TMI Blog2019 (6) TMI 1698X X X X Extracts X X X X X X X X Extracts X X X X ..... upportive material do not carry weight. Coupled with this, hon'ble jurisdictional high court s other decisions in CIT vs. Rungta Properties Pvt. Ltd. [ 2017 (6) TMI 521 - CALCUTTA HIGH COURT] , CIT vs. Shreyahi Ganguly [ 2012 (9) TMI 1113 - CALCUTTA HIGH COURT] , M/s Classic Growers Ltd [ 2013 (2) TMI 825 - CALCUTTA HIGH COURT] also hold such transactions in scrips supported by the corresponding relevant evidence to be genuine. We adopt the above extracted reasoning mutatis mutandis therefore to delete the impugned STCL disallowance / addition. Unexplained commission expenditure disallowance, if any shall automatically follow suit as a necessary corollary. Assessee appeal allowed. - ITA No. 1445/Kol/2018, ITA No. 2156/Kol/2018, ITA No. 2526/Kol/2018, ITA No. 121/Kol/2019, ITA No. 2572/Kol/2018, ITA No. 93/Kol/2019, ITA No. 1653/Kol/2018, ITA No. 1049/Kol/2018, ITA No. 1670/Kol/2018, ITA No. 1983 & 1987/Kol/2018 And Ors. - - - Dated:- 28-6-2019 - Shri S.S. Godara, Judicial Member ITA No. 255 259/Kol/2019, ITA No. 257 258/Kol/2019, ITA No. 2435/Kol/2018, ITA No. 2441/Kol/2018. For the Appellant : Shri Sunil Surana, FCA, Shri Yash Vardhan Baid, Advocate, Ana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliveries were received and given through depository account and the payments were made through banking channels. All the transactions are duly supported by credible evidences in no defect has been found in such documents. The submission made by the appellant was considered. The assessment order of the A.O. was based on the report of the DIT (Inv.). The Investigation Wing of the Department had come out with a comprehensive report on the racket of providing accommodation entries in the form of long term capital gains/ losses by certain unscrupulous elements who had rigged the share price of certain scripts. The report pointed out to the suspicious transactions in the scripts of certain companies with a objective of tax avoidance. The Investigation Wing identified a total of 84 listed companies, 5000 paper companies and 25 entry operators involved in this racket. The statements of the operators were recorded in which they accepted of the rigging the price of the shares and managing the market to bring desirable results which suited their clients. These operators also accepted that they were doing this only for a paltry commission of 50 paisa to 1 rupees per Rs.I00 The A/R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the allegation that the shares of M/s Unno Industries Ltd were rigged during the assessment year 2014-15. In the subsequent financial years, the value of shares of the company had witnessed a downward spiral. Secondly the share prices of M/s Unno Industries Ltd, are not in symmetry with the markets. It is a common knowledge, that when stocks are headed into a bull market cycle, the trend can be detected by a price rise, but when stocks are headed into a bear cycle, the trend can be detected by falling prices. The shares of M/s Unno Industries Ltd, mysteriously followed a reverse trend from the markets. In the period 2016 to 2018 when the Sensex witnessed a historic high, the shares of the company were at an all time low. The above findings, fortifies the findings of the Investigation Wing and the AO, that the transactions in shares were bogus and the share prices were rigged. This volatility in the share price of the M/s Unno Industries Ltd also came to the attention of SEBI. Based on the report of SEBBI, the Bombay Stock Exchange had suspended trading in shares of M/s Unno Industries Ltd for a certain period. The notification from SEBI is reproduced as under:- Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... May 4, 2016 till further notice. Trading Members may further note that: a) In case, any of the aforesaid companies comply (to the satisfaction of the Exchange) with all the provisions of SEBI Listing Regulations, 2015 including payment of fines on or before May 20,2016; trading in securities of the said companies will not be suspended b) However, in case the aforesaid companies fail to comply with the provisions of SEBBI Listing Regulations, 2015, to the satisfaction of the exchange on or before May 20, 2016; then:- Trading in the securities of the companies would be suspended we! May 26, 2016, and the suspension will continue till such time the Company complies including payment of fines, 15 days after suspension has been effected, trading in the shares of non-compliant companies would be allowed on trade for Trade basis in Z group only on the first trading day of every week for six months/. Revocation of suspension would be subject to the companies further complying with the procedure and all extant norms prescribed for revocation of suspension. The BSE notification specially mentions that trading in shares of M/s Unno Industries Ltd is presently suspend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with the concerned entry operators. Hon'ble apex court s decisions in Sumati Dayal vs. CIT (1995) 80 Taxmann.89/214 ITR 801 (SC) and CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC) are quoted before me during the course of hearing at the Revenue s behest. It strongly argues that the department has disallowed/added the impugned STCL based on circumstantial evidence unearthed after a series of search actions / investigations undertaken by the DDIT(Inv). I find no merit in Revenue s instant arguments. The fact remains that the assessee has duly placed on record the relevant contract notes, share certificate(s), detailed corroborative documentary evidence indicating purchase / sale of shares through registered brokers by banking channel, demat statements etc., The Revenue s only case as per its pleadings and both the lower authorities unanimously conclusion that there is very strong circumstantial evidence against the assessee suggesting bogus STCL accommodation entries. I find that there is not even a single case which could pin-point any making against these assessees which could be taken as a revenue nexus. I make it clear that the CBDT s circular dated 10.03.2003 has itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwal Sons (HUF) vs. ITO in ITA No. 1413 to 1420/CHNY/2018; order dt. 06/12/2018, for the proposition that such capital gains have to be brought to tax. He also relied on the judgment of the Hon ble Bombay High Court in the case of Sanjay Bimalchand Jain vs. Principal Commissioner of Income-tax-1, Nagpur; [2018] 89 taxmann.com 196 (Bombay) and the decision of the Smt. M.K. Rajeshwari vs. ITO; ITA No.1723/Bang/2018; Assessment Year 2015-16, order dt. 12/10/2018. 5. After hearing both sides, I find that in a number of cases this bench of the Tribunal and Jurisdictional Calcutta High Court has consistently held that, decision in all such cases should be based on evidence and not on generalisation, human probabilities, suspicion, conjectures and surmises. In all cases additions were deleted. Some of the cases were, detailed finding have been given on this issue, are listed below:- Sl. No. ITA Nos. Name of the Assessee Date of order/judgment 1 ITA No.714 to 718/Kol/2011 ITAT, Kolkata DICT vs. Sunita Khemka 28.10.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these evidences are (a) evidence of purchase of shares, (b) evidence of payment for purchase of shares made by way of account payee cheque, copy of bank statements, (c) copy of balance sheet disclosing investments, (d) copy of demat statement reflecting purchase, (e) copy of merger order passed by the High Court , (f) copy of allotment of shares on merger, (g) evidence of sale of shares through the stock exchange, (h) copy of demat statement showing the sale of shares, (i) copy of bank statement reflecting sale receipts, (j) copy of brokers ledger, (k) copy of Contract Notes etc. 7. The proposition of law laid down in these case laws by the Jurisdictional High Court as well as by the ITAT Kolkata on these issues are in favour of the assessee. These are squarely applicable to the facts of the case. The ld. Departmental Representative, though not leaving his ground, could not controvert the claim of the ld. Counsel for the assessee that the issue in question is covered by the above cited decisions of the Hon ble Jurisdictional Calcutta High Court and the ITAT. I am bound to follow the same. 8. In view of the above discussion I delete the addition made u/s 68 of the Act, o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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