ARVIND M. KARIYA, MUMBAI V. ACIT CEN CIR 12, MUMBAI

ITA 787/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56322 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 15-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B V JHAVERI
• Keywords: Unexplained cash credit; Unexplained expenditure; Share purchase agreement; Penny stocks

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER & SHRI VIJAY PAL RAO, JUDICIALMEMBER S.NO. I.T.A.NO. A.Y APPELLANT RESPONDENT 1 787-M-2010 2005-06 SHRI ARVIND M. KARIYA, A 402, JAY APARTMENT, NEHRU ROAD, SANTACRUZ (E), MUMBAI 400055 PAN: AAEPK0468L ASST. COMMISSIONER OF I.T., CENTRAL CIR. 12, MUMBAI. 2 788-M-2010 2005-06 SMT.SADHANA P. KARIYA, 13, KATHIWAWAD CO-0P. HSG. SOC. LTD.MUMBAI 400 049. PAN: AJHPK6018N ASST. COMMISSIONER OF I.T., CENTRAL CIR. 12, MUMBAI 3 789-M-2010 2005-06 SHRI PARESH M. KARIYA, 13, KATHIWAWAD CO-0P. HSG. SOC. LTD. MUMBAI 400 049. PAN: AAEPKO469M ASST. COMMISSIONER OF I.T., CENTRAL CIR. 12, MUMBAI 4 790-M-2010 2005-06 SHRI PARESH M. KARIYA (HUF) . 13, KATHIWAWAD CO-0P. HSG. SOC. LTD. MUMBAI 400 049. PAN: AABHP6818C ASST. COMMISSIONER OF I.T., CENTRAL CIR. 12, MUMBAI 5 791-M-2010 2005-06 SMT. JIGNA M. KARIYA, A 402, JAY APARTMENT, NEHRU ROAD, SANTACRUZ (E), MUMBAI 400055 PAN: AADPK4913D ASST. COMMISSIONER OF I.T., CENTRAL CIR. 12, MUMBAI APPELLANTS BY : SHRI B.V.JHAVERI. RESPONDENT BY : SHRI PAVAN VED. DATE OF HEARING: 15-12-2011. DATE OF PRONOUNCEMENT: 30-12-2011. O R D E R PER T.R.SOOD, AM: IN THIS GROUP OF CASES IDENTICAL ISSUES ARE RAISED. BOTH THE PARTIES AGREED THAT SINCE FACTS AND ISSUES INVOLVED ARE IDENTICAL, THEREFORE, THE CASE OF SHRI ARVIND M. KARIA IN I.T. A.NO.787-MUM2010 ITA NOS.787 TO 791 OF 2010 2 MAY BE TAKEN UP FOR DETAILED HEARING. IN THIS CASE THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE GROSS SALE CONSIDERATION OF RS.23,44 ,985/-, CLAIMED AS GIVING RISE TO LONG TERM CAPITAL GAINS, AS UNEXPLAINED CASH CREDIT U/S.68. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.1,17,249/- BEING 5% O F THE GROSS SALE CONSIDERATION OF RS.23,44,985/- AS UNEXPLAINED EXPENDITURE U/S.69C ON ACCOUNT OF COMMISSION/SERVICE CHARGES PA YABLE TO THE BROKER ALTHOUGH NO SUCH EXPENDITURE WAS INCURRE D BY THE APPELLANT. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT A S EARCH WAS CONDUCTED IN THIS GROUP WHEREIN SOME CASH AND JEWEL LERY WAS FOUND. THE SEARCH WAS CONDUCTED ON THE SPECIFIC INFORMATIO N THAT THE ASSESSEE IN THIS GROUP HAD OBTAINED ARTIFICIAL CAPI TAL GAINS BY MANIPULATING SHARE TRANSACTIONS. IT WAS ALLEGED THA T ASSESSEE HAD OBTAINED BOGUS BACK DATED PURCHASE BILLS AND SHARES AND RECEIVED THE DELIVERY IN PHYSICAL FORMAT AND LATER ON THESE SHAR ES WERE SOLD AT THE STOCK EXCHANGE THROUGH ENGINEERED TRANSACTIONS AVAI LING BOGUS CAPITAL GAINS. IN THIS CASE THE BOGUS CAPITAL GAINS WERE SA ID TO BE GENERATED ON THE PURCHASE AND SALE OF 15,500 SHARES OF M/S RO BINSON WORLDWIDE TRADE LTD. (ALSO KNOWN BY THE NAME M/S. ROBINSON IM PEX INDIA LTD.). IT WAS NOTED THAT THE SHARES WERE SAID TO HAVE BEEN PURCHASED FROM M/S. DPS SHARES & SECURITIES PVT. LTD. A STATEMENT U/S.131 OF SHRI SUJAL C. SHAH DIRECTOR OF M/S. DPS SHARES & SECURIT IES (P) LTD. WAS RECORDED DURING THE SURVEY CONDUCTED U/S.133A ON 18 -1-2007. IN THIS STATEMENT HE HAS SPECIFICALLY STATED THAT ACTUALLY NO PURCHASE ITA NOS.787 TO 791 OF 2010 3 TRANSACTION IN THE SCRIP OF M/S ROBINSON WORLDWIDE TRADE LTD. WERE CARRIED OUT, BUT ONLY ACCOMMODATION BILLS WERE ISSU ED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ANOTHER DIRECTOR S HRI PRATIK C. SHAH OF M/S. DPS SHARES & SECURITIES PVT. LTD. WAS CALLE D TO THE OFFICE AND HE AGAIN ADMITTED THAT THESE TRANSACTIONS WERE ONLY ACCOMMODATION TRANSACTIONS DURING THE CROSS EXAMINATION. IT WAS A LSO STATED BY HIM THAT FOR PURCHASE OF THESE SHARES MADE BY M/S. DPS SHARES & SECURITIES PVT. LTD. FROM A THIRD PARTY SPECULATION BILLS WERE ISSUED WHERE PROFITS WERE SHOWN IN SPECULATION BUT ACTUALL Y THERE WAS NO SUCH TRANSACTIONS WHERE SPECULATION PROFIT WAS GENE RATED. IT WAS FURTHER ADMITTED THAT SPECULATION TRANSACTIONS WERE NOT SHOWN IN THEIR BOOKS OF ACCOUNT. THEREAFTER, ASSESSEE WAS GIVEN SP ECIFIC OPPORTUNITY FOR CROSS EXAMINATION OF SHRI PRATIK C. SHAH. THE A SSESSEE AVAILED THIS OPPORTUNITY AND HIS REPRESENTATIVE SHRI KETAN MEHTA EXAMINED SHRI PRATIK C. SHAH. EVEN DURING THE COURSE OF CROSS EXA MINATION SHRI PRATIK C. SHAH STATED THAT PURCHASE TRANSACTIONS OF M/S RO BINSON WORLDWIDE TRADE LTD. WERE BOGUS. IT WAS STATED THAT THOUGH PH YSICAL DELIVERY WAS GIVEN BUT SUCH PHYSICAL SHARES WERE GIVEN BY SHRI N ARESH SAHU AND SHRI SHIRISH C. SHAH. IT WAS ULTIMATELY SUBMITTED B EFORE THE AO THAT SHARES WERE ACTUALLY PURCHASED FOR WHICH BILLS WERE THERE AND THE SOURCE OF THE PURCHASE WAS THE SPECULATION PROFIT E ARNED BY THE ASSESSEE. IF THE BROKER HAS NOT SHOWN THOSE TRANSAC TIONS IN HIS BOOKS, THEN IT WAS NOT ASSESSEES FAULT. THE AO AFTER EXAM INING THE SUBMISSIONS OBSERVED THAT PURCHASE OF SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD. WERE EITHER SOURCED BY SUPPOSE D SPECULATIVE ITA NOS.787 TO 791 OF 2010 4 GAINS OR BY PAYING CASH, WHICH MEANS THE ASSESSEE I N THIS GROUP BAS BACK DATED THIS SUPPOSED PURCHASES AND SUCH SPECULA TIVE TRANSACTIONS WERE ALSO PROVED TO BE BOGUS. ON THE BASIS OF THESE OBSERVATIONS AND THE STATEMENT OF SHRI SUJAL C. SHAH AND SHRI PRATIK C. SHAH REGARDING BOGUS TRANSACTIONS, IT WAS CONCLUDED BY THE AO THAT CAPITAL GAINS GENERATED WAS BOGUS. 3. BEFORE THE CIT(A) IT WAS MAINLY SUBMITTED THAT S HARES OF M/S ROBINSON WORLDWIDE TRADE LTD. WERE PURCHASED ON 23- 4-2003 @ RS.1.47 PER SHARE AND THE SAME WERE SHOWN IN THE BA LANCE-SHEET FOR THE YEAR 2004-05. THE SOURCE OF PURCHASE OF THE SHA RES WAS SPECULATION PROFIT. THE SHARES WERE SOLD THROUGH AN UGRAH STOCK AND BROKING PVT. LTD. IN A.Y 2005-06 AND COPIES OF THE SALES BILLS WERE FURNISHED BEFORE THE AO. THE CONSIDERATION WAS RECE IVED BY ACCOUNT PAYEE CHEQUES. IT WAS ALSO POINTED OUT THAT ORIGINA LLY THE SHARES WERE ISSUED IN PHYSICAL FORMAT WHICH WERE DEMATERIALISED ON 30-11-2004. THUS, IT IS CLEAR THAT ALL EVIDENCE FOR PURCHASE AN D SALE OF SHARES WAS THERE WHICH HAS BEEN IGNORED BY THE AO AND THE TRAN SACTIONS WERE HELD TO BE BOGUS ONLY ON THE BASIS OF THE STATEMENT S OF THE TWO DIRECTORS, NAMELY, SHRI SUJAL C. SHAH AND SHRI PRAT IK C. SHAH OF M/S. DPS SHARES & SECURITIES PVT. LTD. IT WAS ALSO SUBMI TTED THAT ONCE TRANSACTIONS OF PURCHASE AND SALES WERE ENTERED INT O BY THE ASSESSEE THERE WAS NO NEED TO VERIFY THE TRANSACTIONS BY HIM AS TO WHETHER SAME WERE THROUGH STOCK EXCHANGE OR RECORDED IN THE BOOKS OF THE BROKER. IT SEEMS DURING THE SEARCH ASSESSEE HAS ACC EPTED IN THE STATEMENT U/S.132(4) THAT THIS TRANSACTION WAS BOGU S. DURING THE ITA NOS.787 TO 791 OF 2010 5 APPELLATE PROCEEDINGS IT WAS SUBMITTED THAT ASSESSE E HAD MADE THE SURRENDER U/S.132[4] TO BUY PEACE OF MIND AND TO AV OID LITIGATION. SINCE DEPARTMENT HAD GONE AHEAD WITH THE LITIGATION , THEREFORE, THIS DECLARATION WAS WITHDRAWN. RELIANCE ON SOME CASE LA W WAS ALSO PLACED. THE LD. CIT(A) AFTER CONSIDERING THE SUBMIS SIONS OBSERVED THAT THERE WAS A RACKET GOING ON IN THE MARKET IN PENNY STOCK WHICH WAS USED FOR BOOKING CAPITAL GAINS. IN THIS RACKET STOC K INVOLVED WERE THAT OF M/S ROBINSON WORLDWIDE TRADE LTD, DATA BASE FINA NCE LTD., BAFFIN ENGG. PROJECT LTD. AND HINDUSTAN STOCKLAND LTD. THE SE RACKETS WERE BUSTED BY THE INVESTIGATION WING AND SEARCHES WERE CONDUCTED AT VARIOUS PLACES IN THE COUNTRY. THE MODUS OPERANDI F OR ADOPTING ENGINEERED BOGUS CAPITAL GAINS USING SUCH PENNY STO CK WAS THAT SOME KEY PLAYERS WERE INVOLVED WHICH CAN BE CALLED OPERA TOR AND BENEFICIARIES. THE OPERATOR IS A PERSON WHO MANIPUL ATES ALL THE TRANSACTIONS NECESSARY TO FABRICATE THE CAPITAL GAI NS ON ACCOUNT OF SHARES INCLUDING THE ARRANGEMENT OF BILLS FOR SUCH TRANSACTIONS. THE BENEFICIARY IS A PERSON WHO PURCHASES ARTIFICIAL/BO GUS CAPITAL GAINS FROM THE OPERATOR BY PAYING THE GROSS AMOUNT OF SAL E PRICE OF SUCH SHARES IN CASH. THE OPERATOR GIVES PHYSICAL SHARES TO THE BENEFICIARY, WHOSE MARKET VALUE IS ROUGHLY EQUIVALENT TO THE MON EY, THE BENEFICIARY INTENDS TO LAUNDER. SUCH SHARES WOULD B E ACCOMPANIED BY A BACKDATED CONTRACT NOTE SHOWING THE SALE OF SHARE S TO THE BENEFICIARY AT LESS THAN A RUPEE OR JUST A FEW RUPEES PER SHARE , AS THEY WERE QUOTED EARLIER (ABOUT AN YEAR. OR SO). THE CONSIDER ATION FROM BENEFICIARY IS MOSTLY SHOWN IN CASH SO THAT THE BAC KDATING OF THE BOGUS ITA NOS.787 TO 791 OF 2010 6 PURCHASE TRANSACTION IS CAMOUFLAGED. SOMETIMES, BOG US SPECULATION PROFIT GENERATED BY HAWALA BILLS IS ALSO USED FOR T HIS PURPOSE. IN SOME RARE CASES, CHEQUE PAYMENTS ARE SHOWN WHEREIN THE P AYMENTS ARE SEEN TO E AT A LATER DATE FOR OBVIOUS REASONS. SIN CE THE SHARES CANNOT BE SOLD IN PHYSICAL FORMAT, THE BENEFICIARY SENDS T HE SHARES TO DEPOSITARY TO BE DEMATERIALIZED AND CONVERTED INTO ELECTRONIC FORM. THE BENEFICIARY SELLS SUCH DEMATERIALIZED SHARES ON SECONDARY MARKET AT THE PREVALENT PRICE AND RECEIVES CHEQUE PAYMENT THEREBY CONVERTING BLACK MONEY INTO WHITE. DEPENDING UPON HOW FAR THE CONTRACT NOTE FOR PURCHASE OF SUCH SHARES WAS BACKDATED, THE BENEFIC IARY LAUNDERS THE MONEY BY EITHER PAYING ZERO OR 10% CAPITA GAIN TAX (DEPENDING ON THE RATES OF TAXATION OF CAPITAL GAINS FOR THE RELEVANT A.Y.) IN SOME CSES IT IS GATHERED THROUGH MARKET INTELLIGENCE THAT THE OP ERATORS BY USING BENAMI ENTITIES/NAME LENDERS RECYCLE THE SAME SET O F SHARES SEVERAL TIMES OVER BY RE-MATERIALIZATION. I.E., CONVERSION OF SHARES FROM ELECTRONIC FORM TO PHYSICAL, FORM AND THEREBY EXTEN DING THE FACILITY OF LAUNDERING BLACK MONEY TO ANOTHER BENEFICIARY. IT H AS BEEN FOUND DURING THE COURSE OF INVESTIGATION THAT THIS CYCLE OF REMATERIALI- ZATION/DEMATERILZATION HAS, BEEN USED SEVERAL TIMES OVER IN THE CASE OF SUCH PENNY STOCKS. DURING SUCH PROCESS, HUGE AMOUNT OF BLACK MONEY WERE CONVERTED BY FABRICATING ARTIFICIAL CAPITAL GA INS. 4. HE FURTHER OBSERVED THAT ASSESSEE IS ALSO ONE OF THE BENEFICIARIES OF THIS PENNY STOCK SCAM WHICH WAS PR OVED DURING THE ASSESSMENT PROCEEDINGS THROUGH THE STATEMENT OF DIR ECTORS OF M/S. DPS SHARES & SECURITIES PVT. LTD. EVEN DURING THE CROSS EXAMINATION, ITA NOS.787 TO 791 OF 2010 7 DIRECTORS OF M/S. DPS SHARES & SECURITIES PVT. LTD ADMITTED THAT THESE TRANSACTIONS WERE ONLY ACCOMMODATION TRANSACTIONS. HE FURTHER OBSERVED THAT ASSESSEE HAS NOT BEEN ABLE TO PROVE T HE PURCHASES TRANSACTIONS AND NO SOURCE FOR THE SAME HAS BEEN SH OWN. THE TRANSACTION OF PURCHASE OF SO CALLED TRANSACTION OF SPECULATION PROFIT WAS NOT ROUTED THROUGH BSE & NSE. THE LD. CIT(A) TH EREAFTER DISCUSSED THE STATEMENTS OF DIRECTORS OF M/S. DPS S HARES & SECURITIES PVT. LTD AND ALSO REFERRED TO CASE LAWS AND ULTIMAT ELY HELD THAT THE TRANSACTIONS WERE BOGUS. 5. BEFORE US, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT CIT(A) HAS DECIDED THE ISSUE AGAINST THE ASSESSEE ON THE B ASIS OF THE GENERAL OBSERVATION REGARDING PENNY STOCK SCAM AND HAS NOT EXAMINED THE ISSUE PROPERLY. HE ARGUED THAT ASSESSEE HAS PURCHAS ES THE SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD ON 17-4-2003 FOR W HICH CONTRACT NOTE WAS AVAILABLE. HE REFERRED TO VARIOUS DOCUMENT S IN THE PAPER BOOK AND POINTED OUT THAT ASSESSEE HAD EARNED SOME SPECULATION PROFIT IN A.Y 2004-05 WHICH WAS USED FOR THE PURPOSE OF PU RCHASE OF SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD. SUCH PROFITS W ERE DULY RETURNED IN THE RETURN OF INCOME FILED FOR A.Y 2004-05 WHICH HAS BEEN ACCEPTED AND EVEN PURCHASES WERE REFLECTED IN THE BALANCE SH EET WHICH HAVE BEEN ACCEPTED BY THE DEPARTMENT. ORIGINALLY THE SHA RES WERE ISSUED IN PHYSICAL FORMAT WHICH GOT TRANSFERRED IN ASSESSEES NAME AND ONLY ONE SHARE CERTIFICATE WAS ISSUED BY THAT COMPANY WHICH WAS LATER ON SPLIT INTO 150 SHARE CERTIFICATES AND THEREAFTER SAME WER E DEMATERIALISED TO DE-MAT ACCOUNT WITH THE DEPOSITORY KNOWN AS ACTION FINANCIAL SERVICES ITA NOS.787 TO 791 OF 2010 8 LTD. SUCH DE-MAT SHARES WERE SOLD THROUGH ANUGRAH S TOCK BROKING LTD. ON 9-12-04 TO 6-1-05 AND THE PAYMENTS HAVE BEE N RECEIVED THROUGH CHEQUES. HE ARGUED THAT ONCE A CLIENT GOES TO THE BROKERS OFFICE HE CANNOT GO BEHIND THE SCENE TO FIND OUT WH ETHER THE TRANSACTION HAS BEEN CARRIED OUT THROUGH THE STOCK EXCHANGE OR IT IS A OFF MARKET TRANSACTION. IN ANY CASE, EVEN UNDER THE REGULATION OFF MARKET TRANSACTIONS ARE PERMITTED BY THE BROKERS. HE THEN REFERRED TO THE CROSS EXAMINATION OF SHRI PRATIK C. SHAH IN WHI CH IN REPLY TO QUESTION NO.22 IT WAS AGREED BY HIM THAT SUCH BOGUS BILLS WERE ISSUED AT THE INSTANCE OF SHRI NARESH SAHU AND PHYSICALLY SHARES WERE GIVEN TO MS. JIGNA A. KARIYA [I.E. ONE OF THE ASSESSEE BE FORE US]. HOWEVER, THE REVENUE HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT SHRI NARESH SAHU WAS ACTING ON BEHALF OF THE ASSESSEE AN D THIS PERSON WAS NOT KNOWN TO THE ASSESSEE AT ALL AND THERE IS NO EV IDENCE TO PROVE THAT THIS PERSON WAS KNOWN TO THE ASSESSEE. IN ANY CASE, IN THE SAME REPLY IT HAS BEEN CLEARLY ADMITTED BY SHRI PARTIK SHAH TH AT PHYSICALLY SHARES WERE GIVEN TO THE ASSESSEE. SIMILARLY, IN REPLY TO QUESTION NO.34 IT HAS BEEN AGAIN REITERATED THAT DELIVERY OF PHYSICAL SHA RES WAS GIVEN TO THE ASSESSEE. THE ASSESSEE WAS NOT REQUIRED TO FIND OUT ANYTHING MORE THAN THIS BECAUSE AGAINST THE PAYMENT IN TERMS OF S PECULATION PROFIT ASSESSEE WAS GIVEN PHYSICAL DELIVERY OF THE SHARES, THEREFORE, THIS STATEMENT CANNOT BE RELIED UPON AT ALL. HE CONTENDE D THAT ASSESSEE HAS PROVED THE PURCHASE IN THE EARLIER YEARS WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT AND NOTHING MORE WAS REQUIRED TO BE PROVED. THE INCOME GENERATED FROM SUCH SALES WAS OFFERED UNDER THE HEAD LONG ITA NOS.787 TO 791 OF 2010 9 TERM CAPITAL GAIN WHICH PROVED THAT ASSESSEE HAD G ENERATED GENUINE CAPITAL GAIN. HE ALSO RELIED ON THE FOLLOWING DECIS IONS: 1. MUKESH R. MAROLIA VS. ACIT 6 SOT 247 (MUM) 2. DCIT VS. MS. INDIRAMMA 6SOT 261 (BANG) 3. I.T.A.NOS.2669 & 2670-M-06 IN THE CASE OF SMT. PUSH PA R. SHAH & SHRI RAMESH V. SHAH VS. ITO 4. I.T.A.NO.1718-M-06 & ORS. IN THE CASE OF SHRI POPAT LAL BACHUBHAI NANDU VS. ACIT & ORS. 6. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND THE CIT(A). HE ALSO FILED A LETTER DATED 14- 11-11 AND POINTED OUT THAT WHEN THE ISSUE REGARDING THE PAPER BOOK WA S TAKEN UP WITH THE AO THE THEN DCIT-12, HAS REPORTED THAT PAGES 42 TO 45 WERE NOT TRACEABLE IN THE RECORDS OF THE OFFICE. A COPY OF T HE LETTER OF DCIT HAS BEEN ENCLOSED WITH THIS LETTER. HE ALSO STRONGLY RE LIED ON THE DECISION OF THE HON'BLE SC IN THE CASE OF SUMATI DAYAL VS. CIT [214 ITR 801]. 7. IN THE REJOINDER, LD. COUNSEL OF THE ASSESSEE SU BMITTED THAT THE REPLY OF THE AO TO THE CIT DR SHOWS THAT PAGES 42 T O 45 ARE NOT TRACEABLE, BUT THESE PAPERS WERE FILED ALONG WITH A NNEXURE K IN LETTER DATED 5-11-08, COPY OF WHICH HAS BEEN FURNISHED BEF ORE US. HE POINTED OUT THAT PAGE 42 IS A COPY OF THE SHARE TRANSFER FO RM DULY EXECUTED BY THE TRANSFEROR AND TRANSFEREE AND PAGE 45 IS A COPY OF THE SHARE CERTIFICATE SHOWING 15500 SHARES HAVING DISTINCTIVE NOS.3948701 TO 3964200. HE ALSO PRODUCED COPIES OF 155 SHARE CERTI FICATES WHICH WERE LATER ON ISSUED BY M/S ROBINSON WORLDWIDE TRADE LTD BY SPLITTING ONE CERTIFICATE IN TO 155 CERTIFICATES WHICH PROVES OWN ERSHIP OF THE SHARES. HE ALSO POINTED OUT THAT IT IS NOT CORRECT STATEMEN T BY THE DCIT THAT M/S ROBINSON WORLDWIDE TRADE LTD IS NOT IN EXISTENC E AND IN THIS ITA NOS.787 TO 791 OF 2010 10 REGARD HE FILED COPIES OF LIST CONTAINING THE NAMES OF THE COMPANIES BY THE MINISTRY OF CORPORATE AFFAIRS, WHICH CLEARLY SH OWS THAT M/S ROBINSON WORLDWIDE TRADE LTD IS EXISTING AT SR.NO.2 AND THE NAME OF THE COMPANY HAS BEEN CHANGED TO SUN & SINE WORLDWID E LTD. AND UNDER COLUMN GLM IT IS SHOWN TO BE THE ACTIVE COMPA NY. HE ALSO FILED A COPY TAKEN FROM BSE INDIA SITE WHICH SHOWS THAT T HE NAME OF THE COMPANY WAS CHANGED BY EXTRA ORDINARY GENERAL MEETI NG FROM M/S ROBINSON WORLDWIDE TRADE LTD TO SUN & SINE WORLDWID E LTD. HE ALSO FILED ANOTHER COPY FROM BSE WHICH SHOWS THAT SHARES WERE QUOTED ON 6 TH SEPTEMBER, 2011 AND PRICE AT THAT MOMENT WAS RS.36 .75 PER SHARE. ALL THESE DOCUMENTS CLEARLY SHOW THAT THE COMPANY I S VERY MUCH IN EXISTENCE UNDER THE NEW NAME SUN & SINE WORLDWIDE L TD. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE MAI NLY ON GENERALIZATION THAT THERE WAS A PENNY STOCK SCAM WH ICH WAS UNEARTHED BY THE DEPARTMENT AND ALSO THAT ASSESSEE HAS NOT BEEN ABLE TO PROVE THE PURCHASE OF SHARES AND IT WAS AN ACCOM MODATION TRANSACTION AS STATED BY THE DIRECTORS OF M/S. DPS SHARES & SECURITIES PVT. LTD. THE LD. CIT(A) AS WELL AS THE LD. DR HAS MAINLY RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F SUMATI DAYAL VS. CIT [SUPRA]. IN THAT CASE THE FACTS WERE AS UNDER: THE APPELLANT CARRIED ON BUSINESS AS A DEALER IN AR T PIECES, ANTIQUES AND CURIOS AT BANGALORE. DURING THE ASSESSMENT YEAR 197 1-72, SHE CLAIMED THAT RECEIVED A TOTAL AMOUNT OF RS.3,11,831 BY WAY OF RA CE WINNINGS IN JACKPOTS AND TREBLE EVENTS IN RACES AT TURF CLUBS IN BANGAL ORE, MADRAS AND HYDERABAD. THE SAID AMOUNT WAS SHOWN BY THE APPELLA NT IN THE CAPITAL ACCOUNT IN THE BOOKS. FOR THE ASSESSMENT YEAR 1972- 73, SHE CLAIMED RECEIPTS ITA NOS.787 TO 791 OF 2010 11 OF RS.93500/- AS RACE WINNINGS IN TWO JACKPOTS AT B ANGALORE AND MADRAS AND THE SAID AMOUNT WAS CREDITED IN THE CAPITAL ACCOUNT IN THE BOOKS. THE INCOME-TAX OFFICER THE INCLUDED THE AMOUNT AS INCOM E FROM OTHER SOURCES AND ASSESSED THEM. THE APPELLANT REFERRED MATTER TO THE SETTLEMENT COMMISSION. THE SETTLEMENT COMMISSION BY A MAJORITY HELD THAT THE EXPLANATION OF THE ASSESSEE WAS NOT GENUINE FOR THE FOLLOWING REASONS: (I) THE APPELLANT'S KNOWLEDGE OF RACING IS VERY MEAGRE. (II) A JACKPOT IS A STAKE OF FIVE EVENTS IN A SINGLE DAY AND ONE CAN BELIEVE A REGULAR AND EXPERIENCED PUNTER CLEARING A JACKPOT OCCASIONALLY BUT THE CLA IM OF THE APPELLANT TO HAVE WON A NUMBER OF JACKPOTS IN THREE OR FOUR SEASONS NOT MERELY AT ONE PLACE BUT AT THREE DIFFERENT CENTRES, NAMELY, MADRAS, BA NGALORE AND HYDERABAD APPEARS, PRIMA FACIE, TO BE WILD AND CONTRARY TO T HE STATISTICAL THEORIES AND EXPERIENCE OF THE FREQUENCIES AND PROBABILITIES. (I II) THE APPELLANT'S BOOKS DO NOT SHOW ANY DRAWINGS ON RACE DAYS OR ON THE IMMEDI ATELY PRECEDING DAYS FOR THE PURCHASE OF JACKPOT COMBINATION TICKETS, WH ICH ENTAILED SIZABLE AMOUNTS VARYING GENERALLY BETWEEN RS. 2,000 AND RS. 3,000. THE DRAWINGS RECORDED IN THE BOOKS CANNOT BE CO-RELATED TO THE V ARIOUS RACING EVENTS AT WHICH THE APPELLANT MADE THE ALLEGED WINNINGS. (IV) WHILE THE APPELLANT'S CAPITAL ACCOUNT WAS CREDITED WITH THE GROSS AMOUNTS OF RACE WINNINGS, THERE WERE NO DEBITS EITHER FOR EXPENSES AND PURCHASE OF TICKETS OR FOR LOSSES. (V) IN VIEW OF THE EXCEPTIONAL LUCK CLAIMED TO HAVE BEEN E NJOYED BY THE APPELLANT, HER LOSS OF INTEREST IN RACES FROM 1972 ASSUMES SIG NIFICANCE. WINNINGS IN RACING BECAME LIABLE TO INCOME-TAX FROM APRIL 1, 19 72, BUT ONE WOULD NOT GIVE UP AN ACTIVITY YIELDING OR LIKELY TO YIELD A LARGE INCOME MERELY BECAUSE THE INCOME WOULD SUFFER TAX. THE POSITION WOULD BE DIFF ERENT, HOWEVER, IF THE CLAIM OF WINNINGS IN RACES WAS FALSE AND WHAT WERE PASSE D OFF AS SUCH WINNINGS REALLY REPRESENTED THE APPELLANT'S TAXABLE INCOME FROM SOME UNDISCLOSED SOURCES. ON THE ABOVE FACTS IT WAS HELD AS UNDER: HELD, DISMISSING THE APPEAL, THE SETTLEMENT COMMI SSION AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES HAS RIGHTLY CONCLUDED THAT THE APPELLANT'S CLAIM AB OUT THE AMOUNT BEING HER WINNINGS FROM RACES IS NOT GENUINE. FROM THE ABOVE DECISION IT IS CLEAR THAT HUMAN PROB ABILITIES OR CIRCUMSTANTIAL EVIDENCES CAN BE TAKEN INTO ACCOUNT FOR DECIDING AN ISSUE. HOWEVER, IN THAT CASE THE CIRCUMSTANCES WERE SO STRONG AGAINST THAT THE DOCUMENTARY EVIDENCE WAS IGNORED BY THE HO N'BLE APEX COURT. BUT IN THE CASE OF THE ASSESSEE BEFORE US IT SHOWS THAT CIRCUMSTANTIAL EVIDENCE IS NOT SO OVER WHELMING AND RATHER THE DOC UMENTARY EVIDENCE CLEARLY PROVES THE TRANSACTIONS. 9. FIRST LET US DEAL WITH THE CONTENTIONS OF THE LD . DR THAT SOME PAPERS IN THE PAPER BOOK AT PAGE NOS.42 TO 45 WERE NOT TRACEABLE IN ITA NOS.787 TO 791 OF 2010 12 THE FILE OF THE AO. THE SECOND ALLEGATION VIDE LETT ER DATED 11-11-11 IS THAT THE COMPANY M/S ROBINSON WORLDWIDE TRADE LTD I S NOT IN EXISTENCE. PAGES 42 AND 43 OF THE PAPER BOOK, WHICH IS A COPY OF THE TRANSFER FORM SIGNED BY THE TRANSFEROR AND THE TRAN SFEREE. PAGE 4 IS A COPY OF THE COVERING LETTER BY THE COMPANY TO THE A SSESSEE TRANSFERRING THE SHARES BY WAY OF A JUMBO CERTIFICATE I.E. ONE C ONSOLIDATED CERTIFICATE IN THE NAME OF THE ASSESSEE AND PAGE-45 IS A COPY OF THE SHARE CERTIFICATE. IT HAS BEEN POINTED OUT THAT SUC H PAPERS WERE FILED WITH THE AO WITH THE LETTER DATED 5-11-08 ALONG WIT H ANNEXURE K AND COPY OF THIS LETTER HAS BEEN FURNISHED BEFORE US WH ICH IS PLACED ON RECORDS. IN THE COLUMN DEALING WITH ANNEXURE K IT I S STATED THAT VARIOUS DOCUMENTS ARE BEING FURNISHED TO PROVE THE GENUINEN ESS OF PURCHASES WHICH INCLUDES THE TRANSFER FORM PLACED AT PAGES 42 AND 43 AND COPY OF THE SHARE CERTIFICATE AT PAGE 45. THIS MAKES IT CLEAR THAT DOCUMENTS WERE FILED BEFORE THE AO BECAUSE IT HAS NOT BEEN DE NIED THAT LETTER DATED 5-11-08 WAS FILED BEFORE THE AO. IN ANY CASE, DURING THE HEARING PHOTO COPIES OF 150 CERTIFICATES ISSUED IN THE NAME OF THE ASSESSEE BY SPLITTING THE JUMBO CERTIFICATE, HAVE BEEN FILED, W HICH SHOW THAT SHARES WERE IN THE NAME OF THE ASSESSEE. A DOCUMENT FROM T HE MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA FROM THE CIT E HTTP://WWW,.MCA,GOV.IN SERIAL NOS.1 & 2 OF THE SAME READ AS UNDER: OLD NAME NEW NAME (1) ROBINSON IMPEX (INDIA) LTD. SUN AND SHINE WORL DWIDE LTD. (2) M/S ROBINSON WORLDWIDE TRADE LTD SUN AND SHINE WORLDWIDE LTD. ITA NOS.787 TO 791 OF 2010 13 THIS CLEARLY SHOWS THAT ROBINSON IMPEX (INDIA) LTD. AS WELL AS M/S ROBINSON WORLDWIDE TRADE LTD WERE MERGED AND THE NE W NAME OF THE COMPANY IS SUN AND SHINE WORLDWIDE LTD. THE ABOVE E XTRACT HAS BEEN TAKEN ON 12-12-2011 WHICH SHOWS THAT THE COMPANY IS VERY MUCH IN EXISTENCE EVEN AS ON TODAY. THIS IS FURTHER SUPPORT ED BY ANOTHER EXTRACT FROM M/S. DPS SHARES & SECURITIES PVT. LTD TAKEN FROM WWW.BSEINDIA.COM . THIS EXTRACT SHOWS THE FOLLOWING INFORMATION: OUTCOME OF EGM 02-05-2011 18:36 M/S ROBINSON WORLD WIDE TRADE LTD HAS INFORMED THAT THE SHAREHOLDERS AT THE EXTRA ORDINAR Y GENERAL MEETING (EGM) OF THE COMPANY HELD ON MAY 02,2011, INTER ALIA, HAV E TAKEN THE FOLLOWING DECISIONS: 1) TO CHANCE TO THE NAME OF THE COMPANY FROM M/S R PBINSON WORLDWIDE TRADE LTD. TO SUN AND SHINE WORLDWIDE L TD. THIS CONFIRMS THAT THE NAME OF THE COMPANY WAS CHAN GED IN THE EXTRA ORDINARY GENERAL MEETING HELD ON 2-5-2011. PERHAPS BECAUSE OF THE CHANGE OF NAME, THE AO HAS NOT BEEN ABLE TO CONFIRM THE EXISTENCE OF THE COMPANY. THE THIRD DOCUMENT IS ALSO TAKEN FROM THE BSE SITE SHOWS THAT SHARES WERE TRADED ON 6-9-2011 AT RS.36. 75. THIS CLEARLY SHOWS THAT SHARES OF THE COMPANY ARE STILL BEING TR ADED BUT UNDER THE NEW NAME. IN THE LIGHT OF THESE DOCUMENTS, WE FIND NO MERIT IN THE OBJECTION RAISED IN THE LETTER OF THE DCIT -12, ADD RESSED TO THE CIT DR, WHICH WAS PLACED BEFORE US. 10. THE SECOND IMPORTANT ISSUE ON THE BASIS OF WHIC H THE CLAIM OF THE ASSESSEE FOR CAPITAL GAIN WAS HELD TO BE BOGUS WAS THE STATEMENT OF DIRECTOR OF M/S. DPS SHARES & SECURITIES PVT. LT D. THE AO HAS FAIRLY GIVEN CROSS EXAMINATION TO THE ASSESSEE OF THE DIRE CTOR OF M/S. DPS ITA NOS.787 TO 791 OF 2010 14 SHARES & SECURITIES PVT. LTD. SHRI PRATIK SHAH DIRE CTOR OF M/S. DPS SHARES & SECURITIES PVT. LTD WAS CROSS EXAMINED BY THE REPRESENTATIVE OF THE ASSESSEE SHRI KETAN MEHTA ON 20-11-2008 AND AO HAS REPRODUCED THE WHOLE CROSS EXAMINATION. THE QUESTIO N AND ANSWER TO QS. NOS.22 & 34 READ AS UNDER: Q.22 . YOU HAVE SLATED IN YOUR STATEMENT U/S. 13] ON ]8. IJ.2008 THAT ALL THE BOGUS BILLS WERE ISSUED BY YOU AT THE INSTRUCTION OF MR.NARESH SABOO AND MR . SHIRISH C.SHAH. DO YOU AGREE WITH THE SAME? ANS. YES I AGREE. THE BOGUS BILLS WERE ISSUED BY .N Y COMPANY AT THE INSTRUCTIONS OF MR.NARESH SABOO. AS THESE HILLS WER E BOGUS AND OFF MARKET TRANSACTION. THE PHYSICAL SHARES WHICH WERE GIVEN B Y US TO THE SAID MS..JIGNA A.KARIYA WERE RECEIVED BY US FROM NARESH SAHOO AND WERE FORWARDED BY US TO MS.JIGNA .A. KARIYA, BECAUSE THESE TRANSACTIONS WERE NOT ON THE FLOOR, THE SAID PHYSICAL SHARES HAD NOT CONIC FROM BSE. HENCE THIS WAS AN ACCOMMODATION TRANSACTION, WE RECEIVED THE SHARES F ROM NARESH SAHOO AND FORWARDED TO MS..JIGNA A.KARIYA. Q.34 . DO YOU WANT TO SAY ANYTHING ELSE? ANS. YES. ALL THESE ACCOMMODATION HILLS/BOGUS BILLS WERE GIVEN BY OUR COMPANY FOR THE ACCOMMODATION OF THE SAID ASSESSEES FOR THE LTCG PURPOSE AND THE DELIVERY OF PHYSICAL SHARES WHICH WERE GIVE N BY US TO THE SAID ASSESSEES WERE RECEIVED BY US FROM MR.NARESH SABOO AND HANDED OVER TO THE SAID ASSESSEES. THE ABOVE CLEARLY SHOWS THAT THE SO CALLED BOGUS SH ARES WERE ISSUED ON THE INSTRUCTIONS OF SHRI NARESH SABOO. BEFORE US IT WAS DENIED THAT ASSESSEE HAS ANYTHING TO DO WITH SHRI NARESH SABOO. NEITHER THE AO NOR THE LD. CIT(A) HAS BROUGHT ANY MATERIAL ON RECO RD TO SHOW THAT SHRI NARESH SABOO HAS SOME CONNECTION WITH THE ASSESSEE. EVEN LD. CIT DR HAS NOT PLACED ANY EVIDENCE TO SHOW THAT SHRI NARES H SABOO WAS ACTING ON BEHALF OF THE ASSESSEE. SECONDLY, SHRI PR ATIK SHAH IN ANSWER TO BOTH QUESTION NOS.22 & 34 HAS CLEARLY ADMITTED T HAT PHYSICAL DELIVERY OF THE SHARES WAS GIVEN TO THE ASSESSEE. N OW THE QUESTION IS HOW ASSESSEE IS GOING TO FIND OUT WHETHER THIS TRAN SACTION WAS BOGUS WHEN PHYSICAL DELIVERY HAS BEEN HANDED OVER TO THE ASSESSEE. THE ITA NOS.787 TO 791 OF 2010 15 AUTHORITIES BELOW HAVE ALSO DOUBTED THE SOURCE FOR PURCHASES. AS POINTED OUT BY THE LD. COUNSEL ASSESSEE HAS EARNED SPECULATION PROFIT AMOUNTING TO RS.28,941/- WHICH HAS BEEN INCLUDED IN THE RETURN OF INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES F OR A.Y 2004-05, A COPY OF THE COMPUTATION IS ON PAGES 22 & 23 OF THE PAPER BOOK AND THIS HAS BEEN ACCEPTED BY THE DEPARTMENT. THE ASSES SEE HAS ALSO FILED THE BALANCE SHEET IN WHICH INVESTMENT IN SHARES HAS BEEN SHOWN AT RS.1,45,06,054/- AND IN THE ANNEXURE SHOWING THE DE TAILS OF INVESTMENT IN M/S ROBINSON WORLDWIDE TRADE LTD SHAR ES HAVE BEEN INCLUDED AT 15500 SHARES AMOUNTING TO RS.28810.54. THIS PURCHASE HAS TO BE TREATED AS ACCEPTED BECAUSE THIS BALANCE SHEET WAS FILED IN A.Y 2004-05 AND NO ADVERSE INFERENCE HAS BEEN TAKEN IN THAT YEAR. THESE DOCUMENTS ARE AVAILABLE AT PAGES 24 TO 26 OF THE PAPER BOOK. THE ASSESSEE HAD ALSO FILED THE CONTRACT NOTE FOR S ALE AND PURCHASE OF SHARES GENERATING SPECULATING PROFIT FILED AT PAGES 36 & 37 OF THE PAPER BOOK. THE CONTRACT NOTE FOR PURCHASE OF 15500 SHARE S OF M/S ROBINSON WORLDWIDE TRADE LTD FROM M/S. DPS SHARES & SECURITI ES PVT. LTD HAS BEEN FILED AT PAGE-38 OF THE PAPER BOOK AND THE PAR TICULARS READ AS UNDER: ORDER NO. TRADE NO. TRADE TIME QUANTITY KIND OF S ECURITY PURCHASE RATE BROKERAGE RATE PLUS AMOUNT BROKERAGE NET RATE 29926007 0002407 10:22:45 15500 ROBIN SON 1.45 0.02 1.47 22785.00 IMP PHY :TOTAL: 22785. 00 THE ABOVE PARTICULARS WOULD NOT INDICATE THAT IT WA S A BOGUS TRANSACTION. IN ANY CASE, ASSESSEE HAS NO NEED TO K NOW WHETHER THE TRANSACTION WAS BOGUS OR NOT BECAUSE EVEN INVOICE H AS BEEN ISSUED BY ITA NOS.787 TO 791 OF 2010 16 M/S. DPS SHARES & SECURITIES PVT. LTD FOR PURCHASE OF THESE SHARES, COPY OF WHICH IS PLACED AT PAGE 39 OF THE PAPER BOO K AND DELIVERY WAS ALSO GIVEN WHICH IS AT PAGE 40 OF THE PAPER BOOK. L ATER ON ASSESSEE FILED AN APPLICATION FOR TRANSFER OF THESE SHARES A ND WE HAVE ALREADY DISCUSSED THE PARTICULARS OF TRANSFER FORM. ULTIMAT ELY, A JUMBO SHARE CERTIFICATE SHOWING 15500 SHARES WAS ISSUED BY THE COMPANY, COPY OF WHICH IS AT PAGE 45 OF THE PAPER BOOK. LATER ON ASS ESSEE LODGED A DEMAT REQUEST WITH ACTION FINANCIAL SERVICES (INDIA ) LTD. FOR DEMAT OF 15500 SHARES OF M/S ROBINSON WORLDWIDE TRADE LTD AN D COPY OF THAT REQUEST IS AVAILABLE AT PAGE 46. THE DEMAT ACCOUNT STATEMENT OF THE ASSESSEE WITH ACTION FINANCIAL SERVICES (INDIA) LTD . SHOWS THAT 15500 SHARES HAVE BEEN DEMATERIALISED. WE FAIL TO UNDERST AND HOW THE SHARES WERE ACTUALLY TRANSFERRED IN PHYSICAL FORM A ND LATER ON DEMATERIALISED AND HOW THIS WHOLE PROCESS CAN BE CA LLED BOGUS. THIS CANNOT BE CALLED BOGUS UNLESS THE CONNIVANCE OF M/S ROBINSON WORLDWIDE TRADE LTD AND ACTION FINANCIAL SERVICES ( INDIA) LTD. IS ALSO ALLEGED AND PROVED. BUT NO ENQUIRY SEEMS TO HAVE BE EN CONDUCTED WITH THESE ENTITIES. ULTIMATELY, THE SHARES HAVE BE EN SOLD THROUGH ANUGRAH STOCK AND BROKING PVT. LTD. ON VARIOUS DATES AS UNDER: DATE QUANTITY 09-12-2004 3000 13-12-2004 3000 04-01-2005 6000 O6-01-2005 3500 THE CONTRACT NOTES FOR THE ABOVE SALES ARE PLACED I N THE PAPER BOOK AT PAGES 48 TO 55. THE ABOVE SALES HAVE BEEN REFLECTED IN THE LATER DEMAT ACCOUNT WITH ACTION FINANCIAL SERVICES (INDIA) LTD. , COPY OF WHICH IS AT ITA NOS.787 TO 791 OF 2010 17 PAGES 57 AND 58 OF THE PAPER BOOK. FROM THE ABOVE I T IS CLEAR THAT ASSESSEE HAS PROVED THE PURCHASES AS WELL AS THE SA LES TRANSACTIONS. THE SHARES HAVE BEEN SOLD THROUGH BSE AND IT IS NOT ALLEGED THAT THESE TRANSACTIONS ARE ALSO OFF MARKET. ALL THESE FACTS C LEARLY PROVE THAT THE TRANSACTIONS ARE GENUINE AND THE SAME CANNOT BE DOU BTED UNLESS AND UNTILL THE OTHER PARTICIPANTS LIKE DEPOSITORY KNOWN AS ACTION FINANCIAL SERVICES (INDIA) LTD. IS ALSO PROVED TO BE BOGUS OR IN CONNIVANCE WITH THE PENNY STOCK SCAM AND EVEN THE SALE CONDUCTED TH ROUGH ANUGRAH STOCK AND BROKING PVT. LTD. IS PROVED TO BE BOGUS. IN OUR OPINION, WHEN OVERWHELMING DOCUMENTARY EVIDENCE IS AVAILABLE TO PROVE THE PURCHASE AND SALE TRANSACTIONS PART OF WHICH HAS AL READY BEEN ACCEPTED BY THE REVENUE IN A.Y 2004-05, THEN A MERE STATEMENT BY THE BROKER WHO HAS SOLD THE SHARES TO THE ASSESSEE THAT THIS WAS AN ACCOMMODATION ENTRY CANNOT LEAD TO A CONCLUSION THA T THE WHOLE TRANSACTION WAS BOGUS. IN THESE CIRCUMSTANCES, WE A RE OF THE VIEW THAT THE SALE AND PURCHASE OF THE SHARES STAND PROVED AN D SHOULD BE ASSESSED UNDER THE HEAD CAPITAL GAINS. 11. GROUND NO.2 : NO ARGUMENTS HAVE BEEN MADE BY BOTH THE PARTIES REGARDING DISALLOWANCE OF 5% COMMISSION ON THE BOGUS TRANSFER OF PURCHASE AND SALE OF SHARES. FIRSTLY, T HERE IS NO EVIDENCE ON RECORD TO SHOW THAT ANY AMOUNT OR PREMIUM WAS PAID FOR ENTERING INTO IN THIS TRANSACTION. SECONDLY, SINCE WE HAVE ALREAD Y ACCEPTED THE TRANSACTIONS TO BE GENUINE, THEREFORE, THIS ISSUE B ECOMES INFRUCTUOUS AND NO ADDITION CAN BE MADE ON ACCOUNT OF 5% PREMIU M. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CI T(A) AND HOLD THAT ITA NOS.787 TO 791 OF 2010 18 THE ASSESSEE HAS ENTERED INTO GENUINE TRANSACTION O F PURCHASE AND SALE OF SHARES. 12. AS OBSERVED RIGHT IN THE BEGINNING THAT FACTS I N ALL OTHER CASES BEFORE US ARE IDENTICAL, THEREFORE, FOLLOWING THIS DECISION ALL THOSE FOUR APPEALS ARE ALSO ALLOWED. 13. IN SUM, ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 3 0/12/2011. SD/- SD/- (VIJAY PAL RAO) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 30-12-2011. P/-*