TMI Blog2020 (12) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Year 2015-16. 2. The grievance of the assessee relates to the addition made u/s 68 of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short] by treating the long term capital gain as not genuine and treating the entire sale receipts as income u/s 115BBE of the Act amounting to ₹ 6,12,44,000/- and is further aggrieved by the addition of ₹ 12,24,880/- being 2% as commission paid on the alleged bogus long term capital gain. 3. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules and have also perused the judicial decisions relied upon by both the sides. 4. Facts emanating from the assessment order show that the assessee E-filed his return of income on 31.08.2015 declaring an income of ₹ 80,61,390/-. The return was processed u/s 143(1) of the Act. Subsequently, return was selected for scrutiny assessment and, accordingly, statutory notices were issued and served upon the assessee. 5. The main reason for selecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referring to the general observations and investigation report and the modus operandi of the entry operators, the Assessing Officer came to the conclusion that the assessee has failed to discharge his onus cast upon him by provisions of section 68 of the Act and made addition of ₹ 6,12,44,000/-. 11. The Assessing Officer further observed that the beneficiaries of such transactions pay some commission to the entry providers and assuming that the assessee must have paid 2% commission, made further addition of ₹ 12,24,880/. 12. The assessee strongly agitated the matter before the ld. CIT(A) but without any success. 13. At the very outset, we have to state that whether the assessee has discharged his onus cast upon him by provisions of section 68 of the Act or not is purely a question of facts. On this premise, we will now examine and explain the facts. 14. The undisputed fact is that the assessee is a habitual investor. In F.Y. 2011-12, the assessee had opening investment of ₹ 11,82,74,033/- on which in that year, the assessee had earned a short term capital gains of ₹ 84,23,576/- and long term capital loss of ₹ 68,07,984/-. The closing value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided that after hearing such evidence, as the assessee may produce and such other evidence as the Assessing Officer may require on specified points and after taking into account all relevant material which he has gathered, the Assessing Officer shall make an assessment on the total income or loss of the assessee. 21. A conspectus reading of all these relevant provisions of the Act show that initial burden is upon the assessee to justify his returned income and if some evidences have been gathered by the Assessing Officer, it is the duty of the Assessing Officer to confront those evidences to the assessee and seek explanation from him. 22. In the instant case, in justification of his return of income, the assessee furnished all the necessary documentary evidences to discharge the initial burden cast upon him. The Assessing Officer simply rubbished all the documentary evidences by referring to the general observations and modus operandi of the entry operators and further supporting his observations by report of the Investigation Wing. 23. It would not be out of place to mention here that LDPL, now known as Arihant Multi Commercial Ltd, is not a paper company nor a shell c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basic details which were not suitably enquired into by the AO. The assessee had discharged the onus initially cast upon it by providing the basic details which were not suitably enquired into by the AO. 27. In the case of Odeon Builders Pvt Ltd 110 Taxmann.com 64, the Hon'ble Supreme Court while dismissing the review petition, held as under: However, on going through the judgments of the CIT, ITAT and the High Court, we find that on merits a disallowance of ₹ 19,39,60,866/- was based solely on third party information, which was not subjected to any further scrutiny. Thus, the ld. CIT(A) allowed the appeal of the assessee stating: Thus, the entire disallowance in this case is based on third party information gathered by the Investigation Wing of the Department, which have not been independently subjected to further verification by the AO who has not provided the copy of such statements to the appellant, thus denying opportunity of cross examination to the appellant, who has prima facie discharged the initial burden of substantiating the purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our humble opinion, neither the Assessing Officer conducted any enquiry nor has brought any clinching evidence to disprove the evidences produced by the assessee. 24. Our above view is fortified by the decision of the Hon'ble Delhi High Court in the case of Fair Invest Ltd 357 ITR 146. The relevant findings of the Hon'ble Jurisdictional High Court of Delhi read as under: 6. This Court has considered the submissions of the parties. In this case the discussion by the CIT(Appeals) would reveal that the assessee has filed documents including certified copies issued by the Registrar of Companies in relation to the share application, affidavits of the Directors, Form 2 filed with the ROC by such applicants confirmations by the applicant for company's shares, certificates by auditors etc. Unfortunately, the assessing officer chose to base himself merely on the general inference to be drawn from the reading of the investigation report and the statement of Mr. Mahesh Garg. To elevate the inference which can be drawn on the basis of reading of such material into judicial conclusions would be improper, more so when the assessee produced material. The least that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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