TaxTMI 
TaxTMI 
2023 (1) TMI 1543
X X X X Extracts X X X X
X X X X Extracts X X X X
....in law the Id. A.O. has erred in denying the exemption claim made u/s 10(38) and in making the addition u/s 68 at Rs.31,22,986/- by treating the entire sale proceeds of listed long-term equity shares subjected to STT, sold on recognized stock exchange after holding the same for more than one year, as unexplained cash credit without properly appreciating the facts of the case, law and supporting documentary evidences in respect of sale and purchase of the LTCG shares furnished on assessment record. 3. That the alleged denial of exemption claim made u/s 10(38) and alleged addition made u/s 68 at Rs.31,22,986/- is wrong on facts and bad in law since the copy of information and documents received from Investigation Directorate, Kolkata have been relied upon by the Id. A.O. without verification and adjudication thereof and assessee appellant has not been provided with such material thus denying the opportunity of cross examination and or rebuttal of the same in gross violation of principal of natural justice. 4. In view of appeal grounds no. 2 & 3 denial by both the lower tax authorities of exemption of LTCG claim u/s. 10(38) of the Act may be restored as claimed in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....prices have been rigged and dealt extensively on the circumstantial evidences and finally the AO is of the opinion that the transactions are not genuine and made addition u/s 68 of the Act of Rs. 31,22,986/- and further the AO has estimated the commission @ 3% u/sec69C of the Act which works out to Rs. 93,690/- and assessed the total income of Rs.35,76,600/- and passed the order u/s 143(3) of the Act dated 29.12.2016. 3.Aggrieved by the order, the assessee has filed an appeal before the CIT(A) challenging the validity of assessment on the jurisdictional issue and merits of the case. Whereas the CIT(A) considered the grounds of appeal, submissions and findings AO and has confirmed the action of the Assessing Officer and dismissed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon'ble Tribunal. 4. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in dismissing the ground of appeal on the validity of assessment and further CIT(A) erred in not considering facts that the assessee has substantiated the purchase of equity shares, bank transactions, bonus shares and share split in the demat account. The Ld.AR su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nformation assessee has been named as beneficiary of any arranged/ fabricated transaction of the impugned penny scrip. iv) 4th appeal ground raised is supplemental ground in respect of both 2nd & 3rd appeal grounds. v) 5th and last appeal ground raised & contest in the above appeal is in respect of assumed 3% commission estimated on the disputed share transaction amount and added by Id. AO at Rs.93,690/- u/s.69C of the Act which has been upheld by 1st Appellate Authority. Evidences in support of impugned share transaction filed in assessment and appeal proceedings: Factual Paper Book filed before hon'ble Tribunal consists the documentary evidences establishes the genuineness of impugned tax exempt LTCG claim beyond any reasonable doubt that appellant assessee. Documents enclosed in the Paper Book in support of exempt LTCG claim of Rs. 31,22,986/- arose on online sale of alleged scrip listed on recognized stock exchange of BSE sold through SEBI registered stock broker at prevailing quoted trade rate on sale date duly subjected to collection of STT, after holding for the period of more than 12 months (long-term capital asset) stands filed on assessment and appea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e indictment of price rigging. Reason given by Id. CIT(Appeal) for confirming the impugned addition: i) On perusal of impugned appeal order it is evident that Id. CIT(Appeal) has confirmed the impugned addition solely on the basis of findings given by Id. AO but without giving any own finding or indicating any fault in the supporting evidences furnished in respect of the impugned transaction. ii) Ld. CIT (Appeal) in his appellate order has also relied and referred order passed by SEBI under in the case of third parties holding the said parties guilty of alleged price rigging by them in the above scrip. iii) Ld. CIT(Appeal) to confirm the impugned addition has heavily relied on the judgment of hon'ble High Court of Calcutta rendered in the case of Swati Bajaj & Others which in the present appeal does not have binding precedent in view of contrary judgments of hon'ble jurisdictional High Court of Bombay rendered in the case Shyam R. Pawar reported at (2015) 229 TAXMAN 0256 (Bombay) and in the case Ziauddin A Siddique in an order dated 4th March, 2022 passed in Income Tax Appeal No. 2012 of 2017. 2. Arguments on validity of impugned....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment of hon'ble High Court of Madhya Pradesh in the case of Forlic Realty (P.) Ltd. vs. PCIT [2019] 101 taxmann.com 311 (Madhya Pradesh). However, while relying on the above referred judgement Id. FAA has failed to appreciate that facts in that case being entirely different and distinguishable to the facts involved in the present case therefore ratio of the above judgement cannot be applied to the case of appellant. Your honor will appreciate that in the case of Forlic Realty having its registered office in Mumbai Maharashtra State and Branch Office in Indore, Madhya Pradesh was filing its return regularly since its incorporation in Indore and assessed as such and that assessee never raised the issue of jurisdiction before it was issued notice u/s.143(2) for A.Y.2011-12 and application filed by it before Chief Commissioner of Income Tax from Indore, Madhya Pradesh State for transfer of its case to Mumbai, Maharashtra State was rejected. Thus, the issue to decide before hon'ble High Court in this case was whether order passed by Chief Commissioner of Income Tax, Indore rejecting the application for transfer its case from Indore, Madhya Pradesh State to Mumbai, Maharashtra St....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an individual is above Rs.15 lakh, then the jurisdiction to assess the assessee lies only by AC/DC and not ITO. So, therefore, only the AC/DC had the jurisdiction to assess the assessee. It is settled law that serving of notice u/s. 143 (2) of the Act is a sine qua non for an assessment to be made u/s. 143(3) of the Act. In this case, notice u/s. 143 (2) of the Act was issued on 06.09.2013 by ITO, Ward-1, Haldia when he did not have the pecuniary jurisdiction to assume jurisdiction and issue notice. Admittedly, when the ITO realized that he did not had the pecuniary jurisdiction to issue notice he duly transferred the file to the ACIT, Circle-27, Haldia on 24.09. 2014 when the ACIT issued statutory notice which was beyond the time limit prescribed for issuance of notice u/s. 143(2) of the Act. We note that the ACIT by assuming the jurisdiction after the time prescribed for issuance of notice u/s. 143(2) of the Act notice became qoarum non judice after the limitation prescribed by the statute was crossed by him. Therefore, the issuance of notice by the ACIT, Circle-27, Haldia after the limitation period for issuance of statutory notice u/s. 143(2) of the Act has set in, goes to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITA No.2202/Kol/2015, order dated 29/05/2020) (iv). Hillman Hosiery Mills Put. Ltd .: (ITA No.2634/Kol/2019, order dated 12/01/2021) (v). Soma Roy: (ITA No.462/Kol/2019, A.Y.2015-16 order dated 08th January, 2020. (4) Here it is also important to record that section 292BB of the Act will not come to rescue the revenue as notice u/s.143(2) by non-jurisdictional Assessing Officer amounts to no notice u/s. 143(2) and it is only manner of service or defects in notice u/s.143(2) which is being cured by section 292BB of the Act. In this regard please refer to detailed elaboration made in the hon'ble Tribunal's order in the case Amiya Gopal Dutta, a copy of which order already stands furnished to hon'ble Bench in the course of hearing taken place in the present appeal on 22/02/2022. In view of the facts of the case and abovementioned judgments of hon'ble ITAT, Kolkata legal ground raised by assessee appellant may kindly be allowed. 3. Arguments On Merits of Impugned Addition made u/s.68 & 69C of the Act: (i). Rebuttal of findings of Id. AO & CIT(Appeal) in respect of huge rise in quoted rate of alleged Scrip On BSE: With r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....puted facts that stock broker of assessee Sharekhan Ltd. through him appellant has sold the impugned scrip has never been implicated by any law enforcement agency for any manipulation in scrip of SSTL. (iii). In the course of hearing taken place in the above appeal on 22/02/2022 before your honor while arguing the matter the Id. Departmental Representative in support of impugned addition made has relied and furnished two no. of adjudication orders passed under the Securities and Exchange Board of India Act, 1992 by SEBI in the case of M/s. Shyam Rathi HUF, order dated March 8, 2019 and another combined order dated June 24, 2019 passed in the case of Mr. Jayeshkumar Narottamdas Gandhi, Ms. Bharati Jayesh Gandhi & Mr. Deval Jayesh Gandhi. SEBI order furnished by Id. DR in the case of M/s. Shyam Rathi HUF relates to banning of him for two years denying him to access or make any dealings on stock exchanges holding him guilty for adopting unfair and prohibited practices in dealing of shares of Shri Shaleen Textiles Ltd. (in short "SSTL). In Appeal filed by Shyam Rathi HUF before The Securities Appellate Tribunal, Mumbai (in short SAT) the above referred adjudication order dated....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of shares had also taken place in off market deal (please refer to question of law raised by revenue and cited in the judgement) has held that no addition can be made merely on the basis of weak financial of alleged scrip not justifying the phenomenal rise in its quoted rate and on another basis of report of Investigation Wings where transaction has taken place through stock exchange, payments have been made through banking channels and even Security Transaction Tax("STT") has also been paid. The hon'ble Court has further held that the Assessing Officer also has not criticized the documentation involving the sale and purchase of shares and Tribunal has also come to a finding that there is no allegation against assessee that it has participated in any price rigging in the market on the shares of alleged penny scrip. (vii). In another judgement rendered by hon'ble jurisdictional High Court of Bombay: in the case of Shyam R. Pawar reported at (2015) 229 TAXMAN 0256 (Bombay) has held that no addition in respect of alleged penny scrip can legally be justified merely on the basis of allegation without bringing any contrary adverse material on record. With reference to he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial placed on record, we found that the facts in the present case and the facts in M/s. Pratibha S. Mhatre in ITA. No. 695/Mum/2018 dated 11.06.2021 are factually identical and the scrip dealt by these assessee's are also on M/s. Shree ShaleenTextiles Limited and we observe that the assessee has purchased these scrips and the transactions were all routed through proper banking channel and in Registered Stock Exchange. We also observed that the Assessing Officer has merely relied on the report from investigation wing and just because assessee has declared some profit and claimed deduction u/s. 10(38) of the Act he proceeded to make the additions. Since the facts in the present case are identical to the case of Mrs. Pratibha S. Mhatrev. ITO (supra) and in Mrs. Pratibha S. Mhatrecase the Coordinate Bench has relied in the case of Shashikant B. Mhatrev. Income Tax Officer in ITA. No. 694/Mum/2018 dated 29.05.2019, in the above case the Coordinate Bench has decided as under: - "7.2. We find that the Id AR pleaded that in an online platform, there would be no nexus between the purchasers and the seller and the delivery of shares and payments would be made through their respe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and address of the purchasers when the assessee sells the shares in the open market. In any case, merely because the alleged purchasers list given by the ld AO in his assessment order had not responded to notice u/s 133(6) of the Act, no adverse inference could be drawn on the assessee for the default committed by those alleged purchasers. The ld AO could have very well resorted to issuance of summons u/s 131 of the Act to those alleged purchasers and / or take necessary action on them in the manner known to law for non-compliance from their side. We hold that the assessee need not discharge her onus of bringing on record the alleged purchasers especially when the shares were sold in the open market in an online platform. Accordingly, the assessee need not prove the identity, creditworthiness of those alleged purchasers of shares and the genuineness of transactions within the meaning of section 68 of the Act. The assessee has received the sale proceeds of shares from her broker M/s Sharekhan Limited. The assessee had shown the credit in the name of M/s Sharekhan Limited in her books. Hence the assessee had duly discharged her onus by furnishing the entire sale details made through....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d AO. Moreover, the ld AO had during the course of examination of the assessee on oath u/s 131 of the Act had even posed a question vide Question No. 24 that assessee had purchased very few shares of well reputed companies during the year like Indus Ind Bank, Crompton Greaves, Larsen and Toubro etc. We find that the ld AO in para 13.4 of his order had observed that on examination of Shri ShivajiraoJondhale on oath u/s 131 of the Act, it was noticed that he had also invested in the shares of SRK Industries Ltd only based on an advice of his friend. Based on this, the ld AO had concluded that the whole basis of purchase of this share is a pre-knowledge of rigging of price and subsequently taking accommodation entry for Long term capital gains. We find from the demat statements for the period 1.4.2012 to 31.3.2013 and 1.4.2013 to 31.3.2014, the assessee had dealt in various reputed scrips and had duly dematted the same and all these transactions are duly reflected in the demat statements issued by the depository participant. 7.6. We find that the ld DR made general submissions with regard to the investigations carried out by Kolkata Income Tax Department after identifying 84 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l. Return data analysis of past years shows the following picture :- Assessment Year Income from salary Short Term Capital Gain Income from other Source Gross Total Income Total Income Exempt LTCG 2012-13 0 0 8,63,168 8,63,168 7,43,168 NIL 2013-14 2,40,000 0 3,98,213 6,38,213 5,36,940 NIL 2014-15 0 4,80,227 6,12,677 11,76,904 10,61,900 5,50,158 4. Main issues involved: The main reason for selection of scrutiny of this case was to examine the earning of suspicious capital gain from transaction in penny stock (input given by Investigation wing). In course of scrutiny, it is seen that assessee had shown income from Long Term Capital Gains from sale of shares of M/s SRK Industries Ltd. to the tune of Rs. 5,50,158/- on sales of shares for Rs.5,57,658/-. This Long Term Capital gain was claimed exempt from Income tax. The assessee had declared following calculation regarding income from long term capital gain on sale of shares exempt from taxation u/s 10(38): Name of Company Sale price Purchase price Exempt u/s 10(38) SRK Industries Ltd. 5,57,658 7,500 5,50,158 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....empt from income tax. All these observations are general in nature and are applied across the board to all the 60,000 or more assessee who fall in this category. Specific evidences produced by the assessee are not controverted by the revenue authorities. No evidence collected from third parties is confronted to the assesses. No opportunity of cross-examination of persons, on whose statements the revenue relies to make the addition, is provided to the assessee. The addition is made based on a report from the investigation wing. 13. The issue for consideration before us is whether, in such cases, the legal evidence produced by the assessee has to guide our decision in the matter or the general observations based on statements, probabilities, human behaviour and discovery of the modus operandi adopted in earning alleged bogus LTCG and STCG, that have surfaced during investigations, should guide the authorities in arriving at a conclusion as to whether the claim in genuine or not. An alleged scam might have taken place on LTCG etc. But it has to be established in each case, by the party alleging so, that this assessee in question was part of this scam. The chain of events and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e validity and correctness of the documentary evidences produced, the same cannot be rejected by the assessee. The Hon'ble Supreme Court in the case of Omar Salav Mohamed Sait reported in (1959) 37 ITR 151 (S C) had held that no addition can be made on the basis of surmises, suspicion and conjectures. In the case of CIT(Central), Kolkata vs. Daulat Ram Rawatmull reported in 87 ITR 349, the Hon'ble Supreme Court held that, the onus to prove that the apparent is not the real is on the party who claims it to be so. The burden of proving a transaction to be bogus has to be strictly discharged by adducing legal evidences, which would directly prove the fact of bogusness or establish circumstance unerringly and reasonably raising an interference to that effect. The Hon'ble Supreme Court in the case of Umacharan Shah & Bros. Vs. CIT 37 ITR 271 held that suspicion however strong, cannot take the place of evidence. 16. We find that the assessing officer as well as the Ld. CIT(A) has been guided by the report of the investigation wing prepared with respect to bogus capital gains transactions. However we do not find that, the assessing officer as well as the Ld. CIT(A), h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dities to Bengal by country boats acquired by Sahibgunj and the notoriety achieved by Dhulian as a great receiving centre for such commodities were merely a background of suspicion and the appellant could not be tarred with the same brush as every arhatdar and grain merchant who might have been indulging in smuggling operations, without an iota of evidence in that behalf. The cancellation of the food grain licence at Nawgachia and the prosecution of the appellant under the Defence of India Rules was also of no consequence inasmuch as the appellant was acquitted of the offence with which it had been charged and its licence also was restored. The mere possibility of the appellant earning considerable amounts in the year under consideration was a pure conjecture on the part of the Income-tax Officer and the fact that the appellant indulged in speculation (in Kalai account) could not legitimately lead to the inference that the profit in a single transaction or in a chain of transactions could exceed the amounts, involved in the high denomination notes, --- this also was a pure conjecture or surmise on the part of the Income-tax Officer. As regards the disclosed volume of business in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be given the opportunity to adduce all relevant evidence upon which he relies, and further that, the evidence of the opposite party should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party. Not providing the said opportunity to cross-examine witnesses, would violate the principles of natural justice. (See also: Union of India v. T.R. Varma, AIR 1957 SC 882; Meenglas Tea Estate v. Workmen, AIR 1963 SC 1719; M/s. Kesoram Cotton Mills Ltd. v. Gangadhar and Ors.,AIR 1964 SC 708; New India Assurance Co. Ltd. v. Nusli Neville Wadia and Anr. AIR 2008 SC 876; Rachpal Singh and Ors. v. Gurmit Singh and Ors. AIR 2009 SC 2448; Biecco Lawrie and Anr. v. State of West Bengal and Anr. AIR 2010 SC 142; and State of Uttar Pradesh v. Saroj Kumar Sinha AIR 2010 SC 3131). 24. In Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944, considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the Assessee had specifically asked to be allowed to cross-examine the representative....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the matter has been decided in accordance with law, as cross-examination is an integral part and parcel of the principles of natural justice." b) Andaman Timber Industries vs. Commissioner of C. Ex., Kolkata-II wherein it was held that: "4. We have heard Mr. Kavin Gulati, learned senior counsel appearing for the Assessee, and Mr. K. Radhakrishnan, learned senior counsel who appeared for the Revenue. 5. According to us, not allowing the Assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the Assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the Assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the Assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll the transactions through the broker were duly recorded in the books of the assessee. The broker has also declared in its books of accounts and offered for taxation. In our view to hold a transaction as bogus, there has to be some concrete evidence where the transactions cannot be proved with the supportive evidence. Here in the case the transactions of the commodity exchanged have not only been explained but also substantiated from the confirmation of the party. Both the parties are confirming the transactions which have been duly supported with the books of accounts and bank transactions. The ld. AR has also submitted the board resolution for the trading of commodity transaction. The broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus. In view of above, we reverse the order of the lower authorities and allow the common grounds of assessee's appeal." [quoted verbatim] This is essentially a finding of the Tribunal on fact. No material has been shown to us who would negate the Tribunal's finding that off market transactions are not prohibited. As regards veracity of the transactions, the Tribunal has come to its ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an appreciation of facts. There is nothing to indicate that the same was perverse or irrational. Accordingly, no question of law arises." d) The BENCH "D" OF KOLKATA ITAT in the case of GAUTAM PINCHA [ITA No.569/Kol/2017] order dated 15.11.2017 held as under vide Page 12 Para 8.1: "In the light of the documents stated i.e. (I to xiv) in Para 6(supra) we find that there is absolutely no adverse material to implicate the assessee to have entered gamut of unfounded/unwarranted allegations leveled by the AO against the assessee, which in our considered opinion has no legs to stand and therefore has to fall. We take note that the ld. DR could not controvert the facts supported with material evidences which are on record and could only rely on the orders of the AO/CIT (A). We note that in the absence of material/evidence the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore also fail. At the cost of repetition, we note that the assessee had furnished all relevant evidence in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee exempted u/s 10(38) of the Act on the basis of suspicion, surmises and conjectures. It is to be kept in mind that suspicion how so ever strong, cannot partake the character of legal evidence. It further held as follows: "We note that the Id. AR cited plethora of the case laws to bolster his claim which are not being repeated again since it has already been incorporated in the submissions of the ld. AR (supra) and have been duly considered to arrive at our conclusion. The ld. DR could not bring to our notice any case laws to support the impugned decision of the ld. CIT(A)/AO. In the aforesaid facts and circumstances of the case, we hold that the ld. CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We therefore direct the AO to delete the addition." f) The BENCH "A" OF KOLKATA ITAT in the case of SHALEEN KHEMANI [ITA No. 1945/Kol/2014] order dated 18.10.2017 held as under vide Page 24 Para 9.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncap Pvt. Ltd. On the floor of the stock exchange are ingenuine or mere accommodation entries. The CIT (A) after relying on the various decision of the coordinate bench, wherein on similar facts and circumstances, issue was decided in favour of the assessee, came to the conclusion that transaction entered by the assessee was genuine. Detailed finding recorded by CIT (A) at para 3 to 5 has not been controverted by the department by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the findings of CIT (A)." h) The Hon'ble Punjab and Haryana High Court in the case of VIVEK MEHTA [ITA No. 894 OF 2010] order dated 14.11.2011 vide Page 2 Para 3 held as under: "On the basis of the documents produced by the assessee in appeal, the Commissioner of Income Tax (Appeal) recorded a finding of fact that there was a genuine transaction of purchase of shares by the assessee on 16.3.2001 and sale thereof on 21.3.2002. The transactions of sale and purchase were as per the valuation prevalent in the Stocks Exchange. Such finding of fact has been recorded on the basis of evidence produced on record. The Tribunal has affirmed such fin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and circumstances of the case, decided the issue in favour of the assessee. We list some of these decisions :- ● Shri Gautam Kumar Pincha vs. ITO, ITA No. 569/Kol/2017, dt. 15/11/2017 ● ITO vs. Shri Shaleenkhemani, ITA No. 1945/Kol/2014, dt. 18/10/2017 ● Mahendra Kumar Baid vs. ACIT, Circle-35; ITA No. 1237/Kol/2017; order dt. 18/08/2017 ● Kiran Kothari HUF vs. ITO, ITA No. 443/kol/2017, order dt. 15/11/2017 The Hon'ble Jurisdictional High Court had in the following cases, upheld the claim of the assessee :- ● CIT vs. ShreyashiGanguli (ITA No. 196 of 2012) (Cal HC) 2012 (9) TMI 1113 ● CIT vs. Rungta Properties Private Limited (ITA No. 105 of 2016) (Cal HC)dt. 08/05/2017 ● CIT vs. Bhagwati Prasad Agarwal (2009 TMI-34738 (Cal HC) in ITA No. 22 of 2009 dated 29.04.2009 6.2. Consistent with the view taken therein, as the facts and circumstances of this case are same as the facts and circumstances of the cases of Navneet Agarwal (supra), we delete the addition made u/s 68 of the Act, on account of sale of shares in the case of both the assessees. The consequenti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e decision of the ITAT in holding that the Assessee had purchased shares out of the funds duly disclosed by the Assessee cannot be faulted. 6. Similarly, the sale of the said shaers for Rs 1,41,08,484/- through two Brokers namely, M/s Richmond Securities Pvt Ltd and M/s Scorpio Management Consultants Pvt Ltd cannot be disputed, because the fact that the Assessee has received the said amount is not in dispute. It is neither the case of the Revenue that the shares in question are still lying with the Assessee nor it is the case of the Revenue that the amounts received by the Assessee on sale of the shares is more than what is declared by the Assessee. Though there is some discrepancy 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 sec....