TMI Blog2015 (10) TMI 2747X X X X Extracts X X X X X X X X Extracts X X X X ..... - I.T.A. No. 24/KOL/2013, I.T.A. No. 25/KOL/2013 , I.T.A. No. 26/KOL/2012, I.T.A. No. 27/KOL/2013 - - - Dated:- 9-10-2015 - Shri P.M. Jagtap, Accountant Member And Shri S.S. Viswanethra Ravi , Judicial Member For the Appellant : Shri Vikash Surana For the Respondent : Shri Debashis Banerjee, JCIT, Sr. D.R. ORDER Per Shri P.M. Jagtap:- These four appeals filed by the four assessees against four separate orders of ld. Commissioner of Income Tax (Appeals), Central-II, Kolkata, all dated 29.10.2012 involve a common issue and the same, therefore, have been heard together and are being disposed of by a single consolidated order for the sake of convenience. 2. All the four assessees in the present case are individuals, who claimed exemption on account of long term capital gain arising from the sale of shares of M/s. Continental Fiscal Management Limited and M/s. Swastik Securities Finance Limited in their returns of income filed for the year under consideration. The said returns filed by all the four assessees were initially processed by the Assessing Officer under section 143(1) of the Income Tax Act, 1961. A search and seizure action under section 132 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their shares and to justify the long term capital gain claimed to be earned by them. He also found it to be very strange that the assessees did not make further investment in the said shares even after having earned astronomical returns by way of long term capital gain. 3. Based on his findings/observations as noted above, the Assessing Officer required the assessees to explain as to why their claim of long term capital gain arising from the sale of shares of the two Companies should not be treated as bogus and the corresponding amounts should not be added to their total income as unexplained cash credits in terms of section 68 of the Act. In reply, the following explanation was offered by the assessees :- 1. During the course of deposition/statement made u/s 131 of the I.T. Act, 1961 in the above mentioned proceeding before your honour, I had clearly stated that there was no business /financial relation whatsoever with Mr. Narendra Kumar Shyamsukha. Neither I know him personally. Further the directors of Ahilya Commercial Pvt. Ltd. Are neither related to me nor I know them personally. 2. No cash was converted into cheque by way of trading in shares of Continental Fis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission income from such transactions and also offered the same for tax. He also found from the enquiry conducted through Inspector that M/s. JIT Software Solutions Pvt. Limited stated to be the purchaser of the shares did never exist at the address provided by the broker. On the basis of these adverse findings, the Assessing Officer arrived at a conclusion that Shri Shyamsukha through M/s. Ahilya Commercial Pvt. Limited had provided accommodation entries to the assessees for claiming exemption on account of bogus long term capital gain and accordingly the amounts of such alleged bogus long term capital gain were added by him to the total income of the assessees treating the same as unexplained cash credits under section 68 in the assessments completed under section 143(3) read with section 147 vide orders dated 31.12.2008. 5. Against the orders passed by the Assessing Officer under section 143(3) read with section 147, appeals were preferred by all the four assessees before the ld. CIT(Appeals). During the course of appellate proceedings before the ld. CIT(Appeals), it was pointed out that all the shares of the two Companies, viz. M/s. Continental Fiscal Management Limited an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given in paragraph 5.2 of his impugned order:- On careful consideration of facts, I am not inclined to agree with the submission of the appellant that the documents seized from the possession of Mr. Shyamsukha have no evidentiary value or that there is no direct evidence that the appellant had paid the cash in lieu of cheque received for sale of shares. As per the provisions of section 292C of the Act, where any books of account or other documents are found in the possession or control of any person in the course of search or survey, it may, in any proceeding under the Act, be presumed that such books of account and other documents are true. In this case, search operation was conducted in the premises of Shri Narendra Shyamsukha and in the course of search page nos. 7 to 10 were seized as per bundle no. NKS/3. At the time of search, in the statement, it was stated by Shri Shyamsukha that the transactions noted on these papers are on account of bogus long term capital gain. Now, as per the provisions of section 292C, the first presumption is that the said seized papers belong to Shri Shyamsukha and the noting made on these papers are true. However, on the basis of this presumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccommodation entries of long term capital gain on behalf of all the beneficiaries mentioned in the seized documents. I also do not found any merit in the submission of the appellant that there is no direct evidence that any amount of cash was paid by the appellant. I am of the opinion that there could not be any eye witness for this, but, there are documentary and circumstantial evidences that the appellant had paid cash to obtain entry of long term capital gain. It is an open secret that during the financial years 2002-03, 2003-04 and 200405, etc. the practice of taking accommodation entries of long term capital gain was rampant in Kolkata. Thus, the documents seized from the possession of Shri Shyamsukha cannot be ignored or cannot be treated as waste pieces of paper. The appellant has also argued that the name of the broker written on the seized paper is different than the broker through whom shares were purchased and sold. I am of the opinion that it might be possible because in this activity several persons and several brokers were involved. But, in any case, it does not mean that the transactions noted on the seized papers are not true. The appellant has relied on various jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re various factors brought on record by the Assessing Officer which clearly indicate that the transactions of purchase of shares claimed to be made by the assessees were accommodation entries and capital gain arising from such transactions was bogus. He invited our attention to the relevant portion of the assessment order in order to highlight such factors as under:- (i) The details found recorded in the relevant documents seized from the possession of Shri Shyamsukha relating to the purchase and sale of transactions exactly tallied with the transactions declared by the assessees in support of their claim for long term capital gain. (ii) Shri Shyamsukha admitted that all these transactions were accommodation entries given by the concerned broker in order to facilitate the concerned persons including the assessees to claim bogus long term capital gain. (iii) Shri Shyamsukha also admitted of having earned commission for helping the assessees to get the accommodation entries from the concerned broker and offered such commission as income to tax. (iv) The two Companies whose shares were claimed to be purchased and sold by the assessees giving rise to the substantial amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was a direct evidence in the form of purchase of shares by the assessees in financial year 2002-03 on payment made by account payee cheques, the reflection of the said shares as investment in the balance-sheets of the assessees as on 31.03.2003 and 31.03.2004 and sale of the said shares in the financial year 2004-05 by the assessees against the payments received again by account payee cheques. The claim of the assessees of these transactions in purchase and sale of shares was also duly supported by the contract notes issued by the concerned brokers. This direct evidence available on record was preferably relied upon by the Tribunal vide its order dated 02/06/2015 in the case of Late Mrs. Kamala Devi Agarwal (L/R. Shri Ashok Kumar Gupta)in ITA No. 500/KOL/2013, Mr. Ashok Kumar Gupta in ITA No. 501/KOL/2013 and Mrs. Amita Gupta in ITA No. 502/KOL/2013 (supra) over the circumstantial evidence brought on record by the Assessing Officer to come to the conclusion that the relevant transactions of purchase and sale of shares giving rising to long term capital gain to the assesses were genuine transactions and the additions made by the Assessing Officer under section 68 by treating th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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