Shri Pramod Kumar Garg,, Agra v. ITO, Agra

CO 46/AGR/2009 | misc
Pronouncement Date: 23-03-2011 | Result: Dismissed

Appeal Details

RSA Number 4620323 RSA 2009
Assessee PAN ABUPG5718P
Bench Agra
Appeal Number CO 46/AGR/2009
Duration Of Justice 1 year(s) 2 month(s) 23 day(s)
Appellant Shri Pramod Kumar Garg,, Agra
Respondent ITO, Agra
Appeal Type Cross Objection
Pronouncement Date 23-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 23-03-2011
Date Of Final Hearing 21-03-2011
Next Hearing Date 21-03-2011
Assessment Year misc
Appeal Filed On 31-12-2009
Judgment Text
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. 327/AGRA/2009 ASSTT. YEAR : 2001-02 INCOME-TAX OFFICER VS. SMT. PALLAVI GARG 4(3) AGRA. C-25 KAMLA NAGAR AGRA. (PAN : ABUPG 5718 P) C.O. NO. 45/AGRA/2009 (IN ITA NO. 327/AGRA/2009) ASSTT. YEAR : 2001-02 SMT. PALLAVI GARG VS. INCOME-TAX OFFICER C-25 KAMLA NAGAR AGRA. 4(3) AGRA. ITA NO. 330/AGRA/2009 ASSTT. YEAR : 2001-02 INCOME-TAX OFFICER VS. SRI PRAMOD KUMAR GARG 4(3) AGRA. C-25 KAMLA NAGAR AGRA. (PAN : ACHPG 7825 N) C.O. NO. 46/AGRA/2009 (IN ITA NO. 330/AGRA/2009) ASSTT. YEAR : 2001-02 SRI PRAMOD KUMAR GARG VS. INCOME-TAX OFFICER C-25 KAMLA NAGAR AGRA. 4(3) AGRA. ITA NO. 331/AGRA/2009 ASSTT. YEAR : 2001-02 INCOME-TAX OFFICER VS. SRI RAKESH KUMAR GARG 4(3) AGRA. C-25 KAMLA NAGAR AGRA. (PAN : ADVPG 8076 E) C.O. NO. 44/AGRA/2009 (IN ITA NO. 331/AGRA/2009) ASSTT. YEAR : 2001-02 SRI RAKESH KUMAR GARG VS. INCOME-TAX OFFICER C-25 KAMLA NAGAR AGRA. 4(3) AGRA. (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI A.K. SHARMA JR. D.R. ASSESSEE BY : SHRI MAHESH AGARWAL C.A. 2 ORDER PER P.K. BANSAL A.M. : THESE APPEALS BY THE REVENUE AND CROSS OBJECTIONS BY DIFFERENT ASSESSEES HAVE BEEN FILED AGAINST THE SEPARATE ORDERS OF LEARNED CIT(A) DATED 29.05.2009 24.06.2009 AND 23.06.2009 ALL RELATING TO ASSESSMENT YEAR 2001-02. THE ONLY COMM ON ISSUE INVOLVED IN THESE THREE APPEALS BY REVENUE RELATES TO THE DELETION OF ADDITIONS MADE B Y ASSESSING OFFICER ON ACCOUNT OF FICTITIOUS SALE TRANSACTIONS OF SHARES TREATING THE SAME TO B E THE INCOME OF ASSESSEES FROM UNDISCLOSED SOURCES. SUCH ADDITIONS MADE IN THE CASES OF ALL TH E THREE ASSESSES STOOD AT RS.9 27 809/- RS.11 41 868/- AND RS.10 76 867/- RESPECTIVELY. IN THE CROSS OBJECTIONS THE ASSESSES HAVE ALSO RAISED COMMON GROUND CHALLENGING THE VALIDITY OF PR OCEEDINGS INITIATED U/S. 147 OF THE INCOME- TAX ACT 1961. SINCE THE ISSUES INVOLVED IN ALL THE SE APPEALS AND CROSS OBJECTIONS ARE COMMON AND THE FACTS GIVING RISE TO THE ADDITIONS ARE ALSO IDENTICAL ALL THESE APPEALS AND CROSS OBJECTIONS ARE DECIDED BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ASSESSEE 2. ADVERTING TO THE APPEALS PREFERRED BY THE REVENU E IN THE CASES OF THESE THREE ASSESSES THE BRIEF FACTS APROPOS THE ISSUE INVOLVED THEREIN ARE THAT THE ASSESSEE SMT. PALLAVI GARG FILED HER RETURN OF INCOME ON 27.07.2001 DECLARING TOTAL INCO ME AT RS.1 60 960/- AND SHRI PRAMOD KUMAR GARG AND RAKESH KUMAR GARGH ON 31.10.2001 DECLARING THEIR TOTAL INCOME AT RS.4 82 810/- AND RS.4 32 750/- RESPECTIVELY. THESE RETURNS WERE PRO CESSED U/S. 143(1). IN THEIR RETURNS THE ASSESSEES HAD SHOWN LONG-TERM CAPITAL GAINS OF RS.9 27 809/- RS.11 41 868/- AND RS.10 76 867/- RESPECTIVELY ON THE SALE OF SHARES OF M/S. B.T. TEC HNET LTD. THROUGH THE SHARE BROKER M/S. C.M.S. SECURITIES LTD. AND CLAIMED EXEMPTION U/S. 5 4EC OF THE INCOME-TAX ACT AS THE ENTIRE AMOUNTS WERE INVESTED IN THE ELIGIBLE SECURITIES I .E. BONDS OF NABARD. 3 3. SUBSEQUENTLY AS A RESULT OF INVESTIGATION MADE BY THE INVESTIGATION WING OF THE DEPARTMENT IN RESPECT TO THE BANK ACCOUNTS IN STATE BANK OF BIKANER & JAIPUR AND ALLAHABAD BANK DELHI THE ASSESSING OFFICER NOTICED THAT THE PRESENT ASSESSEES HAD SHOWN THE RECEIPTS UNDER THE HEAD LONG-TERM CAPITAL GAIN ON FICTITIO US SALES OF SHARES AT RS.9 27 809/- RS.11 41 868/- AND RS.10 76 867/- RESPECTIVELY RES ULTING INTO INCOME ESCAPING ASSESSMENTS IN THE HANDS OF ASSESSEES. ACCORDINGLY NOTICES U/S. 1 48 WERE ISSUED TO THE ASSESSEES AFTER RECORDING REASONS. IN RESPONSE THE ASSESSEES THROUGH THEIR REPLIES SATED THAT THE RETURNS ALREADY FILED BE TREATED AS THE RETURNS FILED IN RESPONSE TO NOTICE U/S. 148. THE DETAILS OF SHARE TRANSACTIONS IN THESE CASES ARE AS FOLLOWS : SMT. PALLAVI GARG :- (I). 8500 SHARE OF M/S B.T.TECHNET WERE PURCHASED ON 04.10.1999 @ 10/- PER SHARE FOR 85000/-. (II). THESE SHARE WERE ALLOTTED TO THE ASSESSEE IN PREFERENTIAL ALLOTMENT DIRECTLY BY THE COMPANY. (III). THESE SHARES WERE REFLECTING IN THE BALANCE SHEET OF THE ASSESSEE FOR THE FINANCIAL YEAR 99-2000. (IV). ASSESSEE SOLD 4000 SHARES ON 14.11.2000 @ 114 /- PER SHARE AND 4500 SHARES ON 16.11.2000 @ 106/- PER SHARES. THE SHARES WERE SOLD THROUGH THE BROKER M/S CMS SECURITIES LTD. DELHI. TOTAL SALE CONSIDERATIO N WAS A 9 27 809/-. SHRI PRAMOD KUMAR GARG : - (I) 9500 SHARE OF M/S B.T.TECHNET WERE PURCHASED O N 04.10.1999 @ 10/- PER SHARE FOR 95000/-. (II) THESE SHARE WERE ALLOTTED TO THE ASSESSEE IN PREFERENTIAL ALLOTMENT DIRECTLY BY THE COMPANY. 4 (III) THESE SHARES WERE REFLECTING IN THE BALANCE SHEET OF THE ASSESSEE FOR THE FINANCIAL YEAR 99-2000. (IV) ASSESSEE SOLD 4000 SHARES ON 16.11.2000 @ 114 /- PER SHARE AND 5500 SHARES ON 16.11.2000 @ 114/- PER SHARES. THE SHARES WERE SOLD THROUGH THE BROKER M/S CMS SECURITIES LTD. DELHI. TOTAL SALE CONSIDERATIO N WAS A 10 76 868/-. SHRI RAKESH KUMAR GARG : - (I) 9500 SHARE OF M/S B.T.TECHNET WERE PURCHASED O N 04.10.1999 @ 10/- PER SHARE. (II) THESE SHARE WERE ALLOTTED TO THE ASSESSEE IN PREFERENTIAL ALLOTMENT DIRECTLY BY THE COMPANY. (III) THESE SHARES WERE REFLECTING IN THE BALANCE SHEET OF THE ASSESSEE FOR THE FINANCIAL YEAR 99-2000. (IV) ASSESSEE SOLD 5000 SHARES ON 14.11.2000 @ 114 /- PER SHARE AND 4500 SHARES ON 14.11.2000 @ 106/- PER SHARES. THE SHARES WERE SOLD THROUGH THE BROKER M/S CMS SECURITIES LTD. DELHI. TOTAL SALE CONSIDERATIO N WAS A 10 76 868/-. 4. THE ASSESSEES VIDE DETAILED QUESTIONNAIRES WERE REQUIRED TO PROVE THE TRANSACTIONS OF PURCHASE AND SALES OF SHARES. IN RESPONSE TO THE QU ESTIONNAIRES THE ASSESSEES HAVE FURNISHED THE FOLLOWING DOCUMENTARY EVIDENCES BEFORE THE ASSESSIN G OFFICER : A) COPY OF BALANCE SHEET AS ON 31.03.2000. B) COPY OF APPLICATION MADE TO THE COMPANY ON ITS PREF ERENTIAL ISSUE OF SHARES. C) COPY OF BANK ACCOUNT SHOWING DEBITS FOR THE DRAFT M ADE TOWARDS PAYMENT OF ALLOTMENT MONEY OF THE SUBJECT SHARES. D) COPY OF ALLOTMENT LETTERS ISSUED BY THE COMPANY FOR THE ACQUISITION OF SHARES AND ALSO RECEIPT OF ALLOTMENT MONEY SHOWING DISTINCTIVE NUMB ERS OF SHARES ALLOTTED. E) COPY OF OFFICIAL QUOTATION RELATING TO THE RATES OF THE SHARES OF THE COMPANY B.T.TECHNET LTD IN M.P.STOCK EXCHANGE WITH FIGURES OF THE VOLUM E IN THE SHARES TRADED IN THE RESPECTIVE PERIOD. F) COPIES OF SHARE CERTIFICATES OF THE COMPANY B.T. T ECHNET LTD. G) DETAILED PROFILE OF THE COMPANY B.T. TECHNET LTD. 5 THE FACTS & ARGUMENTS MADE BY BOTH THE PARTIES ON T HE ISSUE IN THE CASES OF THESE THREE ASSESSEES AND THE REASONS GIVEN BY THE AUTHORITIES IN THEIR R ESPECTIVE ORDERS ARE IDENTICAL. THEREFORE BOTH THE LD. DR AND AR AGREE THAT WHATEVER VIEW IS TAKEN IN THE CASE OF SMT. PALLAVI GARG MAY BE TAKEN IN OTHER TWO CASES OF SHRI PRAMOD KUMR GARG A ND RAKESH KUMAR GARG. FOR THE SAKE OF CONVENIENCE WE FIRST TAKE THE CASE OF SMT. PALLAVI GARG. IN THIS CASE THE ASSESSING OFFICER DOUBTED THE PURCHASE AND SALE TRANSACTIONS OF SHARE S ON THE FOLLOWING REASONING : (I). THE AMOUNT OF DDS SENT AS APPLICATION MONEY TO THE COMPANY AND THAT DEBITED IN THE BANK ACCOUNT OF ASSESSEE IS DIFFERENT. (II). THE NAME IN THE SHARE SCRIP WAS SPELT AS PA LLANI GARG INSTEAD OF PALLAVI GARG. (III). THE BROKER M/S. CMS SECURITIES THROUGH WHOM THE ALLEGED SHARES WERE SOLD DENIED ANY TRANSACTION AS ALLEGED BY ASSESSEE. (IV). IT IS QUITE INCREDIBLE TO EXPERIENCE SUCH A TREMENDOUS INCREASE OF ABOUT 11 TIMES JUST IN A PERIOD OF 13 MONTHS IN THE SELLING RATE O F SHARES. (V). ON THE DATES OF ISSUING THE DDS FOR SALE CONSI DERATION THE OPENING BALANCE IN THE BROKERS BANK ACCOUNT NO. 81 WAS RS.2 061/- AND ON THOSE DATES RS.11 56 000/- AND RS.6 05 000/- WERE CREDITED THROUGH TRANSFER FR OM THE CURRENT ACCOUNT NO. 82 OF ANU SECURITIES THROUGH ITS OPERATOR SUSHILA GUPT A MAINTAINED IN THE SAME BANK. FROM THIS ASSESSING OFFICER OBSERVED THAT THI S WAS THE MANAGED ENTRY OF DDS IN FAVOUR OF THE ASSESSEE IN THE GARB OF SALE O F SHARES AND M/S. CMS SECURITIES WAS USED IN CAMOUFLAGING THE UNACCOUNTED MONEY OF THE ASSESSEE ITSELF. THE ASSESSING OFFICER THEREFORE TREATED THE TRANS ACTION OF SHARES AS NOT PROVED AND THE AMOUNT OF RS.9 27 809/- WAS ADDED TO THE INCOME OF ASSESSE E U/D. 68 AS DERIVED FROM UNDISCLOSED SOURCES. 5. IN APPEAL BEFORE THE CIT(A) THE CIT(A) AFTER C ONSIDERING THE DOCUMENTARY EVIDENCES LAID BY ASSESSEE BEFORE THE ASSESSING OFFICER DETA ILED SUBMISSIONS MADE BY ASSESSEE LACK OF MATERIAL ON RECORD TO SUBSTANTIATE THE STAND OF ACC OMMODATION ENTRIES OF CAPITAL GAINS AND 6 VARIOUS DECISIONS OF TRIBUNAL AND HIGH COURTS HELD THAT THE ASSESSEE SUCCEEDED IN DISCHARGING THE BURDEN CAST UPON HER TO ESTABLISH THE GENUINENE SS OF THE TRANSACTION OF PURCHASE AND SALE OF SHARES. HE THEREFORE DELETED THE ADDITION MADE BY ASSESSING OFFICER. HOWEVER THE INITIATION OF PROCEEDINGS U/S. 147 WAS HELD AS VALID. THE REVENUE IS IN APPEAL AGAINST THE DELETION OF ADDITION WHEREAS THE ASSESSEE HAS FILED CROSS OBJECTION ASSA ILING THE VALIDITY OF PROCEEDINGS U/S. 147 OF THE ACT. 6. DURING THE COURSE OF HEARING THE LEARNED COUNSE L FOR THE ASSESSEES DID NOT PRESS THE ONLY GROUND RAISED IN THE CROSS OBJECTIONS AGAINST THE V ALIDITY OF PROCEEDINGS U/S. 147. THEREFORE ALL THE THREE CROSS OBJECTIONS FILED BY ASSESSEES ARE D ISMISSED AS NOT PRESSED. 7. IN REVENUES APPEAL THE LD. DR RELYING ON THE ORDER OF ASSESSING OFFICER CONTENDED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE A DDITION WITHOUT APPRECIATING THE FACT THAT THERE WAS SUBSTANTIAL MATERIAL BEFORE THE ASSESSING OFFIC ER TO TREAT THE ALLEGED SHARE TRANSACTIONS AS NON-GENUINE AND FICTITIOUS. THE ALLEGED SALE TRANSA CTION OF SHARES WAS DENIED BY THE BROKER THROUGH WHOM THE SALE WAS SHOWN TO HAVE BEEN MADE B Y ASSESSEE. THE HOLDING OF SHARES DID NOT APPEAR IN THE ACCOUNT BOOKS OF ASSESSEE. THE BROKER AND ITS BANK ACCOUNTS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER. THEREFORE THE DELETI ON OF ADDITION MADE BY CIT(A) IS NOT JUSTIFIED AND THE APPEAL OF THE REVENUE DESERVES TO BE ALLOWE D. 8. THE LEARNED AR ON THE OTHER HAND VEHEMENTLY CO NTENDS THAT THE SHARES WERE DIRECTLY ALLOTTED BY THE COMPANY IN PREFERENTIAL ISSUE AS I S EVIDENT FROM ALLOTMENT LETTER AND SHARE SCRIP PHOTOCOPIES OF WHICH ARE PLACED AT PAGES 4 TO 12 OF THE PAPER BOOK. HE SUBMITTED THAT THE 7 LEARNED ASSESSING OFFICER HAS FAILED TO APPRECIATE THE FACT THAT THE DIFFERENCE BETWEEN THE AMOUNTS OF DDS SENT AS APPLICATION MONEY TO THE COM PANY AND THAT DEBITED IN THE BANK ACCOUNT OF ASSESSEE WAS ON ACCOUNT OF BANK CHARGES DEBITED FROM THE ACCOUNT. THE SHARE HOLDING SINCE EARLIER YEAR IS EVIDENT FROM THE BALANCE SHEET FILE D BEFORE THE ASSESSING OFFICER FOR THE YEAR ENDED 31.03.2000 WHICH REFLECTS THE IMPUGNED SHARE S. ALL THE NECESSARY AND RELEVANT DOCUMENTARY EVIDENCES AS ENUMERATED ABOVE IN THIS O RDER WERE PRODUCED BEFORE THE AUTHORITIES BELOW BY THE ASSESSEE IN DISCHARGE OF ITS BURDEN TO PROVE THE SHARE TRANSACTIONS AS GENUINE. THE COPIES OF SHARE APPLICATIONS BALANCE SHEET AS ON 3 1.03.2000 COPY OF BANK ACCOUNT SHOWING DEBITS FOR THE DRAFTS TOWARDS PAYMENT OF ALLOTMENT MONEY OF SHARES COPY OF ALLOTMENT LETTER ISSUED BY THE COMPANY M/S. B.T. TECHNET LTD. AND T HE COPIES OF SHARE CERTIFICATES SHOWING THAT THE SHARES WERE ALLOTTED DIRECTLY BY THE COMPANY IN THE NAME OF ASSESSEE WERE SUBMITTED BEFORE THE ASSESSING OFFICER IN TESTIMONY OF THE FACT THAT THE ASSESSEE HAD MADE GENUINE PURCHASE OF SHARES OF A LISTED COMPANY AND THESE EVIDENCES GO T O BELIE THE STAND OF ASSESSING OFFICER THAT NO MATERIAL TO PROVE THE ACQUISITION OF SHARES WERE PR ODUCED. IN SUPPORT OF SALE TRANSACTIONS OF SHARES THE ASSESSEE HAD SUBMITTED SALE BILL OF M/S . CMS SECURITIES LTD. CONTRACT NOTE STATEMENT OF ACCOUNT OF BROKER AND COPIES OF DEMAND DRAFTS RECEIVED TOWARDS SALE PROCEEDS THE AUTHENTICITY OF WHICH HAS NOT BE DISPROVED BY BRING ING ANY INCRIMINATING MATERIAL ON RECORD OR CARRYING OUT ANY ENQUIRY BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS RELIED ON THE LETTER DATED 28.10.2006 FROM THE BROKER IN WHICH THE BROK ER IS ALLEGED TO HAVE REFERRED TO SOME EARLIER STATEMENT OF TWO OF ITS DIRECTORS SHRI MUKESH GUPTA AND HIS WIFE GIVEN BEFORE EARLIER DDI AGRA DENYING THE SHARE TRANSACTIONS AND ACCEPTING THE A CCOMMODATION ENTRIES GIVEN TO VARIOUS BENEFICIARIES. THE ALLEGED STATEMENT OF THE DIRECTO RS WAS NEITHER CONFRONTED TO THE ASSESSEE NOR ANY OPPORTUNITY WAS PROVIDED TO CROSS EXAMINE THE B ROKER NOR THE ASSESSING OFFICER EVER 8 BOTHERED TO TEST THE BROKER HIMSELF BY CALLING UPON HIS BOOKS OF ACCOUNTS. IT WAS ALSO SUBMITTED THAT SUCH STATEMENTS OF SRI MUKESH GUPTA AND SHUSHI LA GUPTA DIRECTORS OF THE BROKER M/S. CMS SECURITIES LTD. ALSO CAME FOR CONSIDERATION OF THIS TRIBUNAL IN THE CASE OF SEEMA GARG (ITA NO. 252/AGRA/2005 WHEREIN THE TRIBUNAL VIDE ORDER DATE D 31.03.2009 HAS TAKEN NO ADVERSE INFERENCE ON THE BASIS OF SAID STATEMENTS. THIS ORDER OF TRIB UNAL HAS BEEN CONFIRMED BY HONBLE ALLAHABAD HIGH COURT VIDE ORDER DATED 15.02.2011. THE TREMEND OUS INCREASE IN RATES OF SHARES IS NOT AN ABNORMAL PHENOMENA AS ALSO CONSIDERED BY AGRA BENC H OF TRIBUNAL IN THE CASE OF MEMO DEVI 7 DTR 158. THERE IS NO EVIDENCE WITH THE DEPARTMENT TO PROVE THAT ANY AMOUNT FLEW FROM ASSESSEE IN THE SALE TRANSACTION OF SHARES. RELIANC E IS ALSO PLACED ON THE DECISION OF THIRD MEMBER ITAT AGRA BENCH IN THE CASE OF BAIJNATH AG ARWAL 40 SOT 475 WHEREIN 10 000 SHARES OF THE SAME COMPANY WERE SOLD ON 18.11.2000 @ RS.106/ PER SHARE AND THE THIRD MEMBER HAS DECIDED THE ISSUE IN THE IDENTICAL FACTS AND CIRCUMSTANCES IN FAVOUR OF THE ASSESSEE. ON THE STRENGTH OF THESE ARGUMENTS THE LD. COUNSEL FOR THE ASSESSEE REQUESTED TO DISMISS THE APPEAL OF REVENUE BY CONFIRMING THE ORDER OF CIT(A) . 9. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE ORDERS OF TAX AUTHORITIES BELOW INCLUDING CASE LAWS RELIED BEFORE US. WE FIND NO MATERIAL ON RECORD TO SUBSTANTIATE THE STAND TAKEN BY THE ASSES SING OFFICER THAT THERE WAS NO ACTUAL PURCHASE AND SALE OF SHARES BY THE ASSESSEE AND THE MONEY W HATSOEVER SHOWN TO HAVE BEEN RECEIVED AS SALE CONSIDERATION OF SHARES WAS ASSESSEES UNACCOU NTED MONEY. IT IS SETTLED PRINCIPLE OF LAW THAT THE PERSON WHO ALLEGES IS LIABLE TO DISCHARGE HIS O NUS TO PROVE THE ALLEGATION. IN THE PRESENT CASE WE FIND NO EVIDENCE OR MATERIAL ON RECORD TO PROVE THE ALLEGATION OF AO THAT THE MONEY RECEIVED BY ASSESSEE AS SALE CONSIDERATION OF SHARES ACTUAL LY FLOWED FROM HER AND WERE ASSESSEES 9 UNACCOUNTED MONEY. THE REVENUE HAS UTTERLY FAILED T O DISCHARGE THIS BURDEN BY BRINGING ANY EVIDENCE ON RECORD. OUR THIS VIEW IS FORTIFIED BY T HE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KISHAN CHAND CHELLA RAM 125 ITR 713 (SC) WHEREIN IT HAS BEEN HELD THAT THE BURDEN IS ON THE DEPARTMENT TO PROVE THAT THE MONEY BELONGS T O THE ASSESSEE BY BRINGING PROPER EVIDENCE ON RECORD AND THE ASSESSEE COULD NOT BE EXPECTED TO CALL THE CONCERNED PERSONS IN EVIDENCE TO HELP THE DEPARTMENT TO DISCHARGE THE BURDEN THAT LA Y UPON IT. ON THE CONTRARY IN SUPPORT OF HER CLAIM REGARDING ACQUISITION AND SALE OF SHARES THE ASSESSEE HAD FURNISHED ALL THE RELEVANT DOCUMENTARY EVIDENCES IN THE SHAPE OF APPLICATION M ADE IN THE PREFERENTIAL ISSUE OF THE COMPANY BT TECHNET LTD. ALLOTMENT LETTERS COPIES OF SHARE CERTIFICATES CONTRACT NOTES AND SALE BILLS OF THE BROKER COPY OF BRIEF PROFILE OF THE COMPANY COPIE S OF DDS MADE FOR ACQUISITION OF SHARES AUDITED FINANCIAL STATEMENT AND ANNUAL RETURN OF TH E BROKER COPY OF THE INCOME-TAX RETURN OF THE BROKER COPIES OF TRANSACTION /RATES OF THE SHARES IN DELHI STOCK EXCHANGE BETWEEN NOVEMBER 1999 AND JUNE 2000 AND COPIES OF OFFICIAL QUOTATION S OF THE INDORE STOCK EXCHANGE REGARDING THE RATES OF THE COMPANYS SHARES AT WHICH THE SHARES W ERE TRADED IN THAT PERIOD. THE ASSESSEE HAD PAID THE APPLICATION MONEY FOR PURCHASE OF SHARES B Y ACCOUNT PAYEE DRAFTS AND ALSO RECEIVED THE SALE PROCEEDS THROUGH ACCOUNT PAYEE DRAFTS FROM THE BROKER AND DEPOSITED THE SAME IN HIS BANK ACCOUNT. THE PHOTOCOPIES OF SHARE CERTIFICATES WERE ALSO SUBMITTED SHOWING THESE SHARES TO HAVE BEEN ALLOTTED DIRECTLY BY COMPANY TO THE ASSESSEE I N THEIR PREFERENTIAL ISSUE OF SHARES WHICH WERE LATER ON SOLD THROUGH THE BROKER. THE PURCHASE OF S HARES IS ALSO REFLECTED IN THE BALANCE SHEET OF ASSESSEE AS ON 31.03.2000. ALL THESE DOCUMENTARY EV IDENCES SUBMITTED BY ASSESSEE ARE NOT PROVED TO BE UNAUTHENTIC OR FABRICATED TO DISPROVE THE SHARE TRANSACTIONS. 10 10. AS REGARDS THE OBSERVATION OF ASSESSING OFFICER REGARDING TREMENDOUS INCREASE IN THE PRICE OF SHARES WHICH LED HIM TO DOUBT THE IMPUGNE D SHARE TRANSACTIONS WE FIND SUBSTANCE IN THE CONTENTION OF ASSESSEE THAT FLUCTUATION IN SHARE PR ICE IS A NATURAL PHENOMENA AND IT CANNOT BE MADE BASIS FOR DOUBTING THE TRANSACTION OF PURCHASE AND SALE OF SHARES UNTIL SOME CONTRARY MATERIAL IS BROUGHT ON RECORD WHICH IS LACKING IN THE PRESENT CASE. THE ASSESSEES CONTENTION FURTHER STANDS UN-REBUTTED THAT THE SHARES WERE SOL D AT THE RATES PREVAILING AT MP STOCK EXCHANGE. THE LEARNED CIT(A) HAS ALSO RECORDED A FINDING OF F ACT THAT THE RATE AT WHICH THE SALE OF SHARES IS CLAIMED BY ASSESSEE IS IN CLOSE PROXIMITY OF THE RA TES RECORDED IN THE STOCK EXCHANGE DAILY DIRECTORY OF INDORE STOCK EXCHANGE. MOREOVER THE I NCREASE IN SHARE PRICES BY MORE THAN 25 TIMES OF ITS PURCHASE VALUE HAS NOT BEEN TAKEN AS A BNORMAL BY ITAT AGRA BENCH IN THE CASE OF MEMO DEVI 7 DTR 158 BY THIRD MEMBER IN THE CASE OF BAIJNATH AGARWAL VS. ACIT 40 SOT 475(AGRA TRIBUNAL THIRD MEMBER) IN THE SIMILAR CI RCUMSTANCES FOR DOUBTING THE SHARE TRANSACTIONS. THEREFORE THIS ALLEGATION OF THE REV ENUE IN OUR OPINION IS NOT SUSTAINABLE FOR DOUBTING THE SHARE TRANSACTION MADE BY ASSESSEE. 11. THE DIFFERENCE BETWEEN THE AMOUNTS DEBITED IN T HE BANK ACCOUNT OF ASSESSEE AND THE SHARE APPLICATION MONEY IS EXPLAINED TO HAVE BEEN DUE TO BANK CHARGES DEBITED BY THE BANK AND THE WRONG NAME PALLANI GARG IN PLACE OF PALLAVI GARG MENTIONED ON THE SCRIP IS EXPLAINED TO BE THE TYPOGRAPHICAL ERROR WHICH IS VERIFIABLE FROM T HE ALLOTMENT LETTER OF THE COMPANY. SIMILARLY THE TRANSFER OF MONEY FROM BROKERS ONE BANK ACCOUN T TO OTHER FROM WHICH THE DDS WERE ISSUED TO THE ASSESSEE AS SALE PROCEEDS OF SHARES DOES NO T WARRANT TO HOLD THAT THE SAID MONEY FLOWED FROM THE ASSESSEE AND WAS HIS UNACCOUNTED MONEY FOR WANT OF ANY EVIDENCE TO PROVE IT. IN OUR OPINION THESE OBSERVATIONS OF ASSESSING OFFICER DO NOT HOLD GOOD TO DOUBT THE SHARE 11 TRANSACTIONS PARTICULARLY WHEN THE EXPLANATION OF ASSESSEE IS BASED ON MATERIAL ON RECORD AND EVIDENCES LAID BEFORE THE ASSESSING OFFICER. 12. THE PERUSAL OF ASSESSMENT ORDER REVEALS THAT TH E CONCLUSION OF ASSESSING OFFICER ABOUT THE ACCOMMODATION ENTRIES REGARDING RECEIPT OF SALE TRANSACTIONS OF SHARE IS BASED MAINLY ON THE ALLEGED DENIAL OF TRANSACTIONS BY THE BROKER M/S. CMS SECURITIES LTD. VIDE LETTER DATED 28.10.2006. WE HAVE GONE THROUGH THE CONTENTS OF TH IS LETTER REPRODUCED AT PAGE 4 OF THE ASSESSMENT ORDER AND WE FIND THAT THE BROKER HAS RE FERRED TO SOME STATEMENT GIVEN BEFORE THE THEN DDI AGRA SHRI RADHEY SHYAM TWO YEARS BACK REG ARDING THE ACCOMMODATION ENTRIES GIVEN TO VARIOUS BENEFICIARIES. THIS LETTER FURTHER SPEAK S AS UNDER : HONBLE DDI SHRI RADHEY SHYAM JI HAD ASSURED US T HAT IN FUTURE IF YOU RECEIVE ANY NOTICE FROM ANY INCOME TAX AUTHORITY Y OU MAY REFER THEM ABOUT YOUR SUBMISSION MADE TO HIM AND REQUEST THEM TO VERIFY T HESE FACTS FROM HIM. THEREFORE WE REQUEST YOU TO TAKE ACTION IN THESE C ASES ACCORDINGLY. 13. THE CONTENTS OF THIS LETTER ARE EXPLICIT TO OBS ERVE THAT THE BROKER HAS SIMPLY RESPONDED THE NOTICE/LETTER OF ASSESSING OFFICER ONLY BY REFERRIN G TO SOME PREVIOUS STATEMENTS AND HAVING BEEN GUIDED BY THE SUGGESTION ALLEGEDLY GIVEN BY THE THE N DDI AS REPRODUCED ABOVE. THE CONTENTS OF THIS LETTER ARE NOT BASED ON THE RECORDS AND ACCOUN T BOOKS OF THE BROKER. EVEN THE ASSESSING OFFICER DID NOT BOTHER TO CALL FOR THE ACCOUNTS OF BROKER TO TEST HOW THEY ACCOUNTED FOR THE ACCOMMODATION ENTRIES. THEREFORE IN OUR OPINION S UCH A LETTER CANNOT BE MADE A BASIS TO DOUBT THE SHARE TRANSACTIONS WHICH ARE SUPPORTED BY AUTHE NTIC DOCUMENTARY EVIDENCES. MOREOVER THE ALLEGED STATEMENT OF SHRI MUKESH GUPTA AND HIS WIFE SMT. SHUSHILA GUPTA THE DIRECTORS OF BROKER-COMPANY M/S. CMS SECURITIES LTD. GIVEN BEFO RE THE THEN DDI CAME FOR CONSIDERATION 12 BEFORE THE AGRA BENCH OF TRIBUNAL IN THE CASE OF SE EMA GARG (ITA NO. 252/AGRA/2005 WHEREIN THE TRIBUNAL VIDE ORDER DATED 31.03.2009 HAS OBSERV ED AS UNDER : 13. MUCH WEIGHT IS GIVEN TO THE STATEMENTS OF SHRI MUKESH GUPTA AND HIS WIFE SMT. SHUSHILA GUPTA. COPIES OF STATEMENTS ARE PLACE D IN PAPER BOOK AT PGS 81-94. FROM THE STATEMENTS WE NOTE THAT THESE STATEMENTS W ERE NOT RECORDED DURING THE ASSESSMENT PROCEEDINGS WHICH COMPLETED ON 23.03.200 4 WHILE THE STATEMENT IS DATED 27.12.2004. THE STATEMENT WAS RECORDED BY DDI INVESTIGATING WING AGRA AND NOT BY THE ASSESSING OFFICER. IT IS ALSO NOT CL EAR IN WHOSE CASE AND IN WHOSE PRESENCE IT WAS RECORDED. APPARENTLY THE STATEMENT WAS RECORDED UNDER GENERAL INVESTIGATION B THE INVESTIGATING WING. IN THAT SIT UATION STATEMENT CANNOT BE MADE THE BASIS OF ADDITION AGAINST THE ASSESSEE. WE ALS O AGREE WITH THE ARGUMENT OF THE LD AR THAT SHARES WERE SOLD THROUGH M/S CMS SECURIT IES LTD WHICH HAD 7 DIRECTORS AS IS CLEAR FROM PB/130 WHICH IS COPY OF THE ANNUAL RETURN OF THE COMPANY BEFORE THE REGISTRAR OF COMPANIES AND THES E TWO PERSONS COULD NOT SPEAK FOR THE COMPANY AS A WHOLE. 14. FROM THE READING OF THE STATEMENT IT IS CLEAR THAT SHRI MUKESH GUPTA WAS OF DUBIOUS CHARACTER AND HIS STATEMENT CANNOT BE TAKEN AT FACE VALUE. 17. IF THE STATEMENT THAT FIRST CASH WAS DEPOSITE D IN THE ACCOUNT OF ANU SECURITIES AND THEN TRANSFERRED TO THE ACCOUNT OF CMS SECURITI ES BEFORE THE ISSUE OF DRAFTS IS ACCEPTED THEN THE DEPARTMENT SHOULD HAVE ALSO ENQU IRED AS TO HOW THESE TRANSACTIONS HAVE BEEN RECORDED IN THE BOOKS OF CMS SECURITIES LTD. IT BEING A LIMITED COMPANY ALL ITS RECORDS COULD HAVE BEEN EAS ILY OBTAINED FROM THE OFFICE OF THE REGISTRAR OR THE INCOME TAX DEPARTMENT ITSELF. FOR ALL THESE REASONS WE ARE OF THE CONSIDERED OPINION THAT THE STATEMENT OF SHR I MUKESH GUPTA DOES NOT GIVE ANY THING AGAINST THE ASSESSEE TO HOLD THAT HIS SHA RE TRANSACTION WAS BOGUS. THIS ORDER OF TRIBUNAL HAS BEEN CONFIRMED BY HONBL E ALLAHABAD HIGH COURT VIDE ORDER DATED 15.02.2011. IN VIEW OF THESE OBSERVATIONS WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS COUNT. 14. THE ISSUE RELATING TO THE SHARE TRANSACTION OF THE M/S B.T.TECHNET LTD ALSO CAME UP FOR CONSIDERATION BEFORE THE AGRA BENCH IN THE CASE OF ITAT AGRA BENCH IN THE CASE OF BAIJNATH 13 AGARWAL REPORTED IN 40 SOT 475 (AGRA TRIBUNAL 3RD MEMBER). IN THIS CASE 10000 SHARES M/S. BT TECHNET LTD. WERE SOLD ON 18/11/2000 @ 106/- PER SHARE ALLOWING THE ASSESSEES APPEAL HONBLE THIRD MEMBER OBSERVED AS FOLLOWS - 8. IN THE CASE OF ASSESSEE ALLOTMENT OF THE SHAR ES HAS DULY BEEN PROVED AND THERE IS NO DISPUTE ON THE PURCHASE OF SHARES THROU GH ALLOTMENT TO THE ASSESSEE IN THE ASSTT. YEAR 1999-2000. THE SHARES WERE PURCHASE D IN EARLIER YEAR. THE SHARES WERE ALLOTTED IN THE NAME OF THE ASSESSEE. THE ASSE SSEE HAS SUBMITTED BEFORE AO COPIES OF THE CONTRACT NOTE COPIES OF SALE BILLS STATEMENT OF ACCOUNT FROM THE BROKER. IDENTITY OF THE BROKER IS PROVED. 10. I ALSO NOTED FROM THE CASE OF SMT. SEEMA GARG VS ITO IN ITA NO. 252/AG/2005 ON WHICH LEARNED AUTHORISED REPRESENTAT IVE HAS VEHEMENTLY RELIED THAT THE ASSESSEE HAS SOLD SHARES OF M/S B.T.TECHNE T LTD. THE ASSESSEE BEFORE ME HAS ALSO SOLD SHARES BELONGING TO M/S B.T.TECHENT. IN THAT CASE I NOTED THAT THE ASSESSEE HAS SOLD 9500 SHARES OF M/S B.T.TECHENT LT D ON 16 TH NOV. 2000 @ 114/- PER SHARE. WHEN THE MATTER TRAVELED UPTO THE TRIBUN AL ABOUT THE NON-GENUINENESS OF THE PRICE AT WHICH THE SHARES WERE SOLD THE TRI BUNAL ACCEPTED THE SALE VALUE OF THE SHARES. UNDER THESE FACTS THERE CANNOT BE ANY R EASON NOT TO ACCEPT THE VALUE OF SHARES SOLD @ 106/- PR SHARE. 15. IT WAS THE DUTY OF THE AO TO BRING ON RECORD S UFFICIENT EVIDENCE 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 HIS INCOME FROM UNDISCLOSED SOURCES. THE ONLY MATERIAL TO SUPP ORT SUCH CONCLUSION OF THE LOWER AUTHORITIES IS EITHER THE FINDING OF THE DDI IN GENERAL INVESTIGATION OR OBSERVATION THAT THE ASSESSEE COULD NOT PROVE THE T RANSACTION TO BE GENUINE. THIS IS SETTLED LAW IN VIEW OF THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF CIT VS DAULAT RAM RAWATMULL 1972 CTR (SC) 411 THAT APPA RENT IS REAL. ONUS IS ON THE PERSON WHO ALLEGES APPARENT IS NOT REAL. NONE O F THE JUDICIAL PRECEDENTS SUPPORT THE CASE OF THE REVENUE. WHILE MAKING ADDIT ION AS INCOME FROM UNDISCLOSED SOURCES BURDEN ON THE DEPARTMENT IS VER Y HEAVY TO ESTABLISH THAT THE ALLEGED RECEIPT WAS ACTUALLY INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. THE FACTS OF THE PRESENT CASE BEING IDENTICAL TO TH OSE IN THE CASE OF BAIJNATH AGARWAL (SUPRA) RESPECTFULLY FOLLOWING THE DECISION OF THIRD MEMBER WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 14 ITA NOS. 327 330 331 AND CO NO. 45 46 & 44/AGRA/ 2009 15. IN THE RESULT ALL THE THREE APPEALS OF REVENUE AND CROSS-OBJECTIONS OF ASSESSEE ARE DISMISSED. 16. ORDER IN THE CASES OF SMT. PALLAVI GARGH AND SH RI PRAMOD KUMAR GARG WAS PRONOUNCED IN THE OPEN COURT ON 21.03.2011 AND IN THE CASE OF SHRI RAKESH KUMAR GARGT ON 23.03.2011. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 RD MARCH 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT CONCERNED 5. DR ITAT AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY