ANIKET SINGAL,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, CHANDIGARH

3. That the Learned Commissioner of Income Tax (Appeals) was further not justified to uphold the action of the Learned Assessing Officer in treating the transactions relating to purchase and sale of equity shares as sham transactions.

4.1 The details of the long-term capital gains arising to the assessee in the period covered under the appeal are as follows:-

Scrip Purchases Sale Profit/(Loss) FYof No Amount Rate (Rs) FY of No of Amount Rate Purchase of sale shares shares Meenakshi 2013-14 271610 2988700 11/- 2016-17 271610 82123644 302.36 79134944/- Enterprises Shantanu Sheorey 2012-13 840302 8403020 10/- 2016-17 840302 197836759 235.44 189433739/- Aquakult 3 Sunstar Realty 2013-14 66000 330000 5/- 2016-17 66000 3042157 46.09 2712157/- Development Ltd Total 283002560 271280840 4.2 During the assessment proceedings for A.Y. 2016–17 and earlier years, the Assessing Officer confronted all the evidences gathered during the course of search under Section 132 of the Income Tax Act on the assessee, her family members, and group concerns. Search proceedings under Section 132 of the Act were also carried out in the case of Shri Shrish Chandrakant Shah on 09.04.2013 by the Directorate of Income-Tax (Investigation), Ahmedabad, and in the case of Shri R.K. Kedia and Shri Manish Arora on 13.06.2014 by the Directorate of Income-Tax (Investigation), Delhi.

4.3 Shri Shrish Chandrakant Shah, in his statement recorded under Section132(4)of the Act admitted that he was engaged in providing accommodation entries to various beneficiaries including the assessee /her family members through Long Term Capital Gain.

4.4 Shri R.K. Kedia, in his statement recorded under oath u/s 132(4) of the Act on 03.06.2014 admitted that he had arranged accommodation entries for the appellant and her family members against commission in the shape of LTCG. He further admitted that such companies, through which LTCG was arranged, were paper companies, controlled and managed by various accommodation entry providers and such companies were not doing any actual work, but were being used to provide LTCG to various beneficiaries through such accommodation entries.

4.5 The Assessing Officer has reproduced the relevant extracts of the statement of Shri R.K. Kedia at pages 4–6 of the assessment order. In the said statement, he explained the modus operandi through which accommodation entries were provided and has specifically mentioned that the appellant and her family members had taken accommodation entries through him. He also disclosed the names of various accommodation entry providers used for this purpose and detailed the modus operandi followed by them, including how the prices of such shares were rigged, unaccounted 4 cash was taken from the beneficiaries, and the same was routed back into their bank accounts in the guise of long-term capital gains.

4.6 For this purpose, commission at the rate of 5% to 6% was charged from the beneficiaries by such operators. The statements of Shri Shrish Chandrakant Shah and Shri R.K. Kedia recorded under Section 132(4) of the Act were also supported by the seizure of a large number of incriminating documents during the course of search proceedings conducted in their cases on 09.04.2013 and 13.06.2014 respectively, including cash books reflecting the flow of unaccounted cash from the beneficiaries, including the appellant, to such accommodation entry providers.

4.7 On the basis of these facts, the Assessing Officer held that the accommodation entries taken by the appellant and her family members for AY 2016–17 and 2017–18 and earlier years were bogus credits introduced into their bank accounts in the garb of bogus long-term capital gains from the sale of listed securities of paper companies.

4.8 During the year under consideration, the assessee sold shares of “Meenakshi Enterprises” between 14.10.2016 and 10.03.2017, which had been purchased during the financial year 2013–14. The assessee claimed the resultant long-term capital gain (LTCG) of Rs. 7,91,34,944/- arising from the sale of these shares during the year as exempt under section 10(38) of the Act. Similarly, the appellant sold shares of “Shantanu Sheorey Aquakult” between 27.10.2016 and 16.03.2017, which had been purchased during the financial year 2012–13, and earned exempt LTCG of Rs. 18,94,33,739/-. Further, the appellant sold shares of “Sunstar Realty Development Limited” between 05.10.2016 and 14.10.2016, which had been purchased during the financial year 2013–14, and earned exempt LTCG of Rs. 27,12,157/-. Thus, the total long-term capital gains accruing to the appellant amounted to Rs. 27,12,80,840/-, and the aggregate sale proceeds from the sale of these shares were Rs. 28,30,02,560/- (details of the calculation of LTCG are at pages 8–10 of the paper book).

5 4.9 During the course of the assessment proceedings, the Assessing Officer, vide notice issued under section 142(1) dated 16.11.2019 (pages 164 to 172 of the Paper Book), asked the assessee to furnish details of the exempt long- term capital gains and, inter alia, to provide reasons and justification for the purchase along with documentary evidence, as well as the following details:

(i) Since when assessee is dealing in shares and commodities etc. (ii) Whether assessee is a trader or investor in stocks (iii) Give the name and complete address of the assessee’s DP (iv) Details how the assessee came to know about the various companies in which investments are made (v) Name and complete address of the share brokers whose services has been used (vi) How the order are placed through personal visit or over phone (vii) How the decision about investing in shares of a particular company was made (viii) Do the assessee know the business of the companies in which the investment was made (ix) What is the business and location of the companies in which investment is made (x) When was the first time assessee heard about the company in which investment made (xi) Name and complete address of the broker at the time of investment (xii) How the order for sale transaction was placed, provide details with evidence (xiii) How many transactions with the said broker was made in the past through whom the investment was made 4.10 The Assessee vide letter dated 23.12.2019 (Pages175-176 of the PB) provided the reply to the specific queries raised alongwith the following details:-

(i) Copy of allotment letter, share certificate, contract note, DEMAT statement and bank statement evidencing purchase through bank mode (pages 22-34 of PB) (ii) Scrip wise details of sale of shares and contract notes evidencing sale of shares through brokers (pages 35 -153 of PB) (iii) Copy of bank statement evidencing receipt of proceeds of sale of shares (pages 154 – 163 of PB)

6 (iv) It was also submitted that the said investment was made for deriving long-term capital appreciation based on the perception that the company had huge expansion plans and the share price by being low it seemed a low risk investment in a company with high growth potential. (v) The assessee expressed her inability to produce the broker since it was only a customer and did not have any control over them. As regards the purchase of shares it was submitted that the shares having been sold through online trading platform using "BOLT"("Bombay Stock Exchange Online Trading")and delivery of the shares was completed through DEMAT a/c and the identity of the purchaser was not known/described. Further, since the Assessee was just an investor and not in contact with the Directors of the Company it expressed its inability to produce them but simultaneously requested the Assessing Officer to use his good offices to issue letters to the said/Directors asking them to appear for which it was ready to deposit the diet money. (vi) It was also emphasized that all the conditions laid down in section 10(38) of the Act viz. period of holding, securities being listed, sale being subject to STT were fulfilled and accordingly the said LTCG was rightly treated as exempt income. (vii) However, apparently the Assessing Officer was not in agreement with the explanations and evidences furnished on behalf of the Assessee. In particular, he has held that the submission filed while being duly considered were not acceptable for the following reasons(Page 2 to 4 of the assessment order):- "(a) The assessee has not been able to produce the parties who purchased the shares of company sold by the assessee (b) The assessee has not been able to produce the directors of the company whose shares were sold by the assessee to prove their identity, genuineness and creditworthiness. (c) The assessee has not given the details of mode of payment received or paid to the broker. (d) The assessee is not having any knowledge about the business of the company whose shares were sold by him. (e) The assessee has not been able to know how he came to know about the company whose shares were purchased/sold by him. (f) The assessee is not having any knowledge about the director/CEO of the company. (g) The assessee has not been able to explain as to how he came to know about the broker through whom the shares were sold and contact person who told about the broker. (h) The most important and crucial evidence against the assessee is that the assessee, along with other family members, is indulged in arranging One Time (OT) accommodation entries and LTCG in lieu of cash. The nexus of the assessee with the entry provider is proved from the incriminating nature of data seized by the department during the course of search and seizure operations on 03.03.2010 and 21.02.2014 at the residential and business premises of the assessee and his group, Bhushan Power and Steel Limited, and survey u/s 133A 7 of the I.T. Act, 1961 on the BPSL Group on 27.12.2012. A search and seizure operation u/s 132 of the I.T. Act, 1961 was also conducted by the DI (Investigation), Ahmedabad in the case of Sh. Shrish Chandrakant Shah (SCS) on 09.04.2013. Another search and seizure operation u/s 132(1) of the I.T. Act, 1961 was also conducted on Sh. R.K. Kedia and his key employee (Accountant), Sh. Manish Arora, by the DI (Investigation) Wing, New Delhi along with the Bhushan Group on 13.06.2014. During the course of search, the statement of Sh. Shrish Chandrakant Shah (SCS) was recorded u/s 132(4) of the I.T. Act, 1961. During his statement u/s 132(4) of the I.T. Act, 1961, Sh. Shrish Chandrakant Shah admitted and accepted that he was engaged in providing various types of accommodation entries, including exempt long-term capital gain.The statement of Sh. R.K. Kedia was also recorded during the course of search and, in his statement recorded on 13.06.2014 on oath, he admitted that he provided accommodation entries to the assessee group against which he earned commission. In his statement recorded u/s 132(4) of the I.T. Act, 1961, he stated that most of the companies were paper companies controlled and managed by various accommodation entry providers. These companies were not doing any actual business work but were used for providing long-term capital gain entries to various beneficiaries.." 4.11 The Assessing Officer has also relied upon the application of the principle of preponderance of probabilities and, following the same logic and findings, the Assessing Officer has relied upon the said statements of Shri Shrish Chandrakant Shah, Sh Manish Arora Shri R.K. Kedia and documentary evidence seized in the search proceedings to hold that the long-term capital gains of Rs. 27,12,80,838/- arising to the Appellant on sale of shares of "MeenaKshi Enterprises", Shantanu Sheorey and M/s Sunstar Realty Development Ltd are also bogus. There are various sworn statements of entry operators duly supported by corroborative evidences which establish that the fact that the assessee received huge investment amounts of receipts in the garb of sale proceeds against shares of various bogus penny stock companies, managed and controlled by these entry operators. The assessee failed to submit any satisfactory explanation regarding these transactions coupled with the plethora of incriminating evidence and sworn admittance of various persons. Therefore considering the detailed discussion made in the various paras in the different chapters of the assessment order in the case of the assessee for AY 2015-16 and earlier years it has been established that the Assessee indulged in “Sham Transactions” to receive back her unaccounted money in the garb of exempt LTCG. Therefore, the total receipts credited in various bank accounts of the assessee against these bogus/sham transactions have to be treated as unexplained income of the assessee u/s 8 68 of the Income Tax Act, 1916 alongwith the unaccounted commission expenditure @ 6.5% of the total LTCG of the year for arranging these entries.

5.1 The CIT(A) has vide order dated 03.09.2025 held that the Appellant has failed to discharge its burden of proof, that each case is to be decided on the facts and circumstances of that case, relevant factors are to be considered are surrounding circumstances objective facts, evidences adduced, presumptions of facts based on common human experience and held that there is overwhelming evidence that the transaction on which adverse view has been taken are sham transactions.

5.2 On the basis of the said arguments and relying upon certain case laws, the CIT(A) has upheld the action of the Assessing Officer and confirmed the additions. The relevant paragraphs of the order of the CIT(A) are as follows: –

9. The AO’s reliance on tangible material unearthed in the group search and in third-part entry operator investigations is legitimate, particularly because the modus operandi of generating sham LTCG through rigging of penny-stock prices is a continuing pattern. The appellant assets that such statements were neither confronted nor cross-examination offered. Two answers: first, the addition here does not rest solely on third-party statements; it rests primarily on the appellant’s own failure to discharge the section 68 burden, coupled with 9 tell-tale features of the trades. Second, the AO issued multiple detailed questionnaires under section 142(1) and afforded hearings; the appellant had full opportunity to file rebuttal material, seek cross-examination with reasons, and demonstrate genuineness through independent evidence She did not. Even assuming some deficiency in confrontation, appellate proceedings have provided a complete opportunity; yet no substantive rebuttal has been offered. On balance, the evidentiary record suffices to sustain the addition. 9.1 The please that similar additions in earlier years were deleted by the Hon’ble ITAT does not advance the appellant’s case. Each assessment year is a separate unit and res judicata does not apply to income-tax proceedings. The appellant has not demonstrated that the fact and scrips are identical, that the evidentiary lacunae flagged here were absent there, or that the coordinate bench decisions turned on a legal principle that compels allowance here despite the present factual matrix. In any event, appellate findings in other years neither bind the AO nor this authority when confronted with distinct, year-specific trades exhibiting classic penny stock badges. I therefore, distinguish the earlier relief and decline to apply it mechanistically. 9.2 Furthermore, the record reflects issue of notice under section 143(2) on 23.08.2018 and repeated questionnaires under section 142(1) during the course of scrutiny. The queries squarely adverted to the impugned share transactions, sought detailed explanations, and warned of adverse inference in the absence of satisfactory evidence. The law does not mandate a ritualistic, separate show cause if the appellant has already been put to notice of the precise issues and the afforded meaningful opportunity to explain. The appellant responded but failed to cure material deficiencies. There is thus no violation of natural justice. In any case, before me the appellant received full opportunity to fie further evidence or seek cross-examination with justification; none was effectively availed. No prejudice is shown. 9.3 The thrust of the appellant’s argument is that the sale consideration was received by cheque on which STT was paid and, therefore, the LTCG earned was genuine. This cannot be accepted in view of multiple adverse evidences collected by the revenue and the appellant cannot be treated as a passive beneficiary of the transactions. The Supreme Court held in the case of Rakhi Traders (P) Ltd (supra) that in trade transactions with huge price variations of the transactions, it will be too naïve to hold that the transactions were through screen based trading and hence anonymous. According to the Apex Court, such conclusion would be overlooking the prior meeting of minds involving synchronization of buy and sale order and that such transactions were manipulative/deceptive device to create a desired loss and/or profit. 9.4 In view of the detailed discussion as above and based on data obtained from various sources and made available on record, the exemption u/s 10(38) claimed on account of said LTCG by the appellant is held to be a sham transaction only to bring its own unaccounted money in the guise of exempted LTCG and only paper work was done to give a colour of authenticity to the transactions by creating a façade of legitimate transactions. 9.5 The Investigation Wing and the AO has brought on record sufficient material to support the findings that appellant has introduced unaccounted money by camouflaging the share transactions with good paper work. The appellant has not discharged the initial onus of proving the genuineness of share transaction as despite being specifically asked details of share transactions vide notice u/s 142(1) alongwith questionnaire, the appellant failed to produce the parties who purchased the shares of such dummy companies lacking any fundamentals. Similarly, the appellant also failed to give details of mode of payment received/paid to the brokers. The findings stated by the AO 10 co-relates with the statement of accommodation entry providers in a separate search action by the Investigation Wing in if the case of Shri Shrish Chandrakant Shah, Shri R.K. Kedia and Shri Manish Arora. It is clearly held that on the requirement of beneficiaries to infuse their unaccounted cash into their business without having to pay any tax on the same, accommodation entries were provided to them Shri RK Kedia has admitted that the accommodation entries of LTCG might appear to be genuine prima facie, as the payment of cheques while investing in shares or selling of hares is through stock exchange and brokers, but these entities are minutely managed, supervised and controlled by entry/exit operators for earning commission income. The seized record as per Annexure A-23 and copy of cloned seized documents from the premises D-45, Saraswati Garden, New Delhi of LTCG accommodation entries given to the Singals of M/s Bhushan Power and Steel Group using the scrips detailed above. The seized record of 14 pen drives and 3 external hard disk at residence of Shri Manish Arora at D-45, back side GF, Saraswati Garden, New Delhi -110001 on 13.06.2014 provided accommodation entry was being provided to route in unaccounted money as commission basis in this case. Thus, it is not necessary that having contract notes, demat accounts and bank statements, the transactions carried out on stock exchange cannot be manipulated as admitted by the entry operator. Thus, it is seen that the appellant failed to explain the nature and source of credits in the bank account. The commission rates charged have been admitted by various entry providers in their statements and have been admitted this additional income during their proceedings before the department. The appellant argues that at most, only the alleged profit could be taxed and not the entire sale proceeds. This contention ignores the legal character of a section 68 addition. Where the AO establishes that the underlying transaction itself is bogus, the credits found in the books here, the sale proceeds credited lack a proved source and are liable to be brought to tax in full as unexplained credits. In accommodation-entry cases dealing with sham LTCG, courts have repeatedly approved taxing the gross receipts where the whole edifice is found non-genuine On these facts, the AO rightly taxed Rs. 28,30,02,558/- under section 68.

10. The section 69C addition of Rs. 1,76,33,254/- represents the embedded cost to procure accommodation entries. The precise cash trail will rarely surface; estimation on a reasonable basis is legally permissible where the principal transaction is held to be non-genuine. Rates between 3 percent and 7 percent have been judicially upheld in similar contexts. Given the scale, layering and assured one-way returns evident here, the AO’s adoption of 6.5 percent is a fair and conservative estimate. The argument that section 69C must fall because section 68 is deleted cannot help the appellant; since I uphold section 68, the corollary section 69C addition also survives. In respect of applicability of section it is noted that for A/Y 2017-18, the special rate under section 115BBE squarely applies to income assessed under sections 68 and 69C. The AO’s application of section 115BBE is in accordance with the law as amended well before the relevant previous year. The ground lacks merit.

No 1-6 are dismissed.

6. Against the order of the Ld. CIT(A), the assessee preferred an appeal before us.

(i) The entire payment for purchase of shares has been made through banking channels; (ii) The shares were held in demat form for a considerably long period (i.e. almost 18 months) and much beyond the statutory time period mandated for them to be treated as exempt "LTCG" u/s10(38) of the Act; (iii) Sale of shares was undertaken the online platform of a recognized stock exchange after due payment of STT and is evidenced by copies of contract notes issued by brokers (pages35-153 of the paper book); (iv) All transactions for sale of shares were consummated through regular banking channels; (v) The transactions giving rise to the "LTCG" were genuine and carried out in accordance with the prescribed procedures and were duly compliant with the relevant regulatory laws and procedures; (vi) The companies of which shares have been transacted are existing companies and all the transactions have taken place through stock exchange at the prevailing market price; (vii) The addition is solely based on the ex parte statements of brokers which were relevant, if at all, only up to A/Y 2014–15 (all the transactions for sale were entered into after the dates) of any of the searches referred); (viii) While no opportunity for cross examination has been provided even copies of the complete statements on which reliance has been placed, were not provided; (ix) The Assessing Officer has simply levelled bald allegations on the basis of presumptions without any tangible material on record; (x) The transaction for shares were entered in to the ordinary course and were at an arms length; (xi) There is no evidence specific to the year under appeal as to the transactions being allegedly bogus and the "LTCG" being an accommodation entry; 12 (xii) The transactions were entered into as a stock market investor on the basis of information available and anticipation as to future price movements and performance of the Company; (xiii) In the online system prevalent on the Stock Exchanges, a buyer/seller of shares could not be aware of the counter-party whereby he cannot have any control over the price movement; (xiv) The Assessing Officer has just reproduced generally the findings in respect of various brokers/agencies without in any manner stating/proving as to how the Assessee was involved therein. (xv) The act of questioning a transaction as sham has to be based on substantial, concrete and tangible evidence and not just hear say or surmises.

7.1 The AR has also emphasized the fact that the entire case of the Assessing Officer is based on the findings and conclusions in the assessment proceedings for earlier years with no specific evidence or finding for the year under appeal which action is not sustainable given the fact that each year is a separate unit of assessment and the findings/conclusions cannot by themselves and ipso-facto be extrapolated to another year. Before us it has also been argued with respect to the addition u/s 69C that no addition can be made for any assumed/notional expenditure u/s 69C since that section can be invoked only when an expenditure is found to have been incurred and of which the source has not been substantially explained.

7.2 The AR has also emphasized that there is nothing adverse with respect to both the legs of the transactions i.e. purchase/allotment and sale of shares which can lead to any doubts as regards the legal validity, procedural compliance and genuineness thereof. In that view of the matter since there is no doubt with respect to any of the components giving rise to "LTCG", the legality and acceptability thereof can also not be doubted.

7.3 The AR has accordingly stated that the share transactions were genuine entitling the Assessee to exemption u/s10(38)of the Act on long-term capital gains arising on sale of shares. He has also relied upon the decisions of the coordinate Benches of the Chandigarh Benches and Delhi Bench in the case of the appellant and her family members, viz., Shri Brij Bhushan Singal, Smt. Uma Singal, Smt. Ritu Singal, Sh. Neeraj Singal, Aniket Singal, and Sanjay 13 Singal, for earlier assessment years. Copies of these order have been placed at pages Nos 1 to 393 of PB filed by the Appellant on 24.02.2026.

9.1 We find from the record that the entire addition has been made by the Assessing Officer on the basis of the same Arguments, information, evidence, including findings of search u/s. 132 On the basis of which assessments have been completed in the case of the Appellant and her family members for the earlier assessment years 2008-09 to 2015-16. During the appellate proceedings the additions made were deleted by the coordinate Benches of the Chandigarh Bench of the Tribunal in the following cases:- ITANo. OrderDate Assessee A/Y 2015-16 655/CHD/2023 08.10.2024 Sanjay Singal 2015-16 610/CHD/2023 08.10.2024 Sanjay Singal, HUF 706,707 and 709/Chd/2018 07.02.2020 Sanjay Singal 2008-09,2010-11& 2012-13 712, 713 and 715/Chd/2018 07.02.2020 Smt Aarti Singal 2008-09,2010-11& 2012-13 708, 210 and 711/Chd/2018 20.09.2021 Sanjay Singal 2011-12, 2013-14 & 2014-15 714, 716 and 717/Chd/2018 20.09.2021 Smt Aarti Singal 2011-12, 2013-14 & 2014-15 14 2013-14 & 2014-15 718 and 719/Chd/2018 20.09.2021 Aniket Singal 2014-15 705/Chd/2018 20.09.2021 Sanjay Singal 31.10.2018 2010-11, 2011-12 1412/, 1413 and Shri Brij Bhushan and 2012-13 1414/Del/2018 Singal 31.10.2018 Smt Ritu Singal 2010-11, 2011-12 1476/, 1477 and and 2012-13 1478/Del/2018 2010-11 1482/Del/2018 31.10.2018 Smt Uma singal 31.10.2018 Sh Neeraj Singal 2010-11, 2011-12 1485/, 1486 and and 2012-13 1487/Del/2018 217 and 218/Chd/2025 09.09.2025 Smt Aarti Singal 2015-16 and 2016- 17 2015-16 219/Chd/2025 09.09.2025 Shri Aniket Singal 2016-17 220/Chd/2025 09.09.2025 Sh Sanjay Singal 2016-17 221/Chd/2025 09.09.2025 Sh Sanjay Singal 9.2 In particular, while reviewing the facts of the particular appeal in the backdrop of the findings of the Coordinate Benches, we observe that the assessee made investments in the various companies as a prudent investor at a reasonable price, which were held for a substantial period and thereafter sold off on a recognised Stock Exchange as soon as the price reached what the assessee felt was the optimal level 9.3 Moreover, the fact that the assessee made the investments in the said companies as a prudent investor at a reasonable price, which were held for a substantial period and were thereafter sold on a recognized stock exchange and on which STT has been paid, stands duly supported by the following contemporaneous/unrebutted documents/material placed on record:– - Shares were allotted by way of preferential allotment directly by the company and the shares were allotted and always held in Demat form by the assessee; - Transaction of sale was undertaken through broker(s),who was a member of the recognized stock exchange; - Copies of documents in support of allotment of shares by way of preferential allotment directly by the Company; - Copies of contract notes in support of sale of shares; - All transaction of purchase and sale of shares were made through normal banking channels.

9.4 Insofar as reliance has been placed on the statement of Sh. R.K. Kedia, it remains undisputed that Sh. R.K. Kedia is totally unconnected to the 15 assessee insofar as no financial transactions were undertaken with this party; so much so the assessee does not have any financial relationship with the said individual. Thus, the statement of Sh. R.K. Kedia, who is completely unconnected with the impugned transaction, must be ignored from consideration. The search and the statement dated 13.06.2014 of Shri R.K. Kedia was recorded much before the shares were sold by the assessee on the recognized stock exchange for the period(s) covered by this appeal.

9.5 Merely because information is received by the Assessing Officer that someone is alleged to be an entry provider, this cannot lead to a conclusion that the transaction of the assessee is not genuine, when there is nothing on record to even suggest, let alone establish, a link between the so-called entry provider and the transaction of the assessee.

9.6 As regards the allegation of the Assessing Officer with regard to the so- called circumstantial evidence to draw the inference that the share transactions undertaken by the assessee were sham and a colourable device to evade taxes and introduce unaccounted money in her books, the Assessing Officer has failed to appreciate that the market price of any share/scrip on the stock exchange is not simply based on the financial results in any particular year(s); rather, it is based on numerous complex factors, like the nature of business and the product dealt in, the prevailing competitive environment, the future potential of the sector in which the company operates, the positioning of the company in the sector it operates, Government and statutory regulations, international markets and sentiment, the future potential of investment by PE/Investment funds, the perception in the market, the future expected cash flows, etc.

Thus, the adverse inference drawn by the Assessing Officer on the ill-founded assumption that the share prices had increased manifold is totally unfounded and without any valid basis.

9.7 The CIT(A), in particular, has also relied upon the doctrine of preponderance of probabilities and normal human conduct to allege that the transactions undertaken by the assessee were not genuine and that whatever seems apparent is not real. It is a settled position in law, and as also held by the Coordinate Benches, that the onus of proving that the transaction is not real is on the person who alleges it to be so. It is not open to the Revenue to simply allege that the transaction is not real in a given case without bringing on record any tangible material to establish the same.

9.8 In this regard the following paras of the order dated 08.10.2024 passed by Coordinate Bench in and 610/CHD/2023 merit attention:- 31. It is not possible to comprehend as to how the transactions under consideration can be said to be against human conduct. As a matter of fact, it is quite normal for an investor to invest in shares and exit after holding the shares for considerable period, as and when favourable market conditions exist. In fact, the movement in the share market is totally outside the control of the assessee/ investor and therefore, it is not possible for the investor/ appellant to plan the exit price.

17 9.9 To summarize, in the case of the Assessee the shares were acquired by way of preferential allotment directly by the Company for which payment made through banking channels, and which stands duly evidenced by allotment letters issued by the Company sold through the online platform of the Stock Exchange for which payment was received through banking channels after holding them for more than one year and "STT" was duly paid there on, deliveries for shares were taken/given from the DEMAT A/c and transactions for sale duly evidenced by contract notes. Given these facts and the compliance of legal provisions and regulatory compliance, there is no cause or reason to treat the entire scenario as bogus and the transactions as sham.

9.10 In this connection, reference may be made to the following extract(para 44 and 45 of the PB)from the order dated 08.10.2024 passed by our coordinate Bench "B" Chandigarh in and 610/Chd/2023 which reads as follows:-

"

9.11 The CIT(A) as well as the Assessing Officer have referred to the past history of the case and investigations made in earlier years, which by themselves cannot support the case of the Department. It is a trite and uncontroverted principle of law that the Assessing Officer cannot treat a transaction as bogus only on the basis of suspicion or surmise. The Assessing Officer has to bring tangible material on record to support his finding that 18 there has been collusion or connivance between the broker and the assessee for the introduction of its unaccounted money. A transaction of purchase and sale of shares, supported by contract notes, demat statements, and account payee cheques, cannot be treated as bogus.

9.12. It is observed that the Department has not brought on record any fresh facts for the year under appeal and has simply relied upon the findings and arguments of the earlier years. Each year being an independent year of assessment, specific evidence or facts have to be brought on record to sustain any adverse action against an assessee. Moreover, the transactions for the sale of shares giving rise to “LTCG” have actually taken place after the searches during which the various statements, which form the pivot of the case of the Assessing Officer, were recorded.

9.13 In view of the same and the following the orders of the coordinate Chandigarh Bench of the ITAT in earlier years the grounds raised by the Assessee are allowed and we hold that the CIT(A)erred in upholding the action of the Assessing Officer:

(i) in making an addition of Rs.28,30,02,558/-representing sale proceeds of shares u/s68 of the Act; (ii) in making an addition of Rs.1,76,33,254/-u/s69Cof the Act on account of alleged unaccounted commission paid @ 6.5% for earning long-term capital gains; (iii) in holding the transaction of purchase and sale of equity shares as sham.

11. Now we shall deal with appeal of the Assessee in - AY 2016-17 in the case of Aniket Singal 11.1 In this appeal the Assessee has challenged the action of the Assessing Officer in making an addition of Rs 30,87,54,841/- representing sale proceeds 19 of equity shares held by the assessee for more than 12 months by invoking the provisions of section 68 of the Act and making an addition of Rs 1,94,81,340/- u/s 69C on account of alleged unaccounted commission paid@6.5%forthe purpose of earning capital gains. During the year the details of the long term capital gains arising to the Assessee are as follows:-

Purchase Sales Profit/(Loss) FY No Amt Rate FY No Amt Rate Grandma 2011-12 7500000 7500000 1/- 2015-16 7500000 205617705 27.42 198117705 Trading and Agencies Ltd ICVL 2013-14 459871 1541928 3.35 2015-16 459871 103137134 224.27 101595206 Chemicals Ltd. Total 308754839 299712911 11.2 The facts and grounds in this appeal filed by the assessee are, mutatis mutandis, identical to those in in the case of the Smt Aarti Singal. Accordingly, our above observations, findings and conclusion made in shall, mutatis-mutandis, apply in this appeal also.

13. Now we shall deal with the appeal of the assessee in for A/Y 2017-18 in the case of Aniket Singal 13.1 In this appeal the Assessee has challenged the action of the Assessing Officer in making an addition of Rs 4,46,06,135/- representing LTCG on equity shares held by the assessee for more than 12 months by invoking the provisions of section 68 of the Act and making an addition of Rs 28,99,400/- u/s 69C on account of alleged unaccounted commission paid @6.5% forthe purpose of earning capital gains. During the year the details of the long term capital gains arising to the Assessee are as follows:-

20 Purchase Sales Profit/(Loss) FY No Amt Rat FY No Amt Rate e Sunstar 2013-14 1749000 8745000 5 2016-17 1749000 53351135 30.50 44606135 Reality Developme nt Ltd 13.2 The facts and grounds in this appeal filed by the assessee are, mutatis mutandis, identical to those in in the case of the Smt Aarti Singal. Accordingly, our above observations, findings and conclusion made in shall, mutatis-mutandis, apply in this appeal also.