AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 490
X X X X Extracts X X X X
X X X X Extracts X X X X
....osed of by way of this consolidated order. 3. As agreed by both the parties the lead case to be taken up is Jiten K Ajmera legal heir of Late Kishor H Ajmera, in ITA No.626/Mum/2021 and finding given there in will apply mutatis mutandis in all the appeals. In various grounds, assessee has challenged the validity of the proceedings u/s. 153A and on merits, he has challenged the addition of Rs. 3,28,601/- made u/s.68 of the Act on account of alleged bogus / unexplained long term capital gain and also estimated addition by the ld. AO of Rs. 17,249/- u/s.69C on account of estimated unexplained expenses for getting the long term capital gain. The quantum of addition made in all the appeals are as under :- Sr. No. NAME PAN Appeal No Asst. Yrs. Total Income declared in Return Total Income as per Order Disallowances Tax Demand 1 JASMIN AJMERA AABPA7827Q ITA 984/MUM/2020 2012-13 10,99,230 72,84,400 61,70,340 19,06,635 2 ALPESH AJMERA AABPA7897C ITA 1144/MUM/2020 2012-13 61,38,470 91,98,140 30,59,670 9,45,438 3 ASHISH AJMERA AABPA9075G ITA 1135/MUM/2020 2012-13 19,45,270 82,43,260 62,9....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also filed before the ld. AO and ld. CIT(A). 5. One very important fact is that these shares were not purchased from market as assessee had subscribed convertible warrants of PIL offered at Rs. 2.25/- per warrant to be converted into share having face value of Rs. 1/- with premium of Rs. 1.25/- as per the pricing formula of SEBI; and at that time market price of a listed share at Bombay Stock Exchange was around Rs. 4.5/- per share. One very important fact is to be noted that ld. AO has not disputed the purchase of the shares as he has taxed net long-term capital gain only. Thus, the factum and quantum of purchase has not been disputed. Only sale of shares through online platform of BSE has been treated as bogus transaction. 6. These shares were sold on 15 occasions spanning over two accounting years between 16/08/2010 to 06/06/2011. The shares were sold from the stock exchange online screen based mechanism of BSE, through registered broker on which STT was also paid. Assessee has filed documents like brokers note, contract note, D-mat statement, bank statement evidencing sale receipt etc., were filed. Accordingly, the assessee had declared long term capital gain which was c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom BSE in respect of the aforesaid share transactions and found that the shares sold were mostly purchased by various group companies of Shri Shirish C Shah, the details of these companies had been provided from pages 3-9. The details contained the companies of Shri Shirish C Shah purchasing various other shares, the list of which have been elaborated in para 7.2 and there were similar purchases by his companies for PIL and found that 25,39,315 number of shares were purchased by these entities. The ld. AO has further noted that search was also carried out u/s.132 at the office premises of PIL on 09/04/2013 alongwith search in the residence and office premises of Shri Shirish C Shah. It was found by the investigation wing that books of accounts were maintained by Shri Shirish C Shah from Mumbai and there were no underlying assets and all the activities shown in the annual report were just window dressing. The ld. AO also issued summons u/s.131 to various concerns of Shri Shirish C Shah who had purchased shares of PIL from assessee, however, the summons was returned unserved. 10. Another fact which has been brought on record by the ld. AO that there were some ledger accounts foun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of the company of Shri Shirish C Shah and further if there is any material or information, the same was requested to be provided as well as cross examination of the concerned person. All these detailed submissions have been incorporated in the assessment order. The ld. AO then provided certain seized material and other documents which has been listed at page 13 and in response assessee has also given his detailed submissions which too has been incorporated in para 9 from pages 13-20 where various discrepancies were also pointed out with regard to the seized material and stated that some of the transactions which have been mentioned which purportedly stated to have been purchased by Ajmera family in various other scrips through cheque, but no such scrips were purchased and no such amount was ever paid by any of the family members. Like in the information there was mention of purchase of shares of Channel Guide India Ltd., which was never purchased. Thus, it shows that these documents are either forged or have no co-relation with the actual facts from the case of the assessee or the family members. Thereafter, the document-wise reply has been given which has been incorporated in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it would be easy to jack up the price of the shares. The analysis of stock available in Demat account shows that 31.3.2009 91.11% 31.3.2010 73.15% 31.3.2011 76% 31.3.2012 81.23% 31.3.2013 13.27% It means the shares which were in physical form would never hit the stock exchange as the same cannot be traded on BOLT. It also helps in jacking up the price of the shares as substantial shares were purchased from the market through various group companies of Shri Shirish C Shah. Various group companies of Shri Shirish C Shah was always buyer in the market as can be seen from the chart of purchase and sale of shares by Shri Shirish C Shah controlled companies. 14. It may be further appreciated that in such transactions, there may not be a direct evidence to exchange of money by the assessee to the broker / intermediate broker. It has to be gathered from the circumstantial evidences. 15. In this particular case, ledger account maintained by Shri Shirish C Shah was found and provided Ito the assessee at the time of search as well as during the course of assessment proceedings also. Further all the family members sold these sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Shri Shirish C Shah has been relied upon to make the additions. The various materials seized from the premises of Shri Shirish C Shah had since been provided to the assessee for comments. Therefore there is no requirement to allow cross examination of Shri Shirish C Shah to the assessee. 13. The ld. CIT(A), first of all had discussed the entire background and the search in the case of PIL and statement of its Director Shri Om Prakash Khandelwal and has also referred to certain statement wherein Shri Om Prakash Khandelwal has admitted that there is no activity in the company and company is not doing any business. He has referred to question No.8 which was recorded by the Investigation Wing at the time of search in the case of PIL wherein he stated that funds were raised through IPO in the year 1996 and certain entries were provided of share capital to the clients. Thereafter, he has referred to statement of Shri Radheshyam who was Manager for PIL, he has also corroborated the same fact that company was not doing any business for providing accommodation entry. He has also referred to the search in the case of Shri Shirish C Shah that he was involved alongwith his group companies t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er section 132(4) of the Income Tax Act on 30.05.2013 at A 401, Jain Nagar Society, Near Model Town, Upna Khumbaria Road, Surat. I also confirm that I have perused the contents of the same. Q. 14 In the said statement Shri Omprakash Anandilal Khandelwal in response to Question No. 4,5 and 6 has categorically admitted that M/ s. Prraneta Industries Ltd was sold off to Shri Shirish Chandrakant Shah in the year 2008. He has also admitted that Shri Shirish Chandrakant Shah along with one Shri Dewand Dineash chandra Master used M/s. Prraneta Industries Ltd to provide "one time entry" of share capital, unsecured loans and Long Term capital gains. Shri Omprakash Anandilal Khandelwal has also admitted that till 2008 he uses M/s Prraneta Industries Ltd for providing entry of purchase, sale, loans, advances and 'one time entry' of share capital to various clients. Sometime in 2006, he was approached by Shri Shirish Chandrakant Shah who offer to buy M/ s. Prraneta Industries Ltd to use the seam for providing accommodation entry of LTCG and share the commission received on such accommodation entries between themselves. Thus Ms/. Prraneta Industries Ltd was purchased by Shri Sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to be explained by Jasmine Ajmera. 7.16 In his reply Shri Ajmera has explained entries and has owned up transactions. His reply is as below: Ans: "The entire transaction mentioned above which has been reproduced from the data seized during the course of search on Shri Shirish Chandrakant Shah gives the detall of the accommodation entry of LTCG received by my family members and 4 of our group concerns. For eg. on 24.08.2010, we paid cash of Rs. 50,00,000 to Shri Shirish Chandrakant Shah and on 25.08.2010 sale proceeds of 60000 shares 44.10 and on 30.08.2010 sale proceeds of 68000 shares 43.90 (after deducting commission 5.25% on capital gain) of M/s. Prraneta Industries Ltd was receive by us as LTCG. Similar procedure was followed for the entire investment made in M/ s. Prraneta Industries Ltd. Q. 19 In view of the facts mentioned above, it is observed that your, your family members and 4 of your group companies have availed accommodation entry of LICG through M/s. Prraneta Industries Ltd to the tune of Rs 46,95,89,364. Please offer your comments on the same. Ans: Sir, I accept that I have taken accommodation entries of LTCG in the name ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at however, in the case of investment made in the preference shares of M/ s. Empower Inds. Ltd. of Rs. 15,42,40,000/- payment for the same was made through RTGS which is duly getting reflected in this data reproduced above. For eg. 12.01.2011 RTGS of Rs. 1,68,75,000/- against preference shares of M/ s,. Empower Industries India Ltd." 14. After noting all these facts and the statement, he held that in so far as the retraction of statement by Shri Jasmin Ajmera, the same is not lawful and has rejected the same holding that affidavit filed by Shri Jasmin Ajmera has been rejected by the DDIT on the ground that there is no basis that statement was recorded under undue force or pressure. Thereafter, after rejecting the retraction filed by Shri Jasmin Ajmera by way of two affidavits one before the Investigation Wing and one before the ld. AO, he held that there was no pressure or use of force on him during the course of search. He has also distinguished the judgments relied upon by the assessee and finally he upheld the addition of Rs. 3,28,601/- for A.Y.20112-13. 15. Before us ld. Counsel on behalf of the assessee after explaining the entire facts submitted that here in this case i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....officers for more than 48 hours of continuous interrogation and the statements were pre meditated and prepared by the authorized officers. He also pointed out various discrepancies in the statement also that there are various inconsistencies and no co-relation with several parts of the statements which was specifically pointed out to both ld. AO and ld. CIT(A), who have conveniently ignored and have taken into account only part of the statements. 16. Even during the course of assessment proceedings when assessee had filed all the documents like contract cum bill of sale of shares, Demat transaction, payment of STT and the details of shares acquired in the earlier years as well as in the previous year alongwith details retraction affidavit and explanation for each of every issues raised in the notice, ld. AO has simply relied upon the statement recorded in the search of Shri Shirish C Shah and statement of Shri Jasmin Ajmera for drawing adverse inference. 17. In sum and substance he has given the detailed summary of various replies in response to the notices issued by the ld. AO are as under :- iii) Re: Reliance on statement of JA (a) First of all, except for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ered during course of the search nor any copies of such material is given. As such, material cannot be used against the Assessee in any case. Meaningful reply can be given only after being provided with entire material as well as after giving opportunity of cross examination. (v) BSE Data (a) It appears from the data of BSE provided that this data shows sale and purchase transactions of PIL. (b) Our preliminary observation on going through this data is as under: It is seen that the scrip was actively traded during this period. It is seen that there were multiple buyers and sellers in the market. It is seen that there was participation from all kind of cliental like retails/ Corporates/ Institutions. It is further seen that, in fact many parties who had purchased the shares sold by us in the market had resold in the open market. Please note this data confirms our transactions are executed through the Stock Exchange, at the prevailing market rate and same authenticates the bills cum contracts and bank statements already submitted by us in our previous submissions. (c) Screen based computerized trading me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ares so as to complete the alleged circle. This is also against the theory of alleged accommodation entry propounded by the A.O . (h) In absence of any copies of the alleged material found from the premises of SCS, no comments are offered. (i) As regards affidavits alleged to have been executed by some directors of the companies who had purchased the shares, the Assessee is least concerned with the purchaser much less their internal administration. (o) Requested to intimate if intend to proceed ahead. 4.11 17.02.2016 -Notice u/s. 142(1) of the Act for A.Y. 2008-2009 to A.Y. 2014-2015 [Pg. 169 to 170 of the P.B.] Details of the seized material and documents provided to the Assessee was listed (enclosed in pendrive) - Scanned copies of material seized from the premise at Bokadia Mansion A-1 2, 5,6 and 7/Rebuttal at Pg. 284 of P.B.) * Scanned copies of material seized from the premise at Dhankar Wadi A-12 to A35 and RA1 & 2/Rebuttal at Pg. 284 of P.B.J * Scanned copies of material seized from the premise at Shubh Niwas A-1 to A75 and A79 to A89 * ac2 excel file - giving details of transactions with you an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ily members. Many of the scanned pages are loose sheets, rough pages and scribblings, which do not make any sense. (vi) Under the circumstances, no adverse inference can be raised on the basis of the material provided to the Assessee on fact and in law. (vii) Some of the documents bear the name of family members and some transactions are shown to have purportedly executed in their names. The Assessee strongly denied having done such transactions. It appears that some person has wrongfully and fraudulently used the names of family members with malafide intention and without the knowledge of the Assessee. (viii) It seems that few copies of share certificates and blank transfer forms having details of the family members are found from the premises of SCS. The Assessee or the family members had never subscribed to the shares of such companies. (ix) Some pay orders issued by HDFC Bank Ltd. in favour of Channel Guide Ltd. and family member's names are scribbled on it for some reason which the Assessee is not aware of. Therefore, requested to allow cross examination of the author of this scribbling (x) This is a case of clear forgery and ch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....davits 134 on oath are notarised by only three notaries, and that too, within few days (81 affidavits are executed and notarised on one single day), which is difficult to believe as the deponents are scattered at different places. Even the format of these affidavits is not as per the Oath Act. It is not properly verified, indentified or administered. * The purported declarations are not on stamp paper as required under law. * There is no mention of Notarial Register Sr. No. on any of the said purported Declarations and Affidavits. (c) If still reliance is placed on the affidavits, requested to let the Assessee know how and in what manner he intends to rely upon and also give an opportunity to cross-examine such persons. (d) In any case, affidavits / declarations do not cover many other companies / individuals, who have alleged to have purchased shares sold by the Assessee and family members. (e) Requested to let him know what action has been taken against the deponents as well as concerned companies as well as against SCS. Whether the income supposed to have been received by them from SCS has been declared/ assessed in their case? ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessment order, there is merely a passing reference to the statement u/s. 132 (4) recorded during course of the search proceeding against Mr.Jasmin K. Ajmera. Of course, after taking note of the exhaustive reply of Mr.Jasmin K. Ajmera on this aspect, in the ultimate analysis, the A.O. does not appear to have relied upon this statement. In any case, a copy of the so called documents seized from Mr. Shirish Shah and as referred at Question 18 put to Mr. Jasmin Ajmera on 27.07.2013 was neither confronted to him nor was a copy thereof given to him at the time of taking his statement. Similarly, the statement of Jasmin Ajmera as referred at Question 6 of the statement of the Assessee taken on 28.07.2013 was not shown at the time of taking his statement. Mr. Jasmin Ajmera had, in his detailed Affidavit submitted to the A.O., already clarified this very aspect. In any case, there is no statement of the Assessee accepting any such contention. (ii) Without prejudice to the above preliminary objection, it is submitted that the said statement(s) recorded during the search on 25 to 29 July, 2013 were categorically retracted vide affidavit dated 02.08.2013 as the same were taken under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Assessee recorded during the search on 25 to 29 July, 2013 were categorically retracted vide affidavit dated 02.08.2013 as the same were taken under coercion, undue influence and utter duress to the point of calling it white collar extortion. Infact the Assessee was not at his residence during the course of search from 25th July 2013 till 27th July 2013 and his signatures were taken on pre-printed statement. This fact was explained in his affidavit dated 02.08.2013. Therefore, such a statement is not a valid statement in the eyes of law and, consequently, is not binding on the person who gave the statement. It is worth mentioning here that the AO in his entire order has nowhere disputed the contents of the affidavit filed by The Assessee. In fact, there is not even a mention about the retraction made by The Assessee. It is a settled law that if the facts as stated are not disproved or disputed by the Department then the same have to be treated as true and correct. (v) The Assessee further submits that, to the admission of the A.O. himself no incriminating material whatsoever was unearthed during the course of search against the Assessee and his related concerns, much les....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... regulatory authorities like SEBI, BSE, RBI etc., have taken any adverse view regarding PIL with the involvement of the assessee family. In some case SEBI has investigated and in case of few persons who have invested in shares but all of them got absolved by SAT. He has also pointed out that the entire allegation is that assessee was involved with purchasing of said shares through Shri Shirish C Shah, however, it is a matter of fact that many public listed companies and FIIs have also purchased shares of PIL through stock exchange. The total quantity of shares of PIL alleged to have been purchased by companies managed and controlled by Shri Shirish C Shah are far less than the quantities sold in the stock exchange. Regarding sole reliance upon alleged evidences collected in the course of search proceedings against Shri Shirish C Shah in the comments of the assessee, he has submitted that cannot be taken into consideration as same is illegal and bad in law for the following reasons :- i) The material so relied upon is found from a third party's place and not from the Assessee's place. (ii) As is self evident from the replies given in course of the assessmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., have absolutely no relevance so far as the Assessee is concerned. Further, the Assessee is not aware whether any regulatory authorities have taken any adverse view against any of such companies on the basis of so called irregularities. i. The fluctuation of prices is a very common feature of any stock exchange and with respect to any script. Some of the scripts in which similar movements were there and which are never disputed by the Department [Pg. 255 to 269 of P.B.J.As such, this demolishes the very foundation of the A.O. These are only few scripts which were randomly selected for ready reference. There are many other scripts which had similar price fluctuation but which are accepted as genuine and proper even by the Department. j. Further, the Assessee is a regular investors in equity markets, as is clear from the history k. None of the parameters of a bogus transaction is applicable to our sale transactions. 21. Further, the A.O., in his impugned order, has mentioned about a whole bunch of documents unearthed / seized from the premises of Shirish C. Shah who was searched by the Department, purportedly on the basis of which the additions have bee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t a particular receipt is taxable and that it could be brought under the taxing provision. Reliance in this regard is place on the decision of the Hon'ble Supreme Court in the case of Janki Ram Bahadur Ram vs.CIT reported in (1965) 57 ITR 21. 23. Lastly, he submitted that Securities Appellate Tribunal, Mumbai vide judgment dated 05/10/2020 which was with respect to investigation conducted in the scrip of PIL, later on known as Aadhar Ventures India Ltd. for the period 01/01/2009 to 24/04/2015 wherein, the allegation was that price was artificially raised fraudulently through a trading pattern which was manipulative. The SAT in the case of Indivar Traders Pvt. Ltd. vs. Wholetime Member SEBI had held that in the instant case there was no direct evidence of operation of fraud between the assessee as a seller with that of the buyer or with other notices in the impugned order and the assessee has not contributed through LTP on the basis of one trade executed on the self-side unless connection was established with the buyer which in the instant case was lacking and thus, it was held that there was no fraudulent or unfitted facts in securities. Thus, in the case of transaction of s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the search proceedings which reflected the hostile and inimical attitude of the assessee He has also mentioned the DDIT's letter dated 19-11-2013 giving detailed reasons for rejecting the said retraction of the assessee. The ld. DR has also filed paper book containing statement of Shri Jasmin Ajmera and the ledger account showing the movement of cash with Shri Shirish C Shah which was confronted to Shri Jasmin Ajmera while recording his statement u/s. 132(4) of the Act dated 27/07/2013. She has also filed certain SEBI orders with respect to trading in respect of Aadhar Ventures Pvt. Ltd. (formerly known as PIL). Thus, it was submitted that in view of this statement of Shri Jasmin Ajmera alongwith other seized documents, it is clear that the entire transaction of shares of PIL was nothing but an accommodation entry for getting long term capital gain for the entire family. DECISION 25. We have heard rival submissions, perused the relevant material referred to before us at the time of hearing and also the relevant finding given in the impugned orders. The case of the Revenue before us to treat the long term capital gain of Rs. 3,28,601/- as bogus long term capital gain a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espect of purchase of the shares of PIL. It has been stated that assessee and Ajmera family members were regular investors in equity markets having substantial portfolios in volume and value. A detail summary of investments made in hundreds of scrips has been given in the paper book. Further, there were family broking concerns and SEBI registered stock brokers of BSE and NSE since 1996 and all the family members were regularly making investments and dealing in different shares including PIL in earlier years and some of the transactions in PIL undertaken in the year 2005 and LTCG in such transaction in the shares of PIL have been accepted by the department. In so far as purchase of shares of PIL is concerned as noted in the foregoing paragraphs, assessee has subscribed to convertible warrants of PIL which was offered at Rs. 2.25 per warrant when the market price of the listed share of PIL in the stock exchange was Rs. 4.5 per share and the entire consideration was paid by account payee cheque. These shares were sold in two accounting years ranging from Rs. 43.90/- to Rs. 78.95/- and not all the shares were sold and almost more than 25% shares of PIL were still held by the assessee. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... construction and hospitality business. Another point which has been harped upon is that PIL did not had any worth or carried out any business. Thus, the statement alongwith this ledger account, is most clinching evidence against the assessee which has been alleged by the department before us to treat the long term capital gain as bogus. 28. Before us, it has been pointed out that from the bare perusal of the ledger account it is seen that there is no name mentioned of any of the members of the assessee's family or any concern belonging to Ajmera family. One of the biggest allegations of the assessee against the department was that the so called seized documents found from Shri Sirish C Shah which was put to Shri Jasmin Ajmera on 27/07/2013 was neither confronted to him nor copy was given to him at the time of taking the statement. This aspect has been challenged and objected by Shri Jasmin Ajmera before the Investigation Wing immediately after five days after the recording of the statement on 02/08/2013, whereby Shri Jasmin Ajmera has filed retraction affidavit stating the entire facts and the circumstances in which the statement was recorded and no such document was even c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....there are various retraction affidavits, representations and letters submitted before the Investigation Wing immediately after the search and also retraction filed before the ld. AO giving rebuttal and clarification for every question and answer given and also stating that statement taken was under huge pressure and pre fabricated answers and question and he was not shown the document at the time of statement. Once the assessee or Shri Jasmin Ajmera alongwith other family members have retracted statement and have given pointwise rebuttal and details for each and every question in the additional affidavit dated 14/08/2015 and also before the Investigation Wing on August 2013, then at least department should have called Shri Jasmin Ajmera or all those persons who have filed their affidavits either to cross examine them or seek explanation of each and every aspect narrated in the affidavit and the submissions made. They should have called upon him and examined or ask them to testify the retraction made through averment made on oath. All these averments made on oath in the affidavits and the submissions at least should have been dealt either by the Investigation Wing or by the ld. AO. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o say that the core of all the decisions of this Court is to the effect that the voluntary nature of any statement made either before the Custom Authorities or the officers of the Enforcement under the relevant provisions of the respective Acts is a sine qua non to act on it for any purpose and if the statement appears to have been obtained by any inducement, threat, coercion or by any improper means that statement must be rejected brevi manu. At the same time, it is to be noted that merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise, etc. to establish that such improper means has been adopted. However, even if the maker of a the statement fails to establish his allegations of inducement, threat, etc. against the officer who recorded the statement, the authority while acting on the inculpatory statement of the maker is not completely relieved of its obligations in at least subjectively applying its mind to the subsequent retraction to hold that the inculpatory statement was not extorted. It thus boils down that the authority or any court intending to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r 4 days and most importantly when there was an allegation that the questions and answers were pre-prepared and he was not shown the documents and he and his family members were forced to sign because of the unceasing pressure on Jasmin Ajmera continuously for 48 hours during the search, then onus all the more was on the Investigation Wing and the Assessing Officer to verify the contention of the retraction of Shri Jasmin Ajmera and he should have been put to cross examine once again as to why he is retracting his earlier statement. In such a situation as held by the Hon'ble Supreme Court, it is very difficult to treat the inculpatory statement of Shri Jasmin Ajmera against assessee especially in light of other facts and material of the case. Though assessee cannot prove that statement was taken under duress and coercion, but once this fact of statement was recorded under pressure or coercion has been stated or alleged, then ld. AO or Investigation Wing all the more should have negated this allegation made by the person who has given the statement and he should have been cross examined or at least asked upon to substantiate the retraction. If this process has not been followed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cuments loses its evidentiary value in view of the judgment and principle laid down by the Hon'ble Supreme Court in the case of Andaman Timber Industries reported in (2016) 15 SCC 785 and catena of other judgments which has been given before us. 33. One very important point which has been raised by the ld. DR before us that there are series of SEBI orders in respect of scrip of PLI. With respect to three SEBI orders referred by the ld. DR before us, analysis of all these orders has been filed before us by the ld. Counsel. From all these SEBI reports it is seen that neither the name of the assessee nor the family members or any of the brokers with whom assessee had undertaken the sale transaction was part of the investigation report of the department on the basis of which SEBI had initiated enquiry. SEBI has taken action against certain persons who have dealt with the selling of shares post information given by the Investigation Wing, but nowhere SEBI has treated assessee or his family members as suspected persons having indulged into alleged price manipulation in the shares of PIL or sold the shares to dubious or controlled entitles of Shrish S Shah. One very important fact ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion taken by the SEBI has been reversed by the SAT, then, transaction of sale of shares in the hands of the assessee cannot be held to be non-genuine. Accordingly, the SEBI orders referred by the ld. DR does not support the case of the Revenue because in none of the orders any reference has been made to the assessee or assessee family and even such orders passed by SEBI have been quashed by the SAT. 35. Now coming to the merits of the case we have already noted that all the family members and the assessee were regular investors who had invested in several scrips including that of Pranneta Industries Ltd., and once these shares were allotted through convertible warrants in the year 2009 and were sold in AY 2010-11 on the price quoted in the stock market and on the stock exchange online screen based mechanism after paying STT and duly supported by statutory contract notes, it cannot be held that sale proceeds are bogus. 36. Another important fact is that ld. AO has not doubted the purchase of the shares and if the shares purchased in the earlier year have been accepted and if the part of the said shares have been sold during the year and all the documents for online sale and de....