J.P Devadhar, J.:— Heard learned counsel for the parties.
2. By a common order dated July 24, 2009, which is impugned in these, appeals, the Income-tax Appellate Tribunal had disposed of 70 appeals filed by the Revenue. Although the impugned order of the Income-tax Appellate Tribunal relates to 70 assessees, the Revenue has filed appeals under section 260A of the Income-tax Act, 1961 only in respect of 43 assessees. In respect of the remaining 27 assessees, no appeals have been filed. To a query raised by the court regarding the above discrepancy, learned counsel for the Revenue stated that out of 27 assessees, in the case of 8 assessees, appeals have not been filed in view of the small tax effect and in the remaining 19 cases, the appeals have not been filed because the concerned Commissioner of Income-tax was of the opinion that no substantial question of law arises out of the common order of the Tribunal dated July 24, 2009. In response to a further query as to why the Revenue considers these 43 appeals to be different from the 19 cases where appeals have not been filed, the learned counsel for the Revenue fairly stated that he does not find any difference in any of the appeals and submitted that lack of co-ordination between different Commissionerates has resulted in filing appeals in some cases and not filing appeals in other cases, even though there is a common order passed by the Income-tax Appellate Tribunal. The learned counsel for the Revenue while conceding that he is not in a position to find fault with the reasoning given by the Income-tax Appellate Tribunal in deleting the additions made by the Assessing Officer, submitted that these appeals be decided on the merits in the light of the findings recorded by the Assessing Officer and the decision of the apex court in Sumati Dayal v. Commissioner Of Income Tax, Bangalore., [1995] 214 ITR 801; [1995] 80 Taxman 89.
3. In all these cases, the assessees had claimed/offered long-term capital gains on sale of shares of various listed companies, which were all accepted by the Assessing Officer in the respective assessments. Thereafter, on account of search, proceedings were initiated under section 153A of the Act. For easy reference, we may take the facts in Income-tax Appeal No. 41 of 2010. It is agreed between the parties that the decision in Income-tax Appeal No. 41 of 2010 will apply to all the remaining 42 appeals.
4. In Income-tax Appeal No. 41 of 2010, the respondent-assessee had purchased 30,000 shares of M/s. Authentic Investments and Finance Ltd. on April 8, 1999, at the rate of Rs. 0.98 per share. These shares were claimed to have been sold on July 7, 2000, July 14, 2000 and July 21, 2000, at an average value of Rs. 33.81 per share. In the assessment year in question, the assessee offered to tax the capital gains arising from the sale of the above shares, amounting to Rs. 9,84,909 as a long-term capital gain. The same were accepted.
5. Subsequently, on January 20, 2005, there was a search action in the case of various assessees belonging to a group known as Haldiram group. It appears that on March 30, 2005, the group offered additional income of Rs. 2 crores, out of which Rs. 3 lakhs were offered in the hands of the assessee in Income-tax Appeal No. 41 of 2010 for the assessment year 2004-05 and Rs. 7 lakhs in the assessment year 2005-06.
6. The Assessing Officer on the basis of the seized material issued notice under section 153A of the Income-tax Act, 1961, for the assessment year 2001-02 and subsequently passed an assessment order under section 153A read with section 143(3) of the Income-tax Act, 1961, on December 20, 2006, wherein the Assessing Officer computed the total income by disallowing the long-term capital gain and added the entire sale proceeds received on sale of shares amounting to Rs. 10,14,324 as income from undisclosed sources under section 68 of the Income-tax Act, 1961.
7. On appeal filed by the assessee, the Commissioner of Income-tax (Appeals) by his order dated April 19, 2007, held that section 68 of the Act is not applicable to the facts of the present case and accordingly deleted the addition by following his decision in the case of Kamal Kumar Agrawal for the assessment year 2002-03.
8. On further appeal filed by the Revenue, the Income-tax Appellate Tribunal by a common order dated July 24, 2009, dismissed all the 70 appeals filed by the Revenue, the lead matter being the appeal against Kamal Kumar Agrawal (individual). Challenging the aforesaid order of the Income-tax Appellate Tribunal, dated July 24, 2009, these 43 appeals have been filed by the Revenue and no appeals have been filed in the remaining cases. It is pertinent to note that the Revenue has accepted the decision of the Tribunal in the case of Kamal Kumar Agrawal (individual), which is the lead matter.
9. The sole contention raised by the Revenue in these appeals is that the entire long-term capital gains claimed by the assessee represent undisclosed income of the assessee because:
(a) most of the sales of the shares effected by the group are of the same companies and through the same brokers located at Calcutta,
(b) Pradeep Kumar Daga, the principal broker has confirmed that the transactions with the Haldiram group are sham and explained-the modus operandi as follows:
“Party A wants to claim LTCG and approaches me through a person X. Mr. X approaches me with two names, i.e, the buyer (A) and the seller (B). Mr. A buys the share of the 29 company held by the seller B at Rs. 3 through my terminal. After 365 days or one year when the share of the company has reached high of Rs. 100, Mr. X approaches me through Mr. A with the name fresh purchaser Mr. C, who is willing to buy the shares of Mr. A at Rs. 100. Mr. A (who was previously the purchaser and wants to avail of LTCG now) becomes the seller and sells his shares at Rs. 100 to Mr. C through my terminal. Mr. C gives me a cheque of Rs. 100 for the shares bought from Mr. A and subsequently I pay the sale proceeds in cheque/DD to Mr. A after deducting my brokerage. Subsequently, Mr. A on receipt of the sale proceeds by cheques/DD pays Mr. X, the same proceeds by cheques/DD pays Mr. X the same amount by cash (No. 2 account), i.e, Rs. 100 and Mr. X pays the same to Mr. C. In this way, Mr. A converts the black money into white and avails of long-term capital gain.”
(c) The sale transactions were off-market transactions and the Calcutta Stock Exchange by its letter dated May 26, 2005, has confirmed that quite a few of the transactions carried out by Shri Pradeep Kumar Daga were not borne on the records of the exchange and that the details noted on some of the other contract notes did not match.
(d) There were unexplained cash credits in some of the buyer's bank accounts prior to issuance of cheques to the assessees.
10. We see no merit in the above contentions. The fact that the assessees in the group have purchased and sold shares of similar companies through the same broker cannot be a ground to hold that the transactions are sham and bogus, especially when documentary evidence was produced to establish the genuineness of the claim.
11. From the documents produced before us, which were also in the possession of the Assessing Officer, it is seen that the shares in question were in fact purchased by the assessees on the respective dates and the company has confirmed to have handed over the shares purchased by the assessees. Similarly, the sale of the shares to the respective buyers is also established by producing documentary evidence. It is true that some of the transactions were off-market transactions. However, the purchase and sale price of the shares declared by the assessees were in, conformity with the market rates prevailing on the respective dates as is seen from the documents furnished by the assessees. Therefore, the fact, that some of the transactions were off-market transactions cannot be a ground to treat the transactions as sham transactions.
12. The statement of Pradeep Kumar Daga that the transactions with the Haldiram group were bogus has been demonstrated to be wrong by producing documentary evidence to the effect that the shares sold by the assessees were in consonance with the market price. On a perusal of those documentary evidence, the Tribunal has arrived at a finding of fact that the transactions were genuine. Nothing is brought to our notice that the findings recorded by the Tribunal are contrary to the documentary evidence on record.
13. The Tribunal has further recorded a finding of fact that the cash credits in the bank accounts of some of the buyers of shares cannot be linked to the assessees. Moreover, in the light of the documentary evidence adduced to show that the shares purchased and sold by the assessees were in conformity with the market price, the Tribunal recorded a finding of fact that the cash credits in the buyers' bank accounts cannot be attributed to the assessees. No fault can be found with the above finding recorded by the Tribunal. Reliance placed by the counsel for the Revenue on the decision of the apex court in the case of Sumati Dayal, [1995] 214 ITR 801 is wholly misplaced. In that case, the assessee therein had claimed income from horse races and the finding of fact recorded was that the assessee therein had not participated in races, but purchased winning tickets after the race with the unaccounted money. In the present case, the documentary evidence clearly shows that the transactions were at the rate prevailing in the stock market and there was no question of introducing unaccounted money by the assessees. Thus, the decision relied upon by the counsel for the Revenue is wholly distinguishable on the facts.
14. For all the aforesaid reasons, we hold that the decision of the Tribunal is based on findings of fact. No substantial question of law arises from the order of the Tribunal. Accordingly, all these appeals are dismissed. No order as to costs.