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Sl. No. Name of the Donor             Date of Gift       No. of shares Date                   of
                                                         gifted             acquisition       of
                                                                            the shares by
                                                                            the Donee
1        Ms. Pushpa Singh             24.09.2009         15,000             30.03.2003
         Bano       Manzil   Road,
         Ranchi, Jharkhand
         PAN: AGJPS 5134 L
2        M/s.    Manish      Kumar 08.09.2009            50,000             26.03.2003
         Agarwal (HUF)
         Karta    Manish     Kumar
         Agarwal,          Jokhiram
         Market, Upper Bazar,
         Ranchi-834001,
         Jharkhand






                                                                             Shaleen Khemani
                                                                     I.T.A. No. 1945/Kol/2014
                                                                    Assessment Year: 2010-11

d) Photocopy of bank statements and all relevant share ledgers wherein the transaction is fully reflected;

e) Complete Demat account of the assessee as maintained with the SEBI registered depository participant i.e DP namely IDBI Bank Limited, DP ID No. IN300450.

3.3. The ld AO sought to examine the veracity of the long term capital gains exemption claimed by the assessee with respect to sale of shares of SOICL. The ld AO issued notices u/s 133(6) of the Act to various parties including the donors, the stock brokers as Shaleen Khemani I.T.A. No. 1945/Kol/2014 Assessment Year: 2010-11 well as depository participant and collected full information with respect to the transaction. All the parties responded to the said statutory notices by giving proper replies before the ld AO. The ld AO observed that during the financial year 2009-10, the BSE Sensex was 9901 as on 1.4.2009 and 17527 on 31.3.2010 registering a growth of 77% in the Sensex. The ld AO observed that the shares sold by the assessee had registered a growth of 200 times which in his opinion , could not be believed . The ld AO in order to examine the Donors of the Shares gifted to the assessee issued notices to the said parties. The Donors replied to the notice issued u/s 133(6) of the IT Act 1961 and confirmed the transaction of gift however the AO found the reply not satisfactory.

8.1. The ld AR submitted that the 65,000 shares of SOICL was purchased by the Donor in the year 31-03-2003 and the shares were then gifted to the assessee. Thus the purchase of shares was made in the FY 2003-04 which was around 7 years prior to the Shaleen Khemani I.T.A. No. 1945/Kol/2014 Assessment Year: 2010-11 sale of shares by the assessee and there was no addition made in the hands of the Donors of the Shares since the date of the purchase of the shares by the Department and the purchase and the gift of the shares in the hands of the donors were accepted by the department. The ld AR submitted that the evidences and documents furnished by the assessee were neither found to be false nor fabricated. The ld AR submitted that the ld AO doubted the genuineness of the sale transactions only the basis of presumption and summarizes The AO has not brought on record any adverse finding against the assessee, the donors, and the stock brokers by the Investigation Department of the Income Tax Department and or SEBI. It was submitted that the ld AO disallowed the assessee's claim of LTCG on sale of shares of SOICL on suspicion and presumptions alone. It was submitted that the lower authorities have not brought any material or evidence on record to falsify the claim of the assessee or to hold that the share transactions were bogus.

9. We have heard both the rival submissions and perused the materials available on record. We find lot of force in the arguments of the ld AR that the ld AO was not Shaleen Khemani I.T.A. No. 1945/Kol/2014 Assessment Year: 2010-11 justified in rejecting the claim of the assessee on the basis of theory of surrounding circumstances, human conduct, and preponderance of probability without bringing on record any legal evidence against the assessee. We rely on the judgement of Special Bench of Mumbai Tribunal in the case of GTC Industries Ltd. (supra) for this proposition. The various facets of the arguments of the ld AR supra, with regard to impleading the assessee for drawing adverse inferences which remain unproved based on the evidences available on record, are not reiterated for the sake of brevity. The principles laid down in various case laws relied upon by the ld AR are also not reiterated for the sake of brevity. We find that the shares were donated to the assessee by two Donors. Mr Manish Kumar Agarwal gifted 50,000 shares and Mrs Pushpa Singh gifted 15,000 shares. We find that Sri Manish Kumar Agarwal was assessed to tax under PAN AAHM9530L and had filed his return of income for the AY 2010-2011 (which is available in page 31 of paper book) the said Donor had vide his Gift Deed which was duly affirmed before the Notary Public declared (which are available in pages 27-28 of paper book) that the shares were gifted by him to the Donor and also that the shares were held by him since 26-03-2003 and these shares were held in his demat account no. 10079366 DP ID No. IN 301740. We also find that the said donor replied to the notice issued u/s 133(6) of the IT Act 1961 on 18-03-2013 to the ld AO ( which is available in page 33 of paper book), the Donor confirmed the fact of making the gift and delivering the shares by transfer to the Demat Account of the assessee. The copy of the demat account of the Donor is also available in Page 34 of the Paper Book which shows that the Donor was holding 100,000 shares of SOCIL as on 31-03-2006. We similarly find that the other Donor Mrs Pushpa Singh who had gifted 15,000 shares was assessed to tax under PAN AGJPS5134L and had filed her return of income for the AY 2010-2011 (which is available in page 32 of paper book) , the said Donor had vide her Gift Deed which was duly affirmed before the Notary Public declared (which are available in pages 29-30 of paper book) that the shares were gifted by her to the Donor and also that Shaleen Khemani I.T.A. No. 1945/Kol/2014 Assessment Year: 2010-11 the shares were held by her since 30-03-2003 and these shares were held in his demat account no. 10046924 DP ID No. IN 301740. We also find that the said donor replied to the notice issued u/s 133(6) of the IT Act 1961 on 09-03-2013 to the ld AO ( which is available in page 35 of paper book), the Donor confirmed the fact of making the gift and delivering the shares by transfer to the Demat Account of the assessee. The copy of the demat account of the Donor are also available in Pages 38-39 of the Paper Book which shows that the Donor was holding 40,000 shares of SOCIL as on 31-03-2006. Thus the assessee has substantiated and the Donors have duly confirmed the transaction of gift, therefore the ld AO was not justified in doubting the gift of shares made to the assessee.