TMI Blog2018 (4) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities of Kolkata. Assuming that the brokers may have done some manipulation but the assessee cannot be held liable for the Act of the brokers when the entire transactions have been done through banking channels duly recorded in the Demant accounts with a Government depository and traded on the stock exchange. The entire assessment is based upon the conclusion of the DDIT (Inv.) Kolkata and there is no application of mind by the A.O. Moreover, the A.O. had no access to the materials impounded by the Investigation Wing of Kolkata, the A.O. was simply carried away by the reports of the DDIT (Inv.), Kolkata without making any independent decision. There is also nothing on record which could suggest that the assessee gave cash and purchase cheque from the alleged brokers. The entire assessment is based on conjectures and surmises and therefore cannot stand on its own leg. - Decided against revenue - ITA. Nos: 93 to 99/RPR/2014 And C.O. Nos. 12 to 18/RPR/2014 - - - Dated:- 16-4-2018 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER For The Appellant : Smt. Sheetal Shashwat Verma For The Respondent : Shri R.B. Doshi, C.A. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, we, in the interest of natural justice and fair play, are of the view that the matter should go back to the file of the Ld. CIT(A) to decide the issue afresh after taking into consideration the enquiry report of the A.O. as directed by him vide its letter dated 25.03.2008 which might have been completed by the A.O by now and also the orders of the SEBI dated 29.09.2005. Therefore, the appeal of the revenue is allowed for statistical purposes. 5. After the restoration of the appeal, the ld. CIT(A) vide a letter no. 607 dated 19.08.2009 asked the ACIT 1(1), Raipur to submit a remand report in the light of the directions of the Tribunal. The relevant part of the letter read as under:- In this case, the Hon'ble ITAT, Bilaspur Bench, Bilaspur vide, their order in ITA No.456/Nag/2008 dated 26th June, 2009 has restored the matter back to the file of the undersigned decide the issue afresh after taking into consideration the enquiry report of the A.O. Earlier, vide this office letter F.No.CIT(A)/RPR/RR/07-08 dated 25.03.2008 (copy enclosed along with list containing details of LTCG claim, for ready reference), you were required to enquire specifically from the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his statement and the related enquiries, there is nothing on record to suggest that the brokers have given accommodation entries to the assessee. Nor there is any reference to the transactions done by the assessee. The A.O. has simply presumed that the assessee is also engaged in such bogus/sham transaction. 12. Direct and clinching evidences have been completely ignored by the A.O. All the shares purchased were routed through the Demat account with the depository stock holding corporation of India Ltd. The sale transactions are also found duly recorded in the Demat account with the depository. The Demat statements are exhibited at pages 70 to 72 of the paper book. Purchase contracts are exhibited from pages 54 to 57 of the paper book and the sale contracts are exhibited at pages 58 to 61 of the paper book. The purchase and sale of shares have been done through the banking channels. Copies of cheques are exhibited at pages 65 to 69 of the paper book. 13. There is not even a whisper about these direct evidences in the assessment order. 14. The SEBI vide order dated 31.05.2006 had terminated and vacated the ad interim order by which trading in the shares of Nageshwar Invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee cannot be held liable for the Act of the brokers when the entire transactions have been done through banking channels duly recorded in the Demant accounts with a Government depository and traded on the stock exchange. 19. The entire assessment is based upon the conclusion of the DDIT (Inv.) Kolkata and there is no application of mind by the A.O. Moreover, the A.O. had no access to the materials impounded by the Investigation Wing of Kolkata, the A.O. was simply carried away by the reports of the DDIT (Inv.), Kolkata without making any independent decision. 20. There is also nothing on record which could suggest that the assessee gave cash and purchase cheque from the alleged brokers. The entire assessment is based on conjectures and surmises and therefore cannot stand on its own leg. 21. We will now quote certain judicial decisions on similar facts:- 9. The case of the appellant is squarely covered by the decision in COMMISSIONER OF INCOME TAX vs. SMT. JAMNADEVI AGRAWAL ORS. HIGH COURT OF BOMBAY : NAGPUR BENCH dated 23rd September, 2010 reported in (2010) 236 CTR (Bom) 32 : (2010) 328 ITR 656 : (2010) 46 DTR 271wherein it was held that: The fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 12. The Hon'ble High Court of Rajasthan in CIT vs. Smt. Pushpa Malpani - reported in (2011) 242 CTR (Raj.) 559; (2011) 49 DTR 312 dismissed the appeal of department observing 'Whether or not there was sale of shares and receipt of consideration thereof on appreciated value is essentially a question of fact. CIT(A) and Tribunal have both given reasons in support of their findings and have found that at the time of transactions, the broker in question was not banned by SEBI and that assessee had produced copies of purchase bills, contract number share certificate, application for transfer of share certificate to demat account along with copies of holding statement in demat account, balance sheet as on 31st March, 2003, sale bill, bank account, demat account and official report and quotations, of Calcutta Stock Exchange Association Ltd. on 23rd July, 2003. Therefore, 'the prese/itdppeal does not raise any question of law, much less any substantial question of law. 22. The Hon ble High Court of Punjab and Haryana in the case of Anupam Kapoor 299 ITR 0179 has held as under:- Held The Tribunal on the basis of the material on record, held that purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire assessment is based upon the statement of Shri Mukesh Choksi. It is an undisputed fact that neither a copy of the statement was supplied to the assessee nor any opportunity of cross-examination was given by the Assessing Officer/CIT(A). The Hon ble Supreme Court in the case of Andaman Timber Industries in Civil Appeal No. 4228 of 2006 was seized with the following action of the Tribunal:- 6. The plea of no cross examination granted to the various dealers would not help the appellant case since the examination of the dealers would not bring out any material which would not be in the possession of the appellant themselves to explain as to why their ex factory prices remain static. Since we are not upholding and applying the ex factory prices, as we find them contravened and not normal price as envisaged under section 4(1), we find no reason to disturb the Commissioners orders. 15. The Hon ble Apex Court held as under:- According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show Cause We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal. 16. On the strength of the aforementioned decision of the Hon ble Supreme Court, the assessment order has to be quashed. 17. Even on facts of the case, the orders of the authorities below cannot be accepted. There is no denying that consideration was paid when the shares were purchased. The shares were thereafter sent to the company for the transfer of name. The company transferred the shares in the name of the assessee. There is nothing on record which could suggest that the shares were never transferred in the name of the assessee. There is also nothing on record to suggest that the shares were never with the assessee. On the contrary, the shares were thereafter transferred to demat account. The demat account was in the name of the assessee, from where the shares were sold. In our understanding of the facts, if the shares were of some fictitious company which was not listed in the Bombay Stock Exchange/National Stock Exchang ..... X X X X Extracts X X X X X X X X Extracts X X X X
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