ORDER
Rambahadur, J.M.
This appeal, preferred by the revenue, is directed against Commissioner (Appeals)’s order dated 30-12-2003 relating to assessment year 1996-97.
2. Reproduced below are the ground of appeal raised by the revenue :
“On the facts and circumstances of the case, whether the Commissioner (Appeals) was right in law :
“in deleting the addition of Rs. 2,69,500 made under section 68 of the Income Tax Act, 1961 being unexplained credits in assessed’s bank account.”
3. Facts of the case, in brief, are that the assessment in this case was completed by the assessing officer under section 143(3) read with section 147 of the Income Tax Act. The said assessment was reopened on receipt of intimation from the DDI (Inv.) stating that the long-term capital gain declared by the assessed was false and that the transaction was not genuine and a cheque had been taken by the beneficiary, i.e., the assessed by paying cash amount equivalent to the cheque amount and the premium thereon. The assessing officer recorded reasons and issued notice under section 148 of the Act. The assessed filed return in response to the notice declaring the same income as declared in the original return. During the course of reassessment proceedings the assessed submitted his reply and furnished various evidences in support of his claim of long-term capital gain. However, the assessing officer held that the assessed had failed to lead evidences to support the claim of long-term capital gain. The reasons for reaching such conclusion by the assessing officer are as under :
(a) The statement recorded by the DDI (Inv.) of Mr. Shankar Harish Maheshwari and Mr. Praveen Mittal;
(b) The assessed did not furnish the address of the said company;
(c) The assessed could not adduce evidence in support of his claim of purchase of shares;
(d) The assessed failed to adduce any evidence regarding transfer of shares in his name;
(e) The assessed has failed to even furnish the name and address of the person to whom the shares were sold.
4. On the basis of above, an inference was drawn by the assessing officer that the reported transaction of shares was not genuine and it was only a paper transaction. On the basis of above inference, the amount credited in the bank account of the assessed of Rs. 2,69,500 was considered as unexplained credit and the same was added in the income.
5. The assessed carried the matter before the Commissioner (Appeals). The Commissioner (Appeals) vide his order dated 30-12-2003, deleted the addition and the Commissioner (Appeals) held that the assessing officer has not discharged his onus. There is no material or evidence with the assessing officer to come to the conclusion that the transaction shown by the assessed was a bogus transaction. The Commissioner (Appeals) held that the mere fact that the company was not available at the given address cannot conclusively prove that the company was non-existent. Further, Shri Praveen Mittal was a witness of the assessing officer and as such onus was upon him and non-compliance of Shri Praveen Mittal to the summons issued by the assessing officer could not be held against the assessed. The assessed had placed before the assessing officer all necessary bills and evidence to establish the transaction. It was incumbent upon the assessing officer to prove that the material and evidence relied upon by the appellant was bogus. The mere reliance on the statement of the third parties who were never examined by the assessing officer could not be held to be sufficient to come to a finding that the long-term capital gain shown by the assessed was representing undisclosed income of the appellant. In this case the assessing officer has not brought any evidence which can remotely suggest that the material placed before him by the assessed was unreliable, suffered from defects and were inconsistent. On the basis of above findings the Commissioner (Appeals) deleted the addition.
Aggrieved, the revenue is in appeal before the Tribunal.
6. The learned Departmental Representative argued that the Commissioner (Appeals) was not justified in deleting, the addition by shifting the onus on the assessing officer. The argument of the learned Departmental Representative is that it was the claim of the assessed and as such onus was upon him and the Commissioner (Appeals) was not justified in shifting the onus.
7. On the other hand, the learned Authorised Representative has defended the order of the Commissioner (Appeals). He argued that the assessed has discharged his onus by filing all necessary evidence in support of his claim. He has drawn the attention to the various documents before the assessing officer as well as the Commissioner (Appeals) which include purchase contract note, contract note for sales, distinctive numbers of shares purchased and sold, copy of share certificates and the quotation of the shares on the date of purchase and sale. It has been further argued that on all these documents the name and address of each person involved in the transaction, have been stated. The purchase of the shares was made on 2-3-1994, i.e., assessment year 1994-95. The said assessment has been accepted by the department and as such there is no challenge to the purchase of shares. As regards sale of shares, the same has been sold on 27-3-1995. The shares have been sold through a broker who is a registered member of the stock exchange and at the period (price) prevalent on that day. These documents were submitted before the assessing officer and nothing adverse has been said about these documents in the assessment order. The assessing officer has merely relied upon the statement of third parties which was recorded by the assessing officer himself. Moreover, that statement does not directly implicate the assessed. It has been argued that the said statement could not be made the basis for assessment. In support, reliance has been placed on the ratio of decision of Hon’ble Gauhati High Court in the case of Eveready Industries India Ltd. v. Jt. CIncome Tax (2000) 243 Income TaxR 540 (Gau) and Jt. CIncome Tax v. George Williamson (Assam) Ltd. (2003) 181 CTR (Gau) 69. The learned counsel informed that the sale proceeds have been duly accounted for in the account of the appellant and has been received through account payee cheque. That the statements of Mr. Maheshwari and Mr. Mittal did not at any point of time refer to the assessed having not entered into any transaction. According to learned counsel, the assessing officer came to the conclusion entirely on the report of the Deputy Director of Income Tax without making any independent inquiry as is apparent from the assessment order. It was further pointed out that the contention of the assessing officer that the purchases had not been proved is incorrect as the necessary balance sheets had been filed with the return of income of earlier years and the copy of the balance sheets, the purchase bills and the source of funds for purchases were placed before the assessing officer. The assessing officer has not made any comment regarding these documents and no effort was made by him to cross-verify the evidence from the concerned company. The failure to cross-verify cannot lead to a conclusion that the transaction was not entered into. The assessed was a shareholder of the company. He was neither a director nor was he in control of this company. He was simply an investor, having purchased shares in the year 1993 and sold the same in 1995. It is none of his business and onus to keep track of each of the companies in which investment has been made. There is no material and evidence on record to support the allegation of the assessing officer that the investment made in the company and the company in which investment was made was not genuine. The contention of the assessing officer that the company was not traceable is factually incorrect in as much as the company was a registered company with the Registrar of Companies. The shareholder cannot enforce the attendance of the company in which investment has been made in the capacity of a shareholder. As regards the statement of Mr. Praveen Mittal, the learned Authorised Representative argued that Mr. Praveen Mittal was not the witness of the appellant but was that of the revenue. His non-appearance in the assessment proceedings cannot be interpreted against the appellant. On the contrary, it was the onus of the assessing officer to enforce the attendance of Mr. Praveen Mittal and the absence of appearance of Mr. Praveen Mittal in the assessment proceedings and without giving opportunity of cross-examination of Mr. Praveen Mittal the statement made by him before a person who is not the assessing officer cannot be relied upon. The learned Authorised Representative vehemently argued that it is an allegation of the revenue on the basis of which the assessment has been reopened and it is for the revenue to bring evidence on record to support the allegation. To conclude, the learned counsel supported the order of Commissioner (Appeals) and said that the deletion has been rightly made.
8. I have gone through the arguments of the learned Departmental Representative as well as the learned counsel for the assessed and the material placed before me. The assessed has sold investment made in shares. Necessary details as called for have been filed. On going through the assessment order it is observed that nothing wrong or incorrect in the documents and information submitted by the assessed was found. The assessed has made sale of shares and has received payment in the normal course by account payee cheque. The assessing officer in this case is placing reliance on the statement of two persons who themselves have admitted that they are engaged in dubious business. Credence has been given to the statement of the persons having dubious dealings by their own admission over and above the statement of the assessed who has furnished all documents to support his claim. The assessing officer, it appears, has made out a presumption that the assessed has paid cash and purchased the cheque, but no material has been brought on record to substantiate this allegation. This is a fact that the assessed was simply a shareholder of the company. He has made investment in the company in which he was neither a director nor was he in control of the company. He has made investment in shares of which necessary evidence have been filed. Purchase of shares in the assessment year 1993-94 have been reflected by the assessed and also accepted by the revenue. The sale of shares is through a broker. The rate at which the shares were purchased and sold is also not in dispute. The payment has been received through account payee cheque. All these facts are borne on record and accordingly the assessed has discharged his onus. On the other hand, the assessing officer has not brought any material in support of his allegation that the transaction was not genuine. The mere reliance on the statement of third parties who were never examined by the assessing officer himself cannot be held to be sufficient to come to the finding that the transaction was not genuine and moreso when there are other material and evidence to support the transaction. It is settled law that suspicion howsoever strong cannot take the place of legal proof as has been held by the Hon’ble Supreme Court in the case of Uma Charan Shaw & Ors. v. Income Tax (1959) 37 Income Tax 271 (SC). In this case, the assessing officer has not brought any evidence which can even remotely suggest that the material placed before him was unreliable, suffered from defects or were inconsistent. The learned Departmental Representative also could not point out any infirmity in the findings given by the Commissioner (Appeals) as well as the documents and evidence filed in support of the transaction. Accordingly, I do not find any scope to interfere in the findings of the learned Commissioner (Appeals), deleting the addition of Rs. 2,69,500.
9. In the result, revenue’s appeal stands dismissed.