The DCIT- 1(1), Indore v. Smt. Shashi Anand, Indore

ITA 374/IND/2013 | 2005-2006
Pronouncement Date: 09-10-2013 | Result: Dismissed

Appeal Details

RSA Number 37422714 RSA 2013
Assessee PAN ABHPA2451R
Bench Indore
Appeal Number ITA 374/IND/2013
Duration Of Justice 4 month(s) 12 day(s)
Appellant The DCIT- 1(1), Indore
Respondent Smt. Shashi Anand, Indore
Appeal Type Income Tax Appeal
Pronouncement Date 09-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 09-10-2013
Assessment Year 2005-2006
Appeal Filed On 27-05-2013
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.373/IND/2013 A.Y. 2005-06 DEPUTY COMMISSIONER OF INCOME TAX 1(1) INDORE ....... APPELLANT VS GAURAV ANAND INDORE PAN ABHPA 2451 R ....... RESPONDENT ITA NO.374/IND/2013 A.Y. 2005-06 DEPUTY COMMISSIONER OF INCOME TAX 1(1) INDORE ....... APPELLANT VS SMT. SHASHI ANAND INDORE PAN ABHPA 2450 Q ....... RESPONDENT 2 AND ITA NO.375/IND/2013 A.Y. 2005-06 DEPUTY COMMISSIONER OF INCOME TAX 1(1) INDORE ....... APPELLANT VS DARPAN ANAND INDORE PAN ABHPA 2452 N ....... RESPONDENT DEPARTMENT BY SMT. MRIDULA BAJPAI ASSESSEES BY SHRI PANKAJ MOGRA DATE OF HEARING 8.10.2013 DATE OF PRONOUNCEMENT 8.10.2013 O R D E R PER JOGINDER SINGH JUDICIAL MEMBER AGGRIEVED BY THE ORDERS DATED 21.2.2013 OF THE LD. CIT(A)- INDORE THE REVENUE IS IN APPEAL FOR ASSESSMENT YEA R 2005-06 IN RESPECT OF AFOREMENTIONED ASSESSEES. THE COMMON GRO UND RAISED IN THESE APPEALS IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. FIRST APPELLATE AUTH ORITY HAS ERRED IN 3 DIRECTING THE ASSESSING OFFICER TO CONSIDER THE GAI N CLAIMED TO HAVE ARISEN ON TRANSFER OF SHARES AS LONG TERM CAPI TAL GAIN INSTEAD OF INCOME FROM OTHER SOURCES U/S 68 OF THE I.T. ACT 1961 IGNORING THE INQUIRIES CONDUCTED BY THE DEPARTMENT REVEALING THAT THE TRANSACTIONS OF THE SHARES WERE NOT REAL AND FURTHE R ERRED IN IGNORING THE CIRCUMSTANTIAL EVIDENCE AND THE DECISI ONS FROM HON'BLE APEX COURT IN P. MOHAN KALA VS. CIT (291 IT R 278) AND SUMATI DAYAL (224 ITR 801). 2. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSES SEE SHRI PANAKJ MOGRA POINTED OUT THAT THE IMPUGNED ISSUE I S COVERED BY THE ORDER DATED 14.12.2009 IN ITA NO.113/IND/2009 ( AY 2005-06) OF THE INDORE TRIBUNAL IN THE CASE OF SMT. ARJOO AN AND RELATIVE OF THE ASSESSEE ON IDENTICAL FACTS FOR WHICH OUR AT TENTION WAS INVITED TO PAGES 75 TO 98 OF THE PAPER BOOK. IT WAS ALSO ASSERTED THAT THIS ORDER OF THE TRIBUNAL WAS AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT VIDE ORDER DATED 6 TH JANUARY 2012 DISMISSING THE APPEAL OF THE REVENUE (PAGES 102 TO 106 OF PAPER 4 BOOK). THIS FACTUAL ASSERTION OF THE LEARNED COUNSE L FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOVE W E ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE A FORESAID ORDER DATED 14.12.2009: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY CIT(APPEALS)-I INDORE DATED 20.09.2009. 1. THE FIRST GROUNDS OF APPEAL READS AS UNDER:- 2.1 THAT ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE AND IN LAW THE LD. CIT.(A) ERRED IN CONFIRMING THE ACTION OF A.O. TREATING THE ENTIRE AMOUNT OF LONG T ERM CAPITAL GAIN OF RS 41.11.050/- AS INCOME FROM OTHER SOURCES U/S 68 OF THE I.T. ACT AND THEREBY SADDLING THE ASSESSEE WITH A TAX LIABILITY AT NORMAL RATE (30%)I NSTEAD OF 10% APPLICABLE ON LONG TERM CAPITAL 2. THE UNDISPUTED FACTS OF THE CASE AS ARE BOR NE FROM THE RECORDS AND AGREED TO BY BOTH THE PARTIES TO TH E DISPUTE ARE AS UNDER : (I) THE ASSESSEE HAD PURCHASED 22500 SHARES IN T HE COMPANY M/S KONARK COMMERCE AND INDUSTRIES LTD ON 10.04.03. BY PAYING RS45.250 IN CASH FROM SEBI AUTHORIZED BROKER M/S P.K. AGRAWAL & CO. CALCUT TA FROM CALCUTTA STOCK EXCHANGE VIA OFF MARKET TRANSACTION . THIS THE AVERAGE PURCHASE PRICE WORKS OUT TO RS 2.02 PE R SHARE. (II) THE COMPANY M/S KONARK COMMERCE AND INDUS TRIES LTD IS QUOTED PUBLIC LIMITED COMPANY AND LISTED IN VARIOUS STOCK EXCHANGES. THE ASSESSEE HAS DEALT IN CALCUTTA STOCK EXCHANGE FOR PURCHASES AND SO ALSO CALCUTTA STOCK EXCHANGE FOR SALES. 5 (III) THE BROKER M/S P.K.AGRAWAL & CO. CALCUT TA IS REGISTERED BROKER AND WAS AUTHORIZED BY SEBI TO DEA L IN THE SAID SHARES AT THE MATERIAL POINT IN TIME. (IV) THE ASSESSEE HAS FILED VARIOUS EVIDENCES IN SUPPORT OF THE PURCHASE TRANSACTION WHICH INCLUDE INTER ALI A- A. THE PURCHASE BILL AND CONTRACT NOTES OF THE BROKER ON THE RELEVANT DATES. B. THE SHARE CERTIFICATES OF THE COMPANY DULY TRANSFERRED IN THE NAME OF THE ASSESSEE ALONG WITH SPECIMEN TRANSFER DEEDS. C. COPY OF ACCOUNT OF THE ASSESSEE WITH THE BROKER D. THE BALANCE SHEET OF THE ASSESSEE FOR THE A.Y.2004- 05 REFLECTING THE SHARE IN M/S KONARK COMMERCE AND INDUSTRIES LTD HELD AS INVESTMENT BY IT. THE SAID B ALANCE SHEET WAS DULY FILED ALONG WITH THE RETURN OF INCOM E FILED BY THE ASSESSEE ON 30.10.04. E. DETAILS REGARDING DEMATERIALIZATION OF SHARES WITH IDBI BANK LTD. F. QUOTATION OF SHARE PRICES OF M/S KONARK COMMERCE AND INDUSTRIES LTD OF CALCUTTA STOCK EXCHANGE ON TH E RELEVANT DATES. ALL THE ABOVE MENTIONED DETAILS WERE FILED BEFORE T HE LD.AO WHO HAS NOT DOUBTED THE PURCHASE TRANSACTION. (V) THE 22500 SHARES SO PURCHASED WERE SOLD ON 3 DATES IN JUN 2004 REALIZING RS 41 56 500 THEREBY YIELDING AN AVERAGE RATE OF SALE AS RS 184.730PER SHARE. (VI) THE SAID SHARES WERE SOLD THROUGH THE SAME BROKER M/S P.K.AGRAWAL & CO. CALCUTTA WHO IS A REGISTERED BROKER WITH SEBI AND WAS DULY AUTHORIZED TO DEAL IN SUCH SHARES AT THE MATERIAL POINT IN TIME. (VII) THE SAID SHARES WERE SOLD ON THE CALCUTTA S TOCK EXCHANGE ( NOT OFF MARKET TRADE ). (VIII) THE ASSESSEE HAS FILED VARIOUS EVIDENCES IN SUPPORT OF THE SALE TRANSACTION WHICH INCLUDE INTER ALIA: A . THE SALE BILLS AND CONTRACT NOTES AS ISSUED BY THE CALCUTTA BROKER. B. VARIOUS DEMAT SLIPS TO PROVE THE OUTGO (PHYSICA L TRANSFER) OF SHARES FROM THE ASSESSEE S ACCOUNT OF THE BROKER . C. COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE BROKER DULY CONFIRMED BY THE BROKER . 6 D. COPY OF ACCOUNT OF THE BROKER IN THE BOOKS O F THE ASSESSEE. E. BANK DETAILS EVIDENCING THE PAYMENT OF SALE PRICE THROUGH ACCOUNT PAYEE CHEQUES. G. F. QUOTATION OF SHARE PRICES OF M/S KONARK COMMERCE AND INDUSTRIES LTD OF CALCUTTA STOCK EXCHA NGE ON THE RELEVANT DATES. G. REPLY FILED BY BROKER IN RESPONSE TO SUMMONS I SSUED U/S 133(6). 3. THE ASSESSEE HAS FILED A PAPER BOOK RU NNING INTO 67 PAGE WHICH INCLUDE ALL THE EVIDENCES AS ENUMERAT ED ABOVE ALONG WITH COPY OF WRITTEN SUBMISSIONS AS FIL ED BEFORE THE A.O. AND CIT (A) COPY OF CASE LAWS RELIE D UPON BY THE ASSESSEE ALONG WITH COMPARATIVE STATEMENT OF CAPITAL GAIN IN GROUP CASES WHICH WERE ALSO HEARD ALONG WIT H THE PRESENT APPEAL. IN ADDITION TO THE COMPILATION AS MENTIONED ABOVE THE ASSESSEE HAS ALSO FILED A SYN OPSIS RUNNING INTO PAGES A TO K WHEREIN OBJECTION OF THE ASSESSING OFFICER HAS BEEN REPLIED TO. 4. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE MATERIAL ON RECORD .THE SHORT POINT FOR OUR CONSIDE RATION IN THE PRESENT AS IS BORNE OUT FROM THE GROUNDS TAKEN BY THE APPELLANT AND AVERRED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS . WHETHER THE SAID TRANSACTION OF SHARES YIELDING HAN DSOME CAPITAL GAIN TO THEN ASSESSEE CAM BE DISREGARDED ON THE FACE OF IT AND BE TAXED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AS DONE BY THE LD.AO AND CONFIRMED BY TH E LD.CIT (A). 5. BEFORE DECIDING THE ISSUE ON MERITS AND TO AVOI D DUPLICATION IT WOULD BE RELEVANT TO SUMMARIZE TH E BACKGROUND OF THE CASE: (I) IN THE PRESENT CASE THE ASSESSEE HAD DECLARED INCOM E FROM LONG TERM CAPITAL GAIN ON SALE OF 22500 EQUIT Y SHARES OF M/S KONARK COMMERCE AND INDUSTRIES LTD O F RS 4111050/- WHICH WAS DULY OFFERED FOR TAX. THE ASSES SEE CLAIMS THAT THESE SHARES W3ERE PURCHASED BY IT ON 10.04.03. AT COST OF RS 45450 /- AND SOLD THESE AT A CONSIDERATION OF RS 4156500/- BETWEEN 17.06.2004 TO N 29.06.2004.ON THREE DIFFERENT DATES. (II) THE ASSESSING OFFICER STARTED HIS INVESTIGATION BA SED ON CERTAIN ENQUIRIES CONDUCTED BY THE MUMBAI 7 INVESTIGATION WING IN RESPECT OF LONG TERM CAPITAL GAIN SHOWN BY MANY PERSONS ON THE PURCHASE AND SALE OF DABBA TRADING IN PENNY STOCK THAT BASED ON THE SAID INFORMATION IN POSSESSION OF THE ASSESSING OFFICER THE ASSESSING OFFICER COLLECTED INFORMATION U/S 133 (6) OF THE INCOME TAX ACT FROM VARIOUS STOCK EXCHANGES . THE ASSESSING OFFICER ALSO MENTIONED THAT SHARE PRICE O F EVEN RECOGNIZED COMPANIES DID NOT INCREASE BY 82 TIMES A S CLAIMED BY THE ASSESSEE IN THE PRESENT CASE. THE AS SESSING OFFICER IN THE ASSESSMENT ORDER HAS ACCEPTED THAT T HE ASSESSEE HAD FURNISHED THE DETAILS OF SALE AND PURC HASE OF SHARES WITH BILLS OF BROKERS. HOWEVER HE DISBELIEV ED THE SAID EVIDENCES . THE ASSESSING OFFICER ALSO MADE DE TAILED ENQUIRIES ACTIVITIES CARRIED OUT BY IT. THE ASSESSI NG OFFICER ALSO COLLECTED INFORMATION IN RESPECT OF BROKER THR OUGH WHICH THESE SHARE WERE SOLD BY THE ASSESSEE .IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS CONFIRM ED THAT THE ASSESSEE HAD FILED CONFIRMATION OF ACCOUNT FROM M/S P.K.AGRAWAL & CO. CALCUTTA THE ASSESSING OFFICER DISBELIEVED THE LONG TERM CAPITAL GAIN ON SALE OF S HARES OF RS 4111050/- AND TAXED THE SAME U/S 68 OF THE IT AC T BY TREATING THE SAME AS INCOME FROM OTHER SOURCES. (III) THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE LEARNED CIT (A) BUT DID NOT FIND FAVOUR. 6. THE LEARNED COUNSEL OF THE ASSESSEE D URING THE COURSE OF HEARING VEHEMENTLY OPPOSED THE FIN DINGS OF THE LD AO AND OF THE LEARNED CIT (A) IN THE COMPILA TION FILED BEFORE THIS BENCH THE ASSESSEE HAD FILED CO PY OF COMPUTATION OF INCOME AND BALANCE SHEET FOR THE ASSESSMENT YEAR 2004-05 WHEREIN INVESTMENT MADE IN THE SHARES OF M/S KONARK COMMERCE AND INDUSTRIES LTD OF RS 45450/- WAS DULY REFLECTED ON PAGE NO. 34 COPY OF V ARIOUS REPLIES FILED BEFORE THE ASSESSING OFFICER HAVE BEE N FILED ON PAGES 19-26 OF THE COMPILATION .PURCHASE BILLS OF S HARES OF M/S KONARK COMMERCE AND INDUSTRIES LTD AND COPY OF PHYSICAL SHARE CERTIFICATES DULY TRANSFERRED IN THE NAME OF THE ASSESSEE HAVE BEEN FILED ON PAGE NO 27-28 AND P AGES 35-41 OF THE COMPILATION RESPECTIVELY. HE HAS ALSO FILED DEMAT ACCOUNT OF THE ASSESSEE WITH IDBI BANK WHEREI N HOLDING OF SHARES HAS BEEN DULY REFLECTED AND COPY OF SALE INVOICES OF M/S P K AGRAWAL & CO. THROUGH WHOM THE SE SHARES WERE SOLD BY THE ASSESSEE DULY SUPPORTED BY THE RATES OF CALCUTTA STOCK EXCHANGE ON THE RELEVANT DATES.(PAGES 50-57 OF THE COMPILATION). ON PAGE NO 58 COPY OF ACCOUNT OF ASSESSEE IN THE BOOKS OF THE BROKER D ULY 8 SIGNED BY HIM HAS BEEN FILED .THE LD COUNSEL OF THE ASSESSEE ALSO RELIED ON THE SUBMISSIONS MADE BEFORE THE LEARNED CIT (APPEAL).THE LEARNED COUNSEL OF THE ASS ESSEE FURTHER ARGUED THAT THE ASSESSEE HAD FILED COMPLE TE DETAILS IN RESPECT OF PURCHASE AND SALE OF SHARES COPY OF BALANCE SHEET FILED FOR THE ASSESSMENT YEAR2004-05 IT SELF PROVED THE EXISTENCE OF THE SHARES AS ON TH E DATE OF PURCHASE. THE SAID PURCHASES HAVE NOT BEEN DOUBTED BY THE DEPARTMENT. SALE CONSIDERATION HAS BEEN REALIZE D THROUGH ACCOUNT PAYEE CHEQUES. THE LD. COUNSEL ALSO RELIED ON THE VARIOUS DECISIONS AND ALSO ARGUED TH AT RATIO OF DECISION OF HONBLE M.P. HIGH COURT IN THE CASE OF MATACHEM REPORTED IN 245 ITR 160 (MP) APPLIES IN TH E PRESENT CASE. THE ASSESSEE HAS BEEN ABLE TO COMPLET ELY AND SATISFACTORILY DISCHARGE THE ONUS LYING ON HIM TO P ROVE THE SOURCE AND NATURE OF THE CREDIT ENTRY OF SALE PROCE EDS IN ITS ACCOUNT BY OVERWHELMING EVIDENCE INCLUDING CONFIRMA TION FROM THE BROKER. HE FURTHER ARGUED THAT THE ASSESSI NG OFFICER AND ALSO THE LEARNED CIT (APPEAL) MAINLY FO CUSED ABOUT THE EXISTENCE AND GENUINENESS OF THE COMPANY KONARK COMMERCE & INDUSTRIES LTD. THE ACTIVITIES OF THE COMPANY AND THE CREDENTIALS OF THE BROKER HAVE NO B EARING TO THE PRESENT CASE. 7. THE LD. DR HAS TRIED TO PROVE THAT THE SAID COMP ANY (KONARK COMMERCE & INDUSTRIES LTD) WAS A PAPER COMP ANY IN THE SENSE THAT IT HAD NO REAL NET WORTH. THE LD A.R. HAS AVERRED THAT THE ASSESSEE HAS MERELY TREADED IN SHA RES OF THE SAID M/S. KONARK COMMERCE & INDUSTRIES LIMITED WHICH WERE HELD AS INVESTMENT IN THE BOOKS OF THE ASSESSEE. THE ASSESSEE HAD SOLD THESE SHARES ON THE FLOOR OF STOCK EXCHANGE THROUGH RECOGNIZED BROKER AND SAL E CONSIDERATION OF THE SAME WERE ALSO REALIZED THROUG H ACCOUNT PAYEE CHEQUES. THE ENTIRE TRANSACTION HAS B EEN DULY CONFIRMED BY THE BROKER AND CAN BE TRACED FROM REGULAR BANKING CHANNELS. THESE SHARES WERE SOLD BY THE ASSESSEE ON THE CALCUTTA STOCK EXCHANGE THROUGH SEB I AUTHORIZED BROKER WHO WAS DULY AUTHORIZED TO DEAL I N THE SAID SHARES AT THE MATERIAL POINT IN TIME. THE SAID SALE RATES ARE ALSO DULY SUPPORTED BY THE QUOTATIONS OF THE COMPANY IN THE CALCUTTA STOCK EXCHANGE AT THE RELEV ANT TIME. HE FURTHER ARGUED THAT ONCE THE IDENTITY OF T HE BROKER IS PROVED THERE IS NO REASON FOR THE ASSESSING OFF ICER TO DISBELIEVE THE PURCHASE AND SALE BILLS OF THE BROKE RS. HE FURTHER CLARIFIED THAT THE LEARNED CIT(APPEAL) HAS GIVEN 9 UNDUE WEIGHT TO THE ENQUIRY MADE BY THE SEBI AGAIN ST THE BROKER THROUGH WHOM SHARES WERE SOLD BY THE ASSESSE E AND THE FINANCIAL POSITION OF THE COMPANY M/S KONARK COMMERCE AND INDUSTRIES LTD. HE SUBMITTED THAT THE ASSESSEE IS NOT CONCERNED WITH THE ACTION OF THE SE BI AGAINST THE BROKER AND ALSO NOT CONCERNED WITH THE FINANCIAL POSITION OF THE COMPANY. SINCE INVESTMEN TS WERE MADE BY THE ASSESSEE ON THE BASIS OF TIP OF THE BRO KER. HE FURTHER SUBMITTED THAT SHARES WERE PURCHASED BY THE ASSESSEE AND SUCH PURCHASE TRANSACTION HAS BEEN DUL Y INCORPORATED IN ITS BOOKS OF ACCOUNT TRANSACTIONS OF PURCHASE AND SALE HAVE BEEN EXECUTED THROUGH RECOGN IZED BROKERS. HE FURTHER ARGUED THAT THE ASSESSEE HAD RE CEIVED ENTIRE SALE CONSIDERATION THROUGH ACCOUNT PAYEE CHE QUES. THAT IF ANY CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE BROKER OR ITS ASSOCIATED CONCERNS IN THAT CASE IT IS THE BROKERS WHO ARE RESPONSIBLE TO EXPLAIN THE SOURCE O F CASH DEPOSITED BY THEM IN THEIR BANK ACCOUNT. AS PER THE LD. AR THE UNILATERAL CONCLUSIONS DRAWN BY THE LD. A.O. BY CALLING FROM THE ABN AMRO BANK IN CALCUTTA THE ACCOUNT DET AILS OF THE BROKER AS MAINTAINED BY HIM WITH THE SAID BA NK BEHIND THE BACK OF THE ASSESSEE AS WELL AS THE BROK ER ARE NOTHING BUT HIS OWN FIGMENTS OF IMAGINATION AND IN ANY CASE ARE IN FLAGRANT VIOLATION OF NATURAL JUSTICE. THAT THE SOURCE OF CREDIT ENTRY IN THE BOOKS OF THE ASSESSEE IS THE SALE PROCEEDS RECEIVED THROUGH THE CALCUTTA BROKER BY ACCOUNT PAYEE CHEQUES. ONCE THE IDENTITY OF THE BRO KER HIS CAPACITY AND THE GENUINENESS OF THE TRANSACTION IS PROVED THE ASSESSEE IS DEEMED TO HAVE DISCHARGE THE PRIMAR Y ONUS LYING ON HIM OF PROVING THE SAID TRANSACTION. THE L D. AR FURTHER ARGUED THAT AS PER THE VARIOUS DETAILS MENT IONED BY THE A.O. HIMSELF THE IDENTITY OF THE BROKER IS EST ABLISHED BEYOND ANY DOUBT. MOREOVER THE BROKER HAS DULY CONFIRMED THE SAID TRANSACTION AND HAS REPLIED TO V ARIOUS SUMMONS ISSUED TO HIM FROM TIME TO TIME. THE ANALYS IS OF THE BANK ACCOUNT OF THE BROKER THOUGH CALLED BY THE LD. A.O. BEHIND THE BACK OF THE ASSESSEE AS WELL AS THE BROKER FURTHER ESTABLISH THAT THERE WERE VARIOUS INCOMINGS AND OUTGOINGS FROM THE SAID ACCOUNT THUS ESTABLISHING THE CAPACITY OF THE SAID BROKER. IT WOULD BE PERTINENT TO MENTION HERE THAT NONE OF THE TRANSACTIONS IN THE B ANK ACCOUNT OF THE BROKER ARE IN CASH. THE SALE TRANSAC TIONS ARE ON THE FLOOR OF THE STOCK EXCHANGE THROUGH SEBI AUTHORIZED BROKER WHO HAS DULY CONFIRMED ALL THE TRANSACTION ENTERED BY THE ASSESSEE THROUGH HIM TH E SAID TRANSACTIONS ARE DULY SUPPORTED BY SALE INVOICES C ONTRACT 10 NOTES DEMAT SLIPS AND THE PAYMENT IS THROUGH BANKI NG CHANNELS. THUS LEAVING NO IOTA OF DOUBT ABOUT THE TRANSACTION BEING GENUINE. THUS AS PER THE LD AR THE ASSESSEE HAS BY WAY OF OVERWHELMING EVIDENCE BEEN ABOVE TO DISCHARGE THE PRIMARY ONUS LYING ON HIM TO EXPLA IN THE SOURCE OF CREDIT ENTRY IN HIS BOOKS VIZ. THE SALE P RICE OF THE SAID SHARES AS SOLD BY HER THROUGH THE CALCUTTA BRO KER. IT IS PLEADED BY THE LD AR THAT ALL THE ENQUIRIES MADE BY THE LD A.O. BEHIND THE BACK OF THE ASSESSEE ARE IN GROS S VIOLATION OF NATURAL JUSTICE AND SHOULD NOT BE ADMI TTED BUT EVEN IF ADMITTED THEY ONLY HELP THE CASE OF THE AS SESSEE IN PROVING THE IDENTITY THE CAPACITY AND THE GENUINEN ESS OF THE TRANSACTION. HE HAS FURTHER SUBMITTED THAT IF A NY CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE BROKER OR ITS ASSOCIATED CONCERNS IN THAT CASE IT IS THE BROKER S WHO ARE RESPONSIBLE TO EXPLAIN THE SOURCE OF CASH DEPOSITED BY THEM IN THEIR BANK ACCOUNT. THAT FROM THE PERUSAL OF THE BANK ACCOUNT OF THE BROKER AS CALLED FOR BY THE A.O. IT IS EVIDENT THAT NO CASH WAS DEPOSITED IN THE SAID ACCOUNT. THE ASSESSEE IS IN NO WAY RESPONSIBLE TO EXPLAIN THE SO URCE OF SOURCE OF CREDIT ENTRY IN THE BOOKS OF THE ASSESSEE . THE LD A.O. HAD CALLED FOR VARIOUS INFORMATION FROM THE BR OKER FROM TIME TO TIME WHICH WAS DULY AND TIMELY REPLIED TO BY THE SAID BROKER. THE LD AR SUBMITS THAT HE FAILS TO UNDERSTAND AS T O WHY THEN THE BROKER WAS NOT CONFRONTED WITH QUESTI ON ABOUT SOURCE OF CREDIT ENTRY IN THE BOOKS OF THE BR OKER AND AS TO HOW FAR THE ASSESSEE IS BOUND BY THE UNILATER AL CONCLUSION DRAWN BY THE A.O. REGARDING CREDIT ENTRI ES IN THE ACCOUNTS OF THIRD PARTIES WHEN THE BROKER IS AN INCOME TAX ASSESSEE AND HAS ALL THROUGH CO-OPERATED WITH T HE DEPARTMENT IN GIVING TIMELY REPLIES TO THE QUERIES RAISED FROM HIM. HE PLACES RELIANCE ON THE DECISION OF HUM BLE M.P. HIGH COURT IN THE CASE OF METACHEM REPORTED IN 245 ITR 160(MP) AND THE DECISION OF HUMBLE SUPREME COUR T OF INDIA IN THE CASE OF LOVELY EXPORTS REPORTED IN 216 CTR 195(SC). 8. THE LEARNED COUNSEL OF THE ASSESSEE ALSO RELIED ON THE FOLLOWING DECISIONS. GIST OF ALL THESE DECISION S ARE AS UNDER:- 1] 6 SOT 247 (MUM) MUKESH R. MAROLIA VS ADDL. CIT. 2] 121 TTJ 695 (KOL.) ACCHYALAL SHAH V/S. ITO. 11 3] SMT. MEMO DEVI V/S ACIT 7 DTR 158 (AGRA) (ITAT). 4] SHRIPAL SINGH GULATI V/S ITO 9 DTR 564 (AGRA) IT AT). 5] ITO V/S NAVEEN GUPTA 5 SOT 94 (DEL). 6] ITO V/S. SMT. NEELAM CHAWLA 6 DTR 141 (DEL) (ITAT). 7] 120 TTJ 132 (JODH) ACIT V/S CHANDRESH KUMAR MAHESHWARI. 8] 299 ITR 179 AND 182 (P & H) CIT V/S ANUPAM KAPOOR. 9] 8 ITJ 165 (IND) 172 186 & 187 KALANI INDUSTRIES LTD. 10] 216 CTR 195 (SC) LOVELY EXPORTS. 9. THE LEARNED DR ON THE OTHER HAND RELIED ON THE DECISION OF THE LD CIT (APPEAL). IN ADDITION TO THA T THE LEARNED DR ALSO SUBMITTED COPY OF VARIOUS ENQUIRY R EPORTS CONDUCTED BY THE SEBI AGAINST THE BROKER AND AGAINS T THE COMPANY. THE LEARNED DR FURTHER SUBMITTED THAT THE ASSESSEE HAS CONVERTED HER BLACK MONEY THROUGH THE ROUTE OF LONG TERM CAPITAL GAIN INTO OFFICIAL MONEY. HE H AS FURTHER SUBMITTED THAT M/S KONARK COMMERCE AND INDUSTRIES LIMITED HAS NO REAL BUSINESS DURING THAT PERIOD. 10. THAT ALL THE TECHNICAL OBJECTIONS RAISED TO BY THE A.O. REGARDING TRANSFER FORM SIGNATURE DIFFERENCE ETC H AVE BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE AS IS EVID ENT FROM DETAILED WRITTEN SUBMISSIONS FILED BEFORE THE LD CI T (A) AND REPRODUCED BY HIM IN HIS ORDER AND SO ALSO THE DETA ILED SYNOPSIS FILED ON PAGES A-F WHICH ARE NOT REPRODUCE D HERE AGAIN FOR THE SAKE OF BREVITY. THE LD CIT (A) HAS I NFACT VIDE PARA 4.1.3 OF HIS ORDER ON PAGE 21 IMPLIEDLY ACCEPT ED THE EXPLANATIONS AS FILED BY THE ASSESSEE AND HAS MENTI ONED THAT THE ADDITION HAS NOT BEEN MEAN ON THE BASIS OF THE TECHNICAL OBJECTIONS BUT ON FURTHER INVESTIGATIONS THROUGH WHICH THE LD A.O. HAS SUCCEEDED TO LIFT THE VEIL TO ESTABLISH THE CORRECT NATURE OF TRANSACTION. 11. THE LEARNED AR HAS FILED COPY OF PURCHASE BILLS SALE BILLS COPY OF DEMAT ACCOUNT CONFIRMATION AS RECEI VED FROM THE BROKERS THROUGH WHICH THESE SHARES WERE SOLD BY THE ASSESSEE AND COPY OF DETAILED REPLY FILED BEFORE TH E LEARNED 12 CIT (APPEAL). THE LEARNED DR ON THE OTHER HAND RELI ED ON THE FINDING OF THE ASSESSEE OFFICER AND COPY OF ORD ER PASSED BY THE CIT (APPEAL) AND SUBMITTED THE INQUIRY REPOR T AND ORDER AS PASSED BY THE SEBI. THE LEARNED AR HAS FIL ED COMPLETE DETAILS AS TO JUSTIFY THE PURCHASE AND SAL E OF SHARES AND SALE CONSIDERATION HAS ALSO BEEN REALIZE D THROUGH ACCOUNT PAYEE CHEQUES THE MOVEMENT OF SHAR ES HAS ALSO BEEN PROVED FROM THE DEMAT ACCOUNT PURCHA SE OF SHARES HAVE BEEN DULY REFLECTED IN THE BALANCE SHEE T FILED WITH THE RETURN OF INCOME. THAT TO JUSTIFY THE PRIC E OF PURCHASE AND SALE OF SHARES THE LEARNED AR HAS FIL ED QUOTATIONS OF CALCUTTA STOCK EXCHANGE ON THE RELEVA NT POINT IN TIME. THE LEARNED AR FURTHER SUBMITTED THA T THE ASSESSEE HAD MERELY SOLD SHARES OF THAT COMPANY IN THE CAPACITY OF INVESTOR. THAT INQUIRY REPORT AS SUBMIT TED BY THE LEARNED DR ON THE CONTRARY PROVES THE EXISTENCE OF THE BROKER THE COMPANY AND PRICE RIGGING IN THE SHARES OF THAT COMPANY. THE ARGUMENTS OF THE LEARNED DR THAT THE ASSESSEE HAS CONVERTED ITS BLACK MONEY THROUGH THE ROUTE OF LONG TERM CAPITAL GAIN ARE ALSO NOT SUPPORTED BY ANY CONCRETE EVIDENCE BUT MERE SUSPICION OF THE A.O. TH E ASSESSEE OFFICER DESPITE HIS BEST EFFORTS HAS FAILE D TO PROVE ANY LIVE LINK BETWEEN THE CASH DEPOSITED IN THE BAN K ACCOUNT OF THIRD PARTIES AND CHERUBS RECEIVED BY TH E ASSESSEE. THAT IF ANY CASH WAS DEPOSITED IN THE BAN K ACCOUNT OF THE BROKER AND/OR HIS ASSOCIATES IN THA T CASE THE PERSON IN WHOSE ACCOUNTS CASH WAS DEPOSITED IS SOLELY RESPONSIBLE TO EXPLAIN THE SOURCE OF THE SAME. THE ASSESSEE IN NO CASE CAN BE MADE RESPONSIBLE FOR CASH DEPOSIT ED IN THE BANK ACCOUNT OF ANY OTHER PERSON. IN THE CASE O F SALE OF SHARES THE ASSESSEE HAD SOLD ITS INVESTMENT AND TH E AMOUNT AS RECEIVED BY THE ASSESSEE IS NOT REFUNDABL E TO ANYONE. THUS NATURE OF LONG TERM CAPITAL GAIN AND SHARE CAPITAL HAS CLOSE PROXIMITY. IN THAT CASE THE ASSES SEE IS ONLY LIABLE TO PROVE THE MOVEMENT OF SHARES FROM HI S ACCOUNT PAYEE CHERUBS. COPIES OF STOCK EXCHANGE QUOTATIONS DULY SUPPORT THE PRICE OF SHARES. THE EN TIRE TRANSACTION HAS BEEN CATEGORICALLY AND UNEQUIVOCALL Y CONFIRMED BY THE CALCUTTA BROKER. IN ADDITION TO TH AT THE ASSESSEE IS NOT LIABLE TO PROVE ANYTHING. THE DECIS ION OF HUMBLE M.P.HIGH COURT IN THE CASE OF METACHEM REPOR TED IN 245 ITR 160 (MP) SUPPORTS THE CASE OF THE ASSESS EE. THE FINDING OF THE LEARNED A.O. AND THE LEARNED CIT (AP PEAL) ARE MERELY BASED ON PRESUMPTIONS AND SUSPICIONS AND NO LIVE LINK HAS BEEN ESTABLISHED TO SUPPORT THEIR FIN DINGS. THE LD. DR HAS FILED VARIOUS PAPERS CONNECTED WITH THE 13 PROCEEDINGS TAKEN BY SEBI IN VARIOUS CASES DURING T HE COURSE OF HEARING OF APPEAL. NEARLY ALL PAPERS RELA TE TO EVENTS AFTER THE DATE OF TRANSACTION ENTERED INTO B Y THE ASSESSEE. NO REASON HAS BEEN GIVEN BY THE LD. DR AS TO WHY THESE PAPERS SHOULD BE ADMITTED SINCE THEY DO NOT D IRECTLY RELATE TO THE ASSESSEE. THE LD. AR HAS TAKEN AN OBJ ECTION THAT ANY DISCIPLINARY PROCEEDINGS UNDERTAKEN AGAINS T THE BROKER (IN RESPECT OF DEALINGS WITH OTHER COMPANIES ) OR THE COMPANY DO NOT IMPLICATE THE INVOLVEMENT OF THE ASS ESSEE AND THEREFORE THE SAME SHOULD NOT BE ADMITTED AND CONSIDERED AT THIS STAGE. THAT EVEN IF THE SAID DO CUMENTS ARE ADMITTED THEY ONLY SUPPORT THE CASE OF THE ASS ESSEE IN AS MUCH AS THE EXISTENCE OF THE BROKER AND THE COMP ANY AND THE FACT THAT THERE WAS PRICE RIGGING IN THE SH ARE PRICES OF THE COMPANY HAS BEEN PROVEN BEYOND DOUBT. ALSO THAT APPROPRIATE DISCIPLINARY ACTION HAS ALREADY BEEN UNDERTAKEN BY THE MARKET REGULATORY AUTHORITY SEBI AGAINST THOSE WHO WERE ACCUSED OF CREATING ARTIFICI AL PRICE RISE IN THE CASE OF THE COMPANY. THAT WHAT WAS THE FINAL FATE OF THE ORDER OF SEBI WHETHER ANY APPEAL WAS FILED BY THE BROKER AGAINST WHOM EX-PARTE ORDER HAS BEEN PAS SED IS NOT KNOWN. THE ASSESSEE MERELY ACTED UPON THE TIP O F THE BROKER AND WAS ABLE TO REALIZE HANDSOME CAPITAL GAI N IN RESPECT OF HIS INVESTMENT HOLDING. 12. THAT EVEN AFTER THE BEST OF THE EFFORTS OF THE AO HE HAS NOT BEEN ABLE TO ESTABLISH ANY LIVE LINK OF THE ASSESSEE IN ANY OF THE PRICE RIGGING OR ANY OF THE ALLEGED C ASH TRANSACTIONS. MOREOVER THE CONCLUSIONS DRAWN BY TH E AO ARE ONLY HIS OWN FIGMENTS OF IMAGINATION SINCE THEY HAVE BEEN ARRIVED AT HIS OWN WITHOUT EXAMINING THE BROKE R OR THE OTHER COMPANIES WHOSE BANK ACCOUNTS HAVE BEEN CALLED FROM THE BANK BY THE AO. THE LD. AR HAS CITE D THE RECENT EXAMPLE OF SATYAM LTD WHEREIN HUGE CASH BALA NCES) ( WHICH WERE NONEXISTENT) WERE CERTIFIED AS TRUE B Y AUDITOR. STILL THE PRICE OF THE SHARE WAS ON RISE AFTER A ST EEP FALL. THIS ONLY PROVES THAT IN THE SHARE MARKET THE PRICE S OF SHARES ARE NOT DETERMINED BY THE MAIN BUSINESS ACTI VITIES OF THE COMPANIES BUT MORE BY DEMAND-SUPPLY MECHANIS M TIPS RUMORS AND HERD MENTALITY. 13. WE HAVE GIVEN OUR ANXIOUS THOUGHT TO THE RI VAL CONTENTIONS AND AFTER PERUSING THE MATERIAL AVAILA BLE ON RECORD THE CASE LAWS RELIED ON BY BOTH PARTIES. 14 14. THE LEARNED D.R. DURING COURSE OF HEAR ING FURNISHED A COPY OF ORDER DATED 28.4.2009 PASSED BY DR.K.M. IBRAHIM WHOLE TIME MEMBER OF SEBI UNDER REGULATION 28(2) OF SECURITIES AND EXCHANGE BOARD O F INDIA (INTERMEDIARIES) REGULATION 2008 AGAINST M/S P.K.A GRAWAL & CO. THE BROKER IN MATTER OF CORNET INDUSTRIES LTD. WHICH WAS OBTAINED BY THE LEARNED D.R. FROM THE INT ERNET SITE. THE SAID ORDER HAS BEEN PASSED IN THE MATTER OF CORONET INDUSTRIES LTD. AND NOT IN THE CASE OF K ONARK COMMERCE & INDUSTRIES LTD. OF WHICH SHARES WERE PURCHASED AND SOLD BY THE ASSESSEE. THE LEARNED D.R . HAD CONTENDED THAT FROM THE ABOVE ORDER IT IS APPARENT THAT THE BROKER M/S P.K. AGRAWAL & CO. CALCUTTA THROUGH WHI CH THE ASSESSEE ALLEGED TO BE DEALT WITH IN PURCHASES OF SHARE OF THE KONARK COMMERCE & INDUSTRIES LTD. LEAD TO THE CONCLUSION THAT THE TRANSACTION CARRIED OUT THROUGH THE ABOVE BROKER GIVE MISLEADING APPEARANCE OF TRADING IN SECURITIES AND MANIPULATION IN THE SHARE PRICE OF T HE COMPANY KONARK COMMERCE & INDUSTRIES LTD. 15. HOWEVER ANOTHER ORDER DATED 29.9.2009 P ASSED BY ADJUDICATING OFFICER OF SEBI IN THE CASE OF THE BRO KER SRI BALLABH DAS DAGA IN THE MATTER OF THE COMPANY KONA RK COMMERCE & INDUSTRIES LTD. HAS ALSO BEEN FURNISHED BEFORE US WHICH WAS ALSO OBTAINED FROM THE INTERNET SITE. THE SAID ORDER IS IN THE MATTER OF THE COMPANY OF W HICH SHARE WERE PURCHASED & SOLD. IN THE SAID ORDER AT P ARE 22 IT IS MENTIONED AS UNDER:- I OBSERVE THAT FROM THE MATERIAL A VAILABLE ON RECORD THE EXTENT OF ANY QUANTIFIABLE GAIN OR UNFA IR ADVANTAGE ACCRUED TO THE NOTICEE AS A RESULT OF HIS FAULT CANNOT BE ASCERTAINED. THE EXTENT OF LOSS SUFFERED BY THE INVESTORS AS A RESULT OF THE DEFAULT OF THE NOTICEE CANNOT BE DERIVED FROM THE MATERIAL AVAILABLE ON RECORD. 16. FROM THE ABOVE IT IS APPARENT THAT BO TH THE ORDERS ARE NOT BASED ON CONCRETE EVIDENCE AND NO SI NGLE IOTA OF EVIDENCE HAS BEEN DISCUSSED TO PROVE THAT T HE ASSESSEE WAS INVOLVED IN CREATING ARTIFICIAL PRICE RISE IN THE SHARES OF THE CONCERNED COMPANY. THE FINAL FAIT OF THE ORDERS OF THE SEBI DISCUSSED ABOVE ARE NOT KNOWN TO EITHER OF THE SIDES. THE ABOVE ORDERS DO NOT HELP TO THE R EVENUE SO AS TO PROVE LIVE LINK BETWEEN CASH DEPOSITED BY THE ASSESSEE AND RECEIVED CHECK IN FORM OF LONG TERM CA PITAL GAIN. FURTHER THE APPELLANT DID NOT DEALT WITH THE BROKER 15 SRI B.D. DAGA IN WHOSE CASE ENQUIRY WERE CONDUCTED ABOUT SHEARS OF KONARK COMMERCE & INDUSTRIES LTD. FURTH ER IN CASE IF ANY VIOLATION OF THE PROVISIONS OF SEBI (INTERMEDIARIES) REGULATION (2008) OR SEBI ACT 199 2 HAVE BEEN COMMITTED THE SAME IS FAULT OF THE SEBI BROKE RS. THE MANIPULATION IF ANY CONDUCTED BY THE BROKER THE AP PELLANT IS NOT LIABLE TO BE PENALIZED. 17. FURTHER IN VIEW OF THE OVERWHELMING EVIDE NCES FILED BY THE ASSESSEE IN SUPPORT OF ITS TRANSACTION OF PU RCHASE AND SALE OF SHARES OF THE SAID COMPANY DULY CONFIRM ED BY THIRD PARTY EVIDENCE LIKE CONFIRMATIONS OF BROKERS AND BANK DETAILS WE ARE OF THE VIEW THAT THE SHORT POINT FOR OUR DETERMINATION AS ENUMERATED IN PARA 4 (SUPRA) NEEDS TO BE ANSWERED IN FAVOUR OF THE ASSESSEE. THAT IS THE SA ID TRANSACTION WAS RIGHTLY REFLECTED BY THE ASSESSEE A S LONG TERM CAPITAL GAIN. THE LD. AO AS WELL AS THE LD. CI T(A) WERE NOT JUSTIFIED IN TREATING THE SAME AS UNEXPLAINED C ASH CREDIT U/S 68 OF THE I.T. ACT WHEN THE ASSESSEE HAS BEEN ABLE TO DISCHARGE ITS PRIMARY ONUS EFFECTIVELY AND SATISFACTORILY. THE REVENUE COULD NOT ESTABLISH LIV E LINK BETWEEN CASH DEPOSITED BY THE ASSESSEE IN FORM OF L ONG TERM CAPITAL GAIN. ACCORDINGLY THIS GROUND IS DECI DED IN FAVOUR OF THE ASSESSEE. THE ORDER OF THE LD.CIT(A) IS SET ASIDE AND LONG TERM CAPITAL GAIN AS DECLARED BY THE ASSESSEE IS ACCEPTED. 18. GROUND II THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN NOT CATEGORICALLY REJECTING THE FINDING OF A.O. REG ARDING THE ALTERNATE ADDITION MADE BY HIM ABOUT THE ENTIRE AMO UNT OF LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS.41 1 1 050/- AS UNEXPLAINED MONEY U/S 69A OF THE I.T. ACT WHEN T HE ENTIRE TRANSACTION WAS DULY RECORDED IN THE BOOKS O F THE ASSESSEE AND THE SOURCE OF MONEY HAS BEEN DULY EXPLAINED. 19. THIS GROUND HAS BEEN DECIDED BY THE LD. CI T(A) VIDE PAGE 21 PARA 20 OF HIS ORDER IN THE FOLLOWING MANNE R: 4.2 GROUND NO. (1.2) : IN VIEW OF MY DECISION ON THE GROUND NO.(1.1) THE ALTERNATIVE FINDING OF THE AO FOR TAXING THE AMOUNT U/S 69A AS UNEXPLAINED MONEY ON THE GROUND OF INVESTMENT OF THE SAME AMOUNT IN THE FAMILY CONCERN M/S PUNJAB JEWELL ERS HAS NO RELEVANCE AND DOES NOT CALL FOR ANY FURTHER DECISION 16 ON THE ISSUE RAISED IN GROUND NO. (1.2) AND AS SUCH THE SAME IS TREATED AS INFRUCTUOUS. 21. THE LD. AR HAS RELIED UPON THE WRITTEN SUBM ISSIONS AS FILED BEFORE THE LD.CIT(A) AS REPRODUCED BY HIM ON PAGES 17 AND 18 OF HIS ORDER. IT IS CONTENDED BY THE LD.A R THAT THE ASSESSEE HAS RECEIVED SALE PROCEED OF SALE OF S HARES THROUGH AN ACCOUNT PAYEE CHEQUE. THE SAME WAS DEPOS ITED IN HER BANK ACCOUNT AND THEN ADVANCED TO THE FAMILY CONCERN M/S PUNJAB JEWELLERS. THE SOURCE O F AMOUNT RECEIVED BY THE ASSESSEE STANDS PROPERLY EXPLAINED BY THE ASSESSEE WITH PROPER EVIDENCES. HENCE THERE IS NO JUSTIFICATION ON THE PART OF THE ASSESSING OFFICER TO MAKE ALTERNATE ADDITION U/S 69A OF THE INCOME TAX ACT. 22. THE PROVISION OF SECTION 69A OF THE INCOME T AX ACT READ AS UNDER :- 69A UNEXPLAINED MONEY ETC. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY BULLION JEWELLERY OR OT HER VALUABLE ARTICLE AND SUCH MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE IS NOT RECORDED IN THE BOOKS OF ACCOUNT IF ANY MAINTAINED BY HIM FOR ANY SOURCE O F INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOU T THE NATURE AND SOURCE OF ACQUISITION OF THE MONEY BULL ION JEWELLERY OR OTHER VALUABLE ARTICLE OR THE EXPLANA TION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESS ING OFFICER SATISFACTORY THE MONEY AND THE VALUE OF T HE BULLION JEWELLERY OR OTHER VALUABLE ARTICLE MAY BE DEEMED T O BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. 23 A DIVISION BENCH OF THE CALCUTTA HIGH COURT IN KANTILAL CHANDULAL & CO VS CIT (1982) 29 CTR (CAL) 39: (1982) 136 ITR 889 (CAL) WHILE INTERPRETING THE PR OVISIONS OF S. 69A OF THE ACT LAID DOWN THAT TWO CONDITIONS NEED TO BE FULFILLED BEFORE THE PROVISIONS OF S. 69A ARE AP PLIED. THE FIRST CONDITION FOR APPLYING THE PROVISIONS OF S. 6 9A IS THAT THE ASSESSEE SHOULD BE FOUND TO BE OWNER OF ANY MON EY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE AND S ECONDLY THE SAME SHOULD NOT BE FOUND RECORDED IN THE BOOKS OF ACCOUNT IF ANY MAINTAINED BY THE ASSESSEE. 24. THE HONBLE MUMBAI BENCH OF ITAT IN THE CASE O F ITO VS PUKHRAJ N.JAIN REPORTED IN 99 TTJ 364/95 ITD 281 (REFER PARA 24) HAS HELD THAT:- 17 24. FOR MAKING AN ADDITION UNDER S. 69A OF THE IT ACT 1961 APART FROM OWNERSHIP OF THE ASSET/VALUAB LE ARTICLE WHICH IS DEEMED TO BE THE INCOME OF THE AS SESSEE OF THAT FINANCIAL YEAR IT IS ALSO A PREREQUISITE THAT SUCH ASSET/VALUABLE ARTICLE IS NOT RECORDED IN THE BOOK S OF ACCOUNT MAINTAINED BY THE ASSESSEE (IF ANY). 25 THAT FROM THE CLEAR LANGUAGE OF PROVISIO N OF SECTION 69A THE PROVISION OF SECTION 69A APPLIES WHEN THE A SSESSEE FOUND OWNER OF ASSETS/ VALUABLE ARTICLE WHICH WERE NOT RECORDED IN HER BOOKS OF ACCOUNT. HOWEVER IN THE P RESENT CASE THE AMOUNT RECEIVED BY THE ASSESSEE ON SALE O F SHARES IS PROPERLY RECORDED IN HER BOOKS OF ACCOUNT AND RE LEVANT DOCUMENTARY EVIDENCES HAVE ALSO BEEN FILED. HENCE IN ANY CASE THERE IS NO JUSTIFICATION ON THE PART OF THE A SSESSING OFFICER TO MAKE ADDITION BY INVOKING THE PROVISION OF SECTION 69 A OF THE INCOME TAX ACT. WE THUS DECIDE THIS LEG AL GROUND IN FAVOUR OF ASSESSEE. 4. IF THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER CONCLUSION DRAWN IN THE IMPUGNED ORDER MATERIAL AV AILABLE ON RECORD AND THE ASSERTION MADE BY THE LD. RESPECTIVE COUNSEL ARE KEPT IN JUXTAPOSITION AND ANALYSED WE FIND THAT TH E LD. ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT TREATED THE LO NG TERM CAPITAL GAIN AS UNEXPLAINED INCOME U/S 68 OF THE I.T. ACT A GAINST THE CLAIM OF THE ASSESSEES TAXING THE GAIN AT 10% IN TH E RETURN. THE AMOUNT INVOLVED IN THE RESPECTIVE APPEALS IS SUMMAR ISED AS UNDER: S.NO. NAME OF THE ASSESSEE NATURE OF ADDITION AMOUNT (RS.) CONCLUSION OF LD. CIT(A) 1 GAURAV ANAND INCOME FROM LTCG ON SALE OF SHARES INVOKING SEC. 68 OF THE ACT RS.24 96 180 DELETED 2 SMT. SHASHI ANNAD -DO- RS.23 88 080 -DO- 3 DARPAN ANAND -DO- RS.28 41 540 -DO- 18 4.1 IN THE CASE OF SHRI GAURAV ANAND THE ASSESSEE PURCHASED 11000 EQUITY SHARES OF KONARK COMMERCE & IND. LTD. AT A CONSIDERATION OF RS.22 220/- ON 10.4.2003 (COPY OF PURCHASE BILL IS AVAILABLE ON PAGE 14 OF THE PAPER BOOK). THESE S HARES WERE TRANSFERRED ON 20.5.2003 IN THE NAME OF THE ASSESSE E (COPIES OF SHARE CERTIFICATES ARE AVAILABLE AT PAGES 16 TO 26 OF THE PAPER BOOK). THE SHARES WERE SOLD AT A CONSIDERATION OF R S.25 18 400/- ON 19.8.2004 (CONTRACT NOTE IS AVAILABLE AT PAGE 15 OF THE PAPER BOOK). COPIES OF THE CONFIRMATION AND ACCOUNT FROM THE BROKER ARE AVAILABLE AT PAGE 29 & 30OF THE PAPER BOOK. THE SALE WAS MADE THROUGH D-MAT ACCOUNT WITH IDBI BANK (PAGE 32 OF THE PAPER BOOK). THE COPY OF THE BANK ACCOUNT OF THE AS SESSEE WITH IDBI IS AVAILABLE AT PAGE 33 OF THE PAPER BOOK WHER EIN SALE PROCEEDS WERE CREDITED. THE COPY OF THE OFFICIAL QU OTATION FROM THE CALCUTTA STOCK EXCHANGE IN RESPECT OF SHARES S OLD BY THE ASSESSEE IS AVAILABLE ON PAGE 34 OF THE PAPER BOOK . IF THE TOTALITY OF FACTS ARE ANALYSED WE FIND THAT THE ONUS CAST U PON THE ASSESSEE HAS BEEN DULY DISCHARGED. IN VIEW OF THESE FACTS AND 19 THE DECISION OF THE TRIBUNAL WHICH WAS AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). IDENTICAL IS THE SITUATION IN THE CASES OF SMT. SHASHI ANAND AND DARPAN ANAND. THE TRIBUNAL HAS ALREADY PL ACED RELIANCE UPON VARIOUS JUDICIAL PRONOUNCEMENTS WHICH ARE NOT BEING REPEATED BEING MATTER OF RECORD AND MORE SPE CIFICALLY WHEN THE ORDER OF THE TRIBUNAL HAS BEEN AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT. THE RATIO LAID DOWN IN M UKESH R. MAROLIA (6 SOT 247) (MUM) RAJEEV AGRAWAL (89 TTJ 1 095) (DEL) SMT. NEELAM CHAWLA (6 DTR 141) (DEL) SMT. MEMO DEV I VS. ACIT (7 DTR 158) (AGRA) AND ITO VS. NAVIN GUPTA (5 SOT 94) (DEL) FURTHER SUPPORTS THE CASES OF THE ASSESSEES. THE HONBLE JURISDICTIONAL HIGH COURT WHILE DECIDING THE APPEA L OF THE REVENUE U/S 260A OF THE I.T. ACT WHICH IS BORNE OU T OF IDENTICAL FACTS VIDE ORDER DATED 6 TH JANUARY 2012 HAS DULY CONSIDERED THE FACTS HAMMERING THAT THE SHARE PRICE FROM KHOKA COM PANY WITH THE HELP OF UNSCRUPULOUS SHARE TRADING AND ALSO THE DECISION RELIED UPON BY THE REVENUE. THE HONBLE COURT DISMI SSED THE 20 APPEAL OF THE REVENUE. RESPECTFULLY FOLLOWING THE D ECISION FROM HONBLE JURISDICTIONAL HIGH COURT AND ALSO OF THE C OORDINATE BENCH OF THIS TRIBUNAL WE FIND NO INFIRMITY IN THE CONCL USION DRAWN BY THE LD. FIRST APPELLATE AUTHORITY IN THE RESPECTIVE APP EAL. THE ORDERS OF THE LD. CIT(A) ARE AFFIRMED. FINALLY THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 8.10.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9.10.2013 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE !VYS!