SMT. ALKA CHANGOIWALA,KOLKATA vs. ITO, WARD - 34(2), KOLKATA , KOLKATA

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 and sale of the shares of M/s Kappa Pharma Ltd.. The AO based on a general report and modus operandi 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 sale 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.

The assessee carried the matter in appeal and the ld. CIT(A)-10, Kolkata, 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 transaction”. No direct material was found to controvert the evidence filed by the assessee, in support of the genuineness of the Smt. Alka Changoiwala A.Y.2014-15 2 transactions. In other words, the overwhelming evidence filed by the assessee remains unchallenged and uncontroverted. 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 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 generalisation, 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

1236-1237/K/17 Manish Kumar Baid & Others vs 18.08.2017 ITAT - Kolkata ACIT 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. C.I.T. (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 - Kolkata Late Kiran Agarwal vs ITO,Ward- 35(3),Calcutta 5. I am bound by the proposition of law laid down in these case law. They are squarely applicable to the facts of the case. The ld. Departmental Representative, though not leaving his ground, could not controvert the claim of the ld. Counsel for Smt. Alka Changoiwala A.Y.2014-15 3 the assessee that the issue in question is covered by the above cited decisions of the Hon’ble High Courts and the ITAT. 6. The ld. Departmental Representative 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 facts of this case. 7. In view of the above discussion the addition in question is deleted and the appeal of the assessee is allowed. 8. In the result the appeal of the assessee is allowed. Order pronounced in the Court on 05.10.2018.