High Court Of Punjab & Haryana
CIT vs. Anupam Kapoor
Section 45, 69
Vijender Jain, C.J. & Rajive Bhalla, J.
IT Appeal Nos. 356 & 378 of 2004 and 308 of 2005
1st February, 2007
Counsel Appeared :
Yogesh Putney, for the Petitioner : Akshay Bhan, for the Respondent
JUDGMENT
VIJENDER JAIN, C.J. :
By this order, we propose to dispose of ITA Nos. 356 of 2004, 378 of 2004 and 308 of 2005, as common questions of law are sought to be raised by the Revenue. The facts, however, have been extracted from ITA No. 378 of 2004.
2. The Revenue has filed this appeal. Aggrieved by the order “Whether the Hon’ble Tribunal on the facts and circumstances of the case has erred in law in confirming the order of the learned CIT(A) in deleting the addition of Rs. 1,74,552 by holding that the assessee discharged his onus of proving the genuineness of the transaction made by him, whereas, the assessee could not establish even the identity of the company whose shares the assessee alleged to have purchased and sold.”
3. The assessment in this case was completed by the AO under s. 143(3) read with s. 147 of the IT Act. The said assessment was reopened on receipt of the intimation from the Dy. Director of IT (Investigation), Gurgaon, stating that the long-term capital gain declared by the assessee was false and the transaction was not genuine. A cheque had been taken by the beneficiary i.e. by paying cash equivalent to the cheque amount and the premium thereon. The AO recorded reasons and issued notice under s. 148 of the Act. The assessee filed a return and during the course of the reassessment proceedings, the assessee submitted his reply and furnished evidence in support of his claim of long-term capital gain. However, the AO held that the assessee failed to lead evidence to support his claim of the long-term capital gains. The AO passed on order and the amount of Rs. 1,74,552 was considered as unexplained credit and the same was added in the income. The assessee preferred an appeal before the CIT(A). The CIT(A) vide order dt. 30th Dec., 2003 deleted the addition and further held that the AO has not discharged his onus. The CIT(A) further held that there was no material or evidence with the AO………(sic) transaction shown by the assessee was a bogus transaction. The CIT(A) further held that if company was not available at the given address, it cannot conclusively prove that the company was non-existent. The decision of the CIT(A) was challenged by the Revenue before the Tribunal. The Tribunal on the basis of the material on record, held that purchase contract note, contract note for sales, distinctive numbers of shares purchased and sold, copy of share certificates and the quotation of shares on the date of purchase and sale were sufficient material to show that the transaction was not bogus but a genuine transaction. The purchase of shares was made on 28th April, 1993 i.e., asst. yr. 1993-94 and that assessment was accepted by the Department and there was no challenge to the purchase of shares in that year. The shares were sold through a broker, who was a registered broker of the stock exchange on the relevant date. It was also placed before the relevant AO as well as before the Tribunal that the sale proceeds have been accounted for in the account of the assessee and were received through account payee cheque. The Tribunal took into consideration that the AO had not dealt with all the documents placed before him and had simply presumed that transaction was bogus.
The Tribunal was right in rejecting the appeal of the Revenue by holding that the assessee was simply a shareholder of the company. He had made investment in a company in which he was neither a director nor was he in control of the company. The assessee had taken shares from the market, the shares were listed and the transaction took place through a registered broker of the stock exchange. There was no material before the AO, which could have lead to a conclusion that the transaction was simplicitier a device to camouflage activities, to defraud the Revenue. No such presumption could be drawn by the AO, merely on surmises and conjuctures. The Tribunal rightly relied on C. Vasantlal & Co. vs. CIT (1962) 45 ITR 206 (SC), M.O. Thomakutty vs. CIT (1958) 34 ITR 501 (Ker) and Mukand Singh vs. Sales Tax Tribunal (1998) 107 STC 300 (Punjab). It was for the AO, who has reopened the assessment to have sought some evidence on record, to substantiate his formulation of consideration that the assessee has not filed a return bona fide. The Tribunal also took into consideration that it was only on the basis of a presumption that the AO concluded that the assessee had paid cash and purchased the cheque. In the absence of any cogent material in this regard, having been placed on record, the AO could not have reopened the assessment. The assessee had made an investment in a company, evidence whereof was with the AO. Therefore, the AO could not have added income, which was rightly deleted by the CIT(A) as well as the Tribunal. It is settled law that suspicion, howsoever strong cannot take the place of legal proof, as has been held by Hon’ble Supreme Court in the case of Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC).
Learned counsel for the Revenue has contended that the controversy in the present case, is covered by a decision of this Court in IT Appeal No. 256 of 2006 decided on 15th Sept., 2006, Jaspal Singh vs. CIT [reported at (2006) 205 CTR (P&H) 624—Ed.]. We are afraid that the submission of learned counsel for the Revenue does not hold good. In IT Appeal No. 256 of 2006, the following questions of law were framed :
“(a) Whether, on the facts and circumstance of the case, the Tribunal was justified in confirming the action of authorities below by upholding the addition made on account of impugned gifts of Rs. 2 lakhs, 1.70 lakhs and 30 lakhs ?
(b) Whether, on the facts and circumstances of the case, the findings of Tribunal are perverse and against the evidences on record thus unsustainable in law ?
(c) Whether the Tribunal has misdirected itself in being influenced by irrelevant factors and applying erroneous criteria while deciding the issue of genuineness of the impugned gifts ?”
6. In the aforementioned judgment, this Court held that onus to establish that the gift was genuine and bona fide lay upon the assessee. The matter at issue was the nature of the gifts of money received by the assessee from non- resident Indians and as there was sufficient material before the AO, to doubt the bona fides of the transactions, it was rightly held that onus to establish the identity of the donor and the genuineness of the gifts lay upon the assessee. The situation in the present case, as noticed hereinabove is entirely different and relates to transactions of sale of shares, purchase whereof was never challenged by the Revenue. Consequently, we are satisfied that no question of law, much less a substantial question of law, arises for adjudication. Dismissed.
[Citation : 299 ITR 179]
