9911796707
TMI Blog2019 (1) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... y, thereupon shall automatic stood as a necessary corollary. - Decided in favour of assessee - ITA No.1918/Kol/2018, ITA No.1919/Kol/2018, ITA No.1920/Kol/2018, ITA No.1921/Kol/2018 And ITA No.1922/Kol/2018 - - - Dated:- 4-1-2019 - Shri S.S, Godara, Judicial Member For The Assessee : Shri B.K. Poddar, FCA For The Revenue : Shri Arindam Bhattacharya, Addl. CIT-DR ORDER These five assessees have filed their respective appeals for assessment year 2014-15 against the Commissioner of Income-tax (Appeals)-14-10, Kolkata s separate order(s) dated 21.06.2018, 29.06.2018 12.07.2018 passed in case No(s) 104/CIT(A)/14/Ward-47(2)/2016-17,105/CIT(A)-14/Ward-47(2)/2016-17/171/CIT(A) -14/Ward-48(4)/2016-17, 408/CIT(A)-10/Ward-36(3)/14-15 398/CIT(A)-10/Ward- 34(2) 2014-15/2016-17/Kol affirming the Assessing Officer s identical action treating their Long Term Capital Gains of ₹9,40,715/-, ₹9,37,290/-, ₹9,12,979/-, ₹9,89,150/- ₹9,15,209/-; respectively to be unexplained cash credit u/s 68; involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short the Act . Heard all the assessees as well as the department reiterating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstantial evidence leading to the conclusion that LTCG was not a genuine one. 5.1.1. Considering the financials and fundamentals of the company M/s Unno Industries Ltd., in the context of no significant corporate announcements or any big orders of purchase, the AO found the price movements of the scrip M/s Unno Industries Ltd. quite abnormal compared to the rise of the index i.e. BSE Sensex during the corresponding period. Add to this, the learned AO analysed the information received from the investigation wing of the Department. 5.1.2. The AO further analysed the statement of one Shrl Anil Kumar Khemka deposed before the Authorised Officer in which the former gave details of the Penny Stocks which were used for facilitating pre-arranged bogus LTCG/STCL (Short Term Capital Loss) along with 'jamakharchi' clients. He notes that M/s Unno Industries Ltd. was one such Penny stock which was used for such purposes as admitted by the above referred deponent. 5 1.3. Thus, considering all the facts and circumstances, the AO reached the conclusion that everything I.e., from purchase of stock to receiving of cheque for its sale was done in a systematic and organised m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually been done from the party mentioned in the bill to the appellant. It is also noteworthy that even though the bill in respect of M/s FESTINO VINCOM PVT LTD. is dated 07.10.2011, the actual debit of the purported sum is on 31.03.2012 and the alleged credit of the shares is on 02.03.2012. The share bill does not mention the individual distinctive numbers of share certificates that has been sold. It is also noteworthy to mention here that even though the share bill dated 07.10.2011 mentions about the sale of shares of a private limited company viz. M/s Baviscon Vincom Pvt. Ltd., the appellant has ultimately sold the shares of M/s Unno Industries Ltd. which was in fact a merged entity in which the shares of M/s Baviscon Vincom Ltd. (a public limited company) got amalgamated. The appellant has not been able to produce any proof with respect to the folio number or distinctive share certificates evidencing the transfer of the shares in physical format through endorsement from the alleged seller, 5.1. 7. Whether the purchase of shares have been made through a broker 15 also not confirmed through production of any broker note or copies thereof. If the transaction of purchase has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the alleged purchase was debited from the appellant's bank account on 31.03.2012. The record date for bonus offering was known to the seller and yet even before the receipt of the consideration sum, it parted with the shares knowing very well that substantial amount of bonus is to be foregone. This itself leads to the unequivocal conclusion that the appellant's contention with respect to the purchase of shares Is not in the domain of normal human conduct. It is also significant to mention here that another company viz. M/s Pinnacle Vintrade Ltd. also declared bonus issuance on the same record date. That both these companies namely M/s Pinnacle Vintrade Ltd. and M/s Baviscon Vincom Ltd applied for amalgamation with M/s Unno industries within the next 2 months also points to a welldesigned planning In providing accommodation to bogus long term capital gain seekers through the artifice of creating a private company, converting the same to a public company, issuing bonus shares, declaring split of the shares and thereby increasing the share- holding and ultimately amalgamating with a listed company which is very thinly traded and having no business name its worth: M/s Bavis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... innacle Vintrade Limited, Basuklnath Realestate Limited and Baviscon Vincom Limited under Section 393 of the Companies Act, 1956. The Hon'ble High Court, had vide Order dated July 13, 2012 directed that a meeting of the Equity Shareholders of UIL be convened to consider and approve the proposed Scheme of Arrangement. Accordingly a meeting of the Equity Shareholders of UIL was convenedon Monday, August 13, 2012, and the meeting approved the Scheme of Arrangement. It is noteworthy to mention also that as on date 31.03.2011, the net profit after tax and earning per share of M/s Unno Industries Ltd. was in the negative and yet the appellant continued to hold the shares of the same even when the company M/s Baviscon Vincom Ltd. applied for amalgamation with M/s Unno Industries Ltd. within a few months. It is also noteworthy to mention that even taking into account the bonus shares received, the net purchase value per share to the appellant was almost ₹ 16 per share whereas from the table mentioned below it can be seen that net worth of one share of M/s Unno Industries Learned. Was only ₹ 7.87 as on 31.03.2011. And yet, the appellant continued to hold the shares of M/s Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.58 (10.92) 17.24 Balance sheet statement 31.03.2012 31.03.2011 31.03.2010 Sources of funds Paid up equity shares capital 650.00 650.00 650.00 Reserves surplus (71.13) 20.04 20.04 Profit loss account debit balance 158.27 147.35 Net worth 578.87 511.77 522.69 Secured loans 0.00 0.00 0.00 Unsecured loans 43.99 278.87 330.81 Deferred tax liability 0.00 0.00 0.00 Unsecured loans 43.99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this regard- The doubtful nature of the transaction and the manner in which the sums were found credited in the books of accounts maintained by the assessee have been duly taken into consideration by the authorities below: The transactions though apparent were held to be not real one. May be the money came by way of bank cheques and paid through the process of banking transaction but that itself is of no consequence. (Commissioner of Income Tax Vs. P. Mohanakala)(SC) 5.1.14. In identical circumstances, the Nagpur bench of the ITAT In the case of Sanjay Bimalchand Jain versus the ITO in LT.A. No. 61/Nag/2013 observed as below- All the authorities below, in particular the Tribunal, have observed in unison that the assessee did not produce any evidence to rebut the presumption drawn against him under Section 68 of the Act', by producing the parties in whose name the amounts in question had been credited by the assessee in his books of account. In the absence of any cogent evidence, a bald explanation furnished by the assessee about the source of the credits in question viz., realisation from the debtors of the erstwhile firm, in the opinion of the assessing office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anking channel can be held to be assessee's undisclosed income received in the garb of unjustified share application money. In the present case I find that there is no justification whatsoever that the shares of an unknown company of ₹ 5/- can be sold within two years' time at ₹ 485/- without there being any reason on record. This unexplained spurt in the value of unknown company shares is beyond preponderance of probability. It has been held by Hon'ble Apex Court in the case of Durga Prasad More and Sumati Dayal that the test of human probabilities have also to be applied by the authorities below. In the case of Sumati Dayal 214 ITR 801, it was held that during the year 1970-71 (pertaining to the assessment year 1971-72) between April 6, 1970, and March 20, 1971, the appellant claims to have won in horse race a total amount of ₹ 3,11,831/- on 13 occasions out of which ten winnings were from jackpots and three were from treble events. Similarly in the year 1971-72, the appellant won races on two occasions and both times the winning were from a jackpot. These receipts were tested on the touch stone of human probability and it was found that apparent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the above referred decision has since been affirmed by the honourable Nagpur bench of the Bombay High Court in INCOME TAX APPEAL NO. 18/2017 in the case of SANJAY BIMAlCHAND JAIN L/H SHANTIDEVI BIMALCHAND JAIN ,VERSUS THE PR.COMMISSIONER OF INCOME TAX-I,NAGPUR ANOTHER. 5.1.16. On identical circumstances, the Honourable Mumbai Tribunal in the case of Ratnakar M. Pujari versus ITO in I .T.A. No.995/Mum/2012 observes as follows ITA No.1918-1922/Kol/2018 A.Y 2014-15 Page 9 We have considered the rival contentions and also perused the material available We have observed that no scrutiny assessment has been framed for the impugned assessment year by the Revenue u/s 143(3) of the Act originally, while based on information received from Addl.CIT(Inv.), Unit-v, Mumbai that the assessee is indulging in non-genuine and bogus capital gains from transaction of sale and purchase of shares of M/s Shiv Om Investment and Consultancy Limited which was penny stock company and pre-dated contract notes were issued by the Brokers to manipulate and introduce long term capital gains in favour of the assessee which are exempt from tax u/s 10(38) of the Act leading to escapement of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the brokers and payments were made in cash will not be of any help at this stage as the said findings of the AO treating the purchase of shares as sham and bogus in the assessment year.200S-06 has attained finality, Since, purchases are held to be bogus and sham which has attained finality, the sale in consequence thereof whereby payments are received through cheque or shares being sold through stock exchange are not of any help to the assessee for claiming the exemption as long term capital gains as the allegation of the Revenue is that the assessee has in collusion with the Brokers has manipulated and camouflaged the entire transactions of sale and purchase of shares in getting issued pre-dated contract notes for purchases of shares for which payments were also made for these purchase in cash and hence these purchases never existed at that relevant time . It is the allegation of the Revenue that the entire sale and purchase of shares were manipulated by the assessee in collusion with the brokers in order to earn tax free exempt long-term capital gains on sales of shares u/s 10(38) of the Act whereby unaccounted cash of the assessee has been introduced in disguise in lieu of sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uflaged with an intention to evade taxes . We order accordingly. 5.1.17. In similar circumstances, the Honourable Ahmedabad Tribunal in the case of Kamalchand Nathmal Lunia Vs. ITO, Ward-S(2), Surat in ITA number ITA 436/Ahd/2013 observed as follows- ''After hearing both the sides and considering the totality of the facts and circumstances of the case, we are also of the opinion that the purchase as well as the sale transactions of the scrips in question was not genuine. The reason for taking this view is that the purchase rate had not tallied with the rate as per BSE website and that the purchases have also been made in cash. Only paper transactions have been made because there was no evidence of physical delivery of the shares. The AO was right in asking the details of the dividend if any received during the holding period. But no such information was provided at any stage of proceeding. Even, the entries in the Demat Account were not sacrosanct because the AO had found on investigation that those were all off market transactions. It was also noted by the AO that Hon'ble ITAT Mumbai Bench had held that those companies were nothing but entry providers. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon by the appellant, I observe that all of them are distinguishable on facts as the genuineness of the purchase of shares Is not proven in the Instant case and the period of holding as stated is not also proven with any verifiable evidence. 5.1.21. Thus, from the facts and circumstances of the case and the Catena of case laws referred to above, I come to the conclusion that on the basis of documentary evidences, circumstantial evidences, human conduct and preponderance of probabilities what appears to be apparent in this case is actually not real. I affirm the conclusion reached by the AO in this regard that the financial transactions are actually sham and the entire edifice is only a colourable device meant to be a smoke screen to defraud the revenue and evade taxes. The abnormal profits and consequent long-term capital gains on sale of shares has 'actually not arisen from investment in shares In natural or in ordinary way but due to a designed, preplanned, arranged trading made through a camouflaged artifice in cahoots with operators. I also come to the conclusion that the appellant has failed in giving any evidence to prove' the genuineness of the purchase of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emphasizes time and again that the instant issue of bogus LTCG has rightly been decided against the assessee in both assessment as well as lower appellate proceedings raised pertaining to artificial manipulation of share prices in both M/s Unno Industries Ltd. Sharp Trading Finance Ltd. We find no force in Revenue s instant argument. This tribunal coordinate bench s decision in ITA 2394/Kol/2017 Prakash Chand Bhutoria vs. ITO decided on 27.06.2018 for AY 2014-15 itself upholds such a share prices increase to be genuine qua the above former entity as under:- 5. In response to the queries raised by the assessing officer on the issue of the fact that the assessee received ₹ 31,62,372/- from sale of once scrips i.e. Unno Industries Ltd. the assessee submitted the following facts: Details of Purchase of share for Long Term capital Gain F.Y.2013-14 (A.Y.2014-15): 1. I state that I had purchased 100 equity shares of Pinnacle Vintrade Ltd. on 20.01.2012 from Uniglory Developers Pvt. Ltd. Pinnacle Vintrade Ltd. was merged with Unno Industries Ltd. and there was change of management and control of Unno Industries ltd. pursuant to scheme of arrangement sanctione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue, Anna Nagar West, Chennai-600040. 9. Demat Statements of M/s Ashika Stock Broking Ltd. and Guiness Securities Ltd. for f.y. 2013-14 and 2014-15 in respect of long term capital gains are enclosed. Annexure IV. 10. The Equity Shares of M/s Unno Industries Ltd. were submitted for dematerialization on 01.04.2013 and credited to my Demat A/c No. 1203450000003128 with M/s Ashika Stock Broking Ltd. (DP ID No. 12034500) on 12.04.2013 (91000 shares). Details of Sale of Share for Long Term Capital Gain financial year 2013-14(A.Y.2014- 15): 1. The equity shares of M/s Unno Industries Ltd. are listed at Bombay Stock Exchange (BSE), a recognized Stock Exchange of India since last so many years and even during the time of sale by me. The security code of the said equity shares at BSE is 519273 and ISIN No. is INE 142N01023. 2. Equity shares of Unno Industries Ltd. were sold on Bombay Stock Exchange through SEBI registered stock broker Ashika Stock Broking Ltd. and Guiness Securities Ltd. whose details are as under: a) Name: Ashika Stock Broking Ltd. Address: Trinity, 7th Floor, 226/1, A.J.C. Bose Road, Kolkata-700020. Contact No. 033 22839952. b) N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has come to the light that large scale manipulation has been done in market price of shown of certain companies listed in the BSE by certain beneficiary is utilized to purchase shares of such company at a very high artificially inflated market price. Some of the listed companies directly or in directly owned by operators and whose shares price have been apparently manipulated by the syndicate of operators. Out of the above enquiry made by DIT(Inv.), Kolkata has established that one of the main manipulated company which you had availed is also under this syndicate. Hence, it is crystal clear that Sharp Trading Company is one of the main manipulated company (Penny listed) to convert unaccounted cash of beneficiary through long term capital gain with claim a certain percentage of commission. 7. Thereafter the AO made an addition under 68 of the Act. Aggrieved the assessee carried the matter an appeal. The ld. First appellate authority confirmed the action of the AO on the ground that, the transaction in question comes within the ambit of Suspicious Transaction and therefore, the rules of Suspicious Transaction would apply to the case. He further stated that the payments thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uss the case law on the subject. The Hon ble Calcutta High Court in the case of CIT, Kolkata-III vs. Smt. Shreyashi Ganguli reported in [2012] (9) TMI 1113 held as follows: 1. Whether on the facts and circumstances of the case, the order of the Ld.. Tribunal is perverse in law as well as on facts in deleting the addition made by the Assessing Officer as unexplained cash credit under section 68 of the Income Tax Act, 1961, by ignoring the facts on record. The ld. Tribunal after considering the material and hearing came to a fact finding which is as follows: The Assessing Officer has doubted the transaction since the selling broker was subjected to SEBI s action. However, the demat account given the statement of transactions from 01.04.2004 to 31.03.2005 i.e. relevant for the assessment year under appeal (2005-06) are before us. There cannot be any doubt about the transaction as has been observed by the assessing officer. The transactions were as per norms under controlled by the Securities Transaction Tax, brokerage service tax and cess, which were already paid. They were complied with. All the transactions were through bank. There is no iota of evidence over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Limited [ITA No. 105 of 2016] (Cal HC) In this case the Hon ble Calcutta High Court affirmed the decision of this tribunal , wherein, the tribunal allowed the appeal of the assessee where the AO did not accept the explanation of the assessee in respect of his transactions in alleged penny stocks. The Tribunal found that the AO disallowed the loss on trading of penny stock on the basis of some information received by him. However, it was also found that the AO did not doubt the genuineness of the documents submitted by the assessee. The Tribunal held that the AO s conclusions are merely based on the information received by him. The appeal filed by the revenue was dismissed. ( v) CIT V. Andaman Timbers Industries Limited [ITA No. 721 of 2008] (Cal HC) In this case the Hon ble Calcutta High Court affirmed the decision of this Tribunal wherein the loss suffered by the Assessee was allowed since the AO failed to bring on record any evidence to suggest that the sale of shares by the Assessee were not genuine. ( vi) CIT V. Bhagwati Prasad Agarwal [2009- TMI-34738 (Cal HC) in ITA No. 22 of 2009 dated 29.4.2009] In this case the Assessee claimed exemption of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otes, bills and were carried out through recognized stock broker of the Calcutta Stock Exchange and all the bills were received from the share broker through account payee which are also filed in accordance with the assessment. It appears from the facts and materials placed before the Tribunal and after examining the same, the tribunal allowed the appeal by the assessee. In doing so the tribunal held that the transactions cannot be brushed aside on suspicion and surmises. However it was held that the transactions of the shares are genuine. Therefore we do not find that there is any reason to hold that there is no substantial question of law held in this matter. Hence the appeal being ITA No.620 of 2008 is dismissed. 8.5. We note that the ld. 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 by us 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) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble in pages 41- 52 of the Paper Book. We find that the Hon ble Calcutta High Court in the case of Pr CIT Vs Rungta Properties Private Limited ITAT No 105 of 2016 dated 8th May 2017 in a similar issue dismissed the appeal of the Department by making the following observations: ( 11) On the last point, the Tribunal held that the Assessing Officer had not brought on records any material to show that the transactions in shares of the company involved were false or fictitious. It is finding of the assessing officer that the scrips of this company was executed by a broker through cross deals and the broker was suspended for some time. It is assessee s contention on the other that even though there are allegations against the broker, but for that reason alone the assessee cannot be held liable. On this point the Tribunal held As a matter of fact the AO doubted the integrity of the broker or the manner in which the broker operation as per the statement of one of the directors of the broker firm and also AO observed that assessee had not furnished any explanation in respect of the intention of showing trading of shares only in three penny stocks. AO relied the loss of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents, which were also filed in accordance with the assessment. It appears from the facts and materials placed before the Tribunal and after examining the same the Tribunal came to the conclusion and allowed the appeal filed by the assessee. In doing so, the Tribunal held that the transaction fully supported by the documentary evidences could not be brushed aside on suspicion and surmises. However, it was held that the transactions of share are genuine. Therefore, we do not find that there is any reason to hold that there is any substantial question of law involved in this matter. Hence, the appeal being ITA No.620 of 2008 is dismissed. 9.4. We also find that the various other case laws of Hon ble Jurisdictional High Court and other case laws also relied upon by the ld AR and findings given thereon would apply to the facts of the instant case. The ld DR was not able to furnish any contrary cases to this effect. Hence we hold that the ld AO was not justified in assessing the sale proceeds of shares of SOICL as undisclosed income of the assessee u/s 68 of the Act and therefore we uphold the order of the ld CITA and dismiss the appeal of the revenue. Accordingly the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e source of money and payment made to Smart Champs IT Infra Ltd. for such shares allotted is placed in the Paper Book at page no. 11). 3. Annual return no. 20B was filed with Registrar of companies by Smart Champs IT Infra Ltd showing the assessee s name as shareholder (copy of annual return no. 20B filed with Registrar of companies by Smart Champs IT Infra Ltd. is placed in the Paper Book at page no. 12 to 18.) 4. The assessee lodged the said shares with the Depository M/s. Eureka Stock Share Broking Services Ltd. with a Demat request on 11th February, 2012. The said shares were dematerialized on 31st March, 2012 (copy of demat request slip along with the transaction statement is placed in the paper book at page no. 19 to 21). 5. On 24.01.2013, the Hon ble Bombay High Court approved the scheme of amalgamation of Smart Champs IT and Infra Ltd. with Cressanda Solutions Ltd. In accordance with the said scheme of amalgamation, the assessee was allotted 50000 equity shares of M/s. Cressanda Solutions Ltd. The demat shares are reflected in the transaction statement of the period from 1st November 2011 to 31st December, 2013 (A copy of the scheme of amalgamat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee s action giving her involvement in the scam should be established. The allegation imply that cash was paid by the assessee and in return the assessee received LTCG, which is income exempt from income tax, by way of cheque through Banking channels. This allegation that cash had changed hands, has to be proved with evidence, by the revenue. Evidence gathered by the Director Investigation s office by way of statements recorded etc. has to also be brought on recording each case, when such a statement, evidence etc. is relied upon by the revenue to make any additions. Opportunity of cross examination has to be provided to the assessee, if the AO relies on any statements or third party as evidence to make an addition. If any material or evidence is sought to be relied upon by the AO, he has to confront the assessee with such material. The claim of the assessee cannot be rejected based on mere conjectures unverified by evidence under the pretentious garb of preponderance of human probabilities and theory of human behavior by the department. 14. It is well settled that evidence collected from third parties cannot be used against an assessee unless this evidence is put b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. The courts have laid down that judicial notice of such notorious facts cannot be taken based on generalisations. Courts of law are bound to go by 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), have brought out any part of the investigation wing report in which the assessee has been investigated and /or found to be a part of any arrangement for the purpose of generating bogus long term capital gains. Nothing has been brought on record to show that the persons investigated, including entry operators or stock brokers, have named that the assessee was in collusion with them. In absence of such finding how is it possible to link their wrong doings with the assessee. In fact, the investigation wing is a separate department which has not been assigned assessment work and has been delegated the work of only making investigation. The Act has vested widest powers on this wing. It is the duty of the investigation wing to conduct proper and detailed inquiry in any matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-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 the year under consideration in the head office and in branches the Income-tax Officer indulged in speculation when he talked of the possibility of the appellant earning a considerable sum as against which it showed a net loss of about ₹ 45,000. The Income-tax Officer indicated the probable source or sources from which the appellant could have earned a large amount in the sum of ₹ 2,91,000 but the conclusion which he arrived at in regard to the appellant having earned this large amount during the year and which according to him represented the secreted profits of the appellant in its business was the result of pure conjectures and surmises on his part and had no foundation in fact and was not proved against the appellant on the record of the proceedings. If the conclusion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to cross-examine, would amount to adenial of the right to be heard i.e. audi alterampartem. 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the government, is that the government servant is afforded a reasonable opportunity to defend himself against the charges, on the basis of which an inquiry is held. The government servant should be given an opportunity to deny his guilt and establish his innocence. He can do so only when he is told what the charges against him are. He can therefore, do so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 specifically 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 Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that crossexamination of the said dealers could not have brought out any material which would not be in possession of the Appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the Appellant wanted to cross-examine those dealers and what extraction the Appellant wanted from them. 6. As mentioned above, the Appellant had contested the truthfulness of the statements of these two witnesses and wanted to discre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conclusion on analysis of relevant materials. That being the position, Tribunal having analyzed the set off acts in coming to its finding, we do not think there is any scope of interference with the order of the Tribunal in exercise of our jurisdiction under Section 260A of the Income Tax Act, 1961. No substantial question of law is involved in this appeal. The appeal and the stay petition, accordingly, shall stand dismissed. b) The JAIPURITAT in the case of VIVEKAGARWAL[ITA No.292/JP/2017]order dated 06.04.2018 held as under vide Page 9 Para 3: We hold that the addition made by the AO is merely based on suspicion and surmises without any cogent material to controvert the evidence filed by the assessee in support of the claim. Further, the Assessing Officer has also failed to establish that the assessee has brought back his unaccounted income in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sale of shares resulting in long term capital gain. These evidences were neither found by the AO nor by the ld. CIT (A) to be false or fictitious or bogus. The facts of the case and the evidence in support of the evidence 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 that income from LTCG is exempted u/s 10(38) of the Act. Further in Page 15 Para 8.5 of the judgment, it held: We note that the ld. 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 by us 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 fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed income of the assessee u/s 68 of the Act. We therefore direct the AO to delete the addition. f) The BENCH A OF KOLKATAITAT in the case of SHALEENKHEMANI [ITA No.1945/Kol/2014]order dated 18.10.2017 held as under vide Page 24 Para 9.3: We therefore hold that there is absolutely no adverse material to implicate the assessee to the entire gamut of unwarranted allegations leveled by the ld AO against the assessee, which in our considered opinion, has no legs to stand in the eyes of law. We find that the ld DR could not controvert the arguments of the ld AR with contrary material evidences on record and merely relied on the orders of the ld AO. We find that the allegation that the assessee and / or Brokers getting involved in price rigging of SOICL shares fails. It is also a matter of record that the assessee furnished all evidences in the form of bills, contract notes, demat statements and the bank accounts to prove the genuineness of the transactions relating to purchase and sale of shares resulting in LTCG. These evidences were neither found by the ld AO to be false or fabricated. The facts of the case and the evidences in support of the assessee s case clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions 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 finding. Such finding of fact is sought to be disputed in the present appeal. We do not find that the finding of fact recorded by the Commissioner of Income Tax in appeal, gives give rise to any question(s) of law as sought to be raised in the present appeal. Hence, the present appeal is dismissed. i) The Hon ble Jurisdictional Calcutta High Court in the case of CIT vs. Bhagwati Prasad Agarwal in I.T.A. No. 22/Kol/2009 dated 29.04.2009 at para 2 held as follows: The tribunal found that the chain of transaction entered into by the assessee have been proved, accounted for, documented and supported by evidence. The assessee produced before the Commissioner of Income Tax (Appeal) the contract notes, details of his Demat account and, also, produced documents showing that all payments were received by the assessee through bank. j) The Hon ble Supreme Court in the case of PCIT vs. Teju Rohit kumar Kapadia order dated 04.05.2018 upheld the following proposition of law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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