TMI Blog2011 (7) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... s a bona fide belief to record the reasons. The court cannot look into the sufficiency of the material held by the Assessing Officer for the formation of the belief. Once the proceedings are initiated, the onus is on the Assessing Officer to prove that the assessee has escaped the income and for that he has to give the hearing to the assessee and give all the material and evidence collected by him so that the assessee may contradict the same. If the Assessing Officer does not have the material, the reasons cannot be regarded to be bona fide and the initiation of the proceedings can be quashed. If the initiation is valid and subsequently, the assessee proves that there is no escapement of income, the assessment so framed could be quashed/cancelled. We noted that in the decisions relied on by the learned AR, the decision of the Hon ble Supreme Court, which has settled the position of law has not been discussed. The law pronounced by the Supreme Court is the law of land and is binding on all the courts what to talk of this Bench of the Tribunal. We, therefore, set aside the order of the CIT(A) on this issue as, in our opinion, the Assessing Officer has bona fide reason to believe t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .), Agra vide his letter dated 20.03.2008 through Addl. CIT, Range-4, Agra s letter F.No. Addl. CIT/R-4/Agra/R- 4/Agra/Accommodation Entries /2007-08 dated 24.03.2008, that the assessee has obtained accommodation entries and received an amount of ₹ 8,39,212/- on F.Y. 2000-2001 through cheque No./Other No. 121983/111 by arranging/obtaining unreliable document etc. in the form of share application money/capital gains/gifts etc. during the F.Y. 2000-01 from Aayyushi Stock Broker Pvt. Ltd. Sanjay Place, Agra and the same is deposited in her bank account of ANZ Grindlays Bank. On the basis of information received from Addl. DIT(Inv.), Agra vide his letter dated 20.03.2008, I have reason to believe that the income earned as unexplained entry for ₹ 8,39,212/- has escaped assessment and liable to be taxed in F.Y. 2000-2001 relevant to A.Y. 2001-2002. 3. In this case, the original return was filed by the assessee on 30.07.2001 which was processed u/s. 143(1). The assessee did not file any return in response to notice issued u/s. 148. The Assessing Officer issued the statutory notice u/s. 142(1) alongwith the questionnaire dated 28.11.2008. Summons u/s. 131 were also is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be vague information. The assessee did not dispute that amount received from these parties and deposited in the bank account belonging to the assessee. The reasons so recorded have rational connection to the formation of the belief. There is no allegation that the information contained in the reasons to believe does not belong to the assessee. The Assessing Officer has initiated the proceedings after verifying the facts and after receiving the specific information from Investigation Wing which is a valid piece of evidence for initiating proceedings u/s. 147. The reasons thus recorded cannot be said to invalid. Sufficiency of reasons cannot be looked into by the Court. The satisfaction was a bonafide satisfaction and has been exercised in a bonafide manner relating to a prudent person. The information received from the Investigation Wing is sufficient for invoking the proceedings u/s. 147 of the Act. It is not the case of the change of opinion. No earlier assessment has been in the case of the assessee even though the return was filed by the assessee on 30.07.2001. Reliance was placed in this regard on the following case laws : (i). ITO vs. Purshottam Das Bangur Another, 224 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not on what basis the Assessing Officer held so. There is no material referred in the reasons recorded for holding such a view. Thus, the reasons recorded are based on suspicion and surmises. The assessee s request to summon the brokers remained unattended by the Assessing Officer. In this regard reliance was placed on the following decisions : (i). United Electrical Company (P) Ltd. vs. CIT, 258 ITR 317 (Del.) (ii). CIT vs. Pradeep Kumar Gupta, 303 ITR 95 (Del.) (iii). CIT vs. Gulati Industrial Fabrication (P) Ltd., 217 CTR (Del.) 494. 6. It was also contended that from the reasons recorded one can say that the Assessing Officer has not applied his mind. He had borrowed satisfaction. Reliance was placed in this regard on the following cases : (i). Arjun Singh vs. Director of Income Tax, 246 ITR 363 (MP) (ii). Mrs. Vineeta Jain vs. ITO 158 Taxman 167 (Del)(Mag.) (iii). CIT Vs. Atul Jain 299 ITR 383 (Del.). 7. It was pointed out that on the basis of the report of the Investigation Wing, the Hon ble Bench at Agra quashed the re-assessment proceedings in the following cases : (i). Pradeep Kumar gupta vs. ITO (ii). Smt. Jaya Bhatia vs. ITO (iii). Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48. We have gone through the provisions of section 147. This section gives jurisdiction to the Assessing Officer to assess or re-assess the income of the assessee. This section states as under : 147. If the AO has reason to believe that any income chargeable to tax has escaped assessment for any A.Y., he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the a.y. concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Provided that where an assessment under subsection (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieve would mean cause or justification. If the assessing officer has a cause or justification to think or suppose that income had escaped assessment, it can be said to have a reason to have a reason to believe that such income had escaped assessment. The words reason to believe cannot mean that the AO should have finally ascertained the facts by legal evidence. It only means that the AO forms a belief from the examination he makes and information that he receives. If he discovers or finds or satisfies prima-facie himself that the taxable income has escaped assessment, it would amount to saying that he has reason to believe that such income had escaped assessment. The justification for his belief is not to be judged from the standards of proof required for coming to a final decision whether the income has escaped assessment or not. His formation of the belief is not a judicial decision, but an administrative decision. The decision to initiate the proceedings is not to be preceded by any judicial or quasi-judicial enquiry. AT this stage, he is not required to give hearing to the assessee or to provide the material or information in his possession to the assessee for his rebuttal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be reopened u/s. 147 and only one condition has to be satisfied as stated in the main provision of section 147. Since the return was processed u/s. 143(1) even though the assessee has shown capital gains earned on the sale of shares, but the Assessing Officer has not examined the nature of income. Therefore, it cannot be said that the Assessing Officer has duly accepted the profits shown by the assessee on the sale of shares. The transaction entered into by the assessee for sale of shares were not accepted by the Assessing Officer as he has not formed any view on these transactions. The Assessing Officer reopened the assessment on the basis the reasons as reproduced hereinabove. It is apparent that the reasons to believe are based on the information available with AO that M/s. Ayushi Stock Brokers (P) Ltd., Agra provided accommodation entries to the assessee. The assessee has received an amount of ₹ 8,39,212/- M/s. Aayushi Stock Brokers (P) Ltd. and deposited the same amount in his bank account with ANZ Grindlays Bank. On the basis of this information, he was having reason to believe that the income of ₹ 8,39,212/- escaped the assessment. It is not denied that the inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not merely be a pretence. This was so held in the case of S. Narayanappa and Brothers vs. CIT, 63 ITR 219. The Supreme Court has also settled the law in the case of Raymond Woollen Mills Ltd. vs. ITO 236 ITR 34 that in determining whether commencement of the re-assessment was valid, it is only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. The decision of Allahabad High Court in the case of Tin Manufacturing Co.(supra), in our opinion, will also not assist the assessee, rather it will support the case of the Revenue. In this case, the Central Excise Authorities conducted a search against the assessee and when the information was given to the Income-tax Authorities, notices for re-assessment were issued. The assessee went before the CIT(A) for setting aside the reassessment proceedings, which was rejected. The assessee then filed a writ petition, which was dismissed holding that in the re-assessment proceedings, the burden was on the Revenue to establish that there was income which has escaped assessment. For the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill also not help the assessee, as in the case before us, the Assessing Officer was having the prima facie material to have the reasons to believe. The decision of Apex Court in the case of Johri Lal (HUF) vs. CIT (supra), Sheo Nath Singh vs. AAC (supra) and and Ganga Saran Sons (P) Ltd. vs. ITO (supra) also, in our opinion, will not assist the assessee as in the case of the assessee, the Assessing Officer while recording the reasons has the relevant material to form the belief from which a person of ordinary prudence could form as held by us in earlier paragraph. In the case of State Bank of Saurashtra vs. ITO (supra), we noted that the Tribunal has held that the ITO has to record the reasons and not merely states the word information . In that case, the reasons recorded state as under : I have information in my possession that the assessee company has not disclosed full particulars regarding writing off bad debts and hence, there is an under assessment. I, therefore, consider this case as a fit one to reopen u/s. 47(b). 13. In this case, the Tribunal held the assessment not to be justified, as the Assessing Officer has not referred to the income, which is going to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee as in the case of the assessee, the reasons nowhere speaks of borrowed satisfaction on the part of the Assessing Officer. The decision of Mrs. Vineeta Jain vs. ITO (supra), Delhi Bench of ITAT is also not applicable as in that case, the Assessing Officer mentioned that the DDIT believed that the transaction of capital gain is bogus. That is not the case of the assessee. Even the tribunal has not considered the decision of Hon ble Supreme court in the case of Purshottam Dass Bangur another 224 ITR 362 (SC). The cases, as have been relied by the ld. AR which relate to Agra Bench must have been decided on there own facts. The copy of those orders, of appeal Numbers were not provided by the ld. AR so as to ascertain how the reasons have been recorded by the Assessing Officer. It is also not clear whether the notice issued was quashed or proceedings were quashed, whether the reasons to believe were held to be bonafide or not, whether the original assessment in those cases was completed u/s. 143(3) or not. Under these facts, these decisions, in our opinion, cannot be relevant in the case of the assessee. The assessment framed in response to proceedings u/s 147 can be quashed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has discussed various decisions on this issue as under : The questions that emerge for consideration are whether there has been application of mind or change of opinion, whether the objections have been properly dealt with and whether there is a mere suspicion or reason to believe. Regard being had to the aforesaid issues, we think it appropriate to refer to certain citations in the field. In Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC), while dealing with the validity of commencement of reassessment proceedings under section 147 of the Act, the apex court has held that there is prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at that stage. The High Court of Gujarat in Praful Chunilal Patel v. M. J. Makwana, Asst. CIT [1999] 236l1R 832 has opined that in terms of the provision contained in section 147, the Assessing Officer should have reason to believe that any income chargeable to tax has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has a cause or justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lyexamine whether the reasons are relevant and 'have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under section 147(a). It there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Income-tax Officer could not have reason to believe that any part of the income of the assessee had escaped assessment and such escapement was by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts and the notice issued by him would be liable to be struck down as invalid. In Birla VXL Ltd. vs. Asst. CIT (1996) 217 ITR 1, a Division Bench of the Gujarat High Court has opined thus (page 3) : Explanation 2 to section 147 of the Act, as appended to the newly substituted section 147 makes certain provisions, where, in certain circumstances, the income is deemed to have escaped assessment giving jurisdiction to the Assessing Officer to act under the said provision. Another requirement which is necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assumption of jurisdiction under section 148 of the Act. In Phool Chand Bajrang Lal v. ITO [1993J 203 I1R 456, the apex court has held thus (page 477) : From a combined review of the judgments of this court, it follows that an Income-tax Officer acquires jurisdiction to reopen an assessment under section 147(a) read with section 148 of the Income-tax Act, 1961, only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons, which he must record, to believe that, by reason of omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profits or gains chargeable to income-tax has escaped assessment. He may start reassessment proceedings either because some fresh facts had come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no material before the Income-tax Officer to believe that the income had escaped assessment. (emphasis added) In H. A. Nanji and Co. v. ITO [1979] 120 ITR 593 (Cal), it has been held that at the time of issue of notice of the reassessment, it is not incumbent on the Income-tax Officer to come to a finding that income has escaped assessment by reason of the omission or failure of the assessee to disclose fully and truly all material facts necessary for assessment. It has been further held that the belief which the Income-tax Officer entertains at that stage is a tentative belief on the basis of the materials before him which have to be examined and scrutinised on such evidence as may be available in the proceedings for reassessment. The Division Bench held that there must be some grounds for the reasonable belief that there has been a nondisclosure or omission to file a true or correct return by the assessee resulting in escapement of assessment or in underassessment. Such belief must be in good faith, and should not be a mere pretence or change of opinion on inferential facts or facts extraneous or irrelevant to the issue and the material on which the belief is based mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 500 (SC), it has been ruled out(page 511) : Section 147 authorises and permits the Assessing Officer to assess or, reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained- the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 662, for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation and the second and the third part of the beginning paragraph of the socalled reasons are mere directions. From the so-called reasons, it is not at all discernible as to whether the Assessing Officer had applied his mind to the information and independently arrived at a belief that, on the basis of the material which he had before him, income had escaped assessment. Consequently, we find that the Tribunal has arrived at the correction on facts. The law is well settled. There is no substantial question of law which arises for our consideration.(emphasis is ours) At this juncture, it is profitable to refer to the authority in GKN Drive shafts (India) Ltd. v. ITO [2003} 259 ITR 19 (SC) ; [2003] 179 ITR 11 (SC) wherein their Lordships of the apex court have held thus (page 20) ; We see no justifiable reason to interfere with the order under challenge. However we clarify that when a notice under section 14 of the Income-tax Act is issued, the proper course of action for the noticee is to file a return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be appropriate to require the assessee to go through the entire gamut of proceedings. It is totally unwarranted. The present factual canvas has to be scrutinized on the touchstone of the aforesaid enunciation of law. It is worth noting that the learned counsel for the petitioner has submitted with immense vehemence that the petitioner had entered into correspondence to have the documents but the Assessing Officer treated them as objections and made a communication. However, Officer treated them as objections and made a communication. However, on a scrutiny of the order, it is perceivable that the authority has passed the order dealing with the objections in a very careful and studied manner. He has taken note of the fact that the transactions involving ₹ 27lakhs mentioned in the table in annexure P-2 constitute fresh information in respect of the assessee as a beneficiary of bogus accommodation entries provided to it and represents the undisclosed income. The Assessing Officer has referred to the subsequent information and adverted to the concept of true and full disclosure of facts. It is also noticeable that there was specific information received from the office of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961, is that the belief of the Income-tax Officer must be that of an honest and reasonable person based upon reasonable grounds and not on mere suspicion, gossip or rumours. The assessee had purchased some shares in a company during the financial year 1999 and shown the purchase in its returns. During the assessment year 2001-02, the shares were sold. The assessee claimed that the profits made were long-term capital gains assessable at the specified rate of 10 per cent. The Income-tax Department revealed that the transactions were not genuine. A notice was issued under section 148. On a writ petition against the notice : Held, dismissing the petition, that the belief of the Assessing Officer was an honest and reasonable belief on the material which he had received from the Investigation Wing of the Department. Important material had come before the income tax authorities to show that the petitioner was suppressing his income by indulging in bogus transactions. The notice under section 148 was valid. 16. In the case of ITO vs. Purushottam Das Bangur and Another, 224 ITR 362 (SC) as relied heavily by ld. DR , we noted that the apex court held as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely in the form of bank drafts purchased in smaller towns of the country by four sikkim companies floated by the Dalmia group was received in the office of the assessee and further, in search and seizure operations conducted on March 15, 1990, certain cash and jewellery was found but it was not seized whereas books of account and other documents were seized. A perusal of the record showed that before issue of the impugned notice, the Assessing Officer had obtained a copy of the appraisal report and had perused the same. The sufficiency of the material could not be gone into by the High court in exercise of writ jurisdiction. The letter and the appraisal report constituted relevant material for the formation of belief that the assessee s income had escaped assessment. The notice for reassessment was valid. 18. We noted that the apex court in the case of ITO vs. Purushottam Das Bangur and Another, 224 ITR 362 (SC) has settled the law on this issue that at the time of initiation of the proceedings u/s. 147, the Assessing Officer should have the material relevant to the assessee. The information received from the Investigation Wing is also material if it contains the information r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the transaction of sales has not been accepted by the A.O. as he doubted the sale prices and also relied on the statement of Shri Ashok Gupta, Director of M/s. JRD Stock Brokers Pvt. Ltd. who stated that as a matter of fact there was no actual purchase and sale of shares as was reflected in the contract notes issued by M/s. JRD Stock Brokers Pvt. Ltd. to the beneficiaries. In that case the assessee claimed Long Term Capital Gain of ₹ 25,14,770/- and claimed exemption under section 54EA of the Act. The LTCG was shown on account of sale of shares through the brokers. The assessee submitted the copies of bills, share certificates, contract notes etc. during the course of assessment proceedings alongwith details of demand draft through which the sale proceeds has been received. It was also pointed out that the purchases were made through broking concern M/s. JRD Stock Brokers Pvt. Ltd. The A.O. noticed that the shares were purchased @ ₹ 4/- per share and sold @ ₹ 65/- to ₹ 84/- per share. The A.O. was of the view that the transactions were not genuine and are only accommodation entries. The broker pointed out that he was engaged in giving bogus entries for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to give reasons for rejecting them. These are important documents, some of them arise under the provisions of the Companies Act. The brokers were never confronted with the evidences produced by the assessee. The apparent has to be treated as a real unless proved otherwise. Long ago Hon ble Supreme Court has laid this law while rendering the celebrated decision in the case of CIT Vs. Daulat Ram Rawatmal (1964) 53 ITR 574 (SC). The assessee has countered the statements of brokers by way of his duly sworn-in affidavit. We have examined the entire evidences placed in the paper book of the assessee. (12) In the case of ITO vs. Smt. Kusumlata reported in (2006) 105 TTJ (Jd.) 265, copy placed at page no.4 of assessee s Paper Book (judgements relied), the Hon ble Jodhpur Bench has held as under :- For making addition under section 69, the Department is required to prove to the hilt that the impugned transactions are bogus. The burden cast on the Department is very high which is required to be discharged conclusively in this case; there is no such evidence. The assessee has purchased shares from MS. These purchases are evidenced from the contract note. The payment was made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctly come to the conclusion that the assessee has dealt in these shares and these transactions cannot be held bogus. The deletion of addition of ₹ 4,99,062/- is confirmed. (13) The above decision clearly helps the case of the assessee. (14) Credence cannot be given to the statements of the persons who themselves admit and have dubious dealings as against the documentary evidences produced by the assessee. (15) Moreover, when purchases have not been doubted or disputed by the Revenue in this case, the decision of Hon ble Punjab Haryana Court relied by learned A.R. in the case of CIT vs. Anupam Kapoor reported in (2008) 299 ITR 179 (P H) is very much relevant. The held portion of this decision is extracted herein below :- Held, dismissing the appeals, that there was no material before the Assessing Officer which could have led to a conclusion that the transaction was a device to camouflage activities to defraud the Revenue. No such presumption could be drawn by the Assessing Officer merely on surmises and conjectures. The Tribunal took into consideration that it was only on the basis of a presumption that the Assessing Officer concluded that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok Kumar Lavania also the assessee has purchased the share @ ₹ 4/- per share and sold @ ₹ 65/- to 84/- per share. In that case also the A.O. has not accepted the transaction but on the basis of the evidence the Tribunal has accepted the transaction to be genuine one as there was no corroborative evidence to support the statement of the broker. In this case, I noted that the statement of the broker was not recorded. The transaction was treated as non genuine as the assessee could not produce the broker. It is on record in the order of the CIT(A) that the inspector was able to locate the broker at his address at Ghaziabad but he did not deny the transaction but rather stated to give the statement after having the consultation with his CA. The assessee has submitted the confirmation of the broker dated 15.01.2004 which was rejected as it was not on the stamp paper duly signed by the witnesses. The revenue also observed that the broker was avoiding the department. This in my opinion cannot be the ground to hold the transaction to be a non-genuine transaction. The assessee has given the address of the broker and proved the identity of the broker, even the bank account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o-ordinate Bench observed as under :- The assessee has no relation with the directors of the company and was in no way in the capacity to affect the market price of shares. The increase in share prices by more than 25 times too cannot be the basis to assume that the transaction was bogus. Abnormal fluctuation in share prices is a normal phenomena the learned counsel for the assessee filed a chart showing low and high prices of some quoted shares during the 52 weeks as per Economic Times dated 27.02.2007 from which it can be seen that some shares increased even by more than 100 times. 11. In almost similar circumstances the Hon ble Punjab Haryana High Court in the case of CIT Vs. Anupam Kapoor (299 ITR 179) has also observed as under :- The Tribunal was right in rejecting the appeal of the revenue by holding that the assessee was simply a shareholder of the company. He had made the investment in a company in which he was neither a director nor was he in control of the company. The assessee had taken shares from the market, the shares were listed and the transaction took place through a registered broker of the stock exchange. There was no material before the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at no. of persons have allegedly done such transactions during the same period. We are of the view that the ld. CIT(A) has not provided the details of such no. of persons and also have not linked transactions of such no. of persons to the transactions of the assessee from which it could be proved that the transactions carried out by the assessee are a sham transaction. The ld. CIT(A) has referred to the name of one person i.e. Shri Ashok Kumar Lavania whose appeal was pending before him, which does not prove the transaction of the assessee as bogus or sham transaction. As regards the next objection of the ld. CIT(A) that the assessee and his group has shown such capital gain in other years also. The ld. CIT(A) has not brought on record whether such capital gain were a sham transaction and have not approved any linkage with the transaction of the assessee which could further approve that the assessee s transactions were bogus and sham transactions. 13. This finding of the Tribunal is equally applicable to the case of the assessee and I cannot take any adverse view about the genuineness of the transaction on the basis that the broker M/s. Agarwal Co has deposited the cash in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lse 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 the Hon ble Supreme court in the case of Daulat Ram Rawatmull 87 ITR 349 (SC) that the apparent is real. Onus is on the person who alleges apparent is not real. None of the judicial precedent supports the case of the Revenue. While making addition as income from undisclosed sources burden on the department is very heavy to establish that the alleged receipt was actually income of the assessee from the undisclosed sources. Jodhpur Bench of the ITAT in the case of ITO Vs. Smt. Kusumlata (reported in 105 TTJ 265), copy of which is placed in the compilation of the assessee, held as under :- 10. For making addition under s.69 of the Act, the Department is required to prove to the hilt that the impugned transactions are bogus. The burden cast on the Department under s.69C (sic-69) of the Act is very high whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch on difference of opinion on the question under the similar circumstances whether the assessee can be said to have discharged her burden to prove the genuineness of the transaction in shares of M/s. Prasidh Exports Limited and M/s. K.L.P. Finance Limited or that the burden had shifted on the Revenue that can be held to have not discharged by them, the decision to uphold accepting of alleged profit on alleged share of M/s. Prasidh Exports Limited and M/s. K.L.P. Finance Limited as income from other sources instead of assessee has claimed the capital gain is a correct decision or not. The Hon ble Third Member has held as under :- In another order of the Tribunal in ITA No.881/Del/2004, dt. 28th May, 2004 in the case of Smt. Sunita Gupta which has been followed in Sanjay Kumar Bansal (supra) the Tribunal held likewise. It is therefore to be held that the statement of Shri Praveen Mittal the person on whose request the associates M/s Haseeja Gulati introduced Shri Maheshwari to Punjab National Bank on account No.8627 was not a person who could comment that 90 per cent of the transactions from the said bank account Punjab National Bank-8627 were bogus transactions. Shri Mittal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veen Mittal; the assessee did not furnish the address of the said company; the fact that the assessee could not adduce evidence in support of his claim of purchase of shares; that the assessee failed to adduce any evidence regarding transfer of shares in his name; and that the assessee has failed to even furnish the name and address of the person to whom the shares were sold. The only reason to make the addition is that confirmation from the share brokers could not be filed by the assessee and summons issued to the said persons were not served and returned unserved and the names and addresses of the buyer to whom the ultimately shares were sold through the broker were not known to the assessee. The assessee was not in a position to compel the share broker for confirming the transaction, she being neither a director nor having large scale dealings with the brokers over the years so as to show that she was personally in a position to compel them on account of the magnitude of transaction done through them. It was her father who knew the brokers and she acted on his advice and had no contact thereafter. The reasoning that summons issued to the parties came back unserved cannot by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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