Smt. Shweta Agrawal, Indore v. The ACIT 5(1),R-5, Indore

ITA 281/Ind/2019 | 2015-2016
Pronouncement Date: 25-05-2021 | Result: Allowed

Appeal Details

RSA Number 28122714 RSA 2019
Assessee PAN AESPA1653H
Bench Indore
Appeal Number ITA 281/Ind/2019
Duration Of Justice 2 year(s) 2 month(s)
Appellant Smt. Shweta Agrawal, Indore
Respondent The ACIT 5(1),R-5, Indore
Appeal Type Income Tax Appeal
Pronouncement Date 25-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 25-05-2021
Date Of Final Hearing 03-03-2021
Next Hearing Date 03-03-2021
Last Hearing Date 03-03-2021
First Hearing Date 24-11-2020
Assessment Year 2015-2016
Appeal Filed On 25-03-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE HONBLE MANISH BORAD ACCOUNTANT MEMBER AND HONBLE MADHUMITA ROY JUDICIAL MEMBER VIRTUAL HEARING ITA NO.281/IND/2019 ASSESSMENT YEAR 2015-16 SMT. SHWETA AGRAWAL : APPELLANT 82 ASHOK NAGAR SAPNA SANGEETA ROAD INDORE PAN : AESPA1653H V/S ACIT 5(1) INDORE : RESPONDENT ITA NO.279/IND/2019 ASSESSMENT YEAR 2015-16 M/S SANJAY ONKARMAL AGRAWAL(HUF) : APPELLANT 82 ASHOK NAGAR SAPNA SANGEETA ROAD INDORE PAN : AADHA8834K SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 2 V/S ITO-5(3) RANGE-5 INDORE : RESPONDENT REVENUE BY SHRI HARSHIT BARI SR.DR ASSESSEE BY SHRI S.N. AGRAWAL CA DATE OF HEARING 12 .04 .2021 DATE OF PRONOUNCEMENT 2 5 . 0 5 . 202 1 O R D E R PER BENCH THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE OF THE ASSESSEE(S) FOR ASSESSMENT YEAR 2015-16 ARE DIREC TED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-I I (IN SHORT LD. CIT] INDORE DATED 14.01.2019 & 10.01.2019 WHICH AR E ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) DATED 23.12.2017 & 12.12.2017 FRAMED BY AC IT-5(1) AND ITO-5(3) INDORE RESPECTIVELY. 2. ASSESSEE(S) HAS RAISED FOLLOWING GROUNDS OF APPE AL:- (I) SMT. SHWETA AGRAWAL ITA NO.281/IND/2019 ASSESSMENT YEAR 2015-16 SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 3 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW LD. CIT(A) ERRED IN MAINTAINING THE ADDITION AS MADE BY THE ASSESSING OFFICER OF RS.18 65 616/- TO THE TOTAL IN COME OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN AS E ARNED ON SALE OF SHARES UNDER SECTION 68 OF THE ACT WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE HIM M ORE SO WHEN THE APPELLANT HAD FILED AMPLE DOCUMENTS SO AS TO JUS TIFY THE GENUINENESS OF LONG TERM CAPITAL GAIN WHICH ARE NEV ER DISPROVED BY THE ASSESSING OFFICER. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN MAINTAINING THE ADDITION AS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL G AIN AS EARNED ON SALE OF SHARES ON THE BASIS OF THIRD PARTY DOCUMENT S/STATEMENTS WHICH WERE NEVER CONFRONTED WITH THE APPELLANT AND AG AINST WHICH AN OPPORTUNITY OF CROSS EXAMINATION WAS ALSO NOT AL LOWED TO THE APPELLANT. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN CALCULATING THE TAX LIABILI TY BY INVOKING THE PROVISIONS OF SECTION 115BBE OF THE ACT EVEN WHEN T HE SOURCE OF AMOUNT AS FOUND CREDITED WAS DULY EXPLAINED. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN MAINTAINING THE INTEREST AS CHARGED BY THE ASSESSING OFFICER UNDER SECTION 234A AND 234B OF THE ACT. 5. THE APPELLANT RESERVES HER RIGHT TO ADD ALTER AND MODIFY THE GROUNDS OF APPEAL AS TAKEN BY HER. (II) M/S SANJAY ONKARMAL AGRAWAL (HUF) ITA NO.279/IND/2019 ASSESSMENT YEAR 2015-16 SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 4 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW LD. CIT(A) ERRED IN MAINTAINING THE ADDITION AS MADE BY THE ASSESSING OFFICER OF RS.22 88 883/- TO THE TOTAL IN COME OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN AS E ARNED ON SALE OF SHARES UNDER SECTION 68 OF THE ACT BY TREATING IT A S INCOME FROM UNDISCLOSED SOURCE WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE HIM MORE SO WHEN T HE APPELLANT HAD FILED AMPLE DOCUMENTS SO AS TO JUSTIFY THE GENU INENESS OF LONG TERM CAPITAL GAIN WHICH ARE NEVER DISPROVED BY THE A SSESSING OFFICER. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN MAINTAINING THE ADDITION AS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL G AIN AS EARNED ON SALE OF SHARES ON THE BASIS OF THIRD PARTY DOCUMENT S/STATEMENTS WHICH WERE NEVER CONFRONTED WITH THE APPELLANT AND AG AINST WHICH AN OPPORTUNITY OF CROSS EXAMINATION WAS ALSO NOT AL LOWED TO THE APPELLANT. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN CALCULATING THE TAX LIABILI TY BY INVOKING THE PROVISIONS OF SECTION 115BBE OF THE ACT EVEN WHEN T HE SOURCE OF AMOUNT AS FOUND CREDITED WAS DULY EXPLAINED. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN MAINTAINING THE INTEREST AS CHARGED BY THE ASSESSING OFFICER UNDER SECTION 234A AND 234B OF THE ACT. 5. THE APPELLANT RESERVES HER RIGHT TO ADD ALTER AND MODIFY THE GROUNDS OF APPEAL AS TAKEN BY HER. 3. FROM PERUSAL OF THE ABOVE GROUNDS WE FIND THAT F OLLOWING TWO COMMON ISSUES HAVE BEEN RAISED :- SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 5 (I) GENUINENESS OF LONG TERM CAPITAL GAIN FROM SAL E OF EQUITY SHARES OF M/S SUNRISE ASIAN LIMITED CLAIMED EXEMPT U/S 10(38) OF THE ACT AND WHETHER THE LD. C IT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION U/S 68 OF THE ACT (II) WHETHER THE ASSESSMENT PROCEEDINGS ARE LIABLE TO BE QUASHED AS THE OPPORTUNITY OF CROSS EXAMINATION WA S NOT PROVIDED TO THE ASSESSEE THEREBY VIOLATING THE PRI NCIPLES OF NATURAL JUSTICE. 4. AS THE ISSUES RAISED AND FACTS ARE COMMON WE WI LL TAKE UP THE FACTS OF THE ASSESSEE NAMELY SMT. SHWETA AGR AWAL TO ADJUDICATE THE COMMON ISSUES AND OUR DECISION SHALL APPLY MUTANDIS MUTANDIS IN THE CASE OF ANOTHER ASSESSEE NAMELY M/S SANJAY ONKARMAL AGRAWAL (HUF). BOTH THE ASSESS EE(S) AS WELL AS LD. DEPARTMENTAL REPRESENTATIVE HAS RAISED NO OBJECTION IN CASE THE COMMON ISSUES ARE ADJUDICATED IN THE LIGHT OF THE FACTS OF ASSESSEE NAMELY SMT. SHWETA A GRAWAL. SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 6 5. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL RUNNING SOLE PRO PRIETORSHIP M/S SAMARTH IMPEX. RETURN OF INCOME FILED ON 31.3.2 016 DECLARING INCOME OF RS.30 66 420/-. ASSESSEE ALSO CLAIMED EXEMPTION U/S 10(38) OF THE ACT TOWARDS LONG TERM C APITAL GAIN AT RS.18 65 616/-. CASE SELECTED FOR COMPULS ORY SCRUTINY BY CASS FOLLOWED BY SERVING OF NOTICE U/S 143(2) AND 142(1) OF THE ACT. LD. A.O CALLED FOR THE DETAILS OF THE TRANSACTION OF PURCHASE AND SALE OF EQUITY SHARE GI VING RISE TO LONG TERM CAPITAL GAIN OF RS.18 65 616/-. ASSESSEE FILED RELEVANT DETAILS OF PURCHASE OF 10000 SHARES OF M/S CONART TRADERS LIMITED PURCHASED ON 16.01.2012 AT RS.2 50 000/- AND PAID THROUGH BANKING CHANNEL. M/S CONART TRADER S LIMITED WAS SUBSEQUENTLY MERGED WITH M/S SUNRISE AS IAN LIMITED (IN SHORT SAL). ASSESSEE OPENED DEMAT AC COUNT WITH UNION BANK OF INDIA. 10 000 EQUITY SHARES OF M/S S AL WERE RECEIVED IN LIEU OF THE SHARES IN M/S CONART TRADER S LIMITED. SUBSEQUENTLY ASSESSEE SOLD THE SHARES OF SAL ON THE RECOGNISED STOCK EXCHANGE THROUGH A REGISTERED BROK ER AND SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 7 AGAINST THE SALE CONSIDERATION RECEIVED THE COST O F PURCHASE WAS DEBITED GIVING RISE OF LTCG AT RS.18 65 616/-. HOWEVER LD. A.O WAS NOT SATISFIED SINCE IN HIS VIEW THE EXT ENT OF GROWTH AND FINANCIALS OF THE COMPANY WERE NOT SUFFICIENT T O JUSTIFY THE ABNORMAL INCREASE IN THE SHARE PRICE WITHIN A SHORT SPAN OF TIME WHICH WERE VERY LOW IN DECEMBER 2012 AND TH EN INCREASED CONTINUOUSLY UP TO APRIL AND MAY 2015 AN D FELLED THEREAFTER. LD. A.O HAS ALSO GAVE REFERENCE TO VAR IOUS SEARCHES CONDUCTED U/S 132 AND SURVEY U/S 133A OF T HE ACT CARRIED OUT BY THE DEPARTMENT ON VARIOUS BROKERS OF STOCK EXCHANGE AND OTHER COMPANIES WHERE THE INVESTIGATIO N TEAM CAME ACROSS VARIOUS BOGUS TRANSACTIONS OF PROVIDING ACCOMMODATION ENTRIES TO GIVE BENEFIT TO VARIOUS PE RSONS TO CONVERT THEIR UNACCOUNTED CASH INTO ACCOUNTED MONEY IN THE FORM OF BOGUS LTCG. LD. A.O ALSO TOOK STATEMENT OF THE ASSESSEE AND CAME TO THE CONCLUSION THAT THE ASSESS EE HAD NO KNOWLEDGE ABOUT THE COMPANY. HE CONCLUDED THE ASSE SSMENT OBSERVING THAT M/S SAL IS A PENNY STOCK COMPANY AND THE ALLEGED TRANSACTION OF EARNING LTCG IS BOGUS AND SH AM AND SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 8 THE SALE CONSIDERATION IS LIABLE TO BE ADDED AS UNA CCOUNTED CASH CREDIT U/S 68 OF THE ACT AND ACCORDINGLY HE AD DED RS.18 65 616/- BEING THE SALE CONSIDERATION OF SALE OF EQUITY SHARES OF M/S SAL. OTHER ADDITIONS AT RS.1 92 402/ - WERE ALSO MADE. INCOME ASSESSED AT RS.51 24 438/-. 6. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) ONLY AGAINST THE ADDITION MADE U/S 68 OF THE ACT AT RS.18 65 616/-. AGAIN COMPLETE DETAILS OF PURCHASE AND SALES WERE FILED ALONG WITH THE DEMAT ACCOUNT AND BANK ST ATEMENT. HOWEVER LD. CIT(A) WAS NOT SATISFIED AND HE CONFIR MED THE VIEW TAKEN BY LD. A.O OBSERVING THAT THE ASSESSEE I S INDULGED IN ARRANGING BOGUS LTCG THE APPELLANT HAD MADE INV ESTMENT THROUGH THE DERECOGNISED BROKER AND HAVE EARNED EXC ESSIVE RETURN WITHIN A SHORT SPAN OF TIME WHICH IS EXTREME LY UNFAIR. PLACING RELIANCE ON THE DECISIONS LD. CIT(A) HELD T HAT THE TRANSACTIONS OF PURCHASE AND SALE OF EQUITY SHARES GIVING RISE TO THE ALLEGED LTCG AT RS.18 65 616/- ARE SHAM TRAN SACTION WHICH COULD NOT STAND THE TEST OF HUMAN PROBABILITY . SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 9 7. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE T RIBUNAL. 8. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE DET AILED SYNOPSIS PLACED AT PAGE 527 TO 573 OF THE PAPER BOO K WHICH FORMS PART OF THE PAPER BOOK RUNNING FROM PAGE 1 TO 573 AND ANOTHER PAPER BOOK DATED 4.2.2020 RUNNING FROM PAGE 1 TO 91. IT WAS ALSO SUBMITTED THAT THE ISSUE RAISED IN THIS APPEAL ARE SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BENCH MUMBAI IN THE CASE OF DIPESH RAMESH VARDHAN VS DCIT ITA NO.7648/MUM/2019 DATED 11.08.2020 WHICH HAS BEEN SUBSEQUENTLY FOLLOWED BY THE CO-ORDINATE BENCH OF J AIPUR IN THE CASE OF ASHOK AGRAWAL V/S ACIT ITA NO.124/JP/2020 DATED 18.11.2020 . HE ALSO SUBMITTED THAT THERE WAS NO EVIDENCE FOUND WITH REGARD TO THE ASSESSEE WHICH CO ULD INDICATE THAT THE ASSESSEE WAS ENGAGED IN THE ALLEG ED RACKET OF PROVIDING ACCOMMODATION ENTRIES. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CAS E OF M/S ANDAMAN TIMBER INDUSTRIES V/S CCE CONTENDING THAT NO OPPORTUNITY OF CROSS EXAMINATION WAS PROVIDED WHICH THUS VIOLATES THE PRINCIPLES OF NATURAL JUSTICE RENDERIN G THE SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 10 PROCEEDINGS AS NULL AND VOID. 9. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES AND DECISIONS REFERRED AND RELIED BY LD. CIT(A). RELIA NCE WAS ALSO PLACED ON THE JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF SUMAN PODDAR V/S ITO ITA NO.841/2019 DATED 17.09.2 019. 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DEC ISIONS PLACED AND RELIED BY BOTH THE PARTIES. THE FIRST C OMMON ISSUE RELATES TO ADDITION MADE U/S 68 OF THE ACT FOR THE SALE CONSIDERATION RECEIVED FROM SALE OF EQUITY SHARES O F M/S SAL BY TREATING THE LTCG AS BOGUS. WE OBSERVE THAT THE ASSESSEE PURCHASED 10000 EQUITY SHARES OF M/S CONART TRADERS LIMITED ON 16.1.2012 FROM M/S P. SAJI TEXTILES MUM BAI FOR A PRICE OF RS.2 50 000/- PAID BY CHEQUE AND PURCHASED IN PHYSICAL FORM. THERE IS NO RESTRICTION UNDER THE LA W TO PURCHASE EQUITY SHARES ON OFF LINE MODE. VIDE ORDER DATED 22.3.2013 OF THE HONBLE MUMBAI HIGH COURT M/S CONA RT SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 11 TRADERS LIMITED WAS MERGED WITH M/S SAL AND IN LIEU THERE OF 10000 SHARES OF M/S SAL WERE RECEIVED BY THE ASSESS EE IN ITS DEMAT ACCOUNT. AFTER HOLDING THE EQUITY SHARES FOR MORE THAN 12 MONTHS ASSESSEE SOLD THE SHARES OF M/S SAL DURIN G THE PERIOD APRIL 2014 TO JUNE 2014 THROUGH INDIRA SECUR ITIES WHICH IS A REGISTERED BROKER AND ALL THE TRANSACTIO NS OF SALE OF SHARES TOOK PLACE ON THE RECOGNISED STOCK EXCHANGE. SALE CONSIDERATION WAS RECEIVED IN THE BANK ACCOUNT ATTA CHED WITH THE DEMAT ACCOUNT. THE DETAIL OF THE PERSONS PURCH ASING THE SHARES IS NOT AVAILABLE ON THE PORTAL OF SEBI AND A LL THE TRANSACTIONS OF PURCHASE AND SALE TOOK PLACE ON THE PORTAL THROUGH REGISTERED BROKERS UNDER THE CONTROL OF SEB I. M/S SAL HAS NOT BEEN STRIKED OFF AS A SHELL COMPANY. TR ADING OF SHARES OF M/S SAL WAS PERMITTED BY SEBI. ALL THE C ONDITIONS PROVIDED U/S 10(38) OF THE ACT PRIMA FACIE SEEMS TO HAVE BEEN FULFILLED BY THE ASSESSEE. 11. AS REGARDS THE SECOND ISSUE RAISED IS THAT ASSE SSEE WAS NOT PROVIDED OPPORTUNITY OF CROSS EXAMINATION WE O BSERVE THAT LD. A.O HAS REFERRED TO SOME INVESTIGATION REP ORTS CARRIED SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 12 OUT IN THE CASE OF SOME BROKERS AND OTHER ASSESSEE( S) AND THERE IS A REFERENCE OF THE COMPANY M/S SAL HOWEVE R IT IS NOT DISPUTED THAT NAME OF THE ASSESSEE IS NOT APPEARING IN SUCH REPORT NOR ANY EVIDENCE WAS FOUND BY THE LD. A.O WH ICH COULD INDICATE THAT ASSESSEE WAS ALSO A PART OF THE ALLEG ED RACKET OF PROVIDING ACCOMMODATION ENTRY OF BOGUS LTCG NOR ANY PROOF OF ANY AGREEMENT BETWEEN THE ASSESSEE AND OTHER PER SONS MENTIONED IN THE REPORT HAS BEEN FOUND. SO THE BAS IS OF ADDITION IS PRIMARILY ON THE STATEMENT OF THIRD PAR TY AS WELL AS THE INFORMATION GATHERED FROM OTHER SOURCES. PERUS AL OF THE RECORDS SHOWS THAT THE ASSESSEE HAS NOT BEEN PROVID ED ANY ACCESS TO SUCH REPORT NOR ANY OPPORTUNITY WAS PROVI DED TO CROSS EXAMINE THOSE PERSONS WHO ACCEPTED TO HAVE PR OVIDED ACCOMMODATION ENTRIES FOR THE BOGUS LTCG TO THE ASS ESSEE. 12. WE OBSERVE THAT ALL THE ABOVE STATED FACTS AND THE ISSUE OF GENUINENESS OF LTCG AND FAILURE OF THE LD. A.O TO PROVIDE OPPORTUNITY TO CROSS EXAMINATION BY THE ASSESSEE WITH REGARD TO THE ADDITION MADE U/S 68 OF THE ACT FOR THE SALE SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 13 CONSIDERATION RECEIVED FROM SALE OF EQUITY SHARES O F M/S SAL HAS BEEN DEALT BY THE CO-ORDINATE BENCH OF MUMBAI T RIBUNAL IN THE CASE OF DIPESH RAMESH VARDHAN V/S DCIT (SUPRA) AND THE SAME IS SQUARELY APPLICABLE ON THE INSTANT APPE ALS. THE RELEVANT EXTRACT OF THE DECISION OF CO-ORDINATE BEN CH MUMBAI IS REPRODUCED BELOW:- 6. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. SO FAR AS THE FACTUAL MATRIX IS CONCERNED THERE IS NO SUBSTANTIAL DISPUTE REGARDING THE SAME. THE PERUSAL OF RECORD WOULD REVEAL THAT THE ASSESSEE PURCHASED CERTAIN SHARES O F AN ENTITY NAMELY M/S STL AS EARLY AS SEPTEMBER 2011. THE SHARES WER E CONVERTED INTO DEMAT FORM IN ASSESSEES ACCOUNT DURING THE MONTH O F MARCH 2012. THE TRANSACTIONS TOOK PLACE THROUGH BANKING CHANNELS. T HE INVESTMENTS WERE DULY REFLECTED BY THE ASSESSEE IN FINANCIAL STATEME NTS OF RESPECTIVE YEARS. THE COPIES OF FINANCIAL STATEMENTS OF M/S STL FOR F YS 2009-10 & 2010-11 WHICH LED TO INVESTMENT BY THE ASSESSEE IN THAT ENT ITY WAS ALSO FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SUBSEQ UENTLY M/S STL GOT MERGED WITH ANOTHER ENTITY VIZ. M/S SAL PURSUANT TO SCHEME OF AMALGAMATION U/S 391 TO 394 OF THE COMPANIES ACT 1 956. THE SCHEME WAS DULY APPROVED BY HONBLE BOMBAY HIGH COURT VIDE ORDER DATED 22/03/2013 A COPY OF WHICH IS ON RECORD. CONSEQUEN TLY THE SHARES OF M/S STL HELD BY THE ASSESSEE GOT SWAPPED WITH THE S HARES OF M/S SAL AND NEW SHARES WERE ALLOTTED TO THE ASSESSEE DURING JUNE 2013 PURSUANT TO THE APPROVED SCHEME OF AMALGAMATION. M/S SAL IS STATED TO BE LISTED PUBLIC COMPANY GROUP A SHARES SIGNIFYING HIGH TRA DES WITH HIGH LIQUIDITY. THE ASSESSEE HAS SOLD THESE SHARES THROUGH ITS STOC K BROKER NAMELY M/S UNIQUE STOCKBRO PRIVATE LIMITED IN ONLINE PLATFORM OF THE RECOGNISED STOCK EXCHANGE DURING THE MONTH OF MARCH 2014. THE SELLI NG PRICE WAS IN THE RANGE OF RS.489/- TO RS.491/- PER SHARE. THE TRANSA CTIONS TOOK PLACE THROUGH ONLINE MECHANISM AFTER COMPLYING WITH ALL T HE FORMALITIES AND PROCEDURE INCLUDING PAYMENT OF STT. THE DELIVERY OF THE SHARES WAS THROUGH CLEARING MECHANISM OF THE STOCK EXCHANGE AN D SALE CONSIDERATION WAS RECEIVED THROUGH BANKING CHANNELS. THE TRANSACT IONS ARE DULY EVIDENCED BY CONTRACT NOTES DEMAT STATEMENTS BANK STATEMENTS AND OTHER DOCUMENTARY EVIDENCES. THE KEY PERSON OF ASSE SSEE GROUP IN HIS STATEMENT MAINTAINED THE POSITION THAT TRADING TRA NSACTIONS WERE GENUINE SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 14 TRANSACTIONS CARRIED OUT THROUGH STOCK EXCHANGE FOL LOWING ALL PROCESS AND LEGAL PROCEDURES. THE ASSESSEE ALSO FILED TRADING V OLUME DATA AND PRICE RANGE OF THE SCRIP FOR A PERIOD OF MORE THAN 2 YEAR S I.E. FROM JAN 2013 TO JULY 2015. THE SHARES REFLECTED HEALTHY TRADING VO LUME AND THE PRICE RANGE REFLECTED THEREIN WAS IN THE RANGE OF RS.360/ - TO RS.600/- PER SHARE. THE PRICE RANGE WAS STATED TO BE IN THE SAME RANGE FOR 15 MONTHS AFTER THE PERIOD OF SALE OF SHARES BY THE ASSESSEE WHICH HAS NOT BEEN DISPUTED BY THE REVENUE. ON THE BASIS OF ALL THESE FACTS IT CO ULD BE GATHERED THAT THE ASSESSEE HAD DULY DISCHARGED THE ONUS CASTED UPON H IM TO PROVE THE GENUINENESS OF THE STATED TRANSACTIONS AND THE ONUS HAD SHIFTED ON REVENUE TO REBUT THE SAME. 7. AS AGAINST THE ASSESSEES POSITION THE PRIMARY MATERIAL TO MAKE ADDITIONS IN THE HANDS OF ASSESSEE IS THE STATEMENT OF SHRI VIPUL BHAT AND THE OUTCOME OF SEARCH PROCEEDINGS ON HIS ASSOCIATED ENTITIES INCLUDING M/S SAL. HOWEVER THERE IS NOTHING ON RECORD TO ESTABLI SH VITAL LINK BETWEEN THE ASSESSEE GROUP AND SHRI VIPUL BHAT OR ANY OF HIS GR OUP ENTITIES. THE ASSESSEE ALL ALONG DENIED HAVING KNOWN SHRI VIPUL BHAT OR ANY OF HIS GROUP ENTITIES. HOWEVER NOTHING HAS BEEN BROUGHT O N RECORD TO CONTROVERT THE SAME AND ESTABLISH THE LINK BETWEEN SHRI VIPUL BHAT AND THE ASSESSEE. THE OPPORTUNITY TO CROSS-EXAMINE SHRI VIP UL BHAT WAS NEVER PROVIDED TO THE ASSESSEE WHICH IS CONTRARY TO THE D ECISION OF HONBLE SUPREME COURT IN M/S ANDAMAN TIMBER INDUSTRIES V/S CCE (CA NO.4228 OF 2006) WHEREIN IT WAS HELD THAT NOT ALLOWING THE ASSESSEE TO CROSS- EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENT OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUG NED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY IN AS MUCH AS IT AMOUNTS TO VIOLATION OF PRINCIPAL OF NATURAL JUSTICE BECAUSE OF WHICH THE A SSESSEE WAS ADVERSELY AFFECTED. THE WHOLE BASIS OF MAKING THE ADDITION IS THIRD PARTY STATEMENT WITHOUT THERE BEING ANY TANGIBLE MATERIAL. IT IS TR ITE LAW THAT ADDITIONS MERELY ON THE BASIS OF SUSPICIOUS CONJECTURES OR S URMISES COULD NOT BE SUSTAINED IN THE EYES OF LAW AS HELD BY HONBLE SUP REME COURT IN OMAR SALAY MOHAMED SAIT V/S CIT (1959 37 ITR 151). THE S USPICION HOWEVER STRONG COULD NOT PARTAKE THE CHARACTER OF LEGAL EVI DENCE AS HELD BY HONBLE SUPREME COURT IN UMACHARAN SHAW & BROS. V/S CIT (19 59 37 ITR 271). THEREFORE WE FIND THAT ONUS AS CASTER UPON REVENUE TO CORROBORATE THE IMPUGNED ADDITIONS BY CONTROVERTING THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE AND BY BRINGING ON RECORD ANY COGE NT MATERIAL TO SUSTAIN THOSE ADDITIONS COULD NOT BE DISCHARGED BY THE REV ENUE. THE ALLEGATION OF PRICE RIGGING / MANIPULATION HAS BEEN LEVIED WITHOU T ESTABLISHING THE VITAL LINK BETWEEN THE ASSESSEE AND VARIOUS ENTITIES OF S HRI VIPUL BHAT. WE FIND THAT THE WHOLE BASIS OF MAKING ADDITIONS IS THIRD P ARTY STATEMENT AND NO OPPORTUNITY OF CROSS-EXAMINATION HAS BEEN PROVIDED TO THE ASSESSEE TO CONFRONT THE SAID PARTY. AS AGAINST THIS THE ASSES SEES POSITION THAT THAT SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 15 THE TRANSACTIONS WERE GENUINE AND DULY SUPPORTED BY VARIOUS DOCUMENTARY EVIDENCES COULD NOT BE DISTURBED BY TH E REVENUE. 8. THE ALLEGATIONS OF LD.AO THAT THE ASSESSEE WAS P ART OF THE GROUP WHICH INDULGED IN RIGGING OR MANIPULATION OF PRICES OF SH ARES IN CONNIVANCE WITH SHRI VIPUL BHAT IS NOT BACKED BY ANY INDEPENDENT MA TERIAL. FIRSTLY THERE IS NOTHING ON RECORD WHICH ESTABLISHES THE FACT THAT T HE ASSESSEE WAS ACQUAINTED WITH SHRI VIPUL BHAT OR ANY OF HIS ENTIT IES AND SECONDLY THE ONUS CASTED UPON ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS WAS ALREADY DISCHARGED BY THE ASSESSEE. SHRI VIPUL BHAT IN HIS STATEMENT STATED THAT ONE SHRI SANDEEP MAROO ACTED AS INTERMEDIARY WHO INTRODUCED VARDHAN FAMILY TO HIM. HOWEVER NO FURTH ER INVESTIGATIONS HAVE BEEN CARRIED OUT TO ESTABLISH THIS VITAL LINK BETWE EN THE ASSESSEE AND SHRI VIPUL BHAT. WE DO NOT FIND ANY INDEPENDENT INVESTIG ATIONS BY LD. AO TO BRING ON RECORD ANY TANGIBLE MATERIAL TO CORROBORAT E THE SAME. THERE ARE NO EVIDENT OR EVEN ALLEGATION OF ANY CASH EXCHANGE BET WEEN THE ASSESSEE AND GROUP ENTITIES OF SHRI VIPUL BHAT. THIS IS FURTHER EVIDENCED BY THE FACT THAT NO SUBSTANTIAL INCRIMINATING MATERIAL / WEALTH OF T HAT MAGNITUDE HAS BEEN FOUND DURING THE COURSE OF SEARCH OPERATIONS ON ASS ESSEE WHICH WOULD CORROBORATE SUCH PRESUMPTION AND PROVE THAT THE TRA NSACTIONS WERE SHAM TRANSACTIONS IN ANY MANNER. 9. THE FACT THAT THE ASSESSEE COULD NOT PRODUCE THE CONCERNED PERSON OF M/S SAL WAS RIGHTLY CONTROVERTED BY SUBMITTING THAT THE AFORESAID ENTITY WAS NOT UNDER THE CONTROL OF THE ASSESSEE AND THE A SSESSEE WAS UNDER NO OBLIGATION TO DO SO. THE EXISTENCE OF M/S SAL IS BE YOND DOUBT SINCE IT WAS A LISTED CORPORATE ENTITY AND SECONDLY IT WAS SUBJ ECT MATTER OF SCHEME OF AMALGAMATION U/S 391 TO 394. THE SCHEME OF AMALGAMA TION WAS DULY BEEN APPROVED BY HONBLE BOMBAY HIGH COURT. THEREFO RE THE EXISTENCE OF THE SAID ENTITY COULD NOT BE DOUBTED IN ANY MANNER . 10. THE ABOVE CONCLUSION IS FURTHER FORTIFIED BY TH E FACT THAT IN SHARE SALE TRANSACTIONS THROUGH ONLINE MODE THE IDENTITY OF T HE BUYER OF THE SHARES WOULD NOT BE KNOWN TO THE ASSESSEE. THEREFORE THE ADVERSE CONCLUSION DRAWN BY LD. AO MERELY ON THE BASIS OF THE FACT THA T THE BUYER OF THE SHARES WERE GROUP ENTITIES OF SHRI VIPUL BHAT COUL D NOT BE SUSTAINED. THE FACT THAT THERE WERE INDEPENDENT BUYERS ALSO WOULD REBUT THE SAME AND WEAKEN THE CONCLUSION DRAWN BY LD. AO. 11. THE LD. AR HAS RELIED ON PLETHORA OF JUDICIAL P RONOUNCEMENTS IN SUPPORT OF VARIOUS SUBMISSIONS WHICH WE HAVE DULY CONSIDERED. THESE DECISIONS WOULD ONLY SUPPORT THE CONCLUSIONS DRAWN BY US THAT ONCE THE ASSESSEE HAS DISCHARGED THE ONUS OF PROVING THE GEN UINENESS OF THE TRANSACTIONS THE ONUS WOULD SHIFT ON THE REVENUE T O DISLODGE ASSESSEES CLAIM AND BRING ON RECORD CONTRARY EVIDENCES TO REB UT THE SAME. UNTIL AND UNLESS THIS EXERCISE IS CARRIED OUT THE ADDITIONS COULD NOT BE SUSTAINED IN THE EYES OF LAW. SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 16 12. TO ENUMERATE THE FEW THE HONBLE BOMBAY HIGH C OURT IN CIT V/S SHYAM S.PAWAR (54 TAXMANN.COM 108 10/12/2014) DECLI NED TO ADMIT REVENUES APPEAL SINCE THE REVENUE FAILED TO CARRY FORWARD THE INQUIRY TO DISCHARGE THIS BASIC ONUS. THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN MUKESH R.MAROLIA V/S ADDL. CIT (6 SOT 247 15/12/200 5) HELD THAT PERSONAL KNOWLEDGE AND EXCITEMENT ON EVENTS SHOULD NOT LEAD THE ASSESSING OFFICER TO A STATE OF AFFAIRS WHERE SALIE NT EVIDENCES ARE OVER- LOOKED. WHEN EVERY TRANSACTION HAS BEEN ACCOUNTED DOCUMENTED AND SUPPORTED IT WOULD BE VERY DIFFICULT TO BRUSH ASID E THE CONTENTIONS OF THE ASSESSEE THAT HE HAD PURCHASED SHARES AND HAD SOLD SHARES AND ULTIMATELY PURCHASED A FLAT UTILIZING THE SALE PROC EEDS OF THOSE SHARES AND THEREFORE THE CO-ORDINATE BENCH CHOSE TO DELETE TH E IMPUGNED ADDITIONS. WE FIND THAT THIS DECISION WAS FIRSTLY BEEN APPROVE D BY HONBLE BOMBAY HIGH COURT VIDE ITA NO. 456 OF 2007 ON 07/09/2011 A ND THEREAFTER SPECIAL LEAVE PETITION AGAINST THE SAID DECISION HA S BEEN DISMISSED BY HONBLE SUPREME COURT VIDE SLP NO. 20146 OF 2012 DA TED 27/01/2014 WHICH IS REPORTED AS 88 CCH 0027 SCC. THE SMC BENCH OF TRIBUNAL IN ANRAJ HIRALAL SHAH (HU F) V/S ITO (ITA NO. 4514/MUM/2018 DATED 16/07/2019) HELD THAT IN THE AB SENCE OF ANY EVIDENCE TO IMPLICATE THE ASSESSEE OR TO PROVE THAT THE TRANSACTIONS WERE BOGUS THE LONG-TERM CAPITAL GAINS DECLARED BY THE ASSESSEE COULD NOT BE DOUBTED WITH. THIS CASE WAS DEALING WITH GAINS EARN ED BY THE ASSESSEE ON SALE OF SAME SCRIP I.E. M/S SUNRISE ASIAN LTD. 13. THEREFORE CONSIDERING THE ENTIRETY OF FACTS AN D CIRCUMSTANCES WE ARE NOT INCLINED TO ACCEPT THE STAND OF LD.CIT(A) IN SU STAINING THE IMPUGNED ADDITIONS IN THE HANDS OF THE ASSESSEE. RESULTANTLY THE ADDITION ON ACCOUNT OF ALLEGED LONG-TERM CAPITAL GAINS AS WELL AS ESTIMATED COMMISSION AGAINST THE SAME STANDS DELETED. THE GR OUNDS OF APPEAL TO THAT EXTENT STAND ALLOWED. 13. SUBSEQUENTLY CO-ORDINATE BENCH OF JAIPUR IN THE CASE OF ASHOK AGRAWAL V/S ACIT IN ITA NO.124/JP/2020 DATED 18.11.2020 HAS FOLLOWED THE DECISION OF HON'BLE MUMBAI TRIBUNA L IN THE CASE OF DIPESH RAMESH VARDHAN (SUPRA) WHILE DEALING WITH THE SAME ISSUE OF LONG TERM CAPITAL GAIN FROM SALE OF EQUITY SHARE S OF M/S SUNRISE ASIAN LIMITED CLAIMED TO BE EXEMPT U/S 10(3 8) OF THE ACT SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 17 AND DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST T HE REVENUE OBSERVING AS FOLLOWS:- 23. IN THE AFORESAID DECISION IT HAS BEEN HELD TH AT IT IS SESI WHO MONITORS AND REGULATES THE STOCK EXCHANGES & STOCK MARKET AN D WHEN THEIR INVESTIGATION DID NOT REVEAL ANY PRICE OR VOLUME MA NIPULATION BY THE ASSESSEE AND THESE TRANSACTIONS ARE IN THE NORMAL C OURSE THROUGH PROPER & LEGAL CHANNELS. THEN THE ALLEGATIONS OF THE IT DE PARTMENT FALL FLAT AND DENIAL OF DEDUCTION U/S 10(38) OF THE ACT IS ARBITR ARY AND ADDITION OF SALE PROCEEDS OF SHARES OF PAL U/S 68 IS AGAINST THE PRO VISIONS OF ACT. IN THE CASE IN HAND THE ID. AO HAS REFERRED TO SEBI ENQUI RY AGAINST M/S SUNRISE ASIAN LTD. HOWEVER WE NOTE THAT THE SAID ENQUIRY W AS REGARDING FAILURE TO COMPLY WITH CERTAIN DISCLOSURE REQUIREMENTS AND THE REFORE THE SUBJECT MATTER OF THE ENQUIRY HAS NO CONNECTION WITH THE TR ANSACTION OF BOGUS LONG TERM CAPITAL GAIN AND HAS NO BEARING IN JUDGING THE GENUINENESS OF THE TRANSACTION UNDERTAKEN BY THE ASSESSEE OR FOR THAT MATTER THE PRICE AND REALIZATION ON SALE OF SHARES SO UNDERTAKEN BY THE ASSESSEE THROUGH THE STOCK EXCHANGE. FURTHER IT HAS BEEN HELD IN THE AF ORESAID CASE THAT THE FINDINGS OF INVESTIGATION & MODUS OPERANDI IN OTHER CASES NARRATED BY THE AO AND ALSO CIT(A) NOWHERE PROVE ANY CONNECTION WIT H THE ASSESSEE NOR THE ASSESSEE'S INVOLVEMENT OR CONNECTION OR COLLUSI ON WITH THE BROKERS EXIT PROVIDERS ACCOMMODATION PROVIDERS OR COMPANIES OR DIRECTIONS ETC AND FOR MAKING THE ADDITION IT IS NECESSARY TO BRING ON RE CORD EVIDENCE TO ESTABLISH INGENUITY IN TRANSACTIONS OR ANY CONNECTI ON OF THE ASSESSEE OR ITS TRANSACTION WITH ANY OF THE ALLEGED PARTIES. IN THE INSTANT CASE AS WE HAVE DISCUSSED EARLIER THERE IS NO FINDING WHICH PROVES ASSESSEE'S CONNECTION INVOLVEMENT OR COLLUSION WITH SO CALLED ACCOMMODATI ON ENTRY PROVIDERS. FURTHER IN THE AFORESAID CASE THE ISSUE AS TO WHET HER THE LEGAL EVIDENCE PRODUCED BY THE ASSESSEE HAS TO GUIDE OUR DECISION IN THE MATTER OR THE GENERAL OBSERVATIONS BASED ON STATEMENTS PROBABILI TIES ' HUMAN BEHAVIOR AND DISCOVERY OF THE MODUS OPERANDI ADOPTED IN EARN ING ALLEGED BOGUS L TCG AND STCG THAT HAVE SURFACED DURING INVESTIGATI ONS SHOULD G'UIDE THE AUTHORITIES IN ARRIVING AT A CONCLUSION AS TO W HETHER THE CLAIM IS GENUINE OR NOT HAS BEEN DISCUSSED AT LENGTH. AND RE FERRING TO LEGAL PROPOSITION LAID DOWN BY THE HON'BLE SUPREME COURT THAT THE BURDEN OF PROVING A TRANSACTION TO BE BOGUS HAS TO BE STRICTL Y DISCHARGED BY ADDUCING LEGAL EVIDENCE HELD THAT THE MODUS OPERAND I GENERALISATION PREPONDERANCE OF HUMAN PROBABILITIES CANNOT BE THE ONLY BASIS FOR REJECTING THE CLAIM OF THE ASSESSEE UNLESS SPECIFIC EVIDENCE IS BROUGHT ON RECORD TO CONTROVERT THE VALIDITY AND CORRECTNESS O F THE DOCUMENTARY EVIDENCES PRODUCED THE SAME CANNOT BE REJECTED. WE ARE IN COMPLETE SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 18 AGREEMENT WITH THE SAID VIEW AND IN THE INSTANT CAS E WE FIND THAT EVIDENCE PRODUCED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM OF PURCHASE AND SALE OF SHARES ON THE STOCK EXCHANGE HAVE NOT BEEN REFUTED BY ANY ADVERSE FINDINGS OR MATERIAL WHICH COULD DEMONSTRAT E INVOLVEMENT OF THE ASSESSEE OR COLLUSION WITH SO CALLED ACCOMMODATION ENTRY PROVIDERS TO OBTAIN BOGUS LTCG AS SO ALLEGED BY THE AUTHORITIES BELOW. 24. WE ALSO FIND THAT WHILE ANALYZING SALE OF SHARE S OF SIMILAR SCRIP OF M/S SUNRISE ASIAN LTD AND CLAIM OF EXEMPTION OF LONG TE RM CAPITAL GAINS U/S 10(38) THE MUMBAI BENCHES OF THE TRIBUNAL IN CASE OF ANRAJ HIRALAL SHAH (HUF) VS ITO (SUPRA) HAS UPHELD THE CLAIM OF THE ASSESSEE'S CLAI M OF EXEMPTION UNDER SECTION 10(38) OF THE ACT AND THE R ELEVANT FINDINGS OF THE COORDINATE BENCH CONTAINED AT PARA 8 READ AS UNDER: - '8. THE ASSESSEE HAS EARNED SPECULATION PROFIT IN T HE IMMEDIATELY PRECEDING YEAR THROUGH M/S EDEN FINANCIAL SERVICES ALSO AND THE SAID PROFIT HAS BEEN USED TO PURCHASE THE SHARES OF M/S SUNRISE ASIAN LTD. THE ASSESSEE HAS OFFERED THE SPECULATION PROFIT FOR INCOME TAX PURPOSES IN THE IMMEDIATELY PRECEDING YEAR AND IT HAS BEEN ACCEPTED. FURTHER THE ASSESSEE HAS SHOWN THE PURCHA SE OF IMPUGNED SHARES AS INVESTMENT IN THE BALANCE SHEET. HENCE THE PURCHASE OF SHARES HAS BEEN ACCEPTED. FURTHER THE S HARES HAVE BEEN RECEIVED IN THE D-MAT ACCOUNT OF THE ASSESSEE AND THEY HAVE BEEN SOLD THROUGH THE DMAT ACCOUNT ONLY. HENCE THE DELIVERY OF SHARES A/SO STAND PROVED. THE AO HAS NOT BROUGHT AN Y MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE WAS PART OF FRAUDU LENT PRICE RIGGING. ACCORDINGLY IN THE ABSENCE OF ANY EVIDENC E TO IMPLICATE THE ASSESSEE OR TO PROVE THAT THE TRANSACTIONS ARE BOGU S/ 'R AM OF THE VIEW THAT THE CAPITAL GAINS DECLARED BY THE ASSESSE E CANNOT BE DOUBTED WITH. IN THAT VIEW OF THE METIER; THE ADDITION MADE TOWARDS EXPENSES IS NOT ALSO SUSTAINABLE. 25. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIR ETY OF FACTS AND CIRCUMSTANCES PF THE CASE AND FOLLOWING THE DECISIO NS OF THE HON'BLE JURISDICTIONAL HIGH COURT AND OF THAT OF THE COORDI NATE BENCHES IN CASES REFERRED SUPRA WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS DISCHARGED THE NECESSARY ONUS CAST ON HIM IN TERMS OF CLAIM OF EXEMPTION OF LONG TERM CAPITAL GAINS U/S 10(38) OF THE ACT BY ESTABLISHING THE GENUINENESS OF TRANSACTION OF PURCHASE AND SALE OF SHARES AND SATISFYING THE REQUISITE CONDITIONS SPECIFIED THEREIN AND THE GAINS SO ARISING ON SALE OF SHARES THEREFORE HAS BEEN RIGHTLY CLAIMED AS EXE MPT U/S 10(38) OF THE ACT. ACCORDINGLY IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE SET-ASIDE THE ORDER OF THE ID. CIT(APPEALS) AND THE CLAIM OF THE ASSESSEE UL: 10(38) IS ALLOWED. THE MATTER IS THUS DECIDED IN FAVOUR OF TH E ASSESSEE AND AGAINST SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 19 THE REVENUE. IN THE RESULT THE GROUND OF APPEAL SO TAKEN BY THE ASSESSEE IS ALLOWED. 26. IN THE RESULT THE APPEAL OF THE ASSESSEE IS A LLOWED. 14. AS REGARDS THE JUDGMENT OF HONBLE DELHI HIGH C OURT IN THE CASE OF SUMAN PODDAR V/S ITO (SUPRA) DELIVERED ON 17.09.201 9 RELIED BY LD. DEPARTMENTAL REPRESENTATIVE WE FIND THAT HONBLE HIGH COURT OF DELHI IN ITS RECENT JUDGMENT DATED 15 .1.2021 IN THE CASE OF PCIT V/S KRISHNA DEVI & OTHERS ITA NO.125/2020 DEALING WITH THE SIMILAR ISSUE OF CLAIM OF EXEMPTION U/S 10 (38) OF THE ACT FOR LONG TERM CAPITAL GAIN FROM SALE OF EQUITY SHAR ES HAS DULY CONSIDERED THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF SUMAN PODDAR V/S ITO (SUPRA) AND HAS DECIDED AGAINST THE REVENUE CONFIRMING THE ORDER OF THE TRIBUNAL STATIN G IT TO BE THE LAST FACT FINDING AUTHORITY WHO ON THE BASIS OF EVIDENCE BROUGHT ON RECORD HAS RIGHTLY CAME TO THE CONCLUSION THAT THE LOWER TAX AUTHORITIES ARE NOT ABLE TO SUSTAIN THE ADDITION WI THOUT ANY COGENT MATERIAL ON RECORD. RELEVANT EXTRACT OF THE JUDGME NT OF HONBLE DELHI HIGH COURT IN THE CASE OF PCIT V/S KRISHNA DEVI & OTHERS IS REPRODUCED BELOW:- SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 20 10. WE HAVE HEARD MR. HOSSAIN AT LENGTH AND GIVEN OUR THOUGHTFUL CONSIDERATION TO HIS CONTENTIONS BUT ARE NOT CONVI NCED WITH THE SAME FOR THE REASONS STATED HEREINAFTER. 11. ON A PERUSAL OF THE RECORD IT IS EASILY DISCER NIBLE THAT IN THE INSTANT CASE THE AO HAD PROCEEDED PREDOMINANTLY ON THE BAS IS OF THE ANALYSIS OF THE FINANCIALS OF M/S GOLD LINE INTERNATIONAL FINVE ST LIMITED. HIS CONCLUSION AND FINDINGS AGAINST THE RESPONDENT ARE CHIEFLY ON THE STRENGTH OF THE ASTOUNDING 4849.2% JUMP IN SHARE PRICES OF T HE AFORESAID COMPANY WITHIN A SPAN OF TWO YEARS WHICH IS NOT SUPPORTED BY THE FINANCIALS. ON AN ANALYSIS OF THE DATA OBTAINED FROM THE WEBSITES THE AO OBSERVES THAT THE QUANTUM LEAP IN THE SHARE PRICE IS NOT JUSTIFIE D; THE TRADE PATTERN OF THE AFORESAID COMPANY DID NOT MOVE ALONG WITH THE SENSE X; AND THE FINANCIALS OF THE COMPANY DID NOT SHOW ANY REASON FOR THE EXTR AORDINARY PERFORMANCE OF ITS STOCK. WE HAVE NOTHING ADVERSE T O COMMENT ON THE ABOVE ANALYSIS BUT ARE CONCERNED WITH THE AXIOMATI C CONCLUSION DRAWN BY THE AO THAT THE RESPONDENT HAD ENTERED INTO AN AGRE EMENT TO CONVERT UNACCOUNTED MONEY BY CLAIMING FICTITIOUS LTCG WHIC H IS EXEMPT UNDER SECTION 10(38) IN A PRE-PLANNED MANNER TO EVADE TA XES. THE AO EXTENSIVELY RELIED UPON THE SEARCH AND SURVEY OPERA TIONS CONDUCTED BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT IN KOLKATA DELHI MUMBAI AND AHMEDABAD ON PENNY STOCKS WHICH SETS OU T THE MODUS OPERANDI ADOPTED IN THE BUSINESS OF PROVIDING ENTRI ES OF BOGUS LTCG. HOWEVER THE RELIANCE PLACED ON THE REPORT WITHOUT FURTHER CORROBORATION ON THE BASIS OF COGENT MATERIAL DOES NOT JUSTIFY H IS CONCLUSION THAT THE TRANSACTION IS BOGUS SHAM AND NOTHING OTHER THAN A RACKET OF ACCOMMODATION ENTRIES. WE DO NOTICE THAT THE AO MAD E AN ATTEMPT TO DELVE INTO THE QUESTION OF INFUSION OF RESPONDENTS UNACC OUNTED MONEY BUT HE DID NOT DIG DEEPER. NOTICES ISSUED UNDER SECTIONS 1 33(6)/131 OF THE ACT WERE ISSUED TO M/S GOLD LINE INTERNATIONAL FINVEST LIMITED BUT NOTHING EMERGED FROM THIS EFFORT. THE PAYMENT FOR THE SHARE S IN QUESTION WAS MADE BY SH. SALASAR TRADING COMPANY. NOTICE WAS ISS UED TO THIS ENTITY AS WELL BUT WHEN THE NOTICES WERE RETURNED UNSERVED THE AO DID NOT TAKE THE MATTER ANY FURTHER. HE THEREAFTER SIMPLY PROCEE DED ON THE BASIS OF THE FINANCIALS OF THE COMPANY TO COME TO THE CONCLUSION THAT THE TRANSACTIONS WERE ACCOMMODATION ENTRIES AND THUS FICTITIOUS. T HE CONCLUSION DRAWN BY THE AO THAT THERE WAS AN AGREEMENT TO CONVERT UNAC COUNTED MONEY BY TAKING FICTITIOUS LTCG IN A PRE-PLANNED MANNER IS THEREFORE ENTIRELY UNSUPPORTED BY ANY MATERIAL ON RECORD. THIS FINDING IS THUS PURELY AN ASSUMPTION BASED ON CONJECTURE MADE BY THE AO. THIS FLAWED APPROACH FORMS THE REASON FOR THE LEARNED ITAT TO INTERFERE WITH THE FINDINGS OF THE LOWER TAX AUTHORITIES. THE LEARNED ITAT AFTER CONSI DERING THE ENTIRE CONSPECTUS OF CASE AND THE EVIDENCE BROUGHT ON RECO RD HELD THAT THE RESPONDENT HAD SUCCESSFULLY DISCHARGED THE INITIAL ONUS CAST UPON IT SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 21 UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. IT I S RECORDED THAT THERE IS NO DISPUTE THAT THE SHARES OF THE TWO COMPANIES WER E PURCHASED ONLINE THE PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNEL AND THE SHARES WERE DEMATERIALIZED AND THE SALES HAVE BEEN ROUTED FROM DE-MAT ACCOUNT AND THE CONSIDERATION HAS BEEN RECEIVED THROUGH BAN KING CHANNELS. THE ABOVE NOTED FACTORS INCLUDING THE DEFICIENT ENQUIR Y CONDUCTED BY THE AO AND THE LACK OF ANY INDEPENDENT SOURCE OR EVIDENCE TO SHOW THAT THERE WAS AN AGREEMENT BETWEEN THE RESPONDENT AND ANY OTH ER PARTY PREVAILED UPON THE ITAT TO TAKE A DIFFERENT VIEW. B EFORE US MR. HOSSAIN HAS NOT BEEN ABLE TO POINT OUT ANY EVIDENCE WHATSOE VER TO ALLEGE THAT MONEY CHANGED HANDS BETWEEN THE RESPONDENT AND THE BROKER OR ANY OTHER PERSON OR FURTHER THAT SOME PERSON PROVIDED THE ENTRY TO CONVERT UNACCOUNTED MONEY FOR GETTING BENEFIT OF LTCG AS A LLEGED. IN THE ABSENCE OF ANY SUCH MATERIAL THAT COULD SUPPORT THE CASE PU T FORTH BY THE APPELLANT THE ADDITIONS CANNOT BE SUSTAINED. 12. MR. HOSSAINS SUBMISSIONS RELATING TO THE START LING SPIKE IN THE SHARE PRICE AND OTHER FACTORS MAY BE ENOUGH TO SHOW CIRCU MSTANCES THAT MIGHT CREATE SUSPICION; HOWEVER THE COURT HAS TO DECIDE A N ISSUE ON THE BASIS OF EVIDENCE AND PROOF AND NOT ON SUSPICION ALONE. THE THEORY OF HUMAN BEHAVIOR AND PREPONDERANCE OF PROBABILITIES CANNOT BE CITED AS A BASIS TO TURN A BLIND EYE TO THE EVIDENCE PRODUCED BY THE RE SPONDENT. WITH REGARD TO THE CLAIM THAT OBSERVATIONS MADE BY THE CIT(A) W ERE IN CONFLICT WITH THE IMPUGNED ORDER WE MAY ONLY NOTE THAT THE SAID OBSE RVATIONS ARE GENERAL IN NATURE AND LATER IN THE ORDER THE CIT(A) ITSELF NOTES THAT THE BROKER DID NOT RESPOND TO THE NOTICES. BE THAT AS IT MAY THE CIT(A) HAS ONLY APPROVED THE ORDER OF THE AO FOLLOWING THE SAME REASONING AND RELYING UPON THE REPORT OF THE INVESTIGATION WING. LASTLY RELIANCE PLACED BY THE REVENUE ON SUMAN PODDAR V. ITO (SUPRA) AND SUMATI DAYAL V. CIT (SUPRA) IS OF NO ASSISTANCE. UPON EXAMINING THE JUDGMENT OF SUMAN PO DDAR (SUPRA) AT LENGTH WE FIND THAT THE DECISION THEREIN WAS ARRIV ED AT IN LIGHT OF THE PECULIAR FACTS AND CIRCUMSTANCES DEMONSTRATED BEFOR E THE ITAT AND THE COURT SUCH AS INTER ALIA LACK OF EVIDENCE PRODUC ED BY THE ASSESSEE THEREIN TO SHOW ACTUAL SALE OF SHARES IN THAT CASE. ON SUCH BASIS THE ITAT HAD RETURNED THE FINDING OF FACT AGAINST THE ASSESS EE HOLDING THAT THE GENUINENESS OF SHARE TRANSACTION WAS NOT ESTABLISHE D BY HIM. HOWEVER THIS IS QUITE DIFFERENT FROM THE FACTUAL MATRIX AT HAND. SIMILARLY THE CASE OF SUMATI DAYAL V. CIT (SUPRA) TOO TURNS ON ITS OWN SP ECIFIC FACTS. THE ABOVE- STATED CASES THUS ARE OF NO ASSISTANCE TO THE CAS E SOUGHT TO BE CANVASSED BY THE REVENUE. 13. THE LEARNED ITAT BEING THE LAST FACT-FINDING A UTHORITY ON THE BASIS OF SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 22 THE EVIDENCE BROUGHT ON RECORD HAS RIGHTLY COME TO THE CONCLUSION THAT THE LOWER TAX AUTHORITIES ARE NOT ABLE TO SUSTAIN THE A DDITION WITHOUT ANY COGENT MATERIAL ON RECORD. WE THUS FIND NO PERVERSI TY IN THE IMPUGNED ORDER. 14. IN THIS VIEW OF THE MATTER NO QUESTION OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. 15. ACCORDINGLY THE PRESENT APPEALS ARE DISMISSED. 15. ON PERUSAL OF THE DECISION OF THE CO-ORDINATE B ENCH OF MUMBAI IN THE CASE OF DIPESH RAMESH VARDHAN V/S DCIT AND RATIO LAID DOWN BY THE HONBLE HIGH COURT OF DELHI IN THE CASE OF PCIT V/S SMT. KRISHNA DEVI & OTHERS (SUPRA) WE ARE OF THE CONSIDERED VIEW THAT THE CASE OF THE ASSESSEE IS SQ UARELY COVERED BY THE ABOVE STATED JUDGMENTS AND WE BEING BOUND TO FOLLOW THE JUDICIAL PRECEDENCE ARE INCLINED TO HOLD THAT THE CLAIM OF LTCG OF RS.18 65 616/- MADE BY THE ASSESSE E IS GENUINE AND IS ELIGIBLE FOR EXEMPTION U/S 10(38) OF THE ACT. WE ACCORDINGLY SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE ADDITION MADE U/S 68 OF THE ACT BY LD. A.O. IN THE RESULT GROUND RAISED ON MERIT AS WELL AS LEGAL GROUND RAIS ED FOR NOT PROVIDING OPPORTUNITY TO CROSS EXAMINATION IS ALLOW ED IN FAVOUR OF THE ASSESSEE. THUS APPEAL OF THE ASSESSE E NAMELY SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 23 SMT. SHWETA AGRAWAL IS ALLOWED. 16. NOW WE TAKE UP THE APPEAL OF M/S SANJAY ONKARMA L AGRAWAL (HUF) IN ITA NO.279/IND/2019. WE FIND THAT THE SAME ISSUE OF BOGUS LTCG AND ITS ADDITION U/S 68 OF THE ACT AND FAILURE OF LD. A.O TO PROVIDE OPPORTUNITY TO CR OSS EXAMINATION BY THE ASSESSEE HAS BEEN RAISED. AS WE HAVE DECIDED THE VERY SAME ISSUE UNDER THE SIMILAR SET O F FACTS IN THE PRECEDING PARAS I N THE CASE OF SMT. SHWETA A GRAWAL ITA NO.281/IND/2019 WE SHALL APPLY THE SAME DECISION O N THIS APPEAL ALSO IN THE CASE OF ASSESSEE NAMELY M/S SAN JAY ONKARMAL AGRAWAL (HUF) PLACING RELIANCE ON THE DECI SION OF CO-ORDINATE BENCH MUMBAI IN THE CASE OF DIPESH RAMESH VARDHAN V/S DCIT AND RATIO LAID DOWN BY THE HONBLE HIGH COURT OF DELHI IN THE CASE OF PCIT V/S KRISHNA DEVI & OTHERS . IN THE RESULT GROUNDS OF APPEAL RAISED IN ITA NO.279/IND/2019 ARE ALLOWED. SMT. SHWETA AGRAWAL & ANR ITA NO.281 & 279/IND/2019 24 17. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE( S) NAMELY SMT. SHWETA AGRAWAL ITA NO.281/IND/2019 AND M/S SA NJAY ONKARMAL AGRAWAL (HUF) ITA NO.279/IND/2019 ARE AL LOWED. THE ORDER PRONOUNCED AS PER RULE 34 OF ITAT RULES 1963 ON 25.05.2021. SD/- SD/- (MADHUMITA ROY) (MANIS H BORAD) JUDICIAL MEMBER ACCOUNTANT M EMBER / DATED : 25.05. 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR ITAT INDORE/GUARD FILE. BY ORDER ASSTT.REGISTRAR I.T.A.T. INDORE