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Facts
The Revenue appealed against the order of the CIT(A) who deleted additions made by the AO. The AO had made additions on account of unexplained cash credit and commission expenditure, based on information from DGIT (Inv.) Kolkata, suspecting the assessee's sale of shares in M/s Lifeline Drugs and Pharma Limited to be a manipulated penny stock transaction for bogus LTCG.
Held
The Tribunal held that the assessee had discharged the primary onus to substantiate the transactions with documentary evidence. The AO had relied heavily on the Investigation Directorate's report and statements of entry providers without conducting independent inquiries or confronting the assessee with specific evidence. The Tribunal upheld the CIT(A)'s order.
Key Issues
Whether the long-term capital gains claimed as exempt were genuine or a colourable device, and whether the additions made by the AO for unexplained cash credit and commission were justified.
Sections Cited
68, 69C, 10(38), 148A, 148, 139(1), 132(4), 131
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT (ACCOUNTANT & SHRI RAJ KUMAR CHAUHAN
O R D E R Per O. P. Kant (A.M.)
This appeal by the Revenue is directed against the order dated 07th April, 2025 passed by the Ld. Commissioner of Income Tax Appeals/National Faceless Appeal Center, Delhi [in short Ld. CIT (A)] for Assessment Year 2016-17 , raising following grounds:-
1. Whether on the facts and in the circumstances of the hether on the facts and in the circumstances of the hether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the case and in law, the Ld. CIT(A) has erred in directing the case and in law, the Ld. CIT(A) has erred in directing the AO to delete the additions of Rs. 2,40,42,951/ AO to delete the additions of Rs. 2,40,42,951/ AO to delete the additions of Rs. 2,40,42,951/- and Rs. 7,21,289/ 7,21,289/- on account of unexplained cash credit u/s. 68 on account of unexplained cash credit u/s. 68 of the Act and un of the Act and un-explained commission expenditure u/s ission expenditure u/s 69C of the Act respectively made by the AO, ignoring the 69C of the Act respectively made by the AO, ignoring the 69C of the Act respectively made by the AO, ignoring the fact that the addition was made on the basis of credible fact that the addition was made on the basis of credible fact that the addition was made on the basis of credible information received from DGIT (Inv.) Kolkata, that the information received from DGIT (Inv.) Kolkata, that the information received from DGIT (Inv.) Kolkata, that the assessee has sold shares of Penny scrips named M/s. assessee has sold shares of Penny scrips named M/s. assessee has sold shares of Penny scrips named M/s. Lifeline Lifeline Dr Drugs ugs and and Pharma Pharma Limited Limited and "and claimed claimed exemption. u/s 10(38) of the Act?" exemption. u/s 10(38) of the Act?"
2. Whether on the facts and in the circumstances of the 2. Whether on the facts and in the circumstances of the 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing to case and in law, the Ld. CIT(A) has erred in directing to case and in law, the Ld. CIT(A) has erred in directing to delete the addition made by AO in spite of the fact that the delete the addition made by AO in spite of the fact that the delete the addition made by AO in spite of the fact that the scrip" M/s scrip" M/s Lifeline Drugs and Pharma Limited is penny Lifeline Drugs and Pharma Limited is penny stock and the said penny stock has been manipulated to stock and the said penny stock has been manipulated to stock and the said penny stock has been manipulated to generate entries of bogus LTCG facilitating tax evasion by generate entries of bogus LTCG facilitating tax evasion by generate entries of bogus LTCG facilitating tax evasion by a large number of persons? a large number of persons? 3. Whether on the facts and in the circumstances of the 3. Whether on the facts and in the circumstances of the 3. Whether on the facts and in the circumstances of the case and in law case and in law, the Ld. CIT(A) has erred in deleting the , the Ld. CIT(A) has erred in deleting the addition made on account of penny stock transaction addition made on account of penny stock transaction addition made on account of penny stock transaction without appreciating the facts that the action of the AO without appreciating the facts that the action of the AO without appreciating the facts that the action of the AO was based on analysis of information received from was based on analysis of information received from was based on analysis of information received from investigation Wing Kolkata that the assessee has ente investigation Wing Kolkata that the assessee has ente investigation Wing Kolkata that the assessee has entered into penny stock transaction, which was arranged into penny stock transaction, which was arranged into penny stock transaction, which was arranged transaction involved the series of preconceived steps and transaction involved the series of preconceived steps and transaction involved the series of preconceived steps and lack of commercial content and totally an artificially lack of commercial content and totally an artificially lack of commercial content and totally an artificially structured transaction entered into with the sole intent to structured transaction entered into with the sole intent to structured transaction entered into with the sole intent to evade taxes ?" evade taxes ?"
4. Whether on t 4. Whether on the facts and in the circumstances of the he facts and in the circumstances of the case and in law, the Ld. CITIA) has erred in deleting the case and in law, the Ld. CITIA) has erred in deleting the case and in law, the Ld. CITIA) has erred in deleting the addition made on account of penny stock transaction addition made on account of penny stock transaction addition made on account of penny stock transaction without appreciating the facts that during the course of without appreciating the facts that during the course of without appreciating the facts that during the course of investigation, it was found that the scrips in w investigation, it was found that the scrips in w investigation, it was found that the scrips in which the assessee traded is penny stock used for providing assessee traded is penny stock used for providing assessee traded is penny stock used for providing accommodation entry only in form of bogus LTCG." accommodation entry only in form of bogus LTCG." accommodation entry only in form of bogus LTCG."
5. Whether on the facts and circumstances of the case and 5. Whether on the facts and circumstances of the case and 5. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact in law, the Ld. CIT(A) has erred in not appreciating the fact in law, the Ld. CIT(A) has erred in not appreciating the fact that in the cases, where the that in the cases, where there was a suspicious or bogus re was a suspicious or bogus trade, the onus is on the assessee to establish the trade, the onus is on the assessee to establish the trade, the onus is on the assessee to establish the genuineness of price hike and to prove that the price of genuineness of price hike and to prove that the price of genuineness of price hike and to prove that the price of penny stock in which he was traded to claimed penny stock in which he was traded to claimed penny stock in which he was traded to claimed LTCG/STCG or losses was not manipulated, as reliance is LTCG/STCG or losses was not manipulated, as reliance is LTCG/STCG or losses was not manipulated, as reliance is placed on Hon'bl placed on Hon'ble Calcutta High Court in the decision in e Calcutta High Court in the decision in the case of Pr. CIT Vs. Swati Bajaj (I.A.No. GA/2/2022 in the case of Pr. CIT Vs. Swati Bajaj (I.A.No. GA/2/2022 in the case of Pr. CIT Vs. Swati Bajaj (I.A.No. GA/2/2022 in ITAT No. 6 of 2022, Dated. 14.06.2022, wherein it was ITAT No. 6 of 2022, Dated. 14.06.2022, wherein it was ITAT No. 6 of 2022, Dated. 14.06.2022, wherein it was held that merely demonstrating the financials of the held that merely demonstrating the financials of the held that merely demonstrating the financials of the company, volume of trade, transactions though bank company, volume of trade, transactions though bank company, volume of trade, transactions though banking channels inter alia will not suffice. The assessee has to channels inter alia will not suffice. The assessee has to channels inter alia will not suffice. The assessee has to prove that the price of the share or penny stock was not prove that the price of the share or penny stock was not prove that the price of the share or penny stock was not manipulated?" manipulated?"
6. Whether on the facts and circumstances of the case and 6. Whether on the facts and circumstances of the case and 6. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the direct and in law, the Ld. CIT(A) has erred in ignoring the direct and in law, the Ld. CIT(A) has erred in ignoring the direct and circumstantial evidences in view of the decision in Durga mstantial evidences in view of the decision in Durga mstantial evidences in view of the decision in Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dalal Prasad More (1971) 82 ITR 540 (SC) and Sumati Dalal Prasad More (1971) 82 ITR 540 (SC) and Sumati Dalal (1995) 80 Taxmann 89(SC)/1995) 2014 ITR 801(SC) (1995) 80 Taxmann 89(SC)/1995) 2014 ITR 801(SC) (1995) 80 Taxmann 89(SC)/1995) 2014 ITR 801(SC) (1995), rendered by the Hon'ble Supreme Court, wherein it (1995), rendered by the Hon'ble Supreme Court, wherein it (1995), rendered by the Hon'ble Supreme Court, wherein it was held that the court and tribunal have to was held that the court and tribunal have to was held that the court and tribunal have to judge the evidences before it by applying the test of human evidences before it by applying the test of human evidences before it by applying the test of human probabilities, the surrounding circumstances, which had probabilities, the surrounding circumstances, which had probabilities, the surrounding circumstances, which had been exercised by the Officer?" been exercised by the Officer?"
7. Whether on the facts and circumstances of the case and 7. Whether on the facts and circumstances of the case and 7. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is right in deleting the ad in law, the Ld. CIT(A) is right in deleting the ad in law, the Ld. CIT(A) is right in deleting the addition made on account of penny stock transaction without appreciating on account of penny stock transaction without appreciating on account of penny stock transaction without appreciating the facts that on the similar issue of LTCG, the Hon'ble the facts that on the similar issue of LTCG, the Hon'ble the facts that on the similar issue of LTCG, the Hon'ble ITAT, Kolkata in the case of Manoj Jain (HUF) in Kolkata in the case of Manoj Jain (HUF) in Kolkata in the case of Manoj Jain (HUF) in treated the penny stock transaction as 1782/KOL/2018, treated the penny stock transaction as 1782/KOL/2018, treated the penny stock transaction as income from other income from other sources instead of long term capital sources instead of long term capital gain, and the same was upheld by the Hon'ble High Court gain, and the same was upheld by the Hon'ble High Court gain, and the same was upheld by the Hon'ble High Court of Calcutta [2024] 164 taxmann.com 133 (Calcutta), which of Calcutta [2024] 164 taxmann.com 133 (Calcutta), which of Calcutta [2024] 164 taxmann.com 133 (Calcutta), which has been confirmed by the Hon'ble Supreme Court by has been confirmed by the Hon'ble Supreme Court by has been confirmed by the Hon'ble Supreme Court by dismissing dismissing dismissing SLP SLP SLP in in in SLP(C) SLP(C) SLP(C) of of of 21636/2024 21636/2024 21636/2024 dated dated dated 20.09.202 20.09.2024 ?"
8. Whether on the facts and circumstances of the case and 8. Whether on the facts and circumstances of the case and 8. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is right in deleting the addition in law, the Ld. CIT(A) is right in deleting the addition in law, the Ld. CIT(A) is right in deleting the addition without appreciating the decision of the Hon'ble Delhi High without appreciating the decision of the Hon'ble Delhi High without appreciating the decision of the Hon'ble Delhi High Court in the case of Suman Poddar Vs ITO (ITA 841/2019), Court in the case of Suman Poddar Vs ITO (ITA 841/2019), Court in the case of Suman Poddar Vs ITO (ITA 841/2019), wherein exemption c wherein exemption claim u/s 10(38) on account of LTCG laim u/s 10(38) on account of LTCG has been denied and further the SLP filed by Suman has been denied and further the SLP filed by Suman has been denied and further the SLP filed by Suman Poddar vide appeal (c) No. 26864/2019 (arising out of Poddar vide appeal (c) No. 26864/2019 (arising out of Poddar vide appeal (c) No. 26864/2019 (arising out of impugned final judgment and order dated 17.09.2019 in impugned final judgment and order dated 17.09.2019 in impugned final judgment and order dated 17.09.2019 in passed by the High Court of Delhi at passed by the High Court of Delhi at ITA No. 841/2019 passed by the High Court of Delhi at New Delh New Delhi) was dismissed by the Hon'ble Supreme Court i) was dismissed by the Hon'ble Supreme Court of India vide order dated 22.11.2019?” of India vide order dated 22.11.2019?”
Briefly stated the facts of the case are that the Assessee Briefly stated the facts of the case are that the Assessee filed its return of income return of income for the year under consideration the year under consideration on 30.07.2016 30.07.2016 declaring total income of Rs. declaring total income of Rs.5,03,860/- u/s. 139(1) of the Income Tax Act, 1961 (In short, “the u/s. 139(1) of the Income Tax Act, 1961 (In short, “the u/s. 139(1) of the Income Tax Act, 1961 (In short, “the Act”). Subsequently, . Subsequently, notice u/s. 148A dated 26.05.2022 notice u/s. 148A dated 26.05.2022 was issued as to why his case should not be reopened for was issued as to why his case should not be reopened for was issued as to why his case should not be reopened for A.Y. 2016- -17. In response, the assessee assessee filed response vide letter dated 13.06.2022 in support of the alleged vide letter dated 13.0 6.2022 in support of the alleged transaction of purchase and sale of shares of M/s. transaction of purchase and sale of shares of M/s. transaction of purchase and sale of shares of M/s. Lifeline Drugs and Pharma Limited wherein a claim of Lifeline Drugs and Pharma Limited wherein a claim of Lifeline Drugs and Pharma Limited wherein a claim of exemption u/s. 10(38) was made of Rs. 2,40,42,944/ exemption u/s. 10(38) was made of Rs. 2,40,42,944/- exemption u/s. 10(38) was made of Rs. 2,40,42,944/ being long term capital gain. However, the Assessing being long term capital gain. However, the Assessing being long term capital gain. However, the Assessing Officer was not satisfied with the response filed by the Officer was no t satisfied with the response filed by the assessee and accordingly, his case was reopened by way assessee and accordingly, his case was reopened by way assessee and accordingly, his case was reopened by way of issue of notice u/s. 148 of the Act after taking sanction of issue of notice u/s. 148 of the Act after taking sanction of issue of notice u/s. 148 of the Act after taking sanction from the competent authority. In response to the said from the competent authority. In response to the said from the competent authority. In response to the said notice, the assessee filed his return of in notice, the assessee filed his return of income on notice, the assessee filed his return of in 01.05.2023. 01.05.2023.
During the reassessment, in support of the exemption of During the in support of the exemption of Rs. 2,40,42,944/ 2,40,42,944/- claimed u/s. 10(38), claimed u/s. 10(38), the Assessee submitted the copies of contract notes for sale of shares submitted the copies of contract notes for sale of shares submitted the copies of contract notes for sale of shares of M/s. Lifeline Drugs and Pharma Ltd., demat of M/s. Lifeline Drugs and Pharma Ltd., demat of M/s. Lifeline Drugs and Pharma Ltd., demat statements, allotment letters, ledger account of broker, statements, allotment ledger account of broker, bank statements and proof of source of funds utilised for bank statements and proof of source of funds utilised for bank statements and proof of source of funds utilised for acquisition of said shares. However, the Assessing Officer acquisition of said shares. However, the Assessing Officer acquisition of said shares. However, the Assessing Officer relied on the report of the Investigation Directorate relied on the report of the Investigation Directorate relied on the report of the Investigation Directorate relating to coordinate enquiries in the cases of relating to coordinate enquiries in the cases of various relating to coordinate enquiries in the cases of individuals who were engaged in providing bogus entry of individuals who were engaged in providing bogus entry of Long Term Capital Gains, Short Term Capital Gains and Long Term Capital Gains, Short Term Capital Gains and Long Term Capital Gains, Short Term Capital Gains and losses on share transactions in listed penny stocks. losses on share transactions in listed penny stocks. losses on share transactions in listed penny stocks. Statements of many entry providers and beneficiaries Statements of many entry providers and beneficiaries Statements of many entry providers and beneficiaries were recorded under section 132(4) and section 131 of were recorded under section 132 (4) and section 131 of the Act. The investigation led to unearthing of country the Act. The investigation led to unearthing of country the Act. The investigation led to unearthing of country wide scam of bogus entry using penny stocks, listed on wide scam of bogus entry using penny stocks, listed on wide scam of bogus entry using penny stocks, listed on the stock exchanges. The investigation report identified the stock exchanges. The investigation report identified the stock exchanges. The investigation report identified certain penny stock companies which were used for certain penny stock companies which were used for certain penny stock companies which were used for providing the bogus entries of LTCG/STCG/STCL on sale providing the b ogus entries of LTCG/STCG/STCL on sale of shares. The Assessing Officer has noted that M/s of shares. The Assessing Officer has noted that M/s of shares. The Assessing Officer has noted that M/s Lifeline Drugs and Pharma Limited was one of such Lifeline Drugs and Pharma Limited was one of such Lifeline Drugs and Pharma Limited was one of such penny stock companies. Furthermore, the Assessing penny stock companies. Furthermore, the Assessing penny stock companies. Furthermore, the Assessing Officer discussed about the general modus operandi Officer discussed about the general modus operandi Officer discussed about the general modus operandi adopted by the entry providers, share brokers and adopted by the entry providers, share brokers and promoters/directors of penny stock companies, acting in promoters/directors of penny stock companies, acting in promoters/directors of penny stock companies, acting in tandem, to generate bogus entries of LTCG/STCG/STCL. tandem, to generate bogus entries of LTCG/STCG/STCL. tandem, to generate bogus entries of LTCG/STCG/STCL. On the basis of documentary and circumstantial On the basis of documentary and circumstantial On the basis of documentary and circumstantial evidence, applying the test of human conduct and evidence, applying the test of human conduct and evidence, applying the test of human conduct and preponderance of probability, the AO has concluded that, preponderance o f probability, the AO has concluded that, the apparent is not real, the financial transactions are the apparent is not real, the financial transactions are the apparent is not real, the financial transactions are sham ones and the entire edifice was only a colourable sham ones and the entire edifice was only a colourable sham ones and the entire edifice was only a colourable device for evading taxes. Accordingly, the AO held that, device for evading taxes. Accordingly, the AO held that, device for evading taxes. Accordingly, the AO held that, the sum of Rs. 2,40,42,951/-, which the the sum of Rs. 2,40,42,951/ , which the assessee has claimed as exempt LTCG arising on sale of shares, was a claimed as exempt LTCG arising on sale of shares, was a claimed as exempt LTCG arising on sale of shares, was a bogus accommodation entry, and accordingly treated the bogus accommodation entry, and accordingly treated the bogus accommodation entry, and accordingly treated the same as unexplained cash credit under section 68 of the same as unexplained cash credit under section 68 of the same as unexplained cash credit under section 68 of the Act, and added the same to total income. He also made Act, and added the same to total income. He also made Act, and added the same to total income. He also made an addition of Rs. 7,21,289/- u/s. 69C being commission an addition of Rs. 7,21,289 u/s. 69C being commission paid @3% on @3% on such income.
Aggrieved by the additions made, the assessee preferred Aggrieved by the additions made, the assessee preferred an appeal before the ld. CIT(A) who allowed his appeal an appeal before the ld. CIT(A) who allowed his appeal an appeal before the ld. CIT(A) who allowed his appeal and deleted the aforesaid additions made u/s. 68 and and deleted the aforesaid additions made u/s. 68 and and deleted the aforesaid additions made u/s. 68 and 69C of the Act. 69C of the Act.
Before us learned Departmental Representative appearing Before us learned Departmental Representative appearing for the Revenue Revenue submitted that the ld. CIT(A) has failed to the ld. CIT(A) has failed to appreciate the credible information received from the appreciate the credible information received from the appreciate the credible information received from the DGIT(Inv.) Kolkata that the assessee has sold shares of DGIT(Inv.) Kolkata that the assessee has sold shares of DGIT(Inv.) Kolkata that the assessee has sold shares of penny scrip namely M/s. Lifeline Drugs and Pharma Ltd. penny scrip namely M/s. Lifeline Drugs and Pharma Ltd. penny scrip namely M/s. Lifeline Drugs and Pharma Ltd. and wrongly claimed exemption u/s. 10(38) of the Act. and wrongly claimed exemption u/s. 10(38) of the Act. and wrongly claimed exemption u/s. 10(38) of the Act. The ld. CIT(A) has also failed to appreciate that the said CIT(A) has also failed to appreciate that the said CIT(A) has also failed to appreciate that the said penny stock has been manipulated to generate entries of penny stock has been manipulated to generate entries of penny stock has been manipulated to generate entries of bogus LTCG facilitating tax evasion by a large number of bogus LTCG facilitating tax evasion by a large number of bogus LTCG facilitating tax evasion by a large number of persons. The ld. DR further emphasized that in this scrip, persons. The ld. DR further emphasized that in this scrip, persons. The ld. DR further emphasized that in this scrip, there was a suspicious or bogus trade and therefore the there was a suspicious or bogus t rade and therefore the onus was heavy on the assessee to establish the onus was heavy on the assessee to establish the onus was heavy on the assessee to establish the genuineness of the price hike and prove that the price of genuineness of the price hike and prove that the price of genuineness of the price hike and prove that the price of penny stock in which he traded was genuine and not penny stock in which he traded was genuine and not penny stock in which he traded was genuine and not manipulated. He further relied on the decision of Hon’ble manipulated. He further relied on the decision of Hon’ble manipulated. He further relied on the decision of Hon’ble Kolkata High Court in the case of PCIT v. Swati Bajaj Kolkata High Court in the case of PCIT v. Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta). He also placed [2022] 139 taxmann.com 352 (Calcutta). He also placed [2022] 139 taxmann.com 352 (Calcutta). He also placed reliance on the decision of Hon’ble Apex Court in the case reliance on the decision of Hon’ble Apex Court in the case reliance on the decision of Hon’ble Apex Court in the case of Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati of Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dayal (1995) 80 Taxmann 89 (SC) wherein it is held t Dayal (1995) 80 Taxmann 89 (SC) wherein it is held that Dayal (1995) 80 Taxmann 89 (SC) wherein it is held t the circumstantial evidences should be considered which the circumstantial evidences should be considered which the circumstantial evidences should be considered which are not in favour of the assessee in the present case. are not in favour of the assessee in the present case. are not in favour of the assessee in the present case.
On the other side, the ld. AR appearing for the assessee On the other side, the ld. AR appearing for the assessee On the other side, the ld. AR appearing for the assessee submits that the ld. CIT(A) has rightly allowed his appeal submits that the ld. CIT(A) has rightly allowed his appeal submits that the ld. CIT(A) has rightly allowed his appeal for the details reasons enumerated therein. Further, he for the details reaso ns enumerated therein. Further, he also submitted that the case laws relied upon by the ld. also submitted that the case laws relied upon by the ld. also submitted that the case laws relied upon by the ld. DR are not relevant in his facts of the case and clearly DR are not relevant in his facts of the case and clearly DR are not relevant in his facts of the case and clearly distinguishable. distinguishable.
We have heard rival submission of the parties and We have heard rival submission of the parties and perused the relevant material available on record. The perused the relevant material able on record. The issue for consideration before us is whether the LTCG issue for consideration before us is whether the LTCG issue for consideration before us is whether the LTCG earned on sale of shares of M/s. Lifeline Drugs and earned on sale of shares of M/s. Lifeline Drugs and earned on sale of shares of M/s. Lifeline Drugs and Pharma Ltd. amounting to Rs. 2,40,42,944/ Pharma Ltd. amounting to Rs. 2,40,42,944/- is genuine and thereby claim of exemption made u/s. 10(38) of the and thereby claim of exemption made u/s. 10(38) of the and thereby claim of exemption made u/s. 10(38) of the Act is correct or not and how the addition made u/s. 68 Act is correct or not and how the addition made u/s. 68 of the Act and also the commission @3% on such income of the Act and also the commission @3% on such income of the Act and also the commission @3% on such income by the Assessing Officer is justified. The finding of the ld. by the Assessing Officer is justified. The finding of the ld. CIT(A) is reproduced as under:- CIT(A) is reproduced as under:
6.11 APPELLATE DECISION (Gr. No. APPELLATE DECISION (Gr. No.-3) : On merits of the On merits of the addition, I have c addition, I have carefully considered the relevant and material facts on record, in respect of this ground of material facts on record, in respect of this ground of material facts on record, in respect of this ground of appeal
, as brought out in the appeal, as brought out in the assessment order and assessment order and submissions made during appeal proceedings. The moot submissions made during appeal proceedings. The moot submissions made during appeal proceedings. The moot point for adjudication point for adjudication is whether, on the given facts and is whether, on the given facts and circumstances, the transaction of purchase and sale of circumstances, the transaction of purchase and sale of circumstances, the transaction of purchase and sale of shares of shares of M/s Lifeline Drugs and Pharma Limited by the M/s Lifeline Drugs and Pharma Limited by the appellant, and the long term capital gains (LTCG) appellant, and the long term capital gains (LTCG) appellant, and the long term capital gains (LTCG) arising therefrom in the hands of the appellant, was a genuine therefrom in the hands of the appellant, was a genuine therefrom in the hands of the appellant, was a genuine financial transaction, or it was financial transaction, or it was a colourable device solely colourable device solely aimed at claiming substantial exempt income by way of aimed at claiming substantial exempt income by way of aimed at claiming substantial exempt income by way of LTCG in the hands of LTCG in the hands of the appellant. I find that, this issue the appellant. I find that, this issue has to be addressed having regard to all the relevant and has to be addressed having regard to all the relevant and has to be addressed having regard to all the relevant and material material facts relating to the said transaction. I find t facts relating to the said transaction. I find that, the appellant, in the course of assessment the appellant, in the course of assessment the appellant, in the course of assessment proceedings, has brought on record the necessary particulars of has brought on record the necessary particulars of has brought on record the necessary particulars of transactions of purchase and sale of transactions of purchase and sale of shares, along with shares, along with the the the supporting supporting supporting documents documents documents relating relating relating to to to each each each such such such transaction, viz. Contract Notes, transaction, viz. Contract Notes, Ledger account of Broker, account of Broker, Demat Account Statements and relevant Bank Statements. Demat Account Statements and relevant Bank Statements. Demat Account Statements and relevant Bank Statements. On a careful On a careful perusal of evidence brought on record, I find perusal of evidence brought on record, I find that, the appellant has satisfactorily discharged the that, the appellant has satisfactorily discharged the that, the appellant has satisfactorily discharged the primary onus cast upon it to substantiate the impugned primary onus cast upon it to substantiate the impugned primary onus cast upon it to substantiate the impugned transactions, transactions, in the nature of purchase and sale of shares, sale of shares, and sale consideration received during the year, by and sale consideration received during the year, by and sale consideration received during the year, by furnishing all the relevant and furnishing all the relevant and material evidence. material evidence. 6.12 In the course of assessment proceedings, the AO has 6.12 In the course of assessment proceedings, the AO has 6.12 In the course of assessment proceedings, the AO has merely doubted the genuineness of merely doubted the genuineness of share transactio share transactions, and LTCG arising there and LTCG arising there from, primarily relying upon the from, primarily relying upon the report of the Investigation report of the Investigation Directorate and has brushed Directorate and has brushed aside the plethora of documentary evidence furnished by aside the plethora of documentary evidence furnished by aside the plethora of documentary evidence furnished by the appellant. the appellant. The report of the Investigation Directorate The report of the Investigation Directorate relates to providing bogu relates to providing bogus accommodation entry of capital s accommodation entry of capital gains/losses on transactions in penny stock by certain gains/losses on transactions in penny stock by certain gains/losses on transactions in penny stock by certain entry providers. The AO has not pointed out the entry providers. The AO has not pointed out the entry providers. The AO has not pointed out the specific reference, or mention, of the impugned transactions of reference, or mention, of the impugned transactions of reference, or mention, of the impugned transactions of purchase and sale of this particular purchase and sale of this particular scrip undertaken by scrip undertaken by the appellant ( the appellant (which has resulted in LTCG in the hands of which has resulted in LTCG in the hands of the appellant) the appellant) in the said enquiry report. 6.13 The AO has merely relied upon the statements of 6.13 The AO has merely relied upon the statements of 6.13 The AO has merely relied upon the statements of certain entry providers recorded by the certain entry providers recorded by the Investigation Directorate, but has failed to examine them on Directorate, but has failed to examine them on Directorate, but has failed to examine them on oath during the assessment proceedings, the assessment proceedings, in relation to the impugned in relation to the impugned transactions in the scrip of M/s Lifeline Drugs and Pharma transactions in the scrip of M/s Lifeline Drugs and Pharma transactions in the scrip of M/s Lifeline Drugs and Pharma Limited undertaken by the appellant. The AO on his part undertaken by the appellant. The AO on his part has not made any independent enquiry during the has not made any independent enquiry during the has not made any independent enquiry during the assessment proceedings, assessment proceedings, viz. by way of issue of summons viz. by way of issue of summons to Share Brokers; or calling for information to Share Brokers; or calling for information from the Stock Exchanges to verify the genuineness of from the Stock Exchanges to verify the genuineness of from the Stock Exchanges to verify the genuineness of transactions. transactions. 6.14 The impugned share transactions have been under 6.14 The impugned share transactions have been under 6.14 The impugned share transactions have been under taken on the platform of stock exchange, taken on the platform of stock exchange, taken on the platform of stock exchange, through registered Stock Brokers, and payments have been ed Stock Brokers, and payments have been ed Stock Brokers, and payments have been made/received through Banking channel. made/received through Banking channel. made/received through Banking channel. The initial purchase purchase purchase of of of these these these shares shares shares was was was not not not disputed disputed disputed in in in assessments of previous years. All assessments of previous years. All transactions are transactions are recorded in the Appellant's regular books of accounts, recorded in the Appellant's regular books of accounts, recorded in the Appellant's regular books of accounts, which remain which remain undisputed by the Ld. AO. the appellant has the Ld. AO. the appellant has submitted submitted submitted comprehensive comprehensive comprehensive records records records of of of transactions transactions transactions conducted conducted subsequent subsequent to to the the disputed disputed period, period, demonstrating ongoing and substantial engagement in demonstrating ongoing and substantial engagement in demonstrating ongoing and substantial engagement in share market activities. share market activities. 6.15 Thus, neither the purchase nor the s 6.15 Thus, neither the purchase nor the sale of this scrip ale of this scrip are one are one-off transactions. The AO has not reverted any factual finding in the assessment order that, there are factual finding in the assessment order that, there are factual finding in the assessment order that, there are cash deposits reflected in the bank cash deposits reflected in the bank statements of the statements of the appellant, or that of his Stock Broker, or any other appellant, or that of his Stock Broker, or any other appellant, or that of his Stock Broker, or any other person/entity which c person/entity which could be traced back to the appellant. traced back to the appellant. The AO has only made certain general observations The AO has only made certain general observations The AO has only made certain general observations regarding modus regarding modus operandi adopted by the entry providers operandi adopted by the entry providers to generate bogus LTCG/STCG/STCL. However, in view of to generate bogus LTCG/STCG/STCL. However, in view of to generate bogus LTCG/STCG/STCL. However, in view of the specific, relevant and material evidence adduced by the specific, relevant and material evidence adduced by the specific, relevant and material evidence adduced by the appellant to substantiate the impugned e appellant to substantiate the impugned transaction, I am not inclined to agree with the adverse findings of the am not inclined to agree with the adverse findings of the am not inclined to agree with the adverse findings of the AO regarding genuineness of AO regarding genuineness of the share transactions, the share transactions, particularly so due to absence of any cogent evidence to particularly so due to absence of any cogent evidence to particularly so due to absence of any cogent evidence to the contrary being the contrary being brought on record by the AO. ord by the AO. 6.16 It is well 6.16 It is well-established that, the onus lies on the established that, the onus lies on the assessee to adduce necessary documentary assessee to adduce necessary documentary assessee to adduce necessary documentary evidence so as to prove the genuineness of the transaction, as the as to prove the genuineness of the transaction, as the as to prove the genuineness of the transaction, as the relevant facts are within the special relevant facts are within the special knowledge of the knowledge of the assessee. However, the assessee. However, the Courts have held in various cases Courts have held in various cases that, the evidence that, the evidence adduced by the assessee have to be adduced by the assessee have to be examined not superficially, but in depth and having regard examined not superficially, but in depth and having regard examined not superficially, but in depth and having regard to the test of the human probabilities and normal course of test of the human probabilities and normal course of test of the human probabilities and normal course of human conduct. A genuine transaction, in human conduct. A genuine transaction, in absence absence of any cogent contrary evidence, cannot be considered as a cogent contrary evidence, cannot be considered as a cogent contrary evidence, cannot be considered as a colorable device to evade taxes, colorable device to evade taxes, merely on the basis of merely on the basis of general observations, devoid of any specific factual finding general observations, devoid of any specific factual finding general observations, devoid of any specific factual finding which is relevant to which is relevant to the impugned transaction. As such, I the impugned transaction. As such, I find that, the principles relating to use of colourable device find that, the principles relating to use of colourable device find that, the principles relating to use of colourable device laid down by the Hon'ble Supreme Court in the case of down by the Hon'ble Supreme Court in the case of down by the Hon'ble Supreme Court in the case of McDowell & Co Ltd. Vs CTO (1977) (1 SCR 914) McDowell & Co Ltd. Vs CTO (1977) (1 SCR 914) McDowell & Co Ltd. Vs CTO (1977) (1 SCR 914) (SC) cannot be applied on the facts of the present case. cannot be applied on the facts of the present case. cannot be applied on the facts of the present case. On similar facts, Hon'ble Gujrat High Court in similar facts, Hon'ble Gujrat High Court in similar facts, Hon'ble Gujrat High Court in the case of Banyan & Berry Vs CIT (1996) (222 ITR 831) (Gujarat) has Banyan & Berry Vs CIT (1996) (222 ITR 831) (Gujarat) has Banyan & Berry Vs CIT (1996) (222 ITR 831) (Gujarat) has distinguished the case of distinguished the case of McDowell & Co Ltd and held as under, McDowell & Co Ltd and held as under, - "What has been deprecated as tax planning for "What has been deprecated as tax planning for "What has been deprecated as tax planning for avoidance of tax are those avoidance of tax are those acts which have acts which have doubtful or doubtful or questionable character as to their questionable character as to their bona fide and righteousness. Not all legitimate bona fide and righteousness. Not all legitimate bona fide and righteousness. Not all legitimate acts of a taxpayer, acts of a taxpayer, which in the ordinary course which in the ordinary course of conducting his affairs a person does and of conducting his affairs a person does and of conducting his affairs a person does and which under law he is entitled which under law he is entitled to do, can be to do, can be branded branded of questionable character on the anvil of of questionable character on the anvil of Mc Dowells. One cannot read in the Mc Dowells. One cannot read in the aforesaid aforesaid decision that any act of an assessee which decision that any act of an assessee which decision that any act of an assessee which results in reduction of his tax liability or results in reduction of his tax liability or results in reduction of his tax liability or expectation of lax benefit in future amounts to a expectation of lax benefit in future amounts to a expectation of lax benefit in future amounts to a colourable colourable device, device, a a dubious dubious method m ethod or or subterfuge to subterfuge to avoid tax and can be ignored if the avoid tax and can be ignored if the acts are unambiguous and bona fide, merely on acts are unambiguous and bona fide, merely on acts are unambiguous and bona fide, merely on the ground that the ground that treating those as deliberate treating those as deliberate would result in tax liability in future. would result in tax liability in future. While the planning adopted as a device to avoid While the planning adopted as a device to avoid While the planning adopted as a device to avoid tax had been dep tax had been deprecated, the principle cannot be recated, the principle cannot be read as laying down the law that a person is to read as laying down the law that a person is to read as laying down the law that a person is to arrange his affairs so as to attract the maximum arrange his affairs so as to attract the maximum arrange his affairs so as to attract the maximum tax tax liability, and every act which results in tax liability, and every act which results in tax reduction, exemption of tax or not attracting tax reduction, exemption of tax or not attracting tax reduction, exemption of tax or not attracting tax authorized authorized by law is to be treated as a device of treated as a device of tax avoidance." tax avoidance." The ratio of the Gujrat High Court decision in the above The ratio of the Gujrat High Court decision in the above The ratio of the Gujrat High Court decision in the above case has been upheld by Hon'ble Supreme case has been upheld by Hon'ble Supreme case has been upheld by Hon'ble Supreme Court in the case of Union of India Vs Azadi Bachao Andolan (2003) case of Union of India Vs Azadi Bachao Andolan (2003) case of Union of India Vs Azadi Bachao Andolan (2003) (263 ITR 706) (SC). (263 ITR 706) (SC). 6.17 On similar facts, the Sura 6.17 On similar facts, the Surat Bench of ITAT in the recent t Bench of ITAT in the recent judgement dated 29th November judgement dated 29th November 2021, in the case of 2021, in the case of Sandipkumar Parsottambhai Patel Vs ITO (2022) Sandipkumar Parsottambhai Patel Vs ITO (2022) Sandipkumar Parsottambhai Patel Vs ITO (2022) (137 taxmann.com 373) (137 taxmann.com 373) (Surat-Trib.) has held that, has held that, where assessee sold shares and claimed LTCG as exempt where assessee sold shares and claimed LTCG as exempt where assessee sold shares and claimed LTCG as exempt under section under section 10(38), since assessee had submitted nce assessee had submitted evidences in form of bills, contract notes, demat statement evidences in form of bills, contract notes, demat statement evidences in form of bills, contract notes, demat statement and bank account to prove genuineness of transactions of bank account to prove genuineness of transactions of bank account to prove genuineness of transactions of purchase and sale of shares by him and the AO purchase and sale of shares by him and the AO purchase and sale of shares by him and the AO had not found found found any any any fault fault fault in in in said said said documents, documents, documents, impugned impugned impugned disallowance disallowance of exemption under section 10(38) of exemption under section 10(38) of the Act and further addition made on account of sale proceeds of and further addition made on account of sale proceeds of and further addition made on account of sale proceeds of shares as undisclosed income of shares as undisclosed income of assessee under section assessee under section 68 was unjustified. The relevant part of the judgment is 68 was unjustified. The relevant part of the judgment is 68 was unjustified. The relevant part of the judgment is reproduced as under reproduced as under - “22
22. We note that all evidences of sales including l evidences of sales including contract noteswere submitted by the assessee, contract noteswere submitted by the assessee, contract noteswere submitted by the assessee, as noted by us above. The as noted by us above. The Assessing officer has Assessing officer has not found any fault in the documents, as noted not found any fault in the documents, as not found any fault in the documents, as by us above. The payments were received by us above. The payments were received by us above. The payments were received through through account payee cheques and transactio account payee cheques and transaction were done through were done through recognized stock exchange. recognized stock exchange. The inflow of shares is reflected by The inflow of shares is reflected by way of physical share certificate and demat account. physical share certificate and demat account. physical share certificate and demat account.
The shares The shares were transferred through demat were transferred through demat account and the assessee doesnot know the account and the assessee doesnot know the account and the assessee doesnot know the buyer. There is no evidence that as buyer. There is no evidence that assessee has sessee has paid paid cash in return of the receipt through cheque. cash in return of the receipt through cheque. In other words, In other words, there is no evidence that the there is no evidence that the cash was recycled. The assessee is cash was recycled. The assessee is not a party not a party to alleged price rigging. He has no nexus with to alleged price rigging. He has no nexus with to alleged price rigging. He has no nexus with the the company, its directors or operators. He is not company, its directors or operators. He is not con concerned with the activity of broker and has no activity of broker and has no control over the same. Even there is control over the same. Even there is no evidence no evidence that directors of company or broker were that directors of company or broker were that directors of company or broker were involved in involved in price rigging. The Assessee has got price rigging. The Assessee has got only incidental benefit of only incidental benefit of price rise. The assessee price rise. The assessee invested in shares, invested in shares, which gave rise to which gave rise to capital gains in a short period, does not mean that the gains in a short period, does not mean that the gains in a short period, does not mean that the transaction is bogus, as all the documents and transaction is bogus, as all the documents and transaction is bogus, as all the documents and evidences have evidences have been produced before assessing been produced before assessing officer. The shares were sold in officer. The shares were sold in piecemeal on piecemeal on different date through recognized stock different date through recognized stock exchange exchange at quoted price. at quoted price.
Regarding the statement of Shri Anil Khemka, alleged Regarding the statement of Shri Anil Khemka, alleged Regarding the statement of Shri Anil Khemka, alleged entry provider, which is reproduced in entry provider, which is reproduced in Assessment Order Assessment Order at Page 8, we note that said statement recorded neither at Page 8, we note that said statement recorded neither at Page 8, we note that said statement recorded neither implicate Sun & Shine implicate Sun & Shine Worldwide Ltd nor the broker Worldwide Ltd nor the broker Tradebull Tradebulls Securities Pvt. Ltd. and nor the assessee. We s Securities Pvt. Ltd. and nor the assessee. We note that note that physical delivery of shares is proved by the physical delivery of shares is proved by the memorandum of transfer of shares stated in the share memorandum of transfer of shares stated in the share memorandum of transfer of shares stated in the share certificate being registered on 30 certificate being registered on 30-10-2012. Regarding the 2012. Regarding the escalation of prices of shares of M/s. Sun escalation of prices of shares of M/s. Sun escalation of prices of shares of M/s. Sun & Shine Worldwide Ltd., that is, the prices have increased by 140 Worldwide Ltd., that is, the prices have increased by 140 Worldwide Ltd., that is, the prices have increased by 140 times over the period of 17 months. At times over the period of 17 months. At this juncture, it is this juncture, it is submitted by ld Counsel that prices of shares are submitted by ld Counsel that prices of shares are submitted by ld Counsel that prices of shares are determined by the market forces determined by the market forces and not solely on the and not solely on the basis of financial statem basis of financial statements.
On complete perusal of facts and material on record, it is On complete perusal of facts and material on record, it is On complete perusal of facts and material on record, it is noted that the appellant, in the course of assessment noted that the appellant, in the course of assessment proceedings, has brought on record the necessary proceedings, has brought on record the necessary proceedings, has brought on record the necessary particulars of transactions of purchase and sale of particulars of transactions of purchase and sale of particulars of transactions of purchase and sale of shares, along with the supporting documents relating to shares, along with the supporting documents relating to each such transaction, viz. Contract Notes, each such transaction, viz. Contract Notes, Ledger each such transaction, viz. Contract Notes, account of Broker, Demat Account Statements and account of Broker, Demat Account Statements and account of Broker, Demat Account Statements and relevant Bank Statements. No defect or flaws are pointed relevant Bank Statements. No defect or flaws are pointed out by the Assessing Officer in these evidences. out by the Assessing Officer in these evidences. On a out by the Assessing Officer in these evidences. careful perus perusal of evidence brought on record, al of evidence brought on record, we find that, the assessee had been allotted 18,000 shares of assessee had been allotted 18,000 shares of assessee had been allotted 18,000 shares of M/s. Lifeline Drugs and Pharma Ltd. on 25.10.2013 on M/s. Lifeline Drugs and Pharma Ltd. on 25.10.2013 on M/s. Lifeline Drugs and Pharma Ltd. on 25.10.2013 on preferential basis from the said company and payment preferential basis from the said company and payment preferential basis from the said company and payment towards the same was made through banking channel on towards the same was made through banking channel on towards the same was made through banking channel on 31.08.2013 1.08.2013 1.08.2013 which which which were were were then then then dematerialized dematerialized dematerialized on on on 21.10.2013. No deficiencies have been pointed out in 21.10.2013. No deficiencies have been pointed out in 21.10.2013. No deficiencies have been pointed out in regard to the said purchase by the Assessing Officer. regard to the said purchase by the Assessing Officer. regard to the said purchase by the Assessing Officer. Further, the sale transaction of these shares have been Further, the sale transaction of these shares have been Further, the sale transaction of these shares have been taken on the recognised stock exchange wherein th taken on the recognised stock exchange wherein the taken on the recognised stock exchange wherein th securities transaction tax has also been paid by the securities transaction tax has also been paid by the securities transaction tax has also been paid by the assessee. Hence, the primary onus cast assessee. Hence, the p rimary onus casted upon the assessee to substantiate the impugned transactions, in to substantiate the impugned transactions, in to substantiate the impugned transactions, in the nature of purchase and sale of shares, and sale the nature of purchase and sale of shares, and sale consideration received during the year, by f consideration received during the year, by furnishing all consideration received during the year, by f the relevant and material evidence is discharged by the the relevant and is discharged by the assessee. The AO has merely doubted the genuineness of assessee. T he AO has merely doubted the genuineness of share share share transactions, transactions, transactions, and and and LTCG LTCG LTCG arising arising arising therefrom, therefrom, therefrom, primarily relying upon the report of the Investigation primarily relying upon the report of the Investigation primarily relying upon the report of the Investigation Directorate and has brushed aside the plethora of Directorate and has brushed aside the plethora of documentary evidence furnished by the documentary evidence furnished by the assessee. The documentary evidence furnished by the report of the Investigation Directorate relates to providing report of the Investigation Directorate relates to providing report of the Investigation Directorate relates to providing bogus accommodation entry of capital gains/losses on bogus accommodation entry of capital gains/losses on transactions in penny stock by certain entry providers. transactions in penny stock by certain entry providers. transactions in penny stock by certain entry providers. The AO has not pointed out the specific reference, or The AO has n specific reference, or mention, of the impugned transactions of purchase and mention, of the impugned transactions of purchase and mention, of the impugned transactions of purchase and sale of this particular scrip undertaken by the sale of this particular scrip undertaken by the assessee (which has resulted in LTCG in the hands of the (which has resulted in LTCG in the hands of the (which has resulted in LTCG in the hands of the appellant) in the said enquiry report. The AO has merel appellant) in the The AO has merely relied upon the statements of certain entry providers relied upon the statements of certain entry providers relied upon the statements of certain entry providers recorded by the Investigation Directorate, but has failed recorded by the Investigation Directorate, but has failed to examine them on oath during the assessment to examine them on oath during the assessment to examine them on oath during the assessment proceedings in relation to the impugned transactions in proceedings in relation to the impugned transactions in the scrip of M/s Lifeline Drugs and Phar the scrip of M/s Lifeline Drugs and Pharma Limited the scrip of M/s Lifeline Drugs and Phar undertaken by the assessee. The AO on his part has not undertaken by the . The AO on his part has not made any independent enquiry during the made any independent enquiry during the assessment made any independent enquiry during the proceedings, viz. by way of issue of summons to Share proceedings, viz. by way of issue of summons to Share proceedings, viz. by way of issue of summons to Share Brokers; or calling for information from the Stock Brokers; or calling for information from the Stock Exchange or the Directors of the Company ompany to verify the genuineness genuineness of of transactions. The transactions. The impugned impugned share share transactions have been under ansactions have been undertaken on the platform of taken on the platform of stock exchange, through registered Stock Brokers, and stock exchange, through registered Stock Brokers, and payments have been made/received through Banking payments have been made/received through Banking payments have been made/received through Banking channel. These transactions transactions are are recorded recorded in in the the Appellant's regular books of accounts, which remain Appellant's regular books of accounts, which remain Appellant's regular books of accounts, which remain undisputed by the Assessing Officer. undisputed by The Assessing Officer has not has not reverted any factual finding in the reverted any factual finding in the assessment order that, there are cash deposits reflected assessment order that, there are cash deposits reflected assessment order that, there are cash deposits reflected in the bank statements of the appellant, or that of his in the ban statements of the appellant, or that of his Stock Broker, or any other person/entity which could be Stock Broker, or any other person/entity which could be Stock Broker, or any other person/entity which could be traced back to the appellant. The Assessing Officer traced back to the appellant. The Assessing Officer has only made certain general observations regarding modus only made certain general observations regarding modus only made certain general observations regarding modus operandi adopted by the entry providers to operandi adopted by the entry providers to generate operandi adopted by the entry providers to bogus LTCG/STCG/STCL and have not made available bogus LTCG/STCG/STCL and have not made available any adverse material to the assessee. Even the assessee any adverse material to the assessee Even the assessee has not been provided with the cross examination of the has not been provided with the cross examination of the has not been provided with the cross examination of the parties on whose statements reliance is sought to be parties on whose statements reliance is sought to be parties on whose statements reliance is sought to be placed. The Assessing Officer has made the addition on placed. The Assessing Officer has made the addition on his own surmises without any cogent evidences or his own surmises without any cogent evidences or his own surmises without any cogent evidences or material against the assessee. However, in view of material against the assessee. However, in view of the specific, relevant and material evidence adduced by the specific, relevant and material evidence adduced by the specific, relevant and material evidence adduced by the assessee to substantiate the impugned to substantiate the impugned transaction, we are not inclined to not inclined to agree with the adverse findings of the agree with the adverse findings of the Assessing Officer regarding genuineness of Assessing Officer regarding genuineness of the share transactions, particularly so due to absence of any cogent transactions, particularly so due to absence of any cogent transactions, particularly so due to absence of any cogent evidence to the contrary being brought on record. evidence to the contrary being brought on record. Even the case laws relied upon by the ld. DR are not re the case laws relied upon by the ld. DR are not relevant the case laws relied upon by the ld. DR are not re or applicable in the context of factual matrix of present or applicable in the context of factual matrix of present case and hence, not applicable. Accordingly, we uphold case and hence, not applicable. Accordingly, we uphold case and hence, not applicable. Accordingly, we uphold the order of the ld. CIT(A) in deleting the addition of Rs. the order of the ld. CIT(A) in deleting the addition of Rs. the order of the ld. CIT(A) in deleting the addition of Rs. 2,40,42,944/- u/s. 68 of the Act as well as Rs. 2,40,42,944/ u/s. 68 of the Act as well as Rs. 7,21,289/- - u/s. 69C of the Act.
In the result, appeal of the revenue is dismissed In the result, appeal of the dismissed.