND THAT THESE SHARES OF PIL, AS RECORDED IN THE EXCEL SHEET DISCUSSED ABOVE WERE EX ACTLY SOLD BY THE ASSESSEE AND ITS GROUP MEMBERS TO THE COMPANIES CON TROLLED AND MANAGED BY SHRI SCS. THE IMPUGNED SHEET REVEALED TH E RECEIPT OF CASH OF RS.129 CRORES AND CHEQUE PAYMENT OF RS.165.1 CRO RES BY SCS TO THE ASSESSEE FOR PROVIDING ACCOMMODATION ENTRIES BY WAY OF LONG-TERM IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 27 CAPITAL GAIN. SHRI SCS FOR THIS TRANSACTION HAS CHA RGED A COMMISSION OF RS.3.81 CRORES ALONG WITH AANGADIA CHARGES OF RS.9, 02,250/- ONLY. WHEN CONFRONTED, SHRI SCS ALSO ADMITTED THAT HE HAS PROVIDED ACCOMMODATION ENTRIES IN THE NAME OF LONG-TERM CAPI TAL GAIN TO THE GROUP OF THE ASSESSEE THROUGH THE BROKER, SHRI RK K EDIA. 20. FURTHER, RECEIPTS OF CASH RECORDED IN KEDIA-2 S HEET WERE ALSO MATCHING WITH THE BOOKS/ RECORDS MAINTAINED BY SHRI PARVEEN KUMAR JAIN ALIAS PINTU WHICH WERE IMPOUNDED BY THE DIRECT ORATE OF INVESTIGATION OF MUMBAI AS MENTIONED IN PREVIOUS PA RAGRAPH. 21. SIMILARLY, A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT SUBSEQUENTLY AND SIMULTANEOUSLY WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE GROUP AND SHRI RK KEDIA DATED 21ST FEB RUARY 2014 BY THE DIRECTORATE OF CHANDIGARH. IN THE SEARCH PROCEEDING S AT THE PREMISES OF THE ASSESSEE, VARIOUS LOOSE PAPERS WERE FOUND AND I MPOUNDED WHICH WERE INCRIMINATING IN NATURE. THE ASSESSEE WAS ALSO CONFRONTED WITH THE STATEMENTS OF VARIOUS PERSONS RECORDED UNDER SECTIO N 132(4)/131-1A OF THE ACT ALONG WITH THE DOCUMENTS FOUND DURING THE S EARCH IN THE CASE OF SHRI SCS AND PRAVEEN KUMAR JAIN. THE STATEMENT UNDE R SECTION 132(4) OF THE ACT WAS ALSO RECORDED OF THE ASSESSEE WHEREI N HE ADMITTED TO DISCLOSE ADDITIONAL INCOME OF RS. 250 CRORES ON ACC OUNT OF BOGUS LONG- TERM CAPITAL GAIN THROUGH THE SALE OF PIL SHARES. 22. SUBSEQUENTLY, ONE MORE SEARCH AND SEIZURE OPERA TION UNDER SECTION 132 OF THE ACT DATED 13 JUNE 2014 WAS ALSO CARRIED OUT BY THE DIRECTORATE OF INVESTIGATION, DELHI IN THE CASE OF SHRI RK KEDIA, A IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 28 BROKER WHEREIN IT WAS ADMITTED THAT HE HAS ARRANGED THE BOGUS LONG-TERM CAPITAL GAIN ON THE REQUEST OF THE ASSESSEE. FOR TH IS PURPOSE, SHRI RK KEDIA USED TO RECEIVE CASH FROM THE OFFICE OF THE A SSESSEE THROUGH SHRI ALKESH SHARMA AND SURESH GUPTA, EMPLOYEES OF THE BS PL GROUP. LIKEWISE, IN THE COURSE OF SEARCH AND SEIZURE OPERA TION, CERTAIN LOOSE PAPERS OF INCRIMINATING NATURE WERE FOUND WHICH WER E NAMED AS EXTRACT E-14 ANNEXURE A 27. THE RELEVANT PAGE BEARING NO. 6 4 TO 70 OF SUCH SEIZED DOCUMENTS CONTAINED DETAILS OF THE SALE, PUR CHASE OF SHARES AND RECEIPTS AND PAYMENT OF CASH REPRESENTING BOGUS TRA NSACTIONS CARRIED OUT BY THE ASSESSEE AND THE SAME WERE MATCHING WITH THE RECORDS OF KEDIA-2 SHEET, AND RECORDS MAINTAINED BY SHRI PRAVEEN KUMAR JAIN. 23. IN ADDITION TO THE ABOVE, THERE WERE MANY OTHER INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH UNDER S ECTION 132 OF THE ACT AT THE PREMISES OF SHRI RK KEDIA DATED 13TH JUN E 2014. THESE INCRIMINATING DOCUMENTS WERE MAINTAINED IN THE EXCE L SHEETS, BOOKS OF ACCOUNTS AND TALLY SOFTWARE IN CODED FORM. ALL THES E DOCUMENTS WERE UNDER THE CUSTODY OF SHRI MANISH ARORA AN ACCOUNTAN T AND EMPLOYEE OF SHRI RK KEDIA. ON BEING QUESTIONED, SHRI MANISH ARO RA ADMITTED ON OATH THAT ALL THE SEIZED DOCUMENTS RELATED TO THE A CCOMMODATION ENTRY BUSINESS OF SHRI RK KEDIA THROUGH VARIOUS COMPANIES . THIS FACT WAS ALSO ADMITTED BY SHRI RK KEDIA IN THE STATEMENT FUR NISHED UNDER SECTION 132(4) OF THE ACT. AS PER SHRI RK KEDIA, THESE COMP ANIES WERE CONTROLLED AND MANAGED BY VARIOUS ACCOMMODATION ENT RY OPERATORS AND THESE WERE ONLY PAPER COMPANIES WHICH WERE NOT DOIN G ANY ACTUAL WORK. AS SUCH, THESE COMPANIES WERE ENGAGED IN PROVIDING THE VARIOUS ACCOMMODATION ENTRIES INCLUDING THE LONG-TERM CAPIT AL GAIN TO THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 29 VARIOUS BENEFICIARIES. SHRI RK KEDIA ALSO FURNISHED THE LIST OF 31 SUCH COMPANIES ALONG WITH THE DETAILS OF THE PERSONS WHO ARE MANAGING AND CONTROLLING SUCH COMPANIES WITH CONTACT DETAILS. BE SIDES THE STATEMENT OF SHRI RK KEDIA, THE POST SEARCH ENQUIRIES ALSO REVEA LED THE FACT THAT SUCH COMPANIES HIGHLIGHTED BY SHRI RK KEDIA, WERE PAPER COMPANIES WHICH WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. 24. IT WAS NOTICED BY THE AO THAT THE ASSESSEE, THR OUGH SHRI RK KEDIA, HAS TAKEN LONG-TERM CAPITAL GAIN ON THE SALE OF THE SHARES WITH RESPECT TO 10 COMPANIES WHICH WERE INCLUDED IN SUCH 31 COMPANI ES, AS DISCUSSED IN PRECEDING PARAGRAPH. REGARDING SUCH COMPANIES, T HE DETAILS WERE FOUND AND IMPOUNDED FROM THE PREMISES OF SHRI RK KE DIA, CONTAINING THE TRANSACTIONS OF SALE/ PURCHASE OF SHARES AND DE ALING OF CASH. THIS FACT WAS ADMITTED BY HIM THAT THESE COMPANIES WERE ENGAG ED IN PROVIDING ACCOMMODATION ENTRIES. THE LIST OF 10 COMPANIES FRO M WHICH ASSESSEE EARNED LONG TERM CAPITAL STAND AS UNDER: SI. NO. NAME OF THE COMPANY 1. DB (INTERNATIONAL) STOCK BROKERS LTD. 2 BLUE CIRCLE SERVICES LTD. 3 UNISYS SOFTWARE &HOLDING INDUST. LTD. 4 NOUVEAU MULTIMEDIA LTD. 5 ACTION FINANCIAL SERVICES ( INDIA ) LTD. 6 GLOBAL INFRATECH & FINANCE LTD. NOW KNOWN AS ASIAN LAK CAPITAL & FINANCE LTD. 7 RUTRON INTERNATIONAL LTD. 8 RANDER CORPORATION LTD. 9 MATRA KAUSHAL ENTERPRISES LTD. 10 GRANDMA TRADING & AGENCIES LTD. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 30 25. IT WAS FURTHER FOUND THAT ONE OF THE COMPANIES NAMELY M/S BLUE CIRCLE SERVICES LTD WAS CONTROLLED AND MANAGED BY S HRI JAGDISH PRASAD PUROHIT WHO ADMITTED IN THE COURSE OF SEARCH CONDUC TED UNDER SECTION 132 OF THE ACT ON VARIOUS DATES I.E. 19TH NOVEMBER 2011, 12TH FEBRUARY 2013, 17TH DECEMBER 2013 AND 21ST JANUARY 2015 IN A STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT, THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. FOR THIS PURPOSE, HE HAS USED SEVERAL COMPANIES INCLUDING M/S BLUE CIRCLE SERVICES LTD. T HE FINANCIALS OF M/S BLUE CIRCLE SERVICES LTD WERE VERY WEAK AND SHO WING A MEAGRE INCOME. THUS THE RISE IN THE PRICE IN THE SHARES OF M/S BLUE CIRCLE SERVICES LTD FROM RS. 4 TO 75-80 DURING 2010 TO 201 4 WAS NOT JUSTIFIED. HOWEVER, THE TRADE VOLUME OF SHARES OF M/S BLUE CIR CLE SERVICES LTD HAS BEEN RECORDED AT RS.1387.66 CRORES DURING SUCH PERI OD WHICH WAS DONE THROUGH THE SEVERAL BROKERS. MOST OF THE BROKERS AT DIFFERENT POINT OF TIME HAVE ADMITTED ON OATH TO HAVE ARRANGED BOGUS L ONG-TERM CAPITAL GAIN TO CERTAIN BENEFICIARIES THROUGH IMPUGNED COMP ANY I.E. M/S BLUE CIRCLE SERVICES LTD. IN CONNECTION WITH THE SHARE T RADING OF M/S BLUE CIRCLE SERVICES LTD, CERTAIN DOCUMENTS WERE ALSO FO UND FROM THE PREMISES OF SHRI RK KEDIA MARKED AS A-2 PAGES 19 TO 26. THE TRANSACTIONS AS APPEARING IN THESE SEIZED DOCUMENTS WERE EXACTLY MATCHING WITH THE DATA OF BOMBAY STOCK EXCHANGE SHO WING THE SALE MADE BY SHRI ANIKET SINGAL, RELATIVE OF THE ASSESSE E GROUP. FURTHER THE CASH RECEIVED BY SHRI KEDIA AGAINST THE ACCOMMODATI ON ENTRY OF LONG TERM CAPITAL GAIN WAS RECORDED ON DATED 11TH,12TH,1 3TH AND 17TH SEPTEMBER 2012. ANOTHER DOCUMENT WAS ALSO FOUND WH ICH IS INCRIMINATING IN NATURE MARKED AS CHOPRA ACCOUNT/ BPSL ACCOUNT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 31 CONTAINING THE DETAILS OF CASH RECEIPT AND CHEQUE P AYMENT FROM THE GROUP OF THE ASSESSEE IN CONNECTION WITH BOGUS LONG -TERM CAPITAL GAIN ALONG WITH THE COMMISSION CHARGES AT THE RATE OF 6. 5% FOR ARRANGING SUCH ACCOMMODATION ENTRY. THE ENTRIES UNDER THIS RE CONCILIATION STATEMENT WERE ADMITTED BY SHRI RK KEDIA AND HIS EM PLOYEE SHRI MANISH ARORA IN THE STATEMENT FURNISHED UNDER SECTI ON 132(4) OF THE ACT DATED 13TH JUNE 2014. THE COUNTERPARTIES WHO HAVE PURCHASED THE SHARES OF M/S BLUE CIRCLE SERVICES LTD FROM THE GRO UP OF THE ASSESSEE WERE IDENTIFIED WHICH WERE MANAGED BY SHRI PRAVEEN AGGARWAL, SHRI NATWAR LAL DAGA AND SHRI KRISHAN KHADARIA ETC. THE FACT THAT SHRI PRAVEEN AGGARWAL WAS ENGAGED IN PROVIDING THE ACCOM MODATION ENTRIES GETS ESTABLISHED AS HE HAS ADMITTED IN THE STATEMEN T FURNISHED UNDER SECTION 132(4) OF THE ACT AT THE TIME OF SEARCH UND ER SECTION 132 OF THE ACT DATED 13TH SEPTEMBER 2012. 26. IT WAS FURTHER OBSERVED BY THE AO THAT SIMILAR MODUS OPERANDI WAS USED IN RESPECT OF THE REMAINING 9 COMPANIES WI TH RESPECT OF WHICH THE ASSESSEE HAS SHOWN BOGUS LONG-TERM CAPITAL GAIN . THE LIST OF SUCH COMPANIES HAS ALREADY BEEN DISCUSSED IN THE PRECEDI NG PARAGRAPH. THE NECESSARY DOCUMENTS IN CONNECTION WITH SUCH BOGUS L ONG-TERM CAPITAL GAIN WHICH WERE SEIZED FROM THE PREMISES OF RK KEDI A WERE PROVIDED TO THE ASSESSEE. 27. THE AO ALSO FOUND THAT THERE WAS AN INVESTIGATI ON CARRIED OUT BY SEBI IN RESPECT OF CERTAIN COMPANIES WHICH WERE ALL EGED IN THE MANIPULATION OF THE PRICE OF THEIR SCRIPS. THERE WE RE 17 COMPANIES FOUND BY SEBI WHICH WERE ENGAGED IN THE MANIPULATION OF T HE PRICE. OUT OF IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 32 SUCH 17 COMPANIES, 8 COMPANIES ARE THOSE FROM WHERE THE ASSESSEE HAS SHOWN LONG-TERM CAPITAL GAIN AS DISCUSSED ABOVE. 28. THERE WERE CERTAIN OTHER ASSESSEES/BENEFICIARI ES WHO HAVE TAKEN LONG-TERM CAPITAL GAIN ON THE SALE OF PIL AND OTHER COMPANIES AS ADMITTED BY THEM IN THEIR RESPECTIVE ASSESSMENT. ON E OF GROUP NAMELY SHRI UDAY HASMUKHALAL VORA AND DHIREN HASMUKHALAL V ORA HAVE OFFERED THE SAME TO TAX VOLUNTARILY BEFORE THE SETT LEMENT COMMISSION. THE RELEVANT FINDING OF THE AO IS RECORDED ON PAGE 104 TO 106 OF THE ASSESSMENT ORDER. IT WAS ALSO SEEN FROM THE BSE DAT A THAT MAJORITY OF SHARE WERE SOLD WITHIN A MINUTE OF PUTTING THE SALE REQUEST. HOWEVER, THE ASSESSEE AND HIS FAMILY MEMBERS HAVE NOT DISCLOSED THE ADDITIONAL INCOME ADMITTED BY THEM IN THE COURSE OF SEARCH FOR RS. 250 CRORES. 29. IN VIEW OF THE ABOVE, THE AO ISSUED A SHOW CAUS E NOTICE TO THE ASSESSEE, PROPOSING TO TREAT THE AMOUNT OF IMPUGNED LONG-TERM CAPITAL GAIN AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 30. IN RESPONSE TO SUCH SHOW CAUSE NOTICE, THE ASSE SSEE SUBMITTED THAT HE ACQUIRED THE SHARES OF PIL AS SHARE WARRANT WHIC H WERE SUBSEQUENTLY CONVERTED INTO EQUITY SHARES. CONSEQUENTLY THE SHAR ES WERE DEMATERIALISED AND HELD FOR MORE THAN 12 MONTHS. TH E SHARES WERE SOLD THROUGH THE BROKERS REGISTERED WITH THE BSE AND TO THE UNKNOWN PARTIES. ALL THE SALE PROCEEDS WERE RECEIVED AGAINST THE SAL E OF SHARES THROUGH THE BANKING CHANNEL AND THROUGH THE PLATE-FORM OF BSE. NONE OF THE TRANSACTION FOR THE SALE OF SHARES WAS UNDER HIS CO NTROL AS HE WAS UNKNOWN ABOUT THE BUYER OF THE SHARES. ALL THE TRAN SACTIONS OF SALE & IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 33 PURCHASE OF THE SHARES WERE DULY SUPPORTED ON THE C ONTRACT NOTE, SALE BILL ETC. FURTHERMORE, M/S PIL WAS PLANNING TO ESTABLISH A BIG PROJECT IN GUJARAT AND MUMBAI AND IN OVERSEAS COUNTRIES IN THE FIELD OF MOBILE, INTERNET, NETWORK -RELATED SOLUTIONS ETC. THEREFORE , THE ASSESSEE HAS MADE INVESTMENT IN SUCH COMPANY. 31. THE ASSESSEE ALSO CLAIMED THAT HE DOES NOT KNOW ANY PERSON WITH THE NAME SHRI SCS AND PRAVEEN KUMAR JAIN, AND THUS HE HAS NOTHING TO DO WITH THE DOCUMENTS SEIZED FROM THE PREMISES AND THE STATEMENT OF SHRI SCS & PRAVEEN KUMAR JAIN. ACCORDINGLY THE ASS ESSEE REQUESTED FOR THE CROSS-EXAMINATION OF THE PARTIES AS DISCUSS ED ABOVE. SIMILARLY THE ASSESSEE HAS NOT PAID ANY CASH TO THE PARTIES FOR C ARRYING OUT ANY TRANSACTION OF BOGUS LONG-TERM CAPITAL GAIN. THE PU RPOSE OF MAINTAINING DOCUMENTS BY THE THIRD PARTIES WERE NOT KNOWN TO HI M AND THE NAME OF THE ASSESSEE OR HIS FAMILY MEMBERS WERE NOT APPEARI NG IN THOSE SEIZED DOCUMENTS. THEREFORE, NO ADVERSE INFERENCE CAN BE D RAWN AND EVEN THE RECORDS MATCH WITH THE DATA MAINTAINED BY THE RESPE CTIVE PARTIES. 32. THE ASSESSEE ALSO SUBMITTED THAT THE STATEMENT OF SHRI RK KEDIA WAS NOT RELIABLE AS HE WAS CHANGING HIS STAND FREQU ENTLY. THE ASSESSEE FURTHER CONTENDED THAT THE STATEMENT FURNISHED BY H IM UNDER SECTION 132(4) OF THE ACT ADMITTING AN INCOME OF RS. 250 CR ORES DATED 21ST FEBRUARY 2014 CANNOT BE RELIED UPON AS IT WAS GIVEN UNDER THE PRESSURE OF THE SEARCH TEAM. 33. THE SHARES WERE SOLD TO THE UNKNOWN PARTIES. LI KEWISE ALL THE COUNTERPARTIES/PURCHASERS OF THE SHARES WERE NOT AM ONG THE LIST OF 212 IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 34 COMPANIES WHICH WERE ALLEGEDLY ENGAGED IN PROVIDING ACCOMMODATION ENTRIES AND CONTROLLED BY SHRI SCS. THERE CANNOT BE ANY ADVERSE INFERENCE ON THE OBSERVATION THAT THE SHARES WERE S OLD WITHIN A MINUTE AFTER PUTTING THE SALE REQUEST MADE BY THE ASSESSEE . 34. WITH REGARD TO LONG TERM CAPITAL GAIN EARNED BY THE ASSESSEE AND HIS ASSOCIATES FROM THE COMPANIES OTHER THAN PIL, T HE ASSESSEE MADE SIMILAR ARGUMENT THAT HE DID NOT KNOW ANY OF THE PE RSONS WHO WAS ALLEGEDLY CONTROLLING THOSE COMPANIES OR INVOLVED I N ACTIVITY OF ACCOMMODATION ENTRY. THEIR STATEMENTS WERE RECORDED BEHIND HIS BACK. THUS, HE REQUESTED FOR CROSS VERIFICATION AND ALSO REQUESTED TO POINT OUT SPECIFIC CHARGES MADE OUT OF THEIR STATEMENT. THE A SSESSEE SIMILARLY CONTENDED THAT HE OR HIS FAMILY IS NOT INVOLVED IN ANY MANNER IN THE ACTIVITY OF PRICE MANIPULATION BUT ACTING AS NORMAL INVESTOR. THEREFORE, HE IS NOT ANSWERABLE TO ANY FINDING WITH REGARD TO THE MANIPULATION IN THE PRICES OF THE SHARES BY THOSE PERSONS WHO ARE N OT CONNECTED TO HIM IN ANY MANNER. SIMILARLY, HE ALSO CONTENDED THAT WHATE VER DOCUMENT IMPOUNDED FROM THE PREMISES OF THIRD PARTY OR FROM SHRI RK KEDIA WERE NOT PREPARED BY HIM OR HIS FAMILY MEMBERS. LIKEWISE HIS OR HIS FAMILY MEMBERS NAMES WERE NOT APPEARING ON THOSE DOCUMENT. THUS NO INFERENCE CAN BE DRAWN AGAINST HIM. 35. HOWEVER, THE AO DISREGARDED THE CONTENTION OF A SSESSEE BY OBSERVING THAT THE ONUS IS UPON THE ASSESSEE TO JUS TIFY, BASED ON THE DOCUMENTARY EVIDENCE, THAT THE IMPUGNED LONG-TERM C APITAL GAIN IS GENUINE. THERE WERE SEVERAL EVIDENCES RECOVERED IN THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT, CARRIED OUT AT VARIOU S PERSONS AT DIFFERENT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 35 LOCATIONS, WHICH PROVES THAT THE IMPUGNED LONG-TERM CAPITAL GAIN REPRESENTS THE SHAM TRANSACTIONS WHICH WAS UNDERTAK EN THROUGH A SYNDICATE OF ENTRY-PROVIDERS. THUS IN SUCH A SITUAT ION, MERELY FILING THE DMAT ACCOUNT, CONTRACT NOTES, BILLS AND BANK DETAIL S, TO PROVE THAT ALL THE TRANSACTIONS WERE CARRIED OUT THROUGH THE BANKI NG CHANNEL, IS NOT SUFFICIENT ENOUGH ON THE PART OF THE ASSESSEE TO DI SCHARGE THE ONUS IMPOSED UNDER SECTION 68 OF THE ACT. SINCE THE ONUS LIES UPON THE ASSESSEE, IT WAS EXPECTED FROM THE ASSESSEE TO PROD UCE THE BROKERS THROUGH WHOM THE TRANSACTIONS WERE CARRIED OUT AT T HE STOCK EXCHANGE, COUNTERPARTIES WHO PURCHASED THE SHARES FROM THE AS SESSEE, THE DIRECTORS OF THE COMPANIES WITH RESPECT TO WHICH THE LONG-TER M CAPITAL GAIN WAS DECLARED. THE PRODUCTION OF THESE PERSONS WAS NECES SARY TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTIONS BUT THE ASSESSEE FAILED TO DO SO. THE CONTENTION OF THE ASS ESSEE THAT HE DOES NOT KNOW SHRI SCS DOES NOT APPEAR TO BE TRUE FOR THE RE ASONS AS DETAILED BELOW: I. THE GROUP COMPANIES OF THE ASSESSEE HAVE ISSUED SHA RES AT A HUGE PREMIUM TO THE COMPANIES WHICH WERE CONTROLLED AND MANAGED BY SHRI SCS. II. IT WAS ADMITTED BY THE ASSESSEE IN THE SUBMISSION D ATED 3RD FEBRUARY 2016 THAT ITS GROUP COMPANY NAMELY M/S BHU SHAN POWER AND STEEL LIMITED HAS GIVEN ADVANCES FOR THE PURCHASE OF CAPITAL ASSETS IN THE COURSE OF ITS BUSINESS TO THE COMPANIES WHICH WERE MANAGED AND CONTROLLED BY SCS. 36. THERE WERE MANY OPERATORS WHO WERE INVOLVED IN JACKING UP THE PRICE OF CERTAIN COMPANIES AND PROVIDING ACCOMMODAT ION ENTRIES TO THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 36 BENEFICIARIES. THIS FACT OF INVOLVING VARIOUS BROKE RS IN THE ACTIVITY OF ACCOMMODATION ENTRIES HAS ALREADY BEEN ELABORATED I N THE PRECEDING PARAGRAPH. THEREFORE, CONTENTION OF THE ASSESSEE TH AT THE SHARES OF PIL WERE ALSO SOLD TO OTHER COMPANIES WHICH WERE NOT MA NAGED AND CONTROLLED BY SCS DOES NOT MAKE THE TRANSACTION GEN UINE. IT IS FOR THE REASON THAT THERE WAS A SYNDICATE WHICH WAS OPERATI NG IN TANDEM FOR GENERATING THE BOGUS LONG-TERM CAPITAL GAIN. IT IS VERY UNUSUAL THAT MAJORITY OF THE TRADES WERE EXECUTED WITHIN THE MIN UTE AFTER PLACING THE ORDER. IT IS POSSIBLE ONLY WHEN THE BUYER AND THE S ELLER ARE ARTIFICIALLY SYNCHRONISED FOR CARRYING OUT THE TRANSACTIONS. THE RE WERE CERTAIN DOCUMENTS FOUND DURING THE COURSE OF SEARCH MARKED ASKEDIA -2, CASH AND CHEQUE SHEET FROM THE PREMISES OF SHRI S CS AND OTHER DOCUMENTS/RECORDS ETC FROM THE PREMISES OF SHRI RK KEDIA AND PRAVEEN KUMAR JAIN WHICH WERE EXACTLY MATCHING WITH THE REC ORDS OF THE ASSESSEE. THEREFORE THESE DOCUMENTS CONCLUSIVELY PR OVE THAT THE ASSESSEE HAS UNDERTAKEN SHAM TRANSACTIONS IN THE FO RM OF LONG-TERM CAPITAL GAIN. LIKEWISE, THESE SEIZED DOCUMENTS ARE NOT AVAILABLE IN PUBLIC DOMAIN AND THEREFORE NOBODY CAN ACCESS TO TH EM AS THESE RELATE TO THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE GROUP. THUS ALL THE TRANSACTIONS ARE LINKED WITH EACH OTHER. THE STATEM ENT RECORDED OF SHRI RK KEDIA IS BACKED BY PLETHORA OF INCRIMINATING DOC UMENTS WHICH WERE SEIZED DURING THE SEARCH PROCEEDINGS. AS SUCH THE S TATEMENT OF SHRI RKKEDIA SUPPORTS AND INCORPORATES THE EVIDENCES FOU ND DURING THE SEARCH. THEREFORE, THE CONTENTION OF THE ASSESSEE T HAT THE STATEMENT OF SHRI RKKEDIA IS NOT RELIABLE AS HE IS CHANGING HIS STATEMENT IS OF NO SIGNIFICANCE. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 37 37. THE DISCLOSURE MADE BY THE ASSESSEE FOR RS.250 CRORES ON BEHALF OF THE GROUP WAS BASED ON THE DOCUMENTS FOUND DURING T HE SEARCH PROCEEDINGS AT VARIOUS PLACES. THE ENTRIES RECORDED IN THOSE DOCUMENTS I.E. CASH/ CHEQUE SHEET AND KEDIA-2, WERE MATCHING WITH THE BOOKS OF ACCOUNTS/ BANK STATEMENT OF THE ASSESSEE G ROUP. AS SUCH THE ASSESSEE FAILED TO MAKE ANY SATISFACTORY REPLY ON C ONFRONTATION OF VARIOUS DOCUMENTS AND THUS HE ADMITTED IN THE STATE MENT RECORDED UNDER SECTION 132(4)/131-1A OF THE ACT TO DISCLOSE A SUM OF RS.250 CRORES. OUT OF SUCH SUM RS.159.61 CRORES WAS SURRENDERED FOR TH E LONG-TERM CAPITAL GAIN SHOWN FROM PIL IN THE ASSESSMENT YEAR 2011-12 AND 12-13. THEREFORE THE CONTENTION OF THE ASSESSEE THAT THE D ISCLOSURES WERE MADE UNDER PRESSURE IS NOT TENABLE. 38. THE GROUP OF THE ASSESSEE HAS GENERATED HUGE LO NG-TERM CAPITAL GAIN ON THE PURCHASE AND SALE OF SHARES OF THE COMP ANIES WHICH WERE NOT HAVING ANY BUSINESS ACTIVITY. ALL THESE COMPANIES W ERE SHOWING MEAGRE INCOME. LIKEWISE, THESE COMPANIES WERE INCURRING ON LY NOMINAL COST WHICH SUGGESTS THAT THESE COMPANIES ARE NOT ACTIVEL Y ENGAGED IN ANY ACTIVITY. HAD THERE BEEN ANY ACTIVITY, THE SAME WOU LD HAVE BEEN REFLECTED FROM THE FINANCIAL STATEMENTS OF THE RELEVANT COMPA NIES. SIMILARLY, THESE COMPANIES HAVE ISSUED SHARES AT A HUGE PREMIUM WHIC H WAS IMMEDIATELY UTILISED FOR MAKING THE INVESTMENT IN T HE SHARES OF OTHER COMPANIES. THUS, CONSIDERING ALL THESE FACTS, THE A MOUNT OF CAPITAL GAIN GENERATED ON THE SALE PURCHASE OF THESE COMPANIES I S AGAINST THE HUMAN PROBABILITY. THEREFORE, THE PREPONDERANCE OF THE PR OBABILITY SUGGESTS THAT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 38 THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE GROUP IN THE NAME OF LONG- TERM CAPITAL GAIN ARE A SHAM TRANSACTION. 39. THERE WERE VARIOUS DIRECT AND CIRCUMSTANTIAL EV IDENCE AVAILABLE ON RECORD INDICATING THAT THE PRICES OF THE SHARES OF THE IMPUGNED COMPANIES WERE RIGGED UP IN AN ORGANISED MANNER BY THE NETWORK OF THE VARIOUS ENTRY-OPERATORS. ALL THE TRANSACTIONS OF PU RCHASE AND SALE OF THE SHARES OF THESE COMPANIES ON THE STOCK EXCHANGE WER E CARRIED OUT IN SYNCHRONISED MANNER. MOST OF THE TIME TRANSACTION G ETS COMPLETED IMMEDIATELY AFTER PUTTING THE BID ON THE STOCK EXCH ANGE. 40. THERE WERE VARIOUS SEARCH AND SEIZURE OPERATION S AS WELL AS SURVEY OPERATIONS ON VARIOUS COMPANIES, BROKERS, SUB-BROKE RS, EMPLOYEES ETC. WHO HAVE FURNISHED THE STATEMENT UNDER SECTION 132( 4) OF THE ACT BY ADMITTING THAT THEY WERE ENGAGED IN PROVIDING ACCOM MODATION ENTRIES TO THE BENEFICIARIES. SOME OF THE NAMES OF THESE PERSO NS ARE SHRI SCS, PRAVEEN KUMAR JAIN, RK KEDIA, MANISH AROROA, OPK ET C. THE STATEMENTS OF THESE PERSONS WERE BACKED BY VARIOUS INCRIMINATI NG DOCUMENTS FOUND FROM THEIR PREMISES. THUS THE STATEMENTS CORROBORAT E THE FACT THAT THE GROUP OF THE ASSESSEE HAD BEEN ENGAGED IN TAKING TH E ACCOMMODATION ENTRIES FROM VARIOUS ENTRY OPERATORS. LIKEWISE, NON E OF THE STATEMENT WAS RECORDED UNDER SECTION 132(4) OF THE ACT USING ANY COERCION. AS SUCH ALL THE STATEMENTS WERE FURNISHED BY THE ENTRY OPERATORS/COMPANIES ADMITTING THEIR INVOLVEMENT IN THE ACTIVITY OF ACCO MMODATION ENTRIES WHICH WAS BASED ON THE INCRIMINATING MATERIALS. FUR THERMORE, THERE WAS THE CONSISTENCY AMONG THE STATEMENTS FURNISHED BY T HE PARTIES UNDER SECTION 132(4)/131(1A) OF THE ACT ADMITTING THE FAC T THAT THEY WERE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 39 ENGAGED IN PROVIDING THE ACCOMMODATION ENTRIES TO T HE BENEFICIARIES INCLUDING THE ASSESSEE. 41. THERE WERE SERIES OF DOCUMENTS FOUND DURING THE SEARCH WHEREIN THE ENTRIES FOR RECEIPT OF CASH WERE RECORDED. ALL THESE ENTRIES OF CASH RECEIPT WERE MATCHING WITH THE SEIZED DOCUMENTS WHI CH WERE FOUND AT DIFFERENT PLACES DURING THE INDEPENDENT SEARCHES. B ESIDES THE CASH TRANSACTIONS, THERE WERE BANKING TRANSACTIONS ALSO RECORDED WHICH WERE MATCHING WITH THE BOOKS OF ACCOUNTS OF ENTITIES OF ENTRY PROVIDER AND THE BANK STATEMENT OF THE ASSESSEE GROUP COMPANY. ALL T HESE DOCUMENTS READ IN TOTO EVIDENCE THAT THE GROUP OF ASSESSEE HA S GIVEN CASH TO THE ENTRY PROVIDERS FOR GENERATING ACCOMMODATION ENTRIE S IN THE FORM OF LONG TERM CAPITAL GAIN. FOR THIS PURPOSE, THE COMMI SSION WAS ALSO PAID BY THE GROUP OF THE ASSESSEE WHICH WAS ALSO APPEARI NG IN THE SEIZED DOCUMENTS. 42. REGARDING THE CONTENTION OF THE ASSESSEE FOR PR OVIDING THE OPPORTUNITY OF CROSS-EXAMINATION OF THE PERSONS AS DISCUSSED ABOVE, IT WAS NOTICED BY THE AO THAT THE ADDITION WAS NOT MAD E MERELY ON THE BASIS OF THE STATEMENT BUT IT WAS BACKED BY VARIOUS INCRIMINATING DOCUMENTS FOUND DURING THE INDEPENDENT SEARCHES. TH EREFORE IN SUCH CIRCUMSTANCES, IT WAS NOT OBLIGATORY TO EXTEND THE OPPORTUNITY OF CROSS- EXAMINATION TO THE ASSESSEE. BESIDES, THERE WERE NU MEROUS SEARCHES IN DIFFERENT PARTS OF THE COUNTRY IN THE CASE OF VARIO US PERSONS AND THEREFORE IT WAS NOT FEASIBLE TO PROVIDE THE OPPORTUNITY OF T HE CROSS-EXAMINATION OF THE ALLEGED PERSON TO THE ASSESSEE. HOWEVER, NOBODY APPEARED IN RESPONSE TO THE SUMMONS ISSUED TO VARIOUS PARTIES U NDER SECTION IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 40 133(6)/131 OF THE ACT. FURTHERMORE, THE SHAM TRANSA CTIONS GENERALLY CARRIED OUT IN AN ORGANISED MANNER BY THE GROUP/NET WORK OF SYNDICATE AND THEREFORE MEMBER OF SUCH SYNDICATE DID NOT COME FORWARD FOR THE CROSS-EXAMINATION. 43. THE PROCEEDINGS UNDER THE INCOME TAX ACT BEING THE CIVIL PROCEEDINGS DOES NOT REQUIRES ABSOLUTE EVIDENCE. TH EREFORE THE ASPECT OF PREPONDERANCE OF PROBABILITY CANNOT BE IGNORED IN T HE GIVEN FACTS AND CIRCUMSTANCES, ESPECIALLY ON THE BASIS OF THE DOCUM ENTS AND THE STATEMENT RECORDED OF VARIOUS PERSONS DURING VARIOU S SEARCH PROCEEDINGS AS DISCUSSED ABOVE. ALL THE COMPANIES WHICH HAVE BE EN USED FOR THE PURPOSE OF GENERATING THE LONG-TERM CAPITAL GAIN ON THE SALE & PURCHASE OF THE SHARES WERE FINANCIALLY WEAK AND HAVING NO B USINESS TRANSACTION. THUS, NO PRUDENT BUSINESSMAN WILL TAKE THE RISK BY MAKING THE INVESTMENT IN THE SHARES OF SUCH COMPANIES. THEREFO RE, THE PREPONDERANCE OF PROBABILITY SUGGEST THAT THE ASSES SEE HAS ENTERED INTO SUCH TRANSACTION WITH VIEW TO CONVERT UNACCOUNTED M ONEY WITH THE HELP OF ENTRY PROVIDER IN THE FORM OF BOGUS LONG-TERM CA PITAL GAIN WHICH IS ALSO SUPPORTED BY THE PLETHORA OF EVIDENCE GATHERED IN VARIOUS SEARCHES, STATEMENTS AND SURROUNDING FACTS AND CIRCUMSTANCES. ACCORDINGLY, THE AO TREATED ENTIRE LONG TERM CAPITAL GAIN EARNED BY THE ASSESSEE FOR A.Y. 2008-09 TO 2014-15 AS UNACCOUNTED/UNEXPLAINED MONEY U/S 68/69C BEING BOGUS LONG-TERM CAPITAL GAIN AND COMMISSION E XPENSES THEREON. THUS THE AO FOR THE YEAR UNDER CONSIDERATION I.E. A .Y. 2014-15 MADE ADDITIONS FOR A SUM OF RS. 59,85,99,451/- ON ACCOUN T OF BOGUS LONG TERM CAPITAL GAIN AND RS. 3,81,28,694/- ON ACCOUNT OF CO MMISSION CHARGES. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 41 44. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE L EARNED CIT (A) 45. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITT ED THAT THE TRANSACTIONS FOR THE PURCHASE AND SALE OF THE SHARE S OF THE ALLEGED COMPANIES WERE BACKED BY THE NECESSARY SUPPORTING E VIDENCES SUCH AS THE CONTRACT NOTES, DEMAT ACCOUNTS, BANKING STATEME NT SHOWING PAYMENT FOR PURCHASE AND PROCEEDS AGAINST SALE RECE IVED IN BANK ETC. HOWEVER, THE AO HAS NOT POINTED OUT ANY DEFECT IN S UCH DOCUMENTS WHICH WERE PRODUCED BEFORE HIM DURING THE ASSESSMEN T PROCEEDINGS. THE AO HAS MERELY TREATED THE IMPUGNED LONG-TERM CA PITAL GAIN AS BOGUS AND THEREFORE UNEXPLAINED CASH CREDIT ON THE BASIS OF REPORTS RECEIVED FROM THE DIRECTORATE OF INVESTIGATION WING . AS SUCH, THE DIRECTORATE OF INVESTIGATION WING IN THE COURSE OF SEARCH PROCEEDINGS CONDUCTED UNDER SECTION 132 OF THE ACT, IN THE CASE OF VARIOUS PERSONS NOT CONNECTED WITH THE ASSESSEE, HAVE COLLECTED THE DOCUMENTS AS WELL AS RECORDED THE STATEMENTS. BASED ON THE SAME IT WAS A LLEGED THAT THE ASSESSEE HAS GENERATED BOGUS LONG-TERM CAPITAL GAIN . ACCORDINGLY, THE ASSESSEE SUBMITTED THAT THE AO WITHOUT POINTING OUT ANY DEFECTS IN THE PRIMARY DOCUMENTS BUT RELYING ON THE DOCUMENTS/STAT EMENTS OF THE 3RD PARTIES WITHOUT CONDUCTING ANY INDEPENDENT ENQUIRY HAS CONCLUDED THAT THE IMPUGNED LONG-TERM CAPITAL GAIN AS BOGUS IN NAT URE. THUS THE ACT OF THE AO IS WITHOUT THE APPLICATION OF MIND. 46. THE ASSESSEE FURTHER SUBMITTED THAT THERE WAS A SPECIFIC REQUEST MADE TO THE AO DURING THE ASSESSMENT PROCEEDINGS FO R EXTENDING THE OPPORTUNITY OF CROSS-EXAMINATION OF THE PARTIES WHO SE STATEMENTS WERE RELIED FOR ALLEGING THAT THE TRANSACTION OF LONG-TE RM CAPITAL GAIN WAS IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 42 BOGUS IN NATURE. IT IS THE SETTLED LAW THAT NO ADVE RSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE UNTIL AND UNLESS THE ASS ESSEE IS AFFORDED THE OPPORTUNITY OF CROSS VERIFICATION. 47. IT WAS ALSO CONTENDED THAT THE CONDITIONS AS SP ECIFIED UNDER SECTION 10(38) OF THE ACT FOR TREATING THE PARTICULAR LONG- TERM CAPITAL GAIN AS EXEMPTED FROM TAX HAVE BEEN DULY SATISFIED. AS SUCH THE ASSESSEE HAS GENERATED THE LONG-TERM CAPITAL GAIN ON THE SALE OF LISTED SECURITIES AND AFTER MAKING THE PAYMENT OF SECURITY TRANSACTION TA X. THEREFORE, THE AO SHOULD HAVE VIEWED THE TRANSACTIONS OF IMPUGNED LON G-TERM CAPITAL GAIN WITHIN THE PARAMETERS OF THE PROVISIONS SPECIFIED U NDER SECTION 10(38) OF THE ACT. 48. THE SALE AND PURCHASE OF THE SCRIPTS LISTED ON THE STOCK EXCHANGE ARE REGULATED BY SEBI, INTERNAL CONTROL/GUIDELINES OF THE STOCK EXCHANGE. FURTHERMORE, A COMPANY BEFORE LISTING SHARES IN A S TOCK EXCHANGE HAS TO FACE VARIOUS HURDLES FOR COMPLIANCE OF THE CONDITIO NS SPECIFIED BY THE STOCK EXCHANGE AS WELL AS SEBI. THEREFORE, TREATING THE IMPUGNED LONG- TERM CAPITAL GAIN AS BOGUS IN NATURE WOULD BE A DIS GRACE OF SUCH AUTHORITIES WHICH CAME INTO EXISTENCE THROUGH THE P ARLIAMENT OF INDIA. FURTHER IN SUCH A HIGHLY REGULARISED AND FORMALIZED SYSTEM OF TRADING, RIGGING OR MANIPULATING THE TRANSACTION IS ALMOST I MPOSSIBLE. 49. THE WORD PENNY STOCK HAS NOT BEEN DEFINED ANYWH ERE IN ANY OF THE ACT. HOWEVER, PENNY STOCK REFERS TO THE SCRIPTS OF SMALL COMPANIES. THE TRADING OF SHARES OF SUCH SMALL COMPANIES CANNOT BE VIEWED WITH PREJUDICIAL MIND. ACCORDINGLY, ANY GAIN AROSE OUT O F THE TRADING OF IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 43 SHARES OF SUCH SMALL COMPANIES CANNOT BE TERMED AS BOGUS IN NATURE. THE RISE IN THE PRICE OF THE SHARES IN MARKET IS NO T ALWAYS BASED ON THE COMPANYS FINANCIAL POSITION, PROFIT/GROWTH RATHER ITS VALUE/PRICE IS DETERMINED ON THE DEMAND AND SUPPLY OF THE SCRIPT. AS SUCH THE PRICE OF THE SCRIPT DEPENDS UPON VARIOUS FACTORS SUCH AS THE FIELD IN WHICH THE COMPANY IS OPERATING, THE COMPETITION THAT THE COMP ANIES IS FACING, THE DIFFICULTY FOR MAKING THE ENTRY IN THE PARTICULAR F IELD, THE BACKGROUND OF THE PROMOTERS, GOVT. POLICY, BUDGET PROPOSALS, FUTU RE PLANS ETC. 50. FURTHERMORE, THE ASSESSEE WAS NOWHERE INVOLVED IN THE JACKING UP OF THE PRICE OF THE COMPANIES AS DISCUSSED ABOVE. T HERE IS NO ALLEGATION BROUGHT ON RECORD BY THE REVENUE SUGGESTING THAT TH E ASSESSEE WAS INVOLVED IN ANY MANNER IN RIGGING UP THE PRICE OF T HE ALLEGED COMPANIES. THE AO WHILE TREATING THE IMPUGNED LONG-TERM CAPIT AL GAIN AS BOGUS IN NATURE HAS REFERRED TO VARIOUS STATEMENTS AND DOCUMENTS SEIZED IN THE COURSE OF SEARCH FROM THE PLACE OF THE 3RD P ARTIES. AS SUCH THERE WAS NO IOTA OF EVIDENCE FOUND FROM THE PREMISES OF THE ASSESSEE SUGGESTING THAT THE ASSESSEE WAS ENGAGED IN GENERAT ING SUCH CAPITAL GAIN WHICH IS BOGUS IN NATURE. THEREFORE, NO REFERENCE C AN BE MADE TO THE DOCUMENTS COLLECTED FROM THE 3RD PARTY WHILE DECIDI NG THE INCOME OF THE ASSESSEE. 51. THE AO IN TREATING THE LONG-TERM CAPITAL GAIN O N THE SCRIPT OF PIL HAS HEAVILY RELIED UPON THE STATEMENT OF SHRI SCS/ RK KEDIA/ MANISH ARORA, OPAK, PRAVEEN KUMAR JAINVIZ A VIZ THE DOCUME NTS FOUND FROM THE PREMISES OF SCS AND OTHERS. IN THIS REGARD IT W AS SUBMITTED THAT THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 44 ASSESSEE DOES NOT KNOW THE SAID PARTIES EXCEPT SHRI RK KEDIA. NO TRANSACTION WAS CARRIED OUT WITH ANY OF THEM EXCEPT CERTAIN HELP RECEIVED FROM SHRI RK KEDIA. THEREFORE, IT WAS SUBMITTED BY THE ASSESSEE THAT HE HAS NOT PROVIDED ANY CASH TO ANY OF THE PARTY. THE COMPANY NAMELY BSPL HAS GIVEN ADVANCES FOR THE ACQUISITION OF CAPI TAL ASSETS, THROUGH SHRI RK KEDIA, TO VARIOUS COMPANIES IN THE COURSE O F NORMAL BUSINESS. AS SUCH IT WAS NOT KNOWN THAT SUCH COMPANIES BELONG TO SHRI SCS. 52. REGARDING THE SHEET MARKED AS KEDIA-2, IT WAS S UBMITTED THAT ASSESSEE HAS NOT PREPARED SUCH SHEET. THE SHEET WAS PREPARED BY SCS FOR THE REASONS BEST KNOWN TO HIM. AS SUCH, THE ASSESSE E DOES NOT KNOW ANY REASON FOR THE SHEET KEDIA 2 BEING MAINTAINED BY SH RI SCS. THE BANK PAYMENT WAS MADE THROUGH RK KEDIA FOR THE ACQUISITI ON OF THE CAPITAL ASSETS BY BPSL. WHY THE DETAILS OF BANK PAYMENT WER E RECORDED IN THE SHEET FOUND FROM THE PREMISES OF SHRI SCS, THIS QUE STION CAN ONLY BE ANSWERED BY SHRI RK KEDIA. THERE CAN BE SOME INTERN AL DEALING BETWEEN THEM WHICH CAN BE CLARIFIED BY THEM ONLY. I T HAS ALREADY BEEN SUBMITTED THAT IT HAS NOT PROVIDED ANY CASH OF WHAT SOEVER TO ANY PARTY. THEREFORE THE CASH TRANSACTIONS RECORDED IN THE DOC UMENTS FOUND FROM THE PREMISES OF THE 3RD PARTY NAMELY SHRI SCS , RK KEDIA AND PRAVEEN KUMAR JAIN WHICH WERE ALSO MATCHING/CORRELATING WIT H THE RESPECTIVE RECORDS MAINTAINED BY THEM ARE NOT KNOWN BY HIM. FO R WHAT PURPOSE THEY WERE RECORDING THE TRANSACTIONS, THEY CAN ONLY CLARIFY. FURTHERMORE, IN NONE OF THE DOCUMENT THE NAME OF THE ASSESSEE GR OUP WAS SHOWN. THE ASSESSEE ALSO MADE SAME ARGUMENTS WITH RESPECT TO THE CASH AND CHEQUE SHEET FOUND FROM THE PREMISES OF SHRI SCS. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 45 53. THE CASH TRAIL FOUND BY THE AO WITH RESPECT TO THE PARTIES NAMELY SHRI SCS , RK KEDIA AND PRAVEEN KUMAR JAIN PERTAINE D TO THE PERIOD 28TH OF JUNE 2011 TO 27TH AUGUST 2011 WHEREAS THE A SSESSEE HAS MADE THE LAST SALE OF SHARES OF PIL DATED 3RD MAY 2011 M UCH PRIOR TO THE CASH TRAIL AS POINTED OUT BY THE AO. THEREFORE, NO REFER ENCE CAN BE MADE TO SUCH DOCUMENTS. 54. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS NOT MADE ANY PAYMENT OF COMMISSION OR AGREED TO PAY TO SHRI RK KEDIA AS RECORDED FROM THE DOCUMENTS FOUND FROM HIS PREMISES. ADMITTEDLY, THE INVESTMENT IN PIL AND OTHER COMPANIES WAS MADE AS PER THE ADVICE OF S HRI RK KEDIA AND THEREFORE IT MIGHT BE POSSIBLE THAT SHRI RK KEDIA W AS EXPECTING SOME COMMISSION ON SUCH INVESTMENTS. HOWEVER, SHRI RK KE DIA HAS NEVER DEMANDED ANY COMMISSION FROM THE ASSESSEE. THEREFOR E, IT IS BEST KNOWN TO SHRI RK KEDIA, WHAT WAS THE PURPOSE FOR MA INTAINING SUCH RECORD. 55. THE ASSESSEE HAS SOLD THE SHARES OF PIL TO VARI OUS COMPANIES NUMBERING INTO 141 AND THERE WERE ONLY 21 COMPANIES OUT OF SUCH 141 COMPANIES BELONGING TO THE GROUP OF SCS. IN OTHER W ORDS, SEVERAL COMPANIES TO WHOM THE SHARES WERE TRANSFERRED WERE NOT THE PART OF THE ENTITIES OF SHRI SCS. THEREFORE, THERE IS NO QUESTI ON OF TREATING THE SALE OF SHARES TO OTHER COMPANIES AS UNEXPLAINED CASH CR EDIT UNDER SECTION 68 OF THE ACT. ONCE THE TRANSACTION OF SELLING SHARES TO THE COMPANIES OTHER THAN 21 COMPANIES BELONGING TO SHRI SCS HAS TO BE A CCEPTED AS GENUINE LONG-TERM CAPITAL GAIN, THEN THE TRANSACTION OF SEL LING THE SHARES OF THE GROUP COMPANY CONTROLLED AND MANAGED BY SHRI SCS SH OULD ALSO BE GIVEN THE SAME TREATMENT. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 46 56. ALL THE SHARES WERE SOLD THROUGH THE STOCK EXCH ANGE WHICH IS REGULATED BY THE VARIOUS AUTHORITIES. ONCE THE REQU EST OF SALE OF SHARES WAS MADE ON THE STOCK EXCHANGE WHICH WAS MATCHED WI TH THE OTHER PARTY AS BUYER, THE SAME WAS ACCEPTED AND ACCORDING LY, THE TRANSACTION GOT EXECUTED. AS SUCH THERE IS NO ROLE OF THE ASSES SEE IN SUCH PRICE FIXING WITH THE BUYER. AS SUCH THE BUYERS ARE ALWAYS UNKNO WN TO THE SELLER. ACCORDINGLY, THE CONTENTION OF THE AO THAT THE TRAN SACTION OF SALE PURCHASE WAS COMPLETED IN A COUPLE OF MINUTES IS NO T TENABLE AND CARRIED NO MERITS. 57. REGARDING THE LONG-TERM CAPITAL GAIN SHOWN ON T HE SALE OF THE SHARES OF M/S BLUE CIRCLE SERVICES LTD, IT WAS SUBM ITTED THAT IT WAS TREATED AS BOGUS ON THE BASIS OF STATEMENTS RECORDE D OF VARIOUS PERSONS SUCH AS SHRI RK KEDIA, MANISH ARORA, PRAVEEN AGRAWA L AND JAGDISH PUROHIT BESIDES THE DOCUMENT MARKED AS ANNEXURE 2 A ND BACKUP DATA FOUND FROM THE PREMISES OF RK KEDIA. BUT THE FACT I S THIS THAT HE DOES NOT KNOW TO SHRI JAGDISH PUROHIT AND PARVEEN AGGARW AL. MOREOVER, THE ASSESSEE HAS NOT CARRIED OUT ANY TRANSACTION EITHER DIRECTLY OR INDIRECTLY WITH THESE PERSONS. SIMILARLY, THE NAME OF ASSESSEE GROUP WAS NOT APPEARING IN THE STATEMENTS FURNISHED BY SHRI JADIS H PUROHIT AND PRAVEEN AGRAWAL. SIMILARLY, THESE TWO PERSONS DID NOT EVEN ADMITTED IN THE STATEMENT THAT THEY HAVE HELPED EACH OTHER IN GENER ATING THE BOGUS LONG- TERM CAPITAL GAIN. LIKEWISE, THE ALLEGATION OF THE AO THAT SHRI JAGDISH PUROHIT WAS CONTROLLING THE AFFAIRS OF THE COMPANY NAMELY M/S BLUE CIRCLE SERVICES LTD WAS NOT CORRECT AS HIS NAME WAS NOT APPEARING IN THE LIST OF BOARD OF DIRECTORS OF THE COMPANY. THE ASSE SSEE FURTHER IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 47 CONTENDED THAT HIS NAME IS NOT APPEARING ON THE DOC UMENTS SEIZED FROM THE PREMISES OF SHRI RK KEDIA WHICH WERE MARKED AS ANNEXURE 2 AND THE BACKUP DATA. THE TRANSACTIONS RECORDED THEREIN OR BETWEEN SHRI RK KEDIA AND JAGDISH PUROHIT WITHOUT HAVING ANY REFERE NCE TO THE ASSESSEE. FURTHERMORE, THE TRANSACTIONS RECORDED IN THESE SEI ZED DOCUMENTS PERTAINED TO THE FINANCIAL YEAR 2012- 13 WHEREAS TH E ASSESSEE HAS SOLD THE SHARES OF M/S BLUE CIRCLE SERVICES LTD IN THE F INANCIAL YEAR 2011-12. ACCORDINGLY, IT WAS CONTENDED THAT THE ASSESSEE HAS NO ROLE IN THE DOCUMENTS SEIZED DURING THE SEARCH PROCEEDINGS. 58. THE ASSESSEE HAS SOLD THE SHARES IN THE CASE OF M/S BLUE CIRCLE SERVICES LTD WORTH OF RS.170 CRORES. OUT OF RS. 170 CRORES, THE SHARES VALUE OF RS. 60.12 CRORES WERE ALLEGEDLY PURCHASED BY THE COMPANIES CONTROLLED AND MANAGED BY SHRI PRAVEEN AGARWAL, AN ENTRY OPERATOR, WHICH CONSTITUTES 37% OF THE TOTAL VALUE OF THE SHA RES SOLD. THUS IT CAN BE INFERRED THAT THE REMAINING 63% OF THE TOTAL VAL UE OF THE SHARES WERE SOLD TO OTHER PARTIES IN RESPECT OF WHICH NO DOUBT WAS RAISED BY THE AO. FURTHERMORE, ALL THE TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH THE STOCK EXCHANGE REGULATED BY THE SEBI, WHERE THE SELLER AN D THE BUYERS DO NOT KNOW EACH OTHER AND SELLER OR BUYER DOESNT HAVING ANY CONTROL ON SUCH TRANSACTIONS. THUS IT CANNOT BE SAID THAT THE TRANS ACTIONS OF SHARES TRADING WAS CARRIED OUT IN SYNCHRONISED MANNER. 59. WITH RESPECT TO THE ALLEGATION OF THE AO FOR TH E WEAK FINANCIAL AND NO BUSINESS ACTIVITY IN THE CASE OF M/S BLUE CIRCLE SERVICES LTD, THE ASSESSEE REPEATED THE SAME ARGUMENTS WHICH HAVE BEE N ELABORATED IN THE PRECEDING PARAGRAPH. IN SUM AND SUBSTANCE, THE CONT ENTION OF THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 48 ASSESSEE WAS THAT THE WEAK FINANCIAL OF THE COMPANY CANNOT BE A CRITERIA TO DETERMINE THE VALUE OF THE SHARES RATHER IT DEPE NDS UPON VARIOUS OTHER FACTORS. SIMILARLY, THE ASSESSEE SUBMITTED THAT ITS GROUP HAS MADE INVESTMENTS IN THE COMPANY AS DISCUSSED ABOVE AND O THER COMPANIES CONSIDERING THE FUTURE PROSPECTIVE AS A NORMAL INVE STOR ONLY. IF THERE WAS ANY RISE OR FALL IN THE PRICE OF THE COMPANY, HE HA D NO ROLE OF WHATSOEVER AND THERE WAS NO DOCUMENT BROUGHT ON RECORD FOR ALL EGING SO. 60. ALL THE NECESSARY DOCUMENTS IN SUPPORT OF THE T RANSACTIONS FOR THE IMPUGNED LONG-TERM CAPITAL GAIN WERE FURNISHED WHIC H CANNOT BE BRUSHED ASIDE BY THE AO BY RESORTING TO THE APPROAC H OF PREPONDERANCE OF PROBABILITY. IT IS BECAUSE, ALL THE TRANSACTIONS ARE BACKED BY THE DOCUMENTARY EVIDENCE. THUS, NO INFERENCE CAN BE DRA WN AGAINST THE ASSESSEE BASED ON THE PRINCIPLE OF PREPONDERANCE OF PROBABILITY. 61. HOWEVER, THE LEARNED CIT (A) DISAGREED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE GROUP HAS S HOWN LONG-TERM CAPITAL GAIN OF RS. 694 CRORES OVER THE PERIOD OF T IME AGAINST THE INVESTMENT MADE FOR RS.21 CRORES ONLY. THE ENTIRE I NVESTMENT WAS MADE BY THE ASSESSEE GROUP IN THE PENNY STOCK COMPANIES HAVING WEAK FINANCIALS AND NO MAJOR BUSINESS ACTIVITIES. BESIDE S THIS, THE ASSESSEE HAS NOT MADE ANY OTHER INVESTMENT IN ANY OTHER COMPANY. THUS, IT IS HUMANLY IMPOSSIBLE FOR GENERATING SUCH HUGE CAPITAL GAIN IN SUCH SHORT PERIOD OF TIME WITHOUT ANY MANIPULATION. 61.1 THE ASSESSEE HIMSELF HAS ADMITTED TO HAVE GENE RATED LONG-TERM CAPITAL GAIN FOR RS. 250 CRORES IN THE STATEMENT FU RNISHED UNDER SECTION 132(4) OF THE ACT AFTER CONFRONTING VARIOUS DOCUMEN TS OF INCRIMINATING IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 49 NATURE AND THE STATEMENT RECORDED OF VARIOUS PERSON S. THUS, THE ADMISSION BY THE ASSESSEE IN ITSELF IS A VITAL PIEC E OF EVIDENCE THAT THE GROUP OF THE ASSESSEE HAS GENERATED HUGE BOGUS LONG -TERM CAPITAL GAIN. THE ADMISSION FOR DISCLOSING THE INCOME WAS MADE BY THE ASSESSEE BASED ON THE INCREMENTAL DOCUMENTS FOUND DURING THE SEARCH AS WELL AS THE STATEMENTS RECORDED OF VARIOUS PERSONS AND THER EFORE THE ARGUMENT OF THE ASSESSEE THAT THE ADMISSION WAS MADE TO BUY THE PEACE OF MIND OR IT WAS GIVEN UNDER COERCION/PRESSURE HAS NO RELEVANCE. 62. THE BANKING TRANSACTIONS AND SHARES TRANSACTIO NS APPEARING IN THE SHEET MARKED AS KEDIA -2 ARE MATCHING WITH THE BANK STATEMENT AND BSE DATA OF THE ASSESSEE GROUP COMPANY. AT THE SAME TIM E, SUCH SHEET WAS ALSO CONTAINING THE DETAILS OF THE CASH TRANSACTION S AS WELL AS THE COMMISSION CHARGES. THEREFORE, THE TRANSACTIONS REF LECTED IN SUCH SHEET HAS TO BE SEEN AS A WHOLE EVIDENCING THAT THE ASSES SEE HAS PAID CASH AGAINST THE SALE OF SHARES IN ORDER TO TAKE THE ACC OMMODATION ENTRIES. THUS, IT IS HARD TO BELIEVE THE CONTENTION OF THE A SSESSEE THAT ITS GROUP WAS INDULGED IN THE SHARE TRADING ACTIVITY AS THE I NVESTOR ONLY. 63. THE INCRIMINATING DOCUMENTS FOUND DURING THE SE ARCH PROCEEDINGS PERTAINING TO THE PARTICULAR A.Y. ONLY BUT THE ASSE SSEE HAS CARRIED OUT IDENTICAL TRANSACTIONS IN THE IMMEDIATE PRECEDING Y EAR ALSO. THUS, IT CAN BE CONCLUDED THAT THE TRANSACTIONS OF THE EARLIER Y EAR WAS ALSO BOGUS IN NATURE. USUALLY, THE BOGUS TRANSACTIONS ARE FABRIC ATED IN SUCH A WAY THAT THEY APPEAR TO BE CORRECT BASED ON THE DOCUMENTARY EVIDENCE. BUT SUCH EVIDENCE HAS TO BE EVALUATED IN THE LIGHT OF OTHER VITAL INFORMATION AVAILABLE ON RECORD WHICH WAS FOUND IN THE COURSE O F SEARCH OF OTHER IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 50 PARTIES. IF A TRANSACTION IS GENUINE THEN ALL OTHER INFORMATION AVAILABLE ON RECORD WOULD ALSO SUPPORT AND INDICATE THE GENUINEN ESS OF THE TRANSACTIONS. BUT THE ASSESSEE IS HARPING UPON THE DOCUMENTARY EVIDENCE TO JUSTIFY THE TRANSACTIONS OF LONG-TERM CAPITAL GA IN WITHOUT BRINGING ANY MATERIAL ON RECORD AGAINST THE DOCUMENTS/FINDINGS D ISCOVERED DURING THE SEARCH PROCEEDINGS BY THE DIRECTORATE OF INVESTIGAT ION, AHMADABAD, MUMBAI, DELHI, CHANDIGARH ETC. 64. GENERALLY, THE PRINCIPLES OF NATURAL JUSTICE DE MANDS AFFORDING OPPORTUNITY OF CROSS-EXAMINATION OF THE DOCUMENTARY EVIDENCE AS WELL AS THE STATEMENTS RECORDED OF THE PARTIES IF USED A GAINST THE ASSESSEE. BUT SUCH PRINCIPLES ARE NOT ABSOLUTE MEANING THEREBY IT DEPENDS UPON THE FACTS AND CIRCUMSTANCES WHETHER TO EXTEND THE OPPOR TUNITY TO THE ASSESSEE FOR THE CROSS-EXAMINATION. IN A SITUATION WHERE THE ADDITION IS BASED SOLELY ON THE STATEMENTS, THEN IT BECOMES OBL IGATORY ON THE PART OF THE AO TO ADHERE THE PRINCIPLES OF NATURAL JUSTICE. HOWEVER, IN THE CASE ON HAND, THERE WERE VARIOUS VITAL PIECE OF EVIDENCE S WHICH WERE GATHERED AFTER CONDUCTING VARIOUS SEARCHES AT DIFFE RENT LOCATIONS AND ON DIFFERENT PERSONS BY THE DIRECTORATE OF INVESTIGATI ON WING OF MUMBAI, KOLKATA, AHMEDABAD, DELHI AND CHANDIGARH. THEREFORE , IN SUCH A SITUATION IT IS NOT COMPULSORY TO AFFORD THE OPPORT UNITY OF CROSS- EXAMINATION, ESPECIALLY IN FACT THAT THE ASSESSEE F AILED TO DISCHARGE THE ONUS CAST UPON HIM. 65. IN VIEW OF THE ABOVE THE LEARNED CIT (A) CONFIR MED THE ORDER OF THE AO BY OBSERVING AS UNDER: ........ IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 51 IN VIEW OF THE FACTS AND CIRCUMSTANCES BORNE OUT OF THE ASSESSMENT ORDER AND LEGAL PRECEDENTS AS DISCUSSED ABOVE, I AM OF THE VIEW THAT DOCUMENTS SUBMITTED AS EVIDENCES TO P ROVE THE GENUINENESS OF TRANSACTION ARE THEMSELVES FOUND TO SERVE AS SMOKE SCREEN TO COVER UP THE TRUE NATURE OF THE TRANSACTI ONS IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS IT IS REVEALED THA T PURCHASE AND SALE OF SHARES ARE ARRANGED TRANSACTIONS TO CREATE BOGUS PROFIT IN THE GARB OF TAX EXEMPT LTCG BY WELL-ORGANIZED NETWO RK OF ENTRY PROVIDERS WITH THE SOLE MOTIVE TO SELL SUCH ENTRIES TO ENABLE THE BENEFICIARY TO ACCOUNT FOR THE UNDISCLOSED INCOME F OR A CONSIDERATION OR COMMISSION. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE CONSID ERED VIEW THAT SHARE TRANSACTIONS LEADING TO LTCG BY THE APPE LLANT ARE SHAM TRANSACTION ENTERED INTO FOR THE PURPOSE OF EVADING TAX. ACCORDINGLY IT HELD THAT THE AO HAS RIGHTLY ADDED T HE SAID AMOUNT OF RS.62,66,38,865/- AS UNDISCLOSED INCOME OF THE A PPELLANT. SINCE ARRANGING SUCH ACCOMMODATION ENTRY NECESSARILY ENTA ILS PAYMENT OF COMMISSION TO ENTRY PROVIDERS, THE AO'S ACTION I N QUANTIFYING AND ADDING SUCH UNEXPLAINED EXPENDITURE AT RS.3,93, 17,170/- U/S 69 OF THE ACT BASED ON STATEMENTS OF BROKERS/ENTRY PROVIDERS IS ALSO UPHELD FOR THE REASONS RECORDED IN THE ASSESSM ENT ORDER AT PARA 12.4. ACCORDINGLY, ADDITIONS MADE BY THE AO AR E CONFIRMED AND THE GROUNDS OF APPEAL ARE DISMISSED. 66. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 67. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING ORDER OF THE LD.CIT(A) APPRAISED US CHRONOLOGY OF EVENTS, AND IN THIS CONNECTION HE TOOK US THROUGH PAGE NO.1 AND 2 OF THE CONSOLIDATED WRITTEN SUBMISSIONS FILED BY HIM, WHICH IS RUNNING INTO 175 PAGES. IN ORDER TO APPRECIATE THE FACTS IN MORE SCIENTIFIC WAY, WE DEEM IT NECESSARY TO TAKE NOTE OF LIST OF EVENTS INCORPORATED BY THE LD.COUNSEL FOR THE ASSES SEE IN HIS SUBMISSION, WHICH READS AS UNDER: IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 52 DATES PARTICULARS 03.03.2010 SEARCH U/S 132(1) (S&S) ON 03.03.2010 AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE DIRECTORS AND RELATED PERSONS OF THE BHUSHAN POWER & STEEL GROUP (BPSL GROUP) BY DIT(INV), NEW DELHI - NO INCRIMINATING MATERIAL PERTAINING TO ANY IRREGULAR AVAILMENT OF BOGUS LTCG BY THE ASSESSEE(S) FOUND. 04.03.2010 13.04.2010 25.05.2010 18.06.2010 SANJAY SINGAL'S VOLUNTARY DISCLOSURE OF RS. 302 CRS U/S 132(4) IN THE HANDS OF HIMSELF, HIS WIFE AND GROUP COMPANIES (LETTER DT. 18.06.2010, 13.04.2010, 25.05.2010) FOR AY 2010-2011 AS UNDISCLOSED INCOME EMANATING FROM SEIZED DOCUMENTS - NO CONNECTION WITH THE ISSUE OF LTCG. 15.12.2011 20.12.2011 30.06.2013 ASSESSMENTS U/S 153A FOR A.YS 2004-05 TO 2010- 11 IN THE CASES OF SS & ARS - NO ISSUE/ADDITION RELATING TO LTCG PURSUANT TO THE D4 ORDER OF THE ITSC, DT.30.06.2013 THE ASSESSMENT ORDER FOR THE AY 2010-2011 STOOD REVISED - INCOME DECLARED IN THE HANDS OF SS & ARS PARTLY SHIFTED TO THE HANDS OF BPSL AND EXCLUDED FROM THEIR INDIVIDUAL HANDS VIDE ORDER OF THE ITSC 29.03.2012 SEARCH AT HIMANUSH VERMA ON 29.03.12 BY DIT(INV), DELHI - GROUP CONCERNS OF THE ASSESSEE HAD MADE A FURTHER DISCLOSURE OF 89.4 CRS FOR THE AY 2011-2012 AND 2012-13 ON ACCOUNT OF ALLEGED BOGUS SHARE CAPITAL/PREMIUM - NO ISSUE RELATING TO LTCG 13.09.2012 S&S AT RESIDENTIAL CUM OFFICE PREMISES OF PRAVEEN AGARWAL BY DIT(INV) KOLKATA- STATEMENTS RECORDED - DOCUMENTS RELIED UPON MAINLY FOUR EXCEL SHEETS FROM HARD DISK ID MARK PAL/HD/1 - ALLEGEDLY SHOWS DATEWISE DETAIL'S OF CHEQUES/RTGS RECEIVED AND PAID FROM/TO VARIOUS PARTIES INCLUDING BPSL GROUP - STATEMENTS DT. 12.11.2012, 05.02.2014, 30.04.2014, 18.11.2014 & 11.02.2015 RECORDED - ASSESSEE(S) NOT NAMED IN ANY OF THE SEIZED DOCUMENTS OR STATEMENTS. 27.12.2012 SURVEY AT PREMISES OF BPSL GROUP BY DIT(INV), IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 53 CHANDIGARH - BPSL GROUP CONCERNS MADE ANOTHER VOLUNTARY DISCLOSURE OF RS.70.36 CRS FOR AY 2013-14 WRT UNEXPLAINED CREDITS, CASH PAYMENTS FOR LAND PURCHASE AND INTEREST DISALLOWANCE (AND INTEREST DISALLOWANCE IN THE HANDS OF BSPL WAS 9 CRS) - NOTHING INCRIMINATING WITH RESPECT TO LTCG FOUND. 09.04.2013 S&S BY DIT(INV) AHD IN THE CASE OF SIRISH CHANDRAKANT SHAH (SCS) - ALLEGED THAT BSPL HAS RECEIVED A HUGE AMOUNT OF ACCOMMODATION ENTRIES FROM THE CARTEL OF COS. MANAGED AND CONTROLLED BY SCS. AND VARIOUS OTHER ENTRY OPERATORS. DOCUMENTARY EVIDENCE IN THIS REGARD - KEDIA 2 (EXCEL SHEET), CASH & CHEQUE SHEETS (TABULATED DATA FOUND AT PG.7/146 OF THE A.O ORDER) - NOTICEABLY, THE NAMES OF ASSESSEE(S) DO NOT FEATURE IN ANY OF THESE SEIZED DOCUMENTS - STATEMENTS OF SCS, HIS EMPLOYEES, DUMMY DIRECTORS ETC. RELIED UPON -STATEMENTS OF SCS DT. 13.04.2013, 03.06.2013, 05.06.2013, 11.06.2013, 25.11.2013 & 13.01.2014 RELIED UPON 19.10.2011, 12,02.2033, 17.12.2013 STATEMENTS OF JAGDISH PRASAD PUROHIT RECORDED U/S 1317 132(4) IN COURSE OF S&S U/S 132(1) IN THE CASE OF VARIOUS COMPANIES ALLEGEDLY CONTROLLED & MANAGED BY HIM - ASSESSEE(S) NOT NAMED ANYWHERE IN SUCH STATEMENTS 11.10.2013 SEARCH AT THE PREMISES OF PRAVEEN KUMAR JAIN (PINTU) BY DIT(INV), MUMBAI, ADMITTED ON OATH THAT HE WAS IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND USED TO COLLECT CASH FROM ANGADIAS ON BEHALF OF SCS AND WOULD THEN PAY SCS THE SAME AMOUNT IN CHEQUE - SEIZED DOCUMENTS RELIED UPON MAINLY ACCOUNT OF SCS IN BOOKS OF PKJ VIZ. SHIR LEDGER - STATEMENTS DT.L 1.10.2013 RELIED UPON - ASSESSEE(S) NOT NAMED IN ANY OF THE SEIZED DOCUMENTS OR STATEMENTS. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 54 21.02.2014/ 22.02.2014 S&S OPERATION U/S 132(1) AT BPSL GROUP BY DIT(INV), FARIDABAD INCLUDING RESIDENTIAL & OFFICE PREMISES OF THE ASSESSEES HEREIN (THE IMPUGNED SEARCH) - DOCS SEIZED FROM PREMISES OF BPSL AND RELIED UPON BY THE AO: 'ANNEXURE HD OF DATA BACKUP', ANNEXURE A-13, PGS 4 TO 7 & PGS 133,133 & ANNEXURE A-28, PGS 1 TO 27 - ALL PART OF REGULAR RECORDS OF BPSL -THESE SEIZED DOCUMENTS HAVE NO CONNECTION WITH THE ISSUE OF LTCG - NO INCRIMINATING DOCUMENTS FOUND FROM THE PREMISES OF THE ASSESSEES HEREIN STATEMENT OF SRI SANJAY SINGAL RECORDED U/S 132(4) - IN REPLY TO LAST QUESTION ON 22.02.14, SS DISCLOSED ADDITIONAL INCOME OF RS. 250 CRORES FOR THE ENTIRE GROUP AND SUBMITTED A DISCLOSURE LETTER - SPECIFICALLY STATED THAT THE DISCLOSURE WAS MADE TO AVOID LITIGATION AND PURCHASE PEACE OF MIND SIMULTANEOUS SEARCH OPERATION IN THE CASE OF R.K KEDIA BY DIT(INV), DELHI - NOTHING INCRIMINATING WRT THE ASSESSEEE(S) FOUND - IN COURSE OF STATEMENT RECORDED U/S 132(4) ON 21/22.02.2014 STATED THAT INVESTMENTS IN SHARES WERE MADE BY THE SINGALS ON HIS ADVICE - THAT THE LTCG EARNED BY SINGALS WAS GENUINE- CONTENTS OF KEDIA 2 SHEET SEIZED FROM SCS WAS CATEGORICALLY DENIED BY RKK (REPLY TO Q 75). 06.03.2014 SANJAY SINGAL FILED LETTER DT. 06.03.2014 GIVING BREAKUP OF RS, 250 CRORES, I.E. RS. 159.61 CRORES I N THE HANDS OF SS, ARS & SS(HUF) FOR A.Y. 201 1- 12 & 2012-13 - ALLEGEDLY ON ACCOUNT OF EXEMPT LTCG ON SALE OF SHARES OF PRRANETA INDUSTRIES LTD.(PIL) SOLELY FOR THE PURPOSE OF BUYING PEACE OF MIND AND AVOIDING PROTRACTED LITIGATION- BIFURCATION W.R.T THE BALANCE OFFER WAS UNDERTAKEN TO BE SUBMITTED IN A FEW DAYS AFTER EXAMINING SEIZED MATERIALS. 13.06.2014 S&S OPERATION U/S 132(1) CARRIED OUT ONCE A GAIN BY DIT(INV), DELHI AT THE PREMISES OF RKK & AT THE RESIDENTIAL PREMISES OF MANISH ARORA (EMPLOYEE OF RKK) - ALLEGED HARD/SOFT DATA SEIZED - STATEMENTS OF R.K. KEDIA & MANISH ARORA RECORDED. IN COURSE OF HIS STATEMENT RECORDED ON 13.062014 IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 55 WHICH CONTINUED UPTO 16.06. 2014, RKK CHANGED THE STAND TAKEN BY HIM EARLIER ON 22.022014 AND INTERALIA STATED THAT HE HAD ARRANGED BOGUS LTCG ACCOMMODATION ENTRIES FOR VARIOUS MEMBERS OF THE SINGAL FAMILY 14.10.2014 SRI R.K. KEDIA ONCE AGAIN REVERTED TO HIS ORIGINA L STAND AND RETRACTED FROM HIS STATEMENT DATED 13.06.2014 STATING THAT THE SAID STATEMENT WAS RECORDED UNDER EXTREME PRESSURE AND HE WAS FORCIBLY MADE TO SIGN CERTAIN TYPED STATEMENTS WITHOUT BEING ALLOWED TO GO THROUGH THE SAME AND THAT HE WAS NEVER ENGAG ED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. 26.03.2015 DUE TO THE CONTINUOUS PRESSURE CREATED BY THE DEPARTMENT, SRI R.K. KEDIA WITHOUT ANY EXPLICABLE REASON WHATSOEVER, ONCE AGAIN VACILLATED FROM HIS ORIGINAL STAND AND RE-RETRACTED THE RETR ACTION FILED BY HIM ON. 14.10.2014 BY FILING A LETTER & AFFIDAVI T DATED 26.03.2015 12.12.2014 ( SS & ARS) & 29.01. 2015 (SS(HUF)), 12.08.2015 (ANS) NOTICE U/S 15 3A DT. 12.12.14 (SS & ARS), 29.012015 (SS(HUF) & 12.08.2015 (ANS) FOR THE AY 2008-2009 TO 2013-14 ISSUED 19.02. 2015 & 08.09.20I5 ASSESSEE FILED SUBMISSIONS DATED 19.02.15 (IN THE CASE OF SS & ARS) & 08.09.2015(IN THE CASE OF ANS) IN RESPONSE TO NOTICE U/S 153A - VALIDITY OF INITIATION OF PROCEEDINGS U/S 153 A FOR UNABATED YEARS IN THE ABSENCE OF INCRIMINATING MATERIALS CHALLENGED - ADHOC OFFER OF ADDITIONAL INCOME (NOT BACKED BY ANY INCRIMINATING MATERIALS) WAS NOT REFLECTED IN THE RETURNS OF INCOME OF THE ASSESSEE GROUP ON THE STRENGTH OF CBDT CIRCULAR NOS. F. NO. 286/2/2003-IT (INV.) DT 10-3- 2003 AND F, NO. 286/98/2013-IT DT. 18.12.2014. 10.08.20 15 & 08.09.2015 NOTICE U/S 143(2) DT. 10.08.2015 ISSUED NOTICE U/S 142(1) DT. 12.08.2015 - SEEKING DETAILS OF EXEMPT LTCG CLAIMED IN ITR, LEDGER OF PURCHASER/SELLER IN THE BOOKS OF THE ASSESSEE & CASH FLOW STATEMENT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 56 20/21.10.2015 SCNSDT.20.10.2015 (FOR AY 201 1-12 TO 2012- 13) ISSUED. 09.112015 SCN DT.. 09.1 1.2015 (U/S 142(1 ))(FOR AY 201 1- 12 TO 2014-15) ISSUED 13.01.2016 PROCEEDINGS U/S 1 53 A DROPPED IN THE CASE OF SS(HUF) 03.02.2016 ASSESSEE(S)' SUBMISSIONS IN RESPONSE TO SCN DT. 20/21.10.2016 - ALSO REQUESTED FOR OPPORTUNITY OF CROSS EXAMINATION 05.02.2016 LETTER OF AO SEEKING LIST OF PERSONS SOUGHT TO BE CROSS-EXAMINED BY THE ASSESSEE(S). 10.02.2016 NOTICE U/S 142(1) DT. 10.022016 17.02.2016 LETTER FILED BEFORE AO REQUESTING FOR CROSS EXAMINATION 26.03.2016 NOTICE U/S 148 ISSUED TO SS(HUF) 28.03.2016 ASSESSMENT ORDER U/S 153A PASSED IN THE CASES OF SS, ARS, ANS 05.04.2016 SS(HUF) FILED RETURN O F INCOME IN RESPONSE TO NOTICE U/S 148 AND REQUESTED FOR SUPPLY OF REASONS RECORDED U/S 147 15.09.2016 REASONS RECORDED U/S.147 SUPPLIED TO SS (HUF) 15.09.2016 NOTICE U/S.143(2) ISSUED & SERVED ON SS( HUF) 10.05.2016 NOTICE U/S.142(1) ALONG WITH QUESTIO NNAIRE DATED 10.5.2016 SERVED ON SS(HUF) 23.08.2016 SCN U/S.142(1) ISSUED TO SS(HUF) 29.12.2016 ASSESSMENT ORDER U/S.148 R.W.S. 143(3) PASSED IN TH E CASE OF SS(HUF) 31.03.2018 COMBINED ORDER PASSED BY CIT(A) 68. AS OBSERVED EARLIER, THE LD.CIT(A) HAS DECIDED 18 APPEALS BY THE PRESENT IMPUGNED ORDER. OUT OF THOSE 18 APPEALS, A PPEALS OF THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 57 ASSESSEE FOR THE ASSESSMENT YEARS 2008-09, 2011-12, 2012-13 IN THE CASES OF SHRI SANJAY SINGAL AND SMT.ARTI SINGAL HAV E BEEN DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED 7.2.2020. SIMIL ARLY, THE APPEALS OF THE ASSESSEE, SHRI SANJAY SINGHAL HUF FOR THE ASSTT.YEA R 2011-12 AND 2012- 13 HAVE ALSO BEEN DECIDED. THE STAND OF THE LD.COU NSEL FOR THE ASSESSEE IS THAT IN THE GROUP OF BBS GROUP LARGE NUMBER OF A PPEALS CAME TO THE TRIBUNAL. OUT OF WHICH MANY APPEALS HAVE BEEN DECI DED. THE TRIBUNAL HAS SEGREGATED THOSE APPEALS UNDER TWO COMPARTMENTS VIZ. THE APPEALS PERTAINING TO THOSE ASSESSMENT YEARS WHOSE ASSESSME NT YEARS HAVE NOT BEEN ABATED I.E. UNABATED YEAR, BECAUSE ACCORDING T O THE TRIBUNAL SCOPE OF THOSE APPEAL ALTOGETHER DIFFERENT THAN THE SCOPE OF ASSESSMENT YEARS WHERE ASSESSMENT PROCEEDINGS HAVE BEEN ABATED. ACC ORDING TO THE LD.COUNSEL FOR THE ASSESSEE, THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, WHETHER INVOLVE UNABATED OR ABATED YEARS. THE EVIDENCES COLLECTED BY THE REVENUE ARE ALSO COMMON, AND ALL T HOSE EVIDENCES WERE COLLECTED FROM THE PREMISES OF THE THIRD PARTY. TH E ORDERS OF ITAT DATED 31.10.2018 IN THE CASE OF SHRI BRIJ BHUSAN SINGAL I N ITA NO.1412 TO 1414/DEL/2018 AND OTHER APPEALS HAVE BEEN PLACED ON RECORD. SIMILARLY, ORDER OF THE TRIBUNAL IN THE CASE OF SHRI BRIJ BHUS AN SINGAL AND OTHERS VS. DCIT IN ITA NO.1415 TO 1417/DEL/2018 DATED 7.12 .2018 HAVE ALSO BEEN PLACED ON RECORD. ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, THE ISSUES ARE IDENTICAL, AND THERE IS NO DISPARITY ON THE FACTS, AND THEREFORE, THE TRIBUNAL IS REQUIRED TO FOLLOW ITS VIEW TAKEN I N THE CASE OF OTHER FAMILY MEMBERS BY THE COORDINATE BENCH. WE TOOK CO GNIZANCE OF THESE FACTS AND PROCEED TO TAKE NOTE OF FURTHER SUBMISSIO NS RAISED BY THE ASSESSEE AS UNDER: IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 58 I) THE ASSESSEES HAVE FILED THEIR RETURNS OF INCOM E FOR THE YEARS UNDER CONSIDERATION ON VARIOUS DATES. DURING THE SAID YEARS, THE ASSESSEES EARNED LONG TERM CAPITAL GAINS (LTCG) IN VARIOUS SCRIPS ON WHICH SECURITIES TRANSACTION TAX (STT) HA D BEEN DULY PAID AND HAVING COMPLIED WITH ALL THE REQUISITE CON DITIONS, THEY CLAIMED THE LTCG AS EXEMPT U/S 10(38) OF THE ACT. T HE LD. A.O, PROCEEDED TO ADD BACK THE ENTIRE PROCEEDS ARISING O N SALE OF SHARES U/S 68 AND ALLEGED UNACCOUNTED COMMISSION EXPENSES U/S 69C TO THE INCOME OF THE ASSESSEE(S) FOR THE RELEVANT YEAR S RELYING ON VARIOUS ARGUMENTS/SO-CALLED EVIDENCES AS DISCUSSED IN THE BODY OF THE ASSESSMENT ORDERS. IT IS CLEARLY EVIDENT FROM T HE DISCUSSIONS MADE IN THE ASSESSMENT ORDER THAT THE SO-CALLED EVI DENCES USED BY THE A.O IN MAKING THE IMPUGNED ADDITIONS HAVE NO EV IDENTIARY VALUE VIS-A-VIS THE PRESENT ASSESSEES, ARE HIGHLY U NRELIABLE AND DO NOT CONCLUSIVELY PROVE THAT THE IMPUGNED LTCG WERE NOT GENUINE OR SHAM. II) IT IS SUBMITTED THAT MOST OF THE SHARES OF THE COMPANIES ON WHICH LTCG HAS BEEN EARNED WERE ALLOTTED TO THE ASS ESSEES BY WAY OF PREFERENTIAL ALLOTMENT. ONE OF THE GROUNDS T AKEN BY THE A.O IN DOUBTING THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE AND ALLEGING PERSONAL CONNECTION BETWEEN THE ASSESSEE(S ) AND THE PROMOTERS OF THE SAID COMPANIES/ ENTRY PROVIDERS IS THAT THE SHARES OF THE SAID COMPANIES WERE ALLOTTED BY WAY OF PREFE RENTIAL ALLOTMENT. IN THIS REGARD, IT IS SUBMITTED THAT THE ISSUANCE OF SHARES ON PREFERENTIAL BASIS WAS IN CONSONANCE WITH APPLIC ABLE S.E.B.1 IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 59 REGULATIONS AND LISTING AGREEMENT NORMS. IT IS CLAR IFIED HERE THAT THE FACT THAT THE SHARES OF THE COMPANIES WERE ALLO TTED TO THEM BY WAY OF PREFERENTIAL ALLOTMENT DOES NOT SIGNIFY ANY CONNECTION OF THE ASSESSEES WITH THE COMPANIES. IN TERMS OF THE A PPLICABLE PROVISIONS OF THE COMPANIES ACT, A PREFERENTIAL ALL OTTEE OF SHARES IS NOT REQUIRED TO ATTEND ANY BOARD MEETINGS, THERE BEING A COMPLETE DIVERGENCE BETWEEN THE MANAGEMENT AND OWNE RSHIP, A COMPANY BEING A BODY CORPORATE, HAVING A SEPARATE L EGAL ENTITY. THE PROCESS OF PREFERENTIAL ALLOTMENT WHICH IS INVA RIABLY SPREAD BY THE WORD OF MOUTH, THE POSSIBILITY OF PERSONAL CONT ACT BETWEEN THE PROMOTERS/MANAGEMENT AND PREFERENTIAL ALLOTTEES IS MINISCULE. III) VARIOUS STATUTORY/REGULATORY BODIES SUCH AS S.E.B.I, THE STOCK EXCHANGES ETC. ARE INVOLVED IN THE PROCESS OF PREFERENTIAL ALLOTMENT OF SHARES AS WELL AS THE FOLLOW UP OF PUB LIC ISSUE. THE ENTIRE PROCESS INVOLVES A MULTI-STAGE, RIGOROUS, CO ORDINATED AND TIME BOUND PROCESS INVOLVING COMPREHENSIVE DUE-DILI GENCE, VETTING OF DOCUMENTS, BACKGROUND CHECK OF PROMOTERS , COMPLIANCE WITH WELL-LAID OUT GUIDELINES AND PARAMETERS ETC. A COMPANY INTENDING TO GO IN FOR A PUBLIC ISSUE CAN ALLOT SHA RES BY WAY OF PREFERENTIAL ALLOTMENT ONLY AFTER GETTING THE APPRO VAL OF S.E.B.I. IN THE ENTIRE PROCESS, S.E.B.I ALSO APPROVES THE LIST OF PERSONS/ ENTITIES TO WHOM SHARES ARE TO BE ALLOTTED ON PREFERENTIAL B ASIS, ALSO INCORPORATING THEREIN THE TERMS AND CONDITIONS INCL UDING, LOCK IN, IF ANY SUBJECT TO WHICH THE SHARES ARE TO BE ISSUED. I N THE GIVEN BACKDROP, THE ASSESSEE(S) HEREIN CANNOT BE FAULTED FOR RELYING ON A COMMERCIAL PROPOSITION WHICH WAS DULY COMPLIANT WIT H LAW, IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 60 INCLUDING APPROVAL OF S.E.B.I. TO DISREGARD THE ACT IVITIES CONDUCTED BY A COMPANY AS DUMMY WHEN ALMOST ITS ENT IRE SPECTRUM OF ACTIVITIES HAS BEEN PRE-SCRUTINIZED AND APPROVED BY VARIOUS AGENCIES, INCLUDING THE CAPITAL MARKET REGU LATOR S.E.B.I WOULD BE DISREGARDING THE FUNCTIONING OF BODIES OPE RATING UNDER A LAW ENACTED BY THE PARLIAMENT OF INDIA. IV) THE SHARES ALLOTTED BY THE COMPANIES WERE LISTE D AND TRADED ON THE STOCK EXCHANGE. THESE SHARES WERE SUBSEQUENT LY CREDITED TO THE RESPECTIVE DEMAT ACCOUNTS OF THE ASSESSEE(S) HE REIN. AFTER BEING HELD BY THE ASSESSEE(S) FOR A PERIOD OF MORE THAN 12 MONTHS, THEIR SALES WERE AFFECTED THROUGH REGISTERED BROKER S ON THE NSE/BSE IN ACCORDANCE WITH PRESCRIBED REGULATORY PR OCEDURES, RULES AND APPLICABLE LAWS WHEREBY BOTH THE LIMBS OF THE TRANSACTION VIZ. PURCHASE AND SALE OF SHARES GOT DU LY AUTHENTICATED. THE SALE PROCEEDS FOR THE SALE OF SHARES WERE RECEI VED THROUGH NORMAL AND REGULAR BANKING CHANNELS FROM THE STOCK BROKER THROUGH WHOM THE SHARES HAD BEEN SOLD, WHO, IN TURN RECEIVED THE SAME FROM THE STOCK EXCHANGE THROUGH ITS DESIGNATED PAYOUT MECHANISM AND STOOD DULY CREDITED TO THE RESPECTIVE ASSESSEE(S)' BANK ACCOUNTS. V) THE SHARES IN QUESTION WERE OF LISTED COMPANIES AND WERE SOLD AT PREVAILING MARKET RATES THROUGH THE BOMBAY STOCK EXCHANGE ONLINE TRADING (BOLT) PLATFORM OF THE BOMB AY STOCK EXCHANGE AND ALL THE PAYMENTS AGAINST THE SAME WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES/RTGS FROM THE STOCK B ROKER. IT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 61 MAY BE MENTIONED THAT UNDER THE ONLINE WEB-BASED TR ADING PLATFORMS OF THE RELEVANT EXCHANGES AS PER THE PREV ALENT PROCEDURES, THE BROKER ONLY ACTS AS THE INTERMEDIAR Y. THERE IS NO PHYSICAL INTERACTION BETWEEN THE PARTIES AND ACCORD INGLY, THE IDENTITIES OF THE COUNTER-PARTY (WHETHER BUYER OR S ELLER) IS NOT AVAILABLE THEREBY ELIMINATING THE POSSIBILITY OF AN Y COLLUSION BETWEEN THE PARTIES. THE ENTIRE SALES OF SHARES WER E EFFECTED THROUGH WEB-BASED PLATFORMS OF THE RELEVANT EXCHANG ES IN WHICH THE SELLER CAN IN NO WAY SELL THE SHARES TO A PARTI CULAR ENTITY/INDIVIDUAL & VICE VERSA; WHERE THE TRADE IS EXECUTED WHEN THE BID PRICE OFFERED BY THE BUYER MATCHES WITH THE OFFER PRICE OF THE SELLER AND VICE VERSA; AND THE ENTIRE TRANSACTI ON IS A DEMAND AND SUPPLY GAME OVER WHICH NEITHER THE BUYER NOR TH E SELLER HAS ANY CONTROL. THE TRANSACTIONS CARRIED OUT BY THE AS SESSEE(S) STAND FULLY DOCUMENTED AND EVIDENCED BY CONTRACT NOTES/ B ILLS OF THE RELEVANT BROKERS ISSUED IN THE FORM AND MANNER AS P RESCRIBED BY THE REGULATORY AUTHORITIES, COPIES OF WHICH ARE DUL Y ENCLOSED IN PAPER BOOK NO. 3 FILED SEPARATELY IN THE CASE OF EA CH ASSESSEE FOR EACH OF THE YEARS UNDER CONSIDERATION. VI) IT IS SUBMITTED THAT THE ASSESSEE(S) HEREIN WER E NEITHER AWARE NOR COULD BE AWARE OF THE PERSONS/ ENTITIES BUYING THE SHARES SOLD BY THEM. THERE WAS NO WAY FORMAL, INFORMAL OR EVEN COLLUSIVE WHEREBY THEY COULD CONTROL THE SALES OF SHARES TO E NSURE THEIR SALES TO A PARTICULAR PERSON/ENTITY. THE ASSESSEE(S) HERE IN DID NOT HAVE ANY KIND OF RELATIONSHIP OR CONTROL OVER THE SAID C OMPANIES SAVE AS THAT OF PASSIVE INVESTOR AND WERE NOT INVOLVED IN T HE MANAGEMENT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 62 THEREOF AT ANY POINT OF TIME. THE ASSESSEE(S) HAD N O ROLE WHATSOEVER IN THE CAPITAL MARKET OPERATIONS OF THE SCRIPS OR INFLUENCING TO ANY DEGREE OR EXTENT THEIR STOCK MAR KET PRICES. THE TRANSACTIONS WERE ENTERED INTO BY THE ASSESSEE(S) I N THE CAPACITY OF STOCK MARKET INVESTOR ON THE BASIS OF MARKET GOSSIP , INFORMATION AND FEEDBACK RECEIVED FROM VARIOUS PROFESSIONALS, F RIENDS, RELATIVES & OTHER ACQUAINTANCES MAINLY SRI R.K. KED IA, WHO WERE ACTIVELY INVOLVED AND HAD ADEQUATE KNOWLEDGE OF SEC URITIES MARKET, THE ASSESSEE(S)' PERCEPTION AND ANTICIPATIO N AS TO FUTURE PRICE MOVEMENTS ETC. WITH A VIEW TO EARN PROFITS FR OM THE APPRECIATION, WHETHER LONG TERM/ SHORT TERM IN THE PRICES OF THE UNDERLYING SHARES. IN ORDER TO EVIDENCE THE SAID TR ANSACTIONS, ALL RELEVANT DOCUMENTARY EVIDENCES IN THE FORM OF SHARE PURCHASE DOCUMENTS, DEMAT ACCOUNTS, SHARE CERTIFICATES, CONT RACT NOTES AND BANK STATEMENTS EVIDENCING THE RELEVANT ENTRIES REGARDING RECEIPTS AGAINST SALE OF SHARES ETC. WERE DULY FILE D BEFORE THE REVENUE AUTHORITIES. THE SAME ARE ALSO PLACED IN PA PER BOOK NO. 3 FILED SEPARATELY IN THE CASE OF EACH ASSESSEE FOR EACH YEAR UNDER CONSIDERATION BEFORE THE HON'BLE BENCH. VII) IN THE AFORESAID BACKDROP, THE LD.COUNSEL FOR THE ASSESSEE COUNTERED VARIOUS ARGUMENTS BOTH LEGAL AND FACTUAL PUT FORTH BY THE REVENUE AUTHORITIES IN MAKING THE IMPUGNED ADDITION S AS UNDER: 69. RELIANCE ON THIRD PARTY STATEMENTS RECORDED U /S 133A/132(4) WITHOUT ALLOWING OPPORTUNITY OF CROSS- EXAMINATION GROUND NO. 5 IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 63 I) IN MAKING THE IMPUGNED ADDITIONS U/S 68 & 69C OF THE ACT, THE A.O, IN THE ASSESSMENT ORDER HAS PREDOMINANTLY RELIED UPON THE STATEMENTS OF THE FOLLOWING PERSONS RECORDED BY THE INVESTIGATION WING IN COURSE OF SEPARATE SEARCH/SURVEY ACTIONS IN THEIR CASES: NAME OF THE PERSON/ DEPONENT STATUS SIRISH CHANDRAKANT SHAH (SCS) PERSON ALLEGEDLY MANAGING &CONTROLLING AFFAIRS OF M/S. P1L RANJAN KACHAIIA, CHANDAN KUMAR SINGH, DAMODAR ATTAL> DEVANG D. MASTER, DEVANG JHAVERI, PRAKASH DAVE, NARESH PARMAR EMPLOYEES/ ASSOCIATES OF SCS KUMAR RAICHAND MADAN PERSON SUPPLYING DIRECTORS TO SCS PRAVEEN KUMAR JAIN (ALIAS PINTU) ALLEGED ACCOMMODATION ENTRY PROVIDER FACILITATING CONVERSION OF CASH INTO RTGS IN THE A/CS OF SCS SATISH SARAF ALLEGED ACCOMMODATION ENTRY PROVIDER FACILITATING CONVERSION OF CASH INTO RTGS IN THE A/CS OF SCS OM PRAKASH ANDILAL KHANDELWAL PROMOTER & DIRECTOR OF P1L YOGENDER KUMAR GUPTA PROMOTER & DIRECTOR OF M/S. MADAN INDUSTRIES LTD. ALLEGED TO BE CONTROLLED BY SCS JAYESH RAICHAND THAKKAR PROMOTER & DIRECTOR OF M/S. PRABHAV INDUSTRIES LTD. ALLGED TO IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 64 BE CONTROLLED BY SCS SRI SATYAPRAKASH GOEL DIRECTOR OF AVANCE TECHNOLOGIES LTD, ALLEGED TO BE CONTROLLED BY SCS SRI RAJ KUMAR KEDIA ALLEGED ENTRY OPERATOR MANISH ARORA EMPLOYEE OF RAJ KUMAR KEDIA JAGDISH PRASAD PUROHIT PERSON ALLEGEDLY CONTROLLING THE FOLLOWING COS: 1 . BLUE CIRCLE SERVICES LTD. 2. UNISYS SOFTWARE & HOLDING LTD. 3. GLOBAL INFRATECH LTD. DEEPAK PATWARI ALLEGED EXIT PROVIDER PRAVEEN AGARWAL ALLEGED EXIT PROVIDER II) IT MAY BE NOTED THAT IN MOST OF THE STATEMENTS (BARRING THE STATEMENT OF RKK & HIS EMPLOYEE MANISH ARORA), THE ASSESSEE(S) HEREIN HAVE NOT EVEN BEEN NAMED/IMPLICATED. IT IS A LSO PERTINENT TO NOTE THAT ALTHOUGH SRI JAGDISH PRASAD PUROHIT HAS B EEN ALLEGED TO BE MANAGING & CONTROLLING THE AFFAIRS OF BLUE CIRCL E SERVICES LTD. & GLOBAL INFRATECH LTD., AS PER THE INFORMATION COL LECTED FROM THE WEBSITE OF THE REGISTRAR OF COMPANIES, SRI JAGDISH PRASAD PUROHIT WAS NOT EVEN A DIRECTOR IN THE SAID COMPANIES AND A CCORDINGLY HAD NO LOCUS STANDI W.R.T THE SAID COMPANIES. FURTHER, ON A PERUSAL OF THE STATEMENTS OF SRI JADGISH PRASAD PUROHIT, IT MA Y BE SEEN THAT HE HAS GIVEN A LIST OF THE COMPANIES CONTROLLED & MANA GED BY HIM BUT THE NAMES OF BLUE CIRCLE SERVICES LTD. & GLOBAL INF RATECH LTD. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 65 NOWHERE FEATURE IN SUCH LIST FURTHER, SRI JAGDISH P RASAD PUROHIT HAS NOWHERE STATED THAT HE WAS PROVIDING ANY LTCG ACCOM MODATION ENTRIES THROUGH THE COMPANIES ALLEGEDLY CONTROLLED & MANAGED BY HIM. FURTHER, AS ELABORATED SUBSEQUENTLY, THE HON'B LE DELHI ITAT IN THE CASE OF SRI BRIJ BHUSHAN SINGAL & ORS VS. AC IT (SUPRA) HAS GIVEN A SPECIFIC FINDING WHEREIN SHRI RK KEDIA HAS BEEN CATEGORICALLY HELD TO BE UNRELIABLE PERSON AND HIS STATEMENTS AND THE DOCUMENTS SEIZED FROM HIS PREMISES HAVE BEEN HE LD TO HAVE NO EVIDENTIARY VALUE CONSIDERING THE INCONSISTENCIES D ISPLAYED BY HIM. III) THE IMPUGNED ADDITIONS W.R.T THE TRANSACTIONS RESULTING IN EXEMPT LTCG HAVE BEEN MADE BY THE A.O U/S 68 OF THE ACT. SECTION 68 OF THE INCOME-TAX ACT, 1961 IS ATTRACTED WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE AND T HE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE AO, SATISFACTORY. UNDER THE PROVISIONS OF SECTION 68 OF THE ACT, THE PRIMARY ONUS TO EXPLAIN THE NATURE AND SOURCE OF TH E AMOUNT SO FOUND CREDITED IS ON THE ASSESSEE. HOWEVER, ONCE TH E ASSESSEE PROVES THE IDENTITY OF CREDITS BY EITHER FURNISHING PERMANENT ACCOUNT NUMBERS OR COPIES OF BANK ACCOUNTS AND SHOW S THE GENUINENESS OF THE TRANSACTION BY SHOWING THAT MONE Y IN THE BANKS IS BY ACCOUNT PAYEE CHEQUES OR BY DRAFT, ETC., THEN THE ONUS TO DISPROVE THE SAME WOULD SHIFT TO THE REVENUE (SEE P ARAS 13 & 15 OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION (P) LTD. (1986)159 ITR 78 (S C)). IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 66 IV) THE ASSESSEE(S) HEREIN FILED COGENT DOCUMENTARY EVIDENCES PROVING THE NATURE AND SOURCE OF SUMS FOUND CREDITE D IN HIS/THEIR BOOKS OF ACCOUNT VIZ. PROCEEDS ARISING ON THE SALE OF THE IMPUGNED SHARES VIA REGULAR BANKING CHANNELS OVER RECOGNIZED STOCK EXCHANGE THROUGH REGISTERED STOCK BROKERS AT PRICES PREVAILING AT THE STOCK EXCHANGE - AND THUS CONCLUSIVELY ESTABLIS HING ALL THE REQUISITE INGREDIENTS OF SECTION 68 VIZ. IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTIONS INVOLVED. THE PRIMARY ONUS CAST ON THE ASSESSEE(S) U/S 68 TO EXPLAIN THE NATUR E & SOURCE OF SUMS FOUND CREDITED IN HIS BOOKS THUS STOOD DISCHAR GED, SHIFTING THE ONUS TO DISPROVE THE SAME ON THE A.O WHICH THE A.O DESPERATELY FAILED TO DO. THE A.O. DISBELIEVED THE GENUINENESS OF THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE(S) AND THE TRUTHFULNESS OF THE DOCUMENTARY EVIDENCES FURNISHED IN SUPPORT T HERETO CITING REFERENCE TO THIRD PARTY STATEMENTS & THIRD PARTY E VIDENCES GATHERED IN COURSE OF SEPARATE SEARCH ACTIONS IN TH E CASES OF THIRD PARTIES. THE ASSESSEE(S) HEREIN VEHEMENTLY DENIED T HE ALLEGATIONS FRAMED ON THE BASIS OF THE IMPUGNED THIRD PARTY STA TEMENTS & DATA AND MADE A CATEGORICAL REQUEST FOR ALLOWING HIM/THE M AN OPPORTUNITY TO CROSS-EXAMINE THE PERSONS WHOSE STAT EMENTS & SEIZED DOCUMENTS WERE INTENDED TO BE USED AGAINST T HE ASSESSEE(S). HOWEVER, NO SUCH OPPORTUNITY WAS PROVI DED TO THE ASSESSEE(S) IN COMPLETE DENIAL OF PRINCIPLES OF NAT URAL JUSTICE, THUS NULLIFYING/NEUTRALIZING THE REFERRAL VALUE OF SUCH ALLEGED THIRD PARTY EVIDENCES RELIED UPON BY THE A.O. AND CONSEQUENTLY RESULTING IN IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 67 CONCLUSION OF THE SUCCESSFUL DISCHARGE OF ONUS U/S 68 IN THE FAVOUR OF THE ASSESSEE(S). V) THE TWO MAIN PRINCIPLES OF NATURAL JUSTICE ARE F IRSTLY 'NEMO JUDIX IN CAUSA SUA' OR 'NEMO DEBETESSE JUDEX INPROP RIA CAUSA SUA, THAT IS, 'NO MAN SHALL BE A JUDGE IN HIS OWN CAUSE' - AND THE SECOND RULE IS 'AUDI ALTERAM PARTEM' , THAT IS, 'HEAR THE OTHER SIDE.' BOTH MAKE CROSS EXAMINATION AS A SINE QUA NON OF DUE PROCESS OF TAKING EVIDENCE AND NO ADVERSE INFERENCE CAN BE DRAWN AGAI NST A PARTY UNLESS THE PARTY IS PUT ON NOTICE OF THE CASE MADE OUT AGAINST HIM. THE ASSESSEE MUST BE SUPPLIED THE CONTENTS OF ALL S UCH EVIDENCES, BOTH ORAL AND DOCUMENTARY, SO THAT HE CAN PREPARE T HE CASE AGAINST HIM. THIS NECESSARILY ALSO POSTULATES THAT HE SHOUL D CROSS EXAMINE THE WITNESS ON WHOSE STATEMENT THE AO RELIES TO HOL D THE SALE OR PURCHASE OF SHARES AS SHAM OR NOT GENUINE. VI) IT IS TRITE THAT IF AN AUTHORITY IS RELYING ON THE TESTIMONY OF A WITNESS, THE ASSESSEE IS REQUIRED TO BE AFFORDED AN OPPORTUNITY TO CROSS-EXAMINE HIM FAILING WHICH THE TESTIMONY CANNO T BE UTILIZED AGAINST THE ASSESSEE. IF THIS PROCEDURE IS NOT FOLL OWED, THEN THERE WOULD BE A CASE OF DENIAL OF NATURAL JUSTICE TO THE ASSESSEE AND THE ADDITION ON THE BASIS OF SUCH STATEMENTS/ MATERIAL CANNOT STAND. ADDITION ON ACCOUNT OF ACCOMMODATION ENTRY CANNOT B E MADE ON BASIS OF UNCONFRONTED ORAL STATEMENT(S) OF THIRD PA RTY(IES). THE LD.COUNSEL FOR THE ASSESSEES IN SUPPORT OF HIS CONT ENTIONS RELIED UPON THE FOLLOWING JUDICIAL AUTHORITIES: IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 68 (I) ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF C ENTRAL EXCISE (2015) 281 CTR 241 (SC) (II) KISHINCHAND CHELLARAM (AIR 1980 SC 2117) (III) STATE OF M.P. V. CHINTAMAN SADASHIVA WAISHAMP AYAN AIR 1961 SC 1623 (IV) LAKSHMAN EXPORTS LTD. V. COLLECTOR OF CENTRAL EXCISE (2005) 10 SCC 634 (V) RAJIV ARORA V. UNION OF INDIA AND ORS. AIR 2009 SC 1100 (VI) CIT VS. SMC SHARE BROKERS LTD., (2007) 288 ITR 345 (DEL) (VII) EASTERN COMMERCIAL ENTERPRISE, (J994) (CAL) [ 210 ITR 103] (VIII) PRAKASH CHAND NAHTA VS. CIT, (2008) 301 ITR 134 (MP) (IX) BANGODAYA COTTON MILLS LTD. VS. CIT [2009] 21 DTK 200 (CAL) (X) CIT VS. SANJEEV KUMAR JAIN (2009) 310 ITR 178 ( P&H) I (XI) CIT & ANR. VS. LAND DEVELOPMENT CORPORATION (2 009) 316 ITR 328 (KAR) (XII) CIT VS. RAJESH KUMAR (2008) 306 ITR 27 (DEL) (XIII) HEIRS & LRS OF LATE LAXMANBHAI S. PATEL VS. CIT (2009) 222 CTR (GUJ) 138 (XIV) CIT VS. PRADEEP KUMAR GUPTA (2008) 303 ITR 95 (DEL) (XV) CIT VS. DHARAM PAL PREM CHAND LTD. (2007) 295 ITR 105 (DEL) (XVI) CIT VS. A.N. DYANESWARAN (2008) 297 ITR 135 ( MAD) (XVII) P. S. ABDUL MAJEED, (KERALA) (1994) [209 ITR 821] (XVIII) PRARTHANA CONSTRUCTION (P) LTD. [2001] 70 T TJ 122(AHD TRIB) (XIX) CIT VS. S.M AGGARWAL 292 ITR 43 (XX) STRAPTEX INDIA (P) LTD. VS. DCIT [2003] 84 ITD 320 (MUM) (XXI) R.W. PROMOTIONS (P.) LTD. V. ASSTT. CIT [2015 ] 61 TAXMANN.COM 54 (BOM.) (XXII) OBULAPURAM MINING CO, (P.) LTD. V. DY. CIT 1 60 ITD 224 (BANG. - TRIB.) (XXIII) CIT V. INDRAJIT SINGH SURI [2013] 33 TAXMAN N.COM 281/215 TAXMAN 581 (GUJ.) (XXIV) SMT. SUNITA DHADDA V. DY. CIT [2013] 33 TAXM ANN.COM 639 (JP.- TRIB.) (XXV) CANNON INDUSTRIES (P.) LTD. V. DY. CIT [2015] 59 TAXMANN.COM 65 (MUM.- TRIB.) VII) IN THE INSTANT CASE ALSO, MOST OF THE THIRD PA RTY STATEMENTS & EVIDENCES RELIED UPON BY THE A.O VIZ. THE STATEMENT S OF ALLEGED DUMMY DIRECTORS OF VARIOUS COMPANIES, ALLEGED EMPLO YEES OF SIRISH CHANDRAKANT SHAH, STATEMENTS OF OM PRAKASH A NANDILAL KHANDELWAL, PRAVEEN KUMAR JAIN, PRAVEEN AGARWAL, JA GDISH PRASAD PUROHIT, SATISH SARAF, YOGENDRA KUMAR GUPTA, JAYESH RAICHAND THAKKAR, SRI SATYAPRAKASH GOEL, DEEPAK PAT WARI ETC. ARE VERY GENERIC. APART FROM THE FACT THAT THESE PERSON S WERE NOT MADE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 69 AVAILABLE TO THE ASSESSEE(S) FOR CROSS-EXAMINATION, IT IS SUBMITTED THAT THESE DO NOT DIRECTLY IMPLICATE/INCRIMINATE/NA ME THE ASSESSEE(S) HEREIN AS ILLEGAL BENEFICIARIES TO ALLE GED BOGUS LTCG IN THE SHARES OF THE IMPUGNED COMPANIES. THE SAID S TATEMENTS ONLY EXPLAIN THE GENERAL MODUS 'OPERANDI WITH RESPECT TO THE SHARES OF FEW COMPANIES BEING ALLEGEDLY UTILIZED FOR THE PURP OSE OF PROVIDING ACCOMMODATION ENTRIES IN CERTAIN CASES. T HUS, MERE ACCEPTANCE BY THIRD PARTIES OF THEIR INVOLVEMENT IN PROVIDING ACCOMMODATION ENTRIES OF VARIOUS NATURES TO DIFFERE NT PERSONS WHEREIN THE NAME(S) OF THE ASSESSEE(S) HAS/HAVE NOT BEEN IMPLICATED CANNOT FORM THE BASIS FOR MAKING ADDITIO NS U/S 68 & 69C OF THE ACT IN THE ASSESSEE(S) CASE UNLESS A DEF INITE CASE IS PROVED AGAINST THE ASSESSEE(S) AFTER PROVIDING HIM/ THEM DUE OPPORTUNITY OF CROSS-EXAMINATION OF THE ALLEGED DEP ONENTS. VIII) IT IS PERTINENT TO NOTE THAT THE THIRD PARTY STATEMENTS WHICH WERE RELIED UPON BY THE A.OS WERE NOT RECORDED BY T HE A.O IN COURSE OF THE ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE(S) HEREIN BUT WERE PRE-EXISTING STATEMENTS RECORDED BY THE INVESTIGATION WING. SUCH STATEMENTS, AS JUDICIALLY OPINED (INFRA), CANNOT FORM THE BASIS OF ASSESSMENT IN THE CASE OF THE ASSESSES U/S 153A WITHOUT CONDUCTING A PROPER ENQUIRY AND EXAMIN ATION DURING THE ASSESSMENT PROCEEDING ITSELF. TO SUPPORT HIS CO NTENTIONS, THE FOLLOWING DECISIONS ARE RELIED UPON: I) ITO VS. M/S. SOFTLINE CREATIONS (P) LTD. (IN ITA NO . 744/DEI/2012) II) CIT VS. GANGESHWARI METAL PVT. LTD. (2014) 264 CTR 277 (DEL HC) III) M/S. KHATRI PROJECTS\PVT. LTD. VS. ITO (I.T.A, NO. 4353/DEL/2016) IV) M/S. DEVANSH EXPORTS VS. ACIT (I.T.A. NO. 2178/KOL/ 2017) IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 70 V) MOTI ADHESIVE P. LTD. VS. ITO (ITA NO. 3133/DEL/201 8) VI) CIT VS. OASIS HOSPITALITIES PVT. LTD. (2011) 333 IT R 119 (DEL HC) VII) CIT VS. FAIR INVEST LTD. (2013) 357 ITR 146 (DEL HC ) VIII) ITO VS ARORA ALLOYS LTD. (2012) [12 ITR (TRIB)263 ( ITAT CHANDIGARH) IX) CIT VS. M.K. BROTHERS 163 ITR 249 (GUJ -HIGH COURT X) JAGDAMBA TRADING COMPANY VS. ITO 107 TTJ 398 (JD) XI) SARTHAK SECURITIES CO. LTD. VS. ITO 329 ITR 110 (DE LHI HC) XII) DEEPARAJ HOSPITAL (P) LTD. VS. ITO, 41/AGRA/2017 DT . 01.06.2018 (AGRA TRIB) XIII) ITO VS. RELIANCE CORPORATION (2017) 55 ITR 69 (SN) (MUM) (TRIB) XIV) PCIT VS. RMG POLYVINYL (I) LTD. (2017) 83 TAXMANN.C OM 348 (DELHI HC) XV) PCIT VS. MEENAKSHI OVERSEAS (P) LTD. (2017) 82 TAXM ANN.COM 300 (DELHI HC) XVI) GEE CEE CYCLE BALLS PVT. LTD. VS. ITO, ITA NO. 867/ DEL/2013 DT. 30.10.2015 XVII) CIT VS. GOEL SONGS GOLDEN ESTATE PVT LTD. ITA NO. 2 12/2012 DT. 11.04.2012 XVIII) CIT VS. VRINDAVAN FARMS (P) LTD. ITA NO. 71,, 72, 8 5/DEI/2015 DT. 12.08.2015 XIX) DWARKA GEMS LTD. ITA NO. 71/JP/2017 (ITAT JAIPUR) XX) NIRMALA AGARWAL VS. ACIT (ITA NO. 995 & 996/JP/2016 ) (ITAT JAIPUR) IX) DRAWING SUPPORT FROM THE ABOVE CITED JUDGMENTS, IT IS SUBMITTED THAT IN THE INSTANT CASE, THE ADDITION MA DE BY THE AO U/S 68 & 69C PRIMARILY RELYING ON THIRD PARTY DOCUMENTA TION AND THIRD PARTY STATEMENTS RECORDED BY THE INVESTIGATION WING WITHOUT - (I) CONDUCTING AN INDEPENDENT ENQUIRY & INVESTIGATION B Y EXAMINING THE ALLEGED DEPONENTS/DEPARTMENTAL WITNESSES DURING THE ASSESSMENT PROCEEDINGS (II) ALLOWING CROSS-EXAMINAT ION OF THE DEPONENTS TO THE ASSESSEE(S) AND (III) DISCREDITING THE EVIDENCES FURNISHED BY THE ASSESSEE(S) - IS BAD-IN-LAW AND HE NCE NOT SUSTAINABLE. 70. RE: RELIANCE ON THIRD PARTY DOCUMENTATION/ EVID ENCE SEIZED IN COURSE OF SEARCH AT THE PREMISES OF THIRD PARTIES 1. THE A.O HAS ALSO PLACED STRONG RELIANCE ON HA RD/SOFT DATA SEIZED FROM PREMISES OF THIRD PARTIES VIZ, VARIOUS ALLEGED ENTRY/EXIT OPERATORS IN COURSE OF SEARCH OPERATIONS CARRIED OU T IN THEIR CASES. HOWEVER, AS DISCUSSED SUPRA, SUCH DATA WAS NOT CORR OBORATED BY ANY INCRIMINATING MATERIALS/ DOCUMENTS IN THE CASE OF THE ASSESSEE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 71 DESPITE USING THE LONGEST ARM OF THE REVENUE IN THE FORM OF SEARCH ACTION U/S 132(1) AGAINST THE ASSESSEE(S) HEREIN. T HE A.O HAS CATEGORIZED THE VARIOUS ALLEGED DOCUMENTARY EVIDENC ES SEIZED IN COURSE OF SEARCH IN THE CASE OF THE THIRD PARTIES U NDER THE FOLLOWING BROAD SUB-HEADS: W.R.T THE SHARES OF M/S. PRRANETA INDUSTRIES LTD: T HE A.O HAS MAINLY RELIED UPON THE ALLEGED DOCUMENTARY EVIDENCE S SEIZED FROM THE PREMISES OF SRI SIRISH CHANDRAKANT SHAH (SCS) ( MAINLY 'KEDIA 2 SHEET', 'CHEQUE SHEETS' & 'CASH SHEETS'), SRI PRA VEEN KUMAR JAIN (PINTU) (MAINLY 'SHIR LEDGER') AND SRI R.K. KEDIA ( ANNEXURE A- 27, EXTRACT E-14 COMPRISING MAINLY OF 'DEEPU LEDGER ') IN COURSE OF INDEPENDENT SEARCH ACTIONS IN THEIR CASES. IT MA Y BE NOTED THAT THE NAMES OF THE ASSESSEE(S) HEREIN DO NOT FEATURE IN ANY OF THE SAID SEIZED DOCUMENTS. THE SAID DOCUMENTS APPARENTL Y INDICATE SOME TRANSACTIONS INTERSE BETWEEN THE VARIOUS ALLEG ED ENTRY/EXIT OPERATORS. FURTHER, SOME OF THESE DOCUMENTS ALLEGED LY CONTAIN FEW CHEQUE/RTGS ENTRIES TO AND FROM BPSL GROUP COMPANIE S WHICH STAND DULY DISCLOSED IN THE REGULAR BOOKS OF ACCOUN T OF BPSL GROUP COMPANIES AND HENCE CANNOT BE CONSIDERED AS I NCRIMINATING AGAINST THE ASSESSEE(S) HEREIN. THUS, IN THE ABSENC E OF CLEAR MENTION OF THE NAMES OF THE ASSESSEE(S) HEREIN IN T HE SAID THIRD PARTY DOCUMENTATION AND NO NEXUS HAVING BEEN DRAWN BY THE REVENUE AUTHORITIES BETWEEN SUCH THIRD PARTY DOCUME NTATION AND ANY INCRIMINATING MATERIALS FOUND IN COURSE OF SEAR CH FROM THE PREMISES OF THE ASSESSEE(S) HEREIN, NOTHING ADVERSE CAN BE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 72 IMPLICATED AGAINST THE ASSESSEE(S) IN ASSESSMENTS F RAMED U/S 153A OF THE ACT. WITH REFERENCE TO THE SHARES OF THE COMPANIES OTHER THAN M/S. PRRANETA INDUSTRIES LTD.: IN THE NAME OF DOCUMENTAR Y EVIDENCES, THE A.O HAS PRIMARILY RELIED ON CERTAIN FABRICATED HARD/SOFT DATA CLAIMED TO BE SEIZED IN COURSE OF SUBSEQUENT SEARCH ACTION ON SRI R.K. KEDIA ON 13.06.2014, I.E. ALMOST FOUR MONTHS A FTER THE SEARCH ACTION IN THE CASE OF THE ASSESSEE(S) HEREIN ON 22. 04.2014 ALTHOUGH THE SIMULTANEOUS SEARCH ACTION ON SRI R.K. KEDIA ON 22.04.2014 HAD NOT RESULTED IN DISCOVERY OF ANY INCRIMINATING MATERIAL AGAINST THE ASSESSEE(S) HEREIN. AS PER THE CATEGORICAL FIND ING AND RULING OF THE HON'BLE DELHI ITAT IN THE CASE OF SRI BRIJ BHUS HAN SINGAL & ORS VS. ACIT (ITA NOS. 1415-1417, 1479-1481, 1483- 1484/DEL/2018) (AS ALSO ELABORATED SUBSEQUENTLY), N O RELIANCE CAN BE PLACED ON DOCUMENTS SEIZED FROM THE PREMISES OF SRI R.K. KEDIA WHO HAS BEEN SPECIFICALLY HELD TO BE AN UNREL IABLE PERSON INDULGING IN DOUBLE SPEAKING ESPECIALLY WHEN NO OPP ORTUNITY TO CROSS EXAMINE HIM OR HIS EMPLOYEE WAS PROVIDED TO T HE ASSESSEE(S). THE A.O HAS ALSO RELIED ON CERTAIN DAT A (EXCEL SHEETS IN HARD DISK MARKED PAL/HD/1) SEIZED FROM THE PREMI SES OF ONE PRAVEEN AGARWAL (ALLEGED EXIT PROVIDER) IN COURSE O F SEPARATE SEARCH ACTION IN HIS CASE. THE SAID DATA HOWEVER DO ES NOT RELATE TO THE ASSESSEE(S) HEREIN OR TO THE ISSUE OF LTCG UNDE R THE PRESENT APPEALS. THESE ALLEGEDLY RECORD CERTAIN CHEQUE/RTGS ENTRIES TO BPSL GROUP COMPANIES WHICH STAND DULY ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNT OF BPSL GROUP COMPANIES. T HE SAME IS IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 73 CLEARLY EVIDENT FROM THE A.O'S OBSERVATION AT PAGE 98/146 OF THE ASSESSMENT ORDER (IN THE CASE OF SANJAY SINGAL FOR A.Y. 2012-13) THAT 'THE DETAILS OF CHEQUE/RTGS TRANSACTION PERTAI NING TO ASSESSEE GROUP SEIZED FROM PRAVEEN AGARWAL MATCHED THE ENTRI ES RECORDED BY THE ASSESSEE GROUP IN ITS REGULAR BOOKS OF ACCOU NT AND BANK STATEMENTS'. IT MAY FURTHER BE NOTED THAT EVEN IN T HE STATEMENTS OF SRI PRAVEEN AGARWAL (WITH RESPECT TO WHICH NO OPPOR TUNITY OF CROSS EXAMINATION WAS ALLOWED TO THE ASSESSEE(S) DE SPITE CATEGORICAL REQUEST), NOTHING HAS BEEN IMPLICATED A GAINST THE ASSESSEE(S) HEREIN OR WITH RESPECT TO THE LTCG TRAN SACTIONS CARRIED OUT BY THE ASSESSEE(S). THUS, WHAT HAS BEEN ESSENTIALLY RELIED UPON BY THE A.O IS THIRD PARTY DOCUMENTATION IN RESPECT OF WHICH NO OPPORTUNITY OF CROSS EXAMINATION OF THE PE RSON CONTROLLING/OWNING SUCH DOCUMENTS WAS ALLOWED TO TH E ASSESSEE(S). AS SUCH, NOTHING ADVERSE CAN BE IMPLIC ATED AGAINST THE ASSESSEE(S) HEREIN ON THE BASIS THEREOF. COMING TO THE LEGAL VALIDITY AND EVIDENTIARY VALUE OF THIRD PARTY DOCUMENTS, AT THE OUTSET, IT IS CLARIFIED THAT THES E HARD/SOFT DATA WERE NOT SEIZED FROM THE POSSESSION AND CONTROL OF THE ASSESSEE(S) AND HAVE NOT BEEN SHOWN TO BELONG TO THE ASSESSEE(S ) HEREIN. ACCORDINGLY, PRESUMPTION U/S.132(4A/292C W.R.T. THE SE SEIZED MATERIAL IS NOT APPLICABLE TO THE ASSESSEES HEREIN. 71. AS OBSERVED EARLIER, THE LD.COUNSEL FOR THE ASS ESSEE HAS PLACED ON RECORD, THE DETAILED COMBINED DISCUSSION WITH RESPE CT TO PRESENT ASSESSEE, AND THE MAIN SUBMISSIONS MADE BY HIM ARE AS UNDER: IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 74 I) AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT COMPLETE DOCUMENTARY EVIDENCES ESTABLISHING GENUINE NESS OF PURCHASE AND SALES OF THE SHARES IN THE CASES OF AL L ASSESEES WERE GIVEN AND ALSO PLACED ON THE PAPER BOOK. II) WHILE MAKING ADDITIONS, THE LD.AO WAS MAINLY R ELIED ON THE STATEMENT OF PERSONS VIZ. SHRI ANKUR AGARWAL (EMPLO YEE OF BSL), SHRI RK KEDIA (ENTRY PROVIDER), MANISH ARORA (EMPLOYEE OF SHRI RK KEDIA), THE ALLEGED ENTRY AND EXIT OPERATORS, DIRECTORS OF PENNY STOCK COMPANIES ETC. THE ASSESSEE HAS MADE A SPECIFIC REQUEST FOR PROVIDING OPPORTUNI TY TO CROSS- EXAMINE THE PERSONS WHOSE STATEMENTS WERE TAKEN BY THE AO BEHIND THE BACK OF THE ASSESESSEE. HOWEVER, NO SUC H OPPORTUNITY WAS GIVEN TO THE ASSESSEE; BUT WHEN THE ASSESSEE WAS DIRECTED TO APPEAR ON A PARTICULAR DATE TO CROS S-EXAMINE THE PARTIES, BUT THEY WERE NOT AVAILABLE ON THE SPECIFI ED DATE. THEREFORE, THE IMPUGNED ASSESSMENTS WERE FRAMED BY THE AO IN GROSS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. TO SUPPORT THIS CONTENTIONS, THE LD.COUNSEL FOR THE ASSESSEE RELIED UPON VARIOUS CASES LAWS, INCLUDING JUDGMENT OF HONBLE SUPREME C OURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. CIT, 281 CTR 241 (SC). III) THE ASSESSEE HAS EARNED LTCG OUT OF THE PREFER ENTIAL ALLOTMENT. WHILE DENYING THE CLAIM OF THE ASSESSEE , THE LD.AO CONSTRUED WITHOUT ANY BASIS THAT THE ASSESSEE HAS R ELATION WITH IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 75 THE PROMOTERS OF THE SAID COMPANIES AND ENTRY PROVI DERS, AND THEREFORE, PREFERENTIAL SHARES WERE ISSUED TO THE A SSESSEE. IN FACT THE PREFERENTIAL SHARES ISSUED TO THE ASSESSEE WAS IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE SEBI, AND THE ALLOTMENT OF SUCH SHARES HAS BEEN VETTED BY THE SEBI WHICH DID N OT SIGNIFY ANY CONNECTION OF THE ASSESSEE WITH THE PROMOTERS O F THE COMPANY. IV) THE SHARES OF COMPANY WAS LISTED AND TRADED IN THE STOCK EXCHANGE, AND THE SHARES WERE CREDITED TO THE RESPE CTIVE DEMAT ACCOUNTS OF THE ASSESSEE. AFTER A PERIOD OF 12 MONTHS, THEY WERE SOLD THROUGH REGISTERED BROKERS ON THE NS E/BSE IN ACCORDANCE WITH THE PRESCRIBED REGULATORY PROCEDURE S. THE SALE PROCEEDS WERE RECEIVED THROUGH NORMAL BANKING CHANN EL FROM THE STOCK BROKERS. IN OTHER WORDS, TRANSACTIONS OF SALE AND PURCHASES WERE EFFECTED THROUGH PROPER AND LEGAL ME CHANISM, AND THEREFORE, THE SAME CANNOT BE DOUBTED. V) IT IS FURTHER SUBMITTED THAT SHARE TRANSACTION S WERE CONDUCTED THROUGH THE WEB-SITE OF STOCK EXCHANGE AT THE PREVA ILING MARKET RATE, AND THE PAYMENT THEREOF WERE RECEIVED THROUGH BANKING CHANNEL I.E. ACCOUNT PAYEE CHEQUES/RTGS FROM THE ST OCK BROKER. IT IS PERTINENT TO NOTE THAT THERE IS NO H UMAN INTERACTION BETWEEN THE PARTIES, IN RESPECT OF IMPUGNED TRANSAC TIONS, AS THE SAME WERE DONE THROUGH WEB-BASED ON LINE APPLICATIO N. ALL THE TRANSACTIONS ARE CARRIED OUT BY THE ASSESSEE WERE F ULLY DOCUMENTED IN THE FORM OF CONTRACT NOTES/BILLS OF R ELEVANT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 76 BROKERS. COPIES OF THESE CONTRACT NOTES/BILLS OF B ROKERS ARE ANNEXED IN THE PAPER BOOK. VI) THE ASSESSEE HAS NO CONTROL OVER OR AWARE OF THE PARTIES/ENTITIES WHO BUY AND SELL THE SHARES. THE TRANSACTIONS ARE ENTERED INTO BY THE ASSESSEE ON THE BASIS OF IN FORMATION AND FEEDBACK RECEIVED FROM VARIOUS PROFESSIONALS, MARKE T GOSSIPS AND LOOKING TO THE GENERAL MARKET CONDITIONS. THE LD.AO HAS NO ROOM FOR DOUBT THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE, BECAUSE THE ASSESSEE HAS FILED ALL SUPPORTING EVIDE NCES IN THE FORM OF DEMAT ACCOUNTS, SHARE CERTIFICATES, CONTRAC T NOTES, BANK STATEMENTS. VII) IT IS FURTHER SUBMITTED THAT WHILE FRAMING THE ASSESSMENT, THE AO HAS STRONGLY RELIED ON THE STATE MENT OF ALLEGED THIRD PARTIES RECORDED UNDER SECTION 132(4) /133A IN THE COURSE OF SEARCH/SURVEY ACTION. THE ASSESSEE HAS C ONSISTENTLY DENIED ANY LINKAGE BETWEEN MUCH LESS ANY DEALINGS W ITH THE ALLEGED RK KEDIA OR SHRI MANISH ARORA OR ANY OF THE ALLEGED ENTRY OPERATORS/EXIT PROVIDERS OR DIRECTORS OF PENN Y STOCK COMPANIES. WHEN THE ASSESSEE SOUGHT FOR CROSS-EXAM INATION OF THOSE THIRD PARTIES WHOSE STATEMENTS WERE RELIED UP ON BY THE ASSESSEE, NO PROPER OPPORTUNITY WAS GIVEN; AND WHEN A SPECIFIC DATE WAS GIVEN TO THE ASSESSEE FOR THAT PURPOSE, BU T ON THAT DATE NONE OF THE WITNESS APPEARED. IT IS PERTINENT TO NOTE THAT IN POST-SEARCH INVESTIGATIONS/ASSESSMENT PROCEEDINGS, THE SAID RK KEDIA HAS TAKEN CONTRADICTORY STANDS AND ON 13.06. 2014 HE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 77 RETRACTED STATEMENT RECORDED UNDER SECTION 132(4), WHICH WAS FURTHER RETRACTED ON 26.3.2015. THEREFORE, HIS STA TEMENT IS NOT TRUSTWORTHY AND HAS LITTLE EVIDENTIARY VALUE FOR TH E ADJUDICATING AUTHORITY TO PROCEED ON WITH IT. IN THIS REGARD, T HE LD.COUNSEL FOR THE ASSESSEE RELIED UPON VARIOUS CASE LAWS VIZ. JUD GMENT OF HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS. E STER COMMERCIAL ENTERPRISES, 201 ITR 103, ITAT DECISION IN THE CASE OF DCIT VS. BHOLA NATH RADHA KRISHNA, ITA NO.5149/DEL/2012, AND SMT.SMITA P. PATEL VS. AFCIT, 159 TTJ 182 ETC. UNLESS STATEMENTS ARE CORROBORATED WI TH INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH, THE SAME CANNOT BE USED AGAINST THE ASSESSEE TO DRAW AN ADVERSE INFERENCE. VII) IN SUM AND SUBSTANCE, THE LD.COUNSEL FOR THE ASSESS EE REITERATED THAT NO CONCRETE EVIDENCE HAS BEEN UNEARTHED IN THE COURSE OF SEARCH IN THE CASES OF THE ASSESSEE HEREIN TO CONCL USIVELY ESTABLISH THAT THE ASSESSEES HEREIN HAD BOOKED BOGU S LTCG OR THAT THEIR OWN UNACCOUNTED MONEY WAS ROUTED THROUGH TRANSACTIONS IN SHARES OF THE SAID SCRIPS OR THAT T HEY HAD MADE ANY COMPENSATORY PAYMENTS TO THE BUYERS OF THE SAID SCRIPS. 72. THE LD. DR WHILE APPRAISING US WITH THE FACTS A ND CIRCUMSTANCES VERY ELOQUENTLY SUBMITTED THAT THE PRESENT APPEALS RELATE TO THE ABATED ASSESSMENT YEARS AND THEREFORE NO REFERENCE CAN BE MADE TO THE ORDER OF THE ITAT IN THE OWN CASE OF THE PRESENT ASSESSEE OF THE EARLIER YEARS WHICH WAS UNABATED AND RENDERED IN HIS FAVOUR ON TH E REASONING THAT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 78 THERE WAS NO INCRIMINATING DOCUMENTS FOUND DURING T HE COURSE OF SEARCH FROM THE PREMISES OF ASSESSEE. THUS IN THE EARLIER YEARS, BEING UNABATED YEARS, NO ADDITION WAS SUSTAINED BY THE ITAT. BUT I T IS NOT SO IN THE PRESENT CASE BEING ABATED ASSESSMENT YEARS. 73. THE LD. DR FURTHER APPRAISED US THAT THE FACTS/ PARTICULARS OF THE CASE OF SHRI BRIJ BHUSHAN SINGAL, THE FATHER OF THE ASSESSEE, BEARING ITA NOS. 1415 TO 1417/DEL/2018 FOR THE AYS 2013-14 TO 2 015-16 ORDER DATED 7-12-2018, RELIED BY THE LEARNED AR FOR THE A SSESSEE IN SUPPORT OF HIS CLAIM, ARE DIFFERENT IN TERMS OF LAW AND FACTS FROM THE SPECIFICS OF THE PRESENT CASES. FOR THIS PURPOSE, THE LEARNED DR HAS HIGHLIGHTED CERTAIN FACTUAL DIFFERENCES AS DETAILED UNDER: I. IN THE ASSESSMENT OF SHRI BRIJ BHUSHAN SINGAL, THER E WAS NO DISCLOSURE MADE BY HIM IN THE STATEMENT FURNISHED U NDER SECTION 132(4) OF THE ACT WITH RESPECT TO ANY UNDIS CLOSED INCOME WHEREAS IN THE PRESENT CASE THERE WAS A DISC LOSURE OF RS. 250 CRORES ON ACCOUNT OF BOGUS LONG-TERM CAPITA L GAIN IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT WHICH WAS SUBSEQUENTLY AFFIRMED IN A STATEMENT POSTS SEARCH D ATED 6 MARCH 2014 DETAILING THE BREAKUP OF THE UNDISCLOSED INCOME OF RS. 250 CORES. SUCH STATEMENT WAS NEVER RETRACTED B UT THE IMPUGNED INCOME WAS NOT OFFERED TO TAX IN THE RETUR NS OF INCOME. SUCH NON-DISCLOSURE OF INCOME CANNOT BE EQU ATED WITH THE RETRACTION OF THE STATEMENT. AS SUCH THERE IS N O CONCEPT UNDER THE LAW FOR DEEMED/ IMPLIED RETRACTION OF THE STATEMENT WHICH WAS RECORDED UNDER THE SPECIFIC PROVISIONS OF LAW. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 79 II. IN THE PRESENT CASE, VARIOUS MATERIALS OF INCRI MINATING NATURE AND STATEMENTS WERE GATHERED/ COLLECTED DURING THE SEARCH AT THE PREMISES OF THE ENTRY-OPERATORS AND ACCOMPLICES WHI CH WERE EVIDENCING THAT THE ASSESSEE HAS TAKEN BOGUS LONG-T ERM CAPITAL GAIN. ACCORDINGLY THE ASSESSEE, ON CONFRONTATION OF SUCH MATERIALS AND THE STATEMENT OF THE ENTRY OPERATORS HAS ACCEPTED TO HAVE GENERATED BOGUS LONG-TERM CAPITAL GAIN. HOW EVER, IN THE CASE OF SHRI BRIJ BHUSHAN SINGAL, THERE WAS NO SUCH MATERIAL/ STATEMENT WHICH WAS CONFRONTED TO HIM. III. ALL THE ENTRY-OPERATORS, BROKERS AND THEIR ACCO MPLICES HAVE REAFFIRMED AND RESTATED BEFORE THE INCOME TAX AUTHO RITIES AND BEFORE THE OTHER AUTHORITIES UNDER PMLA THAT THEY W ERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES FOR BOGU S LONG- TERM CAPITAL GAIN. BUT IT IS NOT SO IN THE CASE OF SHRI BRIJ BHUSHAN SINGAL. IV. THE ASSESSEE IN THE PAST HAS ALSO ADMITTED THAT HE HAS EARN UNACCOUNTED INCOME WHICH WAS INTRODUCED IN THE COMP ANY IN THE FORM OF SHARE CAPITAL AND PREMIUM. SUCH UNACCOU NTED INCOME WAS OFFERED TO TAX ON DIFFERENT OCCASIONS BY THE ASSESSEE. THUS, THERE REMAINS NO DOUBT THAT THE ASS ESSEE WAS IN THE HABIT OF ADOPTING SUCH DUBIOUS TECHNIQUES FOR L AUNDERING THE UNACCOUNTED INCOME. HOWEVER IN THE CASE OF SHRI BRIJ BHUSHAN SINGAL, THERE IS NO SUCH HISTORY AVAILABLE ON RECORD. LIKEWISE, THE LEARNED DR HAS ALSO HIGHLIGHTED CERTA IN LEGAL/ TECHNICAL DIFFERENCE BETWEEN THE CASE OF THE ASSESSEE VIZ A V IZ SHRI BRIJ BHUSHAN SINGAL AS DETAILED UNDER: IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 80 I. THE HONBLE SUPREME COURT THE CASE OF NRA IRON &STE EL (P.) LTD REPORTED IN 103 TAXMANN.COM 48 HAS CATEGOR ICALLY HELD THAT THE ONUS TO JUSTIFY THE NATURE AND OF SOU RCE OF THE CASH CREDIT UNDER SECTION 68 OF THE ACT LIES UPON T HE ASSESSEE. IT WAS HELD BY THE HONBLE APEX COURT THA T ONCE THE AO HAS CONDUCTED CERTAIN ENQUIRY AND POINT OUT THE DEFECTS IN THE EXPLANATION OF THE ASSESSEE THEN IT IS THE D UTY OF THE ASSESSEE TO PROVE THE CASH CREDIT AS GENUINE IN LIG HT OF AVAILABLE FACTS/ INFORMATION. THIS JUDGEMENT OF T HE HONBLE SUPREME COURT WAS PASSED ON 5THMARCH 2019 WHEREAS T HE DECISION IN THE CASE OF SHRI BRIJ BHUSHAN SINGAL WA S RENDERED IN THE MONTH OF DECEMBER 2018. THUS THE DE LHI ITAT DID NOT HAD THE BENEFIT OF THIS JUDGEMENTS OF THE HONBLE SUPREME COURT. HAD THIS JUDGEMENT BEING AVA ILABLE AT THE TIME OF PASSING THE ORDER IN THE CASE OF SHR I BRIJ BHUSHAN SINGAL BEFORE THE DELHI BENCH, THE OUTCOME WOULD CERTAINLY HAVE BEEN DIFFERENT. II. THE PREDOMINANT REASON FOR ALLOWING THE APPEAL IN T HE CASE OF SHRI BRIJ BHUSHAN SINGAL BY DELHI BENCH OF ITAT WAS THAT THE OPPORTUNITY OF CROSS EXAMINATION WAS NOT P ROVIDED. THUS, THE EVIDENCE RELIED UPON BY THE REVENUE FOR H OLDING THE LONG-TERM CAPITAL GAIN AS BOGUS, WERE DISCARDED . BUT AT THE SAME TIME IT IS IMPORTANT TO NOTE THAT THE HON BLE SUPREME COURT IN MANY CASES HAS HELD THAT THE OPPOR TUNITY OF CROSS EXAMINATION IS NOT NECESSARY WHERE THE ADD ITION HAS BEEN MADE BASED ON THE DOCUMENTARY EVIDENCE. HOWEVE R, IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 81 SUCH DECISIONS OF THE HONBLE COURTS WERE NOT MADE AVAILABLE TO THE CO-ORDINATE BENCH (DELHI) AT THE T IME OF HEARING. OTHERWISE, THE FATE OF THE CASE OF SHRI BRIJBHUSHANSINGAL WOULD HAVE BEEN DIFFERENT. III. IT WAS ALSO SUBMITTED THAT THE HONBLE PUNJAB AND H ARYANA HIGH COURT IN THE CASE OF SMT. KUSUMLATATHAKRAL VS. COMMISSIONER OF INCOME TAX IN ITA NO. 253 OF 2009 D ATED 24TH OF JULY 2019 HAS STATED IN UNEQUIVOCAL TERMS T HAT THE NECESSITY OF GIVING THE CROSS EXAMINATION DEPENDS O N THE FACTS OF EACH CASE. THUS IN A SITUATION WHERE THERE WERE EVIDENCES AVAILABLE ON RECORD WHICH WERE STRONGLY SUGGESTING THAT THE ASSESSEE HAS TAKEN BOGUS LONG-T ERM CAPITAL GAIN, THEN SUCH EVIDENCE CANNOT BE DISCARDE D MERELY ON THE REASONING THAT THE OPPORTUNITY OF CROSS EXAM INATION WAS NOT PROVIDED. IN VIEW OF THE ABOVE, THE LEARNED DR VEHEMENTLY CON TENDED THAT THE PRINCIPLES LAID DOWN BY THE HONOURABLE DELHI BENCH IN THE CASE OF SHRI BRIJ BHUSHAN SINGAL CANNOT BE APPLIED IN THE GIVEN FACTS AND CIRCUMSTANCES. 74. THE LEARNED DR FURTHER SUBMITTED THAT THE ONUS LIES UPON THE ASSESSEE TO EXPLAIN NATURE AND SOURCES OF CREDIT UN DER SECTION 68 OF THE ACT. THE PRIMARY ONUS IS TO FURNISH THE DETAILS WIT H RESPECT TO THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE P ARTIES UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. ONCE THE ASSES SEE FURNISH PRIMARY EXPLANATION THEN BURDEN SHIFT ON REVENUE TO MAKE FU RTHER ENQUIRY AND IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 82 POINT DEFICIENCY IN PRIMARY EXPLANATION. UPON SUCH ENQUIRY, THEREAFTER THE BURDEN ONCE AGAIN SHIFTS ON THE ASSESSEE TO EXP LAIN SATISFACTORY WITH REGARD TO NATURE AND SOURCE OF CREDIT. IN THE CASE ON HAND, BASED ON THE MATERIALS GATHERED DURING THE SEARCH PROCEEDINGS CO NDUCTED AT PREMISES OF VARIOUS ENTRY OPERATORS AND BROKERS AND THE STAT EMENTS COLLECTED OF VARIOUS ENTRY-OPERATORS AND THEIR ACCOMPLICES WERE CONFRONTED TO THE ASSESSEE AND THEREFORE HE ADMITTED TO MAKE A DISCLO SURE OF RS.250 CRORES. THE STATEMENTS GATHERED DURING THE SEARCH P ROCEEDINGS OF VARIOUS PERSONS WERE NOT RETRACTED RATHER THE STATEMENTS WE RE ALSO REITERATED DURING THE PROCEEDINGS UNDER PMLA. HOWEVER, THE ASS ESSEE HAS NOT BROUGHT ANYTHING ON RECORD BASED ON MATERIALS TO DI SPEL THE RESULTS OF THE ENQUIRIES CONDUCTED BY THE REVENUE. AS SUCH, THE ON US WAS UPON THE ASSESSEE TO COUNTER THE STATEMENTS OF THE PARTIES C OLLECTED DURING SEARCH PROCEEDINGS OF VARIOUS PERSONS AS WELL AS THE DOCUM ENTS GATHERED THEREIN. ACCORDINGLY, ALL THESE DOCUMENTS/DETAILS C ANNOT BE BRUSHED ASIDE MERELY ON THE CONTENTION OF THE ASSESSEE THAT THE OPPORTUNITY OF CROSS EXAMINATION WAS NOT AFFORDED TO HIM AND MATER IAL WAS NOT FOUND FROM HIS PREMISES. THE ASSESSEE HAS ADMITTED THE I NCOME OF BOGUS LONG- TERM CAPITAL GAIN IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT WHICH WAS SUBSEQUENTLY REAFFIRMED ABOUT 3 WEEKS LATER IN HIS OWN HANDWRITING. THEREFORE, THE CONTENTION OF THE ASSES SEE THAT HE HAS GIVEN SUCH STATEMENT/ADMISSION OF INCOME UNDER STRESS OR COERCION IS NOT BELIEVABLE/ ACCEPTABLE. THERE WERE VARIOUS STATEME NTS OF BROKERS, ENTRY- OPERATORS AND OTHER PLAYERS WHO ACCEPTED TO HAVE BE EN INVOLVED IN PROVIDING ACCOMMODATION ENTRIES BY WAY OF DUBIOUS T ECHNIQUES WITH THE PURPOSE OF AVOIDING THE TAX LIABILITY. THESE STATEM ENTS WERE NOT RETRACTED IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 83 RATHER THESE WERE REAFFIRMED AND RESTATED BEFORE TH E AUTHORITIES UNDER PMLA. LIKEWISE SHRI RK KEDIA THE BROKER OF THE ASSE SSEE INDEED MADE A RETRACTION BUT SOON THEREAFTER FILED AN AFFIDAVIT TO BY RE-AFFIRMING WITH THIS ORIGINAL STATEMENT. FURTHERMORE, ALL THE STATE MENT FURNISHED BY SHRI RK KEDIA OR OTHER WITNESSES LIKE SIRISH C SHAH, JAG DISHPUROHIT WERE BACKED BY THE DOCUMENTS AND OTHER MATERIALS RECOVER ED DURING THE SEARCH PROCEEDINGS. ALL THESE DOCUMENTS WERE DULY C ROSS CHECKED, CROSS TALLIED WHICH ESTABLISHES THE COMPLETE CHAIN DEPICT ING THE FLOW OF TRANSACTION. THUS THE STATEMENTS WERE DULY SUPPORTE D BY THE INCRIMINATING DOCUMENTS. THE LEARNED DR FURTHER SUB MITTED THAT ONCE THE ASSESSEE ADMITTED TO THE UNEXPLAINED INCOME, IT CAN BE DISPUTED AT HIGHER FORUM WITHOUT RETRACTING SUCH STATEMENT BEFO RE APPROPRIATE AUTHORITY. AT THE SAME TIME, SUCH RETRACTION HAS TO BE BACKED BY ADEQUATE MATERIALS. THE LEARNED DR IN SUPPORT OF HIS CONTENT ION RELIED ON THE JUDGEMENTS AS DETAILED BELOW: A. RAJNISH JAIN VS. CIT REPORTED IN [2018] 402 ITR 12 (ALLAHABAD) B. KANTILAL C. SHAH VS. ACIT IN IT(SS) NO. 21/AHD/2009 REPORTED 142 TTJ 233 C. ACIT VS. HUKUM CHAND JAIN [2011] 337 ITR 238 (CHHAT TISGARH) D. BHAGIRATH AGGARWAL VS. CIT [2013] 351 ITR 143 (DELH I) 75. IN THE ABOVE JUDGEMENTS OF HONBLE DELHI HIGH C OURT THE CBDT CIRCULARS HAVE ALSO BEEN DEALT WHEREIN IT WAS DISCO URAGED TO THE REVENUE OFFICERS BY STATING THAT THERE SHOULD NOT BE ANY FO RCE/COERCION FOR THE ADMISSION OF ANY INCOME ON THE ASSESSEE. AS SUCH, T HERE HAS TO BE OTHER MATERIALS AVAILABLE ON RECORD FOR THE INCOME OF THE ASSESSEE BESIDES THE STATEMENTS RECORDED DURING THE SEARCH AND SURVEY OP ERATIONS. IN THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 84 PRESENT CASE, THERE ARE ENOUGH MATERIALS BESIDES TH E STATEMENTS OF VARIOUS PARTIES INCLUDING THE ASSESSEE PROVING THAT THE ASSESSEE HAS EARNED BOGUS LONG-TERM CAPITAL GAIN. THERE WERE MA NY GLARING FACTS THAT THE COMPANIES, IN WHOSE SCRIP THE ASSESSEE HAS GENE RATED BOGUS LONG- TERM CAPITAL GAIN, WERE NEITHER CARRYING OUT SUFFIC IENT BUSINESS OPERATIONS NOR HAVING ANY FUTURE BUSINESS PLAN. THE REFORE, ANY ABNORMAL RISE IN THE PRICE OF THE SCRIPT THAT TOO WITHIN A S HORT PERIOD OF TIME CANNOT BE JUSTIFIED. IN SUCH FACTS AND CIRCUMSTANCES THERE IS MORE ONUS UPON THE ASSESSEE TO JUSTIFY THE NATURE AND SOURCE OF CREDIT AND GENUINENESS OF THE TRANSACTIONS. LIKEWISE THERE WERE INVESTIGATION REP ORTS FROM SEBI WHEREIN IT WAS ALLEGED THAT THESE COMPANIES WERE IN VOLVED IN ARTIFICIALLY JACKING UP THE PRICE. IN SUCH FACTS AND CIRCUMSTANC ES, THE TRANSACTIONS CANNOT BE JUSTIFIED MERELY ON THE BASIS THAT IT WAS CARRIED OUT ON THE STOCK EXCHANGE AND THROUGH THE BANKING CHANNEL. THE LEARNED DR IN SUPPORT OF HIS CONTENTION RELIED ON THE FOLLOWING J UDGEMENTS: I. SMT. M.K. RAJESHWARI VS. ITO [2018] 99 TAXMANN.COM 339 (BANGALORE-TRIB) II. SANJAY BIMALCHAND JAIN VS. PCIT [2018] 89 TAXMAN.CO M 196 (BOM) III. HARISH KUMAR REPORTED IN (2019)-TIOL-1200-ITAT-MAD 1200 IV. SATISH KISHORE VS. ITO [2019] 179 ITD 333 (DELHI-TR IB) 76. THE LEARNED DR ALSO CONTENDED THAT THE PRINCIPL ES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAY AL VS. CIT REPORTED IN 214 ITR 801 REGARDING THE PRINCIPLE OF PREPONDE RANCE OF HUMAN PROBABILITIES SHOULD BE ADOPTED IN THE GIVEN FACTS AND CIRCUMSTANCES AFTER EVALUATING THE SURROUNDING CIRCUMSTANCES. TH E LEARNED DR FURTHER IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 85 CONTENDED THAT THE ASSESSEE HAS NOT BROUGHT ANYTHIN G AGAINST THE CONCURRENT FINDING OF THE AUTHORITIES BELOW THAT TH ESE COMPANIES WERE MANAGED AND CONTROLLED BY THE ENTRY-OPERATORS TO PR OVIDE THE ACCOMMODATION ENTRIES IN THE MARKET. THESE CONCURRE NT FINDINGS WERE BASED ON VARIOUS STATEMENTS AND THE DOCUMENTS FOUND DURING THE SEARCH PROCEEDINGS. THEREFORE SUCH CONCURRENT FINDINGS SHO ULD NOT BE HAMPERED BASED ON FINDING GIVEN IN THE CASE OF SHRI BRIJ BHU SHAN SINGAL. IN A SITUATION WHERE THERE WERE SEVERAL DIFFERENCES IN F ACT AND CIRCUMSTANCES OF BOTH THE CASES AS DISCUSSED, THE DECISION GIVEN IN CASE OF OTHER ASSESSEE EARLIER ASSESSMENT YEAR IN OWN CASE OF ASS ESSEE CANNOT BE RELIED FOR THE REASON THAT DECISION IN THOSE BATCHES OF AP PEAL WERE PRONOUNCED ON THE QUESTION OF JURISDICTION AND NOT ON THE BASI S OF MERITS. IT IS SETTLED LAW THAT DECISION OF A COURT IS PRECEDENT ONLY FOR THE ISSUE WHICH HAS BEEN DECIDED IN SUCH ORDER. THE LEARNED DR IN SUPPO RT OF HIS CONTENTION RELIED UPON THE JUDGMENT OF HONBLE SUPREME COURT I N CASE OF SUN ENGINEERING LIMITED REPORTED IN 198 ITR 297. 77. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND P ERUSED MATERIAL AVAILABLE ON RECORD. ACCORDING TO THE ASSESSEE, AL L THE MINOR DETAILS BROUGHT TO NOTICE OF THE BENCH BY THE LD.COUNSEL FO R THE REVENUE HAVE BEEN CONSIDERED IN THE CASES OF THE ASSESSEES FATH ER AND MOTHER VIZ. SHRI BRIJ BHUSAN SINGAL AND SMT. UMA SINGAL I.E. ITA NO. 1415 TO 1417/DEL/2018; 1979 TO 1481/DEL/2018 AND 1483 &1484 /DEL/2018 DECIDED ON 7.2.2018 FOR THE ASSTT.YEARS 2013-14 TO 2015-16. COPY OF THE ORDER HAS BEEN PLACED ON RECORD BY THE LD.COUNS EL FOR THE ASSESSEE. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 86 78. WE HAVE PERUSED THIS DETAILED ORDER RUNNING INT O 173 PAGES. WE WILL BE REPRODUCING MAJOR PART OF THIS ORDER VIDE W HICH THE TRIBUNAL HAS APPLIED ITS MIND ON THE DETAILS BROUGHT ON ITS NOTI CE. TO OUR UNDERSTANDING THERE IS NO VARIATION IN THE FACTS AN D CIRCUMSTANCES AND NATURE OF EVIDENCE. THE DEPARTMENT HAS CITED MORE THAN 35 JUDGMENT BEFORE THE ITAT IN THE CASE OF SHRI BRIJ BHUSAN SIN GAL AND CITATIONS OF ALL THESE JUDGMENTS HAVE BEEN NOTICED IN PARA 21 OF INTERNAL PAGE NO.91 OF THE ORDER. THEREAFTER, THE TRIBUNAL HAS REPRODU CED COMMENTS OF THE ASSESSEE ON ALL THE JUDGMENTS WHICH HAVE BEEN GIVEN IN TABULATED FORM AND THESE COMMENTS HAVE BEEN NOTICED IN PAGE NO.93 TO 144. WE FIND THAT LD.COUSNEL FOR THE REVENUE HAS PLACED ON RECOR D COPIES OF FOLLOWING JUDGMENTS BEFORE US. I) SH. BRII BHUSHAN SINGAL & OTHERS UNABATED YEARS R AINISH JAIN V. COMMISSIONER OF INCOME-TAX II) KANTILAL C. SHAH. V.ACIT III) ACIT V. HUKUM CHAND JAIN IV) MS. PRIVANKA CHOPRA V. DCIT V) BHAGIRATH AGGARWAL V. CIT VI) GOPAL S. PANDITH V. DCIT VII) CIT V. VEGETABLE PRODUCTS VIII) SMT. M.K. RAIESHWARI V. ITO IX) HARISH KUMAR V. ITO X) SATISH KISHORE V. ITO XI) UDITKALRAV.ITO XII) SMT. KUSUM LATA THAKRAL V. CIT XIII) CIT V. NOVA PROMOTERS & FINLCASE (P) LTD. XIV) V3S INFRATECH LTD. V. ACIT XV) SANAT KUMAR V. ACIT XVI) POOJA A J IN A III V. ITO XVII) CIT V. VEGETABLE PRODUCTS XVIII) ITOV. SHAMIM M. BHARWANI XIX) PCIT V. NRA IRON AND STEEL XX) DCIT V. BHOGILAL MULCHAND XXI) MANIDHARI STAINLESS WIRE FVT. LTD, V. UNION OF INDI A IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 87 XXII) RAJIV ARORA V. UNION OF INDIA KISHANLAL AGARWALTA V . THE COLLECTOR OF LAND CUSTOMS & ORS. XXIII) NOKIA INDIA (P. LTD, V. DD1T VICE-CHAIRMAN. KV SANG ATHAN V. GIRDHARILAL YADAV 79. A PERUSAL OF ORDER IN THE CASE OF SHRI BRIJ BHU SAN SINGAL WOULD INDICATE THAT MOST OF THESE ORDERS HAVE ALSO BEEN N OTICED BY THE TRIBUNAL VIZ. BHAGIRATH AGGARWAL VS. CIT, CIT VS. NOVA PROMO TERS & FINLEASE P.LTD. AND CIT VS. N.R. PORTFOLIO P.LTD. (SUPRA) AN D MOST OF THESE DECISIONS HAVE BEEN CONSIDERED BY THE TRIBUNAL WHIC H ARE PART OF THIS ORDER. THE TRIBUNAL THEREAFTER DID ITS OWN RESEARC H AND TABULATED SOME SIXTY TWO JUDGMENTS WHICH WILL BE DISCERNIBLE IN TH E FINDING OF THE TRIBUNAL, WHICH WE ARE GOING TO TAKE NOTE ON THIS P OINT. THEREFORE, WE ARE FULLY CONVINCED THAT THERE IS NO DISPARITY ON F ACTS THOUGH SOME ARTIFICIAL ATTEMPTS HAVE BEEN MADE AT THE END OF TH E LD.COUNSEL FOR THE REVENUE BECAUSE OF NOVELTY OF ELOQUENCE POSSESSED B Y SHRI G.C. SRIVASTAVA FOR PERSUADING US TO BELIEVE THAT FACTS ARE DISTINGUISHABLE, BUT WE FAIL TO PERSUADE OURSELVES TO CONCUR WITH HIM. THEREFORE, AT THIS STAGE, WE DEEM IT APPROPRIATE FIRST TO TAKE NOTE OF QUESTION FRAMED BY THE CO-ORDINATE BENCH IN THE CASES OF FATHER OF APPELLA NT NO.1 AND OTHERS WHICH READS AS UNDER: 25. IT IS NOT IN DISPUTE THAT ASSESSEE HAS FURNISHED A LL THE DETAILS SUCH AS PURCHASE BILLS, ALLOTMENT DETAILS, DEMAT A CCOUNTS, BANK STATEMENTS , DETAILS OF PAYMENTS BY CHEQUES AND SALE ON BSE ELECTRONIC PLATFORM, PROOF OF PAYMENT OF SECURITIES TRANSACTION TAX AND RECEIPT OF PAYMENT THROUGH CHEQ UE BY AN INDEPENDENT BROKER, SALE BILLS ETC WHICH IS NOT DOUBTED BY THE REVENUE. THE FACTS HAVE ALREADY NARRATED BY US IN E ARLIER PARAS, WHICH ARE UNDISPUTED BY BOTH THE PARTIES. ON LY FOLLOWING ISSUES ARE TO BE DECIDED IN THIS APPEAL :- I. WHETHER AO CAN USE THE STATEMENTS OF THIRD PARTIES WITHOUT GRANTING CROSS-EXAMINATION OF THOSE PARTI ES. II. WHETHER WITHOUT PROVIDING THE COPIES OF THE STATE MENTS AS WELL AS THE CROSS EXAMINATION OF ALLEGED EXIT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 88 PROVIDERS, SUCH EVIDENCES CAN BE USED AGAINST THE ASSESSEE FOR MAKING ADDITION. III. WHETHER THE INTERIM ORDERS OF THE SEBI RELIED UP ON BY THE LD AO IMPLICATE THE ASSESSEE FOR MAKING ADDIT ION U/S 68 OF THE ACT ON ALLEGED BOGUS LONG-TERM CAPI TAL GAINS. IV. WHETHER CASH TRAILS OF THE BUYERS OF THE SECURITIES AS STATED BY THE LD AO MAKES THE LONG-TERM CAPITAL G AIN OF THE ASSESSEE BOGUS. V. WHETHER THE DISCLOSURE OF SOME OTHER PERSONS AS THE IR UNDISCLOSED INCOME OF LONG-TERM CAPITAL GAIN AFFECT S THE CASE OF THE ASSESSEE ALSO. VI. WHETHER DE HORS ALL THE ABOVE FACTS ADDITION IN T HE HANDS OF THE ASSESSEE U/S 68 OF LONG TERM CAPITAL GAIN CAN BE MADE 26. ON THE FIRST ISSUE OF CROSS-EXAMINATION, IT IS APPA RENT THAT LD AO HAS MADE ADDITION BASED ON THE STATEMENT OF SHRI R.K. KEDIA (ALLEGED ENTRY PROVIDER), MANISH ARORA (EMPLO YEE OF SRI R.K. KEDIA), ALLEGED EXIT OPERATORS, DIRECTORS OF P ENNY STOCK COMPANIES ETC. RECORDED BY VARIOUS OFFICERS OF THE DEPARTMENT. THE ASSESSES HEREIN MADE A CATEGORICAL REQUEST FOR ALLOWING AN OPPORTUNITY TO CROSS-EXAMINE THE PERSONS WHOSE STAT EMENTS WERE INTENDED TO BE USED AGAINST THEM; HOWEVER, NO SUCH OPPORTUNITY WAS PROVIDED TO THE ASSESSES. THE ASSES SES WAS DIRECTED TO APPEAR ON CERTAIN DATES TO CROSS-EXAMIN E SUCH PERSONS BUT ON THE APPOINTED DATES, NONE OF THE PAR TIES TURNED UP THOUGH ASSESSES WERE DULY PRESENT ON THE SPECIFI ED DATES THROUGH THEIR AUTHORISED REPRESENTATIVE. THE LEARNE D ASSESSING OFFICER VIDE PARA NUMBER 4.11 OF HIS ASSESSMENT ORD ER HAS DISCUSSED THIS ISSUE. IT WAS STATED THAT THE OPPORT UNITY TO CROSS-EXAMINE MR. RAJKUMAR KEDIA AND SRI MANISH ARR ORA WAS GRANTED TO THE ASSESSEE BY ISSUING SUMMONS UNDER SE CTION 131 OF THE ACT DIRECTING THESE PARTIES TO APPEAR ON 06/ 12/2016 BUT BOTH OF THEM DID NOT APPEAR. THE ASSESSEE VIDE LET TER DATED 19/12/2016 ONCE AGAIN REQUESTED THAT IF ANY ADVERSE INFERENCE AGAINST THE ASSESSEE IS DRAWN ON THE BASI S OF THE STATEMENT OF THESE PERSONS, AN OPPORTUNITY TO CROS S-EXAMINE THEM MAY KINDLY BE PROVIDED. THE LEARNED AO ISSUED SUMMONS TO 15 OTHER PARTIES UNDER SECTION 131 OF THE ACT TO APPEAR ON 26/12/2016, HOWEVER, NONE APPEARED ON THE APPOINTED DATE. THEREFORE, THE LEARNED ASSESSING OFFICER STATED THA T FINDING IN THIS CASE IS NOT MERELY BASED ON THE ORAL STATEMENT S GIVEN BY THESE ENTRY OPERATORS, BUT IT IS ALSO BASED ON DOCU MENTARY EVIDENCES RECOVERED DURING THE COURSE OF SEARCH IN FORM OF ELECTRONIC DATA. IT WAS FURTHER HELD BY HIM THAT TH ESE STATEMENTS CORROBORATE THE EVIDENCES FOUND. THEN HE STATED THAT THE MAIN PERSON OF THE GROUP MR. NEERAJ SINGAL DURING THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 89 COURSE OF HIS STATEMENT RECORDED ON 24/4/2015 WAS A SKED TO CROSS-EXAMINE SHRI RAJ KUMAR KEDIA HOWEVER, IN ANSW ER TO QUESTION NUMBER 25 HE STATED THAT HE DOES NOT WANT TO CROSS- EXAMINE MR. RAJKUMAR KEDIA, SHRI MANISH ARORA OR SH RI ANKUR AGARWAL. THE LEARNED ASSESSING OFFICER FURTHER STAT ED THAT CROSS-EXAMINATION CANNOT BE RIGHT AND IT IS NOT REQ UIRED BY LAW. FOR THIS PROPOSITION, HE RELIED UPON THE DECISION O F THE HONBLE ALLAHABAD HIGH COURT IN MOTI LAL PADMAPAT UDYOG LIM ITED VS. CIT, 160 TAXMAN 233 AND THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN SATELLITE ENGINEERING LTD VS. UNION O F INDIA, 1983 ELT 2177 BOMBAY. HE FURTHER RELIED UPON THE DECISIO N OF THE HONBLE DELHI HIGH COURT IN CIT VS. NOVA PROMOTERS AND FIN LEASE PRIVATE LIMITED 342 ITR 169 WHERE IN PARA NU MBER 27 WHERE NON-PROVISION OF OPPORTUNITY TO CROSS-EXAMINA TION OF CERTAIN PERSONS WERE NOT FOUND FATAL TO THE ASSESS MENT. AGAINST THIS, THE ASSESSEE HAS ALSO PUT HIS CASE TH AT NON- PROVISION OF CROSS-EXAMINATION OPPORTUNITY IS FATAL TO THE ASSESSMENT. IN THIS BACKGROUND, WHETHER THE ASSESSE E HAS BEEN GRANTED THE OPPORTUNITY OF THE CROSS-EXAMINATI ON OR NOT IS REQUIRED TO BE SEEN. THE FACT, WHICH HAS NOT BEEN D ENIED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT MR. NEERAJ S INGAL IN HIS STATEMENT DATED 24/4/2015 WAS OFFERED AN OPPORTUNIT Y TO CROSS-EXAMINE MR. RAJKUMAR KEDIA. HOWEVER, IN ANSWE R TO QUESTION NUMBER 25, HE REFUSED AND STATED THAT HE D OES NOT WANT TO CROSS-EXAMINE SRI R. K. KEDIA OR SHRI MANIS H AURORA OR SHRI ANKUR AGARWAL. APPARENTLY, THE SEARCH TOOK PLA CE ON 13/06/2014 AND FIRST NOTICE WAS ISSUED UNDER SECT ION 153A ON 8/9/2014. THE FIRST NOTICE UNDER SECTION 143 (2 ) AND 142 (1) WAS ISSUED ON 25/7/2016. THEREFORE, AT THE TIME WH EN THE STATEMENT OF SRI NEERAJ SINGLE WAS RECORDED ON 24/4 /2015, IT WAS NOT KNOWN WHETHER THE STATEMENT OF MR. RAJKUMAR KEDIA, MANISH AURORA, ET CETERA WOULD BE USED AGAINST HIM OR NOT. THEREFORE, APPARENTLY AT THAT PARTICULAR TIME ASSES SEE DID NOT THOUGHT IT FIT TO CROSS-EXAMINE THEM. HENCE, APPARE NTLY SUCH OPPORTUNITY CANNOT BE SAID TO BE AN OPPORTUNITY OF CROSS- EXAMINATION GRANTED TO THE ASSESSEE WITH RESPECT TO THE ADDITION. THE OPPORTUNITY OF CROSS-EXAMINATION IN P RESENT CASE IS ALSO IMPORTANT BECAUSE OF THE REASON THAT MR. RA JKUMAR KEDIA SUBSEQUENTLY RETRACTED HIS STATEMENT. THIS IS SUE HAS BEEN DECIDED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE VIDE ORDER DATED 31/10/2018, WHEREIN IT HAS BEEN HE LD THAT MATERIAL FOUND DURING SEARCH CANNOT BE INCRIMINAT ING MATERIAL AS STATEMENTS RECORDED BY THE REVENUE OF MR. RAJKU MAR KEDIA, MANISH ARORA AND OTHERS WERE USED BY REVENUE WITH OUT GRANTING CROSS OPPORTUNITY. THE ISSUE OF THE CROSS- EXAMINATION WAS DEALT WITH BY THE COORDINATE BENCH AS UNDER:- 107. WE, THEREFORE, BY RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER OF THE CO-ORDINATE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 90 BENCH ARE OF THE CONFIRMED VIEW THAT THE ASSESSMENT FOR THE ASSESSMENT YEAR 2012-13 ALTHOUGH WAS NOT FRAMED U/S 143(3) OF THE ACT, HOWEVER, THE TIME TO ISSUE THE NOTICE U/S 143(2) OF THE ACT HAD ALREADY EXPIRED BEFORE THE SEARCH TOOK PLACE ON 13.06.2014. THEREFORE, FOR THE PURPOSE OF SECTION 153A OF THE ACT, PROCESSING OF THE RETURN O F INCOME U/S 143(1) OF THE ACT WAS ALSO AN ASSESSMENT. AS SUCH THE ASSESSMENT FOR THE ASSESSMENT YEAR 2012-13 WAS ALSO UNABATED. IT IS WELL SETTLED THAT THE ADDITION U/S 153A OF THE ACT CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, NO INCRIMINATING MATERIAL/DOCUMENT WAS FOUND DURING THE COURSE OF SEARCH. THE AO MADE THE ADDITIONS ON THE BASIS OF THE STATEMENT OF THE THIRD PARTIES RECORDED U/S 132(4) OF THE ACT ON THE BASIS OF ALLEGED ENTRY IN HARD/SOFT DATA SEIZED FROM PREMISES OF THIRD PARTIES IN THE COURSE OF SEARCH ACTION IN THEIR CASES. IN THE PRESENT CAS E, COPIES OF THE PANCHANAMA ARE PLACED AT PAGE NOS. 1 TO 58 OF THE ASSESSEES COMPILATION. FROM A BARE PERUSAL OF THE PANCHANAMA OF THE ASSESSEE, IT MAY BE SEEN THAT NOTHING INCRIMINATING WAS FOUND IN THE COURSE OF SEARCH. IT IS ALSO APPARENT FROM THE SEARCH DOCUMENT THAT NO INCRIMINATING MATERIAL IN THE FORM OF UNDISCLOSED, DOCUMENT, UNACCOUNTED MONEY, BULLION, JEWELLERY ETC. INDICATING THE FACTU M OF UNDISCLOSED INCOME WERE FOUND OR SEIZED IN THE COURSE OF SEARCH OPERATION U/S 132(1) OF THE ACT FO R ANY OF THE ASSESSMENT YEARS UNDER CONSIDERATION. IN THE INSTANT CASE, THE AO RELIED UPON THE STATEMENT OF SH. RAJ KUMAR KEDIA HIS EMPLOYEE SH. MANISH ARORA, SH. ANKUR AGARWAL, AN EMPLOYEE OF BSL AND SH. CHANDRAKANT MAHADEV JADHAV. HOWEVER, SH. RAJ KUMAR KEDIA RETRACTED HIS STATEMENT ON 14.10.2014 (COPY OF WHICH IS PLACED AT PAGE NOS. 446 TO 451 OF THE ASSESSEES COMPILATION). THEREAFTER, HE FILED LETTER DATED 31.03.3015 WITHDRAWING HIS RETRACTION, COPY OF WHICH IS PLACED AT PAGE NOS. 452 TO 455 OF THE ASSESSEES COMPILATION. THEREFORE, HE WAS CHANGING HIS STAND AS SUCH HIS STATEMENT CANNOT BE CONSIDERED TO BE RELIABLE. SIMILARLY, SH. ANKUR AGARWAL ALSO RETRACTED HIS STATEMENT VIDE LETTER DATED 20.12.2016 WHICH IS PLACED AT PAGE NO. 190 OF THE ASSESSEES COMPILATION. SIMILAR WAS THE POSITION WITH REGARD TO THE STATEMENT OF SH. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 91 CHANDRAKANT MAHADEV JADHAV RECORDED ON 13.06.2014, THE SAID STATEMENT WAS ALSO RETRACTED VIDE LETTER DATED 24.11.2016. NOW QUESTION ARISES AS TO WHETHER THE ADDITION CAN BE MADE U/S 153A OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL EMANATING FROM SEARCH U/S 132(1) OF THE ACT, ONLY ON THE BASIS OF THE STATEMENT RECORDED U/S 132(4) OF THE ACT, PARTICULARLY, WHEN THE OPPORTUNITY TO CROSS-EXAMINATION OF THE WITNESS WHOSE STATEMENT WERE RELIED, WAS NOT GIVEN TO THE ASSESSEE. THE COORDINATE BENCH FURTHER RELIED UPON THE DECISI ON OF HON'BLE SUPREME COURT IN CASE OF ANDAMAN TIMBER INDUSTRIES ( SUPRA) AND SEVERAL OTHER JUDICIAL PRECEDENTS AND THEREAFTE R NOTED IN PARA NUMBER 113 OF THE ORDER AS UNDER:- 113. IN THE PRESENT CASE, THE OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE PERSON WHOSE STATEMENTS WERE RELIED UPON BY THE AO WAS REQUIRED TO BE GIVEN, ON THE DATE FIXED BY THE AO, THE ASSESSEE PRESENTED HIMSELF THROUGH HIS AUTHORIZED REPRESENTATIVE BUT THE CONCERNED PERSON DID NOT TURN UP, SO IT CANNOT BE SAID THAT THE OPPORTUNITY TO CROSS-EXAMINATION WAS PROVIDED TO THE ASSESSEE, ALTHOUGH THE STATEMENTS OF THIRD PARTIES WERE USED AGAINST THE ASSESSEE. IN THE INSTANT CASE, IT IS AN ADMITTED FACT THAT THE PERSO NS WHOSE STATEMENTS WERE RECORDED AT THE TIME OF SEARCH, LATER ON RETRACTED FROM THEIR STATEMENTS AND ONE PERSON, NAMELY, SH. RAJ KUMAR KEDIA FIRST RETRACTED ON 14.10.2014 AND THEREAFTER WITHDREW THE RETRACTION VIDE LETTER DATED 31.03.2015. THEREFORE, NO RELIANCE CAN BE PLACED ON THE TESTIMONY OF THE SAID PERSON WHO WAS INDULGING IN DOUBLE SPEAKING AND TAKING CONTRARY STANDS. IN THE ABOVE PARAGRAPH, THE COORDINATE BENCH HAS AL READY GIVEN A FINDING THAT THE PERSONS WHOSE STATEMENTS W ERE RECORDED AT THE TIMES OF SEARCH, LATER ON RETRACTED FROM THE STATEMENT AND THEREAFTER FURTHER WITHDREW THE RETRA CTION. THEREFORE, NO RELIANCE CAN BE PLACED ON THE TESTIMO NY OF THE SAID PERSONS WHO ARE TAKING CONTRARY STANDS. IT WAS FURTHER HELD THAT ON THE APPOINTED DATE, IT COULD NOT BE SA ID THAT THE OPPORTUNITY TO CROSS-EXAMINATION WAS PROVIDED TO TH E ASSESSEE ALTHOUGH; THE STATEMENTS OF THIRD PARTIES WERE USED AGAINST THE ASSESSEE. THE COORDINATE BENCH THEREAFTER REFERRED THE DECISION IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 92 OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS EASTERN COMMERCIAL ENTERPRISES (1994) 210 ITR 103 AND CIRCU LAR ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES AND FURTHER H ELD IN PARA NUMBER 117 OF THE DECISION AS UNDER:- 117. FROM THE AFORESAID CIRCULARS, IT IS CLEAR THA T THE ASSESSMENTS MADE PURSUANT TO SEARCH OPERATION ARE REQUIRED TO BE BASED ON INCRIMINATING MATERIALS DISCOVERED AS A RESULT OF SEARCH OPERATION IN THE CASE OF THE ASSESSEE AND NOT ON THE RECORDED STATEMENT. IN THE INSTANT CASE, THE PERSONS WHO GAVE THE STATEMENTS RETRACTED THE SAME AND EVEN THE OPPORTUNITY TO CROSS-EXAMINE WAS NOT AFFORDED TO THE ASSESSEE THUS, IT IS APPARENT THAT THE ASSESSEE HAS NOT BEEN GRANTED AN OPPORTUNITY OF THE CROSS-EXAMINATION OF SRI R. K. K EDIA AND SHRI MANISH ARORA. THE LEARNED AUTHORISED REPRESENTATIV E HAS RELIED UPON THE DECISION OF THE HONBLE SUPREME COU RT WHERE IN RELYING ON CASE OF STATE OF MADHYA PRADESH VS. CH INTAMAN SADASHIV WAISHAMPAYAN AIR 1961 SC 1623 WHEREIN IN P ARA NUMBER 11, IT HAS BEEN HELD REFERRING ANOTHER DE CISION IN UNION OF INDIA VS. TR VARMA STATING IT BROADLY AN D WITHOUT INTENDING IT TO BE EXHAUSTIVE, IT MAY BE OBSERVED T HAT THE RULES OF NATURAL JUSTICE REQUIRE THAT THE PARTY SHOULD HA VE THE OPPORTUNITY OF PRODUCING ALL RELEVANT EVIDENCE ON W HICH HE RELIES, THAT THE EVIDENCES OF THE APPELLANT SHOULD BE TAKEN IN HIS PRESENCE, AND THAT HE SHOULD BE GIVEN THE OPPOR TUNITY OF CROSS-EXAMINING THE WITNESSES EXAMINED BY THAT PART Y, AND THAT NO MATERIAL SHOULD BE RELIED ON AGAINST HIM WI THOUT HE IS BEING GIVEN AN OPPORTUNITY OF EXPLAINING THEM. I T WAS FURTHER STATED THAT IT IS HARDLY NECESSARY TO EMPHASIZE THA T THE RIGHT TO CROSS-EXAMINE THE WITNESSES WHO GIVE EVIDENCES AGAI NST HIM IS A VERY VALUABLE RIGHT, AND IF IT APPEARS THAT EFFEC TIVE EXERCISE OF THIS RIGHT HAS BEEN PREVENTED BY THE ENQUIRY OFFICE R BY NOT GIVING TO OFFICER RELEVANT DOCUMENTS, TO WHICH HE I S ENTITLED, THAT INEVITABLY WOULD BE THAT THE ENQUIRY HAD NOT BEEN H ELD IN ACCORDANCE WITH THE RULES OF NATURAL JUSTICE. THE H ONBLE SUPREME COURT THEREAFTER, REFERRING TO THE ANOTHER DECISION OF THE HONBLE SUPREME COURT HELD THAT THE IMPORTANCE OF GIVING AN OPPORTUNITY TO THE PUBLIC OFFICER TO DEFEND HIMS ELF BY CROSS- EXAMINING WITNESS PRODUCED AGAINST HIM IS NECESSAR Y FOR FOLLOWING THE RULES OF NATURAL JUSTICE. FURTHER, TH E DECISION OF THE HONBLE SUPREME COURT IN CASE OF ANADAMAN TIMBER I NDUSTRIES VS. COMMISSIONER OF CENTRAL EXCISE (2015) 281 CTR 2 41 (SC) HAS HELD AS UNDER :- ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 93 WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOULD B E PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL, WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX- FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. 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 MATTE R 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 DECIDE THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 94 APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTING O R REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF T HE 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 NOTICE. IN THE PRESENT CASE, ALSO THE ASSESSEE SOUGHT OPPOR TUNITY OF CROSS-EXAMINATION OF THE WITNESSES WHOSE STATEMENTS ARE USED BY THE LEARNED ASSESSING OFFICER AGAINST THE ASSESS EE FOR MAKING THE ADDITION. THE ASSESSEE HAS CONTESTED THE TRUTHFULNESS OF THE STATEMENT OF THE WITNESSES RECO RDED BY THE ASSESSING OFFICER. THE TRUTHFULNESS IS ALSO TESTED BY THE CHANGING STANDS FREQUENTLY. IT IS ALSO NOT FOR THE ASSESSING OFFICER TO DECIDE THAT NO OPPORTUNITY IS NECESSARY BECAUSE HE IS NOT AWARE WHAT COULD BE THE PURPOSE FOR THE CROSS-E XAMINATION ASKED BY THE ASSESSEE. THEREFORE NOT GRANTING OF OP PORTUNITY OF THE CROSS-EXAMINATION OF THE BROKERS SRI RK KEDIA, MANISH ARORA, ANKUR AGARWAL, DIRECTORS OF THE COMPANIES WHO HAVE PURCHASED SHARES FROM THE ASSESSEE THROUGH ELECTRON IC PLATFORM OF THE BOMBAY STOCK EXCHANGE/ NSE AND VARI OUS OTHER PEOPLE AS WERE MENTIONED IN THE ASSESSMENT ORDER IS FATAL TO THE ASSESSMENT MADE BY THE ASSESSING OFFICER. WE ARE ALSO CONSCIOUS OF THE DECISION OF THE HONBL E SUPREME COURT IN CASE OF M. PIRAI CHOODI VS. ITO 334 ITR 26 2, WHEREIN THE HONBLE SUPREME COURT WHILE CONSIDERING THE DEC ISION OF THE HONBLE MP HIGH COURT IN 302 ITR 40 HAS HELD THAT N OT GRANTING AN OPPORTUNITY OF CROSS-EXAMINATION TO THE ASSESSEE IS MERELY AN REGULARITY AND THEREFORE THE HIGH COURT WAS NOT CORRECT IN CANCELLING THE ORDER OF THE ADJUDICATING AUTHORITY. THEREFORE, HONBLE SUPREME COURT THOUGHT IT FIT TO SET ASIDE T HE MATTER TO THE ADJUDICATING AUTHORITY WITH A DIRECTION TO GRAN T OPPORTUNITY OF CROSS-EXAMINATION TO THE ASSESSEE. BEFORE US, AN ISSUE ARISES THAT WHETHER THE MATTER SHOULD BE SET ASIDE TO THE FILE OF THE LEARNED ASSESSING OFFICER TO GRANT ASSESSEE AN OPPORTUNITY OF CROSS-EXAMINATION OF ALL THE WITNESSES WHOSE STA TEMENTS HAVE BEEN USED BY THE LEARNED ASSESSING OFFICER IN THE ASSESSMENT ORDER FOR THE PURPOSE OF MAKING THE ADDI TION UNDER SECTION 68 OF THE ACT OR TO ANNUL THE ASSESSMENT OR DER ITSELF. ON CAREFUL PERUSAL OF THE DECISION OF THE HONBLE SUPR EME COURT, IT IS NOTED THAT SUCH DIRECTION WERE GIVEN BY THE HON BLE SUPREME COURT IN THE CASE OF WRIT PETITION FILED BY THE ASS ESSEE BEFORE THE HONBLE HIGH COURT AND THEREFORE SUPREME COURT HELD THAT THE ASSESSEE COULD HAVE GONE BEFORE THE COMMISSIONE R APPEALS TO AGITATE THIS ISSUE OF CROSS-EXAMINATION AND THER EFORE THE OPPORTUNITY WAS AVAILABLE TO THE ASSESSEE AT THAT P ARTICULAR IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 95 POINT OF PROCEEDINGS. IN THE PRESENT CASE, ASSESSE E HAS ALSO RAISED THE SAME ISSUE BEFORE THE LEARNED CIT A THAT CROSS- EXAMINATION HAS NOT BEEN PROVIDED TO THE ASSESSEE D ESPITE ASKING FOR THE SAME. THE LEARNED CIT A HAS ALSO BR USHED ASIDE THE ABOVE ARGUMENT OF THE ASSESSEE WITHOUT GIVING A NY PLAUSIBLE REASON. THEREFORE, WHEN THE ASSESSEE HAS NOT EXHAUSTED ALL THE JUDICIAL PROCESS BEFORE REACHING TO THE HIGHER FORUM, BUT HAS BYPASSED THEM BY INVOKING THE DIFFER ENT RIGHTS, THEN IN SUCH CIRCUMSTANCES, THE VIOLATION OF THE PR INCIPLES OF NATURAL JUSTICE, SUCH AS NOT GRANTING OF OPPORTUNIT Y OF THE CROSS- EXAMINATION, BECOMES ANY REGULARITY AND NOT AN ILLE GALITY. HOWEVER, WHEN THE ASSESSEE HAS EXHAUSTED ALL THE RE MEDIES AVAILABLE TO HIM BY EXERCISING HIS RIGHT OF THE JUD ICIAL PROCESS, THEN IN SUCH CIRCUMSTANCES VIOLATION OF THE PRINCIP LE OF NATURAL JUSTICE, SUCH AS NOT GRANTING AN OPPORTUNITY OF CRO SS- EXAMINATION OF THE WITNESS BECOMES AN ILLEGALITY. T HEREFORE, IN SUCH CIRCUMSTANCES, THE ORDER/ADDITION MADE BASED O N THE STATEMENT OF THIRD PARTIES AND NO OPPORTUNITY HAS B EEN GRANTED TO THE ASSESSEE FOR THEIR CROSS-EXAMINATION DESPITE REPEATED REQUESTS, ADDITION DESERVES TO BE DELETED. 27. THE SECOND ISSUE RELATES TO THE EVIDENCE AND DATA S EIZED FROM THE PREMISES OF THE RAJ KUMAR KEDIA AND PEN DRIVE S EIZED FROM THE RESIDENTIAL PREMISES OF SHRI ANKUR AGARWAL IN T HE SEARCH OPERATIONS, WHETHER CAN BE USED AGAINST THE ASSESS EE. THE FIRST CONTENTION OF THE ASSESSEE IS THAT THESE DOCU MENTS OR EVIDENCES ARE NOT SEIZED FROM POSSESSION AND CONTR OL OF ASSESSEE AND THEY ARE NOT SHOWN TO HAVE BEEN BELONG ING TO ASSESSEE. THEREFORE, THE PRESUMPTION UNDER SECTION 132 (4A) AND SECTION 292C IS NOT AVAILABLE WITH REVENUE. TH EREFORE, THE LEGAL VALIDITY AND EVEN THE EVIDENTIARY VALUE ARE U NDER CHALLENGE. THE CONTENTION OF THE ASSESSEE IS THAT FROM THE COMPUTER FILE NAMED, AS ABCD.XLS IS MERELY THE RECO RD OF PURCHASE OF SHARES, WHICH IS ALSO RECORDED IN THE B OOKS OF ACCOUNTS OF THE ASSESSEE. THEREFORE, EVEN OTHERWIS E, THAT DOES NOT GIVE ANY OCCASION TO MAKE ANY ADJUSTMENT TO THE TOTAL INCOME. AS THE SHARES WERE PURCHASED THROUGH A BRO KER, MR. RAJKUMAR KEDIA NATURALLY HE MIGHT HAVE ALSO MAINTAI NED SUCH RECORDS FOR PURCHASE OF SHARES. THEREFORE, THERE I S NO INFIRMITY IN THESE TWO STATEMENTS. FURTHER, ANOTHER TWO EXCE L SHEETS FOUND FROM MR. AGARWAL BY THE NAME OF JOB.XLS AND C OMM.XLS DOES NOT SHOW THE NAME OF THE ASSESSEE. THEREFORE, THERE IS NO LINKAGE AVAILABLE WITH THOSE DOCUMENTS WITH THE ASS ESSEE. FURTHER, THE ARGUMENT OF THE ASSESSEE ALSO FIND SUP PORT THAT IT WAS FOUND FROM MR. AGARWAL THEREFORE, IT IS OWNED BY HIM AND BELONGS TO HIM. THEREFORE, IT IS FOR HIM TO EXPLAI N WHO OWNS THIS PEN DRIVE. FURTHER, THOSE DOCUMENTS DO NOT SHOW AN Y UNACCOUNTED INCOME FLOWING FROM THE ASSESSEE TO ANY BODY. IN THE SECOND FILE COMM. XLS, THE LEARNED ASSESSING OF FICER HAS IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 96 NOTED THAT NAMES OF THE PERSON SUCH AS R. K. KEDIA HUF AND OTHERS ARE MENTIONED. ACCORDING TO THE AO ALL, THE SE PERSONS ARE ACCOMMODATION ENTRY PROVIDERS AS STATED BY SHRI RAJ KUMAR KEDIA IN HIS STATEMENT. BASED ON THESE FINDIN GS, THE LEARNED AO REACHED AT THE CONCLUSION THAT BUSH AND STEELS LTD FAMILY HAS TAKEN ACCOMMODATION ENTRY OF LONG-TERM C APITAL GAIN FROM RAJ KUMAR KEDIA AND OTHER ENTRY OPERATORS. FIR STLY, IN THAT PARTICULAR FILE, THERE IS NO REFERENCE OF ANY NAME OF THE FAMILY OF THE ASSESSEE. ALL THESE ENTRIES ARE PERTA INING TO A SINGLES DAY THAT IS 21/05/2014. THE ASSESSING OFFI CER HAS NOT CORRELATED WITH ANY OF THE TRANSACTIONS ON THAT DAT E OR NEARBY THAT DATE TO SHOW THAT ASSESSEE HAS INCURRED THIS E XPENDITURE. FURTHER, THE DATA ALLEGEDLY SEIZED FROM THE SEARCH OF SHRI RAJ KUMAR KEDIA CANNOT BE USED AGAINST THE ASSESSEE, UN LESS THE ASSESSEE IS GIVEN AN OPPORTUNITY OF CROSS-EXAMINATI ON OF THE MEN WITH RESPECT TO THE DOCUMENTS FOUND RELATING TO THE ASSESSEE OR WHERE THE NAMES OF THE ASSESSEE ARE MEN TIONED. ON THIS ISSUE ALSO THE COORDINATE BENCH IN ASSESSEE S OWN CASE, HAS HELD THAT SUCH MATERIAL FOUND FROM THIRD- PARTY WHO WAS NOT ALLOWED TO BE CROSS-EXAMINED BY THE ASSESSE E CANNOT BE RELIED UPON:- 121. IN THE PRESENT CASE ALSO, THE AO MADE THE ADDITIONS ON THE BASIS OF THE STATEMENTS OF THIRD P ARTIES RECORDED U/S 132(4)/133A OF THE ACT AND THIRD PARTI ES EVIDENCES/DOCUMENTATION. HOWEVER, NO LIVE NEXUS WIT H THE INCRIMINATING MATERIAL FOUND IN THE COURSE OF S EARCH IN THE CASE OF THE ASSESSEE WAS ESTABLISHED. THE STATEMENTS OF THE THIRD PARTIES WERE RECORDED BEHIN D THE BACK OF THE ASSESSEE BUT THE OPPORTUNITY OF CROSS- EXAMINATION OF SUCH PARTIES WAS NOT ALLOWED TO THE ASSESSEE, EVEN THE STATEMENTS WERE RETRACTED LATER ON. IT IS WELL SETTLED THAT THE PRESUMPTION U/S 132(4A)/29 2C OF THE ACT, IS AVAILABLE ONLY IN THE CASE OF THE PERSO N IN WHOSE POSSESSION AND CONTROL, THE DOCUMENTS ARE FOU ND BUT IT IS NOT AVAILABLE IN RESPECT OF THE THIRD PAR TIES. IN THE PRESENT CASE, THERE WAS NO INDEPENDENT EVIDENCE TO LINK THE SEIZED DOCUMENTS FOUND IN THE PREMISES OF THE T HIRD PARTY WITH ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH OPERATION AT THE PREMISES OF THE ASSESSEE . THEREFORE, THE ENTRIES IN THE DOCUMENTS SEIZED FROM THIRD PARTYS PREMISES WOULD NOT BE SUFFICIENT TO PROVE T HAT THE ASSESSEE WAS INDULGED IN SUCH TRANSACTIONS. IN THE PRESENT CASE, THE PEN DRIVE OF SH. ANKUR AGARWAL CORROBORATED/SUBSTANTIATED, THE SHARE TRANSACTIONS CARRIED OUT BY THE ASSESSEE, WHICH WAS DULY FOUND RECORDED IN THE REGULAR BOOKS OF THE ASSESSEE, AND THE SAID PEN DRIVE DID NOT CONTAIN ANYTHING INCRIMINATI NG AGAINST THE ASSESSEE. THEREFORE, MERELY BASED ON TH E IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 97 STATEMENT OF SH. ANKUR AGARWAL, THE ADDITION MADE U /S 153A OF THE ACT WAS ALSO NOT JUSTIFIED, PARTICULARL Y WHEN SH. ANKUR AGARWAL RETRACTED HIS STATEMENT LATER ON. IN THE INSTANT CASE, THE AO ALSO FAILED TO ESTABLISH A NY LINK/NEXUS OF THE ALLEGED CASH TRAIL. WE, THEREFORE , BY CONSIDERING THE TOTALITY OF THE FACTS AND THE VARIO US JUDICIAL PRONOUNCEMENT DISCUSSED IN THE FORMER PART OF THIS ORDER ARE OF THE VIEW THAT THE ADDITIONS MADE BY THE AO AND SUSTAINED BY THE LD. CIT (A) U/S 153A OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH U/S 132(1) OF THE ACT IN RESPE CT OF UNABATED ASSESSMENT YEARS I.E. THE ASSESSMENT YEARS 2010-11 TO 2012-13 WERE NOT JUSTIFIED. ACCORDINGLY, THE SAME ARE DELETED. 122. A SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS RAJ ESH KUMAR (2008) 306 ITR 27 (DEL.) (SUPRA) WHEREIN IT H AS BEEN HELD AS UNDER: THAT THE MATERIAL COLLECTED BY THE DEPARTMENT BEHIND THE BACK OF THE ASSESSEE WAS USED AGAINST HIM WITHOUT DISCLOSING THE MATERIAL OR GIVI NG AN OPPORTUNITY TO CROSS-EXAMINE THE PERSON WHOSE STATEMENT HAD BEEN USED BY THE DEPARTMENT AGAINST T HE INTEREST OF THE ASSESSEE. THERE WAS VIOLATION OF TH E PRINCIPLES OF NATURAL JUSTICE. 123. SIMILARLY, THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS DHARAM PAL PREM CHAND LTD. (2007) 295 ITR 106 (SUPRA) HELD AS UNDER: THAT THE ASSESSING OFFI CER HAD BASED HIS ASSESSMENT ORDER ON THE REPORT OBTAIN ED FROM THE RESEARCH INSTITUTE. THE CORRECTNESS OF THA T REPORT ITSELF HAVING BEEN UNDER CHALLENGE BY THE ASSESSEE WHO HAD NOT ONLY FILED OBJECTIONS THERETO BUT ALSO SOUG HT PERMISSION ON SEVERAL OCCASIONS TO CROSS-EXAMINE TH E ANALYST EVEN AGREEING TO PAY THE NECESSARY EXPENSES , THE REPORT COULD NOT AUTOMATICALLY HAVE BEEN ACCEPT ED. SINCE THE ASSESSING OFFICER DID NOT PERMIT THE CORR ECTNESS OR OTHERWISE OF THE REPORT TO BE TESTED, THERE WAS A CLEAR VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE BY H IM IN RELYING UPON IT TO THE DETRIMENT OF THE ASSESSEE. E VEN IF THE STRICT RULES OF EVIDENCE MAY NOT APPLY TO ASSES SMENT PROCEEDINGS, THE BASIC PRINCIPLES OF NATURAL JUSTIC E WOULD APPLY TO THE FACTS OF THE CASE. 124. ON A SIMILAR ISSUE, THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE O F PRAKASH CHAND NAHTA VS CIT (2008) 301 ITR 134 (SUPR A) HELD AS UNDER: THAT AS THE ASSESSING OFFICER HAD N OT SUMMONED R IN SPITE OF THE REQUEST MADE UNDER SECTI ON 131 OF THE ACT, THE EVIDENCE OF R COULD NOT HAVE BE EN USED AGAINST THE ASSESSEE AND IN THE ABSENCE OF IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 98 AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD B Y SUMMONING THE SAID WITNESS THE ASSESSMENT ORDER WAS VITIATED. 28. ON THIS ISSUE, HON RAJASTHAN HIGH COURT IN CASE OF CIT VS. SUNNITA DHADHA, AGAINST WHICH SPECIAL LEAVE PETITIO N HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT, CLINCHES TH E ISSUE IN FAVOUR OF THE ASSESSEE. IT IS HELD THAT BASED O N THE DOCUMENT, WHICH WAS RECOVERED FROM A THIRD PARTY, T HE INCOME CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE, WIT HOUT GIVING CROSS EXAMINATION. ACCORDINGLY, THE DOCUMENTS SEIZE D AND FOUND FROM SHRI RAJ KUMAR KEDIA AND SHRI ANKUR AG ARWAL CANNOT BE USED FOR ADDITION IN THE HANDS OF THE ASS ESSEE. THE ASSESSEE HAS ALSO REFERRED TO SEVERAL OTHER JUDICIA L PRECEDENTS CANVASSING THE ABOVE PROPOSITION. 29. IN VIEW OF OUR ABOVE FINDINGS, FINDINGS OF THE COO RDINATE BENCH IN ASSESSEES OWN CASE FOR EARLIER YEARS, AND BASED ON THE VARIOUS JUDICIAL PRECEDENT RELIED UPON, WE DO NOT AGREE THAT DOCUMENT SEIZED FROM THIRD-PARTY CAN BE USED FOR MA KING ADDITION IN THE HANDS OF THE ASSESSEE WITHOUT ASS ESSEE BEING GRANTED AN OPPORTUNITY OF CROSS-EXAMINATION OF THOS E PARTIES. 30. FURTHER, THE ASSESSING OFFICER HAS HEAVILY RELIED U PON THE VARIOUS ORDERS PASSED BY THE SECURITIES AND EXCHANG E BOARD OF INDIA IN VARIOUS COMPANIES IN WHICH THE ASSESSEE HAS EARNED THE LONG-TERM CAPITAL GAIN AS WELL AS IN CAS E OF THE ASSESSEE. FIRST SUCH ORDER RELIED UPON IS INTERI M EX PARTE ORDERS DATED 19/12/2014 PASSED IN CASE OF M/S FIRST FINANCIAL SERVICES LTD AND M/S REDFORD GLOBAL LTD. THE LEARNED CIT-A WAS ALSO HEAVILY HARPING UPON THE ORDERS OF T HE SEBI FOR CONFIRMING THE ADDITION. IN INTERIM ORDER IN REDF ORD GLOBAL LTD, DATED 19/12/2014 ASSESSEE WAS RESTRICTED TO ACCESS THE SECURITIES MARKET TILL FURTHER DIRECTIONS. SUBSEQUE NTLY, ON 20/09/2017, SEBI PASSED AN ORDER IN THAT COMPANY HO LDING THAT THERE ARE NO ADVERSE FINDINGS AGAINST THE AFOR EMENTIONED 82 ENTITIES, WHICH INCLUDED THE FAMILY OF THE ASSES SEE, AND THE ASSESSEE HIMSELF WITH RESPECT TO THEIR ROLE IN THE MANIPULATIONS IN PRICES OF THE SCRIPT OF THE COMPANY. THEREFORE, IT REVOKED THE ORIGINAL ORDER PASSED ON 19/12/2014. SIMILARLY, IN CASE OF FIRST, FINANCIAL SERVICES LTD; THE LEARNED ASSESSIN G OFFICER TOOK NOTE OF INTERIM ORDER PASSED ON 19/12/2014. SEBI PA SSED T FINAL ORDER ON 02/04/2018. VIDE PARA NUMBER 74 AND 90 OF THAT ORDER[WTM/GM/EFD/ 1 /2018-19], SEBI HAS GIVEN A CLEAN CHIT TO THE ASSESSEE AND HIS FAMILY MEMBERS A S UNDER:- SINGAL GROUP 70. BRIJ BHUSHAN SINGAL, NEERAJ SINGAL, UMA SINGAL, MARSH STEEL TRADING LTD. AND VISION STEEL TRADING 7 0. BRIJ BHUSHAN SINGAL, NEERAJ SINGAL, UMA SINGAL, MAR SH IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 99 STEEL TRADING LTD. AND VISION STEEL TRADING LTD.: T HE SCN MENTIONS THAT BRIJ BHUSHAN SINGAL, NEERAJ SINGA L AND UMA SINGAL WERE PREFERENTIAL ALLOTTEES. FFSL TRANSFERRED RS 1 CRORE AND RS. 50 LAKH TO MARSH STE EL TRADING LTD AND VISION STEEL LTD RESPECTIVELY BY WA Y OF INVESTMENTS IN THESE COMPANIES ON SEPTEMBER 19, 201 1. ONE ENTITY NAMED AARTI SINGAL, A RELATIVE OF BRIJ BHUSHAN SINGAL, NEERAJ SINGAL, UMA SINGAL AND RITU SINGAL (HEREINAFTER REFERRED TO AS THE SINGALS) W AS A DIRECTOR IN MARSH STEEL TRADING LTD AND VISION STEE L LTD DURING THE RELEVANT PERIOD. IT HAS BEEN MENTIONED I N THE SCN THAT AS PER THE DISCLOSURES MADE ON BSE, AARTI SINGAL WAS A PROMOTER IN BHUSHAN STEEL LTD TILL QUA RTER ENDING SEPTEMBER 30, 2011 ALONG WITH SANJAY SINGAL, BRIJ BHUSHAN SINGAL, NEERAJ SINGAL, UMA SINGAL AND RITU SINGAL. THEREFORE, IT WAS ALLEGED THAT THESE ENTITI ES ARE CONNECTED AMONG THEMSELVES AND THE AFORESAID TRANSF ER OF RS 1.50 CRORE OUT OF THE ALLOTMENT PROCEEDS TOWA RDS INVESTMENTS IN MARSH STEEL TRADING LTD. AND VISION STEEL LTD RESULTED IN AN INDIRECT TRANSFER OF ALLOTMENT P ROCEEDS TO THE SINGAL GROUP ALLOTTEES. 71. MARSH STEEL TRADING LTD. AND VISION STEEL TRADI NG LTD. HAVE SUBMITTED THAT THE AMOUNT OF RS.100 LAKH RECEIVED BY MARSH STEEL TRADING LTD. FROM FFSL ON SEPTEMBER 16, 2011 AND DECEMBER 14, 2011 WAS TOWARDS CAPITAL CONTRIBUTION IN THE COMPANY. THE COMPANY HAD ALLOTTED 40,000 EQUITY SHARES TO FFSL O N DECEMBER 31, 2011 AND REQUISITE FILINGS WITH REGARD TO THE ALLOTMENT WAS ALSO MADE WITH THE REGISTRAR OF COMPANIES. SIMILARLY, WITH RESPECT TO THE AMOUNTOF RS.50 LAKH RECEIVED BY VISION STEEL LIMITED FROM FF SL ON SEPTEMBER 16, 2011, IT HAS BEEN SUBMITTED THAT T HE AMOUNT WAS TOWARDS CAPITAL CONTRIBUTION IN THE COMPANY AND THE COMPANY ALLOTTED 20,000 EQUITY SHARES ON DECEMBER 13, 2011 TO FFSL. REQUISITE FILI NGS IN THS REGARD WERE MADE WITH ROC. IT HAS BEEN ALSO STATED THAT FUNDS RECEIVED BY THEM WERE INVESTED IN BHUSHAN POWER AND STEEL LTD. 72. BRIJ BHUSHAN SINGAL, NEERAJ SINGAL, UMA SINGAL HAVE SUBMITTED THAT THESE WAS A FESTERING FAMILY DISPUTE BETWEEN BRIJ BHUSHAN SINGAL AND NIRAJ SINGA L (YOUNGER SON) ON THE ONE SIDE AND SANJAY SINGAL (EL DER SON) AND HIS FAMILY MEMBERS ON THE OTHER SIDE. IN T HIS CONNECTION LITIGATIONS BEFORE VARIOUS COURTS WERE F ILED IN THE YEARS 2006 AND 2007. THESE DISPUTES WERE FINALL Y SETTLED BY WAY OF A COMPROMISE IN NOVEMBER 14, 2011 AND TERMS OF SETTLEMENT WERE FULLY IMPLEMENTED BY IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 100 FEBRUARY 2012. APPROPRIATE DISCLOSURES IN THIS REGA RD WERE ALSO MADE TO THE EXCHANGES AT THAT TIME. POST SETTLEMENT, THE COMPLAINTS AND LITIGATIONS FILED BE FORE VARIOUS FORUMS WERE WITHDRAWN. IT HAS BEEN ALSO STA TED THAT OWING TO THE FAMILY DISPUTE, BRIJ BHUSHAN SING AL, UMA SINGAL, NIRAJ SINGAL AND RITU SINGAL HAD NO ROL E TO PLAY IN THE AFFAIRS OF MARSH STEEL TRADING LTD. AND VISION STEEL LTD. IN WHICH AARTI SINGAL (WIFE OF SA NJAY SINGAL) WAS A DIRECTOR. IT HAS BEEN SUBMITTED THAT SINCE MATERIAL DISPUTES EXISTED DURING THE RELEVANT PERIO D, IT CAN NOT BE ALLEGED THAT THE FUNDS RECEIVED FROM FFS L BY MARSH STEEL TRADING LIMITED AND VISION STEEL LIMITE D, WHICH ARE CONTROLLED BY MR. SANJAY SINGAL AND HIS FAMILY MEMBERS, CAME TO BRIJ BHUSHAN SINGAL GROUP. 73. WITH REGARD TO THE FUND TRANSACTION BETWEEN NEE RAJ SINGAL AND PINE ANIMATION LTD., IT HAS BEEN SUBMITT ED THAT RS.80,00,000/- WAS PAID AS CONSIDERATION AMOUN T FOR ALLOTMENT OF 8,00,000 PREFERENCE SHARES ON DECE MBER 12, 2012 AND RS.40,00,000/- TOWARDS SUBSCRIPTION OF 4,00,000 PREFERENCE SHARES ON MARCH 15, 2013. WITH REGARD TO THE QUERY AS TO WHY THEY PURCHASED THE SHARES OF FFSL, IT HA OF S BEEN STATED THAT THEY RE LIED ON THE INFORMATION AND FEEDBACK RECEIVED FROM VARIOUS PROFESSIONALS, FRIENDS AND OTHER PERSONS WHO ARE ACTIVELY INVOLVED AND HAVING ADEQUATE KNOWLEDGE OF THE SECURITIES MARKET. 74. I FIND THAT DURING THE COURSE OF PROCEEDINGS, MARSH AND VISION WERE REPRESENTED JOINTLY AND BRIJ BHUSHA N SINGAL, UMA SINGAL AND NEERAJ SINGAL WERE JOINTLY REPRESENTED, AS PART OF TWO FACTIONS OF THE FAMILY. IT IS SEEN FROM THE SCN THAT THESE ENTITIES HAVE BEEN IMPLICATED BECAUSEOF RECEIPT OF FUNDS BY MARSH AND VISION FROM FFSL AND AARTI SINGALS ASSOCIATION AS A DIRECTOR IN BHUSHAN POWER AND STEEL LTD. WHICH TRANSFERRED RS.6.50 CRORE TO IN MARCH 2012 TO RANIS ATI DEALERS, WHICH WAS A MAJOR BUYER OR EXIT PROVIDER T O THE PREFERENTIAL ALLOTTEES. THE PREFERENTIAL ALLOTTTES HAVE ADEQUATELY EXPLAINED AS TO HOW THEY ARE UNCONNECTED TO RANISATI AND HOW THERE WAS A SETTLEMENT FAMILY-WISE WITH RESPECT TO BHUSHAN POWER & STEEL LTD. LIKEWISE , WITH RESPECT TO MARSH AND VISION, IT HAS BEEN BROUG HT OUT THAT THE FUND TRANSFER BY FFSL WAS EQUITY INVESTMENT AND NOT OTHERWISE. IN VIEW OF THIS, I FI ND THAT THAT NONE OF THESE ENTITIES CAN BE PROCEEDED AGAINS T, NAMELY, BRIJ BHUSAN SINGAL, UMA SINGAL, NEERAJ SING AL, MARSH STEEL LTD. AND VISION STEEL LTD. CONCLUSION IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 101 89. AS REGARDS FFSL, THE SEQUENCE OF EVENTS IS THAT ONE OF ITS DIRECTORS, NATARAJAN, NOTICEE NO. 4 ENTERED INTO AN MOU ON 27TH MAY, 2010 WITH BP JHUNJHUNWALA, NOTICEE NO.6 (WHO CONSCIOUSLY MANIPULATED THE SCRIP PRICE L ATER, I.E. DURING 15 MAY, 2012 TO 8TH FEBRUARY 2013), TO ACQUIRE 58.08 PERCENT OF PAID-UP SHARE CAPITAL OF F FSL. IT HAS BEEN BROUGHT OUT IN THE INVESTIGATION THAT FFSL GOT ITS TRADING SUSPENSION ON BSE (THAT WAS OPERATING F OR A PERIOD BETWEEN JUNE, 2000 TO JULY, 2011) REVOKED ON 8TH JULY, 2011. IT TRADED FOR JUST TWO DAYS ON JULY 8, 2011 AND NOVEMBER 16, 2011. IN THE MEANWHILE, THE COMPAN Y MADE TWO TRANCHES OF PREFERENTIAL ISSUE ONE IN DECEMBER 2011 AND THE OTHER IN APRIL, 2012. SOON AF TER THE EXPIRY OF THE LOCK-IN PERIOD, THE PREFERENTIAL ALLOTTEES STARTED TRADING AND EXITING TAKING ADVANTAGE OF THE HUGE PRICE RISE THAT WAS PREVAILING THEN AND MADE GAINS. THE INVESTIGATION WAS DONE AT THE BEHEST OF LETTERS REC EIVED FROM DIRECTOR GENERAL OF INCOME TAX (INV.), AS THE BACKGROUND OF THIS ORDER STATES. 90. IN THE ULTIMATE ANALYSIS, I AM DRIVEN TO THE CO NCLUSION THAT SUCH FRAUDULENT SCHEMES ARE CONCEIVED AND EXECUTED BY A SET OF CORE ENTITIES WHICH ARE CONNEC TED AND WHICH ARE BOUND BY THE COMMON OBJECTIVE OF MAKI NG WRONGFUL GAINS BY MANIPULATING THE MARKET AND UNDERMINING ITS INTEGRITY. IN THIS PROCESS, CERTAIN ENTITIES ARE LURED INTO THE ARTIFICE WITH THE PROMISE OF QUI CK RETURNS BUT THEIR ROLES DO NOT EXTEND TO PRICE MANI PULATION OR FACILITATING SUCH MANIPULATIONS BY MEANS OF FUND TRANSFERS OR ANY OTHER ACTIVITY OF ABETMENT. THE WH OLE SCENARIO COVERING VARIOUS ENTITIES WITH DIFFERENT M OTIVES MAKES IT IMPERATIVE FOR THE REGULATOR TO STEP IN AN D SECURE THE MARKET PLACE BY WEEDING OUT THOSE ENTITI ES WHICH HAVE MISUSED THE SECURITIES MARKET AND METING OUT DETERRENT PENALTIES ON SUCH ENTITIES. 91. THE LIMITATIONS IN AN INVESTIGATION OF THIS MAG NITUDE WAS REALIZED AND THE SEBI BOARD HAD DECIDED IN DECEMBER 2016 TO RESTRICT ITS SCOPE OF ACTIONS TO T HOSE ENTITIES THAT ARE CONNECTED TO THE COMPANY INVOLVED IN THE PRICE MANIPULATION, I.E. LTP CONTRIBUTORS AND THE COMPANY AND ITS DIRECTORS IF CONNECTION OR RELATION SHIP IS ESTABLISHED WITH THE MARKET MANIPULATION. KEEPING T HIS BACKGROUND IN MIND, ON A REVIEW OF THE ENTIRE PROCEEDINGS BEGINNING FROM THE SCN, THE REPLIES AND SUBMISSIONS OF THE ENTITIES AND THE STAGE AT WHICH THE ENTITIES STAND TODAY, I AM INCLINED TO CONTINUE WIT H THE DEBARMENT AND RESTRAINT ORDERS AGAINST CERTAIN ENTI TIES, INCLUDING THE COMPANY AND ITS NOTICEE DIRECTORS, AN D IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 102 CERTAIN OTHER ENTITIES WHO ARE OBSERVED TO BE LIABL E IN THE RELEVANT PARTS OF THIS ORDER, BASED ON THEIR CONNEC TION WITH THE COMPANY; OR MARKET MANIPULATION; OR THEIR ROLE AS CONDUITS IN FUND TRANSFER TO THE MARKET MANIPULA TORS. ACCORDINGLY, I AM INCLINED TO PASS ORDERS AGAINST V ARIOUS NOTICEES AS SHOWN UNDER THE HEAD DIRECTIONS. 93. AS AGAINST THE REMAINING NOTICEES, THE INTERIM DIRECTIONS ISSUED VIDE INTERIM ORDERS DATED DECEMBE R 19, 2014 AND AUGUST 11, 2015 AND CONFIRMED VIDE CONFIRMATORY ORDERS DATED APRIL 20, 2015, JUNE 02, 2016, JUNE 14, 2016 AND AUGUST 25, 2016 SHALL STAND REVOK ED, WITH IMMEDIATE EFFECT. 95. THE HONBLE SAT HAD DIRECTED SEBI TO PASS FINAL ORDERS IN THE INSTANT MATTER ON OR BEFORE 31ST OF M ARCH, 2018. HOWEVER, DUE TO INTERVENING HOLIDAYS FROM 29T H OF MARCH TO 1ST OF APRIL, 2018, THE SAME IS BEING PASS ED ON THE 2ND APRIL, 2018, IN DUE DEFERENCE WITH THE ORDE RS OF THE HONBLE TRIBUNAL. IT IS RELEVANT TO BRING ON RE CORD THAT THE HEARING FOR ALL ENTITIES GOT CONCLUDED ON 22ND OF MARCH, 2018 AND THE LAST SUBMISSIONS WERE RECEIVED ON 26TH OF MARCH, 2018. 96. A COPY OF THIS ORDER SHALL BE SERVED ON THE DIR ECTOR GENERAL OF INCOME TAX (INV.), DELHI AND THE PRINCIP AL DIRECTORS OF INCOME TAX (INV.) KOLKATA AND CHANDIGA RH, FOR SUCH ACTION, AS DEEMED APPROPRIATE AT THEIR END . 31. ALMOST SIMILAR ORDERS WERE PASSED IN ALL THE COMPAN IES WHEREVER THE INCOME TAX DEPARTMENT ASKED THE SEBI T O ENQUIRE. THE ASSESSEE HAS PLACED ALL THESE ORDERS AT PAGE NU MBER 302 419 OF THE PAPER BOOK. FURTHERMORE, THE PARA NUMBER 96 OF THE ABOVE ORDER CLEARLY SHOWS THAT THE INTIMATION IS AL SO GIVEN TO THE DIRECTOR GENERAL OF INCOME TAX INVESTIGATION, N EW DELHI AND THE PRINCIPAL DIRECTOR OF INCOME TAX INVESTIGAT ION KOLKATA AND CHANDIGARH FOR NECESSARY ACTION. FROM THIS, IT IS APPARENT THAT RELIANCE ON THE INTERIM ORDER OF SECURITIES EX CHANGE CONTROL BOARD OF INDIA BY THE REVENUE AUTHORITIES IS MISPLA CED AS IN EACH OF THESE COMPANIES IN WHICH THE INCOME TAX DEP ARTMENT REQUESTED SEBI TO INVESTIGATE HAS GIVEN A CLEAN CHI T TO THE ASSESSEE AND HIS FAMILY. THEREFORE, RELIANCE ON SEB I INTERIM ORDER WAS MISPLACED AND EVEN OTHERWISE NOW DO NOT S URVIVE IN VIEW OF SUBSEQUENT FINAL ORDERS OF SEBI. 32. THE LEARNED AO ALSO HEAVILY RELIED UPON THE CASH TR AIL OF THE BANK ACCOUNTS OF THE PURCHASER COMPANIES. HE STATED THAT CASH IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 103 WAS DEPOSITED IN SEVERAL BANK ACCOUNTS AND AFTER 3- 7 LAYERS SAME REACHES THE BANK ACCOUNT OF THE COMPANIES. FRO M SUCH CASH COMING THROUGH SEVERAL BANK ACCOUNTS TO THE BA NK ACCOUNT OF PURCHASER COMPANIES WAS USED FOR BUYING THE SHARES HELD BY ASSESSEE. STOCK EXCHANGE TRADING IS SCREEN BASED, IT IS NOT POSSIBLE TO KNOW WHO THE BUYER, AN D SELLER IS. ONLY PRICES OFFERED ALONG WITH QUANTITY IS SHOWN. A NYBODY WHO BIDS FOR PURCHASE OR SALE OF THOSE SHARES CAN ENTER IN TO TRADING. IT IS AN ELECTRONIC TRADING PLATFORM WHENE VER AN ASSESSEE BUYS OR SALES THE SHARE, IN EITHER CASE IDENTITY OF THE OTHER PARTY, I.E. BUYER OR SELLER NOR THE TIMIN G AT WHICH THE SHARES ARE PURCHASED OR SOLD BY THE OTHER PARTY ARE KNOWN BEFOREHAND UNLESS IT IS A SYNCHRONIZED TRADING. NO SUCH ALLEGATION IS MADE BY THE LD AO NOR HAS SEBI FOUND IT SO. ASSESSEE HAS SOLD ALL THE SHARES THROUGH THE RECOGN IZED SHARE BROKER REGISTERED WITH THE SEBI ON ONLINE TRADING P LATFORM OF THE BOMBAY STOCK EXCHANGE AFTER THE PAYMENT OF THE SECURITIES TRANSACTION TAX, PAYMENTS ARE SETTLED BY THE SETTLE MENT MECHANISM OF THE STOCK EXCHANGE TO THE BROKER, AND IN TURN THE BROKER MAKES PAYMENT TO THE SELLER, THE ASSESSEE. M ONEY COMES IN TO THE BANK ACCOUNT OF THE BROKER THROUGH SETTLEMENT MECHANISM OF STOCK EXCHANGE. AS IT IS APPARENT FROM THE ORDER OF THE SECURITIES AND EXCHANGE BOARD OF INDIA, NO S UCH TRANSACTIONS ENTERED INTO BY THE ASSESSEE ARE NOT A T ALL THE SYNCHRONIZED TRANSACTIONS .THERE IS NO INVOLVEMENT ALLEGED OF THE SELLING BROKER OF THE ASSESSEE INVOLVED IN SUCH SYNCHRONIZED TRADES. OF ON THE BOMBAY STOCK EXCHANG E. THERE IS NO SUCH FINDING GIVEN BY THE SECURITIES AND EXCH ANGE BOARD OF INDIA OR BOMBAY STOCK EXCHANGE / NATIONAL STOCK EXCHANGES AS PER ITS SURVEILLANCE SCHEME AND MECHANISM. FURTH ER, THERE IS NO EVIDENCE GATHERED BY THE ASSESSING OFFICER TH AT THE CASH DEPOSITED IN THE BANK ACCOUNT OF THE MULTIPLE COMPA NIES IS GIVEN BY ASSESSEE. THERE IS NO FUNDING PATTERN AVAI LABLE, WHEREIN THE NAME OF THE ASSESSEE APPEARS. FURTHERMO RE THE NOTICES ISSUED BY THE ASSESSING OFFICER UNDER SECTI ON 133 (6) WERE EITHER REMAINED UNSERVED OR NOT RESPONDED BY T HOSE COMPANIES, FOR WHICH NO FAULT CAN BE FOUND WITH THE ASSESSEE. IN FACT, WHEN THE LEARNED ASSESSING OFFICER HAS REL IED UP ON STATEMENTS OF THE REAL OWNERS OR OPERATORS OF THOSE COMPANIES, THEN THE LEARNED ASSESSING OFFICER SHOULD HAVE ASKE D THEM TO PROVIDE THE INFORMATION WHICH AO HAS SOUGHT UNDER SECTION 133 (6) FROM THOSE COMPANIES. AS MENTIONED IN THE O RDER OF THE LD AO, THAT THE COMPANIES WHO HAVE PURCHASED THE SH ARES ARE HAVING THEIR PERMANENT ACCOUNT NUMBERS. NATURALLY, TO TRADE ON BSE / NSE PLATFORMS, THOSE COMPANIES HAVE THEIR CLIENT REGISTRATION WITH THE STOCK EXCHANGES ALSO ACCORDIN G TO THE ESTABLISHED KYC NORMS. ACCORDING TO TRADING REGUL ATIONS THE SECURITIES HAVE BEEN TRANSFERRED IN THEIR DEMAT ACC OUNTS. FOR IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 104 THE PURPOSES OF HOLDING OF SHARES IN DEMAT ACCOUNTS , THOSE COMPANIES ARE ALSO REQUIRED TO HAVE THEIR KYC WIT H THE DEPOSITORIES. FURTHER THE COMPANIES ARE REQUIRED TO FILE THEIR RETURN OF INCOME COMPULSORILY, THEY HOLD THE PAN, AO SHOULD HAVE ENQUIRED WITH THE AO OF THOSE COMPANIES. THERE IS NO FINDING THAT WHAT HAPPENED TO THE SHARES PURCHASED BY THOSE COMPANIES, NO INQUIRY OF THEIR DEMAT HOLDING IS ALS O MADE. FURTHER, THERE IS NO FINDING THAT PRIOR TO PURCHASE S OF THOSE SHARES WHETHER THROE COMPANIES HAVE DEPOSITED MARGI NS ALSO AS PER STOCK EXCHANGE AND SEBI NORMS. THERE IS NOTH ING PLACED ON RECORD TO SHOW THAT THOSE COMPANIES ARE D EBARRED FROM TRADING IN SECURITIES OR NOT. ALL THESE INVEST IGATIONS / FINDING OF LD AO HAVE MANY LOOPHOLES, WHICH REMAINS UNANSWERED. IN THE STATEMENT OF THE DIRECTOR OF THE PENNY STOCK COMPANY STATED THAT THE PREFERENTIAL ALLOTTEES ARE INVOLVED IN MARKET MANIPULATION OF THE PRICES OF THE SCRIPT, HO WEVER, IT IS CONTRARY TO THE ORDER OF THE SECURITIES AND EXCHANG E BOARD OF INDIA. SUCH REFERENCES AVAILABLE IN THE STATEMENT O F DIRECTOR OF RANDER CORPORATION AT Q NO. 13. FURTHER, THE CLAIM OF THE LD AO IS THAT THE COMPANIES WHOSE SHARES ARE PURCHASED AR E NOT CARRYING ON ANY BUSINESS WHEREAS, IN ANSWER TO Q NO . 32 SHRI KUSHAL PRAVEEN SHAH DIRECTOR OF ANUKARAN COMMERCIAL ENTERPRISE LTD HAS GIVEN THE DETAILED DESCRIPTION O F THE BUSINESS BEEN CARRIED OUT BY THAT COMPANY. HE HAS S TATED THAT OUT OF 15 CRORES THE RS. 1.5 CRORE WAS FOR ACQUISIT ION OF THE SHARES AND FURTHER RS. 13.5 CRORES WERE DEPOSITED T O BMC TO CARRY OUT SOME INFRASTRUCTURE PROJECT. FURTHER, IN THE STATEMENT OF SHRI RAM KUMAR KEDIA THE REFERENCE WAS MADE OF M R. JAGDISH PUROHIT (SUCH STATEMENT WAS RETRACTED AND T HEN ONCE AGAIN CONFIRMED). HOWEVER, IN THE STATEMENT OF SHRI JAGDISH PUROHIT THERE IS NO REFERENCE OF ANY WORK CARRIED O UT WITH SHRI RAJ KUMAR KEDIA. THE LD AO HAS MERELY STATED THAT A S MR. JAGDISH PUROHIT IS AN ACCOMMODATION ENTRY PROVIDER AND AS MR. RAJ KUMAR KEDIA HAS NAMED MR. JAGDISH PUROHIT, WITH OUT CORROBORATING HAS LINKED ASSESSEES CASE WITH JAGDI SH PUROHIT. THE LD AO HAS ALSO STATED BY THE STATEMENT OF SHRI DEVESH UPADHAYA NOTED THAT ONE MR. BIKASH SUREKHA WAS INVO LVED IN TRADING OF MANY SCRIPTS AND ALSO HELD THAT MR. SANJ OY DEY WAS OPERATING THE TERMINAL AND THEN ENTERING INTO SYNCH RONIZE TRADING. HOWEVER, NONE OF THESE PERSONS WAS EXAMINE D TO ASCERTAIN THAT HOW THEY HAVE ENTERED INTO SYNCHRONI ZED TRADING. NECESSARILY SUCH SYNCHRONIZED TRADING HAS TO BE WITH THE BROKER OF THE ASSESSEE. NO SUCH LINK WAS ESTABL ISHED. FURTHERMORE, MERELY BECAUSE OF THE MATCHING OF THE TRANSACTION WITH STOCK EXCHANGE THE LD AO REACHED AT THE CONCLU SION THAT THERE IS A SYNCHRONIZED TRANSACTION. SURPRISINGLY, NO SUCH SYNCHRONIZED TRADING WAS REFERRED TO SEBI. ON THIS ISSUE ON SYNCHRONIZED TRADE NO ORDERS OF SEBI WERE PLACED BE FORE US IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 105 UNDER SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TR ADE PRACTICES RELATING TO SECURITIES MARKET) REGULATIONS 2003, AN D AGAINST THE BROKER FOR VIOLATING PROVISIONS OF SEBI (STOCK BROK ERS AND SUB BROKERS) REGULATIONS 1992. MERELY AN ACTION UNDER T HE INCOME TAX ACT, 1961 AGAINST THOSE BROKERS IT IS NOT PROVE D THAT ACTUALLY SYNCHRONIZED TRADE HAS TAKEN PLACE. FURTHE R, THE ALLEGATION OF THE LD ASSESSING OFFICER OF PROVIDING EXIT TO THE ASSESSEE BY DREAM LIGHT EXIM PVT. LTD AND DUARI MAR KETING PVT. LTD ONLY THE STOCK EXCHANGE TRADING SALES DETA IL OF THE ASSESSEE ARE MAINTAINED WHICH ARE UNDISPUTED AS ASS ESSEE HAS RECORDED THEM IN THE BOOKS OF ACCOUNTS BUT TIME AND DATE STAMP OF THE BUYERS WERE NOT MATCHED. THIS IS ALSO MERELY AN ALLEGATION. FURTHER, THOSE DIRECTORS, REAL OWNERS O F THOSE COMPANIES HAVE NOT BEEN CROSS-EXAMINED BY THE ASS ESSEE DESPITE REQUESTED BY ASSESSEE. THEREFORE, IN THESE CIRCUMSTANCES, IT CANNOT BE PROVED THAT THESE ARE T HE DUMMY COMPANIES, ESPECIALLY WHEN THEY ARE HAVING PAN, K YC WITH STOCK EXCHANGES, DEMAT ACCOUNTS, ASSESSED BY INCOM E TAX DEPARTMENTS ETC . FOR RECEIPT OF MONEY THROUGH VARI OUS LAYERS, THEY SHOULD HAVE BEEN RESPONSIBLE IN THEIR OWN CASE S TO SHOW THE GENUINENESS OF THOSE FUNDS. ASSESSEE CANNOT BE COMPELLED TO SHOW THE SAME. IN VIEW OF THIS, THE ALLEGATION OF THE CASH TRAIL OF THE BUYERS OF THOSE SHARES REMAIN S UNPROVED AND MERELY AN ALLEGATION. 33. NEXT, CLAIM OF THE ASSESSING OFFICER THAT MANY BENE FICIARIES OF THE BOGUS LONG-TERM CAPITAL GAINS HAVE DISCLOSED TH E ABOVE SUM AS THEIR UNDISCLOSED INCOME. ACCORDING TO US, IF S OME OTHER PARTIES HAVE OBTAINED THE BOGUS LONG-TERM CAPITAL G AIN IN THEIR OWN CASE, IN SOME OF THE CASE EVEN THE SEBI, WHILE EXONERATED THE ASSESSEE AND HIS FAMILY, HAS IMPLICATED SOME OF THE PARTIES WHO OBTAINED THE BOGUS LONG-TERM CAPITAL GAIN, BUT IT DOES NOT LEAD THAT ASSESSEE IS ALSO SAILING INTO THE SAME BO AT. EVEN OTHERWISE, THERE ARE THOUSANDS OF ENTITIES WHO HAVE EARNED THE LONG-TERM CAPITAL GAIN IN THOSE SCRIPTS, WHICH ARE CHALLENGED BY THE LD AO WHO ARE ALSO EXONERATED BY THE SEBI BY VA RIOUS ORDERS, ALONG WITH THE ORDERS PASSED IN CASE OF THE ASSESSEE AND HIS FAMILY MEMBERS OR INDIVIDUAL ORDERS. HENCE, CASES ARE ALSO THAT IN THOSE PERSONS CASE THEIR CLAIM OF LTCG IS NOT CHALLENGED. INTERESTINGLY THE LD AR ALSO REFERRED TO THE NEWS ITEM IN MONEYLIFE.IN DATED 10/4/2018 WHERE IN INTER NAL MEMO OF SEBI DATED 29/12/2016 IS DISCUSSED. IT SHOWS THA T SEBI ISSUED AN ELABORATE INTERIM ORDER IN RESPECT OF 12 ENTITIES CONNECTED WITH LTCG BOOKING. THESE ARE FIRST FINANC IAL SERVICE LTD, KAILASH AUTO FINANCE LTD, KAMALAKSHI FINANCE C ORP LTD, KELVIN FINCAP LTD, MISHKA FINANCE AND TRADING LTD, MORYO INDUSTRIES LTD, PINE ANIMATION LTD, RADFORD GLOBAL LTD, ECO FRIENDLY FOOD PROCESSING PARK LTD, ESTEEM BIO ORGAN IC FOOD IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 106 PROCESSING LTD, CHANNEL NINE ENTERTAINMENT LTD AND HPC BIOSCIENCES LTD. HOWEVER, IN NONE OF THESE INTERIM ORDERS THE ASSESSEE WAS FOUND TO BE INVOLVED IN ANY OF THE WRO NG DOINGS. SUCH ORDERS OF SEBI ARE ALSO ELABORATELY DISCUSSED IN THIS ORDER ITSELF. THEREFORE, MERELY BECAUSE SOME OF THE PERSONS HAVE DISCLOSED THE LTCG EARNED BY THEM AS DUBIOUS, DOES NOT IMPROVE OR HAMPER THE CASE OF THE ASSESSEE AND HIS FAMILY MEMBERS. 34. THE NEXT ISSUE DISCUSSED BY THE LEARNED ASSESSING O FFICER WAS WITH RESPECT TO THE PREPONDERANCE OF THE PROBABILIT IES IN PARA NUMBER 4.12 OF THE ASSESSMENT ORDER. THE LEARNED AS SESSING OFFICER NOTED THAT IN THE INSTANT CASE, THERE ARE M ANY STATEMENTS DULY SUPPORTED BY THE EVIDENCES THAT THE INDIVIDUALS OF BHUSHAN STEEL LTD GROUP HAS RECEIV ED BOGUS LONG-TERM CAPITAL GAIN ENTITIES S FROM VARIOUS COMP ANIES MANAGED AND CONTROLLED BY ENTRY OPERATORS. FURTHER, THE ASSESSEE HAS INVESTED IN SHARES OF VARIOUS PENNY ST OCK COMPANIES, WHICH WERE NOT DOING ANY MEANINGFUL BUSI NESS, AND EVEN THE EARNING WAS MINIMAL. NO PRUDENT INVEST OR WILL EVER INVEST HUGE SUMS IN A COMPANY, WHICH DOES NOT HAVE HISTORY OF DECLARING DIVIDENDS AND SOUND FINANCIAL CONDITIONS. NONE OF INVESTMENTS, LOSSES HAS BEEN INCURRED BY TH EM. ALL THE TRANSACTIONS OF THE SALE OF SHARES HAVE RESULTED IN TO HUGE ABNORMAL PROFITS, WHICH IS NOT POSSIBLE IN NORMAL C OURSE OF INVESTMENT. HOWEVER, EVIDENCE-INDICATING SHAM TRANS ACTIONS BY ALL THE INVESTORS WERE NOT FOUND BY THE DEPARTMENT, BUT R, THE PATTERN OF INVESTMENT, THE MODUS OPERANDI ADOPTED I S LARGELY SAME FOR 100% OF INVESTORS. THE RATES OF RETURN, PA TTERN OF MOVEMENT OF FUNDS WERE GLARING, NONEXISTENCE OF GEN UINE BUSINESS ACTIVITIES OF SUCH INVESTORS ETC. SAFELY L EAD TO CONCLUSION THAT LONG-TERM CAPITAL GAIN RECEIVED FRO M THESE PENNY STOCK COMPANY IS BOGUS AND TAXABLE. THE LEARN ED ASSESSING OFFICER RELIED UPON THE DECISION OF THE H ONBLE SUPREME COURT IN CASE OF SOME OF SUMATI DAYAL VS. CIT, 125 CTR 124. THE LEARNED AUTHORIZED REPRESENTATIVE VEHE MENTLY OPPOSED THE SAME AND STATED THAT LONG-TERM CAPITAL GAIN WERE ORIGINALLY DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME FOR EARLIER ASSESSMENT YEARS FOR ASSESSMENT YEAR 2010 11 AND 2011 12, WHICH WERE ASSESSED UNDER SECTION 143 (3 ) OF THE INCOME TAX ACT. THEREFORE, IT IS NOT THE CASE OF TH E REVENUE THAT THERE ARE NO POSITIVE EVIDENCES PRODUCED BY THE ASS ESSEE. EVEN IN THOSE CASES, THE ASSESSEE HAS PRODUCED THE COMPL ETE DETAILS OF THE PURCHASE, SHARE APPLICATIONS, PAYMENT BY CHE QUE, SALE ON A STOCK EXCHANGE, RECEIPT OF SALE CONSIDERATION AND MOST IMPORTANTLY THE HOLDING PERIOD OF THOSE SHARES IN T HE BALANCE SHEET OF THE ASSESSEES WHICH WERE ACCEPTED BY THE REVENUE FOR ALL THOSE YEARS. HE THEREFORE SUBMITTED THAT THE TH EORY OF IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 107 PREPONDERANCE OF PROBABILITIES INVOKED BY THE LEARN ED ASSESSING OFFICER IS MERELY A CONJECTURE AND SURMIS ES. HE FURTHER STATED THAT WHEN THE ORIGINALLY THE ASSESSE ES ARE ASSESSED UNDER SECTION 143 (3) OF THE ACT, LONG-TE RM CAPITAL GAIN WERE ACCEPTED AFTER DETAILED ENQUIRIES, NOW IT CANNOT BE SAID THAT THE CAPITAL GAIN EARNED BY THE ASSESSEE I S TO BE TAXED U/S 68 OF THE ACT ON THE PRINCIPLES OF PREPO NDERANCE OF THE PROBABILITIES. HE FURTHER SUBMITTED THAT IT WAS ARGUED BEFORE THE BENCH IN APPEAL FROM EARLIER YEARS THAT NO INCRIMINATING EVIDENCES WERE FOUND DURING THE COU RSE OF SEARCH. THE ORDER IS AWAITED. HE FURTHER STATED THA T THE PREPONDERANCE OF PROBABILITIES WOULD COME INTO PLAY ONLY WHEN THE BASIC TEST OF DIRECT AND FACTUAL EVIDENCES FAIL S. HE STATED THAT IN THE PRESENT CASE THE COMPLETE EVIDENCES HAV E BEEN PLACED BY THE ASSESSEE BEFORE THE REVENUE AUTHORITI ES, THEY ARE NOT FOUND TO BE FALSE BUT ONLY ALLEGATION HAS BEEN MADE THAT TRANSACTIONS ARE SHAM. HE FURTHER STATED THAT THE D ECISION RELIED UPON BY THE LEARNED AO OF HONOURABLE SUPREME COURT IS QUITE DISTINCT ON ITS FACT. ON CAREFUL ANALYSIS OF THE EVIDENCES PLACED BEFORE US, FINDINGS RENDERED BY THE LOWER AU THORITIES, WE PROCEED TO CONSIDER THE TAXABILITY OF THE LONG-T ERM CAPITAL GAIN EARNED BY THE ASSESSEE UNDER SECTION 68 OF THE INCOME TAX ACT WHETHER IN SITUATIONS LIKE THIS, ONE MAY FALL I NTO REALM OF PREPONDERANCE OF PROBABILITY WHERE THERE ARE MANY PROBABLE FACTORS, SOME IN FAVOUR OF THE ASSESSEE AND SOME MA Y GO AGAINST THE ASSESSEE. HOWEVER, THE PROBABLE FACTORS HAVE TO BE WEIGHED ON MATERIAL FACTS SO COLLECTED. HERE, IN TH IS CASE, MATERIAL FACTS STRONGLY INDICATE A PROBABILITY SUPP ORTED BY THE EVIDENCES PRODUCED BY THE ASSESSEE THAT ASSESSEE HA S EARNED LONG-TERM CAPITAL GAIN ON SALE OF THE SHARES. THE A NOTHER VERY STRONG PROBABILITY ARISES IS THAT ASSESSEE HAS INTR ODUCED ITS UNACCOUNTED MONEY IN THE GUISE OF PROFIT ON SALE OF SHARES HOLDING IT IS A LONG TERM CAPITAL GAIN AND SHOWING IT IS A TAX EXEMPT INCOME. THE PROBABLE FACTORS COULD HAVE GONE AGAINST THE ASSESSEE, ONLY IF, I. THERE WOULD HAVE BEEN SOME EVIDENCE FOUND FROM SEARCHES CONDUCTED BY THE DEPARTMENT THAT ASSESSEE WAS THE PERSON WHO AT THE TIME OF PURCHASE OF THE S HARES HAS ISSUED THE CHEQUES TO THE COMPANIES FOR PURCHAS E OF SHARES AND HAS RECEIVED CASH BACK AND AT THE TIME O F SALE OF THOSE SHARES HAVE PAID CASH TO THE ALLEGED BY OR THEIR ASSOCIATES, AND THEN ONLY HAS RECEIVED THE CH EQUES TOWARDS SALE OF THOSE SHARES. II. SUCH EVIDENCES FOUND WERE DULY CORROBORATED WITH TH E STATEMENTS OF THE PARTIES III. CROSS EXAMINATION OF THOSE PARTIES AFFORDED TO THE ASSESSEE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 108 IV. OPPORTUNITY TO THE ASSESSEE TO CONFRONT AND REBUT T HE MATERIALS GATHERED. FIRSTLY, NO SUCH EVIDENCES WERE FOUND DURING THE CO URSE OF SEARCH AND ALL THOSE EVIDENCES WHICH ARE RELIED UPO N BY THE LEARNED REVENUE AUTHORITIES HAVE BEEN HELD BY THE C OORDINATE BENCH IN ASSESSEES OWN CASE TO NOT TO BE AN INCRIM INATING MATERIAL WHICH CAN IMPACT THE TAXABLE INCOME OF THE ASSESSEE AND HIS FAMILY MEMBERS. EVEN THE INVESTIGATION MADE BY THE SECURITIES AND EXCHANGE COMMISSION OF INDIA HAS ALS O HELD THAT ASSESSEE IS NOT AT ALL INVOLVED IN THE MANIPUL ATION OF THE PRICES OF THOSE SCRIPTS. THE REVENUE HAS ALSO NOT S HOWN US ANY SECURITY AND EXCHANGE BOARD OF INDIAS ORDER WHICH EVEN IMPLICATED THE SHARE BROKER, WHICH IS ALLEGED TO HA VE ARRANGED THESE LONG-TERM CAPITAL GAINS FRAUDULENTLY FOR THE ASSESSEE. AT LEAST SOMETHING WOULD HAVE BEEN UNEARTHED FROM SUCH HIGH- LEVEL INVESTIGATION BY TWO CENTRAL GOVERNMENT AUTHO RITIES. FURTHER WHATEVER EVIDENCES WERE FOUND BY THE REVENU E; THEY WERE NOT CONFRONTED TO THE ASSESSEE FOR REBUTTING T HE SAME. STATEMENTS RECORDED OF SEVERAL PERSONS BY REVENUE W ERE NOT ALLOWED TO BE CROSS-EXAMINED BY THE ASSESSEE. IN TH IS SITUATIONS, ONLY ON THE THEORY OF PREPONDERANCE OF PROBABILITIES ADDITION CANNOT BE SUSTAINED. THE THEORY OF PREPON DERANCE OF PROBABILITY IS APPLIED TO WEIGH THE EVIDENCES OF EITHER SIDE A ND DRAW A CONCLUSION IN FAVOUR OF A PARTY WHICH HAS MO RE FAVOURABLE FACTORS IN HIS SIDE. THE CONCLUSIONS HAV E TO BE DRAWN BASED ON CERTAIN ADMITTED FACTS AND MATERIALS AND NOT BASED ON PRESUMPTION OF FACTS THAT MIGHT GO AGAINST ASSESSEE. ONCE NOTHING HAS BEEN PROVED AGAINST THE ASSESSEE W ITH AID OF ANY DIRECT MATERIAL ESPECIALLY WHEN VARIOUS ROUNDS OF INVESTIGATION HAVE BEEN CARRIED OUT, THEN NOTHING C AN BE IMPLICATED AGAINST THE ASSESSEE. THE RELIANCE PLACE D BY THE LEARNED AO ON THE DECISION OF THE HONOURABLE SUPREM E COURT IS CLEARLY DISTINGUISHABLE. SO FAR AS THE FACTS OF THA T CASE WITH THE CASE ON HAND BEFORE U ARE COMPARED, IN THAT PARTICU LAR SITUATION BEFORE THE HONOURABLE SUPREME COURT WHERE THE ASSESSEE WAS CONSTANTLY EARNING MONEY FROM THE JACK POT, FURTHER WAS NOT HAVING ANY LOSSES, IT WAS CONFESSED BEFORE THE SETTLEMENT COMMISSION THAT THE EXPENDITURE INCURRED OR THE LOSSES SUFFERED BY THE ASSESSEE HAVE BEEN ADJUSTED AGAINST THE UNACCOUNTED INCOME OF THE ASSESSEE, BOOKS OF T HE ASSESSEE DID NOT SHOW IN THAT PARTICULAR CASE ANY D RAWINGS FOR PURCHASE OF TICKETS AND INCURRING TRAVEL EXPENDITUR E TO 3 DIFFERENT CITIES PRIOR TO THE DATE OF WINNING OF TH E JACKPOT RACES. THE ASSESSEE HAS GIVEN UP THE WINNING FROM THE JACK POTS IMMEDIATELY ON SAME BECOMING TAXABLE DUE TO THE AME NDMENT IN THE INCOME TAX ACT. CONTRADISTINCTION TO THE ABO VE FACTS IN THE PRESENT CASE, ASSESSEE IS CONSISTENTLY AN INVESTO R IN THE SHARES. THE HOLDING PERIOD OF THE SHARES IS ALSO QU ITE LONG. THE IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 109 ASSESSEE IS ALSO A SHAREHOLDER IN VARIOUS COMPANIES OF THE BHUSHAN STEEL GROUP LIMITED. THE ASSESSEE HAS SHOWN PURCHASE CONSIDERATION PAID BY THE CHEQUE AND RECOR DED IN ITS BOOKS OF ACCOUNTS AND ACCEPTED BY THE REVENUE IN EA RLIER YEARS UNDER THE SCRUTINY ASSESSMENT. THE PRICES AT WHICH THE SHARES HAVE BEEN SOLD ARE TRADED PRICES ON A STOCK EXCHANG E ON WHICH ASSESSEE DOES NOT HAVE ANY CONTROL. THE REGULATORY AUTHORITY I.E. SECURITIES AND EXCHANGE BOARD OF INDIA, STO CK EXCHANGE AUTHORITIES HAS NOT QUESTIONED THE CONDUCT OF THE A SSESSEE AND BROKER SELLING THE SHARES , ON PRICE VARIATION IN THE SHARES OF THE COMPANIES IN WHICH ASSESSEE HAS MADE INVESTMENT . THE ASSESSEE HAS ALSO PAID SECURITIES TRANSACTION TAX O N THE SALE OF SHARES AND THE SALE CONSIDERATION HAS BEEN RECEIVED FROM THE SEBI REGISTERED BROKER AGAINST WHICH THERE IS NO AL LEGATION. IN VIEW OF THIS, IT IS APPARENT THAT ASSESSEE HAS PROD UCED OVERWHELMING EVIDENCES THAT WERE NOT FOUND TO BE FA LSE. IN VIEW OF THIS, THE RELIANCE BY THE LEARNED AO ON THE DECISION OF THE HONOURABLE SUPREME COURT IS MISPLACED. THEREFOR E IN VIEW OF THIS WE DO NOT SUBSCRIBE TO THE OPINION OF THE L EARNED ASSESSING OFFICER THAT ON THE PREPONDERANCE OF THE PROBABILITIES THE INCOME SHOULD HAVE BEEN TAXED IN THE HANDS OF T HE ASSESSEE. 35. THE LD AR HAS SUBMITTED THE PLETHORA OF JUDICIAL PR ECEDENTS WHERE IN IT HAS BEEN HELD THAT IN SUCH CIRCUMSTANCE S, ADDITION U/S 68 OF THE ACT CANNOT BE MADE AND SUCH INCOME IS CHARGEABLE TO TAX AS A LONG-TERM CAPITAL GAIN ONLY. HE SUBMITTED THAT ALL THESE DECISIONS ARE ALSO RENDERE D ON SIMILAR FACTS WHERE THE BROKER WAS TAINTED; CROSS-EXAMINATI ON WAS NOT AFFORDED, CHANGING STATEMENTS OF BROKER, ALLEGATION OF ACCOMMODATION ENTRY PROVIDER ETC. HE FURTHER SUBMIT TED THAT ALMOST ALL THE AUTHORITIES HAVE HELD THAT EITHER THE ASSESSMENT IS INVALID ON ACCOUNT OF VIOLATION OF PR INCIPLES OF NATURAL JUSTICE OR ON THE COMPLETE DOCUMENTATION FU RNISHED OR ON THE BASIS OF CHANGING STATEMENTS OF BROKER OR ON INADEQUATE EVIDENCES OR THE FACTS THAT SUCH EVIDENCES ARE NO T RELIABLE AS IN THE CASE OF THE ASSESSEE SAME ARE HELD TO BE NOT INCRIMINATING MATERIAL ON WHICH ADDITION CAN BE MAD E. WE ALSO HAVE FOUND THAT THE FACTS OF THE ISSUE BEFORE US AR E ALSO SIMILAR TO THE FACTS DEALT WITH BY THOSE JUDICIAL AUTHORI TIES. 36. AS THE ISSUE INVOLVED BEFORE US IS OF CHARGEABILIT Y OF LONG TERM CAPITAL GAIN AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT, WE HAVE ALSO CONDUCTED SOME RESEARCH AND FOUND THAT NOW MANY HIGH COURTS AND COORDINATE BENCHES HAVE HELD IN FAVOUR OF THE ASSESSEE. IN ONE OF THE CASES, SLP FILED BY THE REVENUE AGAINST THE ORDER OF THE HONOURABLE BOMBAY HIGH COURT HAS ALSO BEEN DISMISSED BY HONOURABEL SUPREME COURT . MANY OF THE DECISION OF THE COORDINATE BENCHES HAVE ALSO DISCUSSED IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 110 THE FACTS SIMILAR TO THE ISSUE BEFORE US. SUCH R ECENT CASES ARE LISTED HERE UNDER:- SERIAL NUMBER TITLE OF THE CASE APPEAL NUMBER/ DATE OF DECISION AUTHORITY RENDERING THAT DECISION 1 CIT V SHREYASHI GANGULI ITA 196 OF 2012 CAL HIGH COURT 2 CLASSIC GROWERS LTD V CIT ITA 129 OF 2012 CAL HIGH COURT 3 CIT V LAKSHAMANGARH ESTATE & TRADING CO LIMITED 40 TAXMANN.COM 439 CAL HIGH COURT 4 CIT V RUNGTA PROPERTIES LIMITED ITA NO 105 OF 2016 CAL HIGH COURT 5 CIT V BHAGWATI PRASAD AGARWAL 2009 TMI 34378 CAL HIGH COURT 6 THE COMMISSIONER OF INCOME TAX- 16. VERSUS MRS. KESAR A. GADA INCOME TAX APPEAL NO. 300 OF 2013 BOMBAY HIGH COURT 7 CIT V PREMPAL GANDHI ITA 95 OF 2017 401 ITR 253 PUNJAB & HARYANA HIHCOURT 8 PCIT V HITESH GANDHI ITA 18 OF 2017 PUNJAB & HRYANA HIGH COURT 9 CIT V POOJA AGARWAL ITA NO 385 OF 2011 RAJASTHAN HIGH COURT 10 CIT V SUDEEP GOENKA 29 TAXMANN.COM 402 DATED 3/1/2013 ALLAHABAD HIGH COURT 11 CT V ANUPAM KAPOOR 299 ITR 0179 PUNJAB & HARYANA HIGH IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 111 COURT 12 CIT V ARUNKUMAR AGRWAL HUF 26 TAXMANN.COM 113 JHARKHAND HIGH COURT 13 CIT V SHYAM R PAWAR 54 TAXMANN.COM 108 229 TAXMAN 0256 BOMBAY HIGH COURT 14 PRINCIPAL COMMISSIONER OF INCOME TAX- 5 VERSUS DIPALI MAHENDRA SHAH 2018 (3) TMI 1084 - GUJ GUJARAT HIGH COURT 15 THE COMMISSIONER OF INCOME TAX VERSUS SHRI MUKESH RATILAL MAROLIA. 2011 (9) TMI 919 BOMBAY HIGH COURT SLP DISMISSED BY HON SC ON 27/1/2015 SPECIAL LEAVE TO APPEAL (CIVIL) NO(S).20146/2 012 16 PRINCIPAL COMMISSIONER OF INCOME TAX-5 V. DHWANI MAHENDRA SHAH TAX APPEAL NO.674 OF 2017 GUJARAT HIGH COURT 17 COMMISSIONER OF INCOME TAX VERSUS PUSHPA MALPANI IT APPEAL NO. 50 OF 2010 2010 (11) TMI 799 RAJASTHAN HIGH COURT 18 SMT. BHARTI ARVIND JAIN VS. ITO 6102/MUM/2016) MUMBAI ITAT 19 ITO VS. M/S INDRAVADAN JAIN HUF 4861/MUM/2014 MUMBAI ITAT 20 SWATI MALL V ITO 7/12/2018 KOLAKATTA ITAT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 112 WARD 36(2) 21 VAISHAL SURYAKANT SHAH V ITO 9 CCH 106 AHMEDABAD ITAT 22 SUNITA JAIN V ITO 49 CCH 330 AHMEDABAD ITAT 23 DCIT CENTRAL CIRCLE V PRB SECURITIES P LTD 5/12/2018 KOLAKATA ITAT 24 PRAKASHCHAND BHUTORIAV ITO 53 CCH 275 KOLKATA ITAT 25 RAMPRASAD AGARWAL V ITO 30/11/2018 MUMBAI ITAT 26 ADITYA VIKRAM SUREKA HUF V ITO KOLKATTA 28/11/2018 KOLAKAT ITAT 27 RASHMI MAHESHWARI V ITO 28/11/2018 DELHI ITAT 28 MOHANLAL AGARWAL HUF V ITO 26/11/2018 DELHI ITAT 29 JAISHREE BAMBOLY V ITO 8/11/2018 CHENNAI ITAT 30 SIMI VERMA V ITO 6/11/2018 DELHI ITAT 31 MANOJKUMAR GUPTA V ITO 5/11/2018 DELHI ITAT 32 MADHU KILLA V ACIT 2/11/2018 KOLKATA ITAT 33 KANTHILAL KAMLA BAI V ITO 29/10/2018 CHENNAI ITAT 34 K PRAVEENKUMAR HUF V ITO 29/10/218 CHENNAI ITAT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 113 35 RUKMANIDEVI MANPURIA V DCIT 24/10/2108 KOLKATTA ITAT 36 BISHWANATH AGARWAL V ITO 16/10/2018 KOLKATA ITAT 37 BHANSHALI FINACOM P LTD V DCIT 10/10/2018 KOLKATTA ITAT 38 SANJAY MEHTA V ACIT 28/9/2018 KOLKATTA ITAT 39 MINA MEHTA V ITO 28/9/2018 KOLKATTA ITAT 40 VIKAS JHAWAR V ITO 26/9/2018 KOLKATTA ITAT 41 NEELAM AGARWAL V ITO 26/9/2018 KOLKATTA ITAT 42 RAJKUMAR GOENKA V ITO 26/9/2018 KOLKATA ITAT 43 SHOBHIT GOEL V ITO 25/9/2018 DELHI ITAT 44 KAUSHLAYA DEVI V ITO 19/9/2108 HYDERABAD ITAT 45 AMIT SHAH V ITO 26/9/2018 KOLKATTA ITAT 46 DEEPAK BHATTAD HUF V ITO 19/9/2018 CHENNAI ITAT 47 ARUNKUMAR BHAIYYA V ITO 30/8/2018 DELHI ITAT 48 ITO V KAPIL MITTAL 29/8/2018 JAIPUR ITAT 49 DCIT V SAURABH MITTAL 29/8/2018 JAIPUR ITAT 50 SIKHA DHAWAN V ITO 27/6/2018 DELHI ITAT 51 MEGHRAJSINGH SEHAWAT V DCIT 7/3/2018 JAIPUR ITAT IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 114 52 DCIT V VIMLESHKUMAR SINGH 15/1/2018 RAIPUR ITAT 53 ACIT V PRATIKSHA SHAH 03/10/217 MUMBAI ITAT 54 KETULKUMAR D JAISWAL V ITO 2017 (10) TMI 168 - ITAT AHMEDABAD AHMEDABAD ITAT 55 ITO V ARVINDKUMAR JAIN HUF 18/9/2017 MUMBAI ITAT 56 BHARTI NAVIN CHEDA V ITO 11/9/2017 MUMBAI ITAT 57 KAMLADEVI S DOSHI V ITO 22/5/2017 MUMBAI ITAT 58 BHAVESH SAMBHULAL SOMANI V ITO ITA NO.2263/AHD/2015 20/3/2017 AHMEDABAD ITAT 59 RACHNA SACHIN JAIN V ITO 501 & 502/AHD/2016 7/3/2017 AHMEDABAD ITAT 60 MALTI GHANSHYAMBHAI V ITO 6/2/2017 AHMEDABAD ITAT 61 RAJENDRKUMAR RATILAL JARIWALA V ITO 1753/AHD/2012 29/2/2016 AHMEDABAD ITAT 62 ITO V ARVINDKUMAR JAIN HUF 51 CCH 281 MUMBAI ITAT 37. THE REVENUE HAS ALSO RELIED UP ON SOME DECISIONS WE ALSO DEAL WITH THEM. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS VEHEMENTLY RELIED UPON THE DECISION OF HONOURABLE B OMBAY HIGH COURT IN CASE OF SANJAY BIMALCHAND JAIN VS. PR INCIPAL COMMISSIONER OF INCOME TAX REPORTED AT 89 TAXMAN.COM 196. WE HAVE ALSO PERUSED THE DECISION OF THE COORDINATE BENCH DATED 18/07/2016 IN THAT CASE, WHICH WAS UPHELD BY THE HONOURABLE HIGH COURT. ISSUE BEFORE THE COORDINATE BENCH WAS IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 115 THAT WHETHER, ON SALE OF SHARES PROFIT EARNED BY TH E ASSESSEE CAN BE CHARGED TO TAX AS CAPITAL GAIN OR BUSINESS I NCOME. IN THAT PARTICULAR CASE, THE PAYMENTS WERE MADE IN CAS H FOR PURCHASE OF SHARES. THE ADDRESSES OF THE COMPANIES WHO SHARES ARE PURCHASED AND ADDRESS OF BROKERS ARE ALS O THE SAME. BROKERS WHO SOLD THE SHARES DID NOT RESPOND T O THE INQUIRIES OF THE LEARNED ASSESSING OFFICER. THEREFO RE, ON THE APPRECIATION OF THE FACTS, COORDINATE BENCH HELD TH AT THE INCOME HAS BEEN CORRECTLY TAXED BY THE AO AS BUSINESS INCO ME OF THE ASSESSEE WHEREAS THE ASSESSEE CLAIMED IT TO BE A LO NG-TERM CAPITAL GAIN. THE ASSESSEE CHALLENGED THE CASE BEFO RE THE HONOURABLE HIGH COURT AND IT WAS HELD THAT THERE IS NO SUBSTANTIAL QUESTION OF LAW ARISING. FIRSTLY SPEAKI NG THE CASE BEFORE US IS NOT OF CHARGEABILITY OF LONG-TERM CAPI TAL GAIN AS BUSINESS INCOME OR AS A LONG-TERM CAPITAL GAIN. NEV ERTHELESS, THE ISSUE IS WHETHER THE SALE OF SHARES RESULTING I NTO PROFITS IN THE HANDS OF THE ASSESSEE, WHICH ARE HELD FOR MORE THAN 12 MONTHS, IS CHARGEABLE TO TAX AS LONG-TERM CAPITAL G AIN OR AS UNDISCLOSED INCOME OF THE ASSESSEE. THE CASE OF THE ASSESSEE IS SUPPORTED BY THE PURCHASE BILLS, PAYMENT BY CHEQ UES AND SALE BY ASSESSEE ON RECOGNIZED STOCK EXCHANGE THROU GH A REGISTERED BROKER RECEIVING THE SALE CONSIDERATION THROUGH THE SETTLEMENT MECHANISM OF THE EXCHANGE BY CHEQUE. THE RE IS NO DOUBT ON THE BROKERS WHO PURCHASED SHARES AND ON TH E BROKERS WHO SOLD THE SHARES. IN THE CASE BEFORE THE HONOURA BLE BOMBAY HIGH COURT, ADDITION WAS ON ACCOUNT OF ABSENCE OF ANY INFORMATION COMING FROM THE BROKER WHO SOLD THE SHA RES WHEN ENQUIRED BY THE AO. IN THE PRESENT CASE, THE AO DID NOT RAISE ANY QUESTION TO THE BROKER WHO SOLD THE SHARES. IT IS IN FACT, THE BROKER WHO SOLD THE SHARES LOGGED IN TO HIS TERMINA L AND SOLD THE SHARES ON ELECTRONIC ONLINE PLATFORM OF THE EXC HANGE. IT IS NOT THE CASE OF THE ASSESSEE THAT THE SHARES HAVE N OT BEEN SOLD BY THE ASSESSEE ON THE STOCK EXCHANGE. HERE, THE LE ARNED ASSESSING OFFICER IS CHALLENGING THE WHOLE CYCLE OF THE TRANSACTION, STARTING FROM PURCHASE OF THE SHARES B Y THE ASSESSEE FROM THE MARKET OR ON PREFERENTIAL ALLOTME NT OF SHARES OF SOME OF THE COMPANIES AND SUBSEQUENTLY HOLDING I T AND SELLING IT ON STOCK EXCHANGE AT PREVAILING PRI CES AS SHAM TRANSACTION AS AN ATTEMPT TO CONVERT THE UNACCOUNTE D MONEY OF THE ASSESSEE IN THE FORM OF NON-TAXABLE LONG-TERM C APITAL GAIN. FURTHER, IN THE CASE BEFORE THE HONOURABLE BOMBAY H IGH COURT THE SIMPLE ISSUE WAS THAT THERE WAS AN UNUSUAL RISE IN THE PRICE OF THE SHARE AND NO ENQUIRY WAS CONDUCTED BY THE ANY REGULATORY AUTHORITY. IN THE CASE BEFORE US, THE SE CURITIES AND EXCHANGE BOARD OF INDIA HAS CONDUCTED A DETAILED EN QUIRY AND HAS HELD THAT ASSESSEE IS NOT INVOLVED IN MANIPULAT ION OF PRICES OF ANY SCRIPTS. THEREFORE, IT WAS HELD BY TH E SEBI THAT THE TRANSACTION, AS FAR AS PURCHASE AND SALE OF THE SHARES ON IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 116 BOMBAY STOCK EXCHANGE IS CONCERNED, WAS UNTAINTED. THEREFORE, THE FACTS OF THE CASE BEFORE THE HONOURA BLE BOMBAY HIGH COURT AND FACTS BEFORE US ARE CLEARLY DISTINGU ISHABLE. 38. THE 2 ND DECISION RELIED UPON BY THE LEARNED CIT DR IS IN C ASE OF SHRI ABHIMANYU SOIN VS. ASSISTANT COMMISSIONER OF INCOME TAX [2018 TIOL 733 ITAT CHD]. IN THAT PARTI CULAR CASE, THERE WAS A SPECIFIC ALLEGATION WHICH WAS PROVED TH AT THERE IS A CIRCULAR TRANSACTIONS ENTERED INTO BY THE ASSESSEE S BROKERS FOR THE SCRIP AND FURTHER THERE WAS NO EVIDENCE THAT HO W A CALCUTTA-BASED BROKER FROM LUDHIANA-BASED ASSESSEE HAS RECEIVED IN CASH FOR PURCHASE OF THE SHARES ON THRE E DIFFERENT DATES. APPARENTLY, THE FACT OF PAYMENT OF CASH TO P URCHASE OF SHARES TO THE BROKER SITUATED AT KOLKATA BECAME PRI MORDIAL. FURTHER, THE ASSESSEE WAS IN UNITED STATES FROM 200 9 2012 AND THE CASE WAS PERTAINING TO ASSESSMENT YEAR 2011 12, WHERE THE ASSESSEE HAS MADE A PAYMENT TO ONE OF THE REPRESENTATIVE, WHOSE NAME COULD NOT BE RECOLLECTE D FOR SENDING MONEY TO THE BROKER WHEN IT WAS THE FIRST DEAL WITH THE BROKER. FURTHER, THE SHARES WERE ALSO NOT TRANS ACTED THROUGH ANY RECOGNIZED EXCHANGE AS APPARENTLY THE S HARES WERE TRADED OF A PETTY PRIVATE LIMITED COMPANY. IN ADDITION, THE ASSESSEE COULD NOT PROVE THE REQUISITE SOURCE OF IN VESTMENT DURING THE RELEVANT PERIOD OF INVESTMENT. THE FACTS OF THE CASE BEFORE THE COORDINATE BENCH ARE CLEARLY DISTINGUISH ABLE AND DO NOT APPLY TO THE FACTS OF THE CASE BEFORE US. IN VI EW OF THIS, RELIANCE ON THIS DECISION BY REVENUE IS ALSO MISPLA CED. 39. THE THIRD DECISION RELIED UPON BY THE LEARNED DEPAR TMENTAL REPRESENTATIVE IS OF BANGALORE BENCH SMC WHERE THE SHARES WERE PURCHASED OFF MARKET BY THE ASSESSEE DESPITE H AVING THE SHARES OF THE COMPANY LISTED ON THE STOCK EXCHANGE. THEREFORE, THE FACTS OF THIS CASE ARE ALSO CLEARLY DISTINGUISH ABLE FROM THE FACTS BEFORE US. 40. THE FOURTH DECISION RELIED UPON IS IN CASE OF CHAND AN GUPTA VS. CIT, 229 TAXMAN 173 (PUNJAB AND HARYANA). IN THAT, PARTICULAR CASE THE ASSESSEE EXPRESSED ITS INABILITY TO PRODUC E THE BROKER AND THE AO CONDUCTED INQUIRIES ON HIS OWN. THE QUOT ATIONS WERE ALSO FROM A GUJARATI DIARY THE PRICES COULD NO T BE SUBSTANTIATED BY THE ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAS PRODUCED ALL THE EVIDENCES BEFORE THE ASSESSING OFFICER AND THE LEARNED AO DID NOT PRESS UPON THE A SSESSEE TO PRODUCE ANYBODY INSTEAD OF THAT HE WENT BY THE STAN DARD MODUS OPERANDI AS UNDERSTOOD BY HIM. EVEN IN THE PR ESENT CASE BEFORE US WHETHER THE MODUS OPERANDI IS THE TH INKING OF THE LEARNED AO OR HAS HE BEEN DIRECTED BY SOMEBODY IS NOT KNOWN. THE PRICES AT WHICH THE TRANSACTIONS OF SALE OF SHARES IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 117 HAVE TAKEN ARE MARKET RATE AND THERE IS NO ALLEGA TION AS THE SHARES WERE LISTED ON STOCK EXCHANGE. THEREFORE, TH E FACTS OF THE CASE CITED BY THE LEARNED DEPARTMENTAL REPRESEN TATIVE ARE CLEARLY DISTINGUISHABLE. 41. THE 5 TH DECISION RELIED UPON BY THE LEARNED CIT DR IS WITH RESPECT BALBIR CHAND MAINI VS. CIT [340 ITR 161]. I N THAT PARTICULAR CASE, ON EXAMINATION OF THE BROKER THE B OOKS OF ACCOUNTS OF THE BROKER COULD NOT BE PRODUCED BY HIM TO SHOW THAT HE HAS PURCHASED THE SHARES FROM THE ASSESSEE AND THE SALE OF SHARES HAS ALSO NOT TAKEN PLACE THROUGH ANY STOCK EXCHANGE. THERE WERE CASH DEPOSITS IN THE BANK ACCO UNT OF THE BROKER PRIOR TO ISSUE OF CHEQUES IN THE NAME OF THE ASSESSEE FOR PURCHASE OF SHARES CLAIMED TO BE THE SALE PROCEEDS OF THE SHARES IS RECEIVED IN ADVANCE. THE BROKER ALSO COUL D NOT GIVE THE DETAILS OF THE NAME OF THE PURCHASE OF THE SHAR ES. FURTHER, IT WAS ALSO FOUND BY THE AO THAT THE SHARES SOLD BY TH E ASSESSEE WERE NOT QUOTED ON THE STOCK EXCHANGE AND THERE WAS NO TRADING OF THOSE SHARES ON THE EXCHANGE. THE AO FUR THER NOTED THAT IT WAS A CLOSED CIRCUIT TRANSACTION BETWEEN SO ME PERSONS. THE AO FURTHER FOUND THAT THE SHARES CLAIMED TO HAV E BEEN SOLD THROUGH THE BROKER HAD NOT BEEN TRANSFERRED EVEN AT THE TIME OF MAKING THE ENQUIRY BY THE ASSESSING OFFICER AND SUC H SALES CONTINUED TO BE REGISTERED IN THE NAME OF THE ASSES SEE. THEREFORE, THERE WAS NO TRANSFER OF SHARE AT ALL IN THAT PARTICULAR CASE. ON THESE FACTS, THE ADDITION UNDER SECTION 69 WAS CONFIRMED. ON COMPARISON OF FACTS OF THAT, CASE WITH THE FACTS OF THE PRESENT CASE CLEARLY SHOWS THAT SUCH F ACTS DO NOT EXIST BEFORE US. 42. THE LEARNED CIT DR ALSO RELIED UPON SEVERAL OTHER D ECISIONS WHERE FOR SEVERAL REASONS, THE ADDITION ON SALE OF SHARES SHOWN AS A LONG-TERM CAPITAL GAIN IS CONFIRMED IN T HE HANDS OF THE ASSESSEE. HOWEVER, IN MOST OF THE DECISIONS CIT ED BEFORE US, THERE WAS AN OFF MARKET PURCHASE BY THE ASSESSEE AN D THE ASSESSEE COULD NOT SUBSTANTIATE WITH DOCUMENTARY EV IDENCES THE TRANSACTION OF PURCHASE AND SALE OF THE SHARES. IN MANY OF THE CASES CITED THERE WERE PREDATED CONTRACT NOTE I SSUED BY THE BROKER AND THE PAYMENT FOR PURCHASE OF THE SHARES I S MADE IN CASH AND THAT TOO OFF MARKET. , IN SOME OF THE CASE S, THERE WAS NO PAYMENT BY CHEQUE FOR ACQUISITION OF THE SHARES BUT THERE WAS AN ADJUSTMENT OF PROFITS EARNED BY THE ASSESSEE THROUGH THOSE BROKERS, WHO GENERATED PROFITS IN CASH IN THE NAME OF THE ASSESSEE AND PURCHASE PRICE OF THE SHARES ADJUSTED BY THE BROKER AGAINST THAT PAYMENT TO BE MADE TO THOSE ASS ESSEES. IN SUCH CIRCUMSTANCES, THE ADDITIONS HAVE BEEN CONFIRM ED BY THE COORDINATE BENCHES. THEREFORE, THE FACTS OF THOSE C ASES ARE CLEARLY DISTINGUISHABLE. IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 118 43. THE FOUR PARTIES WE LIKE TO STATE THAT DESPITE SEA RCHES CARRIED OUT ON THE ASSESSEE BASED ON PRE SEARCH INQUIRIES C OUPLED WITH THE SEARCH ON MR. RAJ KUMAR KEDIA AND RECORDING STA TEMENTS OF SO MANY PERSONS THE LD AO KNOWING FULLY WELL THAT F AILURE TO GRANT CROSS EXAMINE WILL MAKE ALL THESE ENQUIRIES FRUITLESS. FURTHER, THERE ARE LOOPHOLES IN THE EVIDENCE RELIED UPON BY THE REVENUE OF NOT REFERRING THE ISSUE OF SYNCHRONIZED TRADING TO THE SEBI. CERTAIN TIMES THE CONVICTION UNDER THE SEBI A CT WOULD HAVE BEEN MORE STRINGENT THEN THE LIABILITY UNDER T HE TAX LAWS. FURTHER, THOUGH THE AO WAS HAVING REASONABLE EVIDEN CES BUT HAS UNNECESSARILY TOOK THE BURDEN ON HIM OF PROVING THAT LONG TERM CAPITAL GAIN EARNED BY THE ASSESSEE IS BOGUS I NSTEAD OF FIRST ASKING ASSESSEE TO PROVE THAT THE ABOVE INCOM E IS EXEMPT U/S 10(38) OF THE ACT. AFTER GRANTING FULL OPPORTUN ITY TO THE ASSESSEE TO ADDUCE AS MANY EVIDENCE AS ASSESSEE COU LD HAVE PRODUCE AND THEN SHOULD HAVE CARRIED OUT VAST POWER S BESTOWED UPON HIM UNDER THE INCOME TAX ACT, 1961 OF EXAMINING THE DETAILS FURNISHED BY THE ASSESSEE. TH E LD AO COULD HAVE ALSO ASKED THE ASSESSEE TO PRODUCE ALL T HE PERSONS WHOSE STATEMENT AO WAS RELYING UPON. HOWEVER, THE L D AO HAS UNNECESSARILY TAKEN THE ONUS OF PROVING LONG-TERM C APITAL GAIN AS BOGUS INSTEAD OF FIRST ASKING ASSESSEE TO PROVE THAT THE LONG- TERM CAPITAL GAIN IS GENUINE. THE LD AO SHOULD HAVE FIRST PUT THE BURDEN TO PUT PRIMA FACIE CASE IN RESPECT OF CA SH CREDIT ON ASSESSEE AS TO HOW IT WAS INTRODUCED IN THE BOOKS O F THE ASSESSEE. HOWEVER, FROM THE FIRST PARAGRAPH OF THE ASSESSMENT ORDER ITSELF THE LD AO ALLEGED THAT ASSESSEE HAS EN TERED INTO A SCAM AND THEY BY WALKED INTO THE TRAP OF SECTION 11 0 OF THE EVIDENCE ACT ON HIM TO PROVE THAT THE LONG-TERM CAP ITAL GAIN EARNED BY THE ASSESSEE IS BOGUS. THE LD AO AFTER TH AT COULD NOT SUBSTANTIATE HIS ALLEGATIONS BY GRANTING CROSS-EXAM INATION TO THE ASSESSEE OF VARIOUS PERSONS. IT IS FATAL TO THE CASE, AS THE ASSESSMENT STRATEGY ADOPTED BY THE LD AO COULD NOT PROVE HIS ALLEGATION. 80. AFTER PERUSAL OF THE ABOVE ORDER, WE ARE OF THE VIEW THAT THERE IS NO DISPARITY ON THE FACTS. ALL RELEVANT CASE LAWS HAV E BEEN CONSIDERED IN THIS ORDER. HOWEVER, DURING THE COURSE OF HEARING, SHRI G.C.SRIVASTAVA HAS EMPHASISED THAT IN THE CASE OF SANJAY SINGAL, H E HAS VOLUNTARILY DISCLOSED RS.250 CRORES ON ACCOUNT OF BOGUS LONG TE RM CAPITAL GAIN IN THE STATEMENT MADE UNDER SECTION 132(4) OF THE ACT FOR THE SEARCH CARRIED OUT ON 21 & 27-2-2014. HE POINTED OUT THAT NOT SUC H VOLUNTARY IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 119 DISCLOSURE WAS AVAILABLE IN THE CASE OF SHRI BRIJ B HUSHAN SINGAL. ACCORDING TO THE LD.AUTHORISED REPRESENTATIVE, THIS DISCLOSURE WAS MADE BY SHRI SANJAY SINGAL ON HIS BEHALF AS WELL AS ON B EHALF OF ENTIRE FAMILY. THEREFORE, HE IS BOUND WITH HIS DISCLOSURE WHICH WA S NOT RETRACTED. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE MAD E REFERENCE TO CBDT CIRCULAR BEARING NO.286/2003 DATED 103.2003 WHICH H AS BEEN FURTHER EXPLAINED IN THE SUBSEQUENT CIRCULARS. THE BOARD H AS EMPHASISED THAT NO DISCLOSURE BE TAKEN FROM THE ASSESSEE AND ENDEAVOUR BE MADE FOR COLLECTION OF THE MATERIAL BECAUSE ACCORDING TO THE BOARD THE DEPARTMENT USED TO TAKE VOLUNTARY DISCLOSURE UNDER SECTION 132 (4) OF THE ACT AND STOPPED FURTHER INVESTIGATION. THIS TYPE OF DECLAR ATION LATER ON RETRACTED BY THE ASSESSEE NOR HONOURED IN THE RETURN FILED BY THEM, AND THE DEPARTMENT FAILED TO CORROBORATE SUCH DISCLOSURE. THUS, ACCORDING TO HIM, THERE IS NO DISPARITY OF SUCH EVENT ON THIS PO INT. NO DOUBT, THE DISCLOSURE OR ADMISSION MADE UNDER SECTION 132 (4) OF THE ACT DURING THE COURSE OF SEARCH PROCEEDINGS IS AN ADMISSIBLE E VIDENCE BUT NOT CONCLUSIVE ONE. THIS PRESUMPTION OF ADMISSIBILITY O F EVIDENCE IS A REBUTTABLE ONE, AND IF AN ASSESSEE IS ABLE TO DEMON STRATE WITH THE HELP OF SOME MATERIAL THAT SUCH ADMISSION WAS EITHER MISTAK EN, UNTRUE OR BASED ON MISCONCEPTION OF FACTS, THEN SOLELY ON THE BASIS OF SUCH ADMISSION NO ADDITION IS REQUIRED TO BE MADE. IT IS TRUE THAT AD MISSION BEING DECLARATION AGAINST AN INTEREST ARE GOOD EVIDENCE, BUT THEY ARE NOT CONCLUSIVE, AND A PARTY IS ALWAYS AT LIBERTY TO WIT HDRAW THE ADMISSION BY DEMONSTRATING THAT THEY ARE EITHER MISTAKEN OR UNTR UE. IN LAW, THE RETRACTED CONFESSION EVEN MAY FORM THE LEGAL BASIS OF ADDITION, IF THE AO IS SATISFIED THAT IT WAS TRUE AND WAS VOLUNTARIL Y MADE. BUT THE BASING IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 120 THE ADDITION ON A RETRACTED DECLARATION SOLELY WOUL D NOT BE SAFE. IT IS NOT A STRICT RULE OF LAW, BUT ONLY RULE OF PRUDENCE. AS A GENERAL RULE, IT IS UNSAFE TO RELY UPON A RETRACTED CONFESSION WITHOUT CORROBORATIVE EVIDENCE. DUE TO THIS GREY SITUATION, CBDT HAS ISSU ED CIRCULAR NO.286/2/2003 PROHIBITING THE DEPARTMENTAL OFFICIAL S FROM TAKING CONFESSION IN THE SEARCH. THE CBDT IS OF THE VIEW T HAT OFTEN THE OFFICIALS USED TO OBTAIN CONFESSIONS FROM THE ASSESSEE AND ST OP FURTHER RECOVERY OF THE MATERIAL. SUCH CONFESSIONS HAVE BEEN RETRACTED AND THEN THE ADDITION COULD NOT WITHSTAND THE SCRUTINY OF THE HIGHER APPE LLATE AUTHORITY, BECAUSE NO MATERIAL WAS FOUND SUPPORTING SUCH ADDIT ION. IT IS PERTINENT TO OBSERVE THAT IN A LARGE NUMBER OF AUTHORITATIVE PRONOUNCEMENTS, IT HAS BEEN HELD THAT MERELY ON THE BASIS OF DECLARATION A DDITION SHOULD NOT BE MADE. THE ALLEGED DECLARATION SHOULD BE SUPPORTED WITH UNEXPLAINED EXPENDITURE OR ASSETS DISCERNIBLE IN THE SEIZED MAT ERIAL DURING THE COURSE OF SEARCH. NO SUCH THINGS WAS UNEARTHED BY THE REV ENUE, THEREFORE, DECISION RELIED UPON BY THE LD.CIT-DR IN THE CASE O F BHAGIRATH AGGARWAL VS. CIT(SUPRA) IS DISTINGUISHABLE ON FACTS . THIS DECISION HAS ALREADY BEEN CONSIDERED BY THE COORDINATE BENCH WHI LE DEALING WITH THE CASE OF FATHER OF THE ASSESSEE. 81. IN HIS NEXT FOLD OF CONTENTIONS, HE SUBMITTED T HAT THERE WAS NO NECESSITY TO PROVIDE OPPORTUNITY TO CROSS-EXAMINE T HE PERSONS WHOSE STATEMENTS WERE RECORDED BY THE REVENUE DURING THE COURSE OF SEARCH. IN OTHER WORDS, REVENUE CAN RELY UPON THIRD PARTY S TATEMENT RECORDED FROM THE BACK WITHOUT GIVING OPPORTUNITY TO THE ASS ESSEE TO CROSS- EXAMINE THEM. THIS ASPECT HAS BEEN DEALT WITH BY T HE ITAT IN THE FINDING REPRODUCED ABOVE, AND THE COORDINATE BENCH PUT RELIANCE UPON IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 121 THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE O F ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CUSTOM & EXCISE, 281 CTR 241 (SC). THE TRIBUNAL HAS REPRODUCED THE FINDING OF HONBLE SUPREME COURT WHILE REJECTING ALL THE CONTENTIONS OF THE REVENUE, AND HELD THAT IF OPPORTUNITY IS NOT BEING GRANTED TO THE ASSESSEE, T HEN THAT PART OF THE EVIDENCE HAS TO BE EXCLUDED. WHILE PERSUADING US T O IGNORE THIS FINDING OF THE CO-ORDINATE BENCH, THE LD.COUNSEL FOR THE RE VENUE PUT EMPHASIS ON THE JUDGMENT OF HONBLE PUNJAB & HARYANA IN THE CASE OF SMT.KUSUM LATA THAKRAL VS. CIT, 185 TAXMAN 237. TH E FACTS IN THIS CASE ARE THAT THE ASSESSEE HAS RECEIVED GIFT IN CAS H. ACCORDING TO THE REVENUE, IN ORDER TO PROVE GIFT AS GENUINE, THE ASS ESSEE HAS TO PROVE IDENTIFY OF THE DONOR, GENUINENESS OF THE TRANSACTI ON AND CREDIT- WORTHINESS OF THE DONOR. THE ASSESSEE PROVED IDENT ITY, BUT FAILED TO PROVE GENUINENESS AND CREDIT-WORTHINESS. DONOR HAS DENIED ADVANCING OF ANY GIFTS TO THE ASSESSEE, AND IN THAT BACKGROUN D THE ASSESSEE ARGUED THAT SHE SHOULD HAVE BEEN GIVEN AN OPPORTUNITY TO C ROSS-EXAMINE THAT DONOR. THIS PLEA HAS BEEN REJECTED AND THE HONBLE COURT HAS OBSERVED THAT THERE IS NO NECESSITY TO GRANT OPPORTUNITY. W E HAVE PERUSED THIS PROPOSITION, BUT IT IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IT IS PERTINENT TO OBSERVE THAT ONUS WAS UPON THE ASSESSE E TO PROVE THAT THE GIFTS ARE GENUINE AND IN ORDER TO DISCHARGE THAT ON US, IT WAS INCUMBENT UPON THE ASSESSEE TO PRODUCE THE DONOR. THOSE DONO RS SHOULD BE WITNESS OF THE ASSESSEE, AND EVEN IF DENIAL OF THE DONOR IS EXCLUDED, THEN ALSO THE ASSESSEE FAILED TO DISCHARGE HER ONUS TO PROVE GENU INENESS OF THE GIFTS. IN OTHER WORDS, NON-GRANTING OF CROSS-EXAMINATION O F THE DONOR HAD NOT IMPACTED CASE OF THE REVENUE, BECAUSE IT IS THE ASS ESSEE WHO HAS TO FIRST IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 122 PROVE GENUINENESS OF THE GIFTS AND IT SHOULD BE THE ENDEVOUR OF THE ASSESSEE TO BRING DONOR IN THE WITNESS BOX AND TAKE A DECLARATION FROM HIM ABOUT GIVING OF GIFTS. THUS, IT WAS NOT DUTY O F THE REVENUE TO CALL FOR THE DONOR AND THEN PROVIDE AN OPPORTUNITY TO TH E ASSESSEE; BECAUSE THAT EXERCISE WILL NOT TAKE THE CASE ANY FURTHER IN FAVOUR OF THE ASSESSEE. AT THE MOST THE DENIAL OF DONOR COULD BE IGNORED TH AT IT WAS NOT POSITIVE EVIDENCE USED BY THE REVENUE FOR REJECTING THE EXPL ANATION OF THE ASSESSEE. THE TRIBUNAL HAS HELD THAT THE ASSESSEE FAILED TO PROVE GENUINENESS OF THE GIFTS. IN THIS BACKGROUND, THER E WAS NO OPPORTUNITY PROVIDED TO THE ASSESSEE FOR CROSS-EXAMINATION, WHI CH OTHERWISE OUGHT TO HAVE BEEN GRANTED. THIS JUDGMENT IS TO BE READ IN THIS LINE. THE JUDGMENT RELIED UPON THE REVENUE DOES NOT TAKE FORW ARD THE ARGUMENTS OF THE LD.COUNSEL FOR THE REVENUE THAT THERE IS NO NEED TO PROVIDE OPPORTUNITY TO CROSS EXAMINE ALL THOSE PERSONS WHOS E STATEMENTS HAVE BEEN RECORDED BY THE INVESTIGATING AGENCY DURING TH E COURSE OF SEARCH AT THEIR RESIDENTIAL PREMISES, AND MORE SO THESE JUDGM ENTS CANNOT BE GIVEN PREFERENCE OVER THE JUDGMENT OF HONBLE SUPREME COU RT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES (SUPRA) WHICH HAS BEEN CO NSIDERED BY THE CO-ORDINATE BENCH. SIMILARLY, OTHER LARGE NUMBERS OF ORDER HAVE BEEN PLACED ON RECORD. THEY ARE DISTINGUISHABLE ON FACT S; THEY HAVE THEIR OWN FACTS WHICH ARE NOT APPLICABLE IN THE INSTANT CASES . BY REFERRING EACH ORDER, WE WILL BE UNNECESSARILY MAKING THIS ORDER M ORE LENGTHY AND BULKY, BECAUSE CO-ORDINATE BENCH HAS CONSIDERED MOR E THAN HUNDRED OF DECISIONS CITED BY BOTH THE SIDES, AND THEREAFTER T HE BENCH HAS RESEARCHED AND REFERRED SIXTY TWO ORDERS ON THIS PO INT OF LAW. BENCH THEREAFTER DECIDED THE APPEALS. AFTER GOING THROUG H WELL REASONED ORDER IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 123 IN THE LIGHT OF MATERIAL BROUGHT TO OUR NOTICE, WE ARE OF THE VIEW THAT ISSUE IN DISPUTE IN ALL THESE APPEALS IS SQUARELY C OVERED BY ORDER OF THE CO-ORDINATE BENCH IN THE CASE OF SHRI BRIJ BHUSAN S INGAL AND OTHERS (SUPRA), AND HOLD THAT THE LONG TERM CAPITAL GAIN D ECLARED BY THE ASSESSEE AND CLAIMED AS EXEMPT UNDER SECTION 10(38) ARE TO B E TREATED AS GENUINE AND THEY ARE NOT TO BE ASSESSED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 82. AS DISCUSSED EARLIER, GROUNDS OF APPEALS IN ALL THE APPEALS ARE COMMON. THEREFORE, IN VIEW OF THE ABOVE DISCUSSION , WE ALLOW ALL THE GROUNDS OF APPEALS AND DELETE ADDITION MADE BY THE LD.AO AND CONFIRM BY THE LD.CIT(A) UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN EACH APPEAL I .E.ITA NOS.708, 710, 711/CHD/2018; ITA NO.714, 716 AND 717/CHD/2018; ITA NO.718 &719/CHD/2018; AND 705/CHD/2018 83. SIMILARLY, ADDITION MADE BY THE AO BY ESTIMATIN G THE EXPENSES ON COMMISSION ALLEGED TO HAVE BEEN INCURRED BY THE ASS ESSEE FOR ARRANGING SUCH LONG TERM CAPITAL GAIN AND ADDED UNDER SECTION 69C OF THE ACT ON ACCOUNT OF UNEXPLAINED COMMISSION EXPENSES ARE ALSO DELETED IN ALL THESE APPEALS AS A CONSEQUENCE TO THE FINDING ON MA IN ISSUE. 84. IN THE RESULT, ALL APPEALS OF THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 20 TH SEPTEMBER, 2021 AT CHANDIGARH. SD/- SD/- N.K. SAINI (VICE-PRESIDENT) (RAJPAL YADAV) (VICE-PRESIDENT CHANDIGARH; DATED 20/09/2021 IN THE CASES OF SHRI SANJAY SINGHAL AND OTHERS VS. DCIT, CHANDIGARH (9 APPEALS) 124 !'#$ %&#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$# % / CONCERNED CIT 4. % ( ) / THE CIT(A) 5. ()* !++ , / DR, ITAT, 6. *,- . / GUARD FILE. () * +(, / BY ORDER, -$/+.(/ $0(, ( DY./ASSTT.REGISTRAR) /, %$'1/ %23,4, / ITAT, CHANDIGARH VK* 1. DATE OF DICTATION- 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. DATE OF DESPATCH OF THE ORDER
Other Referred Cases
-
Laws Referred To
-
Master The Pitch-Deck Game
₹0
1:1 Consultation with family dentist -Your Smile Deserves the Best Care!
₹250
Tax Holiday Secrets for Startups
₹0
Early Retirement Letter
₹0
Assignment of Registered Trademark
Mehul₹500
Budget 2026: 5 Major Personal Tax Changes Every Taxpayer Must Know
Team Counselvise - February 05, 2026
SEBI Resets Mutual Fund Rules: A Structural Shift for Investors
Team Counselvise - March 13, 2026
Transfer Pricing and International Tax Reforms under Finance Bill, 2026: A Practical Overview
Team Counselvise - February 07, 2026