TMI Blog2019 (3) TMI 1626X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax (Appeals)-6 10 Kolkata s separate order dated 08.02.2019 21.08.2018, passed in case No(s). CIT(A), Kolkta-6/10503/2018-19-957/CIT(A)-10/W- 35(1)/2015-16/2017-18/Kol upholding Assessing Officer s identical action treating their Long Term Capital Gains (LTCG) as exempt u/s 10(38) amounting to ₹70,25,200/- and ₹32,11,451/-; respectively to be unexplained cash credits u/s 68, involving proceedings u/s 143(3), r.ws. 147 and Sec. 143(3) of the Income Tax Act, 1961; in short the Act . We have heard the parties reiterating their respective stands. Relevant case file(s) of the former assessee comprising of Assessing Officer section 148 notice dated 23.03.2018 reopening reasons supplied on 13.08.2018, objections filed before the Assessing Officer against reopening in issue dated 26.11.2018, LTCG statement forwarded letter dated 23.08.2018 in respect of LTCG transactions, purchase bills dated 25.07.2009, share certificates of M/s Twenty First Century India Ltd. with transfer advice, bank statement, hon'ble jurisdictional high court s amalgamation order dated.24.12.2010, allotment advice regarding issue of shares by merged companies (Tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RBI as a stock broker. The A.O. in the meanwhile had received information from DTT(Inv.), Kolkata that they have investigated and identified 84 Penny Stock Companies. Search and Survey were also conducted in the office premises of 32 share brokers who accepted that they were involved in bogus LTCG/STCG Scam. One such penny stock company identified by the DIT(Inv.), Kolkata is M/s. Twenty First Century India Ltd. Basic trading pattern of all these 84 penny stock scrips represented a bell shaped trading i.e. prices start at a low range and rise rapidly, stays there for a while and then decreases rapidly. This makes a bell shaped pattern. The A.O. on page no.3 of his order has demonstrated this phenomenon by a giving the data of the share price of M/s. Twenty First Century India Ltd from FY 2001-2002 to FY 2013-2014. Such movement of share is not supported by actual financial credentials as the company concerned has almost no fixed asset, no turnover, no profitability and do not pay taxes. Hence, such companies were designed only for the limited purposes of bogus LTCG/STCG to willing beneficiary. The AO after giving due opportunity to the appellant of being heard held that the sale va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t account ( f) Contract note for sale ( g) Bank Statement reflecting receipt of payment on 18.5.2011, 23.5.2011 27.5.2011. ( h) Demat Statement showing Debit of shares in assessee demat account ( vii) That the assessee sold the shares through M/ s. H.M. Fatehpuria, a SEBI registered Share Broker who was a member of Calcutta Stock Exchange. All the evidences in support of the transactions were produced. The assessee was summoned u/s 131 of the IT Act 1961 and his statement was recorded. The broker of the assessee was summoned u/s 131 of the IT Act 1961 and his statement was recorded. All the parties- confirmed the transaction and there was no adverse material or evidences collected in the assessee case. ( viii) That the assessee sold these shares during AY 2012-2013 through his old and regular share broker M/s. H. M. Fatehpuria member of Calcutta Stock Exchange Association Ltd and received the sale consideration by account payee cheque. ( ix) That the Ld Assessing Officer based on a survey report prepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings after analyzing various information received from the Investigation Wing. Some of the observations which come to light upon examination of the records of the appellant are as below: a. There is a common pattern in the trading of such scrips and the pattern is that they represent a bell shape in their trading. b. In the Balance Sheet of the listed penny stocks it is found that they have no actual financial credentials to support their share, movement pattern. Almost all the companies have no fixed assets. no turnover. and no profitability. c. No such event of growth happened during the sale period of the said Script for which the investment in shares could have jumped almost 38 times in a very short span of time of 2 years. d. In the whole project total 84 listed penny stock companies were identified and worked upon. After that, number of search and surveys were conducted in the Office premises of more than 32 share broking entities who have accepted that they were involved in the bogus LTCG/STCL seam. Surveys were also conducted in the office premises of many accommodation entry providers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions are not natural at all. In my opinion, payment made through banking channel does not constitute the transactions to be genuine transaction since the banking documents are merely self serving recitals. None of the material produced by the appellant is enough to justify the huge gains as claimed under the head Capital Gains. 6.3 In a penny stock which has no business activity or any plan or initiative or any prospect for growth, investor normally sell off such stock whenever price has appreciated to some extent and there is total uncertainty to hold such stock for fabulous appreciation when the investment is not backed by any fundamental of the company, its business policy and future prospect. In absence of any such fact the person who knows beforehand that its price is being manipulated in a concerted way and he is part of such system will benefit. Price movement and volume movement of this stock indicates such fact. The said transaction defies all logic of human probability. In this context the Hon'ble Supreme Court in the case of CIT vs. Durga Prasad More (82 ITR 540) has held that the surrounding circumstances muss be seen to find out the reality of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments - He also found that alleged sale of shares had not taken place through any stock exchange - On scrutiny of books of account of broker, it was found that there were cash deposits in its bank account preceding issue of cheques in name of assessee for purchase of shares claimed to be sale proceeds of same shares received in advance - Broker could not give details of purchaser of share - Moreover, shares claimed to have been sold through broker had not been transferred even at time of making enquiry by Assessing Officer and same continued to be registered in name of assessee - In those circumstances, Assessing Officer held that transaction of sale of shares was an ingenuine transaction and made addition of alleged sale consideration to assessee's income as income from undisclosed sources - Whether on facts, addition made by Assessing Officer was justified - Held, yes. 3. Usha Chandresh Shah Vs ITO (2014-TIOL-14S9-ITAT-MUM) Where the assessee could not produce the copies of share certificates and copies of share transfer forms. The transaction of purchase of shares could not be cross verified. The shares of the company was declared as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in should not have been doubted. We do not find merit in these contentions of the assessee in the light of the facts that there is prevalent practice in the country through which unaccounted money is converted into long term capital gain by circuitous means. While dealing with the issue of long term capital gain accrued to the assessee in short span, one has to examine the financials of the company whose shares were inflated within a short period and after the sharp rise in the price of shares it again comes down. In the instant case, financials were examined by us and we find that the financial worth of the company is meagre and not at all worth to be invested therein. With such financials, we are unable to understand how there can be manifold increase in the shares. In the light of the duration of transactions and the financials of the company whose shares were transacted, we find that the Revenue has brought sufficient material on record to demonstrate that unaccounted money was introduced in the books of accounts through long term capital gain by adopting such method. Whatever judicial pronouncements are relied on, these are in those cases where the transactions are genuine. Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld against the assessees. 8. The order dated 04-01-2019 passed by the ITAT Pune 'B' Bench, Pune, ITA No.1648 1649/PUN/15, A.Y.-2005-06 2006-07 in Rajkumai' B Agarwal Vs. DCIT, Central Circle 1(2), Pune dated 04-01-2019 has held at Para 15 to 17. 15. It is further pertinent to note that it was not only the assessee who booked short term capital gain on the sale of shares of PIL to the above extent, but his family members were also not left behind. They also indulged in the similar paper transactions by allegedly purchasing and selling shares of PIL from the same brokers and showing huge amounts of short term capital gains, for which addition of ₹ 18, 71,906/- has been made in the hands of his son Sh. Bharat Rajkumar Agarwal and ₹ 20,21,001/- in the hands of his wife Ameeta Rajkumar Agarwal for the same assessment year, the appeals of which are being disposed off through this batch of cases. 16. In view of the factual and legal position discussed above, it is crystal clear that PIL is a penny stock company and the assessee obtained only accommodation entries in the garb of short term gain from tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gain / long term capital loss through his share banking firm has been done to few beneficiaries with the help of different accommodation entry operators, promoters of the scripts of various penny stocks other brokers etc. Sh Jai Kishari Poddar also gave details of different bogus scripts/ penny stocks which have been used for providing the accommodation entries of LTCG and LTCL to different beneficiaries using his brokerage company Consortium Capital Put. Ltd. and the name of CCL International Limited having scrip name CCL Inter appears in the list whose shares were sold by the assessee and exemption on LTCG amounting to ₹ 22,28,172/- claimed u/ s. 10(38) of the Act. After perusing the records, I find that in the instant case the investment in shares made by the assessee reveals that he has not been dealing in shares on a regular basis and the entries of LTCG have also been taken by other members of the assessee company and the purchase of these shares were claimed to be through off market deals arid not through Stock Exchange. The financials of - penny stock company M/s CCL International Ltd. and movement of its price are abrupt, unrealistic and based upon any realistic pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. In the result, the appeal of the assessee is dismissed. 8. Since in other appeal i.e. in the case of Anju Rastogi, ITA No. 3810/DeI/2018 (AY 2015-16), similar facts are permeatinq and same finding has been given, therefore, my finding given above will apply mutatis mutandis in this appeal also, because the nature - of transactions, evidences and documents are exactly the same. Thus, both the appeals are treated as dismissed 9. In the result, both the Appeals of the different Assessees are dismissed. 6.5 In view of the above discussion, I find no infirmity in the order of the Ld. A.O. and I confirm the action of the Ld. A.O. in holding the Long Term Capital Gains of ₹ 70,25,200/- to be bogus. Accordingly, Ground No. 9 to 15 are dismissed. 3. Mr. Shah vehemently contends during the course of hearing that the Assessing Officer had conducted a detailed exercise during the course of reassessment in question in order to test genuineness / creditworthiness of the assessee s LTCG in issue. He refers to the above detailed paper book s contents narrated in preceding paragraph to this effect. His ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Industries ltd. pursuant to scheme of arrangement sanctioned by the Hon ble High Court at Bombay. 2. Payment for the purchase of aforesaid 100 equity of Pinnacle Vintrade Ltd. was made by Account Payee Tamilnad Mercantile Ltd. Bank Cheque no. 736027. 3. Bank statement of Tamilnad Mercantile Ltd. Bank reflecting payment (cheque no. 736027) for purchase of the said investment in equity shares of Pinnacle Vintrade Ltd. is enclosed (highlighting the said entry). Annexure-I. 4. The equity shares of Unno Industries Ltd. were allotted pursuant upon merger of Pinnacle Vintrade Ltd. with Unno Industries Ltd. pursuant to sanction of scheme of arrangement by the Hon ble High Court at Bombay, I was issued 91000 equity shares of Unno Industries ltd. in lieu of my shareholding in Pinnacle Vintrade Ltd. The relevant gist of the scheme of arrangement sanctioned by the Hon ble High Court was communicated by the company to the Bombay Stock Exchange vide letter dated 12th February, 2013. A copy of the said letter downloaded from BSE website is enclosed for your ready reference. I also enclose Unno Industries Ltd. letter dated 12th Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay Stock Exchange through SEBI registered stock broker Ashika Stock Broking Ltd. and Guiness Securities Ltd. whose details are as under: a) Name: Ashika Stock Broking Ltd. Address: Trinity, 7th Floor, 226/1, A.J.C. Bose Road, Kolkata-700020. Contact No. 033 22839952. b) Name: Guiness Securities Ltd. Address: Guiness House, 18, Deshpriya Park Road, Kolkata-700026 Contact No. 033 30015555. 3. Contract Notes issued regarding sale of equity shares of Unno Industries Ltd. on Bombay Stock Exchange by SEBI registered brokers- Ashika Stock Broking Ltd. and Guiness Securities ltd. are enclosed. Annexure V. 4. The relevant Demat Account statements of Ashika Stock Broking Ltd. and Guiness Securities Ltd. reflecting the debit of shares of Unno Industries Ltd. upon sale are enclosed. (entries highlighted). Annexure VI . 5. The Ledger of the brokers of Ashika Stock Broking Ltd. and Guiness Securities Ltd. for the financial year 2013-14 are enclosed. Annexure VII. 6. Tamilnad Mercantile Ltd. bank Statement reflecting the receipts of sale consideration from the SEBI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain with claim a certain percentage of commission. 7. Thereafter the AO made an addition under 68 of the Act. Aggrieved the assessee carried the matter an appeal. The ld. First appellate authority confirmed the action of the AO on the ground that, the transaction in question comes within the ambit of Suspicious Transaction and therefore, the rules of Suspicious Transaction would apply to the case. He further stated that the payments through bank of processing of transaction through stock exchange and other such features are only apparent features and that the real feature are the manipulation and abnormal price raise and the sudden dip thereafter. Based on surrounding circumstances and circumstantial evidence and the order of the Tribunal in the case of Bhag Chand Chabra (HUF) vs. ITO , in I.T.A. No. 3088 3107/2007 dated 31.12.2010, the addition made by the AO was confirmed. Aggrieved the assessee is in appeal before us. 8. A perusal of the order of the AO demonstrates that this addition was made merely on suspicion and in a routine and mechanical manner. This is clear from the fact that the AO refers to some Sharp Tradin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction since the selling broker was subjected to SEBI s action. However, the demat account given the statement of transactions from 01.04.2004 to 31.03.2005 i.e. relevant for the assessment year under appeal (2005-06) are before us. There cannot be any doubt about the transaction as has been observed by the assessing officer. The transactions were as per norms under controlled by the Securities Transaction Tax, brokerage service tax and cess, which were already paid. They were complied with. All the transactions were through bank. There is no iota of evidence over the above transactions as it were through demat format. Hence, we agree with the given findings of the ld. Commissioner of Income Tax (Appeals) in accepting the transactions as genuine too. In view of the fact findings we cannot reappreciate, recording is such, cannot be said to be perverse as it is not fact finding of the ld. Tribunal alone. The commissioner of Income Tax came to the same fact finding. Concurrent fact finding itself makes the story of perversity, unbelievable. The D Bench of the Kolkata Tribunal in the case of Gautam Kumar Pincha vs. ITO, in I.T.A. No. 569/Ko ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments submitted by the assessee. The Tribunal held that the AO s conclusions are merely based on the information received by him. The appeal filed by the revenue was dismissed. ( v) CIT V. Andaman Timbers Industries Limited [ITA No. 721 of 2008] (Cal HC) In this case the Hon ble Calcutta High Court affirmed the decision of this Tribunal wherein the loss suffered by the Assessee was allowed since the AO failed to bring on record any evidence to suggest that the sale of shares by the Assessee were not genuine. ( vi) CIT V. Bhagwati Prasad Agarwal [2009- TMI-34738 (Cal HC) in ITA No. 22 of 2009 dated 29.4.2009] In this case the Assessee claimed exemption of income from Long Term Capital Gains. However, the AO, based on the information received by him from Calcutta Stock Exchange found that the transactions were not recorded thereat. He therefore held that the transactions were bogus. The Hon ble Jurisdictional High Court, affirmed the decision of the Tribunal wherein it was found that the chain of transactions entered into by the assessee have been proved, accounted for, documented and supported by evidence. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribunal held that the transactions cannot be brushed aside on suspicion and surmises. However it was held that the transactions of the shares are genuine. Therefore we do not find that there is any reason to hold that there is no substantial question of law held in this matter. Hence the appeal being ITA No.620 of 2008 is dismissed. 8.5. We note that the ld. AR cited plethora of the case laws to bolster his claim which are not being repeated again since it has already been incorporated in the submissions of the ld. AR (supra) and have been duly considered by us to arrive at our conclusion. The ld. DR could not bring to our notice any case laws to support the impugned decision of the ld. CIT(A)/AO. In the aforesaid facts and circumstances of the case, we hold that the ld. CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We, therefore, direct the AO to delete the addition. 9. In the result the appeal of the assessee is allowed. The A bench of the Kolkata Tribunal in the case of ITO vs. Shaleen Khemani in I.T.A. No. 1945/Kol/2014 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( 11) On the last point, the Tribunal held that the Assessing Officer had not brought on records any material to show that the transactions in shares of the company involved were false or fictitious. It is finding of the assessing officer that the scrips of this company was executed by a broker through cross deals and the broker was suspended for some time. It is assessee s contention on the other that even though there are allegations against the broker, but for that reason alone the assessee cannot be held liable. On this point the Tribunal held As a matter of fact the AO doubted the integrity of the broker or the manner in which the broker operation as per the statement of one of the directors of the broker firm and also AO observed that assessee had not furnished any explanation in respect of the intention of showing trading of shares only in three penny stocks. AO relied the loss of ₹ 25,30,396/- only on the basis of information submitted by the Stock fictitious. AO has also not doubted the genuineness of the documents placed on record by the assessee. AO s observation and conclusion are merely based on the information repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conclusion and allowed the appeal filed by the assessee. In doing so, the Tribunal held that the transaction fully supported by the documentary evidences could not be brushed aside on suspicion and surmises. However, it was held that the transactions of share are genuine. Therefore, we do not find that there is any reason to hold that there is any substantial question of law involved in this matter. Hence, the appeal being ITA No.620 of 2008 is dismissed. 9.4. We also find that the various other case laws of Hon ble Jurisdictional High Court and other case laws also relied upon by the ld AR and findings given thereon would apply to the facts of the instant case. The ld DR was not able to furnish any contrary cases to this effect. Hence we hold that the ld AO was not justified in assessing the sale proceeds of shares of SOICL as undisclosed income of the assessee u/s 68 of the Act and therefore we uphold the order of the ld CITA and dismiss the appeal of the revenue. Accordingly the grounds raised by the revenue are dismissed. Applying the proposition of law laid down in all the above referred cases, the facts of this case, I find force i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Ltd. for such shares allotted is placed in the Paper Book at page no. 11). 3. Annual return no. 20B was filed with Registrar of companies by Smart Champs IT Infra Ltd showing the assessee s name as shareholder (copy of annual return no. 20B filed with Registrar of companies by Smart Champs IT Infra Ltd. is placed in the Paper Book at page no. 12 to 18.) 4. The assessee lodged the said shares with the Depository M/s. Eureka Stock Share Broking Services Ltd. with a Demat request on 11th February, 2012. The said shares were dematerialized on 31st March, 2012 (copy of demat request slip along with the transaction statement is placed in the paper book at page no. 19 to 21). 5. On 24.01.2013, the Hon ble Bombay High Court approved the scheme of amalgamation of Smart Champs IT and Infra Ltd. with Cressanda Solutions Ltd. In accordance with the said scheme of amalgamation, the assessee was allotted 50000 equity shares of M/s. Cressanda Solutions Ltd. The demat shares are reflected in the transaction statement of the period from 1st November 2011 to 31st December, 2013 (A copy of the scheme of amalgamation alongw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n question was part of this scam. The chain of events and the live link of the assessee s action giving her involvement in the scam should be established. The allegation imply that cash was paid by the assessee and in return the assessee received LTCG, which is income exempt from income tax, by way of cheque through Banking channels. This allegation that cash had changed hands, has to be proved with evidence, by the revenue. Evidence gathered by the Director Investigation s office by way of statements recorded etc. has to also be brought on recording each case, when such a statement, evidence etc. is relied upon by the revenue to make any additions. Opportunity of cross examination has to be provided to the assessee, if the AO relies on any statements or third party as evidence to make an addition. If any material or evidence is sought to be relied upon by the AO, he has to confront the assessee with such material. The claim of the assessee cannot be rejected based on mere conjectures unverified by evidence under the pretentious garb of preponderance of human probabilities and theory of human behavior by the department. 14. It is well settled that evidence colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities of the Government in most cases and the general impression is that cash would have changed hands. The courts have laid down that judicial notice of such notorious facts cannot be taken based on generalisations. Courts of law are bound to go by evidence. 16. We find that the assessing officer as well as the Ld. CIT(A) has been guided by the report of the investigation wing prepared with respect to bogus capital gains transactions. However, we do not find that the assessing officer as well as the Ld. CIT(A), have brought out any part of the investigation wing report in which the assessee has been investigated and /or found to be a part of any arrangement for the purpose of generating bogus long term capital gains. Nothing has been brought on record to show that the persons investigated, including entry operators or stock brokers, have named that the assessee was in collusion with them. In absence of such finding how is it possible to link their wrong doings with the assessee. In fact, the investigation wing is a separate department which has not been assigned assessment work and has been delegated the work of only making investigation. The Act has vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was restored. The mere possibility of the appellant earning considerable amounts in the year under consideration was a pure conjecture on the part of the Income-tax Officer and the fact that the appellant indulged in speculation (in Kalai account) could not legitimately lead to the inference that the profit in a single transaction or in a chain of transactions could exceed the amounts, involved in the high denomination notes,--- this also was a pure conjecture or surmise on the part of the Income-tax Officer. As regards the disclosed volume of business in the year under consideration in the head office and in branches the Income-tax Officer indulged in speculation when he talked of the possibility of the appellant earning a considerable sum as against which it showed a net loss of about ₹ 45,000. The Income-tax Officer indicated the probable source or sources from which the appellant could have earned a large amount in the sum of ₹ 2,91,000 but the conclusion which he arrived at in regard to the appellant having earned this large amount during the year and which according to him represented the secreted profits of the appellant in its business was the result of pure co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssurance Co. Ltd. v. Nusli Neville Wadia and Anr. AIR 2008 SC 876; Rachpal Singh and Ors. v. Gurmit Singh and Ors. AIR 2009 SC 2448;Biecco Lawrie and Anr. v. State of West Bengal and Anr. AIR 2010 SC 142; and State of Uttar Pradesh v. Saroj Kumar Sinha AIR 2010 SC 3131). 24. In Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944,considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the Assessee had specifically asked to be allowed to cross-examine the representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to cross-examine, would amount to adenial of the right to be heard i.e. audi alterampartem. 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the government, is that the government servant is afforded a reasonable opportunity to defend him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 inasmuch as it amounted to violation of principles of natural justice because of which the Assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the Assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the Assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the Assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the Appellant themselves to explain as to why their ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he confirmation of the party. Both the parties are confirming the transactions which have been duly supported with the books of accounts and bank transactions. The ld. AR has also submitted the board resolution for the trading of commodity transaction. The broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus. In view of above, we reverse the order of the lower authorities and allow the common grounds of assessee s appeal. [quoted verbatim] This is essentially a finding of the Tribunal on fact. No material has been shown to us who would negate the Tribunal s finding that off market transactions are not prohibited. As regards veracity of the transactions, the Tribunal has come to its conclusion on analysis of relevant materials. That being the position, Tribunal having analyzed the set off acts in coming to its finding, we do not think there is any scope of interference with the order of the Tribunal in exercise of our jurisdiction under Section 260A of the Income Tax Act, 1961. No substantial question of law is involved in this appeal. The appeal and the stay petition, accordingly, shall stand dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed i.e. (I to xiv) in Para 6(supra) we find that there is absolutely no adverse material to implicate the assessee to have entered gamut of unfounded/unwarranted allegations leveled by the Assessing Officer against the assessee, which in our considered opinion has no legs to stand and therefore has to fall. We take note that the ld. DR could not controvert the facts supported with material evidences which are on record and could only rely on the orders of the AO/CIT (A). We note that in the absence of material/evidence the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore also fail. At the cost of repetition, we note that the assessee had furnished all relevant evidence in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. These evidences were neither found by the AO nor by the ld. CIT (A) to be false or fictitious or bogus. The facts of the case and the evidence in support of the evidence clearly support the claim of the assessee that the transactions of the assessee were genuine and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence. It further held as follows: We note that the ld. AR cited plethora of the case laws to bolster his claim which are not being repeated again since it has already been incorporated in the submissions of the ld. AR (supra) and have been duly considered to arrive at our conclusion. The ld. DR could not bring to our notice any case laws to support the impugned decision of the ld. CIT(A)/AO. In the aforesaid facts and circumstances of the case, we hold that the ld. CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We therefore direct the AO to delete the addition. f) The BENCH A OF KOLKATAITAT in the case of SHALEENKHEMANI [ITA No.1945/Kol/2014]order dated 18.10.2017 held as under vide Page 24 Para 9.3: We therefore hold that there is absolutely no adverse material to implicate the assessee to the entire gamut of unwarranted allegations leveled by the ld AO against the assessee, which in our considered opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances, issue was decided in favour of the assessee, came to the conclusion that transaction entered by the assessee was genuine. Detailed finding recorded by CIT (A) at para 3 to 5 has not been controverted by the department by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the findings of CIT (A). h)The Hon ble Punjab and Haryana High Court in the case of VIVEK MEHTA [ITA No. 894 OF2010] order dated 14.11.2011 vide Page 2 Para 3 held as under: On the basis of the documents produced by the assessee in appeal, the Commissioner of Income Tax (Appeal) recorded a finding of fact that there was a genuine transaction of purchase of shares by the assessee on 16.3.2001 and sale thereof on 21.3.2002. The transactions of sale and purchase were as per the valuation prevalent in the Stocks Exchange. Such finding of fact has been recorded on the basis of evidence produced on record. The Tribunal has affirmed such finding. Such finding of fact is sought to be disputed in the present appeal. We do not find that the finding of fact recorded by the Commissioner of Income Tax in appeal, gives giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is factual backdrop that both the lower authorities have erred in treating assessee s LTCG to be bogus. The impugned addition(s) of ₹93,19,895/- and ₹4,65,995/1- are deleted. 4. We adopt the above extracted detailed discussion mutatis mutandis to conclude that the assessee has successfully proved genuineness of the share profits in issue claimed as LTCG u/s 10(38) of the Act. We accordingly direct the Assessing Officer to delete the impugned addition of ₹70,75,200/- as unexplained cash credits u/s 68 of the Act. Commission expense disallowance; if any shall also follow suit as a necessary corollary. 5. Learned counsel no more presses assessee s latter substantive ground challenging validity of re-opening / re-assessment in issue. This former lead appeal ITA No.256//Kol/2019 is partly allowed on merits in above terms. 6. Same order follow in latter assessee Purushottam Das Agarwal s case involving identical LTCG added as unexplained cash credits amounting to ₹32,11,451/- u/s. 68 of the Act. 7. These two assessee s appeals are allowed on merits in above terms. Order p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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