SHRI SAJJAN AGARWAL,KOLKATA vs. D.C.I.T.,CIRCLE-3(4), KOLKATA

The assessee is an individual and filed his return of income on 31/08/2015 declaring total income of Rs.11,58,890/-. He declared income from salary and other sources and claimed exemption under the head long term capital gain. The Assessing Officer completed assessment u/s 143(3) of the Act on 27/12/2017 determining the total income at Rs.92,98,480/-. Aggrieved the assessee carried the matter in appeal without success.

Further aggrieved, the assessee is before us.

The ld. Counsel for the assessee, Shri Sunil Surana, submitted that the assessee purchased 12000 shares of GCM Securities Ltd @ Rs.20/ - each on preferential allotment for a total consideration of Rs. 2,40,000/- on 27.3.2013 for which payment was made by account payee cheque. Subsequently, those shares were split into the ratio Assessment Year: 2015-16 & S.A. No.114/Kol/2019 Assessment Year: 2015-16 Shri Sajjan Agarwal of 10:1 and consequently holding of the assessee increased from 12,000 no of shares to of 10:1 and consequently holding of the assessee increased from 12,000 no of shares to of 10:1 and consequently holding of the assessee increased from 12,000 no of shares to 1,20,000 no of shares. Effectively, cost of each shares becomes Rs. 2 per shares. Finally, 1,20,000 no of shares. Effectively, cost of each shares becomes Rs. 2 per shares. Finally, 1,20,000 no of shares. Effectively, cost of each shares becomes Rs. 2 per shares. Finally, between November, 2014 to January, 2015 the assessee so between November, 2014 to January, 2015 the assessee sold all its holding through ld all its holding through Bombay Stock Exchange @ Rs. 69/ Bombay Stock Exchange @ Rs. 69/- share. The assessee earned long term capital gain of share. The assessee earned long term capital gain of Rs. 77,61,956/ - as exempt under sec. 10(38) of the as exempt under sec. 10(38) of the Act in the return of income filed Act in the return of income filed under sec. 139(1) of the Act of the Act. He further submitted that the issue is squarely covered in he issue is squarely covered in his favour by a number of decisions of this Bench of the Tribunal and as the assessee has his favour by a number of decisions of this Bench of the Tribunal and as the assessee has his favour by a number of decisions of this Bench of the Tribunal and as the assessee has submitted :- a) invoices form purchase of shares invoices form purchase of shares. b) time stamped contract notes for the sale of shares on which STT, time stamped contract notes for the sale of shares on which STT, time stamped contract notes for the sale of shares on which STT, brokerage, turnover t brokerage, turnover taxes, SEBI duty and service tax were charged axes, SEBI duty and service tax were charged. c) Copy of Demat Statements showing inflow and outflow of shares. Copy of Demat Statements showing inflow and outflow of shares. Copy of Demat Statements showing inflow and outflow of shares. d) Bank statement highlighting the payments made and the receipts of the Bank statement highlighting the payments made and the receipts of the Bank statement highlighting the payments made and the receipts of the said consideration. said consideration. 4.1. He further pointed out that the assessee stated befo He further pointed out that the assessee stated before the Assessing Officer that re the Assessing Officer that he did not know any person by the name of Shri Devesh Upadhyaya he did not know any person by the name of Shri Devesh Upadhyaya and that he has not and that he has not entered into any transaction with the said person. He submitted that the Assessing entered into any transaction with the said person. He submitted that the Assessing entered into any transaction with the said person. He submitted that the Assessing Officer claims to have examined Shri Devesh Upadhyaya but h Officer claims to have examined Shri Devesh Upadhyaya but has not provided the as not provided the opportunity of cross-examining Shri Devesh Upadhyaya, despite specific requests made examining Shri Devesh Upadhyaya, despite specific requests made examining Shri Devesh Upadhyaya, despite specific requests made in this regard. He prayed for relief. in this regard. He prayed for relief.

The ld. D/R, on the other hand, submitted that there were violations of principles The ld. D/R, on the other hand, submitted that there were violations of principles The ld. D/R, on the other hand, submitted that there were violations of principles of natural justice and that the standard operating procedure (SOP) recently issued by the standard operating procedure (SOP) recently issued by the standard operating procedure (SOP) recently issued by the CBDT on such issues have to be followed. He submitted that the issue may be the CBDT on such issues have to be followed. He submitted that the issue may be the CBDT on such issues have to be followed. He submitted that the issue may be restored to the file of the Assessing Officer for following the SOP laid down by the CBDT restored to the file of the Assessing Officer for following the SOP laid down by the CBDT restored to the file of the Assessing Officer for following the SOP laid down by the CBDT and thereafter completed th and thereafter completed the assessment, in accordance with law.

We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows: below as well as case law cited, we hold as follows:-

Assessment Year: 2015-16 & S.A. No.114/Kol/2019 Assessment Year: 2015-16 Shri Sajjan Agarwal 7. In the case on hand, the assessee has provided all the details and evidence in In the case on hand, the assessee has provided all the details and evidence in In the case on hand, the assessee has provided all the details and evidence in support of its claim before the Assessing Officer during the course of assessment support of its claim before the Assessing Officer during the course of assessment support of its claim before the Assessing Officer during the course of assessment proceedings. The Assessing Officer has merely relied on the information received from proceedings. The Assessing Officer has merely relied on the information received from proceedings. The Assessing Officer has merely relied on the information received from the investigation wing and on the basis of generalisation, rejected the claim of the investigation wing and on the basis of generalisation, rejected the claim of the investigation wing and on the basis of generalisation, rejected the claim of the assessee. The evidence field by the assessee have not been controverted by the revenue assessee. The evidence field by the assessee have not been controverted by the revenue assessee. The evidence field by the assessee have not been controverted by the revenue authorities. Reliance was placed on a statement of Shri Devesh Upadhyaya but authorities. Reliance was placed on a statement of Shri Devesh Upadhyaya but authorities. Reliance was placed on a statement of Shri Devesh Upadhyaya but opportunity of cross-examining him was not granted to the assessee. This Bench of the examining him was not granted to the assessee. This Bench of the examining him was not granted to the assessee. This Bench of the Tribunal in a number of cases has adjudicated the issue in favour of the assessee. Tribunal in a number of cases has adjudicated the issue in favour of the assessee. Tribunal in a number of cases has adjudicated the issue in favour of the assessee. 7.1. Be it as it may, both the parties have agreed that the issue may be restored to the Be it as it may, both the parties have agreed that the issue may be restored to the Be it as it may, both the parties have agreed that the issue may be restored to the file of the Assessing Officer for fresh adjudication, file of the Assessing Officer for fresh adjudication, provided the Assessing Officer follows provided the Assessing Officer follows the Standard Operating Procedures (SOP) issued by the CBDT Standard Operating Procedures (SOP) issued by the CBDT on this issue, in le on this issue, in letter and spirit.

In view of the above discussion, In view of the above discussion, in order to bring all material facts on record and in order to bring all material facts on record and by applying the propositions of law laid down by the Hon’ble Supreme Court in the case applying the propositions of law laid down by the Hon’ble Supreme Court in the case applying the propositions of law laid down by the Hon’ble Supreme Court in the case of Tin Box Co. vs. CIT reported in reported in [2001] 249 ITR 216 (SC), we restore the matter to the store the matter to the file of the Assessing Officer for fresh adjudication, in accordance with law. The Assessing file of the Assessing Officer for fresh adjudication, in accordance with law. The Assessing file of the Assessing Officer for fresh adjudication, in accordance with law. The Assessing Officer is directed to follow the SOP, Officer is directed to follow the SOP, issued by the CBDT on this issue in letter and spirit in letter and spirit and complete the assessment and complete the assessment, in accordance with law.

In the result, appeal of the assessee is allowed for statistical purposes. In the result, appeal of the assessee is allowed for statistical purposes. In the result, appeal of the assessee is allowed for statistical purposes.

The Stay application is dismissed as infructuous. The Stay application is dismissed as infructuous. Kolkata, the Kolkata, the 13th day of March, 2020. .