Vaishal Suryakant Shah,, Ahmedabad v. Income Tax Officer,, Ahmedabad

ITA 815/AHD/2015 | 2006-2007
Pronouncement Date: 21-10-2016 | Result: Allowed

Appeal Details

RSA Number 81520514 RSA 2015
Assessee PAN APZPS0112B
Bench Ahmedabad
Appeal Number ITA 815/AHD/2015
Duration Of Justice 1 year(s) 6 month(s) 12 day(s)
Appellant Vaishal Suryakant Shah,, Ahmedabad
Respondent Income Tax Officer,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 21-10-2016
Assessment Year 2006-2007
Appeal Filed On 08-04-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER SN ITA NO. AY APPELLANT RESPONDENT 1 810/AHD/2015 2006-07 SHRI PRATIK SURYAKANT SHAH F-104 TULIP CITADEL FLATS SHREYAS TEKRA AMBAWADI AHMEDABAD-380015 PAN : APZPS 0112 B INCOME TAX OFFICER WARD -10(3) AHMEDABAD 2 811/AHD/2015 2006-07 SHOBHANABEN SURYAKANT SHAH F-104 TULIP CITADEL FLATS SHREYAS TEKRA AMBAWADI AHMEDABAD-380015 PAN : ABGPS 2286 M REVENUE 3 812/AHD/2015 2006-07 SURYAKANT PANACHAND SHAH F-104 TULIP CITADEL FLATS SHREYAS TEKRA AMBAWADI AHMEDABAD-380015 PAN : ACXPS 7059 J REVENUE 4 813/AHD/2015 2006-07 SURYAKANT P. SHAH HUF F-104 TULIP CITADEL FLATS SHREYAS TEKRA AMBAWADI AHMEDABAD-380015 PAN : AAPHS 7043 J REVENUE 5 814/AHD/2015 2006-07 RACHNA P. SHAH F-104 TULIP CITADEL FLATS SHREYAS TEKRA AMBAWADI AHMEDABAD-380015 PAN : BDLPS 1498 D REVENUE 6 815/AHD/2015 2006-07 VAISHAL SURYAKANT SHAH F-104 TULIP CITADEL FLATS SHREYAS TEKRA AMBAWADI AHMEDABAD-380015 PAN : APXPS 7301 G REVENUE 7 922/AHD/2015 2008-09 SHRI DHWANI MAHENDRA SHAH 104 DEVASHRI APPARTMENTS PRITAMNAGAR AKHADA PALDI AHMEDABAD 380007 PAN : AVBPS 2933 C REVENUE 8-9 923 & 924/AHD/2015 2008-09 & 2009-10 DIPALI MAHENDRA SHAH 104 DEVASHRI APPARTMENTS PRITAMNAGAR AKHADA PALDI AHMEDABAD 380007 PAN : AQBPS 1861 Q REVENUE 10-11 925 & 926/AHD/2015 2006-07 & 2008-09 BHARTI SOMCHAND SHAH 104 DEVASHRI APPARTMENTS PRITAMNAGAR AKHADA PALDI AHMEDABAD 380007 PAN : AGDPS 4182 Q REVENUE ITA NOS. 810 TO 815 922 TO 926/AHD/2015 SHRI PRATIK SURYAKANT SHAH & OTHERS TOTAL 11 APPL S AYS 2006-07 & 2008-09 2 ASSESSEE(S) BY : SHRI BHARAT SHAH AR REVENUE BY : SHRI P. S. CHOUDHARY SR DR / DATE OF HEARING : 20/10/2016 / DATE OF PRONOUNCEMENT: 21/10/2016 / O R D E R PER BENCH : THE ABOVE CAPTIONED APPEALS BY DIFFERENT ASSESSEES ARE PREFERRED AGAINST SEPARATE ORDERS OF THE CIT(A). THE COUNSEL FOR THE ASSESSEES AT THE VERY OUTSET STATED THAT IN THIS BUNCH OF APPEALS THE FACTS AND ISSUES ARE IDENTICAL. THE DR FAIRLY CONCEDED TO THIS AND ON SUCH CONCESSION ALL THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. AS AGREED BY THE REPRESENTATIVES OF BOTH THE SID ES WE HAVE CONSIDERED THE FACTS OF ITA NO.810/AHD/2015 FOR AY 2006-07 IN THE CASE OF SHRI PRATIK SURYAKANT SHAH. 3. THE COMMON GRIEVANCE IN ALL THESE APPEALS RELATE S TO THE TREATMENT OF LONG TERM CAPITAL GAINS AS UNDISCLOSED INCOME OF TH E ASSESSEE DENYING THE EXEMPTIONS OF LONG TERM CAPITAL GAINS ON SALE O F SHARES. 4. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE RE TURNS OF INCOME OF THE ASSESSEES WERE ACCEPTED U/S 143(1) OF THE ACT. SUB SEQUENTLY THE ASSESSING OFFICER RECEIVED INFORMATION RELATING TO A SEARCH A ND SEIZURE ACTION CARRIED OUT IN THE CASE OF M/S. MAHASAGAR SECURITIES PVT LT D INCLUDING GROUP COMPANIES WHICH WERE CONTROLLED BY ONE SHRI MUKESH M. CHOKSI AT MUMBAI. IN HIS STATEMENT SHRI MUKESH CHOKSI ADMIT TED THAT ALL HIS GROUP- COMPANIES WERE PROVIDING ENTRIES FOR TAKING PROFIT OR LOSS BY SHOWING PURCHASE OR SALES OF THE SHARES AND SECURITIES TO V ARIOUS PARTIES ACROSS INDIA ON WHICH HE CHARGED CERTAIN COMMISSION FROM THE BEN EFICIARY PARTIES. SINCE ITA NOS. 810 TO 815 922 TO 926/AHD/2015 SHRI PRATIK SURYAKANT SHAH & OTHERS TOTAL 11 APPL S AYS 2006-07 & 2008-09 3 THE IMPUGNED APPELLANTS WERE THE BENEFICIARIES OF S UCH ACCOMMODATION ENTRIES PROVIDED BY SHRI MUKESH CHOKSI THE ASSESSM ENTS WERE REOPENED. STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE A SSESSEES AND THE REASONS FOR THE REOPENING OF THE ASSESSMENT WERE PR OVIDED. THE RELEVANT PORTION OF THE SAME READS AS UNDER:- PLEASE REFER TO THE ON-GOING RE-ASSESSMENT PROCEED INGS IN YOUR CASE FOR A. Y. 2006-07. IN THIS CONNECTION IT IS TO STATE THAT A SEARCH AN D SEIZURE ACTION CARRIED OUT BY THE DEPARTMENT ON 25/11/2009 IN THE GROUP CASE O F M/S. MAHASAGAR SECURITIES PVT. LTD. AND ALSO COVERED ITS ALL GROUP COMPANIES WHICH WERE CONTROLLED BY SHRI MUKESH M. CHOKSHI AT MUMBAI. SHR I MUKESH M. CHOKSI HIMSELF ADMITTED THAT MY ALL THE GROUP COMPANIES AR E PROVIDING ENTRY FOR TAKING PROFIT OR LOSS BY SHOWING PURCHASE OR SALE O F THE SHARES AND SECURITIES TO VARIOUS PARTIES ACROSS INDIA EN WHICH HE CHARGED CERTAIN COMMISSION FROM THE BENEFICIARY PARTIES. THE SAME INFORMATION RECEI VED BY THIS OFFICE ALONG WITH COPY OF STATEMENT OF SHRI MUKESH M. CHOKSHI RE CORDED BY THE DEPARTMENT ON OATH U/S. 131 OF THE I. T. ACT IN WHI CH THE DETAILS ALSO PERTAIN TO YOU. ON SCRUTINY OF THE DATA/DETAILS RECEIVED IN THIS OFFICE IT IS ASCERTAINED THAT YOU WERE ALSO INVOLVED FOR TAKING UNVERIFIABLE /BOGUS BENEFICIAL ENTRIES FROM THE GROUP COMPANIES BELONGS TO SHRI MUKESH CHO KSI DURING THE F. Y. 2005-06. YOUR TOTAL TRANSACTION INVOLVED IS RS.2 77 740/- FOR TAKING UNVERIFIABLE/BOGUS ENTRIES BY SHOWING PURCHASE AND SALE OF SHARE AND SECURITIES. 3. IN THIS CONTEXT A LETTER ISSUED TO YOU ON 17/10 /2013 AND DULY SERVED UPON YOU ON THE SAME DATE. IN THE SAID FETTER REASONS W ERE FURNISHED TO YOU AND REQUESTED TO PRODUCE OR CAUSE TO BE PRODUCED BEFORE THE UNDERSIGNED THE ACCOUNTS AND/OR DOCUMENTS AS THAT MAY BE NECESSARY TO PRODUCE IN SUPPORT OF YOUR EXPLANATION. HOWEVER IT IS OBSERVED THAT YOU HAVE NOT COMPLIED THIS LETTER TILL DATE. 4. IN VIEW OF THE ABOVE YOU ARE REQUESTED TO SHOW CAUSE IN WRITING WITH AS TO WHY THE TRANSACTION OF RS.2 77 740/- SHOULD NOT BE TREATED AS BOGUS TREATING IT AS BOGUS ENTRIES OF PURCHASE AND SALE OF SHARES AND SECURITIES AND SHOULD NOT BE TREATED AS YOUR DEEMED INCOME AND TAXED UNDE R THE HEAD INCOME FROM OTHER SOURCES. 5. IN RESPONSE TO THE NOTICE AND THE QUERIES THE A SSESSEE FILED A DETAILED REPLY EXPLAINING THE NATURE OF TRANSACTIONS INCLUDI NG PURCHASE AND SALE OF SHARES. IT WAS EXPLAINED THAT THE PAYMENTS HAVE BE EN DONE THROUGH ITA NOS. 810 TO 815 922 TO 926/AHD/2015 SHRI PRATIK SURYAKANT SHAH & OTHERS TOTAL 11 APPL S AYS 2006-07 & 2008-09 4 BANKING CHANNELS THE SHARES WERE TRANSFERRED TO TH E RESPECTIVE DEMAT ACCOUNTS AND WERE SOLD FROM THERE. 6. THE ASSESSEE ALSO QUESTIONED THE STATEMENT OF SH RI MUKESH CHOKSI AND STRONGLY CONTENDED THAT NO ADVERSE VIEW SHOULD BE TAKEN MERELY ON THE STRENGTH OF THE STATEMENT OF A THIRD PARTY WHOSE ST ATEMENT HAS NOT BEEN CONFRONTED TO THE ASSESSEE NOR ANY OPPORTUNITY IS GIVEN TO CROSS-EXAMINE. 7. THE DETAILED SUBMISSIONS OF THE ASSESSEE DID NOT FIND ANY FAVOUR WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER ALSO D ISMISSED THE REQUEST OF THE ASSESSEE FOR PROVIDING AN OPPORTUNITY OF CROSS- EXAMINATION. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER READ AS UNDER:- VI) REGARDING ASSESSEE'S OPINION/REQUEST TO GIVE A N OPPORTUNITY OF CROSS- EXAMINATION BOTH OF MATERIAL FOUND FROM THE THIRD P ARTY I.E. HIS BOOK ETC. AS WELL AS CROSS-EXAMINATION OF THE PERSON WHO HAS DEP OSED AGAINST HER AND WITHOUT COMPLIANCE OF THE SAME IT WOULD NOT BE COR RECT OR MAINTAINABLE TO DRAW ANY ADVERSE INFERENCE AS OBSERVED IN THE SHOW CAUSE NOTICE IT HAS NO WEIGHT FOR THE FOLLOWING REASONS: ~ A) IT IS CONFIRMED BY THE NSE/ISE THAT NO TRADES HAVE BEEN EXECUTED IN THE NAMES OF THE PERSONS WHO HAVE TRADED THROUGH THE GR OUP COMPANIES OF M/S.MAHASAGAR SECURITIES PVT. LTD. CONTROLLED BY SH RI MUKESH R. CHOKSHI. B) SINCE M/S. ALLIANCE INTERMEDIATERIES & NETWORK PVT . LTD. IS NO MORE SUB-BROKER IN NSE SO HOW IT IS POSSIBLE TO GIVE CR EDIT OF ANY CLAIM CONSEQUENT UPON THE SHARES TRADED THROUGH M/S. ALLI ANCE INTERMEDIATERIES'& NETWORK PVT. LTD. C) FURTHER THE KEY PERSON OF M/S. ALLIANCE INTERMEDIA TERIES & NETWORK PVT. LTD. SHRI MUKESH CHOKSHI HAS HIMSELF ADMITTED IN HI S STATEMENT DURING THE SEARCH OPERATION U/S. 132 OF THE I.T. ACT THAT HIS GROUP COMPANIES WERE ENGAGED IN FRAUDULENT BILLING ACTIVITIES IN TH E BUSINESS OF PROVIDING BOGUS SPECULATION PROFIT/LOSS SHORT TERM/LONG TERM CAPITAL GAIN/LOSS COMMODITIES PROFIT/LOSS ON COMMODITY TRADING (THROU GH MCX). D) THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING EVIDE NCES FOR PURCHASE AND SALE OF SHARES SUCH AS NATURE AND SOURCE OF PAYMEN T PAYMENT RECEIPTS THE NAME AND ADDRESS OF THE PARTY TO WHOM PAYMENT W AS MADE FOR ITA NOS. 810 TO 815 922 TO 926/AHD/2015 SHRI PRATIK SURYAKANT SHAH & OTHERS TOTAL 11 APPL S AYS 2006-07 & 2008-09 5 PURCHASE OF SHARES COPY OF BILLS/INVOICES COPY OF TRANSFER FORMS ANY DETAILS REGARDING ANY APPLICATION MADE FOR DEMAT OF SUCH SHARES ETC. E) THERE IS NO REASON TO DISBELIEVE THE STATEMENT OF S HRI MUKESH R. CHOKSHI THAT HE WAS ENGAGED IN FRAUDULENT BILLING ACTIVITIE S IN THE BUSINESS OF PROVIDING BOGUS SPECULATION PROFIT/LOSS SHORT TERM /LONG TERM CAPITAL GAIN/LOSS ETC. AND THE RELEVANT FINDINGS OF THE DD IT(INV.) MUMBAI IN THIS REGARD THAT NO COMPANY OTHER THAN M/S RICHMOND SECURITIES PRIVATE LIMITED HAS TRADED THOUGHT OUR EXCHANGE. THUS THE TRANSACTIONS WHICH HAVE NOT BEEN CARRIED OUT THOUGH THE STOCK EXCHANGE ARE ILLEGAL AND FRAUDULENT AND ARE NOT ELIGIBLE FOR CLAIM OF EXEMPT INCOME U/S. 10(38) OF THE I.T. ACT. THUS AS STATED ABOVE THERE IS NO REASON TO GIVE A N OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE SHRI MUKESH R. CHOKSHI AN D THE MATERIALS FOUND FROM THE THIRD PARTY I.E. BOOKS ETC. THEREFORE I DO NOT AGREE WITH THE OPINION OF THE ASSESSEE AND REJECT THE REQUEST OF T HE ASSESSEE. 8. THE ASSESSING OFFICER CONCLUDED BY DENYING THE E XEMPTION OF LONG TERM CAPITAL GAINS ON THE SALE OF SHARES AND TREATE D THIS SALE CONSIDERATION AS DEEMED INCOME. 9. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) BUT WITHOUT ANY SUCCESS. 10. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. 11. THE LD. COUNSEL FOR THE ASSESSEE(S) VEHEMENTLY STATED THAT DENIAL OF CROSS-EXAMINATION AND RELYING ON A THIRD PARTYS ST ATEMENT WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSEE(S) AND AL SO BY NOT PROVIDING THE COPY OF THE STATEMENT HAS VITIATED THE ENTIRE ASSES SMENT ORDER. IT IS THE SAY OF THE COUNSEL THAT DENIAL OF NATURAL JUSTICE CANNO T BE CONSIDERED IN FRAMING THE ASSESSMENT ORDER. THE COUNSEL FOR THE ASSESSEE CONTINUED BY STATING THAT THE SHARES WERE PURCHASED THROUGH BROKERS AND THE SAME WERE ALSO SOLD THROUGH BROKERS. IF THE BROKERS TURNED OUT TO BE SCAMSTER THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR THE SAME. 12. PER CONTRA THE DR STRONGLY SUPPORTED THE FINDI NGS OF THE REVENUE AUTHORITIES. IT IS THE SAY OF THE DR THAT THE ASSE SSMENT IS NOT MERELY BASED ITA NOS. 810 TO 815 922 TO 926/AHD/2015 SHRI PRATIK SURYAKANT SHAH & OTHERS TOTAL 11 APPL S AYS 2006-07 & 2008-09 6 UPON THE STATEMENT OF SHRI MUKESH CHOKSI BUT ALSO ON THE FACT THAT THE ENTIRE TRANSACTIONS OF THE ASSESSEE WERE BOGUS. 13. HAVING HEARD THE RIVAL CONTENTIONS WE HAVE CAR EFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. AS MENTIONED ELSE WHERE WE HAVE CONSIDERED THE FACTS IN ITA NO.810/AHD/2015. WE FI ND THAT THE ASSESSEE HAD PURCHASED 3000 SHARES OF TELANT INFO LTD FROM M /S. MAHASAGAR SECURITIES PVT LTD ON APRIL 2004. THE CONSIDERATIO N WAS PAID AND THE PAYMENT OF CONSIDERATION IS NOT IN DISPUTE. THE SH ARES OF TELANT INFO LTD WERE LISTED IN THE BOMBAY STOCK EXCHANGE AT THAT PO INT OF TIME. THE SHARES SO PURCHASED WERE SOLD THROUGH M/S. ALLIANCE INTERM EDIATERIES & NETWORK PVT LTD AND THE CONSIDERATION WAS RECEIVED BY CHEQUE. IT W OULD BE PERTINENT TO MENTION HERE THAT THOUGH THE SHARES WE RE PURCHASED IN PHYSICAL FORM THE SAME WERE SENT TO THE COMPANY WI TH SHARE APPLICATION FORM AND THE SHARES WERE TRANSFERRED BY THE COMPANY IN THE NAME OF THE PURCHASER. THEREAFTER THE SHARES WERE TRANSFERRED IN THE DEMAT ACCOUNT FROM WHERE THEY WERE SOLD. IT IS NOT THE CASE OF THE REVENUE THAT THE CONSIDERATION PAID BY THE ASSESSEE AT THE TIME OF P URCHASE OF SHARES WAS RECEIVED BACK IN CASH NOR IT IS THE CASE OF THE RE VENUE THAT THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS RETURNED BACK IN CASH. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE SHARES IN QUES TION ARE STILL LYING WITH THE ASSESSEE NOR IT IS THE CASE OF THE REVENUE THA T THE AMOUNTS RECEIVED BY THE ASSESSEE ON SALE OF THE SHARES IS MORE THAN WHA T IS DECLARED BY THE ASSESSEE. 14. THE ENTIRE ASSESSMENT IS BASED UPON THE STATEME NT OF SHRI MUKESH CHOKSI. IT IS AN UNDISPUTED FACT THAT NEITHER A CO PY OF THE STATEMENT WAS SUPPLIED TO THE ASSESSEE NOR ANY OPPORTUNITY OF CRO SS-EXAMINATION WAS GIVEN BY THE ASSESSING OFFICER/CIT(A). THE HONBLE SUPREME COURT IN THE ITA NOS. 810 TO 815 922 TO 926/AHD/2015 SHRI PRATIK SURYAKANT SHAH & OTHERS TOTAL 11 APPL S AYS 2006-07 & 2008-09 7 CASE OF ANDAMAN TIMBER INDUSTRIES IN CIVIL APPEAL N O. 4228 OF 2006 WAS SEIZED WITH THE FOLLOWING ACTION OF THE TRIBUNAL:- 6. THE PLEA OF NO CROSS EXAMINATION GRANTED TO THE VARIOUS DEALERS WOULD NOT HELP THE APPELLANT CASE SINCE THE EXAMINATION O F THE DEALERS WOULD NOT BRING OUT ANY MATERIAL WHICH WOULD NOT BE IN THE PO SSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX FACTORY PR ICES REMAIN STATIC. SINCE WE ARE NOT UPHOLDING AND APPLYING THE EX FACTORY PR ICES AS WE FIND THEM CONTRAVENED AND NOT NORMAL PRICE AS ENVISAGED UNDER SECTION 4(1) WE FIND NO REASON TO DISTURB THE COMMISSIONERS ORDERS. 15. THE HONBLE APEX COURT HELD AS UNDER:- ACCORDING TO US NOT ALLOWING THE ASSESSEE TO CROS S-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS F LAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRI NCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTE D. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON T HE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATI NG AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER NO SUCH OPPORTUNITY WAS GRANTED AND THE AF ORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED WE FIND THAT REJECTION OF THIS PLEA IS T OTALLY UNTENABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION O F THE SAID DEALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT B E IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX- FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS W ORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. AS MENTIONED ABOVE THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DIS CREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION. THAT APART THE ADJUDICATING AUTHORITY SIMPLY RELIED UPO N THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WERE IN FACT SOLD TO THE SAID DEALERS/WITNESSES AT THE PRICE WHICH IS MENTIONED I N THE PRICE LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EXAMINATION. THEREFO RE IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COU LD BE THE SUBJECT MATTER ITA NOS. 810 TO 815 922 TO 926/AHD/2015 SHRI PRATIK SURYAKANT SHAH & OTHERS TOTAL 11 APPL S AYS 2006-07 & 2008-09 8 OF THE CROSS-EXAMINATION AND MAKE THE REMARKS AS ME NTIONED ABOVE. WE MAY ALSO POINT OUT THAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN CIVIL APPEAL NO. 2216 OF 2000 ORDER DATED 17.03.2005 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DI RECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTING O R REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE WE ARE OF THE OPINION THAT IF TH E TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED THERE WAS NO MATERIAL WIT H THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ONLY BASIS OF ISSUING THE SHOW CA USE WE THUS SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL. 16. ON THE STRENGTH OF THE AFOREMENTIONED DECISION OF THE HONBLE SUPREME COURT THE ASSESSMENT ORDER HAS TO BE QUASH ED. 17. FOR THE SAKE OF THE COMPLETENESS OF THE ADJUDIC ATION EVEN ON FACTS OF THE CASE THE ORDERS OF THE AUTHORITIES BELOW CANNO T BE ACCEPTED. THERE IS NO DENYING THAT CONSIDERATION WAS PAID WHEN THE SHARES WERE PURCHASED. THE SHARES WERE THEREAFTER SENT TO THE COMPANY FOR THE TRANSFER OF NAME. THE COMPANY TRANSFERRED THE SHARES IN THE NAME OF THE A SSESSEE. THERE IS NOTHING ON RECORD WHICH COULD SUGGEST THAT THE SHAR ES WERE NEVER TRANSFERRED IN THE NAME OF THE ASSESSEE. THERE IS ALSO NOTHING ON RECORD TO SUGGEST THAT THE SHARES WERE NEVER WITH THE ASSESSE E. ON THE CONTRARY THE SHARES WERE THEREAFTER TRANSFERRED TO DEMAT ACCOUNT . THE DEMAT ACCOUNT WAS IN THE NAME OF THE ASSESSEE FROM WHERE THE SHA RES WERE SOLD. IN OUR UNDERSTANDING OF THE FACTS IF THE SHARES WERE OF S OME FICTITIOUS COMPANY WHICH WAS NOT LISTED IN THE BOMBAY STOCK EXCHANGE/N ATIONAL STOCK EXCHANGE THE SHARES COULD NEVER HAVE BEEN TRANSFER RED TO DEMAT ACCOUNT. SHRI MUKESH CHOKSI MAY HAVE BEEN PROVIDING ACCOMMOD ATION ENTRIES TO VARIOUS PERSONS BUT SO FAR AS THE FACTS OF THE CASE IN HAND SUGGEST THAT THE TRANSACTIONS WERE GENUINE AND THEREFORE NO ADVERSE INFERENCE SHOULD BE DRAWN. ITA NOS. 810 TO 815 922 TO 926/AHD/2015 SHRI PRATIK SURYAKANT SHAH & OTHERS TOTAL 11 APPL S AYS 2006-07 & 2008-09 9 18. IN THE LIGHT OF THE DECISIONS OF THE HONBLE SU PREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES (SUPRA) AND CONSIDERIN G THE FACTS IN TOTALITY THE CLAIM OF THE ASSESSEE CANNOT BE DENIED ON THE B ASIS OF PRESUMPTION AND SURMISES IN RESPECT OF PENNY STOCK BY DISREGARDING THE DIRECT EVIDENCES ON RECORD RELATING TO THE SALE/PURCHASE TRANSACTIONS I N SHARES SUPPORTED BY BROKERS CONTRACT NOTES CONFIRMATION OF RECEIPT OF SALE PROCEEDS THROUGH REGULAR BANKING CHANNELS AND THE DEMAT ACCOUNT. 19. AS MENTIONED ELSEWHERE AND AS AGREED BY THE REP RESENTATIVES OF BOTH THE SIDES; SINCE THE FACTS ARE COMMON IN ALL THE IM PUGNED APPEALS ALL THE APPEALS BY THE ASSESSEES ARE ALLOWED. THE ASSESSIN G OFFICER IS DIRECTED TO TREAT THE SURPLUS AS LONG TERM CAPITAL GAINS AND AL LOW THE EXEMPTION AS CLAIMED BY THE ASSESSEES. 20. IN THE RESULT ALL THE APPEALS FILED BY THE ASS ESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 21 ST OCTOBER 2016 AT AHMEDABAD. SD/- SD/- (S.S. GODARA) JUDICIAL MEMBER (N.K. BILLAIYA) ACCOUNTANT MEMBER AHMEDABAD; DATED 21/10/2016 BIJU T. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPO NDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A ) 5. $ '' / DR ITAT AHMEDABAD 6. - / GUARD FILE . / BY ORDER TRUE COPY / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD