AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 1332
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.... to the grounds taken in these appeals, it would first be relevant to cull out the facts of the case in brief. Search u/s 132 was conducted against the assessee, on 09-04-2015. The original returns of income for Assessment Year [in short 'AY'] 2012-13 & 2013-14 were filed on 31-08-2012 & 31-07-2013. Prior to the date of search, the time limit for issuance of notice u/s 143(2) had expired for both these AYs. Accordingly, AYs 2012-13 & 2013-14 were not pending before AO on the date of search , so it was unabated assessment years as per second proviso u/s 153A (1) of the Act. The original return of income for AY 2014-15 was filed on 31.07.2014 and the time limit for issuance of notice u/s 143(2) had not expired as on the date of search. Accordingly, AY 2014-15 was an abated assessment year. With regard to AY 2015-16, it was pointed out that the return of income for this year was filed only after the date of search. Therefore, except AYs 2012-13 & 2013-14, the other AYs 2014-15 & 2015-16 were abated assessments. 3. The additions/disallowances made in all these AYs were on account of (a) addition on account of receipt of sale consideration of sale of listed shares u/s 68 of the Act, ....
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....efore us in AYs 2012-13 to 2015-16 objecting to the deletion of the additions by the AO u/s 68 & 69C of the Act. In the Cross Objections filed by the assessee for AYs 2012-13 to 2013-14, it has been contended that, since there was no incriminating material found in the course of search at the premises of the assessee, the Ld. CIT(A) had erred in upholding the validity of these unabated assessments. 5. Since the issue raised in the Cross Objections relates to the validity of the additions made in the unabated AYs 2012-13 & 2013-14, we consider it fit to adjudicate them first. It is noted that, the assessee was deriving salary, rental income and income from other sources. Apart from the foregoing, the assessee, being an active investor in shares & securities, had also earned capital gains. It was brought to our notice that, in the course of search conducted u/s 132 of the Act on 09-04-2015, the assessee was not present and therefore the brother of the assessee, Shri Surendra Jiwrajka, had his statement recorded u/s 132(4) of the Act whose relevant extracts has been extensively reproduced at Pages 68 to 72 of the order. Taking us through his statement, the Ld. AR showed to us that,....
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....nisys Software & Holding Industries Ltd and (iii) M/s Wagend Infra Ventures Ltd. He showed us that no question whatsoever was posed in relation to these scrips in the statement given u/s 132(4) of the Act. For the ease of understanding, we consider it necessary to extract the relevant portion of the statement so recorded u/s 132(4) of the Act, which read as follows: "Q.2 Please state who looks after the financial matters of Shri Dilip B Jiwrajka? Ans: In respect to this I confirm that all the financial matters of Shri Dilip B Jiwrajka are looked after by me only. Q.3 Please provide the details of all the LTCG that has been earned by Shri Dilip Jiwrajka by way of sale of shares/securities since 01.04.2008? Ans: Sir, I am submitting the list of all LTCG earned by Shri Dilip Jiwrajka since 01.04.2008 as Annexure A. These details pertain to the period till AY 2014-15. The return for AY 2015-16 has not been filed and the details for the same are under compilation. Q.4 During the course of search proceedings on 10.04.2015 and 11.04.2015, you had given a statement on oath u/s 132(4) of the I T Act, 1961 on behalf of Shri Dilip Jiwrajka. I am sh....
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....manipulations were done in the transaction of equity shares of M/s Radford Global Ltd, therefore, to avoid protracted litigation with the department I offer to withdraw the claim of exemption u/s 10(38) of the IT Act made by Shri Dilip Jiwrajka on the sale of the shares of Radford Global Limited. As I had stated during the course of recording of my statement on 11.04.2015, I again submit that Shri Dilip Jiwrajka will withdraw his claim of exemption on the profit of Rs. 9,50,64,684/- made on sale of shares of Radford Global Limited during AY 2014-15 and will pay the taxes which would be applicable as per the provisions of I T Act, 1961. I also reiterate that no penal or any such action should be initiated against Shri Dilip Jiwrajka for this offer. Q.17 From the details submitted by you it is seen that Shri Dilip Jiwrajka has claimed exemption u/s 10(38) for the LTCG of Rs. 4,36,08,645/- by way of sale of shares of Shree Shaleen textiles Limited during AY 2014-15. Kindly Confirm Ans. Yes Sir, I confirm that Shri Dilip Jiwrajka has claimed exempt income as LTCG u/s 10(38) on the sale of shares of Shree Shaleen Textiles Limited during AY 2014-15. Q.26 During....
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.... Asianlak Capital and Finance Limited (Global Infratech and Finance Limited), off market purchase of 1,00,000 shares was made on 15.09.2011 from M/s. Sanchita Investments Ltd through M/s. Gungour Suppliers Put Ltd. These shares were credited to the demat account of Shri Dilip Jiwrajka on 20.03.2012. Subsequently, these shares were split in the ratio of 1:10 and these shares were sold during F.Y. 2013-14. Q.36 During the course of recording of statement u/s 132(4) on 11/04/2015, it was bought to your notice that the transactions in the shares Asianlak Capital and Finance Limited (Global Infratech and Finance Limited) are bogus and managed transactions and these shares have been utilized to provide entry of bogus LTCG. In light of the above you are required to explain as to why the transactions in the shares of Asianlak Capital and Finance Limited (Global Infratech and Finance Limited) made by Shri Dilip Jiwrajka should not be treated as penny share transactions. Please explain why the Long Term Capital Gain, claimed to have been earned by Shri Dilip Jiwrajka on sale of shares of Asianlak Capital and Finance Limited (Global Infratech and Finance Limited), should not treated ....
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....rs or their products / profitability / dividend yield. In spite of this, you have advised Shri Dilip Jiwrajka to invest in these shares. No prudent businessman is likely to make an investment of such quantum in such a manner. In view of the above and on the basis of the facts gathered in the course of this search action, the only conclusion that can be drawn is that the entire sequence of events has been made up to obtain entry of bogus LTCG. Please explain as to why such an inference be not drawn in this case. What you have to say in this regard? Ans. Sir, these investments have been made by Shri Dilip Jiwrajka on my advice and these shares have been sold by Shri Dilip Jiwrajka on the stock exchange. I do not wish to comment anything else. Q.58 From the perusal of the working of the long term capital gain in the case of Shri Dilip Jiwrajka for AY 2012-13, it is noted that in AY 2012-13, in KGN Industries Ltd, long term capital gain of Rs.1,66,10,816/- had been shown As per your replies to the above questions you do not know the details you do not know the details of the companies/directors or their products / profitability / dividend yield. In spite of t....
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....Ventures Ltd were not genuine and held that source of sale proceeds of these shares remained unexplained which was accordingly assessed to tax u/s 68 of the Act. The AO further estimated and made addition on account of unexplained commission expenditure @ 7% of the sale proceeds by observing that the assessee would have incurred such expenditure outside the books to accommodate his unaccounted income in the guise of proceeds on sale of listed shares. 7. On appeal, the Ld. CIT(A) observed that the term 'incriminating evidence/material' has not been defined in Section 153A of the Act and therefore it has to be understood in the manner as interpreted by the judicial authorities. According to Ld. CIT(A), if a search is conducted to investigate certain allegations which are found to be correct on analysis of the regular books of accounts seized in the course of search, then the AO is within his power to proceed u/s 153A of the Act. The Ld. CIT(A) observed that the AO had unearthed the modus operandi for certain dubious transactions and listed out unusual activities which was confirmed by the Director of investee company, entry operators etc. in their statements and therefore such sta....
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....ct for it]. And based on these material, the AO issued the show cause notice to the assessee to explain as to why the proceeds derived on sale of shares of M/s Rander Corporation Ltd, M/s Unisys Software & Holding Industries Ltd, M/s Dhenu Buildcon Ltd and M/s Wagend Infra Ventures Ltd should not be treated as his unexplained income of un-abated AY 2012-13 & AY 2013-14. Not being satisfied with the explanation offered, the AO added the same u/s 68 of the Act and also made further addition of unexplained commission expenditure u/s 69C of the Act. 9. The provisions of Section 153A, forming part Chapter XIV of the Act contain special provisions for completing assessments in case of Search conducted u/s 132 or requisitions u/s 132A. These provisions can be invoked only in cases where the Income-tax Department has exercised its extra ordinary powers of conducting search and seizure operations after complying with stringent pre-conditions prescribed in Section 132 of the Act. There is no denial that once a search u/s 132 is conducted against a person then irrespective whether any incriminating material is found, the AO is required proceed against such person for completing the assessm....
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....te of the search shall abate. The total income for such AYs will have to be computed by the Ld AOs as a fresh exercise. The Ld AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The Ld AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Ld AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or re....
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....he Hon'ble Jurisdictional High Court in the case of CIT Vs Gurinder Singh Bawa (386 ITR 483) wherein it was held as follows: "3. For the Assessment Year 2005-06, the respondent-assessee had filed his return of income declaring an income of Rs.9.61 lakhs. The return of income as filed by the respondent- assessee was processed under Section 143(1) of the Act. Admittedly, no notice under Section 143(2) of the Act has been issued. Thereafter on 5 January 2007, a search was conducted on the respondent-assessee under Section 132 of the Act. Consequent thereto, proceedings under Section 153A of the Act were initiated. During the assessment proceedings for A.Y. 2005-06, the Assessing Officer added an amount of Rs.93.72 lakhs (declared as gifts) as being covered by Section 68 of the Act and an amount of Rs.43.67 lakhs (accumulated profits of the lendor) out of Rs.1.5 crores received as loan from one K.P. Developers Pvt. Ltd. as deemed dividend under Section 2(22)(e) of the Act. Undisputedly, respondent-assessee was a shareholder in M/s K.P. Developers (P) Ltd. The aforesaid additions are reflected in an assessment order dated 31 December 2008 passed under Section 143(3) r/w 153....
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....self the issue stands concluded against the revenue by the decision of this Court in Continental Warehousing Corpn. (Nhava Sheva) Ltd. (supra). In the appeal before us, the revenue has made no grievance with regard to the impugned order of the Tribunal holding that in law the proceedings under Section 153A of the Act are without jurisdiction. This in view of the fact that no assessment were pending, so as to abate nor any incriminating evidence was found. The grievance of the revenue is only with regard to finding in the impugned order on the merits of the individual claim regarding gifts and deemed dividend. However once it is not disputed by the revenue that the decision of this Court in Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra) would apply to the present facts and also that there are no assessments pending on the time of the initiation of proceedings under Section 153A of the Act. The occasion to consider the issues raised on merits in the proposed questions becomes academic. 12. Identical view was expressed by the Hon'ble jurisdictional Bombay High Court in the case of CIT Vs SKS Ispat & Power Ltd (398 ITR 584) wherein it was held as follows: "5....
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....ng evidence may also constitute of information, tangible or intangible which suggests or leads to an inference that the assessee is carrying out certain activities outside books of accounts which is not disclosed to the Department. Incriminating material also comprises of document or evidence found in search which demonstrates or proves that what is apparent is not real or what is real is not apparent. In other words, if an assessee has recorded transactions in his books or other documents maintained in the ordinary course then in order to hold the material or evidence found in the course of search to be incriminating in nature, then seized document should lead to conclusion that the entries made in the books of the assessee do not represent true and correct state of affairs. Rather the evidence unearthed or found in the course of search should establish that the real transaction of the assessee was something different than what was recorded in the regular books and therefore the entries in the books did not represent true and correct state of affairs i.e. the assessee has undisclosed income/expense outside the books or that the assessee is conducting income earning activity outsid....
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....on different persons/individuals by other tax officers in some unconnected proceedings. Based on this 'information', search action u/s 132 of the Act was conducted upon the assessee and according to Ld CIT(A), based on analysis of books of accounts, recording of statements etc., certain information came to light which constituted 'incriminating evidence' against the assessee. The Ld. CIT(A) also referred to the third-party statements of the purported entry operators/exit providers as 'incriminating material' qua the assessee. 15. It is noted by us that the 'information' referred to by the Ld. CIT(A) was the inputs received by the Investigating authorities from the SEBI and other Investigation Wings of the Department. The AO has noted at Para 4.3 of the impugned order that the SEBI had passed an interim order dated 19-12-2014 in the matters of the scrip, M/s Radford Global Ltd this scrip (not pertaining to AY 2012-13 & AY 2013-14 ie un-abated assessment years we are dealing with legal issue) and the assessee was found guilty therein of manipulation and rigging of prices on this scrip on stock exchange. Based on these inputs, search action u/s 132 of the Act was conducted upon the....
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....ows that there was no 'inputs' or 'information' received by the Investigating authorities prior to the date of search nor was any incriminating 'information' gathered from the assessee in the course of search. As far as the shares of M/s Dhenu Buildcon Ltd (formerly known as Hingir Rampur Coal Ltd) is concerned, it is noted that although the Investigating officer is noted to have questioned the assessee but in the answers given to Q Nos. 37 & 47, Shri Surendra Jiwrajka (brother of assessee) did not admit of any wrong doing. Also, unlike the questions which were put in relation to the shares of M/s Radford Global Ltd in the backdrop of the inputs received from SEBI, it is noted that the relevant Questions Nos. 37 & 47 posed by the Investigating Officer were general in nature and there was no reference to any 'information' gathered from SEBI or any other Department of Investigation Wing. In fact, it is noted by us, that like Dhenu Buildcon Ltd, similar questions at Q Nos. 48 & 58 were put to the assessee regarding his transactions in the shares of M/s KGN Industries Ltd to which similar replies were furnished by the assessee. Upon enquiry by the Bench, it was gathered that the AO had....
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....o judgment of the Hon'ble Delhi High Court in the case of CIT Vs Best Infrastructure (India) Pvt Ltd (397 ITR 82). In this case along with assessee's search, simultaneous search was also conducted upon Mr. T who admitted to providing accommodation entries to the assessee in form of share application monies, in lieu of cash. Relying on the statement of Mr. T, the AO made additions u/s 68 in the assessments framed u/s 153A for unabated AYs 2005-06 to 2009-10. On appeal the Hon'ble High Court reiterated the settled legal position that unless there is incriminating material qua each of the AYs in which additions are sought to be made, pursuant to search and seizure operation, the assumption of jurisdiction under Section 153A of the Act would be vitiated in law. In view of the aforesaid legal position, the Hon'ble High Court observed that the director of the assessee had admitted undisclosed income only in relation to the year in which search was conducted and no income was admitted in relation to any of the earlier six years. It further observed that no incriminating material was found from the assessee's premises which could justify the additions made u/s 68 of the Act. As regards the....
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.... the relevant instructions dated 10.3.2003 issued by CBDT is reproduced hereunder:- To All Chief Commissioners of Income tax (Cadre Contra) & All Directors General of Income Tax Inv. Sir, Sub:- Confession of additional Income during the course of search & seizureand survey operation - regarding Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search & seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, on confessions during the course of search& seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on' collection of evidence of income which leads to information on what has not been disclosed or is notlikely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search it seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any ac....
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....-13 & 2013-14 have now been rendered academic in nature. We therefore dismiss the same as infructuous. 22. Now we take up the appeals of the Revenue for AYs 2014-15 & 2015-16. The common issues raised by the Revenue in both AYs against the orders of Ld. CIT(A) are, (a) addition on account of receipt of sale consideration of sale of listed shares u/s 68 of the Act, and (b) addition of unaccounted commission u/s 69C of the Act. The Ld. AR pointed out that, the assessment orders passed by the AO for all the AYs 2012-13 to 2015-16 were verbatim same wherein the AO had, inter alia, discussed the transactions conducted by the assessee in seven (7) listed shares, in which the assessee had derived capital gains (both long term and short term). The AO, thereafter, added the proceeds received on the respective sale of such shares as unexplained cash credit u/s 68 of the Act in the respective year in which the transactions in such shares took place, across all these AYs 2012-13 to 2015-16. Therefore, for the purpose of the present discussions, the case of AY 2014-15 is taken as the lead case and our findings and decision therein shall be uniformly followed in AY 2015-16 as well. For A.Y 20....
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....essee on 21-10-2016 for assessment year 2014-15 declaring total income at Rs.3,24,56,530/-. After filing return u/s 153A, the notices u/s 143(2) & 142(1) of the Act were issued from time to time, and the assessee had filed his response thereto, furnishing the details required in the assessment proceedings. The assessee was deriving salary, rental income and income from other sources. Apart from the above, the assessee, being an active investor in shares & securities, had also earned capital gains. 25. The main issues involved in this appeal is in relation to the proceeds received on the sale of certain listed shares, which has been added by the AO to the assessee's income u/s 68 of the Act. Consequently, the AO has also estimated and added unexplained expenditure by way of commission paid for such trades to the assessee's income u/s 69C of the Act. In order to appreciate these issues, it would first be necessary to cull out the background facts and the relevant findings of the AO leading to the impugned additions. It is noted that, in the course of search, the assessee was not present and therefore the brother of the assessee, Shri Surendra Jiwrajka, had his statement recorded u....
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.... of the Act and tax the proceeds received by the assessee on sale of these shares as his unexplained income, as admitted by assessee's brother [Shri Surendra Jiwrajka] in the statement recorded u/s 132(4) of the Act. In response, the assessee filed his objections. The AO, however, was not agreeable to the same. Instead, he set out his observations, which he had inferred/gathered relating to the shares in question, which for the sake of brevity, is being summarized in brief below:- According to the AO, the mere furnishing of documentary evidences was not sufficient to prove the genuineness of the transactions as according to him the assessee was unable to explain the abnormal increase in the prices of these shares with their corresponding financials and/or future prospects of these companies. He observed that the financials of these entities were very poor during the period when the preferential shares were allotted and their business profile did not suggest that these companies were engaged in any substantial activities, which could attract investors. The AO observed that the entire transaction was a colourable device concocted for the purposes of routing the unaccounted i....
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....vily relied on the statement recorded u/s 132(4) of the Act by the brother of the assessee Shri Surendra Jiwarajka wherein the brother has accepted that the amount of gains were derived from transactions that were not genuine and therefore, the Ld. CIT, DR urged that the same may be viewed in accordance with the confession made by the assessee's brother. He further contended that the shares in question were identified as penny scrips in the Investigation Report prepared by Directorate of Investigation, Kolkata. According to him, the office of DIT, Kolkata had found that several assessees had accommodated their unaccounted monies in the guise of bogus long-term capital gain & short term capital gain in these shares. To demonstrate his contention, he took us through the facts set out by the AO in the assessment order regarding the financials and prospects of these companies. He submitted that the huge sums of long/short term capital gains claimed to have been earned by the assessee within a short period of time from sale of these shares was impossible, given the preponderance of human probability. He thus submitted that these transactions of the assessee were not genuine in as much a....
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....e orders dated 20-09-2017, inter-alia, had revoked its earlier interim actions against these shares/companies and exonerated the assessee upon completion of their investigation. He submitted that this subsequent development and crucial fact was brought to the notice of the Ld. CIT(A) by which SEBI cleared these companies as well as the assessee was exonerated from the charges of manipulation of the prices of the shares. Hence, it was urged that when the very basis of the acceptance of the proposal of the investigation wing (to withdraw the claim u/s 10(38) of the Act) by assessee's brother u/s 132(4) of the Act was on a mistake of fact (SEBI's adverse interim actions of 2014) and when in the year 2017, the SEBI itself after carrying out 360 degree investigation and inquiry had cleared the assessee and the shares of the company in question, consequently the foundation (factual basis) prevailing at the time of recording the statement u/s 132(4) of the Act has been completely removed; and accordingly the statement of assessee's brother u/s 132(4) accepting the proposal of the investigation wing to withdraw the exemption claimed u/s 10 (38) of the Act loses its relevance. The Ld. AR th....
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....) deleting these additions be reversed. 30. From the material placed before us, it is noted that, the SEBI vide interim order dated 19-12-2014, inter-alia, restrained the assessee, from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner, till further directions, pending investigation in the scrip of M/s. Radford Global Ltd. The directions issued vide aforesaid interim orders were, inter-alia, confirmed vide subsequent orders passed by SEBI. Subsequent to the interim orders, SEBI carried out an investigation to look into the role of debarred entities in price manipulation in these scrips. Vide order dated 20-09-2017, the earlier interim order was modified by SEBI and the entities including the assessee against whom directions were issued vide aforesaid interim orders/actions were found to be not in violation of provisions of SEBI Act, 1992 and SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities) Market Regulations, 2003. Accordingly, SEBI vide aforesaid order dated 20-09-2017, revoked the directions issued vide earlier interim orders in exercise of powers conferred under section ....
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....hall continue. This revocation order is without prejudice to any other action SEBI may initiate as per law." Thus, there is no evidence that the appellant has indulged in the manipulation of share price of Radford Global Limited." 31. In view of the above, we agree with the submission of the Ld. AR that, when there was no evidence of manipulation of share prices ultimately found by the SEBI upon completion of investigation, the entire basis of the statement of Shri Surendra Jiwrajka recorded in the course of search u/s 132(4) of the Act stood vacated. Perusal of the questions posed to Shri Surendra Jiwrajka (already reproduced at Para 4 above) shows that the Investigating Officer wing's had questioned the genuineness of the capital gains earned in the shares of M/s. Radford Global Ltd in light of the interim SEBI's adverse order dated 19.12.2014. Similarly, the Investigating Officer had also suspected the gains derived in the shares of M/s. Shree Shaleen Textiles Ltd & M/s. Global Infratech & Finance Ltd (formerly Asianlak Capital Finance Ltd.). Faced adversely with the strenuous, complex situation when the Investigations Officer proposed to disallow the exemption to th....
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....he foundation/basis on which offer was made by assessee's brother stands removed. Thus it is noted that the assessee has therefore been able to demonstrate that the statement given by the assessee's brother u/s 132(4) of the Act was based on incorrect facts/wrong assumption of facts (mistaken belief of facts) and the assessee has also adduced material viz., SEBI order dated 20.09.2017, which shows that his brother's statement given earlier was unreliable [since it was based on adverse interim order of SEBI in 2014 which has been modified in 2017 & assessee was exonerated]and therefore should not be given any credence/probative value. On these given facts, the impugned additions made by AO cannot be justified based solely on statements recorded during the course of search, which is otherwise not backed by corroborative evidence. For this, we may gainfully refer to the Instruction F.No.286/2/2003-IT (Inv. II), dated 10-3-2003 issued by the CBDT to the Assessing Officers: "Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of search and seizure and survey operations. Such c....
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....ue pressure/ coercion shall be viewed by the Board adversely. 4. These guidelines may be brought to the notice of all concerned in your Region for strict compliance. 5. I have been further directed to request you to closely observe /oversee the actions of the officers functioning under you in this regard. 6. This issues with approval of the Chairperson, CBDT." 34. For the above reasons therefore, we reject the Ld. CIT, DR's reliance on the statement of assessee's brother u/s 132(4) of the Act to justify the impugned addition/s before us. 35. In his next set of contention, the Ld. CIT, DR relied upon the surrounding circumstances of these scrips noted by the AO in the assessment orders wherein he has discussed their financial statements and future prospects and concluded that their financials did not inspire confidence to justify the upward trend of price movements on the stock exchange. To this, the Ld. AR first submitted that, the assessee had furnished contemporaneous evidences to substantiate its transactions in all these shares. For AY 2014-15, he invited our attention to the following facts relating to the transactions in the shares which were ....
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....res were credited in the demat account on 10.01.2012. Subsequently, bonus shares were issued in the ratio of 19:1 on 30.03.2012. After that the shares held by the appellant stood at 1,50,000 (7,500 x 20). These shares were further split in the ratio of 1:5 on 06.03.2013 and, therefore, the number of shares held by the appellant was 7,50,000 (1,50,000 x 5). 7.50.000 shares was sold by the assessee during the period 31.07.2013 to 24.12.2013. The shares were sold through the SEBI registered broker. The sale consideration of Rs 4,51,46,145/- was received through banking channels." 36. The Ld. AR brought to our notice that, similar facts were noted in AY 2015-16 as well, which were as follows: "The assessee has purchased 50,000 shares of Rander Corporation Ltd between 11.03.2013 to 13.03.2013 for a value of Rs.8,52,867/-. Entire holding was sold on 28.05.2014 for a total consideration of Rs.35,00,871/-. The appellant has earned STCG on sale of shares of Rander Corporation Ltd." 37. The Ld. AR contended that no objective enquiry was conducted by the AO in respect of the contemporaneous transactional documents and evidences furnished by the assessee. Rather, these evidences....
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....ence brought before us to show that the documents filed by the assessee before the AO to substantiate the transaction regarding claim of capital gain in both AY 2014-15 & AY 2015-16 are false and fabricated. 39. In view of the above, the Ld. AR claimed that the assessee had discharged the burden to prove the genuineness of the transactions by bringing on record all relevant contemporaneous evidences. In such a backdrop, he claimed that it was incorrect for the AO to allege that the transactions were bogus on the basis of the purported surrounding circumstances noted by him, rather than disproving these evidences. Be that as it may, it is noted that the Ld. CIT(A) had taken cognizance of this argument of the Revenue and rejected the same by observing as under: "Price of scrips depends on many factors, Companies are operating in different segments and sectors which are not possible to be related and the price of the scrips cannot be correlated with one or two such factors. As a matter of fact these factors may run into hundreds and still it may not be possible to say that all have been accounted for. Weak financial should not be the only parameter to suspicious trading of....
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....otice that the shares of Global Infratech & Finance Ltd (formerly known M/s. Asianlak Capital and Finance Ltd.) were sold in the range of Rs.38.03 to 40.27 whereas these shares made a peak price of Rs.84.49 on the 17th of December 2013. Similarly, the shares of M/s. Radford Global Ltd were sold in the range of Rs.73.26 to 79.80 rather than at its peak price of Rs.85.55 that was achieved in the month of May 2013. Also, the shares of M/s. Shree Shaleen Textiles Ltd were sold in the range of Rs.59.13 to Rs.63.51 whereas the peak price of these shares was Rs.66.15 in October 2013. In the aforesaid factual back-ground, the Ld. AR accordingly submitted that, had the assessee been involved in availing accommodation entries/fixed transaction, then going by the AO's theory, the assessee ought to have sold the shares at the peak price to enjoy higher capital gains, and since that's not the case as evident from the aforesaid relevant facts, according to Ld AR, the AO's alleged theory fails. Before us, the Ld. CIT, DR was neither able to cogently rebut these averments of the Ld. AR, nor able to factually disprove the aforesaid relevant facts brought to our notice to counter the theory propound....
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....ure. Shri Kedia thereafter went on to name the beneficiaries for whom he had arranged the accommodation entries [undisputedly name of assessee is not in the list of beneficiary]. The Ld. AR first stressed on the fact that, Shri Kedia had himself admitted that only some and not all investors in these shares were beneficiaries of bogus gains. He thereafter pointed out that the name of the assessee did not feature in his statement while giving the details of the purported beneficiaries. Having given our due consideration to the contents of this statement, we note that the statement of Shri Kedia on its own did not contain any material against assessee, on the basis of which any prudent person instructed in law would have reached the conclusion that, the transactions conducted by the assessee in publicly listed shares of the companies, in which any person could have traded/invested, had any connection with the averments made by Shri Kedia. Even otherwise, this statement also was not tested on the touch stone of cross examination, and so such third party statement could not have been acted upon to the disadvantage of the assessee, since it would be fragile for violation of the principle....
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....tements had admitted of having any transactions with the assessee. On the same lines, as discussed above, the AO relied on statements of other entry operators. On examination of these statements, we are satisfied that, in none of the statements has any of them admitted of having any transactions or providing accommodation entries to the assessee nor has the AO brought on record any material to link these entry operators / exit providers with the counter parties to whom the shares were sold by the assessee. We therefore hold that the AO was unjustified in making additions u/s 68 & 69C of the Act based on the unsubstantiated and irrelevant statements of entry operators / exit providers qua the assessee. 45. At this juncture, it is necessary to remind ourselves that, similar allegations had been levelled by the SEBI in as much as this watchdog had directly suspected the assessee of price rigging to reap LTCG, in their interim order passed in 2014. As noted earlier, upon completion of the investigation, SEBI has specifically exonerated the assessee of any wrong-doing or manipulation of shares prices of these companies on the BSE (Bombay Stock Exchange). Hence, on the peculiar facts ....
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....perandi. It is on this material that the Assessing Officer holds that the transactions of sale and purchase of shares are doubtful and not genuine. In relation to assessee's role in all this, all that the Commissioner observed is that the assessee transacted through brokers at Calcutta, which itself raises doubt about the genuineness of the transactions and the financial result and performance of the company was not such as would justify the increase in the share prices. Therefore, he reached the conclusion that certain operators and brokers devised the scheme to convert the unaccounted money of the assessee to the accounted income and the assessee utilized the scheme. [Para5] The Tribunal concluded that there was something more which was required, which would connect the assessee to the transactions and which are attributed to the promoters/directors of the two companies. The Tribunal referred to the entire material and found that the investigation stopped at a particular point and was not carried forward by the revenue. A copy of the DMAT account, placed before the Tribunal showed the credit of share transaction. The contract notes in Form-A with two brokers were ava....
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....are reflected in the balance sheets filed by the assessee along with the returns of income for the assessment years 1999-2000 and 2000-01. Therefore, it is seen that as a prima facie evidence, the purchases of shares have been contemporaneously entered into the books of account of the assessee. 10.2 The assessee has been declaring agricultural income in his returns of income for the assessment years from 1990-91 to 2001-02. The total agricultural income returned by the assessee up to the assessment year 1999-2000 was at Rs. 7,57,883. The amount invested in the purchase of shares as on 31-3-1999 was Rs. 4,48,160. The cash available with the assessee by way of agricultural income was much higher than the investment made by the assessee in the purchase of shares as on 31-3-1999. After making the investments in the shares, the assessee had a surplus cash balance of Rs. 3,09,000 as on 1-4-1999. Thereafter, the assessee has further returned an agricultural income of Rs. 66,000 for the assessment year 2000-01. The amount invested in the purchase of shares in the year ending on 31-3-2000 was Rs. 2,57,020. Again the assessee had a cash balance thereof of Rs. 1,18,771. Therefore, it....
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.... support of the contention of the assessee. But, the assessing authority sought to pick and choose the statements given by various parties. While accepting and rejecting such statements given by the parties, the Assessing Officer has made a mistake of accepting irrelevant statements and rejecting relevant statements. During the relevant period in which the assessee transacted in shares, persons like Radha Ashok and Sandeep D. Shah were not carrying on their business of brokers as in the manner they carried on the business in the past. Even their Stock Exchange Memberships were cancelled. It was Shri Satish Mandovara who was carrying on the business mainly for and on behalf of Shri Mangesh Chokshi, Director of M/s. Richmond Securities Pvt. Ltd. Those two persons have categorically admitted before the assessing authority that they had dealings with the assessee in respect of the share transactions. They have confirmed the transactions stated by the assessee that he had with them. These positive statements made before the assessing authority supported the case of the assessee. There is no force in the action of the assessing authority in relying on the negative statements of the other....
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....vey carried out by the department in the business premises of the assessee. There was a survey carried out by the department in the business premises of the assessee. In the course of survey, contract notes for sale of shares, copies of bills thereof, photocopies of share certificates etc., were found. The purchase and sale of shares were also found recorded in the books of account. The department has no case that the survey was a staged enactment. A survey is always unexpected. So, it is not possible to presume that the assessee had collected certain fabricated documents and kept at his business premises so as to hoodwink the survey party to lead them to believe that the assessee had entered into share transactions. Atleast such an inference is not possible in law. The department has no defence against the forcible argument of the learned counsel that the survey conducted by the department has out and out upheld the contention of the assessee that he had purchased and sold shares. We find that this solitary evidence collected in the course of survey is sufficient to endorse the bona fides of the share transactions made by the assessee. 10.9 Therefore, in short on the basi....
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..... On a perusal of those documentary evidence, the Tribunal has arrived at a finding of fact that the transactions were genuine. Nothing is brought to our notice that the findings recorded by the Tribunal are contrary to the documentary evidence on record. 14. The Tribunal has further recorded a finding of fact that the cash credits in the bank accounts of some of the buyers of shares cannot be linked to the assessees. Moreover, in the light of the documentary evidence adduced to show that the shares purchased and sold by the assessees were in conformity with the market price, the Tribunal recorded a finding of fact that the cash credits in the buyers' bank accounts cannot be attributed to the assessees. No fault can be found with the above finding recorded by the Tribunal. 15. Reliance placed by the counsel for the Revenue on the decision of the apex court in the case of Sumati Dayal [1995] 214 ITR 801 is wholly misplaced. In that case, the assessee therein had claimed income from horse races and the finding of fact recorded was that the assessee therein had not participated in races, but purchased winning tickets after the race with the unaccounted money. In ....
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....and survey operations conducted by the Investigation Wing of the Income Tax Department in Kolkata, Delhi, Mumbai and Ahmedabad on penny stocks which sets out the modus operandi adopted in the business of providing entries of bogus LTCG, It was also noticed that the AO made an attempt to delve into the question of infusion of Respondent's unaccounted money, but he did not dig deeper. The Hon'ble court has held that the reliance placed on the Investigation report, without further corroboration on the basis of cogent material, does not justify the conclusion that the transaction is bogus, sham and nothing other than a racket of accommodation entries. The conclusion drawn by the AO, that there was an agreement to convert unaccounted money by taking fictitious LTCG in a pre-planned manner, is therefore entirely unsupported by any material on record. This finding is thus purely an assumption based on conjecture made by the AO. The learned ITAT has recorded that "There is no dispute that the shares of the two companies were purchased online, the payments have been made through banking channel, and the shares were dematerialized and the sales have been routed from de-mat a....
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....oth the companies was done by the assessee through Global Stock and Securities Ltd and the address of the said broker was incidentally the address of the two companies. On these peculiar facts of the case Hon'ble High Court decided the issue in favour of the revenue. Hon'ble ITAT, Mumbai in the case of Vijayrattan Balkrishan Mittal Vs DCIT (supra) has considered the decision of Hon'ble Bombay High Court in the case of Sanjay Bimalchand Jain (supra) and found the facts of that case not applicable to the facts of case of Vijayrattan Balkrishan Mittal Vs DCIT and then the issue has been decided in favour of the assessee." 51. Apart from the above, we have also taken suo-motto judicial notice of the judgment rendered by the Hon'ble Calcutta High Court in the case of Pr. CIT Vs Swati Bajaj (288 Taxman 403). Having carefully perused the same, it is noted that peculiar facts were involved before the Hon'ble Court wherein eighty-nine different appeals of different assessee's were disposed off by the Tribunal in a single consolidated order without taking cognizance of the specific facts involved in each case (appeals preferred by different assessee's). The relevant o....
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....evidences and jumping to circumstantial evidences is not justified even if one refers to the decision of Hon'ble Calcutta High Court. Moreover, as noted by us earlier, this issue at hand is squarely covered by the binding judgments of the Hon'ble jurisdictional High Court, in favour of the assessee, and, therefore following the judicial discipline, the order of the Ld. CIT(A) does not require any interference since we have the benefit of guidance on this subject by the Hon‟ble jurisdictional High Court, which is binding upon us. 54. We may gainfully refer to the following decisions rendered by the coordinate Benches of this Tribunal wherein also, on similar facts and circumstances, following the above referred judgments of the jurisdictional High Court, this Tribunal deleted the addition/s made by the AO u/s 68 of the Act in relation to the long-term capital gains derived on these listed shares. 54.1 In the case of Shri Vasantlal Nyalchand Kikavat Vs. DCIT (ITA No. 7921 & 7922/Mum/2019) dated 17.12.2021, the AO acting on the information shared by the Investigation Wing at Kolkata had held that the long term capital gain earned by the assessee in shares of M/s Unisys Sof....
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....ials or other parameters. There would be buyers and sellers lining up on either side of a potential trade; one party willing to part with ownership and other party willing to acquire the ownership. When both the parties would agree upon a price, the trade is matched and that price would become new market quotation. Therefore, the financials of underlying entities, in such cases, would lose much relevance in so far as the price movement of scrip is concerned. Nothing adverse could be drawn against the assessee on the basis of the same. Therefore, the aforesaid observations as well as conclusion of Ld. AO would not support the case of the revenue. 4.6 Proceeding further, it could be observed that the primary reason to doubt the genuineness of assessee's transactions is findings of investigation wing which was based on general statement of various stock-brokers / operators including statement of Shri R.K. Kedia and Shri Jagdish Prashad Purohit, wherein these persons, without naming the assessee specifically, made an admission that the scrip of Unisys was a penny stock scrip. However, despite specific request of the assessee, the adverse material which form the very basis of a....
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....ever strong could not partake the character of legal evidence as held by Hon'ble Supreme Court in Umacharan Shaw & Bros. V/s CIT (1959 37 ITR 271). The additions made on mere presumptions could not be sustained and there must be something more than mere suspicion to support the assessment as per the decision of Hon'ble Apex Court in Dhakeshwari Cotton Mills Ltd. V/s CIT (26 ITR 775). The assessment should not be based merely on suspicion or guess work but on legitimate material from which reasonable inference of income could have been drawn. 4.8 The last aspect of the matter is that the additions have been made by Ld. AO invoking the provisions of Section 68. The addition u/s 68, in our considered opinion, is not sustainable in view of the fact that credit in assessee's bank account represents sale proceeds of shares sold in recognized stock exchange through registered stock broker. The sale transactions have taken place through recognized stock exchange and the money was received in settlement through banking channels. The assessee had delivered the shares from his demat account to the broker, who, in turn, paid sale consideration to the assessee. In such a case, there co....
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....pany later on split these shares at Rs. 2, per share on 7th March 2013. Therefore, the total shares allotted to the assessee was 2,50,000 shares. The assessee had sold 2,50,000 shares of M/s. Shree Shaleen Textiles Ltd., for trade value of Rs. 1,26,05,797, during the year under consideration. In the computation of income, the long term capital gain of Rs. 1,20,11,807, was claimed under section 10(38) of the Act which arose out of the above transactions. The Assessing Officer tried to verify the genuineness on the basis of material available on record and the submissions made by the Authorised Representative of the assessee. However, not convinced with the submissions of the assessee, the Assessing Officer on the basis of circumstantial evidences available on record concluded that the transactions were sham transactions and aimed only to bring unaccounted money in the guise of exempted long term capital gain and paper work was made up and done merely to give a colour of authenticity to the transaction and by creating a façade of legitimate transactions. Therefore, the total amount of Rs. 1,20,11,807 was added under section 68 of the Act as the assessee has deliberately and wi....
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....e statements of the persons referred to by the AO, was never subjected to cross- examination, despite the assessee's request for the same. This Tribunal accordingly deleted the addition by holding as under: "6. We have heard the rival submissions. The primary facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. The assessee submitted the following details with regard to purchase of shares :- a) Copy of relevant extract of bank statement reflecting the payment of Rs 30 lacs made by the assessee by account payee cheque to the company directly and source thereof along with allotment letter issued by the said company (i.e GIFL) and copy of share certificate issued by GIFL to the assessee on 12.6.2012. These documents are enclosed in pages 71 to 73 of Paper Book. b) Demat account held with NKGSB Co-operative Bank Limited reflecting credit of shares purchased (enclosed in page 154 of Paper Book). c) Copy of approval letter from GIFL. d) Copy of allotment letter from GIFL for shares allotted to the assessee. e) Copy of share certificate issued by GIFL. f) Various events repo....
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....etails together with the supporting evidences were not controverted by the revenue before us. Even the cross examination of the parties mentioned in the show cause notice issued to the assessee by the ld AO were sought by the assessee and the same were refused by the ld AO. We find that the ld AO had also placed reliance on the order passed by SEBI while concluding that the transactions carried out by the assessee in the form of sale of shares as sham and bogus. From the perusal of the SEBI order dated 25.8.2016 in the case of First Financial Services Ltd, we find that from the extracts thereon, that it was stated that M/s GIFL was involved in providing exit to the sellers of equity shares of First Financial Services Ltd and no where stated that this company was involved in providing accommodation entries in the form of capital gains by transacting its own shares through the alleged bogus operators. We also find that the SEBI had passed on order dated 8.1.2018 in the case of GIFL, wherein it was found that the name of the assessee herein or the brokers through whom the assessee transacted were not even included in the said order as parties against whom any adverse inference / findi....
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....is GIFL. Hence there is absolutely no iota of evidence linking the assessee or the registered brokers to even remotely allege that they were involved in artificial rigging of price of scrips which were dealt by the assessee herein. 6.4. We find that the ld AO had stated that GIFL is a company of no value. The revenue stream and the profitability chart reproduced hereinabove does not support the case of the ld AO. Moreover, the status reported by the ld AO about GIFL was in Asst Year 2008-09 which is neither the year of purchase of shares by the assessee nor the year of sale of shares in open market. Hence those findings are totally irrelevant for adjudication of the issue before us. ... 6.7. We find that the ld AO had furnished certain list of parties who were alleged purchasers of shares from the assessee when it was sold in the open market by the assessee. The assessee had pleaded that since the shares were sold in the open market in online platform, he is not aware of the name of the parties as to who had bought the same in the open market. The ld AO sought to issue summons to those alleged purchasers of shares u/s 131 of the Act, which remain uncompli....
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....cussed hereinabove. Merely because the assessee himself is engaged in independent manufacturing business , it cannot be said that all his investment decisions would be prudent and would be done only after analyzing the entire fundamentals and financials of the investee company. It is in everybody's knowledge, that an investor would try to take calculated risks by investing his money on an unknown scrip based on certain information from friends, relatives, or in some stock market related websites and take a chance. Since the scrip purchased by the assessee was showing considerable growth from the time of purchase, the assessee being a gullible investor, continued to hold it for a period of 26 months and later sold it in open market in online platform at prevailing market prices. ... 6.10. It would be pertinent to address the case law relied upon by the ld DR before us on the decision of Hon'ble Bombay High Court (Nagpur Bench) in the case of Sanjay Bimalchand Jain vs Pr.CIT (Nagpur) reported in (2018) 89 taxmann.com 196 (Bombay) dated 10.4.2017 on the impugned issue. From the facts of Sanjay Bimalchand Jain supra, we find that (i) in that case, the broker company t....
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....ancy in the statement of the Director of M/s Richmand Securities Pvt Ltd regarding the sale transaction, the Tribunal relying on the statement of the employee of M/s Richmand Securities Pvt Ltd held that the sale transaction was genuine. 7. In these circumstances, the decision of the ITAT in holding that the purchase and sale of shares are genuine and therefore, the Assessing Officer was not justified in holding that the amount of Rs 1,41,08,484/- represented unexplained investment under section 69 of the Income Tax Act, 1961 cannot be faulted. 8. In the result, we see no merit in this Appeal and the same is dismissed with no order as to costs. 6.12. In view of the aforesaid findings in the facts and circumstances of the case and respectfully following the various judicial precedents relied upon hereinabove, we hold that the ld CITA was not justified in upholding the action of the ld AO in bringing the sale proceeds of shares of GIFL in the sum of Rs 7,88,77,854/- as unexplained income of the assessee treating the same as just an accommodation entry. Consequentially, the addition made towards commission on such accommodation entry at the rate of 5% in the....
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....ata submitted before us indicates that assessee has purchased the same from the stock market and sold the same by reacting to market condition and the steep fall in the price of the shares. From the conduct of the assessee we notice that assessee has purchased the same from the stock market on the advice of portfolio manager. The crux of the matter is regarding claim of loss arising from the trading in shares of following companies, namely: a) Dhenu Builder, India (Rs. 3,95,17,365/-) b) Shri Nath Commercial (Rs. 10,94,32,186/-) c) Tuni Textile Mills (Rs. 2,19,43,210/-) d) Rad Global (Rs.4,14,88,123/-) e) Rad Global (Buy) Rs. 4,85,67,264/-) From a perusal of the order of the lower authorities it is apparent that the disallowance as made by the AO and sustained by the Ld.CIT (A) is based on the enquiries conducted by Investigation Directorates of Kolkata & Ahmedabad on certain stock-brokers and entry providers and the statements recorded from them during the course of search. The analysis made by the Investigation Directorates on the financials/business profile of the impugned companies forms the base for rejecting the claim of lo....
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....ss to the assessee. Such companies were seen to have little financial credentials, no profitability, and no apparent explanation for abrupt rise in prices followed bya steep fall in price of shares. Besides, there are statements of brokers/ entry providers who have accepted that they were involved in the scam of price rigging to facilitate accommodation entries to beneficiaries who have routed their unaccounted cash into the books through circuitous means. However, at the same time the assessee has produced documents to substantiate the genuineness of the transactions carried out through banking channels, through the medium of portfolio management whereby there is no contact between the buyer and the seller. The fact remains that there is direct evidence placed on record by the assessee to support the genuineness of the impugned transactions such as contract notes, share certificates, corroborative evidence indicating purchase/ sale through registered broker as juxtaposed against the findings of the AO based on the general report from Investigation and the modus operandi adopted by unscrupulous entry providers. There is no denying that there is no assessee-specific material on reco....
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....its. From the above decision, it is trite that denial of such crucial rights is a fatal flaw that renders the assessment order a nullity. An assessment purely based on suspicion, surmises and conjectures without any tangible evidence on record against the assessee of any connivance or collusion is unsustainable in law." 54.5 We also refer to the decision rendered in the case of Shri Mukesh Bhoormal Jain v. ITO (ITA No. 6387/Mum/2019) dated 23.12.2021 in which, the AO had doubted the genuineness of the long term capital gain derived on sale of listed shares, by observing that the scrip was insignificant and lacked business fundamentals. On appeal, this Tribunal deleted the addition by observing as under: "3. Assessing Officer observed that the scrip in which assessee traded was proved to be insignificant, bogus, without business fundamentals and required the assessee to prove the genuineness of the same. In reply assessee vide letter dated 11.12.2017 submitted that the long term capital gain generated was genuine stating the details of section 10(38) of the Act. Not convinced with the submissions of the assessee, the Assessing Officer added the sale proceeds of Rs..5,49,....
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....y holding that the purchase of shares were duly recorded in the books of accounts and the source of funds is also explained and the shares were in fact transferred in the name of the assessee and thus the purchases of the assessee can not be fault with. Similarly, the sale of shares was effected can not be disputed because the amount received by the assessee is not in dispute and it is not the case of the Revenue that shares are still lying with the assessee or amount received by the assessee on sale of shares is more than the declared value by the assessee. Under these circumstances, the Hon'ble High Court has held that AO is not justified in holding that sale proceeds of Rs.1,41,08,484/- represented unexplained investment under section 69 of the Act and thus the order of the Tribunal was upheld by the Hon'ble High Court. The Hon'ble Supreme Court also dismissed the appeal of the Revenue filed against the Hon'ble Bombay High Court order. Similarly, in the case of CIT vs. Mrs. Kesar A. Gada (supra) the ITAT deleted the addition by holding that the transaction of purchase and sale of shares made by the assessee were genuine and no addition under section 68 was called for by....
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....ation to the facts of the case and are of the considered view that the assessee had placed on record substantial documentary evidence to substantiate the genuineness and veracity of the purchase and sale of 10,200 shares of M/s Talent Infoways Ltd., viz. copy of the Contract note, dated. 15.04.2004 evidencing the purchase of shares; Copy of the contract note, dated. 06.04.2004 as regards the speculation income, and the copy of the cash receipt for Rs. 168/-; Copy of her account in the books of account of M/s MSPL; Copy of the letter from M/s Talent Infoways Ltd., dated. 29.05.2004, therein confirming the transfer of shares; Copy of the contract notes for sale of shares in the months of September and October, 2005; Copy of the bank statement evidencing receipt of payment for of shares; Copy of STT paid statements on the shares of M/s Talent Infoways Ltd ; Copy of its account as appearing in the books of account of M/s Alliance Intermediateries & Network Pvt. Ltd. evidencing the sale of the shares of M/s Talent Infoways Ltd.; Copy of delivery instructions of shares to the depository for dematerialization of the shares; and Copy of the return of income alongwith the computation of inc....
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.... Ltd., which we find had been duly substantiated by the assessee on the basis of material made available on record, which we find had not been dislodged by the lower authorities. We thus in the backdrop of the totality of the facts of the case are unable to find ourselves to be in agreement with the view arrived at by the lower authorities. We thus set aside the order of the CIT(A), and delete both of the additions of Rs. 9,36,164/- and Rs. 46,808/- made by the A.O, which thereafter were sustained by the CIT(A). The appeal of the assessee is allowed. 13. We have also gone through other decisions cited by the Ld. A.R. and observed that the case of the assessee is squarely covered by the various decisions. We therefore respectfully following the same set aside the order of CIT(A) and direct the AO to delete the addition of Rs.3,43,62,880/- under section 68 of the Act. Ground No.1 & 2 are allowed. 14. The issue raised in ground no.3 is against the confirmation of addition of Rs.6,87,257/- by CIT(A) as made by the AO towards arranging this purchase and sale of shares by applying 2% on the total value of transactions. The ground No.3 is consequential to ground no.1 & 2....
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....uments impounded etc. and the Revenue was unable to point to any specific item or evidence which would lend credence to their case. Although these aspects are not sufficient to draw definite conclusions but coupled with the facts and circumstances discussed in the foregoing, it does lend persuasive value to the case of the assessee. 57. For the above reasons therefore, we do not see any reason to interfere with the order of the Ld. CIT(A) deleting the additions made by the AO u/s 68 & 69C of the Act in AY 2014-15. Accordingly the appeal for AY 2014-15 stands dismissed. 58. Now we take up the appeal for AY 2015-16. As noted earlier, the assessment order passed for AY 2015-16 is verbatim as that of AY 2014-15. It is noted that the scrip in question in this year is M/s Rander Corporation Ltd whose proceeds have been assessed to tax u/s 68 of the Act and further 7% of its traded value has been added as unexplained commission expenditure u/s 69C of the Act. The facts relating to the transaction in shares of Rander Corporation Ltd has been taken note of at Para 36 above. As noted earlier, the assessee has furnished all contemporaneous evidences including purchase invoices, bank sta....