JAYESH SHANTILAL VIRA , MUMBAI V. ACIT-4(1), MUMBAI

ITA 72/MUM/2021

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3548 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 28-01-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL DESH
• Keywords: Bogus purchase; Unexplained cash credit; Unexplained investment; Search and seizure; Principle of natural justice; Cost of acquisition; Accommodation entries; Penny stocks
• Section: 69C; 143(3); 133A; 153A; 14A; 133(6); 143(1); 143(2); 13; 153; 153C; 68; 132; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NOS.72 & 73/M/2021 ASSESSMENT YEARS: 2012-13 & 2013-14 MR. JAYESH SHANTILAL VIRA, 1201, OM CO-OP HSG SOC. LTD., M.B. RAUT ROAD, SHIVAJI PARK, DADAR (W), MUMBAI 400 028 PAN: AACPV7439G VS. ACIT 4(1), 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400020 (APPELLANT) (R ESPONDENT) ITA NOS.79 & 82/M/2021 ASSESSMENT YEARS: 2012-13 & 2013-14 MR. PRATIK JAYESH VIRA, 1301, OM CO-OP HSG SOC. LTD., M.B. RAUT ROAD, SHIVAJI PARK, DADAR (W), MUMBAI 400 028 PAN: ADBPV8590Q VS. ACIT 4(1), 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400020 (APPELLANT) (R ESPONDENT) ITA NOS.80 & 81/M/2021 ASSESSMENT YEARS: 2012-13 & 2013-14 FORAM JAYESH VIRA, 1201, OM CO-OP HSG SOC. LTD., M.B. RAUT ROAD, SHIVAJI PARK, DADAR (W), MUMBAI 400 028 PAN: AACPV7435L VS. ACIT 4(1), 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400020 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NEELKANTH KHANDELWAL, A.R. SHRI NAGIN PARIKH, C.A REVENUE BY : SHRI SUNIL DESHPANDE, D.R. ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 2 DATE OF HEARING : 01.04.2021 DATE OF PRONOUNCEMENT : 08.06.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY THR EE DIFFERENT ASSESSEES AGAINST THE ORDERS DATED 29.12. 2019 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2012-13 & 2013-14. SINCE THE ISSUES INVOLVED ARE COMMON IN ALL THE APP EALS, THESE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAK E OF BREVITY AND CONVENIENCE. FIRST, WE WOULD LIKE TO TAKE ITA N O.72/M/2021 A.Y. 2012-13. 2. THE GROUNDS TAKEN BY THE ASSESSEE IN AY 2012-13 ARE REPRODUCED AS UNDER: 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACT S IN NOT HOLDING THAT THE AO HAS ERRED IN ISSUING NOTICE U/S. 143(2) OF THE ACT WHICH IS BAD IN LAW, ILLEGAL AND NULL AND VOID. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN NOT HOLDING THAT THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 153A OF THE ACT PASSED BY THE AO IS BAD IN LAW, ILLEGAL AND NULL AND VOID. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN NOT HOLDING THAT THE AO ERRED IN PASSING THE ASSESSMENT ORDER IN GROSS VIOL ATION OF PRINCIPLES OF NATURAL JUSTICE. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.5,46,86,294/- AS AN UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT BY TREATING THE CLAIM OF LTCG ON SALE OF SHARES AS NON-GENUINE. 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.16,40,588/- U/S. 69 OF THE ACT ON ACCOUNT OF ALL EGED ACCOMMODATION ENTRY CHARGES IN THE FORM OF COMMISSION PAID. 3. THE ISSUES RAISED IN GROUND NO.1 & 2 ARE AGAINST THE JURISDICTION OF THE AO TO FRAME ASSESSMENT UNDER SE CTION 143(3) READ WITH SECTION 153A OF THE ACT. THE ASSESSEE HA S CHALLENGED BY WAY OF GROUND NO.1 THAT NOTICE ISSUED UNDER SECT ION 143(2) IS ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 3 BAD IN LAW AND CONSEQUENTLY ILLEGAL, NULL AND VOID WHEREAS VIDE GROUND NO.2 THE ASSESSEE HAS CHALLENGED THAT THE AS SESSMENT FRAMED IS BAD IN LAW. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED R ETURN OF INCOME ON 30.07.2012 DECLARING AN INCOME OF RS.18,7 9,100/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . THEREAFTER, A SEARCH ACTION UNDER SECTION 132 OF TH E ACT WAS CONDUCTED ON 06.10.2017 ON M/S SUNSHINE GROUP, M/S . SABARI DEVELOPER LLP AND M/S. EVERGREEN ENTERPRISES AND VA RIOUS OTHER ENTITIES COVERING THEIR OFFICES, BRANCHES AND RESIDENCES OF THE MAIN PERSONS. SIMULTANEOUSLY, SURVEY UNDER SEC TION 133A OF THE ACT WAS ALSO CONDUCTED ON VARIOUS OTHER ENTI TIES. THE SEARCH WAS ALSO EXTENDED TO COVER THE DIRECTORS OF THE GROUP. DURING THE COURSE OF SEARCH, THE SEARCH TEAM FOUND EVIDENCES OF ACCOMMODATION ENTRIES IN THE FORM OF UNSECURED LOAN , BOGUS PURCHASES AND BOGUS LONG TERM CAPITAL GAIN ON PENNY STOCKS. THE SEARCH TEAM OBSERVED THAT NO SUNSHINE GROUP HAS TAKEN HUGE UNSECURED LOANS FROM SHELL AND BOGUS COMPANIES WHICH WERE NOT DOING ANY BUSINESS AND WERE BEING MANAGED BY KOLKATA BASED ENTRY PROVIDERS SUCH AS JAGDISH PUROH IT, PRAVEEN AGARWAL, PANKAJ AGARWAL AND RAJKUMAR THARAD ETC. I N THE SAID SEARCH SHRI JAY SHANTILAL VEERA WAS ALSO COVERED UN DER SECTION 132 OF THE ACT. POST SEARCH, NOTICE UNDER SECTION 153A OF THE ACT HAS BEEN ISSUED ON 11.01.2019 WHICH WAS DULY SE RVED UPON THE ASSESSEE AND COMPLIED WITH BY FILING RETURN OF INCOME ON 09.02.2019 DECLARING TOTAL INCOME AT RS.18,17,100/- . NOTICE UNDER SECTION 143(2) WAS ALSO ISSUED ON 12.02.2019 AND DULY SERVED UPON THE ASSESSEE. THE AO FINALLY FRAMED TH E ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 1 53A OF THE ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 4 ACT ASSESSING THE TOTAL INCOME AT RS.4,10,28,240/- AS AGAINST THE RETURN OF INCOME OF RS.18,79,100/- BY MAKING TW O ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH CREDITS UNDER SECTIO N 68 OF RS.3,80,08,867/- AND UNEXPLAINED CASH CREDIT UNDER SECTION 69C OF RS.11,40,266/-. 5. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE US THAT THE ASSESSMENT IN THIS CASE HAS ATTAINED FINALITY ON TH E DATE OF SEARCH AS THE ASSESSMENT RELATED TO A.Y. 2012-13 WH EREAS THE SEARCH WAS CONDUCTED ON 06.10.2017 AND THEREFORE TH E ASSESSMENT WAS UNABATED ON THE DATE OF SEARCH. THE LD. A.R. SUBMITTED THAT IN THE CASE OF UNABATED ASSESSMENT O N THE DATE OF SEARCH, ADDITION CAN ONLY BE MADE IN THE ASSESSM ENT FRAMED UNDER SECTION 143(3) READ WITH SECTION 153A OF THE ACT , IF THERE IS AN INCRIMINATING MATERIAL FOUND DURING THE COURS E OF SEARCH AND NOT OTHERWISE. IN THE PRESENT CASE THE LD. A.R . SUBMITTED THAT DURING THE COURSE OF SEARCH, NO INCRIMINATING MATERIAL WAS FOUND WITH REGARD TO THE PURCHASE AND SALE OF SHARE S MADE BY THE ASSESSEE AND THEREFORE ADDITION MADE UNDER SECT ION 68 & 69C ARE WITHOUT JURISDICTION AND MAY KINDLY BE DELE TED ON THE JURISDICTIONAL ONLY. THE LD. A.R. WHILE TAKING US THROUGH THE PROVISIONS OF SECTION 153A OF THE ACT SUBMITTED THA T THE PROVISIONS AS REGARDS SEARCH PROCEEDINGS ARE CONTAI NED IN SECTION 153A AND IT IS A COMPLETE CODE ITSELF AS TH E PROVISIONS OF SECTION 153A PROVIDE THAT THE POWERS OF AO TO FRAME ASSESSMENT IN THE CASE OF UNABATED ASSESSMENT ARE VERY LIMITED AND ANY ADDITIONS IN THE UNABATED ASSESSMENT YEAR CAN ONLY BE BASED UPON THE INCRIMINATING MATERIAL FOUND DURING THE CO URSE OF SEARCH. THE LD. A.R. SUBMITTED THAT IN THE PRESENT CASE THE ASSESSMENT HAD ALREADY ATTAINED FINALITY ON THE DAT E OF SEARCH ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 5 AND THEREFORE NO ADDITION COULD HAVE BEEN MADE IN A BSENCE OF ANY INCRIMINATING MATERIAL. THE LD. A.R. IN DEFENC E OF HIS ARGUMENT HEAVILY RELIED ON THE DECISION IN THE CASE OF MS. KALPANA RUIA & ORS. ITA NO.6519/M/2019 & ORS. IN WH ICH AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE COORDINATE BENCH IN FAVOUR OF THE ASSESSEE. 6. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT THE ASSESSEE THUS FOUND TO BE ENGAGED IN THE PURCHASE A ND SALE OF PENNY STOCKS AND HAVE MADE BOGUS GAIN ON THE SALE A ND PURCHASE OF THE SAID SHARES. THEREFORE, THE ARGUME NTS OF THE LD. A.R. ARE THAT SUCH ADDITION WITHOUT SEIZED MATERIA LS IS WITHOUT JURISDICTION IS WRONG AND AGAINST THE PROVISIONS OF LAW. THE LD. D.R. SUBMITTED THAT IN CASE THE POWERS OF THE AO AR E CONFINED TO THE ADDITION BASED ON THE INCRIMINATING MATERIAL T HEN THERE IS NO POINT IN MAKING SEARCH EVEN IN THOSE ASSESSMENT YEARS WHICH HAVE ATTAINED FINALITY ON THE DATE OF SEARCH OTHERW ISE THE PROVISIONS OF SECTION 153A WILL BE RENDERED OTIOSE. THE LD DR THEREFORE PRAYED THAT THE GROUND NO. 1 AND 2 DESERV E TO BE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE UNDISPUTED FACTS ARE THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE FOR THE INSTANT YEAR ON 30.07.2012 DECLARING AN INCOME OF RS.18,79,100/- WHICH WAS PROCESSED UNDER SECTION 14 3(1) OF THE ACT. SEARCH AND SEIZURE ACTION WAS CONDUCTED ON 06 .10.2017 AND THUS ON THE DATE OF SEARCH, THE ASSESSMENT HAS ATTAINED FINALITY AND IS AN UNABATED ASSESSMENT ON THE DATE OF SEARCH. WE FIND MERIT IN THE ARGUMENTS OF THE LD. A.R. THAT IN THE CASE OF ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 6 UNABATED ASSESSMENT YEAR, ADDITION CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE CO URSE OF SEARCH AND NOT ON THE OTHERWISE. IN THE PRESENT CA SE, WE HAVE NOTED THAT NO INCRIMINATING MATERIAL WAS FOUND DURI NG THE COURSE OF SEARCH IN RELATION TO THE PURCHASE AND SA LE OF PENNY STOCKS AND THE AUTHORITIES BELOW HAVE RELIED ON THE GENERAL INVESTIGATION THAT ASSESSEE HAS MADE PURCHASE AND S ALE IN PENNY STOCKS ON THE BASIS OF DOCUMENTS WHICH ARE AL READY ON RECORDS AND MADE HUGE ADDITION OF BOGUS LONG TERM C APITAL GAIN. THE AO HAD DISCUSSED THE MODUS OPERANDI OF THE PENN Y STOCK COMPANIES AND OPERATORS INVOLVED IN CARRYING OUT THE PURCHASE AND SALE OF SHARES. HOWEVER, NOWHERE THE AO HAS RE FERRED TO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH IN RELATION TO PURCHASE AND SALE OF SHARES. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL SMT. KALPANA MUKESH RUIA VS. DCIT ITA NO.6519/M/2019 A.Y. 2012-13 & ORS. ORDER DATED 31.1 2.2020 WHEREIN AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. T HE OPERATIVE PART IS REPRODUCED AS UNDER: 43. IN OUR CONSIDERED OPINION, THE HONOURABLE JURI SDICTIONAL HIGH COURT HAS NEVER MENTIONED THAT IT IS ONLY ASSESSMENT WHICH HAS BEEN COMPLETED UNDER SECTION 143(3) THAT ADDITION UNDER SECTION 153(A) CANNOT BE DONE WITHOUT REFERENCE TO INCRIMINATING SEIZED MATERIAL HONOURABLE JURISDICTI ONAL HIGH COURT HAS CLEARLY MENTIONED THAT IT IS THOSE ASSESSMENTS WHICH ARE UN ABATED, THAT IS NOT PENDING, TO WHICH THE ABOVE SAID RATIO WILL APPLY. ASSESSMENTS WHICH ARE NOT PENDING ARE NOT ONLY THOSE WHICH HAVE BEEN COMPLETED UNDER SECTION 143(3) BUT ALSO THOSE FOR WHICH THE TIME FOR ISSUING NOTICE UNDER SECTION 143 (2) HAVE ALREADY ELAPSED. IN OTHER WORDS THE REFERENCES IS TO THOSE ASSESSMENTS IN WHOSE CASE ASSESSMENT UNDER SECTION 143 (3) CANNOT NOW BE DONE. IT IS NOT AT ALL THE CASE OF THE REVENUE THAT IN THE APPEALS WHICH HAVE BEEN CLAIMED AS UNAB ATED HERE THERE WAS TIME FOR ASSESSMENT UNDER SECTION 143(3). IN THIS VIEW OF TH E MATTER, IN OUR CONSIDERED OPINION, THE SUBMISSION OF THE LEARNED COUNSEL OF T HE ASSESSEE SUCCEEDS THAT ADDITION IN THE CASE OF UNABATED ASSESSMENT WITHOUT REFERENCE TO INCRIMINATING SEIZED MATERIAL FOR ASSESSMENT U/S.!53(A) IS NOT SU STAINABLE ON THE TOUCHSTONE OF ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 7 ABOVE SAID HONOURABLE JURISDICTIONAL HIGH COURT DEC ISION. THEREFORE, THE LEARNED CIT APPEALS AND THE LEARNED DEPARTMENTAL REPRESENTATIVE PLEA IN TRYING TO DISTINGUISH THE SAME BY REFERENCE TO HON'BLE DELHI HIGH COURT D ECISION AND HONOURABLE SUPREME COURT DECISION IN THE CASE OF RAJESH JHAVER I (SUPRA) DOESN'T SUCCEED. 44. IT MAY NOT BE OUT OF PLACE HERE TO MENTION THAT IT IS SPECIFICALLY PROVIDED IN SECTION 153A 'THAT ASSESSMENT OR REASSESSMENT IF AN Y RELATING TO ANY RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN THIS SUBSEC TION PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132 A AS THE CASE MAY BE SHALL ABATE.' THIS MAKES IT FURT HER ABUNDANTLY CLEAR THAT ONLY THOSE ASSESSMENTS WHICH ARE PENDING ABATE. HENCE SA NGUINE PROVISIONS OF THE ACT READ WITH HONOURABLE JURISDICTIONAL HIGH COURT DECI SION AS ABOVE MAKE IT ABUNDANTLY CLEAR THAT THE ASSESSMENTS WHICH DO NOT ABATE AND ASSESSMENT AND ADDITION UNDER SECTION 153 A WITHOUT REFERENCE TO I NCRIMINATING SEIZED MATERIAL IS NOT SUSTAINABLE. 45. THE JURISPRUDENCE REGARDING JURISDICTIONAL DEFE CT IN ASSESSMENT UNDER SECTION 153A / 153C WITHOUT REFERENCE TO INCRIMINATING SEIZ ED MATERIAL HAS ALSO BEEN EXPOUNDED BY HONOURABLE SUPREME COURT IN THE CASE O F COMMISSIONER OF INCOME TAX VS. SINGHAD TECHNICAL EDUCATION SOCIETY IN CIVI L APPEAL NO. 11080 OF 2017 AND OTHERS. IN THIS REGARD THE HONOURABLE SUPREME COURT IN PARAGRAPH 18 OF THE SAID ORDER OBSERVED THAT :- IN THIS BEHALF IT WAS NOTED BY THE ITAT THAT AS PER PROVISIONS OF SECTION 153C OF THE ACT,, INCRIMINATING MATERIAL WHICH WAS SEIZE D HAD TO PERTAINS TO ASSESSMENT YEARS IN QUESTION AND IT IS AN UNDISPUTE D FACT THAT THE DOCUMENTS WHICH WERE SEIZED DID NOT ESTABLISH ANY C ORRELATION, DOCUMENT - WISE, WITH THESE FOR ASSESSMENT YEARS SINCE THIS RE QUIREMENT UNDER SECTION 153C OF THE ACT IS ESSENTIAL FOR ASSESSMENT UNDER T HE PROVISION IT BECOMES A JURISDICTIONAL DEFECT. WE FIND THIS REASONING TO BE LOGICAL AND VALID HAVING REGARD TO THE PROVISIONS OF SECTION 153C OF THE ACT .' 46. WE ALSO NOTE THAT THE CO-ORDINATE BENCH OF IT A T IN THE CASE OF SHRI VIJAYRATTAN BALKRISHAN MITTAL (SUPRA) IN SIMILAR SITUATION HELD THAT, DEHORSE INCRIMINATING MATERIAL ASSESSMENT U/S. 153A IS NOT SUSTAINABLE IN THE CASE OF UNABATED ASSESSMENT. WE MAY GAINFULLY REFER TO THE SAID DECI SION AS UNDER: 44. AFTER HEARING BOTH THE PARTIES AND PERUSI NG THE FACTS ON RECORD, WE OBSERVED THAT UNDISPUTABLY THE ASSESSMENT IN THE IN STANT YEAR HAS NOT ABATED ON THE DATE OF SEARCH. WE FURTHER FIND THAT THE EVIDENCES WERE GATHERED AFTER ISSUING NOTICE UNDER SECTION 133(6) THAT ASSESSEE HAS EARNED OUT SYNCHRONIZED TRADES FOR OBTAINING BOGUS LTCG. I N OUR OPINION, THE SAID INFORMATION/DATA IS COLLECTED AFTER THE DATE OF SEA RCH AND DOES NOT CONSTITUTE INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH. KEEPING IN VIEW THE SAID FACTS AND CIRCUMST ANCES, WE ARE OF THE CONSIDERED VIEW THAT ADDITION TO THE INCOME OF THE ASSESSEE CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING RECORD FOUND DUR ING THE COURSE OF SEARCH. IN THE PRESENT CASE, THERE IS NO SUCH INCRI MINATING MATERIAL AND THEREFORE, THE AO HAS NO JURISDICTION TO MAKE ADDIT ION IN THE UNABATED ASSESSMENT. THE CASE OF THE ASSESSEE IS SQUARELY CO VERED BY THE DECISION OF HON'BLE BOMBAY HIGH COURT DECISION IN THE CASE OF C ONTINENTAL WAREHOUSING ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 8 CORPORATION (NHAVA SHEVA) LTD. (SUPRA), WHEREIN THE HON'BLE BOMBAY HIGH COURT HELD AS UNDER. 'A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE ID. CIT(A) WAS JUSTIFIED IN DELETING THE A DDITION OF RS.3,91,55,000/-UNDER SECTION 68 OF THE ACT IN RESP ECT OF SHARE APPLICATION MONEY AND ADDITION OF RS. 11,24,964/- U NDER SECTION 14A MADE BY THE ASSESSING OFFICER, AS IT WAS NOT BASED ON INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. D) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS.3,91,55,000/- UNDER SECTION 68 OF THE ACT IN RES PECT OF SHARE APPLICATION MONEY AND ADDITION OF RS. 11,24,964/- U NDER SECTION 14A MADE BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THAT THE DECISION OF CONTINENTAL WAREHOUSING CORPORATION & T HE DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS HAVE NOT BEE N ACCEPTED BY THE DEPARTMENT AND AN SLP HAS BEEN FILED IN THE SUPREME COURT IN BOTH THE CASES DECIDED BY THE HIGH COURT I.E. CONTINENTA L WAREHOUSING CORPORATION AS WELL AS ALL CARGO GLOBAL LOGISTICS V IDE APPEAL CIVIL 8546 OF 2015 AND SLP CIVIL 5254-5265 OF 2016 RESPEC TIVELY.' 45. SINCE, THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, WE THEREFORE RESPECTFULLY FOLLOWING THE RAT IO LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE ABOVE DECISION, SE T ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. RE SULTANTLY, THE APPEAL OF THE ASSESSEE ON JURISDICTIONAL ISSUE IS ALLOWED. 47. AS REGARDS THE ISSUE OF SEIZED MATERIAL IT IS C LEAR THAT IN THE APPEALS WHICH HAVE REMAINED UNABATED THE ADDITION IS WITHOUT REFERENCE TO ANY SEIZED MATERIAL. THE MATERIALS REFERRED ARE ONLY THE STATEMENT OBTAINED OF THE ASSESSEE UNDER SECTION 132 (4). THESE HAVE BEEN DULY RETRACTED. HENCE WITH OUT CORROBORATIVE MATERIAL ADDITION ONLY BASED UPON THE RETRACTED STATEMENT IS NOT SUSTAINABLE. FOR THIS PROPOSITION FOLLOWING CASE LAWS ARE GERMANE: CIT VS. SUNIL AGARWAL (379 ITR 367) CIT VS. NARESH KUMAR AGARWAL (369 ITR 171) DCIT VS. NARENDRA GARG & ASHOK GARG (AOP) (IT A NO. 1531 & 1532 OF 2007 DATED 28.7.2016) DCIT VS. MARATHON FISCAL PVT. LTD. (ITA NO. 5 783 & 5784/MUM/2017 DATED 28.8.2019) TRIBHUVANDAS BHIINJI ZAVERI (ITA 2250 & 2251/MU M/2013 DT. 4.11.2015) 48. IT MAY ALSO BE PERTINENT TO NOTE HERE THAT NO S EIZED MATERIAL SAID TO BE INCRIMINATING WAS PRODUCED BEFORE US. IN LIGHT OF A BOVE SAID CASE LAWS THE OBSERVATION OF LEARNED CIT(A) THAT INCRIMINATING MA TERIAL NEED NOT BE SPECIFIC HAS NO LEGS TO STAND. THIS VERY OBSERVATION BY THE LEAR NED CIT(A) ITSELF IS AN ADMISSION THAT NO SPECIFIC INCRIMINATING MATERIAL HAS BEEN SE IZED AND REFERRED IN THE ASSESSMENT ORDER HENCE, IN ALL CASES OF UNABATED AS SESSMENT THE ASSESSMENT FAILS ON JURISDICTIONAL DEFECT. THUS, ITA NO. 6519/MUM/20 19, 6520/MUM/2019, ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 9 6515/MUM/2019, 6516/MUM/2019, 6513/MUM/2019 & 6514/ MUM/2019 ARE DISMISSED ON ACCOUNT OF JURISDICTIONAL DEFECT. 49. AS REGARDS THE ISSUE OF ADDITIONS ON MERITS FOR THE BOGUS LONG-TERM CAPITAL GAIN, WE NOTE THAT THE SAME IS BASED UPON THE MODUS OPERA NDI OF EARNING BOGUS LONG- TERM CAPITAL GAIN IN GENERAL MENTIONED BY THE ASSES SING OFFICER. IT IS FURTHER MORE BASED UPON THE STATEMENTS OBTAINED UPON SURVEY. FUR THERMORE IT IS BASED UPON ASSESSING OFFICER'S ANALYSIS OF THE IMPUGNED COMPAN IES FINANCIALS WHEREIN THE ASSESSING OFFICER IS OF THE OPINION THAT THE. INCRE ASE IN VALUE IS UNJUSTIFIED. FURTHERMORE ASSESSING OFFICER HAS REFERRED TO GENER AL SEBI ACTION IN CASE OF BOGUS LONG-TERM ENTRY OPERATORS. HOWEVER NONE OF THE BROK ERS OR THE PERSONS OR THE COMPANIES DEALT IN THESE APPEALS HAVE BEEN REFERRED IN THE ABOVE SAID SEBI ENQUIRY NOTED BY THE AO IN HIS ORDER. AS REGARDS THE MERITS OF ADDITIONS BASED UPON THE STATEMENT OBTAINED FROM SURVEY FROM 3RD PARTIES THE SAME IS NOT AT ALL SUSTAINABLE WITHOUT ANY CORROBORATIVE MATERIAL. THIS POSITION W AS EXPOUNDED BY THE HONOURABLE SUPREME COURT IN THE CASE OF S. KADER KH AN (SUPRA). THAT THERE IS NO MATERIAL INCREMENTING AVAILABLE IN THIS REGARD IS C LEARLY EVIDENT FROM THE OBSERVATION OF THE ASSESSING OFFICER IN THE ORDER I TSELF. THE ASSESSING OFFICER MENTIONS THAT WHAT IS REAL WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS AT ANY PLACE. HE MENTIONS IN THE ASSESSMENT ORDER THAT NO BOOK EN TRIES TO THE REAL TRANSACTIONS EITHER IN THE BOOKS OF ASSESSEE OR IN THE BOOKS OF THIS ENTRY OPERATORS ARE THERE. THIS CLEARLY SIGNIFIES THAT ASSESSING OFFICER IS NO T REFERRING TO ANY INCRIMINATING MATERIAL SEIZED. AS REGARDS THE OBSERVATION OF THE ASSESSING OFFICER THAT THE SHARE BROKER HAS ACCEPTED THAT HE WAS ACTING ON THE ADVIC E OF SHRI PRAKASH MODI ON BEHALF OF THE ASSESSEE, AGAIN THERE IS NO INCRIMINA TING SEIZED RECORD IN THIS REGARD. THE SAME REMAINS SOLELY STATEMENT UPON SURVEY WHICH IS NOT A CONCLUSIVE EVIDENCE OF ADDITION OF UNDISCLOSED INCOME WITHOUT CORROBORA TIVE MATERIAL. 8. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISI ON OF THE CO- ORDINATE BENCH OF THE TRIBUNAL WHICH HAS BEEN PASSE D AFTER FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION (NHA VA SHEVA) LTD. (2015) 374 ITR 645 (BOM) AND VARIOUS OTHER DEC ISIONS, HOLD THAT THE ADDITION MADE BY THE AO UNDER SECTION 68 & 69 ARE WITHOUT JURISDICTION AND ARE DIRECTED TO BE DELETED ON THE JURISDICTIONAL ISSUE. 9. THE ISSUES RAISED IN GROUND NO.3 & 4 ARE ON MERI T CHALLENGING THE ORDER OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.3,80,08,867/- BY LD. CIT(A) AS MADE BY THE AO UN DER SECTION ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 10 68 AS UNEXPLAINED CASH CREDIT BY TREATING THE LONG TERM CAPITAL GAIN ON SALE OF SHARES AS NON GENUINE. 10. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAS CL AIMED THE LONG TERM CAPITAL GAIN ON SALE OF SHARES OF TWO COM PANIES AS EXEMPT UNDER SECTION 10(38). THE DETAILS WHEREOF I S GIVEN AS UNDER: NA ME OF SCRIPT NO. OF EQUITY SHARES DATE OF ACQUISITION COST OF ACQUISITIO N YEAR OF SALE SALE CONSIDERATIO N GAIN/LOSS BLUE CIRCLE SERVICES LTD. 3,45,961 06.09.2010 5,18.942 FY 2011-12 2,58,07,807 2,52,88,865 M/S GEMSTONE INVESTMENT LTD. 14,00,000 30.10.2009 33,60,000 FY 2011-12 1,22,01,060 88,41,060 ACCORDING TO THE REVENUE THE SAID TRANSACTIONS ARE SUSPICIOUS AND BOGUS WHICH WAS REVEALED DURING THE COURSE OF SEARCH AND SEIZURE ACTION ON THE ASSESSEE. THE SEAR CH TEAM FOUND THAT THESE TWO COMPANIES M/S. BLUE CIRCLE SER VICES LTD. AND M/S. GEMSTONE INVESTMENT LTD. WHICH HAVE LISTED ON BOMBAY STOCK EXCHANGE WERE USED FOR PROVIDING ACCOMMODATION ENTRIES OF LONG TERM CAPITAL GAIN/ SH ORT TERM CAPITAL GAIN. OUT OF THESE TWO COMPANIES M/S. BLUE CIRCLE SERVICES LTD. IS INCLUDED IN THE LIST OF 84 COMPANI ES WHOSE SHARE PRICES HAVE BEEN MANIPULATED AND RIGGED BY A SYNDIC ATE OF OPERATORS. THE AO DISCUSSED THE MODUS OPERANDI OF THESE COMPANIES IN GREAT DETAIL IN THE ASSESSMENT ORDER A ND REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE SAID SHORT TERM CAPITAL GAIN SHOULD NOT BE ADDED TO THE INCOME OF THE ASSES SEE WHICH WAS REPLIED BY THE ASSESSEE VIDE WRITTEN SUBMISSION DATED ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 11 09.12.2019. THE ASSESSEE ALSO FILED THE PROOF OF P URCHASE AND SALE OF SHARES INCLUDING THE D-MAT ACCOUNT, CONTRAC T NOTES ETC. AND ALSO THE DETAILS OF BROKERS THROUGH WHOM THESE TRANSACTIONS WERE CARRIED OUT. THE AO FINALLY REJECTED THE CLAIM OF THE ASSESSEE UNDER SECTION 10(38) OF THE ACT AND ADDED THE ENTIRE SALE CONSIDERATION REALISED FROM SALE OF SHARES OF THESE TWO COMPANIES VIZ. RS.2,58,07,807/- AS SALE OF SHARES O F M/S. BLUE CIRCLE SERVICES LTD. AND RS.1,22,01,060/- OF M/S. G EMSTONE INVESTMENT LTD. AND ADDED THE SAME UNDER SECTION 68 OF THE ACT AS UNEXPLAINED INVESTMENT IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) READ WITH SECTION 153A OF THE ACT. 11. IN THE APPELLATE PROCEEDINGS ALSO THE LD. CIT(A ) AFFIRMED THE ORDER OF AO BY HOLDING THAT THE LONG TERM CAPIT AL GAIN AS CLAIMED EXEMPT UNDER SECTION 10(38) OF THE ACT ON S ALE OF SHARES OF TWO COMPANIES AS STATED HEREINABOVE ARE BOGUS AN D FICTITIOUS. THE LD CIT(A) ALSO RELIED HEAVILY ON THE GENERAL IN VESTIGATION DONE BY SEARCH TEAM IN KOLKATA. 12. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE ASSESSEE HAS EARNED CAP ITAL GAIN OF RS.3,41,29,925/- BY SELLING SHARES OF TWO COMPANIES ON A TOTAL SALE CONSIDERATION OF RS.3,80,08,867/-. THE ASSESS EE HAS CLAIMED THE SAID GAIN ON THE SALE OF THESE TWO SCRI PTS AS EXEMPT UNDER SECTION 10(38) OF THE ACT. WE NOTE THAT ASSE SSEE HAS PURCHASED THESE SHARES THROUGH BOMBAY STOCK EXCHANG E AND THE PAYMENT WAS MADE THROUGH ACCOUNT PAYEE CHEQUES AND THE PURCHASE OF SHARES IS DULY EVIDENCED BY CONTRACT NO TES AND RECORDED IN D-MAT ACCOUNT. SIMILARLY, THE SALE OF SHARES WAS ALSO MADE THROUGH REGISTERED BROKER OF BOMBAY STOCK EXCHANGE. ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 12 WE ALSO NOTE THAT ONE OF THE TWO SCRIPTS NAMELY M/S . BLUE CIRCLE SERVICES LTD. ON WHICH A CAPITAL GAIN OF RS.2,52,88 ,865/- WAS EARNED HAS BEEN HELD TO BE NOT A PENNY STOCK IN THE CASE OF SHRI SUBRATA BENERJEE VS. ACIT ITA NO.2275/KOL/2018 & OR S. THE OPERATIVE PART IS REPRODUCED AS UNDER: 5. COMING TO LATTER TWO APPEAL(S) FILED AT THE REV ENUE'S BEHEST (SUPRA), THERE IS NO DISPUTE THAT THE ASSESSING OFFICER HAD ADOPTED IDEN TICAL REASONING IN DISALLOWING THE LOSSES IN ISSUE TO THE TUNE OF RS.78,25,188/- A ND RS.1,44,20,606/-; RESPECTIVELY AFTER ALLEGING HOLDING SAME TO BE BOGUS ENTRIES. TH E CIT(A)'S FINDINGS REVERSING THE SAID IDENTICAL ADDITION READ AS FOLLOWS: 'I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHORIZE D REPRESENTATIVE OF (THE APPELLANT AS WELL AS THE ASSESSMENT ORDER FRAMED IN THE LIGHT OF THE MATERIALS AVAILABLE ON RECORD BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT, PROCEEDINGS. THE FACTS OF THE CASE ARE THAT THE AO IN TREATING THE SHARE TRADING LOSS OF SUM OF RS78,25,188/- AS B OGUS IN NATURE. THE APPELLANT IS A PUBLIC LIMITED COMPANY ENGAGED IN TH E BUSINESS OF NON- BANKING FINANCIAL ACTIVITIES. THE APPELLANT FOR THE YEAR UNDER CONSIDERATION FILED ITS RETURN OF INCOME DECLARING INCOME OF RS 3 0,26,790/-. THE SAID INCOME WAS DECLARED AFTER CLAIMING LOSS ON PURCHASE AND SALE OF EQUITY SHARES OF RS 78,25,188/-. THE SAID LOSS WAS INCURRE D FOR 17,000 EQUITY SHARES OF BLUE CIRCLE SERVICE LTD OF RS 9,60,171/- AND FOR 48,550 EQUITY SHARES OF TUNI TEXTILES LTD OF RS 68,65.017/-. THE AO IN THE ASSESSMENT ORDER ALLEGES THAT, HE HAS RECEIVED SOME INFORMATION FROM THE INVESTIGATION WING, KOLKATA AB OUT THE APPELLANT THAT IT HAS CLAIMED BOGUS/FICTITIOUS LOSS BY TRADING IN SCR IPTS NAMELY 'BLUE CIRCLE SERVICES LTD' & 'TUNI TEXTILE LTD'. FINALLY, THE AO RELYING ENTIRELY UPON THE INFORMATION OF THE INVESTIGATION WING, KOLKATA HELD THAT LOSS INCURRED BY APPELLANT COMPANY BY TRADING IN SCRIPTS OF BLUE CIR CLE SERVICES LIMITED AMOUNTING TO RS9,60,171/- AND TUNI TEXTILE MILLS LT D AMOUNTING TO RS 68,65,0177- ARE FICTITIOUS LOSS. THE AR HAS SUBMITTED THAT DURING THE COURSE OF SCRU TINY ASSESSMENT PROCEEDINGS THE ASSESSEE'S LETTER DATED 15.03.2016 AND 18.03.2016 FILED IN THE OFFICE OF AO AND THE SAID LETTERS INCLUDED COMP LETE DETAILS OF PURCHASE, SALE, PAYMENTS, MOVEMENT OF SHARES, CONTRACT NOTICE S RECEIVED FROM RESPECTIVE STOCK EXCHANGE LOSS/GAINS ETC. IN RESPEC T EACH AND EVERY SHARES WHICH WERE TRADED BY THE APPELLANT DURING THE RELEV ANT YEAR, THE DOCUMENTS, EVIDENCES FILED BY THE APPELLANT WERE NO T FOUND TO BE BOGUS OR FALSE, THERE WAS NO IRREGULARITY OR DISCREPANCY POI NTED OUT BY THE AO IN RESPECT OF DETAILS FILED BY THE APPELLANT DURING TH E RELEVANT CLAIM THAT THE SHARE LOSS IS A GENUINE LOSS. THE AR FURTHER HAS SU BMITTED THAT IN THE ASSESSMENT ORDER; BESIDES RELYING UPON THE GENERAL REPORT OF THE INVESTIGATION WING, KOLKATA. THE AO HAS NOT BROUGHT ON RECORD ANY COGENT, RELEVANT EVIDENCES AND FACTS WHICH CAN PROVE THAT I N REALITY THERE WAS NO ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 13 PURCHASE & SALE OF SHARES BY THE APPELLANT OR THE L OSS INCURRED BY THE APPELLANT WAS A BOGUS LOSS, THE AR HAS FURTHER SUBM ITTED THAT THE APPELLANTS BEING A REGISTERED NBFC, ITS MAIN INCOME IS ONLY FROM SHARE TRADING AND INTEREST INCOME, PURCHASE AND SALE OF S HARES IS THE REGULAR BUSINESS ACTIVITY OF THE APPELLANT IT IS NOT THAT T HE APPELLANT HAS ONLY DEALT IN SHARES OF THESE TWO COMPANIES, THE APPELLANT HAS TR ADED IN NUMBER OF SCRIPTS WHICH HAS RESULTED IN PROFITS AS WELL AS LO SSES ALSO, SO, IT'S A REGULAR BUSINESS ACTIVITY OF THE APPELLANT COMPANY, THE APP ELLANT FILED COMPLETE DETAILS OF ENTIRE SHARE TRANSACTION INCLUDING THOSE MENTIONED HEREIN ABOVE BEFORE THE AO, SUCH DETAILS INCLUDED STATEMENT OF Q UANTITY OF SHARES PURCHASED AND SOLD OF EACH SCRIP, SCRIP WISE PROFIT AND LOSS EARNED DURING THE RELEVANT YEAR, DETAILS OF PURCHASE AND SALE OF TUNI TEXTILE MILLS LTD AND BLUE CIRCLE SERVICES LTD ALONG WITH CONTRACT NOTES RECEIVED FROM RESPECTIVE STOCK EXCHANGE INCLUDING SETTLEMENT NUMBER, DEMAT S TATEMENT (ISSUED BY THE DEPOSITORY PARTICIPANT) SHOWING INWARD AND OUTW ARD .MOVEMENT IN SUCH SCRIPTS, COPIES OF BANK STATEMENTS WERE ALSO FURNIS HED TO SUBSTANTIATE THE PAYMENTS MADE AND PAYMENTS RECEIVED IN RESPECT OF T RADING OF SHARES OF THESE SCRIPTS AND AN EXPLANATION WAS ALSO FILED VID E LETTER DATED 15,03,2016 EXPLAINING AS TO WHY NO DISALLOWANCE OF SHARE LOSS SHOULD BE MADE BY THE AO, THE AR FURTHER SUBMITTED THAT THE SCRIPTS WERE NOT SUSPENDED BY SEBI EITHER AT THE TIME OF TRANSACTION ENTERED BY THE AP PELLANT OR THEREAFTER. THERE IS NO DENIAL OF ANY OF THE TRANSACTION OF EIT HER PURCHASE OR SALE BY THE STOCK EXCHANGES WHERE THE TRANSACTIONS WERE ENTERED UPON. THE SHARES WERE PURCHASED AND SOLD AT PREVAILING MARKET RATE T HROUGH THE STOCK EXCHANGE AND THE ENTIRE TRANSACTIONS WERE ROUTED TH ROUGH PROPER BANKING CHANNEL. THE SHARES WERE DULY REFLECTED IN THE DEMA T ACCOUNT OF THE APPELLANT COMPANY. THE AR OF THE APPELLATE ALSO PLA CED HIS RELIANCE ON VARIOUS JUDGEMENTS AS MENTIONED ABOVE IN HIS SUBMIS SIONS, I HAVE GONE THROUGH THE SUBMISSIONS ALONG WITH DOCU MENT AS FILED BY THE AR DURING THE APPELLATE PROCEEDING. I FIND THAT ALL TH E TRANSACTIONS WERE EXECUTED IN THE RELEVANT YEAR, THE PURCHASE AND SAL E OF SHARES WERE MADE THROUGH ONLINE TRADING SYSTEM. I FIND FROM THE PERU SAL OF PAPER BOOK FILED ALONG WITH WRITTEN SUBMISSIONS THAT THE CONTRACT NO TES WERE RECEIVED FROM RESPECTIVE STOCK EXCHANGE IN SUPPORT OF PURCHASE AN D SALE OF SUCH SHARES, SIMILARLY THE DEMAT ACCOUNT AND BANK STATEMENT OF T HE APPELLANT COMPANY PLACED IN THE PAPER BOOK REFLECT ALL THE TRANSACTIO NS OF THE APPELLANT. I FIND THAT FROM THE MATERIALS AVAILABLE IN PAPER BOOK, IT CAN SAFELY BE CONCLUDED THAT THE TRANSACTIONS WERE COMPLETE IN TERMS OF DOC UMENTATION AND THERE WAS NO DEFECT IN THE PAPERS SUBMITTED BY THE APPELL ANT IN SUPPORT OF THE TRANSACTIONS. THE APPELLANT HAS PROVED THE TRANSACT ION ON THE BASIS OF DOCUMENTS AND THEREFORE THE GENERAL REPORT OF THE I NVESTIGATION WING WITHOUT CONSIDERING THE POSITIVE EVIDENCES AS WELL AS WITHOUT ESTABLISHING ANY NEXUS WITH ANY OF THE OPERATOR WITH THE APPELLA NT COMPANY SHOULD BE HELD TO BE INVALID. NO INVESTIGATION HAS BEEN CARRI ED OUT BY THE AO OR BY THE INVESTIGATION WING TO BRING ON RECORD ANY MATERIAL TO DISBELIEVE THE CLAIM OF THE APPELLANT. THE AO OR THE INVESTIGATION WING HAS MADE ACADEMIC DISCUSSION REGARDING THE PROBABILITY OF THE APPELLA NT HAVING ENTERED INTO TRANSACTIONS IN COLLUSION WITH OPERATOR OF SCRIPTS WITH A VIEW TO CLAIM LOSS IN ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 14 SHARE TRADING BUSINESS AND THEREBY REDUCING THE TAX ABLE INCOME AND TAX LIABILITY. IN FACT THERE IS NO EVIDENCE THAT THE PR ICES OF THE SCRIPTS HAVE BEEN DEFLATED BY THE APPELLATE TO TAKE ADVANTAGE TO AVOI D TAX. THE AO HAS NOT DOUBTED THE PURCHASE OR SALE PRICE PREVAILING AT TH E MATERIAL POINT OF TIME. IT IS A SETTLED LAW BY NOW THAT NO ADDITION OR DISA LLOWANCE SHOULD BE MADE OR SUSTAINED ON CONJECTURES, SPECULATION AND SUSPIC ION, HOW HIGH OR STRONG THEY MAY BE, BECAUSE SUSPICION AND SURMISES WITHOUT ANY EVIDENCE CANNOT TAKE THE PLACE OF PROOF. I FIND THAT THE AO DID NOT DISCHARGE THE BURDEN WHICH HAD SHIFTED ON HIM AND HAD JUST MECHANICALLY ADHERED TO DISALLOW THE LOSS ON THE BASIS OF GENERAL REPORT OF THE INVESTIG ATION WING, CLAIMED BY THE APPELLANT WITHOUT REBUTTING ANY OF THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICER HAD NOT DEALT WITH THE SPECIFIC F ACTS OF THE CASE. MERELY MAKING CERTAIN OBSERVATIONS ON THE BASIS OF ASSUMPT IONS AND DRAWING AN ADVERSE INFERENCE THEREON, WITHOUT ANY ACCEPTABLE E VIDENCE ON RECORD. I FIND THAT IN THE PRESENT CASE INDULGED IN SUSPICION S, CONJECTURES AND SURMISES AND ACTED WITHOUT ANY EVIDENCE OR UPON A V IEW OF THE FACTS WHICH COULD NOT REASONABLY BE ENTERTAINED OR THE FACTS FO UND WERE SUCH THAT NO PERSON ACTING JUDICIALLY AND PROPERLY INSTRUCTED AS TO THE RELEVANT LAW COULD HAVE FOUND, OR THE FINDING WAS, IN OTHER WORDS, IS ENTITLED TO SUSTAIN. I FIND THAT THE AO DISALLOWED THE LOSS OF RS.78,25, 188/- SUFFERED BY THE ASSESSES COMPANY SOLELY ON THE BASIS OF THE INFORMA TION OF THE INVESTIGATION WING WITHOUT MAKING ANY INDEPENDENT ENQUIRY IN RESP ECT OF THE ASSESSEE COMPANY'S TRANSACTIONS OF PURCHASE AND SALE OF SHAR ES OF THE TWO COMPANIES VIZ. BLUE CIRCLE AND TUNI TEXTILES. THE A O DISREGARDED THE SUBMISSIONS OF THE ASSESSEE COMPANY AND ALL LEGAL E VIDENCES PRODUCED / FURNISHED BY IT IN RELATION TO THE AFORESAID LOSS I N THE TRANSACTIONS OF PURCHASE AND SALE OF THE SHARES OF THE TWO COMPANIE S. THE ASSESSING OFFICER DID NOT BRING ON RECORD ANY LEGAL EVIDENCE OR MATER IAL ON RECORD TO HOLD THAT THE APPELLANT'S TRANSACTIONS RELATING TO PURCHASE A ND SALE OF SHARES OF THE AFORESAID TWO COMPANIES WERE MANIPULATED/PRICES RIG GED/BOGUS. I FIND THAT THE APPELLANT HAD DISCHARGED ITS ONUS OF BY FURNISH ING ALL EVIDENCES BUT THE AO HAS NOT DISCHARGED HIS ONUS BY MAKING FRESH ENQU IRY AND PROVING THAT THE DOCUMENTS / EVIDENCES AS FILED BY THE APPELLATE ARE PROVED TO BE FALSE OR BOGUS. IT IS DIFFICULT, IF NOT IMPOSSIBLE, TO HO LD THAT THE TRANSACTION OF BUYING AND SELLING OF SHARES WAS A COLOURABLE TRANS ACTION OR WAS RESORTED TO WITH ANY ULTERIOR MOTIVE OF REDUCING THE TAX PAYABL E. THE ASSESSEE PRODUCED THE CONTRACT NOTES, DETAILS OF HIS DEMT ACCOUNT AND , ALSO, PRODUCED DOCUMENTS SHOWING THAT ALL PAYMENTS WERE RECEIVED B Y THE ASSESSEE THROUGH BANK. IT CANNOT BE SAID BY ANY STRETCH OF I MAGINATION THAT ANY LOSS WAS GENERATED. THE OPINION THAT THE ASSESSEE GENERA TED A SIZABLE AMOUNT OF LOS:, OUT OF PRE-ARRANGED TRANSACTIONS SO AS TO RED UCE THE QUANTUM OF INCOME LIABLE FOR TAX MIGHT HAVE BEEN THE VIEW EXPR ESSED BY THE ASSESSING OFFICER, BUT HE MISERABLY FAILED TO SUBSTANTIATE TH AT LOSS MIGHT HAVE BEEN SUFFERED. IF THE LOSS WAS SUFFERED, THEN APPROPRIAT E DEDUCTION HAS TO BE MADE AND THERE IS NO REASON WHY THE ASSESSING OFFIC ER SHOULD HAVE REFUSED TO DO SO. THE TRANSACTIONS WERE CARRIED OUT AT THE PREVAILING PRICE. THEREFORE, THE QUESTION OF GENERATING LOSS COULD NO T HAVE ARISEN. THE SUSPICION ENTERTAINED BY THE ASSESSING OFFICER WAS MISPLACED OR IN ANY EVENT ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 15 NOT SUBSTANTIATED. THE TRANSACTIONS WERE AS PER NOR MS UNDER CONTROLLED BY THE SECURITIES TRANSACTION TAX, BROKERAGE SERVICE T AX AND CESS, WHICH WERE ALREADY PAID. THEY WERE COMPLIED WITH. ALL THE TRAN SACTIONS WERE THROUGH BANK. THERE IS NO IOTA OF EVIDENCE OVER THE ABOVE T RANSACTIONS AS IT WERE THROUGH D-MAT FORMAT. THE ASSESSEE, HOWEVER, CLARIF IED THAT HE HAD CARRIED OUT ALL THE TRANSACTIONS OF PURCHASE AND SALE OF TH OSE SHARES THROUGH REGISTERED SHARE BROKERS AND THAT THEY HAD ISSUED T HE CONTRACT NOTES WHICH HAD BEEN DULY SUBMITTED. IT WAS ALSO POINTED OUT TH AT THE CONSIDERATION FOR PURCHASE AND SALE OF THOSE SHARES HAVE BEEN PAID OR RECEIVED THROUGH BANKING CHANNELS AND COPIES OF BANK STATEMENTS HAVE ALSO BEEN SUBMITTED. IT FURTHER APPEARED THAT ON PURCHASE OF THESE SHARE S THE DELIVERY WAS TAKEN IN DEMAT ACCOUNT AND SIMILARLY WHEN THE SHARES WERE SOLD, THE DELIVERY TO THE RESPECTIVE BROKERS HAVE ALSO BEEN GIVEN THROUGH DEMAT ACCOUNT. THE COPY OF THE DEMAT ACCOUNT WAS ALSO SUBMITTED DURING THE ASSESSMENT PROCEEDING AND THE SAME HAS ALSO BEEN FILED DURING THE APPELLATE PROCEEDING (PB PAGE-267 TO 270). THE ASSESSING OFFICER HAD NOT BROUGHT ANYTHING ON R ECORD TO PROVE THAT THERE WAS ANY CONNIVANCE BETWEEN THE ASSESSEE AND T HE SHARE BROKERS. THE ASSESSING OFFICER HIMSELF HAD NOT BROUGHT ANYTHING ON RECORD TO PROVE THAT THE TRANSACTIONS OF PURCHASE AND SALE OF THE SHARES IN WHICH THE ASSESSEE HAD SUFFERED THE LOSS WERE NOT GENUINE TRANSACTIONS . THE APPELLATE HAD SUBMITTED THE COMPLETE DOCUMENTARY EVIDENCES TO PRO VE HIS TRANSACTIONS OF PURCHASE AND SALE OF THOSE SHARES AND THE ASSESSING OFFICER COULD NOT PROVE THAT THE EVIDENCE SUBMITTED BY THE ASSESSEE WAS EIT HER FALSE OR FICTITIOUS. THE AR OF THE APPELLATE ALSO PLACED HIS RELIANCE IN VARIOUS JUDGEMENT INCLUDING OF JURISDICTION HIGH COURT AND IT AT AS M ENTIONED ABOVE IN IS SUBMISSION. KEEPING IN VIEW OF ABOVE, I AM OF THE V IEW THAT THE APPELLATE HAD SUBMITTED THE COMPLETE DOCUMENTARY EVIDENCES TO PROVE HIS TRANSACTIONS OF PURCHASE AND SALE OF THOSE SHARES A ND THE ASSESSING OFFICER COULD NOT PROVE THAT THE EVIDENCE SUBMITTED BY THE ASSESSEE WAS EITHER FALSE OR FICTITIOUS. THE AO HAS MADE THE ADDITION S IMPLY ON THE BASIS OF GENERAL REPORT OF THE INVESTIGATION WING. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ADDIT ION AND THIS GROUND OF APPEAL IS ALLOWED.' THERE IS NO DISPUTE THAT THE CIT(A) HAD ADOPTED THE VERY REASONING IN REVENUE'S LATTER APPEAL ITA NO.1496/KOL/2017 FOR ASSESSMENT Y EAR 2014-15 S WELL. 5. WE HAVE HEARD RIVAL CONTENTIONS AT REVENUE'S AND ASSESSEE'S BEHEST AGAINST AND IN SUPPORT OF CIT(A)'S FINDINGS REVERSING ASSESSING OFFICER'S IDENTICAL ACTION TREATING THE ASSESSEE'S LOSSES ARISING FROM SALE OF VARIOUS SCRIPT TO BE NON-GENUINE. THE REVENUE FAILS TO DISPUTE HEREIN AS WELL AS THERE IS NO MATERIAL EITHER OF THE CASE FILE INDICATING THIS ASSESSEE TO HAVE AVAILED ACCOMMODAT ION ENTRIES AS PER ANY SEARCH / SURVEY STATEMENT. THE REVENUE SEEKS TO PLACE A VERY HEAVY RELIANCE IN DEPARTMENT INVESTIGATION WING SURVEY OPERATION STATEMENTS U/S. 133A FROM ONE OF THE ASSESSEE'S DIRECTORS AGAINST GENUINENESS OF THE IMP UGNED LOSSES. WE FIND THAT SUCH A SEARCH AND SURVEY STATEMENT; IF ANY IN ABSENCE OF ANY EVIDENCE IN ITSELF CARRIES NO VALUE AS PER CBDT'S CIRCULAR DATED 10.03.2003 AS RE ITERATED IN SUBSEQUENT ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 16 CLARIFICATION DATED 18.12.2014. WE THEREFORE GO BY OUR FOREGOING DETAILED DISCUSSION TO CONCLUDE THAT THE CIT(A) HAS RIGHTLY DELETED THE IMPUGNED LOSS DISALLOWANCE IN BOTH ASSESSMENT YEAR(S). THE REVENU E'S TWO APPEALS ITA NO. 1495- 1496/KOL/2017 FAIL ACCORDINGLY. 13. THEREFORE, RESPECTFULLY, FOLLOWING THE DECISION OF THE CO- ORDINATE BENCH OF THE TRIBUNAL, WE HOLD THAT THE LO NG TERM CAPITAL GAIN ON THE SALE OF SHARES OF M/S. BLUE CI RCLE SERVICES LTD. IS NOT A BOGUS CAPITAL GAIN AS THE AO HAS SOLE LY RELIED ON THE REPORT OF INVESTIGATION/SURVEY TEAM AND HAS NOT CAR RIED OUT ANY FURTHER VERIFICATION ON THE BASIS OF DOCUMENTS FURN ISHED BY THE ASSESSEE. SIMILARLY, THE POSITION OF LONG TERM CAP ITAL GAIN EARNED ON THE SALE OF SHARES OF M/S. GEMSTONE INVESTMENT L TD. OF RS.88,41,060/- IS SAME AS THE ASSESSEE HAS FILED AL L THE NECESSARY EVIDENCES BEFORE THE AO AND AO HAS FAILE D TO CARRY OUT ANY FURTHER INVESTIGATION TO PROVE THAT THE LON G TERM CAPITAL GAIN EARNED BY THE ASSESSEE IS BOGUS AND FICTITIOUS . CONSEQUENTLY, THE APPEAL OF THE ASSESSEE SUCCEEDS O N MERIT ALSO. ACCORDINGLY, THE ISSUE RAISED IN GROUND NO.3 & 4 AR E ALLOWED. 14. THE ISSUE RAISED IN GROUND NO.5 IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.11,40,266/- BY LD. CIT(A) AS MADE BY THE AO UNDER SECTION 69 OF THE ACT TOWAR DS COMMISSION PAID ON THE ACCOMMODATION ENTRIES. SINC E WE HAVE ALREADY DECIDED THE GROUNDS RAISING LEGAL AS WELL AS MERITS IN FAVOUR OF THE ASSESSEE AND CONSEQUENTLY THE ADDITI ON OF RS.11,40,266/- IS ALSO ORDERED TO BE DELETED AS THI S IS CONSEQUENTIAL ONE. ACCORDINGLY THE GROUND NO.5 IS A LLOWED. 15. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLO WED. ITA NOS.72 & 73/M/2021 & ORS MR. JAYESH SHANTILAL VIRA & ORS 17 ITA NO.73/M/2021, A.Y. 2013-14, ITA NO.79 A.Y. 2012-1 3, ITA NO.82/M/2021 A.Y. 2013-14, ITA NO.80/M/2021 A.Y. 2012-13 & ITA NO.81/M/2021 A.Y 2013-14 16. THE ISSUE INVOLVED IN THE ABOVE APPEALS IS IDE NTICAL TO THE ONE AS STATED ABOVE IN ITA NO.72/M/2021 FOR A.Y. 20 12-13. THEREFORE, OUR FINDINGS IN ITA NO.72/M/2021 FOR A.Y . 2012-13, MUTATIS MUTANDIS, WOULD APPLY TO THESE APPEALS AS W ELL. ACCORDINGLY THE APPEALS OF THE ASSESSEE ARE ALLOWED . 17. IN THE RESULT, ALL THE APPEALS OF THE THREE ASS ESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.06.2021. SD/- SD/- ( AMARJIT SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 08.06.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.