Smt. Kiran Ramkrishan Batra, Surat v. The ACIT.,Circle-2,, Surat

ITA 765/AHD/2009 | 2005-2006
Pronouncement Date: 16-09-2011 | Result: Allowed

Appeal Details

RSA Number 76520514 RSA 2009
Assessee PAN ABHPB3067A
Bench Ahmedabad
Appeal Number ITA 765/AHD/2009
Duration Of Justice 2 year(s) 6 month(s) 11 day(s)
Appellant Smt. Kiran Ramkrishan Batra, Surat
Respondent The ACIT.,Circle-2,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 16-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 16-09-2011
Date Of Final Hearing 14-09-2011
Next Hearing Date 14-09-2011
Assessment Year 2005-2006
Appeal Filed On 06-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH - AHMEDABAD (BEFORE S/SHRL BHAVNESH SAINI JM AND A. MOHAN ALAN KAMONY AM) ITA NO.762/AHD/2009 AY: 2005-06 SMT. VIMLARANI BIHARILAL BATRA PROP. SHYAM SILK MILLS I-3302 SURAT TEXTILE MARKET RING ROAD SURAT VS THE A. C. I. T. CIRCLE-2 AAYAKAR BHAVAN MAJURA GATE SURAT PA NO. ABHPB 3067 A (APPELLANT) (RESPONDENT) ITA NO.763/AHD/2009 AY: 2005-06 SHRI SHAKUN R. BATRA PROP. SHIVAM INTERNATIONAL G-3307 SURAT TEXTILE MARKET RING ROAD SURAT VS THE A. C. I. T. CIRCLE-2 AAYAKAR BHAVAN MAJURA GATE SURAT PA NO. AFSPB 7578 M (APPELLANT) (RESPONDENT) ITA NO.764/AHD/2009 AY: 2005-06 SHRI RAMKRISHAN BATRA PROP. BATRA SILK MILLS G-3307 SURAT TEXTILE MARKET RING ROAD SURAT VS THE A. C. I. T. CIRCLE-2 AAYAKAR BHAVAN MAJURA GATE SURAT PA NO. ABBPB 7734J A (APPELLANT) (RESPONDENT) ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 2 ITA NO.765/AHD/2009 AY: 2005-06 SMT. KIRAN RAMKISHAN BATRA PROP. SHIVAM SILK MILLS G-3307 SURAT TEXTILE MARKET RING ROAD SURAT VS THE A. C. I. T. CIRCLE-2 AAYAKAR BHAVAN MAJURA GATE SURAT PA NO. ABBPB 7735 K (APPELLANT) (RESPONDENT) ITA NO.766/AHD/2009 AY: 2005-06 SHRI BIHARILAL K. BATRA PROP. KUNAL SILK MILLS I-3302 SURAT TEXTILE MARKET RING ROAD SURAT VS THE A. C. I. T. CIRCLE-2 AAYAKAR BHAVAN MAJURA GATE SURAT PA NO. ABHPB 3068 R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RASESH SHAH AR RESPONDENT BY SHRI Y. C. SURTI DR DATE OF HEARING: 14-09-2011 DATE OF PRONOUNCEMENT: 16 -09-2011 O R D E R PER BHAVNESH SAINI: ALL THE APPEALS BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE LEARNED CIT(A)- II SURAT DATED 29 TH DECEMBER 2008 FOR ASSESSMENT YEAR 2005-06. 2. IN ITA NO. 763/AHD/2009 AND 764/AHD/2009 THE LE ARNED COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO.2 CHALLENGING THE ADDITION ON ACCOUNT OF HOUSEHOLD EXPENSES. THESE GR OUNDS IN BOTH THE APPEALS ARE DISMISSED BEING NOT PRESSED. ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 3 3. IN ALL THE APPEALS THE ONLY GROUND OF APPEAL LE FT FOR CONSIDERATION IS REGARDING ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AS AGAINST LONG TE RM CAPITAL GAINS SHOWN BY THE ASSESSEES ON SALE OF SHARES. SINCE IDE NTICAL QUESTIONS ARE INVOLVED IN ALL THE APPEALS THEREFORE ALL THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF THROUGH THIS COM MON CONSOLIDATED ORDER. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES ARGUED AT LENGTH IN THE CASE OF SMT. VIMLARANI BIHA RILAL BATRA IN ITA NO.762/AHD/2009 AND SUBMITTED THAT THE ISSUE IS SAM E IN THE OTHER APPEALS AND THE ORDER IN THIS CASE MAY BE FOLLOWED IN THE OTHER APPEALS. FOR THE PURPOSE OF DISPOSAL OF ALL THE APP EALS THROUGH ITA NO.762/AHD/2009 IS DISPOSED OF AS UNDER. ITA NO.762/AHD/2009 (SMT. VIMLARANI BIHARILAI BATRA ) 4. IN THIS APPEAL THE ASSESSEE CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITION OF RS. 9 92 264 7- FOR UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AS AGAINST LONG TE RM CAPITAL GAIN SHOWN BY THE ASSESSEE ON SALE OF SHARES OF RS. 8 8 6 9097-. 5. THE FACTS AS NOTED IN THE IMPUGNED ORDER ARE THA T THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRA DING IN SAREES THROUGH HER PROPRIETORSHIP CONCERN M/S. SHYAM SILK MILLS. DURING THE YEAR THE ASSESSEE HAD CLAIMED LONG TERM CAPITAL GA IN OF RS.8 86 909/- FROM SHARE TRANSACTIONS DETAILS OF WH ICH HAVE BEEN REPRODUCED BY THE AO IN PARA 4 OF THE ASSESSMENT OR DER. THE ASSESSEE FILED COPIES OF CONTRACT NOTES/BILLS ISSUE D BY THE CONCERNED BROKER IN SUPPORT OF THE PURCHASE AND SALE OF THE S HARES. IN ORDER TO ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 4 VERIFY THE GENUINENESS OF THE ASSESSEE'S CLAIM THE AO ISSUED A NOTICE U/S 133(6) OF THE IT ACT TO THE CALCUTTA STO CK EXCHANGE (CSE). SIMILAR LETTERS WERE ALSO ISSUED TO THE CONCERNED B ROKERS. THE CSE INFORMED THAT THOUGH M/S. ASHISH STOCK BROKING PVT. LTD. (ASB) HAD TRADED IN THE SHARES OF M/S. GLOBE STOCK & SECURITI ES LTD. THROUGH THE EXCHANGE ON 27-12-2002 AND 30-06-2004 YET THE TRAD E TIME NUMBER AND THE DATE DID NOT MATCH WITH THE BILLS ISSUED BY THE SAID BROKER. SIMILAR WAS THE SITUATION WITH REGARD TO M/S HERALD COMMERCIAL LTD. IT WAS FURTHER INFORMED THAT THE SHARES OF THE THIRD C OMPANY M/S. SILICON VALLEY INFOTECH LTD. WERE NOT TRADED THROUG H THE EXCHANGE. THE AO CONFRONTED THE ASSESSEE WITH SUCH INFORMATIO N FURNISHED BY THE CSE THROUGH A SHOW-CAUSE NOTICE. THE ASSESSEE FURNISHED A DETAILED REPLY. IT WAS SUBMITTED THAT THE SHARES OF M/S. SILICON VALLEY IFOTECH LTD. AND M/S. HERALD COMMERCIAL LTD. WERE P URCHASED ON 21- 03-2003 AND 22-03-2003 THROUGH THE BROKER M/S. REN U PODDAR. THE PURCHASE CONSIDERATION WAS PAID BY ACCOUNT PAYEE DE MAND DRAFTS AND THE INVESTMENT WAS DULY REFLECTED IN THE ASSESS EE'S BALANCE SHEET AS ON 31-03-2003. THE SHARES WERE DEMATERIALI ZED INTO THE ASSESSEE'S DEMAT ACCOUNT ON 25-07-2003 AND 28-04-20 03. IT WAS ALSO SUBMITTED THAT THE SHARES WERE ACTUALLY HELD B Y M/S. TRANS SCAN SECURITIES PVT. LTD. AND M/S. MATHRAN SECURITIES PV T. LTD. AND THE ASSESSEE WAS THE BENEFICIARY. A PHOTOCOPY OF THE DE MAT ACCOUNT WAS SUBMITTED AND IT WAS CLAIMED THAT IN SUCH A SITUAT ION THE CSE'S REPLY HAD BECOME IRRELEVANT. FURTHER THE SHARES OF M/S. SILICON VALLEY INFOTECH LTD AND M/S. HERALD COMMERCIAL LTD. WERE SOLD IN THE ROLLING MARKET THROUGH M/S N. M. LOHIA &. CO. AND THE SHARE S WERE GIVEN FOR DE-LOADING THROUGH M/S. SODHANI SECURITIES LTD. AND THEY WERE DULY ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 5 DE-LOADED FROM THE ASSESSEE'S DEMAT ACCOUNT ON 20-0 4-2004 IN SUCH A SITUATION THE INTIMATION OF THE CSE THAT TH E TRANSACTIONS WERE NOT EXECUTED ON 21-04-2004 HAD BECOME IRRELEVANT. S UBSEQUENTLY THE BROKER HAD EFFECTED THE TRANSACTIONS THROUGH TH E CONTRACT NOTES. ALL SUCH TRANSACTIONS WERE DULY RECORDED IN THE ASS ESSEE'S BOOKS OF ACCOUNT. THE AO REJECTED THE ASSESSEE'S EXPLANATION S AND SUBMISSIONS THE REASONS FOR WHICH HAVE BEEN NOTED IN PARA 4 TO 6 OF THE ASSESSMENT ORDER. HER FIRST OBSERVATION WAS THA T EVEN THOUGH THE ASSESSEE HAD CLAIMED TO HAVE PURCHASED THE SHARES O F M/S. SILICON VALLEY INFOTECH LTD. AND HERALD COMMERCIAL LTD. THR OUGH M/S. RENU PODDAR THE BROKER AND THAT PAYMENTS HAD BEEN MADE BY DEMAND DRAFTS THE ASSESSEE HAD FAILED TO FURNISH ANY CONF IRMATION FROM THE SAID BROKER. NOTICE U/S 133(6) ISSUED TO M/S. RENU PODDAR WAS RETURNED UNSERVED. SECONDLY WHILE THE DATE OF PURC HASE OF THE SHARES OF M/S. SILICON VALLEY INFOTECH LTD. IN THE CONTRACT NOTE WAS SHOWN AS 21-03-2003 THE PAYMENT THROUGH THE DEMAND DRAFT WAS MADE ON 21-08-2003. IT WAS NOT POSSIBLE THAT THE AS SESSEE WOULD HAVE BEEN ALLOWED A CREDIT PERIOD OF ALMOST FIVE MO NTHS. IN THE BUSINESS OF SHARE TRADING PAYMENTS HAVE TO BE MADE LATEST WITHIN A WEEK FROM THE DATE OF SETTLEMENT. THE FACTS CLEARLY SHOWED THAT THE SHARES WERE NEVER TRADED ON THE DATES GIVEN AND THE CONTRACT NOTES ISSUED BY M/S. RENU PODDAR WERE BOGUS. THIRDLY IT WAS CLAIMED THAT THE SHARES OF M/S. SILICON VALLEY INFOTECH LTD. AND M/S. HERALD COMMERCIAL LTD. WERE ENTERED/CREDITED INTO THE DEMA T ACCOUNT ON 25- 07-2003 AND 28-04-2003 HOWEVER THE DEMAT ACCOUNT SHOWED THE UNLOADING OF THE SHARES FROM THE ACCOUNT OF M/S. TR ANS SCAN SECURITIES PVT. LTD. AND M/S. MATHRAN SECURITIES PV T. LTD. IT WAS NOT ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 6 EXPLAINED AS TO HOW THE SHARES WERE OBTAINED FROM T HE SAID COMPANIES AND CREDITED TO THE ASSESSEE'S DEMAT ACCO UNT AND HOW THE DATES OF PURCHASE AND SALE AS REFLECTED IN THE CONTRACT NOTES IN THE NAME OF THE ASSESSEE COULD BE RECONCILED W ITH THE TRANSACTIONS WITH M/S TRANS SCAN SECURITIES PVT. L TD AND M/S. MATHRAN SECURITIES PVT. LTD. FOURTHLY THE ASSESSEE HAD FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE TO PROVE THAT THE SHARES WHICH WERE CREDITED IN THE DEMAT ACCOUNT WERE THE ONES O N WHICH THE LONG TERM CAPITAL GAIN HAD BEEN CLAIMED. FIFTHLY IT HAD BEEN CLAIMED THAT THE SHARES OF M/S. SILICON VALLEY INFOTECH LTD. AND M/S. HERALD COMMERCIAL LTD. WERE SOLD IN THE ROLLING MARKET THR OUGH M/S. N. M. LOHIA & CO. HOWEVER THE CSE HAD CATEGORICALLY STAT ED THAT M/S. N. M. LOHIA & CO HAD NOT EXECUTED ANY TRADE IN THE SHA RES OF M/S. SILICON VALLEY INFOTECH LTD. ON 21-04-2004. MERE FI LLING OF THE CONTRACT NOTES DID NOT ESTABLISH THE GENUINENESS OF THE TRAN SACTIONS. THE FACT THAT THE PAYMENT OF SERVICE TAX IF ANY WAS NOT REFL ECTED IN THE CONTRACT NOTES PERTAINING TO THE ALLEGED PURCHASE AND SALE O F THE SHARES OF M/S. HERALD COMMERCIAL LTD. ALSO PROVED THAT THE C ONTRACT NOTES FILED BY THE ASSESSEE WERE NOT GENUINE. THE AO FURTHER NO TED THAT THE TRADE TIME NUMBER AND THE VOLUME OF SHARES AS REFL ECTED IN THE PURCHASE AND SALE BILLS ISSUED BY ASB WERE ENTIRELY DIFFERENT FROM WHAT WAS SHOWN IN THE PRINT-OUTS OF THE SHARES ACTU ALLY TRADED THROUGH THE CSE ON 27-12-2002 AND 30-06-2004. THE A SSESSEE WAS UNABLE TO EXPLAIN SUCH DISCREPANCIES. ON THE BASIS OF SUCH OBSERVATIONS THE AO CAME TO THE CONCLUSION THAT TH E CLAIM OF LONG TERM CAPITAL GAIN WAS NOT GENUINE AND THAT SUCH C LAIM HAD BEEN MADE FOR THE PURPOSE OF REDUCING THE TAX LIABILITY. CONSEQUENTLY THE ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 7 SUM OF RS.9 92 264/- CREDITED IN THE ASSESSEE'S BOO KS OF ACCOUNT AND CLAIMED AS THE SALE PROCEEDS OF SUCH SHARES WA S TREATED BY THE AO AS UNEXPLAINED CASH CREDIT WHICH SHE ADDED TO TH E ASSESSEE'S TOTAL INCOME UNDER THE PROVISIONS OF SECTION 68 OF THE IT ACT. 6. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED C IT(A) AND IT WAS SUBMITTED THAT SHARES OF M/S. HERALD COMMERCIAL LTD . AND M/S. SILICON VALLEY INFOTECH LTD. WERE SOLD THROUGH M/S. N. M. LOHIA & CO WHEREAS THE SHARES OF M/S. GLOBE STOCK & SECURITIE S LTD. WERE SOLD THROUGH ASB AND BOTH OF THEM WERE THE MEMBERS OF T HE CSE. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE THERE WAS SIMPLY NO DISCREPANCY IN THE DOCUMENTS FURNISHED BY THE AS SESSEE OR IN THE TRANSACTIONS. ALL REQUISITE DOCUMENTARY EVIDENCES H AD BEEN FURNISHED BEFORE THE AO. EVEN IN THE SHOW-CAUSE NOTICE DATED 21-12-2007 THE AO DID NOT PROPOSE TO MAKE ANY ADDITION PERTAINING TO THE TRANSACTIONS SHOWN IN THE SHARES OF M/S. GLOBE STOC K & SECURITIES LTD. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSES SEE THE AO HAD MISINTERPRETED THE INFORMATION FURNISHED BY THE CSE . THEY HAD ONLY MENTIONED THAT M/S. N. M. LOHIA AND M/S. RENU PODDA R HAD NOT EXECUTED ANY TRADE ON SPECIFIC DATES IN SHARES OF M /S. SILICON VALLEY INFOTECH LTD. AND M/S HERALD COMMERCIAL LTD. NO SU CH COMMENT WAS MADE IN RESPECT OF THE SHARES OF M/S. GLOBE STOCK & SECURITIES LTD. HOWEVER THE AO HAD ERRONEOUSLY OBSERVED THAT AS PE R THE INFORMATION FURNISHED BY THE CSE THE TRADE TIME N UMBER AND DATE(S) PERTAINING TO THE TRANSACTIONS IN THE SHARES OF M/S . GLOBE STOCK & SECURITIES LTD. AS FURNISHED BY ASB DID NOT MATCH WITH THE ACTUAL TRADING THROUGH THE EXCHANGE REITERATING THE TRANS ACTIONS PERTAINING ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 8 TO THE ENTRIES IN THE DEMAT ACCOUNT IT HAS BEEN CO NTENDED BY THE COUNSEL FOR THE ASSESSEE THAT THE AO HAD NOT PROVID ED THE DETAILS PERTAINING TO THE TRANSACTIONS IN THE SHARES OF M/S . GLOBE STOCK & SECURITIES LTD. AS FURNISHED BY THE CSE. IT HAS BEE N VEHEMENTLY AND REPEATEDLY ARGUED THAT NO ADDITION COULD BE MADE PE RTAINING TO THE TRANSACTIONS INVOLVING THE SHARES OF M/S. GLOBE STO CK & SECURITIES LTD. SINCE NO ADVERSE FINDING WAS GIVEN THROUGHOUT THE ASSESSMENT PROCEEDINGS. THE LEARNED COUNSEL FOR THE ASSESSEE H AS FURNISHED A CONTRACT NOTE ISSUED BY M/S. ASB WITH REGARD TO THE SHARES OF M/S. GLOBE STOCK & SECURITIES LTD. WHICH IS ADDITIONAL E VIDENCE. WITH REGARD TO THE OBSERVATION OF THE AO THAT THE BROKER S HAD NOT REPLIED TO THE NOTICES ISSUED BY HER IT HAS BEEN ARGUED THAT M/S. ASB HAD GIVEN A CERTIFICATE REGARDING THE PURCHASE AND THE SALE OF THE SHARES OF M/S. GLOBE STOCK & SECURITIES LTD. AND M/S. ASHI SH STOCK BROKING PVT. LTD ALONG WITH M/S. N. M. LOHIA & CO. HAD ALS O SUBMITTED THE LEDGER ACCOUNT OF THE ASSESSEE IN THEIR BOOKS. ONLY IN THE CASE OF M/S. RENU PODDAR THERE WAS NON-COMPLIANCE. IT WAS THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IN THE EVENT OF NON- COMPLIANCE BY THE BROKER NO ADVERSE INFERENCE COUL D BE DRAWN AGAINST THE ASSESSEE. THE LEARNED COUNSEL FOR THE A SSESSEE HAS GONE ON TO REBUT THE OBSERVATIONS OF THE AO ON DIFF ERENT POINTS. WITH REGARD TO THE DELAY IN THE PAYMENTS MADE TOWARDS TH E PURCHASE CONSIDERATION OF THE SHARES OF M/S. SILICON VALLEY INFOTECH LTD. AND M/S. HERALD COMMERCIAL LTD. BY FIVE MONTHS IT HAS BEEN SUBMITTED THAT THE PURCHASES COULD NOT BE DOUBTED BECAUSE OF SUCH DELAY. THE PAYMENT HAD BEEN MADE THROUGH THE BANK AND THE SHAR ES HAD BEEN DEPOSITED IN THE DEMAT ACCOUNT. WITH REGARD TO THE CREDIT OF THE ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 9 SHARES IN THE DEMAT ACCOUNT FROM THE ACCOUNTS OF M/ S TRANS SCAN SECURITIES PVT LTD. AND M/S MATHRAN SECURITIES PVT LTD IT HAS BEEN ITTED THAT THE ASSESSEE COULD-NOT BE EXPECTED TO EX PLAIN HOW THE SHARES WHICH HAS BEEN PURCHASED BY THE ASSESSEE H AD COME INTO THE DEMAT ACCOUNT FROM THE ACCOUNTS OF THE SAID COM PANIES. SUCH INFORMATION COULD HAVE BEEN OBTAINED FROM THE DEPOS ITORY PARTICIPANT - M/S SODHANI SECURITIES LTD. OR FROM THE BROKERS. THE ASSESSEE COULD NOT BE BURDENED TO ESTABLISH ANY CO-RELATION BETWEEN THE SHARES PURCHASED THROUGH THE BROKERS AND THEIR CRED IT IN THE DEMAT ACCOUNT WITH THE ACCOUNTS OF THE SAID COMPANIES. T HERE WAS NO DOUBT OF THE FACT THAT THE SHARES WHICH WERE CREDIT ED IN THE DEMAT ACCOUNT HAD BEEN SOLD RESULTING IN THE LONG TERM C APITAL GAIN. WITH REGARD TO THE INFORMATION FURNISHED BY THE CSE IT HAS BEEN CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE T HAT THE CSE HAD NOT DENIED THE TRANSACTIONS INVOLVING THE SALE OF S HARES. THE SHARES COULD HAVE BEEN SOLD 'OFF MARKET' BY THE BROKER SIN CE THE TRADE TIME AND NUMBER WAS NOT MENTIONED. IT HAS BEEN ARGUED TH AT SINCE THE ASSESSEE DID NOT CARRY OUT ANY TRANSACTION THROUGH THE EXCHANGE NO ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESS EE. THE TRANSACTIONS WERE ALL CONDUCTED THROUGH AUTHORIZED BROKERS. THE ASSESSEE COULD NOT BE EXPECTED TO PROVIDE ANY CLARI FICATION REGARDING THE INFORMATION FURNISHED BY THE CSE. WHEN A TRANSA CTION IS EXECUTED THROUGH A BROKER WHO IS A MEMBER OF THE STOCK EXCHA NGE THE ASSESSEE HAD EVERY RIGHT TO BELIEVE THAT THE CONTRA CT NOTE ISSUED BY THE BROKER REGARDING SUCH TRANSACTION AND THE DETA ILS CONTAINED THEREIN WERE FACTUALLY CORRECT. IT HAS BEEN FURTHE R SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE SHARES HA D BEEN SOLD AT ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 10 THE PREVAILING MARKET RATES AND THE ASSESSEE HAD AL SO FURNISHED A COPY OF THE BANK ACCOUNT WHEREIN ENTRIES RELATING T O THE PAYMENTS MADE TOWARDS THE PURCHASES AND THE PAYMENTS RECEIV ED AGAINST THE SALE OF SHARES HAD BEEN DULY REFLECTED. THEREFORE NO ADDITION COULD BE MADE UNDER THE PROVISIONS OF SECTION 68 OF THE I T ACT. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V/ S ANUPAM KAPOOR 299 ITR 179 AND ON THE DECISION OF THE KERA LA HIGH COURT IN THE CASE OF K. N. NARAYANAN V/S ITO 145 ITR 373. 7. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE CONFIRMED THE ADDITION AND DISMISSED THE A PPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 5 TO 5.7 ARE REPRODU CED AS UNDER. 5. / HAVE CAREFULLY CONSIDERED BOTH THE POSITIONS. I HAVE ALSO GONE THROUGH THE COPIES OF THE DOCUMENTS ENCLOSED BY THE AR ESPECIALLY THE DEMAT ACCOUNT. T HE CLAIM OF LTCG WAS MADE ON THE BASIS OF THE DIFFEREN CE IN THE SALE AND PURCHASE VALUES OF THE SHARES OF THREE COMPANIES M/S. HERALD COMMERCE LTD. (HERCOMM) M/S . SILICON VALLEY AND M/S GLOBE STOCK & SECURITIES (G LOBE STOCK) THE BASIC INGREDIENTS THEREFORE WERE THE PURCHASES AND SALES OF THESE SHARES. IT WAS CLAIMED THAT THE PURCHASES WERE MADE THROUGH M/S. RENU PODDAR. HOWEVER EVEN TILL THE APPELLATE PROCEEDINGS NO CONFIRMATION HAS BEEN FURNISHED FROM THE ALLEGED BR OKER REGARDING THE PURCHASES. THE AR HAS ATTEMPTED TO WA SH HIS HANDS OFF BY STATING THAT THE ASSESSEE COULD NO T BE HELD RESPONSIBLE IF THE BROKER HAD FAILED TO FURNIS H A CONFIRMATION. IF SUCH A POSITION IS TO BE ACCEPTED THE INCOME-TAX DEPARTMENT MIGHT AS WELL PUT AN END TO A LL SCRUTINY PROCEEDINGS. NOT ONLY WAS THE ASSESSEE NOT ABLE TO FURNISH ANY CONFIRMATION FROM THE BROKER WHO IS SAID TO HAVE PURCHASED THE SHARES ON BEHALF OF THE ASSESSEE ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 11 BUT INQUIRIES MADE BY THE AO THROUGH THE ISSUANCE O F NOTICE U/S 133(6) OF THE ACT WAS NOT RESPONDED TO NOR COULD THE NOTICE BE SERVED. THIS WAS IMPORTANT ESPE CIALLY IN RELATION TO THE SHARES OF SILICON VALLEY WAS CON CERNED SINCE AS MENTIONED BY THE CSE THESE SHARES WERE N OT TRADED THROUGH THE SAID EXCHANGE. THIS CLEARLY SHOW ED THAT NOT ONLY WERE THE CONTRACT NOTES ISSUED BY THE SAID BROKER IN RESPECT OF THE PURCHASES OF SHARES OF M/S . SILICON VALLEY AND M/S. HERCOMM ABSOLUTELY BOGUS T HE PURCHASES THEMSELVES WERE CONSEQUENTLY ESTABLISHED AS BEING NOT GENUINE. 5.1 SECONDLY THE AR HAS ATTEMPTED TO IGNORE THE D ELAY IN THE PAYMENT OF PURCHASE CONSIDERATION BY 5 MONTH S BY ARGUING THAT THE GENUINENESS OF THE PURCHASES WAS ESTABLISHED BY THE FACT THAT THE SHARES WERE CREDIT ED TO THE DEMAT ACCOUNT AND THAT THE ASSESSEE HAD MADE PAYMENTS THROUGH BANKING CHANNELS AND THE PURCHASE S HAD APPEARED IN THE BALANCE SHEET OF THE ASSESSEE A S ON 31-03-2003. EVEN WHILE USING THE DEMAT ACCOUNT AS A N EVIDENCE IN SUPPORT OF THE PURCHASES THE AR HAS ATTEMPTED TO WASH HIS HANDS OFF THE QUERY RAISED BY THE AO REGARDING THE SHARES COMING INTO THE DERNAT ACCO UNT FROM THE ACCOUNTS OF M/S. TRANS SCAN SECURITIES PVT . LTD AND M/S. MATHRAN SECURITIES PVT. LTD. BY ARGUING TH AT THE ASSESSEE COULD NOT BE BURDENED TO ESTABLISH ANY CORRELATION BETWEEN THE SHARES PURCHASED THROUGH TH E BROKER(S) AND ITS CREDIT IN THE DEMAT ACCOUNT FROM THE ACCOUNTS OF THE SAID TWO COMPANIES. 5.2 AN EXAMINATION OF THE DEMAT ACCOUNT OF THE ASSESSEE CLEARLY EXPOSES THE BOGUS NATURE OF THE TRANSACTIONS. FIRSTLY WHERE IT HAS BEEN CLAIMED TH AT THE SHARES OF ALL THE THREE COMPANIES WERE PURCHASED BY THE ASSESSEE 'WITH THE HELP AND GUIDANCE OF STOCK BROKE R NAMELY M/S. RENU PODDAR' AND CONTRACT NOTES WERE AL SO FURNISHED FROM M/S RENU PODDAR IN SUPPORT OF THE PURCHASES THE DEMAT ACCOUNT SHOWS THE PURCHASES OF 2500 AND 3200 SHARES OF GLOBE STOCK FROM M/S EAST I NDIA SECURITIES LTD. CREDITED ON 14-02-2303 AND-10-07-20 03. ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 12 THE POINT TO NOTE IS THAT IF M/S. RENU PODDAR WAS INDEED THE BROKER WHO HAD FACILITATED THE PURCHASES AND WHOEVER MAY HAVE LAST OWNED THE SHARES THE NAME OF M/S. RENU PODDAR WOULD HAVE APPEARED IN THE DEMAT ACCOUNT. FURTHER THE ASSESSEE CLAIMED TO HAVE PURCHASED 3200 SHARES ON 27-12-2002 WHEREAS THEY WERE DEPOSITED/CREDITED IN THE DEMAT ACCOUNT ON 10- 07- 2003 I.E. ALMOST 7 MONTHS LATER. THE SHARES WERE OBVIOUSLY PURCHASED IN PHYSICAL FORM AND IF PURCHAS ED THROUGH A BROKER IN THIS CASE M/S. RENU PODDAR TH EN THE BROKER WOULD HAVE TO PUT HIS/HER SEAL AND SIGNATURE ON THE REVERSE OF THE SHARE DOCUMENTS. NO MENTION WAS MADE BY THE ASSESSEE REGARDING THE PURCHASE OF 2500 SHARES OF THE SAME COMPANY. 5.3 THE ASSESSEE CLAIMED TO HAVE PURCHASED 600 SHARES OF HERCOMM ON 22-03-2003 THROUGH M/S. RENU PODDAR HOWEVER THE DEMAT ACCOUNT SHOWS THE CREDIT OF THE SHARE FROM M/S. MATHARAN SECURITIES LTD ON 28-0 4- 2003. THE 2500 SHARES OF SILICON VALLEY WERE CLAIME D BY THE .ASSESSEE TO HAVE BEEN PURCHASED FORM M/S. RENU PODDAR ON 21-03-2003. THE DEMAT ACCOUNT SHOWS THE SHARES TO HAVE BEEN CREDITED BY M/S TRANS SCAN SECURITIES PVT LTD ON 25-07-2003. I. E. FOUR MONTHS LATER. IT IS QUITE OBVIOUS THAT THE CONTRACT NOTES ISSUED BY M/S. RENU PODDAR WERE BOGUS. IT IS FOR THIS REASON THAT THE SAID BROKER HAD FAILED TO FURNISH CONFIRMATION LETT ERS IN RESPECT OF SUCH TRANSACTIONS AND THE NOTICE U/S 133 (6) ISSUED WAS RETURNED UNSERVED. THE PURCHASES CLAIMED BY THE ASSESSEE ARE THEREFORE UNSUBSTANTIATED AND HENC E BOGUS. AS A RESULT THE PURCHASE VALUE OR CONSIDERA TION CLAIMED TO HAVE BEEN PAID BY THE ASSESSEE CANNOT BE ACCEPTED AND CONSEQUENTLY THE LTCG WAS RIGHTLY REJECTED BY THE AO. 5.4 WHILE DECIDING SUCH AN ISSUE IT IS ESSENTIAL TO HAVE AN IDEA ABOUT THE TRANSACTIONS THAT HAVE TAKEN PLAC E DURING THE RELEVANT YEARS IN THE CALCUTTA STOCK EXC HANGE (CSE) IN RESPECT OF WHAT IS CALLED 'PENNY SCRIPTS'. BOGUS COMPANIES WERE FLOATED OR CREATED AND THEN LISTED O N THE ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 13 CSE WITH SHARE PRICES AT NEGLIGIBLE VALUES. A CAUCUS OR SYNDICATE OF SHARE BROKERS THEN MANIPULATED THE SHA RES PRICES OF THESE SCRIPTS TO EXORBITANT HIGHS. VARIOU S INTERESTED PARTIES PURCHASED THE SALE CONSIDERATION OF SUCH SHARES AT HIGH VALUES. HOWEVER TO EL-AIM CAPI TAL GAIN PURCHASES HAD TO BE SHOWN AND THAT TOO BACKD ATED. IT IS WHILE REGULARIZING THE PURCHASES THAT MOST OF THESE PARTIES HAVE FALTERED WHICH HAS COMPLETELY EXPOSED THE SCAM. IN FACT SEVERAL STOCK BROKERS HAD BEEN SUSPE NDED BY THE CSE FOR MANIPULATING THE PRICES OF THESE 'PE NNY SCRIPTS'. 5.5 IN THE CASE OF THE ASSESSEE IT WAS SUBMITTED I N WRITING BEFORE THE AO THAT THE SHARES OF ALL THE TH REE COMPANIES WERE HELD BY M/S TRANS. SCAN SECURITIES P VT. LTD. M/S MATHRAN SECURITIES PVT. LTD. AND EAST IND IA SECURITIES PVT. LTD. (PARA 4-5 PAGES-4) BUT IT WAS NOT EXPLAINED AS TO HOW THE SHARES OF GLOBE STOCK HERC OMM AND SILICON VALLEY HAD BEEN OBTAINED/PURCHASED FROM THESE COMPANIES AND AT WHAT PRICE. NO DOCUMENTARY EVIDENCE HAS YET BEEN FURNISHED IN SUPPORT OF SUCH TRADING AND TRANSACTIONS. IT IS FOR THIS REASON THA T THE AR HAS ATTEMPTED TO BYPASS THIS ISSUE BY ARGUING THAT THE ASSESSEE CANNOT BE BURDENED TO ESTABLISH THE CO-REL ATION BETWEEN THE PURCHASE OF THE SHARES AND ITS CREDITIN G IN THE DEMAT ACCOUNT. WHEN THE ASSESSEE CLAIMED THAT T HE DEMAT ACCOUNT BELONGED TO HIM HE HAD TO NECESSARIL Y EXPLAIN ALL THE ENTRIES IN IT AS IN A BANK STATEME NT. 5.6 THE AR AS VEHEMENTLY ARGUED THROUGH OUT HIS WRITTEN SUBMISSION THAT THERE WAS NO ADVERSE FINDIN G WITH REGARD TO THE TRANSACTIONS INVOLVING GLOBE STOCK. T HE ABOVE DISCUSSION CLEARLY EXPOSES THE FALLACY OF HIS ARGUMENT. SUCH CLEAR CUT FINDINGS IN TERMS OF THE F ACTS OF THE CASE MAKES THE APPLICATION OF THE CASE-LAWS RE LIED UPON BY THE AR TOTALLY IRRELEVANT AND UNNECESSARY. 5.7 TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE IN CONSIDERABLE DETAIL IT IS HELD THAT WHEN THE PURCHASE OF THE SHARES WAS NOT ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 14 VERIFIABLE EITHER WITH REGARD TO THE SOURCE OR THE ENTITY FROM WHOM PURCHASED OR EVEN THE PRICE AT WHICH THE Y WERE PURCHASED THERE COULD SIMPLY BE NO QUESTION O F SUCH SHARES BEING SOLD BY THE ASSESSEE RESULTING IN ANY LTCG. SUCH A CLEAR CUT FINDING LEADS TO THE OBVIOUS INFERENCE THAT THE SUM OF RS 9 92 264 CREDITED TO T HE ASSESSEE'S BANK ACCOUNT DID NOT REPRESENT THE SALE PROCEEDS OF ANY SHARE OR SECURITY. CONSEQUENTLY SU CH CREDIT COULD ONLY BE TREATED AS UNEXPLAINED IN TERM S OF SECTION 68 OF THE IT ACT. THE ADDITION OF THE SAID SUM IS THEREFORE CONFIRMED.' 8. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND F ILED DETAILS OF SHARES PURCHASED AND SOLD. THE SAME IS REPRODUCED A S UNDER: VIMLA B. BATRA DETAILS OF SHARES PURCHASE & SALES NAME OF SCRIPT DATE OF PURCHASE DATE OF DEMAT NO. OF SHARE AMOUNT DATE OF PAYMENT DATE OF SALE NO. OF SHARE AMOUNT PROFT/LOSS SILICON VAIL 21/03/03 25/07/03 2500 50075 21/08/03 21/04/04 2500 561500 511425 GLOBE STOCK 27/12/02 10/07/03 3200 24050 26/03/03 30/06/04 3200 425376 401326 HERCOM 22/03/03 28/04/03 600 31230 26/03/03 15/04/04 600 5388 -25842 HE HAS SUBMITTED THAT THE ADDITION HAS BEEN MADE U/ S 68 OF THE IT ACT MAINLY ON THE REASONS THAT IT WAS CONDUCTED OFF MARKET AND THAT THE SECURITY SHOULD BE LISTED AT STOCK EXCHANGE. HE HAS SUBMITTED THAT PURCHASES OF THE SHARES HAVE BEEN MADE IN THE FINANCIAL YEAR 2002-03 AND REFLECTED IN THE BALANCE SHEET OF THE A SSESSEE WHICH HAS NOT BEEN DOUBTED BY THE REVENUE AUTHORITIES. HE HAS SUBMITTED THAT ALL THE SHARES WERE LISTED AT CALCUTTA STOCK E XCHANGE HE HAS REFERRED TO THE DOCUMENTS FILED IN THE PAPER BOOK PB-8 IS THE LETTER OF CALCUTTA STOCK EXCHANGE DATED 19-12-2007 INTIMATING THAT M/S. N. M. ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 15 LOHIA & CO. HAS DONE TRADING OF M/S HERALD COMMERC E LTD. ON 15- 04-2004. THEREFORE SALE IN THAT CASE IS CONFIRMED. SIMILARLY THE PURCHASE OF SHARES BY M/S. RENU PODDAR OF M/S. SILI CON VALLEY INFOTECH LTD. WAS DONE ON 21-03-2003 IS CONFIRMED B UT NO COMMENTS HAVE BEEN GIVEN FOR GLOBE STOCK LTD. PB-9 IS THE CO NTRACT NOTE ISSUED BY M/S. ASHISH STOCK BROKING PVT. LTD. FOR SALE OF SHARES OF M/S. GLOBE STOCK & SECURITIES LTD. PB-10 IS FOR OFFICIAL MARKET RATE. PB- 11 IS DELIVERY INSTRUCTION. PB-14 IS CONFIRMATION OF B ROKERS FOR PURCHASE OF SHARES BY THE ASSESSEE OF GLOBE STOCK & SECURITI ES LTD. PB-15 IS CONFIRMATION OF BROKERS FOR SALE OF THE SAME SHARES FOR THE ASSESSEE ON 30-06-2004 AND PAYMENT THROUGH CHEQUE. PB-16 IS SALE CONSIDERATION OF RS.5388/- FOR M/S. HERALD COMMERCI AL LTD. PB-17 IS THE DELIVERY INSTRUCTION OF THE SAME. PB-18 IS CERT IFICATE OF M/S. N. M. LOHIA & CO. LTD. FOR SALE OF SHARES IN A SUM OF RS. 5388/-. PB-20 IS ACCOUNT OF THE BROKER SHOWING PAYMENT THROUGH BANK OF RS.5 61 500/- OF SHARES OF M/S. SILICON VALLEY INFO TECH LTD. PB-21 IS CONTRACT NOTE OF THE SAME TRANSACTIONS. PB-22 IS DE LIVERY NOTE OF THE SAME TRANSACTION. PB-27 IS THE COPY OF THE BANK ACC OUNT OF THE ASSESSEE TO SHOW RECEIPT THROUGH BANKING CHANNEL OF SHARE CONSIDERATION OF RS.5 61 500/- AND RS.4 25 376/-. P B-30 IS THE BALANCE SHEET OF THE ASSESSEE AS ON 31-03-2005 SHO WING M/S. N. M. LOHIA & CO. LTD. ON ASSETS SIDE IN A SUM OF RS.5388 /-. HE HAS SUBMITTED THAT SUFFICIENT MATERIAL WAS FILED BEFORE THE AUTHORITIES BELOW TO PROVE GENUINE TRANSACTIONS. HE HAS SUBMITT ED THAT ADDITIONS WERE MADE MAINLY BECAUSE SHARES WERE SOLD BY THE BR OKERS OFF MARKET. THE PRICE OF SALE OF SHARES DERAILS WITH T HE QUOTATION FILED INFORMATION OBTAINED FROM WEBSITE IN ORDER TO CLAIM DEDUCTION U/S 112 ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 16 (1) (D) OF THE IT ACT. HE HAS REFERRED TO THE DECIS ION OF ITAT AHMEDABAD BENCH IN THE CASE OF SHRI PRAKASH CHAND S . SANDH IN ITA NO.3270/AHD/2008 DATED 24-02-2009 IN WHICH IT W AS HELD THAT PROFIT ON SHARES AND SALE OF SHARES OR SECURITIES C ANNOT BE TREATED AS CREDIT ENTRY AS ENVISAGED U/S 68 OF THE IT ACT HE HAS ALSO RELIED UPON THE ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF MA HESH KUMAR GUPTA VS ITO IN ITA NO.2814/AHD/2007 AND 2828/AHD/2 008 DATED 07-01-2011 IN WHICH ON IDENTICAL FACTS ADDITION HAS BEEN DELETED. HE HAS SUBMITTED THAT THE SAME CIT(A) IN THE CASE OF T HE ASSESSEE HAS ALLOWED RELIEF TO THE ASSESSEE IN THE CASE OF HITES HKUMAR BABULAL SANGHVI DATED 31-10-2007. COPY OF THE SAME IS FILED ON RECORD. HE HAS THEREFORE SUBMITTED THAT ADDITION U/S 68 OF T HE IT ACT IS NOT JUSTIFIED AND CLAIM OF THE ASSESSEE FOR LONG TERM C APITAL GAIN MAY BE ALLOWED. 9. ON THE OTHER HAND THE LEARNED DR RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AO ISSUED LETTERS U/S 133 (6) OF THE IT ACT WHICH HAVE NOT BEEN RESPONDED. THE AS SESSEE DID NOT FILE ANY EVIDENCE TO GET THE PURCHASES OF SHARES VE RIFIED. THEREFORE NO LONG TERM CAPITAL GAIN SHOULD BE ALLOWED TO THE ASSESSEE. HE HAS SUBMITTED THAT THE ASSESSEE HAS FAILED TO MAKE OUT A CASE; THEREFORE ADDITION MAY BE CONFIRMED. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD. DURING THE YEAR UNDER CONSIDERATION THE AS SESSEE CLAIMED TO HAVE SOLD SHARES OF 3 COMPANIES NAMELY M/S GLOBE S TOCK & SECURITIES LTD. M/S. HERALD COMMERCE LTD. AND M/S. SILICON VALLEY ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 17 INFOTECH LTD. AS PER THE DETAILS NOTED IN THE ASSES SMENT ORDER THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS FI LED THE EVIDENCES FOR PURCHASE AND SALES OF SHARES WHICH AR E BROKERS CONTRACT NOTE FOR PURCHASE AND SALE OF SHARES TRAN SACTION STATEMENT OF DEMAT ACCOUNT IN RESPECT OF CREDIT OF SHARES ON ACCOUNT OF PURCHASE AND DEBIT ON ACCOUNT OF SALES DELIVERY IN STRUCTIONS NOTE FOR SALE OF SHARES BANK STATEMENT PROVING THE RECEIPT OF SALES CONSIDERATION AND PAYMENT OF PURCHASES COPY OF THE BALANCE SHEET OF THE EARLIER YEAR CONFIRMATION/LEDGER ACCOUNT OF THE ASSESSEE FROM THE BROKERS BOOKS OF ACCOUNTS AND THE QUOTATION OF THE STOCK EXCHANGE LETTER OF THE CALCUTTA STOCK EXCHANGE (PB -8) CONFIRMING SALES MADE ON 15-04-2004 OF M/S. HERALD COMMERCE LT D. BY THE BROKER. THE PURCHASE OF SHARES OF M/S. SILICON VALL EY INFOTECH LTD. ON 21-03-2003 WAS ALSO CONFIRMED. NO DETAILS OF M/S. G LOBE STOCK & SECURITIES LTD. ARE MENTIONED. THUS THE FINDINGS O F THE AO WERE INCORRECT AS REGARDS THIS FACT. THE ASSESSEE SUBMIT TED THAT SINCE TRANSACTIONS WERE OFF MARKET BY THE BROKERS THEREF ORE INFORMATION GIVEN BY THE STOCK EXCHANGE WOULD NOT BE RELEVANT T O THE MATTER IN ISSUE. DESPITE PART OF THE TRANSACTIONS HAVE BEEN C ONFIRMED THE STOCK EXCHANGE THE PURCHASES AND SALES OF SHARES WERE FU LLY SUPPORTED BY COPIES OF THE CONTRACT NOTE AND THE DETAILS ALONG W ITH ACCOUNT AND CONFIRMATION ETC. OF THE BROKERS COPIES OF WHICH AR E FILED IN THE PAPER BOOK. THE PURCHASE OF SHARES WAS DULY RECORDED AND THUS THE TRANSACTIONS WERE MADE OUT OF DISCLOSED FUNDS AND B ILLS OF PURCHASE AND SALES OF THE SHARES WERE DULY RECORDED AND SUPP ORTED BY THE DOCUMENTS. THE BROKERS THROUGH WHOM SUCH TRANSACTIO NS WERE MADE HAVE CONFIRMED THE SAME AND THE SAME CONFIRMATIONS ARE FILED IN THE ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 18 PAPER BOOK. THE ASSESSEE HAD ALSO FILED DETAILS OF THE DEMAT ACCOUNT SHOWING THE PURCHASES AND SALES OF SHARES OF THESE 3 COMPANIES. THE DOCUMENTS FILED ON RECORD PROVE THE GENUINE TRA NSACTIONS ARE RECORDED BY THE ASSESSEE THROUGH BROKERS. SOURCES O F THE FUNDS ARE ACCOUNT PAYEE CHEQUES AND DEMAND DRAFTS AND ALL THE PAYMENTS RECORDED IN THE BANK ACCOUNT. ACCORDING TO THE ASSE SSEE SINCE THE SHARES ARE LISTED WITH THE STOCK EXCHANGE THEREFOR E IN ORDER TO CLAIM BENEFIT U/S 112 (1) (D) OF THE IT ACT THE ONLY REQ UIREMENT WAS NECESSARY THAT THE SHARES SHOULD BE LISTED IN A REC OGNIZED STOCK EXCHANGE. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE IT IS NOT NECESSARY THAT THE SHARES SHOULD BE SOLD THROUGH RE COGNIZED STOCK EXCHANGE. IT IS NOT IN DISPUTE THAT ALL THE SHARES REMAINED IN DEMAT ACCOUNT OF THE PARTIES AND GENUINENESS OF THE SAME WAS NOT DOUBTED. THE IDENTITY OF THE BROKERS HAS NOT BEEN DOUBTED. E VEN IF THE SALE TRANSACTIONS WERE OFF MARKET TRANSACTIONS THEY WER E PROPERLY DOCUMENTED AND SUPPORTED BY EVIDENCES. THE PURCHASE OF SHARES IN THE EARLIER YEAR HAVE NOT BEEN DOUBTED WHICH ACCORD ING TO THE ASSESSEE HAVE BEEN REFLECTED IN THE BALANCE SHEET I N THE FINANCIAL YEAR 2002-03. THUS THE ABOVE EVIDENCES AND EXPLANA TIONS OF THE ASSESSEE SUPPORT THE EXPLANATION OF THE ASSESSEE TH AT THE ASSESSEE ENTERED INTO GENUINE TRANSACTIONS. THE DETAILS WOUL D SHOW THAT THE ASSESSEE PROVED THE SOURCES OF THE SALE OF THE SHAR ES. THEREFORE NO ADDITION WAS REQUIRED TO BE MADE U/S 68 OF THE IT A CT. UNDER THE PROVISIONS OF SECTION 68 OF THE IT ACT THE ASSESSE E IS REQUIRED TO PROVE THE SOURCE OF THE SUM WHICH WAS CREDITED IN T HE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. ITAT AHMEDABAD BENCH IN THE CASE OF SHRI PRAKASH CHAND S. SANDH (SUPRA) HELD TH AT PROFIT ON ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 19 SHARES AND SALE OF SHARES/SECURITIES CAN NEVER BE C ASH CREDIT ENTERED AS ENVISAGED IN THE PROVISIONS OF SECTION 68 OF THE IT ACT BECAUSE FOR CONSIDERING A CREDIT ENTRY IN THE BOOKS OF ACCOUNTS DETAILS OF PARTY IN WHOSE NAME THE CREDIT ENTRY APPEARS HAS TO BE THERE . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME CI T(A) WHO PASSED THE IMPUGNED ORDER HAS CONSIDERED THE IDENTI CAL ISSUE IN THE CASE OF HITESHKUMAR BABULAL SANGHVI (SUPRA) AND DEL ETED THE SIMILAR ADDITION VIDE ORDER DATED 31-10-2007 COPY OF WHICH IS FILED AT PAGE 17 OF THE PAPER BOOK OF THE CASE LAW. THE IDENTICAL IS SUE WAS CONSIDERED BY ITAT AHMEDABAD 'B' BENCH IN THE CASE OF MAHESH K UMAR GUIPTA VS ITO IN ITA NO. 2814/AHD/2007 AND 2828/AHD/2008 D ATED 07-01- 2011 IN WHICH IN PARA 16 OF THE ORDER IT WAS HELD A S UNDER: '16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL AVAILABLE ON RECORD. IT WAS SUBMITTED BY T HE ASSESSEE THAT ALL THE TRANSACTIONS WERE OFF MARKET TRANSACTIONS AND WERE NOT CONDUCTED THROUGH STOCK EXCHANGE. THEREFORE INFORMATION FURNISHED BY THE S TOCK EXCHANGES WAS IRRELEVANT. THE PURCHASE AND SALES OF SHARES WERE FULLY SUPPORTED BY THE COPIES OF CONTRA CT NOTES AND BILLS ALONG WITH ACCOUNT CONFIRMATION ETC . THE PURCHASES OF SHARES WERE DULY RECORDED AND THESE WE RE MADE OUT OF DISCLOSED FUNDS AND THE BILLS WERE MADE BY ACCOUNT PAYEE CHEQUES. THE BILLS OF PURCHASE AND SA LES OF SHARES WERE DULY RECORDED AND SUPPORTED BY THE DOCUMENTS. THE BROKERS THROUGH WHOM SUCH TRANSACTIO NS WERE MADE HAVE CONFIRMED THE SAME AND SAME CONFIRMATIONS ARE FILED IN THE PAPER BOOK. THE ASSE SSEE HAD ALSO FILED COPY OF DEMAT ACCOUNT SHOWING THE PURCHASES AND SALES OF THE SHARES OF THE3 COMPANIES WITH WHOM THE ASSESSEE DEALT WITH. SAME ARE FILED A T PAGE 25 AND 26 OF THE PAPER BOOK. THE PURCHASE CONTRACTS BILLS SALE CONTRACTS AND CONFIRMATIONS OF THE BROKERS ARE ALSO FILED IN THE PAPER BOOK TO SHOW TH AT ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 20 GENUINE TRANSACTIONS ARE RECORDED BY THE ASSESSES THROUGH THE BROKERS. THE SOURCES OF THE FUNDS ARE ACCOUNT PAYEE CHEQUES AND ALL THE PAYMENTS HAVE BEE N MADE THROUGH ACCOUNT PAYEE CHEQUES. OUT OF THE 3 COMPANIES WHOSE SHARES WERE TRANSACTED THE SHARES OF M/S. ELTORL LTD. AND M/S. HAZOOR MEDIA WERE LISTED ON AHMEDABAD STOCK EXCHANGE AND ON BOMBAY STOCK EXCHANGE. THE SHARES OF M/S. SARITA SOFTWARE WERE ORIGINALLY LISTED ON BOMBAY STOCK EXCHANGE AS PER EXPLANATION OF THE ASSESSEE. THEREFORE THE TRANSAC TIONS CONDUCTED BY THE ASSESSEE CANNOT BE TREATED AS ILLE GAL. THE ABOVE EVIDENCES PRODUCED BEFORE THE AUTHORITIES BELOW CLEARLY PROVE THAT THE ASSESSEE ENTERED INTO GENUINE TRANSACTIONS OF SHARES. ALL THE SHARES REMA INED IN THE DEMAT ACCOUNT OF THE PARTIES AND GENUINENESS OF WHICH IS NOT DOUBTED. THE SALES OF SHARES ARE SUPPO RTED BY THE DETAILS ISSUED BY THE BROKERS. PAYMENTS WERE ISSUED BY ACCOUNT PAYEE CHEQUES. THE IDENTITY OF TH E BROKERS HAVE NOT BEEN DOUBTED. EVEN IF THE SALE TRANSACTIONS WERE OFF MARKET TRANSACTIONS THEY WER E PROPERLY DOCUMENTED AND SUPPORTED BY THE ABOVE EVIDENCES. THE ABOVE FACTS AND EVIDENCES ON RECORD CLEARLY SUPPORT THE CASE OF THE ASSESSEE THAT THE ASSESSEE ENTERED INTO THE GENUINE TRANSACTIONS. THE DETAILS OF THE SOURCES OF THE SALE OF SHARES HAVE B EEN PROVED. THEREFORE NO ADDITION U/S 68 OF THE IT ACT COULD BE MADE AS IS MADE BY THE AO. THE LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT THE SAME CIT(A) WHO PAS SED THE IMPUGNED ORDER HAS CONSIDERED IDENTICAL ISSUE I N THE CASE OF SHRI SANJAYKUMAR AGARWAL (SUPRA) AND DELETE D THE SIMILAR ADDITION VIDE ORDER DATED 29-05-2007 CO PY OF WHICH IS FILED AT PAGE 23 OF THE PAPER BOOK. THE OR DER OF THE LEARNED CIT(A) IN THE CASE OF SHRI SANJAYKUMAR AGARWAL HAS BEEN CONFIRMED BY THE TRIBUNAL IN ITA NO.3142/AHD/2007 DATED 12-02-2010 AND PARA 7 OF THE ORDER OF THE TRIBUNAL READS AS UNDER: '7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES. LOOKING TO THE FACTS OF THE CASE AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS CALLED FO R ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 21 THE REMAND REPORT AND THE REMAND REPORT OF THE A. O. IT WAS SEEN THAT CSE VIDE THEIR LETTER HAD CLEARLY CONFIRMED THAT THE SHARES OF BOTH THE COMPAN IES WERE LISTED WITH THE EXCHANGE. WE FIND THAT THE GENUINENESS OF THE TRANSACTIONS OF PURCHASE AND SALES OF SHARES. IN THE REMAND REPORT IT WAS CLEARL Y MENTIONED THAT THE TRANSACTION HAS BEEN CLEARLY CONFIRMED BY THE BROKERS BUT ALSO THROUGH SEPARATE LETTER ISSUED BY THE BROKERS DT 6.3.2006 WE FIND THAT THE CIT(A) HAS CALLED FOR THE REMAND REPORT AND THE INQUIRIES WERE CONDUCTED TO ASCERTAIN WHETHER OR NOT TRANSACTIONS EVEN THOUGH THEY WERE CONDUCTED ON-LINE IT HAS BEEN DULY REPORTED BY EXCHANGE AS REQUIRED BY THE GUIDELINES ISSUED BY THE SEBI. THE AO HAS FURNISHED REPORT DT. 24.4.2007 WHEREIN IT HAS BEEN MENTIONED THAT THE BROKERS AND THE DEPOSITORY HAVE CONFIRMED THE SAID SHARE TRANSACTIONS. THEREFORE WE ARE OF THE VIEW THAT THE CIT(A) IS JUSTIFIED IN DELETING THE SAME A ND OUR INTERFERENCE IS NOT REQUIRED.' THE SAME DECISION IS ALSO CONSIDERED BY ANOTHER BEN CH OF THE TRIBUNAL IN THE CASE OF SHETH HEENA AKSHAY V S DCIT (SUPRA) AND ADDITION HAS BEEN DELETED (PB-5). THESE FACTS WOULD PROVE THAT THE ADDITION MADE IN T HE CASE OF SHRI SANJAYKUMAR AGARRWAL HAS BEEN DELETED BY THE LEARNED CIT(A) AND HIS APPELLATE ORDER HAS BEEN CONFIRMED BY THE TRIBUNAL. THEREFORE FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF SHRI SANJAYKUMAR AGA RWAL WE DO NOT FIND IT TO BE A FIT CASE FOR CONFIRMING T HE ADDITION. THE LEARNED COUNSEL FOR THE ASSESSEE A LSO RELIED UPON THE DECISION OF THE HON'BLE PUNJAB & HA RYANA HIGH COURT IN THE CASE OF CIT VS ANUPAM KAPOOR (SUP RA) IN WHICH PURCHASE AND SALE WAS ACCEPTED BY THE DEPARTMENT AND SALE PROCEEDS WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND HAVE BEEN ACCOUNTED FOR I N THE ACCOUNTS OF THE ASSESSEE. THE SHARES WERE LISTE D AND TRANSACTIONS TOOK PLACE THROUGH REGISTERED BROKERS OF THE STOCK EXCHANGE. THE DEPARTMENTAL APPEAL WAS ACCORDINGLY DISMISSED FINDING NO SUBSTANTIAL QUESTI ON OF ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 22 LAW. THE ABOVE FACTS WOULD PROVE THAT THE ASSESSEE EXPLAINED GENUINE TRANSACTION OF SALE AND PURCHASE OF THE SHA RES. THE SOURCES OF THE SALE OF SHARES ARE EXPLAINED THROUGH EVIDENCE AND MATERIAL ON RECORD. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS AND EVIDENCES ON RECORD WE ARE OF THE VIEW THAT TH E AUTHORITIES BELOW HAVE WRONGLY MADE THE ADDITION U/S 68 OF THE IT ACT. THE ORDERS OF THE AUTHORITIES BELOW ARE ACCORDINGLY SET ASIDE AND THE ADDITION IS ACCORDINGLY DELETED. IN THE RESULT GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED.' THE ISSUE IS THEREFORE COVERED BY THE ABOVE ORDER S OF THE TRIBUNAL. THE FACTS AND CIRCUMSTANCES NOTED ABOVE CLEARLY PRO VE THAT THE ASSESSEE EXPLAINED GENUINE TRANSACTIONS ON SALES AN D PURCHASES OF THE SHARES. THE SOURCES OF SALE OF SHARES ARE EXPLA INED THROUGH EVIDENCES AND MATERIALS ON RECORD. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS AND EVIDENCES ON RECORD WE ARE OF THE VIEW THAT THE AU THORITIES BELOW HAVE WRONGLY MADE THE ADDITION U/S 68 OF THE IT ACT . THE TRANSACTIONS DECLARED BY THE ASSESSEE SHALL HAVE TO BE ACCEPTED BY THE REVENUE AUTHORITIES FOR CAPITAL GAINS. ORDERS OF THE AUTHOR ITIES BELOW ARE ACCORDINGLY SET ASIDE AND THE ADDITION IS DELETED. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.763 764 765 AND 766/AHD/2009 12. IN ITA NO.763/AHD/2009 THE ASSESSEE CHALLENGED THE ADDITION OF RS.13 25 755/- ON ACCOUNT OF UNEXPLAINED CASH CR EDIT U/S 68 OF THE IT ACT AS AGAINST LONG TERM CAPITAL GAIN SHOWN BY T HE ASSESSEE ON SALE OF SHARES OF RS.11 89 535/-. IN ITA NO.764/AHD /2009 THE ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 23 ASSESSEE CHALLENGED THE ADDITION OF RS.25 03 873/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AS AGA INST LONG TERM CAPITAL GAIN SHOWN BY THE ASSESSEE ON RS.22 36 388/ -. IN ITA NO.765/AHD/2009 THE ASSESSEE CHALLENGED THE ADDITIO N OF RS.7 15 3447- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AS AGAINST LONG TERM CAPITAL GAIN SHOWN BY THE ASSESSEE ON SALE OF SHARES OF RS.6 37 954/-. IN ITA NO.766/AHD/2009 THE ASSESSEE CHALLENGED THE ADDITION OF RS.24 78 580/- ON ACCOUN T OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AS AGAINST LONG TE RM CAPITAL GAIN SHOWN BY THE ASSESSEE ON SALE OF SHARES OF RS.22 11 220/-. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES SUBMITT ED THAT THE ISSUE IN THESE APPEALS ARE SAME AS IS CONSIDERED IN ITA NO.7 62/AHD/2009 IN THE CASE OF SMT. VIMLARANI BIHARILAL BATRA (SUPRA). THEY HAD ALSO SUBMITTED THAT THE FACTS AND EVIDENCES ARE SAME IN ALL THE CASES AND THE ORDER IN ITA NO.762/AHD/2009 MAY BE FOLLOWED. O N CONSIDERATION OF THE SUBMISSIONS OF THE PARTIES IN THE LIGHT OF T HE FINDINGS OF THE AUTHORITIES BELOW WE FIND THAT PARTIES HAVE RIGHTL Y STATED THAT THE ISSUES ARE SAME IN THESE APPEALS ON ACCOUNT OF ADDI TION U/S 68 OF THE IT ACT AS AGAINST LONG TERM CAPITAL GAIN DECLARED B Y THE ASSESSEE. BY FOLLOWING THE ORDER IN THE CASE OF SMT. VIMLARANI B IHARILAL BATRA (SUPRA) WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITIONS. 13. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE ON THIS ISSUE ARE ALLOWED. ITA NO762 763 764 765 AND 766/AHD/2009 SMT. VIMLARANI BIHARILAL BATRA & 4 OTHERS VS ACIT CIRCLE-2 SURAT 24 14. IN THE RESULT THE APPEALS IN ITA NO.762/AHD/20 09 ITA NO.765/2009 AND ITA NO.766/AHD/2009 ARE ALLOWED. HO WEVER THE APPEALS OF THE ASSESSEE IN ITA NO.763/AHD/2009 AND ITA NO 764/AHD/2009 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 16/9/11 SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD /