TMI Blog2019 (1) TMI 1869X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeals have been filed at the instance of the three different Assessees against the separate orders of the Commissioner of Income Tax (Appeals) 2, Ahmedabad [CIT(A) in short] vide appeal(s) no.CIT(A)-2/ITO, S.K. Wd-4/Modasa/150, 147, 149/13-14 identically dated 05/01/2015 arising in the assessment orders passed under s.143(3) r.w.s.147 of the Income Tax Act, 1961(here-in-after referred to as the Act ) all dated 30/12/2013 relevant to Assessment Year (AY) 2007-08. 2. First, we take up the assessee s appeal in ITA No.544/Ahd/2015 in the case of Pinal D. Jaiswal as lead case. 3. The assessee has raised the following grounds of appeal:- 1. The Learned Commissioner of Appeals-II has erred in facts and in law, in confirmed addition Amount of ₹ 5,26,461/- as a Income from other sources, which Learned Income tax Officer has added as a unexplained credit u/s.68 of Income Tax Act. The Learned Income Tax Officer has also not granted Long Term Capital gain U/s.10(38) of I.T. Act. 2. The Assessment made U/s.143(3) r.w.s. 147 is invalid, as it was made beyond the period of limitation laid down in section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, the Assessing Officer denied the benefit claimed u/s 10(38) of the Act as claimed by the assessee. Thus the AO treated the capital gain income as income from undisclosed sources. 7. The aggrieved assessee preferred an appeal to the Ld. CIT(A). The assessee before the Ld. CIT(A) submitted that there was no crossexamination opportunity provided against the statement of Mukesh M. Chokshi recorded u/s 132(4) of the Act. The assessee also claimed that his name is not appearing in the list of the beneficiary as provided by Shri Mukesh M. Chokshi. 7.1. However, the Ld. CIT(A) observed that the cross-examination opportunity would not result in the new findings. The assessee has not made any request before the Assessing Officer for cross-examination opportunity. 8. The contract note issued by the Stock Exchange is bogus. Therefore, the capital gain income as claimed exempt u/s 10(38) of the Act is not eligible for such an exemption. Accordingly, the Ld. CIT(A) confirmed the order of the Assessing Officer. 9. Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. 10. The Ld.AR before us submitted that in the identical facts and circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een transferred to demat account. Shri Mukesh Choksi may have been providing accommodation entries to various persons but so far as the facts of the case in hand suggest that the transactions were genuine and therefore, no adverse inference should be drawn. In the light of the decisions of the Hon'ble Supreme Court in the case of Andaman Timber Industries (supra) and considering the facts in totality the claim of the assessee cannot be denied on the basis of presumption and surmises in respect of penny stock by disregarding the direct evidences on record relating to the sale/purchase transactions in shares supported by broker's contract notes, confirmation of receipt of sale proceeds through regular banking channels and the demat account. 19. As mentioned elsewhere and as agreed by the Representatives of both the sides; since the facts are common in all the impugned appeals, all the appeals by the assessees are allowed. The Assessing Officer is directed to treat the surplus as Long Term Capital Gains and allow the exemption a claimed by the assessees. 20. In the result, all the appeals filed by the assessees are allowed. 4.3 Learned AR also cited an order of Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has decided the issue of long term capital gain in favour of the assessee as the said statement of Shri Mukesh Chokshi was a general statement and could not be corroborated by any material evidence. He relied upon the following decisions in this respect: 1. Kataria Ketan Ishwarlal vs. ITO ITA No.4304/M/2007 decided on 30/04/2010. 2. ACIT vs. Shri Ravindrakumar Toshniwal ITA No.5302/M/2008 decided on 24/02/2010. 3. ITO Vs. Truptic Shah ITA No.1442/M/2010 decided on 29/04/2011. 4. Smt. Manjulaben L. Shah Vs. ITO ITA No.3112/M/2014 decided on 31/10/2014 5. We find that the facts of the above stated cases were all most identical to that of the assessee. In the case of Kataria Ketan Ishwarlal vs. ITO (Supra), the transactions were carried out through the same broker i.e. M/s. Gold Star Finvest Pvt. Ltd. The Tribunal allowed the appeal of the assessee observing as under: 6.1 We have considered the rival submissions made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. From the copy of the share certificate, Demat account, share transfer form filed in the Paper Book, we find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Chokshi. c) Mr. Mukesh Chokshi had stated that the sale proceeds have been paid to the assessee through the funds provided by the assessee. 12. As regards point (a) above, we find that the issue is covered by the decision of the Tribunal in the case of Mukesh R. Marolia wherein it has been held that off market transaction is not a unlawful activity and there is no relevance in seeking details of share transaction from stock exchange when the sale was not on stock exchange and relying upon it for making addition. 13. As regards points (b) (c) above, we find that the assessee has filed relevant documentary evidence before the AO but the AO has failed to consider the same. The CIT[A] in his order has considered the said evidence and has come to the conclusion that the share transactions are genuine. However, as held by the Tribunal in the case of Rajinidevi A. Chowdhary [cited supra], which is on similar set of facts, the AO could have verified from the Registrar of companies as to whether the shares have been transferred and the names of the shareholders in whose names shares have been transferred. The decision of the Tribunal in the case of Rajinidevi A. Chowdhary has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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