TaxTMI 
TaxTMI 
2023 (4) TMI 1400
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....re purchased on premium and payment was made through banking channel as well as impugned shares were duly received by the appellant which were later credited in his DMAT account, thus purchase and ownership of shares with assessee is established and cannot be doubted, therefore the profit from sale of such shares cannot be held as bogus. 1.2 That the Ld. AO and also CIT(A) failed to appreciate that shares of M/s Kappac Pharma Ltd. are quoted in recognized stock exchange and its shares were sold by the assessee through authorised share broker on the online portal of the recognized stock exchange after paying STT and payment was received through banking channels as well as shares were duly debited in DMat account and thereby sale of shares is established and not at all doubtful and therefore consequent LTCG is not at all non-genuine and thus the addition made u/s 68 deserves to be deleted. 1.3 That the above mentioned addition made by the A.O. after interalia observing that the financial transaction effected by the assessee were sham ones and confirmed by Ld CIT(A) without rebutting the documentary evidences of purchase, banking channel payment, D-Mat account and su....
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....ces of the case, the Ld. CIT(A) has grossly erred in confirming the addition of Rs. 63,402/- made by Ld. AO u/s 69C of the I. T. Act, 1961 on whims and fancies and baselessly alleging that the assessee has paid commission at the rate of 2% of the long term capital gain to the entry provider without appreciating the facts and circumstances of the case and the submissions made and further bringing no evidence on record for saying so. Thus, the addition of Rs. 63,402/- deserves to be deleted.'' 2.1 Apropos Ground No. 1 to 1.6 and 2 of the assessee, brief facts of the case are that the assessee is an individual and during the year under consideration has derived Income from Salary, Income from Share trading and Income from other sources. Return of Income for the year was filed on 26.08.2015 declaring total income at Rs. 5,48,200/-. The case of assessee was selected for scrutiny by issue of notice u/s 143(2) of the Act. Details and information sought by AO were furnished and assessment was completed u/s 143(3) of the Act after making addition u/s 68 to the tune of Rs. 31,70,080/- by treating the long term capital gain [claimed exempt u/s 10(38)] as accommodation entry and thus bogus,....
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....pplicable to the present appeal. Therefore, the said decision does not help the assessee in the present case. In the case of Suman Poddar vs ITO (supra), full facts were put up before the Hon'ble ITAT who has decided the issue in favour of the Revenue. The abve decision has been upheld by the Hon'ble High Court of Delhi and Hon'ble Apex Court. Therefore, the same becomes the guiding principle in taxing such sort of transactions. (42) As I mentioned at several places that the issue relating to penny stock of share capital is very critical issue from both taxation point of view as well as from the economic point of view. These practices of converting unaccounted money into white money was running through several years and it is only in 2013 and onwards the various agencies of Government of India as well as Income Tax Department acted on this and busted the racket. Therefore, these issues need to be decided in the context and background not otherwise. It is the substance of the transaction which is more important than the Form of transaction i.e. simply showing that the assessee has earned exempt long term capital gain and there are umpteen number of facts which suggest that ....
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....submission is as under: Ground of Appeal No. 1 to 1.6 and 2: In all these grounds of appeal, assessee has challenged the action of ld. CIT(A) in confirming addition of Rs. 31,70,080/- made by ld.AO u/s 68 of the Act by treating genuine Long Term Capital Gain earned by assessee as mere accommodation entry and bogus and thereby withdrawing exemption u/s 10(38). As all the grounds of appeal are interrelated, the same are dealt with together for the sake of convenience. Brief facts pertaining to these grounds of appeal are that assessee was holding 12500 shares of M/s Kappac Pharma Ltd., acquired by him in F.Y. 2012-13 on 16.1.2013 (APB-32) for Rs. 1,87,500/-, which were sold during the year for consideration for Rs. 31,58,765/-[in Nov.- Dec., 2014] (APB 42-44) after holding the same for more than twelve months. Accordingly, Long term capital gain of Rs. 29,71,725/- earned from the sale of such shares was declared in the return of income filed. As shares sold were of a listed public limited company i.e. M/s Kappac Pharma Ltd. and were sold through recognised stock exchange after holding for a period of more than one year and the STT was paid on sale, the profit earned....
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....ther, ld.AO had referred some order of SEBI having no direct reference of the assessee. During the course of assessment proceeding, opportunity for cross examination of the witnesses of the department i.e. the above named two persons whose statements were solely relied upon to conclude that the assessee has obtained accommodation entries, was demanded but the same was not allowed nor there was any whisper in the assessment order as to why such opportunity was denied to the assessee. In first appeal, ld. CIT(A) without appreciating the evidences and details submitted, confirmed the action of the ld. AO by primarily quoting numerous case laws on human probabilities, however again no defect whatsoever was pointed out in the documentary evidences furnished by assessee and these document evidences were not rebutted by ld. CIT(A) also. Ld. CIT(A) on his own theories and assumptions has denied the opportunity of cross examination and further tried to deviate his finding from the direct judgment of Hon'ble jurisdictional high court on this issue where the Hon'ble court has confirmed the order passed by the Hon'ble Jaipur bench of ITAT. In this regard, at the outset, it is....
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.... to the assessee despite of specific request). From the perusal of the said statements, it is noticed that none of these two persons had stated that assessee has taken any accommodation entry from them nor any reference of the assessee was made in any manner that assessee has approached them for providing accommodation entry. Further they had not stated that the broker M/s KIFS Securities Ltd. through whom the assessee has sold the scrips was involved in arranging accommodation entries. However, relying upon the statements of Shri Jai Kishan Poddar and Sh. Anil Khemka, ld. AO concluded that M/s Kappac Pharma ltd. is a bogus entity and further went on holding that long term capital gain earned by assessee on sale of shares of M/s Kappac Pharma Ltd. is merely an accommodation entry and exemption claimed u/s 10(38) was denied (even though assessee has neither purchased nor sold the shares of this company through broking firms of Sh.Jai Kishan Poddar or Sh. Anil Khemka). It would not be out of place to mention here that apart from the so called information received from Investigation Wing, Kolkatta containing statements of Shri Jai Kishan Poddar and Sh. Anil Khemka, there was ....
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....dings or by the Ld. CIT(A) in appellate proceedings in support of the conclusion drawn by them that the assessee had earned bogus LTCG in connivance with Shri Jai Kishan Poddar or Sh. Anil Khemka. On the other hand the assessee has filed various documents duly evidencing purchase of shares, copy of Dmat Account, payments being made by account payees cheque and similarly also the evidence related to sale, which was made online on the Bombay Stock Exchange and through recognized stock exchange broker namely M/s KIFS Securities Ltd. However all these evidences were just ignored and not rebutted by the AO before making addition. In view of these facts, it is submitted that the impugned addition being solely based upon such uncorroborated statements of third parties is clearly bad in law. It would not be out of place to mention here that ld. AO has completely followed casual approach and has ignored the facts of the case, which is evident from the observations of ld. AO at page 25 para 3.5 that "It was found that the shares of the company were scarcely traded in the past but all of a sudden after the purchases by the assessee, the prices of the shares increased abnormally for a....
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....d has then summarised principles laid down by Hon'ble Apex Court. From perusal of decision, it is apparent that the facts of impugned case were completely different than facts of case of the assessee. Most important finding in said judgement is that ld. AO has to independently make enquiries/issue summons to lenders and verify the identity/creditworthiness of such lenders, whereas in the case of assessee, ld.AO has simply relied upon the information readily available on various websites and without verifying the same with regards to assessee. Even ld. AO has not provided the opportunity to cross examine his witness nor statements of such persons were ever supplied thus such action of the AO is contrary to the principle laid down by hon'ble Apex court who clearly held that proper and sufficient enquiries should have been made before reaching to the conclusion. Your honours' would appreciate that a judgement may render certain principles, however the same cannot be blatantly applied in any and every case unless facts involved are same. In the instant case of assessee, there was no search/survey action conducted in the premises of assessee and no specific information was collected, ra....
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.... Special bench of Mumbai ITAT in the case of ITO Vs. M/s. GTC Industries Limited Tobacco House (Caselaws paper Book Pages 144-236) where the Hon'ble Special Bench of ITAT after considering all the aspects of "preponderance of human probabilities" and other issues has held that: "46. ......It is quite a trite law that suspicion how so ever strong may be but cannot be the basis of addition except for some material evidence on record. The theory of 'preponderance of probability' is applied to weigh the evidences of either side and draw a conclusion in favour of a party which has more favourable factors in his side. The conclusions have to be drawn on the basis of certain admitted facts and materials and not on the basis of presumption of facts that might go against assessee. Once nothing has been proved against the assessee with aid of any direct material especially when various rounds of investigation have been carried out, then nothing can be implicated against the assessee." The aforesaid judgement of Hon'ble Special Bench was followed by Hon'ble Kolkatta ITAT in the case of Mahendra Kumar Baid Vs. ACIT dated 18.08.2017. Hon'ble SC in the case of [Umachar....
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....ajasthan High Court on the premise that in that case additions were made by ld.AO solely on the basis of appraisal report and order of Settlement commission passed in some other case and moreover in that case no independent EPS/PE analysis was done by ld.AO. In this regard, it is submitted that in present case also, ld.AO has simply relied upon information related to third parties passed on by investigation wing that too of Kolkata and some EPS/PE analysis data available on internet and no independent enquiry has been made by ld.AO. Thus, facts in the case of Pooja Agarwal (cited supra) are identical to present case and action of ld.AO in not considering the same is against the principle of judicial precedence. Hon'ble Jaipur bench of ITAT in the case of ACIT vs Saroj Parwal in ITA No. 753/JP/19 has also decide the issue in favour of the assessee. Recently Hon'ble Jaipur bench of ITAT vide order dated 31.08.2022 in the case of Manohar Lal Chug vs. ITO in ITA No. 312/JP/2021 has held that: "6.3. The issue of penny stock and consequent additions made has elaborately dealt with by ITAT Jaipur Bench in the case of Pramod Jain & Others (supra) and relying on t....
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....ere conducted in the form of recording statements of broker so as to bring on record any evidence of the said transaction being an accommodation entry ; * STT has been on sale of shares and shares had been sold through National Stock Exchange ; * Payment for sale of shares was received through banking channels; Thus, when all the documentary evidences filed before the Ld. AO were in favour of assessee, solely on the basis of some casual replies given by assessee, transactions cannot be held as sham. It is pertinent to note here that in the case before Hon'ble Punjab and Haryana High Court, shares were purchased for cash, then too, transaction was held as genuine as all the documents were in favour of assessee,. Thus instant case of assessee is far better as payment for purchase of such shares was made by account payee cheques. As has been submitted that the statements of Shri Anil Kumar Khemka were recorded behind the back of assessee, therefore vide reply dated 23.11.2017, a specific request was made before the Ld. AO that such person be confronted and assessee may be allowed to cross-examine him so as to verify the veracity / truthfuln....
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....ity simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above." Hon'ble Apex Court in the case of CIT vs Odeon Builders Pvt. Ltd. in Civil Appeal No. 9604-9605 of 2018 has held as under: S. 68/69 Bogus Purchases: Disallowance cannot be made solely on third party information without subjecting it to further scrutiny. The assessee has prima facie discharged the initial burden of substantiating the purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts and the fact of payment through cheques, & VAT Registration of the sellers & their Income Tax Return. The AO has also not provided a copy of the statements to the assessee, thus denying it opportunity of cross examination. In this regard, it is fu....
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....si-judicial authority is bound by law to follow. In the present case however, the impugned assessment order has been passed in violation of the principles of natural justice and therefore, is bad in law. Hon'ble Jaipur Bench of Tribunal in the case of Sh. Pramod Jain vs. DCIT (Case law Paper Book Pages 35-39) has relied upon the view taken by Hon'ble Apex Court in Andaman Timbers and held that the statements of witness cannot be made sole basis of making assessment without giving an opportunity of cross examination and consequently it is a serious flaw which renders the order a nullity. Hon'ble Jaipur Bench of Tribunal in the case of DCIT vs Saurabh Mittal ITA No. 16/JP/18 has deleted the additions made on similar issues. Excerpts of decision are as under: S. 68 Bogus capital gains from penny stocks: Reliance by AO on statements recorded by the Investigation Wing to conclude that the capital gains are bogus without giving an opportunity of cross examination is a complete violation of principles of natural justice as held in CCE Vs Andaman Timber Industries 127 DTR 241(SC). The AO has not controverted the evidence of purchase bills, payment of consideratio....
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....o mention that these shares were not sold through the broking concern of Jai Kishan Poddar / Anil Khemka, through which they have been allegedly indulged in providing accommodation entries. Thus the sale of shares of assessee is totally independent and unrelated with brokers engaged in providing accommodation entries (on whom the AO is relying). v. The sales of these shares made by assessee is duly backed by contract note cum bill of the share broker namely M/s KIFS Securities Ltd. which also contain the order No. , the order timing, trade No. and trade time (APB 42-44). Thus sale of share on each occasion is duly backed by date and time stamp and other necessary details as prescribed and mandated by the Bombay Stock Exchange as evident from the contract note issued by its member brokers to the assessee in relation to the online transaction of these shares done on Bombay Stock Exchange. Obviously as the sale was made online, the sales of share was at prevailing market rate at that time and it cannot be manipulated by assessee by and means. vi. Further, at the time of sale STT had been paid. Thus the assessee fulfilled all the conditions of section 10(38) to claim ....
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.... because of some internal information available to the assessee. Para No. 7 "Nobody can have the shares in his own name in D-mat Account without acquiring or allotment through due process hence, except the purchase consideration paid by the assessee holding of shares cannot be doubted when the assessee has produced all the relevant record of issuing of allotment of shares, payment of share application money through bank, share certificate and demat account showing the shares credited in the demat account of the assessee on dematerialization. The said company M/s Paridhi Properties Ltd. was subsequently merged with M/s Luminaire Technologies Ltd. vide scheme approved by the Hon'ble Bombay High Court order dated 27.07.2012. Hence, the assessee got allotted the equity shares of M/s Luminaire Technologies Ltd. as per swap ratio approved in the scheme and consequently the assessee was allotted 5 lacs share of Rs. 1/- each on M/s Luminaire Technologies Ltd. The evidence produced by the assessee leave no scope of any doubt about the holding of the shares by the assessee. Para No. 8 As regards the purchase consideration when the assessee has shown the sh....
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....ces furnished by assessee and statement of third party recorded in some other proceedings by some different officer behind the back of assessee for which opportunity of cross-examination by assessee was also denied. Thus, decision of Hon'ble Jaipur Bench of ITAT in the case of Shri Pramod Jain (supra) fully supports the case of assessee and squarely applies in the instant case of the appellant, as the facts of this case are very similar to the above cited case decided by Hon'ble ITAT, Jaipur Bench. Further, ld.AO has failed to substantiate his case by conducting any independent enquiry or by bringing any material on record to prove that assessee has received his money back. Thus doubts regarding genuineness of transaction are nothing more than suspicion. SEBI enquiry cannot be a basis for addition: The main reason of addition is the enquiry made by SEBI that these companies are involved in price rigging and thereby helping others in purchasing the capital gain. This cannot be considered as conclusive evidence to hold the assessee as liable for making addition in the income tax proceedings. In this regard reliance is placed on the decisio....
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....STT. Thus all the conditions enumerated in section 10(38) for holding the profit from the sale of shares as exempt have duly been fulfilled by the assessee, thus in no circumstances it could be held as bogus or sham transaction more particularly when no corroborative evidence was brought on record by the department to hold that assessee had introduced his undisclosed income in the garb of long term capital gain. It is further submitted that recently the Hon'ble Calcutta High Court in the case of Swati Bajaj has observed that the report of Investigation Wing was available on online portal from where the same could be assessed by the appellant also, therefore, it cannot be said the report was not confronted before making the assessment. In this regard, kind attention of the Hon'ble Bench is invited to the fact that the said report was available on online portal from 30.12.2017 and prior to that it was available with the department only. The assessment in this case was completed on 05.12.2017, therefore, there was no occasion for the assessee to consider the report of Investigation Wing. Further the ld. AO also has not referred nor relied upon the report of Investigation Wing....
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.... cases: i. Mahesh Mundra Mumbai vs ITO 21(1)ITA No. 1176/Mum/2012 ii. ITO ward 20(1) vs Naveen Gupta in ITA No 696 (Delhi) SOT 2006 94 Delhi iii. Mayur M Shah HUF Mumbai vs ITO 25(3) ITA No. 2390/Mum/2013 iv. ITO v SmtKusumlata in ITA No. 387 105 TTJ (2006) 265 Jodhpur v. ChandrakantBabulal Shah vs ITO 16(2)(4) ITA No. 6108/Mum/2009 vi. Dalpat Singh Choudhary vs ACIT (2012) 143 TTJ 500 (Jodhpur Trib) vii. ACIT v Shri Ravindra Kumar ToshnivallTA No. 5302/Mum/2008 viii. Jafferali K Rallonse v DCIT Central 5 in ITA No. 68/Mum/2009 ix. Mrs Rajinidevi A. Chowdhary v ITO ITA No. 6455/M/07 dated 30/04/2008 x. DCIT v Shri Pinakir L Shok in ITA No. 3030 & 3453/M/08 Dated 14/0712009 xi. CIT Vs. Shyam R. Pawar reported in [2015] 54 taxmann.com 108 (Bom) xii. ITO Vs. M/s Indravadan Jain, HUF, ITA No. 4861 & 5168 / Mum / 2014 xiii. Purushottam Soni vs ITO (Jaipur ITAT) ITA No. 288/JP/2017 xiv. Dipesh Ramesh Vardhan vs DCIT (Delhi ITAT) ITA No. 7648/Mum/2019 Therefore, in light of the submissions made above and case laws cited, it is prayed that the addition of R....
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.... Rakhi Trading Private Ltd. (Civil Appeal No. 1969 of 2011-SC) 2.5 As regards Ground No. 1 to 1.6. and 2 of the assessee, the Bench has have considered the rival contentions, perused the material available on record and gone through findings of the lower authorities recorded in their respective orders as well as gone through the various judicial rulings placed before me by both the parties to drive home their contentions. Brief facts pertaining to the issue are that assessee was holding 12500 shares of M/s Kappac Pharma Ltd. which were acquired by him in F.Y. 2012-13 on 16.01.2013 for Rs. 1,87,500/-, which were sold during the year under consideration for Rs. 31,58,765/- [in November - December 2014], after holding the same for more than 12 months [more particularly around 22 months]. Consequent long term capital gain of Rs. 29,71,725/- earned from sale of these shares was declared in the return of income and as shares were of listed public limited company, sold through recognized stock exchange after holding for a period of more than one year and due STT [Securities Transaction Tax] was paid, long term capital gain was claimed exempt u/s 10(38) of Income Tax Act, 1961. These sh....
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....ons who have operated as entry providers but there is no reference in those statements about the assessee being one of the beneficiary, nor any material has been brought on record, otherwise also by the AO, to prove the assessee being beneficiary through them. There is no doubt that if the assessee has claimed LTCG from purchase and sale of shares, as exempt u/s 10(38) of I.T. Act, 1961, the primary onus is on the assessee to substantiate his claim by producing supporting evidences. On perusal of the details so submitted by the ld. AR of the assessee, it is seen by me that the assessee has furnished various documentary evidences in support of purchase and subsequent sale of the shares leading to earning of LTCG by the assessee, as mentioned in brief just herein above and mentioned in detail in the submission of the ld. AR. The assessee has purchased 12500 shares for Rs. 1,87,500/- and made payment through banking channel which stood debited in the bank account of the assessee. These shares were dematerialized on 26.06.2013 [12000 shares] and 26.08.2013 [500 shares] and deposited in the DMAT account maintained by Alankit Assignment Ltd., the independent third party.Thus it is clear ....
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....commodation entry and more particularly when even those persons have not specifically stated anywhere in their statement that the assessee is one of the beneficiary of arrangement of accommodation entry provided by them. In the entire assessment order the AO has not made any reference to any documentary evidence which can be said to be an incriminating material against the assessee which may reflect that the assessee has availed the accommodation entry of bogus long term capital gain. Mere uncorroborated statement of third person with which assessee has not at all dealt with in purchase and sale of share and even the person has not named the assessee being beneficiary from him / them or through his / their companies cannot be a ground for treating the transaction of purchase and sale of shares so made by the assessee as bogus, in absence of any cogent evidence or material brought on record by the AO. The statement of those third person about accommodation entry may be the starting point for doubting the transaction (though it is evident that assessee has not carried out any transaction through these persons or their companies) but for converting a doubt into certainty, the AO is re....
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.... also submitted that the ld. CIT(A) while confirming the addition has relied upon the judgement of Hon'ble Apex Court in the case of SEBI Vs. Rakhi Trading Pvt. Ltd. However, the facts of the case are quite different then the instant case of the assessee. In that case parties were involved in synchronized trading of shares whereas assessee has sold the shares through recognized broker and on online portal of stock exchange, where parties are completely unknown to each other and share prices are determined by market forces. Thus, facts being different, the aforesaid caselaw so relied upon by the ld. CIT(A) is not applicable in the case of appellant. Ld. AR has also rightly submitted that facts in the case of CIT Vs. NRA Iron & Steel Pvt. Ltd. so relied upon by ld. CIT(A) are also different then the facts of the case of the assessee and moreover within the same judgment, there is finding that AO has to independently make enquiries / issue summons to the lender and verify the identity / creditworthiness of such lenders, whereas in the instant case of the assessee, the AO has simply relied upon the information stated to have been available with him without independently verifying the d....
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....information was confronted with the assessee, the department has prima-facie discharged his burden. However, in the present case as is admitted by the ld. AO himself in the remand report that no report whatsoever was available with him at the time of making the assessment, thus there is no question of supplying the copy of report now relied upon by the department of Investigation Wing, Calcutta which has been made the vary basis for holding the transaction of sale and purchases of shares by the assessee as bogus. The Hon'ble SC in the case of Odeon Builders Pvt. Ltd. has clearly stated that not providing the copy of the third party information to the assessee who has prima-facie discharged the initial burden of substantiating the purchases through various documents is a serious error and entire addition was deleted. As in the present case, no such report was supplied, therefore, the judgment of Hon'ble Calcutta High Court in the case of Swati Bajaj is not applicable to the case of assessee. 2. The assessee is based in Rajasthan. All the Courts/Tribunals within the jurisdiction of Hon'ble Rajasthan High Court are bound by the decision of Hon'ble Rajasthan High Court. ....
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.... that proof of transactions being evidences have to be given weightage over presumptions 4.1 Pooja Agarwal, ITA 385/2011, In the said caseit was held that no addition can be made if the following conditions are satisfied: i. There is no trail which could substantiate that the cash has flown back to the assessee. ii. The transactions is supported by documents appear to be genuine transaction. iii. The statements recorded do not have a clear and a distinct remark about the assessee so as to challenge the genuineness of the transaction. 4.2 PCIT vs Pramod Jain, DB ITA No. 209/2018 The decision in case of Pooja Agarwal was followed 4.3 CIT vs Sumitra Devi [2014] 49 taxmann.com 37 (Rajasthan) Hon'ble Rajasthan High Court has held that in the said there were several suspicious circumstances as indicated by AO, however, the findings of AO were more on presumption rather than on cogent proof. Further, AO failed to show that documents placed on record by the assessee were false, fabricated or fictitious. 4.4 CIT vs PushpaMalpani [2012] 20 taxmann.com 597 (Rajasthan) "...3. Upon hearing learned....
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....SC) dismissed the SLP filed against the decision of Hon'ble Gujarat High Court in the case of PCIT vs Parasben Kasturchand Kochar [2021] 130 taxmann.com 176 (Gujarat). Hon'ble Gujarat High Court held that there was no substantial question of law and upheld the finding of the Tribunal (in Para 4). Hon'ble Tribunal held that in a case where assessee produced all the evidences and addition was made on the basis of statements recorded by Investigation Wing, which were neither confronted nor the assessee was allowed opportunity to cross examine, such addition could not be sustained (Para 2): "9. In our considered opinion, in such case assessee cannot be held that he earned Long Term Capital gain through bogus company when he has discharged his onus by placing all the relevant details and some of the shares also remained in the account of the appellant after earning of the long term capital gain. 10. Learned A.R. contention is that no statement of the Investigation Wing was given to the assessee which has any reference against the assessee. 11. In support of its contention, learned A.R. also cited an order of Coordinate Bench in ITA No. 62/Ahd/2018 in the matte....
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.... leave petition against judgment dated July 31, 2017, of the Jaipur Bench of the Rajasthan High Court in D.-B,L_TA. No. 197 of 2012 whereby the High Court held that the Tribunal was justified in deleting the addition of Rs. 4,07,00,000 of "on money" said to have been received with respect to subject land of the assessee holding that the question what was the price of the land at the relevant time, was a pure question of fact and that unless it was established on record by the Department, that as a matter of fact, the consideration did pass to the seller from the purchaser, the Department had no right to make any additions, especially since none of the witnesses were examined before the Assessing Officer, and the assessee did not have any opportunity to cross-examine them" [Emphasis Supplied] 7.4 Andaman Timber Industries (CIVIL APPEAL No. 4228 OF 2006) "...not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which th....
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....ing 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. This flawed approach forms the reason for the learned ITAT to interfere with the findings of the lower tax authorities. The learned ITAT after considering the entire conspectus of case and the evidence brought on record, held that the Respondent had successfully discharged the initial onus cast upon it under the provisions of Section 68 of the Act. It is 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 account and the consideration has been received through banking channels." The above noted factors, including the deficient enquiry conducted by the AO and the lack of any independent source or evidence to show that there was an agreement between the Respondent and any other party, prevailed upon the ITAT to take a different view. Before us, Mr. Hossain has not been able to point out any evidence whatsoever to allege that money c....
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....65 page 103 of the order of Hon'ble Calcutta High Court wherein following observation was made by the Hon'ble Calcutta High Court: "...Nothing prevented the assessee from mentioning that unless and until the report is furnished and the statements are provided, they would not in a position to take part in the enquiry which is being conducted by the assessing officer in scrutiny assessment under Section 143(3) of the Act.." In the instant case specific request was made for copy of report as well as copies of statements recorded of different persons. 10. In respect of the circumstantial evidences the Hon'ble Calcutta High Court has not disturbed the settled position of law that circumstantial evidences can be looked into only when direct evidences are not available (Para 69 page 108). In the instant case direct irrefutable evidences were made available to the ld. AO and, therefore, ignoring the direct evidences and jumping to circumstantial evidences is not justified even in reference to the decision of Hon'ble Calcutta High Court. Recently, on similar facts and circumstances, the Hon'ble ITAT Jaipur Bench in the case of Manoha rLal Chug Vs. ITO in ITA No....
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....cifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which could not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was no for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealer and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross - examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list ....
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....nts. At least something would have been unearthed from such global level investigation by two Central Government authorities. In case of certain donations given to a Church, originating through these benami bank accounts on the behest of one of the employees of the assessee company, does not implicate that GTC as a corporate entity was having the control of these bank accounts completely. Without going into the authenticity and veracity of the statements of the witnesses Smt. Nirmlala Sundaram, we are of the opinion that this one incident of donation through bank accounts at the direction of one of the employee of the Company does not implicate that the entire premium collected all throughout the country and deposited in Benami bank accounts actually belongs to the assessee company or the assessee-company had direct control on these bank accounts. Ultimately, the entire case of the revenue hinges upon the presumption that assessee is bound to have some large share in so called secret money in the form of premium and its circulation. However, this presumption or suspicion how strong it may appear to be true, but needs to be corroborated by some evidence to establish a link that GTC ....