COMMISSIONER OF INCOME TAX Vs. ANUPAM KAPOOR

JUDGEMENT

(1.) 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

(3.) 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. v. : [1962]45ITR206(SC) , M.O. Thomakutty v. : [1958]34ITR501(Ker) and Mukand Singh v. 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. v. : [1959]37ITR271(SC) .