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TMI Blog2023 (3) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... crip Wagend Infra venture Ltd., which against the human probability in view of the fact that the company was neither making any profit nor declared dividend." 3. "On the fact and circumstances of the case, the Learned CIT(A) has erred in deleting the addition of Rs. 4,33,71,4681- made by the AO on account of unexplained cash credit u/s. 68 of the I. Act, 1961 without appreciating the fact that the Hon'ble Supreme Court in the case Sumati Dayal Vs CIT (1995) 214 ITR 801 (SC) has held genuineness could validity be tested on the ground or principle of preponderance of human possibilities which form a valid ground or parameter for determining the genuineness." 2. The brief facts of the case are that the assessee is an individual and derives income from capital gains and income from other sources. The assessee has filed the return of income for the A.Y 2013-14 on 16.09.2014 with a total income of Rs. 1,08,070/-.The return of income was processed u/s 143(1) of the Act. The search operations U/sec132 of the Act conducted at the residential premises of the assessee as he is engaged in obtaining bogus long term capital gains on sale of shares and claimed exempt U/sec10(38) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Copies of statement of demat account operated and maintained by the assessee share brokers evidencing the sale are also enclosed /or your kind perusal. Following are being claimed to be direct Copies of ledger account of the share brokers evidencing payment of STT on the sale, bank statements evidencing receipt of sale consideration as well as computation of long term capital gain have already been furnished yet the same are being enclosed again. From the above stated facts it is evident that complete details verification of claim of Long Term Capital Gain by the assessee have been furnished. The assessee has been issued and served a show cause notice whereby he has been asked to explain as to why the Long Term Capital Gain accrued to him shall not be treated as undisclosed income and taxed as cash credit under Section 68 of the Act. The stated show cause notice has been issued alleging that the claim of Long Term Capital Gain of the assessee is not simple or lucid and your good self are in possession of certain circumstantial direct as well as direct evidences to show that the Long Term Capital Gain claimed by the assessee is not genuine and on that basis your good self ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is not a penny stock company and has not been found or held to be so. Thus, drawing adverse cognizance only upon the basis of suspicion is against the principles of natural justice and law and thus, it is most humbly requested that no adverse cognizance may be drawn in this regard. 2. Your goodself in Para 2.4 (ii) has stated that the result of enquiry was also shared with SEBI and SEBI after investigating some of the cases have found the allegation to be correct. In this regard it is most humbly submitted that recently certain restrictions were imposed by SEBI and stock exchanges on transactions in shares of 331 companies which were found and alleged to be indulged in the stated pernicious practice of generating bogus Long Term Capital Gain. A copy of the list of said entities is enclosed for your kind perusal. From the perusal of the stated list it is evident that even from the part of SEBI and stock exchange there has been no allegation in respect of the shares of M/s Wagend Infra Ventures Limited. Since the show cause notice issued by your good self is based solely upon surmises and conjectures it is most humbly requested that a specific enquiry may be conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been referred to by several courts in several judicial pronouncements. Relevant extract of one of such judicial pronouncements of Hon'ble Delhi High Court in the case of CIT vs Kabul (2016) 380 ITR 0573 (HC)(Delhi) is reproduced hereunder:- "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six A Vs immediately preceding the previous year relevant to the A Yin which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as afresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant A Y in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders/or each of six ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garwal vs. DCIT, ITA No.84/De1/2013 g) ACIT vs. Manoj Narain Aggarwal, ITAN No. 5518/De1/2012 h) Jakson Engineering Ltd. vs. ACIT, 2014-TIOL-l94-ITAT-DEL i) ACIT vs. PACL India Ltd, 2013-TIOL-734-ITAT-DEL Though it is understood that all these judicial pronouncements cited above are related to the assessment proceedings which have abated as a consequence of search and could easily be distinguished yet these are being referred to take cognizance and moot of the judiciary on the importance of incriminating. material found during the course of search action. It is not out of place to mention here that in some of the judicial pronouncements the search action have been referred to as the final action taken by the department to find out the truth and facts of an assessee. In the case of the assessee neither any incriminating material evidencing the rigging of prices of M/s Wagend Infra Ventures Limited nor any evidence indicating any generation of of/icr income commensurate to the quantum of Long Term Capital Gain accrued to the assessee was found and seized. Thus, in the absence of other income which would have been routed by the assessee in the form of Long Terni Capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds of appeal, the CIT(A) has dealt elaborately on investment pattern, submissions, material information, judicial decisions and for the same assessment year in the assessee's father case the long term capital gains on the sale of shares of M/s Wagent Infra Venture was accepted by the department. Finally Ltd.CIT(A) has also relied on the Hon'ble High Court and Hon'ble Tribunal decisions and followed the judicial precedents and observed that the action of the AO is not tenable and allowed these grounds of appeal by deleting the addition and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the revenue has filed an appeal before the Hon'ble Tribunal. 5. At the time of hearing, the Ld.DR submitted that the CIT(A) has erred in granting relief to the assessee by deleting addition and overlooking the findings of the A.O on the statement recorded in sale of shares and the evidences. The Ld.DR supported the order of the AO and prayed for allowing the revenue appeal. 6. Contra, the Ld. AR submitted that the CIT(A) has considered the facts, information, transactions of sale of shares and judicial decisions of the Hon'ble High Court and Hon'ble Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made the addition based on the statement u/s 132(4) of the Act of Mr. Rajkumar Kedia mentioning that the assessee was involved in providing accommodation entries and no such statement was confronted to the assessee and opportunity of cross examination was provided to the assessee. Further not providing an opportunity to cross examination and statement is violation of principles of natural justice. The assessee has substantiated before the AO with the documents with respect to allotment of shares of M/s Wagend Infra Venture Pvt Ltd (formerly known as M/s Agarwal Holdings Ltd) referred to page 31 to 33 of the paper book. The assessee has filed the details, evidences on the disputed issue before the AO in lieu of the notice issued u/s 142(1) of the Act, whereas the AO based on the conjunctions and surmises has treated the LTCG as unexplained cash credit u/s 68 of the Act. The assessee has submitted the details in respect of allotment of shares with supporting share application form, bank statement, demat statement and broker ledger accounts and discharged the onus cast upon the assessee and demonstrated the information placed at page 34 to 50 of the paper book. 8. Whereas the AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s where the payments and receipts are through banking channel and the identity, genuineness of the transaction and creditworthiness have been proved. The assessee has made elaborate submissions before the CIT(A) along with evidences, facts and judicial decisions. The Ld. AR further submitted that the CIT(A) has considered the factual aspects and information satisfying the three ingredients u/s 68 of the Act and the assessee has discharged his burden by submitting the details, but the AO has not made any independent enquiry or conducted any inspection of facts and only relied heavily on the statement recorded. Whereas the assessee has purchased the shares in the normal course of business and claimed exemption u/s 10(38) of the Act. We found that the assessee has submitted voluminous information before the AO to substantiate the claim of exemption u/s 10(38) of the Act and also before the CIT(A) which cannot be overlooked. Further the CIT(A) has dealt extensively on the disputed issue and relied on the catena of judicial decisions, at this juncture we consider it appropriate to refer to the findings of the CIT(A) in granting relief to the assessee dealt at Para 7.0 to 7.7 of the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gain seekers were distinguishable from the facts of the case of the appellant a) A comparative chart showing difference between the modus operandi adopted by the bogus capital gain seekers as narrated in the assessment order and that of appellant is as under:- or relation with an assessee. appellant because the father of the I appellant was an old shareholder of the stated company. 2 The purported investors are returned No evidence substantiating the same their initial investment amount in was found or ever brought on record in cash. the case of the appellant. 3 The transaction of sale is settled by Neither evidence of any such cash providing unaccounted cash which is payment was found nor any income routed through paper companies, commensurate to said capital gain found in the case of the appellant. Further, the appellant didn't had income commensurate to the capital gains which he could have routed in the form of capital gains. b)It is further pertinent to mention here that the Long Term Capital Gain accrued to the father of the appellant is assessed as genuine and no adverse cognizance was drawn by the Ld. AO in his case. This conclusively prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T vs. Prem Pal Gandhi, (2018) 401 ITR 0253 (P&H) ii Pr. CIT v/s. Hitesh Gandhi, ITA No. 18 of 2017(0 & M) iii. Farrah Marker Vs. ITO (2016) 46 CCH 0535 (Mum Tribunal) iv. Sh. Prakash Chand Bhutoria vs. ITO, ITA No. 2394/Ko1/2017 v. DCIT vs. Sunita Khemka, LTA Nos. 714 to 718/Ko1/2011 vi. Principal CIT v/s. Prempal Gandhi, ITA-95-2017(0& M) vii. ITO 24(3)(1) v/s, M/s. Indravadan Jain HUF ITA - 4861/Mum/2014 ACIT 24 (3) v/s. Shri.Indravan Jain ITA No. 5168/Mum/2014 viii. Smt. Durgadevi Mundra v/s ITO 21(1)(1) ITA No. 1175/Mum/2012 ix. Shri. Mahesh Mundra V/s. ITO 21(1)(1) ITA No. 1175/Mum/2012 x. Shri. Pramod Kumar Lodha v/s. ITO ITA No. 826/ JP/2014 xi. Mr. Navneet Agrawal, Legal Heir of Late Kiran Agrawal v/s. ITO Wd 35 (3), ITA No. 2281/Ko1/2017 Meenu Goyal v/s. ITO Ward 31(1), ITA No. 6235/ Del/2017 xiii. Shri. Anil Nand Kishore Goyal v/s. ACIT, Central Circle, ITA No. 1256/PN/2012 xiv. ITO 24(3)(1) v/s. M/s. Arvind Kumar Jain-HUF, ITA No. 4862/Mum/2014 xv. CIT V/s. Smt. Jamnadevi Agrawal& ORS., 328 ITR 0356" 7.2 The submissions of the Learned Counsel have been carefully considered. The Learned Counsel affirmed that the transactions were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in his statement. Even in the search, no contrary evidences could be detected. In view of the above, the addition made by the AO cannot be upheld. 7.3 The AO has heavily relied upon the statement of Shri Rajkumar Kedia and Shri Pravin Agarwal. It was stated by the AO that Shri Rajkumar Kedia has said that the appellant was a well-known entry operator of Mumbai. However, extract of the statement which is a part of the assessment order, do not mention the name of the assessee anywhere. This, again, appears to be presumption made by the AO. The assessee had asked for copies of the statement where the assessee's name was mentioned and also to provide for cross examination of both Rajkumar Kedia and Pravin Agarwal, which has not been provided by the AO. It is a fact that during the course of search no incriminating material was found with the assessee. Moreover, the assessee has not admitted to indulging in any manipulation of long term/short term capital gain. He had only admitted to refer a few people who are in need of entries to one Mr. Akash Agarwal. Mr. Akash Agarwal, who was also searched said in his statement that Mr. .Jajoo controls and manages some companies. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment. This not having been done, the denial of such opportunity goes to root of the matter and strikes at the very foundation of the reassessment and therefore renders the orders passed by the CIT(A) and the Tribunal vulnerable. In our view the assessee was bound to be provided with the material used against him apart from being permitting him to cross examine the deponents. Despite the request dated 15th February, 1996 seeking an opportunity to cross examine the deponent and furnish the assessee with copies of statement and disclose material, these were denied to him. In this view of the matter we are inclined to allow the appeal on this very issue." 7.4 The Hon'ble ITAT, Mumbai in the case of Ms. Farrah Marker ITA No. 3801/Mum/2011 held as under: "From the appreciation of the facts of the case, the material evidence placed on record by the assesse and in the light of the discussion of the factual and legal matrix of the case as discussed from para 3.1 to 3.4.7 of this order (supra(, we are of the considered opinion that the authorities below i.e. AO/CIT(A) have made the addition u/s. 68 of the Act merely on presumptions, suspicions and surmises in respect of penny s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had made an application for allotment of 50000 equity shares of "Smart champs IT and Infra Ltd." and she was allotted the share on 3rd December 2011 (copy of Application form, intimation of allotment and share certificate Paper Book at page 8 to 10). 2. The payment for the allotment of shares was made through an account payee cheque (copy of the bank statement evidencing the source of money and payment made to "Smart Champs IT & Infra Ltd." for such shares allotted is placed in the Paper Book at page no. 11). 3. Annual return no, 20B was filed with Registrar of companies by "Smart Champs IT & Infra Ltd" showing the assessee's name as shareholder (copy of annual return no. 20B filed with Registrar of companies by "Smart Champs IT & Infra Ltd. "is placed in the Paper Book at page no. 12 to 18.) 4, The assessee lodged the said shares with the Depository M/s. Eureka Stock & Share Broking Services Ltd. with a Demat request on I lth February, 2012. The said shares were dematerialized on 31st March, 2012 (copy of demat request slip along with the transaction statement is placed in the paper book at page no. 19 to 21). 5. On 24.01.2013, the Hon'ble Bombay High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in earning alleged bogus LTCG and STCG, that have surfaced during investigations, should guide the authorities in arriving at a conclusion as to whether the claim in genuine or not. An alleged scam might have taken place on LTCG etc. But it has to be established in each case, by the party alleging so, that this assessee in question was part of this scam. The chain of events and the live link of the assessee's action giving her involvement in the scam should be established. The allegation imply that cash was paid by the assessee and in return the assessee received LTCG, which is income exempt from income tax, by way of cheque through Banking channels. This allegation that cash had changed hands, has to be proved with evidence, by the revenue. Evidence gathered by the Director Investigation's office by way of statements recorded etc. has to also be brought on record in each case, when such a statement, evidence etc. is relied upon by the revenue to make any additions. Opportunity of cross examination has to be provided to the assessee, if the AO relies on any statements or third party as evidence to make an addition. If any material or evidence is sought to be relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Umacharan Shah & Bros. Vs. CIT 37 ITR 271 held that suspicion however strong, cannot take the place of evidence. In this connection we refer to the general view on the topic of conveyance of immovable properties. The rates/sale price are at variance with the circle rates fixed by the Registration authorities of the Government in most cases and the general impression is that cash would have changed hands. The courts have laid down that judicial notice of such notorious facts cannot be taken based on generalisations. Courts of law are bound to go by evidence. 16. We find that the assessing officer as well as the Ld. CIT(A) has been guided by the report of the investigation wing prepared with respect to bogus capital gains transactions. However, we do not find that the assessing officer as well as the Ld. CIT(A), have brought out any part of the investigation wing report in which the assessee has been investigated and /or found to be a part of any arrangement for the purpose of generating bogus long term capital gains. Nothing has been brought on record to show that the persons investigated, including entry operators or stock brokers, have named that the assessee was in collusion w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of the food grain licence at Nawgachia and the prosecution of the appellant under the Defence of India Rules was also of no consequence inasmuch as the appellant was acquitted of the offence with which it had been charged and its licence also was restored. The mere possibility of the appellant earning considerable amounts in the year under consideration was a pure conjecture on the part of the Income-tax Officer and the fact that the appellant indulged in speculation (in Kalai account) could not legitimately lead to the inference that the profit in a single transaction or in a chain of transactions could exceed the amounts, involved in the high denomination notes,-this also was a pure conjecture or surmise on the part of the Income-tax Officer. As regards the disclosed volume of business in the year under consideration in the head office and in branches the Income-tax Officer indulged in speculation when he talked of the possibility of the appellant earning a considerable sum as against which it showed a net loss of about Rs. 45,000. The Income-tax Officer indicated the probable source or sources from which the appellant could have earned a large amount in the sum of Rs. 2,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a v. T.R. Varma, AIR 1957 SC 882; Meenglas Tea Estate v. Workmen, AIR 1963 SC 1719; M/s. Kesoram Cotton Mills Ltd. v. Gangadhar and Ors. ,AIR 1964 SC708; New India Assurance Co. Ltd. V. Nusli Neville Wadia and Anr. AIR 2008 SC 876; Rachpal Singh and Ors, v. Gurmit Singh and Ors. AIR 2009 SC 2448;Blecco Lawrie and Anr. v. State of West Bengal and Anr. AIR 2010 SC 142; and State of Uttar Pradesh v. Saroj Kumar Sinha AIR 2010 24. In Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944,considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the Assessee had specifically asked to be allowed to cross-examine the representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to cross examine, would amount to a denial of the right to be heard i.e. audial terampartem. 28. Thea meaning of providing a reasonable opportunity to show cause against an actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the Assessee was adversely affected. It is to be come in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the Assessee disputed the correctness of the statements and wanted to cross examine, the Adjudicating Authority did not grant this opportunity to the Assessee. It- would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the Assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rej9cti2n of this plea is totally untenable The Tribunal has simply stated that cross examination of the said dealers could not have brought out any material which would not be in possession of the Appellant themselves to explain as to why their e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been duly supported with the books of accounts and bank transactions. The ld. AR has also submitted the board resolution for the trading of commodity transaction. The broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus. In view of above, we reverse the order of the lower authorities and allow the common grounds of assessee's appeal," [quoted verbatim] This is essentially a finding of the Tribunal on fact. No material has been shown to us who would negate the Tribunal's finding that off market transactions are not prohibited. As regards veracity of the transactions, the Tribunal has come to its conclusion on analysis of relevant materials. That being the position, Tribunal having analyzed the set of facts in coming to its finding, we do not think there is any scope of interference with the order of the Tribunal in exercise of our jurisdiction under Section 260A of the Income Tax Act, 1961. No substantial question of law is involved in this appeal. The appeal and the stay petition, accordingly, shall stand dismissed." b) The JAIPURITAT in the case of VIVEKAGARWAL[ITA No.292/JP/2017]order dated 06.04.2018 held as under vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and and there fore has to fall. We take note the id. DR could not controvert the facts supported with material evidences which are on record and could only rely on the orders of the AO/CIT (A). We note that in the absence of material evidence the allegations that the assessee/brokers got involved in price rigging /manipulation of shares must therefore also fail. At the cost of repetition, we note that the assessee had furnished all relevant evidence in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. These evidences were neither found by theA0 nor by the Id. CIT (A) to be false or fictitious or bogus. The facts of the case and the evidence in support of the evidence clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee that income from LTCG is exempted u/s 10(38) of the Act." Further in Page 15 Para 8.5 of the judgment, it held: "We note that the Id. AR cited plethora of the case laws to bolster his claim which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by account payee cheque, delivery of shares were taken, contract of sale was also complete as per the Contract Act, therefore, the assessee is not concerned with any way of the broker. Nowhere the AO has alleged that the transaction by the assessee with these particular broker or share was bogus, merely because the investigation was done by .SEBI against broker or his activity, assessee cannot be said to have entered into in genuine transaction, insofar as assessee is not concerned with the activity of the broker and have no control over the same. We found that M/s Basant Periwal and Co. never stated any of the authority that transactions in M/s Ramkrishna Fincap Pvt. Ltd. On the floor of the stock exchange are in genuine or mere accommodation entries. The CIT (A) after relying on the various decision of the coordinate bench, wherein on similar facts and circumstances, issue was decided in favour of the assessee, came to the conclusion that transaction entered by the assessee was genuine Detailed finding recorded by CIT (A) at para 3 to 5 has not been controverted by the department by bringing any positive material on record. Accordingly, we do not find any reason to interfere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and rely on the evidence produced by the assessee in support of its claim and base our decision on such evidence and not on suspicion or preponderance of probabilities. No material was brought on record by the AO to controvert the evidence furnished by the assessee. Under these circumstances, we accept the evidence filed by the assessee and allow the claim that the income in question is a bona fide Long Term Capital Gain arising from the sale of shares and hence exempt from income tax. 21.Under the circumstances and in view of the above discussion, we uphold the contentions of the assessee and delete the addition in question." 7.6 Similar view has been held by the ITAT, Mumbai in the case of ITO vs Indravadan Jain, HUF ITA No. 4861/Mum/2014 wherein it was held: "We have considered rival contentions and carefully gone through the orders of authorities below and found from the record that the AO has treated the share transaction as bogus on the plea that SEBI has initiated investigation in respect of Ramkrishna Fincap Pvt. Ltd. The AO further stated that investigation revealed that transaction through M/s Basant Periwal and Co. on the floor of stock exchange was more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trading of the scrip as a surveillance measure in notice dated 28.03.2016 where the name of the company at Sr.No.30 in mentioned. Subsequently by another BSE notice dated 12.07.2016 trading in the company ( M/s Wagend Infra Venture Limited has resumed with effect from 15-7-2016 and both these notices were brought to the knowledge of the revenue and are not disputed. The fact remains that the share/scrip in which the assessee has traded and made long term capital gains, is not subject any investigation by the SEBI but as a surveillance measure, the scrip trading was suspended and was resumed on 15.07.2016 and there were no adverse findings on this issue by the appellate authorities. We found that the AO has not provided material used adverse on the assessee and there was no cross examination was allowed to the assessee of a person whose statement was recorded. The assessee has sold the scrip in recognized stock exchange through SEBI registered stock broker at a prevailing market price, which was subject to collection of security transaction tax (STT). Further the assessee has submitted the details of allotment of shares, source of acquisition of the year, proof of name change, share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is a finding of fact by the Tribunal that the transaction of purchase and sale of the shares of the alleged penny stock of shares of Ramkrishna Fincap Ltd. ("RFL") is done through stock exchange and through the registered Stock Brokers. The payments have been made through banking channels and even Security Transaction Tax ("STT") has also been paid. The Assessing Officer also has not criticized the documentation involving the sale and purchase of shares. The Tribunal has also come to a finding that there is no allegation against assessee that it has participated in any price rigging in the market on the shares of RFL. 3. Therefore we find nothing perverse in the order of the Tribunal. 4. Mr. Walve placed reliance on a judgment of the Apex Court in Principal Commissioner of Income-tax (Central)-1 vs. NRA Iron & Steel (P) Ltd.' but that does not help the revenue in as much as the facts in that case were entirely different. 5. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal). Against the appellate order the Revenue had filed the aforesaid Income Tax Appeal which has been dismissed by the ITAT. After detailed discussion, the ITAT has recorded the following findings of fact: "The above findings recorded by Id. CIT(A) are quite exhaustive whereby he has discussed the basis on which the Assessing Officer had made the additions. While allowing relief to the assessee, the Id. CIT(A) has specifically held that there is no adverse comment in the form of general and specific statement by the Pr. Officer of stock exchange or by the company whose shares were involved in these transactions and he held that Assessing Officer only quoted facts pertaining to various completely unrelated persons whose statement were recorded and on the basis of unfounded presumptions. He further held that the name of the appellants were neither quoted by any of such persons nor any material relating to the assessee was found at any place where investigation was done by the investigation Wing. The ld. CIT(A) relying on various orders of Lucknow Benches and other Benches has allowed relief to the assessee by placing reliance on the evidences filed by the assessee before Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould conduct enquiry on the impugned transaction to substantiate that the claim of the assessee for LTCG/STCL is non genuine and further held that the AO can rely on circumstantial evidence based on the doctrine of preponderance of probabilities in such cases where it is beyond the reach to carve out direct evidences. But, in the present case we find that the AO has made no enquiry other than relying on the report of the investigation wing and the steep increase in the price of the shares. We are of the considered opinion that the AO should have done a further analysis and enquired into the genuineness of the alleged transaction. We place our reliance for this proposition on the decision of the Hon'ble Apex Court in the decision of Principal Commissioner of Income Tax Vs. NRA Iron and Steel Private Limited (2019) 412 ITR 161 (SC). In the present case in hand the assessment order is flawed by lack of enquiry by the AO. 6. From the above observation and by respectfully following the decision cited above, we hereby direct to delete the addition made u/s 68 of the Act. 15.We find the AO has not conducted any investigation or enquiry in respect of the information submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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