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TMI Blog2022 (7) TMI 1563X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessment assessing total income of the assessee at Rs. 8,30,620/- making addition of Rs. 3,67,940/- treating the same as unaccounted and unexplained amount credited to the bank of account of the assessee invoking provisions of section 68 of the Act. Against which, the assessee preferred appeal before the CIT(A), but again the CIT(A) upheld the view of the AO, confirmed the above addition made by the AO and dismissed the appeal of the assessee. Now, the assessee is in further appeal before the Tribunal. 4. Before us, ld. AR submitted the contentions of the assessee on the grievance raised by this appeal and demonstrated the same with documentary evidence as described here under, that: 1. Shares of Sun bright Stock Broking Services Ltd. purchased on 26.06.2009 for Rs. 3.40 per share through registered broker. 2. Purchase price paid through bank account on 26.06.2009 itself, statement at PN 12 of PB. 3. Shares received in demat account on 26.06.2009 itself. Demat account at PN 10 & 11 of PB, relevant shares reflected on PN 1 1 of PB. 4. Shares of Rs. 10/- were sub-divided into shares of Rs. 5/- each and in place of 11,000 shares, assessee received 22,000 shares. Rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Demat account at PN 10 & 11 of PB. Addition made on the basis of general observations. Nothing specific against the assessee. AO has not made out a case as to how the lengthy observations made by him are present or applicable in the case of the assessee. No case made out that either the assessee or her broker were party to any manipulation. Even if there was any price rigging, in absence of involvement of assessee, it was not relevant. Business, turnover, profitability etc. of the company may not be significant but investment decisions are taken by investor not on the basis of present or past achievement but on market tips, credibility of the management, future plans etc. The market does not depend only upon the past and present figures. Reliance on: - i) ITO vs Kedar Agrawal in ITA no. 117/RPR/2014 dt. 02.02.2018, relevant finding in para 24 and 19. ii) DOT vs Rakesh Saraogi & Sons HUP in ITA no. 93 to 99/RPR/2014 dt. 16.04.2018. PN 33 to 48, relevant findings on 38,39,41 & 74 of PB. iii) Navneet Agarwal in ITA no. 2281/Kol./2017 dt. 20.07.2018, PN 49 to 75 of PB. Relevant observations on para 11 & 12. Relevant findings in para 15 & 16. iv) Summary of some other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon. Prima facie, the order of AO was focused on general description of process with respect to unaccounted and unexplained money routed to the account of beneficiary/ assessee in the garb of Long term capital gain. The Ld AO has relied upon the investigation report of investigation wing, Calcutta and suspension of trading of Sun bright Stock Broking Ltd due to surveillance measures, the same aspect has further demonstrated by the AO by affixing screen shots of the suspension of the said company on account surveillance by the SEBI. Contention of the AO was accepted by the Ld CIT(A) reiterating the same facts, transaction was considered as a sham transaction. 8. We have observed that the assessment was entirely based on the report of the Investigation Wing of the Calcutta. No independent enquiry was made for the case of assessee. AO's assumption, that the broker has done some manipulation in the transaction and thereby the assessee was benefitted, was based on surmises, have no documentary evidence to prove that the assessee was involved in such bogus transaction or that the assessee has given any cash to the broker. Admittedly, transactions are substantiated with the documentary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 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 Rs. 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 the Income-tax Officer was thus either perverse or vitiated by suspicions, conjectures or surmises, the finding of the Tribunal was equally p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 a denial of the right to be heard i.e. audio alteram partem. 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 by cross- examining the witnesses produced against him. The object of supplying statements is that, the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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 cross-examination 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 discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 of facts 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 JAIPUR ITAT in the case of VIVEK AGARWAL [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 AO has also failed to establish that the assessee has brought back his unaccounted income in the shape of long term capital gain. Hence we delete the addition made by the AO on this account." c) The Hon'ble Punjab and Haryana High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 facts and circumstances of the case, we hold that the ld. CIT (A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ANI [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 support the claim of the assessee that the transactions of the assessee were bonafide and genuine and therefore the ld AO was not justified in rejecting the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 laid down by the Hon'ble Gujrat High Court as under: " It can thus be seen that the appellate authority as well as the Tribunal came to concurrent conclusion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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