ACIT-3, Mathura v. Smt. Kela Devi Agarwal, Mathura

ITA 75/AGR/2010 | 2002-2003
Pronouncement Date: 29-10-2010 | Result: Dismissed

Appeal Details

RSA Number 7520314 RSA 2010
Assessee PAN AAOPA7979A
Bench Agra
Appeal Number ITA 75/AGR/2010
Duration Of Justice 7 month(s) 6 day(s)
Appellant ACIT-3, Mathura
Respondent Smt. Kela Devi Agarwal, Mathura
Appeal Type Income Tax Appeal
Pronouncement Date 29-10-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 29-10-2010
Date Of Final Hearing 25-08-2010
Next Hearing Date 25-08-2010
Assessment Year 2002-2003
Appeal Filed On 23-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.75/AGR/2010 ASST. YEAR: 2002-03 A.C.I.T. 3 MATHURA. VS. SMT. KELA DEVI AGAR WAL 16 DAYAL KUNJ JAGANNATH PURI MATHURA. (PAN : AAOPA 7979 A). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD KUMAR JR. D.R. RESPONDENT BY : SHRI M.M. AGARWAL C.A. ORDER PER P.K. BANSAL A.M.: THIS APPEAL HAS BEEN FIELD BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 28.01.2010. THE ONLY GROUND TAKEN IN THIS APPEAL R ELATES TO THE DELETION OF ADDITION OF ` 11 37 480/- MADE ON ACCOUNT OF UNEXPLAINED INCOME O F LONG TERM CAPITAL GAIN ON SALE OF SHARES. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E SUBMITTED RETURN OF INCOME OF ` 8 54 330/- IN WHICH SHORT TERM CAPITAL GAIN OF ` 10 54 044/- WAS SHOWN AGAINST WHICH SET OFF OF BROU GHT FORWARD LOSSES UNDER THE HEAD CAPITAL GAINS WAS A LSO CLAIMED FOR THE EARLIER YEARS TO THE EXTENT OF ` 16 72 787/- AND THUS THE BALANCE CAPITAL LOSS WAS CLAIMED TO BE CARRIED FORWARD AMOUNTING TO ` 6 18 743/-. THE SHORT TERM CAPITAL GAIN WAS WORKED OUT BY THE ASSESSEE ON SALE OF 12000 2 SHARES OF SUMA FINANCE LIMITED FOR ` 11 37 480/- WHICH WERE PURCHASED ON 10.05.2001 FOR ` 83 436/- INCLUSIVE OF TRANSFER CHARGES AND BANK CHA RGES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED THAT 12000 SHARE S OF SUMA FINANCE LIMITED WERE PURCHASED FOR ` 80 460/- ON 10.05.2001 THROUGH BROKER M/S AGGARWALA & CO. NEW DELHI VIDE THEIR BILL NO.SB-1705 DATED 17.05.2001 AND THESE SHARES WERE S OLD ON 28.12.2001 VIDE BILL NO.P2-1201 DATED 12.01.2001 THROUGH M/S SRIDHAR FINANCIAL SERV ICES LIMITED NEW DELHI FOR A NET CONSIDERATION OF ` 11 37 480/-. PHOTOCOPIES OF BILLS FOR PURCHASE AND SALE ALONG WITH CONTRACT NOTES WERE FILED. THE PURCHASE CONSIDERATION WAS P AID VIDE DEMAND DRAFT NO.195551 ( ` 80 000/-) AND CASH OF ` 460/-. THE SALE PROCEEDS WERE SHOWN AS RECEIVED FR OM M/S. SRIDHAR FINANCIAL SERVICES LIMITED THROUGH DEMAND DRAFTS ON NAINITAL BANK LIMITED DETAILED AS UNDER :- 28.01.2002 ` 6 00 000/- 29.01.2002 ` 5 37 480/- 3. REQUISITIONS WERE ISSUED BY THE ASSESSING OFFICE R TO M/S AGGARWAL & CO. AND M/S SRIDHAR FINANCIAL SERVICES LIMITED. BOTH THE REQUI SITIONS RETURNED UNSERVED WITH THE POSTAL REMARK LEFT WITHOUT ADDRESS. THE ASSESSEE SUBMIT TED PHOTOCOPY OF THE SHARE CERTIFICATES SHOWING THE TRANSFER OF THE SHARES IN ASSESSEES NA ME ALONG WITH PHOTOCOPY OF THE LETTER DATED 30.06.2001 OF SUMA FINANCE & INVESTMENT LIMITED INT IMATING TRANSFER OF THE IMPUGNED SHARES IN FAVOUR OF THE ASSESSEE. THE A.O. ALSO ENQUIRED FRO M DELHI STOCK EXCHANGE WHICH INTIMATED THAT NO TRADING HAS TAKEN PLACE IN THE SHARES OF SUMA FI NANCE ON 10.05.2001 IN DELHI STOCK EXCHANGE. THE A.O. ALSO DEPUTED THE INSPECTOR TO C OLLECT THE INFORMATION BUT THE INSPECTOR COULD NOT TRACE OUT THE COMPANIES AS PER THE REPORT AS RE PRODUCED IN THE ASSESSMENT ORDER. ULTIMATELY 3 THE ASSESSING OFFICER HELD THAT THE TRANSACTION TO BE SHAM AND TREATED ` 11 37 480/- AS INCOME FROM UNDISCLOSED SOURCES. THE ASSESSEE WENT IN APP EAL BEFORE THE CIT(A). THE CIT(A) ULTIMATELY AFTER GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE DIRECTED THE ASSESSING OFFICER TO ADOPT THE SHORT TERM CAPITAL GAINS AS PER RETURN AN D ALLOW SET OFF OF BROUGHT FORWARD LOSSES UNDER THE HEAD CAPITAL GAINS AFTER VERIFICATION BY OBSERVING AS UNDER :- IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT DOUB TED THE APPELLANTS INVESTMENT IN THE IMPUGNED SHARES. RATHER HE HAS QUESTIONED THE PURCHASE OF THE IMPUGNED SHARES @ ` 6.60 PER SHARE WHICH WAS HIGHER THAN THE RATE OF ` 3.90 QUOTED ON THE DELHI STOCK EXCHANGE. THE APPELLANT HAS CLAIMED TO HAVE PAID THE PURCHASE CONSIDERATION BY DRAFT WHICH HAS NOT BEEN CONTROVERTED BY THE ASSESSING OFFICER. THE IMPUGNED REMITTANCES OF ` 11 37 480/- WERE RECEIVED BY THE APPELLANT BY DRAFTS OF NAINITAL BANK LIMITED FROM S HRIDHAR FINANCIAL SERVICES LIMITED WHICH HAS NOT BEEN CONTROVERTED BY THE ASSE SSING OFFICER. THE EXISTENCE OF THE BROKER M/S.SHRIDHAR FINANCIAL SERVICES LIMIT ED IS NOT IN DOUBT AS THE U.P. STOCK EXCHANGE HAS CONFIRMED THAT IT WAS REGISTERED AS A BROKER ON THE U.P. STOCK EXCHANGE. THE EXISTENCE OF COMPANY M/S. SUMA FINANCE & INVESTMENT LIMITED IS NOT IN DOUBT INSOMUCH THAT ITS SHARES WE RE BEING TRADED ON THE DELHI STOCK EXCHANGE. THE SHAREHOLDING OF THE APPELLANT HAS NOT BEEN CONTROVERTED BY THE ASSESSING OFFICER. THE SELLING RATE IS ENDORSE D BY THE QUOTATION ON RECORD WHICH IS UN-REFUTED. IN VIEW OF THE FOREGOING I FIND THAT THE IMPUGNED S HARE TRANSACTIONS HAVE NOT BEEN PROVED AS NON-GENUINE AND THEREFORE FINDI NG OF THE ASSESSING OFFICER THAT THE SHORT TERM CAPITAL GAINS DISCLOSED BY THE APPELLANT IS HER UNDISCLOSED INCOME IS NOT TENABLE. ACCORDINGLY THE ASSESSING OFFICER IS DIRECTED TO ADOPT THE SHORT TERM CAPITAL GAINS AS PER RETURN AND ALLOW SE T OFF OF BROUGHT FORWARD LOSSES UNDER THE HEAD CAPITAL GAINS AFTER VERIFICATION. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IS DULY COVERED BY THE DECISION OF THIRD MEMBER IN THE CASE OF ITO VS. SMT. BIBI RANI BANSAL IN ITA NO.101/AGR/2005 FOR THE A.Y. 2001-02 IN WHICH VIDE ORDER DATED 09.02.2010 THIS TRIBUNAL HAS CONFIRMED THE ORDER OF THE CIT(A) . WE NOTED IN THAT CASE THE ASSESSEE HAS PURCHASED THE SHARES AND SOLD THOSE SHARES THROUGH M/S. P.K. JAIN & ASSOCIATES I.E. THE BROKER. 4 THE PURCHASE OF SHARES HAS NOT BEEN DOUBTED BY THE ASSESSING OFFICER. SIMILARLY THE PURCHASE HAS NOT BEEN DOUBTED BY THE ASSESSING OFFICER IN TH E CASE BEFORE US. THE ASSESSING OFFICER HAS DOUBTED THE SALE CONSIDERATIO N WHICH WAS RECEIVED BY THE ASSESSEE THROUGH DEMAND DRAFT FROM M/S. SRIDHAR FINANCIAL SERVICES L IMITED ON NAINITAL BANK LIMITED. THE ASSESSING OFFICER DOUBTED THE SALES TRANSACTION. I N THAT CASE THIS TRIBUNAL AFTER CONSIDERING ALL THE ASPECTS HAS HELD AS UNDER :- 10. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW AS WELL AS THE ORDER OF MY LD. CO LLEAGUE MEMBERS. I NOTED THAT WHILE PASSING THE DISSENT ORDER THE LD. A.M. HAS MAINLY R ELIED ON ITS SEPARATE ORDER PASSED IN THE CASE OF SHRI BAIJNATH AGARWAL (ITA NO.133/AGR/2 005). I HAVE GONE THROUGH THE ORDER OF SHRI BAIJNATH AGARWAL AND NOTED THAT IN HIS DISS ENT ORDER IN THAT CASE THE LD. A.M. HAS RELIED ON THE DECISION OF SHRI ASHOK KUMAR LAVANIA (ITA NO.112/AGR/2004). I HAVE GONE THROUGH THE DECISION OF SHRI ASHOK KUMAR LAVANIA IN ITA NO.112/AGR/2004 WHICH WAS DECIDED BY THE BENCH CONSTITUTING OF SAME LD. J.M. AND LD. A.M. VIS--VIS THE FACTS OF THE CASE OF THE ASSESSEE. IN THAT CASE ALSO THE TRANSA CTION OF SALES HAS NOT BEEN ACCEPTED BY THE A.O. AS HE DOUBTED THE SALE PRICES AND ALSO REL IED ON THE STATEMENT OF SHRI ASHOK GUPTA DIRECTOR OF M/S. JRD STOCK BROKERS PVT. LTD. WHO STATED THAT AS A MATTER OF FACT THERE WAS NO ACTUAL PURCHASE AND SALE OF SHARES AS WAS REFLECTED IN THE CONTRACT NOTES ISSUED BY M/S. JRD STOCK BROKERS PVT. LTD. TO THE B ENEFICIARIES. IN THAT CASE THE ASSESSEE CLAIMED LONG TERM CAPITAL GAIN OF ` 25 14 770/- AND CLAIMED EXEMPTION UNDER SECTION 54EA OF THE ACT. THE LTCG WAS SHOWN ON ACCOUNT OF SALE OF SHARES THROUGH THE BROKERS. THE ASSESSEE SUBMITTED THE COPIES OF BILLS SHARE C ERTIFICATES CONTRACT NOTES ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALONGWITH DETA ILS OF DEMAND DRAFT THROUGH WHICH THE SALE PROCEEDS HAS BEEN RECEIVED. IT WAS ALSO P OINTED OUT THAT THE PURCHASES WERE MADE THROUGH BROKING CONCERN M/S. JRD STOCK BROKERS PVT. LTD. THE A.O. NOTICED THAT THE SHARES WERE PURCHASED @ ` 4/- PER SHARE AND SOLD @ ` 65/- TO ` 84/- PER SHARE. THE A.O. WAS OF THE VIEW THAT THE TRANSACTIONS WERE NOT GENUINE AND ARE ONLY ACCOMMODATION ENTRIES. THE BROKER POINTED OUT THAT HE WAS ENGAGE D IN GIVING BOGUS ENTRIES FOR THE PURCHASE AND SALE OF THE SHARES ON COMMISSION BASIS . WHEN THE MATTER TRAVELED TO THE TRIBUNAL THE TRIBUNAL DELETED THE ADDITION BY OBSE RVING AS UNDER :- (10) SO IN THE GIVEN CASE ALSO THE DEPARTMENT CANN OT TREAT THE LONG TERM CAPITAL GAINS AS ASSESSEES INCOME FROM OTHER SOURC ES. THERE IS NO DIRECT EVIDENCE. THE STATEMENTS OF THE BROKERS WERE RECOR DED AT THE BACK OF THE ASSESSEE. AN OPPORTUNITY OF CROSS-EXAMINATION MEAN S AND IMPLIES A CLEAR OPPORTUNITY AFTER PROVIDING COPIES OF SUCH ADVERSE STATEMENTS TO CROSS- EXAMINE. OTHERWISE ALSO THE STATEMENT OF SHRI ASHO K GUPTA IS TOO VAGUE 5 TO BE OF ANY EVIDENTIARY VALUE. HE HAS NOWHERE STA TED THAT THE TRANSACTION OF THE ASSESSEE WAS BOGUS OR NOT GENUINE. HE HAS N O CORROBORATIVE EVIDENCE TO SHOW THAT THE CASH FOR DRAFTS WAS RECEI VED FROM THE ASSESSEE. IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE HIS ST ATEMENT CANNOT BE ACCEPTED AS TRUE ON HIS MERE IPSE DIXIT. SHRI MANO J AGARWAL WAS NOT PRODUCED FOR CROSS-EXAMINATION. FROM HIS STATEMENT NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. SHRI MANOJ AGAR WAL HANDED OVER A LETTER TO D.D.I. (INV) IN WHICH HE STATED THAT OUT OF THE TOTAL TRANSACTIONS THE TRANSACTIONS AMOUNTING TO RS.100 CRORES WERE O NLY BOOK ENTRIES. SO IT FOLLOWS AS A NECESSARY COROLLARY THAT ENTIRE TRANSA CTIONS WERE NOT IN- GENUINE. HE HAS ALSO NOT NAMED THIS ASSESSEE. WIT H REGARD TO AGARWAL & COMPANY THERE ARE NO ADVERSE COMMENTS IN THE ASSES SMENT ORDER AGAINST THE ASSESSEE. THE A.O. HAS NOT SAID ANYTHI NG ABOUT THE TRANSACTIONS ENTERED THROUGH THIS BROKER. WHEREAS THE ASSESSEE HAS PRODUCED : I) COPIES OF SALES AND PURCHASE BILLS; II) SHARE CERTIFICATES AND TRANSFER LETTERS; III) CONTRACT NOTES; IV) DULY TRANSFERRED SHARE CERTIFICATES RECEIVED FR OM THE COMPANIES; AND V) AFFIDAVIT. (11) THERE IS NO DOUBT IN SUCH CASES THE BROKERS BECOME THE WITNESSES OF THE DEPARTMENT. THE DEPARTMENT HAS GOT STATEMEN TS OF THESE BROKERS WHICH ARE USED AGAINST THE ASSESSEE. IRRESPECTIVE OF THE FACT THAT THE STATEMENTS WERE RECORDED AT THE BACK OF THE ASSESSE E AND THAT THE ASSESSEE WAS OR WAS NOT AFFORDED OPPORTUNITY FOR CROSS-EXAMI NATION WHEN OVERWHELMING DOCUMENTARY EVIDENCES ARE PRODUCED BY THE ASSESSEE THE BURDEN SHIFTS ON THE REVENUE TO EXPLAIN AWAY THEM. EVERY TIME THE STATEMENTS CANNOT HELP THE DEPARTMENT. HOW THE ABO VE MENTIONED EVIDENCES COULD BE IGNORED ? THE REVENUE HAS TO GI VE REASONS FOR REJECTING THEM. THESE ARE IMPORTANT DOCUMENTS SOM E OF THEM ARISE UNDER THE PROVISIONS OF THE COMPANIES ACT. THE BROKERS W ERE NEVER CONFRONTED WITH THE EVIDENCES PRODUCED BY THE ASSESSEE. THE A PPARENT HAS TO BE TREATED AS A REAL UNLESS PROVED OTHERWISE. LONG AG O HONBLE SUPREME COURT HAS LAID THIS LAW WHILE RENDERING THE CELEBRA TED DECISION IN THE CASE OF CIT VS. DAULAT RAM RAWATMAL (1964) 53 ITR 574 (S C). THE ASSESSEE HAS COUNTERED THE STATEMENTS OF BROKERS BY WAY OF H IS DULY SWORN-IN AFFIDAVIT. WE HAVE EXAMINED THE ENTIRE EVIDENCES P LACED IN THE PAPER BOOK OF THE ASSESSEE. (12) IN THE CASE OF ITO VS. SMT. KUSUMLATA REPORTED IN (2006) 105 TTJ (JD.) 265 COPY PLACED AT PAGE NO.4 OF ASSESSEES P APER BOOK (JUDGEMENTS RELIED) THE HONBLE JODHPUR BENCH HAS HELD AS UNDE R :- 6 FOR MAKING ADDITION UNDER SECTION 69 THE DEPARTME NT IS REQUIRED TO PROVE TO THE HILT THAT THE IMPUGNED TRA NSACTIONS ARE BOGUS. THE BURDEN CAST ON THE DEPARTMENT IS VERY H IGH WHICH IS REQUIRED TO BE DISCHARGED CONCLUSIVELY IN THIS CASE ; THERE IS NO SUCH EVIDENCE. THE ASSESSEE HAS PURCHASED SHARES F ROM MS. THESE PURCHASES ARE EVIDENCED FROM THE CONTRACT NOT E. THE PAYMENT WAS MADE BY CHEQUE. THESE SHARES WERE TRAN SFERRED IN THE NAME OF THE ASSESSEE. THE ASSESSEE HELD THESE SHARES FOR MORE THAN ONE YEAR. SHE SOLD THESE SHARES TO J A MEMBE R OF STOCK EXCHANGE. J IN HIS LETTER HAS CONFIRMED THAT TRANS ACTION AND THE PAYMENT WAS MADE THROUGH CHEQUE. THE ASSESSEE HAS PROVIDED ALL THE REQUISITE EVIDENCES IN SUPPORT OF ALL TRANSACTI ONS. SIMPLY BECAUSE J COULD NOT PRODUCE HIS BOOKS OF ACCOUNT OR THE QUOTED RATE OF SHARES IN STOCK EXCHANGE BEING LESS OR THE TRANSACTIONS BEING NOT REPORTED BY J TO THE STOCK EXCHANGE WOUL D NOT MAKE A TRANSACTION BOGUS. THE STOCK EXCHANGE HAS INTIMATE D THE A.O. THAT THEY ARE ONLY HAVING INFORMATION OF THE TRANSACTION S BETWEEN TWO MEMBERS OF THE STOCK EXCHANGE AND NOT OTHERWISE. I N THE PRESENT CASE THE TRANSACTION WAS BETWEEN A MEMBER AND A NO N-MEMBER AND THEREFORE SUCH TRANSACTIONS WERE NOT REPORTED IN THE STOCK EXCHANGE. FURTHER THE CREDIT IN THE BANK ACCOUNT OF J IS BY CLEARANCE. THEREFORE THE ALLEGATION OF THE A.O. T HAT THE AMOUNT WAS DEPOSITED IN CASH HAS NO BASIS. THE ASSESSEE H AS ACCEPTED HAVING INVESTED HER FUNDS ON THE ADVICE OF HER FATH ER-IN-LAW. THE BURDEN OF PROVING A TRANSACTION IS ALWAYS ON THE PE RSON ASSERTING IT TO BE BOGUS AND THIS BURDEN HAS TO BE STRICTLY D ISCHARGED BY ADDUCING LEGAL EVIDENCE OF A CHARACTER WHICH WOULD EITHER DIRECTLY PROVE THE FACT OF BOGUSNESS OR ESTABLISH C IRCUMSTANCES UNERRINGLY AND REASONABLY RAISING AN INFERENCE TO T HAT EFFECT. THE ASSESSEE MADE PAYMENT FOR THE PURCHASE FROM HER OWN SOURCES THROUGH BANKING CHANNEL. THE SHARES WERE TRANSFERR ED IN THE NAME OF THE ASSESSEE AND WERE HELD BY HER FOR MORE THAN ONE YEAR. THERE IS NO RELATIONSHIP BETWEEN THE PARTY FROM WHO M THE ASSESSEE PURCHASED THE SHARES AND THE PARTY TO WHOM THESE WE RE SOLD. THE SHARES WERE DELIVERED AFTER ITS SALE AND THE ASSESS EE DID NOT REMAIN IN POSSESSION OF THOSE SHARES. FROM THE ABOVE FACT S IT IS ESTABLISHED THAT THE ASSESSEE ACQUIRED THE SHARES T O EARN PROFIT. THERE IS NO EVIDENCE EXCEPT SPECULATION THAT THIS P ROFIT IS NOT FROM THE SALE OF SHARES. THE A.O. HAS FAILED TO ESTABLI SH HIS CASE AND TO DISCHARGE THE REQUISITE BURDEN CAST ON HIM. THE AU THORISED REPRESENTATIVE HAS FILED THE REQUISITE QUOTATION OF 18 TH JULY 1996 ALONG WITH THE REQUISITE PROOF OF TRANSACTIONS OF 9 000 SHARES ALONG WITH TRANSFER OF SHARE CERTIFICATE. THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS CORRECTLY COME TO THE CONCLUSION THAT THE ASSESSEE HAS DEALT IN THESE SHA RES AND THESE 7 TRANSACTIONS CANNOT BE HELD BOGUS. THE DELETION OF ADDITION OF ` 4 99 062/- IS CONFIRMED. (13) THE ABOVE DECISION CLEARLY HELPS THE CASE OF T HE ASSESSEE. (14) CREDENCE CANNOT BE GIVEN TO THE STATEMENTS OF THE PERSONS WHO THEMSELVES ADMIT AND HAVE DUBIOUS DEALINGS AS AGAIN ST THE DOCUMENTARY EVIDENCES PRODUCED BY THE ASSESSEE. (15) MOREOVER WHEN PURCHASES HAVE NOT BEEN DOUBTED OR DISPUTED BY THE REVENUE IN THIS CASE THE DECISION OF HONBLE P UNJAB & HARYANA COURT RELIED BY LEARNED A.R. IN THE CASE OF CIT VS. ANUPAM KAPOOR REPORTED IN (2008) 299 ITR 179 (P&H) IS VERY MUCH R ELEVANT. THE HELD PORTION OF THIS DECISION IS EXTRACTED HEREIN BELOW :- HELD DISMISSING THE APPEALS THAT THERE WAS NO MA TERIAL BEFORE THE ASSESSING OFFICER WHICH COULD HAVE LED TO A CON CLUSION THAT THE TRANSACTION WAS A DEVICE TO CAMOUFLAGE ACTIVITIES T O DEFRAUD THE REVENUE. NO SUCH PRESUMPTION COULD BE DRAWN BY THE ASSESSING OFFICER MERELY ON SURMISES AND CONJECTURES. THE TR IBUNAL TOOK INTO CONSIDERATION THAT IT WAS ONLY ON THE BASIS OF A PRESUMPTION THAT THE ASSESSING OFFICER CONCLUDED THAT THE ASSES SEE HAD PAID CASH AND PURCHASED THE CHEQUE. IN THE ABSENCE OF A NY COGENT MATERIAL IN THIS REGARD HAVING BEEN PLACED ON RECO RD THE ASSESSING OFFICER COULD NOT HAVE REOPENED THE ASSES SMENT. THE ASSESSEE HAD MADE AN INVESTMENT IN A COMPANY EVIDE NCE WHEREOF WAS WITH THE ASSESSING OFFICER. THEREFORE THE ASS ESSING OFFICER COULD NOT HAVE ADDED THE INCOME WHICH WAS RIGHTLY DELETED BY THE COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL (16) THUS THE SUM TOTAL OF THE FOREGOING DISCUSSIO NS GO TO CUMULATIVELY ESTABLISH THAT THE ASSESSEE HAS BEEN SUCCESSFUL IN PROVING THE LONG TERM CAPITAL GAIN EARNED BY HIM IN THIS CA SE. HE HAS ALSO ESTABLISHED THAT HE IS EXEMPT FROM TAX QUA LONG TER M CAPITAL GAINS AS HAS BEEN CLAIMED. 11. IN MY OPINION THIS CASE IS EQUALLY APPLICABLE IN THE CASE OF THE ASSESSEE. IN THE CASE OF THE ASSESSEE PURCHASE OF THE SHARES HAS DU LY BEEN PROVED AND THERE IS NO DISPUTE ON THE PURCHASE OF THE SHARES BEING MADE BY THE ASS ESSEE. THE SHARES WERE PURCHASED IN EARLIER YEAR. THE SHARES WERE TRANSFERRED IN THE N AME OF THE ASSESSEE AS HAS BEEN CONFIRMED BY THE COMPANY WHEN ENQUIRED BY THE A.O. THE ASSESSEE HAS SUBMITTED BEFORE THE A.O. COPIES OF THE CONTRACT NOTES COPI ES OF THE SALES BILLS STATEMENT OF ACCOUNT FROM THE BROKER OLD ADDRESS OF THE BROKER NEW ADDRESS OF THE BROKER. THE IDENTITY OF THE BROKER IS PROVED. PURCHASES WERE N OT DOUBTED BY THE A.O. THE DEMAND DRAFT FOR THE SALE CONSIDERATION WAS ISSUED FROM TH E ACCOUNT OF M/S. P.K. JAIN & 8 ASSOCIATES I.E. BROKERS. THE MONEY HAS NOT BEEN DE POSITED IN CASH IN THIS ACCOUNT BUT HAS COME TO THIS ACCOUNT BY WAY OF TRANSFER FROM THE AC COUNT OF M/S. S.G. FINCAP LIMITED. THE LD. A.M. HAS DISTINGUISHED THE DECISION OF ASHO K KUMAR LAVANIA. ON THE BASIS OF THAT IN ASHOK KUMAR LAVANIAS CASE PURCHASE OF THE SHARES WAS NOT IN DISPUTE. WHILE IN FACT IN ASSESSEES CASE THE PURCHASE OF SHARES IS A LSO NOT IN DISPUTE BUT RATHER THE COMPANY HAS DIRECTLY CONFIRMED TO THE A.O. THE PURC HASE OF THE SHARES BY THE ASSESSEE IN REPLY TO THE NOTICE ISSUED UNDER SECTION 133(6). T HE LD. A.M. WAS ALSO THE PARTY TO THAT DECISION. I NOTED THAT IN THIS CASE THE A.O. HAS D OUBTED THE SALE CONSIDERATION BECAUSE THE SHARE PRICE HAS INCREASED TREMENDOUSLY. I NOTE D THAT IN THE CASE OF ASHOK KUMAR LAVANIA ALSO THE ASSESSEE HAS PURCHASED THE SHARE @ ` 4/- PER SHARE AND SOLD @ ` 65/- TO ` 84/- PER SHARE. IN THAT CASE ALSO THE BROKER HAS N OT ACCEPTED THE TRANSACTION BUT ON THE BASIS OF THE EVIDENCE THE TRIBUNAL HAS ACCEPTED THE TRANSACTION TO BE GENUINE ONE AS THERE WAS NO CORROBORATIVE EVIDENCE TO SUPPORT THE STATEMENT OF THE BROKER. IN THIS CASE I NOTED THAT THE STATEMENTS OF THE BROKER COULDNT BE GIVEN ANY CREDENCE AS HE HAS STATED DIFFERENTLY VIDE DIFFERENT LETTERS. EARLIER HE DEN IED THE TRANSACTION BEING ENTERED INTO. SUBSEQUENTLY HE HAS ACCEPTED THAT HE HAS ISSUED THE DRAFT AFTER RECEIVING THE CASH. AGAIN HE SAID THAT THE CASH WAS ROUTED THROUGH SOME BOGUS ACCOUNT BUT HE ACCEPTED THAT THE DRAFT HAS BEEN MADE FROM HIS ACCOUNT. SUBSEQUENTLY AGAIN HE POINTED OUT THAT HE RECEIVED CASH OF ` 9 00 000/- AND ` 5 00 000/- WHILE HE HAS ISSUED DRAFT OF ` 5 99 500/- AND ` 6 19 508/- RESPECTIVELY. WHAT HAPPENED TO THE BALA NCE AMOUNT? NOTHING HAS BEEN BROUGHT ON RECORD OR STATED BY THE BROKER. THE ASS ESSEE WAS NOT PROVIDED CROSS- EXAMINATION. THE STATEMENT HAS BEEN RECORDED AT TH E BACK OF THE ASSESSEE. THIS IS A SETTLED LAW THAT NO ADDITION CAN BE SUSTAINED ON TH E BASIS OF THE STATEMENT RECORDED AT THE BACK OF THE ASSESSEE AND WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE PERSON WHO HAS GIVEN THE STATEMENT AT THE BACK OF T HE ASSESSEE. I HAVE ALSO GONE THROUGH THE DECISION OF DELHI HIGH COURT IN THE CASE OF SMC SHARE BROKERS LIMITED 288 ITR 345 (DELHI) AND THAT OF KISHAN CHAND CHELLARAM 125 ITR 713 (SC) AND THAT OF UMACHARAN SHAW & BROS. 37 ITR 271 (SC). ALL THOSE DECISIONS LAY DOWN THE PROPOSITION OF THE LAW THAT STATEMENT RECORDED AT THE BACK OF THE ASSESSEE CANNOT BE USED AGAINST THE ASSESSEE UNTIL AND UNLESS THE ASSESSEE HAS BEEN GIVEN THE OP PORTUNITY TO CROSS EXAMINE THE PERSON. LD. D.R. WAS ASKED IN THE OPEN COURT WHETHER ANY OP PORTUNITY FOR CROSS EXAMINATION WAS PROVIDED TO THE ASSESSEE IN RESPECT OF THE BROKER. THE LD. D.R. EXPRESSED HIS INABILITY AS THE RECORD DOES NOT SHOW THAT ANY SUCH OPPORTUNITY WAS PROVIDED. IN ALMOST SIMILAR CIRCUMSTANCES HONBLE CALCUTTA HIGH COURT IN THE C ASE OF EASTERN COMMERCIAL ENTERPRISES (210 ITR 103) OBSERVED AS UNDER :- AT THE EARLIER OCCASION HE CLAIMED ALL HIS SALES T O BE GENUINE BUT BEFORE THE ASSESSING OFFICER IN THE CASE OF THE ASS ESSEE HE DISOWNED THE SALES SPECIFICALLY MADE TO THE ASSESSEE. THIS STAT EMENT CAN AT THE WORST SHOW THAT S IS NOT A TRUSTWORTHY WITNESS AND LITTLE VALUE CAN BE ATTACHED TO WHAT HE STATED EITHER IN HIS AFFIDAVIT OR IN HIS CR OSS EXAMINATION BY THE ASSESSING OFFICER. HIS CONDUCT NEUTRALIZES HIS VAL UE AS A WITNESS. A MAN INDULGED IN DOUBLE SPEAKING CANNOT BE SAID BY ANY M EANS A TRUTHFUL MAN AT ANY STAGE AND NO COURT CAN DECIDE ON WHICH OCCAS ION HE WAS TRUTHFUL. 9 12. FURTHER AS NOTED THE STATEMENT WAS RECORDED B Y THE DDI INVESTIGATION WING AGRA AND NOT BY THE ASSESSING OFFICER HIMSELF. THU S THE TRUTHFULNESS OF THE STATEMENT REMAINED UNTESTED BY THE ASSESSING OFFICER. ITAT DELHI IN THE CASE OF RAJEEV AGARWAL (139 TAXMAN 170 (MAG.)) HAS OBSERVED AS UNDER :- THE MERE RELIANCE ON THE STATEMENT OF THIRD PARTIE S WHO WERE NEVER EXAMINED BY THE ASSESSING OFFICER HIMSELF CAN NOT BE HELD TO BE SUFFICIENT TO COME TO THE FINDING THAT THE TRANSACT ION WAS NOT GENUINE AND MORE SO WHEN THERE ARE OTHER MATERIAL AND EVIDENCES TO SUPPORT THE TRANSACTION. 13. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMC SHARE BROKERS LTD (288 ITR 345) ALSO OBSERVED AS UNDER :- THERE IS NO DOUBT THAT THE STATEMENT OF MANOJ AGAR WAL HAD EVIDENTIARY VALUE BUT WEIGHT COULD NOT BE GIVEN TO IT IN PROCEEDINGS AGAINST THE ASSESSEE WITHOUT IT BEING TESTED UNDER CROSS-EXAMINATION. IN THE ABSENCE OF STATEMENT BEING TESTED IT CANNOT BE SAID THAT IT SHOULD BE BELIEVED COMPLETELY TO THE PREJUDICE OF ASSESSEE. 14. UNDER THESE FACTS I AM OF THE OPINION THAT THE CASE OF THE ASSESSEE IS DULY COVERED BY THE DIVISION BENCH OF THIS TRIBUNAL IN THE CASE OF ASHOK KUMAR LAVANIA IN ITA NO.112/AGR/2004 WHICH HAS BEEN DECIDED BY THE BENC H CONSTITUTING OF THE SAME VERY LEARNED MEMBERS. JUDICIAL DISCIPLINE DEMANDS THAT ON THE SIMILAR FACTS THE BENCH IS BOUND TO FOLLOW ITS EARLIER DECISIONS. THE PRINCIP LES OF JUDICIAL DISCIPLINE REQUIRE THAT THE ORDER OF THE CO-ORDINATE BENCH HAS TO BE FOLLOWED. 15. I HAVE ALSO BEEN NOMINATED AS THIRD MEMBER IN T HE CASE OF SHRI BAIJNATH AGARWAL ITA NO.133/AGR/2005 WHICH ALSO I DISPOSED OF WITH MY ORDER OF EVEN DATE. IN THAT CASE ALSO I HAVE HELD THAT THE ASSESSEES CASE IS DULY COVERED BY THE DECISION OF THE DIVISION BENCH IN THE CASE OF SHRI ASHOK KUMAR LAVA NIA IN ITA NO.112/AGR/2004. 16. I ALSO NOTED FROM THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A) THAT WHILE SCRUTINIZING THE EVIDENCE FILED BY THE ASSESSEE AND FRAMING THE ORDER THEIR MINDS WERE INFLUENCED WITH THE OTHER CONSIDERATION THAT THE VA LUE OF THE SHARES HAS TREMENDOUSLY INCREASED WHICH WAS ABNORMAL AND INDICATES THAT THE ENTIRE TRANSACTION IS MANAGED ONE. THE PRICES HAVE INCREASED IN 15 TO 16 MONTHS BY 16 TIMES. ALTHOUGH THE RATE OF ` 72/- WAS QUOTED ON 28.11.2000 IN M.P. STOCK EXCHANGE IS APPARENT FROM PAGE 11 PARA (III) OF THE ASSESSMENT ORDER. IT WAS FURTHER OBSERVED THAT IN SUCH A SHORT PERIOD SHARE OF NO OTHER REPUTED COMPANY HAS INCREASED SO MUCH AND THE SHARE MARKET HAS ALSO NOT SHOWN SUCH A RISE. IN MY OPINION THE SHARE MARKET IS QU ITE VOLATILE AND PRICES DO FLUCTUATE ABNORMALLY. IT IS SEEN THAT THE SHARES DEALT BY TH E ASSESSEE WERE QUOTED AT M.P. STOCK EXCHANGE AT ALMOST SIMILAR RATES AT WHICH THEY WERE SOLD. THE ASSESSEE IS ONLY A SMALL 10 SHAREHOLDER OF THE COMPANY. HE IS NOT THE DIRECTOR OF THE COMPANY OR OF THE STOCK EXCHANGE. UNDER THESE CIRCUMSTANCES HOW HE CAN MAN IPULATE THE PRICES IS BEYOND ONES COMPREHENSION. IT IS PERTINENT THAT THE ISSUE OF A BNORMAL INCREASE IN PRICES OF THE SHARES HAS COME UP FOR CONSIDERATION BEFORE THE ITAT AGRA BENCH IN THE CASES OF SMT. MEMO DEVI (ITA NO.396/AG/2004 REPORTED AS 7 DTR 158) W HEREIN THE CO-ORDINATE BENCH OBSERVED AS UNDER :- THE ASSESSEE HAS NO RELATION WITH THE DIRECTORS OF THE COMPANY AND WAS IN NO WAY IN THE CAPACITY TO AFFECT THE MAR KET PRICE OF SHARES. THE INCREASE IN SHARE PRICES BY MORE THAN 25 TIMES TOO CANNOT BE THE BASIS TO ASSUME THAT THE TRANSACTION WAS BOGUS. ABNORMAL FLUCTUATION IN SHARE PRICES IS A NORMAL PHENOMENA THE LEARNED COUNSEL FOR THE ASSESSEE FILED A CHART SHOWING LOW AND HIGH PRICES OF SOME QUOTED SHARES DURING THE 52 WEEKS AS PER ECONOMIC TIMES DATED 27.02.2007 FROM W HICH IT CAN BE SEEN THAT SOME SHARES INCREASED EVEN BY MORE THAN 100 TI MES. 17. IN ALMOST SIMILAR CIRCUMSTANCES THE HONBLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ANUPAM KAPOOR (299 ITR 179) HAS ALSO OBSERVED AS UNDER :- THE TRIBUNAL WAS RIGHT IN REJECTING THE APPEAL OF THE REVENUE BY HOLDING THAT THE ASSESSEE WAS SIMPLY A SHAREHOLDER OF THE COMPANY. HE HAD MADE THE INVESTMENT IN A COMPANY IN WHICH HE WA S NEITHER A DIRECTOR NOR WAS HE IN CONTROL OF THE COMPANY. THE ASSESSEE HAD TAKEN SHARES FROM THE MARKET THE SHARES WERE LISTED AND THE TRANSACT ION TOOK PLACE THROUGH A REGISTERED BROKER OF THE STOCK EXCHANGE. THERE W AS NO MATERIAL BEFORE THE AO WHICH COULD HAVE LEAD TO A CONCLUSION THAT THE TRANSACTION WAS SIMPLICITER A DEVICE TO CAMOUFLAGE ACTIVITIES TO DE FRAUD THE REVENUE. NO SUCH PRESUMPTION COULD BE DRAWN BY THE AO MERELY O N SURMISES AND CONJECTURES. 18. IN THE STOCK EXCHANGE WHEN THE TRANSACTION IS E NTERED INTO THE ASSESSEE IS NOT AWARE OF ABOUT THE BUYER OF THE SHARES. HE ENTERS INTO TRANSACTION ONLY THROUGH A SHARE BROKER. THEREFORE THE OBSERVATION OF THE A.O. THA T THE ASSESSEE COULD NOT IDENTIFY THE BUYER CANNOT BE THE BASIS OF REGARDING THE TRANSACT ION TO BE NON-GENUINE ONE. I ALSO NOTED THAT THE A.O. HAS BEEN INFLUENCED WITH THE FA CT THAT THE ASSESSEE HAS DELIVERED THE BLANK TRANSFER SHARE CERTIFICATES TO THE BROKER WHE N THE DELIVERY OF THE SHARES WERE GIVEN. SINCE THE DEAL HAS TO TAKE PLACE BETWEEN THE BROKER S THE ASSESSEE HAS TO GIVE ONLY BLANK TRANSFER SHARE CERTIFICATE TO THE BROKER WITHOUT ME NTIONING THE NAME OF THE BUYER. THERE IS NOTHING WRONG IN MY OPINION AND THIS IS A USUAL PRACTICE IN THE BUSINESS. FROM THE ENTIRE APPRECIATION OF THE EVIDENCE I NOTED THAT T HE ASSESSEE HAD ACQUIRED THE SHARES THE PURCHASE MADE ON 15.07.1999 WAS DULY DECLARED BY TH E ASSESSEE IN EARLIER YEARS WHICH STAND ACCEPTED BY THE REVENUE. THE SHARES WERE SOL D THROUGH STOCK BROKERS WHO WERE REGISTERED WITH THE STOCK EXCHANGE. SHARES WERE SO LD AT THE PRICES QUOTED AT THE STOCK EXCHANGE AT THE RELEVANT TIME. THE PAYMENT OF SALE CONSIDERATION ALSO FLOWN FROM THE 11 BANK ACCOUNT OF THE BROKER WHERE THE FUND CAME THRO UGH CLEARING NOT IN CASH. THE DECISION OF THE LOWER AUTHORITIES ARE INFLUENCED BY THE GENERAL OBSERVATION OF THE INVESTIGATION WING THAT AROSE A SUSPICION TURNED IN TO CONCLUSIVE PROOF IN THE MINDS OF THE AUTHORITIES THAT EVERYBODY WHO HAS SOLD THE SHARES AT A HIGH PRICE HAS CONVERTED HIS UNACCOUNTED MONEY THROUGH ACCOMMODATION ENTRIES. T HIS APPROACH DOES NOT HAVE ANY LEG TO STAND. HONBLE SUPREME COURT IN THE CASE OF UMACHARAN SHAW & BROS VS. CIT 37 ITR 271 (SC) HAS CLEARLY LAID DOWN THAT SUSPICION H OWSOEVER STRONG CANNOT TAKE PLACE OF PROOF. FROM THE ENTIRE APPRECIATION OF EVIDENCE I NOTED THAT ASSESSING OFFICER HAS FAILED TO ESTABLISH THAT THE ASSESSEE HAS INTRODUCED HIS O WN UNACCOUNTED MONEY IN THE SHAPE OF ALLEGED SALE PROCEEDS OF SHARES. HONBLE SUPREME C OURT IN THE CASE OF KISHAN CHAND CHELLARAM VS. CIT REPORTED IN 125 ITR 713 (SC) HAS OBSERVED THAT THE AMOUNT CANNOT BE ASSESSED AS UNDISCLOSED INCOME OF ASSESSEE IN TH E ABSENCE OF POSITIVE MATERIAL BROUGHT BY THE REVENUE TO PROVE THAT THE AMOUNT IN FACT BEL ONGED TO ASSESSEE AS THE BURDEN LAY ON THE REVENUE. 19. IN ALMOST SIMILAR CIRCUMSTANCES THE ITAT DELHI C BENCH IN THE CASE OF ITO VS. NAVEEN GUPTA (5 SOT 94) COPY OF WHICH IS PLACED BY LD. A.R. HAS OBSERVED AS UNDER :- NEVERTHELESS IT IS ALSO NOTEWORTHY THAT THE A.O. HAS FAILED TO ESTABLISH THAT IN LIEU OF THE AFORESAID SALE PROCEE DS THE ASSESSEE HAS SURREPTITIOUSLY INTRODUCED HIS UNACCOUNTED MONEY IN THE BANK ACCOUNT. AFTER HAVING PERUSED THE ENTIRE MATERIAL THAT IS AV AILABLE ON RECORD THERE IS NO AVERMENT MUCH LESS ANY EVIDENCE WITH THE RE VENUE IN THIS REGARD. WHILE THERE MAY BE ENOUGH GROUNDS WITH THE AO TO CA RRY OUT THE IMPUGNED VERIFICATION EXERCISE TO TEST THE EFFICACY OF THE TRANSACTIONS RESULTING IN LONG TERM MATERIAL GAINS IN THE HAND O F THE ASSESSEE BUT THERE IS NO COGENT MATERIAL OR EVIDENCE TO INDICATE THAT THE IMPUGNED SALE PROCEEDS REFLECTED UNACCOUNTED INCOME OF THE ASSESS EE. 20. IT WAS THE DUTY OF THE A.O. TO BRING ON RECORD SUFFICIENT EVIDENCES AND MATERIAL TO PROVE THAT THE DOCUMENTS FILED BY THE ASSESSEE WERE BOGUS FALSE OR FABRICATED AND THE LONG TERM CAPITAL GAIN SHOWN BY HIM WAS ACTUALLY HI S INCOME FROM UNDISCLOSED SOURCES. THE ONLY MATERIAL TO SUPPORT SUCH CONCLUSION OF THE LOWER AUTHORITIES IS EITHER THE FINDINGS OF THE DDI IN GENERAL INVESTIGATIONS OR TH E TWISTING STATEMENTS OF M/S P.K. JAIN & ASSOCIATES WHICH REMAIN UNTESTED BY THE A.O. HIMS ELF. NONE OF THE JUDICIAL PRECEDENT SUPPORTS THE CASE OF THE REVENUE. WHILE MAKING ADD ITION AS INCOME FROM UNDISCLOSED SOURCES BURDEN ON THE DEPARTMENT IS VERY HEAVY TO E STABLISH THAT THE ALLEGED RECEIPT WAS ACTUALLY INCOME OF THE ASSESSEE FROM THE UNDISCLOSE D SOURCES. JODHPUR BENCH OF THE ITAT IN THE CASE OF ITO VS. SMT. KUSUMLATA (REPORTE D IN 105 TTJ 265) COPY OF WHICH IS PLACED IN THE COMPILATION OF THE ASSESSEE HELD AS UNDER :- 10. FOR MAKING ADDITION UNDER S.69 OF THE ACT THE DEPARTMENT IS REQUIRED TO PROVE TO THE HILT THAT THE IMPUGNED TRA NSACTIONS ARE BOGUS. THE BURDEN CAST ON THE DEPARTMENT UNDER S.69C (SIC- 69) OF THE ACT IS VERY 12 HIGH WHICH IS REQUIRED TO BE DISCHARGED CONCLUSIVEL Y IN THIS CASE; THERE IS NO SUCH EVIDENCE. THE ASSESSEE HAS PURCHASED SHARE S FROM M/S MAHESHWARI SONS. THESE PURCHASES ARE EVIDENCED FRO M THE CONTRACT NOTE. THE PAYMENT WAS MADE BY CHEQUE. THESE SHARES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE. THE ASSESSEE HELD THESE SHAR ES FOR MORE THAN ONE YEAR. SHE SOLD THESE SHARES TO THE MEMBER OF STOCK EXCHANGE SHRI J.K. JAIN. SHRI J.K. JAIN IN HIS LETTER DT. 22 ND DEC. 1999 HAS CONFIRMED THE TRANSACTION AND THE PAYMENT WAS MADE THROUGH CHEQUE . THE ASSESSEE HAS PROVIDED ALL THE REQUISITE EVIDENCES IN SUPPORT OF ALL TRANSACTIONS. SIMPLY BECAUSE SHRI J.K. JAIN COULD NOT PRODUCE HIS BOOKS OF ACCOUNT OR THE QUOTED RATE OF SHARES IN DELHI STOCK EXCHANGE BEING LESS OR THE TRANSACTIONS BEING NOT REPORTED BY SHRI J.K. JAIN T O THE STOCK EXCHANGE WOULD NOT MAKE A TRANSACTION BOGUS. THE JAIPUR STO CK EXCHANGE HAS INTIMATED THE AO THAT THEY ARE ONLY HAVING INFORMAT ION OF THE TRANSACTIONS BETWEEN TWO MEMBERS OF THE STOCK EXCHANGE AND NOT O THERWISE. IN THE PRESENT CASE THE TRANSACTION WAS BETWEEN A MEMBER AND A NON-MEMBER AND THEREFORE SUCH TRANSACTIONS WERE NOT REPORTED IN THE STOCK EXCHANGE. FURTHER THE CREDIT IN THE BANK ACCOUNT OF SHRI J.K . JAIN IS BY CLEARANCE. THEREFORE THE ALLEGATION OF THE AO THAT THE AMOUNT WAS DEPOSITED IN CASH HAS NO BASIS. THE ASSESSEE HAS ACCEPTED HAVING INV ESTED HER FUNDS ON THE ADVICE OF HER FATHER-IN-LAW. THE BURDEN OF PROVING A TRANSACTION IS ALWAYS ON THE PERSON ASSERTING IT TO BE BOGUS AND THIS BUR DEN HAS TO BE STRICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE OF A CHARACTE R WHICH WOULD EITHER DIRECTLY PROVE THE FACT OF BOGUSNESS OR ESTABLISH C IRCUMSTANCES UNERRINGLY AND REASONABLY RAISING AN INFERENCE TO THAT EFFECT. 21. I HAVE ALSO GONE THROUGH VARIOUS OTHER DECISION S ON SIMILAR ISSUE UNDER THE SIMILAR FACTS AND I NOTED THAT THIS TRIBUNAL HAD CO NSISTENTLY ACCEPTED THE GENUINENESS OF THE SHARE TRANSACTION. THOSE CASES ARE AS UNDER :- ITO VS. SUNITA GUPTA - ITA NO.881/DEL/2004 (DELHI B ENCH SMC) DILIP GARGH VS. ITO ITA NO.470/AGR/2004 GOPAL PRASAD AGARWAL VS. ACIT ITA NO.128/AGR/2004 22. I ALSO NOTED THAT THE CASE OF THE ASSESSEE IS D ULY COVERED BY THE DECISION OF THE THIRD MEMBER IN THE CASE OF SMT. SUNITA OBEROI VS. ITO (AGRA) (TM) ITA NO.273/AGR/2004 A.Y. 1995-96 DATED 07.08.2009 30 D TR (AGRA) (TM) (TRIB.) 474 IN WHICH ON DIFFERENCE OF OPINION ON THE QUESTION UNDE R THE SIMILAR CIRCUMSTANCES WHETHER THE ASSESSEE CAN BE SAID TO HAVE DISCHARGED HER BUR DEN TO PROVE THE GENUINENESS OF THE TRANSACTION IN SHARES OF M/S. PRASIDH EXPORTS LIMIT ED AND M/S. K.L.P. FINANCE LIMITED OR THAT THE BURDEN HAD SHIFTED ON THE REVENUE THAT CAN BE HELD TO HAVE NOT DISCHARGED BY THEM THE DECISION TO UPHOLD ACCEPTING OF ALLEGED P ROFIT ON ALLEGED SHARE OF M/S. PRASIDH EXPORTS LIMITED AND M/S. K.L.P. FINANCE LIMITED AS INCOME FROM OTHER SOURCES INSTEAD 13 OF ASSESSEE HAS CLAIMED THE CAPITAL GAIN IS A CORRE CT DECISION OR NOT. THE HONBLE THIRD MEMBER HAS HELD AS UNDER :- THE ONLY REASON TO MAKE THE ADDITION IS THAT CONFI RMATION FROM THE SHARE BROKERS COULD NOT BE FILED BY THE ASSESSE E AND SUMMONS ISSUED TO THE SAID PERSONS WERE NOT SERVED AND RETURNED UN SERVED AND THE NAMES AND ADDRESSES OF THE BUYER TO WHOM THE ULTIMATELY S HARES WERE SOLD THROUGH THE BROKER WERE NOT KNOWN TO THE ASSESSEE. THE ASSESSEE WAS NOT IN A POSITION TO COMPEL THE SHARE BROKER FOR CONFIR MING THE TRANSACTION SHE BEING NEITHER A DIRECTOR NOR HAVING LARGE SCALE DEALINGS WITH THE BROKERS OVER THE YEARS SO AS TO SHOW THAT SHE WAS P ERSONALLY IN A POSITION TO COMPEL THEM ON ACCOUNT OF THE MAGNITUDE OF TRANS ACTION DONE THROUGH THEM. IT WAS HER FATHER WHO KNEW THE BROKERS AND S HE ACTED ON HIS ADVICE AND HAD NO CONTACT THEREAFTER. THE REASONING THAT SUMMONS ISSUED TO THE PARTIES CAME BACK UNSERVED CANNOT BY ITSELF BE HELD AGAINST THE ASSESSEE AS WHETHER THE SHARE BROKER CONTINUES THE BUSINESS OR DISCONTINUES THE SAME OR CHANGED THE ADDRESSES OR FOR THAT MATTER TH E COMPANIES WHOSE SHARES WERE PURCHASED AND SOLD CHANGED THEIR PREMIS ES OR NAMES AS CHANGED BY VIRTUE OF BEING ACQUIRED BY SOME OTHER C OMPANY THE ASSESSEE CANNOT BE HELD LIABLE TO STAY IN TOUCH FOR ALL TIME S TO COME. SIMILARLY NO REASONS ARE THERE TO SHOW THAT SHRI PRAVEEN MITTAL WAS EVER IN A POSITION TO DECLARE THE TRANSACTIONS OF AN ACQUAINTANCE BROK ER AS BOGUS TRANSACTIONS NEITHER ANY EVIDENCE HAS BEEN LED NOR REASONS ADVANCED TO SUPPORT HOW HE COULD BE CONSIDERED TO BE A RELIABLE PERSON SO AS TO IGNORE THE EVIDENCES AVAILABLE ON RECORD I.E. CONTRACT NOT ES OF SALE AND OF THE SPECIFIC SHARES OF SPECIFIC RATES ON SPECIFIC DATES . SHRI PRAVEEN MITTAL WAS THE WITNESS OF THE DEPARTMENT THE ONUS WAS THEREFO RE ON THE DEPARTMENT TO PRODUCE HIM AND MAKE HIM AVAILABLE FOR CROSS-EXA MINATION BY THE ASSESSEE. SIMILARLY THE EVIDENCE THAT THE COMPANI ES WERE NOT IN EXISTENCE AT THE ADDRESS AVAILABLE WITH THE DEPARTMENT DOES N OT DETRACT FROM THE ASSESSEES CLAIM IN VIEW OF THE DOCUMENTS AVAILABLE ON RECORD. THE DISCREPANCY IN THE AMOUNTS TO THE EXPENDITURE OF RS .53 356 WAS BECAUSE OF CONSISTENT STATEMENT BY THE ASSESSEE THAT THE SH ARE BROKER MADE A SHORT PAYMENT AND DISPUTED THE REMAINING AMOUNT. THE DEP ARTMENT HAS THUS PROCEEDED ENTIRELY ON SUSPICION AND SURMISES IF SEE N IN THE LIGHT OF THE ORDERS OF THE TRIBUNAL. THE CLAIM OF THE ASSESSEE IN REGARD TO THE FIRST ISSUE IS TO BE ALLOWED. 23. THUS IN VIEW OF THE AFORESAID DISCUSSIONS THE DECISIONS OF THE THIRD MEMBER THE DECISIONS OF THE COORDINATE BENCHES TOTALITY OF TH E FACTS AND CIRCUMSTANCES AND EVIDENCE ON RECORD I AM OF THE CONSIDERED VIEW THAT THE ACT ION OF THE CIT(A) WAS NOT CORRECT IN CONFIRMING THE ASSESSMENT OF ` 12 19 538/- AS THE INCOME FROM UNDISCLOSED SOURCES AS AGAINST THE SALE CONSIDERATION OF SHARES DECLARED B Y THE ASSESSEE. THE CIT(A) WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF LONG TERM CAPIT AL GAIN OF THE ASSESSEE FROM SALE OF 14 SHARES. I ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ASSESS THE INCOME DECLARED FROM THE SALE OF SHARES UNDER THE HEAD INCOME FROM LONG TERM CAPITAL GAIN. THUS THE GROUNDS NO.1 & 2 OF ASSESSEES APPEAL SHOULD BE ALLOWED. G ROUND NO.3 OF ASSESSEES APPEAL IS CONSEQUENTIAL IN NATURE DOES NOT REQUIRE ANY ADJUD ICATION. SO FAR THE GROUND NO.1 OF REVENUES APPEAL IS CONCERNED THE SAME SHOULD STAN D DISMISSED AS INFRUCTUOUS IN VIEW OF MY DECISION ON GROUNDS NO.1 & 2 OF ASSESSEES APPEA L. GROUND NO.2 IN REVENUES APPEAL IS ALSO CONSEQUENTIAL IN NATURE AND SHOULD STAND DI SMISSED. 24. THE MATTER WILL NOW GO BEFORE THE REGULAR BENCH FOR DECIDING THE APPEAL IN ACCORDANCE WITH THE MAJORITY OPINION. 5. RESPECTFULLY FOLLOWING THE AFORESAID THIRD MEMBE R DECISION OF THIS TRIBUNAL IN OUR VIEW NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). THUS THE GROUND TAKEN BY THE REVENUE STANDS DISMISSED. 6. IN THE RESULT APPEAL FILED BY THE REVENUE STAND S DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 29.10.2010) SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 29 TH OCTOBER 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY