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TMI Blog2019 (8) TMI 1192X X X X Extracts X X X X X X X X Extracts X X X X ..... t specifically state so, such amendments, in the light of the detailed discussions above, can only be treated as retrospective and effective from the date related statutory provisions was introduced. Viewed thus, the third proviso to Section 50C should be treated as curative in nature and with retrospective effect from 1st April 2003, i.e. the date effective from which Section 50C was introduced. We note that Finance Act, 2018, w.e.f. 01.04.2019 provided that no adjustments shall be made in a case where the variation between stamp duty value and the sale consideration is not more than 5% of the sale consideration. In the assessee s case under consideration, the stamp duty valuation is ₹ 3,27,01,950/- and sale consideration is ₹ 3,15,00,000/-. The difference of ₹ 12,01,950/- is not more than 5% of the sale consideration. That is, it is at 3.81% [12,01,950 / 3,15,00,000 x 100] of sale consideration, therefore, we delete the addition Bogus loss incurred in share trading - HELD THAT:- Assessee s case is covered by the judgment of Co-ordinate Bench of ITAT Kolkata in the case of Sanjib Kumar Patwari(HUF) [ 2019 (5) TMI 1670 - ITAT KOLKATA] . Revenue has failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brief facts qua the issue are that the assessee has filed his return of income declaring total income of Rs. NIL and claimed current year loss of ₹ 1,19,46,383/-. The assessee s case has been selected for scrutiny through CASS. Notice u/s 143(2) was issued on 22.04.2016 along with questionnaires and served upon the assessee. During the course of assessment proceedings, on perusal of the profit loss account of the assessee for the year ended 31.03.2014 along with its computation of income for the A.Y. 2014-15, it was noticed by Assessing Officer that, the assessee had declared long term capital gain of ₹ 1,22,63,576/- against sale of property at Pretoria Street, Kolkata on 14.12.2013. During the course of assessment proceeding, the assessee was asked to furnish the details of property sold along with copy of sale deed and other relevant supporting documents regarding the indexation cost claimed while computing long term capital gain. The A.R. of the assessee through his letter dated 21.04.2016 submitted the copy of sale deed of the said property. Ongoing through, the details submitted by the assessee, it was noticed by the AO that the assessee had sold a property on 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said property u/s 55A read with section 50C(2) of the Act. But no report had been received from the DVO within the time sought for. Hence the provision of section 50C of the Act is being invoked in case of the assessee and the value as per stamp duty authority is being adopted as the full value of consideration received for the purpose of computation long term capital gain. Hence, in the case of the assessee, the market value of ₹ 3,27,01,950/- (as per stamp duty valuation) was concerned as the full value of consideration received as a result of the transfer / sale of property by the assessee. So, an amount of ₹ 12,01,950/- (difference of ₹ 3,27,01,950/- - ₹ 3,15,00,000/-) was added to the total income of the assessee by invoking section 50C of the Act. 6. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the addition made by the Assessing Officer. Aggrieved by the order of the ld. CIT(A) the assessee is in appeal before us. 7. The ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration. This amendment, (by way of insertion of third proviso in section 50C of the Act), was explained, in the Memorandum Explaining the Provisions of Finance Bill 2018, as follows: At presentwhile taxing income from capital gains (section 50C), business profits (section 43CA) and other sources (section 56) arising out of transactions in immovable property, the sale consideration or stamp duty value, whichever is higher is adopted. The difference is taxed as income both in the hands of the purchaser and the seller. It has been pointed out that this variation can occur in respect of similar properties in the same area because of a variety of factors, including shape of the plot or location. In order to minimize hardship in case of genuine transactions in the real estate sector, it is proposed to provide that no adjustments shall be made in a case where the variation between stamp duty value and the sale consideration is not more that five per cent of the sale consideration. These amendments will take effect from 1st April, 2019, and will, accordingly, apply in relation to the assessment year 2019-20 and the subsequent assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputed on the basis of such consideration under section 48 of the Income-tax Act. 9. We note that at present while taxing income from capital gains (section 50C), business profits (section 43CA) and other sources (section 56) arising out of transactions in immovable property, the sale consideration or stamp duty value, whichever is higher is adopted. The difference is taxed as income both in the hands of the purchaser and the seller. It has been pointed out that this variation can occur in respect of similar properties in the same area because of a variety of factors, including shape of the plot or location. In order to minimize hardship in case of genuine transactions in the real estate sector, it was proposed by the Finance Act 2018, that no adjustments shall be made in a case where the variation between stamp duty value and the sale consideration is not more that five per cent of the sale consideration. These amendments will take effect from 1st April, 2019, and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent years.While the Government has thus recognized the genuine and intended hardship in the cases in which there is minor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l value of the consideration. We note that this third proviso relates to determination of value of property therefore it cannot be a substantive amendment. Normally substantive amendments in law in applicable prospective. In view of these discussions, as also for the detailed reasons set out earlier, it is a procedural amendment in law to help the assessee to determine the value or to compute the value of property hence this amendment is not to punish the assessee just because there is minor variation between stamp duty value and the sale consideration. We note that the statute such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, for that we rely on the judgment of the Hon ble Supreme Court in the case of Alom Extrusions Ltd 185 Taxman 416 (SC) wherein it was held as follows: 8. On reading the above provisions, it becomes clear that the assessee(s)-employer(s) would be entitled to deduction only if the contribution stands credited on or before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1983, with effect from 1-4-1984, expressly commences with a non obstante clause, the underlying object being to disallow deductions claimed merely by making a Book entry based on Mercantile System of Accounting. At the same time, section 43B [main section] made it mandatory for the Department to grant deduction in computing the income under section 28 in the year in which tax, duty, cess, etc., is actually paid. However, Parliament took cognizance of the fact that accounting year of a company did not always tally with the due dates under the Provident Fund Act, Municipal Corporation Act [octroi] and other Tax laws. Therefore, by way of first proviso, an incentive/relaxation was sought to be given in respect of tax, duty, cess or fee by explicitly stating that if such tax, duty, cess or fee is paid before the date of filing of the Return under the Income-tax Act [due date], the assessee(s) then would be entitled to deduction. However, this relaxation/incentive was restricted only to tax, duty, cess and fee. It did not apply to contributions to labour welfare funds. The reason appears to be that the employer(s) should not sit on the collected contributions and deprive the workmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso is required to be read into the section to give the section a reasonable interpretation, it could be read retrospective in operation, particularly to give effect to the section as a whole. Accordingly, this Court, in Allied Motors (P.) Ltd.'s case (supra), held that the first proviso was curative in nature, hence, retrospective in operation with effect from 1-4-1988. It is important to note once again that, by Finance Act, 2003, not only the second proviso is deleted but even the first proviso is sought to be amended by bringing about an uniformity in tax, duty, cess and fee on the one hand vis-a-vis contributions to welfare funds of employee(s) on the other. This is one more reason why we hold that the Finance Act, 2003, is retrospective in operation. Moreover, the judgment in Allied Motors (P.) Ltd.'s case (supra) is delivered by a Bench of three learned Judges, which is binding on us. Accordingly, we hold that Finance Act, 2003, will operate retrospectively with effect from 1-4-1988 [when the first proviso stood inserted]. Lastly, we may point out the hardship and the invidious discrimination which would be caused to the assessee(s) if the contention of the Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is curative in nature, hence, it is retrospective and it would operate with effect from 1-4-1988 [when the first proviso came to be inserted]. For the above reasons, we find no merit in this batch of civil appeals filed by the Department which are hereby dismissed with no order as to costs. 11. Similarly, the Hon ble Supreme Court in the case of Allied Moters (P) Ltd, 91 Taxman 205 (SC) held as follows: A proviso which is inserted to remedy unintended consequences and to make the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. Accordingly, the sales-tax collected by the assessee collected in the last quarter of the relevant previous year and paid after the end of the previous year but within the time allowed under the relevant sales-tax law could not be disallowed under section 43B, while computing the business income of the said previous year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had claimed a short term capital loss of ₹ 58,27,745/-. The assessee was asked to furnish a detailed chart of the same along with supporting documents. On perusal of the details furnished by the assessee, it was found that, the assessee has also incurred loss on sale of two stock viz. Shree Shaleen Textile Ltd. and Luminaire Technologies Ltd. which were penny stocks. A detailed chart of the STCL arising from the sale of the said two scrips is furnished as under: From the above chart, it transpires that the assessee has purchased the above scrips at a very high rate and has sold out the same at a very low price within a short span of approximately two months thereby incurring a huge loss (short term capital loss) of ₹ 31,46,527/-. But since the two scrips are penny stocks which has been further supported by the thin volume of trade and bell shaped movement of its price. Further, the Bombay Stock Exchange through its notice dated 01.01.2015 has suspended trading in the scrip viz. Shree Shaleen Textile Ltd. w.e.f 07.01.2015 as per direction received from SEBI. From the above the discussion, an inference could be drawn that, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Patwari(HUF) in I.T.A. No.205/Kol/2018 for A.Y. 2014-15, has deleted the addition. The detailed findings of the Coordinate Bench is given below: 12. We have heard both the parties and perused the material available on record. We note that the assessee is a regular investor in shares and has been investing in shares since past several years. The said fact is evident from the details given below: Thus, from the above table, it is abundantly clear that the assessee is a regular investor in shares and is having a substantial amount of investments. During the year under consideration, the assessee has sold the impugned three scrips and earned capital gains on the same which is claimed year after year consistently. The details of long term capital gain earned by the assessee is given below: We note that the assessee claimed exemption of LTCG of ₹ 7,12,89,467/- u/s 10(38) of the Act, since the shares purchased and sold were listed shares and were purchased and sold through stock broker in Stock Exchange and STT was deducted at the time of sale. The details of purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the long term capital gain(LTCG) arose to the assessee. These all documents and evidences were available before the ld CIT(A) as well as before the ld AO. The Assessee submitted before us following documents and evidences in respect of Kailash Auto Finance Ltd. ( 1) KAILASH AUTO FINANCE LTD. i) Copy of purchase bill dated 12.02.2012, reflecting the purchase of 3,20,000 shares of Careful Projects Advisory Ltd. from Trump Traders Pvt. Ltd. (Paper Book Page No. 4) ii) Copy of purchase bill dated 09.10.2012 reflecting the purchase of 9,00,000 shares of Careful Projects Advisory Ltd. from Trump Traders Pvt. Ltd. (Paper Book Page No. 5) iii) Copy of Bank Statement reflecting the debit transaction of the amount of ₹ 3,20,000/- paid for the purchase of shares by cheque no. 729958 on 10.02.2012 (Paper Book Page No. 9) iv) Copy of Bank Statement reflecting the debit transaction of the amount of ₹ 9,00,000/- paid for the purchase of shares by cheque no. 037633 on 09.10.2012 (Paper Book Page No. 8) v) Copy of statement of DEMAT account evidencing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Copy of purchase bill dated 10.08.2013, reflecting the purchase of 50,000 shares of EINS Edutech Ltd. from Neptune Financial Advisory Pvt. Ltd. (Paper Book Page No.7); ii) Copy of Bank Statement reflecting the debit transaction of the amount of ₹ 8,00,000/- paid for the purchase of shares by cheque no. 37644 on 01.08.2013 (Paper Book Page No. 10) iii) Copy of statement of DEMAT account evidencing the debit of shares of EINS Edutech Ltd. on 01.12.2014, 02.12.2014, 06.12.2014, 11.12.2014 and so on; (Paper Book Page No. 63) iv) Copy of Contract Notes evidencing the sale of shares of E1NS Edutech Ltd.; v).Copy of bank statement reflecting the transactions of sale of shares of EINS Edutech Ltd. (Paper Book page No. 59-61) . Therefore, by submitting these plethora documents and evidences, the ld Counsel for the assessee claimed that long term capital gain (LTCG) earned in respect of the scrips, namely: Kailash Auto Finance Ltd., Lifeline Drug Pharma Ltd, and EinsEdutceh Ltd. (Now Aplaya Creations Ltd.) are genuine. We also note that the Securities Exchange Board of India (SEB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re assessment is completed u/s. 143(3) of the Income Tax Act. ( viii) These facts are verifiable from the regular books of accounts. ( ix) The transactions can also be verified from the Stock Exchange. ( x) The SEBI has cleared these shares and scrips from the allegation of Market Rigging. Hence, the genuineness of the transaction cannot be doubted. 15. Now coming to the allegations made by the Assessing Officer for making the addition. The Assessing Officer alleged in the assessment order that on the basis of information received from the investigation wing, Kolkata, the claim of LTCG u/s 10(38) by the assessee is bogus. In the assessment order, the ld. Assessing Officer has mentioned the story that the list of 84 scrips identified by the investigation wing where price rigging have been found which includes the name of the scrips in which the assessee has earned Long Term Capital Gain. The Assessing Officer alleged that the transactions were pre-arranged to book such gain in the hands of the pre-fixed beneficiaries. The above allegations are generalized an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck Exchange. iii) The shares were purchased and sold based on the prevailing market condition. iv) The purchase and sale of shares are supported by contract notes. The payments were received through proper banking channel. v) The purchase and sale transactions were subjected to Security Transaction Tax, Service Tax, Brokerage charges and Stamp duty. vi) The share purchase and sale transactions are reflected in the d-mat account. vii) The purchase of shares (Investments) was not disputed in earlier year, where assessment is completed u/s. 143(3) of the Income Tax Act. viii) These facts are verifiable from the regular books of accounts. ix) The transactions can also be verified from the Stock Exchange. x) The interim order of SEBI about which the AO has discussed in his order, has been reversed by the final order of SEBI dated 21.09.2017,where the SEBI has cleared the assessee from the allegation of Market Rigging. Therefore, so far first allegation of the assessing officer is concerned, the assessee has pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in the statement of third party, the name of the assessee was not implicated. Even otherwise, according to Learned Counsel, no adverse inference could be drawn against the assessee on the basis of untested statements without allowing opportunity of cross-examination. For that we rely on the following judgements in support of the aforesaid view:- ( i) Andman Timber Industries vs. CCE [2015] 62 taxmann.com 3 (SC) ( ii) ITO vs. Ashok Kumar Bansal ITA No. 289/Agr/2009 (Agra ITAT) ( iii) ACIT vs. Amita Agarwal Others ITA No. 247/(Kol) of 2011 (Kol ITAT) ( iv) ITO vs. BijayaGanguly- ITA Nos. 624 625/Kol/2011 (Kol ITAT) ( v) GaneshmullBijay Singh Baid HUF vs. DCIT ITA Nos. 544/Kol/2013 (Kolkata ITAT) ( vi) Rita Devi Others vs. DCIT IT(SS))A Nos. 22-26/Kol/2011 (Kol-ITAT) ( vii) Malti Ghanshyambhai Patadia vs. ITO - ITA No.3400/Ahd/2015Ahmedabad ITAT) ( viii) Pratik Suryakant Shah vs. ITO [2017] 77 taxmann.com 260 (Ahmedabad ITAT) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmediate effect. The revocation of the directions issued vide the above mentioned orders (at paragraph 7) is only in respect of the entities mentioned at paragraph 5 of this order in the matter of Kailash Auto. As regards remaining entities in the scrip of Kailash Auto, violations under SEBI Act, PFUTP Regulations, etc., were observed and SEBI shall continue its proceedings against them. Hence, the directions issued vide confirmatory order dated June 15, 2016 against the remaining 2 entities shall continue. This revocation order is without prejudice to any other action SEBI may initiate as per law. We note that in the above order of the SEBI, the name of the assessee is also mentioned in the serial no. 154. Therefore, the SEBI itself has freed the assessee from market rigging allegation and thus the assessee is proved to be a bona-fide investor not involved in any malicious activities.Hence, considering the above, it is abundantly clear that no doubt can be arisen about the shares being penny stock. 17. We note that the assessee had never entered into any transaction with Sri Sunil Dokania against whom investigation wing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon the presumption that the assessee has ploughed back his own unaccounted money in the form of bogus LTCG. However, this presumption or suspicion howsoever strong it may appear to be, but needs to be corroborated by some evidence to establish a link that the assessee had brought back his unaccounted income in theform of LTCG. 20. We note that since the purchase and sale transactions are supported and evidenced by Bills, Contract Notes, Demat statements and bank statements etc., and when the transactions of purchase of shares were accepted by the ld AO in earlier years, the same could not be treated as bogus simply on the basis of some reports of the Investigation Wing and/or the orders of SEBI and/or the statements of third parties. In support of the aforesaid submissions, the ldCounsel, in addition to the aforesaid judgements, has referred to and relied on the following cases:- ( i) Baijnath Agarwal vs. ACIT [2010] 40 SOT 475 (Agra (TM) ( ii) ITO vs. Bibi Rani Bansal [2011] 44 SOT 500 (Agra) (TM) ( iii) ITO vs. Ashok Kumar Bansal ITA No. 289/Agra/2009 (Agra ITAT) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inference of that fact. The Hon ble Apex Court further held that it is not enough to show circumstances which might create suspicion because the court cannot decide on the basis of suspicion. It has to act on legal grounds established by evidence. The ld AR submitted that similar view has been taken in the following judgments while deciding the issue relating to exemption claimed by the assessee on LTCG on alleged Penny Socks. ( i) ITO vs. Ashok Kumar Bansal ITA No. 289/Agr/2009 (Agra ITAT) ( ii) ACIT vs. J. C. Agarwal HUF ITA No. 32/Agr/2007 (Agra ITAT) 22. Moreover it was submitted before us by ld Counsel that the AO was not justified in taking an adverse view against the assessee on the ground of abnormal price rise of the shares and alleging price rigging. It was submitted that there is no allegation in orders of SEBI and/or the enquiry report of the Investigation Wing to the effect that the assessee, the Companies dealt in and/or his broker was a party to the price rigging or manipulation of price in BSE/CSE. The ld AR referred to the following judgments in support of this contention wherein unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Calcutta High court in various cases, as mentioned below: ( i) . CIT V. Shreyashi Ganguli [ITA No. 196 of 2012] (Cal- HC) In this case the Hon ble Calcutta High Court held that the Assessing Officer doubted the transactions since the selling broker was subjected to SEBI s action. However, the transactions were as per norms and suffered STT, brokerage, service tax, and cess. There is no iota of evidence over the transactions as it were reflected in demat account. The appeal filed by the revenue was dismissed. ( ii) CIT V. Rungta Properties Private 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 ld AO did not accept the explanation of the assesseein respect of his transactions in alleged penny stocks. The Tribunal found that the ld 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 ld AO did not doubt the genuineness of the documents submitted by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses. 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. ( vi) The Hon'ble Calcutta High Court in the case of Principal Commissioner Of Income vs M/S. Blb Cables And Conductors; ITAT No.78 of 2017, GA No.747 of 2017; dt. 19 June, 2018, had upheld the order of the Tribunal by observing as follows:- 4. We have heard both the side and perused the materials available on record. The ld. AR submitted two papers books. First book is running in pages no. 1 to 88 and 2nd paper book is running in pages 1 to 34. Before us the ld. AR submitted that the order of the AO is silent about the date from which the broker was expelled. There is no law that the off market transactions should be informed to stock exchange. All the transactions are duly recorded in the accounts of both the parties and supported with the account payee cheques. The ld. AR has also submitted the IT return, ledger copy, letter to A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le transactions or were resorted to with ulterior motive. We note that above mentioned judgments of Hon ble Calcutta High Court, by and large held that where the whole transactions were supported by contract notes, bills and were carried out through recognized stockbroker of Stock Exchange and all the payments made to the stockbroker and all the payments received rom stockbroker through account payee cheques, then in these facts and circumstances addition made by assessing officer on account of bogus long term capital gain should be deleted. We note that unless and until the order of Jurisdictional Hon ble High Court is reversed by Hon ble Supreme Court, the same has to be given due effect. Judicial discipline demands that once an order has been passed in the assessee s own case, by the Jurisdictional High court, the Tribunal is duty bound to act in accordance with the same. We note that in the case of Union of India v. Raghubir Singh (1989) 178 ITR 548 (SC), the Supreme Court held that the doctrine of binding precedent has merit of promoting certainty and consistency in judicial decisions. As per the doctrine of precedent, all lower Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os. 22-26/Kol/2p11 (Kol ITAT) ( xxv) Surya Prakash Toshniwal vs. ITO ITA No. 1213/Kol/2016 (Kol ITAT) ( xxvi) Sunita Jain vs. ITO ITA No. 201 502/Ahd/2016 (Ahmedabad ITAT) ( xxvii) Ms. Farrah Marker vs. ITO ITA No. 3801/Mum/2011 (Mumbai ITAT) ( xxviii) Anil Nandkishore Goyal vs. ACIT ITA Nos. 1256/PN/2012 (Pune ITAT) ( xxix) CIT vs. Sudeep Goenka [2013] 29 taxmann.com 402 (Allahabad HC) ( xxx) CIT vs. Udit Narain Agarwal [2013] 29 taxmann.com 76 (Allahabad HC) ( xxxi) CIT vs. Jamnadevi Agarwal [2012] 20 taxmann.com 529 (Bombay HC) ( xxxii) CIT vs. Himani M. Vakil [2014] 41 taxmann.com 425 (Gujarat HC) ( xxxiii) CIT vs. Maheshchandra G. Vakil [2013] 40 taxmann.com 326 (Gujarat HC) ( xxxiv) CIT vs. Sumitra Devi [2014] 49 Taxmann.com 37 (Rajasthan HC) ( xxxv) GaneshmullBijay Singh Baid HUF vs. DCIT ITA Nos. 544/Kol/2013 (Kolkata ITAT) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of shares as undisclosed income of the assessee under section 68 of the Act :- ( v) ITO vs. Ashok Kumar Bansal ITA No. 289/Agr/2009 (Agra ITAT) ( vi) ACIT vs.Amita Agarwal Others - ITA Nos. 247/(Kol)/ of 2011 (Kol ITAT) ( vii) Lalit Mohan Jalan (HUF) vs. ACIT ITA No. 693/Kol/2009 (Kol ITAT) ( viii) Mukesh R. Marolia vs. Addl. CIT [2006] 6 SOT 247 (Mum) 31. We note that the ld. D.R. had heavily relied upon the decision of the Hon ble Bombay High Court in the case of Bimalchand Jain in Tax Appeal No. 18 of 2017. We note that in the case relied upon by the ld. D.R, we find that the facts are different from the facts of the case in hand. Firstly, in that case, the purchases were made by the assessee in cash for acquisition of shares of companies and the purchase of shares of the companies was done through the broker and the address of the broker was incidentally the address of the company. The profit earned by the assessee was shown as capital gains which was not accepted by the A.O. and the gains were treated as business profit of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence. In the aforesaid facts and circumstance, for allowing the appeal we rely on the decision of the Hon ble Calcutta High Court in the case of M/s. Alipine Investments in ITA No.620 of 2008 dated 26th August, 2008 wherein the High Court held as follows : It appears that there was loss and the whole transactions were supported by the contract notes, 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. 36. We note that the ld. AR cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to all the 60,000 or more assessees who fall in this category. Specific evidences produced by the assessee were not controverted by the revenue authorities. No evidence collected from third parties was confronted to the assessees. No opportunity of cross-examination of persons, on whose statements the revenue relied to make the addition, was provided to the assessee. The addition is made based on a report from the investigation wing. The issue for consideration is whether, in such cases, the legal evidence produced by the assessee has to guide 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 is 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 the live link of the assessee's action giving her involvement in the scam should be establishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the documentary evidences produced, the same cannot be rejected by the assessee. 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 Assessing officer as well as the Commissioner (Appeals) has been guided by the report of the investigation wing prepared with respect to bogus capital gains transactions. However, the Assessing Officer as well as the Commissioner (Appeals), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. [Para 20] 26. To conclude, we note that SEBI has given a clean chit to the company and has freed it from the allegation of market rigging. Therefore, the allegation of the AO itself becomes infructuous. Further, the assessee had also requested for an opportunity to cross examine Sri Sunil Dokania, whose statement has been relied on by the AO for making the addition. However, the Ld. AO did not provide any opportunity for cross examine, the so-called operators. It is well established law that no adverse view can be taken against an assessee, on the basis of statement recorded by department of any person without providing copy of the statement to the assessee and also without providing opportunity for cross examination of the said person. We note that the assessee had never entered into any transaction with Sri Sunil Dokania, against whom investigation wing had allegedly made inquiry. We also note that in the extracts of the statement of Sri Sunil Dokania given in the Show Cause notice, it is nowhere mentioned that the alleged person has provided any entry to the assessee directly. We note that the ld Counsel has proved that assessee is a r ..... 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