Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA
Before: Shri S.S, Godara
आदेश /O R D E R These five assessees have filed their respective appeals for assessment year 2014-14against the Commissioner of Income-tax (Appeals)’s separate orders in as many cases affirming the Assessing Officer’s identical action treating their long term capital gains arising from sale of equity shares in various entities to be bogus thereby treating the said income as unexplained cash credits u/s. 68 involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard Learned Representatives putting in appearance on behalf of all these assessees. Case file(s) perused.
ITA No.1040, 1041,1347, 1525, 1527/Kol/2018 A.Y 2014-15 Page 3 2. I find that the parties that the identical sole substantive grievance raised in these five appeals is that of correctness of both the lower authorities’ action treating the corresponding LTCG of ₹14,89,502/-, ₹14,84,340/-, ₹15,68,590/-, ₹5,96,250/- & ₹10,32,055/- (appeal-wise in seriatim); respectively. Learned Departmental Representative’s case as per both the lower authorities stand is that all these assessees have acted in coll8sion with the respective brokers in artificially jacking up stock prices in issue. His case therefore is that all the entities whose shares have been purchased by these assessees have seen astronomical rise in the relevant holding period within a short span of time. It is further submitted that the DIT (Inv) & various searches have unearthed many such entry operators facilitating such LTCG in question. Case law Sumati Dayal vs. CIT 214 ITR 801 (SC) and CIT vs. Durga Prasad More (1971) 82 ITR (SC) is quoted in support that the impugned LTCG have been rightly treated as unexplained cash credits in both the lower proceedings.
I have given thoughtful consideration to rival contentions. I find that this tribunal’s co-ordinate bench’s decision in Neeraj Gupta vs. ITO decided on 05.10.2018 has accepted the very point of adjudication in assessee’s favour as follows:- “2. The sole issue that arises for my adjudication is whether the Assessing Officer was right in rejecting the claim of the assessee that he had earned Long Term Capital Gains on purchase an sale of the shares of M/s UNNO Industries Limited and M/s NCL Research & Financial Services Ltd. The AO based on a general report and modus opeandi adopted generally in these cases and on general observations has concluded that the assessee has claimed bogus long term capital gain. He made an addition of the entire ale proceeds of the shares as income and rejected the claim of exemption made u/s. 10(38) of the Act. The evidence produced by the assessee in support of the genuineness of the transaction was rejected.
3. The assessee carried the matte in appeal and the ld. CIT(A), had upheld the addition. The ld. CIT(A) has in his order relied upon “circumstantial evidence” and “human probabilities” to uphold the findings of the AO. He also relied on the so called “rules of suspicious transactions”. No direct material was found to controvert the evidence fled by the assessee, in support of the genuineness of the transactions. In other words, the overwhelming evidence filed by the assessee remains unchallenged and uncontoverted. The entire conclusions drawn by the revenue authorities, are based on a common report of the Director of Investigation, Kolkata, which was general in nature and not specific to any assessee. The assessee was not confronted with any statement or material alleged to be the basis of the report of the Investigation ITA No.1040, 1041,1347, 1525, 1527/Kol/2018 A.Y 2014-15 Page 4 Wing of the department and which were the basis on which conclusion were drawn against the assessee. Copy of the report was also not given.
Under the circumstances, in a number of cases this bench of the Tribunal has consistently held that decision in all such cases should be based on evidence and not on generalistaion, human probabilities, suspicion, conjectures and surmises. We have in all cases deleted such additions. Some of the cases were detailed finding which are listed below:- Sl.No. of the assessee Date of order/judgment 1 1236- Manish Kumar Baid & Others vs 18.08.2017 1237/K/17 ACIT ITAT-Kolkata 2 443/Kol/2017 Kiran Kothari (HUF) vs ITO 15.11.2017 3 22 of 2009 CIT Kolkata-III vs Bhagwati 29.04.2009 Calcutta High Prasad Agarwal Court 4 456 if 2007 CIT vs. Shri Mukhesh Ratilal 07.09.2011 Bombay High Marolia Court 5 18 of 2017 Pr. CIT (Central) Ludhiana vs 16.02.2017 Punjab and Sh. Hitesh Gandhi Haryana High Court 6 95 of 2017 Pr. C.I.T. vs Prem Pal Gandhi 18.01.2018 Punjab and Haryana High Court 7 2281/Kol/2017 Navneet Agarwal, Legal Heir of 20.07.2018 ITAT – Late Kirani Agarwal vs ITO, Kolkata Ward-35(3), Calcutta 5. I am bound by the proposition of law laid down the case law. They are squarely applicable to the fact of the case. The ld. Departmental Representative, though not leaving his ground, could not controvert the claim of the ld. Counsel for the assessee that the issue in question is covered by the above cited decisions of the Hon'ble High Courts and the ITAT.
The ld. Departmental Representative filed detailed written submissions and relied on the judgment of the Hon'ble Supreme Court in the case of Securities and Exchange Board of India vs Rakhi Trading Private Ltd in Civil Appeal No.1969 of 2011 with Civil Appeal Nos. 3174-3177 of 2001 and Civil Appeal No.3180 of 2011. The ld. Counsel for the assessee submits that there is no surviving order of SEBI against the assessee or the company, the script of which was purchased and sold by the assessee. When there is no surviving adverse order of SEBI, against the claim of the assessee, the judgment of the Hon'ble Supreme Court cannot be applied to the fact of this case.”