ACIT, UDAIPUR v. Shri Hastimal Chaplot, RAJSAMAND

ITA 203/JODH/2013 | 2005-2006
Pronouncement Date: 31-10-2013 | Result: Dismissed

Appeal Details

RSA Number 20323314 RSA 2013
Assessee PAN ABGPL5502K
Bench Jodhpur
Appeal Number ITA 203/JODH/2013
Duration Of Justice 6 month(s) 26 day(s)
Appellant ACIT, UDAIPUR
Respondent Shri Hastimal Chaplot, RAJSAMAND
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 29-10-2013
Date Of Final Hearing 29-10-2013
Next Hearing Date 29-10-2013
Assessment Year 2005-2006
Appeal Filed On 04-04-2013
Judgment Text
IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.K. SAINI ACCOUNTANT MEMBER. ITA NO.198/JODH/2013 (A.Y. 2005-06) ACIT CIRCLE-2 VS. SMT. SHAISHVEE CHAPLOT UDAIPUR. CHAPLOT GALI RAJNAGAR RAJSAMAND. PAN NO. ABGPL 5502 K (APPELLANT) (RESPONDENT) ITA NO.199/JODH/2013 (A.Y. 2005-06) ACIT CIRCLE-2 VS. SMT. SHILPA CHAPLOT UDAIPUR. CHAPLOT GALI RAJNAGAR RAJSAMAND. PAN NO. AAPPC 9323 H (APPELLANT) (RESPONDENT) ITA NO.202/JODH/2013 (A.Y. 2005-06) ACIT CIRCLE-2 VS. SMT. PRIYANKA CHAPLOT UDAIPUR. CHAPLOT GALI RAJNAGAR RAJSAMAND. PAN NO. AEOPS 2149 N (APPELLANT) (RESPONDENT) 2 ITA NO.203 /JODH/2013 (A.Y. 2005-06) ACIT CIRCLE-2 VS. SHRI HASTIMAL CHAPLOT UDAIPUR. CHAPLOT GALI RAJNAGAR RAJSAMAND. PAN NO. ABHPC 3607 M (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI R.H. GOHEL- D.R. DATE OF HEARING : 29/10/2013. DATE OF PRONOUNCEMENT : 31/10/2013. O R D E R PER BENCH THESE FOUR APPEALS BY THE DEPARTMENT RELATING TO T HE DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 23/01/2013 OF LD. CIT (A) UDAIPUR FOR THE COMMON A .Y. 2005-06. SINCE THESE APPEALS WERE HEARD TOGETHER AND SIMILAR ISSUE S ARE INVOLVED SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED O RDER FOR THE SAKE OF CONVENIENCE. 2. LEARNED COUNSEL FOR THE ASSESSEE MOVED AN APPLICAT ION DATED 29/10/2013 FOR ADJOURNMENT OF THE CASES. EARLIER A LSO WHENEVER THESE CASES WERE FIXED ON 29/08/2013 AND 04/10/2013 ADJOU RNMENT WAS SOUGHT 3 WHICH WAS GRANTED AND THE CASES WERE FIXED FOR TODA Y. HOWEVER THERE WAS NO REPRESENTATION FROM THE ASSESSEES SIDE AND AN APPLICATION FOR ADJOURNMENT WAS MOVED STATING THE SAME REASON WHICH WAS EARLIER I.E. NECESSARY PREPARATION COULD NOT BE MADE. IN OUR OPINION IT CANNOT BE A GROUND TO SEEK ADJOURNMENT EVERY TIME. WE THERE FORE REJECT THE APPLICATION FOR ADJOURNMENT AND PROCEED TO DECIDE T HE CASES ON MERIT AFTER HEARING THE LEARNED D.R. AND THE MATERIAL AVA ILABLE ON RECORD EXPARTE QUA THE ASSESSEE. 3. FIRST WE WILL DEAL WITH THE APPEAL IN ITA NO. 198 /JODH/2013. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF TH E CASE THE LD CIT(A) HAS ERRED IN:- 1. DELETING THE ADDITION OF RS. 15 69 818/- MADE B Y THE AO BY HOLDING THE CLAIMED LONG TERM CAPITAL GAIN AS NON-GENUINE A ND IGNORING THE FINDING GIVEN BY THE AO IN THE ASSESSMENT ORDER. 2. REJECTING THE ALTERNATIVE FINDING OF THE AO OF T REATING IT AS SHORT TERM CAPITAL GAIN. 3. DELETING THE ADDITION OF RS. 60 651/- MADE BY TH E AO BEING UNDISCLOSED COMMISSION PAID FOR ARRANGING THE ACCOM MODATION ENTRIES. THAT THE APPELLANT CRAVES TO ADD AMEND ALTER DE LETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING. 4. GROUNDS NO. 1 & 2 RELATES TO THE DELETION OF ADDI TION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON-GENUINENESS OF LONG TERM CAPITAL GAIN 4 WHILE GROUND NO.3 IS CO-RELATED TO GROUNDS NO. 1 & 2 AND RELATES TO THE ALLEGED COMMISSION PAID FOR ARRANGING THE CAPITAL G AIN. 5. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 30/07/2005 AND REVISED THE SAME ON 03/10/ 2005 SHOWING INCOME OF RS. 17 28 388/- INCLUDING LONG TERM CAPIT AL GAIN OF RS. 15 69 618/- WHICH WAS PROCESSED. LATER ON A SURV EY UNDER SECTION 133A OF THE I.T. ACT 1961 (HEREINAFTER REFERRED TO ACT IN SHORT) WAS CONDUCTED IN BAPU GROUP OF CASES AND CERTAIN LOOSE PAPERS WERE FOUND WHICH WERE IMPOUNDED. ACCORDING TO ASSESSING OFFIC ER THOSE LOOSE PAPERS REVEALED THAT ASSESSEE WAS INDULGED IN ARRAN GING BOGUS CAPITAL GAINS DURING THE ASSESSMENT YEAR UNDER CONSIDERATIO N. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DECLARED SALE CONSIDERATION OF RS. 16 44 055/- AND FROM THIS SALE A SUM OF RS. 70 919 /- WAS REDUCED AS COST OF ACQUISITION AND RS. 3 318/- AS BANK COMMISSION A ND OTHER CHARGES. THE ASSESSING OFFICER ALSO OBSERVED THAT PAGE 43 OF THE ANNEXURE B-21 SHOWS THAT THE FIGURES RECORDED ON THE PAPER WERE D IFFERENT AND THE DUE PROPORTION OF TOTAL DALALI OF RS. 3 80 000/- HAD NO T BEEN SHOWN ANYWHERE IN THE RETURN OF INCOME. THE ASSESSING OFFICER ISS UED NOTICE UNDER SECTION 148 OF THE ACT AFTER RECORDING THE REASONS THE ASSESSEE RAISED CERTAIN OBJECTIONS AGAINST THE ISSUANCE OF NOTICE U NDER SECTION 148 OF THE 5 ACT AND THOSE WERE DISPOSED OFF. THE ASSESSEE ALSO CHALLENGED THE REOPENING OF THE ASSESSMENT UNDER SECTION 148 R.W.S . 147 OF THE ACT. LEARNED CIT(A) HOWEVER HELD THAT THE INITIATION A ND ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT WAS LEGALLY VALID. THE ASSESSEE HAD NOT PREFERRED ANY APPEAL AGAINST THE SAID OBSERVATION O F THE LEARNED CIT(A). HOWEVER ON MERIT THE ASSESSEE SUCCEEDED BEFORE TH E LEARNED CIT(A) AND THE ADDITIONS MADE BY THE ASSESSING OFFICER WER E DELETED. AGAINST THE ORDER OF THE LEARNED CIT(A) THE DEPARTMENT IS IN APPEAL. 6 . DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE FOR DETAILS OF LONG TERM CAPITAL GAIN DERI VED FROM THE SALE OF SHARES. IN RESPONSE TO THIS IT WAS SUBMITTED THAT THE ASSESSEE PURCHASED SHARES OF M/S. SUMA FINANCE & INVESTMENT LTD. 1366 /21 III FLOOR NAIWALA KAROL BAGH NEW DELHI 11005 IN THE YEAR 20 03-04 THROUGH BROKER M/S. KRISHANA STOCK BROKING CO. LTD. 34 RASHID MA RKET DELHI. THE SHARES WERE PURCHASED BY MAKING PAYMENT IN CASH THR OUGH M/S. M.V. ASSOCIATES AND THE TRANSACTIONS WERE CARRIED OUT TH ROUGH NATIONAL STOCK EXCHANGE LTD. NEW DELHI. IN ORDER TO VERIFY THE G ENUINENESS OF THE TRANSACTIONS THE ASSESSING OFFICER CONDUCTED THE E NQUIRIES UNDER SECTIONS 133(6) AND 131 OF THE ACT. ON ENQUIRY IT WAS FOUN D THAT THE BROKER M/S. KRISHANA STOCK BROKING CO. LTD. WAS NOT TRACEABLE A S THE NOTICE ISSUED 6 UNDER SECTION 133(6) OF THE ACT RETURNED BY THE POS TAL AUTHORITIES UNSERVED WITH THE REMARKS NO SUCH FIRM EXITS. TH E ASSESSING OFFICER ALSO CONDUCTED AN ENQUIRY FROM THE NATIONAL STOCK E XCHANGE LTD. DELHI AND IT WAS INFORMED THAT M/S. KRISHNA STOCK BROKING CO. LTD. WAS NEITHER A REGISTERED TRADING MEMBER NOR A SUB-BROKING AFFIL IATED TO ANY REGISTERED TRADING MEMBER OF THE EXCHANGE AND AS PER RECORD OF THE EXCHANGE M/S. MAHADEV STOCK BROKING CO. LTD. WAS REGISTERED TRADI NG MEMBER OF THE EXCHANGE AND THE MEMBER WAS EXPELLED W.E.F. 24/01/2 001. THE ASSESSING OFFICER CONCLUDED THAT M/S. KRISHNA STOCK BROKING CO. LTD. WAS USING THE REGISTRATION NUMBER OF DEBARRED SHARE BRO KER FIRM AND HENCE THE BILLS ISSUED BY IT FOR PURCHASE OF SALE WERE NO T GENUINE AT ALL. AS REGARDS TO THE POSITION OF M/S. M.V. ASSOCIATES TH ROUGH WHICH THE PAYMENT IN CASH WAS MADE THE ASSESSING OFFICER OBS ERVED THAT AS PER SPOT VERIFICATION BY THE INSPECTOR NO SUCH COMPANY WAS IN EXISTENCE ON THE GIVEN ADDRESS. THE ASSESSING OFFICER ALSO OBSE RVED THAT THE NOTICE UNDER SECTION 133(6) OF THE ACT ISSUED TO M/S. SUMA FINANCE & INVESTMENT RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARK LEFT HE THEREFORE WAS OF THE VIEW THAT THE TRANSACTIONS WERE BOGUS AN D WERE NOTHING BUT AN ACCOMMODATION ENTRY IN THE FORM OF LONG TERM CAPITA L GAIN. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SHOW-CAUSE AS TO WHY THE SALE 7 CONSIDERATION OF RS. 15 69 818/- MAY NOT BE TAXED U NDER SECTION 68 OF THE ACT AS UNEXPLAINED CASH CREDITS. IN RESPONSE TO IT THE ASSESSEE SUBMITTED THAT HE HAD CORRECTLY PURCHASED SHARES OF AFORESAID COMPANY THROUGH THE SAID BROKER IN THE YEAR 2003-04 AND THE RELEVANT DO CUMENTS HAD ALREADY BEEN PROVIDED. IT WAS FURTHER STATED THAT THE ASSE SSEE WAS NOT HAVING THE CONTACT WITH THE SAID COMPANY WHICH MIGHT HAVE CHA NGED OR MAY NOT EXIST AT PRESENT. THE ASSESSING OFFICER DID NOT AC CEPT THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING THAT A PERSON WHO DID NO T HAVE ANY INFORMATION ABOUT FINANCIAL POSITION AND THE GENUIN ENESS OF ITS EXISTENCE WOULD MAKE HUGE INVESTMENT IN PURCHASE OF SHARES OF THE SAID COMPANY. HE FURTHER OBSERVED THAT THE COMPANY WHOSE BILLS A ND CONTRACT NOTE WERE FURNISHED BY THE ASSESSEE HAD BEEN PROVED TO B E A BOGUS BROKER AS INFORMED BY THE NSE LTD. NEW DELHI. HE ALSO OBSERV ED THAT THE ASSESSEE DID NOT FURNISH ORIGINAL SHARE CERTIFICATE. AS REGA RDS TO THE EVIDENCE IN RESPECT OF PURCHASE OF SHARE CLAIMED TO HAVE BEEN F URNISHED THE ASSESSING OFFICER MENTIONED THAT THE SAME WAS NOT A CCEPTABLE FOR WANT OF EVIDENCE. THE ASSESSEE SUBMITTED THAT HE HAD FU RNISHED ALL THE PROOFS SUCH AS COPY OF DEMAT ACCOUNT CONFIRMATION OF PAYM ENTS WHICH WERE RECEIVED THROUGH BANK DRAFTS AND THAT THE BILLS ISS UED BY THE BROKER CLEARLY SHOWED THAT IT WAS A MEMBER OF NATIONAL STO CK EXCHANGE AND THAT 8 THE NECESSARY DOCUMENTS AND PAYMENTS HAD BEEN RECEI VED BY THE ASSESSEE IN TIME WHICH WAS ONLY REQUIREMENT FOR EN TERING INTO THE GENUINENESS OF THE TRANSACTION. HOWEVER THE ASSES SING OFFICER DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE HAD JUST FURNISHED THE DOCUMENTS OBTAINED/ISSUED BY THE BOGUS BROKER IN SUPPORT OF HER CLAIM OF PURCHASE AND SALE OF SHARES . AS REGARDS TO THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE WAS NO T AWARE OF THE BROKER WAS NOT REGISTERED WITH NSEL OR COMPANY WAS NOT LIS TED THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS IN A BUSINES S AND WITHOUT HAVING WHEREABOUT OF BROKER AND COMPANY WHY DID SHE INVES T HUGE MONEY THAT TOO FOR THE FIRST TIME. AS REGARDS TO THIS CONTENT ION OF THE ASSESSEE THAT SHE HAD RECEIVED PAYMENTS IN TIME WHICH WAS ONLY R EQUIREMENT FOR ENTERING INTO GENUINENESS OF THE TRANSACTION THE A SSESSING OFFICER MENTIONED THAT AS THE RECEIPTS OF PAYMENTS DID NOT PROVE THE GENUINENESS OF THE TRANSACTION THE CONTENTION OF T HE ASSESSEE WAS NOT PROVED. ACCORDINGLY HE HELD THAT THE ASSESSEE FAI LED TO FULFIL THE PRIMARY PROCEDURE OF PURCHASE AND SALE OF SHARES AND MADE T HE ADDITION OF RS. 15 69 818/- UNDER SECTION 68 OF THE ACT. RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF MC. DOWELL & CO. LTD. VS. COMMERCIAL TAX OFFICER REPORTED IN 154 ITR 148 . 9 7. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND THE FOLLOWING SUBMISSIONS WERE MADE AS I NCORPORATED IN PARA 3.2 OF THE IMPUGNED ORDER WHICH ARE REPRODUCED VER BATIM AS UNDER:- 4.1. DURING THE YEAR UNDER APPEAL THE APPELLANT H AS DECLARED THE LONG TERM CAPITAL GAIN OF RS. 15 69 818/- ON SALE OF 17 500 EQUITY SHARES OF SUMA FINANCE AND INVESTMENT LTD IN HER RETURN OF INCOME FILED ON DATED 03-10- 2005 THE COPY OF RETURN OF INCOME IS ENCLOSED HEREW ITH. 4.2. THE ASSESSING OFFICER HAS DISALLOWED THE LON G TERM CAPITAL GAIN CLAIMED BY THE APPELLANT AND MADE THE DISALLOWANCE OF LONG TERM CAPITAL GAIN ON SALE OF EQUITY SHARES OF RS 15 69 818/- AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT DOUBTING THE GENUINENES S OF EQUITY SHARE TRANSACTIONS CARRIED OUT BY THE APPELLANT RESULTING THE LONG TERM CAPITAL GAIN DURING THE YEAR UNDER APPEAL. 4.3. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT SHE HAS PURCHASED 17 500 EQUITY SHARES ON DATED 04-04-2003 OF M/S SUM A FINANCE AND INVESTMENT LTD. ('THE COMPANY) FOR RS. 70 919/- TH ROUGH M/S KRISHNA STOCK BROKING COMPANY LIMITED 34 RASHID MARKET DELHI - 110051 ('THE BROKER'). 4.4. THE APPELLANT STATES THE OTHER RELEVANT DETAI LS OF THE ABOVE EQUITY SHARES AS UNDER: S.NO. CONTRACT NOTE/PURCHASE BILL NO. DATE OF PURCHASE OF SHARES QUANTITY OF SHARES PURCHASED RATE PER SHARE AMOUNT (RS.) 1 S - 04 - 0129 04/04/2003 17500 RS.4/ - 70 000 2 BROKERAGE 875 3 SERVICE TAX 44 4 TOTAL COST OF SHARES PURCHASED 70 919 4.5 THE CONTRACT CUM PURCHASE BILLS RECEIVED FROM THE BROKER CLEARLY SHOWS THE DETAILS OF QUANTITY KIND OF SECURITY PU RCHASE RATE BROKERAGE 10 RATE OF BROKERAGE SERVICE TAX AND VALUE MENTIONED FOR PURCHASE OF SHARES. THE COPIES OF THE RELEVANT CONTRACT NOTES CUM PURCH ASE BILLS SHOWING THE ABOVE DETAILS ARE ENCLOSED HEREWITH. 4.6. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT SHE HAD PLACED THE VERBAL ORDER TO THE BROKER FOR PURCHASE OF THE ABOV E EQUITY SHARES OF SUMA FINANCE AND INVESTMENT LTD IN HER ACCOUNT. 4.7. THE BROKER HAD PURCHASED 17500 EQUITY SHARES BEARING DISTINCTIVE NUMBERS FROM 5507501 TO 5525000 FOR RS. 70 919/- (I NCLUDING EXPENSES) IN HER NAME AS PER VERBAL ORDERS OF THE APPELLANT. 4.8. THE APPELLANT MADE THE PAYMENT OF PURCHASE C ONSIDERATION OF SHARES OF RS. 70 919/- TO THE BROKER OUT OF HER ACCUMULATE D SAVINGS AND/OR REGULAR SOURCES OF THE APPELLANT. 4.9. THE BROKER CONFIRMED THE RECEIPT OF PURCHASE CONSIDERATION IN ITS STATEMENT OF ACCOUNT SENT TO THE APPELLANT. THE COP Y OF STATEMENT OF ACCOUNT OF THE BROKER IS ENCLOSED HEREWITH. 4.10. M/S SUMA FINANCE AND INVESTMENT LTD. ('THE C OMPANY') HAS ALSO INFORMED TO THE APPELLANT VIDE ITS LETTER DATED 30- 04-2003 THAT SHARE CERTIFICATES OF 17500 SHARES BEARING NUMBERS 12578 TO 12752 OF RS. 10/- EACH OF THE COMPANY HAVE BEEN TRANSFERRED IN HER NA ME. THE COPY OF THE CONFIRMATION LETTER DATED 30-04-2003 OF THE AFORESA ID COMPANY IS ENCLOSED HEREWITH. 4.11. THE COMPANY HAS ALSO SENT THE ORIGINAL SHAR E CERTIFICATES DULY TRANSFERRED IN THE NAME OF THE APPELLANT ALONG WITH ITS LETTER DATED 30-04- 2003. 4.12. THEREAFTER THE COMPANY HAS CONSOLIDATED EQUI TY SHARE CERTIFICATES BEARING NUMBERS 12578 TO 12752 INTO ONE SHARE CERTI FICATE OF 17500 SHARES AT THE REQUEST OF THE APPELLANT. THE COPIES OF CON SOLIDATED SHARE CERTIFICATE AND THE LETTER DATED 25-07-2003 ARE ENCLOSED HEREWI TH. 4.13. THE APPELLANT MAINTAINS THE REGULAR BOOKS O F ACCOUNTS. SHE HAS RECORDED THE ABOVE INVESTMENT IN SHARES IN HER REGU LAR OF BOOKS OF ACCOUNT 11 AND SHOWN THE ABOVE INVESTMENT IN 17 500 SHARES AMO UNTING TO RS.70 919/- IN HER BALANCE SHEET AS ON 31-03-2004 U NDER THE HEAD INVESTMENT 'SUMA FINANCE AND INVESTMENT LTD'. THE C OPY OF BALANCE SHEET IS ENCLOSED. 4.14. THEREAFTER THE APPELLANT HAS DEMATERIALIZED THE ABOVE EQUITY SHARES WITH J&K BANK DEPOSITORY SERVICES OF JAMMU & KASHMI R BANK LTD. G-40 CONNAUGHT PLACE NEW DELHI 110001 (DP ID NO LN 3023 49 UNDER CLIENT LD N0.10221172) UNDER DEMATERIALIZATION PROCESS THE C OPY OF THE STATEMENT OF SHARE HOLDING WITH SHARE DEPOSITORY IS ENCLOSED HEREWITH. 4.15. THE APPELLANT HAS SOLD 17 500 EQUITY SHARES ON DATED 10-06-2004 AT THE RATE OF RS. 94 PER SHARE THROUGH HER BROKER VID E SALE CONTRACT AND SALE BILL NUMBER P-00-0146 DATED 12-06-2004. THE COPY OF CONTRACT NOTE AND SALE BILL IS ENCLOSED HEREWITH. 4.16. THE APPELLANT STATES THE OTHER RELEVANT DETA ILS OF THE SALES OF ABOVE EQUITY SHARES AS UNDER: S.NO. CONTRACT NOTE/ SALE BILL NO. DATE OF SALE OF SHARES QUANTITY OF SHARES SOLD RATE PER SHARE AMOUNT (RS.) 1 P - 06 - 0146 10/06/2004 17500 RS. 94/ - 16 45 000 2 LESS: BROKERAGE 875 3 LESS: SERVICE TAX 70 4 TOTAL REALIZATION OF SHARES SOLD 16 44 055 4.17. THUS THE APPELLANT HAS SOLD HIS TOTAL EQUIT Y SHARES THROUGH HER BROKER FOR RS. 16 44 055/-AFTER DEDUCTION OF BROKER AGE AND SERVICE TAX. THE COPIES OF CONTRACT NOTE AND SALE BILL NO. P-06-0140 DATED 12-06-2004 IS ENCLOSED HEREWITH. 4.18. THEREAFTER THE BROKER HAS REMITTED THE AMOU NT OF NET SALE CONSIDERATION OF SHARES OF RS. 16 40 737/- AFTER DE DUCTING THE BANK CHARGES OF RS.3 318/-(RS. 16 44 055/- MINUS RS. 3 318/-) TO THE APPELLANT AS PER FOLLOWING DETAILS : 12 S.NO DD/CH NO. DATE AMOUNT (RS.) DEPOSITED WITH 1 752529 18/08/2004 4 99 000 - 00 SBBJ 2 752606 03/09/2004 9 98 000 - 00 SBBJ 3 156131 19/02/2005 1 43 737 - 00 IDBI TOTAL 16 40 737-00 4.19. THE APPELLANT ENCASHED THE ABOVE BANK DRAFT S AND CHEQUES OF NET SALE CONSIDERATION OF RS. 16 40 737/- IN HER SAVING BANK ACCOUNTS BEARING NUMBER 01190039944 HOLDING WITH SBBJ RAJSAMAND AND HER-SAVING BANK ACCOUNT BEARING NUMBER 104104000035307 HOLDING WITH LDBL BANK RAJSAMAND. THE COPIES OF THE ABOVE SAVING BANK ACCO UNTS OF THE APPELLANT ARE ENCLOSED HEREWITH FOR YOUR KIND PERUSAL PLEASE. 4.20. THE APPELLANT VERY HUMBLY AND RESPECTFULLY S UBMITS THAT THE COPIES OF SHARE CERTIFICATES CONTRACT NOTES AND PURCHASE B ILLS LETTER OF TRANSFER OF SHARES STATEMENT OF ACCOUNTS OF THE BROKER AND SHA RES PURCHASE APPEARING IN THE BALANCE SHEET AS 0N 31-03-2004 OF THE APPELL ANT SHARE HOLDING STATEMENT OF THE DEPOSITORY RECEIPT OF SALES CONSI DERATION OF SHARES THROUGH BAKING CHANNEL OSTENSIBLY ESTABLISH THE GEN UINENESS OF THE SHARE TRANSACTIONS CARRIED OUT BY THE APPELLANT ON THE RE LEVANT DATES. 4.21. IN THE PRESENT CASE THE APPELLANT HAS FURNI SHED ALL THE CONCRETE EVIDENCES FOR PURCHASE OF SHARES TRANSFER AND CONS OLIDATION OF SHARE CERTIFICATE EVIDENCES FOR DEMATERIALIZATION OF SHA RES SALE OF SHARES RECEIPT OF SALES CONSIDERATION THROUGH BANKING CHANNEL FIL ING OF RETURN OF INCOME FOR THE ABOVE ASSESSMENT YEAR SHOWING THE SHARES IN THE BALANCE SHEET AS ON 31-03-2004 AS INVESTMENT IN SHARES AND CONFIRMAT ION OF ACCOUNT OF THE APPELLANT RECEIVED FROM THE BROKER ETC CLEARLY PROV ES THE GENUINENESS OF SHARE TRANSACTIONS MADE BY THE APPELLANT. OUR RELIA NCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE. DALPAT SINGH CHOUDHARY VS ACIT (2012) 143 TTJ 500 (JD) DCIT VS SMT HANSA CHOUDHARY (2012) 143 TTJ 76 (JD) (UO) ACIT VS CHANDRESH KUMAR MAHESHWARI (2009) 120 TTJ 132 (JD) BARYNATH AGARWAL VS ACIT (2010) 133 TTJ 129 (AGRA) (TM) CIT VS SMT. PUSHPA MALPANI (2011) 49 DTR 312 CIT VS ASHOK KUMAR KAKKAR HUF (2008) L7L TAXMANN 3 54 (DEL) 13 ACIT VS J.R. SOLVENT INDUSTRIES P LTD. (2009) 24 D TR 387 (CHD)(TRIB) ACCHYALAL SHAW VS INCOME TAX OFFICER (2009) 121 TT J 695 (KOL) ITO VS SMT. BIBI RANI BANSAL (2010) 133 TTJ 394 (A GRA) (TM) SMT. SUNITA OBEROI VS INCOME TAX OFFICER (2009) 12 6 TTJ 745 (AGRA)(TM) 4.22. IN THE PRESENT CASE THE APPELLANT HAD FURNI SHED ALL THE COGENT AND CONCRETE EVIDENCES OF DEFINITE LEGAL CHARACTER TO E STABLISH THE GENUINENESS OF THE SHARES TRANSACTION CARRIED OUT BY THE APPELL ANT. 4.23. THE APPELLANT VERY RESPECTFULLY STATES THAT HE HAS CORRECTLY CLAIMED THE LONG TERM CAPITAL GAIN OF RS. 15 69 818/- ON SA LE OF SHARES IN HER RETURN AND MADE THE PAYMENT OF DUE TAXES THEREON THEREFOR E THE DISALLOWANCES OF CAPITAL GAIN OF RS. 15 69 818/- IS UNWARRANTED A ND UNSUSTAINABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LIABLE TO B E DELETED. 4.24. THE APPELLANT VERY RESPECTFULLY FURTHER SUB MITS THAT THE ASSESSING OFFICER HAS TREATED THE AMOUNT OF LONG TERM CAPITAL GAIN OF RS. 15 69 818/- AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 4.25. SECTION 68 OF THE ACT PROVIDES THAT WHERE AN Y SUM IS FOUND IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE MAINTAINED FOR AN Y PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OP INION OF THE ASSESSING OFFICER SATISFACTORY THE SUM SO CREDITED MAY BE C HARGED TO INCOME TAX AS INCOME OF THAT ASSESSEE OF THAT PREVIOUS YEAR. 4.26 LN THE PRESENT CASE THE APPELLANT HAD MAINT AINED HER REGULAR BOOKS OF ACCOUNTS AND SHE HAS RECORDED THE ABOVE INVESTME NT IN SHARES IN HER REGULAR OF BOOKS OF ACCOUNT. 4.27 THE APPELLANT HAD DEMATERIALIZED OF HER SHAR ES WITH J&K BANK DEPOSITORY SERVICES OF JAMMU & KASHMIR BANK LTD. UN DER DEMATERIALIZATION PROCESS AND STATEMENT OF SHARE HOLDING OF SHARE DEP OSITORY (COPIES ENCLOSED) ALSO PROVES THE EXISTENCE AND GENUINENESS OF THE SHARES HOLDING BY THE APPELLANT. 4.28. THE APPELLANT HAVING SUBMITTED COPIES OF CON TRACT NOTES SALE BILL STATEMENT OF ACCOUNT AND CONFIRMATION FROM THE BROK ER TO SUBSTANTIATE THE 14 SALE OF SHARES CLEARLY PROVES THAT THE SHARES TRANS ACTION CARRIED ON BY THE APPELLANT ARE GENUINE AND IMPUGNED INCOME DISCLOSED BY THE APPELLANT AS CHARGEABLE TO TAX AS CAPITAL GAIN CANNOT BE TREATED AS CASH CREDIT UNDER SECTION 68 OF THE ACT. 4.29. THE APPELLANT VERY RESPECTFULLY FURTHER SUBM ITS THAT ON THE FACE OF THE LETTER OF BROKER GIVING DETAILS OF SHARES PURCHASED AND SOLD ON BEHALF OF THE APPELLANT MENTIONING THE COMMISSION CHARGED BY HIM AS WELL AS THE DOCUMENTS AVAILABLE WITH HIM FOR PURCHASE OF SHARES AS WELL AS REALIZATION OF SALE PROCEEDS AND CREDITING THE SAME TO THE BANK ACCOUNT OF THE APPELLANT AND OTHER EVIDENCES PRODUCED BY THE APPEL LANT CLEARLY ESTABLISH THAT THE LONG TERM CAPITAL GAIN CLAIMED BY THE APPE LLANT ON TRANSACTION OF SHARES IS PERFECTLY GENUINE AND REALIZATION OF SALE PROCEEDS OF SHARES CANNOT BE TREATED AS CASH CREDIT UNDER SECTION 68 OF THE A CT. 4.30. THUS IT IS PROVED THAT THE AMOUNT OF CAPITAL GAIN OF RS. 15 69 818/- RECEIVED BY THE APPELLANT AGAINST THE SALE OF SHARE S CAN NOT BE TREATED AS UNEXPLAINED CASH CREDIT THE ADDITION OF CASH CREDI T OF RS. 15 69 818/-MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND IS LI ABLE TO BE DELETED. 4.31. THE APPELLANT VERY HUMBLY FURTHER STATES THA T HE HAS SHOWN THE ABOVE INVESTMENT IN SHARES IN HER BALANCE SHEET UNDER THE HEAD 'SUMA FINANCE AND INVESTMENT LTD' AND THE REALIZATION OF SALE PRO CEEDS OF SHARES RECEIVED BY THE APPELLANT THROUGH BANKING CHANNEL BY ACCOUNT PAYEE CHEQUES/DEMAND DRAFTS CLEARLY PROVES THAT THE GENUI NENESS OF THE SHARE TRANSACTIONS AND THE LONG TERM CAPITAL GAIN CLAIMED BY THE APPELLANT. 4.32. THUS THE APPELLANT HAD SATISFACTORILY EXPLAI NED THE NATURE AND SOURCE OF THE AMOUNT OF SALE CONSIDERATION RECEIVED BY HER FROM SALE OF SHARES FURNISHING ALL THE COGENT AND CONCRETE EVIDENCES OF DEFINITE LEGAL CHARACTER AND THEREFORE THE ADDITION OF CAPITAL GAIN OF SHA RES OF RS. 15 69 818/- MADE BY THE ASSESSING OFFICER TREATING THE SAME AS UNEXPLAINED CASH CREDIT IS UNWARRANTED AND LIABLE TO BE DELETED. 4.33. THUS THE APPELLANT HAS DISCHARGED HER PRIMA RY ONUS CAST UPON HER BY FURNISHING ALL INFORMATION AND THE ABOVE DOCUMENTS TO THE ASSESSING OFFICER. CIT VS. ORISSA CORPORATION (P) LTD. (1986) 159 IT R 78 (SC) NEMI CHAND KOTHARI VS. CIT (2003)264 ITR 254 (GAU ) 15 4.34. THE ASSESSING OFFICER MISERABLY FAILED TO D ISCHARGE THE ONUS CAST UPON HIM TO PROVE THAT THE DOCUMENTS AND OTHER EVIDENCES SUBMITTED BY TNE APPELLANT RELATING TO THE SHARE TRANSACTIONS ARE TO TALLY FALSE AND BOGUS AND THEREFORE THE LONG TERM CAPITAL GAIN CLAIMED BY THE APPELLANT IS GENUINE AND THE ADDITION OF SALE CONSIDERATION UNDER SECTION 68 OF THE ACT AS UNEXPLAINED CASH CREDIT IS TOTALLY INCORRECT AND PA TENTLY ERRONEOUS AND THE SAME IS LIABLE TO BE DELETED. 4.35. THE ASSESSING OFFICER HAS OBSERVED THAT HE HAS ISSUED THE COMMISSION TO ADIT DELHI AND IT WAS INFORMED TO HIM THAT THER E WAS NO SUCH BROKER COMPANY AND THEREFORE THE SUMMONS ISSUED IN THE N AME OF THE BROKER WERE RETURNED UNSERVED. 4.36 THE APPELLANT VERY HUMBLY SUBMITS THAT HE HA S PROVIDED THE ADDRESSES OF THE SHARE BROKER TO THE ASSESSING OFFI CER AS AVAILABLE WITH HER ON THAT DATE. IT MAY HAPPEN THAT THE SAID BROKING C OMPANY HAS CHANGED THE PLACE OF HIS OFFICE WHICH HAS NOT BEEN INFORMED TO THE APPELLANT. 4.37 THE APPELLANT VERY HUMBLY SUBMITS THAT MERE F ACT THAT THE SUMMONS ISSUED BY THE ADIT NEW DELHI HAS BEEN RETURNED 'UNS ERVED' COULD NOT LEAD TO THE CONCLUSION THAT THE SHARE TRANSACTIONS WERE NOT GENUINE. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE NATIONAL FEED STORE VS. DCIT (1996) 88 TAXMANN 71 (CHD.) HERTZ & WAVES ENGINEERS (P) LTD. VS. CIT (1992) 4 2 ITD 558 (HYD.) JAGDISH OIL MILL VS. ITO (1995) 82 TAXMANN 67 (IND ORE) MANGA RAM DEO MAL VS. ITO (1979) 8 TTJ (JP) 405 LTO VS. HINDUSTAN COLD STORAGE & REFRIGERATION CO. (1984) 19 TTJ (DEL) 467 BHADAMAL HAZARI MAL VS. ITO (1978) 5 TTJ (GAU.) 29 7. 4.38. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT THE BROKER IS INCOME TAX ASSESSEE ASSESSED AT COMPANY CIRCLE-2 AT DELHI. THE ASSESSING OFFICER OUGHT TO HAVE ISSUED THE COMMISSION TO ASSESSING OFFICER COMPANY CIRCLE-2 AT DELHI TO MAKE THE PROPER ENQUIRY ABOUT THE EXISTENC E OF THE BROKER. 4.39. THE ASSESSING OFFICER HAS NOT MADE THE PROPE R ENQUIRY ABOUT THE EXISTENCE OF THE BROKER AND THEREFORE THE FINDINGS OF THE ASSESSING OFFICER 16 THAT THE BROKER IS NOT IN EXISTENCE ARE TOTALLY INC ORRECT AND PATENTLY ERRONEOUS. 4.40 THE APPELLANT VERY HUMBLY STATES THAT THE VA RIOUS DOCUMENTS RELATING TO THE SHARES ISSUED BY THE BROKER AND SENT TO THE APPELLANT CLEARLY PROVES THE EXISTENCE OF THE BROKER. 4.41. THE ASSESSING OFFICER HAS OBSERVED THAT NAT IONAL STOCK EXCHANGE OF INDIA LIMITED DELHI INFORMED HIM THAT BROKER IS NE ITHER A REGISTERED BROKER NOR A SUB-BROKER AFFILIATED TO ANY REGISTERED TRADI NG MEMBER OF THE EXCHANGE AND THE SECURITIES OF SUMA FINANCE AND INV ESTMENT LTD. ARE NOT LISTED ON THE EXCHANGE. 4.42 THE APPELLANT VERY RESPECTFULLY FURTHER SUBM ITS THAT THERE MAY OFF- MARKET VALID SHARE TRANSACTIONS. ANY ENQUIRY FROM STOCK EXCHANGE WILL NOT YIELD ANY RESULT IN FAVOUR OF THE DEPARTMENT IN THE CASE OF OFF MARKET TRANSACTION. 4.43. THE ASSESSING OFFICER HAS TO SEE WHETHER TH E SALE HAS BEEN AFFECTED OR NOT AS PER THE DOCUMENTS AND AS PER THE ACCEPTANCE AND ADMISSION OF THE RESPECTIVE BROKERS. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISION: ACCHYALAL SHAW VS LTO (2009) 121 TTJ 695 (KOL) 4.44. THE APPELLANT HAVING SHOWN THE -CAPITAL GAIN FROM SALE OF SHARES IN OFF MARKET TRANSACTION WHICH TRANSACTIONS WERE CONFIRME D BY THE SHARE BROKER AND THEREFORE THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITION OF THE AMOUNT OF CAPITAL GAIN UNDER SECTIO N 68 OF THE ACT MERE ON SUSPICION AND ENQUIRY FROM STOCK EXCHANGE. 4.45. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE INFORMATION UNDER SECTION 133(6) WERE CALLED FROM M/S SUMA FINANCE AN D INVESTMENT LTD. AND HIS AUTHORIZED SIGNATORIES OF THE COMPANY BUT THE SAME WAS RETURNED BACK LEFT BY THE POSTAL AUTHORITIES. 4.46. THE APPELLANT VERY HUMBLY SUBMITS THAT THE M ERE FACT THAT THE NOTICE UNDER SECTION 133(6) WERE RETURNED BACK WITH THE RE MARK 'LEFT' COULD NOT LEAD TO THE CONCLUSION THAT ABOVE PARTIES ARE NOT I N EXISTENCE. 17 4.47. THE APPELLANT HAS PLACED THE VARIOUS DOCUME NTS SENT TO THE APPELLANT RELATING TO THE SHARE TRANSACTIONS WHICH CLEARLY PROVES THE EXISTENCE OF BROKER AND SUMA FINANCE AND INVESTMENT LTD' AND THE SHARE TRANSACTIONS CARRIED ON BY THEM WITH APPELLANT ARE GENUINE. 4.48. IT IS RESPECTFULLY FURTHER SUBMITTED THAT TH E APPELLANT HAS SURRENDERED 17500 EQUITY SHARES OF SUMA FINANCE AND INVESTMENT LTD. TO J & K BANK DEPOSITORY SERVICES HAVING DP LD NO IN 302349 FOR D EMATERIALIZATION OF THE SAME (COPY OF ACKNOWLEDGEMENT IS ENCLOSED). 4.49. THE J & K BANK DEPOSITORY SERVICES OF JAMMU & KASHMIR BANK LTD. (DP ID NO LN 302349 HAS DEMATERIALIZED THE ABOVE EQUITY SHARES UNDER CLIENT LD NO.10221172 IN THE 4.50. NAME OF THE APPELLANT THE COPY OF THE STAT EMENT OF HOLDING OF SHARES IN THE NAME OF APPELLANT IS ENCLOSED HEREWIT H. 4.51. THE DEMATERIALIZATION OF SHARES WITH J&K BAN K DEPOSITORY SERVICES CLEARLY PROVES THE EXISTENCE AND GENUINENESS OF SHA RES AND THE VALIDITY OF SHARE TRANSACTIONS CARRIED OUT BY THE BROKER. 4.52. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT THE APPELLANT HAS FAILED TO SUBMIT THE CERTAIN INFORMATION CALLED VID E HIS LETTER DATED 30-10- 2009. 4.53. THE APPELLANT VIDE HER LETTER DATED 08-12-20 09 HAD SUBMITTED ALL INFORMATIONS AVAILABLE WITH HER. THERE WERE CERTAIN INFORMATIONS WHICH COULD NOT BE POSSIBLE TO SUBMIT FOR THE APPELLANT B EFORE THE ASSESSING OFFICER BEING BEYOND HER CONTROL. 4.54. IT IS WELL SETTLED THAT LAW DOES NOT COMPEL A MAN TO DO WHAT HE CAN NOT POSSIBLY PERFORM ( LEX NON COGIT AD IMPOSSIBILI A). OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISION FOR THIS PURPOSE : COCHIN STATE POWER AND LIGHT CO-OP. LTD VS. STATE OF KERALA (1965) AIR 1688 (SC) 4.55. THE ASSESSING OFFICER OBSERVED THAT THE ASS ESSEE HAS ACTUALLY ROUTED HIS UNACCOUNTED MONEY IN THE FORM OF SO CALLED LONG TERM CAPITAL GAIN IN 18 ORDER TO AVOID THE PAYMENT OF TAXES AND IT IS A CLE AR CUT CASE OF SHAM TRANSACTIONS SUBJECT TO BE TAXED UNDER SECTION 68 O F THE ACT AS UNEXPLAINED CASH CREDITS. 4.56. THE APPELLANT VERY RESPECTFULLY SUBMITS THA T THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY WORTHWHILE MATERIAL CONC RETE AND TANGIBLE EVIDENCE TO ESTABLISH THAT THE APPELLANT HAS INTROD UCED HER OWN UNACCOUNTED MONEY IN THE SHAPE OF THE SALE PROCEEDS OF SHARES AND FOR PROVING SHAM TRANSACTIONS OF CAPITAL GAIN AS CLAIME D BY THE APPELLANT. 4.57. THE ASSESSING OFFICER HAS FURTHER NOT PLACE D ANY CONCRETE AND POSITIVE EVIDENCE ON RECORD THAT BY WHICH MODE THE UNACCOUNT ED MONEY HAS TRAVELED FROM THE APPELLANT TO THE OTHER AGENCIES. 4.58. IN THE ABSENCE OF ANY CONCRETE AND TANGIBLE EVIDENCE OF DEFINITE LEGAL CHARACTER TO SUBSTANTIATE HIS ABOVE ALLEGATIONS THE SHARE TRANSACTIONS OF THE APPELLANT CANNOT BE TREATED AS SHAM TRANSACTIONS CA RRIED OUT BY THE APPELLANT WITH UNACCOUNTED MONEY. THEREFORE THE 4.59. DISALLOWANCE OF CAPITAL GAIN AND ADDITION O F LONG TERM CAPITAL GAIN OF RS. 15 69 818/- AS UNEXPLAINED CASH CREDIT UNDER SE CTION 68 OF THE ACT IS UNWARRANTED AND UNSUSTAINABLE IN LAW AS WELL AS ON THE FACTS OF THE CASE AND THE SAME IS LIABLE TO BE DELETED. 4.60. THE APPELLANT VERY HUMBLY REQUEST THAT SHE H AS MADE THE GENUINE TRANSACTIONS AND CORRECTLY CLAIMED THE LONG TERM CA PITAL GAIN ON SHARES AND THEREFORE THE DISALLOWANCE OF CAPITAL GAIN AND ADD ITION OF CASH CREDIT OF RS. 15 69 818/- MADE BY THE ASSESSING OFFICER IS UNWARR ANTED AND UNSUSTAINABLE IN LAW AS WELL AS ON THE FACTS AND CI RCUMSTANCES OF THE CASE. 4.61. ALL OTHER OBSERVATIONS FINDINGS AND/OR ALL EGATIONS MADE BY THE ASSESSING OFFICER AND INFERENCES AND CONCLUSIONS DR AWN BY HIM ON THE BASIS OF SUCH FINDINGS ARE TOTALLY INCORRECT ARBITRARY AND FICTITIOUS AND BASED ON MERE ASSUMPTIONS AND PRESUMPTIONS SURMISES AND CON JECTURES PURE GUESS DOUBTS SUSPICION AND HYPOTHETICAL AND IMAGI NARY GROUNDS. 4.62. IT IS WELL SETTLED POSITION OF LAW THAT NO ADDITION CAN BE MADE ON THE BASIS OF MERE ASSUMPTIONS PRESUMPTIONS SURMISES A ND CONJECTURES PURE GUESS DOUBTS SUSPICION AND HYPOTHETICAL AND IMAGI NARY GROUNDS. OUR RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE: 19 DHAKESWARI COTTON MILLS LTD. VS. CIT (1954) 26 I TR 775 (SC) OMAR SALAY MOHAMMED SAIF VS. CIT (1959) 37 ITR 15 1 (SC) DHIRAJLAL GIRDHARILAL VS. CIT (1954) 26 ITR 736 ( SC) LAL CHAND BHAGAT AMBIKA RAM VS. CIT (1959) 37 ITR 288 (SC) 4.63. THE APPELLANT FURTHER SUBMITS THAT THE ADDI TIONS AND/OR DISALLOWANCES OF INCOME OR EXPENSES MADE ON THE BAS IS OF MERE PRESUMPTION OR ESTIMATE HOWEVER STRONG AND WELL F OUNDED IT MAY BE CAN NOT BE SUSTAINED IN THE EYE OF LAW AND BY ITSELF WO ULD NOT TAKE THE PLACE OF EVIDENCE AND CONSTITUTE FOR HOLDING THE VALIDITY OF SUCH ADDITIONS OR DISALLOWANCES. OUR RELIANCE HAS BEEN PLACED ON FOL LOWING JUDICIAL DECISION FOR THIS PURPOSE: UMA CHARAN SHAH AND BROTHERS VS. CIT (1959) 37 IT R 271 (SC) 4.64. THE APPELLANT VERY HUMBLY SUBMITS THAT SHE HAD FURNISHED ALL THE COGENT AND CONCRETE EVIDENCES TO ESTABLISH THE GENU INENESS OF THE SHARES TRANSACTION CARRIED OUT BY THE APPELLANT. 4.65. THE APPELLANT VERY RESPECTFULLY FURTHER SUB MITS THAT THE FACTS OF THIS CASE ARE SQUARELY COVERED WITH THE FACTS CONTAINED IN THE APPEALS CASES OF SHRI SHANKEY GUJAR (APPEAL N0.9S/IT/UDR/2010-11 DAT ED 15-12-2011) SHRI SHAMBHU SINGH SOLANKI (APPEAL NO. 560/IT/UDR/ 2006- 07 DATED 14-10- 2008) SHRI PRAKASH RANKA (APPEAL NO. 96/IT/UDR/ 20 06-07 DATED 19-02- 2007) AND NIRUPAM PATHAN (APPEAL NO. 91/IT/UDR/ 200 6-07 DATED 19-02- 2007) SHRI RAMZAN KHAN PATHAN (APPEAL NO.92/IT/UDR/ 2006-07 DATED 19/02/2007) DECIDED BY YOUR PREDECESSORS WHEREIN TH E ADDITION OF LONG- TERM AND SHORT TERM CAPITAL GAIN AS CASH CREDIT MAD E BY THE ASSESSING OFFICER ON THE SIMILAR SET OF FACTS HAS BEEN DELETE D BY THEM . THE COPIES OF THE ABOVE DECISIONS ARE PACED ON RECORD FOR YOUR RE ADY REFERENCE PLEASE. 4.66. FOR THE VARIOUS REASONS STATED ABOVE THE A PPELLANT VERY HUMBLY REQUEST THAT THE APPELLANT HAS MADE THE GENUINE TRA NSACTIONS AND CORRECTLY CLAIMED THE LONG TERM CAPITAL GAIN ON SHARES AND T HEREFORE THE DISALLOWANCE OF CAPITAL GAIN AND ADDITION OF CASH C REDIT OF RS. 15 69 818/- MADE BY THE ASSESSING OFFICER IS UNWARRANTED AND UN SUSTAINABLE IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 20 4.67. IN VIEW OF THE FOREGOING GROUNDS OF DEFENCE THE APPELLANT VERY HUMBLY PRAYS THAT THE DISALLOWANCE OF CAPITAL GAIN AND ADDITION OF CASH CREDIT BY RS. 15 69 818/- MADE BY THE ASSESSING OFF ICER MAY KINDLY BE DELETED. 8. APART FROM THE ABOVE SUBMISSIONS THE ASSESSEE FILE D AN APPLICATION UNDER RULE 46A OF THE I.T. RULES 1962 (HEREINAFTER REFERRED TO AS RULES IN SHORT) ENCLOSING THEREWITH STATEMENT OF DEMAT OF SHARES OF J & K BANK DEPOSITORY SERVICES LIST OF SHARE TRADING QUOTATIO NS MADHYA PRADESH STOCK EXCHANGE CERTIFICATE OF REGISTRAR OF COMPANI ES HARYANA FOR CHANGE OF COMPANYS NAME IN THE ABOVE AND HAD CLAIM ED THAT THOSE ADDITIONAL EVIDENCES COULD NOT BE SUBMITTED BEFORE THE ASSESSING OFFICER BECAUSE THE SAME WERE NOT AVAILABLE WITH THE ASSESS EE. THE LEARNED CIT(A) SENT THE DOCUMENTS FURNISHED BY THE ASSESSEE UNDER SECTION 46A OF THE RULES TO THE ASSESSING OFF ICER FOR HIS COMMENTS ON THE ADMISSIBILITY AND MERIT OF THE EVIDENCES AND THE ASSESSING OFFICER VIDE LETTER NO. 1846 DATED 31/12/2012 SUBMITTED HIS REPORT AS UNDER:- IN THE ABOVE REFERRED CASE DURING THE COURSE OF A SSESSMENT PROCEEDINGS IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAS DISCL OSED SALE CONSIDERATION ON SALE OF SHARE AND AFTER REDUCING COST OF ACQUISI TION AND BANK CHARGES/OTHER CHARGES LONG TERM CAPITAL GAIN WAS AL SO SHOWN. IN ORDER TO VERIFY THE VERACITY OF SUCH TRANSACTIONS AND THE EX ISTENCE OF THE PERSONS /CONCERNS INVOLVED IN THESE TRANSACTIONS THE THEN AO HAS CALLED FOR INFORMATION U/S. 133(6) OF THE ACT . AFTER DUE VERI FICATION FROM THE CONCERNED PERSONS (BROKE/NSEL ETC.) THE AO HAS TREA TED THESE TRANSACTION 21 AS BOGUS TRANSACTIONS AND NOTHING BUT AN ACCOMMODAT ION ENTRY IN THE FORM OF LTCG TO BRING THE UNACCOUNTED MONEY IN THE BOOKS WITHOUT PAYING THE LEGAL TAXES. FURTHER THE ASSESSEE HAS FAILED TO PR OVE GENUINENESS OF SUCH TRANSACTIONS. HENCE AFTER GIVING DETAILED REASONI NG THE A0 HAS TREATED SALE CONSIDERATION AS UNEXPLAINED CASH CREDITS U/S.68 OF THE ACT FURTHER ADDITION ACCOUNT OF UNDISCLOSED COMMISSION PAYMENT WAS ALSO MADE. IN THE PRESENT CONTEXT THE A.R. OF THE ASSESSEE HAS FILED STATEMENT OF DEMAT OF SHARES LIST OF SHARE TRADING QUOTATIONS CERTIFICATE OF ROC. AFTER GONE THROUGH THE ALL MATERIAL TOGETHER I AM OF THE VIEW THAT THE THEN AO WAS RIGHT IN TREATING THE DECALRED LONG TERM CAPITA L GAIN AS BOGUS TRANSACTION AFTER GIVING DETAILED REASONING IN ASSE SSMENT ORDER AND DETAILED ENQUIRY FROM BROKER /NSEL. THE ADDITIONAL EVIDENCE S FURNISHED BY THE A/R OF THE ASSESSEE HAS NO MEAN. IT IS HUMBLY REQUESTED THAT CONTENTION OF THE ASSE SSEE MAY KINDLY BE CONSIDERED ON MERIT KEEPING IN VIEW ABOVE FACTS AND DISCUSSION. 9. THE ABOVE SAID REPORT OF THE ASSESSING OFFICER WAS CONFRONTED TO THE ASSESSEE WHO MADE THE FOLLOWING SUBMISSIONS ON THE REMAND REPORT:- 1. THE ASSESSING OFFICER HAS OBSERVED THAT THE SHAR E TRANSACTIONS CARRIED OUT BY THE APPELLANT ARE BOGUS AND NOTHING BUT ACCO MMODATION ENTRIES IN THE FORM OF LONG TERM CAPITAL GAIN. 2. THE ASSESSING OFFICER SIMPLY REITERATED THE OB SERVATIONS AND /OR FINDINGS OF ASSESSMENT ORDER WITHOUT SUBMITTING THE SPECIFIC COMMENTS ON ADMISSIBILITY OF ADDITIONAL EVIDENCES FILED BY THE APPELLANT DURING THE COURSE OF APPEAL. 3. THE APPELLANT VERY HUMBLY SUBMITS THAT HE HAS MADE THE DETAILED SUBMISSIONS WITH CONCRETE EVIDENCES DURING APPEAL P ROCEEDINGS THAT THE TRANSACTIONS FOR PURCHASE AND SALE OF SHARES CARRIE D OUT BY THE APPELLANT ARE GENUINE AND REAL TRANSACTIONS GENERATING THE AC TUAL LONG TERM CAPITAL GAIN IN THE HANDS OF THE APPELLANT. 4. FOR THE SAKE OF BREVITY ALL THESE DETAILED SU BMISSIONS ARE NOT BEING REITERATED HERE BUT THEY SHOULD BE TREATED AS PART AND PARCEL OF THESE SUBMISSIONS IN RESPONSE TO THE REMAND REPORT. 22 5. IN THE PRESET CASE THE APPELLANT HAS FILED THE STATEMENT OF DEMAT OF SHARES OF J & K BANK DEPOSITORY SERVICES LIST OF S HARE TRADING QUOTATIONS MADHY PRADESH STOCK EXCHANGE CERTIFICATE OF REGIST RAR OF COMPANY'S HARIYANA FOR CHANGE OF COMPANY'S NAME AS AN ADDITIO NAL EVIDENCES IN THE ABOVE APPEAL. 6. THE APPELLANT COULD NOT PRODUCED THE ADDITIONA L EVIDENCES BEFORE THE ASSESSING OFFICER AS THE SAME COULD NOT BE AVAI LABLE WITH THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS DESPITE OF HER ALL EFFORTS. 7. THUS THE APPELLANT WAS PREVENTED BY SUFFICIEN T CAUSE FROM PRODUCING THE ABOVE ADDITIONAL EVIDENCES BEFORE THE ASSESSING OFFICER WHICH ARE VERY MUCH RELEVANT TO GROUNDS OF APPEAL. 8. IT IS PRIMA FACIE CLEAR THAT THE APPELLANT HAS BONA FIDE REASONS FOR NON FILING OF THESE EVIDENCES AND DOCUMENTS FILED ARE R ELATED TO THE ROOT OF THE MATTER AND NECESSARY TO EXAMINE THE CLAIM OF THE AP PELLANT. 9. RULE 46A(1)( C ) OF THE INCOME-TAX RULES PROVID ES THAT WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PR ODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUNDS OF APPEAL MAY FILE THE ADDITIONAL EVIDENCE BEFORE YOUR GOOD S ELF . 10. THE ADDITIONAL EVIDENCES FILED BY THE APPELLA NT BEFORE YOUR GOOD SELF GOES TO THE ROOT OF GROUNDS OF APPEAL FILED BY THE APPELLANT AND HIGHY ESSENTIAL FOR IMPARTING THE JUSTICE TO THE APPELLAN T IN THE APPEAL. 11. IT IS WELL SETTLED THAT THE POWER OF FIRST AP PELLATE AUTHORITY ARE CONTERMINOUS WITH THOSE OF ASSESSING OFFICER AND CA N HAVE THE SCOPE OF ADMIT THE EVIDENCE BY VIRTUE OF EXPLANATION TO SECT ION 251 OF THE ACT WHILE DISPOSING OF THE APPEAL AND DECIDING THE MATTER ARI SING OUT OF THE PROCEEDINGS. 12. THE FILING OF ADDITIONAL EVIDENCES ARE ALSO C OVERED BY RULE 46A(4) AS WELL AS THE SCHEME OF POWER UNDER SECTION 250(4) OF THE ACT 13. DESPITE OF THE PROVISIONS OF RULE 46A OF THE RULES THE PROVISIONS OF SECTION 250 ENABLES THE FIRST APPELLATE AUTHORITY T O ACCEPT THE ADDITIONAL EVIDENCES. 23 14. RULE 46A(4) CLEARLY PROVIDES THAT NOTHING CON TAINED IN RULE 46A(1) SHALL EFFECT THE POWER OF CIT (A) TO DIRECT THE PRO DUCTION OF ANY DOCUMENT FOR EXAMINATION OF AND WITNESS TO ENABLE HIM TO DIS POSE THE APPEAL AT HIS OWN MOTION. OUR ABOVE SUBMISSIONS ARE WELL FORTIFIE D WITH THE JUDICIAL DECISIONS ALREADY CITED IN OUR APPLICATION FILED BE FORE YOUR GOOD SELF 15. THE APPELLANT VERY HUMBLY FURTHER SUBMITS THA T THE ASSESSING OFFICER HAS NOT OBJECTED THE ADMISSIBILITY OF ADDITIONAL EV IDENCES FILED BY THE APPELLANT ANYWHERE IN THE REMAND REPORT. 16. THE APPELLANT SUBMITS THAT HE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE IN FILING THE NEW/ADDITIONAL EVIDE NCES WHICH HAS SIGNIFICANT BEARING ON THE SUBJECT MATTER OF APPEAL FOR RENDERI NG JUSTICE. 17. IT IS THEREFORE VERY HUMBLY REQUESTED THAT YOUR GOOD SELF SHOULD CONSIDER THE ADDITIONAL EVIDENCES EXERCISING YOUR P OWER UNDER SUB-SECTION 4 AND 5 OF SECTION 250 OF THE ACT FOR IMPARTING THE REAL AND SUBSTANTIVE JUSTICE TO THE APPELLANT AND OBLIGE. 18. THE OTHER OBSERVATIONS AND /OR FINDINGS MADE BY THE ASSESSING OFFICER IN HIS REMAND REPORT ARE HAVING NO PRIVITY OR NEXUS WITH THE ISSUE OF ADMISSIBILITY OF ADDITIONAL EVIDENCES AND THEY ARE BEYOND THE SCOPE OF RULE 46A OF THE RULES AND THEREFORE REQUIRES NO COMMENT S OF THE APPELLANT.' 10. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE ASSESSING OFFICER OBSE RVED THAT THE ASSESSEE SOLD 17500 EQUITY SHARES OF M/S. SUMA FINANCE & INVESTMENT LTD . AND DECLARED CAPITAL GAIN AT RS. 15 69 818/- AGAINST TH E SALE PROCEEDS OF RS. 16 44 055/-. HE FURTHER OBSERVED THAT IN THE DETAIL S FURNISHED DURING THE APPEAL PROCEEDINGS AS ADDITIONAL EVIDENCES WHICH W ERE FORWARDED TO THE ASSESSING OFFICER THE ASSESSEE HAD FILED COMPLETE DETAILS OF THE TRANSACTIONS OF THE SHARES LIKE STATEMENT OF DEMAT ACCOUNT LIST OF SHARES 24 TRADING QUOTATIONS OF MADHYA PRADESH STOCK EXCHANG E CERTIFICATE OF REGISTRAR OF COMPANIES ETC. WHICH REVEALED THAT TH E SHARE TRANSACTIONS WERE NOT BOGUS. HE FURTHER OBSERVED THAT THE SUBST ANTIVE PART OF THE ISSUE OF DISPUTE HAD BEEN PROVED BEYOND DOUBT BY TH E ASSESSEE AND IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSE SSEE HAD NOT MADE ANY PURCHASE OF SHARES BECAUSE PAPERS RELATING TO THE P URCHASE OF SHARES WERE FOUND AND IMPOUNDED DURING THE COURSE OF SURVE Y OPERATIONS AT THE BUSINESS PREMISES OF ASSESSEES GROUP THEREFORE I T CANNOT BE SAID THAT THE SALE PROCEEDS DECLARED BY THE ASSESSEE ON ACCOU NT OF SHARE WAS A MADE UP STORY TO INTRODUCE THE CONCEALED INCOME OF THE ASSESSEE. IT WAS ALSO OBSERVED THAT THE SALE PROCEEDS HAD BEEN RECEI VED BY THE ASSESSEE THROUGH BANKING CHANNELS AND THE ASSESSING OFFICER HAD NOT MADE ANY ENQUIRY TO BRING SOME EVIDENCE ON RECORD TO ESTABLI SH THAT HOW THE CONCEALED INCOME WAS FLOWN TO THE SHARE BROKER THRO UGH WHOM THE SHARES WERE PURCHASED AND THE SHARE BROKER AFTER DE DUCTING HIS COMMISSION HAD RETURNED THE SAID CONCEALED INCOME OF THE ASSESSEE THROUGH BANK DRAFT. LEARNED CIT(A) STATED THAT ON EXAMINATION OF THE DETAILS FILED AS ADDITIONAL EVIDENCE THE FOLLOWING FACTS WERE RELEVANT:- A) THE APPELLANT HAS A DEMAT ACCOUNT NO.10221172 W ITH J & K. BANK DEPOSITORY SERVICES OF JAMMU & KASHMIR BANK LTD. PL OT NO. 132-134 SECTOR -44 GURGAON (HARYANA). THE SHARES OF SUMA FINANCE & INVESTMENT LTD. ARE 25 LISTED WITH MADHYA PRADESH STOCK EXCHANGE. THE SALE OF SHARES IS EFFECTED THROUGH THE DEMAT ACCOUNT. B) SALES PROCEEDS HAVE BEEN RECEIVED THROUGH BANK ING CHANNEL. LT IS A FACT THAT ANY SALE OF SHARES IS NOT POSSIBLE THROUG H DEMAT ACCOUNT IF THE SHARES ARE NOT LISTED IN SOME STOCK EXCHANGE AND AV AILABLE IN THE DEMAT ACCOUNT. ADMITTEDLY THE CASE OF THE APPELLANT IS N OT SO BUT THE ASSESSEE HAS PROPER DEMAT ACCOUNT WHERE SHARES ARE AVAILABLE FOR SALE AND THESE SHARES ARE LISTED IN THE MADHYA PRADESH STOCK EXCHA NGE. 11. LEARNED CIT(A) HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE SALE PROCEEDS OF SHARES AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT AND IN MAKING AN ADDITION OF RS. 15 6 9 818/-. ACCORDINGLY THE SAID ADDITION WAS DELETED. 12. AS REGARDS TO THE ISSUE RELATING TO LONG TERM CAPIT AL GAIN CLAIMED BY THE ASSESSEE THE OBSERVATION OF THE ASSESSING OFFI CER WAS THAT THE ASSESSEE CLAIMED THE SHARES OF M/S. SUMA FINANCE & INVESTMENT LTD. WERE PURCHASED ON 10/04/2002 04/04/2003 AND SOLD O N 12/06/2004 HOWEVER AS PER COPY OF SHARES CERTIFICATE THE SHA RES WERE ISSUED ON 25/07/2003 AND THE SAID SHARES WERE SOLD ON 10/06/2 004 I.E. AFTER 11 MONTHS THEREFORE THE SAME WAS REQUIRED TO BE ASSE SSED AS SHORT TERM CAPITAL GAIN. 13. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER T O THE LEARNED CIT(A) AND THE SUBMISSIONS MADE AS INCORPORATED IN PARA 4.2 OF THE IMPUGNED ORDER WERE AS UNDER:- 26 4.35. THE ASSESSING OFFICER HAS OBSERVED THAT TH E COPY OF SHARE CERTIFICATE FILED BY THE APPELLANT REVEALED THAT THE SHARES WER E ISSUED ON DATED 25/07/2003 WHICH CLEARLY PROVES THAT SHARES WERE HE LD BY THE APPELLANT LESS THAN 12 MONTHS HENCE THE SAME DOES NOT FALL U NDER THE PURVIEW OF THE LONG TERM CAPITAL GAIN AND REQUIRED TO BE TAXED AS SHORT TERM CAPITAL GAIN. 4.36. THE APPELLANT VERY RESPECTFULLY SUBMITS THA T SHE HAS PURCHASED 17 500 EQUITY SHARES ON DATED 04-04-2003 OF M/S SUM A FINANCE AND INVESTMENT LTD FOR RS. 70 919/- VIDE BILL NUMBER S -04-0129 FROM THE BROKER. 4.37. M/S SUMA FINANCE AND INVESTMENT LTD. HAS AL SO SENT THE ORIGINAL SHARE CERTIFICATES TO THE APPELLANT DULY TRANSFERRE D IN HER NAME ALONG WITH ITS LETTER DATED 30-04-2003. 4.38. THEREAFTER M/S SUMA FINANCE AND INVESTMENT LIMITED HAVE CONSOLIDATED EQUITY SHARE CERTIFICATES BEARING NUMB ERS 12483 TO 12577 INTO ONE SHARE CERTIFICATE OF 17500 SHARES AND ISSUED TH E SAME ON DATED25-07- 2003. 4.39. FACTUALLY THE APPELLANT HAD PURCHASED THE SHARES ON DATED 04-04- 2003 AND SOLD THEM ON DATED 10-06-2004 WHICH COVER S THE PERIOD OF HOLDING OF SHARES FOR MORE THAN 12 MONTHS. 4.40. LT IS VERY HUMBLY FURTHER SUBMITTED THAT TH E PERIOD OF 12 MONTHS IS RECOGNIZED FROM THE DATE OF PURCHASE OF SHARES IN T HE NAME OF THE BUYER AND NOT FROM THE DATE OF CONSOLIDATION OF DIFFERENT NUMBERS OF SHARES INTO ONE SHARE. 4.41. LN THE PRESENT CASE THE PERIOD OF HOLDING OF SHARES BY THE APPELLANT WILL BE RECOGNIZED FROM THE DATE OF PURCHASE OF SHA RES BY HER WHICH COVERS THE PERIOD OF HOLDING OF SHARES BY THE APPELLANT FO R MORE THAN 12 MONTHS AND THE APPELLANT IS ELIGIBLE TO CLAIM THE LONG TER M CAPITAL GAIN ON THE SHARES PURCHASED BY HER. NO PROVISIONS OF SHORT TER M CAPITAL GAINS ARE APPLICABLE ON THE FACTS OF THIS CASE. ' 14. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSING OFFICER HAD TAKEN LONG TERM CAPITAL GAIN 27 DECLARED BY THE ASSESSEE ON SALES OF SHARES AS SHOR T TERM CAPITAL GAIN ON THE BASIS OF THE DATE MENTIONED IN THE SALE CERTIFI CATE WHICH WAS ACTUALLY CONSOLIDATED SHARE CERTIFICATE. HE FURTHE R OBSERVED THAT AS PER THE DETAILS OF SHARES PURCHASED BY THE ASSESSEE IT WAS SEEN THAT THE ASSESSEE HAD PURCHASED 17500/- SHARES @ RS. 4/- EAC H ON 04/4/2003 VIDE CONTRACT NOTE/PURCHASE BILLS NO. S-04-0128 THESE S HARES WERE LATER ON CONSOLIDATED IN ONE SHARE CERTIFICATE DATED 25/07/2 003 AND THE SAME WERE SOLD ON 10/06/2004. THEREFORE THE DATE TAKEN BY THE ASSESSING OFFICER FOR TREATING THE LONG TERM CAPITAL GAIN DEC LARED BY THE ASSESSEE AS SHORT TERM CAPITAL GAIN WAS INCORRECT AND AS THE SH ARES SO SOLD WERE IN THE POSSESSION OF ASSESSEE FOR MORE THAN 12 MONTHS THERE WAS NO GROUND FOR TREATING THE CAPITAL GAIN ON ACCOUNT OF SALE OF SUCH SHARE AS SHORT TERM CAPITAL GAIN. 15. ANOTHER ISSUE AGITATED BY THE DEPARTMENT IN THIS AP PEAL RELATES TO THE DELETION OF ADDITION OF RS. 60 651/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF ALLEGED PAYMENT AS COMMISSION FROM UNDIS CLOSED SOURCE. 16. THE SAID ADDITION WAS MADE BY THE ASSESSING OFFICER BY OBSERVING THAT THE ASSESSEE MADE THE PAYMENT TO OBTAIN THE AC COMMODATION ENTRIES IN THE LONG TERM CAPITAL GAIN FROM UNDISCLO SED SOURCES. THE 28 SUBMISSIONS OF THE ASSESSEE BEFORE THE LEARNED CIT( A) ON THIS ISSUE AS INCORPORATED IN PARA 5.2 OF THE IMPUGNED ORDER ARE AS UNDER:- 5.1. 'THE ASSESSING OFFICER HAS MADE THE ADDITIO N/ DISALLOWANCES OF ALLEGED COMMISSION/BROKERAGE OF RS.60 651/- ON THE PRESUMPTION THAT HE HAS MADE THE PAYMENT OF SUCH ALLEGED COMMISSION/BRO KERAGE TO THE BROKER OUT OF HIS UNDISCLOSED INCOME FOR GETTING THE ALLEG ED ACCOMMODATION ENTRY OF LONG TERM CAPITAL GAIN DERIVED FROM SALE OF SHAR ES. 5.2. FOR THIS PURPOSE THE ASSESSING OFFICER HAS RELIED ON THE LOOSE PAPERS PAGE 43 OF ANNEXURE B-21 IMPOUNDED DURING THE COURS E OF SURVEY. 5.3. THE ASSESSING OFFICER HAS PRESUMED THAT THE APPELLANT MIGHT HAVE PAID THE ESTIMATED COMMISSION/BROKERAGE OF RS.60 65 1/- (AROUND AT THE RATE OF 4%) TO THE BROKER FOR GETTING THE ACCOMMODA TION ENTRY OF LONG TERM CAPITAL GAIN. 5.4. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT THE APPELLANT HAS NOT DISCLOSED THE PAYMENT OF ESTIMATED COMMISSION/BROKE RAGE IN HIS BOOKS OF ACCOUNTS AND THEREFORE HE ADDED THE SAME TO THE R ETURNED INCOME OF THE APPELLANT ASSUMING THAT THE PAYMENT OF ALLEGED COMM ISSION/BROKERAGE HAS BEEN MADE OUT OF UNDISCLOSED INCOME OF THE APPELLAN T. 5.5. THE APPELLANT VERY RESPECTFULLY SUBMITS THAT LOOSE PAPER IS NEITHER BOOKS OF ACCOUNTS NOR DOCUMENT UNDER SECTION 34 OF THE EVIDENCE ACT 1988 HAVING NO EVIDENTIARY VALUE WITHOUT CORROBORAT ING THE CONTENTS OF SUCH LOOSE PAPER BY ANY TANGIBLE AND POSITIVE EVIDE NCE OF DEFINITE LEGAL CHARACTER. 5.6. MERE NOTING ON THE LOOSE PAPERS WITHOUT AN Y CORROBORATIVE AND POSITIVE EVIDENCE NO INFERENCE AND CONCLUSION CAN BE DRAWN BY THE ASSESSING OFFICER THAT THE APPELLANT HAD MADE THE P AYMENT OF COMMISSION/ BROKERAGE OF RS. 60 651/- TO THE BROKER FOR ARRANGI NG ALLEGED ACCOMMODATION ENTRY OF INVESTMENT AND SALE OF SHARE S. 5.7. MOREOVER THE ASSESSING OFFICER HAS NOT PLA CED AND COGENT MATERIAL AND POSITIVE EVIDENCE ON RECORD TO ARRIVE THE CONCL USION THAT THE APPELLANT HAS MADE THE PAYMENT OF BROKERAGE OF RS. 60 651/- T O THE BROKER OR TO ANY 29 ONE PERSON FOR ARRANGING THE ACCOMMODATION ENTRY OF LONG TERM CAPITAL GAIN. 5.8. IN THE ABSENCE OF ANY CONCRETE EVIDENCE TO P ROVE THE ABOVE ALLEGATION OF THE ASSESSING OFFICER NO ADDITION/DI SALLOWANCE OF COMMISSION/BROKERAGE OF RS. 60 651/- CAN BE MADE TO THE RETURNED INCOME OF THE APPELLANT. 5.9. THE APPELLANT VERY HUMBLY SUBMITS THAT HE HA S ALREADY PROVED THE GENUINENESS OF THE SHARE TRANSACTIONS MADE THROUGH HIS BROKERS ON THE VARIOUS GROUNDS AS STATED ABOVE. 5.10. THE AMOUNT OF LONG TERM CAPITAL GAIN OF RS. 15 69 818/- REPRESENTS THE AMOUNT OF CAPITAL GAIN DERIVED FROM THE SALE OF GENUINE SHARES AND NOT THE AMOUNT DERIVED FROM ANY ACCOMMODATION ENTRY REC EIVED FROM HIS BROKER. 5.11. THE ASSESSING OFFICER HAS NOT PLACED ANY WOR THWHILE MATERIAL AND CONCRETE AND TANGIBLE EVIDENCE OF DEFINITE LEGAL CH ARACTER TO PROVE THAT THE APPELLANT HAS OBTAINED THE ACCOMMODATION ENTRY IN T HE FORM OF LONG TERM CAPITAL GAIN AND MADE THE PAYMENT OF DALALI OR COMM ISSION ON SHARES. 5.12. LN THE ABSENCE OF ANY CONCRETE AND POSITIVE EVIDENCE TO PROVE THAT THE APPELLANT HAS OBTAINED THE ACCOMMODATION ENTRY IN THE FORM OF LONG TERM CAPITAL GAIN AND MADE THE PAYMENT OF DALALI OR COMMISSION ON SHARE THE ADDITION AND/OR DISALLOWANCE MADE BY THE ASSESS ING OFFICER OF COMMISSION/BROKERAGE OF RS. 60 651/- IS LIABLE TO B E DELETED. 5.13. THE APPELLANT FURTHER VERY RESPECTFULLY SUB MITS THAT HE HAS NEVER PAID ANY BROKERAGE/COMMISSION IN CASH OUT OF HER BO OKS OF ACCOUNTS. 5.14. THE BROKER HAS RENDERED THE SERVICES FOR PU RCHASE AND SALE OF GENUINE SHARES FOR THE APPELLANT AND THE BROKER HAS ALREADY DEDUCTED THE AMOUNT OF BROKERAGE FROM THE SALE CONSIDERATION OF THE SHARES IN HIS BILL AND SENT THE NET AMOUNT OF SALE CONSIDERATION TO TH E APPELLANT THROUGH THE BANKING CHANNEL BY ACCOUNT PAYEE CHEQUES /DRAFTS. 5.15. THE OBSERVATIONS FINDINGS AND/OR ALLEGATION S MADE BY THE ASSESSING OFFICER AND INFERENCES AND CONCLUSIONS DRAWN BY HIM THAT THE ASSESSEE HAS 30 RECEIVED THE ACCOMMODATION ENTRY OF LONG TERM CAPIT AL GAIN OF RS.15 69 818/- FROM HIS BROKER ON PAYMENT OF COMMIS SION/BROKERAGE OF RS RS.60 651/- IN CASH OUT OF UNDISCLOSED INCOME ARE T OTALLY INCORRECT ARBITRARY FICTITIOUS AND BASED ON MERE ASSUMPTIONS AND PRESUMPTIONS SURMISES AND CONJECTURES PURE GUESS DOUBTS SUSPI CION IRRELEVANT AND EXTRANEOUS CONSIDERATIONS AND HYPOTHETICAL AS WELL AS IMAGINARY GROUNDS. 5.16. IT IS WELL SETTLED POSITION OF LAW THAT THE ASSESSING OFFICER CAN NOT MADE THE ADDITION/DISALLOWANCE OF INCOME/EXPENSES O N MERE ASSUMPTION AND PRESUMPTION PURE GUESS DOUBTS AND SUSPICION A ND ESTIMATES. RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDICIAL DECISIONS FOR THIS PURPOSE: DHAKESWARI COTTON MILLS LTD. VS. CIT (1954) 26 I TR 775 (SC) DHIRAJ LAL GIRDHARI LAL VS. CIT (1954) 26 ITR 726 (SC) LAL CHAND BHAGAT AMBIKA RAM VS. CIT (1959) 37 ITR 288 (SC) OMAR SALAY MOHAMMED SAID VS. CIT (1959) 37 ITR 15 1 (SC) 5.17. LT IS FURTHER VERY RESPECTFULLY SUBMITTED TH AT THE ADDITION AND/OR DISALLOWANCES OF INCOME MADE ON THE BASIS OF MERE P RESUMPTION OR ESTIMATE HOWEVER STRONG AND WELL FOUNDED IT MAY B E CAN NOT SUSTAINED IN THE EYE OF LAW AND BY ITSELF WOULD NOT TAKE THE PLA CE OF EVIDENCE AND CONSTITUTE MATERIAL FOR HOLDING THE VALIDITY OF SUC H ADDITION AND OR DISALLOWANCE. OUR RELIANCE HAS BEEN PLACED ON THE F OLLOWING JUDICIAL DECISION FOR THIS PURPOSE: UMA CHARAN SHAH & BROS. VS. CIT (1959) 37 ITR 271 (SC) 5.18. LN THE PRESENT CASE THE ASSESSING OFFICER HA S MADE THE ADDITION /DISALLOWANCE OF ALLEGED COMMISSION/BROKERAGE OF RS .60 651/- IN CASH SOLELY ON PRESUMPTION AND ESTIMATE AND THEREFORE T HE ADDITION/ DISALLOWANCE OF ALLEGED COMMISSION/BROKERAGE MADE B Y THE ASSESSING OFFICER IS LIABLE TO BE DELETED. 5.19. THE APPELLANT VERY HUMBLY STATES THAT HE HAS NEITHER TAKEN ANY ACCOMMODATION ENTRY FROM HIS BROKER AND NOR PAID AN Y COMMISSION IN CASH TO HIM. 5.20. THE ASSESSING OFFICER HAS NOT BROUGHT ANY CO GENT AND WORTHWHILE MATERIAL AND CONCRETE EVIDENCE TO PROVE HIS PRESUMP TION OF PAYMENT OF 31 ESTIMATED ALLEGED COMMISSION/BROKERAGE OF RS RS.60 651/- IN CASH ON THE ALLEGED ACCOMMODATION ENTRY. 5.21. LN THE ABSENCE OF ANY CONCRETE EVIDENCE TO PROVE THE PRESUMPTION OF PAYMENT OF ESTIMATED COMMISSION IN CASH ON THE ALLE GED ACCOMMODATION ENTRY THE ADDITION/DISALLOWANCE OF ALLEGED ESTIMAT ED COMMISSION/ BROKERAGE OF RS.60 651/- IN CASH OUT OF UNDISCLOSED INCOME -IS UNWARRANTED AND UNSUSTAINABLE IN LAW AS WELL AS ON THE FACTS OF THE CASE. 5.22. LN VIEW OF THE FORE GOING GROUNDS OF DEFENC E THE APPELLANT VERY HUMBLY PRAYS THAT THE ADDITION/DISALLOWANCE OF ALLE GED ESTIMATED COMMISSION/ BROKERAGE OF RS.60 651/- IN CASH MAY KI NDLY BE DELETED. 17. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE OBSERVED THAT THE BROKERAGE FROM THE SALE CONSIDERA TION HAD ALREADY BEEN DEDUCTED BY THE BROKER AND THE BALANCE AMOUNT HAD BEEN RECEIVED BY THE ASSESSEE THROUGH DEMAND DRAFT/CHEQUES AND TH AT THE ASSESSING OFFICER HAD NOT BROUGHT ANY MATERIAL ON RECORD TO S UGGEST THAT THE ASSESSEE HAD PAID THE COMMISSION SEPARATELY. ACCOR DINGLY THE SAID ADDITION WAS DELETED. NOW THE DEPARTMENT IS IN AP PEAL. 18. LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE AS SESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSM ENT ORDER DATED 29/12/2009. 19. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT C ASE IT IS AN ADMITTED FACT THAT THE ASSESSEE FURNISHED CERTAIN ADDITIONAL EVIDENCES UNDER RULE 32 46A OF THE I.T. RULES THOSE EVIDENCES COULD NOT BE FURNISHED BEFORE THE ASSESSING OFFICER BUT THOSE WERE RELEVANT TO DECID E THE CONTROVERSY. THEREFORE LEARNED CIT(A) FORWARDED THOSE ADDITIONA L EVIDENCES TO THE ASSESSING OFFICER FOR HIS COMMENT. ADDITIONAL EVID ENCES FURNISHED BY THE ASSESSEE WERE EXAMINED BY THE LEARNED CIT(A) WHO A LSO CONSIDERED THE REMAND REPORT OF THE ASSESSING OFFICER AND CATEGORI CALLY STATED THAT THE ASSESSEE FURNISHED COMPLETE DETAILS OF THE TRANSACT IONS OF THE SHARES I.E STATEMENT OF DEMAT ACCOUNT LIST OF SHARE TRADING QUOTATIONS OF MADHYA PRADESH STOCK EXCHANGE CERTIFICATE OF REGISTRAR OF COMPANIES WHICH CLEARLY PROVED THAT THE ASSESSEE ENTERED INTO THE T RANSACTION HAVING DEMAT ACCOUNT NO. 10221172 WITH J & K BANK DEPOSITO RY OF J & K BANK LTD. GURGEON (HARYANA) AND THE SALE OF THE SHARES OF M/S SUMA FINANCE & INVESTMENT LTD. WHICH WERE LISTED WITH MADHYA PR ADESH STOCK EXCHANGE WAS AFFECTED TO DEMAT ACCOUNT. LEARNED CI T(A) ALSO VERIFIED THAT THE SALES PROCEEDS HAD BEEN RECEIVED THROUGH B ANKING CHANNEL AND THAT ANY SALE OF THE SHARES WAS NOT POSSIBLE THROUG H DEMAT ACCOUNT IF THE SHARES WERE NOT LISTED IN SOME STOCK EXCHANGE. IN THE PRESENT CASE THE ASSESSEE WAS HAVING PROPER DEMAT ACCOUNT AND SO LD THE SHARES WHICH WERE LISTED IN THE MADHYA PRADESH STOCK EXCHANGE T HE SALE PROCEED RECEIVED BY THE ASSESSEE THROUGH BANK CHANNEL WAS N OT DOUBTED BY THE 33 ASSESSING OFFICER. THE PURCHASE OF THE SHARES WAS THROUGH A BROKER AND NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT T HE SAID BROKER WAS NOT IN EXISTENCE AT THE RELEVANT TIME WHEN THE PURCHASE S WERE MADE. SO THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE WAS A GEN UINE TRANSACTION AND AS THE SHARES WERE PURCHASED ON 04/04/2003 WHICH W ERE SOLD ON 10/06/2004 THEREFORE THE HOLDING PERIOD OF THE SHARES WAS MORE THAN 12 MONTHS AS SUCH THE PROFIT EARNED BY THE ASSESSEE ON ACCOUNT OF SALE OF SHARES WHICH WERE HELD FOR MORE THAN 12 MONTHS WAS LONG TERM CAPITAL GAIN. IN THAT VIEW OF THE MATTER WE DO NOT SEE AN Y INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE. 20. AS REGARDS COMMISSION PAID TO EARN PROFIT THE LEAR NED CIT(A) CATEGORICALLY STATED THAT THE BROKERAGE WAS DEDUCT ED FROM THE SHARE CONSIDERATION BY THE BROKER AND ONLY BALANCE AMOUNT WAS PAID TO THE ASSESSEE THROUGH DEMAND DRAFT. THE SAID OBSERVATIO N OF THE LEARNED CIT(A) WAS NOT REBUTTED. WE ARE OF THE VIEW THAT T HE LEARNED CIT(A) HAS RIGHTLY DELETED THE ADDITION ON ACCOUNT OF ALLEGED COMMISSION/BROKERAGE MADE BY THE ASSESSING OFFICER ON THE BASIS OF PRESU MPTION. WE THEREFORE CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINABOVE ARE OF THE VIEW THAT THE LEARNED CIT(A) RIGHTLY DEL ETED THE ADDITIONS 34 MADE BY THE ASSESSING OFFICER AND WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). 21. IN ALL OTHER APPEALS I.E. ITA NO. 199 202 & 203/JO DH/2013 THE FACTS ARE SIMILAR AS WERE INVOLVED IN ITA NO. 198/J ODH/2013 (SUPRA) EVEN THE GROUNDS RAISED BY THE DEPARTMENT ARE IDENTICAL EXCEPT DIFFERENCE IN THE AMOUNT INVOLVED THEREFORE OUR FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER WHILE DECIDING THE APPEAL IN ITA NO. 198 /JODH/2013 SHALL APPLY MUTATIS MUTANDIS FOR THE REMAINING APPEAL UNDER CONSIDERATION. 22. IN THE RESULT APPEALS FILED BY THE DEPARTMENT ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 31 ST OCTOBER 2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST OCTOBER 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR ITAT JODHPUR.