TMI Blog2015 (3) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the past years were filed prior to the search in the normal course suo moto disclosing the particulars of subject additions which stood accepted u/s 143(l) of the Act. Assessment as contemplated u/s 153A is not a de novo assessment and additions made therein, has to be necessarily restricted to undisclosed income unearthed during search. There is nothing on record to suggest that any corroborative evidence was found to justify the addition in question. The first appellate authority held that the issue of genuineness of the claim of LTCG and STCG of assessee group should be judged independently on the strength and merit of documentary and other third party contemporary evidences, irrespective of the admission/retraction of the assessee. This exercise was carried out by the first appellate authority in the subsequent part of the order. In the light of the above the appellant submitted that in view of the voluminous documentary evidence and material on record and there being no material in the possession of the Assessing Officer to rebut the said evidence, the transactions of purchase and sale of shares were conclusively proved by the appellant. The same should not have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the totality of the facts of the case and relying on various decisions cited supra and considering the elaborate discussion by the Ld. CIT(A) we find no infirmity in his order accepting the Long Term Capital Gains and Short Term Capital Gains declared by the assessee. Accordingly, the order of the CIT(A) is upheld and the grounds raised by the Revenue are dismissed. - Decided in favour of assessee. - ITA.No.1157 to 1161/PN/2008, ITA.No.1162 to 1165/PN/2008, ITA.No.1166 to 1169/PN/2008, ITA.No.1170 to 1174/PN/2008, ITA.No.1175 to 1177/PN/2008, ITA.No.1178 to 1181/PN/2008, ITA.No.1182 to 1185/PN/2008, ITA.No.1186, 1187, 1189 & 1191/PN/2008, ITA. - - - Dated:- 28-9-2012 - Shailendra Kumar Yadav And R. K. Panda JJ. For the Petitioner : S. K. Singh For the Respondent : J. P. Bairagra ORDER All these appeals filed by the Revenue pertain to Peety group on similar issue, so they are being decided by this consolidated order. 2. First we take up ITA.No. 1157 to 1161/PN/2008. In ITA.No.1157/PN/2008 revenue has raised the following grounds: 1. Whether on the facts and circumstances of the case the ClT (A)-I, Nagpur was justified in holding that the contract notes, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ughters-in-law Smt.Varsha Surendra Peety, Smt.Rachna Jitendra Peety and Smt.Namrata Ravindra Peety, and HUF of Shri Ravindra Shantilal Peety. Search seizure operations u/s.132(1) of the Act were conducted on 17.03.2006 in this group. As stated above, this search covered following entities: Premises searched Business/ residential Nature of activity/ sources of income Remark SRJ Peety Steels P. Ltd. Business Manufacture of mild steel ingots --- Sri Om Rolling Mills P. Ltd. Do Manufacture of mild steel bars --- S/Shri Shantilal Peety, Surendra Peety, Ravindra Peety, Jitendra Peety, Varsha Peety, Namrata Peety and Rachana Peety (All individuals) Residential premises at Sharda Kutir, Shani Mandir Road, Old Jalna, Jalna Capital Gain, salary, house rent, Business Income All belong to Peety family who reside in a common residence. The searches were carried out on the strength of joint/common warrant of authorization issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.153A r.w.s. 143(3) consequent to search, which was subject matter of present appeal, the Assessing Officer sought to tax the income from LTCG u/s.69A of the Act. It was the case of the Assessing Officer that income under the head LTCG shown in return for all the above mentioned assessment years is sham and, therefore, the amount so generated represented unexplained money liable to be assessed under the head 'Income from Other Sources' u/s.69A of the Act. An alternative plea was taken by the Assessing Officer that income if not assessable u/s.69A, would fall to be assessed under the head 'Adventure in the nature of Trade'. While arriving at the above conclusion, the Assessing Officer mainly relied on the following evidences to support his case: 1. Statement u/s.132(4) recorded from Shri Surendra Shantilal Peety on the date of search offering the income shown in the regular return under the head LTCG as undisclosed income in various hands which was subsequently retracted at the time of filing the return. 2. Statements recorded by the department from few brokers namely Vishal Bhagwandas of Vijay Bhagwandas and Co., Pratik Shah of DPS Shares and Securities after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as unexplained money u/s.69A of the Act. 4. Whether the alternative approach of the Assessing Officer in treating the entire transaction under the head 'an adventure in the nature of trade' is sustainable. 8. Firstly the issue of admission as the basis of assessment and retraction thereof has been addressed by the first appellate authority. In this regard, observations of Assessing Officer are as under: (a) That Shri Surendra Shantilal Peety had given a statement u/s.132(4) on 24.03.2006, when confronted with the statements of certain brokers namely, Dhawal R Shah, Director, Trimiti Investment and Financial Services Ltd., Pune, Milan R Parikh, MD Action Financial Services P Ltd., and Vijay Bhagabandas, Vijay Bhagaban Das Co., Mumbai, that the LTCG shown by various family members is not genuine and that the same is offered for taxation. Same was later confirmed in a letter dated 29.04.2006. (b) That the income so offered in course of search was not included in the returns filed in response to notice u/s.153A and the same amounts to a retraction which is not permissible under law. (c) That in the subsequent statement recorded on 14.12.2007, Sri Surendra Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) Members of the Peety family, after evaluating the evidence available with them and after obtaining the missing papers from the brokers, filed their returns without admitting that the transactions were not genuine. vi) It is not uncommon that such statements are recorded under inducement, promise, persuasion, under exceptional circumstances and in an atmosphere of high pressure liable to cause nervousness amounts to involuntary statements divorced from the actual facts on record. Thus statement given by the assessee cannot bind him on the face of other evidences supporting his case. In this regard the assessee relied on the decision in the case of Deepchand and Co. Vs. ACIT (1995) 51 TTJ Bom 421, wherein it was held that a statement recorded during search proceeding which continued for an unduly long period cannot be considered to be free, fearless and voluntary. Thus, an element of compulsion is discernible in the case of the assessee on the facts and circumstances of case justifying retraction. vii) It was submitted that the measure of search is to unearth documents, revealing concealed income and wealth since strictly speaking interrogation is not a part of the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced by the assessee during the course of assessment proceedings, the Assessing Officer ought not have placed undue importance on the admission in absence of clinching corroborative evidence for same. x) It is also a well accepted principle that an admission is not conclusive evidence as to the truth of the matters stated therein. It is only a piece of evidence, the relevancy of which is required to be judged basing on the material evidence and circumstances in which it is made. in the case of the assessee as explained above, the statement was made without having the benefit of referring to any document in confusion and on the assertion of the department that they have evidence against the assessee by way of some statements of brokers which were not made available to the assessee. xi) A mere confessional statement without there being any documentary proof shall not be used as evidence against the assessee. The statement of managing director was recorded in course of search wherein he admitted undisclosed income but later retracted from the said statement and accordingly the Court held that without documentary proof, a statement alone cannot be utilized against the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 SC. These are cases where department failed to produce the witnesses, thus bringing to an end the process of taking evidence. In other words, the evidence is closed on this issue in favour of the assessee. xiv) As regards retraction, the principle is that it should be retracted before the concerned authority decides the matter. In other words, the assessee should not place the authorities in such a position so as to thwart the process of investigation. in the case of the assessee, the retraction was well evident from the returns filed in response to notice under section 153A and assessee's letters addressed to the department. This gave the authorities sufficient time to collect corroborative evidence which they have failed to do as explained in the preceding paras. xv) It was submitted that estoppel is a rule of evidence but not a cause of action and that it cannot be a basis of assessment and creation of a liability under the Act as held in CIT Vs. Asit Kumar Ghosh (1953) 24 ITR 576 (SC). Therefore the assessee cannot be held liable on the basis of a mere statement which was made under exceptional circumstance as explained above. Assessing Officer cannot utilize conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. A third opportunity was given at the instance of this authority in course of appellate proceedings to produce the brokers. The Assessing Officer failed to produce these brokers, thereby closing the evidence for all intents and purposes. It may be worthwhile to mention here that although the Assessing Officer failed to produce the brokers for cross- examination before conclusion of assessment proceeding, there is no whisper in the assessment order in this regard.... The third failure not only compounds the matter but also gives an unmistakable impression that contents of the statements which were shown to the appellant in course of search were suspect and not recorded by following the due procedure of law. The admission of the appellant in course of search may be read In conjunction with the so called unsubstantiated statements of brokers but not in isolation, appreciating the entirety of the circumstances and in the background of documentary evidence supporting the case of the appellant which the department has failed to impeach till the stage of appellate proceeding. 8.3. In this regard, it was submitted that in the assessment order the Assessing Officer has made an observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee retracted from the statement and offered no income. In course of assessment proceedings, the Assessing Officer asked the assessee to produce evidence to prove that the claim regarding export income and genuineness of gifts. The assessee apparently failed to produce any documentary evidence either in course of search or before Assessing Officer to support his contention that the export profit/gifts are genuine. The assessee also failed to substantiate the allegation that the statement was taken on duress, a ground taken subsequent to admission. The Assessing Officer also came to a finding that these receipts were introduced to explain investments made during the period. Therefore, the Assessing Officer came to a conclusion that the claim of the assessee is not acceptable and his retraction is an afterthought. In this regard, the first appellate authority observed, i) that the assessee failed to produce any documentary evidence at the time of search regarding genuineness of export profit and NRI gift. ii) that no evidence was found in course of search to corroborate assessee's claim that he had earned export profit or received NRI gift. iii) that the assessee fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- in the statement recorded u/s.132(4) of the Act. Subsequently the admission was retracted and the income so admitted was not included in the return. It was alleged that the statement was recorded under force and coercion. Since the assessee failed to substantiate its assertion that the department coerced the assessee in making the admission, the Assessing Officer added the amount as admitted. This was upheld by the ITAT for similar reasons. Before the Hon'ble High Court, two issues were raised. (a) the plea of coercion (b) It was also argued that a mere statement cannot be sole basis of assessment made u/s.143(3). The concerned Hon'ble High Court dismissed the allegation of coercion as untenable. At the same time the Court remanded the matter for the reason that the order failed to reveal on what evidence the assessment was made as the same is the specific mandate of law while framing the assessment u/s.143(3). The first appellate authority observed that the ratio of the above case does not apply to facts of the present case for the following reasons: i) The assessee has not raised the plea of coercion. ii) There is no failure on the part of the assessee to ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore the Assessing Officer should have reached the correct conclusion in appreciation of these facts in totality in an order passed u/s.153A r.w.s. 143(3). D. The Assessing Officer's next relieance is Dr. S.C.Gupta Vs. CIT (2000) 248 ITR 782 (All.). The facts in the said case are that in course of survey the assessee admitted certain income as undisclosed but subsequently retracted from the same on the grounds of coercion. The assessee failed to prove the allegation. Further assessee did not go beyond mere allegation and failed to produce any evidence that he has not earned the admitted income. Under such circumstances the appellate forum decided against the assessee. The case of the assessee is different as there is no allegation of duress. The assessee produced voluminous documentary evidence before the Assessing Officer to prove that the transactions in shares are genuine but the Assessing Officer failed to consider the same in its totality and framed the assessment on mere surmice and conjecture. Similarly the first appellate authority distinguished case of Saratchand Bholanath Vs. CIT (1994) 210 ITR 682 (MP) and Mahesh B Shah Vs. ACIT (1999) 238 ITR 130 Ker, relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ------- 35,857,929 6,294,868 Ravindra Peety 2003-2004 2,217,617 2004-2005 3,417,070 13,506,996 5,112,199 2005-2006 2006-2007 14,121,867 1,187,900 ------------- ------------- 33,263,550 6,300,099 Jitendra Peety 2003-2004 572,400 2004-2005 3,123,440 2005-2006 10,380,183 2,896,856 2006-2007 16,277,690 1,205,873 ------------- ------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 2005-2006 8,835,795 128,515 2006-2007 7,915,540 251,399 ------------- ------------- 21,806,258 379,914 Scrip and year-wise details Asst Year Name of Scrip Name of Assessee Amount of Investment 2001-2002 Bharat Heavy Surendra Peety 214,266 Shantilal Peety 212,198 ----------- 397,148 2001-2002 Corporation Bank Shantilal Peety 169,989 2001-2002 Hindustan Zinc Shantilal Peety 60,275 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ravindra Peety 36,640 ----------- Total 121,900 2002-2003 Geometrick Soft Shantilal Peety 111,659 2002-2003 Bharat Electricals Surendra Peety 184,950 Jitendra Peety 102,900 ----------- Total 287,850 2002-2003 Mastek Limited Surendra Peety 51,184 Jitendra Peety 92,748 ----------- Total 143,932 2002-2003 Hinduja TMT Shantilal Peety ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28,834 ----------- Total 276,076 2004-2005 Fast Track Shantilal Peety 160,097 Surendra Peety 274,025 Ravindra Peety 277,385 Jitendra Peety 252,845 Ravindra PeetyHUF 170,558 Jitendra PeetyHUF 169,680 Varsha Peety 216,717 Namrata Peety 215,447 Rachna Peety 212,412 ----------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. v. Investigation carried out by the BSE against some brokers. vi. Offer of Income by some assessees (not related to Peety group) in relation to transactions in Penny stocks. vii. Newspaper reports. viii. Background of certain companies whose shares were purchased and sold. ix. Case laws on human probability.' 9.4. The above evidences relied on in assessment order were broadly divided into two categories. The first category relates to admission by Shri Surendra Shantilal Peety, adverse statement of some brokers through whom transactions in purchase and sales were effected. The second category relates to circumstantial evidences. In course of hearing before the first appellate authority from time to time, the assessees have filed their explanations on the observations made by the Assessing Officer in the order, which are being discussed below, as appreciated by the first appellate authority: 9.5. Assessees relied on submissions dated 04.03.2008. In this regard, the first appellate authority observed that while completing the assessment, the Assessing Officer has totally ignored the unrebuttable documentary evidence on record and those produced by assessee wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee contended that the Assessing Officer passed the order on 28.12.2007 as would be evident from assessment order. This was changed to 31.12.2007. The inferences against the assessees for all intents and purposes were drawn on 28.12.2007 itself and ex parte evidence was made use of without following any legal procedure as mandated by law. There was no whisper in the said order as to the request of the assessee for cross-examination and results thereof which was most crucial aspect of the proceeding for fastening a liability against the assessee. This further shows that the authorities worked with a closed and predetermined mind to tax the assessee on evidences not recognized in law. Thus affording of the opportunity was a mere idle formality. iv) The Assessing Officer has totally ignored various written submissions submitted by the assessee from time to time, regarding the entire share transactions, in reply to his various questionnaires or has not dealt with them properly. Written submissions were filed by the assessee on 24.08.2007, 07.09.2007, 20.10.2007, 08.11.2007 and 17.12.2007. The same were annexed before the first appellate authority in the paper book which has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them were in the capacity of interested witness rather than as an independent witness. 9.8. The appellant stated that as to how a quasi judicial authority can utilise such statements which are evasive and contradictory and not supported by any material evidence beyond oral evidence. For all purposes these are circumstantial in nature. Such statements should not be relied on for reaching reasonable conclusions. The moot question that arises is, can such statements be available as evidence to be used against another person as such. 9.9. As against the presumptions and assumptions of the Assessing Officer, the appellant contended that he has strong evidence that share transactions are genuine which is evident from following facts: i) As mentioned earlier regular books of accounts are maintained by all the members of the Peety family right from day one. ii) The Purchases and Sales of Shares in question were duly accounted in the regular books of accounts for the year/s in which the purchases/sales were made. iii) The purchase and sale of the shares were evidenced by their having been shown in the Annual Accounts attached with the regular returns of income for the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, total sale consideration, brokerage, settlement no., trade no., order no., bills of broker, all the contract notes were found at the time of action u/s 132 and some of the contract notes were also seized by the raiding party. The above bills show that the sale was effected through the electronic trading platform of recognized Stock Exchange. iv) There was no dispute with regard to date of sales. v) The sale consideration on sale of shares was received through regular bank channel in the form of account payee cheques/drafts and the same were credited in regular bank account maintained by the appellant. There is no dispute that the sale price is actually received by the appellant from brokers and was duly supported by their bills, etc. There is no dispute with regard to date of receipt of the sale proceeds. vi) The transactions are duly recorded in the books of the share brokers. Brokers confirmation statement are submitted before the first appellate authority. vii) Shares sold have been actually delivered and routed through demat accounts identifying the brokers to whom the delivery of shares are given. viii) The debit entries in assessees' demat account eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess of assessment without going through the requirements of law as contemplated in section 139/147. iv) It may be appreciated that reason to believe being essential stipulation in law to issue a warrant, any further satisfaction by the Assessing Officer, at the threshold stage has been dispensed with in the matter of issuance of a notice consequent to search. The same does not mean that mere issuance of a notice would give unfettered freedom to the Assessing Officer to complete the assessment when no evidence is discovered in search. v) An assessment proceeding consequent to search is not meant to unsettle the income shown in the regular return in the absence of evidence. It is not meant to make roving and fishing enquiry. This notice is meant to assess the undisclosed Income, if any discovered in course of search basing on the material found. vi) The legislature could never have intended to give unfettered freedom to unsettle the entire process of assessment of all the earlier years in the absence of evidence discovered in course of search. A search u/s. 132 is authorised to unearth undisclosed income which the assessee would not disclose in normal course. Section 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire sale proceeds on share transactions to tax at maximum rate and applicability of section 69A of the Act for all years for all assessees. The first appellate authority also appreciated the alternate stand of the Assessing Officer whether assessees were investors or engaged in adventure of trade of share business. The first appellate authority found the approach of Assessing Officer a half hearted and tentative to the issues involved. He also addressed some significant aspects of assessment order vis-a-vis the returns filed in regular course and also after search. The first appellate authority summed up the transactions as under: i) That the contract notes were genuine and were acted upon and there is nothing in the submissions of the Assessing Officer except suspicion to assail the genuineness of the contract notes and all other subsequent action. ii) That since the contract notes were acted upon culminating in credit of these shares in the DEMAT account, after following successive steps and procedures, there is no room for any suspicion in respect of the income earned from the transaction in shares. iii) That the date of contract note is the date of holding of the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental Representative submitted that the CIT(A) was not justified in holding that the contract notes, and broker's bills etc., found and seized in the course of search action and proved to be bogus by the statement of the brokers who issued these broker notes do not amount to be incriminating material. The CIT(A) was not justified in holding that the SEBI's action against the broker and certain companies cannot be given any weightage as this does not relate to the case of the assessee even though same brokers have admitted before different Income tax authorities that they had issued bogus broker notes to assessee. The CIT(A) was not justified in holding that the broker notes issued by the brokers and the companies which are tainted as reliable evidence for holding the transaction as genuine while at the same time not accepting the statements given by the brokers as correct. The CIT(A) was also not justified in holding that the application of section 69A of the Act was not warranted even though it was proved that the assessee was in possession of money claimed to have been earned by long term and short term capital gain. The CIT(A) was also not justified in holding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale proceeds of shares as unexplained income and unrecorded in books of account and adding u/s.69A of the Act is not justified. The Assessing Officer has erred in placing undue weightage to the admission made by the assessee u/s.132(4) of the Act totally ignoring assessee's repeated submissions that the statement was given in a confused state of mind and without having benefit of referring to various documents which conclusively proved the genuineness of the transactions. The Assessing Officer was not justified in making addition by treating the same as unexplained money u/s.69A of the Act. The Assessing Officer was not justified in observing that amount in question be taxed as business income/adventure in the nature of trade if at any point of time transactions were found to be genuine. The Assessing Officer was not justified in treating certain shares of Fast Tract Entertainment and Prannet Industries as not genuine. 13.1. Referring to the following decisions the Ld. Counsel for the assessee submitted that all the issues raised by the Assessing Officer and Ld. Departmental Representative have been dealt with and the order of the Ld. CIT(A) being in consonance with the jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s manufactured and Sri Om Rolling Mills Pvt. Ltd., wherein mild steel bars are manufactured. 14.1. Returns of income for A.Ys. 2002-03 to 2005-06 were filed u/s.139(1) of the Act accompanied by all requisite documents and were processed u/s.143(1) for each of the years under consideration. In the returns for each year, assessee had shown an income under the head Long Term Capital Gains pertaining to sale of shares held as investment which was accepted as such by the Department. 14.2. In respect of above, stand of the assessee has been that- a) Regular books of accounts are maintained by all the members of the Peety family right from the beginning. Copies of Balance Sheet, P L A/c and computation of income for the assessment years under consideration are attached as pages 1 to 30 of Paper Book-I. b) The purchases and sales of shares in question were duly accounted for in the regular books of accounts for the years in which the purchases/sales were made. c) The purchase and sale of the shares were evidenced by their having been shown in the Annual Accounts attached with the regular returns of income for relevant year/years. d) The shares which were held as investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o seized by the raiding party. The above bills reveal that the sale was effected through the electronic trading platform of recognized Stock Exchange. There is no dispute with regard to date of sales which is a matter of record. o) The sale consideration of the sale of shares is received through regular banking channels in the form of account payee cheques/drafts and the same were credited in regular bank account maintained by the assessee. p) The transactions were duly recorded in the books of the share brokers. q) Shares sold have been actually delivered and routed through Demat accounts identifying the brokers to whom the delivery of the shares were made. r) The debit entries in the Demat Account evidences the delivery of the shares. s) Copies of contract notes, Sales bills, broker account, client ledger in the books of broker, Bank statements, Demat Account and BSE Stock Price list are submitted as Pages 33- 60, 174-202, 257-262, 278-291, 334-387,419-440, 462-503 523-528 of the Paper Book-I. 14.3. All the above details indicate that the transactions in shares were well regulated and were through authorized brokers, routed through appropriate channels includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 086 5,38,25 STCG 11,78,132 LTCG Exempt 1,39,20,086 1,64,00,910 14.5. Basically, the sale proceeds of the shares, held as investment, has been added to the income returned u/s.153A for each of the year under consideration by holding that these amounts represent the unexplained money of the company. It was contended that prior to the search, the returns of income for the A.Ys. 2002-03 to 2005-06 had already been filed u/s.139(1) of the Act accompanied by all the requisite documents and processing u/s.143(1) of the Act stood completed. During the course of search no incriminating materials were found relating to these years which could have been added back in the proceedings u/s.153A. The details regarding the transaction in shares for each of the year under consideration were very well placed before the Department in the computation of income of each year and no query was ever raised by the Department. There was nothing in the intimation u/s.143(1) to indicate any deficiency with regard to the assessee's claim of transaction in shares, the income shown and the evidences furnished in respect thereof. 14.6. The additions made u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer has added the entire sale proceeds of shares as undisclosed income of the assessee in assessment u/s.153A of the Act. When the Long Term Capital Gains and Short Term Capital Gains emanating from the said sale proceeds have been offered for taxation, the entire sale proceeds in our opinion cannot be added again to the returned income since the same is not justified on fact of it. 14.10. During the course of assessment, various notices and questionnaires were issued to the assessee. Same were replied. The details of the correspondences between the assessee and the Department are as under: a) In response to a notice u/s. 142(1) dated 10.08.2007, the assessee vide his reply dated 24.08.2007 gave the year-wise details of shares and deposits held by him for all the years under consideration. Copies of bank statements, Contract notes/Broker notes, Purchase Bills of shares were also submitted. A copy of the letter dated 24.08.2007 is attached as Pages l-3 of the Paper Book-II. b) In reply to notice dated 5.09.2007, details of purchase and sale of shares held on long term basis were submitted. A copy of the statement is attached as Pages 32, 61, 173, 203, 256, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132(4) of the Income tax Act, 1961, totally ignoring the appellant's repeated submissions that the statements were made in a hurry, in a confused state of mind and without having the benefit of referring to the various documents which conclusively proved the genuineness of the transactions. b) That the A.O. was not justified in making the addition of ₹ 25,63,205/-, ₹ 45,32,334/-, ₹ 35,79,802/-, ₹ 1,29,94,996/- and ₹ 1,42,51,3201- for AY.'s 2002-03 to 2006-07 respectively by treating the sum as unexplained money under section 69A of the Income-tax Act. c) That the AO. was not justified in observing that the above sums would be taxed as business income/adventure in the nature of trade if at any point of time the transactions were found to be genuine. d) That the A.O. was not justified in treating the purchases of shares of Fast Track and Pranneta Industries Ltd. as not genuine. e) That the A.O. was not justified in rejecting the claim of the assessee in respect of capital gains. f) That the A.O. was not justified in charging interest under section 234A, 234B and 234C of the Income tax Act, 1961. g) That the A.O. was not justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005-06 had already been filed u/s. 139(1) of the Act, accompanied by requisite documents and processing u/s. 143(1) of the Act, stood completed. During the course of search no incriminating material were found relating to these years which could have been added back in the proceedings u/s. 153A. All the details regarding the Long Term Capital Gain earned on sale of shares by each of the assessees for each of the years under consideration were already available on record before concerned Revenue authorities which was accepted year after year along with the returns. 14.13.4. The statements recorded during the course of search could not be said to be evidence found as a result of search , though the same may be obtained during the search . In case an addition is intended to be made as the undisclosed income on the basis of such statements, it has to be first proved that these statements are relatable to such evidence. The only evidence relied upon by the Assessing Officer is the statement of Sri Surendra S Peety recorded in the course of search. There is nothing on record to suggest that any incriminating document or material was discovered as a result of search. Above stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of CIT Vs. Shri Ramdas Motor Transport [1999] 238 ITR 177 (AP) held that under the provisions of section 132(4) as it existed at the relevant time the question of examining any person by the authorised officer would arise only when he found such person to be in possession of any undisclosed money or books of account. But, in this case, it was admitted by the Revenue that on the dates of search, the Department was not able to find any unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the managing director and other directors. In such a case, when the managing director or any other persons were not found to be in possession of any incriminating material, the question of examining them by the authorised officer during the course of search and recording any statement from them by invoking the powers under section 132(4) did not arise. The Explanation to section 132(4) permitting such examination came into effect only from April 1, 1989. Even if it were held that the statement of the managing director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and seizures and survey operations, no attempt should be made to obtain confession as to undisclosed income. The above circular goes into the purpose and scope of search and emphasizes following aspects: a) The purpose of search is evidence gathering with regard to undisclosed income. b) It is not for obtaining confession as to the undisclosed income and adopting the same in the assessment without any corroborative evidence. c) The evidence should be in the realm of demonstrable evidence to sustain assessment. d) In the absence of corroborative evidence, there is a possibility of valid retraction in the return of income filed subsequent to search. e) It recognizes that a mere confession by an oral statement would not suffice unless there is enough evidence to corroborate such confession. 14.14. On the basis of the above factual discussion, not much reliance should be placed on statements made by the assessee during the course of search because no corresponding seized material was found in the course of search to justify the additions in question. The verbal statement of the assessee without any connection with the other materials found during the search canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the office and residential premises of the group to establish that the transactions in shares were not genuine. Even there is no evidence to suggest flow of cash from the assessee to the brokers for indulging in such activities. On the contrary, there was evidence in the records of the department by way of returns and other supporting evidences to suggest that the transactions were genuine and matter of record at relevant point of time. On the face of these clinching evidences, the evidence in possession of the Assessing Officer relates to some oral statement of some brokers who alleged, without substantiating, that the purchases and sales were by way of accommodation entries. Thus, the statement given by the assessee should not bind him on the face of the overwhelming nature of evidences available in the record of the department and those produced by the assessee in the absence of any other adverse evidences produced by the department to supporting its stand. The measure of search is to unearth documents revealing concealed income and wealth. Since interrogation is not an object of the search, it is expected that a respondent is not put to pressure into making an admission and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e so offered in the course of search. Subsequently, on a statement recorded of assessee Shri Surendra S Peety u/s. 131 of the Act on 14.12.2007 as to why his acceptance of undisclosed income is not reflected in the return of income filed in pursuance to the notice u/s.153A, he stated that the same was made under pressure as he did not have access to the papers and documents lying at his factory premises to verify his claim. 15.3.1. Regarding retraction, Hon'ble Punjab and Haryana High Court in the case of Kishanlal Shivchand Rai 88 ITR 293 (P H), has held that it is an established principle of law that a party is entitled to show and prove that an admission made by him previously was in fact not correct and true. It was incumbent upon the Inspecting Assistant Commissioner to have afforded the assessee full opportunity to prove his assertions. The Inspecting Assistant Commissioner proceeded to impose penalty solely on the basis of the fact that the amounts were surrendered by the assessee at the time of the assessment. Even treating the surrender as an admission of the concealment of undisclosed income, the Inspecting Assistant Commissioner could not deny the assessee its rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual reasoned finding of first appellate authority need no interference from our side. 16. Regarding statement of Broker we find that the Assessing Officer has heavily relied on the statements of various stock/share brokers which were recorded behind the back of the respondent and was not provided to assessees till the concluding stage of the proceeding. A request was made by the assessee vide letter dated 19.12.2007 and these statements were made available to the assessee on 25.12.2007 which happened to be a public holiday. The opportunity for cross examination was afforded to the respondent on 26.12.2007 and assessee was directed to be present at the office of the Director of Investigation at Scindia House, Ballard Estate, Bombay. Despite all inconveniences caused due to constraints of time, the respondent along with his Authorized Representatives were present but the department failed to produce their witnesses. Another opportunity was given on 31.12.2007 at the same premises and yet again the department failed to produce the witnesses. Thereafter an e-mail was sent to the concern Assessing Officer requesting him not to rely on these ex-parte statements while framing the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 held that the statement recorded had no evidentiary value until it has some corroborative material/evidence. The relevant extract of the same is reproduced as under: Going by the verdict of the High Courts and the position reaffirmed by the CBDT through its circular, it becomes abundantly clear that no addition can be made or sustained simply on the basis of statement recorded at the time of survey/search. In order to make an addition on the basis of surrender during search or survey, it is sine qua non that there should be some other material to correlate the undisclosed income with such statement. Adverting to the facts of the instant case, only to the extent of ₹ 21.14 lakhs there is a material to co-relate with the admission, representing the excess stock found at the time of survey. Evidently the surrender made by the assessee at the time of survey to that extent and offered for taxation in the return of income is in order. But insofar as the amount in dispute to the tune of ₹ 28. 85 lakhs is concerned, such surrender was specifically made towards any other discrepancy . There is no mention in the assessment order of any such discrepancy found as a result o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which is also one among the two brokers through which the assessee had allegedly dealt with. Assessee had also filed an affidavit whereby Shri Mukesh Choksi had, against the earlier statements given by him, confirmed the transactions. It is also seen that the assessee was not given a chance to examine Shri Mukesh Choksi despite request. Hon'ble Supreme Court has in the case of Mehta Parikh Vs. CIT (30 ITR 181) laid down the law that where a person who has given an affidavit was not cross examined, it would not be open to challenge the correctness of the statements therein. Here, Shri Mukesh Choksi was not allowed to be cross examined despite assessee's request nor was he cross examined by the A.O. vis- a-vis the affidavit. Therefore, in our opinion, the A.O. could not have brushed aside such affidavit. Hence no mistake can be seen in the order of the Ld CIT(A) in following the decision of this Tribunal in the case of Mukesh R Marolia(supra). 16.6. in the case before us, the transactions in question routed through authorized channel, carried out at prevalent market rates and supported by proper bills and documents. The assessee has discharged the onus cast upon him by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention that he has not purchased shares for the Peety Family has not been disputed by the assessee. DPS Shares and Securities confirmed that they have done genuine sales of scrips of Fast Track, Prannet Industries on behalf of Peety Family. The Assessing Officer himself has accepted that the brokers have confirmed that the sale of the impugned shares were undertaken by them but has gone on to draw a conclusion that since there were no purchases, the sale of the shares made through them were not genuine. Any document has to be taken as a whole and the Assessing Officer should not pick and choose those parts of the statements which suits him and totally reject those parts of the same statements which are in support of the assessee. Therefore, either the Assessing Officer should not rely on the statements at all or if he uses these statements as evidence against the assessee then he should read it as a whole and also accept those parts of the statements which support the assessee. One of the most significant evidence which has been conveniently ignored in the assessment order relates to transaction with Trimiti Investment from whom bulk of shares pertaining to G Tech Info, Highla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares is physical format from T.H.Vakil, Vijay Bhagwandas, DPS for Peety family. It was found that all these purchase bills issued by the brokers were bogus, this was also communicated to you on 28.11.07. These brokers of Bombay admitted that these Bills are backdated i.e. these had been prepared just before the sale of these shares through D-mat? As you were sub-broker had arranged these shares for Peety family from these brokers. Hence why it shall not be presumed that the bills issued by your concern Trimiti Inv. Fin. Services Pvt. Ltd., cannot be treated as back dated bogus. A. Our concern has not issued bogus bills. 16.9. The extract of the above statement shows that the transactions with Trimiti Investment were not bogus. Therefore, any documents with this concern should not be suspected unless there is anything otherwise on record. Moreover, during the course of assessment proceeding, the statement of Shri Sourin Mehta was before the Assessing Officer which was accepted as no adverse inference has been drawn with regard to this transaction in the assessment order. As stated above M/s.Trimiti Investments through whom majority of transactions of purchases were effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share issuing company as the assessee had not purchased shares directly from the company and that the alleged denial by the shares issuing company about the transfer of the shares is better known to them and not to the assessee. As far as the assessee is concerned, the transaction of purchase and sale of 20,000 shares through the registered broker is proved by documentary evidence filed on record. The payments of sale proceeds of 20,000 shares were received by the assessee by account payee cheques. It was found that the transaction has been entered into through a registered broker at prevalent market price and was supported by documentary evidence. The transaction of sale and purchase of shares had been confirmed by the share broker both in his statement recorded u/s.131 of the Act and also by an affidavit filed before the Assessing Officer. In these facts, the Tribunal held that no case of addition u/s.68 of the Act is made by Revenue against the assessee and the fact of purchase and sale is proved by documentary evidence filed before Assessing Officer. 16.11. In case of Shri Acchyalal Shaw ITA No.1977/KoI/2008, the ITAT Kolkata Bench has held as under: In our considered o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m which the Assessing Officer has inferred the conclusion against the assessee. Hon'ble Supreme Court In Dhakeshwari Cotton Mills Ltd. Vs. CIT (1954) 261TR 775 (SC), has held that the Income Tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence and material at all. There must be something more than suspicion to support the assessment. It was held that a suspicion however strong may not take the place of proof. Therefore the assessment made by the Assessing Officer which is predominantly influenced by uncorroborated evidence deserves to be set aside. In case before us as against the evidence and material available with the assessee to prove the transactions of Long Term Capital Gain, the Assessing Officer tried to analyze the transactions of only two scrips namely Fast Track Entertainment (paras 13 to 24 of the assessment order) and Prannet Industries (paras 26 to 28) and concluded that the transactions of all scrips of all the assessees and for all the years were not genuine which is not justified. 18. A search assessment u/s. I53A should be evidence based. A search is authorized to unearth undisclosed assets or transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of this amount which was not disclosed in his books of accounts; during search in assessee's premises and in the subsequent proceedings as well, no such undisclosed receipts have been found. Thus, applicability of Section 69A becomes null and void, ab-initio. This also implies that assessee's claim with regard to capital gain in each year remains unaltered as per the computation filed along with the return. 18.2. Moreover, the computation of income filed by the assessee in the original return as well as in the returns filed u/s 153A shows that the day trading profit has been included in the total taxable income for the relevant year. The same has been accepted by the AO while making his own computation in the impugned orders. This clearly establishes the source of investment in purchases of the relevant year as claimed by the assessee whereas in the discussions on the issue of capital gain the AO has expressed his reservation about the original date of purchase and has doubted these very transactions which are financed through day trading profit only, as stated above day trading profits are declared in each year when the same accrued to the assessee. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in placing part reliance on the same and adopting pick and choose policy to make additions of the amount of sale proceeds realized on account of transaction in shares leading to capital gains in the absence of cogent material in support of undertaking such an exercise. Where the share dealing profit were held as genuine by the Assessing Officer, he should have also accepted the capital gains reflected in the very same books of accounts. While arriving at an adverse conclusion against the assessee, the Assessing Officer seems to be deliberately relied only on those evidences and enquiry results which were against the assessee while diluting the significance of other evidences which were in favour of the assessee. 18.3. It is settled legal position that seized material has to be read and accepted as a whole and it is not permissible to pick and choose or make further estimate therefrom unless and until there is cogent evidence in support of undertaking such an exercise. The settled principle is that documents found in search should be treated as genuine with respect to all entries recorded therein. The Revenue is not justified in taking a view that only part of the contents i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been shown for all the years in their respective Income Tax Returns and appropriates taxes were paid on the same. The charging section 69A provides for addition of only unrecorded income and wealth and when no explanation is given by the appellant or the explanation given by assessee is not up to the satisfaction of the Assessing Officer regarding its nature and source of acquisition. The assessee has recorded the sale proceeds and purchase consideration in their books of accounts and very well explained its nature and source of acquisition. Assessee group have sold the shares through registered brokers who are known and identifiable income tax payee, received money from them through appropriate banking channels which are duly confirmed by them. Such additions made by treating the sale proceeds of shares as unexplained income and not recorded in books of accounts and adding it u/s. 69A of the Act is not justified. 18.6. The Hon'ble MP High Court in the case of Man Mohan Sadani Vs. CIT (2008) 304 ITR 52 (MP) has held that the entire sale proceeds cannot be regarded as profit or treated as undisclosed income of the assessee. On the contrary, it is the net profit rate which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable to the assesses of the group as under: a) The appellants in this group are individuals comprising also of the lady members of the family and Hindu Undivided Families of various members. b) None of the family members are dealers in shares. c) The activity is not in the usual line of business of the group. d) The investment was made out of their respective capital accounts. e) The investments were made by them as ordinary investors. f) In all cases delivery of shares were taken and transactions were not speculative in nature. g) The holdings had continued for a fairly long time. h) In the books and returns filed, the shares were shown as investment and not as stock in trade which was accepted by the department for a long period of time. Since the amounts received were realization of capital, it was clearly a capital receipt. i) There was no concept of venture or organized trade attached with the activity. There was no organization associated with trade. A business requires greater activity and a greater organization which were conspicuously absent in these cases. j) There is no element of adventure or trade in the shares transaction. k) Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suggest that the motive was to sell the shares and earn some quick profit. Therefore, the transactions were not an adventure in the nature of trade and the profit arising from sale of the shares was not assessable as income from business. 19.4. In this background, it is clear that the Assessing Officer was not able to establish that the assessees were engaged in adventure in the nature of trade. The CIT(A) while rejecting the propositions made by the Assessing Officer, to treat the share transactions as an adventure in the nature of trade has stated in para 19.3 of his order as under (pages 85 86): I would reiterate that the AO, in the instant case, was unduly governed by his, wish to bring the entire sale receipts of shares under the maximum rate of tax. In the process he has ignored the fact that the Income Tax Act lays down specific laws/method to compute different heads of income with varying tax slabs/rates. Once the AO decided to approach the issue with this mind set he started looking for various methods to achieve this purpose. Originally in the assessment he taxed the entire receipts as unexplained receipts u/s. 69A which is legally not tenable. Thereafter, he ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CIT Vs. Smt.Jamnadevi Agrawal reported in (2010) 328 ITR 656 (Bom.), has held as under: The assessee purchased 30,000 shares on April 8, 1999 and sold them on July 7, 14, 21, 2000. The assessee offered long- term capital gains on sale of shares which was accepted by the Assessing Officer in the respective assessments. Subsequently, there was a search action in the case of various assessees belonging to a group and the group offered additional income of ₹ 2 crores, out of which ₹ 3 lakhs were offered in the hands of the assessee for the assessment year 2004-05 and ₹ 7 lakhs in the assessment year 2005-06. The Assessing Officer on the basis of the seized material issued notice under section 153A of the Income Tax Act, 1961, for assessment year 2001- 02 and subsequently passed an assessment order under section 153A read with section 143(3) computing the total income disallowing the long-term capital gain and adding the entire sale proceeds received on sale of shares amounting to ₹ 10,14,324 as income from undisclosed sources under section 68 of the Act. The Commissioner(Appeals) held that section 68 of the Act was not applicable to the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imself is not involved in that type of transaction, if purchased the share from that broker innocently and bonafidely and if he show his bonafide in transaction by showing relevant material, facts and circumstances and documents, then merely on the basis of the reason that share broker was involved in dealing in the share of a particular company in collusion with others or in the manner of unfair trade practices against the norms of S.E.B.I. and Stock Exchange, then merely because of that fact a person who bonafidely entered into share transaction of that company through such broker then only by mere assumption such transactions cannot be held to be a sham transaction. Fact of tinted broker may be relevant for suspicion but it alone necessarily does lead to conclusion of all transaction of that broker as tinted. In such circumstances, further enquiry is needed and that is for individual case. Such further enquiry was not conducted in that case. 11. At this junction, it would be relevant to mention here that it is not disputed by the Revenue before us that the shares of these assessees were already shown in the earlier Balance Sheet submitted by the assessees, and therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... htly accepted the cost of purchase/acquisition of shares as stated by the assessee. The same is upheld. 19.5.3. We find the Mumbai Bench of the Tribunal in the case of Shri Jafferali K Rattonsey Vs. DCIT reported in 2012-TIOL-236- ITAT-MUM, has held as under: 9. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. In the instant case the A.O. made addition of ₹ 5,09,25,802/- as unexplained cash credit holding the sale of shares by the assessee as bogus. While doing so he relied heavily on the statement given by Mr. Mukesh Choksi wherein he has stated that the transactions of purchase of shares are not carried out through them and the name of his company has been wrongly used and no transaction mentioned in the ledger has been carried out through them. The A.O. had also another proposition that the total purchase price on the date of dematerialisation comes to ₹ 44110775/- which becomes unexplained investment in shares. After deducting the investment in shares from sale price the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and denied to have made any transaction with the assessee on account of purchase of shares. The relevant questions and answers of Mr. Mukesh Choksi recorded by the A.O. on 24.12.2008, copy of which is placed at paper book page No. 19 to 23 are as under. Q No. 7:- Do you know Shri Jafferali K. Rattonsey and Smt. Hamida Rattonsey? Ans. No. I do not know them. Q No. 8:- I am showing you the ledger account of Mahasagar Securities Pvt. Ltd. in the books of Shri J.K. Rattonsey and Smt. Hamida J. Rattonsey. From this account it is seen that the assessee have carried out regular transaction with Mahasagar Securities Pvt. Ltd. Pl. confirm the ledger account furnished by the assessee with the copy of ledger account of J.K. Rattonsey and Smt. Hamida J. Rattonsey appearing in the books of Mahasagar Securities Pvt. Ltd. Ans.: I have seen the ledger and on the perusal of the same I found that the transactions are not carried out through us. It seems that our name has been used and no transaction mentioned in the ledger have been carried out through us. Mahasagar Securities have no relations with the J.K. Rattonsey and Smt. Hamida J. Rattonsey. 9.3. On the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present they are not available with me, I will furnish the same after receipt of the same. 9.5 From the above, it is clear that Mr. Mukesh Choksi is double speaking in his statements i.e. one given before the A.O. and the one during cross examination before the A.O. Under these circumstances one has to see the evidentiary value of a person making double speaking. We find the Hon'ble Calcutta High Court in the case of Eastern Commercial Enterprises (supra) has held that a man indulging in double speaking cannot be said by any means a truthful man at any stage and no Court can decide on which occasion he was truthful. We find the co-ordinate bench of the Tribunal in the case of Mrs. Uttara S. Shorewala (supra) (in which one of us - the Accountant Member is a party) following the decision of Hon'ble Calcutta High Court upheld the order of the ld. CIT(A) in holding that the A.O. cannot make any addition in the assessee's hands despite the assessee not having made any payment to the entities mentioned by Shri Choksi, whose statement is being relied upon by him. The CIT (A) also noted that Mr.Mukesh Choksi has been vacillating right through and has given different versi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is allowed. 19.5.4. We find the Mumbai Bench of the Tribunal in the case of ITO Vs. Mrs.Rasila N Gada Ors., in the consolidated order dated 8th August, 2012, has held as under: 5.1. After perusing the material available we are of the opinion that considering the facts and circumstances of the case, the order passed by the FAA does not suffer from any legal infirmity. Hon'ble Bombay High Court in the case of Sharada Credit and Mukesh R Marolia has upheld the orders of the ITAT, Mumbai. In those cases it has been held that shares purchased/sold in the off market cannot be considered illegal transactions. We find that the AO had not afforded opportunity of cross-examination of Shri Mukesh Choksi to the assessee. It is noteworthy that Sh. Choksi had not named the assessee in his statements as the beneficiary who had availed bogus entries. We have noticed that the assessee had shown the investment in shares in the balancesheet of the earlier assessment year and her return of income was accepted by the Department. We are of the opinion that once sales/purchase of shares is accompanied by this kind of evidences the genuineness of the said transactions cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration. Respectfully following the orders of the Hon'ble High Court and the coordinating benches of the Tribunal we hold that purchase and sale of shares by the assessee was a genuine transaction, and hence, addition made by the AO cannot be endorsed. Upholding the orders of the FAA, we dismiss the appeals filed by the AO. 19.5.5. We find the Nagpur Bench of the ITAT in the case of ACIT Vs. Kamal Kumar S.Agrawal Ors., reported in 133 TTJ 818, has held as under: The assessee earned capital gains during the period covered by s.153A proceedings. It is also noted that all such transactions have been taken into consideration while filing the returns for these years in the normal course and the Department has also accepted the nature of such transactions. It is very important to note that no incriminating material has been found during the course of search which could have cast doubt on the genuineness of the transactions or could have indicated that it was a case of assessee's own undisclosed money utilized in the execution of such transactions. Voluminous documentary evidences have been filed by the assessee to prove its claim which support the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be out of place to mention that stock market operations are subject to different regulations and the interest of general public is protected by prohibiting the market intermediaries from indulging in unfair trade practices. The order of the SEBI relied on by the Revenue is mainly on the aspect of price rigging in such manner. Hence, the same cannot be of any assistance to the cause of the Revenue. Thus, on the basis of appreciation of facts and circumstances of the case as a whole and considering the documentary evidences on record, the share transactions cannot be considered as ingenuine/sham and, therefore, the sale proceeds of such share transactions cannot be taxed under s.68. As regards the plea of the Revenue regarding treatment of share transactions as an adventure in the nature of trade taken during the course of appellate proceedings for the first time, in the course of assessment proceedings, the AO has taken a definite stand of such transactions being bogus or sham. Hence, such plea has rightly been rejected by the CIT(A) after examining the scope of the powers of the CIT(A) as well as role of the AO in the scheme of Act. Under the scheme of the Act, incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Shah for price rigging of shares, who was suspended by SEBI. (ix) Broker's husband is a relative of the family. (x) Absence of relevant entries in the records of Calcutta Stock Exchange. (xi) It was held that since the assessee received sale consideration and the same is against the sale of shares, addition cannot be made u/ s. 68 of the I. T. Act. It was further held that from the date of transfer of shares in the demat account of the assessee and its sale, period of holding is to be counted. The plea taken by the assessee that the assessee has purchased the shares off market was not accepted at this stage. Accordingly, the facts of this case are entirely different from the facts of the instant case. The various other decisions relied on by the Ld. Departmental Representative as well as the Assessing Officer also do not apply to the facts of the present case. 19.6. Considering the totality of the facts of the case and relying on various decisions cited supra and considering the elaborate discussion by the Ld. CIT(A) we find no infirmity in his order accepting the Long Term Capital Gains and Short Term Capital Gains declared by the assessee. Accordingly, the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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