RATNAKAR M. PUJARI, MUMBAI V. ITO WD 25(3)(3), MUMBAI

ITA 995/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3759 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 13-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VISHWAS V MEHENDALE
• Assessee Lawyers: B S BIST
• Keywords: Bogus purchase; Unexplained cash credit; Tangible material; Difference of opinion; Sham transactions; Reason to believe; Change of opinion
• Section: 143(3); 142(1); 68; 148

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.995 /MUM/2012 ( / ASSESSMENT YEAR : 2006-07) RATNAKAR M. PUJARI, SHOP NO. 10, GEETA SADAN, IRANIWADI NO. 3, KANDIVALI (W), MUMBAI 400057. / V. INCOME TAX OFFICER, WARD 25(3)(3), R. NO. 304, C-11, PRATYAKSHAKAR BHAVAN, BANDRA-KURLA COMPLEX, MUMBAI 400051. ./ PAN :AGCPP8410B ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI VISHWAS V. MEHENDALE ASSESSEE BY : SHRI B.S. BIST (D.R.) / DATE OF HEARING : 09-05-2016 / DATE OF PRONOUNCEMENT : 03-08-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 995/MUM/2012, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 25 TH NOVEMBER, 2011 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 35 MU MBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2006-07, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSME NT ORDER DATED 29 TH DECEMBER, 2009 PASSED BY THE LEARNED ASSESSING OFFI CER (HEREINAFTER CALLED THE AO) U/S 143(3) R.W.S. 147 OF THE INCOME TAX A CT,1961 (HEREINAFTER CALLED THE ACT). ITA 995/MUM/2012 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- BEING AGGRIEVED BY THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) THE APPELLANT PREFERS THE APPEA L ON THE FOLLOWING AMONGST OTHER GROUNDS WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER; 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, HON. COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN CON FIRMING THE RE-OPENING THE ASSESSMENT BASED ON THE INFORMATION FRO M ADDL. CIT(INV), WHICH WAS RELEVANT TO AY-2007-08 AND NOT F OR THE AY-2006- 07. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, HON. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CO NFIRMING THE COMPUTATION OF APPELLANT'S TAXABLE INCOME AT RS.5,59,3 60/- AS AGAINST APPELLANT'S RETURNED INCOME OF RS.66,610/-. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, HON. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN TR EATING THE AMOUNT REALIZED FROM THE SALE OF SHARES OF A LISTED COMPANY AS UNEXPLAINED CASH CREDIT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, HON. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN NO T APPRECIATING THE FACT THAT THE SHARES OF A LISTED COMPANY HAVE BEEN SO LD THROUGH A RECOGNIZED STOCK EXCHANGE AND THE TRANSACTION HAS ALS O BEEN CHARGED TO SECURITY TRANSACTION TAX. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING A FAST FOOD AND JUICE CENTRE IN IRANIWAD I IN KANDIVALI (W) UNDER THE NAME AND STYLE OF BHAGVWATI JUICE CENTRE. SPECIFIC INFORMATION WAS RECEIVED FROM ADDL. CIT (INV.) , UNIT-V , MUMBAI THAT THE AS SESSEE IS INDULGING IN NON- GENUINE AND BOGUS CAPITAL GAINS FROM THE TRANSACTIO NS OF PURCHASE AND SALE OF SHARES OF M/S SHIV OM INVESTMENT & CONSULTANCY L TD., A KOLKATTA BASED COMPANY. IT WAS ALSO MENTIONED IN THE INFORMATION RECEIVED BY THE REVENUE THAT M/S SHIV OM INVESTMENT & CONSULTANCY LTD. QUOT ED AT THE KOLKATTA STOCK EXCHANGE WAS ONLY A PENNY STOCK COMPANY AND F OR THE PURPOSE OF SHOWING THE HOLDING PERIOD OF MORE THAN 12 MONTHS, M/S BADRI PRASAD & ITA 995/MUM/2012 3 SONS AND OTHER KOLKATTA BASED BROKERS HAVE ISSUED P RE-DATED CONTRACT NOTES ON THE DATES PRIOR TO JULY, 2004 FOR THE SALE OF SH ARES OF THIS COMPANY AT THE RATE OF RS. 4/- TO RS.4.50 PER SHARE TO THE VARIOUS PERSONS. IT WAS ALSO MENTIONED THAT ASSESSEE HAS PURCHASED 4000 SHARES O F M/S SHIV OM INVESTMENTS ON 11 TH MAY, 2004 FOR A CONSIDERATION OF RS. 4,080/- AND O UT OF THE SAME, 1000 SHARES WERE SOLD ON 16 TH MAY, 2006 AND 2500 SHARES WERE SOLD ON 27 TH JANUARY, 2006 FOR A TOTAL CONSIDERATION OF RS. 6,8 9,750/-. THUS, THE REVENUE HAS REASON TO BELIEVE THAT INCOME CHARG EABLE TO TAX HAS ESCAPED ASSESSMENT IN THE CASE OF THE ASSESSEE AND THE ASS ESSMENT WAS RE-OPENED BY ISSUE OF NOTICE U/S 148 OF THE ACT DATED 7 TH APRIL, 2008 WAS ISSUED AND SERVED UPON THE ASSESSEE ON 1ST MAY, 2008 , I.E. WITHIN A PERIOD OF 4 YEARS FROM THE END OF ASSESSMENT YEAR. IN REPLY, THE ASSESSEE VID E LETTER DATED 27 TH OCTOBER, 2009 HAS SUBMITTED THAT ORIGINAL RETURN FILED ON 5 TH JUNE, 2006 MAY BE TREATED AS A RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THE A.O. NOTICED THAT ASSESSMENT IN THE CASE OF THE ASS ESSEE FOR THE ASSESSMENT YEAR 2005-06 I.E. THE YEAR IN WHICH THE ALLEGED SHA RES WERE CLAIMED TO BE PURCHASED BY THE ASSESSEE WAS COMPLETED ON 24 TH DECEMBER, 2009 U/S 143(3) R.W.S. 147 OF THE ACT WHEREIN IT WAS CLEARLY PROVED THAT THE ASSESSEES CLAIM OF PURCHASE OF ALLEGED 4000 SHARES OF M/S SHIV OM INVE STMENTS AND CONSULTANCY LIMITED ON 11 TH MAY, 2004 FOR A CONSIDERATION OF RS. 4,080/- WAS BOGUS AND WAS ONLY A PAPER TRANSACTION. THE RELEV ANT PORTION OF THE ASSESSMENT ORDER DATED 24.12.2009 PASSED BY THE AO U/S 143(3) R.W.S. 147 OF THE ACT FOR THE ASSESSMENT YEAR 2005-06 IS REPRO DUCED BELOW:- BOGUS PURCHASE OF SHARES: AS MENTIONED EARLIER, IN THIS CASE SPECIFIC INFORMATION WAS RECEIVED FROM ADDL.DI T (INV.), UNIT-V, MUMBAI THAT ASSESSEE IS INDULGED IN BOGUS/NON-GENUI NE LONG TERM CAPITAL GAIN FROM THE TRANSACTIONS OF ALLEGED PURCH ASE AND SALE OF SHARES OF M/S SHIV OM INVESTMENTS. FURTHER, IN THE SAID INFORMATION IT WAS ALSO MENTIONED THAT ASSESSEE HAS PURCHASED ITA 995/MUM/2012 4 4000 SHARES OF M/S SHIV OM INVESTMENTS ON 11.05.200 4 FOR A CONSIDERATION OF RS. 4,080/- AND OUT OF THE SAME, 1 000 SHARES WERE SOLD ON 16.05.2006 AND 2500 SHARES WERE SOLD O N 27.1.2006 FOR A TOTAL CONSIDERATION OF RS.6,89,750/-. FROM TH IS, IT IS QUITE APPARENT THAT ASSESSEE HAS PURCHASED THE ALLEGED SH ARE FOR RS.4 PER SHARE IN MAY'2004 AND SOLD THE SAME FOR RS.197 PER SHARE IN JANUARY'2006 (I.E. 2500 SHARES WERE SOLD ON 27.01.2 006 FOR RS.197/- PER SHARE) WHICH MEANS THAT THE VALUE OF T HE SCRIP HAS GONE TO 49 TIMES OF ITS PURCHASE WITHIN A SHORT PER IOD TIME WHICH IS QUITE UNUSUAL AND UNBELIEVABLE. 5.1 IN VIEW OF THE ABOVE SPECIFIC AND CONCRETE INFO RMATION RECEIVED, VIDE THIS OFFICE NOTICE U/S 142(1) OF THE I.T.ACT-1 961, DATED 04.08.2009 ASSESSEE WAS REQUIRED FURNISH THE DETAIL S OF INVESTMENT MADE IN SHARES ALONG WITH ALL DOCUMENTAR Y EVIDENCES. IN REPLY, ASSESSEE'S AR VIDE LETTER DATED 27.10.200 9 HAS SUBMITTED THAT ASSESSEE HAS PURCHASED 4000 SHARES OF SHIV OM INVESTMENTS IN MAY'2004 FOR RS.4,080/-. IN SUPPORT OF THIS PURC HASE, ASSESSEE HAS ENCLOSED A COPY OF BILL ISSUED BY M/S BADRI PRA SAD & SONS, DATED 11.05.2004. ON GOING THROUGH THE SAID BROKER BILL, IT IS CLEARLY SEEN THAT THE VITAL COLUMNS IN THE SAID BRO KER BILL SUCH AS ORDER NO., TRADE NO. & TRADE TIME WERE LEFT BLANK. WITHOUT THESE DETAILS, THIS BILL CANNOT BE HELD AS GENUINE. THIS CLEARLY FORTIFIES INFORMATION RECEIVED IN THE CASE OF THE ASSESSEE TH AT SAID BILL ISSUED M/S BADRI PRASAD & SONS IS NOTHING BUT A BOG US BILL. 5.2 IN VIEW OF THE SAME, VIDE THIS OFFICE LETTER DA TED 19.11.2009, ASSESSEE WAS REQUESTED TO SHOW CAUSE AS TO WHY THE PURCHASE OF THESE SHARES SHALL NOT BE TREATED AS NON-GENUINE. F URTHER, IN THE ITA 995/MUM/2012 5 SAID LETTER, HE WAS SPECIFICALLY REQUIRED TO FURNIS H THE FOLLOWING DETAILS: (I) YOUR ENTIRE BUSINESS ACTIVITY IS AT MUMBAI, WHY AND THROUGH WHOM YOU HAVE APPROACHED THE KOLKATTA SHARE BROKER, M/S BADRI PRASAD & SONS THROUGH WHOM YOU HA VE CLAIMED TO HAVE PURCHASED 4000 SHARES OF SHIV OM (II) DETAILS OF PAYMENT MADE TO PURCHASE THE ABOVE SHARES ALONG WITH MODE/PROOF OF PAYMENT. 5.3 IN REPLY TO THE ABOVE, ASSESSEE'S AR HAS SUBMIT TED THAT INVESTMENT IN THE SHARES OF SHIV OM INVESTMENTS AND CONSULTANCY LTD. WAS MADE BY THE ASSESSEE IN 2004 ON THE BASIS OF ADVICE GIVEN BY HIS WELL-WISHER. FURTHER WITH REGARD TO MO DE OF PAYMENT, HE HAS SUBMITTED THAT THE PURCHASE OF THESE SHARES HAVE BEEN MADE IN CASH. HOWEVER, NO PROOF OF SUCH CASH PAYMEN T WAS SUBSTANTIATE WITH ANY KIND OF DOCUMENTARY EVIDENCES . 5.6 IN VIEW OF THE ABOVE DISCUSSION AND AFTER CONSI DERING THE SUBMISSIONS MADE BY THE ASSESSEE, THE FOLLOWING DIS CREPANCIES ARE NOTICED WITH REGARD TO THE PURCHASE OF THESE SH ARES. (I) THE RELEVANT COLUMNS IN THE PURCHASE BILL I.E. ORDE R NO., TRADE NO., AND TRADE TIME ARE LEFT BLANK. (II) NO PROOF/SOURCE OF PAYMENT FOR PURCHASE OF THESE SH ARES IS BROUGHT ON RECORD. (III) THE PURCHASE OF THE SHARES CANNOT BE VERIFIABLE FRO M THE CALCUTTA STOCK EXCHANGE SINCE THE VITAL COLUMNS IN THE SAID ITA 995/MUM/2012 6 BROKER BILL SUCH AS ORDER NO., TRADE NO. & TRADE TI ME WERE LEFT BLANK. 5.7 FURTHER, BEFORE PROCEEDING INTO THE CASE, ONE H AS TO LOOK INTO THE GENERAL MODUS OPERANDI ADOPTED BY THE ASSESSEES WHO INDULGE IN CONVERTING THEIR UNACCOUNTED 'CASH TO AC COUNTED FORM THROUGH THE ROUTE OF CAPITAL GAINS. WITH THE EXEMPT ION/ REDUCTION IN TAX ON CAPITAL GAINS ON SHARES, THERE IS RAMPANT PR ACTICE OF ROUTING THE UNACCOUNTED CASH IN THE FORM OF LONG TERM CAPIT AL GAINS AND CLAIMING THE SAME AS EXEMPT / CONCESSIONAL TAX RATE . THE GENERAL MODUS OPERANDI ADOPTED BY SUCH TYPE OF ASSESSES IS AS UNDER: (I) WITH THE COLLUSION OF BROKER, SHARES ARE PURCHASED OF AN UNKNOWN COMPANY WITH DUBIOUS BACKGROUND FOR MINISCU LE CONSIDERATION. FOR THIS PURPOSE, THE BROKER ISSUES A FAKE BROKERAGE NOTE. (II) THE COUNTER PARTY IS/ARE USUALLY NOT TRACEABLE AND RELATED TO THE BROKER AND THE BROKER UNDERTAKES OFF-MARKET TRANSACTIONS TO ACCOMMODATE THE ASSESSEE. (III) AFTER A YEAR, THE SHARES ARE SOLD BACK BY THE ASSES SEE, IN THE MEANTIME, THE SHARES PRICES ARE RIGGED BY THE C ONCERNED BROKER TO AN ABNORMALLY HIGH LEVEL. (IV) THE SHARES ARE NOW SOLD BY THE ASSESSEE AND SALE CONSIDERATION IS RECEIVED. THE SALE CONSIDERATION I S IN FACT FIRST PAID BY THE ASSESSEE IN CASH TO A TRUSTED CON FIDANTE OF THE BROKER. THIS CASH CONSIDERATION WHICH IS INTROD UCED IN A BANKING CHANNEL BY ROUTING THROUGH A NUMBER OF ACCO UNTS, ITA 995/MUM/2012 7 FINALLY REACHES THE ACCOUNTS OF THE BROKER. WITH TH IS AMOUNT, THE BROKER PAID THE CONSIDERATION TO THE ASSESSEE. (V) THUS THE ASSESSEE'S OWN CASH IS INTRODUCED AND COMES BACK IN THE FORM OF LONG TERM CAPITAL GAIN THEREBY CLAIMING CONCESSIONAL TAX RATE. (VI) THE OTHER TYPICAL CHARACTERISTICS OF SUCH TRAN SACTIONS ARE AS FOLLOWS: (A) THE SCRIP INVESTED IN AN OBSCURE ONE IN MOST CASES. IT IS MERELY SHELL COMPANY WITH NO ACTIVITIE S WHATSOEVER. (B) THE ASSESSEE HIMSELF WILL BE UNAWARE OF THE FINANCIAL PERFORMANCE OF THE COMPANY IN WHICH HE IS INVESTED. (C) THE SHARES ARE PURCHASED AT LOWER LEVELS AND SO LD AT HIGHER RATES THROUGH THE SERIES OF OFF-MARKET TRANSACTIONS CREATED BY THE BROKER WITH VESTED INTEREST. THE SHARE PRICES ARE ARTIFICIALLY RIGGED THROUGH OFF MARKET TRANSACTIONS. THIS HIKE IS NOT SUPPORTED BY THE FUNDAMENTALS OF THE COMPANY. (D) THE ASSESSEE USES THE SERVICES OF THE BROKER ON LY FOR THESE PARTICULAR TRANSACTIONS. ALSO, THE ASSESS EE OTHERWISE IS PASSIVE INVESTOR OR DOES NOT INVEST IN OTHER SCRIPS. ITA 995/MUM/2012 8 (E) THE ASSESSEE HAS NEVER MET THE BROKER AND USUAL LY CLAIMS THAT THE TRANSACTIONS ARE ARRANGED THROUGH A DIFFERENT PERSON. 5.8 HAVING SEEN THE ABOVE MODUS OPERANDI AND THE ME THOD IN WHICH THESE TYPES OF TRANSACTIONS ARE STRUCTURED, T HE FOLLOWING FACTS EMERGES IN THE CASE OF THE ASSESSEE WHICH ARE DISCUSSED IN DETAIL AS UNDER: (A) PURCHASE OF SHARES IS AN OFF MARKET TRANACTION : FROM THE MODUS OPERANDI ADOPTED BY THE ASSESSEE, IT IS SEEN THAT THE PURCHASE TRANSACTION HAS BEEN DONE OFF MARKET I N PHYSICAL FORM BY PAYING CASH. THIS HAS BEEN CARRIED OUT IN A PLANNED MANNER TO CAPITALIZE THE BLACK MONEY BY TAKING EXEM PTION BY CLAIMING THE SAME AS LONG TERM CAPITAL GAIN. (B) NOT IN CONFIRMITY WITH SEBI GUIDELINES : AS EVIDENT FROM THE ABOVE, ASSESSEE HAS PURCHASED T HE SHARE M/S SHIV OM IN PHYSICAL FORM AND THEREAFTER, THE SAME H AVE BEEN CONVERTED INTO ELECTRONIC MODE. IN SUCH CASE OFF MA RKET TRANSACTIONS, AS PER SEBI GUIDELINES, A BROKER CANN OT ISSUE A BROKERAGE NOTE CONTAINING TIME STAMP OF STOCK EXCHA NGE TRADED TIME EVEN THOUGH THE TRANSACTIONS ARE NOT ROUTED TH ROUGH STOCK EXCHANGE AND SUCH TRANSACTIONS ARE OFF MARKET TRANS ACTIONS. SEBI HAD VIDE CIRCULAR NO. SMDRP/POLICY/CIT-21/99, DATED 14TH SEPTEMBER'1999 BANNED ALL NEGOTIATED DEALS INCLUDIN G CROSS DEALS AND ALL SUCH DEALS ARE REQUIRED TO BE EXECUTED ONLY ON THE SCREENS OF EXCHANGES IN THE PRICE AND ORDER MATCHING MECHAN ISM OF THE ITA 995/MUM/2012 9 EXCHANGE JUST LIKE ANY OTHER NORMAL TRADE. THUS FRO M THE ABOVE, IT CAN BE SEEN THAT SUCH TRANSACTIONS ARE ILLEGAL, AND ARE NOT IN CONFORMITY WITH REGULATORY GUIDELINES. C) PAYMENT FOR PURCHASE MADE IN CASH : THE PURCHASE PAYMENTS WERE MADE IN CASH AND NOT THR OUGH THE NORMAL BANKING CHANNEL THEREFORE THE SAME WERE NON- VERIFIABLE FROM THE AUTHENTIC SUPPORTING DETAILS SUCH AS BANK ACCOUNTS/DOCUMENTS. ON ONE SIDE, ASSESSEE IS CLAIMI NG THAT MONEY IS RECEIVED THROUGH BANKING CHANNEL AND SO TR ANSACTION IS GENUINE, BUT WHAT THE ASSESSEE IS NOT CONSIDERING T HAT, THE STARTING POINT, I.E. PAYMENTS FOR SHARES PURCHASED IS MADE T HROUGH CASH AND ANY OTHER MODE WHICH IS NOT BANKING CHANNEL, EV EN THOUGH ASSESSEE WAS HAVING BANK ACCOUNT WHY THE PURCHASES WERE NOT MADE BY MAKING PAYMENT THROUGH BANK. HENCE WHEN THE STARTING POINT ITSELF IS NOT GENUINE, HOW THE WHOLE TRANSACT IONS CAN BE CONSIDERED AS GENUINE. D) ASSESSEE NOT A REGULAR INVESTOR IN SHARES: THE ASSESSEE IS NOT A REGULAR INVESTOR IN SHARES. H ENCE, IT IS QUITE SURPRISING AS TO HOW HE EARNED A PHENOMENAL RETURN OF 49 TIMES WITHIN A SHORT SPAN OF PERIOD WHICH IS EXTREMELY UN USUAL. THE PAST RECORDS OF THE ASSESSEE FOR THE PRECEDING YEARS SHO W THAT THE ASSESSEE HAS BEEN HARDLY ACTIVE IN THE STOCK MARKET . THIS BEING THE CASE, THE ASSESSEE HAS ENTERED INTO A SHAM TRAN SACTION WITH THE FULL KNOWLEDGE OF IT, SO AS TO CONVERT UNACCOUN TED MONEY INTO ACCOUNTED MONEY IN THE GUISE OF CAPITAL GAINS. ITA 995/MUM/2012 10 E) NATURE OF TRANSACTION : THE NATURE OF TRANSACTION ITSELF LOOKS SUSPICIOUS F ROM THE MANNER IT HAS BEEN CONDUCTED I.E. THE ABNORMAL APPRECIATION I N THE VALUE OF SHARES, THE MODE OF PAYMENT FOR PURCHASE OF SHARES NOT DOING THE TRANSACTION THROUGH THE NORMAL SHARE DEALING PROCED URES. THE ASSESSEE HAS SHOWN TO HAVE RECEIVED SALE PROCEEDS T HROUGH CHEQUE WHEREAS PURCHASES WERE CONSCIOUSLY MADE IN C ASH IN THE AFORESAID MANNER TO FACILITATE MANIPULATION OF THE PURCHASE FOR ASSESSEE'S BENEFIT. F) PENNY SHARE : THE SHARES IN WHICH THE ASSESSEE HAS CLAIMED TO HAV E MADE A DEAL, ARE IDENTIFIED AS PENNY SHARES BY THE INVESTI GATION WING OF THE DEPARTMENT BECAUSE RATES OF THESE SHARES ARE NO T BASED ON BUSINESS RESULTS OF THE COMPANIES BUT SAME ARE FLUC TUATED BY INSIDER'S TRADING FROM ZERO VALUE (NEGLIGIBLE PRICE ) TO VERY HIGH PRICE AND VICE VERSA WITHOUT ANY REASON OR BASIS TO ACCOM MODATE OR GENERATE BOGUS CAPITAL GAIN OR LOSS. 5.9 IN THE INSTANT CASE, ALL THE ABOVE FEATURES ARE PRESENT IN THE TRANSACTION OF SHARES MADE BY THE ASSESSEE. MOREOVE R, THERE IS ALSO A SPECIFIC INFORMATION THAT ASSESSEE IS INDULG ED IN NON- GENUINE & BOGUS CAPITAL GAIN OBTAINED FROM THE TRAN SACTIONS OF PURCHASE AND SALE OF SHARES OF M/S SHIV OM INVESTME NTS & CONSULTANCY LTD., A KOLKATTA BASED COMPANY. IN THI S RESPECT, IT IS ALSO PERTINENT TO MENTION THAT EVEN ASSESSEE HAS FA ILED TO FURNISH THE PROOF OF PAYMENT FOR THESE TRANSACTIONS. ITA 995/MUM/2012 11 5.10. SUBJECT TO THE ABOVE DISCUSSION, IT IS HELD T HAT THE SO CALLED PURCHASE OF SHARES IS A FABRICATED TRANSACTIONS AND HENCE THE SAME ARE HELD AS BOGUS. 4. FROM THE ABOVE, IT WAS OBSERVED BY THE A.O. THAT THE SO CALLED PURCHASE OF SHARES OF M/S SHIV OM INVESTMENT AND CONSULTANCY LIMITED WERE FABRICATED TRANSACTION AS HELD IN THE ASSESSEES OW N CASE FOR ASSESSMENT YEAR 2005-06. THE A.O. OBSERVED THAT THE PAYMENTS FOR S HARES PURCHASED WERE MADE THROUGH CASH AND NOT THROUGH BANKING CHANNEL. THUS, THE A.O. CAME TO THE CONCLUSION THAT THE ASSESSEES CLAIM OF RECE IPT OF RS. 4,92,750/- ON ALLEGED SALE OF SHARES PURCHASED FROM M/S SHIV OM I NVESTMENT AND CONSULTANCY LIMITED WAS NOT GENUINE AND A FABRICATE D TRANSACTION THROUGH WHICH THE UNACCOUNTED MONEY HAS BEEN CONVERTED INTO ACCOUNTED MONEY AND THE SAME HAS BEEN TREATED AS UNEXPLAINED CASH CREDI TS AND BROUGHT TO TAX, VIDE ASSESSMENT ORDER DATED 29.12.2009 PASSED U/S 1 43(3) READ WITH SECTION 147 OF THE ACT. 5.AGGRIEVED BY THE ASSESSMENT ORDER DATED 29.12.200 9 PASSED U/S 143(3) READ WITH SECTION 147 OF THE ACT PASSED BY THE A.O. , THE ASSESSE FILED ITS FIRST APPEAL BEFORE THE LEARNED CIT(A). 6. BEFORE THE LEARNED CIT(A), THE ASSESSEE SUBMITTE D ITS SUBMISSION WHICH ARE REPRODUCED AS UNDER:- (I) WE ARE ENCLOSING THE COPIES OR THE CONTRACT NO TES OF PURCHASE AND SALE OF SHARES AND THE COPY OR LEDGER OR BADRI PRASAD & SONS (SHARE BROKER THROUGH WHOM THE SHARES WERE PURCHASE D), THE COPIES OF THE COMPUTATION OF INCOME, REVISED COMPUT ATION OF INCOME, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT A ND ITA 995/MUM/2012 12 SUBMISSIONS MADE DURING ASSESSMENT PROCEEDINGS ARE ALSO ENCLOSED. (II) THE ASSESSING OFFICER HAS RELIED ON THE ASSESS MENT ORDER OF A.Y. 2005-06 FOR PROVING THAT THE PURCHASE OR SHARE S IS A SHAM TRANSACTION. THE ASSESSMENT ORDER OF A.Y.2005-06 IS ITSELF UNDER APPEAL BEING BAD LAW AND NOT MAINTAINABLE. (III) THE ASSESSING OFFICER HAS PROCEEDED TO DRAW I NFERENCES AND CONCLUSIONS BASED ON INFORMATION RECEIVED FROM ADDL . CIT (INV.) AND HAS ARRIVED AT FOLLOWING CONCLUSIONS WHICH ARE EITHER IRRELEVANT OR TOTALLY DISTORTED. (A) PURCHASE OR SHARES IS AN OFF MARKET TRANSACTION . (B) NOT IN CONFORMITY WITH SEBI GUIDELINES (C) PAYMENT FOR PURCHASE MADE IN CASH (D) ASSESSEE NOT A REGULAR INVESTOR IN SHARES (E) NATURE OF TRANSACTION LOOKS SUSPICIOUS (F) SHARES OR COMPANY IDENTIFIED AS PENNY SHARES IV) THE ASSESSING OFFICER APPEARS TO HAVE PRECONCEI VED NOTIONS AND HAS TWISTED AND DISTORTED ALL THE FACTS ACCORDING T O HIS CONVENIENCE AND IN ORDER TO PROVE THE SAME. ITA 995/MUM/2012 13 V) THE ASSESSING OFFICER HAS FAILED TO APPRECIATE T HE FACT THAT THE ABSENCE OF ORDER NO. TRADE NO. AND TRADE TIME ON TH E CONTRACT NOTE/BROKER BILL DOES NOT MAKE THE TRANSACTION AN O FF-MARKET TRANSACTION. VI) THE ASSESSING OFFICER HAS FAILED TO PROVE AS TO HOW THIS PARTICULAR TRANSACTION IS NOT IN CONFORMITY WITH TH E SEBI GUIDELINES. VII) THE ASSESSING OFFICER HAS ERRONEOUSLY CONCLUDE D THAT SINCE PAYMENT IS MADE IN CASH, THE TRANSACTION IS BOGUS. VIII) THE ASSESSING OFFICER HAS ERRED IN CONCLUDING THAT SINCE ASSESSEE IS NOT REGULAR INVESTOR IN SHARES, HE SHOU LD NOT BE ABLE TO EARN A RETURN OF 49 TIMES WITHIN A SHORT SPAN OF PE RIOD. IX) THE ASSESSING OFFICER HAS ERRED IN CONCLUDING T HAT THE NATURE OF TRANSACTION LOOKS SUSPICIOUS. THIS STATEMENT PROVE S THE FACT THAT THE REPORT OF THE INVESTIGATION DEPARTMENT HAS DIST ORTED HIS VIEW AND ALL GENUINE, SIMPLE AND PRACTICAL MATTERS LOOK MANIPULATED. X) THE ASSESSING OFFICER HAS ERRED IN STATING THAT THE COMPANY SHIV OM INVESTMENT & CONSULTANCY LTD. IS A PENNY STOCK C OMPANY. IF THERE HAD BEEN ANY TRUTH IN THE STATEMENT OF THE IN VESTIGATION DEPARTMENT, THE COMPANY WOULD HAVE BEEN DELISTED OR ITS SHARES WOULD HAVE CRASHED IN THE MARKET. IN ACTUAL FACT T HE COMPANY IS EVEN TODAY LISTED AND AS ON 11-01-2009 ITS RATE WAS RS. 197.34 IN THE CALCUTTA STOCK EXCHANGE. XI) THE ASSESSING OFFICER HAS FAILED TO APPRECIATE THE FACT THAT THE SHARES HAVE BEEN SOLD THROUGH A RECOGNIZED STOCK EX CHANGE AND ITA 995/MUM/2012 14 THE TRANSACTION HAS BEEN CHARGED TO SECURITY TRANSA CTION TAX AND IS THUS ELIGIBLE FOR EXEMPTION U/S 10(38). THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSIONS, REJECTED THE CONTENTION OF THE ASSESSEE AFTER DISCUSSING THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2005-06 PASSED U/S 143(3) R.W.S. 147 OF THE ACT. H E HAS ALSO RELIED ON THE FOLLOWING CASE LAWS TO SUPPORT HIS FINDING: 1. MC DOWELL AND COMPANY LIMITED V. CTO (1985) 154 ITR 148(SC) 2. PHOOLCHAND BAJRANG LAL V. ITO (1992) 203 ITR 456 (SC) 3. CONSOLIDATED PHOTO AND FINVEST LTD. V. ACIT (DEL HI HC) (2006) 151 TAXMANN 41 (DELHI) 4. INDO ADEN SALT MFG. & TRADING CO. PVT. LTD. V. C IT, 159 ITR 624 (SC) 5. RAM PRASAD V. ITO (1995) 82 TAXMAN 199 (ALL) 6. CONSOLIDATED PHOTO & FINVEST LTD. ACIT (2006) 15 1 TAXMANN 41 (DELHI) 7. KEVENTER (P.) LTD. V. DCIT (2004) 89 ITD 347 (KO L.) APPEAL NOS. 344 AND 345 (CAL.) OF 2001. 8. BRIJ MOHAN AGARWAL V. ACIT, (2004) 140 TAXMAN 31 7 (ALL) 9. ACIT V. SOMNATH MAINI, IT APPEAL NO.829 (CHD.) OF 2002, [2006] 7 SOT 201 (CHD.) 10. CIT V. VIPIN BATRA [2008] 166 TAXMAN 102 (DELHI ) (IT APPEAL NO. 1189 OF 2006). 11. DCIT V. PAWAN KUMAR MALHOTRA [2010] 2 ITR (TRIB ) 250 (DEL) IT APPEAL NO. 3684 (DELHI) OF 2008. THUS, THE LD. CIT(A) UPHELD THE ORDER OF THE A.O. VIDE APPELLATE ORDERS PASSED BY LEARNED CIT(A) DATED 25.11.2011. ITA 995/MUM/2012 15 7. AGGRIEVED BY THE APPELLATE ORDERS DATED 25.11.20 11 PASSED BY THE LEARNED CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION OF RS. 4,92,750/- HAS BEEN MADE U/S 68 OF THE ACT TOWARDS SALE OF 2500 SHARES OF SHIV OM INVESTMENT AND CONSULTANCY SOLD THROUGH STO CK EXCHANGE WHICH WAS TREATED AS UNEXPLAINED CASH CREDITS IN THE HAND S OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE ASSESSMENT ORDER AND SUBMITTED THAT IN THE ASSESSMENT YEAR 2007-08 THE R EVENUE HAS ACCEPTED THE GAIN EARNED ON THE SALE OF SHARES AS LONG TERM CAPI TAL GAIN U/S 143(1) OF THE ACT. HE SUBMITTED THAT THE REVENUE HAS REOPENED THE ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06 AND TREATED THE PURCHASE OF SHARES AS BOGUS ALTHOUGH NO ADDITIONS WERE MADE IN MONETARY TERMS. THE SAID ASSESSMENT ORDER HAS BEEN PLACED IN PAPER BOOK PAGE NO. 42-52 FILED WITH THE TRIBUNAL. THE APPELLATE ORDER PASSED BY THE LEARNED CIT(A) FO R ASSESSMENT YEAR 2005-06 HAS ALSO BEEN PLACED VIDE PAPER BOOK PAGE 53 TO 55 AND SUBMITTED THAT NO ADDITIONS WERE MADE FOR PURCHASE ALTHOUGH THE SAME WERE TREATED AS BOGUS AND HENCE THE ASSESSEE DID NOT CONTESTED THE FINDIN GS OF AO BY TREATING THE PURCHASE OF 4000 SHARES OF SHIV OM INVESTMENT AND C ONSULTANCY LIMITED AS BOGUS AND SHAM TRANSACTION. THE LD. COUNSEL SUBMIT TED THAT THE ASSESSEE HAS NOT CHALLENGED THE SAID FINDINGS AS NO ADDITION WAS MADE BY REVENUE IN THE ASSESSMENT YEAR FOR 2005-06 ON MONETARY TERMS A ND THE ASSESSEE WAS NOT SADDLED WITH ANY LIABILITY TO PAY TAX IN THE AS SESSMENT YEAR 2005-06 BY HOLDING OF THE REVENUE BY THE SAID PURCHASE OF 4000 SHARES OF SHIV OM INVESTMENT AND CONSULTANCY AS BOGUS PURCHASE. HE S UBMITTED THAT THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08 THE CASE WAS PROCESSED U/S 143(1) OF THE ACT AND THE LONG TERM CAPITAL GAIN WA S ACCEPTED. THE LD. COUNSEL SUBMITTED THAT THE REVENUE HAS TREATED THE PURCHASES OF SHARES MADE FROM SHIV OM INVESTMENT AND CONSULTANCY LIMITE D AS BOGUS. HE SUBMITTED THAT THE COMPANY IS ACTIVE AND THE DETAIL S FROM THE REGISTRAR OF ITA 995/MUM/2012 16 COMPANIES , ROC KOLKATTA HAS BEEN FILED AND PLACED AT PAPER BOOK PAGE 24 TO SHOW THAT M/S SHIV OM INVESTMENT AND CONSULTANCY LTD. IS AN EXISTING COMPANY AND AN ACTIVE COMPANY. THE LD. COUNSEL SUB MITTED THAT THE SHARES WERE TRADED THROUGH STOCK EXCHANGE. THE LIST OF DI RECTORS ARE ALSO PLACED ON RECORD. THE LD. COUNSEL DREW OUR ATTENTION TO PAPER BOOK PAGE NO. 16 TO SHOW THAT THE SHARE WERE PURCHASED FROM BADRI PRASAD & S ONS BY THE ASSESSEE AND SIMILARLY THE DETAILS OF WHICH ARE PLACED AT PAPER BOOK PAGE 16 TO 19 AND CONTENDED THAT THESE ARE OFF MARKET PURCHASES FORM REGISTERED BROKERS. SIMILARLY, IT WAS SUBMITTED THAT THE SALE HAS BEEN MADE IN THE MONTH OF JANUARY, 2006 AND THE AMOUNT HAS BEEN RECEIVED ON 6 TH FEBRUARY, 2006 IN THE BANK ACCOUNT OF THE ASSESSEE. THE SAID BANK AC COUNT DETAILS WERE PLACED AT PAPER BOOK PAGE 37 OF PAPER BOOK . THE LD COUNSE L SUBMITTED THAT IN THE CASE OF HIS BROTHER MR. NAGESH M PUJARI , THE LEARN ED CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE CONFIRMING THE ACTION OF THE AO IN ASSESSING THE SAID GAINS AS SHORT TERM CAPITAL GAINS.THE SAID APP ELLATE ORDERS OF THE LEARNED CIT(A) IN THE CASE OF BROTHER OF THE ASSESSEE IS PL ACED IN PAPER BOOK PAGE 64- 69 OF PAPER BOOK. 9. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT SPECIFIC INFORMATION WAS RECEIVED THAT THE ASSESSEE HAS INDULGED IN BOGU S TRANSACTION IN SHARES. IN THE ASSESSMENT YEAR 2005-06 THE TRANSACTION FOR PURCHASE OF 4000 SHARES HAS BEEN TREATED AS BOGUS WHEREAS NO ADDITION HAS B EEN MADE. THE ASSESSEE HAS ACCEPTED THE TRANSACTIONS FOR PURCHASE OF SHARE S WERE BOGUS AND IT CANNOT BE TREATED AS GENUINE TRANSACTION. THE PAYM ENTS OF THE PURCHASES WERE MADE IN CASH. THE A.O. HAS RIGHTLY HELD THAT THE ACTIVITIES OF THE ASSESSEE WERE CREATING SUSPICIOUS, HENCE, THE AUTHO RITIES HAS RIGHTLY TREATED THE TRANSACTION AS UNDISCLOSED CASH CREDITS. FOR T HE ASSESSMENT YEAR 2007- 08, IT WAS SUBMITTED BY LEARNED DR THAT NO SCRUTINY ASSESSMENT HAS BEEN MADE U/S 143(3) OF THE ACT. ITA 995/MUM/2012 17 10. IN THE REJOINDER, THE LD. COUNSEL FOR THE ASSES SEE RELIED UPON THE DECISION OF THE HYDERABAD BENCH OF THIS TRIBUNAL IN THE CASE OF ITO V. SMT. AARTI MITTAL REPORTED IN [2014] 41 TAXMANN.COM 118 (HYDERABAD TRIB).IT IS THE SUBMISSION OF THE ASSESSEES COUNSEL THAT NO EN QUIRY HAS BEEN MADE BY THE REVENUE WITH STOCK EXCHANGE. IT WAS SUBMITTED T HAT THE ASSESSEE FILED BALANCE SHEET OF BHAGVATI JUICE CENTRE ALONG WITH T HE RETURN OF INCOME FILED WITH THE REVENUE FOR THE ASSESSMENT YEAR 2005-06 WH ICH IS AT PAGE 40 OF THE PAPER BOOK AND THERE IS NO REQUIREMENT TO DISCLOSE THE PURCHASE MADE ON 11- 05-2004 IN THIS BALANCE SHEET OF BUSINESS AS PERSON AL BALANCE SHEET WAS NOT FILED AS THERE IS NO REQUIREMENT TO FILE THE PERSON AL BALANCE SHEET WITH THE REVENUE ALONG WITH RETURN OF INCOME(PAGE 38-41 /PB) . BUT, IT WAS SUBMITTED THAT CAPITAL GAINS WAS DULY DECLARED IN RETURN OF I NCOME FILED WITH THE REVENUE FOR THE IMPUGNED ASSESSMENT YEAR . 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAWS CITED B Y THE PARTIES. WE HAVE OBSERVED THAT NO SCRUTINY ASSESSMENT HAS BEEN FRAME D FOR THE IMPUGNED ASSESSMENT YEAR BY THE REVENUE U/S 143(3) OF THE AC T ORIGINALLY, WHILE BASED ON INFORMATION RECEIVED FROM ADDL.CIT(INV.), UNIT-V , MUMBAI THAT THE ASSESSEE IS INDULGING IN NON-GENUINE AND BOGUS CAPITAL GAINS FROM TRANSACTION OF SALE AND PURCHASE OF SHARES OF M/S SHIV OM INVESTMENT AN D CONSULTANCY LIMITED WHICH WAS PENNY STOCK COMPANY AND PRE-DATED CONTRAC T NOTES WERE ISSUED BY THE BROKERS TO MANIPULATE AND INTRODUCE LONG TERM C APITAL GAINS IN FAVOUR OF THE ASSESSEE WHICH ARE EXEMPT FROM TAX U/S 10(38) O F THE ACT LEADING TO ESCAPEMENT OF INCOME FROM TAXATION , WHICH LED TO I SSUE OF NOTICE DATED 07-04- 2008 U/S 148 OF THE ACT WHICH IS WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR , THE RECEIPT OF AFORE-STATED INFOR MATION FROM ADDL. CIT(INV) IN OUR CONSIDERED VIEW IS FRESH AND TANGIBLE MATERIAL WHICH HAS LIVE LINK AND NEXUS WITH THE FORMATION OF BELIEF THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT , AND KEEPING IN VIEW THAT THE ORIGINAL ASSESSMENT WAS NOT FRAMED ITA 995/MUM/2012 18 U/S 143(3) OF THE ACT AND NO OPINION WAS EVER FORME D BY THE AO AND HENCE THERE IS NO CHANGE OF OPINION KEEPING IN VIEW THE R ATIO OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF ACIT V. RAJESH JHAVERI STOCK BROKERS PRIVATE LIMITED (2007) 291 ITR 500(SC), WE UPHOLD THE RE-OP ENING OF THE ASSESSMENT U/S 147/148 OF THE ACT. WE HAVE OBSERVED THAT THE ASSESSEE HAS MADE PURCHASES OF 4000 SHARES OF M/S SHIV OM INVESTMENT AND CONSULTANCY LIMITED FOR RS.4,080/- ON 11 TH MAY, 2004 IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2005-06. THE SAID SHARES WERE PURC HASED IN OFF MARKET TRANSACTIONS FOR WHICH PAYMENTS WERE MADE IN CASH. THE SAID PURCHASES HAVE BEEN TREATED AS BOGUS AND SHAM TRANSACTIONS BY THE REVENUE AS IT IS ALLEGED THAT CERTAIN BROKERS HAVE MANIPULATED AND ISSUED PR E-DATED CONTRACT NOTES WHICH EVEN DID NOT HAVE DETAILS SUCH AS TIME OF CON TRACT, TRADE NUMBER , TRANSACTION DETAILS ETC AND PAYMENTS WERE ALSO MADE IN CASH BY THE ASSESSEE AGAINST SUCH SHAM AND BOGUS PURCHASE WITH THE OBJEC TIVE OF INTRODUCING BY MANIPULATING TAX FREE EXEMPT LONG TERM CAPITAL GAIN S U/S 10(38) OF THE ACT LEADING TO ESCAPEMENT OF INCOME FROM TAXATION , AND THE SAID FINDINGS OF THE AO WITH RESPECT TO BOGUS AND SHAM PURCHASES HAVE BE COME CONCLUSIVE AND FINAL AS THE ASSESSEE HAS NOT CHALLENGED THE FINDI NGS OF THE LEARNED AO MADE IN THE ASSESSMENT ORDER DATED 24.12.2009 PASSED BY THE AO U/S 143(3) READ WITH SECTION 147 OF THE ACT IN THE FIRST APPEAL FI LED WITH LEARNED CIT(A) FOR THE ASSESSMENT YEAR 2005-06 AND HENCE THE FINDING OF TH E AO HAS ATTAINED FINALITY. SINCE THE SAID FINDINGS OF THE AO WITH RE SPECT TO PURCHASES OF 4000 SHARES OF M/S SHIV OM INVESTMENT AND CONSULTANCY LI MITED IN ASSESSMENT YEAR 2005-06 HAVE BECOME CONCLUSIVE HAVING ATTAINED FINALITY, THE SALES IN CONSEQUENCE THEREOF THE SHAM AND BOGUS PURCHASES CA NNOT BE ACCEPTED AS GENUINE. THE ASSESSEE HAS EXPLAINED THAT THE PURCHA SES WERE BACKED WITH CONTRACT NOTES OF THE BROKERS AND PAYMENTS WERE MAD E IN CASH WILL NOT BE OF ANY HELP AT THIS STAGE AS THE SAID FINDING OF THE A O TREATING THE PURCHASE OF SHARES AS SHAM AND BOGUS IN THE ASSESSMENT YEAR 200 5-06 HAS ATTAINED FINALITY. SINCE, PURCHASES ARE HELD TO BE BOGUS AND SHAM WHICH HAS ATTAINED ITA 995/MUM/2012 19 FINALITY, THE SALE IN CONSEQUENCE THEREOF WHEREBY P AYMENTS ARE RECEIVED THROUGH CHEQUE OR SHARES BEING SOLD THROUGH STOCK E XCHANGE ARE NOT OF ANY HELP TO THE ASSESSEE FOR CLAIMING THE EXEMPTION AS LONG TERM CAPITAL GAINS AS THE ALLEGATION OF THE REVENUE IS THAT THE ASSESSEE HAS IN COLLUSION WITH THE BROKERS HAS MANIPULATED AND CAMOUFLAGED THE ENTIRE TRANSACTIONS OF SALE AND PURCHASE OF SHARES IN GETTING ISSUED PRE-DATED CONT RACT NOTES FOR PURCHASES OF SHARES FOR WHICH PAYMENTS WERE ALSO MADE FOR THESE PURCHASE IN CASH AND HENCE THESE PURCHASES NEVER EXISTED AT THAT RELEVAN T TIME . IT IS THE ALLEGATION OF THE REVENUE THAT THE ENTIRE SALE AND PURCHASE OF SHARES WERE MANIPULATED BY THE ASSESSEE IN COLLUSION WITH THE BROKERS IN OR DER TO EARN TAX FREE EXEMPT LONG TERM CAPITAL GAINS ON SALES OF SHARES U/S 10(3 8) OF THE ACT WHEREBY UN- ACCOUNTED CASH OF THE ASSESSEE HAS BEEN INTRODUCED IN DISGUISE IN LIEU OF SALE PROCEEDS OF SHARES. KEEPING IN VIEW FACTS AND CIRCU MSTANCES OF THE CASE AND AS PER OUR DISCUSSIONS AND REASONING AS SET OUT ABOVE, WE FIND NO INFIRMITY IN THE ORDERS OF THE LEARNED CIT(A) WHICH WE UPHOLD AND SU STAIN. THE ASSESSEE RELIED UPON THE DECISION OF THE ITAT , HYDERABAD IN THE CA SE OF ITO V. SMT AARTI MITTAL (2014) 41 TAXMANN.COM 118(HYD.-TRIB) WHEREBY THE TRIBUNAL HAS ARRIVED AT THE DECISION THAT SALE AND PURCHASE WAS GENUINE EVEN THOUGH PURCHASE WAS OFF-MARKET TRANSACTION WHICH WAS ROUTE D NOT THROUGH STOCK EXCHANGE BUT BACKED BY PHYSICAL DELIVERY OF SHARES WHICH WAS LATER DE-MATED AND UNDER THE CIRCUMSTANCES THE ITAT HELD THE TRANS ACTIONS AS GENUINE IN NATURE AND THE ASSESSEE CLAIM WAS FOUND TO BE IN OR DER , BUT IN THE INSTANT CASE THERE IS A CONCLUSIVE AND FINAL FINDING OF FAC T THAT PURCHASES OF SHARES WERE BOGUS AND SHAM AS WAS HELD BY THE REVENUE IN T HE ASSESSMENT YEAR 2005-06 WHICH HAS NOT BEEN DISLODGED SO FAR AS THE ASSESSEE ACCEPTED THE SAID FINDINGS WHICH BECAME CONCLUSIVE, THUS THE FACTS IN THE INSTANT CASE ARE DISTINGUISHABLE AS AGAINST THE RELIED UPON CASE OF THE ASSESSEE IN SMT AARTI MITTAL(SUPRA) ON THAT GROUND ITSELF. SIMILARLY, CO NTENTIONS OF THE ASSESSEE THAT THE REVENUE HAS ACCEPTED THE GAINS ON SALE OF 1500 SHARES OF M/S SHIV OM INVESTMENT AND CONSULTANCY LIMITED IN THE SUCCEEDIN G ASSESSMENT YEAR 2007- ITA 995/MUM/2012 20 08 AS LONG TERM CAPITAL GAINS WHILE PROCESSING OF R ETURN U/S 143(1) OF THE ACT IS NOT OF HELP TO THE ASSESSEE AS EVERY ASSESSMENT YEAR IS SEPARATE ASSESSMENT YEAR AND MERELY BECAUSE THE REVENUE HAS NOT SELECTE D THE CASE UNDER SCRUTINY BY ISSUING NOTICE U/S 143(2) OF THE ACT AND FRAMIN G DETAILED SCRUTINY U/S 143(3) OF THE ACT INSTEAD CHOSE TO PROCESS THE RETU RN U/S 143(1) OF THE ACT WITHOUT SCRUTINY WILL NOT ENTITLE THE ASSESSEE TO G ET THE WELL REASONED ASSESSMENT ORDERS AND APPELLATE ORDERS OF THE LEARN ED CIT(A) DISLODGED IN THE ABSENCE OF THE COGENT MATERIAL AND EVIDENCES TO DEM OLISH THE FINDINGS OF THE AUTHORITIES BELOW. THE REVENUE IN THE CASE OF THE A SSESSEES BROTHER HAS ALSO DECLARED THE PURCHASE AND SALE OF SHARES AS BOGUS B UT BROUGHT TO TAX , GAINS ARISING FROM SALE OF SHARES AS SHORT TERM CAPITAL G AINS . THIS IN OUR CONSIDERED VIEW, IS ALSO NOT OF HELP AS THE REVENUE IN THE INS TANT CASE HAS COME TO THE CONCLUSIVE FINDING WHICH ATTAINED FINALITY THAT THE TRANSACTIONS OF PURCHASE OF SHARES ARE SHAM AND BOGUS TRANSACTIONS CAMOUFLAGED WITH AN INTENTION TO EVADE TAXES . WE ORDER ACCORDINGLY. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA N0. 995/MUM/2012 FOR THE ASSESSMENT YEAR 2006-07 IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST, 2016, 2016. # $% &' 03-08-2016 ( ) SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 03-08-2016 [ ITA 995/MUM/2012 21 .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI D BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI