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TMI Blog2019 (1) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. The issue is, therefore, covered by the Order of Shri Amar Nath Goenka, New Delhi & Others vs. The ACIT, Circle-20(1), New Delhi (2018 (12) TMI 754 - ITAT DELHI). - Decided in favour of assessee - ITA.No.5971/Del./2018, ITA.No.5972/Del./2018, ITA.No.5973/Del./2018 And ITA.No.5974/Del./2018 - - - Dated:- 12-12-2018 - Shri Bhavnesh Saini, Judicial Member For the Assessees : Ms. Rano Jain, Advocate And Shri Pranshu Singhal, C.A. For the Revenue : Shri S.L. Anuragi, Sr. D.R. ORDER All the above four appeals filed by different Assessees are directed against different Orders of the Ld. CIT(A)-14, New Delhi, Dated 31.07.2018 for the A.Y. 2015- 2016. 2. I have heard the Learned Representatives of both the parties and perused the findings of the authorities below and considered the material available on record. Learned Representatives of both the parties submitted that the issue is same in all the appeals. Therefore, all appeals were heard together. Both the parties mainly argued in the case of Ms. Anupama Garg in I.T.A.No.5971/Del./2018 and have submitted that the issue is same in the remaining three appeals. Therefore, Order in this case may be followed in ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financials had no support, was neither the result of co-incidence nor of a genuine investment activities but were created through well planned and an executed scheme in which Company brokers and buyers and sellers of the scrip worked deliberately to achieve the predetermined objectives. The A.O. called for the explanation of assessee. The reply of the assessee is reproduced in the assessment order in which the assessee filed the requisite details and documentary evidences before A.O. It was also explained that assessee held the share for three years in physical form and then in Demat account and then sold these shares on recognized Stock Exchange through share broker on which STT on sale of share have been paid. The assessee produced sufficient documentary evidences to prove genuineness of the transaction. No adverse material have been brought on record against the assessee. The assessee relied upon several decisions to show that proposed action for addition is wholly unjustified. The A.O. however, rejected the explanation of assessee and noted that assessee has received sale consideration of ₹ 6,14,000/- on sale of shares of penny stock company M/s. Jackson Investment Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Veena Gupta vs. ACIT, Order of ITAT, Delhi in ITA.No.5662/Del./2018, Dated 27.11.2018. 5. Smt. Jyoti Gupta vs. ITO, Order of ITAT Delhi Bench in ITA.No.3510/Del./2018, Dated 06.11.2018. 6. Anubhav Jain vs. ITO, Order of ITAT, Delhi Bench in ITA.No.4566/Del./2018, Dated 26.11.2018. 7. Suresh Kumar Chug vs. ITO, Order of ITAT, Delhi Bench in ITA.No.2789/Del./2018, Dated 29.11.2018. 5.1. Learned Counsel for the Assessee on merit also submitted that all the documentary evidences were produced before the authorities below which have not been doubted by them, therefore, assessee proved genuineness of the transaction in the matter. Therefore, addition is wholly unjustified. 6. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that assessee could not explain the receipt of alleged share transaction profits credited in her bank account, therefore, addition was rightly made. The Ld. D.R. relied upon the following decisions. 1. Sanjay Bimalchand Jain L/H Shantidevi Bim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 070. PAN AAPPG9369R C/o.Shri Kapil Goel, Advocate, F-26/124, Sector-7, Rohini, Delhi 110085. vs. The ACIT, Circle-20(1), New Delhi (Appellant) (Respondent) ITA.No.5883/Del./2018 Assessment Year 2015-2016 Shri Arvind Goenka, New Delhi 110 070. PAN ACTPG1708Q C/o.Shri Kapil Goel, Advocate, F-26/124, Sector-7, Rohini, Delhi 110085. vs. The ACIT, Circle-20(2), New Delhi. (Appellant) (Respondent) ITA.No.6457/Del./2018 Assessment Year 2014-2015 Smt. Preeti Yadav, New Delhi 110 070. PAN AALPY3249A C/o.Shri Kapil Goel, Advocate, F-26/124, Sector-7, Rohini, Delhi 110085. vs. The Income Tax Officer, Ward-33(5), New Delhi. (Appellant) (Respondent) ITA.No.6458/Del./2018 Assessment Year 2014-2015 Smt. Sneha Yadav, New Delhi 110 070. PAN ACVPY0483A C/o.Shri Kapil Goel, Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A.O. found that the assessee claimed ₹ 23.44.613/- as long term capital gain (LTCG) on sale of listed shares. Part of the Long Term Capital Gain (LTCG) has been claimed to have been earned is through sale of shares of M/s.Esteem Bio Organic Food Processing Ltd., (Scrip Code - EBFL Security Id-534927) listed on Bombay Stock Exchange (BSE). The summary of the share transaction is as under : Sale consideration of 1200 shares Rs.14,61,585/- Less: Cost of acquisition ₹ 60,000/- LTCG : Rs.14,01,585/- 4.1. The assessee claimed LTCG from sale of Esteem Bio Shares as exempt from taxation under section 10(38) of Income-Tax Act, 1961. The assessee at assessment proceedings furnished details of mode of acquisition of these shares, bank A/c statements where sale proceeds are credited, depository participant statements and stock broker notes to support claim of exempt LTCG. The A.O. observed from the submissions of the assessee together with facts and circumstances of case in general and those surrounding the share transactions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is applicable and the same is taxable @ 30%. The A.O. accordingly made the addition of ₹ 14,61,585/-. 5. The assessee challenged the addition before Ld. CIT(A). The written submissions of the assessee and grounds of appeals are reproduced in the appellate order in which the assessee briefly explained that cost of the acquisition of ₹ 60,000/- have not been reduced. The addition is perverse and invalid and based on irrelevant reason. The statement of Shri Sanjay Vohra was not confronted to the assessee and no right of crossexamination have been given to rebut his statement. Therefore, such statement cannot be read in evidence against the assessee. No copy of the Investigation report of SEBI have been provided to assessee. The transaction is done on online through recognized Stock Exchange through Demat account and Security Transaction Tax ( STT ) as per the contract note duly paid. The assessee produced all the documentary evidences like bank statement, contract notes, transaction statement of Demat account, copy of share certificates, financial ledger of the assessee with broker etc., to prove the transaction as genuine. No specific material have been brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of any person. The appeal of assessee was accordingly dismissed by the Ld. CIT(A). 6. Before the Tribunal, the Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that that all documentary evidences were filed before A.O, of which were filed in the paper book. The documents are, copy of the application for allotment of shares along with copy of the cheque. Allotment of shares, copy of the bank pass book, copy of the Demat account of Oriental Bank of Commerce showing accrued 6000 shares of the aforesaid company, copy of the contract note of share broker for sale of the shares, copy of the financial ledger of the share broker showing sale of the shares, copy of the credit payment with bank statement. Learned Counsel for the Assessee filed copies of several Orders of the ITAT, Delhi Bench, Kolkata Bench and Mumbai Bench to show that in similar circumstances additions have been deleted. Learned Counsel for the Assessee also relied upon the Order of ITAT, Delhi SMC Bench, in the case of Arun Kumar, Delhi Others vs. ACIT, Circle-1, Noida in ITA.No.457, 2825 2826/ Del./ 2018, Dated 05.11.2018 in which the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise from the transfer of long term capital asset and being equity share in a company where the transfer of sale of such equity share is entered into on or after the date of which Chapter-VII of the Finance Act, 2004 comes into force and such transaction is chargeable to security transaction tax under that Chapter. In the case of the assessee, both twin conditions are satisfied. He has filed copy of the shares certificate with transfer form, copy of debit note issued by Shreeji Broking (P) Ltd., copy of cash receipt of Shreeji Broking (P) Ltd., copy of ledger account of Indus Portfolio (P) Ltd., Page | 18 ITA No.3035/Del/2018 copy of form for evidence for payment of securities transaction tax on transaction entered in a recognized stock exchange and copy of the bank statement of the assessee in the Paper Book. He has further submitted that on identical facts, ITAT SMC Bench, Delhi in the case of Meenu Goel vs ITO in ITA No.6235/Del/2017 for AY 2014-15 vide order dated 19.03.2018 relying upon the decision of Hon'ble Punjab Haryana High Court in the case of Pr.CIT vs Prem Pal Gandhi in ITA No.95-2017 vide order dated 18.01.2018, allowed the claim of the assessee. The findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction. I further note that the addition in dispute made by the AO and upheld by the Ld. CIT(A) u/s 68 as unexplained credit instead of long term capital gain as claimed by the assessee, however, the source identity and genuineness of the transaction having been established by documentary evidences and there is no case for making addition u/s 68 of the Act, hence, the same deserve to be deleted. I note that in most of the case laws of the Hon'ble High Courts referred by the Ld. DR the reason on the basis of addition was confirmed was that the assessee had not tendered cogent evidence with regard to share transaction, however, in the present the case assessee has submitted all the documents / evidences, therefore, the case laws relied by the Ld. DR are based on distinguished facts and circumstances, hence, the said case laws are not applicable in the present case. However, in my considered opinion, the issue in dispute is squarely covered by the various decisions of the ITAT and the Hon'ble High Courts including the recent decision dated 18.1.2018 of the Hon'ble High Court i.e. Hon'ble High Court of Punjab Haryana in the case of PCIT (Central), Ludhiana vs. Prem P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid figure by the A.O. ? 3. The first three questions of law raised in this appeal are covered against the appellant by an order and judgment of a Division Bench of this Court dated 16.02.2017 in ITA-18-2017 titled as The Pr. Commissioner of Income Tax (Central), Ludhiana vs. Sh. Hitesh Gandhi, Bhatti Colony, Chandigarh Road, Nawanshahar. 4. The issue in short is this : The assessee purchased shares of a company during the assessment year 2006-07 at ₹ 11/- and sold the same in the assessment year 2008-09 at ₹ 400/- per share. In the above case, namely, ITA 18- 2017 also the assessee had purchased and sold the shares in the same assessment years. The AO in both the cases added the appreciation to the assessees' income on the suspicion that these were fictitious transactions and that the appreciation actually represented the assessee's income from undisclosed sources. In ITA-18-2017 also the CIT(Appeals) and the Tribunal held that the AO had not produced any evidence whatsoever in support of the suspicion. On the other hand, although the appreciation is very high, the shares were traded on the National Stock Exchange and the payments and receipts were routed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary evidences which have not been rebutted by the authorities below. Whatever inquiry was conducted in the cases of other parties and statement recorded of several persons namely Sh. Anil Khemka, Sh. Sanjay Vohra and Sh. Bidyoot Sarkar as referred in the assessment order and the report of the Investigation Wing were not confronted to the assessee and above statements were also not subject to cross-examination on behalf of the assessee. Therefore, such evidences cannot be read in evidence against the assessee. The order of the SEBI was also not confronted to the assessee. AO did not mention any such fact in assessment order. More so in those reports and statements, the name of the assessee has not been referred to. Ld. Counsel for the assessee, therefore, rightly contended that the twin conditions of section 10(38) of the Act have been satisfied in the case of the assessee. The assessee has been able to prove that she has entered into the genuine transaction of purchase and sale of shares and the sale consideration is received from broker through banking channel. The brokers have not denied the transaction with the assessee. The assessee rooted the transaction of sale of shares t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 4326/Del./2009 vide Order Dated 27.05.2015 in paras 12 to 14 held as under : 12. We have considered the submissions of both the parties and gone through the material available on the record. In the present case, it is noticed that the assessee purchased the shares in earlier years which were shown as investment in the books of accounts and reflected in the Asset Side of the Balance Sheet , out of those investments (copy which is placed at page no. 23 and 24 of the assessee's paper book), the assessee sold certain investments and accounted for the profit / loss and offered the same for taxation. In the present case, the amount in question was neither a loan or the deposit , it was also not on account of share application money, the said amount was on account of sale of investment therefore the provisions of Section 68 of the Act were not applicable and the AO was not justified in making the addition. In our opinion, the Ld. CIT(A) rightly deleted the addition made by the AO. 13. On a similar issue the Hon'ble Jurisdictional High Court in the case of CIT vs. Vishal Holding and Capital Pvt. Ltd. vide order dated 9th August, 2010 upheld the order dated 30.7.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. did not make any enquiry on the documentary evidences filed by the assessee. No material have been brought on record against the assessee to disprove the claim of assessee. It is not the case of the Revenue that amount received on sale of shares is more than what is declared by the assessee. The assessee pleaded that the Interim Order of the SEBI have been diluted by passing final order in which no adverse view have been taken against the aforesaid company. Thus, the claim of assessee of purchase and sale of shares have been supported by documentary evidences. The statement of Shri Sanjay Vohra was recorded by the Investigation Wing, Kolkata, but, the same was not confronted to the assessee and his statement was also not subjected to cross-examination on behalf of the assessee. Therefore, his statement cannot be read in evidence against the assessee. I rely on the decision of Hon ble Supreme Court in the case of Kishan Chand Chela Ram 125 ITR 713 (SC). The A.O. did not mention any fact as to how the claim of assessee was sham or bogus. The assessee thus, satisfied the conditions of Section 10(38) of the I.T. Act. The broker through whom transactions have been carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been considered in the case of Shri Amar Nath Goenka, Delhi (supra). Therefore, following the reasons for decision in the case of Shri Amar Nath Goenka, Delhi (supra), we set aside the Orders of the authorities below and delete the entire additions. Accordingly, appeals of the Assessees are allowed. 14. In the result, ITA.No.5883, 6457, 6458 and 6459/Del./2018 of the Assessees are allowed. 15. To sum-up, all the appeals of the Assessees are allowed. 8. In the present case, the A.O. relied upon certain statements of the share brokers recorded by Investigation Wing, Kolkata to prove that they have provided accommodation entries for long term capital gains. The assessee in her statement requested that assessee may be allowed for cross-examinations of these statements. However, no cross-examination have been allowed to the assessee to cross-examine any of such share brokers. Therefore, such statements could not be admissible in evidence against the assessee. The decisions relied upon by the Learned Counsel for the Assessee squarely apply to this proposition. I also rely upon the decision of the Hon ble Supreme Court in the case of Kishan Chand Chelaram 125 ITR 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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