TMI Blog2010 (2) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted by the revenue - assessee contended that decision of the lower authorities are influenced by the general observation of the Investigation Wing that arose a suspicion turned into conclusive proof in the minds of the authorities that everybody who has sold the shares at a high price has converted his unaccounted money through accommodation entries - Held that:- It was the duty of the AO to bring on record sufficient evidences and material to prove that the documents filed by the assessee were bogus, false or fabricated and the long-term capital gain shown by him was actually his income from undisclosed sources. The only material to support such conclusion of the lower authorities is either the findings of the DDI in general investigations or the observation that the assessee could not prove the transaction to be genuine one. This is the settled law in view of the decision of CIT v. Daulat Ram Rawatmull [1972 (9) TMI 9 - SUPREME Court] that the apparent is real. It is undisputed that assessee has supplied all the evidence regarding the purchase. Entire approach of the lower authorities are based on suspicion, surmises and conjectures, the same cannot be approved. CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer. But the learned Assessing Officer concluded that the assessee did not file share certificate before him and could not produce the broker before him. He also observed that the assessee could not prove the identity of the buyer so mutually agreed buyer and seller is also not established. After considering the abnormal increase in the prices of shares, the learned Assessing Officer doubted that in just 14 months time the price of the shares has allegedly increased by more than 11 times. So he treated the entire sale transaction of shares as stage managed and hence, treated the entire amount of Rs. 10,57,900 as assessee's undisclosed and unexplained income and added the same under section 68 of the Act in assessee's hand. 3. The learned CIT(A) more or less on the similar reasonings confirmed the impugned addition. Now the assessee is further aggrieved. 4. We have heard the rival submissions and have carefully perused the available materials on record. Both the parties have taken host of arguments and reasoning to support their claim and contentions are more or less similar. Parties have maintained similar reasonings and arguments which were taken before learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of directory of members of Delhi Stock Exchange. In the light of the above evidences, it is incorrect to suggest that the identity of the broker is not established. In respect or sale of shares the broker issued contract note, bill and account statement which are usually issued by the brokers in such security transactions. The broker has also filed an affidavit confirming the sale of shares on behalf of the assessee. The sale consideration of shares was paid by the broker through demand draft issued out of his bank account and this fact is evident from the remand report given by the learned Assessing Officer. The contract notes are placed at pages 36 to 41 of the assessee's Paper Book. The declaration is placed at page 43 of the assessee's Paper Book. Page 9 of assessee's Paper Book and page 9 of CIT(A)'s order are relevant in this regard. The bank statement to which the authorities are referring to was admittedly never confronted to the assessee. Thus, in our considered opinion, the assessee has provided all necessary materials regarding sale of shares. The learned Assessing Officer as well as the learned CIT(A) have acted on mere suspicion than on substance. Under similar circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee took such a root to be converted into white money. In the absence of any proof thereof on record, only on surmises and conjectures the assertion of the learned Assessing Officer cannot be accepted even in the face of strongest suspicion. A suspicion cannot substitute a proof. Therefore, we cannot agree with the department in this regard. Insofar as heavy sale price which admittedly increased manifolds in a short span of time is concerned, it was argued by the learned A.R. by producing cutting of the news paper "Economic Times dated 31-7-2008" in which there was a news item that the share prices multiplied manifolds within a span of 52 weeks. Otherwise also this is a common place experience that the people invest their money in share and securities only with a view to earn fortunes immediately with no loss of time and in this mellee many a times they lose even their hard earned money. It is by sheer luck and by chance that a person gets good returns of his investment in shares sometimes. When queried, learned A.R. promptly referred to the listed rates, date of sale of shares, copy of which is placed at Paper Book page 47. These shares were sold at Delhi. From this evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer is bound to bring some concrete basis on which he can make additions in the account of house-hold expenses. The reply of the assessee comes thereafter only. This addition being simply ad hoc and based on guess work cannot be sustained in the eyes of law. The entire addition is, therefore, ordered to be deleted. Ground No. 3 is allowed. 9. In the result, appeal of the assessee is partly allowed. Sanjay Arora, Accountant Member:- 1. I have carefully gone through the order proposed by my ld. Brother, JM, and also discussed the same with him. However, being unable to persuade myself to be in agreement therewith, I respectfully propose to write my separate order, i. e., in relation to the second and the principal ground of the assessee's appeal, which relates to the assessment of the Long-Term Capital Gains (LTCG) declared by the assessee as income from other sources. The facts:- 2. The facts of the case would bear mention, being pertinent; there being no much ambiguity in the law in the matter. 3. The assessee declared LTCG in respect of sale of 10000 shares in one M/s. B.T. Technet Limited, New Delhi which stood sold on 18-11-2000 through a stock brok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from his broker); - the current address of the company as well as that of the transferee(s) of the said shares as per its records; - information on whether the shares were sold through the Stock Exchange or vide an off-market transaction, in which case the particulars of the purchaser(s); - evidence to support the reported sale rate, as also that recorded during the preceding and succeeding six months, i.e., of the date of sale; - the assessee's experience in dealing in shares, if any. 5. The assessee, despite availing and being granted several opportunities, however, could not submit information on the various factual areas/ aspects of the transaction, as stood called for, even as it did file copy of declaration from the broker dated 15-1-2004, confirming the transaction. Meanwhile, the Assessing Officer on the basis of his investigation in the matter, in terms of the directions by the first appellate authority, submitted his findings to the ld. CIT(A) vide his report dated 6-12-2004, and which stood also confronted to the assessee by him in the appellate proceedings. An examination of the said report with reference to the material on record, vis-a-vis the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt by the Assessing Officer to the broker, Shri Ranjit Kumar Agarwal, Proprietor M/s. Agarwal and Co., Delhi, though, however, without response. Mr. Aggarwal, on his examination by the ITI, did not disclose anything worth mentioning, apart from stating that his firm stood closed long back (without specifying any date, month or even period), and that he would give his statement only after consulting his counsel, Shri K.K. Jain, C.A. It is relevant to state that the most basic information, i.e., as to the identity of the purchaser, was not forthcoming from him, and which, besides being only in compliance with the requirement, is also vital to the assessee's claim of the transaction being genuine, and would go to validate his own declaration confirming the transaction as furnished by the assessee. The Company:- 8. The Assessing Officer wrote to the company during the course of assessment proceedings vide letter dated 8-1-2004, requiring various details, including, though not limited to, the address(es) of the transferee(s) of the impugned shares. The company not responding thereto, fresh opportunity was given to the assessee vide order sheet entry dated 23-6-2004, to furnish t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion), Agra on 27-1-2003, whereat he confirmed that the rate of the company's scrip came down to the level of Rs. 10 per share in the month of October and November, 2000. Also, the scrip stood also listed at the Chennai Stock Exchange; though no trading was reported at the said Stock Exchange in its respect since May, 2000, a fact which stands confirmed by the said Director. [(*) and not Rs. 1.70 per share, as stated at page 16 of the appellate order] The broker's bank account:- 9.2 The Assessing Officer, through his efforts, was able to locate the broker's relevant bank account, being Account No. 10007 with Indian Overseas Bank, Puneet Vihar, Delhi. It is not necessary for our purpose to go through the various amounts as detailed by the ld. CIT(A) in his order, and it would suffice to say that the assessee's draft, as also others, stood issued against cash deposit in the said account immediately prior to the withdrawal for the purpose of issue of the draft(s). During the period January, 2000 to July, 2001, deposit to the extent of Rs. 9 crores was made in the said account, most of it in cash, which stood withdrawn immediately by cheque or transfer. The account thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here interested persons, in light of the information in their possession, wish to transact business even though the market stands closed. Such off-market or kerb transactions, it may be clarified, per their very nature, imply an active trade in the relevant scrip, with the trading public evincing, for whatever reason, deep interest therein, which is completely missing in the present case even as evident from the number of shares, reported on monthly basis, transacted at the Delhi Stock Exchange, which is the principal, nay, the only Exchange where the trading activity stands witnessed since May, 2000. Secondly, such transactions are on principal-to-principal basis, between the buyer and the seller, and both known to the broker, who facilitates the deal, as the parties may have confidence only in him. Further, being outside the regulatory framework of the market, the law (the Securities Contract Regulation Act, 1956), to protect the interest of the buyers and sellers, provides for such transaction only on spot basis, i.e., payment against immediate and ready delivery, i.e., such transactions can in law be only undertaken on spot basis. Again, the SEBI, vide its letter dated 14-3-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 20th February, 2001, i.e., three months after the sale, while off-market transactions are on spot basis, i.e., immediate delivery against payment. Apart from, thus, being in breach of the statutory and the regulatory mandate, impinging on the authenticity of the transaction, there is no question of the assessee not knowing the particulars of the purchaser, its debtor for the sale amount, i.e., to whom the shares stood 'sold' on credit by assuming concomitant credit risk in contravention of the law, leave alone only his identity. and the amount realized therefrom, presumably, only after much pursuance. This is all the more so as the market rate of the scrip at the relevant time was below par, so the buyer could well have, as any reasonable or prudent person under like circumstances would, charged the assessee-seller or the broker of having conned or played on fraud on him. In fact, the matter only needed to be brought by 'him' to the notice of the Stock Exchange or even the SEBI, the broker being registered with it, for him to be brought to justice, and the punitive action flowing to the broker concerned. What is further intriguing is that not only he does not do any such, but 'p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olio Management v. Dy. CIT [2003] 87 ITD 537 (Mum.), on which reliance stands placed by the ld. CIT(A) (pg. 45 of the appellate order) are deemed apposite and relevant so as to merit reproduction, as under:- "The contention that the validity of the transactions cannot be looked into within the frame of the question is, with respect, off the mark because merely legal validity does not necessarily give a touch of genuineness to the transaction, which depends on various other considerations. Therefore, the further contention that since the question referred to the Special Bench is limited to the application of the rule laid down in McDowell [1985] 154 ITR 148 (SC), it presupposes that the sale and lease-back transaction is valid and therefore it cannot be held to be non-genuine, cannot be accepted. Every step in the whole transaction may be legally correct, but still whether the while transaction is genuine in sense that it is riot a subterfuge or colourable device or a dubious method is an entirely different question not dependent solely on the fact that every step in the transaction is legally valid or correct." 10.3 I, next, examine the transaction from the stand-point of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm (two share certificates), with the incident disqualification as to transferability, makes for an intriguing situation. That is, is it a premeditated complex of transactions? Coming to the establishment of the sale rate, the wide disparity, which works to as high as 3600 per cent and as low as 1644 per cent, when reckoned with the two extremes of the price band obtaining at the Delhi Stock Exchange, i.e., with reference to the stated sale price (though the same work to 1232 per cent to 4077 per cent as per the revised figures), belies all claims to reasonability or reality. As correctly claimed by the revenue, being borne by normal observation, even during the earlier days, when there was no National Stock Exchange (NSC), and the technology had not made deep inroads into the share trading activity (electronic exchanges, internet connectivity, etc.), the variation between the rate(s) at any given point of time at two Stock Exchanges would be, i.e., generally speaking, in the range of 1 per cent to 2 per cent. In fact, a class of brokers, called jobbers, and which exist even to date, engage themselves only in this area of trading activity, i.e., buying at a lower rate from one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only indicative of a good demand for the scrip, the reported volume on any given date does not exceed 200 shares. Further, in any case, all the persons interested in selling would flock it rather than transacting through the Delhi Stock Exchange, which is contrary to the observed trading activity reported at the said Stock Exchange, i.e., not more than 200 per day on any given day from March 2000 to 27-11-2000, after which there is, unexplicably, no trading at all. Finally, even allowing for some market aberrations, the variation, as observed by the authorities below, between the quotes of the relevant scrip obtaining at the two Exchanges, i.e., from 12 (106/8.60) to 47 (123/ 2.60) times, is beyond all comprehension. It does not take much to understand that the rate at the M.P. Stock Exchange, apart from being not representative, clearly manipulated, so that there can be no question of any infirmity in the Revenue's inference of the said sale price as being not real or only un-genuine. As such, there is no force in the assessee's argument of having sold its confirmed shareholding at the 'existing' or 'prevailing' market rate, the 'sale' rate being neither existing nor representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost) before that time, so that he could be produced by him in the assessment proceedings either before that date, or at least thereafter; the assessment getting completed vide order dated 31 -3-2004. In fact, as rightly pointed out by the ld. CIT(A), this itself raises several questions as to why the assessee did not furnish the said confirmation (dated 15-1-2004) to the Assessing Officer, doing so only subsequently videhis letter dated 13-8-2004, i.e., in the remand proceedings. Finally, in view of the fact that the broker himself, on being contacted, has not been able to render any definite information on the required points, even as the same only forms part of his regular trade, the transaction having been confirmed by him, and thus a subject-matter of his record, with reference to which only the confirmation stands ostensibly given by him, despite being issued notices under section 133(6) and summons under section 131 of the Act, it is apparent that the broker has nothing further to state, in support of the assessee's case. As such, neither is the assessee's own non-cooperative conduct, nor its inability to produce its broker, on whose evidences he relies; rather, builds up his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bts in the matter, as is in respect of the share price at a distant Stock Exchange of an unknown or not well known company both in terms of price and volume, with both the price and the trading at the DSEL being confirmed by the company's WTD and consistent with the trading pattern, with the 'sale' rate being over twelve times the maximum price obtaining in the month of November, 2000 at the DSEL, the only Stock Exchange reporting trade activity in the scrip. Couple this with the non-existence of the 'purchaser' of the shares, who, even in case of a market transaction, has to exist to complete the same, with the Revenue having approached the broker, the assessee's case in this regard, i.e., qua the sale rate (as well as the transaction), it is clear, stands disproved, rather than proved (refer Annexures 'A' and 'B' to the appellate order/para 10.3). As such, in view thereof, the said case cannot be said to be comparable with the assessee's case. In fact, the Tribunal, in a number of cases, granted relief to the assessees where the Revenue proceeded to doubt the credit explained with reference to the liquidation of the jewellery declared by the assessees under VDIS, 1997, by pointin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds the power of the assessing authority as well as the nature of evidences and the basis for the Revenue to arrive at valid inferences under the Act based on circumstantial evidence and preponderance of human probabilities; as also the burden of proof cast on the assessee under section 68 of the Act; the law in the matter being well-settled by the Apex Court and, in fact, legion:- CIT v. Durga Prasad More [1971] 82 ITR 540 (SC). McDowell and Co. v. CTO [1985] 154 ITR 148 (SC). Sunil Siddharth Bhai v. CIT [1985] 156 ITR 509 (SC). Workman, Associated Rubber Industry Ltd. v. Associated Rubber Industry Ltd. [1986] 157 ITR 77 (SC). Sumati Dayal v. CIT [1995] 214 ITR 801 (SC). Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706 (SC). CIT v. H.R. Sugar Factory (P.) Ltd. [1991] 187 ITR 363 (All.). CIT v. L.N. Dalmia [1994] 207 ITR 89 (Cal.). Relevant excerpts from the following decisions stand reproduced by the ld. CIT(A) in his order:- Juggilal Kamalpat v. CIT [1969] 73 ITR 702 (SC). Jiyajeerao Cotton Mills Ltd. v. CIT [1958] 34 ITR 888 (SC). Mittal Belting and Machinery Stores v. CIT [2002] 253 ITR 341 (Punj. and Har.). Mid East P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares in M/s. B.T. Technet Limited. Share application money of Rs. 25,000 was sent through D.D. No. 376096, dated 1-9-1999 drawn at Vijaya Bank, Jeoni Mandi, Agra. The assessee received allotment letter dated 4-10-1999 showing the folio number P00084. Two share certificates of 5000 shares each showing the distinctive numbers and certificate numbers were also received by the assessee. The assessee has duly shown the investment. These shares were sold at the rate of Rs. 106 through the broker M/s. Agarwal and Co. being the member of Delhi Stock Exchange. On the sale of shares, the assessee has shown LTCG. The Assessing Officer did not accept the genuineness of the sale transaction and observed that the assessee could not produce the broker. The identity of the buyer and the seller was also not established. He also doubted that in just 14 months time the prices of the shares cannot be increased by more than 11 times. The CIT(A) confirmed the order of the Assessing Officer. When the matter went before the Tribunal, the ld. Judicial Member (J.M.) accepted the genuineness of transactions while the ld. Accountant Member (A.M.) did not agree with the decision of the J.M. and has written a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee applied for allotment of the shares vide application No. 2163 alongwith demand draft No. 376096, dated 1-9-1999 drawn at Vijaya Bank, Jeoni Mandi, Agra for Rs. 25,000. Thereafter he received an allotment advice bearing date of allotment as 4-10-1999. The balance amount of Rs. 75,000 was sent to the company through an account payee demand draft No. 377370, dated 21-3-2000 drawn on Vijaya Bank. Both the demand drafts were made out of the same bank account No. 5038 belonging to the assessee. The folio No. of the assessee was P00084. The assessee received two share certificates for 5000 shares each. The copy of the share application money, allotment letter and share certificates were placed on Paper Book. Thus, it was contended that the assessee has supplied all the evidence regarding the purchase and evidence namely copy of share application, copy of acknowledge of share application, copy of letter of allotment, copies of share certificates, copy of bank account from where the payment was made for the shares. It was pointed out that the assessee has received the annual report of the company for which attention was drawn towards pages 13 to 35 of the Paper Book. Thus, it was cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He sold the shares through the broker. It was pointed out that the CIT(A) has concluded that as the broker did not appear before the Department for recording his statement, the transaction is not genuine. This approach of the CIT(A) is totally illegal. The identity of the broker is duly proved as he was registered with the SEBI. He is an Income-tax assessee and PAN was given in the declaration. The broker has issued all the necessary documents like contract note, sale bill, copy of account. The broker has also confirmed the sale of shares. The notices and the summons were duly served by the department on the broker. The Department's Inspector has also personally contacted the broker. The broker has not given any adverse or negative statement regarding the sale of shares with the assessee. The payment of the sale consideration of the shares were received by the assessee through account payee draft issued from bank account of broker maintained at Indian Overseas Bank, New Delhi. Mere deposit of the cash by the broker before issue of sale consideration does not create any adverse evidence against the assessee as many parties may buy shares in cash. The assessee does not have any cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh deposited in the account of the broker cannot be the basis for not accepting the transaction of the assessee. The assessment has been completed under section 143(3) of the Act. Deep investigation was carried out but no evidence has been brought on record which may prove that the assessee has deposited cash in the bank account of the broker. The inference has been drawn merely on surmises and conjectures. There is no direct evidence against the assessee that he has paid cash to anybody to purchase the impugned demand draft. So far the conduct of the assessee is concerned; the assessee has submitted all the evidences regarding sale and purchase of the shares alongwith the return filed under section 139. The assessee has replied to all the queries raised by the department and co-operated with the Assessing Officer in making the assessment. The assessee had made complete efforts to assist the department in presenting the broker as is evident from the facts on record. The conduct of the assessee had never been different from a normal investor. The shares purchased by the assessee was a capital asset within the meaning of section 2(14) of the Act. It was a Long-Term Capital Gain withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ania (supra) and it was pointed out that the identity of the broker was duly accepted by the same Bench consisting of the same ld. Members. Attention was also drawn towards the decision of Third Member in the case of Smt. Sunita Oberoi v. ITO in [IT Appeal No. 273 (Agra) of 2004, dated 7-8-2009] for the assessment year 1995-96, 30 DTR (Agra)(TM) (Trib.) 474 at page 476. It was contended that the assessee was not in a position to compel the share broker for confirming the share transaction, as she was neither a Director nor having large scale dealings with the broker over the years so as to show that she was personally in a position to compel the broker on account of the magnitude of the transaction done through them. Referring to para No. 8 of the order of ld. A.M., it was contended that the assessee cannot be held responsible if the company has not filed details of the shareholding with the Registrar of the Companies (RoC). In this regard reliance was placed on the decision of this Tribunal in the case of Smt. Seema Gargh v. ITO [IT Appeal No. 252 (Agra) of 2005], a copy which is available at pages 111 to 135 of the compilation. Referring to that, it was pointed out from page 112 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... address was received back with the remark of the Postal authorities "left without address". The person from whom the assessee has purchased the shares is unknown/unidentified. The party to whom the shares were sold is also unknown/unidentified. The company, shares of which were allegedly transacted, has not confirmed the purchase and transfer of shares. The broker is not traceable/identifiable at the given address. Thus, it was contended that the transaction was in doubt. The assessee was given proper opportunity. No evidence that the assessee has applied for this share was furnished. No corresponding evidence with the company regarding purchase of shares and deposit of the money later on was furnished. Delhi Stock Exchange confirmed that no trade reported during this period. The increase in the value of the shares is high from normal and unrealistic. In just 14 months, prices of the shares have allegedly increased by 11 times. This is totally unbelievable. The only conclusion from this can be drawn is that the entire transaction is stage managed. The Assessing Officer has given a finding on the peculiar facts of the case that it cannot be said that the addition was made merely on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given case also the department cannot treat the long-term capital gains as assessee's income from other sources. There is no direct evidence. The statements of the brokers were recorded at the back of the assessee. An opportunity of cross-examination means and implies a clear opportunity after providing copies of such adverse statements to cross-examine. Otherwise also the statement of Shri Ashok Gupta is too vague to be of any evidentiary value. He has nowhere stated that the transaction of the assessee was bogus or not genuine. He has no corroborative evidence to show that the cash for drafts was received from the assessee. In the absence of any corroborative evidence his statement cannot be accepted as true on his mere ipse dixit. Shri Manoj Agarwal was not produced for cross-examination. From his statement no adverse inference can be drawn against the assessee. Shri Manoj Agarwal handed over a letter to DDI (Inv.) in which he stated that out of the total transactions, the transactions amounting to Rs. 100 crores were only book entries. So it follows as a necessary corollary that entire transactions were not in-genuine. He has also not named this assessee. With regard to Agarwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter has confirmed that transaction and the payment was made through cheque. The assessee has provided all the requisite evidences in support of all transactions. Simply because J could not produce his books of account or the quoted rate of shares in stock exchange being less or the transactions being not reported by J to the stock exchange, would not make a transaction bogus. The stock exchange has intimated the Assessing Officer that they are only having information of the transactions between two members of the stock exchange and not otherwise. In the present case, the transaction was between a member and a non-member and therefore, such transactions were not reported in the stock exchange. Further, the credit in the bank account of J is by clearance. Therefore, the allegation of the Assessing Officer that the amount was deposited in cash has no basis. The assessee has accepted having invested her funds on the advice of her father-in-law. The burden of proving a transaction is always on the person asserting it to be bogus and this burden has to be strictly discharged by adducing legal evidence of a character, which would either directly prove the fact of bogusness or establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have reopened the assessment. The assessee had made an investment in a company, evidence whereof was with the Assessing Officer. Therefore, the Assessing Officer could not have added the income, which was rightly deleted by the Commissioner (Appeals) as well as the Tribunal." (16) Thus, the sum total of the foregoing discussions go to, cumulatively, establish that the assessee has been successful in proving the long-term capital gain earned by him in this case. He has also established that he is exempt from tax qua long-term capital gains as has been claimed." 8. In my opinion, this case is equally applicable in the case of the assessee. In the case of the assessee, allotment of the shares has duly been proved and there is no dispute on the purchase of the shares through allotment to the assessee in the assessment year 1999-2000. The shares were purchased in earlier year. The shares were allotted in the name of the assessee. The assessee has submitted before the Assessing Officer, copies of the contract notes, copies of the sales bills, statement of account from the broker, address of the broker. The identity of the broker is proved. I also noted that in the case of Ashok K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be genuine in the case of Ashok Kumar Lavania (supra). 9. Under these facts, I am of the opinion that the case of the assessee is duly covered by the Division Bench of this Tribunal in the case of Ashok Kumar Lavania (supra) which has been decided by the Bench constituting of the same very learned Members. Judicial discipline demands that on the similar facts the Bench is bound to follow its earlier decisions. The principles of judicial discipline requires that the order of the Co-ordinate Bench has to be followed. 10. I also noted from the Assessment Order and the order of the CIT(A) that while scrutinizing the evidence filed by the assessee and framing the order, their minds were influenced with the other consideration that the value of the shares has tremendously increased which was abnormal and indicates that the entire transaction is managed one. In my opinion, the share market is quite volatile and prices do fluctuate abnormally. I also noted from the case of Smt. Seema Gargh (supra) on which the ld. A.R. has vehemently relied that the assessee has sold the shares of M/s. B.T. Technet Limited. The assessee before me has also sold the shares belonging to M/s. B.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. No such presumption could be drawn by the Assessing Officer, merely on surmises and conjectures." 12. The revenue is also influenced that the assessee could not prove the name and address of the buyer of the shares. In the stock Exchange when the transaction is entered into, the assessee is not aware of about the buyer of the shares. He enters into transaction only through a share broker. Therefore, the observation of the Assessing Officer that the assessee could not identify the buyer cannot be the basis of regarding the transaction to be non-genuine one. I also noted that the revenue has been influenced with the fact that the assessee has delivered the blank transfer share certificates to the broker when the delivery of the shares were given. Since the deal has to take place between the brokers, the assessee has to give only blank transfer share certificate to the broker without mentioning the name of the buyer. There is nothing wrong in my opinion and this is a usual practice in the business. From the entire appreciation of the evidence, I noted that the assessee had acquired the shares, the purchase of which was duly declared by the assessee in earlier years which stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record that broker was a relative or associate of the assessee. The assessee, in my opinion, does not have any control on the bank account of the broker, where the fund came through clearing, not in cash. The decision of the lower authorities are influenced by the general observation of the Investigation Wing that arose a suspicion turned into conclusive proof in the minds of the authorities that everybody who has sold the shares at a high price has converted his unaccounted money through accommodation entries. This approach does not have any leg to stand. Hon'ble Supreme Court in the case of Umacharan Shaw and Bros. (supra) has clearly laid down that suspicion howsoever strong cannot take place of proof. From the entire appreciation of evidence, I noted that Assessing Officer has failed to establish that the assessee has introduced his own unaccounted money in the shape of alleged sale proceeds of shares. Hon'ble Supreme Court in the case of Kishanchand Chellaram v. CIT [1980] 125 ITR 713 has observed that "the amount cannot be assessed as undisclosed income of assessee in the absence of positive material brought by the revenue to prove that the amount in fact belonged to assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. The assessee has purchased shares from M/s. Maheshwari Sons. These purchases are evidenced from the contract note. The payment was made by cheque. These shares were transferred in the name of the assessee. The assessee held these shares for more than one year. She sold these shares to the member of stock exchange Shri J.K. Jain. Shri J.K. Jain in his letter dated 22nd December, 1999 has confirmed the transaction and the payment was made through cheque. The assessee has provided all the requisite evidences in support of all transactions. Simply because Shri J.K. Jain could not produce his books of account or the quoted rate of shares in Delhi Stock Exchange being less or the transactions being not reported by Shri J.K. Jain to the stock exchange would not make a transaction bogus. The Jaipur Stock Exchange has intimated the Assessing Officer that they are only having information of the transactions between two members of the stock exchange and not otherwise. In the present case, the transaction was between a member and a non-member and therefore, such transactions were not reported in the stock exchange. Further, the credit in the bank account of Shri J.K. Jain is by clearance. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same premises and as such he was not capable to comment upon the nature of work done by Shri Maheshwari could hardly be having intimate knowledge of Shri Praveen Mittal personally who could only claim knowledge of public facts namely that Shri Maheshwari was a broker registered with Kanpur Stock Exchange dealing in new public issues having an office at Antariksh Bhawan, New Delhi for which purpose Shri Mittal requested his friends Haseeja and Gulati to introduce Shri Maheshawri to their bankers for opening an account. How he became aware of the categorical information to assert that the transactions done by Shri Maheshwari's account No. 8627 were sham does not inspire any confidence. The statements have been recorded at the back of the assessee and although have been confronted however have been recorded in the case o'f different assessees. But in the present case the concerned persons whose statements have been relied upon were not made available to the assessee for cross-examination. That these facts are identical to the present case is not disputed by the Revenue. The explanation of the assessee rebutting the statements confronted to the assessee in the facts of that case ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscontinues the same or changed the addresses or for that matter the companies whose shares were purchased and sold changed their premises or names as changed by virtue of being acquired by some other company the assessee cannot be held liable to stay in touch for all times to come. Similarly, no reasons are there to show that Shri Praveen Mittal was ever in a position to declare the transactions of an acquaintance broker as bogus transactions neither any evidence has been led nor reasons advanced to support how he could be considered to be a reliable person so as to ignore the evidences available on record, i.e., contract notes of sale and of the specific shares of specific rates on specific dates. Shri Praveen Mittal was the witness of the Department, the onus was therefore on the Department to produce him and make him available for cross-examination by the assessee. Similarly, the evidence that the companies were not in existence at the address available with the Department does not detract from the assessee's claim in view of the documents available on record. The discrepancy in the amounts to the expenditure of Rs. 53,356 was because of consistent statement by the assessee tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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