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TMI Blog2021 (6) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act 1961(In short the Act ) dated 24.11.2017 framed by ITO-Burhanpur respectively. 2. Assessee(s) has raised following grounds of appeal:- (i) Smt. Neelam Mittal ITA No.434/Ind/2019 Assessment Year 2015-16 1. On the facts and circumstances of the case and in law the learned Commissioner of Income tax (Appeals)-II, Indore ( CIT(A) ) erred in confirming the action of Assessing Officer in making addition in the assessment and not accepting the income as returned by the Appellant. The Appellant prays that the said addition and adjustment be deleted and returned Income be accepted. 2.On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the action of Assessing Officer in disallowing the claim of long term capital gains on sale of listed shares amounting to ₹ 1654277. The Appellant prays that the said disallowance be directed to be deleted. 3.On the facts and circumstances of the case and in law the CIT(A) erred in not providing or confronting the alleged information, third party material and statements, if any, which have been relied for drawing adverse inference in disallowing the claim of exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any of the foregoing grounds of appeal. 3. From perusal of the above grounds we find that the common issues have been raised firstly relates to genuineness of Long Term Capital Gain(in short LTCG), claimed exempt u/s 10(38) of the Act arising from sale of equity shares of Kappac Pharma Limited and secondly legal issue that opportunity of cross examination not provided to assessee(s). 4. As issues raised and facts are common, at the request of all the parties, these appeals were heard together and being disposed off by way of this common order for the sake of convenience and brevity. As agreed by all the parties we will take up the facts of assessee namely Neelam Mittal to adjudicate the common issues. 5. Brief facts of the case as culled out from the records are that the assessee is an individual. She filed e-return of income on 29.10.2015 showing income at ₹ 3,22,610/-. Case selected under complete scrutiny through CASS followed by serving of notices u/s 143(2) and 142(1) of the Act. While examining records it was revealed that during the year assessee had earned LTCG at ₹ 16,54,277/- from sale of 3000 equity shares of Kappac Pharma Limited (in shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of another person to which the assessee is not connected and also no opportunity to cross examine Mr. Nishant Niyati was provided even after making specific request. He submitted that in view of the judgment of the Hon'ble Apex Court in the case of Andaman Timber Industries vs. CCE 281 CTR 241(SC). The impugned addition is liable to be deleted and the proceedings deserves to be quashed as the assessee was not provided any opportunity to cross examine the person on the basis of whose statement addition has been made in the hands of assessee. Ld. Counsel for the assessee also referred to various documents filed in the paper book dated 07.04.2021 running from pages 1 to 17. Reliance was placed on following decisions: 1. Arun Kumar v. ACIT (ITANo.457/Del/2018) 2. Usha Singhania v. ITO (ITANo.1495/Kol/2018 3. Shyam Sundar Agarwal v. ITO (ITANo.1714/Kol/2018 4. Suresh Kumar Chug v. ITO (ITA No.2789/Del/2018 5. Sidhartha Jain vs. ITO (ITANo.4459/Del/2017 6. Himanshu Chaudhary v. ITO (ITANo.7772/Del/2017 7. Radhika Garg v. ITO (ITANo.2429/Del/2018 8. Yogendra Dalmia ITANo.774/KOL/2018 dated 09.08.2019 (I.T.A.T., Kolkata) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in 2010. Thereafter in 2012 on 18.09.2012 both the assessee(s) purchased 3000 equity shares each at ₹ 2 per share and paid cash. Purchasing of equity shares on offline mode is not barred in law. After the purchase the shares were lodged for getting transfer in the name of assessee and the same was completed on 09.10.2012 by transfer No.26217 and registered Folio No.AS0273 in the case of Neelam Mittal vide transfer No.26218 by registered Folio No.TS0022 in case of Titu Mittal. Thereafter these shares were sold through member of Bombay Stock Exchange namely Indira Securities Pvt. Ltd. having SEBI REGN. No. INB011286631. The sale consideration so received was credited to the bank account of the assessee. We further note that the shares are sold through registered brokers on the stock exchange. The details of buyers of the shares are not visible as all such transaction of purchase and sale on the recognized stock exchange are carried out through registered brokers and work under a software controlled by SEBI. So the genuineness of documents evidencing sale consideration from sale of shares has not been doubted by revenue authorities. 12. It is also brought to our no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the addition. We therefore allow the legal ground commonly raised through Ground No.3 by both the assessee(s) holding that no addition should have been made without providing opportunity of cross examination with Mr. Nishant Nyati to both the assessee(s) namely Smt. Neelam Mittal and Smt. Ritu Mittal as the statement of Mr. Nishant Nyati was taken at the back of the assessee(s). Thus the common Ground No.3 raised by both the assessee(s) are allowed. 15. As regards merits of the case, we find that the issue raised in the instant case of question of genuineness of Long Term Capital Gain from sale of shares of Kappac Pharma Limited is squarely covered by the decision of Co-ordinate Bench of Kolkatta in the case of Yougendra Dalmia (supra) and the relevant extract is reproduced below: Para 6 Next comes assessee s latter appeal ITA No.775/Kol/2018 seeking to reverse both the lower authorities action treating his sale proceeds amounting to ₹ 1,81,009/- derived from sale of shares in M/s GCM Securities Pvt. Ltd and Kappac Pharma Ltd. has to be in the nature of unexplained cash credits. Both the lower authorities have further disallowed the alleged commission e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There are number of incidences where the share prices of certain listed companies increased drastically but that all depends on demand and supply of the equity share, perception of its growth and the market sentiments. Unless and until the company of which the equity shares are being traded is found to be involved in malpractices the financial results are not commensurate with the prices at the NSE/BSE portal and sufficient proofs are available showing the alleged company to be a bogus/penny stock or paper company, one cannot question the genuineness of transactions carried out on the portal of NSE/BSE which are under the control of Securities and Exchange Board of India. [emphasis supplied] S17. As regards the judgment relied by the Ld. DR we find that the case of the Tribunal in the case of Udit Kalra (supra) is a decision given by a single member on 08.01.2019 and the same will not be applicable, since the Coordinate Bench Kolkata being a double bench has decided the very same issue in favour of assessee vide order dated 09.08.2019. 18. As regards the judgment of Hon'ble Delhi High Court in the case of Suman Poddar vs. ITO [2019] 112 taxmann.com 329 (Delhi), th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocks, which sets out the modus operandi adopted in the business of providing entries of bogus LTCG. However, the reliance placed on the report, without further corroboration on the basis of cogent material, does not justify his conclusion that the transaction is bogus, sham and nothing other than a racket of accommodation entries. We do notice that the AO made an attempt to delve into the question of infusion of Respondent s unaccounted money, but he did not dig deeper. Notices issued under Sections 133(6)/131 of the Act were issued to M/s Gold Line International Finvest Limited, but nothing emerged from this effort. The payment for the shares in question was made by Sh. Salasar Trading Company. Notice was issued to this entity as well, but when the notices were returned unserved, the AO did not take the matter any further. He thereafter simply proceeded on the basis of the financials of the company to come to the conclusion that the transactions were accommodation entries, and thus, fictitious. The conclusion drawn by the AO, that there was an agreement to convert unaccounted money by taking fictitious LTCG in a pre-planned manner, is therefore entirely unsupported by any material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f no assistance. Upon examining the judgment of Suman Poddar (supra) at length, we find that the decision therein was arrived at in light of the peculiar facts and circumstances demonstrated before the ITAT and the Court, such as, inter alia, lack of evidence produced by the Assessee therein to show actual sale of shares in that case. On such basis, the ITAT had returned the finding of fact against the Assessee, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix at hand. Similarly, the case of Sumati Dayal v. CIT (supra) too turns on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue. 13. The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order. 14. In this view of the matter, no question of law, much less a substantial question of law arises for our consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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