Ramesh Chandra K Shah , Kolkata V. ACIT, Central Circle - 3(1), , Kolkata

ITSSA 112/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4794 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 05-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY RAI
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit; Unexplained expenditure; Search and seizure; Share purchase agreement; Transactions in derivatives; Earning of tax free income; Question of law; Accommodation entries; Onus to prove; Sham transactions; Penny stocks
• Section: 131; 68; 132; 133A; 153A; 205

Judgement Text

1 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] I.T(SS).A. NOS. 112 & 113/KOL/2018 ASSESSMENT YEARS: 2011-12 & 2012-13 RAMESH CHANDRA K. SHAH (PAN: AQCPS6999Q) VS. ASSISTANT COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-3(1), KOLKATA. APPELLANT RESPONDENT FOR THE APPELLANT SHRI MIRAJ D. SHAH, AR FOR THE RESPONDENT SHRI SANJAY RAI, CIT, DR DATE OF HEARING 15.11.2018 DATE OF PRONOUNCEMENT 12.02.2019 ORDER PER SHRI A.T.VARKEY, JM BOTH THESE APPEALS OF THE ASSESSEE ARISE OUT OF THE SEPARATE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -21, KOLKATA FOR AYS 2011-12 AND 2012-13 DATED 14.09.2018. SINCE GROUNDS ARE COMMON AND FACTS ARE IDENTICAL, WE DISPOSE OF BOTH THESE APPEALS BY THIS CONSOLIDATED ORDER. FOR THE SAKE O F BREVITY WE TAKE THE ITA NO. 112/KOL/2018 FOR AY 2011-12 AS THE LEAD CASE. 2. THE MAIN GRIEVANCE OF ASSESSEE IS AGAINST THE AC TION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.2,35,58,171/- WHICH THE ASSESSEE CLAIMED TO HAVE RECEIVED AS SALE CONSIDERATION/LTCG/EXEMPT INCOME ON SALE OF SCRIPS OF M/S. TUNI TEXTILES MILLS LTD. FOR AY 2011-12 AND ADDITION OF 0.5% AS COMMISSION AMOUN TING TO RS.1,17,791/-. FOR AY 2012-13, THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAI NST THE ACTION OF THE LD. CIT(A) IN 2 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 UPHOLDING THE ADDITION OF RS.2,89,17,929/- WHICH TH E ASSESSEE RECEIVED AS SALE CONSIDERATION/LTCG/EXEMPT INCOME ON SALE OF SCRIP O F M/S. TUNI TEXTILES MILLS LTD. AND 0.5% OF ITS AMOUNT COMES TO RS.1,44,590/- AS COMMIS SION. 3. THE BRIEF FACTS OF THE CASE AS NOTED BY AO ARE T HAT PURSUANT TO A WARRANT U/S. 132 OF THE ACT SEARCH WAS CARRIED OUT IN THE RESIDENTIAL A ND BUSINESS PREMISES OF CHIRAG GROUP ON 12.08.2015 AND THE AO NOTICED THAT THE ASSESSEE AN INDIVIDUAL BELONGS TO THIS GROUP. THEREAFTER, ACCORDING TO AO, DURING THE COURSE OF S EARCH AND SEIZURE OPERATION CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND IT REVEALS T HAT THIS ASSESSEE HAS AVAILED CERTAIN BOGUS LTCG DURING THE AYS. 2011-12 AND 2012-13. AC CORDING TO AO, THE FOLLOWING INCRIMINATING DOCUMENTS RELATED TO THE CASE WERE SE IZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION: RAMESHCHANDRA K. SHAH CJ-2 21 TO 31 AY 2010-11 AY 2011-12 AY 2012-13 BOGUS LTCG TAKEN BY THE ASSESSEE RAMESHCHANDRA K. SHAH CJ-13 21 TO 39 08 TO 18 AY 2012-13 AY 2011-12 BOGUS LTCG ACCORDING TO AO, IF THE SHARE PURCHASE AND CONSEQUE NTLY SALE OF SHARES OF M/S. TUNI TEXTILES MILLS LTD. (HEREINAFTER REFERRED TO AS M/S . TTML) BY THE ASSESSEE, THE FOLLOWING FACTS COULD BE NOTICED. THAT ASSESSEE HAD (I) PURCH ASED 2 LAKHS SHARES OF M/S. TTML @ RS.10/- PER SHARE ON 14.11.2010 BY MAKING A PAYMENT OF RS.20 LAKHS. IT WAS TAKEN NOTE BY THE AO THAT ASSESSEE HAD PURCHASED THE SHARES UNDER PREFERENTIAL ALLOTMENT AND NOT THROUGH THE STOCK EXCHANGE; (II) LATER THE ASSESSEE HAD SOL D 1,09,000 SHARES OF M/S. TTML FROM 02.02.2011 TO 30.11.2011 ON VARIOUS DATES AND AVAIL ED THE PRE-ARRANGED BOGUS LTCG OF RS.2,35,58,171/- FOR AY 2011-12; (III) AFTERWARDS T HERE WAS A SPLIT BY M/S. TTML AND THE FACE VALUE OF ITS SHARES AND THE ASSESSEES REMAINI NG 91000 SHARES BECAME 9,10,000 SHARES; (IV) ASSESSEE SOLD HIS REMAINING 9,10,000 SHARES D URING AY 2012-13 AND AVAILED PRE- ARRANGED BOGUS LTCG OF RS.2,89,17,929/-. FROM THE AFORESAID TRANSACTIONS, THE AO WAS OF THE OPINION THAT ASSESSEE HAD RECEIVED AN ABNORMAL GAIN IN 12 MONTHS OF SHARE HOLDING AND WHICH IS INFLATED AND UNREALISTIC. ACCORDING TO AO , THE PURCHASE AND SALE OF THIS SCRIP ARE 3 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 NOTHING BUT COLORABLE DEVICE TO LAUNDER THEIR UNEXP LAINED MONEY, ON WHICH THEY DO NOT WANTED TO PAY TAX. ACCORDING TO AO, THIS COMPANY ( M/S. TTML) DOES NOT HAVE ANY FINANCIAL CREDIBILITY AND NO ONE WOULD INVEST ANY A MOUNT IN ITS SHARES. ACCORDING TO AO, THE ASTRONOMICAL RISE OF THE VALUE OF SHARES SHOWS THAT THERE IS A SYNDICATE OF PLAYERS WHO ARE RIGGING THE VALUE OF THE SHARES AND SALES ARE C ARRIED OUT THROUGH PRE-ARRANGED PARTIES TO GET LTCG/EXEMPT INCOME FOR BENEFICIARIES LIKE ASSES SEE. ACCORDING TO AO, THE HUMAN PROBABILITY IS THAT NOBODY WOULD HAVE INVESTED IN T HIS PENNY STOCK COMPANY AND PRICE HAVE BEEN RIGGED AND/OR SALES HAVE BEEN CARRIED OUT BY T HESE PRE-ARRANGED MANNER TO FACILITATE LTCG/EXEMPT INCOME OF ASSESSEE, WHICH IS A COLORABL E DEVICE TO LAUNDER THEIR ILL GOTTEN MONEY/UNEXPLAINED MONEY INTO THE MAIN STREAM BY WRA PPING IT AS LTCG AND, THEREFORE, THE AO MADE THE ADDITION OF THE ENTIRE AMOUNT WHICH THE ASSESSEE CLAIMED TO HAVE RECEIVED AS SALE CONSIDERATION AND ALSO MADE AN ADDITION OF 0.5 % AS COMMISSION, WHICH THE ASSESSEE WOULD HAVE GIVEN TO THE BROKER FOR THE AFORESAID PU RPORTED ACTIONS. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS P LEASED TO DISMISS THE SAME. AGGRIEVED, THE ASSESSEE IS BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE, SHRI MIRAJ D. SHAH ASSAILING THE DECISION OF THE LD. CIT(A) DREW OUR ATTENTION TO THE FACT THAT THE ASSE SSEE HAD FILED RETURN OF INCOME ON 18.08.2011 FOR AY 2011-12 AND THE DATE FOR ISSUING SEC. 143(2) NOTICE ELAPSE D ON 31.03.2012. SO, ON THE DATE OF SEARCH I.E. ON 12.0 8.2015 THE ASSESSMENT FOR AY 2011-12 WAS NOT PENDING BEFORE THE AO ON THE DATE OF SEARCH AND, THEREFORE, NO ADDITION CAN BE MADE WITHOUT THE AID OF INCRIMINATING MATERIAL UNEA RTHED DURING THE SEARCH. LIKEWISE, IN RESPECT TO AY 2012-13 , THE LD. AR SUBMITTED THAT THE RETURN OF INCOME FO R THIS ASSESSMENT YEAR WAS FILED ON 11.09.2012 AND THE DATE FOR ISSUE OF SEC. 143(2) NOTICE ELAPSED ON 30.09.2013 AND SINCE THIS ASSESSMENT YEAR WAS ALSO NOT PENDING BEFORE THE AO ON THE DATE OF SEARCH I.E. ON 12.08.2015, THEREFORE, THE AO CAN NOT MAKE ANY ADDITION WITHOUT THE AID OF INCRIMINATING MATERIAL UNEARTHED DURING SEARCH. FO R THE AFORESAID PROPOSITION OF LAW, THE LD. AR DREW OUR ATTENTION TO THE FOLLOWING JUDGMENT S: 4 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 I) THE HONBLE DELHI HIGH COURT IN CIT VS. KABUL CHAWL A (2016) 380 ITR 573 (DEL.), II) THE HON'BLE JURISDICTIONAL CALCUTTA HIGH COURT IN I TA NO. 661 OF 2008 COMMISSIONER OF INCOME TAX VS.VEERPRABHU MARKETING LTD. III) THE HONBLE DELHI HIGH COURT IN PR. CIT VS. KURELE PAPER MILLS PVT. LTD., ITA NO. 369 OF 2015; SLP OF DEPARTMENT DISMISSED. AND IT WAS THE CONTENTION OF THE LD. AR THAT SINCE THERE WAS NO INCRIMINATING MATERIAL REGARDING THE PURCHASE AND SALE OF SHARES OF M/S. T TML FOUND DURING SEARCH WHICH COULD BE TERMED AS INCRIMINATING MATERIAL, QUESTION OF MA KING ANY ADDITION ON THE LTCG/EXEMPT INCOME ALREADY DULY DISCLOSED BY THE ASSESSEE IN TH E RETURN OF INCOME AND BALANCE SHEET COULD NOT HAVE BEEN ADDED IN THE HANDS OF THE ASSES SEE. THEREFORE, IT WAS POINTED OUT THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MAD E BY THE AO AND, THEREFORE, HE PLEADS THAT THE ENTIRE ADDITION CANNOT BE SUSTAINED AND, T HEREFORE, NEED TO BE DELETED. 5. PER CONTRA, THE LD. CIT, DR SHRI SANJAY RAI COUN TERING THE SUBMISSION OF LD AR, THAT NO INCRIMINATING MATERIALS WERE SEIZED DURING SEARC H, DREW OUR ATTENTION TO PAGE NO.3 WHEREIN THE AO HAS CLEARLY NOTED THAT THERE WAS INC RIMINATING MATERIAL FOUND DURING SEARCH WHICH WAS THE BASIS OF ADDITION. THEREFORE, ACCORD ING TO HIM, THE CONTENTION OF THE LD. AR WAS FACTUALLY WRONG AND SINCE THE AO HAS MADE THE A DDITION BASED ON INCRIMINATING MATERIAL AS STATED IN THE ASSESSMENT ORDER, THE ADD ITIONS MADE ARE AS PER LAW AND THE CASE LAWS RELIED ON BY THE LD. AR WILL NOT COME TO THE R ESCUE OF THE ASSESSEE AND, THEREFORE, ACCORDING TO LD. DR THE ADDITION MADE IS AS PER THE MANDATE OF LAW. THE LD. CIT, DR WONDERED AS TO HOW A PENNY STOCK OF M/S. TTML COULD HAVE EARNED ASTRONOMICAL VALUE WITHIN A SHORT PERIOD OF TWELVE MONTHS AND ACCORDIN G TO HIM, IT IS NOTHING BUT STAGE MANAGED, PRE-ARRANGED AND THERE IS A SYNDICATE INVO LVED IN THIS RACKET WHEREIN THE BENEFICIARIES BUY THE PENNY STOCK OF SHARES FOR A V ERY LOW PRICE AND AFTER TWELVE MONTHS, THE PRICE IS RIGGED SYSTEMATICALLY AND WHEN IT RISES TO AN ASTRONOMICAL AMOUNT, PRE-ARRANGED PLAYERS WILL BUY THE SHARES WITH THE MONEY OF THE B ENEFICIARIES ONLY AND THUS, THE ASSESSEE WILL GET BACK HIS MONEY IN THE GUISE OF THE SALE CO NSIDERATION WHICH THE ASSESSEE WOULD THEN CLAIM AS LTCG AND IN RETURN OF INCOME, AS EXEMPT IN COME AND THUS THE BENEFICIARY LIKE 5 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 ASSESSEE LAUNDER THEIR UNEXPLAINED ILL GOTTEN MONEY AND BRING IT OUT IN TO THE MAIN STREAM AS WHITE MONEY WITHOUT GIVING ANY TAX FOR THEIR ILL GO TTEN MONEY. 6. THE LD. DR RELIED ON THE ORDER OF THE HONBLE BO MBAY HIGH COURT NAGPUR BENCH AT NAGPUR, ITA NO.18/2017 (SANJAY BIMALCHAND JAIN VS. CIT DATED 10.04.2017 WHEREIN THE HONBLE HIGH COURT UPHELD THE TRIBUNALS ORDER AND THE AOS ORDER MAKING SUCH AN ADDITION ON SALE OF PENNY STOCK. THE LD. DR ALSO R ELIED ON THE DECISION OF THE BANGALORE TRIBUNAL IN SMT. M/. K. RAJESHWARI VS. ITO, ITA NO. 1723/BANG/2018 DATED 12.10.2018 WHEREIN ALSO THE TRIBUNAL WAS PLEASED TO CONFIRM TH E ADDITION ON SUCH GAIN OF LTCG EXEMPT INCOME. THE LD. DR ALSO BROUGHT TO OUR NOTI CE THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF S. AJIT KUMAR IN CIVIL APPEAL NO. 10164 OF 2010 DATED 02.05.2018 WHEREIN THE HONBLE SUPREME COURT IN SEC . 158BB PROCEEDINGS HELD THAT THE MATERIALS FOUND DURING SIMULTANEOUS SURVEY CARRIED OUT ALONG WITH SEARCH CAN ALSO BE TAKEN INTO CONSIDERATION WHILE MAKING ASSESSMENT. THE LD . DR ALSO DREW OUR ATTENTION TO THE FACT THAT IN THE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA HAS ACCEPTED THAT M/S. TTML IS A PENNY STOCK COMPANY AND THE SHARES OF THE COMPANY H AVE BEEN USED TO PROVIDE ACCOMMODATION ENTRY OF LTCG TO THE PREFERENTIAL ALL OTTEES DURING AY 2011-12 TO 2012-13. AND, ACCORDING TO HIM, THE ASSESSEE WAS GIVEN OPPOR TUNITY TO APPEAR BEFORE THE AO IF HE DESIRES TO CROSS EXAMINE THESE PERSONS ON 20.11.201 7 BY NOTICE DATED 13.11.2017. IT WAS ALSO BROUGHT TO OUR NOTICE THAT ON 20.11.2017 SHRI NARENDRA PRABHUDAYAL SUREKA APPEARED BEFORE THE ADIT- 3(4), MUMBAI AND THAT HIS STATEMEN T WAS RECORDED U/S. 131 OF THE ACT AND IT WAS BROUGHT TO OUR NOTICE THAT THE ASSESSEE DID NOT APPEAR IN THE OFFICE OF ADIT ON 20.11.207 TO CROSS EXAMINE SHRI NARENDRA PRABHUDAYA L SUREKA. THE LD. DR THUS CONTENDED THAT THE BOGUS LTCG WAS RIGHTLY ADDED AND THE IMPUG NED ORDER OF THE LD. CIT(A) DOES NOT NEED ANY INTERFERENCE FROM OUR PART AND NEEDS TO BE CONFIRMED. 7. IN HIS REJOINDER, THE LD. AR BROUGHT TO OUR NOTI CE THAT THE ISSUE WHETHER THE SALE CONSIDERATION/LTCG/EXEMPT INCOME ARISING FROM THE S ALE OF M/S. TTML IS NO LONGER RES INTEGRA AND THIS TRIBUNAL HAS ALREADY ACCEPTED THE CLAIM OF THE ASSESSEE BASED ON THE 6 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 DOCUMENTS FILED BEFORE IT THAT THE LTCG CLAIM ON SA LE OF M/S. TTML IS A GENUINE AND, THEREFORE, ITS CLAIM OF EXEMPT INCOME NEEDS TO BE A LLOWED AND FOR THAT THE ASSESSEE DREW OUR ATTENTION TO THE ORDERS PASSED BY THIS TRIBUNAL IN KIRAN KOTHARY, HUF VS. ITO 2017 (11) TMI 1075, WHEREIN THE TRIBUNAL HAS UPHELD THE CLAIM OF THE ASSESSEE IN RESPECT TO SALE OF M/S. TTML, WHICH IS AS UNDER: 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORDS. WE NOTE THAT IN THE PRESENT CASE, THE APPELLANT HAD PURCHASED 13500 SHA RES OF M/S. TUNI TEXTILE MILLS PRIVATE LIMITED ON 06.04.2011 FROM A STOCK BROKER IN OFF- MARKET TRANSACTIONS FROM M/S BADRI PRASAD & SONS, WHO WAS A MEMBER OF CALCUTTA STOCK EXCHANG E. THESE SHARES WERE HELD IN THE DEMAT ACCOUNT OF THE ASSESSEE MAINTAINED WITH M/S CD EQU ISEARCH PVT. LTD , A MEMBER OF MUMBAI STOCK EXCHANGE AND ULTIMATELY THESE SHARES WERE SOL D THROUGH M/S. CD EQUISEARCH AND ON SUCH SALE, SECURITY TRANSACTION TAX WAS DULY PAID. PAYMENTS WERE DULY RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE. WE TAKE NOTE THAT THE PURC HASE OF SHARES BY OFF-MARKET TRANSACTIONS FOR PURCHASE OF SHARES IS NOT ILLEGAL AS WAS HELD B Y THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DOLARRAI HEMANI VS ITO IN ITA NO.19/KOL /2014 DATED 02.12.2016. THE TRANSACTIONS WERE ALL THROUGH A REGISTERED BROKER ( PAGES 18 AND 19 OF THE PAPER BOOK), BACKED BY A CONTRACT NOTE (PAGE 22 OF THE PAPER BOOK) AND SHARES WERE CREDITED IN THE DEMAT ACCOUNTS (PAGE 25 OF THE PAPER BOOK) AND DULY REFLECTED IN T HE BOOKS OF ACCOUNT. IN THE LIGHT OF THESE EVIDENCES ON RECORD WE ARE OF THE OPINION THAT THE PURCHASE OF SHARES PER-SE CANNOT BE HELD TO BE BAD. 9.1. WE NOTE THAT THERE WAS A SURVEY CONDUCTED U/S 133A OF THE ACT BY THE MUMBAI INVESTIGATION WING AGAINST M/S. TUNI TEXTILE MILLS PVT. LTD ON 02.06.2015 AND IN THE SURVEY A DEPOSITION WAS TAKEN ON OATH WHEREIN THE MANAGING DIRECTOR OF THE SAID COMPANY S HRI N.P.SUREKHA WAS EXAMINED AND HE STATED THAT 47 PERS ONS WERE ALLOTTED PREFERENCE SHARES ON 25.01.2010 AND A SUM OF RS.7.50 CRORES WAS RAISED B Y THE COMPANY. HE FURTHER SUBMITTED THAT THIS ENTIRE DEAL WAS DONE BY ONE SHRI MANISH BAID A ND THEN THESE 47 INVESTORS USED THE SHARES ALLOTTED TO THEM, SOLD THE SAME AT JACKED UP PRICE AND IN THE PROCESS THEY EARNED BOGUS LONG TERM CAPITAL GAIN FROM SUCH TRANSACTIONS WHICH WAS STAGE MANAGED BY SHRI M.BAID. BASED ON THIS STATEMENT, THE LOWER AUTHORITIES CONCLUDED THA T THE TRANSACTIONS OF THE ASSESSEE WERE ALSO PART OF THE BOGUS TRANSACTIONS AND THE SAME WAS ACC ORDINGLY HELD TO BE UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. WE DO NOT SUBSCRIBE TO TH E SAID VIEW TAKEN BY THE AUTHORITIES BELOW FOR THE REASONS STATED BELOW:- WE NOTE THAT THE ASSESSEE WAS NOT A PART OF 47 PERS ONS, WHO THE MANAGING DIRECTOR HAS NAMED IN THE LIST OF 47 PERSONS AND WE ALSO NOT E THAT THERE IS NO MATERIAL TO REMOTELY SUGGEST THAT THE ASSESSEE DEALT WITH THE SAID ENTR Y OPERATOR SHRI MANISH BAID, WHO IS SAID TO HAVE STAGE MANAGED AND UNDERTAKEN THE ENTIRE TRANSA CTIONS. WE ALSO FIND THAT THE ASSESSEE HAS NOT DEALT WITH ANY PERSON OR BROKER NAMED IN QUESTI ON NO.28 OF THE STATEMENT WHICH HAS BEEN RECORDED ON OATH BY THE SURVEY TEAM AND WHICH HAS BEEN REPRODUCED B Y THE LD. CIT(A) FROM PAGES 31 TO 36 OF THE IMPUGNED ORDER(QUESTION NO.2 8 FINDS PLACE IN PAGE-35 OF THE IMPUGNED ORDER). WE THEREFORE FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT THE STATEMENT RECORDED ON OATH DURING THE SURVEY CANNOT BE THE SOLE BASIS FOR ADVERSE FINDING AGAINST THE ASSESSEE. FOR THIS WE RELY ON THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF CIT VS KHADER KHAN SON 352 ITR 480 (SC) WHEREIN IT HAS BEEN HELD THAT SECTION 133A (SURVEY) DOES NOT EMPOWER ANY INCOME TAX AUTHORITIES TO EXAMINE ANY P ERSON ON OATH, HENCE ANY SUCH STATEMENT LACKS EVIDENTIARY VALUE AND ANY ADMISSION MADE DURI NG THE SURVEY CANNOT BY ITSELF BE MADE 7 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 THE BASIS OF ADDITION. WE THEREFORE HOLD THAT THE S TATEMENT OF SHRI N.P.SUREKHA RECORDED ON OATH DURING THE SURVEY PROCEEDINGS CANNOT BE THE SO LE BASIS TO MAKE THE IMPUGNED ADDITION. WE NOTE THAT THE ASSESSEE HAD NOT PURCHASED THE SHA RES BY THE PREFERENCE SHARE ROUTE AS STATED BY THE PARTY BEFORE THE SURVEY PARTY. THE ALLOTMENT MADE IN PREFERENCE SHARE WAS ON 25-01-2010, WHEREAS THE ASSESSEE PURCHASED THE SHARES ON 06-04-2011 THROUGH THE BROKER. ( I.E AFTER MORE THAN ONE YEAR AND THREE MONTHS) WE F IND THAT THE TRANSACTIONS OF CAPITAL GAINS AS CLAIMED BY THE ASSESSEE WAS DULY BACKED BY RELEV ANT DOCUMENTARY EVIDENCES WHICH INCLUDE THE FOLLOWING :- (I)THE BALANCE SHEET OF THE ASSESSEE FOR THE FINAN CIAL YEAR 2011-12 WHEREIN THE INVESTMENT MADE IN THESE SHARES WERE DULY RECORDED AND REFLECT ED (PAGE 16 OF THE PAPER BOOK); II) THE BILLS OF PURCHASE OF SHARES OF M/S. TUNI T EXTILE MILLS PVT. LTD (PAGE 18 OF THE PAPER BOOK) III)COPY OF THE DEMAT STATEMENT MAINTAINED WITH M/S . CD EQUI SEARCH WHERE THE SHARES WERE HELD (PAGE 24 OF THE PAPER BOOK) IV) COPY OF THE CONTRACT NOTES ISSUED BY M/S. CD EQ UI SEARCH LTD, MEMBER OF MUMBAI STOCK EXCHANGE HAVING SEBI REGISTRATION NO.INB010781133 AND CODE NO.087 (PAGE 19 TO 22 OF THE PAPER BOOK V) THE BANK STATEMENT MAINTAINED BY THE ASSESSEE WI TH BANK OF MAHARSHTRA REFLECTING THE PAYMENT RECEIVED FOR THE SALE OF SHARES (PAGE 23 OF THE PAPER BOOK). 9.2. WE FIND FORCE IN THE CONTENTIONS OF THE LD . AR THAT THE AO AND CIT(A) WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE ON THE BASIS OF THEORY OF SURROUNDING CIRCUMSTANCE, HUMAN CONDUCT AND PREPONDERANCE OF PROBABILITY WITH OUT BRINGING ON RECORD ANY RELEVANT LEGALLY ADMISSIBLE EVIDENCE AGAINST THE ASSESSEE. F OR THE SAID PROPOSITION WE RELY ON THE JUDGMENT OF THE SPECIAL BENCH OF MUMBAI BENCH IN TH E CASE OF GTC INDUSTRIES LTD. (SUPRA). THE VARIOUS FACETS OF THE CONTENTION OF THE AO, T O ROPE IN THE ASSESSEE FOR DRAWING ADVERSE INFERENCES WHICH REMAIN UNPROVED BASED ON THE EVIDE NCE AVAILABLE ON RECORD ARE NOT REITERATED FOR THE SAKE OF BREVITY. THE PRINCIPLES LAID DOWN IN VARIOUS CASE LAWS RELIED UPON BY THE LD. AR ARE ALSO NOT REITERATED FOR THE SAKE OF BREVITY. WE FURTHER FIND THAT NEITHER THE REPORTS RELIED ON BY THE AO HAS NOT BEEN BROUGHT ON RECORD NOR IS THERE ANY REFERENCE OF FINDING OF SUCH REPORT TO IMPUTE THE ASSESSEE IS TH ERE ON RECORD. THE AO HAS MERELY CARVED OUT CERTAIN FEATURES/MODUS- OPERANDI OF COMPANIES INDUL GING IN PRACTICES NOT SANCTIONED BY LAW AND AS MENTIONED IN SUCH REPORT. HOWEVER, WE NOTE T HAT NEITHER ANY INVESTIGATION WAS CARRIED OUT AGAINST THE ASSESSEE NOR AGAINST THE BROKERS TO WHOM THE ASSESSEE DEALT WITH THE PURCHASE AND SALE OF SHARES IN QUESTION. THUS THE AO HAS FAI LED TO BRING ON RECORD ANY MATERIAL CONTAINED IN THE PURPORTED REPORTS WHICH ARE HAVING SO CALLED ADVERSE IMPACT ON THE ASSESSEE. WE FURTHER FIND THAT THE COMPANY UNDER SCANNER WAS HAVING SHARE CAPITAL AS ON 31.03.2013 OF RS.13.18 CRORES AND WAS HAVING ASSETS WORTH RS.24.2 5 CRORES AND A TURN OVER OF RS.19.32 CRORES AND PROFIT OF RS.1.35 CRORES. THUS THE ALLEG ATION THAT THESE COMPANIES DID NOT HAVE FINANCIAL CREDENTIALS IS NOT CORRECT AND SO IS PERV ERSE AND THEREFORE WE DO NOT SUBSCRIBE TO THE SAID FINDING AND NECESSARILY NEGATE THE FINDING. AT THE COST OF REPETITION, WE FIND THAT THE TRANSAC TIONS OF SALE OF SHARES BY THE ASSESSEE WAS DULY BACKED UP BY MATERIAL/EVIDENCE INCLUDING C ONTRACT NOTES, DEMAT STATEMENT, BANK ACCOUNT REFLECTING TRANSACTIONS, THE STOCK BROKERS HAVE CONFIRMED THE TRANSACTIONS (PAGES 24- 25 OF THE PAPER BOOK), THE SHARES HAVING BEEN SOLD ON THE ONLINE PLATFORM OF THE STOCK 8 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 EXCHANGE AND EACH TRADE OF SALE OF SHARES WERE HAVI NG UNIQUE TRADE NUMBER AND TRADE TIME. IT IS NOT THE CASE OF THE AO THAT THE SHARES WHICH WER E SOLD ON THE DATE MENTIONED IN THE CONTRACT NOTE WERE NOT THE TRADED PRICE ON THAT PARTICULAR D ATE. THE AO DOUBTED THE TRANSACTIONS DUE TO THE HIGH RISE IN THE STOCK PRICE AND FOR THAT THE A SSESSEE CANNOT BE BLAMED UNLESS THERE WAS ANY MATERIAL/EVIDENCE TO PROVE THAT THE ASSESSEE OR ANY ONE ON HIS BEHALF HAS RIGGED THE STOCK PRICE. IT SHOULD BE NOTED THAT THE STOCK EXCHANGE A ND SEBI ARE THE STATUTORY AUTHORITIES APPOINTED BY THE GOVT. OF INDIA TO ENSURE THAT THER E IS NO STOCK RIGGING OR MANIPULATION. THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW T HAT THESE AGENCIES HAVE ALLEGED ANY STOCK MANIPULATION AGAINST THE ASSESSEE OR THE BROK ERS OR THE COMPANY IN QUESTION. IN ABSENCE OF ANY EVIDENCE TO BACK THE CONCLUSION OF AO/CIT(A) , IT CANNOT BE SAID THAT MERELY BECAUSE THE STOCK PRICE MOVED SHARPLY, THE ASSESSEE WAS TO BE BLAMED FOR BOGUS TRANSITIONS. IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE HAS PURCHASED T HE STOCKS THROUGH REGISTERED BROKERS AND THEREAFTER THE ASSESSEE HAS SOLD THE SHARES THROUG H THE REGISTERED SHARE/STOCK BROKERS WITH CALCUTTA STOCK EXCHANGE, AND BOTH HAVE CONFIRMED T HE TRANSACTIONS AND HAVE ISSUED VALID CONTRACT NOTES AS PER LAW; AND IN SIMILAR CASE, TH E HONBLE CALCUTTA HIGH COURT IN THE CASE OF PRINCIPAL CIT VS RUNGTA PROPERTIES IN ITA NO.105 OF 2016 DATED 08 MAY, 2017 WHEREIN IT WAS HELD THAT ON THE LAST POINT, THE TRIBUNAL HELD THA T THE AO HAD NOT BROUGHT RELEVANT MATERIAL TO SHOW THAT THE TRANSACTIONS IN SHARES OF THE COMPANY INVOLVED WERE FALSE OR FICTITIOUS. IT IS THE FINDING OF THE AO THAT THE SCRIPTS OF THIS COMPANY WAS EXECUTED BY A BROKER AND THE BROKER WAS SUSPENDED FOR SOME TIME. IT IS THE ASSESSEES C ONTENTION THAT EVEN THOUGH THERE ARE ALLEGATIONS AGAINST THE BROKER, AND FOR THAT REASON THE ASSESSEE CANNOT BE HELD LIABLE ON THIS POINT, THE TRIBUNAL HELD THAT AS A MATTER OF FACT THE AO DOUBTED THE INTEGRITY O F THE BROKER AND THE BROKER FIRM AND ALSO AO OBSERVED THAT THE ASSESSEE HAD NOT FURN ISHED ANY EXPLANATION IN RESPECT OF ANY DISCUSSION OF TRADING OF SHARES. THE AO RELI ED THE LOSS OF RS.25,30,396/- ONLY ON THE BASIS OF INFORMATION SUBMITTED BY STOCK AS F ICTITIOUS. THE AO HAS ALSO NOT DOUBTED THE GENUINENESS OF THE DOCUMENTS PLACED BY THE ASSESSEE ON RECORD. THE AOS OBSERVATION AND CONCLUSION ARE MERELY BASED ON INFO RMATION. THEREFORE ON SUCH BASIS, NO DISALLOWANCE CAN BE MADE AND ACCORDINGLY WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY ALLOWED THE CLAI M OF THE ASSESSEE. THIS GROUND NO.1 OF THE REVENUE IS DISMISSED. WE AGREE WITH THE REASONING OF THE TRIBUNAL ON THIS POINT ALSO. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER. THE SU GGESTED QUESTION, IN OUR OPINION DO NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. 9.3. IN THE LIGHT OF THE DOCUMENTS STATED I.E. (I T O V) IN PAGE14(SUPRA) WE FIND THAT THERE IS ABSOLUTELY NO ADVERSE MATERIAL TO IMPLICATE THE ASS ESSEE TO THE ENTIRE GAMUT OF UNFOUNDED/UNWARRANTED ALLEGATIONS LEVELED BY THE AO AGAINST THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION HAS NO LEGS TO STAND AND THEREFO RE HAS TO FALL. WE TAKE NOTE THAT THE LD. DR COULD NOT CONTROVERT THE FACTS WHICH ARE SUPPORTED WITH MATERIAL EVIDENCES FURNISHED BY THE ASSESSEE WHICH ARE ON RECORD AND COULD ONLY RELY ON THE ORDERS OF THE AO/CIT(A). WE NOTE THAT THE ALLEGATIONS THAT THE ASSESSE/BROKERS GOT I NVOLVED IN PRICE RIGGING/MANIPULATION OF SHARES MUST THEREFORE CONSEQUENTLY FAIL. AT THE COS T OF REPETITION, WE NOTE THAT THE ASSESSEE HAD FURNISHED ALL RELEVANT EVIDENCE IN THE FORM OF BILL S, CONTRACT NOTES, DEMAT STATEMENT AND BANK ACCOUNT TO PROVE THE GENUINENESS OF THE TRANSACTION S RELEVANT TO THE PURCHASE AND SALE OF SHARES RESULTING IN LONG TERM CAPITAL GAIN. NEITHER THESE EVIDENCES WERE FOUND BY THE AO NOR BY THE LD. CIT(A) TO BE FALSE OR FICTITIOUS OR BOGU S. THE FACTS OF THE CASE AND THE EVIDENCE IN SUPPORT OF THE EVIDENCE CLEARLY SUPPORT THE CLAIM O F THE ASSESSEE THAT THE TRANSACTIONS OF THE ASSESSEE WERE GENUINE AND THE AUTHORITIES BELOW WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE 9 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 ASSESSEE EXEMPTED U/S 10(38) OF THE ACT ON THE BASI S OF SUSPICION, SURMISES AND CONJECTURES. IT IS TO BE KEPT IN MIND THAT SUSPICION HOW SO EVER ST RONG, CANNOT PARTAKE THE CHARACTER OF LEGAL EVIDENCE. IN THE AFORESAID FACTS AND CIRCUMSTANCE, FOR ALLOWING THE APPEAL WE RELY ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S. ALIPINE INVESTMENTS IN ITA NO.620 OF 2008 DATED 26 TH AUGUST, 2008 WHEREIN THE HIGH COURT HELD AS FOLLOW S : IT APPEARS THAT THERE WAS LOSS AND THE WHOLE TRANS ACTIONS WERE SUPPORTED BY THE CONTRACT NOTES, BILLS AND WERE CARRIED OUT THROUGH RECOGNIZED STOCK BROKER OF THE CALCUTTA STOCK EXCHANGE AND ALL THE BILLS WERE RECE IVED FROM THE SHARE BROKER THROUGH ACCOUNT PAYEE WHICH ARE ALSO FILED IN ACCOR DANCE WITH THE ASSESSMENT. IT APPEARS FROM THE FACTS AND MATERIALS PLACED BEFO RE THE TRIBUNAL AND AFTER EXAMINING THE SAME, THE TRIBUNAL ALLOWED THE APPEAL BY THE ASSESSEE. IN DOING SO THE TRIBUNAL HELD THAT THE TRANSACTIONS CANNOT BE BRUSHED ASIDE ON SUSPICION AND SURMISES. HOWEVER IT WAS HELD THAT TH E TRANSACTIONS OF THE SHARES ARE GENUINE. THEREFORE WE DO NOT FIND THAT THERE IS ANY REASON TO HOLD THAT THERE IS NO SUBSTANTIAL QUESTION OF LAW HELD IN THIS MATTER. HE NCE THE APPEAL BEING ITA NO.620 OF 2008 IS DISMISSED. 9.4. WE NOTE THAT THE LD. AR CITED PLETHORA OF THE CASE LAWS TO BOLSTER HIS CLAIM WHICH ARE NOT BEING REPEATED AGAIN SINCE IT HAS ALREADY BEEN INCORPORATED IN THE SUBMISSIONS OF THE LD. AR (SUPRA) AND HAVE BEEN DULY CONSIDERED TO ARRIVE AT OUR CONCLUSION. THE LD. DR COULD NOT BRING TO OUR NOTICE ANY CASE LAWS TO SUPPORT THE IM PUGNED DECISION OF THE LD. CIT(A)/AO. IN THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF SALE PROCEEDS OF THE S HARES AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. WE THEREFORE DIRECT THE AO TO DE LETE THE ADDITION. 8. FURTHER, ACCORDING TO LD. AR, THERE WAS NOT A SI NGLE SHRED OF INCRIMINATING EVIDENCE AGAINST THE LTCG CLAIM MADE BY THE ASSESSEE IN BOTH THE ASSESSMENT YEARS. ACCORDING TO LD. AR, THE DOCUMENTS FOUND, WHICH THE AO HAD RECOR DED IN HIS ASSESSMENT ORDER IS NOTHING BUT THE TRANSACTIONS WHICH ARE ALREADY RECO RDED IN THE BOOKS IN THE NORMAL COURSE OF BUSINESS. ACCORDING TO LD. AR, THE FACT OF THE ASSE SSEE RECEIVING THE LTCG/EXEMPT INCOME, FOR BOTH THE YEARS HAVE BEEN DULY REFLECTED IN THE RETURN OF INCOME AND BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME AND WHICH ARE ALREA DY WITH THE DEPARTMENT BEFORE THE SEARCH. SO, ACCORDING TO HIM, THERE IS NO QUESTION OF ANY UNDISCLOSED INCOME IN RESPECT OF SALE OF THESE SCRIPS OF M/S. TTML. IT WAS POINTED O UT BY THE LD. AR THAT THE DOCUMENTS TERMED BY THE AO AS INCRIMINATING I.E. CJ-2 AND CJ- 13 IS NOTHING BUT LOOSE SHEETS OF PAPERS WHICH THOUGH THE AO HAS TERMED IT AS INCRIMINATING IS IN NO WAY CAN BE CLASSIFIED AS INCRIMINATING MATERIAL BECAUSE THERE IS NOTHING EME RGING FROM THESE PAPERS WHICH WILL POINT A FINGER OR HAS A NEXUS WITH ANY UNDISCLOSED INCOME FOR BOTH THE ASSESSMENT YEARS AS 10 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 WRONGLY INFERRED BY AO. THE LD. AR PAINSTAKINGLY T OOK US THROUGH THE DOCUMENTS SHOWED AT PAGES 33 TO 44 OF PAPER BOOK WHICH IS MARKED AS CJ2 PLACED AT PAGES 45-69 MARKED AS CJ-13 AND TOOK US THROUGH THESE DOCUMENTS AND ASSER TED THAT THERE IS NEITHER AN IOTA OF MATERIAL WHICH COULD SUGGEST THAT THE ASSESSEE HAS NEITHER DISCLOSED ANY INCOME TO THE DEPARTMENT BEFORE THE SEARCH NOR THE DEPARTMENT WAS ABLE TO UNEARTH SOME UNDISCLOSED INCOME WHICH HAS NOT BEEN DISCLOSED BY THE ASSESSEE BEFORE THE SEARCH TOOK PLACE IN ASSESSEES PLACE. THEREFORE, ACCORDING TO LD. AR, T HE ASSERTION OF THE AO IN THE ASSESSMENT ORDER AND THE LD. CIT, DR THAT THERE WAS INCRIMINAT ING MATERIALS IN THE FORM CJ-2 FOR AY 2010-11 TO 2012-13 AND CJ 13 OF AY 2011-12 AND 2012 -13 IS INCORRECT AND MISLEADING. ACCORDING TO HIM, CJ-2 AND CJ-13 CANNOT BE TERMED A S INCRIMINATING MATERIAL BY ANY STRETCH OF IMAGINATION AND, THEREFORE, ACCORDING TO HIM, TH E AO EITHER NOT UNDERSTANDING THE MEANING OF INCRIMINATING MATERIAL HAS TRIED TO MISL EAD BY STATING THAT THESE DOCUMENTS ARE INCRIMINATING MATERIALS AGAINST THE ASSESSEE WHEN IN FACT IT IS NOT AS PLEADED BEFORE US. 9. FURTHER, THE LD. AR DREW OUR ATTENTION TO THE ST ATEMENT GIVEN BY SHRI NARENDRA PRABHUDAYAL SUREKA WHEREIN ACCORDING TO AO AND LD. CIT, DR, SHRI SUREKA ADMITTED THAT M/S. TTML IS A PENNY STOCK COMPANY AND WAS INVOLVE D IN PROVIDING ACCOMMODATION ENTRY TO PREFERENTIAL SHARE HOLDER OF THE SAID SCRIP AND EVEN AFTER THIS STATEMENT AGAINST THE ASSESSEE WAS BROUGHT TO THE NOTICE OF ASSESSEE, THE ASSESSEE DID NOT UTILIZE THE OPPORTUNITY GIVEN BY THE DEPARTMENT TO CROSS EXAMINE SHRI SUREK A WHICH GOES ON TO AFFIRM THE DEPARTMENTS VIEW THAT SHARES OF M/S. TTML IS PENNY STOCK AND LTCG CLAIM IS NOTHING BUT BOGUS. THE LD. AR EXPLAINED THAT FIRST OF ALL, THE ASSESSEE DOES NOT KNOW THIS SHRI NARENDRA PRABHUDAYAL SUREKA AND UNDISPUTEDLY THE STATEMENT O F THIS PERSON WAS RECORDED BEHIND THE BACK OF THE ASSESSEE AND SO IN THE FIRST PLACE IT C ANNOT BE RELIED UPON TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE. DRAWING OUR ATTENTI ON TO THE ENTIRE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA, THE LD. AR CONTENDED T HAT THERE IS NO WHISPER OF THE ASSESSEES NAME BY THIS PERSON EVEN AS A BENEFICIAR Y FROM THE PURCHASE AND SALE OF SHARES OF M/S. TTML. ACCORDING TO LD. AR, THE SALE TRANSACTI ONS HAVE TAKEN PLACE IN THE ELECTRONIC PLATFORM OF BOMBAY STOCK EXCHANGE THROUGH RECOGNIZE D SHARE BROKER AND THE TRANSACTIONS 11 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 WERE ALL OF THE SCRIPS WHICH WERE KEPT IN DE MAT AC COUNT FORMAT AND THROUGH BANKING TRANSACTIONS AND THAT THE ASSESSEE HAD FILED ALL TH E DOCUMENTS TO PROVE THE PURCHASE AND SALE OF THE SCRIPS. ACCORDING TO LD. AR, EVEN IF SOME P ERSONS WERE INVOLVED IN NEFARIOUS PRACTICE OF PURCHASE OF SUCH SHARES AND THEREAFTER ENGAGED IN PRE-ARRANGED SALE OF M/S. TTML THAT CANNOT BE THE SOLE BASIS FOR TAKING A VI EW THAT THE ASSESSEE WAS ALSO INVOLVED IN SUCH PRE-PLANNED TRANSACTION UNLESS THERE IS SOME M ATERIAL/EVIDENCE TO SUGGEST/SUBSTANTIATE THAT ASSESSEE WAS IN FACT INVOLVED IN THE CONSPIRAC Y OR HE WAS ALSO ACTIVE PARTICIPANT IN THE RACKET OF PURCHASE AND LATER STAGE MANAGED SALE OF SHARES. ACCORDING TO LD. AR, SINCE THE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA IN NO WAY HAVE NAMED THE ASSESSEE/BROKER AS A PARTICIPANT IN THIS PURPORTED STAGE MANAGED SH OW OR CONSPIRACY LEADING TO IT AS ALLEGED, THE STATEMENT OF SHRI NARENDRA PRABHYDAYAL SUREKA C ANNOT BE CALLED AS AN INCRIMINATING STATEMENT QUA THE ASSESSEE AND, THEREFORE, SINCE TH ERE WAS NOTHING INCRIMINATING AGAINST THE ASSESSEE OR HIS BROKERS IN RESPECT TO SALE OF SHARE S OF M/S. TTML, THE QUESTION OF CROSS EXAMINATION DOES NOT ARISE. THEREFORE, ACCORDING T O LD. AR, ON A GENERAL STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA WHO MIGHT HAVE TAKEN PA RT IN ILLEGAL ACTIVITY IN PROVIDING ACCOMMODATION ENTRY FOR SOME BENEFICIARIES BY PROVI DING SHARES OF M/S. TTML AND THEREAFTER FACILITATED SALES OF IT, CANNOT BE A GRO UND TO DISCARD THE BONAFIDE TRANSACTIONS CARRIED OUT BY THE ASSESSEE. ACCORDING TO LD. AR, T HE ASSESSEES PURCHASE AND SALE OF SHARES OF M/S. TTML CANNOT BE PAINTED BLACK ONLY ON THE GE NERAL STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA AND MOREOVER, SINCE SHRI NARENDR A PRABHUDAYAL SUREKA HAS NOT NAMED THE ASSESSEE TO BE A COMPLICIT IN HIS ILLEGAL ACTIV ITY OR AS A BENEFICIARY, NO ADVERSE INFERENCE CAN BE DRAWN EVEN ON THE GENERAL STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA. THEREFORE, HE SUBMITTED THAT SINCE ALL THE DOCUMENT S IN THE HANDS OF THE ASSESSEE SUBSTANTIATE THE TRANSACTION WHICH RESULTED IN LTCG HAVE BEEN PRODUCED AND THE AO HAS NOT BEEN ABLE TO FIND OUT ANY INFIRMITY IN ANY OF THE D OCUMENTS AND AFTER HAVING FOUND THE DOCUMENTS AS CORRECT, THE ASSESSEES CLAIM OUGHT TO HAVE BEEN ACCEPTED UNLESS THERE IS ADVERSE MATERIAL TO THE CONTRARY AGAINST THE ASSESS EE ON HIS LTCG CLAIM. THEREFORE, SINCE THE TRIBUNAL HAS ALREADY ACCEPTED THE CLAIM OF LTCG OF OTHER ASSESSEES IN RESPECT TO THE SCRIPS OF M/S. TTML, HE WANTS US TO ALLOW THE CLAIM OF THE PRESENT ASSESSEE ALSO. 12 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 10. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. FIRST, WE MAKE IT CLEAR THAT AS PER THE ADMIT TED FACTS ENUMERATED IN PARA 4 SUPRA, BOTH THE ASSESSMENT YEARS BEFORE US ARE UNABATED ASSESSM ENTS, SINCE THESE ASSESSMENT YEARS WERE NOT PENDING BEFORE THE AO ON THE DATE OF SEARCH ON 12.08.2015, SO NO ADDITION CAN BE MADE BY THE AO, WITHOUT THE AID OF INCRIMINATING MATERIA LS. WITH THAT BACKGROUND IN MIND, LET US SEE WHETHER THERE ARE ANY INCRIMINATING MATERIALS U NEARTHED AGAINST THE ASSESSEE DURING SEARCH, WHICH CAN JUSTIFY THE ADDITION MADE BY THE AO. IN THE SAID LOOK-OUT, WE NOTE THAT THE AOS ASSERTION THAT INCRIMINATING MATERIAL I.E. CJ- 2 AND CJ-13 WERE RECOVERED DURING SEARCH WHICH SHOW THAT THE ASSESSEE DEALT WITH M/S. TTML W HICH RESULTED IN BOGUS LTCG, OUR OPINION AFTER EXAMINING CAREFULLY EACH DOCUMENTS WH ICH ARE PLACED FROM PAGES 32 TO 69 ARE THAT THEY ARE NOTHING BUT BANK STATEMENT, LEDGERS, ACCOUNTS MAINTAINED BY ASSESSEE OF GCM SECURITIES[BROKER], LEDGER ACCOUNT OF BANK OF INDIA , BURRA BAZAR BRANCH, CONTRACT NOTES OF SALE, SUMMARY OF LTCG, BALANCE SHEET, INCOME TAX RE TURN WHICH DOCUMENTS ACCORDING TO US, CAN BY NO STRETCH OF IMAGINATION BE TERMED AS I NCRIMINATING MATERIAL, RATHER WE NOTE THAT THESE WERE THE VERY SAME DOCUMENTS THE ASSESSEE HAD ALREADY DISCLOSED BEFORE SEARCH AND ON THE STRENGTH OF WHICH THE ASSESSEE, IN FACT HAD CLAIMED AUTHENTICALLY TO HIS TRANSACTION FOR CLAIMING LTCG. SO, WE FIND THAT THERE IS NO INCRIMI NATING MATERIAL UNEARTHED AGAINST THE ASSESSEE DURING SEARCH AS MISUNDERSTOOD BY THE AO A ND THE LD. CIT DR BEFORE US. ONLY OTHER INCRIMINATING MATERIAL ACCORDING TO LD. DR BE FORE US IS THE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA WHICH HAS BEEN RECORDED BY THE D EPARTMENT. THE AO HAS REPRODUCED HIS STATEMENT IN THE ASSESSMENT ORDER ITSELF. AFTE R CAREFULLY GOING THROUGH THE CONTENTS OF THE STATEMENT WE NOTE THAT THIS STATEMENT WAS RECOR DED BY THE DEPARTMENT BEFORE THE SEARCH I.E. ON 02.06.2015 WHEREAS SEARCH TOOK PLACE ON 12. 08.2015. SO ADMITTEDLY NO INCRIMINATING STATEMENT WAS RECORDED DURING SEARCH UNDER SECTION 132(4) OF THE ACT. AS WE NOTED THIS STATEMENT WAS RECORDED BY THE DEPARTMEN T BEFORE THE SEARCH AND THE INFERENCE THAT CAN BE DRAWN IS THAT THE SEARCH TEAM LEADERS W OULD BE AWARE OF THE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA IN RESPECT OF SHARES OF M/S. TTML, SO WHILE CONDUCTING SEARCH, THEY WOULD ENTHUSIASTICALLY LOOK FOR SOME M ATERIAL/DIARY/ELECTRONIC ENTRY/COMPUTER 13 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 ENTRY/PRINT OUT TO SHOW THE MOVEMENT OF CASH FROM A SSESSEES COFFER TO THE PURCHASE OF SHARES FROM ASSESSEE (I.E. TO THE PRE-ARRANGED BUYE R AT THE BOMBAY STOCK EXCHANGE WHO BOUGHT ASSESSEES SHARE OF M/S. TTML FOR ASTRONOMIC AL PRICE) OR AS TO FIND OUT ANY CORRESPONDENCE/LINK/NEXUS TO ESTABLISH THE ASSESSEE S RELATIONSHIP BETWEEN SHRI NARENDRA PRABHUDAYAL SUREKA OR SHRI MANISH BAID. THOUGH DUR ING HEARING WE ASKED THE DEPARTMENT TO SHOW SOME MATERIAL LEAVE ALONG EVIDENCE TO SUGGE ST ANY LINK OF ASSESSEE WITH SHRI NARENDRA PRABHUDAYAL SUREKA OR SHRI MANISH BAID, TH EY COULD NOT PRODUCE BEFORE US. SO, UNDISPUTEDLY SINCE THE STATEMENT OF SHRI NARENDRA P RABUDAUAL SUREKA HAS BEEN RECORDED BEHIND THE BACK OF ASSESSEE THAT TOO BEFORE SEARCH AND DOES NOT DIRECTLY IMPLICATE THE ASSESSEE IN ANY WRONG DOING CANNOT BE TERMED AS INC RIMINATING MATERIAL AGAINST ASSESSEE. MOREOVER, WE SHOULD HASTEN TO ADD THAT SHRI NARENDR A PRABHUDAYAL SUREKAS STATEMENT (IN DETAIL WE WILL DISCUSS LATER) IS A GENERAL STATEMEN T THAT M/S. TTML IS A PENNY STOCK. HOWEVER, WE NOTE THAT SHRI NARENDRA PRABHUDAYA SURE KA HAS ATTRIBUTED NO KNOWLEDGE ABOUT THE BENEFICIARIES AND HAS PUT THE ENTIRE BLAME ON S HRI MANISH BAID, WHOSE STATEMENT AO HAS NOT PLACED ON RECORD AND SO SHRI NARENDRA PRABHUDAY AL SUREKAS STATEMENT IN NO WAY ADVANCES THE CASE AGAINST THE ASSESSEE, BECAUSE SHR I NARENDRA PRABHUDAYAL SUREKA IS IGNORANT ABOUT ANY PREFERENTIAL SHARE HOLDERS. SO WITHOUT ANY INCRIMINATING MATERIAL AGAINST THE ASSESSEE FOUND DURING SEARCH IN RESPECT TO SHAR ES OF M/S. TTML, NO ADDITION CAN BE MADE WITHOUT INCRIMINATING MATERIAL FOUND DURING SE ARCH. SO, SINCE BOTH THE AYS BEFORE US WERE NOT PENDING BEFORE AO ON DATE OF SEARCH, SO WI THOUT INCRIMINATING MATERIALS UNEARTHED DURING SEARCH, NO ADDITION CAN BE MADE AS HELD BY H ONBLE DELHI HIGH COURT IN KABUL CHAWLA (SUPRA) WHEREIN THEIR LORDSHIPS HELD AS UNDE R: SUMMARY OF LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DE CISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHE D REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. 14 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE TOTAL INCOME OF THE AFOREMENTIONED SIX YEARS IN S EPARATE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE D ISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHE R POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RE LEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS S ECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD ASSESS IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD REASSESS TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO O NE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATI NG MATERIAL UNEARTHED DURING THE COURSE OF PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH W ERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 11. THE HON'BLE JURISDICTIONAL CALCUTTA HIGH COURT IN ITA NO. 661 OF 2008 COMMISSIONER OF INCOME TAX VS.VEERPRABHU MARKETING LTD. HAS ALSO HELD AS UNDER: WE AGREE WITH THE VIEW EXPRESSED BY THE KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS PRE-REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISE D U/S 153(C) R.W SECTION 153(A). IN THE CASE BEFORE US, THE AO HAS MADE A DISALLOWANCE OF T HE EXPENDITURE, WHICH WAS HELD DISCLOSED, FOR ONE REASON OR THE OTHER, BUT SUCH DISALLOWANCES MADE BY THE AO WERE UPHELD BY THE LD.CIT(A) BUT THE LD. TRIBUNAL DELETED THESE DISALL OWANCE. WE FIND NO INFIRMITY IN THE AFORESAID ACT OF THE LD. TRIBUNAL. THE APPEAL IS, T HEREFORE, DISMISSED. 12. IN A SIMILAR CASE M/S. KURELE PAPER MILLS PVT. LTD. ADDITION WAS MADE BY THE AO (IN SEC. 153A PROCEEDINGS) WITHOUT INCRIMINATING MATERI AL UNEARTHED DURING SEARCH, THE SHARE CAPITAL RECEIVED BY THE ASSESSEE U/S. 68 OF THE AC T WAS DELETED BY THE TRIBUNAL, WHICH ORDER HAS BEEN UPHELD BY HONBLE DELHI HIGH COURT IN PR. CIT VS. KURELE PAPER MILLS PVT. LTD. (2016) 380 ITR 571 (DEL) WHICH DECISION HAS NOT BEE N DISTURBED BY THE HONBLE SUPREME COURT (2016) 380 ITR (ST.) 69-ED AND WAS PLEASED TO DISMISS THE SLP. 15 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 13. BEFORE WE PART FOR COMPLETENESS, WE WOULD LIKE TO ANALYZE THE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA WHO ACCORDING TO REVENU E HAS GIVEN INCRIMINATING OCULAR EVIDENCE AGAINST THE ASSESSEE IN-RESPECT OF SCRIPS OF M/S TTML. FROM THE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA IT REVEALS THAT HE IS T HE MANAGING DIRECTOR OF M/S. TTML. HIS STATEMENT HAS BEEN RECORDED ON 02.06.2015 (BEFO RE SEARCH WHICH HAPPENED ON 12.08.2015) (APPEAL PAPER PAGES 72 TO 81). FROM A PERUSAL OF THE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA WE NOTE THAT HIS COMPAN Y M/S. TTML WAS NOT A FLY BY NIGHT COMPANY. IT HAS A RUNNING FACTORY WHICH IS SITUATED AT B4/5, MIDC, MURBAD, THANE AND HE WAS THE MANAGING DIRECTOR OF THE COMPANY SINCE 06.0 7.1987 AND THIS COMPANY WAS LISTED WITH THE BSE IN 1996 AND IT WAS IN THE BUSINESS OF MANUFACTURING CLOTH FROM YARN. IT IS DISCERNED THAT M/S. TTML WAS DELISTED DUE TO NON-CO MPLIANCE WITH THE STATUTORY REQUIREMENT OF BSE AND THE COMPANY INCURRED LOSSES SO, HAD APPLIED WITH THE BIFR IN THE YEAR 2000 AND WAS DECLARED AS A SICK UNIT ON 16.04. 2002. THEREAFTER, HE SAID THAT WHEN THE PROCEEDINGS WERE GOING ON AT BIFR, SINCE NO FINANCI AL INSTITUTION WAS FORTHCOMING TO FINANCE THE COMPANY, HE CAME INTO CONTACT WITH SHRI MANISH BAID WHO SUGGESTED HIM THE ROUTE OF PREFERENTIAL SHARES TO RAISE CAPITAL AND H E HAS REPLIED TO QUESTION NO. 12 THAT THE LIST OF PREFERENTIAL ALLOTTEES WAS GIVEN AT ANNEXURE I ( WHICH IS NOT ANNEXED BEFORE US) AND THAT HE HAS RAISED CAPITAL OF RS.7,50,00,000/- AT RS. 10/- FACE VALUE FROM 47 HUF/INDIVIDUAL ON 25.01.2010. ACCORDING TO SHRI NARENDRA PRABHUDAYAL SUREKA THESE PREFERENTIAL SHARES WERE ALLOTTED TO PEOPLE WHO WAS KNOWN ONLY TO SHRI MANIS H BAID AND TO QUESTION NO. 31 HE HAS ANSWERED THAT THE AMOUNT RECEIVED AS INVESTMENT THR OUGH PREFERENTIAL SHARE ALLOTMENT WAS UTILIZED FOR THE BUSINESS AFFAIRS OF THE M/S. TTML IN THE FORM OF CAPITAL INVESTMENT AND A SEPARATE BANK ACCOUNT WAS CREATED WITH THE INDIAN O VERSEAS BANK, NARIMAN POINT. THE COMPANY WAS AGAIN LISTED WITH BSE ON 13.03.2009. A FTER SAYING ALL THE AFORESAID FACTS, TO A QUESTION AS TO HOW THE SHARE PRICE SHOT UP TO HIGH PRICE, SHRI NARENDRA PRABHUDAYAL SUREKA HAS STATED THAT IT IS A PENNY STOCK COMPANY AND THA T THE SHARES OF THE COMPANY HAVE BEEN USED TO PROVIDE ENTRY FOR BOGUS LTCG TO THE PREFERE NTIAL ALLOTTEES AND ON THE SAME BREATH AGAIN HAS SAID THAT THE ENTIRE SCHEME HAS BEEN MANA GED AND CONTROLLED BY SHRI MANISH BAID. FROM THE REPLY OF SHRI SUREKA, IT TRANSPIRES THAT M /S. TTML IS A RUNNING CLOTH MILL AND THERE 16 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 ARE STILL EMPLOYEES WORKING IN HIS FACTORY AND ALSO HE DOES NOT KNOW PERSONALLY ABOUT THE PREFERENTIAL SHAREHOLDERS AND CONVENIENTLY HAS STAT ED THAT ONE SHRI MANISH BAID HAS BROUGHT THESE SHAREHOLDERS FROM WHOM RS. 7.50 CR. WAS COLLE CTED AND IT WAS INFUSED AS CAPITAL INTO HIS COMPANY M/S. TTML. IT IS ALSO NOTED THAT THOUGH SHRI NARENDRA PRABHUDAYAL SUREKA HAS STATED THAT HE DOES NOT KNOW ANY OF THE PREFERENTIA L ALLOTTEES, WE NOTE THAT THE AO HAS NOT MADE ANY ATTEMPT TO GET THE STATEMENT OF SHRI MANIS H BAID ON BOARD, WHICH WOULD HAVE THROWN LIGHT AS TO WHETHER THE ASSESSEE HAD ANY CON TACT WITH MR. MANISH BAID WHO IS SUPPOSED TO HAVE BEEN MAIN PLAYER, AND WOULD HAVE C LEARED THE AIR OF SUSPICION. WE NOTE THAT THE ASSESSEE HAS BEEN ALLOTTED PREFERENTIAL SH ARES VIDE LETTER DATED 27.01.2010 OF RS. 2 LACS VIDE COMPANYS SHARE CERTIFICATE DATED 25.01.2 010 WHICH THOUGH CASTS DOUBT, BUT IT CANNOT BE THE SOLE BASIS FOR TERMING THE ENTIRE CLA IM OF ASSESSEE AS BOGUS OR THAT ASSESSEES MONEY WAS LAUNDERED IN THE MODUS OPERANDI AS SUGGES TED BY THE DEPARTMENT, BECAUSE AS PER HIS STATEMENT SHRI SUREKA WHEN HE WAS FACING FINANC IAL CRISIS WENT TO SHRI MANISH BAID AND SOUGHT HIS HELP TO RAISE THE FUNDS AND BY THAT PROC ESS RS 7.50 CRORES WAS COLLECTED BY ALLOTMENT OF SHARES AND THAT FUND WAS INFUSED AS C APITAL INTO HIS COMPANY M/S TTML AND THEN M/S TTML WAS AGAIN LISTED IN BSE. THEREAFTER, THE SHARE VALUE PURCHASED BY ASSESSEE FOR RS 10/- PER SHARE STARTED RISING, WHICH ACCORDI NG TO SHRI SUREKA WAS AS PER THE SCHEME AND PLAN OF SHRI BAID AND INORDER TO RIGGLE OUT OF THE QUESTION HOW THE PRICE OF SHARES OF M/S TTML SUDDENLY ROSE TO ASTRONOMICAL PRICE HAS PUT TH E BLAME ON SHRI BAID. SO, IF SHRI SUREKA HAS TO BE BELIEVED, THEN IT TURNS OUT THAT H E WAS AN ACCOMPLICE ALONG WITH SHRI BAID, FOR COLLECTION OF RS 7.5 CR BY WAY OF PREFERENTIAL SHARE ALLOTMENT, WHICH PAVED THE WAY FOR LTCG. THOUGH WE NOTE THAT SHRI SUREKA HAS CONVENIEN TLY PALMED OFF THE WRONG ACTS ATTRIBUTABLE TO SHRI BAID ALONE AND THE DEPARTMENT HAS NOT SPELLED OUT WHAT ACTION HAS BEEN TAKEN AGAINST SHRI NARENDRA PRABHUDAYAL SUREKA IN THE LIGHT OF HIS OWN STATEMENT OR IT HAS BEEN EXAMINED AS TO WHETHER HIS STATEMENT IS SELF S ERVING OR NOT, COULD HAVE BEEN CLEARED ONLY IF STATEMENT OF SHRI MANISH BAID WAS RECORDED WHICH CLEARLY COULD HAVE BROUGHT OUT THE CORRECT FACTS. SO WITHOUT THE STATEMENT OF SHRI MANISH BAID WE CANNOT ATTRIBUTE ANY WRONG DOING ON THE PART OF ASSESSEE. FROM THE AFORE SAID DISCUSSION WE NOTE THAT THE STATEMENT OF SHRI SUREKA DOES NOT IN ANY MANNER DI RECTLY IMPLICATE THE ASSESSEE AND SO BASED 17 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 ON THE STATEMENT OF SHRI SUREKA ALONE, NO ADVERSE I NFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. THEREFORE, WE MADE A FINDING SUPRA THAT S HRI SUREKA STATEMENT REPRODUCED IN THE ASSESSMENT ORDER AS NOT INCRIMINATING QUA THE ASSES SEE. 14. COMING TO THE MERITS OF THE CASE WE NOTE THAT T HE ASSESSEE HAS APPLIED FOR ALLOTMENT OF 2,00,000 EQUITY SHARES AT FACE VALUE @ RS. 10 EA CH ON 4.01.2010 IN M/S. TTML. THE COMPANY ISSUED AND ALLOTTED 2,00,000 EQUITY SHARES ON PREFERENTIAL BASIS ON 25.01.2010 AND INFORMED ASSESSEE ON 27.01.2010 WITH A CONDITION TH AT THE SHARES SHALL BE HELD IN FOR A LOCK IN PERIOD FOR ONE YEAR. COPIES OF APPLICATION FOR A LLOTMENT, ALLOTMENT LETTER & PHOTOCOPY OF SHARE CERTIFICATE ARE AVAILABLE IN PAPER BOOK PAGES 70 -72. THE ASSESSEE HAD PAID THE PURCHASE CONSIDERATION OF RS.20,00,000/- VIDE ACCOU NT PAYEE CHEQUE ISSUED UPON BANK OF INDIA ON 14/01/2010, WHICH WAS CLEARED ON 15/01/201 0. COPY OF BANK STATEMENT IS AVAILABLE AT PAGE ENCLOSED AT PAGE-73 OF THE PAPER BOOK. SUCH INVESTMENT OF RS.20,00,000/- MADE IN M/S. TTML WAS DULY REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE AS ON 31/03/2010. COPY OF BALANCE SHEET AND P&L ACCOUNT I S SEEN PLACED AT PAGES 74-75 OF THE PAPER BOOK. THE SHARES WERE DE-MATTED WITH NSDL AN D KEPT IN THE DE-MAT ACCOUNT OPENED WITH DEPOSITORY PARTICIPATORY M/S EUREKA STOCK & SH ARE BROKING SERVICES LIMITED (DPID: IN302105). COPY OF DE-MAT REQUEST FORM IS SEEN PLAC ED AT PAGE 76 OF THE PAPER BOOK. THE SHARES WERE RELEASED AFTER COMPLETION OF THE LOCK-I N PERIOD I.E. AFTER 25/01/2011 AND THEREAFTER THE ASSESSEE SOLD SOME OF HIS HOLDING TH ROUGH THE BOMBAY STOCK EXCHANGE AT VARIOUS DATES FROM 02/02/2011 THROUGH SEBI REGISTER ED BROKER (NO. INB 010793439), M/S GCM SECURITIES LIMITED (BSE CODE 6250). IN THIS PR OCESS 1,09,000 SHARES WERE SOLD TILL 30/03/2011 AGAINST CONTRACT NOTES, FOR TOTAL CONSID ERATION OF RS.2,46,83,694, WHICH WAS INCLUSIVE OF SECURITY TRANSACTION TAX (SIT) OF RS.3 5,523. COPY OF CONTRACT NOTES EVIDENCING SALE OF SHARES ARE FOUND PLACED AT PAGES 77-85 OF PAPER BOOK. WE NOTE THAT THE ASSESSEE RECEIVED THE MONEY INTO HIS BANK ACCOUNT M AINTAINED WITH BANK OF INDIA WITHIN THE TIME PERIOD AS PRESCRIBED UNDER STOCK EXCHANGE REGU LATIONS AND THE COPY OF BANK STATEMENT REFLECTING RECEIPT IS AVAILABLE AT PAGES 86-91 OF PAPER BOOK. WE NOTE THAT THE SHARES WERE DEBITED IN THE DE-MAT ACCOUNT IN VARIOU S DATES AS PER THE VARIOUS DATES IN 18 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 CONSONANCE WITH THE CONTRACT NOTES. COPY OF DE-MAT TRANSACTION STATEMENT IS FOUND PLACED AT PAPER BOOK PAGE 92. SINCE ASSESSEE PURCHASED SHARES OF THIS SCRIPS OF 1,09,000 AT RS.10,90,000 AND SOLD THE SHARES FOR RS. 2,46,83,69 4, HE MADE A CAPITAL GAIN OF RS.2,35,93,694. COPY OF LONG TERM CAPITAL GAIN STAT EMENT IS AVAILABLE AT PAGE 93 OF PAPER BOOK. SINCE THE SALE WAS MADE AFTER ONE YEAR OF HO LDING AND AFTER PAYMENT OF STT AND TRANSACTIONS TOOK PLACE IN THE FLOOR OF THE RECOGNI ZED STOCK EXCHANGE (BSE), THE INCOME WAS COMPUTED BY ASSESSEE UNDER LONG TERM CAPITAL GAIN W HICH IS EXEMPTED FROM TAX U/S. 10(38) OF THE ACT. THE ASSESSEE PRODUCED ALL RELEVANT DOC UMENTS IN SUPPORT OF THE TRANSACTION INCLUDING PURCHASE BILLS, SALE CONTRACT NOTES, BANK STATEMENT AND D-MAT STATEMENT REFLECTING PURCHASE AND SALE OF SHARES THE LTCG CLAIM OF ASSES SEE CANNOT BE BRUSHED ASIDE WITHOUT ADVERSE MATERIAL TO SUGGEST IT AS BOGUS. WE NOTE TH AT THE BALANCE 91,000 SHARES WERE CONTINUED TO BE REFLECTED IN THE DE-MAT STATEMENT. IN THE COMPUTATION OF INCOME, INCOME UNDER VARIOUS HEADS, WERE STATED INCLUDING INCOME F ROM LONG TERM CAPITAL GAIN. FURTHER THE LTCG WAS SHOWN IN THE INCOME SIDE OF THE INCOME-EXP ENDITURE A/C FOR FY 2010-11. COMPUTATION OF INCOME FOR AY 11-12 & I & E A/C IS F OUND PLACED AT PAGE 94 OF THE PAPER BOOK. BALANCE INVESTMENT IN M/S. TTML FOR 91,000 AT A COST OF RS.9,10,000 WAS CONTINUED TO BE REFLECTED IN THE BALANCE SHEET AS ON 31/03/20 11. COPY OF BALANCE SHEET AS ON 31/03/2011 IS FOUND PLACED AT PAGE 95 OF PAPER BOOK . WE ALSO NOTE THAT THE ASSESSEE HAS SUBMITTED AN EXTRACT OF PRICE DATA OF BSE TO SUBSTA NTIATE THAT THE SHARES WERE SOLD AT PREVAILING MARKET PRICE. COPY OF THE BSE PRICE DATA DURING THE PERIOD OF SALE IS FOUND PLACED AT PAGES 96 AND 97 OF PAPER BOOK. WE NOTE T HAT THE AO DID NOT FIND ANY DEFECT/ DISCREPANCY ABOUT THE DOCUMENTS WHICH WERE PRODUCE D TO ESTABLISH THE GENUINENESS OF THE SHARE TRANSACTION. BEFORE US THE LD. AR SUBMITTED T HAT THE AOS SHOW CAUSE NOTICE WAS REPLIED DENYING ANY RELATION WITH THE PARTIES REFER RED IN THE INVESTIGATION REPORT. COPY OF THE REPLY IS FOUND PLACED AT PAGES 98 TO 100 OF THE PAP ER BOOK. WE NOTE THAT THE AO BASED ON THE GENERAL INVESTIGATION REPORT OF THE DEPARTMENT DISCARDED ALL THE ABOVE EVIDENCES. FURTHER THE AO TAKING NOTE OF THE PRICE RISE, HIGH VOLUME, LOW FUNDAMENTALS ETC. HELD THAT THE SHARE TRANSACTION AS BOGUS. IT WAS BROUGHT TO OUR NOTICE THAT THE AO DID NOT PROVIDE DURING THE ASSESSMENT PROCEEDINGS, ANY COPIES OF TH E MATERIAL, INVESTIGATION REPORTS, 19 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 STATEMENTS PURPORTEDLY RECORDED BEHIND THE BACK OF THE ASSESSEE TO CREATE A SMOKE SCREEN OF SUSPICION AND DOUBT AGAINST THE ASSESSEE. AND AO BA SED ON THIRD PARTY EVIDENCE WHICH WERE NOT SUPPLIED TO THE ASSESSEE BRUSHED ASIDE THE AFOR ESAID DOCUMENTS WHICH SUBSTANTIATED THE LTCG AND HELD THE TRANSACTION TO BE BOGUS, WHICH AC CORDING TO LD. AR, IS NOT FAIR JUST AND REASONABLE AND SO WANTS THE CLAIM OF ASSESSEE ALLOW ED AS DONE IN SIMILAR CASE. 15. WE NOTE THAT FOR CLAIMING EXEMPTION U/ S 10(38 ) OF ACT THREE REQUIREMENT NEEDS TO BE FULFILLED. FIRSTLY, THE SHARE PURCHASED SHOULD B E HELD FOR MORE THAN 1 YEAR. SECONDLY THE SHARES SHOULD BE LISTED & SOLD ON RECOGNIZED STOCK EXCHANGE. THIRDLY ON THE SAID SALE, NECESSARY SECURITY TRANSACTION TAX (STT) HAS BEEN P AID. IN THE PRESENT CASE, THE SHARES OF M/S. TTML WAS ACQUIRED BY ASSESSEE ON 25/01/2010 FR OM THE COMPANY ON PREFERENTIAL BASIS. AFTER THE LOCK-IN PERIOD OF ONE YEAR, THE SH ARES WERE PLACED IN THE DE-MAT ACCOUNT. SOME SHARES WERE SOLD IN BSE ON VARIOUS DATES START ING FROM 02/02/2011 ONWARDS AFTER PAYMENT OF ALL STATUTORY LEVIES INCLUDING STT & BRO KERAGE. THUS, AFTER THE SHARES WERE HELD FOR MORE THAN 1 YEAR, THE SAME WAS SOLD ON RECOGNIZ ED STOCK EXCHANGE AND NECESSARY STT PAID. HENCE THE ASSESSEE IS LEGALLY ELIGIBLE TO AVA IL THE EXEMPTION U/S. 10(38) OF THE ACT AND THE AO ONLY CAN DENY THE CLAIM ON COGENT GROUNDS WI TH MATERIAL TO SUBSTANTIATE HIS CONCLUSION THAT ASSESSEE INDULGED ALONG WITH PERSON S STATEMENT RECORDED (WHICH IS SUPPORTED BY SOME MATERIAL TO SUGGEST) THAT ASSESSE E WAS BENEFICIARY TO THE WHOLE STAGE MANAGED CLAIM OF EXEMPT GAIN. 16. AO INVOKED SECTION 68 OF THE ACT TREATING THE SHARE TRANSACTION AS SHAM AND ADDED THE LTCG OF RS.2,35,93,694 INVOKING SECTION 68 OF T HE ACT. SECTION 68 OF THE INCOME TAX ACT, READS AS UNDER: WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER , SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 17. FROM THE ABOVE IT MAY BE SEEN THAT THE PRIMARY LIABILITY, U/S 68 OF THE ACT, IS THAT OF THE ASSESSEE IN WHOSE BOOKS THE CASH CREDIT ENTRY I S FOUND. THIS LIABILITY ARISES ONLY WHEN 20 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 THE ASSESSEE FAILS TO PROVE SATISFACTORILY THE SOUR CE FROM WHERE IT RECEIVED THE AMOUNT AND THE NATURE OF THE AMOUNT SO RECEIVED THAT IS, IT HA S TO SHOW HOW THE SAID AMOUNT IS NOT AN INCOME-RECEIPT. 18. FROM THE AFORESAID DOCUMENTS DISCUSSED IN DETA IL HEREIN ABOVE AT PARA 14 (SUPRA) IT CAN BE SEEN THAT THE ASSESSEE HAD EXPLAINED THE NAT URE & SOURCE OF TRANSACTION IN DETAIL IN ORDER TO DISCHARGE ITS ONUS/PRIMARY LIABILITY. THE ASSESSEE AS WE HAD TAKEN NOTE HAS SOLD THE EQUITY SHARES OF M/S. TTML AS LONG TERM CAPITAL ASS ETS AND RECEIVED PAYMENT FROM THE BOMBAY STOCK EXCHANGE THROUGH THE SEBI REGISTERED B ROKER M/S GCM SECURITIES LIMITED. THE AO, WE NOTE HAS NOT SPELLED OUT SPECIFICALLY AN Y DEFECTS IN THE DOCUMENTS COVERING THE TRANSACTION NEITHER IN THE SHARE ALLOTMENT LETTER F OR ACQUISITION NOR IN RESPECT OF CONTRACT NOTES FOR SALE, BANK STATEMENT SHOWING PAYMENT FOR PURCHASE & RECEIPT FOR SALES, DE-MAT STATEMENT SHOWING MOVEMENT OF SHARES, BALANCE SHEET REFLECTING INVESTMENT & CORRESPONDING BOOKING OF CAPITAL GAINS IN THE P&L A /C FOR CORRESPONDING SALE OF SHARES IN DIFFERENT YEARS. IT IS TRITE THAT ONCE THE ASSESSEE HAS DISCHARGED ITS ONUS/PRIMARY LIABILITY, IT WILL BE AO'S BURDEN TO BRING ON RECORD ANY COGENT M ATERIAL IN SUPPORT OF THE CONTRARY CONTENTION THAT THE TRANSACTION ENCOMPASSING THE SA LE WAS SHAM. HOWEVER, IN THE BACKGROUND OF THE FACTS DISCUSSED ABOVE, THE AO FAI LED TO BRING ON RECORD ANY MATERIAL TO SUBSTANTIATE THE FACT THAT THE SHARE TRANSACTION IN QUESTION WAS BOGUS. THE STATEMENT OF SHRI NARENDRA PRABHUDAYAL SUREKA TO THE DEPARTMENT/INVES TIGATION WING REPRODUCED IN THE ASSESSMENT ORDER MIGHT SHOW THEIR COMPLICITY IN IND ULGING IN THE NEFARIOUS ACTIVITY OF PROVIDING ACCOMMODATION ENTRY FOR BENEFICIARIES TO CLAIM LTCG ON SALE OF SHARES OF M/S. TTML, BUT THESE ARE GENERAL STATEMENTS EXPLAINING T HE MODUS OPERANDI AND FEW NAMES BUT THE DEPARTMENT HAS NOT BROUGHT OUT ANY DIRECT STATE MENT OF THIS PERSON TO IMPLICATE THE ASSESSEE AS AN ACCOMPLICE IN THEIR PURPORTED STAGE MANAGED ILLEGAL ACTIVITY. WITHOUT WHICH WE ARE AFRAID WE CANNOT JUSTIFY THE ACTION OF AO/LD . CIT(A). IN THIS RESPECT, WE TAKE NOTE OF THE OBSERVATION MADE BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF NAVNEET AGARWAL VS. ITO, KOLKATA, ITA NO. 2281/KOL/2017 DAT ED 20.07.2018: 21 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 THE HON'BLE SUPREME COURT IN THE CASE OF OMAR SALA V MOHAMED SAIT REPORTED IN (1959) 37 ITR 151 (S C) HAD HELD THAT NO ADDITION C AN BE MADE ON THE BASIS OF SURMISES, SUSPICION AND CONJECTURES. IN THE CASE OF CIT (CENT RAL), KOLKATA VS. DAULAT RAM RAWATMULL REPORTED IN 87 ITR 349, THE HON'BLE SUPREME COURT H ELD THAT, THE ONUS TO PROVE THAT THE APPARENT IS NOT THE REAL IS ON THE PARTY WHO CLAIMS IT TO BE SO. THE BURDEN OF PROVING A TRANSACTION TO BE BOGUS HAS TO BE STRICTLY DISCHARG ED BY ADDUCING LEGAL EVIDENCES, WHICH WOULD DIRECTLY PROVE THE FACT OF BOGUSNESS OR ESTABLISH C IRCUMSTANCE UNERRINGLY AND REASONABLY RAISING AN INTERFERENCE TO THAT EFFECT. THE HON'BLE SUPREME COURT IN THE CASE OF UMACHARAN SHAH & BROS. VS. CIT 37 ITR 271 HELD THAT SUSPICION HOWEVER STRONG, CANNOT TAKE THE PLACE OF EVIDENCE. IN THIS CONNECTION WE REFER TO THE GENERAL VIEW ON THE TOPIC OF CONVEYANCE OF IMMOVABLE PROPERTIES. THE RATES/SALE PRICE ARE AT VARIANCE WI TH THE CIRCLE RATES FIXED BY THE REGISTRATION AUTHORITIES OF THE GOVERNMENT IN MOST CASES AND THE GENERAL IMPRESSION IS THAT CASH WOULD HAVE CHANGED HANDS. THE COURTS HAVE LAID DOWN THAT JUDIC IAL NOTICE OF SUCH NOTORIOUS FACTS CANNOT BE TAKEN BASED ON GENERALIZATIONS. COURTS OF LAW ARE B OUND TO GO BY EVIDENCE. 19. SECTION 68 OF THE ACT REQUIRES THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF SUCH CREDIT. ON THE ISSUE OF BURDEN OF PROOF, THE HON'BL E CALCUTTA HIGH COURT, IN THE CASE OF CIT VS. PRECISION FINANCE PVT. LTD. (1994) 208 ITR 465 (CAL) LAID DOWN THAT THE ASSESSEE IS REQUIRED TO ESTABLISH: A) IDENTITY OF PAYER, B) GENUINENESS OF TRANSACTION AND C) CREDITWORTHINESS OF PAYER 20. AS EXPLAINED, THE TRANSACTION WAS MADE IN THE B OMBAY STOCK EXCHANGE THROUGH A SEBI REGISTERED BROKER. AS PER THE ESTABLISHED PROC ESS, ON EXECUTION OF THE ORDERED TRANSACTION, THE EXCHANGE SHALL HANDOVER THE PAYMEN T TO THE BROKER AND IN TURN THE BROKER SHALL ARRANGE FOR PAYMENT TO THE SELLER I.E. THE AS SESSEE. IN THIS CASE, M/S GCM SECURITIES LIMITED, HAVING SEBI REGISTRATION NO.INB 010793439, BSE MEMBERSHIP NO. 6250 HAD EXECUTED THE TRANSACTION. THUS THE IDENTITY OF THE BROKER IS ESTABLISHED FROM M/S. GCM SECURITY LTD. THE BROKER. 21. FROM THE RECORDS, THE ASSESSEE RECEIVED THE SAL E CONSIDERATION AFTER SALE OF SCRIPS OF M/S. TTML SINCE M/S. GCM SECURITIES LIMITED IS A SE BI REGISTERED BROKER HAVING MEMBERSHIP BOTH IN NSE & BSE, THERE CANNOT BE ANY Q UESTION ABOUT THE WORTHINESS OF THE 22 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 SAME AS THE SAME IS COVERED UNDER THE KYC NORMS OF THE EXCHANGES. IT IS NOTED THAT THE BROKER HAD ALL ALONG COMPLIED WITH THE REQUIREMENT TO MAINTAIN THE MARGIN MONEY AS PER EXCHANGE NORMS AND SEBI HAD NEVER PUT ANY RESTRICTI ON ON M/S. GCM SECURITIES LIMITED FOR CAPITAL MARKET OPERATIONS. 22. TO SUBSTANTIATE THE GENUINENESS OF THE TRANSAC TION, THE ASSESSEE HAD PLACED COMPLETE DOCUMENTS BEFORE THE AO. IN RESPECT OF ACQUISITION OF SHARES IN M/S. TTML, THE ASSESSEE SUBMITTED ALLOTMENT LETTER OF THE COMPANY & BANK ST ATEMENT SHOWING PAYMENT OF RS.20,00,000/- AS CONSIDERATION. SUCH PURCHASE WAS ALSO REFLECTED IN THE DE-MAT STATEMENT OF THE ASSESSEE AS A GENUINE HOLDER OF SHARES. FOR SALE, THE ASSESSEE PLACED CONTRACT NOTE ISSUED BY BROKER, BANK STATEMENT SHOWING RECEIPT OF CONSIDERATION & DE-MAT STATEMENT REFLECTING THE MOVEMENT OF SHARES. IN THE BALANCE S HEET OF THE ASSESSEE, INVESTMENTS MADE IN THE SHARES OF M/S. TTML WERE REFLECTED AND IN THE P ROFIT & LOSS ACCOUNT, THE LTCG AS EARNED BY THE ASSESSEE, WAS DISCLOSED. THE AO HAS N OT FOUND FAULT WITH THE GENUINENESS OF SUCH DOCUMENTS. IN FACT THE SALE TRANSACTION WAS EX ECUTED THROUGH SEVERAL INDEPENDENT BODIES LIKE THE DEPOSITORY PARTICIPANT, THE BANKER, THE STOCK EXCHANGE ETC. 23. THE ASSESSEE SOLD THE SHARES ON THE BSE THROUGH HIS STOCK BROKER M/S GCM SECURITIES LIMITED. IN SUPPORT OF THE SALE OF SHARE S CONTRACT NOTE IN THE PRESCRIBED FORM WAS ISSUED BY THE BROKER. THE CONTRACT NOTE INCLUDED RE LEVANT INFORMATION SUCH AS DATE AND TIME OF TRANSACTION, CONTRACT NOTE NUMBER, SETTLEMENT NU MBER, DETAILS OF SERVICE TAX PAID, DETAILS OF BROKERAGE AND DETAILS OF STT PAID. NO MATERIAL W AS BROUGHT ON RECORD BY THE AO THAT THE INFORMATION CONTAINED IN CONTRACT NOTE WAS FALSE OR THAT THE SALE OF SHARES ACTUALLY NEVER HAPPENED. ON THE CONTRARY THE INFORMATION SHOWS THA T THE ASSESSEE CARRIED OUT SALE THROUGH BSE, THE SALE WAS MADE AT THE PREVAILING PRICE AT T HE EXCHANGE AND THE CONSIDERATION WAS RECEIVED THROUGH BSE VIA BANKING CHANNEL AFTER DELI VERY OF SHARES FROM THE DE-MAT ACCOUNT. 24. AFTER DISPOSAL OF SHARES, DELIVERY OF SHARES WA S MADE THOROUGH ASSESSEE'S DE-MAT ACCOUNT WITH M/S EUREKA STOCK & SHARE BROKING SERVI CES LIMITED. THE ENTRIES IN THE DE-MAT 23 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 ACCOUNT SHOWED THAT DELIVERY OF SHARES WAS RECORDED IN THE NSDL'S RECORD AND THE SHARES WERE DELIVERED TO THE DE-MAT ACCOUNT OF M/S. GCM SE CURITIES LIMITED. THESE FACTS WERE NEITHER CONTROVERTED NOR DISPROVED BY THE AO. 25. ON THE CONTRARY, WE NOTE THAT DESPITE SPECIFIC REQUEST MADE BY ASSESSEE DURING ASSESSMENT PROCEEDINGS THE AO DID NOT CONDUCT ANY I NVESTIGATION IN RELATION TO THE ALLEGED CHAIN OF TRANSACTIONS LEADING TO ULTIMATE DESTINATI ON OF THE CASH WHICH COULD HAVE SHED LIGHT ON THE ASSESSEE'S CONNIVANCE IF HE HAD INDULGED IN THE PRE-PLANNED SHAM TRANSACTION. FURTHER, WE NOT THAT THE AO NEITHER EXAMINED THE B ROKER NOR THE STOCK EXCHANGE AUTHORITY OR PROVIDE THE REFERRED REPORT OF THE INVESTIGATION WING TO THE ASSESSEE WHICH WAS RELIED HEAVILY WHILE FRAMING THE ASSESSMENT AND PREJUDICES THE MIND OF AO. SO, HE BRUSHED ASIDE ALL THE DOCUMENTS PRODUCED BY THE ASSESSEE WITHOUT ANY REASON. 26. THE AO VIEWED THAT BECAUSE OF VARIOUS ADVERSE REPORTS AS WELL AS UNNATURAL PRICE MOVEMENT, THE TRANSACTIONS MADE IN M/S. TTML WERE B OGUS, THE COORDINATE BENCH OF THIS TRIBUNAL HAD OCCASION TO DEAL WITH THE ISSUES RAISE D FOR THE SHARES OF M/S. TTML IN THE CASE OF KIRAN KOTHARI. HUF VS. ITO, ITA NO. 443/KOL/2017 , WHERE THE SHARES WERE SOLD AT A HIGH PRICE. ALLOWING THE ASSESSEE'S APPEAL, THE TRI BUNAL HELD: '9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORDS. WE NOTE THAT IN THE PRESENT CASE, THE APPELLANT HAD PURCHASED 13500 SHARES OF M /S. TUNI TEXTILE MILLS PRIVATE LIMITED ON 06.04.2011 FROM A STOCK BROKER IN OFF-MARKET TRANSA CTIONS FROM M/S BADRI PRASAD & SONS, WHO WAS A MEMBER OF CALCUTTA STOCK EXCHANGE. THESE SHARES WERE HELD IN THE DEMAT ACCOUNT OF THE ASSESSEE MAINTAINED WITH M/S. C. D EQUISEARC H PVT. LTD, A MEMBER OF MUMBAI STOCK EXCHANGE AND ULTIMATELY THESE SHARES WERE SOLD THRO UGH M/S. C.D EQUISEARCH AND ON SUCH SALE, SECURITY TRANSACTION TAX WAS DULY PAID. PAYME NTS WERE DULY RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE. WE TAKE NOTE THAT THE PURC HASE OF SHARES BY OFF-MARKET TRANSACTIONS FOR PURCHASE OF SHARES IS NOT ILLEGAL AS WAS HELD B Y THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DOLARRAI HEMANI VS ITO IN ITA NO. 19/KO L/2014 DATED 02.12.2016. THE TRANSACTIONS WERE ALL THROUGH A REGISTERED BROKER ( PAGES 18 AND 19 OF THE PAPER BOOK), BACKED BY A CONTRACT NOTE (PAGE 22 OF THE PAPER BOOK) AND SHARES WERE CREDITED IN THE DEMAT ACCOUNTS (PAGE 25 OF THE PAPER BOOK) AND DULY REFLECTED IN T HE BOOKS OF ACCOUNT. IN THE LIGHT OF THESE EVIDENCES ON RECORD WE ARE OF THE OPINION THAT THE PURCHASE OF SHARES PER-SE CANNOT BE HELD TO BE BAD. 9.2. WE FIND FORCE IN THE CONTENTIONS OF THE LD. AR THAT THE AO AND CIT(A) WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE ON THE BASIS OF THEORY OF SURROUNDING CIRCUMSTANCE, HUMAN 24 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 CONDUCT AND PREPONDERANCE OF PROBABILITY WITHOUT BR INGING ON RECORD ANY RELEVANT LEGALLY ADMISSIBLE EVIDENCE AGAINST THE ASSESSEE. FOR THE S AID PROPOSITION WE RELY ON THE JUDGMENT OF THE SPECIAL BENCH OF MUMBAI BENCH IN THE CASE OF GT C INDUSTRIES LTD. (SUPRA). THE VARIOUS FACETS OF THE CONTENTION OF THE AO, TO ROPE IN THE ASSESSEE FOR DRAWING ADVERSE INFERENCES WHICH REMAIN UNPROVED BASED ON THE EVIDENCE AVAILAB LE ON RECORD ARE NOT REITERATED FOR THE SAKE OF BREVITY. THE PRINCIPLES LAID DOWN IN VARIOU S CASE LAWS RELIED UPON BY THE LD. AR ARE ALSO NOT REITERATED FOR THE SAKE OF BREVITY. WE FUR THER FIND THAT NEITHER THE REPORTS RELIED ON BY THE AO HAS NOT BEEN BROUGHT ON RECORD NOR IS THERE ANY REFERENCE OF FINDING OF SUCH REPORT TO IMPUTE THE ASSESSEE IS THERE ON RECORD. THE AO HAS MERELY CARVED OUT CERTAIN FEATURES/MODUS OPERANDI OF COMPANIES INDULGING IN PRACTICES NOT SA NCTIONED BY LAW AND AS MENTIONED IN SUCH REPORT. HOWEVER, WE NOTE THAT NEITHER ANY INVESTIGA TION WAS CARRIED OUT AGAINST THE ASSESSEE NOR AGAINST THE BROKERS TO WHOM THE ASSESSEE DEALT WITH THE PURCHASE AND SALE OF SHARES IN QUESTION. THUS THE AO HAS FAILED TO BRING ON RECORD ANY MATERIAL CONTAINED IN THE PURPORTED REPORTS WHICH ARE HAVING SO CALLED ADVERSE IMPACT ON THE ASSESSEE. 9.3. IN THE LIGHT OF THE DOCUMENTS STATED I.E. (I TO V) IN PAGE14(SUPRA) WE FIND THAT THERE IS ABSOLUTELY NO ADVERSE MATERIAL TO IMPLICATE THE ASS ESSEE TO THE ENTIRE GAMUT OF UNFOUNDED/UNWARRANTED ALLEGATIONS LEVELED BY THE AO AGAINST THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION HAS NO LEGS TO STAND AND THEREFO RE HAS TO FAIL. WE TAKE NOTE THAT THE LD. DR COULD NOT CONTROVERT THE FACTS WHICH ARE SUPPORTED WITH MATERIAL EVIDENCES FURNISHED BY THE ASSESSEE WHICH ARE ON RECORD AND COULD ONLY RELY ON THE ORDERS OF THE AO/LD. CIT(A). WE NOTE THAT THE ALLEGATIONS THAT THE ASSESSEE/BROKERS GOT INVOLVED IN PRICE RIGGING/MANIPULATION SHARES MUST THEREFORE CONSEQUENTLY FAIL. AT THE COS T OF REPETITION, WE NOTE THAT THE ASSESSEE HAD FURNISHED ALL RELEVANT EVIDENCE IN THE FORM OF BILL S, CONTRACT NOTES, DEMAT STATEMENT AND BANK ACCOUNT TO PROVE THE GENUINENESS OF THE TRANSACTION S RELEVANT TO THE PURCHASE AND SALE OF SHARES RESULTING IN LONG TERM CAPITAL GAIN. NEITHER THESE EVIDENCES WERE FOUND BY THE AO NOR BY THE LD. CIT(A) TO BE FALSE OR FICTITIOUS OR BOGU S. THE FACTS OF THE CASE AND THE EVIDENCE IN SUPPORT OF THE EVIDENCE CLEARLY SUPPORT THE CLAIM O F THE ASSESSEE THAT THE TRANSACTIONS OF THE ASSESSEE WERE GENUINE AND THE AUTHORITIES BELOW WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE EXEMPTED U/S. 10(38) THE ACT ON THE BASIS OF SUSPICION, SURMISES AND CONJECTURES. IT IS TO BE KEPT IN MIND THAT SUSPICION HOWSOEVER STRO NG, CANNOT PARTAKE THE CHARACTER OF LEGAL EVIDENCE. 27. LET US LOOK AT CERTAIN JUDICIAL DECISIONS ON SI MILAR FACTS:- 28. THE CASE OF THE ASSESSEES IS SIMILAR TO THE DE CISION OF HONBLE BOMBAY HIGH COURT, NAGPUR BENCH IN CIT VS. SMT. JAMNADEVI AGRAWAL & OR S. DATED 23RD SEPTEMBER, 2010 REPORTED IN (2010) 328 ITR 656 WHEREIN IT WAS HELD THAT: 'THE FACT THAT THE ASSESSEES IN THE GROUP HAVE PURC HASED AND SOLD SHARES OF SIMILAR COMPANIES THROUGH THE SAME BROKER CANNOT BE A GROUN D TO HOLD THAT THE TRANSACTIONS ARE SHAM AND BOGUS, ESPECIALLY WHEN DOCUMENTARY ITA NOS. 93 TO 99/RPR/2014 & C.O. NOS. 12 TO 18/RPR/2014 . A.Y. 2004-05 10 PRODUCED TO ESTABLISH THE GENUINENESS OF THE CLAIM. FROM THE DOCUMENTS PRODUCED, IT IS SEEN THAT THE SHARES IN Q UESTION WERE IN FACT PURCHASED BY THE ASSESSEES ON THE RESPECTIVE DATES AND THE COMPANY H AS CONFIRMED TO HAVE HANDED OVER THE SHARES PURCHASED BY THE ASSESSEES. SIMILARLY, THE S ALE OF THE SHARES TO THE RESPECTIVE BUYERS IS ALSO ESTABLISHED BY PRODUCING DOCUMENTARY EVIDENCE. IT IS TRUE THAT SOME OF THE TRANSACTIONS 25 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 WERE OFF-MARKET TRANSACTIONS. HOWEVER, THE PURCHASE AND SALE PRICE OF THE SHARES DECLARED BY THE ASSESSEES WERE IN CONFORMITY WITH THE MARKET RA TES PREVAILING ON THE RESPECTIVE DATES AS IS SEEN FROM THE DOCUMENTS FURNISHED BY THE ASSESSEES. THEREFORE, THE FACT THAT SOME OF THE TRANSACTIONS WERE OFF-MARKET TRANSACTIONS CANNOT BE A GROUND TO TREAT THE TRANSACTIONS AS SHAM TRANSACTIONS. THE STATEMENT OF THE BROKER P TH AT THE TRANSACTIONS WITH THE H GROUP WERE BOGUS HAS BEEN DEMONSTRATED TO BE WRONG BY PRODUCIN G DOCUMENTARY EVIDENCE TO THE EFFECT THAT THE SHARES SOLD BY THE ASSESSEES WERE IN CONSO NANCE WITH THE MARKET PRICE. ON PERUSAL OF THOSE DOCUMENTARY EVIDENCE, THE TRIBUNAL HAS ARRIVE D AT A FINDING OF FACT THAT THE TRANSACTIONS WERE GENUINE. NOTHING IS BROUGHT ON RECORD TO SHOW THAT THE FINDINGS RECORDED BY THE TRIBUNAL ARE CONTRARY TO THE DOCUMENTARY EVIDENCE ON RECORD. THE TRIBUNAL HAS FURTHER RECORDED A FINDING OF FACT THAT THE CASH CREDITS IN THE,BANK A CCOUNTS OF SOME OF THE BUYERS OF SHARES CANNOT BE LINKED TO THE ASSESSEES. MOREOVER, YN THE LIGHT OF THE DOCUMENTARY EVIDENCE ADDUCED TO SHOW THAT THE SHARES PURCHASED AND SOLD BY THE A SSESSEES WERE IN CONFORMITY WITH THE MARKET PRICE, THE TRIBUNAL RECORDED A FINDING OF FA CT THAT THE CASH CREDITS IN THE BUYERS' BANK ACCOUNTS CANNOT BE ATTRIBUTED TO THE ASSESSEES. NO FAULT CAN BE FOUND WITH THE ABOVE FINDING RECORDED BY THE TRIBUNAL. THEREFORE, THE DECISION O F THE TRIBUNAL IS BASED ON FINDING OF FACTS. NO SUBSTANTIAL QUESTION OF LAW ARISES FROM THE ORDE R OF THE TRIBUNAL.ASSTT. CIT VS. KAMAL KUMAR S. AGRAWAL (INDL.) & ORS. (2010) 41 DTR (NAG) (TRIB) 105: (2010) 133 TTJ (NAG) 818 AFFIRMED; SUMATI DAYAL VS. CIT (1995) 125 CTR (SC) 124: (1995) 80 TAXMAN 89 (SC) DISTINGUISHED. 12. THE HON'BLE HIGH COURT OF RAJASTHAN IN CIT VS. SMT. PUSHPA MALPANI - REPORTED IN (2011) 242 CTR (RAJ.) 559; (2011) 49 DTR 312 DISMIS SED THE APPEAL OF DEPARTMENT OBSERVING 'WHETHER OR NOT THERE WAS SALE OF SHARES AND RECEIP T OF CONSIDERATION THEREOF ON APPRECIATED VALUE IS ESSENTIALLY A QUESTION OF FACT. CIT(A) AND TRIBUNAL HAVE BOTH GIVEN REASONS IN SUPPORT OF THEIR FINDINGS AND HAVE FOUND THAT AT THE TIME O F TRANSACTIONS, THE BROKER IN QUESTION WAS NOT BANNED BY SEBI AND THAT ASSESSEE HAD PRODUCED COPIE S OF PURCHASE BILLS, CONTRACT NUMBER SHARE CERTIFICATE, APPLICATION FOR TRANSFER OF SHAR E CERTIFICATE TO DEMAT ACCOUNT ALONG WITH COPIES OF HOLDING STATEMENT IN DEMAT ACCOUNT, BALAN CE SHEET AS ON 31ST MARCH, 2003, SALE BILL, BANK ACCOUNT, DEMAT ACCOUNT AND OFFICIAL REPORT AND QUOTATIONS, OF CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. ON 23RD JULY, 2003. THEREFORE, 'TH E PRESE/ITDPPEAL DOES NOT RAISE ANY QUESTION OF LAW, MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW. 29. THE HONBLE HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF ANUPAM KAPOOR 299 ITR 0179 HAS HELD AS UNDER:- THE TRIBUNAL ON THE BASIS OF THE MATERIAL ON RECOR D, HELD THAT PURCHASE CONTRACT NOTE, CONTRACT NOTE FOR SATES, DISTINCTIVE NUMBERS OF SHA RES PURCHASED AND SOLD, COPY OF SHARE CERTIFICATES AND THE QUOTATION OF SHARES ON THE DAT E OF PURCHASE AND SALE WERE SUFFICIENT MATERIAL TO SHOW THAT THE TRANSACTION WAS NOT BOGUS BUT A GENUINE TRANSACTION. THE PURCHASE OF SHARES WAS MADE ON 28TH APRIL, 1993 I.E.. ASST. YR. 1993-94 AND THAT ASSESSMENT WAS ACCEPTED BY THE DEPARTMENT AND THERE WAS NO CHALLEN GE TO THE PURCHASE OF SHARES IN THAT YEAR. IT WAS ALSO PLACED BEFORE THE RELEVANT AO AS WELL A S BEFORE THE TRIBUNAL THAT THE SALE PROCEEDS HAVE BEEN ACCOUNTED FOR IN THE ACCOUNTS OF THE ASSE SSEE AND WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUE. THE TRIBUNAL WAS RIGHT IN REJECTING T HE APPEAL OF THE REVENUE BY HOLDING THAT THE ASSESSEE WAS SIMPLY A SHAREHOLDER OF THE COMPAN Y. HE HAD MADE INVESTMENT IN A COMPANY IN WHICH HE WAS NEITHER A DIRECTOR NOR WAS HE IN CO NTROL OF THE COMPANY. THE ASSESSEE HAD TAKEN SHARES FROM THE MARKET, THE SHARES WERE LISTE D AND THE TRANSACTION TOOK PLACE THROUGH A REGISTERED BROKER OF THE STOCK EXCHANGE. THERE WAS NO MATERIAL BEFORE THE AO, WHICH COULD HAVE LEAD TO A CONCLUSION THAT THE TRANSACTION WAS SIMPLICITIER A DEVICE TO CAMOUFLAGE 26 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 ACTIVITIES, TO DEFRAUD THE REVENUE. NO SUCH PRESUMP TION COULD BE DRAWN BY THE AO MERELY ON SURMISES AND CONJECTURES. IN THE ABSENCE OF ANY COG ENT MATERIAL IN THIS REGARD, HAVING BEEN PLACED ON RECORD, THE AO COULD NOT HAVE REOPENED TH E ASSESSMENT. THE ASSESSEE HAD MADE AN INVESTMENT IN A COMPANY, EVIDENCE WHEREOF WAS WITH THE AO. --THEREFORE, THE AO COULD NOT HAVE ADDED INCOME, WHICH WAS RIGHTLY DELETED BY THE CIT(A) AS WELL AS THE TRIBUNAL. IT IS SETTLED LAW THAT SUSPICION, HOWSOEVER STRONG CANNOT TAKE THE PLACE OF LEGAL PROOF. CONSEQUENTLY, NO QUESTION OF LAW, MUCH LESS A SUBST ANTIAL QUESTION OF LAW, ARISES FOR ADJUDICATION. C. VASANTLAL & CO. VS. CIT (1962) 45 ITR 206 (SC), M.O. THOMAKUTTY VS. CIT (.1958) 34 ITR 501 (KER)) AND MUKAND SINGH VS. SALE S TAX TRIBUNAL (1998) 107 STC 300 (PUNJAB) RELIED ON; UMACHARAN SHAW &BROS. VS. CIT ( 1959) 37 ITR 271 (SC) APPLIED; JASPAL SINGH VS. CIT (2006) 205 CTR (P & H) 624 DISTINGUIS HED 30. THE CO-ORDINATE BENCH OF AHMEDABAD IN ITA NOS. 501 & 502/AHD/2016 HAD THE OCCASION TO CONSIDER A SIMILAR ISSUE WHICH WAS WHER EIN THE ASSESSMENT WAS FRAMED ON THE STRENGTH OF THE STATEMENT OF A BROKER. THE RELEVANT PART READS AS UNDER:- 14. THE ENTIRE ASSESSMENT IS BASED UPON THE STATEMENT O F SHRI MUKESH CHOKSI. IT IS AN UNDISPUTED FACT THAT NEITHER A COPY OF THE STATEMEN T WAS SUPPLIED TO THE ASSESSEE NOR ANY OPPORTUNITY OF CROSS-EXAMINATION WAS GIVEN BY THE A SSESSING OFFICER/CIT(A). THE HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTR IES IN CIVIL APPEAL NO. 4228 OF 2006 WAS SEIZED WITH THE FOLLOWING ACTION OF THE TRIBUNA L :- 6. THE PLEA OF NO CROSS EXAMINATION GRANTED TO THE VARIOUS DEALERS WOULD NOT HELP THE APPELLANT CASE SINCE THE EXAMINATION OF THE DEA LERS WOULD NOT BRING OUT ANY MATERIAL WHICH WOULD NOT BE IN THE POSSESSION OF TH E APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX FACTORY PRICES REMAIN STATIC. SI NCE WE ARE NOT UPHOLDING AND APPLYING THE EX FACTORY PRICES, AS WE FIND THEM CON TRAVENED AND NOT NORMAL PRICE AS ENVISAGED UNDER SECTION 4(1), WE FIND NO REASON TO DISTURB THE COMMISSIONERS ORDERS. 15. THE HONBLE APEX COURT HELD AS UNDER :- ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROS S-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THO SE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUST ICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND T HAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAI D TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNI TY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AF ORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE T RIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TR IBUNAL HAS SIMPLY STATED THAT CROSS- EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROU GHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EXFACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL T O HAVE GUESS WORK AS TO FOR WHAT 27 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOS E DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR T ESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS EXAMINATIO N. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAIN TAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETH ER THE GOODS WERE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES AT THE PRICE WHICH IS ME NTIONED IN THE PRICE LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EXAMINATION. THEREFO RE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUB JECT MATTER OF THE CROSS- EXAMINATION AND MAKE THE REMARKS AS MENTIONED ABOVE . WE MAY ALSO POINT OUT THAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN CIVIL APPEAL NO. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED REM ITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL O N MERITS GIVING ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF TH E TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MATERIAL WITH THE DEPARTM ENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESA ID TWO WITNESSES WAS THE ONLY BASIS OF ISSUING THE SHOW CAUSE. WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL. 16. ON THE STRENGTH OF THE AFOREMENTIONED DECISIO N OF THE HONBLE SUPREME COURT, THE ASSESSMENT ORDER HAS TO BE QUASHED . 17. EVEN ON FACTS OF THE CASE, THE ORDERS OF THE AU THORITIES BELOW CANNOT BE ACCEPTED. THERE IS NO DENYING THAT CONSIDERATION WAS PAID WHEN THE SHA RES WERE PURCHASED. THE SHARES WERE THEREAFTER SENT TO THE COMPANY FOR THE TRANSFER OF NAME. THE COMPANY TRANSFERRED THE SHARES IN THE NAME OF THE ASSESSEE. THERE IS NOTHING ON RECOR D WHICH COULD SUGGEST THAT THE SHARES WERE NEVER TRANSFERRED IN THE NAME OF THE ASSESSEE. THER E IS ALSO NOTHING ON RECORD TO SUGGEST THAT THE SHARES WERE NEVER WITH THE ASSESSEE. ON THE CON TRARY, THE SHARES WERE THEREAFTER TRANSFERRED TO DEMAT ACCOUNT. THE DEMAT ACCOUNT WAS IN THE NAME OF THE ASSESSEE, FROM WHERE THE SHARES WERE SOLD. IN OUR UNDERSTANDING OF THE FACTS, IF TH E SHARES WERE OF SOME FICTITIOUS COMPANY WHICH WAS NOT LISTED IN THE BOMBAY STOCK EXCHANGE/N ATIONAL STOCK EXCHANGE, THE SHARES COULD NEVER HAVE BEEN TRANSFERRED TO DEMAT ACCOUNT. SHRI MUKESH CHOKSI MAY HAVE BEEN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS PERSONS BUT SO FAR AS THE FACTS OF THE CASE IN HAND SUGGEST THAT THE TRANSACTIONS WERE GENUINE AND THER EFORE, NO ADVERSE INFERENCE SHOULD BE DRAWN. 18. IN THE LIGHT OF THE DECISIONS OF THE HONBLE S UPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES (SUPRA) AND CONSIDERING THE FACTS IN TOT ALITY, THE CLAIM OF THE ASSESSEE CANNOT BE DENIED ON THE BASIS OF PRESUMPTION AND SURMISES IN RESPECT OF PENNY STOCK BY DISREGARDING THE DIRECT EVIDENCES ON RECORD RELATING TO THE SALE/PUR CHASE TRANSACTIONS IN SHARES SUPPORTED BY BROKERS CONTRACT NOTES, CONFIRMATION OF RECEIPT OF SALE PROCEEDS THROUGH REGULAR BANKING CHANNELS AND THE DEMAT ACCOUNT. 28 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 19. ACCORDINGLY, WE DIRECT THE A.O. TO TREAT THE GA INS ARISING OUT OF THE SALE OF SHARES UNDER THE HEAD CAPITAL GAINS- SHORT TERM OR LONG TERM AS THE CASE MAY BE. THE OTHER GRIEVANCE OF THE ASSESSEE BECOMES INFRUCTUOUS. THE TRANSACTIONS WERE ALL THROUGH ACCOUNT PAYEE CH EQUES AND REFLECTED IN THE BOOKS OF ACCOUNTS. THE PURCHASE OF SHARES AND THE SALE OF SH ARES WERE ALSO REFLECTED IN DEMAT ACCOUNT STATEMENTS. THE SALE OF SHARES SUFFERED STT , BROKERAGE ETC. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT CANNOT BE HELD THAT T HE TRANSACTIONS WERE BOGUS. THE FOLLOWING JUDGMENTS OF HONBLE JURISDICTIONAL HIGH COURT :- THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME VS M/S. BLB CABLES AND CONDUCTORS ; ITAT NO.78 OF 2017, GA NO.747 OF 2017; DT. 19 JUNE, 2018 , HAD UPHELD THE ORDER OF THE TRIBUNAL BY OBSERVING AS FOLLOWS:- '4. WE HAVE HEARD BOTH THE SIDE AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. THE LD. AR SUBMITTED TWO PAPERS BOOKS. FIRST BOOK IS RUNNING I N PAGES NO. 1 TO 88 AND 2ND PAPER BOOK IS RUNNING IN PAGES 1 TO 34. BEFORE US THE LD. AR S UBMITTED THAT THE ORDER OF THE AO IS SILENT ABOUT THE DATE FROM WHICH THE BROKER WAS EXPELLED. THERE IS NO LAW THAT THE OFF MARKET TRANSACTIONS SH OULD BE INFORMED TO STOCK EXCHANGE. ALL THE TRANSACTIONS ARE DULY RECORDED IN THE ACCOUNTS OF BOTH THE PARTIES AND SUPPORTED WITH THE ACCOUNT PAYEE CHEQUES. THE LD. AR HAS ALSO SUBMITTE D THE IT RETURN, LEDGER COPY, LETTER TO AO LAND PAN OF THE BROKER IN SUPPORT OF HIS CLAIM W HICH IS PLACED AT PAGES 72 TO 75 OF THE PAPER BOOK. THE LD. AR PRODUCED THE PURCHASE & SALE CONTRACTS NOTES WHICH ARE PLACED ON PAGES 28 TO 69 OF THE PAPER BOOK. THE PURCHASE AND SALES REGISTERS WERE ALSO SUBMITTED IN THE FORM OF THE PAPER BOOK WHICH IS PLACED AT PAGES 76 TO 87. THE BOARD RESOLUTION PASSED BY THE COMPANY FOR THE TRANSACTIONS IN COMMODITY WA S PLACED AT PAGE 88 OF THE PAPER BOOK. ON THE OTHER HAND THE LD. DR RELIED IN THE ORDER OF THE LOWER AUTHORITIES. 4.1 FROM THE AFORESAID DISCUSSION WE FIND THAT THE ASSESSEE HAS INCURRED LOSSES FROM THE OFF MARKET COMMODITY TRANSACTIONS AND THE AO HELD SUCH LOSS AS BOGUS AND INADMISSIBLE IN THE EYES OF THE LAW. THE SAME LOSS WAS ALSO CONFIRMED B Y THE LD. CIT(A). HOWEVER WE FIND THAT ALL THE TRANSACTIONS THROUGH THE BROKER WERE DULY R ECORDED IN THE BOOKS OF THE ASSESSEE. THE BROKER HAS ALSO DECLARED IN ITS BOOKS OF ACCOUNTS A ND OFFERED FOR TAXATION. IN OUR VIEW TO HOLD A TRANSACTION AS BOGUS, THERE HAS TO BE SOME C ONCRETE EVIDENCE WHERE THE TRANSACTIONS CANNOT BE PROVED WITH THE SUPPORTIVE EVIDENCE. II) M/S CLASSIC GROWERS LTD. VS. CIT [ITA NO. 129 OF 20 12] (CAL HC) IN THIS CASE THE LD AO FOUND THAT THE FORMAL EVIDENCES PRODUCED BY THE ASSESSEE TO SUPPORT HUGE LOSSES CLAIMED IN THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES WERE STAGE MANAGED. THE HONBLE HIGH COURT HELD THAT THE OPINI ON OF THE AO THAT THE ASSESSEE GENERATED A SIZEABLE AMOUNT OF LOSS OUT OF PREARRANGED TRANSACTIONS SO AS 29 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 TO REDUCE THE QUANTUM OF INCOME LIABLE FOR TAX MIGH T HAVE BEEN THE VIEW EXPRESSED BY THE LD AO BUT HE MISERABLY FAILED TO SUBSTANTIATE THAT. THE HIGH COURT HELD THAT THE TRANSACTIONS WERE AT THE PREVAI LING PRICE AND THEREFORE THE SUSPICION OF THE AO WAS MISPLACED AND NOT SUBSTANTI ATED. III)CIT V. LAKSHMANGARH ESTATE & TRADING CO. LIMITE D [2013] 40 TAXMANN.COM 439 (CAL) IN THIS CASE THE HONBLE CALCUTTA HIGH COURT HELD T HAT ON THE BASIS OF A SUSPICION HOWSOEVER STRONG IT IS NOT POSSIBLE TO RE CORD ANY FINDING OF FACT. AS A MATTER OF FACT SUSPICION CAN NEVER TAKE THE PLACE O F PROOF. IT WAS FURTHER HELD THAT IN ABSENCE OF ANY EVIDENCE ON RECORD, IT IS DIFFICULT IF NOT IMPOSSIBLE, TO HOLD THAT THE TRANSACTIONS OF BUYING OR SELLING OF SHARES WERE CO LOURABLE TRANSACTIONS OR WERE RESORTED TO WITH ULTERIOR MOTIVE. IV) CIT V. SHREYASHI GANGULI [ITA NO. 196 OF 2012] (CA L HC) IN THIS CASE THE HONBLE CALCUTTA HIGH COURT HELD THAT THE ASSESSING OFFICER DOUBTED THE TRANSACTIONS SINCE THE SELLING BROKER WAS SUBJECTED TO SEBIS ACTION. HOWEVER THE TRANSACTIONS WERE AS PER NORMS AND SUFFERED STT, BR OKERAGE, SERVICE TAX, AND CESS. THERE IS NO IOTA OF EVIDENCE OVER THE TRANSACTIONS AS IT WERE REFLECTED IN DEMAT ACCOUNT. THE APPEAL FILED BY THE REVENUE WAS DISMIS SED. V) CIT V. RUNGTA PROPERTIES PRIVATE LIMITED [ITA NO. 1 05 OF 2016] (CAL HC) IN THIS CASE THE HONBLE CALCUTTA HIGH COURT AFFIRMED THE DECISION OF THIS TRIBUNAL , WHEREIN, THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE WHE RE THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE IN RESPECT OF HIS TRANSACTIONS IN A LLEGED PENNY STOCKS. THE TRIBUNAL FOUND THAT THE AO DISALLOWED THE LOSS ON TRADING OF PENNY STOC K ON THE BASIS OF SOME INFORMATION RECEIVED BY HIM. HOWEVER, IT WAS ALSO FOUND THAT TH E AO DID NOT DOUBT THE GENUINENESS OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE. THE TRIBUN AL HELD THAT THE AOS CONCLUSIONS ARE MERELY BASED ON THE INFORMATION RECEIVED BY HIM. TH E APPEAL FILED BY THE REVENUE WAS DISMISSED. 30 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 VI) CIT V. ANDAMAN TIMBERS INDUSTRIES LIMITED [ITA NO. 721 OF 2008] (CAL HC) IN THIS CASE THE HONBLE CALCUTTA HIGH COURT AFFIRM ED THE DECISION OF THIS TRIBUNAL WHEREIN THE LOSS SUFFERED BY THE ASSESSEE WAS ALLOWED SINCE THE AO FAILED TO BRING ON RECORD ANY EVIDENCE TO SUGGEST THAT THE SALE OF SHARES BY THE ASSESSEE WERE NOT GENUINE. VII) CIT V. BHAGWATI PRASAD AGARWAL [2009- TMI-34738 (CA L HC) IN ITA NO. 22 OF 2009 DATED 29.4.2009] IN THIS CASE THE ASSESSEE CLAIMED EXEMPTION OF INCO ME FROM LONG TERM CAPITAL GAINS. HOWEVER, THE AO, BASED ON THE I NFORMATION RECEIVED BY HIM FROM CALCUTTA STOCK EXCHANGE FOUND THAT THE TRANSACTIONS WERE NOT RECORDED THEREAT. HE THEREFORE HELD THAT THE TRANSACTIONS WERE BOGUS. THE HONBLE JURISDICTIONAL HIGH COURT, AFFIRMED THE DECISION OF THE TRIBUNAL WHEREIN IT WAS FOUND THAT THE CHAIN OF TRANSACTIONS ENTERED INTO BY THE ASSESSEE HAVE BEEN PROVED, ACCOUNTED FOR, DOCUM ENTED AND SUPPORTED BY EVIDENCE. IT WAS ALSO FOUND THAT THE ASSESSEE PRODUCED THE CONTR ACT NOTES, DETAILS OF DEMAT ACCOUNTS AND PRODUCED DOCUMENTS SHOWING ALL PAYMENTS WERE RECEIV ED BY THE ASSESSEE THROUGH BANKS. ON THESE FACTS, THE APPEAL OF THE REVENUE WAS SUMMARIL Y DISMISSED BY HIGH COURT. 31. WE NOTE THAT SINCE THE PURCHASE AND SALE TRA NSACTIONS ARE SUPPORTED AND EVIDENCED BY BILLS, CONTRACT NOTES, DEMAT STATEMENTS AND BANK ST ATEMENTS ETC., AND WHEN THE TRANSACTIONS OF PURCHASE OF SHARES WERE ACCEPTED BY THE LD AO IN EARLIER YEARS, THE SAME COULD NOT BE TREATED AS BOGUS SIMPLY ON THE BASIS OF SOME REPORT S OF THE INVESTIGATION WING AND/OR THE ORDERS OF SEBI AND/OR THE STATEMENTS OF THIRD PARTI ES. IN SUPPORT OF THE AFORESAID SUBMISSIONS, THE LD AR, IN ADDITION TO THE AFORESAI D JUDGEMENTS, HAS REFERRED TO AND RELIED ON THE FOLLOWING CASES:- (I) BAIJNATH AGARWAL VS. ACIT [2010] 40 SOT 475 (AGRA (TM) (II) ITO VS. BIBI RANI BANSAL [2011] 44 SOT 500 (AGRA) (TM) (III) ITO VS. ASHOK KUMAR BANSAL ITA NO. 289/AGRA/2009 (AGRA ITAT) (IV) ACIT VS. AMITA AGARWAL & OTHERS ITA NOS. 247/(KOL )/ OF 2011 (KOL ITAT) 31 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 (V) RITA DEVI & OTHERS VS. DCIT IT(SS))A NOS. 22-26/K OL/2P11 (KOL ITAT) (VI) SURYA PRAKASH TOSHNIWAL VS. ITO ITA NO. 1213/KOL/ 2016 (KOL ITAT) (VII) SUNITA JAIN VS. ITO ITA NO. 201 & 502/AHD/2016 (A HMEDABAD ITAT) (VIII) MS. FARRAH MARKER VS. ITO ITA NO. 3801/MUM/2011 ( MUMBAI ITAT) (IX) ANIL NANDKISHORE GOYAL VS. ACIT ITA NOS. 1256/PN/ 2012 (PUNE ITAT) (X) CIT VS. SUDEEP GOENKA [2013] 29 TAXMANN.COM 402 ( ALLAHABAD HC) (XI) CIT VS. UDIT NARAIN AGARWAL [2013] 29 TAXMANN.COM 76 (ALLAHABAD HC) (XII) CIT VS. JAMNADEVI AGARWAL [2012] 20 TAXMANN.COM 529 (BOMBAY HC) (XIII) CIT VS. HIMANI M. VAKIL [2014] 41 TAXMANN.COM 425 (GUJARAT HC) (XIV) CIT VS. MAHESHCHANDRA G. VAKIL [2013] 40 TAXMANN. COM 326 (GUJARAT HC) (XV) CIT VS. SUMITRA DEVI [2014] 49 TAXMANN.COM 37 (RAJA STHAN HC) (XVI) GANESHMULL BIJAY SINGH BAID HUF VS. DCIT ITA NOS. 544/KOL/2013 (KOLKATA ITAT) (XVII) MEENA DEVI GUPTA & OTHERS VS. ACIT ITA NOS. 4512 & 4513/AHD/2007 (AHMEDABAD ITAT) (XVIII) MANISH KUMAR BAID ITA 1236/KOL/2017 (KOLKATA ITAT) (XIX) MAHENDRA KUMAR BAID ITA 1237/KOL/2017 (KOLKATA ITAT ) 32. THE LD AR ALSO BROUGHT TO OUR NOTICE THAT ONCE THE ASSESSEE HAS FURNISHED ALL EVIDENCES IN SUPPORT OF THE GENUINENESS OF THE TRAN SACTIONS, THE ONUS TO DISPROVE THE SAME IS ON REVENUE. HE REFERRED TO THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF KRISHNANAND AGNIHOTRI VS. THE STATE OF MADHYA PRADE SH [1977] 1 SCC 816 (SC) . IN THIS CASE THE HONBLE APEX COURT HELD THAT THE BURDEN OF SHOWING THAT A PARTICULAR TRANSACTION IS BENAMI AND THE APPELLANT OWNER IS NOT THE REAL OWNE R ALWAYS RESTS ON THE PERSON ASSERTING IT TO BE SO AND THE BURDEN HAS TO BE STRICTLY DISCHARG ED BY ADDUCING EVIDENCE OF A DEFINITE CHARACTER WHICH WOULD DIRECTLY PROVE THE FACT OF BE NAMI OR ESTABLISH CIRCUMSTANCES UNERRINGLY AND REASONABLY RAISING INFERENCE OF THAT FACT. THE HONBLE APEX COURT FURTHER HELD THAT IT IS NOT ENOUGH TO SHOW CIRCUMSTANCES WH ICH MIGHT CREATE SUSPICION BECAUSE THE 32 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 COURT CANNOT DECIDE ON THE BASIS OF SUSPICION. IT H AS TO ACT ON LEGAL GROUNDS ESTABLISHED BY EVIDENCE. THE LD AR SUBMITTED THAT SIMILAR VIEW HAS BEEN TAKEN IN THE FOLLOWING JUDGMENTS WHILE DECIDING THE ISSUE RELATING TO EXEMPTION CLAI MED BY THE ASSESSEE ON LTCG ON ALLEGED PENNY SOCKS. (I) ITO VS. ASHOK KUMAR BANSAL ITA NO. 289/AGR/2009 ( AGRA ITAT) (II) ACIT VS. J. C. AGARWAL HUF ITYA NO. 32/AGR/2007 ( AGRA ITAT) 33. MOREOVER IT WAS SUBMITTED BEFORE US BY LD AR TH AT THE AO WAS NOT JUSTIFIED IN TAKING AN ADVERSE VIEW AGAINST THE ASSESSEE ON THE GROUND OF ABNORMAL PRICE RISE OF THE SHARES AND ALLEGING PRICE RIGGING. IT WAS SUBMITTED THAT THERE IS NO ALLEGATION IN ORDERS OF SEBI AND/OR THE ENQUIRY REPORT OF THE INVESTIGATION WING TO THE EFFECT THAT THE ASSESSEE, THE COMPANIES DEALT IN AND/OR HIS BROKER WAS A PARTY TO THE PRICE RIGGING OR MANIPULATION OF PRICE IN CSE. THE LD AR REFERRED TO THE FOLLOWING JUDGMENTS IN SU PPORT OF THIS CONTENTION WHEREIN UNDER SIMILAR FACTS OF THE CASE IT WAS HELD THAT THE AO W AS NOT JUSTIFIED IN REFUSING TO ALLOW THE BENEFIT UNDER SECTION 10(38) OF THE ACT AND TO ASSE SS THE SALE PROCEEDS OF SHARES AS UNDISCLOSED INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT :- (I) ITO VS. ASHOK KUMAR BANSAL ITA NO. 289/AGR/2009 ( AGRA ITAT) (II) ACIT VS. AMITA AGARWAL & OTHERS - ITA NOS. 247/(KO L)/ OF 2011 (KOL ITAT) (III) LALIT MOHAN JALAN (HUF) VS. ACIT ITA NO. 693/KOL /2009 (KOL ITAT) (IV) MUKESH R. MAROLIA VS. ADDL. CIT [2006] 6 SOT 247 (MUM) 34. WE NOTE THAT THE LD. D.R. HAD HEAVILY RELIED UP ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BIMALCHAND JAIN IN TAX APPEAL NO. 18 OF 2017. WE NOTE THAT IN THE CASE RELIED UPON BY THE LD. D.R, WE FIN D THAT THE FACTS ARE DIFFERENT FROM THE FACTS OF THE CASE IN HAND. FIRSTLY, IN THAT CASE, THE PUR CHASES WERE MADE BY THE ASSESSEE IN CASH FOR ACQUISITION OF SHARES OF COMPANIES AND THE PURCHASE OF SHARES OF THE COMPANIES WAS DONE THROUGH THE BROKER AND THE ADDRESS OF THE BROKER WA S INCIDENTALLY THE ADDRESS OF THE COMPANY. THE PROFIT EARNED BY THE ASSESSEE WAS SHOW N AS CAPITAL GAINS WHICH WAS NOT 33 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 ACCEPTED BY THE A.O. AND THE GAINS WERE TREATED AS BUSINESS PROFIT OF THE ASSESSEE BY TREATING THE SALES OF THE SHARES WITHIN THE AMBIT OF ADVENTU RE IN NATURE OF TRADE. THUS, IT CAN BE SEEN THAT IN THE DECISION RELIED UPON BY THE LD. DR, THE DISPUTE WAS WHETHER THE PROFIT EARNED ON SALE OF SHARES WAS CAPITAL GAINS OR BUSINESS PROFIT . 35. IT IS CLEAR FROM THE ABOVE THAT THE FACTS OF T HE CASE OF THE ASSESSEE ARE IDENTICAL WITH THE FACTS IN THE CASE OF KIRAN KOTHARI HUF (SUPRA ), WHEREIN THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS DELETED THE ADDITION AND ALLOWED THE C LAIM OF LTCG ON SALE OF SHARES OF M/S TTML. SO WE, RESPECTFULLY FOLLOWING THE SAME, SET A SIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO NOT TO TREAT THE LONG TERM CAPITAL AS BOGUS AND DELETE THE CONSEQUENTIAL ADDITION. 36. THE NEXT ISSUE IN CONFIRMING THE ADDITION O F RS.1,17,791/- AS UNEXPLAINED EXPENDITURE TOWARDS COMMISSION CHARGES OF SALE OF SUCH SHARES B Y THE OPERATOR. WE HAVE ALREADY HELD THAT THE TRANSACTIONS RELATING TO LTCG WERE GENUINE AND NOT THE ACCOMMODATION ENTRIES AS ALLEGED BY THE AO. CONSEQUENTLY THE ADDITION OF RS. 1,17,791/- IS HEREBY DIRECTED TO BE DELETED. WE ACCORDINGLY HOLD THAT THE ISSUE IS ALL OWED IN FAVOUR OF THE ASSESSEE. 37. OTHER GROUNDS ARE GENERAL IN NATURE, THEREFORE, IT IS DISMISSED. 38. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 12/02/201 9 SD/- SD/- (J. SUDHAKAR REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12TH FEBRUARY, 2019 JD.(SR.P.S.) 34 ITA NO. 112 & 113/KOL/2018 RAMESH CHANDRA K. SHAH, AYS 2011-12& 2012-13 COPY OF THE ORDER FORWARDED TO: 1 APPELLANT SHRI RAMESH CHANDRA K. SHAH, FLAT-17A, RAMESWARA MANSION, 10/4A, ELGIN ROAD, KOLKATA-700 020. 2 RESPONDENT ACIT, CENTRAL CIRCLE-3(1), KOLKATA. 3 4 5 CIT(A)-21, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR KOLKATA