TMI Blog2023 (8) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... only. Thus, there is a complete series of factors and evidences demonstrating the genuineness of assessee s transactions and not a single of them has been disputed by revenue. Thus capital gain declared by assessee must be accepted as genuine and we do so. Accordingly, we delete the additions made by revenue-authorities. The assessee succeeds in these appeals. - Shri Vijay Pal Rao, Judicial Member And Shri B.M. Biyani, Accountant Member For the Assessee : Ms. Nisha Lahoti, CA and Shri Vijay Bansal, CA For the Revenue : Shri Ashish Porwal, Sr. DR ORDER PER B.M. BIYANI, A.M.: These two appeals are filed by assessee assailing the two appeal-orders, both dated 09.09.2022 and both passed by learned Commissioner of Income-Tax, National Faceless Appeal Centre, Delhi [ Ld. CIT(A) ], which in turn arise out of assessment-orders dated 13.12.2018 and 14.12.2018 respectively for assessment years [ AY ] 2011-12 and 2012-13 passed by learned DCIT/ACIT-1(1), Indore [ Ld. AO ] u/s 147 read with section 143(3) of Income-tax Act, 1961 [ the Act ]. 2. These appeals involve identical issue and the parties were represented by same Representatives; accordingly at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee made following arguments and claimed that the lower-authorities have wrongly treated the capital gain declared by assessee as non-genuine: (i) It is submitted that the transactions done by assessee are fully supported by all valid documents. The details of documents placed before lower-authorities and also filed in the Paper-Book of AY 2011-12 are as under: Document Paper-Book page No. 1 Year-wise summary of purchase and sale of shares starting from financial year 2007-08 to 2017-18 (AY 2008-09 to 2018-19) 22 2 De-mat A/c 24 3 Copy of Pass Book of Union Bank of India from 13.12.2007 to 13.02.2008 from which the purchase consideration was paid 25 to 27 4 Copies of Contract Notes 31 to 34 5 Statement of date-wise purchases of shares and payment of purchase consideration 35 6 A/c Statement of Axis Bank wherein the sale considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that was for the reason that in those days, the dematerialization system was not popular and the persons used to maintain physical shares. (v) It is submitted that the even after credit of shares in De-mat A/c on 31.12.2008, the assessee did not sell shares in one lot or even in one year. The sales was made in tranches in four years during AY 2010-11, 2011-12, 2012-13 and lastly in AY 2018-19. (vi) It is submitted that the shares were held by assessee in De-mat A/c itself from 31.12.2008 till AY 2018-19; thus the total holding period from 31.12.2008 till AY 2018-19 is approximately 10 years. Ld. AR strongly contended that holding for a period of 10 years itself is the single most factor which rules out all allegations against assessee. (vii) Lastly, it is submitted that the assessee is a regular investor which is clearly evident from other shares held by assessee in De-mat A/c placed at Page No. 24 of Paper-Book. Thus, it is not a case of solitary or isolated transactions of KCLIPL only to generate bogus capital gain as alleged. 7. Per contra, Ld. DR for revenue made following contentions and claimed that the revenue has rightly treated the capital gain declared by as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 174 (Delhi ITAT) 8. In Rejoinder, Ld. AR made following submissions/contentions: (i) That the assessee has filed all documents and not a single document is disputed by AO. In fact, Ld. CIT(A) has himself mentioned in Para No. 5.6 of appeal-order that the AO has not disputed documents of assessee. (ii) That the shares were purchased as well as sold through stock exchange. There is no off-market purchase or off-market sale. (iii) That the entire sale is made through platform of recognized stock exchange and the assessee has no way or means to know the buyers. Moreover, the names and information of buyers as well as notices issued to them u/s 133(6) as noted by AO in assessment-order were never confronted to assessee; those details are directly mentioned by AO in assessment-order. (iv) That the statement of Shri Mohan Jhanwar, director of KCLIPL are recorded at the back of assessee and no opportunity had been given to assessee to cross-examine or rebut the same. Further, there is nothing adverse in the statements. (v) That there is no iota of evidence to reveal that the assessee was involved in alleged price-rigging. In fact, the assessee was not aware of price-riggi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO s noting in assessment-order came to the knowledge of assessee only after seeing the assessment-order. Same is the case of statement of Shri Mohan Jhawar, director of KCLIPL, which were not provided or confronted to assessee. Since the enquiries from buyers u/s 133(6) and statement of Shri Mohan Jhawar are assessee-specific and heavily relied upon by AO in assessment-order, the AO was legally duty bound to provide opportunity to assessee before making them a basis to draw any conclusion. But then the AO has not done so which is against the settled judicial principle of audi alteram partem . Another contention is based on AO s noting that the turnover and profit of KCLIPL from year 2000 to 2005 were negligible but we fail to understand how this noting is relevant to assessee s case when the assessee has made first purchase transaction itself on 03.12.2007 which is much after year 2005. In fact, this factor goes in favour of assessee for the simple reason that the AO himself admitted that in the year 2005, there was a change in management of KCLIPL and by virtue of SEBI order dated 06.10.2005, Shri Mohan Jhawar and others were given management. In stock market, change in manag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first blush itself. But in the present case of assessee, the vital factors are such that (i) the purchase and sale both were done through stock-exchange, not off-market (ii) the payment and receipt of both purchase and sale considerations were through banking channel and not in cash, (iii) the assessee is a regular investor and holding other securities also, (iv) the shares were got dematerialized immediately and held in de-mat a/c thereafter, and (v) most importantly, the assessee has held shares for about a period of 10 years and sold in four assessment years in tranches. Thus, the vital factors of assessee s case are totally different then the facts of decisions relied upon by Ld. DR. Therefore, the said decisions are not applicable to assessee s case. 12. That brings us to conclude that the facts of present appeal, as is evident from foregoing discussion, do not reveal any problem or negativity. The revenue in such a situation cannot reply upon mere suspicious, conjecture, preponderance of probabilities or report of investigation wing of department. In our considered view, there capital gain declared by assessee must be accepted as genuine and we do so. Accordingly, we del ..... X X X X Extracts X X X X X X X X Extracts X X X X
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