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TMI Blog2015 (1) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... he transaction cannot be doubted - Decided against revenue. - ITA No.503/LKW/2012 - - - Dated:- 23-1-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER For the Appellant : Shri. Amit Nigam, D.R. For the Respondent : Shri. Abhinav Mehrotra, Advocate ORDER PER SUNIL KUMAR YADAV: This appeal is preferred by the Revenue against the order of the ld. CIT(A), inter alia, on various grounds, which are as under:- 1 The Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in deleting the addition of ₹ 21,52,517/- under section 68 of the Income Tax Act, 1961 on account of income from other sources, without appreciating the facts brought on record by the Assessing Officer during the course of assessment proceedings. 2 The Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in holding that the addition made by the AO was based on conjecture and surmise, even though :- (a) the steep and unbelievable increase in the value of shares of Nageshwar Investment Ltd, (b) the assessee's failure to. furnish copy of the transfer deed for the sale of these shares, (c) the evidence of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, we extract the written submission point-wise on the order of the Assessing Officer, before the ld. CIT(A) as under:- Our point wise submissions as regards the allegations raised in the assessment order, reproduced as above, is as under point wise: 1. The A. O. doubted that in the period of 15 months there has been an increase of 30 times in the shares of NIL which is improbable and something unbelievable was manipulated by the brokers. In this connection it is respectfully submitted that NIL is a listed company and the shares have been sold at market rate as per sale bills and market quotations. The A.O. stated that something improbable has been manipulated by the broker. This observation is based on conjectures and surmises and is not related with the assessee. Merely by writing these words in the assessment order and without any evidence on record and blaming the assessee by these observations and drawing an adverse inference is bad in law. 2. In the group A companies there was no such increase at the relevant point of time as alleged in the assessment order. This allegation of the A.O. is baseless as the shares have been sold at market quotations. Others shares ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received from the broker in a bonafide transaction of purchase and sale of shares and deposited in the bank account of the assessee. Thus no adverse inference can be drawn. 8. The A.O. stated that in a similar case of Smt. Anupama Gupta as duly assessed by DCIT-1, long term capital gains of ₹ 1088900/- on the sale of WOO shares of Nageshwar Investments Ltd. has been surrendered. The assessee is not bound by the decision of any other assessee. Why that lady surrendered and under what circumstances does not affect pima-facie case of the assessee and appeal From the above, your honour will appreciate that the A.O. did not produce any material during the course of the assessment proceedings in order to show that the transaction of purchase and sale of shares was sham and anything wrong has been done by the assessee. The A.O. completed assessment on whims and surmises. The A.O. acted in an unreasonable manner Reliance is placed on the following decisions: The onus to prove that the apparent is not the real is on the party who claims it to be so. C.I. T. (Central) Calcutta vs Daulat Ram Rawatmull 87 ITR 349 (SC). Since the A.O. did not bring anything on record to af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and the judgments as aforesaid. The appellant has controverted each and every objection raised by the AO. All the evidences as regards sales and purchases were filed. The AO has not challenged the purchases and the fact that the shares had been transferred in the name of the appellant. The basic reason for the addition is conjecture and surmise that how could the price of share go so much high and also that another person having such shares did surrender his income u/s 68. The same does imply that the transaction undertaken by the appellant were incorrect. All the transactions were through the stock exchange and through banking channels and through the brokers. If the broker has paid the money to the appellant by depositing cash, here again it cannot be alleged that the appellant had deposited cash in that account. The broker if free to do what he wants and the AO has based his judgment only on conjectures and surmises. The evidences showing the transactions as bogus are not gathered and not placed on the record by the A.O. The assessee has discharged his onus by submitting the brokers note, copy of share certificate duly transferred / allotted in the name of the assessee ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased 25,000 shares of Nageshwar Investment Ltd. from M/s S.B. Bhutra Co. at ₹ 2.02 per share at a cost of ₹ 50,500/- on 26.12.2001 and the payment was made through DD and shares were sold through broker, Shri. Rajendra Prasad Shah for ₹ 16.74 lakhs as per settlement dated 13.3.2003 and earned long term capital gains. Similarly, 5,000 shares of Supreme Agro Products Ltd. were purchased on 25.2.2002 by making payment of ₹ 50,000/- and the same were sold through broker, D. N. Kansal Securities Ltd. for ₹ 4,78,517/- within a short span. Since there was increase of 30 times within a period of 15 months, the Assessing Officer has rightly doubted, as it is improbable and unbelievable. Therefore, the addition made by the Assessing Officer is correct and justified. 7. The ld. counsel for the assessee, on the other hand, besides placing reliance upon the order of the ld. CIT(A), has submitted that the assessee has maintained demat account and the sale has been effected through demat account based on the quotation of the day. In support of his contention, the ld. counsel for the assessee has invited our attention to the quotation as on 12.3.2003, in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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