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2019 (1) TMI 273
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....med on 29.12.2016. The Revenue's two appeal(s) ITA No.1495-1496/Kol/2017 is latter M/s Tribute Trading & Finance Ltd's cases are directed against CIT(A), please very appeal No. 423-544/CIT(A)-2/16-17 the CIT(A)-2 Kolkata's separate orders both dated 21.04.2017, in case reversing the Assessing Officer's action treating Short Term Capital Loss(es) of Rs.78,25,188/- in assessment year 2013-14 and Rs.1,44,20,606/- in assessment year 2014-15 respectively as unexplained. Relevant proceedings in all three cases are u/s 143(3) of the Income Tax Act, 1961; in short 'the Act'. Heard both the learned representatives. Case file(s) perused. 2. We notice at the outset that although the sole substantive identical issue involved in all these three appeal(s) is that of genuineness of the assessee's long term capital gains & losses hereinabove, the Assessing Officer in assessments framed in both assessees cases had treated the respective capital gains arising from sale of shares in M/s NCL Research & Financial Services in former as well as losses in latter cases (supra) to be lacking genuineness. Both the learned representatives are ad idem during the course of hearing that the Assessing Offic....
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....d that the entire Long Term Capital Gains claim of Rs. 3,26,63,032/- has been made out of sale of shares of M/s NCL, Research and Financial Services Ltd. "From the details filed by the assessee it is noticed that the assessee purchased 29,000 units of shares of M/s. NCL Research and Financial Services Ltd. for a total consideration of Rs. 79,75,000/*. Subsequently, these shares were credited to his demat account. The assessee sold all these shares of M/s. NCL Research and Financial Services Ltd. for Rs. 4,06,38,032/*(net) making a profit of Rs. 3,26,63,032/* through the broker M/s. Kotak Securities Limited after adjustment of all charges. In the case of CIT vs L.N. Dalmia (1994) 207 ITR 89, the Hon'ble Calcutta High Court held the device adopted by the assessee to reduce the tax liability to be colour and sham. In this case the Court observed as follows:- "As discussed, the assessee affected a transaction of sale of shares held by him to the companies formed by himself holding the major part of the shares of such companies along with the nephew and the wife, who held only the smaller part therein and are shown to have suffered a loss by the sale which would be....
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....t discharged by the assessee in the instant case, cheques were issued simultaneously by the parties in favour of each other for purchase and repurchase on the same day without both the parties having sufficient funds in the bank. That itself goes to show that the transaction was not genuine. This aspect, however, could not be explained by the assessee. Regarding sale of shares of three companies particularly J. Ltd. no evidence was produced on behalf of the assessee that there was no other buyer of the shares except its chairman, although those shares were quoted in the stock exchange. The fact that though the sale through broker of listed shares is essential under the Securities Contracts) Regulation) Act, 1956, it was not done in the instant case was also ignored by the Tribunal. The Tribunal failed to take note of the fact that the assessee company and K tried to claim loss in their respective assessment for tax avoidance by factious transactions. Considering the totality of the facts and in the circumstances of the case, the Tribunal was not correct in law in directing the Assessing Officer the share of loss of to the assessee company. 4. Submission of the Assessee: ....
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....hoc disallowance of Rs. 5,00,000/- has been made on pure suspicion and conjecture as evident from his finding that there is a chance of leakage of revenue and to plug possible loss of revenue such disallowance is made. In the background of above facts, we make detailed submission on various grounds as under:- Ground Nos. 1(a) to 1(c) These grounds have been preferred against AO.'s action to consider L TCG on sale of shares of NCL Research & Financial Services Ltd. amounting to Rs. 3,26,63,032/- as unexplained cash credit U/s 68 by denying exemption U/s 10(38). 1. The return filed was selected for scrutiny and the Assessee complied with all statutory notices issued from time to time by furnishing all relevant details, evidences and explained the return by producing the books of accounts etc. 2. The appellant purchased 29000 shares of NCL Research & Financial Services Ltd. at a consideration of Rs. 79,75,000 @ Rs. 275/share. The said shares were credited in the demat account of the Appellant Assessee on 25.07.2012 maintained with Stock Holding Corporation of India Limited. During the previous year relevant to the Assessment Year 2014-15 the App....
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....ing on the respective dates of sale, as evidenced by the quotations given by the Bombay Stock Exchange. The following documents were produced by the assessee before the Assessing Officer in support of the aforesaid transactions of sale of shares of NCL (i) Contract Notes for sale of shares of NCL. (ii) Ledger/Demat Statement issued by Depository Participant viz. Kotak Securities Ltd. showing delivery of shares of NCL on sale of shares. (iii) Bank Statement / Pass Book showing receipt of sale consideration through banking channels. (iv) Market rate quotations . (v)Books of accounts produced. 5. It appears from the observations made in the assessment order that Ld. A.O. has heavily relied upon the report: of Directorate of Investigation, Kolkata while carrying out investigation to unearth the racket of generating bogus entries of Long Term Capital Gains (L TCG) which is exempt from tax and the modus operandi adopted by the operators to make the beneficiary by shares of pre- determined Penny Stock controlled by them. After discussing the investigation report in a general view A.O. concluded as under. - (i) Individ....
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.... "It is, therefore, clear that the Tribunal in arriving at the conclusion it did in the present case indulged in suspicions, conjectures and surmises and acted without any evidence or upon a View of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, or the finding was, in other words, perverse and this court is entitled to interfere. It is most respectfully submitted that not allowing opportunity of cross-examination of the witness is a serious flaw which makes the order nullity. Please refer to the following judgements on this issue: (i) Andaman Timber Industries vs. Commissioner of Central Excise [2015J 62 taxmann.com 3 (sq]. In this case the Adjudicating authority had passed an order against the assessee relying on the statements of third parties by observing that there was no need to provide opportunity of cross examination. However, the Hon'ble Supreme Court laid down that not allowing an opportunity to cross examination is a serious flaw which renders the order a nullity 9. That the facts of the present appellant an....
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....ed in Long Term Capital Gains of Rs. 3,26,63,032/- which the assessee claimed to be exempt' under section 10(38) of the Act. During the course of assessment proceedings the assessee submitted following details documents and evidences in relation to such transactions of purchase and sale of shares. (i) Demat Account statement showing credit of 29000 shares of NCL (ii) Balance Sheet as on 31.03.2011, 31.03.2012 & 31.03.2013 and also the details of investment in shares to show that the shares purchased by assessee at different times did appear in the books of accounts of the assessee and were reflected in his Balance Sheet. There were other investments in shares and those were also reflected in the Balance Sheet. The assessment for A.Y. 2013-14 in which investment in shares of NCL was made was completed U/s 143(3). (SEBI approved Depository Participant) (iv) Fifteen Contract Notes in respect of shares of NCL sold by assessee on different dates during the Financial Year 2013*14. (v) Bank statement showing payments received by account payee cheques on different dates for such sale of shares of NCL In course of hearing of the case, the Ld. AR referred to various ....
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....ries on receipt of commission and have voluntarily surrendered and offered for taxation. (iv) The particular script Le. NCL Research and Financial Services Ltd. finds mention in the list of bogus Long term / short term capital loss as per information and data provided by Income Tax Investigation Wing, Kolkata The ld. AR also brought our attention to the enquiry report made by Pr. Director of Income Tax (Investigation, Kolkata in the matter of transactions of KAFL. The ld. AO relied on the statements of different persons including Sri Sunil Kumar Dokania recorded by the Investigation Wing of Kolkata who explained the modus operandi of providing accommodation entries of LTCG and Short Term Capital Loss (STCL). These persons also provided the lists of beneficiaries to who they provided accommodation entries. The ld. A/R has shown that the list of beneficiaries provided by these persons also did not contain the name of assessee and / or the name of the share broker viz. Ashika Stock Braking Ltd. It is reiterated that the AO has not made any independent enquiry and also there is no corroborating evidence to support the allegations of the AO. It is submitted that parties whose s....
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....r an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not in the opinion of the Assessing Officer satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year. " 2. It is implied from the language used that assessee must have incurred expenditure and the assessee has either failed to offer any explanation regarding source from which expenditure was incurred or such explanation is in the opinion of A.O. is not satisfactory. 3. The observations and findings recorded at para 5 of assessment order do not suggest any clue that the assessee had incurred expenditure. The observations that various brokers and operators giving entries of bogus L TCG as per report of Investigation Wing admitted. that beneficiaries have to pay commission @ 2% of total transaction cannot be utilised in assessee's case since the name of share broker Kotak Securities Ltd. is not found in the Investigation report. 4. Moreover, A.O.'s observations do not suggest tha....
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....(ii) Sumati Dayal vs CIT 214 ITR 801 (SC) :- As laid down by this Court, apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. In this case, it is observed that suddenly within one year the prices of these shares jumped. No business activity and profit of the company has been reported. No reason has been adduced to explain how the company's share suddenly rose to this level. Merely transacting through banking channel will not make the appellant entitled for exemption u/s. 10(38). The appellant entered into an adventure in the nature of trade and therefore the income is taxable as business profit and not as LTCG. Reliance is placed on the order of the judgment of Hon'ble ITAT in the case of Sanjay Bimalchand Jain LIH Shantidevi Bimalchand Jain Income Tax Appellate Tribunal Nagpur Bench Nagpur ITA No. 61/Nag/2013. "The facts of the case clearly indicate that the assessee has ind....
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....1. it was held that during the year 1970-71 (pertaining to the assessment year 1971-72) between April 6, 1970, and March 20, 1971 the appellant claims to have won in horse race a total amount of Rs. 3, 11, 831/- on 13 occasions out of which ten winnings were from jackpots and three were from treble events. Similarly in the year 1971-72, the appellant won races on two occasions and both times the winning were from a jackpot. These receipts were tested on the touch stone of human probability and it was found that apparent was not real. That it was contrary to statistical theory and experience of the frequencies and probabilities. The exceptional luck enjoyed by the assessee was held to be beyond preponderance of probability. Hence the Hon'ble Apex Court has affirmed the view that it would not be unreasonable to infer that the appellant .had not really participated in any of the races except to the extent of purchasing the winning tickets after the events presumably with unaccounted funds. When the present case is examined on the touch stone of above case law, it is clear that these transactions of the assessee can by no stretch of imagination be considered as investment ....
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.... did not qualify an investment and rather it was an investment made by the assessee was not to derive income but to earn profit. Both the brokers i.e. the broker through whom the assessee purchased the shares and the broker through whom the shares were sold were located at Ko. d the assessee did not have an inkling as to what was going on in the whole transaction except paying a sum of Rs. 65,000/- in cash for the purchase of shares of the two penny stock companies. The authorities found that though the shares were purchased by the assessee at Rs. 5,50 Ps. Per share and Rs. 4/- per share from the two companies in the year 2003, the assessee was able to sell the shares just within a years time at Rs. 486.55 Ps and Rs. 485.65 ps per share. The broker through whom the shares were sold by the assessee did not respond to the assessing officer's letter seeking the names, addresses and the bank accounts of the persons that had purchased the shares sold by the assessee. The authorities have recorded a clear finding of fact that the assessee had indulged in a dubious share transaction meant to account for the undisclosed income in the garb of long term capital gain. While so observing, ....
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....ell artificial rigging in its prices throughout the relevant holding period. It strongly emphasises that assessee had declared impugned LTCG in collusion with various entry operators engaged in raising prices of the relevant scrip's prices. Its case therefore is that the impugned exorbitant price-rise of the above scrip is a stage managed show not liable to be accepted as genuine as per hon'ble apex court's decisions in Sumati Dayal vs. CIT (1995) 80Taxmann 89 / 214 ITR 801(SC) and CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC). We find no merit in Revenue's above arguments. The fact remains that the assessee has successfully demonstrated throughout with the help of evidence on record to have made the impugned sale purchase transactions in the relevant scrip for prescribed mode as per its voluminous documentary evidence (supra). The Revenue fails to pin point even a single material during the course of hearing indicating any of the alleged entry operator taking the assessee's name for providing accommodation entry its by way of the long terms capital gains. We notice in this backdrop of the fact that this tribunal's co-ordinate bench's decision in ITO vs. Shri Surersh Chan....
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....f the transactions. In other words, the overwhelming evidence filed by the assessee remains unchallenged and uncontroverted. The entire conclusions drawn by the revenue authorities, assessee based on a common report of the Director of Investigation, Kolkata, which was general in nature and not specific to any assessee. The assessee was not confronted with any statement or material alleged to be the basis of the report of the Investigation Wing of the department and which were the basis on which conclusion were drawn against the assessee. Copy of the report was also not given. 4. Under the circumstances, in a number of cases this bench of the Tribunal has consistently held that decision in all such cases should be based on evidence and not on generalisation, human probabilities, suspicion, conjectures and surmises. We have in all cases deleted such additions. Some of the cases were detailed finding have been given on this issue are listed below:- Sl.No ITA No.s Name of the assessee Date of order / judgment 1 1236-1237/K/17 ITAT-Kolkata Manish Kumar Baid & Others vs ACIT 18.08.2017 2 443/Kol/2017 Kiran Kothari (HUF) vs.ITO 15.11.2017 3 ....
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.... uphold the findings of the AO. He also relied on the so called "rules of suspicious transaction". No direct material was found to controvert the evidence filed by the assessee, in support of the genuineness of the transactions. In other words, the overwhelming evidence filed by the assessee remains unchallenged and uncontroverted. The entre conclusions drawn by the revenue authorities, are based on a common report of the Director o Investigation, Kolkata, which was general in nature and not specific to any assessee. The assessee was not confronted with any statement or material alleged to be the basis of the report of the Investigation Wing of the department and which were the basis on which conclusion were drawn against the assessee. Copy of the report was also not given. 4. Under the circumstances, in a number of cases this bench of the Tribunal has consistently held that decision in all such cases should be based on evidence and not on generalisaton, human probabilities, suspicion, conjectures an surmises. We have in all cases deleted such additions. Some of the cases were detailed finding which are listed below:- Sl. No. ITA Nos. Name of the Assessee Date of ....
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....tions based on statements, probabilities, human behavior and discovery of the modus operandi adopted in earning alleged bogus LTCG and STCG, that have surfaced during investigations, should guide the authorities in arriving at a conclusion as to whether the claim in genuine or not. An alleged scam might have taken place on LTCG etc. But it has to be established in each case, by the party alleging so, that this assessee in question was part of this scam. The chain of events and the live link of the assessee's action giving her involvement in the scam should be established. The allegation imply that cash was paid by the assessee and in return the assessee received LTCG, which is income exempt from income tax, by way of cheque through Banking channels. This allegation that cash had changed hands, has to be proved with evidence, by the revenue. Evidence gathered by the Director Investigation's office by way of statements recorded etc. has to also be brought on record in each case, when such a statement, evidence etc. is relied upon by the revenue to make any additions. Opportunity of cross examination has to be provided to the assessee, if the AO relies on any statements or third party....
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....y and reasonably raising an interference to that effect. The Hon'ble Supreme Court in the case of Umacharan Shah & Bros. Vs. CIT 37 ITR 271 held that suspicion however strong, cannot take the place of evidence. In this connection we refer to the general view on the topic of conveyance of immovable properties. The rates/sale price are at variance with the circle rates fixed by the Registration authorities of the Government in most cases and the general impression is that cash would have changed hands. The courts have laid down that judicial notice of such notorious facts cannot be taken based on generalisations. Courts of law are bound to go by evidence. 16. We find that the assessing officer as well as the Ld. CIT(A) has been guided by the report of the investigation wing prepared with respect to bogus capital gains transactions. However, we do not find that the assessing officer as well as the Ld. CIT(A), have brought out any part of the investigation wing report in which the assessee has been investigated and /or found to be a part of any arrangement for the purpose of generating bogus long term capital gains. Nothing has been brought on record to show that ....
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....in merchant who might have been indulging in smuggling operations, without an iota of evidence in that behalf. The cancellation of the food grain licence at Nawgachia and the prosecution of the appellant under the Defence of India Rules was also of no consequence inasmuch as the appellant was acquitted of the offence with which it had been charged and its licence also was restored. The mere possibility of the appellant earning considerable amounts in the year under consideration was a pure conjecture on the part of the Income-tax Officer and the fact that the appellant indulged in speculation (in Kalai account) could not legitimately lead to the inference that the profit in a single transaction or in a chain of transactions could exceed the amounts, involved in the high denomination notes,--- this also was a pure conjecture or surmise on the part of the Income-tax Officer. As regards the disclosed volume of business in the year under consideration in the head office and in branches the Income-tax Officer indulged in speculation when he talked of the possibility of the appellant earning a considerable sum as against which it showed a net loss of about Rs. 45,000. The Income-tax Offi....
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....at party. Not providing the said opportunity to crossexamine witnesses, would violate the principles of natural justice. (See also: Union of India v. T.R. Varma, AIR 1957 SC 882; Meenglas TeaEstate v. Workmen, AIR 1963 SC 1719; M/s. KesoramCotton Mills Ltd. v. Gangadhar and Ors. ,AIR 1964 SC708; New India Assurance Co. Ltd. v. Nusli Neville Wadia and Anr. AIR 2008 SC 876; Rachpal Singh and Ors. v. Gurmit Singh and Ors. AIR 2009 SC 2448;Biecco Lawrie and Anr. v. State of West Bengal and Anr. AIR 2010 SC 142; and State of Uttar Pradesh v.Saroj Kumar Sinha AIR 2010 SC 3131). 24. In Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944,considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the Assessee had specifically asked to be allowed to cross-examine the representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to cross-examine, would....
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....ave heard Mr. Kavin Gulati, learned senior counsel appearing for the Assessee, and Mr. K.Radhakrishnan, learned senior counsel who appeared for the Revenue. 5. According to us, not allowing the Assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the Assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the 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 Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the Assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this p....
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....ctions cannot be proved with the supportive evidence. Here in the case the transactions of the commodity exchanged have not only been explained but also substantiated from the confirmation of the party. Both the parties are confirming the transactions which have been duly supported with the books of accounts and bank transactions. The ld. AR has also submitted the board resolution for the trading of commodity transaction. The broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus. In view of above, we reverse the order of the lower authorities and allow the common grounds of assessee's appeal." [quoted verbatim] This is essentially a finding of the Tribunal on fact. No material has been shown to us who would negate the Tribunal's finding that off market transactions are not prohibited. As regards veracity of the transactions, the Tribunal has come to its conclusion on analysis of relevant materials. That being the position, Tribunal having analyzed the set of facts in coming to its finding, we do not think there is any scope of interference with the order of the Tribunal in exercise of our jurisdiction under Section 260A of ....
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.....1: "In the light of the documents stated i.e. (I to xiv) in Para 6(supra) we find that there is absolutely no adverse material to implicate the assessee to have entered gamut of unfounded/unwarranted allegations leveled by the AO against the assessee, which in our considered opinion has no legs to stand and therefore has to fall. We take note that the ld. DR could not controvert the facts supported with material evidences which are on record and could only rely on the orders of the AO/CIT (A). We note that in the absence of material/evidence the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore also fail. At the cost of repetition, we note that the assessee had furnished all relevant evidence in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. These evidences were neither found by the AO nor by the ld. CIT (A) to be false or fictitious or bogus. The facts of the case and the evidence in support of the evidence clearly support the claim of the assessee that the transactions o....
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.... that suspicion how so ever strong, cannot partake the character of legal evidence. It further held as follows: "We note that the ld. AR cited plethora of the case laws to bolster his claim which are not being repeated again since it has already been incorporated in the submissions of the ld. AR (supra) and have been duly considered to arrive at our conclusion. The ld. DR could not bring to our notice any case laws to support the impugned decision of the ld. CIT(A)/AO. In the aforesaid facts and circumstances of the case, we hold that the ld. CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We therefore direct the AO to delete the addition." f) The BENCH "A"OF KOLKATA ITAT in the case of SHALEEN KHEMANI[ITA No.1945/Kol/2014]order dated 18.10.2017 held as under vide Page 24 Para 9.3: "We therefore hold that there is absolutely no adverse material to implicate the assessee to the entire gamut of unwarranted allegations leveled by the ld AO against the assessee, which in our considered opinion, has no legs to stand in the eyes of law. We find that the ....
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.... transaction entered by the assessee was genuine. Detailed finding recorded by CIT (A) at para 3 to 5 has not been controverted by the department by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the findings of CIT (A)." h) The Hon'ble Punjab and Haryana High Court in the case of VIVEK MEHTA [ITA No. 894 OF2010] order dated 14.11.2011 vide Page 2 Para 3 held as under: "On the basis of the documents produced by the assessee in appeal, the Commissioner of Income Tax (Appeal) recorded a finding of fact that there was a genuine transaction of purchase of shares by the assessee on 16.3.2001 and sale thereof on 21.3.2002. The transactions of sale and purchase were as per the valuation prevalent in the Stocks Exchange. Such finding of fact has been recorded on the basis of evidence produced on record. The Tribunal has affirmed such finding. Such finding of fact is sought to be disputed in the present appeal. We do not find that the finding of fact recorded by the Commissioner of Income Tax in appeal, gives give rise to any question(s) of law as sought to be raised in the present appeal. Hence, the present appeal....
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....from the case file. We therefore adopt the above detailed reasoning mutatis mutandis to delete the impugned addition of unexplained LTCG." 4. We adopt the above detailed reasoning mutatis mutandis to delete the impugned addition of Rs.3,26,63,032/- made in assessment order as affirmed in lower appellate proceedings. The former assessee succeeds in appeal ITA No.2275/Kol/2018. 5. Coming to latter two appeal(s) filed at the Revenue's behest (supra), there is no dispute that the Assessing Officer had adopted identical reasoning in disallowing the losses in issue to the tune of Rs.78,25,188/- and Rs.1,44,20,606/-; respectively after alleging holding same to be bogus entries. The CIT(A)'s findings reversing the said identical addition read as follows: "I have considered the submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the materials available on record before the assessing officer during the assessment proceedings. The facts of the case are that the AO in treating the share trading loss of sum of Rs. 78,25,188/- as bogus in nature. The appellant is a public limited company engaged in the business of No....
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....lted in profits as well as losses also, So, it's a regular business activity of the appellant company, The appellant filed complete details of entire share transaction including those mentioned herein above before the AO, Such details included Statement of quantity of shares purchased and sold of each scrip, scrip wise profit and loss earned during the relevant year, details of purchase and sale of Tuni Textile Mills Ltd and Blue Circle Services Ltd along with Contract Notes received from respective Stock Exchange including settlement number, demat statement (issued by the Depository participant) showing inward and outward .movement in such scripts, Copies of bank statements were also furnished to substantiate the payments made and payments received in respect of trading of shares of these scripts and an explanation was also filed vide letter dated 15,03,2016 explaining as to why no disallowance of share loss should be made by the AO, The AR further submitted that the scripts were not suspended by SEBI either at the time of transaction entered by the appellant or thereafter. There is no denial of any of the transaction of either purchase or sale by the stock exchanges where the....
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....take the place of proof. I find that the AO did not discharge the burden which had shifted on him and had just mechanically adhered to disallow the loss on the basis of general report of the investigation wing, claimed by the appellant without rebutting any of the submissions of the appellant. The Assessing Officer had not dealt with the specific facts of the case. Merely making certain observations on the basis of assumptions and drawing an adverse inference thereon, without any acceptable evidence on record. I find that in the present case indulged in suspicions, conjectures and surmises and acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, or the finding was, in other words, is entitled to sustain. I find that the AO disallowed the loss of Rs. 78,25,188/- suffered by the assessee company solely on the basis of the information of the Investigation wing without making any independent enquiry in respect of the assessee company's transactions of purchase and sale of shares of the two companies viz. ....
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....t that the consideration for purchase and sale of those shares have been paid or received through banking channels and copies of bank statements have also been submitted. It further appeared that on purchase of these shares the delivery was taken in Demat account and similarly when the shares were sold, the delivery to the respective brokers have also been given through Demat account. The copy of the Dernat account was also submitted during the assessment proceeding and the same has also been filed during the appellate proceeding (PB page-267 to 270). The Assessing Officer had not brought anything on record to prove that there was any connivance between the assessee and the share brokers. The Assessing Officer himself had not brought anything on record to prove that the transactions of purchase and sale of the shares in which the assessee had suffered the loss were not genuine transactions. The appellate had submitted the complete documentary evidences to prove his transactions of purchase and sale of those shares and the Assessing Officer could not prove that the evidence submitted by the assessee was either false or fictitious. The AR of the appellate also place....