Ashok Kumar Bansal, Agra v. ITO, Agra

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO.289/AGR/2009 ASST. YEAR: 2000-01 INCOME TAX OFFICER 4(1) VS. SHRI ASHOK KUMAR BANSAL AGRA. 54 BANSAL NAGAR FATEHABAD ROAD AGRA. (PAN : ABCPB 9509 J) C.O. NO.10/AGR/2010 (IN ITA NO.289/AGR/2009) ASST. YEAR: 2000-01 SHRI ASHOK KUMAR BANSAL VS. INCOME TAX OFFICER 4(1) 54 BANSAL NAGAR AGRA. FATEHABAD ROAD AGRA. (PAN : ABCPB 9509 J) (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI VINOD KUMAR JR. D.R. ASSESSEE BY : SHRI ROOP KISHORE AGARWAL ADVOCATE ORDER PER P.K. BANSAL A.M.: THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE HAVE BEEN FILED AGAINST THE ORDER OF THE CIT(A) DATED 09.04.2009. 2. THE ONLY ISSUE INVOLVED IN THE APPEAL FILED BY T HE REVENUE AND THE CROSS OBJECTION DID NOT PRESS BY THE ASSESSEE RELATES TO THE DELETION OF ADDITION OF ` 9 40 657/- MADE BY THE 2 ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED/UNDISCL OSED LONG TERM CAPITAL GAIN (LTCG) BY THE CIT(A). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS SUBMITTED THE FOLLOWING DETAILS IN RESPECT OF LTCG OF ` 9 40 657/- :- NAME OF COMPANY - GRIVES HOTELS LTD. NO. OF SHARE PURCHASED - 17000 DATE OF PURCHASE - 15.05.1998 DATE OF TRANSFER - 27.05.1998 RATE AND AMOUNT OF PURCHASE - @ 4.50 PER SHARE 767 01/- NAME OF THE BROKER - MOTLEY SECURITIES (P) LTD 2670 HUDSON LINE GTB NAGAR DELHI. BROKERS BILL DETAIL - NOTC-SAMAY/15/005 DT. 16.0 5.1998 DATE OF SALE - 18.06.99 RATE AND AMOUNT OF SALE - @ 55.50 PER SHARE 942429 /- BROKERS NAME - JRD STOCK BROKER (P) LTD. 4866/24 SHEEL TARA HOUSE ANSARI ROAD DARYAGANJ NEW DELHI. DETAILS OF BILLING - NO. D1-A-PC/1999013/6 DT. 26 .06.1999 MODE OF PAYMENT OF SALE - ACCOUNT PAYEE DRAFTS. 4. THE ASSESSEE SUBMITTED PHOTOCOPY OF THE DAILY AM AR UJALA DATED 16.05.1998 SHOWING PER SHARE RATE @ ` 4.50 IN SUPPORT OF PURCHASE OF SHARES. SIMILARLY PHOTOCOPY OF HINDUSTAN TIMES DATED 20.05.1999 SHOWING PER SHARE RATE OF ` 55.50 AS ON DATE OF SALE BY THE ASSESSEE HAS ALSO BEEN FILED. COPIES OF CONTRACT NOTES SALE BI LLS AND STATEMENT OF ACCOUNTS FOR PURCHASE AS WELL AS SALE OF 17000 SHARES OF GRIVES HOTEL LIMITE D DULY MAINTAINED THE ASSESSEE HAS ALSO BEEN FIELD BEFORE THE ASSESSING OFFICER. REPORT DATED 2 4.09.2004 FROM M/S. JOYLIN JAIN & ASSOCIATES COMPANY SECRETARIES REGARDING HOLDING OF 17000 SHAR ES BY THE ASSESSEE WAS ALSO SUBMITTED. DETAILS OF THE BROKER THROUGH WHOM THE PURCHASES AN D SALES OF SHARES WERE MADE WAS ALSO FILED. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EX PLANATION OF THE ASSESSEE. HE THEREFORE 3 MADE THE ADDITION OF ` 9 40 657/- BY HOLDING THAT THE ASSESSEE COULD NOT P ROVE THE SALE OF SHARES AND GENUINENESS OF THE RECEIPTS OF MONEY UNDER SECT ION 68 OF THE INCOME-TAX ACT 1961 (THE ACT HEREINAFTER). THE ASSESSEE WENT IN APPEAL BEF ORE THE CIT(A). THE CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- I HAVE CONSIDERED THE FACTS SUBMISSION OF THE AR DOCUMENTS FILED PERUSED THE RECORD AND ALSO GONE THROUGH THE VARIOU S DECISIONS REFERRED BY A.O & APPELLANT. THE SHORT QUESTION FOR CONSIDERATION W AS WHETHER THE EVIDENCE PRODUCED BY THE ASSESSEE WAS SUFFICIENT TO DISCHARG E THE INITIAL ONUS OF PROVING THE GENUINENESS OF THE SHARE TRANSACTION. THE ASSE SSING OFFICER HAS PLACED NO MATERIAL ON RECORD AGAINST THE ASSESSEE FROM WHICH IT CAN BE INFERRED THAT THE TRANSACTION OF PURCHASE AND SALES OF SHARES ENTERED INTO BY THE ASSESSEE WERE EITHER BOGUS OR ACCOMMODATION ENTRY. AS REGARDS TH E OBSERVATIONS OF THE ASSESSING OFFICER THAT THE APPELLANT COULD NOT PROD UCE THE BROKER AND THE PURCHASER OF THE SHARES WHICH MADE HIM TREAT THE CA PITAL GAIN AS THE UNEXPLAINED MONEY IS MERELY HIS OWN BELIEF AND HAS NO BASIS. A PPELLANT ALONG WITH THE RETURN OF HIS INCOME HAD MADE COMPLETE DISCLOSURE OF THE C APITAL GAIN ON THE SALES OF THESE SHARES WHICH HE HAD CLAIMED EXEMPT U/S 54F BE ING THE INVESTMENT MADE IN THE CONSTRUCTION OF THE RESIDENTIAL HOUSE. ALL THE CIRCUMSTANCES AND HUMAN PROBABILITIES ARE IN FAVOR OF THE ASSESSEE THE AO HAS NOT POINTED OUT DEFECT IN THE DOCUMENTS/EVIDENCE SUBMITTED BY THE APPELLANT IN RE LATION TO THE SALES/PURCHASE TRANSACTIONS. IN THESE CIRCUMSTANCES OF THE CASE WH EN THE ASSESSEE IS IN POSSESSION OF 17000 EQUITY SHARES OF THE COMPANY TH EN THESE SHARES HAVE TO BE SOLD TO SOME PERSON AND THE ASSESSEE HAD DONE THE S AME BY SELLING THE SHARE THROUGH A BROKER OF A RECOGNIZED STOCK EXCHANGE. T HE APPELLANT HAD DISCHARGED HIS ONUS BY PROVIDING THE DOCUMENTS/EVIDENCE IN REL ATION TO THE IDENTITY OF THE BROKER AND THE GENUINENESS OF THE TRANSACTION. THE AO HAS NOT BROUGHT EVIDENCE TO SHOW THAT SUCH CAPITAL GAIN WAS A SHAM TRANSACTI ON AND HAS NOT PROVED ANY LINKAGE WITH THE TRANSACTION OF THE ASSESSEE WHICH COULD FURTHER PROVE THAT THE ASSESSEE'S TRANSACTIONS WERE BOGUS OR MERELY AN ENT RY. NO EFFORTS WERE MADE TO SHOW THAT THE MONEY FROM THE APPELLANT TO THE BROKE R HAS NOT CHANGED HANDS. IT WAS ALSO NOT ESTABLISHED BY THE AO HOW THE ALLEGED CAPITAL GAIN WAS THE UNEXPLAINED MONEY OF THE APPELLANT IRRESPECTIVE OF THE FACT THAT COMPLETE DISCLOSURE WAS MADE IN THE RETURN OF INCOME. ON TH E OTHER HAND APPELLANT HAS SUBMITTED THE CONTRACT NOTE OF BROKERS SALE AND PU RCHASE BILLS OF THE BROKERS COPIES OF THE SHARE CERTIFICATES ETC WHICH THE ASSE SSING OFFICER NEVER REBUTTED IN ORDER TO PROVE THEY ARE FALSE OR UNTRUE. THE AGRA BENCH OF HON'BLE ITAT IN THE CASE OF ASHOK KUMAR AGARWAL IN ITA NO. 129/AG/2004 DATED 3.4.2006 IN THE SIMILAR CIRCUMSTANCES HAVE CANCELLED THE ADDITION O F LONG TERM CAPITAL GAINS ON SIMILAR FACTS. ALSO HON'BLE ITAT AGRA BENCH AGRA ON SIMILAR FACTS IN THE CASE OF 4 VINEET KHERA AND MEMO DEVI ON 14.3.2008 AND OTHER C ASES HAVE ACCEPTED SUCH LONG TERM CAPITAL GAINS. FURTHER HON'BLE P&H HIGH COURT IN THE CASE OF CIT VS ANUPAM GUPTA REPORTED IN 166 TAXMANN 178 ON SIMILAR FACTS AND CIRCUMSTANCES TREATED THE LONG TERM CAPITAL GAIN ON THE SALES OF SHARES AS GENUINE. THE AO IN THE 'REASON TO BELIEVE' AS WELL AS IN THE ORDER U/S 147/143(3) HAS COMPARED THE FACTS OF THE PRESENT CASE WITH THAT OF ONE SHRI. AS HOK KUMAR LAVANIA AND COMMENTED ON THE MODUS OPERANDI FOLLOWED IN THE TWO CASE WHICH ACCORDING TO HIM WAS MERELY A MODE OF ADJUSTING UNACCOUNTED MONE Y BY TAKING ACCOMMODATION ENTRY. APPELLANT VIDE HIS REJOINDER WHICH IS ON RECORD PROVIDED THE COPY OF THE ORDER OF THE HON'BLE ITAT AGRA BENC H AGRA IN THE CASE OF SHRI ASHOK KUMAR LAVAINA ITA 112/AGRA/2004 WHEREIN HON'B LE AGRA BENCH VIDE ITS ORDER DATED 30/05/2008 HAS UPHELD THE MODUS OPERAND I AND ALSO CONFIRMED THE LONG TERM CAPITAL GAIN ON THE SALE OF SHARES AS GEN UINE. NO ADVERSE INFERENCE HAS BEEN DRAWN BY THE HON'BLE BENCH. SIMILARLY IN THE PRESENT CASE I FIND NO DEFECT IN SHARE TRANSACTIONS BEING MADE BY THE APPE LLANT AND AS SUCH NO ADVERSE INFERENCE IS DRAWN. APPELLANT HAD DONE THE SAME AS WOULD BE DONE BY ANY PERSON WITH A PRUDENT MIND IN ORDER TO SELL HIS COMMODITY. IT IS EVIDENT FROM THE RECORD THAT THE AO FAILED TO ESTABLISH THE NEXUS BETWEEN T HE SALE PROCEEDS OF THE SHARES AND SO CALLED UNACCOUNTED MONEY OF THE APPELLANT WH ICH ACCORDING TO HIM IS MERE A BOGUS ENTRY TAKEN FROM THE BROKER. NEITHER THE S TATEMENT OF THE BROKER OR ANY OTHER DOCUMENTARY EVIDENCE IS ON RECORD FROM WHICH IT COULD BE ESTABLISHED THAT THE APPELLANT HAD TAKEN ENTRY FROM THE BROKER M/S J .R.D STOCK BROKER (P) LTD. THUS IN VIEW OF THE ABOVE POSITION OF FACTS AND THE LAW I HOLD THAT ON MERIT THE ADDITION OF RS.9 40 657/- IS WHOLLY UNJUSTIFIED AND IS HEREBY DELETED. 5. AT THE OUTSET THE LD. A.R. POINTED OUT THAT THE CASE OF THE ASSESSEE IS DULY COVERED BY THE DECISION OF THIS TRIBUNAL IN ITA NO.129/AGR/2004 IN THE CASE OF SHRI ASHOK KUMAR AGARWAL VS. ACIT IN WHICH THE SHARES IN DISPUTE RELATES TO M/S. GRIVES HOTELS LIMITED NOW KNOWN AS KEDIA INFOTECH LIMITED. WHEN THE MATTER TRAVELED TO THE TRIBUNAL IN WHICH THIS TRIBUNAL VIDE ORDER DATED 03.04.2006 TREATED THE PURCHASE AND SALE OF S HARES TO BE GENUINE AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. FOR THIS ATTENTION WAS DRAWN TO PAGE NO.33 OF THE PAPER BOOK. OTHERWISE ALSO IT WAS CONTENDED THAT THE CASE OF T HE ASSESSEE IS DULY COVERED BY THE DECISION OF THE THIRD MEMBER IN THE CASE OF ITO VS. SMT. BIBI R ANI BANSAL IN ITA NO.101/AGR/2005 FOR THE ASSESSMENT YEAR 2001-02 IN WHICH VIDE ORDER DATED 0 9.02.2010 THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE CIT(A) DELETING THE ADDITION SO MADE. 5 6. THE LD. D.R. ON THE OTHER HAND DID NOT DENY TH AT THE CASE IS NOT COVERED BY THE DECISION OF SHRI ASHOK KUMAR AGARWAL OR THE DECISION OF THE THIRD MEMBER AS RELIED BY THE LD. A.R. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE GONE THROUGH THE ORDER OF THE HONBLE THIRD MEMBER IN THE CASE OF ITO VS. SMT. BI BI RANI BANSAL IN ITA NO.101/AGR/2005 FOR THE ASSESSMENT YEAR 2001-02. WE NOTED IN THAT CASE THE ASSESSEE HAS PURCHASED THE SHARES AND SOLD THOSE SHARES THROUGH M/S P.K. JAIN & ASSOC IATES I.E. THE BROKER. THE PURCHASE OF THE SHARES HAS NOT BEEN DOUBTED BY THE ASSESSING OFFICE R. THE ASSESSING OFFICER HAS DOUBTED THE SALE CONSIDERATION WHICH WAS RECEIVED BY THE ASSESS EE THROUGH DEMAND DRAFT ISSUED FROM THE ACCOUNT OF M/S. P.K. JAIN & ASSOCIATES. THE ASSESS ING OFFICER HAS ALSO DOUBTED THE SALE PRICE AT WHICH THE SHARES WERE SOLD. IN THAT CASE THIS TRI BUNAL AFTER CONSIDERING ALL THE ASPECTS HAS HELD AS UNDER :- 10. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW AS WELL AS THE ORDER OF M Y LD. COLLEAGUE MEMBERS. I NOTED THAT WHILE PASSING THE DISSENT ORDER THE LD. A.M. HAS MA INLY RELIED ON ITS SEPARATE ORDER PASSED IN THE CASE OF SHRI BAIJNATH AGARWAL (ITA NO .133/AGR/2005). I HAVE GONE THROUGH THE ORDER OF SHRI BAIJNATH AGARWAL AND NOTE D THAT IN HIS DISSENT ORDER IN THAT CASE THE LD. A.M. HAS RELIED ON THE DECISION OF SHR I ASHOK KUMAR LAVANIA (ITA NO.112/AGR/2004). I HAVE GONE THROUGH THE DECISION OF SHRI ASHOK KUMAR LAVANIA IN ITA NO.112/AGR/2004 WHICH WAS DECIDED BY THE BENCH CONSTITUTING OF SAME LD. J.M. AND LD. A.M. VIS--VIS THE FACTS OF THE CASE OF THE ASS ESSEE. IN THAT CASE ALSO THE TRANSACTION OF SALES HAS NOT BEEN ACCEPTED BY THE A.O. AS HE DOUBT ED THE SALE PRICES AND ALSO RELIED ON THE STATEMENT OF SHRI ASHOK GUPTA DIRECTOR OF M/S. JRD STOCK BROKERS PVT. LTD. WHO STATED THAT AS A MATTER OF FACT THERE WAS NO ACTUAL PURCHASE AND SALE OF SHARES AS WAS REFLECTED IN THE CONTRACT NOTES ISSUED BY M/S. JRD STOCK BROKERS PVT. LTD. TO THE BENEFICIARIES. IN THAT CASE THE ASSESSEE CLAIMED L ONG TERM CAPITAL GAIN OF RS.25 14 770/- AND CLAIMED EXEMPTION UNDER SECTION 54EA OF THE ACT. THE LTCG WAS SHOWN ON ACCOUNT OF SALE OF SHARES THROUGH THE BROK ERS. THE ASSESSEE SUBMITTED THE COPIES OF BILLS SHARE CERTIFICATES CONTRACT NOTES ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALONGWITH DETAILS OF DEMAND DRAFT THROU GH WHICH THE SALE PROCEEDS HAS BEEN RECEIVED. IT WAS ALSO POINTED OUT THAT THE PURCHAS ES WERE MADE THROUGH BROKING CONCERN 6 M/S. JRD STOCK BROKERS PVT. LTD. THE A.O. NOTICED THAT THE SHARES WERE PURCHASED @ RS.4/- PER SHARE AND SOLD @ RS.65/- TO RS.84/- PER SHARE. THE A.O. WAS OF THE VIEW THAT THE TRANSACTIONS WERE NOT GENUINE AND ARE ONLY ACCO MMODATION ENTRIES. THE BROKER POINTED OUT THAT HE WAS ENGAGED IN GIVING BOGUS ENT RIES FOR THE PURCHASE AND SALE OF THE SHARES ON COMMISSION BASIS. WHEN THE MATTER TRAVEL ED TO THE TRIBUNAL THE TRIBUNAL DELETED THE ADDITION BY OBSERVING AS UNDER :- (10) SO IN THE GIVEN CASE ALSO THE DEPARTMENT CANN OT TREAT THE LONG TERM CAPITAL GAINS AS ASSESSEES INCOME FROM OTHER SOURCES. THE RE IS NO DIRECT EVIDENCE. THE STATEMENTS OF THE BROKERS WERE RECORDED AT THE BACK OF THE ASSESSEE. AN OPPORTUNITY OF CROSS-EXAMINATION MEANS AND IMPLIES A CLEAR OPPORTUNITY AFTER PROVIDING COPIES OF SUCH ADVERSE STATEMENTS TO CROS S-EXAMINE. OTHERWISE ALSO THE STATEMENT OF SHRI ASHOK GUPTA IS TOO VAGUE TO BE OF ANY EVIDENTIARY VALUE. HE HAS NOWHERE STATED THAT THE TRANSACTION OF THE ASSESSEE WAS BOGUS OR NOT GENUINE. HE HAS NO CORROBORATIVE EVIDENCE TO SHOW THAT THE CASH FOR DRAFTS WAS RECEIVED FROM THE ASSESSEE. IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE HIS STATEMENT CANNOT BE ACCEPTED AS TRUE ON HIS MERE IPSE DIXIT. SHRI M ANOJ AGARWAL WAS NOT PRODUCED FOR CROSS-EXAMINATION. FROM HIS STATEMENT NO ADVER SE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. SHRI MANOJ AGARWAL HANDED OV ER A LETTER TO D.D.I. (INV) IN WHICH HE STATED THAT OUT OF THE TOTAL TRANSACTIONS THE TRANSACTIONS AMOUNTING TO RS.100 CRORES WERE ONLY BOOK ENTRIES. SO IT FOLLOW S AS A NECESSARY COROLLARY THAT ENTIRE TRANSACTIONS WERE NOT IN-GENUINE. HE HAS AL SO NOT NAMED THIS ASSESSEE. WITH REGARD TO AGARWAL & COMPANY THERE ARE NO ADVE RSE COMMENTS IN THE ASSESSMENT ORDER AGAINST THE ASSESSEE. THE A.O. HA S NOT SAID ANYTHING ABOUT THE TRANSACTIONS ENTERED THROUGH THIS BROKER. WHEREAS THE ASSESSEE HAS PRODUCED : I) COPIES OF SALES AND PURCHASE BILLS; II) SHARE CERTIFICATES AND TRANSFER LETTERS; III) CONTRACT NOTES; IV) DULY TRANSFERRED SHARE CERTIFICATES RECEIVED FR OM THE COMPANIES; AND V) AFFIDAVIT. (11) THERE IS NO DOUBT IN SUCH CASES THE BROKERS BECOME THE WITNESSES OF THE DEPARTMENT. THE DEPARTMENT HAS GOT STATEMENTS OF T HESE BROKERS WHICH ARE USED AGAINST THE ASSESSEE. IRRESPECTIVE OF THE FACT TH AT THE STATEMENTS WERE RECORDED AT THE BACK OF THE ASSESSEE AND THAT THE ASSESSEE WAS OR WAS NOT AFFORDED OPPORTUNITY FOR CROSS-EXAMINATION WHEN OVERWHELMING DOCUMENTAR Y EVIDENCES ARE PRODUCED BY THE ASSESSEE THE BURDEN SHIFTS ON THE REVENUE T O EXPLAIN AWAY THEM. EVERY TIME THE STATEMENTS CANNOT HELP THE DEPARTMENT. HO W THE ABOVE MENTIONED EVIDENCES COULD BE IGNORED ? THE REVENUE HAS TO GI VE REASONS FOR REJECTING THEM. THESE ARE IMPORTANT DOCUMENTS SOME OF THEM ARISE U NDER THE PROVISIONS OF THE COMPANIES ACT. THE BROKERS WERE NEVER CONFRONTED W ITH THE EVIDENCES PRODUCED BY THE ASSESSEE. THE APPARENT HAS TO BE TREATED AS A REAL UNLESS PROVED 7 OTHERWISE. LONG AGO HONBLE SUPREME COURT HAS LAID THIS LAW WHILE RENDERING THE CELEBRATED DECISION IN THE CASE OF CIT VS. DAUL AT RAM RAWATMAL (1964) 53 ITR 574 (SC). THE ASSESSEE HAS COUNTERED THE STATE MENTS OF BROKERS BY WAY OF HIS DULY SWORN-IN AFFIDAVIT. WE HAVE EXAMINED THE ENTI RE EVIDENCES PLACED IN THE PAPER BOOK OF THE ASSESSEE. (12) IN THE CASE OF ITO VS. SMT. KUSUMLATA REPORTED IN (2006) 105 TTJ (JD.) 265 COPY PLACED AT PAGE NO.4 OF ASSESSEES PAPER B OOK (JUDGEMENTS RELIED) THE HONBLE JODHPUR BENCH HAS HELD AS UNDER :- FOR MAKING ADDITION UNDER SECTION 69 THE DEPARTME NT IS REQUIRED TO PROVE TO THE HILT THAT THE IMPUGNED TRA NSACTIONS ARE BOGUS. THE BURDEN CAST ON THE DEPARTMENT IS VERY HIGH WHIC H IS REQUIRED TO BE DISCHARGED CONCLUSIVELY IN THIS CASE; THERE IS NO S UCH EVIDENCE. THE ASSESSEE HAS PURCHASED SHARES FROM MS. THESE PURCH ASES ARE EVIDENCED FROM THE CONTRACT NOTE. THE PAYMENT WAS MADE BY CH EQUE. THESE SHARES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE. THE ASSESSEE HELD THESE SHARES FOR MORE THAN ONE YEAR. SHE SOLD THESE SHAR ES TO J A MEMBER OF STOCK EXCHANGE. J IN HIS LETTER HAS CONFIRMED THAT TRANSACTION AND THE PAYMENT WAS MADE THROUGH CHEQUE. THE ASSESSEE HAS PROVIDED ALL THE REQUISITE EVIDENCES IN SUPPORT OF ALL TRANSACTIONS. SIMPLY BECAUSE J COULD NOT PRODUCE HIS BOOKS OF ACCOUNT OR THE QUOTED RATE OF SHARES IN STOCK EXCHANGE BEING LESS OR THE TRANSACTIONS BEING NOT R EPORTED BY J TO THE STOCK EXCHANGE WOULD NOT MAKE A TRANSACTION BOGUS. THE STOCK EXCHANGE HAS INTIMATED THE A.O. THAT THEY ARE ONLY HAVING IN FORMATION OF THE TRANSACTIONS BETWEEN TWO MEMBERS OF THE STOCK EXCHA NGE AND NOT OTHERWISE. IN THE PRESENT CASE THE TRANSACTION WA S BETWEEN A MEMBER AND A NON-MEMBER AND THEREFORE SUCH TRANSACTIONS WERE NOT REPORTED IN THE STOCK EXCHANGE. FURTHER THE CREDIT IN THE BANK AC COUNT OF J IS BY CLEARANCE. THEREFORE THE ALLEGATION OF THE A.O. T HAT THE AMOUNT WAS DEPOSITED IN CASH HAS NO BASIS. THE ASSESSEE HAS A CCEPTED HAVING INVESTED HER FUNDS ON THE ADVICE OF HER FATHER-IN-LAW. THE BURDEN OF PROVING A TRANSACTION IS ALWAYS ON THE PERSON ASSERTING IT TO BE BOGUS AND THIS BURDEN HAS TO BE STRICTLY DISCHARGED BY ADDUCING LE GAL EVIDENCE OF A CHARACTER WHICH WOULD EITHER DIRECTLY PROVE THE FA CT OF BOGUSNESS OR ESTABLISH CIRCUMSTANCES UNERRINGLY AND REASONABLY R AISING AN INFERENCE TO THAT EFFECT. THE ASSESSEE MADE PAYMENT FOR THE PUR CHASE FROM HER OWN SOURCES THROUGH BANKING CHANNEL. THE SHARES WERE T RANSFERRED IN THE NAME OF THE ASSESSEE AND WERE HELD BY HER FOR MORE THAN ONE YEAR. THERE IS NO RELATIONSHIP BETWEEN THE PARTY FROM WHOM THE ASSESSEE PURCHASED THE SHARES AND THE PARTY TO WHOM THESE WERE SOLD. THE SHARES WERE DELIVERED AFTER ITS SALE AND THE ASSESSEE DID NOT R EMAIN IN POSSESSION OF THOSE SHARES. FROM THE ABOVE FACTS IT IS ESTABLIS HED THAT THE ASSESSEE ACQUIRED THE SHARES TO EARN PROFIT. THERE IS NO EV IDENCE EXCEPT SPECULATION THAT THIS PROFIT IS NOT FROM THE SALE O F SHARES. THE A.O. HAS 8 FAILED TO ESTABLISH HIS CASE AND TO DISCHARGE THE R EQUISITE BURDEN CAST ON HIM. THE AUTHORISED REPRESENTATIVE HAS FILED THE R EQUISITE QUOTATION OF 18 TH JULY 1996 ALONG WITH THE REQUISITE PROOF OF TRANS ACTIONS OF 9000 SHARES ALONG WITH TRANSFER OF SHARE CERTIFICATE. T HEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS CORRECTLY COME TO THE CONCLUSION THAT THE ASSESSEE HAS DEALT IN THESE SHA RES AND THESE TRANSACTIONS CANNOT BE HELD BOGUS. THE DELETION OF ADDITION OF RS.4 99 062/- IS CONFIRMED. (13) THE ABOVE DECISION CLEARLY HELPS THE CASE OF T HE ASSESSEE. (14) CREDENCE CANNOT BE GIVEN TO THE STATEMENTS OF THE PERSONS WHO THEMSELVES ADMIT AND HAVE DUBIOUS DEALINGS AS AGAINST THE DOCU MENTARY EVIDENCES PRODUCED BY THE ASSESSEE. (15) MOREOVER WHEN PURCHASES HAVE NOT BEEN DOUBTED OR DISPUTED BY THE REVENUE IN THIS CASE THE DECISION OF HONBLE PUNJA B & HARYANA COURT RELIED BY LEARNED A.R. IN THE CASE OF CIT VS. ANUPAM KAPOOR R EPORTED IN (2008) 299 ITR 179 (P&H) IS VERY MUCH RELEVANT. THE HELD PORTION OF THIS DECISION IS EXTRACTED HEREIN BELOW :- HELD DISMISSING THE APPEALS THAT THERE WAS NO MA TERIAL BEFORE THE ASSESSING OFFICER WHICH COULD HAVE LED TO A CON CLUSION THAT THE TRANSACTION WAS A DEVICE TO CAMOUFLAGE ACTIVITIES T O DEFRAUD THE REVENUE. NO SUCH PRESUMPTION COULD BE DRAWN BY THE ASSESSING OFFICER MERELY ON SURMISES AND CONJECTURES. THE TRIBUNAL TOOK INTO C ONSIDERATION THAT IT WAS ONLY ON THE BASIS OF A PRESUMPTION THAT THE ASS ESSING OFFICER CONCLUDED THAT THE ASSESSEE HAD PAID CASH AND PURCH ASED THE CHEQUE. IN THE ABSENCE OF ANY COGENT MATERIAL IN THIS REGARD HAVING BEEN PLACED ON RECORD THE ASSESSING OFFICER COULD NOT HAVE REOPEN ED THE ASSESSMENT. THE ASSESSEE HAD MADE AN INVESTMENT IN A COMPANY E VIDENCE WHEREOF WAS WITH THE ASSESSING OFFICER. THEREFORE THE ASSESSI NG OFFICER COULD NOT HAVE ADDED THE INCOME WHICH WAS RIGHTLY DELETED BY THE COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL (16) THUS THE SUM TOTAL OF THE FOREGOING DISCUSSIO NS GO TO CUMULATIVELY ESTABLISH THAT THE ASSESSEE HAS BEEN SUCCESSFUL IN PROVING THE LONG TERM CAPITAL GAIN EARNED BY HIM IN THIS CASE. HE HAS ALSO ESTAB LISHED THAT HE IS EXEMPT FROM TAX QUA LONG TERM CAPITAL GAINS AS HAS BEEN CLAIMED . 11. IN MY OPINION THIS CASE IS EQUALLY APPLICABLE IN THE CASE OF THE ASSESSEE. IN THE CASE OF THE ASSESSEE PURCHASE OF THE SHARES HAS DU LY BEEN PROVED AND THERE IS NO DISPUTE ON THE PURCHASE OF THE SHARES BEING MADE BY THE ASS ESSEE. THE SHARES WERE PURCHASED IN EARLIER YEAR. THE SHARES WERE TRANSFERRED IN THE N AME OF THE ASSESSEE AS HAS BEEN 9 CONFIRMED BY THE COMPANY WHEN ENQUIRED BY THE A.O. THE ASSESSEE HAS SUBMITTED BEFORE THE A.O. COPIES OF THE CONTRACT NOTES COPI ES OF THE SALES BILLS STATEMENT OF ACCOUNT FROM THE BROKER OLD ADDRESS OF THE BROKER NEW ADDRESS OF THE BROKER. THE IDENTITY OF THE BROKER IS PROVED. PURCHASES WERE N OT DOUBTED BY THE A.O. THE DEMAND DRAFT FOR THE SALE CONSIDERATION WAS ISSUED FROM TH E ACCOUNT OF M/S. P.K. JAIN & ASSOCIATES I.E. BROKERS. THE MONEY HAS NOT BEEN DE POSITED IN CASH IN THIS ACCOUNT BUT HAS COME TO THIS ACCOUNT BY WAY OF TRANSFER FROM THE AC COUNT OF M/S. S.G. FINCAP LIMITED. THE LD. A.M. HAS DISTINGUISHED THE DECISION OF ASHO K KUMAR LAVANIA. ON THE BASIS OF THAT IN ASHOK KUMAR LAVANIAS CASE PURCHASE OF THE SHARES WAS NOT IN DISPUTE. WHILE IN FACT IN ASSESSEES CASE THE PURCHASE OF SHARES IS A LSO NOT IN DISPUTE BUT RATHER THE COMPANY HAS DIRECTLY CONFIRMED TO THE A.O. THE PURC HASE OF THE SHARES BY THE ASSESSEE IN REPLY TO THE NOTICE ISSUED UNDER SECTION 133(6). T HE LD. A.M. WAS ALSO THE PARTY TO THAT DECISION. I NOTED THAT IN THIS CASE THE A.O. HAS D OUBTED THE SALE CONSIDERATION BECAUSE THE SHARE PRICE HAS INCREASED TREMENDOUSLY. I NOTE D THAT IN THE CASE OF ASHOK KUMAR LAVANIA ALSO THE ASSESSEE HAS PURCHASED THE SHARE @ RS.4/- PER SHARE AND SOLD @ RS.65/- TO 84/- PER SHARE. IN THAT CASE ALSO THE B ROKER HAS NOT ACCEPTED THE TRANSACTION BUT ON THE BASIS OF THE EVIDENCE THE TRIBUNAL HAS A CCEPTED THE TRANSACTION TO BE GENUINE ONE AS THERE WAS NO CORROBORATIVE EVIDENCE TO SUPPO RT THE STATEMENT OF THE BROKER. IN THIS CASE I NOTED THAT THE STATEMENTS OF THE BROKE R COULDNT BE GIVEN ANY CREDENCE AS HE HAS STATED DIFFERENTLY VIDE DIFFERENT LETTERS. EAR LIER HE DENIED THE TRANSACTION BEING ENTERED INTO. SUBSEQUENTLY HE HAS ACCEPTED THAT HE HAS ISSUED THE DRAFT AFTER RECEIVING THE CASH. AGAIN HE SAID THAT THE CASH WAS ROUTED T HROUGH SOME BOGUS ACCOUNT BUT HE ACCEPTED THAT THE DRAFT HAS BEEN MADE FROM HIS ACCO UNT. SUBSEQUENTLY AGAIN HE POINTED OUT THAT HE RECEIVED CASH OF RS.9 00 000/- AND RS.5 00 000/- WHILE HE HAS ISSUED DRAFT OF RS.5 99 500/- AND RS.6 19 508/- RESPECTIVELY. WHAT HAPPENED TO THE BALANCE AMOUNT? NOTHING HAS BEEN BROUGHT ON RECORD OR STATED BY THE BROKER. THE ASSESSEE WAS NOT PROVIDED CROSS-EXAMINATION. THE STATEMENT HAS BEEN RECORDED AT THE BACK OF THE ASSESSEE. THIS IS A SETTLED LAW THAT NO ADDITION C AN BE SUSTAINED ON THE BASIS OF THE STATEMENT RECORDED AT THE BACK OF THE ASSESSEE AND WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE PERSON WHO HAS GIVEN THE STATEMENT AT THE BACK OF THE ASSESSEE. I HAVE ALSO GONE THROUGH THE DECISION OF DELHI HIGH COURT IN THE CASE OF SMC SHARE BROKERS LIMITED 288 ITR 345 (DELHI) AND THAT OF KISHAN CHAND CHELLARAM 125 ITR 713 (SC) AND THAT OF UMACHARAN SHAW & BROS. 37 ITR 271 (SC). ALL THOSE DECISIONS LAY DOWN THE PROPOSITION OF THE LAW THAT STATEMENT RECORDED AT THE BACK OF THE ASSESSEE CANNOT BE USED AGAINST THE ASSESSEE UNTIL AND UNLESS THE ASSESSEE HAS BEEN GIVEN THE OPPORTUNITY TO CROSS EXAMINE THE PERSON. LD. D .R. WAS ASKED IN THE OPEN COURT WHETHER ANY OPPORTUNITY FOR CROSS EXAMINATION WAS P ROVIDED TO THE ASSESSEE IN RESPECT OF THE BROKER. THE LD. D.R. EXPRESSED HIS INABILITY A S THE RECORD DOES NOT SHOW THAT ANY SUCH OPPORTUNITY WAS PROVIDED. IN ALMOST SIMILAR CIRCUM STANCES HONBLE CALCUTTA HIGH COURT IN THE CASE OF EASTERN COMMERCIAL ENTERPRISES (210 ITR 103) OBSERVED AS UNDER :- AT THE EARLIER OCCASION HE CLAIMED ALL HIS SALES T O BE GENUINE BUT BEFORE THE ASSESSING OFFICER IN THE CASE OF THE ASSESSEE HE DISOWNED THE SALES SPECIFICALLY MADE TO THE ASSESSEE. THIS STATEMENT CAN AT THE WORST SHOW THAT S IS NOT A TRUSTWORTHY WITNESS AND LITTLE VALUE CAN BE A TTACHED TO WHAT HE STATED EITHER 10 IN HIS AFFIDAVIT OR IN HIS CROSS EXAMINATION BY THE ASSESSING OFFICER. HIS CONDUCT NEUTRALIZES HIS VALUE AS A WITNESS. A MAN INDULGED IN DOUBLE SPEAKING CANNOT BE SAID BY ANY MEANS A TRUTHFUL MAN AT ANY STAGE AND N O COURT CAN DECIDE ON WHICH OCCASION HE WAS TRUTHFUL. 12. FURTHER AS NOTED THE STATEMENT WAS RECORDED B Y THE DDI INVESTIGATION WING AGRA AND NOT BY THE ASSESSING OFFICER HIMSELF. THU S THE TRUTHFULNESS OF THE STATEMENT REMAINED UNTESTED BY THE ASSESSING OFFICER. ITAT DELHI IN THE CASE OF RAJEEV AGARWAL (139 TAXMAN 170 (MAG.)) HAS OBSERVED AS UNDER :- THE MERE RELIANCE ON THE STATEMENT OF THIRD PARTIE S WHO WERE NEVER EXAMINED BY THE ASSESSING OFFICER HIMSELF CANNOT BE HELD TO BE SUFFICIENT TO COME TO THE FINDING THAT THE TRANSACTION WAS NOT GENUINE AND MORE SO WHEN THERE ARE OTHER MATERIAL AND EVIDENCES TO SUPPORT THE TRANSAC TION. 13. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMC SHARE BROKERS LTD (288 ITR 345) ALSO OBSERVED AS UNDER :- THERE IS NO DOUBT THAT THE STATEMENT OF MANOJ AGAR WAL HAD EVIDENTIARY VALUE BUT WEIGHT COULD NOT BE GIVEN TO IT IN PROCEE DINGS AGAINST THE ASSESSEE WITHOUT IT BEING TESTED UNDER CROSS-EXAMINATION. I N THE ABSENCE OF STATEMENT BEING TESTED IT CANNOT BE SAID THAT IT SHOULD BE B ELIEVED COMPLETELY TO THE PREJUDICE OF ASSESSEE. 14. UNDER THESE FACTS I AM OF THE OPINION THAT THE CASE OF THE ASSESSEE IS DULY COVERED BY THE DIVISION BENCH OF THIS TRIBUNAL IN THE CASE OF ASHOK KUMAR LAVANIA IN ITA NO.112/AGR/2004 WHICH HAS BEEN DECIDED BY THE BENC H CONSTITUTING OF THE SAME VERY LEARNED MEMBERS. JUDICIAL DISCIPLINE DEMANDS THAT ON THE SIMILAR FACTS THE BENCH IS BOUND TO FOLLOW ITS EARLIER DECISIONS. THE PRINCIP LES OF JUDICIAL DISCIPLINE REQUIRE THAT THE ORDER OF THE CO-ORDINATE BENCH HAS TO BE FOLLOWED. 15. I HAVE ALSO BEEN NOMINATED AS THIRD MEMBER IN T HE CASE OF SHRI BAIJNATH AGARWAL ITA NO.133/AGR/2005 WHICH ALSO I DISPOSED OF WITH MY ORDER OF EVEN DATE. IN THAT CASE ALSO I HAVE HELD THAT THE ASSESSEES CASE IS DULY COVERED BY THE DECISION OF THE DIVISION BENCH IN THE CASE OF SHRI ASHOK KUMAR LAVA NIA IN ITA NO.112/AGR/2004. 16. I ALSO NOTED FROM THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A) THAT WHILE SCRUTINIZING THE EVIDENCE FILED BY THE ASSESSEE AND FRAMING THE ORDER THEIR MINDS WERE INFLUENCED WITH THE OTHER CONSIDERATION THAT THE VA LUE OF THE SHARES HAS TREMENDOUSLY INCREASED WHICH WAS ABNORMAL AND INDICATES THAT THE ENTIRE TRANSACTION IS MANAGED ONE. THE PRICES HAVE INCREASED IN 15 TO 16 MONTHS BY 16 TIMES. ALTHOUGH THE RATE OF RS.72/- WAS QUOTED ON 28.11.2000 IN M.P. STOCK EXCHANGE IS APPARENT FROM PAGE 11 PARA (III) OF 11 THE ASSESSMENT ORDER. IT WAS FURTHER OBSERVED THAT IN SUCH A SHORT PERIOD SHARE OF NO OTHER REPUTED COMPANY HAS INCREASED SO MUCH AND THE SHARE MARKET HAS ALSO NOT SHOWN SUCH A RISE. IN MY OPINION THE SHARE MARKET IS QU ITE VOLATILE AND PRICES DO FLUCTUATE ABNORMALLY. IT IS SEEN THAT THE SHARES DEALT BY TH E ASSESSEE WERE QUOTED AT M.P. STOCK EXCHANGE AT ALMOST SIMILAR RATES AT WHICH THEY WERE SOLD. THE ASSESSEE IS ONLY A SMALL SHAREHOLDER OF THE COMPANY. HE IS NOT THE DIRECTOR OF THE COMPANY OR OF THE STOCK EXCHANGE. UNDER THESE CIRCUMSTANCES HOW HE CAN MAN IPULATE THE PRICES IS BEYOND ONES COMPREHENSION. IT IS PERTINENT THAT THE ISSUE OF A BNORMAL INCREASE IN PRICES OF THE SHARES HAS COME UP FOR CONSIDERATION BEFORE THE ITAT AGRA BENCH IN THE CASES OF SMT. MEMO DEVI (ITA NO.396/AG/2004 REPORTED AS 7 DTR 158) W HEREIN THE CO-ORDINATE BENCH OBSERVED AS UNDER :- THE ASSESSEE HAS NO RELATION WITH THE DIRECTORS OF THE COMPANY AND WAS IN NO WAY IN THE CAPACITY TO AFFECT THE MARKET PRIC E OF SHARES. THE INCREASE IN SHARE PRICES BY MORE THAN 25 TIMES TOO CANNOT BE TH E BASIS TO ASSUME THAT THE TRANSACTION WAS BOGUS. ABNORMAL FLUCTUATION IN SHA RE PRICES IS A NORMAL PHENOMENA THE LEARNED COUNSEL FOR THE ASSESSEE FI LED A CHART SHOWING LOW AND HIGH PRICES OF SOME QUOTED SHARES DURING THE 52 WEE KS AS PER ECONOMIC TIMES DATED 27.02.2007 FROM WHICH IT CAN BE SEEN THAT SOM E SHARES INCREASED EVEN BY MORE THAN 100 TIMES. 17. IN ALMOST SIMILAR CIRCUMSTANCES THE HONBLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ANUPAM KAPOOR (299 ITR 179) HAS ALSO OBSERVED AS UNDER :- THE TRIBUNAL WAS RIGHT IN REJECTING THE APPEAL OF THE REVENUE BY HOLDING THAT THE ASSESSEE WAS SIMPLY A SHAREHOLDER OF THE C OMPANY. HE HAD MADE THE INVESTMENT IN A COMPANY IN WHICH HE WAS NEITHER A D IRECTOR NOR WAS HE IN CONTROL OF THE COMPANY. THE ASSESSEE HAD TAKEN SHARES FROM THE MARKET THE SHARES WERE LISTED AND THE TRANSACTION TOOK PLACE THROUGH A REG ISTERED BROKER OF THE STOCK EXCHANGE. THERE WAS NO MATERIAL BEFORE THE AO WHI CH COULD HAVE LEAD TO A CONCLUSION THAT THE TRANSACTION WAS SIMPLICITER A D EVICE TO CAMOUFLAGE ACTIVITIES TO DEFRAUD THE REVENUE. NO SUCH PRESUMPTION COULD BE DRAWN BY THE AO MERELY ON SURMISES AND CONJECTURES. 18. IN THE STOCK EXCHANGE WHEN THE TRANSACTION IS E NTERED INTO THE ASSESSEE IS NOT AWARE OF ABOUT THE BUYER OF THE SHARES. HE ENTERS INTO TRANSACTION ONLY THROUGH A SHARE BROKER. THEREFORE THE OBSERVATION OF THE A.O. THA T THE ASSESSEE COULD NOT IDENTIFY THE BUYER CANNOT BE THE BASIS OF REGARDING THE TRANSACT ION TO BE NON-GENUINE ONE. I ALSO NOTED THAT THE A.O. HAS BEEN INFLUENCED WITH THE FA CT THAT THE ASSESSEE HAS DELIVERED THE BLANK TRANSFER SHARE CERTIFICATES TO THE BROKER WHE N THE DELIVERY OF THE SHARES WERE GIVEN. SINCE THE DEAL HAS TO TAKE PLACE BETWEEN THE BROKER S THE ASSESSEE HAS TO GIVE ONLY BLANK TRANSFER SHARE CERTIFICATE TO THE BROKER WITHOUT ME NTIONING THE NAME OF THE BUYER. THERE IS NOTHING WRONG IN MY OPINION AND THIS IS A USUAL PRACTICE IN THE BUSINESS. FROM THE 12 ENTIRE APPRECIATION OF THE EVIDENCE I NOTED THAT T HE ASSESSEE HAD ACQUIRED THE SHARES THE PURCHASE MADE ON 15.07.1999 WAS DULY DECLARED BY TH E ASSESSEE IN EARLIER YEARS WHICH STAND ACCEPTED BY THE REVENUE. THE SHARES WERE SOL D THROUGH STOCK BROKERS WHO WERE REGISTERED WITH THE STOCK EXCHANGE. SHARES WERE SO LD AT THE PRICES QUOTED AT THE STOCK EXCHANGE AT THE RELEVANT TIME. THE PAYMENT OF SALE CONSIDERATION ALSO FLOWN FROM THE BANK ACCOUNT OF THE BROKER WHERE THE FUND CAME THRO UGH CLEARING NOT IN CASH. THE DECISION OF THE LOWER AUTHORITIES ARE INFLUENCED BY THE GENERAL OBSERVATION OF THE INVESTIGATION WING THAT AROSE A SUSPICION TURNED IN TO CONCLUSIVE PROOF IN THE MINDS OF THE AUTHORITIES THAT EVERYBODY WHO HAS SOLD THE SHARES AT A HIGH PRICE HAS CONVERTED HIS UNACCOUNTED MONEY THROUGH ACCOMMODATION ENTRIES. T HIS APPROACH DOES NOT HAVE ANY LEG TO STAND. HONBLE SUPREME COURT IN THE CASE OF UMACHARAN SHAW & BROS VS. CIT 37 ITR 271 (SC) HAS CLEARLY LAID DOWN THAT SUSPICION H OWSOEVER STRONG CANNOT TAKE PLACE OF PROOF. FROM THE ENTIRE APPRECIATION OF EVIDENCE I NOTED THAT ASSESSING OFFICER HAS FAILED TO ESTABLISH THAT THE ASSESSEE HAS INTRODUCED HIS O WN UNACCOUNTED MONEY IN THE SHAPE OF ALLEGED SALE PROCEEDS OF SHARES. HONBLE SUPREME C OURT IN THE CASE OF KISHAN CHAND CHELLARAM VS. CIT REPORTED IN 125 ITR 713 (SC) HAS OBSERVED THAT THE AMOUNT CANNOT BE ASSESSED AS UNDISCLOSED INCOME OF ASSESSEE IN TH E ABSENCE OF POSITIVE MATERIAL BROUGHT BY THE REVENUE TO PROVE THAT THE AMOUNT IN FACT BEL ONGED TO ASSESSEE AS THE BURDEN LAY ON THE REVENUE. 19. IN ALMOST SIMILAR CIRCUMSTANCES THE ITAT DELHI C BENCH IN THE CASE OF ITO VS. NAVEEN GUPTA (5 SOT 94) COPY OF WHICH IS PLACED BY LD. A.R. HAS OBSERVED AS UNDER :- NEVERTHELESS IT IS ALSO NOTEWORTHY THAT THE A.O. HAS FAILED TO ESTABLISH THAT IN LIEU OF THE AFORESAID SALE PROCEEDS THE AS SESSEE HAS SURREPTITIOUSLY INTRODUCED HIS UNACCOUNTED MONEY IN THE BANK ACCOUN T. AFTER HAVING PERUSED THE ENTIRE MATERIAL THAT IS AVAILABLE ON RECORD THERE IS NO AVERMENT MUCH LESS ANY EVIDENCE WITH THE REVENUE IN THIS REGARD. WHILE T HERE MAY BE ENOUGH GROUNDS WITH THE AO TO CARRY OUT THE IMPUGNED VERIFICATION EXERCISE TO TEST THE EFFICACY OF THE TRANSACTIONS RESULTING IN LONG TERM MATERIAL GA INS IN THE HAND OF THE ASSESSEE BUT THERE IS NO COGENT MATERIAL OR EVIDENCE TO INDI CATE THAT THE IMPUGNED SALE PROCEEDS REFLECTED UNACCOUNTED INCOME OF THE ASSESS EE. 20. IT WAS THE DUTY OF THE A.O. TO BRING ON RECORD SUFFICIENT EVIDENCES AND MATERIAL TO PROVE THAT THE DOCUMENTS FILED BY THE ASSESSEE WERE BOGUS FALSE OR FABRICATED AND THE LONG TERM CAPITAL GAIN SHOWN BY HIM WAS ACTUALLY HI S INCOME FROM UNDISCLOSED SOURCES. THE ONLY MATERIAL TO SUPPORT SUCH CONCLUSION OF THE LOWER AUTHORITIES IS EITHER THE FINDINGS OF THE DDI IN GENERAL INVESTIGATIONS OR TH E TWISTING STATEMENTS OF M/S P.K. JAIN & ASSOCIATES WHICH REMAIN UNTESTED BY THE A.O. HIMS ELF. NONE OF THE JUDICIAL PRECEDENT SUPPORTS THE CASE OF THE REVENUE. WHILE MAKING ADD ITION AS INCOME FROM UNDISCLOSED SOURCES BURDEN ON THE DEPARTMENT IS VERY HEAVY TO E STABLISH THAT THE ALLEGED RECEIPT WAS ACTUALLY INCOME OF THE ASSESSEE FROM THE UNDISCLOSE D SOURCES. JODHPUR BENCH OF THE ITAT IN THE CASE OF ITO VS. SMT. KUSUMLATA (REPORTE D IN 105 TTJ 265) COPY OF WHICH IS PLACED IN THE COMPILATION OF THE ASSESSEE HELD AS UNDER :- 13 10. FOR MAKING ADDITION UNDER S.69 OF THE ACT THE DEPARTMENT IS REQUIRED TO PROVE TO THE HILT THAT THE IMPUGNED TRANSACTIONS AR E BOGUS. THE BURDEN CAST ON THE DEPARTMENT UNDER S.69C (SIC-69) OF THE ACT IS V ERY HIGH WHICH IS REQUIRED TO BE DISCHARGED CONCLUSIVELY IN THIS CASE; THERE IS N O SUCH EVIDENCE. THE ASSESSEE HAS PURCHASED SHARES FROM M/S MAHESHWARI SONS. THE SE PURCHASES ARE EVIDENCED FROM THE CONTRACT NOTE. THE PAYMENT WAS MADE BY CHEQUE. THESE SHARES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE . THE ASSESSEE HELD THESE SHARES FOR MORE THAN ONE YEAR. SHE SOLD THESE SHAR ES TO THE MEMBER OF STOCK EXCHANGE SHRI J.K. JAIN. SHRI J.K. JAIN IN HIS LET TER DT. 22 ND DEC. 1999 HAS CONFIRMED THE TRANSACTION AND THE PAYMENT WAS MADE THROUGH CHEQUE. THE ASSESSEE HAS PROVIDED ALL THE REQUISITE EVIDENCES I N SUPPORT OF ALL TRANSACTIONS. SIMPLY BECAUSE SHRI J.K. JAIN COULD NOT PRODUCE HIS BOOKS OF ACCOUNT OR THE QUOTED RATE OF SHARES IN DELHI STOCK EXCHANGE BEING LESS OR THE TRANSACTIONS BEING NOT REPORTED BY SHRI J.K. JAIN TO THE STOCK E XCHANGE WOULD NOT MAKE A TRANSACTION BOGUS. THE JAIPUR STOCK EXCHANGE HAS I NTIMATED THE AO THAT THEY ARE ONLY HAVING INFORMATION OF THE TRANSACTIONS BETWEEN TWO MEMBERS OF THE STOCK EXCHANGE AND NOT OTHERWISE. IN THE PRESENT CASE T HE TRANSACTION WAS BETWEEN A MEMBER AND A NON-MEMBER AND THEREFORE SUCH TRANSAC TIONS WERE NOT REPORTED IN THE STOCK EXCHANGE. FURTHER THE CREDIT IN THE BAN K ACCOUNT OF SHRI J.K. JAIN IS BY CLEARANCE. THEREFORE THE ALLEGATION OF THE AO THA T THE AMOUNT WAS DEPOSITED IN CASH HAS NO BASIS. THE ASSESSEE HAS ACCEPTED HAVIN G INVESTED HER FUNDS ON THE ADVICE OF HER FATHER-IN-LAW. THE BURDEN OF PROVING A TRANSACTION IS ALWAYS ON THE PERSON ASSERTING IT TO BE BOGUS AND THIS BURDEN HAS TO BE STRICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE OF A CHARACTER WHICH WOULD EITHER DIRECTLY PROVE THE FACT OF BOGUSNESS OR ESTABLISH CIRCUMSTANCES UNERRINGLY AND REASONABLY RAISING AN INFERENCE TO THAT EFFECT. 21. I HAVE ALSO GONE THROUGH VARIOUS OTHER DECISION S ON SIMILAR ISSUE UNDER THE SIMILAR FACTS AND I NOTED THAT THIS TRIBUNAL HAD CO NSISTENTLY ACCEPTED THE GENUINENESS OF THE SHARE TRANSACTION. THOSE CASES ARE AS UNDER :- ITO VS. SUNITA GUPTA - ITA NO.881/DEL/2004 (DELHI B ENCH SMC) DILIP GARGH VS. ITO ITA NO.470/AGR/2004 GOPAL PRASAD AGARWAL VS. ACIT ITA NO.128/AGR/2004 22. I ALSO NOTED THAT THE CASE OF THE ASSESSEE IS D ULY COVERED BY THE DECISION OF THE THIRD MEMBER IN THE CASE OF SMT. SUNITA OBEROI VS. ITO (AGRA) (TM) ITA NO.273/AGR/2004 A.Y. 1995-96 DATED 07.08.2009 30 D TR (AGRA) (TM) (TRIB.) 474 IN WHICH ON DIFFERENCE OF OPINION ON THE QUESTION UNDE R THE SIMILAR CIRCUMSTANCES WHETHER THE ASSESSEE CAN BE SAID TO HAVE DISCHARGED HER BUR DEN TO PROVE THE GENUINENESS OF THE TRANSACTION IN SHARES OF M/S. PRASIDH EXPORTS LIMIT ED AND M/S. K.L.P. FINANCE LIMITED OR THAT THE BURDEN HAD SHIFTED ON THE REVENUE THAT CAN BE HELD TO HAVE NOT DISCHARGED BY 14 THEM THE DECISION TO UPHOLD ACCEPTING OF ALLEGED P ROFIT ON ALLEGED SHARE OF M/S. PRASIDH EXPORTS LIMITED AND M/S. K.L.P. FINANCE LIMITED AS INCOME FROM OTHER SOURCES INSTEAD OF ASSESSEE HAS CLAIMED THE CAPITAL GAIN IS A CORRE CT DECISION OR NOT. THE HONBLE THIRD MEMBER HAS HELD AS UNDER :- THE ONLY REASON TO MAKE THE ADDITION IS THAT CONFI RMATION FROM THE SHARE BROKERS COULD NOT BE FILED BY THE ASSESSEE AND SUMM ONS ISSUED TO THE SAID PERSONS WERE NOT SERVED AND RETURNED UNSERVED AND THE NAMES AND ADDRESSES OF THE BUYER TO WHOM THE ULTIMATELY SHARES WERE SOLD THROUGH THE BROKER WERE NOT KNOWN TO THE ASSESSEE. THE ASSESSEE WAS NOT IN A POSITION TO CO MPEL THE SHARE BROKER FOR CONFIRMING THE TRANSACTION SHE BEING NEITHER A DIR ECTOR NOR HAVING LARGE SCALE DEALINGS WITH THE BROKERS OVER THE YEARS SO AS TO S HOW THAT SHE WAS PERSONALLY IN A POSITION TO COMPEL THEM ON ACCOUNT OF THE MAGNITU DE OF TRANSACTION DONE THROUGH THEM. IT WAS HER FATHER WHO KNEW THE BROKE RS AND SHE ACTED ON HIS ADVICE AND HAD NO CONTACT THEREAFTER. THE REASONIN G THAT SUMMONS ISSUED TO THE PARTIES CAME BACK UNSERVED CANNOT BY ITSELF BE HELD AGAINST THE ASSESSEE AS WHETHER THE SHARE BROKER CONTINUES THE BUSINESS OR DISCONTINUES THE SAME OR CHANGED THE ADDRESSES OR FOR THAT MATTER THE COMPAN IES WHOSE SHARES WERE PURCHASED AND SOLD CHANGED THEIR PREMISES OR NAMES AS CHANGED BY VIRTUE OF BEING ACQUIRED BY SOME OTHER COMPANY THE ASSESSEE C ANNOT BE HELD LIABLE TO STAY IN TOUCH FOR ALL TIMES TO COME. SIMILARLY NO REAS ONS ARE THERE TO SHOW THAT SHRI PRAVEEN MITTAL WAS EVER IN A POSITION TO DECLARE TH E TRANSACTIONS OF AN ACQUAINTANCE BROKER AS BOGUS TRANSACTIONS NEITHER A NY EVIDENCE HAS BEEN LED NOR REASONS ADVANCED TO SUPPORT HOW HE COULD BE CONSIDE RED TO BE A RELIABLE PERSON SO AS TO IGNORE THE EVIDENCES AVAILABLE ON RECORD I .E. CONTRACT NOTES OF SALE AND OF THE SPECIFIC SHARES OF SPECIFIC RATES ON SPECIFIC D ATES. SHRI PRAVEEN MITTAL WAS THE WITNESS OF THE DEPARTMENT THE ONUS WAS THEREFORE O N THE DEPARTMENT TO PRODUCE HIM AND MAKE HIM AVAILABLE FOR CROSS-EXAMINATION BY THE ASSESSEE. SIMILARLY THE EVIDENCE THAT THE COMPANIES WERE NOT IN EXISTENCE A T THE ADDRESS AVAILABLE WITH THE DEPARTMENT DOES NOT DETRACT FROM THE ASSESSEES CLAIM IN VIEW OF THE DOCUMENTS AVAILABLE ON RECORD. THE DISCREPANCY IN THE AMOUNTS TO THE EXPENDITURE OF RS.53 356 WAS BECAUSE OF CONSISTENT STATEMENT BY THE ASSESSEE THAT THE SHARE BROKER MADE A SHORT PAYMENT AND DISPUTED THE REMAINING AMOUNT. THE DEPARTMENT HAS THUS PROCEEDED ENTIRELY ON SUSPICION AND SURMISES IF SEEN IN THE LIGHT OF THE ORDERS OF THE TRIBUNAL. THE CLAIM OF THE ASSESSEE IN REGARD TO THE FIRST ISSUE IS TO BE ALLOWED. 23. THUS IN VIEW OF THE AFORESAID DISCUSSIONS THE DECISIONS OF THE THIRD MEMBER THE DECISIONS OF THE COORDINATE BENCHES TOTALITY OF TH E FACTS AND CIRCUMSTANCES AND EVIDENCE ON RECORD I AM OF THE CONSIDERED VIEW THAT THE ACT ION OF THE CIT(A) WAS NOT CORRECT IN CONFIRMING THE ASSESSMENT OF RS.12 19 538/- AS THE INCOME FROM UNDISCLOSED SOURCES AS AGAINST THE SALE CONSIDERATION OF SHARES DECLARED B Y THE ASSESSEE. THE CIT(A) WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF LONG TERM CAPIT AL GAIN OF THE ASSESSEE FROM SALE OF SHARES. I ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ASSESS THE INCOME DECLARED FROM THE 15 SALE OF SHARES UNDER THE HEAD INCOME FROM LONG TERM CAPITAL GAIN. THUS THE GROUNDS NO.1 & 2 OF ASSESSEES APPEAL SHOULD BE ALLOWED. G ROUND NO.3 OF ASSESSEES APPEAL IS CONSEQUENTIAL IN NATURE DOES NOT REQUIRE ANY ADJUD ICATION. SO FAR THE GROUND NO.1 OF REVENUES APPEAL IS CONCERNED THE SAME SHOULD STAN D DISMISSED AS INFRUCTUOUS IN VIEW OF MY DECISION ON GROUNDS NO.1 & 2 OF ASSESSEES APPEA L. GROUND NO.2 IN REVENUES APPEAL IS ALSO CONSEQUENTIAL IN NATURE AND SHOULD STAND DI SMISSED. 24. THE MATTER WILL NOW GO BEFORE THE REGULAR BENCH FOR DECIDING THE APPEAL IN ACCORDANCE WITH THE MAJORITY OPINION. 8. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THIS TRIBUNAL IN OUR VIEW NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT( A). THUS GROUND TAKEN BY THE REVENUE STANDS DISMISSED. 9. SINCE THE CROSS OBJECTION WAS NOT PRESSED BY THE LD. A.R. THE SAME IS DISMISSED AS NOT PRESSED. 10. IN THE RESULT APPEAL FIELD BY THE REVENUE AS W ELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE STAND DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 11.02.2011). SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 11 TH FEBRUARY 2011 PBN/* 16 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY