Principal Commissioner Of Income Tax @APPELLANT@Hash Shri Pramod Jain

Defects are waived.

In all these appeals common question of law and facts are involved hence they are decided by this common judgment.

By way of these appeals, the appellant has assailed the judgment and order of the Tribunal whereby Tribunal has allowed the appeals of the

assessee.

Counsel for the appellant has framed following substantial question of law:-

Appeal No.209/2018

(i) Whether the Tribunal was justified in deletingthe addition of Rs.2,64,04,191/- made by Assessing Officer and confirmed by CIT(A), made on

account of bogus Long Term Capital Gain as the companies in which the investment was made were bogus?

(ii) Whether the Tribunal was justified in deletingthe addition of Rs.1,32,020/- made on account of commission and disallowance of Rs.12,500/made on

account of legal expenses relating to bogus share transaction?

Appeal No.212/2018

(i) Whether the Tribunal was justified in deletingthe addition of Rs.1,11,44,029/- made by Assessing Officer and confirmed by CIT(A), made on

account of bogus Long Term Capital Gain as the companies in which the investment was made were bogus?

(ii) Whether the Tribunal was justified in deletingthe addition of Rs.55,720/- made on account of commission and disallowance of Rs.5,000 made on

account of legal expenses relating to bogus share transaction?

Appeal No.214/2018

(i) Whether the Tribunal was justified in deletingthe addition of Rs.1,11,29,534/-, made by Assessing Officer and confirmed by CIT(A), made on

account of bogus Long Term Capital Gain as the companies in which the investment was made were bogus?

(ii) Whether the Tribunal was justified indeleting the addition of Rs.55,568/- made on account of commission and disallowance of Rs.10,000/- made on

account of legal expenses relating to bogus share transaction?

Appeal No.215/2018

(i) Whether the Tribunal was justified in deletingthe addition of Rs.1,26,96,120/-, made by Assessing Officer and confirmed by CIT(A), made on

account of bogus Long Term Capital Gain as the companies in which the investment was made were bogus?

(ii) Whether the Tribunal was justified in deletingthe addition of Rs.63,480/- made on account of commission and disallowance of Rs.10,000/made on

account of legal expenses relating to bogus share transaction?

Appeal No.218/2018

(i) Whether the Tribunal was justified in deletingthe addition of Rs.2,08,18,627/-, made by Assessing Officer and confirmed by CIT(A), made on

account of bogus Long Term Capital Gain as the companies in which the investment was made were bogus?

(ii) Whether the Tribunal was justified indeleting the addition of Rs.1,04,093/- made on account of commission and disallowance of Rs.10,000/- made

on account of legal expenses relating to bogus share transaction?

However, now the issue is squarely covered by the decision of this court in ITA No.385/2011 (Commissioner of Income Tax vs. Smt. Pooja

Agarwal) decided on 11.9.2017 which reads as under:-

“6. Counsel for the appellant has taken us to the order of AO stating that the assessee involved in jewelry business has taken entry for the purpose

of converting the black money into white and referred this entry from broker, one Shri P.K.Agarwal. Entry provided from Calcutta has been taken.

The assessee derives income from salary,capital gains and other sources. A survey under Section 133A of the Act was conducted as the business

premises of M/s Royal Jewellers, Telipada of which assessee is 50% partner, on 21st and 22nd of January, 2008, during which various incriminating

documents were found and impounded wherein several unaccounted transaction were recorded. Reassessment proceedings were initiated by issuing

notice under Section 147 R/W 148 of the Act. Vide Show Cause Notice the assessee was specifically asked as to why the amount of

Rs.98,56,872/should not be treated as an accommodation entry.

The assessee submitted reply to the ShowCause Notice contending therein that the share transactions are genuine and the ‘Short Term Capital

Gain’ of Rs.98,56,872/- has been earned from the purchases and sales of shares of Konark Commercial Ltd. And Limtux Investment Ltd.

Investigation revealed that the entire share transactions were bogus and mere accommodation entries obtained from an entry provider Shri

P.K.Agarwal form Kolkata. The said fact was revealed during search carried out by the Investigation Wing, Jaipur in the case of B.C.Purohit Group.

It is pertinent to note that during the surveyoperation, it was admitted by the assessee that no investment in shares was made by him during the said

period. It was further found that the company M/s Konark Commercial Ltd. Was never listed in Calcutta Stock Exchange and the assessee was

never its shareholder.

After considering the entire factual matrixthe Assessing Officer held that the assessee had arranged the said accommodation entries from entry

providers for converting its undisclosed money into white money and thus the amount of Rs.98,56,872/- was treated as undisclosed income of the

assessee.

Counsel for appellant has taken us to theorder of AO.

However, counsel for the respondent hastaken us to the order of CIT(A) and also to the order of Tribunal and contended that in view of the

finding reached, which was done through Stock Exchange and taking into consideration the revenue transactions, the addition made was deleted by the

Tribunal observing as under:-

“Contention of the AR is considered. One of the main reasons for not accepting the genuineness of the transactions declared by the appellant that

at the time of survey the appellant in his statement denied having made any transactions in shares. However, subsequently the facts came on record

that the appellant had transacted not only in the shares which are disputed but shares of various other companies like Satyam Computers, HCL, IPCL,

BPCL and Tata Tea etc. Regarding the transactions in question various details like copy of contract note regarding purchase and sale of shares of

Limtex and Konark Commerce & Ind. Ltd., assessee’s account with P.K. Agarwal & co. share broker, company’s master details from

registrar of companies, Kolkata were filed.

Copy of depository a/c or demat account with Alankrit Assignment Ltd., a subsidiary of NSDL was also filed which shows that the transactions were

made through demat a/c. When the relevant documents are available the fact of transactions entered into cannot be denied simply on the ground that

in his statement the appellant denied having made any transactions in shares. The payments and receipts are made through a/c payee cheques and the

transactions are routed through Kolkata Stock Exchange. There is no evidence that the cash has gone back in appellants’s account. Prima facie

the transaction which are supported by documents appear to be genuine transactions. The AO has discussed modus operandi in some sham

transactions which were detected in the search case of B.C. Purohit Group. The AO has also stated in the assessment order itself while discussing

the modus operandi that accommodation entries of long term capital gain were purchased as long term capital gain either was exempted from tax or

was taxable at a lower rate. As the appellant’s case is of short term capital gain, it does not exactly fall under that category of accommodation

transactions. Further as per the report of DCIT, Central Circle3 Sh. P.K. Agarwal was found to be an entry provider as stated by Sh. Pawan Purohit

of B.C. Purihit and Co. group. The AR made submission before the AO that the fact was not correct as in the statement of Sh. Pawan Purohit there

is no mention of Sh. P. K. Agarwal. It was also submitted that there was no mention of Sh. P. K. Agarwal in the order of Settlement Commission in

the case of Sh. Sushil Kumar Purohit. Copy of the order of settlement commission was submitted. The AO has failed to counter the objections raised

by the appellant during the assessment proceedings. Simply mentioning that these findings are in the appraisal report and appraisal report is made by

the Investing Wing after considering all thematerial facts available on record does not help much. The AO has failed to prove through any independent

inquiry or relying on some material that the transactions made by the appellant through share broker P.K. Agarwal were non-genuine or there was

any adverse mention about the transaction in question in statement of Sh. Pawan Purohi. Simply because in the sham transactions bank a/c were

opened with HDFC bank and the appellant has also received short term capital gain in his account with HDFC bank does not establish that the

transaction made by the appellant were non genuine. Considering all these facts the share transactions made through Shri P.K. Agarwal cannot be

held as nongenuine. Consequently denying the claim of short term capital gain made by the appellant before the AO is not approved. The AO is

therefore, directed to accept claim of short term capital gain as shown by the appellant.â€​

The same was confirmed by CIT appeal, inview of this we are of the opinion that the view taken by the Tribunal as well as CIT is correct.

In that view of the matter, the issues areanswered in favour of the assessee and against the department.

In that view of the matter, no substantial question of law arises.

Hence, the appeals stand dismissed.