Vijay Radheshyam Nyati HUF, Dhar v. ITO, Dhar

ITA 704/Ind/2018 | 2014-2015
Pronouncement Date: 25-05-2021 | Result: Allowed

Appeal Details

RSA Number 70422714 RSA 2018
Assessee PAN AJPPN2679C
Bench Indore
Appeal Number ITA 704/Ind/2018
Duration Of Justice 2 year(s) 9 month(s) 8 day(s)
Appellant Vijay Radheshyam Nyati HUF, Dhar
Respondent ITO, Dhar
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 25-03-2021
Next Hearing Date 25-03-2021
Last Hearing Date 27-06-2019
First Hearing Date 06-03-2019
Assessment Year 2014-2015
Appeal Filed On 16-08-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE HON'BLE MANISH BORAD ACCOUNTANT MEMBER AND HON'BLE MADHUMITA ROY JUDICIAL MEMBER ITA NO.203/IND/2019 ASSESSMENT YEAR:2014-15 KUMARI AYUSHI N YATI 10 BALAJI VIHAR 1-2 MAA DURG NAGAR NAVLAKHA MAIN ROAD 1 TO 7 INDORE / VS. ITO 5(5) INDORE (APPELLANT) (REVENUE ) P.A. NO.AJPPN2679C ITA NO.703/IND/2018 ASSESSMENT YEAR:2014-15 SMT. VIJAYA NYATI 5 NYATI HOUSE MANDI ROAD DHAMMOD DIST: DHAR M.P. / VS. ITO DHAR (APPELLANT) (REVENUE ) P.A. NO.AAPPN8302B ITA NO.704/IND/2018 ASSESSMENT YEAR:2014-15 SHRI VIJAY KUMAR RADHESHYAM NYATI HUF 5 NYATI HOUSE MANDI ROAD DHAMMOD DIST: DHAR M.P. / VS. ITO DHAR (APPEL LANT) (REVENUE ) P.A. NO.AACHV4415Q KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 2 ITA NO.705/IND/2018 ASSESSMENT YEAR:2014-15 SHRI MANISH KUMAR RADHESHYAM NYATI HUF 5 NYATI HOUSE MANDI ROAD DHAMMOD DIST: DHAR M.P. / VS. ITO DHAR (APPELLANT) (REVENUE ) P.A. NO.AACHN2172G ITA NO.488/IND/2019 ASSESSMENT YEAR:2014-15 SMT. MAMTA NYATI 5 NYATI HOUSE MANDI ROAD DHAMMOD DIST: DHAR M.P. / VS. ITO DHAR (APPELLANT) (REVENUE ) P.A. NO.ASEPN7014R APPELLANT BY SHRI MANEE SH VAIDYA & MISS PREETI PAT W A ARS REVENUE BY SHRI HARS HIT BARI SR. DR DATE OF HEARING: 12.04.2021 DATE OF PRONOUNCEMENT: 25 .05.2021 / O R D E R PER BENCH THE ABOVE CAPTIONED APPEALS ARE AT THE INSTANCE O F DIFFERENT ASSESSEE(S) AND ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-1& II (IN SHOR T CIT(A)) INDORE DATED 14.11.2018 18.05.2019 04.05.2018 04 .05.2019 & 31.01.2019. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 3 2. AS THE ISSUE RAISED IN ALL THESE APPEALS ARE SIM ILAR THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. (I) GROUNDS OF APPEAL IN ITA NO.203/IND/2019 - KUMA RI AYUSHI NYATI 1.THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ACTIO N OF THE ASSESSING OFFICER DISALLOWING LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS. 36 14 053/- CLAIMED EXEMPT U/S 10(38) OF THE ACT 1961 AND BROKERAGE @ 2% OF RS.72 281/- FOR EARNING THE SAID GAIN THUS TO TALING RS.36 86 334/- AND TREATING IT AS INCOME FROM UNDISCLOSED SOURCES. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LONG TERM CAP ITAL GAIN OF RS. 36 14 053/- WAS RIGHTLY CLAIMED AS EXEMPT U/S 10(38 ) BE ACCEPTED AS SUCH AND THE ALLEGED BROKERAGE @ 2% OF RS.72 281/- SPENT TO EARN SUCH GAIN HE DELETED AND THE ORDER OF THE LD. CIT(A) MAY VERY KINDLY BE QUASHED. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD TO ALTER AMEND MODIFY SUBSTITUTE DELETE AND/ OR RESCIND ALL OR ANY OF TH E GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING IF NECESSITY SO ARISES. (II) GROUNDS OF APPEAL IN ITA NO.703/IND/2018 - SM T. VIJAYA NYATI 1. THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER DISALLOWING LONG TERM CAPITAL GAIN ON SALE OF SHARE S OF RS. 33 98 3871- CLAIMED EXEMPT U/S 10(38) OF THE ACT 1961 AND TREA TING IT AS INCOME FROM UNDISCLOSED SOURCES. THAT ON THE FACTS AND IN THE C IRCUMSTANCES OF THE CASE THE LONG TERM CAPITAL GAIN OF RS. 33 98 387/- WAS RIGHTLY CLAIMED AS EXEMPT U/S 10(38) AND IT IS PRAYED THAT THE EXEM PT LONG TERM CAPITAL GAIN BE ACCEPTED AS SUCH AND THE ORDER OF THE LD. C IT(A) BE QUASHED. 2.THAT THE LD. CIT(A) HAS GROSSLY ERRED IN DISALLO WING LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS. 33 98 387/- CLAIMED E XEMPT U/S 10(38) OF THE I.T. ACT 1961 AND TREATING IT AS INCOME FROM U NDISCLOSED SOURCES BY - (A) RELYING SOLELY ON THE BASIS OF STATEMENT OF SHR I VIPUL VIDUR BHATT RECORDED U/S 131 BY A.D.I.T.(INV)-4(3) MUMBAI DURI NG THE COURSE OF SURVEY PROCEEDINGS U/S 133A IN THE CASE OF M/S SHIPRA FABR ICS PVT. LTD. MUMBAI. (B)USING THE STATEMENT OF SHRI VIPUL VIDUR BHATT AN D NOT PROVIDING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE WH ICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. (C) COMPLETELY IGNORING THE WELL- ESTABLISHED POSIT ION OF LAW THAT NO KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 4 ADDITION CAN BE MADE SOLELY ON THE BASIS OF STATEME NTS RECORDED ON OATH DURING THE COURSE OF SURVEY PROCEEDINGS U/S 133A HA VING NO EVIDENTIARY VALUE. (D)SIMPLY ON THE BASIS OF INFORMATION RECEIVED FROM A.D.I.T.(INV) MUMBAI WITHOUT MAKING OWN INDEPENDENT ENQUIRY AND EFFORTS. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD TO ALTER A MEND MODIFY SUBSTITUTE DELETE AND/ OR RESCIND ALL OR ANY OF TH E GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING IF NECESSITY SO ARISES. (III) GROUNDS OF APPEAL IN ITA NO.704/IND/2018 - S HRI VIJAY KUMAR RADHESHYAM NYATI HUF 1. THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ACTI ON OF THE ASSESSING OFFICER DISALLOWING LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS. 35 01 004/- CLAIMED EXEMPT U/S 10(38) OF THE ACT 1961 AND TREATING IT AS INCOME FROM UNDISCLOSED SOURCES. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LONG TERM CAPITAL GA IN OF RS. 35 01 004/- WAS RIGHTLY CLAIMED AS EXEMPT U/S 10(38) AND IT IS PRAYED THAT THE EXEMPT LONG TERM CAPITAL GAIN BE ACCEPTED AS SUCH AND THE ORDER OF THE LD. CIT(A) BE QUASHED. 2. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN DISALL OWING LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS. 35 01 004/- CLAIMED E XEMPT U/S 10(38) OF THE I.T. ACT 1961 AND TREATING IT AS INCOME FROM U NDISCLOSED SOURCES BY - (A) RELYING SOLELY ON THE BASIS OF STATEMENT OF SHR I VIPUL VIDUR BHATT RECORDED U/S 131 BY A.D.I.T.(INV)-4(3) MUMBAI DURI NG THE COURSE OF SURVEY PROCEEDINGS U/S 133A IN THE CASE OF M/S SHIPRA FABR ICS PVT. LTD. MUMBAI. (B)USING THE STATEMENT OF SHRI VIPUL VIDUR BHATT AN D NOT PROVIDING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE WH ICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. (C) COMPLETELY IGNORING THE WELL- ESTABLISHED POSIT ION OF LAW THAT NO ADDITION CAN BE MADE SOLELY ON THE BASIS OF STATEME NTS RECORDED ON OATH DURING THE COURSE OF SURVEY PROCEEDINGS U/S 133A HA VING NO EVIDENTIARY VALUE. (D)SIMPLY ON THE BASIS OF INFORMATION RECEIVED FROM A.D.I.T.(INV) MUMBAI WITHOUT MAKING OWN INDEPENDENT ENQUIRY AND EFFORTS. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD TO ALTER AMEND MODIFY SUBSTITUTE DELETE AND/ OR RESCIND ALL OR ANY OF TH E GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING IF NECESSITY SO ARISES. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 5 (IV) GROUNDS OF APPEAL IN ITA NO.705/IND/2018 - SH RI MANISH KUMAR RADHESHYAM NYATI HUF 1.THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ACTIO N OF THE ASSESSING OFFICER DISALLOWING LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS. 33 25 952/- CLAIMED EXEMPT U/S 10(38) OF THE ACT 1961 AND TREATING IT AS INCOME FROM UNDISCLOSED SOURCES. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LONG TERM CAPITAL GA IN OF RS. 33 25 952/- WAS RIGHTLY CLAIMED AS EXEMPT U/S 10(38) AND IT IS PRAYED THAT THE EXEMPT LONG TERM CAPITAL GAIN BE ACCEPTED AS SUCH AND THE ORDER OF THE LD. CIT(A) BE QUASHED. 2. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN DISALL OWING LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS. 33 25 952/- CLAIMED E XEMPT U/S 10(38) OF THE I.T. ACT 1961 AND TREATING IT AS INCOME FROM U NDISCLOSED SOURCES BY - (A) RELYING SOLELY ON THE BASIS OF STATEMENT OF SHR I VIPUL VIDUR BHATT RECORDED U/S 131 BY A.D.I.T.(INV)-4(3) MUMBAI DURI NG THE COURSE OF SURVEY PROCEEDINGS U/S 133A IN THE CASE OF M/S SHIPRA FABR ICS PVT. LTD. MUMBAI. (B)USING THE STATEMENT OF SHRI VIPUL VIDUR BHATT AN D NOT PROVIDING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE WH ICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. (C) COMPLETELY IGNORING THE WELL- ESTABLISHED POSIT ION OF LAW THAT NO ADDITION CAN BE MADE SOLELY ON THE BASIS OF STATEME NTS RECORDED ON OATH DURING THE COURSE OF SURVEY PROCEEDINGS U/S 133A HA VING NO EVIDENTIARY VALUE. (D)SIMPLY ON THE BASIS OF INFORMATION RECEIVED FROM A.D.I.T.(INV) MUMBAI WITHOUT MAKING OWN INDEPENDENT ENQUIRY AND EFFORTS. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD TO ALTER AMEND MODIFY SUBSTITUTE DELETE AND/ OR RESCIND ALL OR ANY OF TH E GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING IF NECESSITY SO ARISES. (V) GROUNDS OF APPEAL IN ITANO.488/IND/2019 SMT. MAMTA NYATI 1.THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ACTIO N OF THE ASSESSING OFFICER DISALLOWING LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS. 35 99 598/- CLAIMED EXEMPT U/S 10(38) OF THE ACT 1961 AND TREATING IT AS INCOME FROM UNDISCLOSED SOURCES. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LONG TERM CAPITAL GA IN OF RS. 35 99 598/- WAS RIGHTLY CLAIMED AS EXEMPT U/S 10(38) AND IT IS PRAYED THAT THE EXEMPT LONG TERM CAPITAL GAIN BE ACCEPTED AS SUCH AND THE ORDER OF THE LD. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 6 CIT(A) BE QUASHED. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD TO ALTER AMEND MODIFY SUBSTITUTE DELETE AND/ OR RESCIND ALL OR ANY OF TH E GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING IF NECESSITY SO ARISES. 3. FROM PERUSAL OF THE ABOVE GROUNDS WE FIND THAT FOLLOWING TWO ISSUES OF EACH ONE IS COMMON IN ALL THE CASE AND ON E RELATES TO THE ASSESSEE KUMARI AYUSHI NYATI AND THE SAME ARE AS FO LLOWS:- (I) ISSUE OF GENUINENESS OF CLAIM OF EXEMPT INCOME U/S 10(38) OF THE ACT FROM LONG TERM CAPITAL GAIN ( IN SHORT LTCG) ARISING FROM SALE OF EQUITY SHARES OF M/S SUNRISE A SIAN LIMITED LISTED ON RECOGNIZED STOCK EXCHANGE AND TH E AMOUNT IMPUGNED BEFORE US ARE AS UNDER:- S.NO. NAME LONG TERM CAPITAL GAIN 1 MS. AYUSHI NYATI RS. 36 14 053/ - 2 SMT. VIJAYA NYATI RS. 33 98 387/ - 3 SHRI VIJAY KUMAR RADHESHYAM NYATI HUF RS. 35 01 004/ - 4 SHRI MANISH KUMAR RADHESHYAM NYATI HUF RS. 33 25 952/ - 5 SMT. MAMTA NYATI RS. 35 99 598/ - (II) ADDITION FOR BROKERAGE EXPENSES OF RS.72 281/- DEE MED TO HAVE BEEN INCURRED BY MISS AYUSHI NYATI FOR ARRANGI NG ACCOMMODATION ENTRY OF LTCG. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 7 4. SINCE MOST OF THE ISSUES ARE COMMON AND AS AGREE D BY ALL THE PARTIES WE WILL TAKE UP THE FACTS OF MISS AYUSHI NY ATI FOR THE PURPOSE OF ADJUDICATION. 5. BRIEF FACTS OF THE CASE ARE THAT RETURN OF INCOM E FOR ASSESSMENT YEAR 2014-15 WAS E-FILED ON 29.7.2014 DE CLARING INCOME OF RS.4 10 680/-. CASE SELECTED FOR SCRUTINY THROUGH CASS FOLLOWED BY SERVING OF STATUTORY NOTICES U/S 143(2) AND 142(1) OF THE ACT. IN THE RETURN OF INCOME LONG TERM CAPITAL GAI N OF RS.36 14 053/- WAS CLAIMED AS EXEMPT INCOME U/S 10( 38) OF THE ACT ARISING FROM SALE OF EQUITY SHARES OF M/S SUNRI SE ASIAN LIMITED (IN SHORT SAL) LISTED AT BOMBAY STOCK EXCHANGE. IT WAS SUBMITTED BY THE ASSESSEE THAT THE EQUITY SHARES WERE HELD FO R MORE THAN 12 MONTHS SALE TOOK PLACE ON A RECOGNIZED STOCK EXCHA NGE AND SHARES WERE TRANSFERRED FROM DEMAT ACCOUNT THUS FULFILLING ALL THE CONDITIONS PROVIDED U/S 10(38) OF THE ACT. BUT LD. A.O WAS NOT CONVINCED AND HE ON THE BASIS OF INFORMATION AVAILA BLE WITH HIM ACQUIRED FROM THIRD SOURCE WHICH MAINLY INCLUDED TH E OUTCOME OF SEARCH & SURVEY ACTIONS AT VARIOUS BROKERS OF STOCK EXCHANGE ACROSS THE COUNTRY AND THE FINDING OF INVESTIGATION WING ABOUT KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 8 BOGUS ENTRIES AND MANIPULATION THROUGH PENNY STOCK COMPANIES CONCLUDED THAT M/S SUNRISE ASIAN LIMITED IS A PENNY STOCK COMPANY AND THE LONG TERM CAPITAL GAIN CLAIMED BY T HE ASSESSEE IS MERELY AN ACCOMMODATION ENTRY TAKEN FOR CONVERTI NG UNACCOUNTED MONEY INTO EXEMPT INCOME. LD. A.O ACCO RDINGLY DENIED THE BENEFIT OF EXEMPTION AND ADDED RS.36 14 053/- TO THE INCOME OF THE ASSESSEE AND ADDITION ALSO MADE FOR E STIMATED BROKERAGE EXPENSE OF RS.72 281/- CALCULATED @2% OF THE LONG TERM CAPITAL GAIN AND ADDED TO THE INCOME. ACCORDINGLY INCOME ASSESSEE AT RS.40 97 010/-. 6. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) AND MADE SUBMISSIONS IN ORDER TO PROVE THAT THE ALLEGED TRANSACTION OF LONG TERM CAPITAL GAIN IS A GENUINE TRANSACTION. I T WAS SUBMITTED THAT THE PURCHASE WAS ORIGINALLY MADE ON 22.09.2011 FOR PURCHASE OF 7500 EQUITY SHARES OF CONART TRADERS LTD FROM SA NTOSHIMA LEASE FINANCE & INVESTMENT (INDIA) LTD (NAME CHANGED TO S ANTOSHIMA TRADE LINK LTD). FURTHER PURSUANT TO THE ORDER OF HON'BLE BOMBAY HIGH COURT DATED 22.03.2013 THERE WAS A MERGER OF C ONART TRADERS LTD AND SANTOSHIMA TRADE LINK LTD WITH M/S SUNRISE ASIAN LIMITED KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 9 AND ASSESSEE RECEIVED 7500 EQUITY SHARE OF SAL. S ALES OF THESE EQUITY SHARES WAS EFFECTED THROUGH BOMBAY STOCK EXC HANGE AND THEREFORE THE LONG TERM CAPITAL GAIN IS A GENUINE C LAIM U/S 10(38) OF THE ACT. 7. LD. CIT(A) WAS HOWEVER NOT SATISFIED AND HE AFTE R PLACING RELIANCE ON DECISIONS CONCLUDED THAT THE ALLEGED TR ANSACTIONS IS SHAM WHICH CANNOT STAND THE TEST OF HUMAN PROBABILI TY AND THUS THE ADDITION HAS RIGHTLY BEEN MADE BY THE LD. A.O. 8. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 9. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED R EFERRING TO THE WRITTEN SUBMISSIONS PLACED ON RECORD WHICH ARE REPRODUCED BELOW:- CHRONOLOGY OF THE TRANSACTION: 1. THE COMMON ISSUE INVOLVED IS LONG TERM CAPITAL GAIN ON SALE OF SHARES CLAIMED EXEMPT U/S 10(38) ALLEGED AS PENNY STOCKS. 2. PURCHASE OF 7500 SHARES @ RS. 20/- EACH OF CONART T RADERS LTD. WAS MADE BY CHEQUE FROM SANTOSHIMA LEASE FINANCE & INVE STMENT (INDIA) LTD. ON 17.09.2011 FOR RS. 1 50 000/- IN PHYSICAL FORM T HROUGH AN OFF-MARKET TRANSACTION. 3. THE SHARES OF CONART TRADERS LTD. WERE DULY DEMATER IALIZED. 4. NAME OF SANTOSHIMA LEASE FINANCE & INVESTMENT (INDI A) LTD. WAS CHANGED TO SANTOSHIMA TRADELINKS LTD. ON 16.09.2011 . 5. AMALAGAMATION OF CONART TRADERS LTD AND SANTOSHIMA TRADELINKS LTD. WITH SUNRISE ASIAN LTD. TOOK PLACE ON 11.10.2012 BY ORDER OF MUMBAI HIGH COURT. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 10 6. ASSESSEE RECEIVED 7500 SHARES OF SUNRISE ASIAN LTD. IN LIEU OF SHARES OF CONART TRADERS LTD. POST AMALGAMATION ON 26.06.2013 RECEIVED IN DEMAT ACCOUNT ON 28.06.2013. 7. SALE OF 7500 SHARES OF SUNRISE ASIAN LTD. WAS MADE ON DIFFERENT DATES THROUGH AN AUTHORIZED BROKER SWASTIKA INVESTMART LT D / ARIHANT CAPITAL MARKETS RESULTING IN LTCG CLAIMED EXEMPT U/S 10(38) . 8. IT WOULD BE WORTHWHILE TO NOTE THAT THE SALE PROCEE DS WERE RECEIVED BY CHEQUE DULY CREDITED IN BANK ACCOUNTS OF THE ASSESS EES RESPECTIVELY. 9. SUNRISE ASIAN LTD. WAS LISTED AND TRADED ON BOMBAY STOCK EXCHANGE. 10. THE FOLLOWING DOCUMENTS WERE SUBMITTED BEFORE THE A SSESSING OFFICER : A) COPY OF SHARE CERTIFICATE DATED 25.11.2011 IN THE N AME OF SANTOSHIMA TRADELINKS LTD. HOLDING 7500 SHARES OF CONART TRADE RS LTD. (LATER ON AMALGAMATED WITH SUNRISE ASIAN LTD.) DULY ENDORSED IN THE FAVOUR OF ASSESSEE. B) COPY OF RELEVANT PAGE OF BANK STATEMENT DEPICTING P AYMENT MADE TO SANTOSHIMA LEASE FINANCE AND INVESTMENT (INDIA) LTD . NAME CHANGED TO SANTOSHIMA TRADELINKS LTD. W.E.F. 16.09.2011 FO R PURCHASING 7500 SHARES OF CONART TRADERS LTD. C) COPY OF NOTICE CONVENING THE MEETING OF SHAREHOLDER S OF SUNRISE ASIAN LIMITED D) COPY OF ORDER OF BOMBAY HIGH COURT APPROVING THE SC HEME OF AMALGAMATION OF SANTOSHIMA TRADELINKS LTD. AND CONA RT TRADERS LTD. WITH SUNRISE ASIAN LTD. E) COPY OF PUBLIC NOTICE PUBLISHED IN FREE PRESS JOURN AL ON 11.10.2012 INFORMING CONVENING OF MEETING SEEKING APPROVAL OF SHAREHOLDERS OF SUNRISE ASIAN LTD. AS DIRECTED BY BOMBAY HIGH COURT . F) COPY OF DEMAT ACCOUNT TRANSACTION LEDGER WITH SARAS WAT BANK AND SWASTIKA INVESTMART LTD. DEPICTING MOVEMENT OF SHA RES IN QUESTION. G) COPY OF CONTRACT NOTES FOR SALE OF 7500 SHARES OF S UNRISE ASIAN LTD. H) COPY OF CALCULATION OF LTCG ON SALE OF 7500 SHARES OF SUNRISE ASIAN LTD. ALL THE AFORESAID DOCUMENTS FORM PART OF OUR PAPER BOOK. THE AOS OBSERVATIONS IN THE ASSESSMENT ORDER ARE DEVOID OF MERITS FOR THE FOLLOWING REASONS: - A) THE ASSESSEE PURCHASED SHARES FROM M/S SANTOSHIMA T RADELINKS LTD. WHICH WAS DULY ENDORSED AT THE BACK OF THE SHARE CE RTIFICATE. SO THE QUESTION OF CONTRACT NOTES DOES NOT ARISE AS IT WAS AN OFF-MARKET TRANSACTION AND SHARE CERTIFICATE IN PHYSICAL FORM WAS ISSUED WHICH WAS DULY ENDORSED IN FAVOUR OF THE ASSESSEE WHEN TH E ASSESSEE BOUGHT THE SHARES. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 11 B) THE CHEQUE WAS ISSUED IN THE NAME OF M/S SANTOSHIMA LEASE FINANCE & INVESTMENT (INDIA) LTD. WHOSE NAME WAS SUBSEQUENT LY CHANGED TO M/S SANTOSHIMA TRADELINKS LTD. THE CHEQUE WAS ISSUE D BEFORE THE NAME CHANGE I.E. 17.09.2011 WHEREAS THE NAME OF M/S SANTOSHIMA LEASE FINANCE & INVESTMENT (INDIA) LTD. WAS CHANGED TO M/S SANTOSHIMA TRADELINKS LTD. JUST A DAY BEFORE AND HE NCE THE ASSESSEE WAS UNAWARE OF THE DEVELOPMENTS. THE CHANGE OF NAME IN THE BANK ACCOUNT ALSO TAKES SOME TIME AS THERE IS A PROCESS INVOLVED IN THE CHANGE OF NAME. C) THE PURCHASE WAS MADE VIA AN OFF-MARKET TRANSACTION AND PAYMENT WAS ROUTED THROUGH DENA BANK. THE SHARE CERTIFICATE ALLOTTING SHARES BEARS THE DATE OF LAST WEEK OF NOVEMBER 2011 THE R EASON BEING THAT THE CHANGE OF NAME AND OTHER FORMALITIES WERE TAKIN G PLACE AND SINCE THE ALLOTMENT WAS MADE IN PHYSICAL FORM SOME TIME G AP IS INEVITABLE. D) THE SHARE CERTIFICATE CARRIES ONLY THE ENDORSEMENT NOT THE TRANSFER OF SHARES. THE ENDORSED SHARE CERTIFICATE WAS RECEIVED IN SECOND WEEK OF DECEMBER 2011. THE SHARES WERE DEMATERIALIZED SUBS EQUENTLY IN THE NEXT YEAR I.E. 2012. E) THE RUBBER STAMP ANALOGY IS BASELESS AS M/S SANTOSH IMA TRADELINKS LTD. WAS A SUBSTANTIAL SHAREHOLDER OF CONART TRADER S LTD. AND HENCE A RUBBER STAMP MUST HAVE BEEN PREPARED TO SAVE TIME A S THE SHARE CERTIFICATES WERE ISSUED MANUALLY. THE ENDORSEMENT OF SHARES IN THE NAME OF THE PURCHASER I.E. THE ASSESSEE WHEN THEY W ERE SOLD IS HAND WRITTEN. F) THE BROKER ACCOUNT REFERRED BY THE AO IS THAT OF US S BROKING PVT. LTD. FROM WHOM THE TRANSACTION OF THE SHARES OF CONART T RADERS LTD. HAS NOT TAKEN PLACE. (IN CASE OF VIJAYA NYATI) THE ASSESSEE WAS HAVING DEMAT ACCOUNT WITH TWO MORE DEPOSITORIES VIZ. SARASWAT BA NK AND SWASTIKA INVESTMART LTD. FROM WHOM SHARES WERE PURCHASED AND SOLD RESPECTIVELY. G) THE CREDIT IN THE DEMAT ACCOUNT ON 12.02.2013 IS SI MPLY BECAUSE OF THE SREASON THAT THE ASSESSEE WAS HOLDING SHARES IN PHY SICAL FORM AND IF THE SHARES IN QUESTION WERE SENT FOR DEMATERIALIZAT ION ON A LATER DATE IT IS IMMATERIAL AS THE PERIOD OF HOLDING SHALL BE COU NTED FROM THE DATE OF PURCHASE AND HENCE THE THEORY OF SHORT TERM CAPITAL GAIN IN THE ALTERNATE IS AGAIN BASELESS. H) THE ALLEGATION THAT SUNRISE ASIAN LTD. WAS A PAPER COMPANY IS A FIGMENT OF IMAGINATION. THE COMPANY WAS TRADING IN TEXTILES DIAMONDS AND SHARES. THE REVENUE FROM OPERATIONS AS ON 31.03.2013 AND 31 .03.2014 STOOD AT RS. 73 83 56 861 AND RS. 113 45 80 505 RE SPECTIVELY WHICH ARE HEALTHY FIGURES TO PROVE THAT THE COMPANY HAD B USINESS. THE PROFIT AFTER TAX OF SUNRISE ASIAN LTD AS ON 31. 03.2013 AND 31.03.2014 WAS RS. 27 58 163 AND RS. 69 54 857 RESP ECTIVELY WHICH KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 12 BY NO MEANS WAS MEAGER. THE RESERVES & SURPLUS OF T HE COMPANY STOOD AT RS. 32.21 CRORES AND RS. 32.61 CRORES AS O N 31.03.2013 AND 31.03.2014 RESPECTIVELY. THE EPS AS ON 31.03.2013 S TOOD AT 0.65. THE AO HAS NOT ADDRESSED THE PROFITS BUT FIXED ASSETS W HICH ARE IMMATERIAL IN THE CASE OF A TRADING ACTIVITY. EVEN THE RESEARC H UNIT OF CRISIL HAS NOT GIVEN ANY ADVERSE OPINION ON THE COMPANY BUT GI VEN GOOD PROSPECTS OF THE COMPANY AS ON 31.03.2016. COPY OF CRISIL REP ORT IS ENCLOSED AT PAGES 01 TO 04. I) THE ALLEGATION THAT THE DOCUMENTS ARE COOKED UP IS AGAIN MISCONCEIVED AS THE SHARES WERE LISTED ON BSE. THE DOCUMENTS PRO VIDED BY THE ASSESSEE PROVE THAT THE PRIMARY ONUS CAST ON HIM HA D BEEN DISCHARGED AND IT WAS OPEN TO THE AO TO CONTROVERT THE SAME BU T HE HAS INSTEAD TAKEN SHELTER OF THREE SUPREME COURT DECISIONS AND REACHED A DEFINITIVE CONCLUSION THAT THE DOCUMENTS HAVE BEEN COOKED UP W ITH THE HELP OF CONNIVING BROKERS WHO ARE INTERESTED IN SUCH DUBIOU S TRANSACTIONS. THE ENTIRE CONCLUSION IS BASED ON CONJECTURES AND SURMI SES WITHOUT ANY EVIDENCE. NEITHER THE ASSESSEE NOR THE BROKER HAVE BEEN IMPLICATED IN THE SEBI INVESTIGATION. J) THE AO HAS OBSERVED THAT THE CASE WAS SELECTED FOR SCRUTINY ON THE BASIS OF INPUTS PROVIDED BY THE INVESTIGATION WING. SO THERE IS NO APPLICATION OF MIND BUT MERELY A BORROWED SATISFACT ION ON THE BASIS OF WHICH THE ASSESSMENT HAS BEEN FRAMED. K) THE AO HAS DONE NO INDEPENDENT INVESTIGATION AT HIS END. NEITHER ANY SUMMONS U/S 131 NOR ANY NOTICES U/S 133(6) WERE ISS UED TO ANY OF THE ENTITIES INVOLVED TO CONFIRM THE VERACITY OF TRANSA CTIONS. INSTEAD HE CHOSE TO MAKE THE ADDITION SIMPLY ON THE BASIS OF S USPICION WHICH HOWSOEVER STRONG IT MAY BE CANNOT REPLACE EVIDENCE. THE LD. CIT(A) ON THE OTHER HAND HAS RELIED ON THE INVESTIGATION CARRIED OUT BY DIT (INVESTIGATION) KOLKATTA AND DISCUSSED THE ALL EGED MODUS OPERANDI OF THE OPERATORS PAN INDIA TO RIG SHARE PRICES AND GENER ATE LONG TERM CAPITAL GAIN WHICH IS EXEMPT FROM TAX. NO OPPORTUNITY WAS GIVEN BY THE LD. CIT(A) TO COUNTER THE SAME. THE LD. CIT(A) HAS ALSO QUOTED ADMISSION MADE BY VA RIOUS ENTITIES LIKE M.P. STOCK EXCHANGE INDORE DESTINY SECURITIES LTD. NEW DELHI THAT SUNRISE ASIAN WAS ONE OF THE PENNY STOCKS THROUGH WHICH LONG TERM CAPITAL GAINS WERE ARRANGED FOR BENEFICIARIES. THESE ARE GENERAL OBSER VATIONS AND THE APPELLANT WAS NEVER CONFRONTED WITH THESE FACTS. THE LD. CIT(A) HAS FURTHER OBSERVED THAT THE APPELL ANT HAS NOT PRODUCED EVIDENCES IN SUPPORT OF THIS CLAIM ARE NOT BASED ON FACTS AS THE APPELLANT HAS PRODUCED ALL POSSIBLE DOCUMENTARY EVIDENCES TO DISC HARGE THE PRIMARY ONUS CAST ON HIM AS STATED ABOVE. FURTHER OBSERVATIONS M ADE BY THE LD. CIT(A) ARE ADDRESSED AS UNDER :- KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 13 I) THE OBSERVATION THAT THE ASSESSEE HAS NOT MADE ANY INVESTMENT IN ANY OTHER SHARES WHICH IS NOT CORRECT IN ONE OF THE CAS ES (SMT. VIJAYA NYATI) AS THE ASSESSEE HAS NOT DEALT MERELY IN SUNRISE ASI AN LTD. II) SHARES WERE NOT PURCHASED WITH THE COLLUSION OF BRO KER AS THE PURCHASE WAS AN OFF-MARKET TRANSACTION AND NOT AT A MINISCUL E PRICE BUT @ RS. 20/- PER SHARE. III) SINCE IT WAS AN OFF-MARKET TRANSACTION THE QUESTION OF RECORDING OF PURCHASE ON THE STOCK EXCHANGE OR MARKET DOES NOT A RISE. IV) THERE IS NO ILLEGALITY IN MAKING AN OFF-MARKET PURC HASE. V) THE PAYMENT FOR PURCHASE WAS MADE BY CHEQUE AND NOT CASH AS STATED AND THE SAME CAN BE VERIFIED FROM THE BANK STATEMEN T OF DENA BANK WHICH WERE SUBMITTED BEFORE THE AO AND THE CIT(A). VI) THE CONVERSION OF SHARES INTO DEMAT FORM IS MADE BE FORE THE SALE IS MADE AND AGAIN THERE IS NO ILLEGALITY IN THAT. THE DATE OF PURCHASE IS IMPORTANT. THERE ARE DIFFERENT REASONS FOR NOT CONV ERTING THE SHARES INTO DEMAT FORM IMMEDIATELY FROM ITS PHYSICAL FORM. DEMA TERIALISATION OF SHARES TOOK PLACE WELL IN ADVANCE. THERE IS A SUBST ANTIAL GAP FROM DEMAT OF SHARES AND SALE OF SHARES. VII) THE INVESTORS ARE BASICALLY GUIDED BY TIPS FROM THE BROKERS IN MAXIMUM CASES OR THEIR OWN STUDY OF THE MARKET BUT THE PERC ENTAGE OF SUCH PEOPLE WITH OWN STUDY IS VERY LOW. LOOKING AT THE L ARGE NUMBER OF TRADERS/INVESTORS ON THE MARKET ALL ARE NOT QUALIFI ED TO STUDY THE INTRICACIES OF THE MARKET AND TAKE DECISIONS ON THE IR OWN. THE MARKETS NORMALLY WORK ON BUZZ OR NEWS COMING FROM THE MARKE T NEWS AVAILABLE ON NET TIPS CIRCULATED BY FRIENDS OR BRO KERS. THE ENTRY AND EXIT INTO A PARTICULAR STOCK IS GUIDED BY EXTRANEOU S FACTORS. VIII) THE ALLEGATION THAT SUNRISE ASIAN LTD. WAS HAVING N O TURNOVER OR PROFITS IS AGAIN A FIGMENT OF IMAGINATION OF LD. CIT(A). TH E COMPANY WAS TRADING IN TEXTILES DIAMONDS AND SHARES. THE REVEN UE FROM OPERATIONS OF SUNRISE ASIAN LTD AS ON 31.03.2013 AND 31.03.201 4 WAS RS. 73 83 56 861 AND RS. 113 45 80 505 RESPECTIVELY WHI CH BY NO MEANS WAS MEAGER. THE PROFIT AFTER TAX OF SUNRISE ASIAN L TD AS ON 31.03.2013 AND 31.03.2014 WAS RS. 27 58 163 AND RS. 69 54 857 RESPECTIVELY WHICH BY NO MEANS WAS MEAGER. THE RESERVES & SURPLU S OF THE COMPANY STOOD AT RS. 32.21 CRORES AND RS. 32.61 CRO RES AS ON 31.03.2013 AND 31.03.2014 RESPECTIVELY. EVEN THE EP S AS ON 31.03.2013 STOOD AT 0.65. IX) THE CONCLUSIONS DRAWN ARE NOT BASED ON FACTS BUT O N REPORTS OF INVESTIGATION WING OR STATEMENTS RECORDED BEHIND TH E BACK OF THE ASSESSEE WITHOUT AFFORDING AN OPPORTUNITY OF BEING HEARD. THE MOST IMPORTANT PART IN THE LD. CIT(A) ORDER IS HIS QUOTING OF THE STATEMENT OF SHRI VIPUL VIDUR BHATT RECORDED ON 04.02.2016 BY ADIT (INV) UNIT 4(3) MUMBAI DURING THE COURSE OF SURVEY U/S 133A IN THE CASE OF SHIPRA FABRICS KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 14 PVT. LTD. MUMBAI WHEREIN SHRI VIPUL VIDUR BHATT CAT EGORICALLY ACCEPTED THAT HE HAS RIGGED THE PRICE OF SHARES OF M/S SUNRISE AS IAN LTD. REFERENCE TO Q. 20 HAS BEEN MADE. YOUR HONOURS KIND ATTENTION IS DRAWN TO THE DECISI ON OF THE HONBLE ITAT MUMBAI BENCH IN THE CASE OF MAYURESH LOGISTICS ITA 6691/MUM/2017 (COPY AT PAGES 200 TO 216) WHERE IN A REFERENCE HAS BEE N MADE TO THE RETRACTION OF STATEMENT MADE BY SHRI VIPUL VIDUR BHATT ON AFFIDAV IT DATED 02.09.2016 WHERE HE HAS DENIED TO HAVE GIVEN ANY ACCOMMODATION ENTRIES. (REFER PAGE 208) THE SAID STATEMENT HAS NOT BEEN REJECTED AND T HUS STANDS ACCEPTED BY THE REVENUE AUTHORITIES. WHEN THE RETRACTION STATEM ENT IS MADE ON AFFIDAVIT ON OATH THEN IT WAS REQUIRED TO BE COUNTERED BY REVENU E AND REJECTED BY THE APPELLATE AUTHORITIES BUT IT HAS NOT BEEN DONE. THE STATEMENT MADE EARLIER ON 04.02.2016 BY SHRI BHATT THUS LOSES ITS SANCTITY AN D HAS NO VALUE. MOREOVER SHRI BHATT NEVER NAMED THE APPELLANT AS A BENEFICIA RY IN THE STATEMENT. MOREOVER ANY STATEMENT RECORDED BEHIND THE BACK OF THE ASSESSEE AND WITHOUT GIVING AN OPPORTUNITY TO CROSS EXAMINE HAS NO VALUE. THE HONBLE SUPREME COURT IN PULLANGODE RUBBER PROD UCE COMPANY LTD. VS. STATE OF KERALA & ANOTHER (1973) 91 ITR 0018 (SC) HAS HELD THAT THE ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDEN CE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN TO THE ASSESSEE WHO MADE ADMISSION TO SHOW THAT IT IS INCORRECT AND THE ASSESSEE SHOULD BE GIV EN PROPER OPPORTUNITY TO SHOW THE CORRECT STATE OF AFFAIRS. FURTHER THE HONBLE SUPREME COURT IN THE CASE OF A NDAMAN TIMBER INDUSTRIES VS COMMISSIONER OF CENTRAL EXCISE REPORTED IN 281 CTR 0241 (SC) (COPY AT PAGES 196 TO 199) HAS HELD THAT : NOT ALLOWING ASSESSEE TO CROSS-EXAMINE WITNESSES B Y ADJUDICATING AUTHORITY THOUGH STATEMENTS OF THOSE WITNESSES WERE MADE AS B ASIS OF IMPUGNED ORDER AMOUNTED IN SERIOUS FLAW WHICH MAKE IMPUGNED ORDER NULLITY AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IT WOULD BE WORTHWHILE TO SUBMIT HERE THAT ALL THE OBSERVATIONS AND EVIDENCES WHICH ARE NARRATED BY THE LD. CIT(A) ARE PART OF TH E INTERNAL DOCUMENTS CIRCULATED BY THE INVESTIGATION WING AND USED AGAIN ST THE ASSESSEE WITHOUT HIS/HER KNOWLEDGE AND WITHOUT AFFORDING ANY OPPORTU NITY OF BEING HEARD OR CROSS EXAMINATION. IT IS ALLEGED THAT ON GETTING TH IS INFORMATION THE APPELLANT INDULGED IN BOGUS LONG TERM CAPITAL GAIN AND CLAIME D IT AS EXEMPT WHICH IS NOT BASED ON FACTS. THE LD. CIT(A) HAS PLACED RELIANCE ON AS MANY AS 5 CASE LAWS. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 15 HE HAS MAINLY RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT NAGPUR BENCH IN THE CASE OF SANJAY BIMALCHAND JAIN VS. PR. CIT (2018) THE FACTS IN THE CASE OF SANJAY BIMALCHAND JAIN ARE DIF FERENT AND DISTINGUISHABLE MAINLY BECAUSE :- (I) IN THAT CASE THE BROKER THROUGH WHICH THE SHARES W ERE SOLD DID NOT RESPOND TO AO'S LETTER REGARDING THE NAMES AND ADDR ESS AND BANK ACCOUNT OF THE PURCHASER OF THE SHARES SOLD BY THE ASSESSEE (II) AT THE TIME OF ACQUISITION OF SHARES OF BOTH COMPAN IES BY THE ASSESSEE THE PAYMENTS WERE MADE IN CASH (III) THE ADDRESS OF BOTH THE COMPANIES WERE SAME (IV) THE AUTHORIZED SIGNATORY OF BOTH THE COMPANIES WERE ALSO THE SAME (V) THE PURCHASE OF SHARES OF BOTH THE COMPANIES WAS DO NE BY THAT ASSESSEE THROUGH BROKER GSSL AND THE ADDRESS OF THE SAID BR OKER WAS SAME AS THE ADDRESS OF THE TWO COMPANIES. NONE OF THESE FACTORS ARE PRESENT IN THE PRESENT CA SE BEFORE YOUR HONOUR. HENCE IT CAN BE CONCLUDED THAT THE DECISI ON OF HONBLE BOMBAY HIGH COURT IS FACTUALLY DISTINGUISHABLE. IN THE CASE BEFORE YOUR HONOUR THE LD. CIT(A) WHO H AS COTERMINOUS POWERS AS THAT OF THE ASSESSING OFFICER MADE NO EFFORTS TO CONDUCT INDEPENDENT ENQUIRIES BUT CHOSE TO RELY ON BORROWED SATISFACTIO N. THE OTHER JUDGMENTS CITED BY THE LD. CIT(A) HAVE BE EN DISTINGUISHED BY OTHER JUDGMENTS OF APPELLATE AUTHORITIES WHICH HAVE BEEN SUBMITTED SEPARATELY AS CASE LAWS PAPER BOOK. TO SUMMARIZE ONCE AGAIN: 1. THE PURCHASE WAS AN OFF-MARKET TRANSACTION WHERE PA YMENT WAS MADE BY ACCOUNT PAYEE CHEQUE AND DULY REFLECTED IN THE BANK ACCOUNT. 2. THE SHARE OF SUNRISE ASIAN LTD. WAS DULY TRADED ON BSE. 3. THE SALE OF SHARES WAS MADE ONLINE ON BSE THROUGH A REGISTERED AND RENOWNED BROKER OF INDORE I.E. SWASTIKA INVESTMART LTD. EVEN STT WAS PAID. 4. THE SALE PROCEEDS WERE RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE. 5. THE SALE AND PURCHASE OF TRANSACTION HAD BEEN MADE THROUGH ACCOUNT PAYEE CHEQUE WHICH WAS SUPPORTED BY A COPY OF BANK ACCOUNT. 6. THE MOVEMENT OF SHARES IS EVIDENCED BY A DEMAT STAT EMENT. 7. NO CRITICAL FAULTS WERE FOUND BY THE AO IN THE DOCU MENTS SUBMITTED BEFORE HIM. 8. NO INDEPENDENT ENQUIRIES OR INVESTIGATION WAS DONE EITHER BY THE ASSESSING OFFICER OR THE LD. CIT(A). KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 16 9. THE ENTIRE ADDITION WAS MADE BY THE ASSESSING OFFIC ER ONLY ON THE BASIS OF PRESUMPTION AND PRESUPPOSITIONS INSTEAD OF CONSIDE RING THE DOCUMENTS/ INFORMATION AND EXPLANATION PROVIDED BY THE ASSESSE E. 10. IN THE CASE BEFORE OUR HONOUR THE BROKER M/S SWASTI KA INVESTMART LTD. HAS NOT BEEN IMPLICATED BY SEBI NOR IT HAS BEE N PENALIZED BY SEBI. 11. JUST BECAUSE A SMALL AMOUNT INVESTED IN 'PENNY' ST OCKS GAVE RISE TO HUGE GAIN IN A SHORT SPAN OF TIME DOES NOT NECES SARILY MEAN THAT THE TRANSACTION IS 'BOGUS' IF NO FAULT WAS FOUND WITH T HE DOCUMENTATION AND EVIDENCES PUT BEFORE THE AO OR THE CIT(A). 12. THE NATURE OF TRANSACTION DOES NOT CHANGE JUST BECA USE THERE IS AN INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING . 13. THE AO FAILED TO GIVE ANY COGENT REASONS TO REJECT THE CLAIM OF THE ASSESSEE. THE ASSESSMENT ORDER IS BASED ON SURMISE S AND CONJECTURES AND RELYING SOLELY ON THE REPORT OF THE INVESTIGATI ON WING WHICH IS UNTENABLE. 14. THE LD. CIT(A) HAS AGAIN QUOTED THE REPORT OF THE D IRECTORATE OF INVESTIGATION KOLKATTA AND STATEMENT OF SHRI VIPUL VIDUR BHATT. THESE DOCUMENTS/ EVIDENCES WERE NEVER SHARED WITH THE APP ELLANT NOR AN OPPORTUNITY TO CROSS EXAMINE WAS AFFORDED DESPITE A SPECIFIC REQUEST MADE TO THE LD. CIT(A) (REFER SUBMISSION MADE BEFOR E LD. CIT(A)) WHICH BECOMES A NULLITY IN VIEW OF THE HONBLE SUPREME CO URT DECISION IN THE CASE OF ANDAMAN TIMBER INDUSTRIES 281 CTR 0241 (SC ) 15. THE INVESTIGATION PROCEEDINGS WERE NOT COMPLETE BUT BY THAT TIME AO REACHED A CONCLUSION THAT THE ASSESSEE WAS A BENEFI CIARY INVOLVED IN MALPRACTICES AND A PART OF THE SCAM WHERE PRICES WE RE RIGGED TO GAIN LONG TERM CAPITAL GAINS. IN FACT THE REPORT OF THE INVES TIGATION WING SHOULD HAVE BEEN A STARTING POINT FOR THE AO TO PROCEED WITH FU RTHER INVESTIGATION BUT HE INSTEAD OF DOING SO TOOK IT AS A FINALITY. 16. SEBI COULD NOT COMPLETE ANY INVESTIGATION AGAINST S HARES OF SUNRISE ASIAN LTD. AS THE SAME STOOD ABATED AS THE PERSONS TO WHOM NOTICES WERE ISSUED VIZ. SHRI RAMESH KATARIA AND SMT. SAROJINI K ATARIA HAD EXPIRED. COPY OF THE SEBI ORDER IS ENCLOSED AT PAGES 05 TO 0 8. 17. SO FAR AS THE SUSPENSION OF TRADING ON BSE OF SUNRI SE ASIAN LTD. IS CONCERNED IT WAS NOT DUE TO SOME CIRCUIT TRADING OR RIGGING / PRICE MANIPULATION BUT NON- COMPLIANCE OF LISTING REGULAT IONS AND FAILURE TO PAY THE MANDATORY FINES FOR MUCH NON-COMPLIANCE. A COPY OF CLIPPING OF THE ECONOMIC TIMES DATED 17.11.2016 IS ENCLOSED AT PAGE 09 HEREWITH. THE BSE HAS FURTHER REVOKED ITS ORDER OF COMPULSORY DEL ISTING ON 11.05.2018 IN CASE OF SUNRISE ASIAN LTD. RELEVANT EXTRACT OF THE ORDER DOWNLOADED FROM BSE SITE IS ENCLOSED AT PAGES 10 TO 11. 18. THE COMPANY WAS MAKING PROFITS IN THE YEAR UNDER CO NSIDERATION AND SHOWED GOOD PROSPECTS. REPORT OF RESEARCH DEPAR TMENT OF CRISIL FORTIFIES THIS VIEW. IF THE COMPANY WAS SHOWING NO PROFITS HOW COULD IT INFORM THE BSE ABOUT ITS PROPOSED PAYMENT OF INTERI M DIVIDEND. COPY OF KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 17 LETTER DATED 24.10.2016 BY SUNRISE ASIAN LTD. TO BS E IS ENCLOSED AT PAGE 12. 19. THE MOST IMPORTANT POINT IN THIS CASE IS THAT NEITH ER THE ASSESSING OFFICER NOR THE LD. CIT(A) WERE ABLE TO UNEARTH ANY MONEY TRAIL WHICH PROVED THAT THE APPELLANTS OWN MONEY HAS COME BACK TO SHIM IN THE GARB OF LONG TERM CAPITAL GAIN. THE ENTIRE ADDITION THUS FALLS FLAT AS IT IS PURELY BASED ON SUSPICION AND SURMISES AND SUSPICION HOWSO EVER STRONG IT MAY BE CANNOT REPLACE EVIDENCE. 20. THE ENTIRE CASE IS BUILT ON CONJECTURES AND SURMISE S WITHOUT ANY EVIDENCE AGAINST THE ASSESSEE APPELLANTS. MERELY TH E MODUS OPERANDI GENERAL OBSERVATIONS PREPONDERANCE OF HUMAN PROBAB ILITIES CANNOT BE THE ONLY BASIS FOR REJECTING THE CLAIM OF THE ASSESSEE. RELIANCE IS LACED ON FOLLOWING DECISIONS: 1. KARUNA GARG & ORS. VS. ITO & ORS. (DELHI TRIBUNAL) (2019) - 56 CCH 0371 2. DEEPAK NAGAR VS. ACIT (DELHI TRIBUNAL) (2019) - 56 CCH 0143 (PAGES 9 20 OF CASE LAWS PAPER BOOK) 3. VIJAYRATTAN BALKISHAN MITTAL & ORS. VS. DCIT (MUMBA I TRIBUNAL) (2019) ITA NO. 3427-3429/MUM/2019 ( PAGES 21 102 OF CASE LAWS PAPER BOOK) 4. ITO VS. ARVIND KUMAR JAIN HUF (MUMBAI TRIBUNAL) ( 2017) - 51 CCH 0281 (PAGES 103 106 OF CASE LAWS PAPER BOOK ) 5. DIPAK KR. DE SARKAR VS. ITO (KOLKATA TRIBUNAL) (2 019) - 56 CCH 0253 (PAGES 107 132 OF CASE LAWS PAPER BOOK) 6. RADHIKA GARG & ANR. VS. ITO & ANR. (DELHI TRIBUNAL) (2019) - 55 CCH 0002 (PAGES 133 150 OF CASE LAWS PAPER BOOK ) 7. VIDHI MALHOTRA & ANR. VS. ITO & ANR. (DELHI TRIBUNA L) (2018) - 54 CCH 0429 (PAGES 151 156 OF CASE LAWS PAPER B OOK) 8. AMAR NATH GOENKA & ORS. VS. ACIT & ORS. (DELHI TRIB UNAL) (2018) - 54 CCH 0344 (PAGES 157 167 OF CASE LAW S PAPER BOOK) 9. DCIT VS. SAURABH MITTAL (JAIPUR TRIBUNAL) (2018) - 53 CCH 0530 PAGES 168 188 10. VAISHAL SURYAKANT SHAH VS. ITO (AHMEDABAD TRIBUNAL) (2017) - 49 CCH 0106 (PAGES 189 195 OF CASE LAWS PAPER BOOK) 11. ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CENT RAL EXCIESE (HON'BLE SUPREME COURT) -2015 94 CCH 0187 12. ITO VS. MAYURESH LOGISTICS PVT. LTD. (MUMBAI TRIBU NAL)-2019 ITANO.6691 KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 18 13. SMT. APARNA MISRA VS. ITO-23(4) (KOLKATTA) TRIBUNAL ) I.T.A. NO. 161/KOL/2019 ASSESSMENT YEAR: 2015-16 (2021) (PAGES 217 226 OF CASE LAWS PAPER BOOK) 14. ACHAL GUPTA VS. ITO (LUCKNOW TRIBUNAL) (2021) (PA GES 227 242 OF CASE LAWS PAPER BOOK 15. PR CIT-12 DELHI VS. SMT. KRISHNA DEVI & OTHERS (DE LHI HIGH COURT) (2021) (PAGES 243 252 OF CASE LAWS PAPER BOOK) 16. ANRAJ HIRALAL SHAH (HUF) VS. ITO 19(1) MUMBAI ITA T MUMBAI SMC (2021) (PAGES 253 256 OF CASE LAWS PAPER BOOK) 17. DIPESH RAMESH VARDHAN VS. DCIT- CENTRAL CIRCLE -2(2 ) MUMBAI (ITAT MUMBAI D BENCH) (2020) (PAGES 257 - 276 OF CAS E LAWS PAPER BOOK) 18. ASHOK AGRAWAL & OTHERS V/S ACIT JAIPUR I.T.A.T. I TA NO.124/JP/20 & OTHERS DATED 18.11.2020. 10. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THA T THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BENCH OF JAIPUR IN THE CASE OF ASHOK AGRAWAL AND OTHERS ITA NO.124/JP/2020 & OTHERS ORDER DATED 18.11.2020 WHEREIN SIMILAR FACTS AND ISSUES HAVE BEEN EXAMINED RELATING TO LON G TERM CAPITAL GAIN FROM SALE OF SHARES OF M/S SUNRISE ASIAN LIMIT ED AND HON'BLE TRIBUNAL HAS HELD THAT SINCE THE ASSESSEE HAS DISCH ARGED THE NECESSARY ONUS CASTED ON HIM IN TERMS OF CLAIM OF E XEMPTION OF LONG TERM CAPITAL GAIN U/S 10(38) OF THE ACT BY EST ABLISHING THE GENUINENESS OF TRANSACTION TO PROVE THAT SAL IS N OT A PENNY STOCK COMPANY AND ALSO SATISFYING THE REQUISITE CONDITION S IN ORDER TO KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 19 CLAIM THE EXEMPTION U/S 10(38) OF THE ACT FOR LTCG ARISING FROM SALE OF EQUITY SHARES OF M/S SAL. 11. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE LD. AO HAS DISCUSSED ALL THE RELEVANT FACT S IN THE ASSESSMENT ORDER AS WELL AS THE MODUS OPERANDI OF VARIOUS ENTRY PROVIDERS AS DETECTED BY THE DEPARTMENT DURING THE INVESTIGATION CARRIED OUT BY THE DIRECTORATE OF INVESTIGATION KO LKATA DELHI ETC. AND WHICH HAS BEEN UPHELD BY THE ID CIT(A) BY PASSI NG A DETAILED ORDER. THUS IT COMES TO THE LIGHT THAT LARGE SCALE MANIPULATION HAS BEEN DONE IN THE MARKET PRICE OF SHARES OF CERTAIN COMPANIES LISTED ON BOMBAY STOCK EXCHANGE BY A GROUP OF PERSONS WORK ING AS SYNDICATE FOR THE PURPOSE OF PROVIDING ENTRIES OF T AX EXEMPT BOGUS LONG TERM CAPITAL GAINS TO LARGE NUMBER OF BENEFICI ARIES IN LIEU OF UNACCOUNTED CASH. THUS IN ORDER TO CONVERT BLACK M ONEY INTO WHITE WITHOUT PAYMENT OF INCOME-TAX A LARGE NUMBE R OF PERSONS ARE AVAILING ACCOMMODATION ENTRIES OF BOGUS LONG TE RM CAPITAL GAINS. THE ID. D/R HAS SUBMITTED THAT THE AO HAS DI SCUSSED EACH AND EVERY ASPECT OF THE MODUS OPERANDI OF THE ENTRY PROVIDERS UNDER WHICH THE BENEFICIARIES ARE ASKED TO BUY SOME SHARE S OF PRE- KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 20 DETERMINED PENNY STOCK COMPANY CONTROLLED BY THEM A T A VERY NOMINAL PRICE MOSTLY OFF-LINE THROUGH PREFERENTIAL ALLOTMENT. THE BENEFICIARIES HOLD THE SHARES FOR ONE YEAR TO AVAIL THE LONG TERM CAPITAL GAIN EXEMPTION UNDER SECTION 10(38) OF THE IT ACT. IN THE MEANTIME THE OPERATORS RIG THE PRICE OF STOCK AND GRADUALLY RISE ITS PRICE MANY TIMES FROM 500 TO 1000 TIMES. THIS IS DO NE THROUGH LOW VOLUME TRANSACTION INDULGED IN BY THE DUMMIES OF TH E OPERATOR AT A PRE-DETERMINED PRICE. LD. D/R ALSO SUBMITTED THAT T HE AO AFTER DISCUSSING THE MODUS OPERANDI OF THE OPERATORS MINUTELY HAS FOUND THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES OF AV AILING THE ACCOMMODATION ENTRIES OF BOGUS LONG TERM CAPITAL GA IN. THERE IS A STIFF RISE IN THE PRICE OF THE SHARES AT THE TIME O F SALE AS AGAINST THE ACQUISITION COST WHICH CLEARLY SHOWS THAT THE TRANS ACTION IS NOT GENUINE BUT IT IS A BOGUS TRANSACTION OF ACCOMMODAT ION ENTRIES OF LONG TERM CAPITAL GAIN. THE LD. D/R HAS SUBMITTED T HAT THE TRANSACTION THROUGH BANKING CHANNEL AND SALE OF SHA RES ON THE STOCK EXCHANGE IS NOT SACROSANCT TO HOLD THAT THE T RANSACTION IS GENUINE WHEN ALL OTHER SURROUNDING CIRCUMSTANCES IN DICATE THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES OF BOGUS CAPITAL KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 21 GAIN IN RESPECT OF PENNY STOCK AND THE CIRCUMSTANTI AL EVIDENCE AND SURROUNDING CIRCUMSTANCES CANNOT THUS BE IGNORED. T HUS THE LD. AO HAS CLEARLY BROUGHT OUT THE CASE OF ACCOMMODATIO N ENTRIES OF BOGUS LONG TERM CAPITAL GAIN AND WHICH HAS BEEN RIG HTLY CONFIRMED BY THE ID CIT(A). THE ID. D/R HAS RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN CASE OF SUMAN PODDAR VS. ITO 112 TAXMANN.COM 329 (DELHI). THE ID. D/R HAS SUBMITTED THAT THE HON'BLE HIGH COURT HAS CONFIRMED THE DECISION O F THE TRIBUNAL WHEREBY THE LONG TERM CAPITAL GAINS CLAIMED BY THE ASSESSEE IN RESPECT OF PURCHASE AND SALE OF PENNY STOCK WERE TR EATED AS BOGUS TRANSACTIONS BEING ACCOMMODATION ENTRIES. IT WAS SU BMITTED THAT THE SLP FILED BY THE ASSESSEE AGAINST THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT HAS BEEN DISMISSED BY THE HON'BLE SUPREME COURT REPORTED IN 112 TAXMANN.COM 330 (SC). 12. THE LD A/R IN HIS REJOINDER SUBMITTED THAT THE DECISION RELIED UPON BY THE LD. D/R IN CASE OF SUMAN PODDAR VS. ITO (SUPRA) IS NOT APPLICABLE IN THE FACTS OF THE ASSESSEES CASE AS I N THE SAID CASE IT WAS A FINDING OF FACT BY THE TRIBUNAL HOLDING THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE OF ACTUAL SALE EXCEP T THE CONTRACT KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 22 NOTES ISSUED BY THE SHARE BROKER WHEREAS IN THE CAS E OF THE ASSESSEE THE ASSESSEE PRODUCED ALL THE DOCUMENTARY EVIDENCES RIGHT FROM ALLOTMENT OF SHARES HOLDING IN DEMAT AC COUNT PAYMENT OF PURCHASE CONSIDERATION AS WELL AS RECEIPT OF THE SALE CONSIDERATION THROUGH BANKING CHANNEL THUS THE SAI D DECISION CANNOT BE APPLIED IN THE PRESENT CASE. RELIANCE PLA CED ON THE JUDGMENT OF HON'BLE HIGH COURT OF DELHI IN THE CAS E OF PCIT V/S SMT. KRISHNA DEVI & OTHERS WHEREIN HON'BLE HIGH COURT DECIDED IN FAVOUR OF THE ASSESSEE AFTER CONSIDERING THE JUDGME NT IN THE CASE OF SUMAN PODDAR V/S ITO (SUPRA) AND SUMATI DAYAL V/S CIT (1995) AIR 2019 . 13. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US CAREFULLY GONE THROUGH THE DECISIO NS AND JUDGMENTS REFERRED AND RELIED BY BOTH THE PARTIES. FIRST COMMON ISSUE RAISED BY THE ASSESSEE(S) IS WITH REGARD TO L ONG TERM CAPITAL GAIN CLAIMED U/S 10(38) OF THE ACT ARISING FROM SAL E OF EQUITY SHARES OF M/S SUNRISE ASIAN LIMITED THROUGH RECOGNI ZED STOCK EXCHANGE AND TRANSFER EFFECTED THROUGH DEMAT ACCOUN T. THE ASSESSEE(S) HAS CHALLENGED THE FINDING OF LD. CIT(A ) TREATING THE KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 23 ALLEGED TRANSACTION AS SHAM THEREBY CONFIRMING THE FINDING OF LD. A.O THAT THE ALLEGED CAPITAL GAIN IS AN ACCOMMODATI ON ENTRY ARRANGED BY THE ASSESSEE(S) THROUGH SALE OF SHARES OF ALLEGED PENNY STOCK COMPANY NAMELY M/S SUNRISE ASIAN LIMITED HAV ING NO MEANS AND THE PRICE OF EQUITY SHARE OF THIS COMPANY IS MANIPULATED. THE ISSUE IN BRIEF REMAINS IS WHETHE R M/S SUNRISE ASIAN LIMITED IS A PAPER/ PENNY STOCK COMPANY. 14. WE NOTE THAT THE ORIGINAL PURCHASE OF EQUITY SH ARE OF CONART TRADERS LIMITED WAS MADE ON 17.9.2011 AND THIS COMP ANY WAS SUBSEQUENTLY MERGED TO M/S SUNRISE ASIAN LIMITED BY THE ORDER OF HON'BLE BOMBAY HIGH COURT AND ASSESSEE RECEIVED THE CONVERTED EQUITY SHARES OF M/S SUNRISE ASIAN LIMITED IN THE IR DEMAT ACCOUNT. THEREAFTER DURING THE YEAR UNDER APPEAL TH E SHARES WERE SOLD THROUGH RECOGNIZED STOCK EXCHANGE AT THE PRICE APPEARING ON THE PORTAL OF THE EXCHANGE. THE SHARES WERE TRANSF ERRED FROM DEMAT ACCOUNT AND CONSIDERATION WAS RECEIVED. ALL THE EVIDENCES IN SUPPORT OF ABOVE STATED TRANSACTIONS HAVE BEEN F ILED BEFORE THE LOWER AUTHORITIES AND THEIR GENUINENESS ARE NOT IN DOUBT. THE MAIN CONTENTION OF THE REVENUE AUTHORITIES IS THAT M/S S UNRISE ASIAN KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 24 LIMITED IS NOT A COMPANY OF WORTH LOOKING TO THE PR ICE OF EQUITY SHARES APPEARING AT THE STOCK EXCHANGE PORTAL AND W AS MANIPULATED BY THE BROKERS AND OTHERS BY INCREASING THE SHARE PRICE ABNORMALLY AND THEN PROVIDE BOGUS LONG TERM C APITAL GAIN ENTRIES. 15. BEFORE US LD. COUNSEL FOR THE ASSESSEE HAS REFERRED TO VARIOUS JUDGMENTS OF WHICH FEW WAS SQUARELY APPL ICABLE ON THE FACTS AND ISSUES PLACED BEFORE US. THERE ARE SO MU CH SIMILAR THAT THEY ALSO PERTAINS TO ISSUE OF LONG TERM CAPITAL GA IN FROM SALE OF EQUITY SHARES OF M/S SUNRISE ASIAN LIMITED. CO-ORD INATE BENCH OF MUMBAI IN THE CASE OF DIPESH RAMESH VARDHAN V/S DCIT ITA NO.764/MUM/2019 DATED 11.08.2020 AND CO-ORDINATE BENCH OF JAIPUR IN THE CASE OF ASHOK AGRAWAL ITA NO.124/JP/2020 AND OTHERS ORDER DATED 18.11.2020 HAS ADJUDICATED VERY SAME ISSUE. EVEN THIS TRIBUNAL RECENTLY IN THE CASE OF MR. AYUSH JAIN AND OTHERS ITA NO.616/IND/2019 ORDER DATED 30.4.2021 DEALT WITH THE VERY SAME ISSUE PERTAINING TO GENUINENESS OF CLAIM OF LO NG TERM CAPITAL GAIN U/S 10(38) OF THE ACT FOR SALE OF EQUITY SHARE S OF M/S SUNRISE ASIAN LIMITED AND BOTH THE ABOVE STATED JUDGMENTS O F CO-ORDINATE BENCHES OF MUMBAI AND JAIPUR ARE CONSIDERED AND RE LIANCE HAS KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 25 ALSO PLACED ON THE JUDGMENT OF HON'BLE HIGH COURT O F DELHI IN THE CASE OF PCIT V/S SMT. KRISHNA DEVI & OTHERS (SUPRA) OBSERVING AS FOLLOWS:- 15. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED T HE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE JUDGMENTS AND DECISIONS REFERRED AND RELIED BY BOTH THE PARTIES. THE ISSUE OF GENUI NENESS OF CLAIM OF EXEMPTION OF LONG TERM CAPITAL GAIN (IN SHORT LTGC ) U/S 10(38) OF THE ACT FROM SALE OF EQUITY SHARES OF A LISTED COMPANY NAME LY M/S SUNRISE ASIAN LIMITED (IN SHORT SAL) CARRIED OUT THROUGH A REC OGNIZED STOCK EXCHANGE AND SHARES BEEN TRANSFERRED THROUGH DEMAT ACCOUNT I S IN DISPUTE BEFORE US. REVENUE AUTHORITIES HAVE ALLEGED THAT THE COMP ANY NAMELY M/S SUNRISE ASIAN LTD IS A PENNY STOCK COMPANY AND TH E TRANSACTION GIVING RISE TO LTGC IS SHAM AND ASSESSEE HAS USED COLORABL E DEVICE TO CONVERT ITS UNACCOUNTED MONEY INTO LONG TERM CAPITAL GAIN IN OR DER TO CLAIM EXEMPTION U/S 10(38) OF THE ACT. ASSESSEE HAS ALSO CHALLENGED THE ACTION OF LD. A.O MAKING ADDITION FOR ESTIMATED BROKERAGE EXPENSES FOR ARRANGING THE ALLEGED BOGUS LONG TERM CAPITAL GAIN. 16. WE OBSERVE THAT THE ASSESSEE HAS CLAIMED TO HAV E SOLD 30000 EQUITY SHARES OF M/S SUNRISE ASIAN LIMITED FOR A CO NSIDERATION OF RS.1 46 95 302/-. THESE SHARES WERE CLAIMED TO BE PURCHASED ON 10.10.2011 AT COST OF RS.6 00 000/-. LD. COUNSEL F OR THE ASSESSEE HAS FILED FOLLOWING SEQUENCES OF EVENTS WHICH HAVE OCCU RRED SINCE THE PURCHASE OF THESE EQUITY SHARES DURING THE FINANCIA L YEAR 2011-12 TILL THEY WERE FINALLY SOLD DURING FINANCIAL YEAR 2013-14. PERIOD OF EVENT EVENT JUNE 2011 MEETING WITH DIRECTOR MR. NILESH P CHAUHA N REGARDING INVESTMENT IN SANTOSHIMA LEASE FINANCE & INVESTMENT (INDIA) LTD KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 26 05 JULY 2011 ISSUE OF PROPOSAL FOR PRIVATE PLACEMEN T OF SHARES OF THE COMPANY AT A PREMIUM OF RS.10/- PER SHARES ALONGWITH COPY OF LIST OF DIRECTORS AND COPY OF FINANCIAL REPORT FOR FINANCIAL YEAR 2007-08 FINANCIAL YEAR 2008-09 & FINANCIAL YEAR 2009-10 20 JULY 2021 LETTER ISSUED TO THE COMPANY FOR FURTH ER CLARIFICATIONS AND REQUIRING COPIES OF MEMORANDUM OF ASSOCIATION ARTICLES OF ASSOCIATION AND BALANCE SHEET FOR THE FINANCIAL YEAR 2010-11. 28 JULY 2011 REPLY RECEIVED FROM THE COMPANY ALONGW ITH THE DOCUMENTS DESIRED. 19 SEPTEMBER 2011 APPLIED FOR 30000 EQUITY SHARES OF THE COMPANY BY PAYING AN AMOUNT OF RS.6 00 000/- OCTOBER 2011 RECEIVED SHARES CERTIFICATE IN RESPECT OF SHARES ALLOTTED. JULY 2012 RECEIVED BALANCE SHEET OF THE SANTOSHIMA TRADELINKS LIMITED (NAME OF COMPANY CHANGED W.E.F. 16.09.11) FOR THE FINANCIAL YEAR 2011-12 OCTOBER 2012 RECEIVED NOTICE FOR COURT CONVENED ME ETING OF EQUITY SHARES HOLDERS FOR AMALGAMATION OF COMPANY AND ANOTHER COMPANY CONART TRADERS LIMITED WITH SUNRISE ASIAN LIMITED. 19 OCTOBER 2012 PLACED REQUEST FOR GETTING THE SHARES IN DEMATERIALIZED FORM. 22 OCTOBER 2012 LETTER ISSUED TO MR NILESH P CHOUHAN DIRECTOR OF THE COMPANY SEEKING INFORMATION IN RESPECT OF AMALGAMATION AND RAISING CONCERNS ABOUT THE PROPOSAL. NOVEMBER RECEIVED LETTER FROM THE COMPANY EXPLAININ G THE KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 27 2012 RATIONALE FOR MERGER AND SATISFYING THE QUERIE S RAISED. MARCH 2013 THE HON'BLE BOMBAY HIGH COURT PASSED TH E ORDER FOR MERGER OF THE COMPANY WITH M/S SUNRISE ASIAN LIMITED JUNE 2013 NEW SHARES IN SUNRISE ASIAN LIMITED RECEI VED IN LIEU OF HOLDING OF SANTOSHIMA TRADELINKS LIMITED IN DEMAT ACCOUNT. JULY 2013 RECEIVED BALANCE SHEET OF THE SUNRISE ASI AN FOR THE FY 2012-13 NOV 13 ONWARDS SALE OF SHARES THROUGH STOCK EXCHANGE FOLLOWING DOCUMENTS WERE FURNISHED: . COPIES OF CONTRACT NOTES IN RESPECT OF SALE OF SHARES. . COPY OF LEDGER ACCOUNT OF THE BROKER. . COPY OF THE BANK ACCOUNT STATEMENT FOR THE YEAR REFLECTING THE TRANSACTIONS WITH BROKER. 17. FROM GOING THROUGH THE ABOVE SEQUENCE OF EVENTS WHICH ARE DULY SUPPORTED BY EVIDENCE FILED BY THE ASSESSEE BEFORE BOTH THE LOWER AUTHORITIES AND BEFORE US PRIME FACIE SHOW THAT TH E ASSESSE APPLIED FOR 30000 EQUITY SHARES ON 19.9.2011 THE NAME OF THE CO MPANY AT THE POINT OF TIME WAS SANTOSHIMA LEASE FINANCE & INVESTMENT LIMI TED WHICH WAS LATER ON CHANGED TO SANTOSHIMA TRADELINKS LIMITED. THIS COMPANY WITH ANOTHER COMPANY NAMELY M/S CONART TRADERS LIMITED W AS PLANNED TO BE AMALGAMATED WITH M/S SUNRISE ASIAN LIMITED. HON'BL E BOMBAY HIGH COURT PASSED AN ORDER FOR MERGER OF THE COMPANY WIT H M/S SUNRISE ASIAN LIMITED. NEW SHARES IN M/S SUNRISE ASIAN LIMITED W ERE RECEIVED IN THE DEMAT ACCOUNT OF THE ASSESSEE IN LIEU OF HOLDING IN THE SHARES OF M/S SANTOSHIMA TRADELINKS LIMITED. UNDISPUTEDLY THE AS SESSEE HAS HELD THE KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 28 SHARE FOR MORE THAN 12 MONTHS AND THE INCOME IN THE FORM OF LONG TERM CAPITAL GAIN IS CLAIMED TO HAVE ARISE FROM THE TRAN SFER OF LONG TERM CAPITAL ASSETS BEING EQUITY SHARE IN THE COMPANY CA RRIED OUT THROUGH RECOGNIZED STOCK EXCHANGE AND THE TRANSACTION BEING CHARGEABLE TO SECURITY TRANSACTION TAX. ON THE STRENGTH OF THESE FACTS THE ASSESSEE HAS CLAIMED EXEMPTION U/S 10(38) OF THE ACT FOR LONG TE RM CAPITAL GAIN FROM SALE OF EQUITY SHARES OF M/S SUNRISE ASIAN LIMITED. ON THE OTHER HAND REVENUE AUTHORITIES ARE ALLEGING THAT THERE IS AN U PWARD INCREASE IN THE PRICE OF EQUITY SHARE OF M/S SUNRISE ASIAN LIMITED AND LOOKING TO THE FINANCIAL GROWTH OF THE ASSESSEE THE INCREASE IN TH E SHARE PRICE IS ABNORMAL AND UNPRECEDENTED AND BEYOND HUMAN PROBABI LITY AND THUS IT WAS CONCLUDED THAT THE TRANSACTION IS SHAM TRANSACT ION AND THE M/S SUNRISE ASIAN LIMITED IS A PENNY STOCK COMPANY. 18. FURTHER IN VIEW OF THE CLAIM OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ISSUE RAISED BEFORE US IS SQUARELY COVERED BY T HE DECISION OF CO- ORDINATE BENCHES WE HAVE GONE THROUGH THE FACTS IN VOLVED IN THE CASE OF DIPESH RAMESH VARDHAN V/S DCIT (SUPRA) AND FIND THA T THE CO-ORDINATE BENCH OF MUMBAI HAS THOROUGHLY EXAMINED THE SIMILAR SET OF FACTS AND THE SAME ISSUE AS RAISED BEFORE US INCLUDING THE CLAIM OF EXEMPT INCOME OF LONG TERM CAPITAL GAIN FROM SALE OF EQUITY SHARES OF SAL U/S 10(38) OF THE ACT AND THE REVENUE CONTENDING IT TO BE A SHAM AND BOGUS TRANSACTION LIABLE TO BE TAXED U/S 68 OF THE ACT AS UNEXPLAINE D CASH CREDIT AND ESTIMATED BROKERAGE EXPENSE FOR ARRANGING LTCG. AF TER THOROUGHLY DISCUSSING THE FACTS AND ISSUES CO-ORDINATE BENCH MUMBAI HAS DECIDED IN FAVOUR OF THE ASSESSEE AND HELD THAT THE CLAIM O F LONG TERM CAPITAL GAIN U/S 10(38) OF THE ACT FROM THE SALE OF EQUITY SHARES OF M/S SUNRISE ASIAN LIMITED IS GENUINE AND SAL IS NOT A PENNY STO CK COMPANY AND FURTHER HOLDING THAT THE ALLEGED TRANSACTION IS NEI THER BOGUS NOR SHAM. FURTHER THE TRIBUNAL HAS DELETED THE ADDITION FOR E STIMATED BROKERAGE EXPENSES FOR ARRANGING ACCOMMODATION ENTRY. RELEVA NT FINDING OF HON'BLE KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 29 MUMBAI TRIBUNAL IN THE CASE OF DIPESH RAMESH VARDHA N VS DCIT RECENTLY DELIVERED ON 11.08.2020 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 REGARDIN G THE SAME. THE PERUSAL OF RECORD WOULD REVEAL THAT THE ASSESSEE PU RCHASED CERTAIN SHARES OF AN ENTITY NAMELY M/S STL AS EARLY AS SEPT EMBER 2011. THE SHARES WERE CONVERTED INTO DEMAT FORM IN ASSESS EES ACCOUNT DURING THE MONTH OF MARCH 2012. THE TRANSACTIONS T OOK PLACE THROUGH BANKING CHANNELS. THE INVESTMENTS WERE DULY REFLECTED BY THE ASSESSEE IN FINANCIAL STATEMENTS OF RESPECTIVE YEARS. THE COPIES OF FINANCIAL STATEMENTS OF M/S STL FOR FYS 2009-10 & 2010-11 WHICH LED TO INVESTMENT BY THE ASSESSEE IN THAT ENT ITY WAS ALSO FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. SUBSEQUENTLY M/S STL GOT MERGED WITH ANOTHER ENTIT Y VIZ. M/S SAL PURSUANT TO SCHEME OF AMALGAMATION U/S 391 TO 394 O F THE COMPANIES ACT 1956. THE SCHEME WAS DULY APPROVED B Y HONBLE BOMBAY HIGH COURT VIDE ORDER DATED 22/03/2013 A CO PY OF WHICH IS ON RECORD. CONSEQUENTLY THE SHARES OF M/S STL H ELD BY THE ASSESSEE GOT SWAPPED WITH THE SHARES OF M/S SAL AND NEW SHARES WERE ALLOTTED TO THE ASSESSEE DURING JUNE 2013 PUR SUANT 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 THROU GH ITS STOCK BROKER NAMELY M/S UNIQUE STOCKBRO PRIVATE LIMITED I N ONLINE PLATFORM OF THE RECOGNISED STOCK EXCHANGE DURING TH E MONTH OF MARCH 2014. THE SELLING PRICE WAS IN THE RANGE OF RS.489/- TO RS.491/- PER SHARE. THE TRANSACTIONS TOOK PLACE THR OUGH ONLINE MECHANISM AFTER COMPLYING WITH ALL THE FORMALITIES AND PROCEDURE INCLUDING PAYMENT OF STT. THE DELIVERY OF THE SHARE S WAS THROUGH KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 30 CLEARING MECHANISM OF THE STOCK EXCHANGE AND SALE C ONSIDERATION 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 ASSESSEE GROUP IN HIS STATEMENT MAINTAINED THE POSITION TH AT TRADING TRANSACTIONS WERE GENUINE TRANSACTIONS CARRIED OUT THROUGH STOCK EXCHANGE FOLLOWING ALL PROCESS AND LEGAL PROCEDURES . THE ASSESSEE ALSO FILED TRADING VOLUME DATA AND PRICE RANGE OF T HE SCRIP FOR A PERIOD OF MORE THAN 2 YEARS I.E. FROM JAN 2013 TO JULY 2015. THE SHARES REFLECTED HEALTHY TRADING VOLUME AND THE PRI CE RANGE REFLECTED THEREIN WAS IN THE RANGE OF RS.360/- TO R S.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 T HESE FACTS IT COULD BE GATHERED THAT THE ASSESSEE HAD DULY DISCHA RGED THE ONUS CASTED UPON HIM TO PROVE THE GENUINENESS OF THE STA TED TRANSACTIONS AND THE ONUS HAD SHIFTED ON REVENUE TO REBUT THE SA ME. 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 A SSOCIATED ENTITIES INCLUDING M/S SAL. HOWEVER THERE IS NOTHI NG ON RECORD TO ESTABLISH VITAL LINK BETWEEN THE ASSESSEE GROUP AND SHRI VIPUL BHAT OR ANY OF HIS GROUP ENTITIES. THE ASSESSEE ALL ALO NG DENIED HAVING KNOWN SHRI VIPUL BHAT OR ANY OF HIS GROUP ENTITIES. HOWEVER NOTHING HAS BEEN BROUGHT ON RECORD TO CONTROVERT THE SAME A ND ESTABLISH THE LINK BETWEEN SHRI VIPUL BHAT AND THE ASSESSEE. THE OPPORTUNITY TO CROSS-EXAMINE SHRI VIPUL BHAT WAS NEVER PROVIDED TO THE ASSESSEE WHICH IS CONTRARY TO THE DECISION OF HONBLE SUPREM E COURT IN M/S ANDAMAN TIMBER INDUSTRIES V/S CCE (CA NO.4228 OF 20 06) WHEREIN IT WAS HELD THAT NOT ALLOWING THE ASSESSEE TO CROSS -EXAMINE THE KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 31 WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENT OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY IN AS MU CH AS IT AMOUNTS TO VIOLATION OF PRINCIPAL OF NATURAL JUSTICE BECAUS E OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. THE WHOLE BASIS OF MAKING THE ADDITION IS THIRD PARTY STATEMENT WITHOUT THERE BEI NG ANY TANGIBLE MATERIAL. IT IS TRITE LAW THAT ADDITIONS MERELY ON THE BASIS OF SUSPICIOUS CONJECTURES OR SURMISES COULD NOT BE SU STAINED IN THE EYES OF LAW AS HELD BY HONBLE SUPREME COURT IN OMA R SALAY MOHAMED SAIT V/S CIT (1959 37 ITR 151). THE SUSPICI ON HOWEVER STRONG COULD NOT PARTAKE THE CHARACTER OF LEGAL EVI DENCE AS HELD BY HONBLE SUPREME COURT IN UMACHARAN SHAW & BROS. V/S CIT (1959 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 COGENT MATERIAL TO SUSTAIN THOSE ADD ITIONS COULD NOT BE DISCHARGED BY THE REVENUE. THE ALLEGATION OF PRI CE RIGGING / MANIPULATION HAS BEEN LEVIED WITHOUT ESTABLISHING T HE VITAL LINK BETWEEN THE ASSESSEE AND VARIOUS ENTITIES OF SHRI V IPUL BHAT. WE FIND THAT THE WHOLE BASIS OF MAKING ADDITIONS IS TH IRD PARTY STATEMENT AND NO OPPORTUNITY OF CROSS-EXAMINATION H AS BEEN PROVIDED TO THE ASSESSEE TO CONFRONT THE SAID PARTY . AS AGAINST THIS THE ASSESSEES POSITION THAT THAT THE TRANSACTIONS WERE GENUINE AND DULY SUPPORTED BY VARIOUS DOCUMENTARY EVIDENCES CO ULD NOT BE DISTURBED BY THE 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 SHARES IN CONNIVANCE WITH SHRI VIPUL BHAT IS NOT BACKED BY AN Y INDEPENDENT MATERIAL. FIRSTLY THERE IS NOTHING ON RECORD WHICH ESTABLISHES THE FACT THAT THE ASSESSEE WAS ACQUAINTED WITH SHRI VIP UL BHAT OR ANY KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 32 OF HIS ENTITIES AND SECONDLY THE ONUS CASTED UPON ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS WAS ALREADY DIS CHARGED 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 FURTHER INVESTIGATIONS H AVE BEEN CARRIED OUT TO ESTABLISH THIS VITAL LINK BETWEEN THE ASSESS EE AND SHRI VIPUL BHAT. WE DO NOT FIND ANY INDEPENDENT INVESTIGATIONS 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 EXCHA NGE BETWEEN THE ASSESSEE AND GROUP ENTITIES OF SHRI VIPUL BHAT. THI S IS FURTHER EVIDENCED BY THE FACT THAT NO SUBSTANTIAL INCRIMINA TING MATERIAL / WEALTH OF THAT MAGNITUDE HAS BEEN FOUND DURING THE COURSE OF SEARCH OPERATIONS ON ASSESSEE WHICH WOULD CORROBORA TE SUCH PRESUMPTION AND PROVE THAT THE TRANSACTIONS WERE SH AM TRANSACTIONS IN ANY MANNER. 9. THE FACT THAT THE ASSESSEE COULD NOT PRODUCE THE CONCERNED PERSON OF M/S SAL WAS RIGHTLY CONTROVERTED BY SUBMI TTING THAT THE AFORESAID ENTITY WAS NOT UNDER THE CONTROL OF THE A SSESSEE AND THE ASSESSEE WAS UNDER NO OBLIGATION TO DO SO. THE EXIS TENCE OF M/S SAL IS BEYOND DOUBT SINCE IT WAS A LISTED CORPORATE ENTITY AND SECONDLY IT WAS SUBJECT MATTER OF SCHEME OF AMALGA MATION U/S 391 TO 394. THE SCHEME OF AMALGAMATION WAS DULY BEEN AP PROVED BY HONBLE BOMBAY HIGH COURT. THEREFORE 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 THE BUYER OF THE SHARES WOULD NOT BE KNOWN TO THE ASSESSEE. THER EFORE THE ADVERSE CONCLUSION DRAWN BY LD. AO MERELY ON THE BA SIS OF THE FACT THAT THE BUYER OF THE SHARES WERE GROUP ENTITIES OF SHRI VIPUL BHAT COULD NOT BE SUSTAINED. THE FACT THAT THERE WERE IN DEPENDENT BUYERS KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 33 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 P ROVING THE GENUINENESS OF THE TRANSACTIONS THE ONUS WOULD SHI FT ON THE REVENUE TO DISLODGE ASSESSEES CLAIM AND BRING ON RECORD CO NTRARY EVIDENCES TO REBUT THE SAME. UNTIL AND UNLESS THIS EXERCISE I S CARRIED OUT THE ADDITIONS COULD NOT BE SUSTAINED IN THE EYES OF LAW . 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) D ECLINED TO ADMIT REVENUES APPEAL SINCE THE REVENUE FAILED TO CARRY FORWARD THE INQUIRY TO DISCHARGE THIS BASIC ONUS. THE CO-OR DINATE BENCH OF THIS TRIBUNAL IN MUKESH R.MAROLIA V/S ADDL. CIT (6 SOT 247 15/12/2005) HELD THAT PERSONAL KNOWLEDGE AND EXCITE MENT ON EVENTS SHOULD NOT LEAD THE ASSESSING OFFICER TO A S TATE OF AFFAIRS WHERE SALIENT EVIDENCES ARE OVER- LOOKED. WHEN EVERY TRANSACTION HAS BEEN ACCOUNTED DOCUMENTED AND SUPPORTED IT WOULD BE VERY DIFFICULT TO BRUSH ASIDE THE CONTENTIONS OF THE ASSESSEE THAT HE HAD PURCHASED S HARES AND HAD SOLD SHARES AND ULTIMATELY PURCHASED A FLAT UTILIZI NG THE SALE PROCEEDS OF THOSE SHARES AND THEREFORE THE CO-ORDI NATE BENCH CHOSE TO DELETE THE IMPUGNED ADDITIONS. WE FIND THAT THIS DECISION WAS FIRSTLY BEEN APPROVED BY HONBLE BOMBAY HIGH COURT VIDE ITA NO. 456 OF 2007 ON 07/09/2011 AND THEREAFTER SPECIAL L EAVE PETITION AGAINST THE SAID DECISION HAS BEEN DISMISSED BY HON BLE SUPREME COURT VIDE SLP NO. 20146 OF 2012 DATED 27/01/2014 W HICH IS REPORTED AS 88 CCH 0027 SCC. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 34 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 TH E ABSENCE OF ANY EVIDENCE TO IMPLICATE THE ASSESSEE OR TO PRO VE THAT THE TRANSACTIONS WERE BOGUS THE LONG-TERM CAPITAL GAIN S DECLARED BY THE ASSESSEE COULD NOT BE DOUBTED WITH. THIS CASE W AS DEALING WITH GAINS EARNED 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 SUSTAINING THE IMPUGNED ADDITIONS IN THE HANDS OF THE ASSESSEE. RE SULTANTLY THE ADDITION ON ACCOUNT OF ALLEGED LONG-TERM CAPITAL GA INS AS WELL AS ESTIMATED COMMISSION AGAINST THE SAME STANDS DELET ED. THE GROUNDS OF APPEAL TO THAT EXTENT STAND ALLOWED. 19. 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 TRIBUNAL IN THE CASE OF DIPESH RAMESH VARDHAN (SUPRA) QWHILE DEALING WITH THE SAME ISSUE OF LONG TERM CAPITAL GAIN FROM SALE OF EQUITY SHARES OF M/S SUNRISE ASIA N LIMITED CLAIMED TO BE EXEMPT U/S 10(38) OF THE ACT AND DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE 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 AND WHEN THEIR INVESTIGATION DID NOT REVEAL ANY PRICE O R VOLUME MANIPULATION BY THE ASSESSEE AND THESE TRANSACTIONS ARE IN THE NORMAL COURSE THROUGH PROPER & LEGAL CHANNELS. THEN THE ALLEGATIONS OF THE IT DEPARTMENT FALL FLAT AND DENIAL OF DEDUCT ION U/S 10(38) OF THE ACT IS ARBITRARY AND ADDITION OF SALE PROCEEDS OF SHARES OF PAL U/S 68 IS AGAINST THE PROVISIONS OF ACT. IN THE CAS E IN HAND THE ID. AO HAS REFERRED TO SESI ENQUIRY AGAINST M/S SUNRISE ASIAN LTD. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 35 HOWEVER WE NOTE THAT THE SAID ENQUIRY WAS REGARDIN G FAILURE TO COMPLY WITH CERTAIN DISCLOSURE REQUIREMENTS AND THE REFORE THE SUBJECT MATTER OF THE ENQUIRY HAS NO CONNECTION WIT H THE TRANSACTION OF BOGUS LONG TERM CAPITAL GAIN AND HAS NO BEARING IN JUDGING THE GENUINENESS OF THE TRANSACTION UNDERTAKEN BY THE AS SESSEE OR FOR THAT MATTER THE PRICE AND REALIZATION ON SALE OF S HARES SO UNDERTAKEN BY THE ASSESSEE THROUGH THE STOCK EXCHAN GE. FURTHER IT HAS BEEN HELD IN THE AFORESAID CASE THAT THE FINDIN GS OF INVESTIGATION & MODUS OPERANDI IN OTHER CASES NARRATED BY THE AO AND ALSO CIT(A) NOWHERE PROVE ANY CONNECTION WITH THE ASSESS EE NOR THE ASSESSEE'S INVOLVEMENT OR CONNECTION OR COLLUSION W ITH THE BROKERS EXIT PROVIDERS ACCOMMODATION PROVIDERS OR COMPANIE S OR DIRECTIONS ETC AND FOR MAKING THE ADDITION IT IS NECESSARY TO BRING ON RECORD EVIDENCE TO ESTABLISH INGENUITY IN TRANSACTIONS OR ANY CONNECTION OF THE ASSESSEE OR ITS TRANSACTION WITH ANY OF THE ALL EGED PARTIES. IN THE INSTANT CASE AS WE HAVE DISCUSSED EARLIER THERE I S NO FINDING WHICH PROVES ASSESSEE'S CONNECTION INVOLVEMENT OR COLLUS ION WITH SO CALLED ACCOMMODATION ENTRY PROVIDERS. FURTHER IN THE AFORE SAID CASE THE ISSUE AS TO WHETHER THE LEGAL EVIDENCE PRODUCED BY THE ASSESSEE HAS TO GUIDE OUR DECISION IN THE MATTER OR THE GENE RAL OBSERVATIONS BASED ON STATEMENTS PROBABILITIES ' HUMAN BEHAVIOR AND DISCOVERY OF THE MODUS OPERANDI ADOPTED IN EARNING ALLEGED BO GUS L TCG AND STCG THAT HAVE SURFACED DURING INVESTIGATIONS SHO ULD G'UIDE THE AUTHORITIES IN ARRIVING AT A CONCLUSION AS TO WHETH ER 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 STRI CTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE HELD THAT THE MODUS OPERAND I GENERALISATION PREPONDERANCE OF HUMAN PROBABILITIE S CANNOT BE THE ONLY BASIS FOR REJECTING THE CLAIM OF THE ASSESSEE UNLESS SPECIFIC KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 36 EVIDENCE IS BROUGHT ON RECORD TO CONTROVERT THE VAL IDITY AND CORRECTNESS OF THE DOCUMENTARY EVIDENCES PRODUCED THE SAME CANNOT BE REJECTED. WE ARE IN COMPLETE AGREEMENT WI TH THE SAID VIEW AND IN THE INSTANT CASE WE FIND THAT EVIDENCE PROD UCED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM OF PURCHASE AND SA LE OF SHARES ON THE STOCK EXCHANGE HAVE NOT BEEN REFUTED BY ANY ADV ERSE FINDINGS OR MATERIAL WHICH COULD DEMONSTRATE INVOLVEMENT OF THE ASSESSEE OR COLLUSION WITH SO CALLED ACCOMMODATION ENTRY PROVID ERS 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 CLAIM OF EXEMPTION UNDER SECTION 10( 38) OF THE ACT AND THE RELEVANT FINDINGS OF THE COORDINATE BENCH C ONTAINED AT PARA 8 READ AS UNDER:- '8. THE ASSESSEE HAS EARNED SPECULATION PROFIT IN T HE IMMEDIATELY PRECEDING YEAR THROUGH M/S EDEN FINANCI AL SERVICES ALSO AND THE SAID PROFIT HAS BEEN USED TO PURCHASE THE SHARES OF M/S SUNRISE ASIAN LTD. THE ASSESSEE H AS OFFERED THE SPECULATION PROFIT FOR INCOME TAX PURPO SES IN THE IMMEDIATELY PRECEDING YEAR AND IT HAS BEEN ACCEPTED . FURTHER THE ASSESSEE HAS SHOWN THE PURCHASE OF IMPUGNED SHA RES AS INVESTMENT IN THE BALANCE SHEET. HENCE THE PURCHASE OF SHARES HAS BEEN ACCEPTED. FURTHER THE SHARES HAVE B EEN RECEIVED IN THE D-MAT ACCOUNT OF THE ASSESSEE AND T HEY HAVE BEEN SOLD THROUGH THE DMAT ACCOUNT ONLY. HENCE THE DELIVERY OF SHARES A/SO STAND PROVED. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE WAS PA RT OF FRAUDULENT PRICE RIGGING. ACCORDINGLY IN THE ABSEN CE OF ANY KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 37 EVIDENCE TO IMPLICATE THE ASSESSEE OR TO PROVE THAT THE TRANSACTIONS ARE BOGUS/ 'R AM OF THE VIEW THAT THE CAPITAL GAINS DECLARED BY THE ASSESSEE CANNOT BE DOUBTED WI TH. 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 1 0(38) OF THE ACT BY ESTABLISHING THE GENUINENESS OF TRANSACTION OF PURC HASE AND SALE OF SHARES AND SATISFYING THE REQUISITE CONDITIONS SPEC IFIED THEREIN AND THE GAINS SO ARISING ON SALE OF SHARES THEREFORE HA S BEEN RIGHTLY CLAIMED AS EXEMPT U/S 10(38) OF THE ACT. ACCORDINGL Y IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE SET-ASIDE THE ORD ER OF THE ID. CIT(APPEALS) AND THE CLAIM OF THE ASSESSEE UL: 10(38) IS ALLOWED. THE MATTER IS THUS DECIDED IN FAVOUR OF THE ASSESSE E AND AGAINST THE REVENUE. IN THE RESULT THE GROUND OF APPEAL SO TAK EN BY THE ASSESSEE IS ALLOWED. 26. IN THE RESULT THE APPEAL OF THE ASSESSEE IS A LLOWED. 19. WE FIND THAT BOTH THE ABOVE DECISIONS ARE SQUAR ELY APPLICABLE ON THE FACTS AND ISSUES RAISED BEFORE US. LD. DEPARTMENTA L REPRESENTATIVE HAS RELIED ON TWO JUDGMENTS THE ONE OF HON HIGH COURT OF GAUHATI IN THE CASE OF CIT V/S SMT. SANGHAMITRA BHARALI (2014) TO TAXM ANN.COM 47 (GAUHATI) (SUPRA) IS NOT APPLICABLE ON THE INSTANT CASE SINCE IN THIS CASE THE COMPANY ADDRESS WHERE SHARES WERE SOLD BY THE ASSESSEE HAS NOT BEEN FOUND BY THE INSPECTOR OF THE INCOME TAX DEPARTMENT PROVING ITS NON EXISTENCE. THIS IS NOT THE FACT IN THE INSTANT CASE AS NEITHER ANY SUCH ENQUIRY HAS BEEN KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 38 CONDUCTED AND SECONDLY NO DISPUTE HAS BEEN RAISED A BOUT THE EXISTENCE OF THE COMPANY. THEREFORE THE JUDGMENT OF HONBLE GAU HATI HIGH COURT IS NOT APPLICABLE AND THUS DISTINGUISHABLE. 20. AS REGARDS THE JUDGMENT OF HONBLE SUPREME COUR T IN THE CASE OF SUMAN PODDAR V/S ITO (SUPRA) DELIVERED ON 22.11.201 9 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.125/2 020 DEALING WITH THE SIMILAR ISSUE OF CLAIM OF EXEMPTION U/S 10(38) OF T HE ACT FOR LONG TERM CAPITAL GAIN FROM SALE OF EQUITY SHARES HAS DULY CO NSIDERED THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF SUMAN PODDA R V/S ITO (SUPRA) AND HAS CONFIRMED THE ORDER OF THE TRIBUNAL STATING IT TO BE THE LAST FACT FINDING AUTHORITY WHO ON THE BASIS OF EVIDENCE BROU GHT ON RECORD HAS RIGHTLY CAME TO THE CONCLUSION THAT THE LOWER TAX A UTHORITIES ARE NOT ABLE TO SUSTAIN THE ADDITION WITHOUT ANY COGENT MATERIAL ON RECORD. RELEVANT EXTRACT OF THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF PCIT V/S KRISHNA DEVI & OTHERS IS REPRODUCED BELOW:- 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 BASIS OF THE ANALYSIS OF THE FINANCIALS OF M/S GOLD LINE INT ERNATIONAL FINVEST LIMITED. HIS CONCLUSION AND FINDINGS AGAINST THE RE SPONDENT ARE CHIEFLY ON THE STRENGTH OF THE ASTOUNDING 4849.2% J UMP IN SHARE PRICES OF THE AFORESAID COMPANY WITHIN A SPAN OF TW O YEARS WHICH IS NOT SUPPORTED BY THE FINANCIALS. ON AN ANALYSIS OF THE DATA OBTAINED FROM THE WEBSITES THE AO OBSERVES THAT TH E QUANTUM LEAP IN THE SHARE PRICE IS NOT JUSTIFIED; THE TRADE PATT ERN OF THE AFORESAID COMPANY DID NOT MOVE ALONG WITH THE SENSEX; AND THE FINANCIALS OF KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 39 THE COMPANY DID NOT SHOW ANY REASON FOR THE EXTRAOR DINARY PERFORMANCE OF ITS STOCK. WE HAVE NOTHING ADVERSE T O COMMENT ON THE ABOVE ANALYSIS BUT ARE CONCERNED WITH THE AXIO MATIC CONCLUSION DRAWN BY THE AO THAT THE RESPONDENT HAD ENTERED INT O AN AGREEMENT TO CONVERT UNACCOUNTED MONEY BY CLAIMING FICTITIOUS LTCG WHICH IS EXEMPT UNDER SECTION 10(38) IN A PR E-PLANNED MANNER TO EVADE TAXES. THE AO EXTENSIVELY RELIED UP ON THE SEARCH AND SURVEY OPERATIONS CONDUCTED BY THE INVESTIGATIO N WING OF THE INCOME TAX DEPARTMENT IN KOLKATA DELHI MUMBAI AND AHMEDABAD ON PENNY STOCKS WHICH SETS OUT THE MODUS OPERANDI ADOPTED IN THE BUSINESS OF PROVIDING ENTRIES OF BOGUS LTCG. HOWEVE R THE RELIANCE PLACED ON THE REPORT WITHOUT FURTHER CORROBORATION ON THE BASIS OF COGENT MATERIAL DOES NOT JUSTIFY HIS CONCLUSION TH AT THE TRANSACTION IS BOGUS SHAM AND NOTHING OTHER THAN A RACKET OF A CCOMMODATION ENTRIES. WE DO NOTICE THAT THE AO MADE AN ATTEMPT T O DELVE INTO THE QUESTION OF INFUSION OF RESPONDENTS UNACCOUNTED MO NEY BUT HE DID NOT DIG DEEPER. NOTICES ISSUED UNDER SECTIONS 133(6 )/131 OF THE ACT WERE ISSUED TO M/S GOLD LINE INTERNATIONAL FINVEST LIMITED BUT NOTHING EMERGED FROM THIS EFFORT. THE PAYMENT FOR T HE SHARES IN QUESTION WAS MADE BY SH. SALASAR TRADING COMPANY. N OTICE WAS ISSUED TO THIS ENTITY AS WELL BUT WHEN THE NOTICES WERE RETURNED UNSERVED THE AO DID NOT TAKE THE MATTER ANY FURTHE R. HE THEREAFTER SIMPLY PROCEEDED ON THE BASIS OF THE FINANCIALS OF THE COMPANY TO COME TO THE CONCLUSION THAT THE TRANSACTIONS WERE A CCOMMODATION ENTRIES AND THUS FICTITIOUS. THE CONCLUSION DRAWN BY THE AO THAT THERE WAS AN AGREEMENT TO CONVERT UNACCOUNTED MONEY BY TAKING FICTITIOUS LTCG IN A PRE-PLANNED MANNER IS THEREFO RE ENTIRELY UNSUPPORTED BY ANY MATERIAL ON RECORD. THIS FINDING IS THUS PURELY AN ASSUMPTION BASED ON CONJECTURE MADE BY THE AO. T HIS FLAWED APPROACH FORMS THE REASON FOR THE LEARNED ITAT TO I NTERFERE WITH THE KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 40 FINDINGS OF THE LOWER TAX AUTHORITIES. THE LEARNED ITAT AFTER CONSIDERING THE ENTIRE CONSPECTUS OF CASE AND THE E VIDENCE BROUGHT ON RECORD HELD THAT THE RESPONDENT HAD SUCCESSFULL Y DISCHARGED THE INITIAL ONUS CAST UPON IT UNDER THE PROVISIONS OF S ECTION 68 OF THE ACT. IT IS RECORDED THAT THERE IS NO DISPUTE THAT THE S HARES OF THE TWO COMPANIES WERE PURCHASED ONLINE THE PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNEL AND THE SHARES WERE DEMATE RIALIZED AND THE SALES HAVE BEEN ROUTED FROM DE-MAT ACCOUNT AND THE CONSIDERATION HAS BEEN RECEIVED THROUGH BANKING CHA NNELS. THE ABOVE NOTED FACTORS INCLUDING THE DEFICIENT ENQUIR Y CONDUCTED BY THE AO AND THE LACK OF ANY INDEPENDENT SOURCE OR EVIDEN CE TO SHOW THAT THERE WAS AN AGREEMENT BETWEEN THE RESPONDENT AND A NY OTHER PARTY PREVAILED UPON THE ITAT TO TAKE A DIFFERENT VIEW. BEFORE US MR. HOSSAIN HAS NOT BEEN ABLE TO POINT OUT ANY EVID ENCE WHATSOEVER TO ALLEGE THAT MONEY CHANGED HANDS BETWEEN THE RESP ONDENT AND THE BROKER OR ANY OTHER PERSON OR FURTHER THAT SOM E PERSON PROVIDED THE ENTRY TO CONVERT UNACCOUNTED MONEY FOR GETTING BENEFIT OF LTCG AS ALLEGED. IN THE ABSENCE OF ANY SUCH MATERIAL THA T COULD SUPPORT THE CASE PUT 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 CIRCUMSTANCES THAT MIGHT CREATE SUSPICION; HOWEVER THE COURT HAS TO DECIDE AN ISSUE ON THE BASIS OF EVIDENCE AND PROOF AND NOT O N SUSPICION ALONE. THE THEORY OF HUMAN BEHAVIOR AND PREPONDERANCE OF P ROBABILITIES CANNOT BE CITED AS A BASIS TO TURN A BLIND EYE TO T HE EVIDENCE PRODUCED BY THE RESPONDENT. WITH REGARD TO THE CLAI M THAT OBSERVATIONS MADE BY THE CIT(A) WERE IN CONFLICT WI TH THE IMPUGNED ORDER WE MAY ONLY NOTE THAT THE SAID OBSERVATIONS ARE GENERAL IN KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 41 NATURE AND LATER IN THE ORDER THE CIT(A) ITSELF NO TES 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 RE ASONING 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 EXAM INING THE JUDGMENT OF SUMAN PODDAR (SUPRA) AT LENGTH WE FIND THAT THE DECISION THEREIN WAS ARRIVED AT IN LIGHT OF THE PEC ULIAR FACTS AND CIRCUMSTANCES DEMONSTRATED BEFORE THE ITAT AND THE COURT SUCH AS INTER ALIA LACK OF EVIDENCE PRODUCED BY THE ASSESS EE THEREIN TO SHOW ACTUAL SALE OF SHARES IN THAT CASE. ON SUCH BA SIS THE ITAT HAD RETURNED THE FINDING OF FACT AGAINST THE ASSESSEE HOLDING THAT THE GENUINENESS OF SHARE TRANSACTION WAS NOT ESTABLISHE D BY HIM. HOWEVER THIS IS QUITE DIFFERENT FROM THE FACTUAL M ATRIX AT HAND. SIMILARLY THE CASE OF SUMATI DAYAL V. CIT (SUPRA) TOO TURNS ON ITS OWN SPECIFIC FACTS. THE ABOVE-STATED CASES THUS A RE OF NO ASSISTANCE TO THE CASE SOUGHT TO BE CANVASSED BY TH E REVENUE. 13. THE LEARNED ITAT BEING THE LAST FACT-FINDING A UTHORITY ON THE BASIS OF THE EVIDENCE BROUGHT ON RECORD HAS RIGHTL Y COME TO THE CONCLUSION THAT THE LOWER TAX AUTHORITIES ARE NOT A BLE TO SUSTAIN THE ADDITION WITHOUT ANY COGENT MATERIAL ON RECORD. WE THUS FIND NO PERVERSITY 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 CONSIDER ATION. 15. ACCORDINGLY THE PRESENT APPEALS ARE DISMISSED. 21. WE THEREFORE ARE OF THE CONSIDERED VIEW THAT TH E FACTS INVOLVED AND ISSUES RAISED IN THE INSTANT APPEAL ARE SQUARELY CO VERED BY THE DECISION OF CO-ORDINATE BENCH OF MUMBAI AND JAIPUR IN THE CASE OF DINESH RAMESH KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 42 VARDHAN V/S DCIT AND ASHOK AGRAWAL V/S ACIT RESPECT IVELY AND FURTHER FIND SUPPORT FROM THE JUDGMENT OF HON'BLE DELHI HIG H COURT IN THE CASE OF PCIT V/S KRISHNA DEVI & OTHERS AND THUS HOLD THAT T HE ALLEGED TRANSACTION OF EARNING LONG TERM CAPITAL GAIN FROM SALE OF EQUI TY SHARES OF M/S SUNRISE ASIAN LIMITED IS NEITHER BOGUS NOR SHAM AND THUS ELIGIBLE FOR EXEMPTION U/S 10(38) OF THE ACT AND NO ADDITION WAS THUS CALLED FOR U/S 68 OF THE ACT. WE ACCORDINGLY ALLOW GROUND NO.1 RA ISED BY THE ASSESSEE NAMELY SHRI AYUSH JAIN AND DELETE THE ADDITION OF R S.1 40 95 302/- AND ALSO ALLOW GROUND NO.2 THUS DELETING ADDITION FOR E STIMATED BROKERAGE EXPENSES OF RS.4 22 859/-. THE OTHER TWO GROUNDS A RE GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 22. IN THE RESULT APPEAL OF THE ASSESSEE SHRI AYUS H JAIN IN ITA NO.616/IND/2019 IS ALLOWED. 16. WE THEREFORE IN THE LIGHT OF THE ABOVE DISCUSSI ON AND IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE JUDGMENT OF THE CO-ORDINATE BENCHES I N CASES REFERRED (SUPRA) CONSISTENTLY HOLDING THAT SUNRISE ASIAN LI MITED IS NEITHER A PENNY STOCK NOR A PAPER COMPANY ARE OF THE CONSI DERED VIEW THAT AS ALL THE FIVE ASSESSEE(S) NAMELY KUMARI AYUSHI NY ATI SMT. VIJAY NYATI SHRI VIJAY KUMAR RADHESHYAM NYATI (HUF) SHR I MANISH KUMAR RADHESHYAM NYATI (HUF) SMT. MAMTA NYATI HAVE DISCHARGED NECESSARY ONUS CASTED UPON THEM IN TERMS OF CLAIM OF EXEMPTION OF LONG TERM CAPITAL GAIN U/S 10(38) OF T HE ACT BY KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 43 ESTABLISHING THE GENUINENESS OF TRANSACTION OF PURC HASE AND SALE OF SHARES AND SATISFYING THE REQUISITE CONDITIONS SPEC IFIED THEREIN AND THE LONG TERM CAPITAL GAIN SO ARISEN HAS BEEN RIGHT LY CLAIMED AS EXEMPT U/S 10(38) OF THE ACT. SINCE WE HAVE HELD T HE TRANSACTION OF LONG TERM CAPITAL GAIN AS GENUINE NO ADDITION FOR E STIMATED BROKERAGE EXPENSE OF RS.72 281/- IS THUS CALLED FOR IN THE CASE OF MISS. AYUSHI NYATI. WE THEREFORE ALLOW THE COMMON ISSUES RAISED IN ALL THE INSTANT APPEALS IN FAVOUR OF THE ASSESSE E(S) AND SET ASIDE THE ORDER OF LD. CIT(A) AND ALLOW THE CLAIM OF LTCG EXEMPTION U/S 10(38) OF THE ACT FROM SALE OF EQUITY SHARES OF SA L AND DELETE THE FOLLOWING ADDITIONS:- S.NO. NAME AMOUNT 1 MS. AYUSHI NYATI RS. 36 14 053/ - 2 SMT. VIJAYA NYATI RS. 33 98 387/ - 3 SHRI VIJAY KUMAR RADHESHYAM NYATI HUF RS. 35 01 004/ - 4 SHRI MANISH KUMAR RADHESHYAM NYATI HUF RS. 33 25 952/ - 5 SMT . MAMTA NYATI RS. 35 99 598/ - 17. ACCORDINGLY ALL THE GROUNDS RAISED BY THE ASSES SEE(S) ARE ALLOWED. KUMARI AYUSHI NYATI & OTHERS ITA NOS.203/IND/2019 703 TO 705/IND/2018 & 488/IN D/2019 44 18. IN THE RESULT APPEALS OF THE ASSESSEE(S) NAMELY KUMARI AYUSHI NYATI (ITA NO.203/IND/2019) SMT. VIJAY NYAT I (ITA NO.703/IND/2018) SHRI VIJAY KUMAR RADHESHYAM NYATI (HUF) (ITA NO.704/IND/2018) SHRI MANISH KUMAR RADHESHYAM NYATI (HUF) (ITA NO.705/IND/2018) SMT. MAMTA NYATI (ITA NO.488/IND/2019) ARE ALLOWED. THE ORDER PRONOUNCED AS PER RULE 34 OF ITAT RULES 1963 ON 25.05.2021. SD/- SD/- (MADHUMITA ROY) (MANISH BO RAD) JUDICIAL MEMBER ACCOUNTAN T MEMBER / DATED : 25 TH MAY 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