ARVIND M. KARIYA, MUMBAI v. ACIT CEN CIR-12, MUMBAI

CO 180/MUM/2009 | 2004-2005
Pronouncement Date: 20-10-2010 | Result: Dismissed

Appeal Details

RSA Number 18019923 RSA 2009
Assessee PAN AAEPK0468L
Bench Mumbai
Appeal Number CO 180/MUM/2009
Duration Of Justice 1 year(s) 1 month(s) 5 day(s)
Appellant ARVIND M. KARIYA, MUMBAI
Respondent ACIT CEN CIR-12, MUMBAI
Appeal Type Cross Objection
Pronouncement Date 20-10-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 20-10-2010
Date Of Final Hearing 22-12-2009
Next Hearing Date 22-12-2009
Assessment Year 2004-2005
Appeal Filed On 15-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI BEFORE SHRI S V MEHROTRA ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 5670/MUM/2008 (ASSESSMENT YEAR 2004-05) ACIT CENTRAL CIRCLE -12 OLD CGO ANNEXE BUILDING ROM NO.803 8 TH FL M K KARVE ROAD MUMBAI-400020 APPELLANT VS ARVIND M KARIYA A-402 JAY APARTMENT NEHRU ROAD SANTACRUS(E) MUMBAI-400055 PAN: AAEPK0468L RESPONDENT CO.NO. 180/MUM/2009 ARVIND M KARIYA .CROSS-OBJECTOR V/S ACIT CENTRAL CIRCLE -12 RESPONDENT REVENUE BY : SHRI HARIGOVIND SINGH ASSESSEE BY : SHRI VIMAL PUNAMIY A O R D E R PER VIJAY PAL RAO JM THIS APPEAL BY THE REVENUE AND CROSS-OBJECTION ARE DIRECTED AGAINST THE ORDER DATED 9.6.2008 OF CIT(A) -XIX FOR THE ASSESSMENT YEAR 2004-05. ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 2 2. THE REVENUE IN THIS APPEAL HAS RAISED THE FOLLOW ING REVISED GROUNDS: I) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.45 55 979/- BEING FICTI TIOUS LONG TERM CAPITAL GAINS SHOWN BY THE ASSESSEE II) THE LD. CIT(A) HAS ERRED IN GIVING RELIEF TO TH E ASSESSEE BY NOT APPRECIATING THAT THE PURCHASE OF SHARES ITSELF WAS NOT PROVED AS THE SUB-BROKER FRO M WHOM THE ASESEEE HAS MADE OFF MARKET PURCHASE OF THESE SHARES WAS A FIRM IN WHICH THE ASSESSEE HIMSE LF WAS A PARTNER. FURTHER THIS FROM M/S SHREENIDHI STOCK AND BROKING HAD FAILED TO GIVE THE CORRECT ADDRESS OF THE SUPPOSED SELLER OF SHARES AND NEITHE R HAD IT ENTERED INTO AN AGREEMENT WITH THE ALLEGED SELLER OF SHARES NOR HAD IT MAINTAINED THE DATABAS E OF THIS ALLEGED SELLER OF SHARES THOUGH REQUIRED TO D O SO AS PER STIPULATION; III) THE CIT(A) HAS ERRED IN LAW BY HOLDING THAT TH E ADDITIONS WERE WRONGLY MADE AS PER PROVISIONS OF SECTION 68 OF THE IT ACT 1961. MORE APPLICATION OF WRONG SECTION CANNOT MAKE THE ADDITION BAD PARTICULARLY WHEN IN THE FACTS AND CIRCUMSTANCES T HE ASSESSEE HAD ACTUALLY INTRODUCED HIS UNDISCLOSED INCOME BY MEANS OF ENTERING INTO FICTITIOUS SHARE TRANSACTIONS IV) THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN HOLDING THAT THE ISSUE RELATING TO SUPPOSED DOUBLE ADDITION ACCOUNT OF LONG TERM CAPITAL GAINS IS A CONSEQUENTIAL GROUND EMANATING OUT OF THE GROUND NO.3 WHICH RELATES TO ASSESSEES CLAIM THAT THE AO HAS WRONGLY ADDED RS`.45 55 979/- UNDER SECTION 68 OF THE IT ACT AS NOTED BY THE AO IN HIS ORDER THE ADDITION AMOUNTING TO RS`.45 55 979/- RELATES EXCLUSIVELY TO THE SHARE TRANSACTIONS OF M/S SHALIM AR AGRO LTD WHEREAS THE ADDITIONS AMOUNTING TO RS..15 19 471/- RELATES TO SHARES OTHER THAN M/S SHALIMAR AGRO LTD. 3. WE HAVE HEARD THE LEARNED DR AS WELL AS LEARNED AR AND CONSIDERED THE RELEVANT RECORD FOR ADMITTING TH E REVISED ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 3 GROUNDS. THE REVENUE FILED THE GROUNDS ALONG WITH THE MEMO OF APPEAL AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THECAE AND IN LAW THE LD. CIT(A) HAS ERRED IN : HOLDING THAT A COPY OF CERTIFICATE FURNISHED BEFOR E HIM DURING THE APPELLANT PROCEEDINGS AS A CERTIFICA TE AS REQUIRED UNDER SECTION 72A. DIRECTING THE AO TO PROCEED IN ACCORDANCE WITH LAW IN THE FACE OF SUCH CERTIFICATE WITHOUT APPRECIATIN G THE LEGAL OBLIGATION AS PROVIDED U/S 72A(2)(II) THAT TH E ASSESSEE SHOULD FURNISH THE REQUISITE CERTIFICATE FROM THE COMPETENT AUTHORITY ALONG WITH THE RETURN OF INCOME 4. SINCE REVISED GROUNDS ARE ARISING OUT OF THE IMP UGNED ORDER AND MODIFIED VERSION AS WELL AS THE GROUNDS R AISED ORIGINALLY ARE REGARDING THE ISSUE OF DELETION OF ADDITION MADE UNDER SECTION 68 OF THE IT ACT. THEREFORE WE FI ND THAT THE REVISED GROUNDS ARE MORE CLEARLY AND APPROPRIATELY HIGHLIGHTING THE ISSUE INVOLVED IN THE APPEAL FILE D BY THE REVENUE. THUS WHEN THE REVENUE HAVE NOT RAISED AN Y NEW ISSUE IN THE REVISED GROUNDS THEN THE SAME ARE ADMI TTED AND TAKEN ON RECORD. 5. ONLY ISSUE ARISES WHETHER THE TRANSACTIONS OF PU RCHASE AND SALE OF SHARES OF M/S SHALIMAR AGRO PRODUCT LT D WAS A SHAM TRANSACTION AND THE SALE CONSIDERATION CLAIMED BY THE ASSESSEE WOULD BE TREATED AS UNEXPLAINED CASH CREDI T U/S 68 OF THE ACT. ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 4 7. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S SHOWN LONG TERM CAPITAL GAIN OF `.31 65 175/- AND `. 24 7 1 310/- UNDER 20 % AND 10% TAX CATEGORY OF THE SALE OF SHARES AN D ALSO CLAIMED EXEMPTION UNDER SECTION 54F OF `.31 65 101 /-. DURING THE ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESS EE TO FURNISH THE DETAILS OF PURCHASE AND SALE OF SHARES ALONG WITH THE PURCHASE NOTE IN RESPECT OF CAPITAL GAIN AS WEL L AS A COPY OF DMAT STATEMENT. THE AO HAS OBSERVED FROM THE P URCHASE NOTE THAT M/S SHREENIDHI STOCK AND BROKING HAD I SSUED ALLEGED PURCHASE OF 15000 SHARES OF M/S SHALIMAR A GRO PRODUCTS LIMITED ON BEHALF OF THE ASSESSEE. M/S SH REENIDHI STOCK AND BROKING IS A PARTNERSHIP CONCERNED OF TH E ASSESSEE. TO VERIFY THE GENUINENESS OF THE SAID TRA NSACTIONS THE AO ISSUED NOTICE DATED 26.09.2006 UNDER SECTIO N 133(6) OF THE ACT TO M/S SHREENIDHI STOCK AND BROKING AND ASKED THEM TO SUBMIT THE NAME AND ADDRESS OF MAIN BROKER TO WHOM IT WAS AFFILIATED IN THE FINANCIAL YEAR 2002-03. IT WAS INFORMED BY THE AUTHORIZED REPRESENTATIVE OF M/S SHREENIDH I STOCK AND BROKING THAT THEIR MAIN BROKER WAS VIDYUT DEVNDRAKUMAR GR. FLOOR RAJABAHADUR MANSION 32 AMBALA DOSHI MARG FORT MUMBAI-400001. THE AO ISSUED SU MMONS UNDER SECTION 131 OF THE ACT TO THE MAIN BROKER VID YUT DEVNDRAKUMAR ASKING THEM TO SUBMIT A COPY OF THE C ONTRACT NOTE DULY CERTIFIED DETAILS OF PAYMENT RECEIVED D ESCRIPTIVE NUMBERS OF SHARES SOLD BY THEM TO M/S SHREENIDHI STOCK AND ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 5 BROKING . IN RESPONSE TO THE SAID SUMMON THE MAIN BROKER VIDYUT DEVENDRAKUMAR VIDE THEIR LETTER DATED 16.11. 2006 HAD SUBMITTED THAT THEY HAVE NOT EXECUTED ANY TRADE OF SHALIMAR AGRO LTD ON 24.4.2002 ON THEIR BSE TERMINALS. A CO PY OF THE SAID LETTER WAS FORWARDED TO THE ASESEEE BY THE A O AND ASKED TO SHOW CAUSE AS TO WHY THE TRANSACTIONS SHO ULD NOT BE TREATED AS SHAM TRANSACTION. IN REPLY THE ASSES SEE VIDE LETTER DATED 4.12.2006 SUBMITTED THAT THE SHARES W ERE PURCHASED FROM M/S M/S SHREENIDHI STOCK AND BROK ING ON 24.04.2002 AND NOT FROM M/S VIDYUT DEVENDRAKUMAR. IT WAS ALSO SUBMITTED THAT M/S SHREENIDHI STOCK AND BRO KING PURCHASED THE SAID SHARES FROM ONE MR. BHAGWAN SOL ANKI RESIDING AT NEW SHIVAJI NAGAR KAPASWADI VERSOVA LINK ROAD ANDHERI (W) MUMBAI-400058. IN VIEW OF THE SAID REPLY OF THE ASSESSEE THE AO ISSUED SUMMONS UNDER SECTIO N 131 TO MR.BHAGWAN SOLANKI THROUGH INSPECTOR IN CHARGE TO SERVE THE SAID SUMMONS. THE INSPECTOR REPORTED THAT DUE T O INCOMPLETE ADDRESS HE COULD NOT FOUND THE PERSON AN D ON INQUIRY IN THE AREA NOBODY KNOWS WHEREABOUTS OF S UCH PERSON. THEREFORE THE SUMMONS WERE RETURNED UN-SE RVED. THE AO THEN ASKED THE ASSESSEE VIDE ORDER DATED 8. 12.2006 TO PRODUCE MR.BHAGWAN SOLANKI FOR EXAMINATION AND T HE ASSESSEE SHALL ALSO PRESENT FOR CROSS-EXAMINATION O N 15.12.2006 AT 10.30 AM. THE ASSESSEE DID NOT PROD UCE MR.BHAGWAN SOLANKI AND SUBMITTED VIDE LETTER DATED ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 6 14.12.2006 THAT THE TRANSACTION OF PURCHASE OF SHAR ES IN QUESTION WAS DONE OFF-MARKET THEREFORE NOT AVAIL ABLE WITH THE STOCK EXCHANGE AS WELL AS MAIN BROKER. THE TR ANSACTION WAS DONE THROUGH SUB-BROKER AND WAS IN PHYSICAL FO RM ALONG WITH TRANSFER FORM. HE HAS PRODUCED THE COPIES OF CERTIFICATES DATED 30.04.2002 TO SHOW THAT THE SHARES WERE GOT TRANSFERRED. THE ASSESSEE POINTED OUT THAT NO PAYM ENT WAS MADE BY HIM BUT THE AMOUNT WAS ADJUSTED AGAINST TH E CREDIT BALANCE LYING WITH THE SUB-BROKER. THE ASSESSEE FUR THER SUBMITTED THAT THE SHARES WERE PURCHASED FROM ONE SHRI BHAGVAN SOLANKI ON 24.4.2002 FOR A TOTAL CONSIDERA TION OF `. 1 09 500/- WHICH WAS CREDITED TO HIS ACCOUNT AND AD JUSTED AGAINST OPENING DEBIT BALANCE AND SHARES WERE GIVEN FOR DEMATERIALIZATION ON 28.05.2003. THE ASSESSEE DOES NOT KNOW THE PERSON FROM WHOM THE SHARES WERE PURCHASED BECAUSE THE SHARES WERE PURCHASED FROM SHARE BROKER . ACCORDINGLY THE ASSESSEE DOES NOT HAVE HIS LATEST STATUS. SINCE THE TRANSACTION WAS DONE ABOUT FOUR YEARS BAC K FOR TRACING THE PERSON IS HIGHLY IMPOSSIBLE. THE AO T HEN ISSUED SUMMONS TO SUB-BROKER M/S SHREENIDHI STOCK AND B ROKING FOR SUBMISSION OF CLIENTS REGISTRATION FORM OF SH RI BHAGVAN SOLANKI AND PAN. IT WAS REPLIED BY M/S SHREENIDHI STOCK AND BROKING THAT IT WAS NOT MANDATORY FOR THE SUB -BROKER TO MAINTAIN CLIENTS REGISTRATION FORM OF THEIR CLIENT S FOUR YEARS AGO AND NOW BHAGVAN SOLANKI DO NOT DEAL WITH THEM. ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 7 THEREFORE THEY DO NOT HAVE THE CLIENT REGISTRATIO N AGREEMENT AND CONSEQUENTLY PAN NO.. THE AO SOUGHT CLARIFICAT ION ABOUT THE PROCEDURE AND REQUIREMENT OF ENTERING INTO AN A GREEMENT WITH THE SUB-BROKER FROM THE MAIN BROKER M/S VIDYUT DEVENDRAKUMAR. THE MAIN BROKER INFORMED THE AO TH AT IN THE YEAR 2002-03 THE SUB-BROKER ARE OBLIGED TO ENTER IN TO AGREEMENT AND MAINTAIN THE DATABASE OF THEIR CLIENT S. THE AO OBSERVED NON-MAINTENANCE OF DATA BASE OF THE CLIENT AND SUB- BROKER IN THE FORM IN WHICH THE ASSESSEE IS A PART NER REVEALS FICTITIOUS NATURE OF THE TRANSACTION. THE AO ALSO I SSUED SUMMONS TO M/S SHALIMAR AGRO LTD FOR PRODUCING THE CERTIFIED TRUE COPY OF ANNUAL RETURN FILE FOR THE FINANCIAL YEAR FROM IN THE OFFICE OF THE REGISTRAR OF COMPANIES CERTIFIE D TRUE COPY OF SHARE TRANSFER DEED TRANSFERRING SHARES IN THE NAME OF MR. ARVIND KARIA AND EXTRACT OF MEMBER REGISTER DULY CE RTIFIED BY THE COMPANY. NO REPLY RECEIVED FROM THE COMPANY AN D THEREFORE THE AO DOUBTED THE GENUINENESS OF THE D OCUMENTS. THE AO HAS ALSO HELD THAT THE ASSESSEE FAILED TO P ROVE THAT HE HAS PURCHASED THE SHARES FROM MR. BHAGVAN SOLANK I. ACCORDINGLY THE SALE PROCEEDS RECEIVED IN THE ASS ESSEES BOOKS OF ACCOUNT IN RESPECT OF SHARES WERE TREATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX A CT 1961. CONSEQUENTLY THE EXEMPTION U/S 54F WAS ALSO DISALL OWED. ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 8 8. ON APPEAL THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE VIDE PARAGRAPH 5.7 AS UNDER : 5.7 AFTER CONSIDERING THE VARIOUS FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS JUDICIAL PRONOUNCEMENTS OF MUKESH R MAROLIA V/S ADDL CIT(2006) 6 SOT 247 (BOM) AND ITO V/S NAVEEN GUPTA (2006) 5 SOT 94(DEL) AS ALSO MENTIONED BY THE AR OF THE APPELLANT I AM OF THE OPINION THAT THE L OGIC AND ARGUMENTS PRESENTED BY THE AR OF THE APPELLANT HAVE GREAT FORCE AND THE AO WAS NOT JUSTIFIED IN MAKING THIS ADDITION UNDER SECTION 68 AMOUNTING TO `.45 55 979/- IS DELETED AND THE CLAIM OF THE APPEL LANT IS RESTORED. FURTHER WITH REGARD TO THE CLAIM OF DEDUCTION UNDER SECTION 54F ALSO THE AO MAY FOLLOW UP ACCORDINGLY. THIS GROUND OF THE APPELLANT IS TRE ATED AS ALLOWED: 9. BEFORE US THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE FAILED TO PROVE THAT THE PURCHASE OF SHARE S WERE FROM SHRI BHAGWAN SOLANKI. THE CLAIM OF THE ASESEE E THAT HE HAS PURCHASED THE SHARES FROM SUB-BROKER BY M/S SH REENIDHI STOCK AND BROKING AND NOT DIRECTLY FROM SHRI BHAG WAN SOLANKI IS ALSO NOT ACCEPTED BECAUSE THE ASSESSEE H IMSELF IS A PARTNER IN THE SUB-BROKING FIRM AND THUS MADE TH E FICTITIOUS ARRANGEMENT. DESPITE VARIOUS OPPORTUNITIES ARE GIVE N TO THE ASSESSEE BY THE AO THE ASSESSEE FAILED TO PRODUCE MR.BHAGVAN SOLANKI. EVEN THE MAIN BROKER HAS ALS O REFUSED TO HAVE DONE ANY TRANSACTION IN THE SHARES OF M/S SHALIMAR AGRO LTD. THEREFORE THE SALE PROCEEDS RECEIVED A ND CREDITED IN THE ASSESSEES BOOKS OF ACCOUNT IN RESPECT OF S HARES OF M/S SHALIMAR AGRO LTD IS ONLY A FICTITIOUS AND ACCO MMODATION ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 9 ENTRIES MANIPULATED BY THE ASSESSEE. THE LD. DR HA S HEAVILY RELIED UPON THE ORDER OF THE AO. 10. ON THE OTHER HAND THE LEARNED AR HAS SUBMITTED THAT THE AO HAS NOT AT ALL DISPUTED THE SALE OF SHARES IN QUESTION BY THE ASSESSEE THEREFORE WITHOUT THE PURCHASES OF SHARES AND SALE OF THE SAME IS NOT POSSIBLE. THE AO HAS DOUBTED THE TRANSACTION OF PURCHASE OF SHARES BY THE ASSESS EE AND NOT THE SALE OF SHARES. THE LEARNED AR HAS FURTHER CON TENDED THAT THE PURCHASE OF SHARES ARE NOT IN THE RELEVANT PREV IOUS YEAR BUT THE SAME IN THE PREVIOUS YEAR AND THEREFORE THE SAME CANNOT BE CONSIDERED FOR DISALLOWANCE IN THE RELEV ANT PREVIOUS YEAR. WHEN THE SALE OF SHARES HAS NOT BE EN DOUBTED AND DISPUTED BY THE AO THEN THE ADDITION CANNOT B E MADE BY TREATING THE SAME AS UNEXPLAINED CASH CREDIT. THE LEARNED AR HAS SUBMITTED THAT THE SHARES WERE PURCHASED ON 24. 4.2002. THE COMPANY HAS TRANSFERRED THE SHARES IN THE NAME OF THE ASSESSEE ON 30.4.2002. HE HAS REFERRED THE CERTIF ICATE OF TRANSFER OF SHARES BY THE COMPANY DATED 30.4.2002 A ND SUBMITTED THAT WHEN THE SHARES IN QUESTION WERE TRA NSFERRED IN THE NAME OF THE ASSESSEE ON 30.4.2002 THEN THE TRAN SACTIONS OF PURCHASE CANNOT BE DISPUTED. THE LEARNED AR HA S FURTHER SUBMITTED THAT THE ASSESSEE DISCLOSED THE SHARES IN THE BALANCE SHEET FOR THE PERIOD ENDING ON 31.3.2003 WH ICH ALSO SHOWS THAT THE TRANSACTION OF PURCHASES OF SHARES BY THE ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 10 ASSESSEE IS GENUINE AND CANNOT BE DOUBTED. THE ASE SEEE PRODUCED BEFORE THE AO THE PURCHASE NOTE REGARDING THE PURCHASE OF SHARES COPY OF CERTIFICATE LETTER OF THE COMPANY DATED 30.4.2002 CONFIRMING THE TRANSFER OF SHARES IN THE NAME OF THE ASESEEE DMAT ACCOUNT STATEMENT FOR PURCHASE AS WELL AS SALE OF THE SHARES COPY OF LEDGER ACCOUNT OF TH E ASESEEE IN THE BOOKS OF BROKING FIRM FOR THE PURCHASE OF SHAR ES. THUS IT IS CONTENDED BY THE LEARNED AR THAT THE ASESEEE HAS PROVED WITHOUT ANY DOUBT THAT THE PURCHASE AND SALE TRAN SACTIONS WAS GENUINE AND DULY SUPPORTED BY THE NECESSARY EVI DENCE. AS REGARD THE OBJECTION OF THE AO REGARDING NOT PRO VIDING COPY OF ANNUAL RETURN OF THE COMPANY DESPITE THE SUMMONS ISSUED. THE LEANED AR HAS SUBMITTED THAT THE ASSESSEE VIDE LETTER DATED 22.2. 2002 INFORMED THE AO THAT THE SUMMONS WERE ISSUED AT INCORRECT ADDRESS PROBABLY. THE ASSESSEE THEN HAD PERSONALLY HANDED OVER THE SUMMON TO THE COMPANY A ND THE COMPANY HAS SENT THE LETTER CONFIRMING THE TRANSFER OF THE SHARES IN THE NAME OF THE ASSESSEE BUT THE AO HAS I GNORED THE SAME. SINCE THE ASSESSEE PURCHASED THE SHARES FROM THE SUB-BROKERS THE ASESEEE WAS NOT RESPONSIBLE TO PRO DUCE SHRI BHAGVAN SOLANKI. IT WAS OFF-MARKET TRANSACTION AND THEN THE BROKER WAS TO ISSUE PHYSICAL FORM AND THE PURC HASING COMPANY DOES NOT COME TO KNOW THE NAME OF T HE SELLER. HE HAS RELIED UPON THE ORDER OF THIS TRIBU NAL IN THE CASE OF DCIT V/S SHRI PINAKIN L SHAH IN ITA ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 11 NO.3030/MUM/2008 (AY 2005-06) ORDER DATED 14.07.200 9. HE HAS ALSO RELIED ON THE ORDER OF THIS TRIBUNAL IN T HE CASE OF MRS.RAJNIDEVI A CHODHARY V/S ITO IN ITA NO.6455/MUM/2007(AY 203-04) ORDER DATED 30.4.2008 A S WELL AS THE DECISION OF THE ITAT DELHI BENCH C IN ITO V/S NAVEEN GUPTA REPORTED IN (2006) 5 SOT 94(DELHI). 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND R ELEVANT RECORD. THE ASESEEE PURCHASED THE SHARES IN QUESTI ON THROUGH M/S SHREENIDHI STOCK AND BROKING THE FI RM IN WHICH THE ASSESSEE IS A PARTNER. THE AO DOUBTED THE TRA NSACTION OF PURCHASES ON THE GROUND THAT THE ASSESSEE HAS NOT P RODUCED ONE SHRI BHAGVAN SOLANKI FROM WHOM THE SHARES WERE PURCHASED. SECONDLY NO PAYMENT WAS MADE BY THE A SSESSEE FOR PURCHASING THE SHARES IN QUESTION. SINCE THE AS SESSEE IS A PARTNER IN THE FIRM THE SALE AND PURCHASE CONSIDER ATION WAS ADJUSTED ONLY BY WAY OF BOOK ENTRIES WHICH IS SHOWN IN THE FINAL ACCOUNT OF THE FIRM. THOUGH THE ASSESSEE HAS SHOWN THE TRANSACTION IN ITS BALANCE SHEET ENDING ON 31.3.200 2. HOWEVER NO DEED OF TRANSFER OR ANY RECORD WAS PROD UCED BY THE ASSESSEE TO SHOW THE ACTUAL DATE OF PURCHASE EX CEPT THE PURCHASE NOTE WHICH IS ISSUED BY THE BROKING FIRM IN WHICH THE ASESEEE IS A PARTNER. THE AO ISSUED SUMMONS TO THE M/S SHALIMAR AGRO LTD FOR FURNISHING OF ANNUAL RETURN OR SHOWING THE TRANSFER OF SHARES IN THE NAME OF THE ASESEEE. THE AO ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 12 HAD ALSO SOUGHT OTHER INFORMATION FROM THE COMPANY BUT NO RESPONSE WAS RECEIVED FROM THE COMPANY. THE LEARN ED AR OF THE ASSESSEE HAS VEHEMENTLY CONTENDED THAT THE S UMMONS WERE ISSUED ON INCORRECT ADDRESS AND THE ASSESSEE HIMSELF HAS GOT THE SUMMONS SERVED AND IN RESPONSE THE CO MPANY ISSUED LETTER DATED 30.4.2002 CONFIRMING THE TRANSF ER OF THE SHARES IN THE NAME OF THE ASESEEE. WE NOTE THAT TH E ALLEGED TRANSACTION IS OFF-MARKET AND IN THE ABSENCE OF OTH ER EVIDENCE IT IS NECESSARY TO ESTABLISH THE GENUINENESS OF TH E TRANSACTIONS AND THUS THE CONCERNED COMPANY SHOUL D FURNISH THE NECESSARY RECORD FOR VERIFICATION. AS EVIDENT FROM THE LETTER DATED 30.4.2002 ISSUED BY THE COMPANY THAT THE SHARES WERE TRANSFERRED IN THE NAME OF THE ASESEEE BUT THE VERACITY OF THE SAID LETTER HAS NOT BEEN EXAMINED BY THE A O BECAUSE THE AO WANTED SOME MORE INFORMATION AND RECORD FROM THE COMPANY WHICH WAS NOT PRODUCED. PRIMA FACIE IT APP EARS THAT THE SHARES WERE TRANSFERRED IN THE NAME OF THE ASSE SSEE ON 30.4.2002 AND THE TRANSACTION OF PURCHASE TOOK PLA CE DURING THE YEAR 2002-03 RELEVANT TO THE ASSESSMENT YEAR 2003-04. HOWEVER THE RELEVANT RECORD WAS NOT MADE AVAILABLE BEFORE THE AO TO VERIFY THE VERACITY OF THE SAID LETTER D ATED 30.04.2002 OF CONFIRMATION. THEREFORE EVEN IF IT IS PRESUMED THAT THE SHARES WERE PURCHASED DURING THE YEAR 2002-03 THE ACTUAL DATE OF TRA NSACTION HAS TO BE ESTABLISHED SPECIFICALLY WHEN THE ASSESSEE HAS P URCHASED ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 13 THE SHARES THROUGH THE FIRM IN WHICH HE IS A PARTNE R AND DID NOT MAKE ANY PAYMENT. THE PERSON FROM WHOM THE SHA RES WERE PURCHASED WAS ALSO NOT PRODUCED. EVEN NO ENT RY EXCEPT SHOWING THE TRANSACTION IN THE FINAL ACCOUNT HAS P RODUCED TO ESTABLISH THE ACTUAL DATE OF PURCHASE OF SHARES. A CCORDINGLY THIS MATER REQUIRES PROPER VERIFICATION AND EXAMINA TION WITH RESPECT TO THE ACTUAL DATE OF PURCHASE SO THAT THE NATURE OF CAPITAL GAIN (SHORT OR LONG TERM) CAN BE COMPUTED. ACCORDINGLY WE REMIT THE ISSUE OF CAPITAL GAIN ARI SING OUT OF THE PURCHASE AND SALE OF SHARES OF M/S SHALIMAR AGR O LTD. TO THE RECORD OF AO. THE ISSUE OF EXEMPTION U/S 54F I S CONSEQUENTIAL ONE THEREFORE THE SAME IS ALSO REQU IRES TO BE DECIDED AS PER THE OUTCOME OF THE ISSUE OF CAPITAL GAIN. ACCORDINGLY WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE RECORD OF THE AO FOR VERIFICATIO N AND EXAMINATION. 12. IN THE RESULT THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES CO.NO. 180/MUM/2009 13. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CROSS- OBJECTION: 1. ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LEANED CIT(A) HAS ERRED IN NOT PROPERL Y AND COMPLETELY INCORPORATING CONTENTS OF THE STATEMENT OF FACTS FILED WITH HIM BY THE CROSS-OBJE CTOR; ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 14 2. ON FACT AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT PROPERL Y AND COMPLETELY INCORPORATING CONTENTS OF THE LETTER DATED 14.05.2008 FILED WITH HIM BY THE CROSS-OBJECT OR 14. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEA RNED DR AND CONSIDERED THE RELEVANT RECORD. THE ONLY GRIEV ANCE OF THE ASSESSEE IN THIS CROSS-OBJECTION IS THAT THE CIT(A) HAS NOT PROPERLY INCORPORATED THE CONTENTS OF THE STATEMENT OF FACTS AND LETTER DATED 14.05.2008 FILED BY THE ASSESSEE. IT IS EVIDENT FROM THE IMPUGNED ORDER THAT THE CIT(A) HA S DECIDED THE ISSUE AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE AND ALSO THE OBJECTION RAISED BY THE AO IN THE ASSE SSMENT ORDER. IT IS NOT NECESSARY FOR THE APPELLATE AUTH ORITY TO RECORD EACH AND EVERY SENTENCE IN THE ORDER AS PLEADED BY THE ASESEEE. WHEN THE CIT(A) HAS CONSIDERED ALL THE RELEVANT CONTENTIONS WHILE PASSING THE IMPUGNED ORDER AND DE CIDED THE ISSUE IN FAVOUR OF THE ASESEEE THEN WE FIND NO SUBS TANCE AND MERITS IN THE GROUNDS RAISED BY THE ASESEEE IN THE CROSS- OBJECTION. ACCORDINGLY WE DISMISS THE CROSS-OBJECT ION. 15. IN SUM AND SUBSTANCE THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND CROSS-OBJECTIO N OF THE ASESEEE STANDS DISMISSED. ITA NO. 5670/MUM/2008 CO.NO. 180/MUM/2009 15 PRONOUNCED IN THE OPEN COURT ON 20.10.2010 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 20 TH OCT 2010 SRL:23910 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI