TMI Blog2021 (12) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... had escaped assessment and, no obligation is cast upon him to have finally ascertained the said fact by legal evidence or conclusion. Our aforesaid view is as per the mandate of the judgment of the Hon ble Supreme Court in the case of ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd[ 2007 (5) TMI 197 - SUPREME COURT] AO had validly assumed jurisdiction u/s 147 of the Act and reopened the case of the assessee. We, thus, finding no infirmity in the validity of the jurisdiction assumed by the A.O for reopening the case of the assessee u/s 147 of the Act, uphold the same. The Ground of appeal No. 1 is dismissed. Addition u/s 68 - In the backdrop of our aforesaid deliberations are of the considered view that de hors any cogent material made available on record by the department which would prove to the hilt that the assessee had not carried out any genuine transaction of purchase/sale of shares of JMD Telefilms Industries Ltd. and, in the garb of bogus entry of a tax exempt LTCG u/s 10(38) of the Act, laundered his unaccounted money, the assessee s duly substantiated claim of having carried out genuine transaction of purchase/sale of shares of JMD Telefilms Industries Ltd. which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant to disclose fully and truly all material facts. b) The appellant respectfully submits that the AO initiated reassessment proceedings on the basis of suspicion, conjectures and surmises, without any concrete material or evidence to support the same and also without satisfying himself about reliability of the investigation report received by him from the Director of Investigation, Kolkata and applicability of the same to the facts in the case of the appellant. c) The appellant, therefore, prays that the very basis of initiating the reassessment proceedings, being vague and unreliable, the said proceedings be held as void ab initio and order passed pursuant thereto be quashed as bad in law. GROUND NO. 2 - AGAINST DENIAL OF S. 10 (38) EXEMPTION FOR LONG-TERM CAPITAL GAINS OF ₹ 5,93,45,030/- FROM SALE OF QUOTED SHARES OF JMD TELEFILMS LIMITED a) The CIT (A) has erred in confirming denial of exemption under Section 10(38) of the Act claimed by the appellant, though all the conditions stated in that section are satisfied, by alleging bogus and manipulated share prices without leading any evidence in support of such assumption and/or suspicion. b) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jectures and surmises. The sale transactions were carried out by the appellant through Motilal Oswal Securities Limited, the well-known broker registered with recognised stock exchanges and their brokerage/commission is duly charged in their bills which fact is totally ignored. The appellant has not paid any other amount to them or any other party as alleged. Since there is no valid basis or concrete evidence for his assumption about payment of commission for sale of the said shares, such disallowance is not sustainable - on facts and in law. c) In the above background, the appellant prays that the disallowance of ₹ 36,38,987/- as the imaginary expenditure (by way of commission for sale of the shares in JMD Telefilms Limited), which is neither paid nor claimed by the appellant, be deleted. GROUND NO. 5 - AGAINST LEVY OF INTEREST OF ₹ 1,60,35,802/- UNDER SECTION 234B OF THE ACT a) The CIT (A) has erred in confirming interest charged under Section 234B of the Act. b) The appellant politely submits that the denial of exemption under Section 10(38) of the Act and additions made by the AO and sustained by the CIT (A) could never have been imagined or pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee vide a letter dated 16.06.2017 filed his objections. However, the A.O not finding favour with the objections raised by the assessee qua the validity of the reassessment proceedings dismissed the same vide his letter dated 05.07.2017. 3. During the course of the assessment proceedings, it was observed by the A.O that the assessee in his return of income had claimed LTCG on sale of shares of a scrip, viz. M/s JMD Telefilms Industries Ltd. (formerly known as Avtar Finance and Management Consultants) and subsequently known as M/s JMD Ventures Ltd. (Scrip Code: 511092) as shown below: Name of security Oty Date of purchase Purchase amount Date of sales Qty Sales amount LTCG JMD Telefilms Inds. Ltd. (Avtar Finance) 35000 26.02.09 59500 01.04.10 35000 2280950 2221450 JMD Telefilms Inds. Ltd. (Avtar Finance) 60000 26.02.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 37000 4449250 4386350 JMD Telefilms Inds. Ltd. (Avtar Finance) 100000 26.02.09 170000 21.10.10 100000 5089000 4919000 JMD Telefilms Inds. Ltd. (Avtar Finance) 89624 26.02.09 152361 22.10.10 89624 4397260 4244899 Total 767500 1304750 767500 60649780 59345030 The A.O vide his notice issued u/s 142(1), dated 13.09.2017 called for certain details w.r.t the LTCG on sale of shares of M/s JMD Telefilms Industries Ltd. that was claimed by the assessee as exempt u/s 10(38) of the Act. Also, notices u/s 133(6), dated 02.11.2017 were issued by the A.O to the so called exit providers i.e the parties who had purchased the scrip of M/s JMD Telefilms Industries Ltd. from the assessee through broker on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., which were complied with by the said parties as under: Sr. No. Name of the Persons Remarks 1. M/s Runicha Construction Co. P. Ltd. Called for personal attendance on 11.12.2017 and produce the documents and sent through postal authorities and same were returned back remarked as Left . 2. M/s BP Fintrade P. Ltd. Called for personal attendance on 11.12.2017 and produce the documents but reply received on 22.12.2017 stated therein that We reiterate that the said Kamlesh Gupta is not known to us and we have never dealt with him ever. Also the A.O summoned the assessee u/s 131 of the Act and recorded his statement on 18.12.2017. 4. After collecting the aforesaid details and carrying out necessary verifications, the A.O deliberated at length on the modus operandi that was adopted by the accommodation entry operators for providing bogus LTCG/STCL entries to various beneficiaries and, concluded, that the LTCG on the sale of shares of M/s JMD Ventures Ltd. shown by the assessee in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of the aforesaid exercise the LTCG beneficiary would pay cash to exit entry provider or a person who wants to book a loss and in return would get a cheque. The A.O was of the view that the operator would thereafter take his commission qua the aforesaid accommodation entry in cash. Also, he was of the view that thereafter as price of the share would crash the loss taking beneficiary would sell his holding that was purchased at a high value for a small price which would result in an artificial loss. In order to fortify his conviction that the price of the scrip in question viz. JMD Telefilms Industries Ltd. was artificially rigged to facilitate provision of bogus LTCG/STCL the A.O referred to the financials of the assessee company as were gathered by him from the data available in the public domain, as under: F.Y. Share capital Gross Turnover Expenses PAT Earnings Per Share 2009-10 7.01 84.65 84.34 1.55 0.22 2010-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried out by him in connivance with operators/brokers/promoters etc to evade taxes, as under : a. Mode of acquisition of share: Assessee had purchased 100000 equity shares on preferential basis of M/s JMD Telefilms Industries Ltd. for s₹ 17,00,000/- on 26.02.2009. This was an off-market transaction and these shares were later dematerialized. Owing to share split, the number of shares with assessee swelled to 10,00,000 on 13.07.2009. Subsequently, the assessee sold 767500 of these shares on BSE through broker in F.Y. 2010-11. b. Sale of shares and unusual rise in the price: Further the assessee has sold 767500 shares for sale consideration of ₹ 6,06,49,780/- which is 4543% gain and as discussed the rise in share prices is not holding to any commercial principles and market factors. c. Findings of Investigation wing: The findings of the Directorate of Investigation as discussed above have proved that several share brokers, entry operators and the assessee had worked out an arrangement in which the shares were acquired by the assessee, the share prices were rigged and then with the help of operators by routing the cash, shares were sold at high price to arri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly, the AO vide his order passed u/s 143(3) r.w.s 147, dated 27.12.2017 assessed the income of the assessee at ₹ 6,84,06,690/-. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(A). Observing, that the gain of ₹ 5,93,45,030/- derived by the assessee from the sale of share of M/s JMD Telefilms Industries Ltd. was derived from bogus and manipulated share prices which were nothing but unexplained investment/income of the asssessee that was converted under the garb of share market investment, the CIT(A) upheld the view taken by the A.O. Accordingly, the CIT(A) sustained the addition of ₹ 5,93,45,030/- that was made by the A.O u/s 68 of the Act a/w the addition of ₹ 36,68,987/- made by him u/s 69C of the Act. The CIT(A) while upholding the view taken by the A.O held as under: 10 Decision: I have considered the facts of the case and submissions made by the appellant. Crux of the matter taken up in the ground of appeal no. 5 to 18 is whether the amount of long term capital gains of ₹ 6,06,49,780/- claimed as exempt under Section 10(38) of the Act I. T. Act, 1961 are taxable as unexplained cash credits u/s 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(38) of the Act. June October, 2010 1) Contract notes for the relevant period. 2) Transaction statement for the said period Refer Annexure 2(iii) 10.2 Analysis of the purchase and sale of shares reveals that th eassessee upplied for the shares in January 2009, paid for the shares and wsa issued shares in February 2009 and dematted the same in June/July 2009. Assessee started selling his shareholding from March 2010 and initially sold 132500 shares in march 2010, transferred 100000 shares to his wife Mrudula Gupta on 31 October 2010 and sold of the balance 767500 shareds from April 2010 to October 2010 and claims to have earned sale proceeds of ₹ 6,06,49,780/- and derived profits of ₹ 5,93,45,030/- which were claimed as exempt under Sec. 10(38) of the I.T. Act. 1961. 10.3 Assessee company and its CAs were specifically informed to file details and documents relating to the bank account copies and copies of utilization of funds, however, the CAs have not filed details and documents, especially copies of bank accounts for the entire financial year 2010-11 relevant to AY 2011-12, however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and/or in investing in immoveable properties and/or for some other purposes from March 2010 onwards till October 2010 and hence went ahead with this plan jointly with persons like Purohits and/or others persons/ companies to derive the benefit of availing of claiming tax exemption for long term capital gains u/s. 10 (38) of the I.T. Act, 1961 and executed it with finesse and hence converted his unexplained income as 'long term capital gains through so called share market operations in shares of JMD Telefilms Limited and claimed tax exemption u/s. 10 (38) of the l.T. Act, 1961. Assessee does not appear to have derived such benefits in later and/or earlier assessment years. This is further confirmed by the statements of the Purohits, the directors and persons associated with the JMD Telefilms limited and the investigations made by the investigation wing of the income tax department at Kolkata. In nutshell, the entire profits of ₹ 5,93,45,030/- derived from the so called sale of JMD Telefilms Limited were derived from bogus and manipulated share prices and were nothing but unexplained investments/income of the assessee which was converted under the garb of share market inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 36,38,987/- u/s.69C are confirmed and the grounds of appeal of the appellant no. 5 to 18 are dismissed. 6. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. We have heard the ld. authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. As the assessee has assailed the validity of the jurisdiction assumed by the A.O for reopening his case under Sec. 147 of the Act, therefore, we shall first deal with the maintainability of the said claim. As is discernible from the records, information regarding bogus LTCG/STCL and its beneficiaries was uploaded by the Directorate of Systems, which in turn was based on the in-depth investigations that were carried out by the Directorate of Investigation, Kolkata. As stated by the A.O, the name of the assessee had figured in the list of the beneficiaries of bogus LTCG/STCL. On the basis of the aforesaid information the case of the assessee was reopened by the A.O u/s 147 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns like promoters/operators/brokers connected with transactions of this scrip at various places located across India. 4. Taking into consideration the investigation done by the Investigation wing of Income-tax department and in depth analysis of data by undersigned, I believe that KMLESH NEMICHAND GUPTA has availed bogus entry of long term capital gain through unfair means. 5. In view of the above facts, I have reason to believe that the income of at least ₹ 5,95,15,091/- chargeable to tax has escaped assessment for A.Y 2011-12 by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year and it is fit case for issuing notice u/s 148 of the Income Tax Act, 1961. Before us, the ld. Authorized Representative (for short A.R ) for the assessee has assailed the validity of the jurisdiction assumed by the A.O for reopening the case of the assessee on two fold reasons, viz. (i) that the case of the assessee had been reopened on the basis of borrowed satisfaction of the Directorate of Investigation, Kolkata; and (ii). that the reassessment proceedings had been initiated on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., had escaped assessment, by reason of the failure on his part to disclose fully and truly all material facts necessary for assessment. In the backdrop of the aforesaid factual position, we are unable to comprehend as to on what basis it is claimed by the ld. A.R that that A.O had reopened the case of the assessee on the basis of a borrowed satisfaction and/or on the basis of suspicion, conjectures and surmises, de hors any concrete material. As observed by us hereinabove, the A.O had before him sufficient material/information on the basis of which he had arrived at a bonafide belief that the income of the assessee chargeable to tax had escaped assessment. We may herein observe that at the stage of reopening of a case u/s 147 of the Act, the A.O is only required to have a cause or justification to know or suppose that income of the assessee chargeable to tax had escaped assessment and, no obligation is cast upon him to have finally ascertained the said fact by legal evidence or conclusion. Our aforesaid view is as per the mandate of the judgment of the Hon ble Supreme Court in the case of ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 291 ITR 500, wherein the Hon ble Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted shares of M/s JMD Telefilms Industries Ltd., and had further erred in adding the sale proceeds of ₹ 6,06,49,780/- as an unexplained cash credit u/s 68 of the Act. Controversy involved in the present appeal hinges around the declining of the assessee s claim for exemption of the LTCG of ₹ 5,93,45,030/- on sale of shares of M/s JMD Telefims Industries Ltd. [formerly known as Avtar Finance and Management Consultants) and subsequently known as M/s JMD Ventures Ltd. (Scrp Code : 511092) u/s 10(38) of the Act. Shorn of unnecessary details, the assessee had in his return of income for the year under consideration claimed to have sold 7,67,500 shares of M/s JMD Ventures Ltd. for a consideration of ₹ 6,06,49,780/- after holding the same for a period of more than 1 year. Long Term Capital Gain (LTCG) of ₹ 5,93,45,030/- on the aforesaid sale transactions was claimed by the assessee as exempt u/s 10(38) of the Act. Information was gathered by the A.O from the data related to bogus LTCG/STCL that was uploaded by the Directorate of Systems, which in turn was based on the in-depth investigations as regards accommodation entry activities qua bogus LTCG/STCL carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lined of having carried out any transaction with the assessee ; or stated that they had purchased the shares from the stock exchange and had not made any purchase on any personal level from the assessee. The replies furnished by the aforementioned three parties in compliance to notices issued to them u/s 133(6), read as under : Sr. No. Name of the Parties Remarks 1. M/s BP Fintrade P. Ltd. Reply received on 10.11.2017 stated therein that We had been dealing through BP Equities P. Ltd. 2. Shri Dipak Kumar Agarwal Reply received on 09.11.2017 stated therein that I do not have any transaction with Shri Kamlesh N. Gupta in shares/securities or otherwise before, during and after A.Y. 2011-12 3. M/s Navdurga Investment Consultants P. ltd. Reply received on 04.12.2017 stated therein that Purchased from the stock exchange and no such purchases were made on personal level. No transaction of any sort or means has been carried out with the said indivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is the claim of the A.O that as per the information received from the Directorate of Investigation, Kolkata, M/s JMD Telefilm Industries Ltd., a scrip listed on BSE/NSE, as per the statements of various persons like promoters/operators/brokers etc. who were connected with the transactions of the said scrip at various places located across India, was a penny stock company, that was used for artificial trading. During the course of the assessment proceedings, the A.O after referring to the modus operandi that was adopted by accommodation entry providers for providing bogus LTCG/STCL entries to the beneficiaries had referred to a list comprising of 28 brokers/6 operators/2 promoters who as per the information made available to him by the Directorate of Investigation, Kolkata had played a role in manipulating the scrip of M/s JMD Telefilms Industries Ltd. Out of the aforementioned list of persons the A.O recorded the statements of a select few, viz. (i). Shri. Pravin Kumar Agarwal, Entry Operator; (ii). Shri. Dhruv Narayan Jha, Promoter; (iii). Shri. Kailash Purohit, Promoter; and (iv). Shri. Anuj Aggarwal, Broker. On a perusal of the respective statements of the aforementioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further stated by him that he was looking after the audio/video CD DVD business of JMD Telefilms Industries Ltd. In fact, it was stated by him that except for financial activities he was looking after the other business activities of JMD Telefilms Industries Ltd. On being queried as regards the modus operandi that was adopted for providing accommodation entries a/w the beneficiary companies to whom the same were provided, he refrained from answering the same and stated that the same would be explained by Shri. Jagdish Purohit. (D). Shri. Anuj Aggarwal : Statement of Shri. Anuj Aggarwal, broker, was recorded u/s 131 of the Act on 21.03.2015 by the DDIT(Inv.), Kolkata during the course of the survey conducted u/s 133A on certain concerns, viz. M/s Korp Securities Ltd.; M/s Divyadrishti Traders Pvt. Ltd; and M/s Divyadrishti Merchants Pvt. Ltd. It was stated by him that he was engaged in the business of share trading share broking through Korp Securities Ltd. On being queried as regards the nature of the business activities carried out by the companies in which he was a director, viz. Korp Securities Ltd; Asteroids Infra LLP; and Silky Moon Infra LLP, it was stated by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld by him way back between the period 01/04/2010 to 22/10/2010. Be that as it may, we may herein observe, that though nothing incriminating in context of the assessee emerges from the statements of the aforementioned persons, however, as stated by the ld. A.R, and rightly so, the said statements could not have been pressed into service by the A.O for drawing of adverse inferences against the assessee without confronting the same to him a/w affording of an opportunity to cross-examine the said persons. In this regard, it would be relevant and pertinent to point out that the assessee vide his letter dated 18.03.2020 (Page 71 of APB ) had specifically requested for full legible copies of the statements of all the 32 parties that were relied upon by the A.O. Our aforesaid view is fortified by the judgment of the Hon ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise (2015) 281 CTR 241 (SC). In its aforesaid judgment, it was observed by the Hon ble Apex Court that not allowing the assessee to cross-examine witnesses by the Adjudicating Authority though statements of those witnesses were made as basis of the impugned order amounted to a serious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted by the ld. A.R that the assessee had challenged the said assessment order and the same as on date is pending before the CIT(A). Out of the balance 8,67,500 shares the assessee had transferred 1,00,000 shares to his wife Mrs. Mridulla Gupta through an unregistered gift deed. The balance 7,67,500 shares were sold by the assessee during the year under consideration i.e over the period June, 2010 to October, 2010 and the LTCG of ₹ 5,93,15,038/- arising therefrom was claimed by him as exempt u/s 10(38) of the Act. Copies of the contract notes and the transaction report of Motilal Oswal Securities Ltd. evidencing the aforesaid transaction of sale of shares was filed by the assessee before the lower authorities. As regards the initial off-market purchase of one lac shares of JMD Telefims Industries Ltd. by the assessee, we may herein observe that an off-market transaction for purchase of shares is not illegal. As observed by us hereinabove, the purchase transaction of shares was carried out by the assessee vide account payee cheque and the sale of shares have suffered STT, service tax, total turnover tax, stamp duty charge etc. As is discernible from the orders of the lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived from the Directorate of Investigation, Kolkata revealed the modus operandi that was adopted by the promoters/operators/brokers a/w the beneficiaries for obtaining bogus LTCG/STCL entries, we find that the same are only in the nature of general observations and the same on a standalone basis in the absence of any material/evidence proving that the assessee had colluded with the promoters/brokers/operators for laundering his unaccounted money in the garb of tax exempt LTCG, cannot justify drawing of any adverse inferences as regards the transaction of purchase/sale of shares in question by the assessee. As is discernible from the assessment order, one of the major aspect that had weighed in the mind of the A.O for stamping the transaction of purchase/sale of shares of JMD Telefilms Industries Ltd. by the assessee as a structured transaction with a purpose of facilitating tax evasion in the garb of a bogus claim of tax exempt capital gain u/s 10(38) of the Act and laundering of his ill-gotten money; was the fact that within a short span there was a steep rise in the price of shares of JMD Telefilms Industries Ltd., i.e by 19 times in 8 months i.e from ₹ 7.93 in October, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,00,000 shares to his wife Smt. Mridulla Gupta. The balance 7,67,500 shares were sold by the assessee on the floor of BSE through his broker Motilal Oswal Securities Limited for a consideration of ₹ 6,06,49,780/-. Backed by the substantial documentary evidence filed by the assessee which beyond doubt substantiates the genuineness of the transaction of purchase and sale of shares of JMD Telefilms Industries Ltd. by him, we are afraid that the unsubstantiated claim of the A.O that the assessee had converted his unaccounted money by taking fictitious LTCG in a pre-planned manner cannot be accepted. At this stage, we may herein observe, that the very basis adopted by the CIT(A) for sustaining the view of the A.O that the assessee had obtained a bogus entry of LTCG, viz. that the assessee had only after a period of 2 years i.e in the year 2014 invested in shares of another company, i.e Justdial company; that the assessessee had not revealed the user of the sale proceeds of the shares of JMD Telefilms Industries Ltd; that the assessee did not derive such gain from purchase/sale of shares in the preceding/succeeding years; that why did the assessee not invest the surplus funds i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its stock. We have nothing adverse to comment on the above analysis, but are concerned with the axiomatic conclusion drawn by the AO that the Respondent had entered into an agreement to convert unaccounted money by claiming fictitious LTCG, which is exempt under Section 10(38), in a pre-planned manner to evade taxes. The AO extensively relied upon the search and survey operations conducted by the Investigation Wing of the Income Tax Department in Kolkata, Delhi, Mumbai and Ahmedabad on penny stocks, which sets out the modus operandi adopted in the business of providing entries of bogus LTCG. However, the reliance placed on the report, without further corroboration on the basis of cogent material, does not justify his conclusion that the transaction is bogus, sham and nothing other than a racket of accommodation entries. We do notice that the AO made an attempt to delve into the question of infusion of Respondent's unaccounted money, but he did not dig deeper. Notices issued under Sections 133(6)/131 of the Act were issued to M/s Gold Line International Finvest Limited, but nothing emerged from this effort. The payment for the shares in question was made by Sh. Salasar Tradin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent source or evidence to show that there was an agreement between the Respondent and any other party, prevailed upon the ITAT to take a different view. Before us, Mr. Hossain has not been able to point out any evidence whatsoever to allege that money changed hands between the Respondent and the broker or any other person, or further that some person provided the entry to convert unaccounted money for getting benefit of LTCG, as alleged. In the absence of any such material that could support the case put forth by the Appellant, the additions cannot be sustained. 12. Mr. Hossain's submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent. With regard to the claim that observations made by the CIT(A) were in conflict with the Impugned Order, we may only note that the said observations are general in nature and later in the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r what consideration, and the fact that the sale consideration was received vide account payee cheques; copy of de-mat account of the assessee showing the share transactions; contract notes of the brokers (which are system generated documents prescribed by the stock exchange) giving details of transactions; the Hon ble High Court observed that the Tribunal had rightly concluded that the transaction of purchase/sale of shares was not an accommodation transaction for conversion of cash into accounted or regular payment. Insofar the discrepancy as pointed out by the stock exchange as regards the client code was concerned, the Hon ble High Court upheld the view taken by the Tribunal that the same would not suffice to prove that the share transactions were bogus or sham. 13. We, thus, in the backdrop of our aforesaid deliberations are of the considered view that de hors any cogent material made available on record by the department which would prove to the hilt that the assessee had not carried out any genuine transaction of purchase/sale of shares of JMD Telefilms Industries Ltd. and, in the garb of bogus entry of a tax exempt LTCG u/s 10(38) of the Act, laundered his unaccounted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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