TaxTMI 
TaxTMI 
2017 (10) TMI 1413
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....59/Mum/2010, challenging the confirmation of addition of Rs. 69,07,803/- made by assessment u/s 153A of the Act on the ground that no incriminating material was found or seized during the course of search reflecting undisclosed income. It was also pleaded that no notice u/s 143(2) of the Act was ever served upon/given to the assessee within the stipulated period. The Bench asked the Ld. DR whether any notice u/s 143(2) of the Act was given to the assessee. The Ld. DR after going through the record fairly admitted that no notice u/s 143(2) was given to the assessee, as is apparent from the assessment order. Considering the decision of the Special Bench (supra) and the decision in the case of NTPC Ltd.(supra) from Hon'ble Apex Court, we admit the legal ground raised by the assessee. Assessee has also filed written submissions, copy given to the Ld. DR and such submissions are kept on record. 2. The assessee, before us, has strongly contended that no notice u/s 143(2) of the Act was ever served upon the assessee. This factual matrix was fairly accepted by the Ld. DR, therefore, in the light of this admission, we shall examine the legality of assessment and consequent addition u/s....
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....riod prescribed for issuance of notice u/s 143(2) had already expired. The relevant extract of the provision of section 153A of the Act is reproduced hereunder for ready reference and analysis:- "153A. Assessment in case of search or requisition. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years ; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reasse....
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....ent u./s 143(3) of the Income Tax Act, 1961 (twelve months from the end of the month in which the return is furnished 31/08/2006 5. Status of Assessment date of search Concluded/Not Pending 2.3. From the above chart given it is clear that the assessee filed the original return on 12/08/2005, therefore, on the date of search i.e. on 18/01/2007 time limit for issue of notice u/s. 143(2) of the Act had expired. Therefore, there was no assessment pending in the case of assessee for the year under consideration on date of search and in such a case there was no question of abatement. Thus, Assessing Officer can make the addition only on the basis of incriminating material found during the course of search. In case of assessee there was no such incriminating material or evidence found during the course of search in order to support of the addition and the alleged addition was merely based upon the statement of one of the directors of M/s. DPS Shares and Securities Pvt. Ltd. from whom purchase transactions were made. However, there was no incriminating material or evidence was found during search. The decision of the Tribunal in the case of Gurinder Singh Baba vs DCIT 28 taxman.com 32....
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....2003 and on satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income for six years immediately preceding the year search. The Special Bench further held that in case assessment has abated, the AO retains the original jurisdiction as well as jurisdiction under section 153A for which assessment shall be made for each assessment year separately. Thus in case where assessment has abated the AO can make addition in the assessment, even if no incriminating material has been found But in other case the Special Bench held that the assessment under section 153A can be made on the basis of incriminating material which in the context of relevant provisions means books of account and other document found in the course of search but not produced in the course of original assessment and undisclosed income or property disclosed during the course of search. In the present case, the assessment had been completed under summary scheme under section 143(1) and time limit for issue of notice under section 143(2) had expired on the date of search. Therefore, there was no assessment pen dine in the case and in such a case there....
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....second proviso to sub-section (1) is not applicable that the Division Bench was required to express a specific opinion. The provision deals with those cases where assessment or reassessment, if any, relating to the assessment years falling within the period of six assessment years referred to in sub-section (1) of section 153A were pending. If they were pending on the date of the initiation of the search under section 132 or making of requisition under section 132A, as the case may be, they abate. It is only pending proceedings that would abate and not where there are orders made of assessment or reassessment and which are in force on the date of initiation of the search or making of the requisition. As that specific argument was canvassed and dealt with by the Division Bench and that is how it was called upon to interpret section 153A of the IT Act, then, each of the above conclusions rendered by the Division Bench would bind us. 30. Even otherwise, we agree with the Division Bench when it observes as above with regard to the ambit and scope of the powers conferred under section 153A of the Act. Since we are not required to trace out the history and we can do nothing better than....
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....material found as a result of search." (II) Identically, the Tribunal relying upon the decision/s, in the case of Shri Govind Agarwal v ACTT in ITA No 3389/M/2011 dated 10.01.2014 (1TAT, Mumbai) has held as under: "6. During the proceedings before us, Shri Devendra Mehta, Id Counsel for the assessee raised the above mentioned grounds and questioning the additions and the validity of the assessment u/s 153A of the Act. In this regard, Ld Counsel for the assessee submitted various arguments before us, which are common to the ones already mentioned in detail and adjudicated by us in connection with the appeals filed in the case of Shri Govind Agarwal vs. ACTT vide ITA Nos.3389/M/2011 (AY: 2002-2003) and ITA No. 3390/M/2011 (AY: 2004-2005) vide order dated 10.01.2014. For the sake of completeness of this order, relevant portions of the said order of the Tribunal (supra) are reproduced here under: .......... 17. Rajasthan High Court judgment in the case of Jai Steel (India) (supra), vide para 18, it is categorically mentioned that "the requirement of assessment or reassessment under the said section (153A) has to be read in the context of sections 132 or 132A of the Act, inas....
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....re was certain income belonging to the assessee, which had not been disclosed to the department in the impugned assessment years. Since the search was on the new management, the assessee company became the person other then the person searched. In these circumstances, issue of notice u/s 153C and assessment to be framed under this provision is imperative, as the provision is non obstante. In these circumstances, the following have to be taken into consideration are a) whether there is any incriminating material, indicating income not declared before the revenue authorities and b) whether the assessment in any assessment years or any assessment year in which notice u/s 153C is pending. If the answer to both these questions are in the negative then the assessment to be framed shall be as per the ratio laid down in the case of Special Bench decision in the All Cargo and Delhi High Court in the case of Anil Kumar Bhatia. 20. It would be worth mentioning that even in the case of Pratibha Industries (supra), as quoted by the DR, the ratio laid down is the validity of issue of notice u/s 153A and assessment to be framed u/s 143(3)/153A but it has also been specified therein, that if....
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....otal income under section 153A read with 143(3) ". (V) Similar view was taken by the Tribunal in the case of Neeta Doshi & Manisha Doshi in ITA No 439 and 441/[If12010 (Page No. 355-371 of the Paper book-H) dated 30/11/2015. Identically, the Tribunal in the case of Zeenat P. Sanghavi vs DCIT in ITA No. 8026/Mum/2010 (Page No. 372-393 of the Paper Book-II) vide its order dated 19/12/2014 and also in the case of Jignesh P. Shah vs DCIT in ITA No 1553 & 3173/M/2010, vide order dated 13/02/2015. (Page No 394-405 of the Paper Book-I1) took similar view. The Hon'ble Calcutta High Court in LMJ International Ltd. Vs. DCIT (2008) 119 TTJ (Kol) 214 (Page No 406-418 of the Paper Book- I1): Held that where nothing incriminating is found in the course of search relating to any assessment years, the assessments for such years cannot be disturbed; items of regular assessment cannot be added back in the proceedings under s. 153C when no incriminating documents were found in respect of the disallowed amounts in search proceedings. It is also noted that the Tribunal in the case of husband (Shri Brijesh D. Shah) of the present assessee on identical issue, vide order dated 03/02/2016 ITA Nos. 141....
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.....12.08 by a consolidated Asstt. Order for Asstt. Years 2001-02 to 2007- 08, wherein addition was made on account of sale proceeds of shares u/s.68 of I.T. Act. 6. It was argued by Ld. A.R. that the entire assessment for all the years under appeal passed under section 153A in the assessee's case is ultravires the provisions of the said section. The Ld. A.R. submitted that a bare perusal of section 153A makes it clear that it applies to a person in whose case a search is initiated u/s 132 of the Act, or whose books of account, other documents or any assets are requisitioned u/s 132A after 31.05.2003. Section 153A provides that where a search is initiated u/s 132 the Assessing Officer shall "assess or reassess the total income of six assessment years immediately preceding the assessment year" relevant to the previous year in which the search is conducted or requisition is made. The 1st Proviso states that the Assessing Officer shall "assess or reassess the total income in respect of each assessment year falling within such six assessment years" while the 2nd Proviso states that the assessment or reassessment relating to the said six assessment years "pending" on the date of initiati....
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.... the legality and validity of the order of the Commissioner under section 263 of the IT Act. Had that been the case, the Division Bench was not required to trace out the history of section 153A of the IT Act and the power that is conferred thereunder. When the Revenue argued before the Division Bench that the power under sect ion 153A can he invoked and exercised even in cases where the second proviso to sub-sect ion (1) is not applicable that the Division Bench was required to express a specific opinion. The provision deals with those cases where assessment or reassessment, if any relating to the assessment years falling within the period of six assessment years referred to in subsection (1) of sect ion 153A were pending. I f they were pending on the date of the initiation of the search under section 132 or making of' requisition under section 132A, as the case may be, they abate. It is only pending proceedings that wouldabate and not where the reare orders made of assessment or reassessment and which are in force on the date of initiation of the search or making of the requisition. As that specific argument was canvassed and dealt with by the Division Bench and that is how it....
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....urisdiction under section 153A for which assessment shall be made for each assessment year separately. Thus in case where assessment has abated the AO can make addition in the assessment, even if no incriminating material has been found. But in other case the assessment under section 153A can be made on the basis of incriminating material which in the context of relevant provisions means book of account and other document found in the course of search but not produced in the course of original assessment and undisclosed income or property disclosed during the course of search. In the present case, the assessment had been completed under summary scheme under section 143(1) and time limit for issue of notice under section 143(2) had expired on the date of search. Therefore, there was no assessment pending in the case and in such a case there was no question of abatement. Therefore, addition could be made only on the basis of incriminating material found during search. 10. Reliance was also placed on the decision of co-ordinate bench in the case of "Pruthvi Industries 141 ITD 151, V.R. Machine Tools Pvt. Ltd. in ITA No.4174 to 4177/M/2013, Zeenat P. Sanghavi in ITA No.8026/M/2010 or....
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....t was advanced for the benefit of the assessee by using the two forms as conduces and the said amount was rightly assessed as deemed dividend in the hands of the assessee in block assessment. 13. Reliance was also placed on the decision of the ITAT Delhi Bench in case of Rubber Enterprises Pvt. Ltd. 88 ITD 95 wherein it was held that onus of proof that commission paid was genuine, the assessee should miserably failed to demonstrate that services were rendered to it and failed to discharge onus, therefore not entitled to deduction to commission paid. Reliance was also placed on the decision of Rajesh Jhaveri Stock Brokers Pvt. Ltd. in support of the proposition that intimation under section 143(1)(a) cannot be treated an order by issuing and there being no issue under section 143(1)(a), the question of change of opinion does not arise. The Ld. D.R. also relied on the decision of the Hon'ble Supreme Court in the case of Calcutta Knitwears 43 taxman.com 446, Sujit Singh Chavra order dated 25.10.96. 14. The Ld. D.R. also has drawn our attention to the budget speech of Finance Minister explaining the provisions of Finance Bill, 2003 and also Departmental Circular No.7 of 2003 dated ....
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....ial was found during the course of search, the additions so made were not justified. Our view is also supported by the decision of coordinate bench (Bombay) in case of Shri Gurinder Singh Bawa (supra), Pruthvi Industries (supra), V.R.Machine Tools Pvt. Ltd. (supra) and in the case of Zeenat P. Sanghavi (supra), as discussed above. 16. In view of above discussion, since no incriminating material was found during the course of search, the addition made under section 153A, when the assessment was not pending, was not justified. 17. As we have decided the legal issue in favour of the assessee, we are not going into merits of the additions so made. 18. In the result, all the appeals of the assessee are hereby allowed." 2.7. We note that the Tribunal in the case of husband of the assessee, which is also part of the same search and seizure operation u/s 132(1) of the Act and that too on identical facts/issue clearly held that no incriminating material was found during the course of search, consequently, the addition made u/s 153A of the Act, when the assessment was not pending, is not justified. The Ld. DR did not dispute this factual matrix. Applying the ratio/principle laid down ....
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....aid decisions, the assessee filed appeal before the First Appellate Authority, wherein, the additions were confirmed as unexplained cash credit u/s 68 of the Act and the addition of Rs. 65,78,860/- (Assessment Year 2005-06) and Rs. 15,23,130/- (Assessment Year 2006-07) on account of alleged bogus long term capital gains on the sale of shares of Robinson Impex Pvt. Ltd., it is noted that the assessee challenged the additions before the Ld. First Appellate Authority under different section, whereas, the Ld. Assessing Officer made addition of the aforementioned amounts and the First Appellate Authority confirmed the same as unexplained cash credit u/s 68 of the Act. No cross objection or cross appeal has been filed by the Revenue against confirmation of additions under different section by the First Appellate Authority. The whole issue revolves around whether, the impugned amounts of Rs. 65,78,860/- (Assessment Year 2005-06) and Rs. 15,23,130 (Assessment Year 2006-07), being sale proceeds of shares of M/s Robinson Impex Ltd. can be treated as unexplained cash credit u/s 68 of the Act. The assessee purchased 50000 shares of M/s Robinson World Wide Trade Ltd. (formerly known as M/s Robi....
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....are available at pages 132 to 133 of the paper book. It was also asked by the Bench from the ld. counsel for the assessee whether all these documents were made available to the ld. Assessing Officer/Ld. Commissioner of Income Tax (Appeal). It was specifically explained that these documents were very much made available before both the authorities. It was also explained that the assessee had D-mat account with Oriental Bank of Commerce (formerly Global Trust Bank) with client ID No.80055254 in which these shares were dematerialized on 21/09/2004 for which our attention was invited to copy of the De-mat statement showing dematerialization of 50000 shares of M/s Robinson Impex India Ltd. and sale through M/s Pruthvi Brokers and Shares Holdings Pvt. Ltd. during Financial Year 2005-06 (pages 135 to 138 of the paper book). It is noted that out of these 50000 shares (purchase in Financial Year 2003-04) 43000 shares were sold on different dates during relevant Financial Year 2004-05 and balance 7000 shares were sold on different dates during Financial Year 2005-06 relevant to Assessment Year 2006-07. All these shares (50000) were sold through M/s Pruthvi Brokers and Shares Holdings Pvt. Lt....
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....vi Brokers and Shares Holdings Pvt. Ltd and confirmation of sale from the broker are available at pages 138.16 to 138.17 (Assessment Year 2005-06) and 138.22 to 138.25 (Assessment Year 2006-07) of the paper book. The pool account of M/s Pruthvi Brokers and Shares Holdings Pvt. Ltd. having client ID No.80055254 with Oriental Bank of Commerce, showing delivery of shares of M/s Robinson Impex Ltd. to the pool account and subsequently delivery of shares from this pool account to Bombay Stock Exchange on sale of shares is available at pages 141 to 152 (Assessment Year 2005-06) and 167 to 171 (Assessment Year 2006-07) is available in the paper book. The relevant copies of trade files received by M/s Pruthvi Brokers and Shares Holdings Pvt. Ltd., from BSE, for the settlement period confirming the sale transactions of M/s Robinson Impex Ltd. under client Code No.D003 are available at pages 153 to 166 (Assessment Year 2005-06) and 172 to 175 (Assessment Year 2006-07). All these evidences clearly fortifies the claim of the assessee regarding genuineness of sale transaction. As explained by the ld. counsel for the assessee, these documents were duly made available to Ld. Assessing Offic....
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....ket transactions (Para 10.2.4 of the Assessment Order) VI. Enquiries were conducted by issuing notice u/s 133(6) of the Act with the purchase broker. (parts 9 of the Assessment Order). No inquiry was however made in the case of sales broker M/s. Pruthvi Brokers & Shareholdings Pvt. Ltd. VII. With regards to the alleged commission at 5 percent, the Assessing Officer relied on the decision of Sumati Dayal reported at 214 ITR 801 to state that it is apparent that when the assessee has obtained artificial capital gain he would have to pay some sort of compensation to the operators since the operators have carried out this illegal activity at a large scale. Further, reliance was placed on the order of the CIT(A) in the case of Shri Ashok Mehta wherein the CIT(A) had confirmed payment of commission at the rate of 5 percent. (Para 10.2.5 of the Assessment Order). 3.4. On appeal, before the Ld. Commissioner of Income Tax (Appeal), the facts were considered and broadly, following conclusion was arrived at by the First Appellate Authority. I. The Ld. CIT(A) has discussed the modus operandi adopted by operators in general for fabricating share transactions resulting in artificial/bogus....
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....inistered on me and the consequences of giving a false statement has been explained to me. Q. 2 What are your sources of income? ANs: Stock Brokerage. Q.3 Please explain it in detail. Ans. My card is suspended by BSE, I have taken NSE terminal-ship from one of the NSE broker, who charges me 1.5% brokerage, in return, I charge my various clients 3.0%. Q. 4 Please give the name of the broker for whom you are doing trading business. Ans. Excel Mercantile Private Ltd. He is a NSE broker. Q. 5 Since when you have started this brokerage business? Ans. I started this in June, 2006. Before that I used to trade on my terminal for various clients. Q. 6 Other than the so called brokerage business done by you, have you ever undertook any other type of business in shares in any other manner. if so, please described in details. Ans. Apart from this for the year 2003-04 and 2004-05, we had issued off-market purchase bills in the year 05-06. Q. 7 To whom for and in what scrips you had been indulging in off-market operations? Ans. Mr. Naresh Jain & Naresh Saboo having office at Blue Moon Chambers, N M Road, Fort, Mumbai - 400001. On knowing that we were in financial crunch a....
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..../s. Robinson Worldwide Ltd around 40 lac shares, and in Fasttrack Entertainment around 8 - 10 lac shares. Q. 14 Have you maintained any register for the above operation? Ans. We have maintained the details in computer. I am submitting herewith a hard and soft copy of the documents/data for your perusal. Q. 15 Had you been accepting or paying cash regarding the above transactions from anybody? Ans. I have not accepted or paid any cash regarding the whole operation from anybody, except for the commission @ one paise per share, in cash from Shri Naresh Saboo and the same amount of one paise per share was received by us from Mr. Sirish C. Shah s/o. Mr. Chandulal Shah. Q. 16 From the data furnished by you, it is seen that you have given quantity of shares and rate only. However, no information is available about the sales. Please explain the same. Ans. As stated earlier, my work was limited to the extent of issuing of purchase bill as per the requirement of Shri Naresh Saboo to the ultimate beneficiaries, who are known only to Shri Naresh Sabo°. Jam not aware, at what rate and when the ultimate beneficiaries have sold these shares. Hence these data are not available with....
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....the document s were produced and in these circumstances, deleted the additions. No fault can be found with this approach of the Tribunal. 7. In so far as other assesses are concerned, it is pointed out that the documentary evidence was available before the A. 0. but the A. 0. and CIT(A) have not considered the same and the matter has been remanded back for reconsideration. 8. After hearing the learned counsel, we are of the opinion that the order of the Tribunal cannot be sustained, in the first instance apart from the retracted statement of 21.1.2004, subsequent statement made on 25.3.2004 has not been considered Secondly, there was documentary evidence on record The A. 0. while considering whether the retraction was under duress or coercion had also to consider the genuineness of the documents which were produced as this is documentary evidence. The test of evidentiary value of the oral evidence and the documentary evidence has to be borne in mind The A.O. will have to comply with the settled principle of law. Documentary evidence ifgenuine must prevail over the oral statement. We however, do not propose to go into these issue as they have not been considered or answered. We ....
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....das Vs. DCIT in ITA No. 5021/Muni196 (Page Nos 473-498 of the Paper Book -II) rendered under somewhat similar circumstances. In the said case, the assessee Sri Bhagwandas Gordhandas (BG), proprietor of M/s. Bhagwandas Gordhandas (MBG) was engaged in the business of share broking, share jobbing and trading in shares. A search was conducted in the case of a broker M/s. T.H. Vakil (MTHV) in August 1992. During that search, Sri Rajcn C. Vakil (RCV), prop of MTHV admitted about transferring of hawala losses to a number of share brokers, including the assessee-assessee. Relying on the admission/ statement of RCV, the A.0 treated nine transactions of the assessee with MTHV to be non-genuine and meant simply for transferring fictitious speculation losses aggregating to Rs. 59,41,5001- to the assessee. Given the aforesaid facts, the Hon'ble Tribunal at para 27 of the order ruled as under: " ....the deponent or declarant is himself tainted in as much as he himself is involved in the transactions and his above statement partakes the nature of a selfexplanatory statement In the circumstances an important characteristic, so essential for reliability of statement of the deponent, of being ....
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....ase, no question of cross-examination of the broker arises when there is no specific statement with regards to the assessee. 3.12. It is further noted that the alleged crossexamination as held was not conducted in context of the assessee. During the course of cross-examination proceedings, the purchase documents which have been stated to be accommodation bills pertain to Shri Brijesh D. Shah and which do not belong to the assessee. The relevant extract of said statement is extracted hereunder: "Q. 5 I am showing you the contract note and bill for purchase of shares of Robinson Impex issued by your company to Shri Brijesh Shah and Sint. Pratiksha Shah, Late Shri Shreevallabh Damani and Smt. Saroj Devi Damani, For e.g. bills as under: Bill date Name of the Party Quantity Amount Bought/Sold 04/04/03 Brijesh D. Shah 79500 120840 Bought This contract note/bill is in the name of Shri Brijesh Shah, issued by your company M/s. DPS Shares & Securities P. Ltd. Please confirm whether you have issued this and who has signed the said contract note/bill. Whether he is authorized to sign. Ans. This bill and contract note are given by our company to Brijesh Sh....
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.... 2011 with analogous case Assessing Officer himself, it is clear that after getting that enquiry report, the SEBI prima facie found involvement of some of the share brokers in unfair trade practices. Even in a case where the share broker was found involved in unfair trade practice and was involved in lowering and rising of the share price, and any person, who himself is not involved in that type of transaction, ifpurchased the share from that broker innocently and bonajIdely and if he show his bonaflde in transaction by showing relevant material, facts and circumstances and documents, then merely on the basis of the reason that share broker was involved in dealing in the share of a particular company in collusion with others or in the manner of unfair trade practices against the norms of SE. B. I and Stock Exchange, then merely because of that fact a person who bonafidely entered into share transaction of that company through such broker then only by mere assumption such transactions cannot be held to be a shame transaction. Fact of tinted broker nay be relevant for suspicion but it alone necessarily does lead to conclusion of all transaction of that broker as tinted. In such circu....
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.... Later on assessee lodged a demat request with Action Financial Services (India) Ltd. for demat of 15500 shares of M/s Robinson Worldwide Trade Ltd and copy of that request is available at page 46. The demat account statement of the assessee with Action Financial Services (India) Ltd. shows that 15500 shares have been dematerialised. We fail to understand how the shares were actually transferred in physical form and later on dematerialised and how this whole process can be called bogus. This cannot be called bogus unless the connivance of M/s Robinson Worldwide Trade Ltd and Action Financial Services (India) Ltd. is also alleged and proved. But no enquiry seems to have been conducted with these entities. Ultimately, the shares have been sold through Anugrah Stock and Broking Pvt. Ltd. on various dates as under: Date Quantity 09-12-2004 3000 13-12- 2004 3000 04-01- 2005 6000 o6-01-2005 3500 The contract notes for the above sales are placed in the paper book at pages 48 to 55. The above sales have been reflected in the later demat account with Action Financial Services (India) Ltd, copy of which is at pages 57 and 58 of the paper book. From the above it is clear that assessee has pro....
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....PS Shares and Securities Private Limited which are placed at paper book page 2 7-28. The Ld. Counsel stated before us that the speculative profit of Rs. 13168.67 earned by the assessee was duly declared and disclosed to the Revenue and offered for taxation by the assessee in the return of income filed with the Revenue which is placed at paper book page 42-46 for the assessment year 2004-05. The id. Counsel stated before us that purchase of 10000shares of Robinson impex (India) Limited were duly declared and disclosed to the Revenue in the return of income filed with the Revenue for financial year 2 003- 04 (assessment year 2004-05) which is placed at page 42-46 of paper book. The said 10000 shares of Robinson Impex (India) Limited were dematted in the month of June 2004 in favour of the assessee which is placed at page 32 of paper book The Id. Counsel stated that the transactions of sale and purchase of shares are genuine although there are discrepancies in trade log with BSE at the time of purchase as detailed by A 0 in the assessment order which is a mistake of broker. The id. Counsel stated that the sale of 10000 Ro bins on Impe x Ind ia Limi t ed wa s a l s o und e r ta k en th....
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....f the Tribunal in ITO vs. Aarti Alittal reported, (2013) 37 CCH 0227 (Hyd. Trib.) (Page No 541-571 of the Paperbook-II), held as under: "In consonance with the fundamental principle that there cannot be a sale without a purchase, if the purchase of shares by the assessees is disbelieved, there cannot be consequent sale of the said shares by the assessee. Therefore, the fact of the purchases cannot be doubted, since the same ultimately resulted in conversion of shares into electronic form and credit of the same in the D-MAT account. Once it is credited to the D-MAT account the sales are effected through the floor of the stock exchange. The AO has not brought out anything to even remotely suggest that the sale transactions were arranged by the assessee. There is no mention in the entire order about the identity of the party who has purchased the same through electronic stock exchange, the nexus between the assessees and the said party could not be established. The most crucial aspect which could be considered as incriminating in such transactions may relate to a case where compensatory payments are made by the seller to the buyer. No evidence has been brought on record that the ass....
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.... any adverse inference against the assessees to the effect that the transactions are not genuine. Similarly, even the opening of D-MA T accounts at Calcutta, a remote place may give rise to a suspicion, but the same cannot lead to any adverse inference against the assessee. In course of hearing, the assessee 's had produced its books, there is no finding in the assessment order that payments were not made to the brokers similarly there is no observation in the order that the sales were arranged between the assessee 's and the buyer. In the absence of any cogent finding by the AO the observation merely raises some suspicion but this suspicion cannot take the place of proof Even with regard to the enquiry got conducted by the assessing officer through the DOT Calcutta, which revealed that most of the brokers and the companies were not traceable, the CJT(A) is correct in concluding that mere failure to trace the brokers and companies cannot be held as fatal to the transaction of both purchase and sale, when the details of which have been duly explained by the assessees. The assessee, in our considered opinion, has duly discharged the onus that lies on it, in establishing the g....
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....he Income-tax Act, 1961, it was for the assessee to explain the nature and source of the sums credited in his books of account and in the instant case, the appellant had allegedly failed to explain the purchases of penny stock and the sales thereof. (iv) Thus, the alleged capital gains of Rs. 65,78,60/- for A,Y. 2005-06 and Rs. 15,23,130 for A.Y. 2006-07 was chargeable to tax u/s 68 of the Income-tax Act, 1961, 3.19. As far as the allegation of penny stock scam, busted by the Investigation Wing is concerned, it is observed that no addition can be made in the hands of the assessee merely on the basis of a general report of the Investigation Wing unless the assessee is proved to be a part of it by bringing tangible evidence on record. In the assessee's case, admittedly no evidence was found during the course of search to prove that the assessee was part of any such alleged scam or that he had booked artificial capital gains. The entire addition in the case of the assessee, case rests merely on the statement of third party. As already discussed above, an uncorroborated & unsubstantiated statement of third party does not have any evidentiary value. Reliance can be placed upon th....
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....n the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year." 3.21. The scope of section 68 was explained by the Hon'ble Allahabad High Court in the case of Anil Rice Mills Vs. CIT (2006) 282 ITR 236 (All) (Page Nos 587-602 of the Paper Book - II)in the following words: "Under section 68, if any sum is found credited in the books of account of the assessee and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not in the opinion of the AO, satisfactory, the sum so credited may be charged to income tax as income of the assessee of that previous year. Therefore what has to be enquired into by the assessing authority is about the nature and source of the deposit. If the explanation with regard to nature and source is found unsatisfactory, only then the amount so credited may be treated as income. Assessee has to prove three conditions (1) Identity of th....
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....d settlement period wherein the BSE has confirmed the sale transaction of M/s. Robinson Impex Ltd under client code D003 (pages 75-94 of the Paper Book). Further, the DeITA mat A/c with Oriental Bank of Commerce (Formerly known as Global Trust Bank) (IN 301071) with Client ID No. 80055254 showing the dematerialization and subsequent sale of 50000 shares of Robinson by the appellant through Pruthvi Brokers & Shareholdings P. Ltd. during A.Y. (pages 134 of the Paper Book) also goes a long way to prove the genuineness of the impugned transactions. Thus, the impugned sale transactions were duly conducted through a recognized stock exchange and also confirmed by the BSE. The sale proceeds were received through M/s. Pruthvi Brokers by way of account payee cheque which were credited in HDFC Bank, Fort Branch A/c No. 0601330003532 (bank statement available at pages 176 to 177 of the Paper Book). Thus, the sale proceeds were also received through regular banking channels. As such, the genuineness of the impugned transactions is proved beyond doubt. The totality of facts clearly establishes that the (i) Identity of M/s. Pruthvi Brokers & Shareholdings Pvt. Ltd (ii) the creditworthiness or ca....
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....w that the earning of speculation profit of Rs. 15,12,490 for A.Y. 2006- 07 and purchase of shares of Robinson for Rs. 76,052/- during F.Y. 2003-04 relevant to A.Y. 2004-05 were bogus only on the basis of an unsubstantiated statement of third party sans any material found in course of search. Various Courts and Tribunals have time and again held in a plethora of cases that power of review is not available to the Assessing Officer under the Act and in the absence of any material change in facts, a different view than taken in earlier years cannot be taken. 3.26. So far as, the statement and subsequent crossexamination of Sri Pratik C. Shah by the assessee and the purchase transactions being off market, the assessee made the following submissions before the Assessing Officer vide letter dated 08/12/2008 reproduced on page 14 of Assessment Order Para No.10: "Your honour has mentioned that the director of Ms. DPS Share & Securities Pvt. Ltd. in their statement on 18.01.2007 stated on Oath that "they have issued only bogus accommodation bills for facilitating capital gain to the ultimate beneficiaries and for which they have not handed over the bills to the beneficiaries. Further no ....
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.... of the Act for the said A.Y. 2004-05 were completed by the AO without making any addition on the said count. The said statement of Shri Pratik C. Shah however, has no relevance to the sale of the impugned shares during F.Y. 2004-05 relevant to A.Y. 2005-06 and F.Y. 2005-06 relevant to AN. 2006-07 through M/s. Pruthvi Brokers & Shareholdings Pvt. Ltd which has been duly confirmed by the BSE and by M/s. Pruthvi Brokers & Shareholdings Pvt. Ltd. Thus, as far as the impugned sale proceeds of Rs. 65,78,860/- for F.Y. 2004-05 relevant to A.Y. 2005-06 and Rs. 15,23,130/- for F.Y. 2005-06 relevant to A.Y. 2006-07 are concerned, both the Assessing Officer and the Ld. CIT(A) have failed to bring on record any material whatsoever to prove that the same did not pertain to sale of shares of M/s. Robinson Impex Ltd through M/s. Pruthvi Brokers & Shareholdings Pvt. Ltd but represented assessee's own undisclosed money. Thus, the assessee having clearly explained the nature and source of the credits in his bank account to the extent of Rs. 65,78,860/- for F.Y. 2004-05 relevant to AN. 2005-06 and Rs. 15,23,130/- for F.Y. 2005-06 relevant to A.Y. 2006-07, no addition in respect of the said amoun....
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....) 26 SOT 30 (Del) (Page Nos. 603-611 of the Paper Book - II) supports the case of the assessee, wherein it was held as under: "Income - Cash credit - Scope and validity of addition u/s 68 - In every case of application of section 68, nature and source of sum found credited have first to be examined - Even though there was enough evidence on record to treat purchase of diamonds as bogus, amounts credited to the account of export sales could not be straightway added u/s 68 where sale consideration was claimed to have been received through banking channels with names and addresses of purchasers who remitted the amount without examining the credit entries and background of purchasers - Though the burden of proof is on assessee, question of discharge thereof is required to be decided on examination and appraisal of material on record." 3.29. Reference can be made to the following case laws wherein under somewhat similar circumstances as in the case of the present assessee, it was consistently held that where the assessee proved the (i) identity of creditor (ii) creditworthiness of creditor (iii) genuineness of transactions, no addition could be made u/s 68 of the Income-tax Act, 1961....
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.... 2005-06, the year under consideration, on 31.12.2007 or thereafter till 31.03.2011, which he has not done." (ii) In another case of Tulip Hotels (P) Ltd. Vs. DCIT (2010) 37 SOT 77 (Mumbai) (TM) it was held as under :- "Revenue has doubted the genuineness merely on the basis of presumption and suspicion ignoring the documentary evidences produced by the assessee, which establish the genuineness of transaction - Assessee has duly established the identity of the creditor, creditworthiness of the creditor and also genuineness of the transaction - Addition made and confirmed by lower authorities under s. 68 are liable to be deleted " The Jodhpur Bench of the Tribunal in ACIT Vs. Chandresh Kumar Maheshwari (2009) 120 TTJ (Jd) 132(Page Nos 640-643 of the Paper Book - II) held as under: "Income - Cash credit - Genuineness of share transaction - Amount claimed by assessee as long-term capital gains on sale of shares disbelieved by AO as not genuine and addition made under s. 68- Not justified in the facts and circumstances of the case - Assessee produced on record share certificate with distinctive numbers issued by CSL, a public limited company - These shares were sold by assessee t....
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....ng & Finance Ltd. (2008) 299 ITR 268 (Del) (Page Nos 707-726 of the Paper Book - 11) held that "A distillation of the precedents yields the following propositions of law in context of s. 68. The assessee has to prima facie prove (1) the identity of the creditor/subscriber (2) the genuineness of the transaction namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the creditor/ subscriber. If relevant details of the address or PAN identity of the creditor/ subscriber are furnished to the Department along with copies of the shareholders register, share application forms, share transfer register etc. it would constitute acceptable proof or acceptable explanation by the assessee. The Department would not be justified in drawing an adverse inference only because the creditor/ subscriber fails or neglects to respond to its notices." Held further that "Assessee - company having received subscription to the public/ rights issues though banking channels and furnished complete details of the shareholders, no addition could be made under s. 68 in the absence of any positive material or evidence to indicate tha....
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....t entered into at the floor of the stock exchange. The coordinate Bench of the Tribunal in the case of Mukesh R. Marolia vs Addl. CIT (2006) 6 SOT 247 (Mum.) order dated 15/12/2005 held as under:- This appeal is filed by the assessee. The relevant assessment year is 2001-02. It is directed against the order passed by the CIT(A)- XV at Mumbai on 24-12-2004 and arises out of the assessment completed under section 143(3) of the Income-tax Act, 1961. 2. The assessee is carrying on the business of manufacturing handkerchief as the proprietor of M/s. Rumal Manufacturing Company. The assessee had filed its return of income for the impugned assessment year for a total income of Rs. 4,28,219 added by an agricultural income of Rs. 6,000. The income returned by the assessee included business income, income from other sources and also long-term capital gains on sale of shares and sale of office premises. 3. The assessee had purchased a residential flat at Colaba, Mumbai during the relevant previous year. The flat was jointly purchased with his wife. Assessee's share in the flat is 70 per cent and the share of wife is 30 per cent. The long-term capital gains declared by the assessee o....
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....de by the assessing authority under section 69. The CIT(A) confirmed the addition upholding the finding of the assessing authority that the purchase of shares was bogus. The main thrust of the CIT(A) to arrive at the above finding was that the share transactions were carried out by the assessee outside the stock exchange and not through any registered broker. The CIT(A) held that the responsibility of the assessee is greater in proving the bona fides of such offmarket transactions. In fact, while arriving at his conclusion, the CIT(A) did not approve the mode of share transactions adopted by the assessee, off the Stock Exchange. The addition was therefore confirmed. As an obvious consequence, the disallowance of claim of deduction under section 54E was also upheld. Regarding the remaining two additions also, the CIT(A) agreed with the assessing authority that the assessee has not proved the bona fides of those amounts. Those two additions also have been confirmed. The first appeal was accordingly dismissed by the CIT(A). The assessee is aggrieved and therefore, the second appeal before us. 6. The grounds raised by the assessee in this appeal read as under : "1. That on the fac....
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....e said sum represented the refund of outstanding loan credit from Rainbow Industries through account payee cheques. 6(b) That the revenue authorities have made the said addition under section 69 of the Act on the alleged ground of lack of evidence of such refund and this Act was arbitrary and uncalled for inasmuch as the transaction was through banking channel and the identity and genuineness of the transaction could have been easily found out. 7. That the Learned CIT(A) fell in error in confirming the addition of Rs. 2,00,000 under section 68 of the Act being the bank deposit in the assessee's minor daughter's bank account on the alleged ground of lack of genuineness and creditworthiness, in spite of the fact that the money was given by assessee's co-brother as gift through cheque issued on Bank of India, Mumbai, confirmation and bank statement of the said co-brother were filed. 8. That the order of the learned CIT(A) is arbitrary, unwarranted, without any merit and bad in law, the same should be quashed and the assessee be given such relief(s) as prayed for." 7. Before proceeding further, it is necessary to discuss in brief, the facts relating to the three add....
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....9. (VI)That the purchase and sale of shares are not reflected in the records of Bombay Stock Exchange. (VII)That assessee had no funds with him for the purchase of the shares. (VIII)That the interconnected Stock Exchange of India has informed that no transactions were carried out by Richmond Securities Pvt. Ltd. in respect of the assessee. (IX)That another Broker Scorpio Management ceased to be a member of the National Stock Exchange with effect from February 20, 1999. (X)That Shri Mukesh Chokshi, Director of Richmond Securities Pvt. Ltd., has made a statement that he had not issued any bill to the assessee; (XI)That the ADIT (Inv.) at Hyderabad has informed that according to M/s. Centil Agro Tech., the assessee had never held any of its shares. (XII)That the assessee did not produce Mr. Sathish stated to be a broker. Even though the assessee has informed that all the payments except that of Rs. 11,55,750 were received from M/s. Richmond Securities Pvt. Ltd. The assessee had also received monies from Rushab Investments and Tripathi Sales Corporation, but the latter two receipts were not disclosed by him. The genuineness of the transactions were not established for the....
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....as that the said amount was outstanding as a loan credit with M/s. Rainbow Industries at Tardeo, Mumbai. It was further explained by the assessee that the said amount was repaid by M/s. Rainbow Industries which was in turn reflected by the fixed deposits. 7.3 The third addition is the amount of Rs. 2 lakhs made under section 68. This amount has been reflected in the accounts of the assessee's minor daughter Miss Zankhana. According to the assessee, the amount was gifted by assessee's co-brother. His explanation was not accepted by the assessing authority as well as the CIT(A). Therefore, the said addition was also confirmed. 8. The above three mentioned additions confirmed by the CIT(A) are the subject-matter of this appeal. We will first consider the addition of Rs. 1,41,08,484. 8.1 Shri S.K. Tulsian, the learned Counsel appearing for the assessee made extensive arguments against the addition. His contentions are summarized below. 8.2 The foremost argument of the learned counsel is that the case of the assessee regarding purchase and sale of shares was fully supported by the details collected in the course of survey conducted by the department in the business premi....
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....isclosed in the return of income filed by the assessee for the assessment years 1999-2000 and 2000-01. That the purchases were made out of the identified and disclosed funds; that the sale of the shares were duly disclosed in the returns filed by the assessee for the assessment year 2001-02; that the persons through whom most of the purchase and sales were transacted had confirmed the transactions with the assessee; that the proceedings from the sale of shares were received by the assessee by account payee cheques and pay orders. The assessee had produced letters from various companies confirming the holding of shares by the assessee during the relevant period. That the purchase and sales of shares were off-market transactions and as such the communications from various Stock Exchanges were wholly irrelevant. 8.6 The learned counsel of the assessee further explained on the facts of the case. He has filed detailed paper book containing such details. The break up of purchase and sale of shares are furnished. The learned counsel submitted that most of the purchase and sale of shares were carried out through Shri Satish Mandovara, Mediator, who is a specialist in off-market trading o....
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.... submitted that in the light of statements made available before the assessing authority it was made clear that the shares were sold through Shri Satish Mandovara who was an Assistant of Shri Mangesh Chokshi, the Director of M/s. Richmond Securities Pvt. Ltd. The sales are supported by the details issued by M/s. Richmond Securities Pvt. Ltd. Payments were issued by cheques. The bank accounts were identified. Shri Mandovara paid the money to the assessee out of the collections made from various jobbers. Even the cheques were issued on behalf of M/s. Richmond Securities Pvt. Ltd. as instructed by Shri Mangesh Chokshi. It was the case that M/s. Scorpio Management Consultancy Pvt. Ltd. also that the identity of the said company as a broker was never doubted. Even though the sales transactions were off-market transactions, they were documented and supported by various evidences. 8.11 Therefore, the learned counsel submitted that there is no basis for sustaining an addition of Rs. 1,41,08,484. 9. Shri R.K. Singh, the learned Commissioner of Income-tax who appeared for the Revenue placed the case of the Revenue in detail before the Bench. He stated that the Assessing Officer has made ....
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....om the concerned parties. Statements given by those parties do really quash the concocted story made out by the assessee. 9.5 The learned Commissioner further contended that the Assessing Officer as well as the CIT(A) have examined the issue in a very exhaustive manner explaining each and every instance of evidence and have passed very speaking orders and have conclusively arrived at a finding that the amount of Rs. 1,41,08,484 stated to be received by the assessee on sale of shares was only bogus and not real. He, therefore, submitted that the addition may be confirmed in the hands of the assessee. 10. We heard both sides in detail and perused rival contentions in the light of the records of the case and the paper book filed by the assessee. In the return of income filed by the assessee for the year under appeal, the purchase of flat at Colaba for a consideration of Rs. 2,06,72,904 was reflected. The assessee's contribution in the purchase of the flat was @ 70 per cent for which the investment amounted to Rs. 1,44,71,033. The source of investment was, among other things, the sale proceeds of shares of Rs. 1,41,08,484. This amount has been questioned by the revenue authorit....
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....ff-market transactions are not permissible. The assessee has stated that the transactions were made with the help of professional mediators who are experts in off-market transactions. 10.4 When the transactions were off-market transactions, there is no relevance in seeking details of share transactions from Stock Exchanges. Such attempts would be futile. Stock Exchanges cannot give details of transactions entered into between the parties outside their floor. Therefore, the reliance placed by the assessing authority on the communications received from the Stock Exchanges that the particulars of share transactions entered into by the assessee were not available in their records, is out of place. There is no evidential value for such reliance placed by the assessing authority. The assessee had made it very clear that the transactions were not concluded on the floor of the Stock Exchange. The matter being so, there is no probative value for the negative replies solicited by the assessing authority from the respective Stock Exchanges. We are of the considered view that the materials collected by the assessing authority from the Stock Exchanges are not valid to dispel or disbelieve the....
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....y the assessing authority more on the ground of presumption than on factual ground. The presumption is so compelling that comparatively a small amount of investment made by the assessee during the previous year period relevant to the assessment years 1999- 2000 and 2000-01 have grown into a very sizable amount ultimately yielding a fabulous sum of Rs. 1,41,08,484 which was used by the assessee for the purchase of the flat at Colaba. The sequence of the events and ultimate realization of money is quite amazing. That itself is a provocation for the Assessing Officer to jump into a conclusion that the transactions were bogus. But, whatever it may be, an assessment has to be completed on the basis of records and materials available before the assessing authority. Personal knowledge and excitement on events, should not lead the Assessing Officer to a state of affairs where salient evidences are over-looked. In the present case, howsoever unbelievable it might be, every transaction of the assessee has been accounted, documented and supported. Even the evidences collected from the concerned parties have been ultimately turned in favour of the assessee. Therefore, it is, very difficult to ....
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....he paper book), there was an opening balance as on 1-4-2000 amounting to Rs. 6,61,063.43. There are also payment entries by cheques for Rs. 1,61,063.43 and Rs. 5 lakhs. This statement of account has been confirmed by the Proprietor of M/s. Rushab Industries. He has also furnished his assessment particulars before the assessing authority. Therefore, in such circumstances, without any further enquiries and collection of evidence, it is not possible for the assessing authority to come to a finding against the assessee. The assessee has explained the availability of cash necessary for making bank deposits with the help of his accounts and account of copies of the other party along with his confirmation. In these circumstances, we find that the addition of Rs. 6,61,063.43 is not justified. Therefore, it is, deleted. 13. The last point is regarding the addition of Rs. 2 lakhs. The assessee has furnished the details of the remittance of the said amount by Shri Ravindra Kumar Tailor who is in New Zealand. He is the co-brother of the assessee. He had issued cheque No. 251788 dated 13-3-2001 drawn on his NRE Account 27622 with Bank of India, Mumbai Central Branch. When the remittance of mo....
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....(the Act) challenges the order dated 23rd August, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respectof Assessment Year 2011-12. 2. Mr. Chhotaray, the learned counsel urges only the following questions of law for our consideration : "(i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that an amount of Rs. 490/ per share received by the respondent assessee constituted share premium of the assessee company? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in disagreeing with invocation of Section 68 of the Act to tax share premium? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in holding that because its subsidiary company has started manufacturing and therefore interest income from fixed deposit is to be charged as business income? Regarding question no.(ii): 1. (a) Before the Tribunal, the Revenue raised a new plea viz. that the so called share premium has also to be judged on the touchstone of Section 68 of the Act which provides for cash credit being charg....
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....orded by the Tribunal was justified. In the present case of the assessee also no incriminating material was found out by the Revenue, the shares were De-mated, the sale was effected at the floor of the Bombay Stock Exchange, the money was received through banking channel, identity of the parties is not in dispute, therefore the addition cannot be affirmed on the basis of the statement of a third party. Thus, the ratio laid down in the aforesaid case and the conclusion arrived at clearly supports the case of the assessee. In another case in CIT vs. Gagandeep Infrastructure Pvt. Ltd. [2017] 394 ITR 680 (Bom), order dated 20.03.2017, wherein on the issue whether the Tribunal was justified in deleting the addition of Rs. 7,53,50,000/- made u/s. 68 of the Act, being share capital/share premium received during the year and the ld. Assessing Officer added the same as unexplained cash credit. The Hon'ble Jurisdictional High Court considering the decision from the Hon'ble Apex court in CIT vs. Lovely Exports P. Ltd. [2009] 319 ITR (Statue 5) (SC), held that it does not entitle the Revenue to add the same to the income of the assessee as unexplained cash credit, further supports the ....
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....is without any basis. In earlier paras of this order, we have decided the issue in favour of the assessee by holding that the addition on account of alleged capital gain on sale of shares was explained one as the sale proceeds were received through banking channel. The observation/allegation that such commission was payble by the assessee at the rate of 5% to 7% of the capital gain amount is without any basis/evidence. The ratio laid down in the decision in Umacharan Shaw and Bros vs. CIT 37 ITR 271 (Page Nos. 225 to 231 of the Paper Book - II)that "suspicion, howsoever strong cannot take the place of legal proof". Further, it is an accepted principle of law that an assessment based on no material at all or based on inadequate material, is bad in law, supports the case of the assessee. Reference can also be made to the following decisions:- a. Dbakeswari Cotton Mills Ltd. Vs. CIT (1954) 26 ITR 775 (SC) b. Raj Mohan Saha Vs. CIT (1964) 52 ITR 231 (Assam) c. CIT Vs. Gokaldas Hukumehand (1943) 11 ITR 462 (Born) d. Ram Datta Sita Ram of Basti (1947) 15 ITR 61 (All) e. Narayan Chandra Baidya Vs. CIT (1951) 20 ITR 287 In earlier paras of this order, we have already elaborated ....
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....R is that, while granting relief to the assessee, the First Appellate Authority ignored the facts, whereas, the ld. counsel for the assessee, defended the order of the Ld. Commissioner of Income Tax (Appeal) in deleting the penalty. 6.1. We have considered the rival submissions and perused the material available on record. It is noted that the First Appellate Authority deleted the penalty because the addition was made merely on the basis of statement of one of the Directors and the broker did not confirmed the purchase. There is uncontroverted finding that the assessee was having consolidated share certificate received from the company and the copies of letter received were filed before the Assessing Officer. This finding of the Ld. Commissioner of Income Tax (Appeal) rather supports the case of the assessee not only on quantum addition but on penalty also. The cases relied upon by the First Appellate Authority, more specifically on page-18 supports the case of the assessee which are not being repeated. The finding of the Ld. Commissioner of Income Tax (Appeal) was not controverted by the Revenue. Therefore, we don't find any infirmity in the order of the First Appellate Authority....