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TMI Blog2025 (3) TMI 1461X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted. 3. The Ld. CIT(A) erred in law and on facts in confirming the above addition of Rs. 88,84,000/- made without confronting any direct material / statement collected against the assessee and without affording any opportunity to cross-examine despite specific request made. Thus, the assessment proceedings are vitiated and the addition so made must be deleted. 4. The Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 4,44,200/- allegedly paid as commission without any bringing any evidence on record but merely on conjectures and surmises. Thus, the addition so made must be deleted. 5. The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing." 2. Facts of the case may be concisely described as that the return of income for A.Y. 2014-15 was filed by the assessee / appellant on 14.07.2014, declaring total income at Rs. 38,26,220/- and in pursuance thereof return was processed u/s 143(1) of the Act. Thereafter, selected for scrutiny and initial notice u/s 143(2) dated 21.09.2015 was issued and duly served upon the assessee through legal heirs. 3. It is said to be that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% of Rs 88,84,000/- is also assessable as undisclosed cash payments to the Entry Operator, hence, this amount is also liable to be added to the income of the Assessee u/s 68 of the Income Tax Act. Thus, a total amount of Rs. 93,28,200/- is being added to the total income declared by the Assessee. Addition: Rs. 93,28,200/-." 7. In this regard, the Ld. CIT(A) confirmed the addition in question of Rs. 93,28,200/- and relevant para nos.-4.5 and 4.6 are reproduced as under: "4.5 In the line of aforesaid conclusion drawn by Hon'ble Court, the Jurisdictional High Court, in the case of Udit Kalra vs. ITO dated 3rd April, 2019 has decided the issue against the appellant on identical facts for the transactions entered into by appellant in the case of investment in shares of M/s. Kappac Pharma Ltd and claiming u/s 10(38) of IT Act. Similar view has been taken by jurisdictional ITAT also in such cases. In a recent case namely Shri Sandeep Bhargav vs ACIT, Circle-60(1), New Delhi, vide their order dated 20.08.2019, have taken a view that such transactions, as mentioned, are bogus and to be taxed as cash credit u/s 68 of IT Act. The decision was given by Hon'ble ITAT in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal heir Manish Kumar Kotawala and thereafter assessment proceedings were initiated, hence would say that notice issued on dead person and only this count assessment proceedings became null and void. 11. The Ld. AR further submitted that from the perusal of investigation report it is crystal clear that it does not contain the name of the assessee / appellant or its registered broker in any manner and no logical conclusion can be drawn from the said report. So far as the statement of Mr. Vikrant Kayan, which is referred by the Ld. AO was also not provided to the appellant. 12. The Ld. AR also emphasized that the Ld. AO strangely mentioned that provision of Section 131(1), should not be in the present case and expressed the illogical observations that no useful purpose shall be served even if the summons u/s 131 may issue and he expressly avoid the requirement of cross examination by stating that cross examination of the operators would serve. The Ld. AR draws our attention at AO's order in para no. 8.3, which is reproduced as under: "8.3 On the issue of examination and cross-examination the discussion is being initiated here suo-moto. Appellate Authorities have, in numerous d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NO Industries Ltd. has been deleted by the Coordinate Benches of ITAT, Delhi, and also of Kolkatta Benches in around nine-ten cases as follows. * ITA No. 410/D/2018 Mohit Hora (HUF) vs. ITO * ITA No. 2021/D/2018 Shoubit Goel (HUF) vs. ITO * ITA NO.- 5662/D/2018 Veena Gupta vs. ACIT * ITA NO.- 6087/D/2018 Sh. Rajeev Agarwal & Sons vs. ITO * ITA No.- 2394/Kol/2017 Prakash Chand Bhutoria vs. ITO * ITA No. 1790/Kol/2018 Sumaysh Aggarwal * ITA No.- 2474/Kol/2018 Mahavir Jhanwar vs. ITO * ITA No.- 1693/Kol/2018, Sh. Pawan Kumar Kabra vs. ITO * ITA No.- 1694/Kol/2018, Sh. Raj Kumar Kabra vs. ITO * ITA No.- 731/Kol/2018 Smt. Minu Gupta vs. ITO. The Ld. AR also submitted that unless some defects are pointed out by the Ld. AO in the documents submitted the same needs to be accepted and, in this case, it is crystal clear that the same does not contain even a whisper that the document submitted by the appellant was not genuine or defective. The appellant invested in shares, which gave rise to capital gains in a short period, does not been produced before Ld. AO. He also submitted that there is no whisper in the assessment order or the order passed by the Ld. CIT(A) that assessee/ ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears that there was loss and the whole transactions were supported by the contract notes, bills and were carried out through recognized stock braker of the Calcutta Stock Exchange and all the bills were received from the share broker through account payee which are also fled 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 a side 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. 620/2008 is dismissed. 27. In the aforesaid facts and circumstances of the case, we hold that the Id.CIT(A) was not justified in upholding the addition of sale proceeds of the shares as undisclosed income of the assessee u/s 68 of the Act. We therefore delete the addition of Rs. 33,15,263. 28. Since, we have deleted the main addition of Rs. 33,15,263/-, therefore, the addition on account of commission paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "12. Mr. Hossain's submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion, however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent. With regard to the claim that observations made by the CIT(A) were in conflict with the Impugned Order, we may only note that the said observations are general in nature and later in the order, the CIT(A) itself notes that the broker did not respond to the notices. Be that as it may, the CIT(A) has only approved the order of the AO, following the same reasoning, and relying upon the report of the Investigation Wing. Lastly, reliance placed by the Revenue on Suman Poddar case (supra) and Sumati Dayal case (supra) is of no assistance. Upon examining the judgment of Suman Poddar case (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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue." 18. The Ld. AR relied upon in the case of Mrs. Neeta Bothra vs. Income-tax Officer [2022] 137 taxmann.com 463 (Chennai-Trib.), the relevant para no. 13 is reproduced as under: "13. In this case, there is no dispute with regard to fact that assessee has filed relevant documents including contract note issued by stock broker, as per which purchase and sale of shares were through online. The assessee has paid consideration for purchase of shares by cheque and had received consideration for sale of shares by cheque. The Assessing Officer has not made any adverse comments on the evidences filed by the assessee, but he has disbelieved documents filed by the assessee for simple reason that broker was kept under watch list by the SEBI for fraudulent and unfair trade practices relating to Securities Market Regulations, 1995. We find that basis on which the Assessing Officer has concluded his finding to hold the assessee is a beneficiary of bogus long term capital gain is not supported by any corroborative evidences. No doubt, broker may be kept under watch list for some fraudulent activities, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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