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 Shri Amar Nath Goenka, New Delhi – 110 070. vs. The ACIT, Circle-20(1), New Delhi.
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Shri Amar Nath Goenka, New Delhi 110 070. vs. The ACIT, Circle-20(1), New Delhi.
December, 13th 2018
        IN THE INCOME TAX APPELLATE TRIBUNAL
             DELHI BENCHES "SMC" : DELHI

   BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
                  ITA.No.5882/Del./2018
                Assessment Year 2015-2016

Shri Amar Nath Goenka,
New Delhi ­ 110 070.             The ACIT,
PAN AAPPG9369R
C/o.Shri Kapil Goel,             Circle-20(1),
Advocate, F-26/124,        vs.
Sector-7, Rohini,                New Delhi.
Delhi ­ 110085.
         (Appellant)                    (Respondent)
                  ITA.No.5883/Del./2018
                Assessment Year 2015-2016
Shri Arvind Goenka,
New Delhi ­ 110 070.             The ACIT,
PAN ACTPG1708Q
C/o.Shri Kapil Goel,             Circle-20(2),
Advocate, F-26/124,        vs.
Sector-7, Rohini,                New Delhi.
Delhi ­ 110085.
         (Appellant)                    (Respondent)
                  ITA.No.6457/Del./2018
                Assessment Year 2014-2015
Smt. Preeti Yadav,
New Delhi ­ 110 070.             The Income Tax Officer,
PAN AALPY3249A
C/o.Shri Kapil Goel,             Ward-33(5),
Advocate, F-26/124,        vs.
Sector-7, Rohini,                New Delhi.
Delhi ­ 110085.
         (Appellant)                    (Respondent)
                              2
                               ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                   Shri Amar Nath Goenka, Delhi & Others.

                                                                        .

                   ITA.No.6458/Del./2018
                 Assessment Year 2014-2015

Smt. Sneha Yadav,
New Delhi ­ 110 070.               The Income Tax Officer,
PAN ACVPY0483A
C/o.Shri Kapil Goel, Advocate,     Ward-33(5),
F-26/124,                      vs.
Sector-7, Rohini,                  New Delhi.
Delhi ­ 110085.
          (Appellant)                     (Respondent)
                   ITA.No.6459/Del./2018
                 Assessment Year 2014-2015

Smt. Pooja Yadav,
New Delhi ­ 110 070.               The Income Tax Officer,
PAN AHXPY2139G
C/o.Shri Kapil Goel, Advocate,     Ward-33(5),
F-26/124,                      vs.
Sector-7, Rohini,                  New Delhi.
Delhi ­ 110085.
          (Appellant)                     (Respondent)

                For Assessees : Shri Kapil Goel, Advocate
                For Revenue : Shri S.L. Anuragi, Sr. D.R.

              Date of Hearing : 08.12.2018
      Date of Pronouncement : 12.12.2018

                           ORDER

          This Order shall dispose-of all the above five

appeals filed by different Assessees on an identical question
                                3
                                ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                    Shri Amar Nath Goenka, Delhi & Others.

                                                                         .

with regard to addition under section 68 of the I.T. Act, 1961,

on account of claim of long term capital gains.

2.          I have heard the Learned Representatives of both

the parties and perused the findings of the authorities below

and considered the material available on record.               Learned

Representatives of both the parties mainly argued in ITA.No.

5882/Del./2018 and have submitted that the issue is same in

the remaining appeals, therefore, Order in this case may be

followed in other four appeals. In this view of the matter, I

proceed to decide ITA.No.5882/Del./2018 as under.


ITA.No.5882/Del./2018 - Shri Amar Nath Goenka, New Delhi :


3.          This appeal by Assessee has been directed against

the Order of the Ld. CIT(A)-7, New Delhi, Dated 08.08.2018,

for   the   A.Y.   2015-2016,   challenging      the     addition      of

Rs.14,61,585/- under section 68 of the I.T. Act, 1961, on

account of long term capital gains.
                                   4
                                   ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                       Shri Amar Nath Goenka, Delhi & Others.

                                                                            .

4.            Briefly, the facts of the case are that the assessee

filed its original return of income declaring income of

Rs.25.35.010/-.       The assessee is an individual and declared

income from Salary, House Property and Income from other

sources. The assessee is Employee-Director of M/s. Premier

Polyfilm Ltd. The assessee filed necessary details which have

been examined by the A.O. The A.O. found that the assessee

claimed Rs.23.44.613/- as long term capital gain (LTCG) on

sale of listed shares. Part of the Long Term Capital Gain

(LTCG) has been claimed to have been earned is through sale

of shares of M/s.Esteem Bio Organic Food Processing Ltd.,

(Scrip Code - EBFL Security Id-534927) listed on Bombay

Stock Exchange (BSE). The summary of the share transaction

is as under :

     Sale consideration of 1200 shares                Rs.14,61,585/-
     Less: Cost of acquisition                         Rs.    60,000/-
     LTCG :                                            Rs.14,01,585/-


4.1.          The assessee claimed LTCG from sale of Esteem Bio
                              5
                              ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                  Shri Amar Nath Goenka, Delhi & Others.

                                                                       .

Shares as exempt from taxation under section 10(38) of

Income-Tax Act, 1961. The assessee at assessment proceedings

furnished details of mode of acquisition of these shares, bank

A/c statements where sale proceeds are credited, depository

participant statements and stock broker notes to support claim

of exempt LTCG. The A.O. observed from the submissions of

the assessee together with facts and circumstances of case in

general and those surrounding the share transactions of M/s

Esteem Bio Organic Food Processing Ltd ("EBFL") in particular

and noted that the events are not as simple as described in

assessee's   submissions.   There     are     several      important

circumstantial as well as direct evidences that lead to the

conclusion that the exempt Long-Term Capital Gain claimed by

assessee on sale of shares of EBFL is not genuine but is pre-

arranged collusive transaction in form of accommodation entry

without real substance. The A.O. noted that the assessee has

earned windfall gain within a short span of time that too with

the investment in a relatively unknown company. The financial
                                   6
                                      ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                          Shri Amar Nath Goenka, Delhi & Others.

                                                                               .

figures of the above company are noted in the Order to show

that   net    profit   on    turnover      have     declined.      There      is

unreasonable and inexplicable rise in the share prices of the

Company within a short span. The transactions are carried-out

with predetermined understanding, plan. Increase of share

price of the Company did not commensurate with its financial

results and fundamentals. There is unrealistic returns on the

investment.     The    DIT    (Investigation),      Kolkata       carried-out

countrywide     investigation    to     un-earth       organized      racket/

syndicate for generating bogus entries of long term capital

gains which is exempt from tax. Statement of several entry

operators were recorded which include statement of Shri

Sanjay Vohra who has admitted in his statement that M/s.

Esteem Bio Organic Food Processing Ltd., is a penny stock

company whose shares have been artificially manipulated to

provide long term capital gains. The assessee was given show

cause notice as to why the same should not be treated as non-

genuine transactions. The assessee explained before A.O. that
                               7
                                ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                    Shri Amar Nath Goenka, Delhi & Others.

                                                                         .






all evidences related to sale and purchase of shares have been

provided and there is no material to hold that transactions are

bogus. All the purchases have been made through banking

channels and sold through stock market platform. Reason of

suspicion is insufficient. The allegation that price is rigged is

baseless and without any evidence. No opportunity to cross-

examine have been given of the statements which are used

against the assessee. The A.O. however, did not accept the

contention of the assessee and by applying the test of human

probability held that long term capital gains claimed by

assessee is not genuine and falls within the ambit of Section 68

of the I.T. Act. Therefore, Section 115BBE of the I.T. Act is

applicable and the same is taxable @ 30%. The A.O.

accordingly made the addition of Rs.14,61,585/-.

5.        The assessee challenged the addition before Ld.

CIT(A). The written submissions of the assessee and grounds

of appeals are reproduced in the appellate order in which the

assessee briefly explained that cost of the acquisition of
                                 8
                                 ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                     Shri Amar Nath Goenka, Delhi & Others.

                                                                          .

Rs.60,000/- have not been reduced. The addition is perverse

and invalid and based on irrelevant reason. The statement of

Shri Sanjay Vohra was not confronted to the assessee and no

right of cross-examination have been given to rebut his

statement. Therefore, such statement cannot be read in

evidence against the assessee. No copy of the Investigation

report of SEBI have been provided to assessee. The transaction

is done on online through recognized Stock Exchange through

Demat account and Security Transaction Tax ("STT") as per

the contract note duly paid. The assessee produced all the

documentary evidences like bank statement, contract notes,

transaction statement of Demat account, copy of share

certificates, financial ledger of the assessee with broker etc., to

prove the transaction as genuine. No specific material have

been brought against the assessee on record to disprove the

claim of assessee. The amount is paid and received through

banking channel. No information of any inquiry made from the

broker have been provided. Oral evidence cannot prevail over
                               9
                                  ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                      Shri Amar Nath Goenka, Delhi & Others.

                                                                           .

documentary    evidence.   M/s.     Esteem       Bio    Organic      Food

Processing Ltd., has been very much a going concern

company, an acting Company on MCA website allowed till

recently to trade on recognized stock exchange by the SEBI.

No copy of report of Investigation Wing have been provided.

Assessee has no control over activity of the company in

question whether its price rig etc., The SEBI after detailed

investigation pronounced its order dated 06.09.2017 that

there is no irregularity found in the case of M/s. Esteem Bio

Organic Food Processing Ltd., Therefore, interim order was

revoked. This company still listed with BSE and shares of the

company are being traded regularly. The assessee purchased

6000 shares through public issue and payment for this is

made through banking channel, out of which, part shares

have been sold and remaining are still with the assessee. The

shares were directly transferred to Demat account, copy of

which is also filed. The assessee held shares for more than the

period specified by the Act to claim long term capital gains.
                               10
                                ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                    Shri Amar Nath Goenka, Delhi & Others.

                                                                         .

The assessee has sold the shares through recognized stock

exchange as governed by the SEBI on which STT has been

paid. The contract note issued by the stock exchange/broker

cannot be doubted. The assessee relied upon several decisions

in support of the contention that assessee entered into

genuine transaction. The assessee relied upon Judgment of

Hon'ble Delhi High Court in the case of Pr. CIT-5 vs. Jatin

Investment Pvt. Ltd., in ITA.No.43 & 44 of 2016, Dated

18.01.2017 approving the Order of ITAT, Delhi Bench in the

case of ITO, Ward-4(2), New Delhi vs. Jatin Investment Pvt.

Ltd., New Delhi in ITA.No.4325 & 4326/Del./2009. The Ld.

CIT(A), however, did not accept the contention of assessee and

dismissed the appeal of assessee. The Ld. CIT(A), more or less

on the same reasoning as given by the A.O. noted that there is

strong circumstantial evidence against the assessee and that

transaction is an accommodation entry, therefore, following

the rule of preponderance of probability decided the issue

against the assessee. It is also observed that A.O. is not under
                               11
                                ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                    Shri Amar Nath Goenka, Delhi & Others.

                                                                         .

obligation to allow cross-examination of any person. The

appeal of assessee was accordingly dismissed by the Ld.

CIT(A).

6.         Before the Tribunal, the Learned Counsel for the

Assessee   reiterated   the   submissions       made      before     the

authorities below and submitted that that all documentary

evidences were filed before A.O, of which were filed in the

paper book. The documents are, copy of the application for

allotment of shares along with copy of the cheque. Allotment of

shares, copy of the bank pass book, copy of the Demat

account of Oriental Bank of Commerce showing accrued 6000

shares of the aforesaid company, copy of the contract note of

share broker for sale of the shares, copy of the financial ledger

of the share broker showing sale of the shares, copy of the

credit payment with bank statement. Learned Counsel for the

Assessee filed copies of several Orders of the ITAT, Delhi

Bench, Kolkata Bench and Mumbai Bench to show that in

similar circumstances additions have been deleted. Learned
                              12
                               ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                   Shri Amar Nath Goenka, Delhi & Others.

                                                                        .

Counsel for the Assessee also relied upon the Order of ITAT,

Delhi SMC Bench, in the case of Arun Kumar, Delhi & Others

vs. ACIT, Circle-1, Noida in ITA.No.457, 2825 & 2826/ Del./

2018, Dated 05.11.2018 in which the Tribunal followed

several decisions of various Benches of the Tribunal including

the Order of ITAT, Delhi Bench in the case of ITO vs. Jatin

Investment Pvt. Ltd., in ITA.Nos.4325 & 4326/Del./2009,

Dated 27.05.2015 in which similar addition has been deleted,

in which it was held that "on sale of investment, provisions of

Section 68 will not be applicable". He has submitted that the

said decision has been confirmed by the Hon'ble Delhi High

Court in the case of Pr. CIT-5 vs. Jatin Investment Pvt. Ltd.,

2017-TMI-342-Del-HC. He has submitted that the Tribunal

following this decision decided the issue in favour of the

assessee. Learned Counsel for the Assessee also relied upon

the Order of the ITAT, Delhi Bench in the case of Smt. Shikha

Dhawan,    Gurgaon     vs.   ITO,    Ward-4(2),       Gurgaon         in

ITA.No.3035/Del./2018, Dated 27.06.2018 in which the
                                  13
                                  ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                      Shri Amar Nath Goenka, Delhi & Others.

                                                                           .

Tribunal following its earlier decisions as well as decision of

Hon'ble Punjab & Haryana High Court in the case of PCIT

(Central), Ludhiana vs. Prem Pal Gandhi in ITA.No.95 of 2017,

Dated 18.01.2018, decided similar issue in favour of the

assessee. Copies of the Orders are placed on record. Learned

Counsel for the Assessee, therefore, submitted that the issue

is covered by the aforesaid decisions of the Tribunal.


7.        On the other hand, Ld. D.R. relied upon the Orders

of the authorities below.


8.        I   have   considered        the    rival   submissions     and

perused the material on record. The ITAT, Delhi Bench in the

case of Smt. Shikha Dhawan, Gurgaon vs. ITO, Ward-4(2),

Gurgaon (supra) in paras 6 to 10 noted the submissions of

both the parties and decided the issue in favour of the

assessee. The findings are reproduced as under :

     6.   Ld.   Counsel     for   the        assessee    reiterated    the

     submissions made before the authorities below and
                          14
                           ITA.No.5882, 5883, 6457 to 6459/Del./2018
                               Shri Amar Nath Goenka, Delhi & Others.

                                                                    .

submitted that an inquiry conducted in the cases of other

assessees and statements referred to by the AO in the

assessment order have not been confronted to the

assessee. The assessee has not been named by any of

these persons for indulging in taking accommodation

entries. He has, therefore, submitted that such evidence

cannot be read in evidence against the assessee and

relied upon the decision of the Hon'ble Supreme Court in

the case of Kishan Chand Chela Ram 125 ITR 713 (SC).

He has submitted that for claiming exemption u/s 10(38)

of the Act, the assessee shall have to prove twin conditions

i.e. the income arise from the transfer of long term capital

asset and being equity share in a company where the

transfer of sale of such equity share is entered into on or

after the date of which Chapter-VII of the Finance Act,

2004 comes into force and such transaction is chargeable

to security transaction tax under that Chapter. In the case

of the assessee, both twin conditions are satisfied. He has
                          15
                           ITA.No.5882, 5883, 6457 to 6459/Del./2018
                               Shri Amar Nath Goenka, Delhi & Others.

                                                                    .

filed copy of the shares certificate with transfer form, copy

of debit note issued by Shreeji Broking (P) Ltd., copy of

cash receipt of Shreeji Broking (P) Ltd., copy of ledger

account of Indus Portfolio (P) Ltd., Page | 18 ITA

No.3035/Del/2018 copy of form for evidence for payment

of securities transaction tax on transaction entered in a

recognized stock exchange and copy of the bank statement

of the assessee in the Paper Book. He has further

submitted that on identical facts, ITAT SMC Bench, Delhi

in   the   case   of   Meenu      Goel     vs     ITO     in    ITA

No.6235/Del/2017 for AY 2014-15 vide order dated

19.03.2018 relying upon the decision of Hon'ble Punjab &

Haryana High Court in the case of Pr.CIT vs Prem Pal

Gandhi in ITA No.95-2017 vide order dated 18.01.2018,

allowed the claim of the assessee. The findings of the

Tribunal in para 6 to 8 are reproduced as under:-
                     16
                      ITA.No.5882, 5883, 6457 to 6459/Del./2018
                          Shri Amar Nath Goenka, Delhi & Others.

                                                               .


"6.   I have heard both the parties and perused the

relevant records available with me, especially the

orders of the revenue authorities and the case law

cited by both the parties. I note that assessee has

earned Long Term Capital Gain amounting to

Rs.18,46,600/- during the financial year 2013-14 and

the same has been claimed exempt under Section

10(38) of Income Tax Act, 1961. The assessee had

purchased of 45,000/- shares of Unisys Software

Holding Industries Ltd amounting Rs. 9,38,600/- at a

premium of Rs. 20.85 per share in physical form. Out

of the aforesaid 45000/- Shares assessee sold of 8000

Shares only i.e. 17.77%. Thus, the major part of the

Shares i.e. 82.33% are still in the hand of the assessee.

In my view the assessee just wanted to enter into the

transaction to earn exempted capital gain, but the
                     17
                      ITA.No.5882, 5883, 6457 to 6459/Del./2018
                          Shri Amar Nath Goenka, Delhi & Others.

                                                               .


assessee did not sell all the share 45000 shares instead

of sale of a part i.e. 8000 shares only when that time

was the best price ever. All the transaction were made

through account payee cheque/banking channel and

assessee had purchased share in financial year 2009-

10 and sold the same in the financial year 2013-14

resulting in Long Term Capital Gain. The assessee has

submitted various documentary evidences to prove

the genuineness of the transaction of sale and

purchase of shares which includes a copy of purchase

bill dated 22.02.2010; a copy of share transfer form in

the favour of the assessee; Copy of bank statement

highlighting the payment made against the share

purchased; Transaction statement of the stock broker

i.e. Pace Stock Broking Services (P) Ltd., account; copy

of bank statement in which sale proceed from the sale
                     18
                      ITA.No.5882, 5883, 6457 to 6459/Del./2018
                          Shri Amar Nath Goenka, Delhi & Others.

                                                               .


of shares received; copy of calculation of long term

capital gain, which was not faulted by the AO.

However, the lower authorities have not considered

the aforesaid documents and rejected all the claims

made by the assessee by relying on the report of the

Investigation Wing and thereby made the addition,

which is not sustainable in the eyes of law. I further

find that the AO has given detailed explanation in the

order regarding the modus operandi of bogus LTCG

scheme but failed to substantiate how the assessee fell

in the purview of the same without bringing any

material on record and proving that the assesssee was

directly involved in the so called bogus transaction. I

further note that the addition in dispute made by the

AO and upheld by the Ld. CIT(A) u/s 68 as

unexplained credit instead of long term capital gain
                     19
                      ITA.No.5882, 5883, 6457 to 6459/Del./2018
                          Shri Amar Nath Goenka, Delhi & Others.

                                                               .


as claimed by the assessee, however, the source

identity and genuineness of the transaction having

been established by documentary evidences and there

is no case for making addition u/s 68 of the Act,

hence, the same deserve to be deleted. I note that in

most of the case laws of the Hon'ble High Courts

referred by the Ld. DR the reason on the basis of

addition was confirmed was that the assessee had not

tendered cogent evidence with regard to share

transaction, however, in the present the case assessee

has submitted all the documents / evidences,

therefore, the case laws relied by the Ld. DR are based

on distinguished facts and circumstances, hence, the

said case laws are not applicable in the present case.

However, in my considered opinion, the issue in

dispute is squarely covered by the various decisions
                     20
                     ITA.No.5882, 5883, 6457 to 6459/Del./2018
                         Shri Amar Nath Goenka, Delhi & Others.

                                                              .


of the ITAT and the Hon'ble High Courts including

the recent decision dated 18.1.2018 of the Hon'ble

High Court i.e. Hon'ble High Court of Punjab &

Haryana in the case of PCIT (Central), Ludhiana vs.

Prem Pal Gandhi passed in ITA No. 95 of 2017.


     Decision dated 18.1.2018 of the Hon'ble High

     Court of Punjab & Haryana in the case of

     PCIT (Central), Ludhiana vs. Prem Pal Gandhi

     passed in ITA No. 95 of 2017 wherein it has

     been held as under:-


     "2. The following questions of law have been

     raised:-


     (i)   Whether    on       the   facts   and    in    the

     circumstances        of   the   case,   the    Hon'ble

     Income Tax Appellate Tribunal has erred in

     upholding the order of the CIT(A) deleting
                   21
                   ITA.No.5882, 5883, 6457 to 6459/Del./2018
                       Shri Amar Nath Goenka, Delhi & Others.

                                                             .


the addition of Rs. 4,11,77,474/- made by

the    AO     on        account      of     sham      share

transactions ignoring an important aspect

that the transaction of shares showing their

purchase price at Rs. 11,00,000/- and sale

consideration at Rs. 4,23,45,295/- within a

period of less than two years / purchases of

shares made in cash not cheque that too

before shares got dematerialized / worth of

the company at the time of purchase / sale of

shares      not    proved-         All     suggest        non-

genuineness of the said transaction?


(ii)   Whether      on       the   facts    and      in    the

circumstances           of   the   case,     the   Hon'ble

Income Tax Appellate Tribunal has erred in

law in upholding the order of the CIT(A)

deleting the addition of Rs. 4,11,77,474/-
                 22
                 ITA.No.5882, 5883, 6457 to 6459/Del./2018
                     Shri Amar Nath Goenka, Delhi & Others.

                                                          .


made by the AO on account of sham share

transactions, whereas the CIT(A) himself had

held that the assessee had not been able to

substantiate the source of investment of

Rs.11,00,000/- in the said shares purchased

during the financial year 2005-06 and the AO

was directed to reopen the case of the

assessee for the assessment year 2006-07

on this issue?


iii)   Whether the Hon'ble ITAT has erred in

ignoring and important aspect that              in such

cases of sham transactions of shares showing

abnormal hike in their value, where the facts

themselves speak loud and clear, the AO is

justified to even draw an inference from the

attendant circumstances ?
                     23
                      ITA.No.5882, 5883, 6457 to 6459/Del./2018
                          Shri Amar Nath Goenka, Delhi & Others.

                                                               .


     (iv)      Whether on the facts and in the

     circumstances        of   the   case,    the    Hon'ble

     Income Tax Appellate Tribunal has erred in

     law in upholding the order of the CIT(A)

     deleting the addition of Rs.12,59,000/- made

     by the AO on the basis of seized document

     on the grounds that the AO has not pointed

     out as to how the figures of Rs. 12.59 lacs

     has been worked out ignoring the fact that

     the assessee himself in his reply to the AO

     had tried to explain the source of the receipts

     of Rs. 12,59,000/- instead of challenging the

     working out of the said figure by the A.O. ?


3.          The first three questions of law raised in

this appeal are covered against the appellant by an

order and judgment of a Division Bench of this Court

dated 16.02.2017 in ITA-18-2017 titled as The Pr.
                      24
                      ITA.No.5882, 5883, 6457 to 6459/Del./2018
                          Shri Amar Nath Goenka, Delhi & Others.

                                                               .


Commissioner of Income Tax (Central), Ludhiana vs.

Sh. Hitesh Gandhi, Bhatti Colony, Chandigarh Road,

Nawanshahar.


4.          The issue in short is this : The assessee

purchased    shares    of   a   company        during      the

assessment year 2006-07 at Rs. 11/- and sold the same

in the assessment year 2008-09 at Rs. 400/- per share.

In the above case, namely, ITA 18- 2017 also the

assessee had purchased and sold the shares in the

same assessment years. The AO in both the cases

added the appreciation to the assessees' income on

the suspicion that these were fictitious transactions

and that the appreciation actually represented the

assessee's income from undisclosed sources. In ITA-

18-2017 also the CIT(Appeals) and the Tribunal held

that the AO had not produced any evidence
                     25
                      ITA.No.5882, 5883, 6457 to 6459/Del./2018
                          Shri Amar Nath Goenka, Delhi & Others.

                                                               .


whatsoever in support of the suspicion. On the other

hand, although the appreciation is very high, the

shares were traded on the National Stock Exchange

and the payments and receipts were routed through

the bank. There was no evidence to indicate for

instance that this was a closely held company and

that the trading on the National Stock Exchange was

manipulated in any manner.


5.   In these circumstances, following the judgment

in ITA- 18-2017, it must be held that there is no

substantial question of law in the present appeal.


6.   Question (iv) has been dealt with in detail by the

CIT(A) and the Tribunal. Firstly, the documents on

which the AO relied upon the appeal were not put to

the Assessee during the assessment proceedings. The
                             26
                              ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                  Shri Amar Nath Goenka, Delhi & Others.

                                                                       .


     CIT(A) nevertheless considered them in detail and

     found that there was no co- relation between the

     amounts sought to be added and the entries in those

     documents. This was on an appreciation of facts.

     There is nothing to indicate that the same was

     perverse or irrational. Accordingly, no question of

     law arises.


     7.       In the circumstances, the appeal is dismissed."

7.   Keeping in view of the facts and circumstances of the

case as explained above and respectfully following the

precedent,      as   aforesaid,    the     addition      amounting

Rs.18,46,600/- made by the AO and confirmed by the Ld.

CIT(A) is hereby deleted and ground raised by the assessee

is allowed.


8.    In the result, the appeal of the assessee is allowed."
                            27
                            ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                Shri Amar Nath Goenka, Delhi & Others.

                                                                     .

6.1. He has, therefore, submitted that the issue is covered

in favour of the assessee by above decision. The assessee

entered into genuine transaction, therefore, no addition

u/s 68 of the Act be made against the assessee.


7.   On the other hand, Ld. Sr. DR relied upon the orders

of the authorities below.


8.   I have heard the rival submissions and perused the

material   available   on   record.    The    assessee       placed

sufficient documentary evidences before the AO which are

copy of the shares certificates with transfer form, copy of

debit note issued by Shreeji Broking (P) Ltd., copy of cash

receipt of Shreeji Broking (P) Ltd., copy of the account

statement of the assessee in the books of the broker, copy

of ledger account of Indus Portfolio (P) Ltd., copy of

evidence for payment of securities transaction tax and

copy of the bank statement of the assessee to show that

the assessee had entered into genuine transaction of
                          28
                           ITA.No.5882, 5883, 6457 to 6459/Del./2018
                               Shri Amar Nath Goenka, Delhi & Others.

                                                                    .

purchase of share which were later on sold through the

broker on recognized stock exchange after payment of STT.

The claim of the assessee for sale of shares has been

supported by the documentary evidences which have not

been rebutted by the authorities below. Whatever inquiry

was conducted in the cases of other parties and statement

recorded of several persons namely Sh. Anil Khemka, Sh.

Sanjay Vohra and Sh. Bidyoot Sarkar as referred in the

assessment order and the report of the Investigation Wing

were not confronted to the assessee and above statements

were also not subject to cross-examination on behalf of the

assessee. Therefore, such evidences cannot be read in

evidence against the assessee. The order of the SEBI was

also not confronted to the assessee. AO did not mention

any such fact in assessment order. More so in those

reports and statements, the name of the assessee has not

been referred to. Ld. Counsel for the assessee, therefore,

rightly contended that the twin conditions of section 10(38)
                          29
                           ITA.No.5882, 5883, 6457 to 6459/Del./2018
                               Shri Amar Nath Goenka, Delhi & Others.

                                                                    .

of the Act have been satisfied in the case of the assessee.

The assessee has been able to prove that she has entered

into the genuine transaction of purchase and sale of

shares and the sale consideration is received from broker

through banking channel. The brokers have not denied the

transaction with the assessee. The assessee rooted the

transaction of sale of shares through recognized stock

exchange after making payment of STT. In similar

circumstances, ITAT SMC Bench, Delhi in the case of

Meenu Goel vs ITO (supra) following the decision of

Jurisdictional Hon'ble P&H High Court in the case of Pr.CIT

vs Prem Pal Gandhi (supra) deleted the similar addition.

Therefore, the issue is covered in favour of the assessee by

the order of ITAT, Delhi Bench in the case of Meenu Goel

vs ITO (supra) followed by judgment of Jurisdictional P&H

High Court which is binding. There is no other material

available on record to rebut the claim of the assessee of

exemption claimed u/s 10(38) of the Act.
                                 30
                                  ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                      Shri Amar Nath Goenka, Delhi & Others.

                                                                           .

       9.    Keeping in view of the above discussion and the

       material on record, in the light of the order of the Tribunal

       in the case of Meenu Goel vs ITO (supra), I set aside the

       orders of the authorities below and delete the addition of

       Rs.19,51,357/-.    The   appeal      of   the     assessee       is,

       accordingly, allowed.


       10.   In the result, the appeal of the assessee is allowed."

8.1.         The ITAT, Delhi SMC Bench, in the case of Arun

Kumar, Delhi vs. ACIT, Circle-1, Noida (supra) following

several decisions of various Benches of the Tribunal and

following the decision of ITAT, Delhi Bench in the case of ITO,

Ward-4(2), New Delhi vs. Jatin Investment Pvt. Ltd., New Delhi

and Judgment of Hon'ble Delhi High Court in the same case

(supra) allowed the appeal of assessee on identical facts. The

Hon'ble Bombay High Court in the case of CIT-13 vs. Shyam

R. Pawar (2015) 229 Taxman 256 (Bom.) held as under :
                              31
                               ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                   Shri Amar Nath Goenka, Delhi & Others.

                                                                        .

       "Where DMAT account and contract note showed details

       of share transaction, and Assessing Officer had not

       proved said transaction as bogus, capital gain earned on

       said transaction could not be treated as unaccounted

       income under section 68."


8.2.       ITAT, Hyderabad Bench in the case of ITO, Ward-2,

Nizamabd vs. Smt. Aarati Mittal (2014) 149 ITD 728 (Hyd.)

(Trib.) held as under :







       "Where assessee having purchased shares in physical

       form, converted them in D-Mat form and thereupon sale

       of those shares was carried out through recognized

       stock exchange after paying securities transaction tax,

       said transactions were to be regarded as genuine in

       nature and, therefore, assessee's claim for exemption

       under section 10(38) was to be allowed."

8.3.       ITAT, Delhi Bench in the case of ITO, Ward-4(2),

New Delhi vs. Jatin Investment Pvt. Ltd., New Delhi in
                               32
                                ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                    Shri Amar Nath Goenka, Delhi & Others.

                                                                         .

ITA.No.4325 & 4326/Del./2009 vide Order Dated 27.05.2015

in paras 12 to 14 held as under :


     "12.       We have considered the submissions of both

     the parties and gone through the material available on the

     record. In the present case, it is noticed that the assessee

     purchased the shares in earlier years which were shown

     as investment in the books of accounts and reflected in the

     "Asset Side" of    the "Balance Sheet", out of those

     investments (copy which is placed at page no. 23 and 24

     of the assessee's paper book), the assessee sold certain

     investments and accounted for the profit / loss and offered

     the same for taxation. In the present case, the amount in

     question was neither a loan or the deposit , it was also not

     on account of share application money, the said amount

     was on account of sale of investment therefore the

     provisions of Section 68 of the Act were not applicable and

     the AO was not justified in making the addition. In our
                            33
                             ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                 Shri Amar Nath Goenka, Delhi & Others.

                                                                      .

opinion, the Ld. CIT(A) rightly deleted the addition made

by the AO.

13.          On a similar issue the Hon'ble Jurisdictional

High Court in the case of CIT vs. Vishal Holding and

Capital Pvt. Ltd. vide order dated 9th August, 2010 upheld

the order dated 30.7.2009 of the ITAT in ITA no.

1788/Del/2007 for the assessment year 2000-2001

wherein the order of the Ld. CIT(A) making the similar

deletion was upheld by observing in para 6 as under :-

             "We are of the view that the assessee had

             produced copies of accounts, bills and contract

             notes issued by M/s. MKM Finsec Pvt. Ltd., and

             had been maintaining books of account as per

             Companies     Act.   The      assessee      had     also

             demonstrated the purchase and sale of shares

             over a period of time as seen from the balance

             sheet's. In our opinion, the Assessing Officer has
                              34
                              ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                  Shri Amar Nath Goenka, Delhi & Others.

                                                                       .


          simply acted on the information received from

          the Investigation Wing without verifying the

          details furnished by the assessee. The assessee

          has also produced best possible evidence to

          support its claim. Consequently the addition

          made by the Assessing Officer cannot be

          sustained."

14.       We, therefore, considering the totality of the

facts do not see any valid ground to interfere with the

findings of the Ld. CIT(A). Accordingly, we do not see any

merit in this appeal of the department. In ITA no.

4326/Del./2009 of       the        assessment year 2004- 05

identical issue having similar facts is involved, the only

difference is in the amount of addition which was deleted

by the Ld. CIT(A). Therefore, our findings given in former

part of this order, in respect of assessment year 2003-04,
                               35
                                ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                    Shri Amar Nath Goenka, Delhi & Others.

                                                                         .

       shall apply mutatis mutandis for assessment year 2004-

       05.

                In the result, appeals of the department are

       dismissed."


8.4.         The Order is confirmed by the Hon'ble Delhi High

Court by dismissing the Departmental Appeal in case of PCIT

vs. Jatin Investment Pvt. Ltd., in ITA.No.43 & 44 of 2016

Dated 18.01.2017 and decided the similar issue in favour of

the assessee.


8.5.         Considering the material on record in the light of

above decisions it is clear that assessee placed sufficient

documentary evidences before A.O. to prove genuineness of

the transaction. The assessee purchased shares through

banking channel and actually got the shares transferred in his

name. Purchase was made through cheque which is supported

by bank statement. The transactions of sale have been made

through Demat account. The contract note along with other
                              36
                               ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                   Shri Amar Nath Goenka, Delhi & Others.

                                                                        .

details were produced to show that purchase and sale of the

shares have been made through banking channel through

recognized Stock Exchange through Demat account on which

Security Transaction Tax have also been paid. The A.O. did

not make any enquiry on the documentary evidences filed by

the assessee. No material have been brought on record against

the assessee to disprove the claim of assessee. It is not the

case of the Revenue that amount received on sale of shares is

more than what is declared by the assessee. The assessee

pleaded that the Interim Order of the SEBI have been diluted

by passing final order in which no adverse view have been

taken against the aforesaid company. Thus, the claim of

assessee of purchase and sale of shares have been supported

by documentary evidences. The statement of Shri Sanjay

Vohra was recorded by the Investigation Wing, Kolkata, but,

the same was not confronted to the assessee and his

statement was also not subjected to cross-examination on

behalf of the assessee. Therefore, his statement cannot be read
                               37
                                ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                    Shri Amar Nath Goenka, Delhi & Others.

                                                                         .

in evidence against the assessee. I rely on the decision of

Hon'ble Supreme Court in the case of Kishan Chand Chela

Ram 125 ITR 713 (SC). The A.O. did not mention any fact as to

how the claim of assessee was sham or bogus. The assessee

thus, satisfied the conditions of Section 10(38) of the I.T. Act.

The broker through whom transactions have been carried out

have not denied the transaction conducted on behalf of the

assessee. It, therefore, appears that the addition is merely

made on presumption and assumptions of certain facts which

are not part of the record. The issue is, therefore, covered in

favour of the assessee by several Orders of the Tribunal

including the case of Smt. Shikha Dhawan, Gurgaon vs. ITO,

Ward-4(2), Gurgaon (supra). There is no other material

available on record to rebut the claim of assessee of exemption

claimed under section 10(38) of the I.T. Act. Keeping in view of

the above discussion and material on record in the light of

above decisions of the Tribunal and Hon'ble Delhi High Court,

I set aside the Orders of the authorities below and delete the
                                    38
                                    ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                        Shri Amar Nath Goenka, Delhi & Others.

                                                                             .

addition    of   Rs.14,61,585/-.     The    appeal      of   Assessee      is

accordingly allowed.


9.          In     the   result,   ITA.No.5882/Del./2018            of   the

Assessee is allowed.


ITA.No.5883/Del./2018 ­ Shri Amarnath Goenka, Delhi :


10.         This appeal by Assessee has been directed against

the Order of the Ld. CIT(A)-7, New Delhi, Dated 08.08.2018,

for   the   A.Y.     2015-2016      challenging      the     addition      of

Rs.7,00,793/- under section 68 of the I.T. Act on account of

long term capital gains. The facts in this care are similar as

have been considered in the case of Shri Amar Nath Goenka in

ITA.No.5882/Del./2018 hereinabove.


ITA.No.6457/Del./2018 ­ Smt. Preeti Yadav, New Delhi :
ITA.No.6458/Del./2018 ­ Smt. Sneh Yadav, New Delhi. :
ITA.No.6459/Del./2018 ­ Smt. Pooja Yadav, New Delhi :

11.         These appeals by the above Assessees are directed

against the different Orders of the Ld. CIT(A)-11, New Delhi,
                                39
                                 ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                     Shri Amar Nath Goenka, Delhi & Others.

                                                                          .

Dated 10.08.2018, for the A.Y. 2014-2015 challenging the

additions     of      Rs.33,79,407/-,      Rs.34,70,815/-            and

Rs.34,10,399/- respectively, under section 68 of the I.T. Act,

1961, on account of long term capital gains.


12.         Learned    Representatives     of   both      the    parties

submitted that the issue is same as have been considered in

the case of Shri Amar Nath Goenka, Delhi in ITA.No.5882/

Del./2018 (supra) except that in these cases the sale is

shares of M/s. KAPPAC Pharma Limited, through broker.

Learned Representatives of both the parties submitted that the

issue being the sale, therefore, Order in the case of Shri Amar

Nath Goenka, Delhi (supra) may be followed.


13.         We find that the issue in the remaining four appeals

is same as has been considered in the case of Shri Amar Nath

Goenka, Delhi (supra). Therefore, following the reasons for

decision in the case of Shri Amar Nath Goenka, Delhi (supra),

we set aside the Orders of the authorities below and delete the
                                 40
                                  ITA.No.5882, 5883, 6457 to 6459/Del./2018
                                      Shri Amar Nath Goenka, Delhi & Others.

                                                                           .

entire additions. Accordingly, appeals of the Assessees are

allowed.


14.        In   the   result,   ITA.No.5883,      6457,      6458     and

6459/Del./2018 of the Assessees are allowed.


15.        To sum-up, all the appeals of the Assessees are

allowed.


           Order pronounced in the open Court.


                                            Sd/-
                                            (BHAVNESH SAINI)
Delhi, Dated 12th December, 2018           JUDICIAL MEMBER
VBP/-
Copy to
1.    The appellant
2.    The respondent
3.    CIT(A) concerned
4.    CIT concerned
5.    D.R. ITAT `SMC' Bench, Delhi
6.    Guard File.
                      // By Order //


           Assistant Registrar : ITAT Delhi Benches :
                          Delhi.

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