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For Appellant(s) Mr.T.Ravi Kumar in all TCAs : Senior Standing Counsel For Respondent(s) Mr.Srinath Sridevan, in all TCAs and Senior Counsel petitioners in all WPs: for Mr.Bhagawath Krishnan For Respondents in all Mr.B.Ramanakumar WPs: Senior Standing Counsel and Mr.Avinash Krishnan Ravi Junior Standing Counsel COMMON JUDGMENT THE CHIEF JUSTICE Since all these Tax Case Appeals filed by the Revenue and the writ petitions filed by the assessees arise out of a common and inter- connected set of facts, they were heard together and are disposed of by this common judgment.

2. As the disposal of T.C.A.Nos.714 and 721 of 2018 will have a bearing on the outcome of the other cases, they are taken up as lead cases for disposal of this batch.

3.1. T.C.A.No.714 of 2018 has been filed by the Revenue against the order dated 28.02.2018 passed by the Income Tax Appellate Tribunal, Madras "C" Bench [for brevity, "the Tribunal"] in I.T.A.No.1787/Chny/2017, whereby the Tribunal allowed the appeal of the assessee, Sohanraj Uttamchand, and directed deletion of the addition of Rs.32,90,96,125/- made by the Assessing Officer under Section 68 of the Income-tax Act, 1961 [for brevity, "the Act"], and further directed that the gain arising from the sale of shares of PFL Infotech Limited be treated as Long Term Capital Gain exempt under Section 10(38) of the Act.

3.2. T.C.A.No.721 of 2018 has been filed by the Revenue against the connected order dated 14.03.2018 passed by the very same Bench of the Tribunal in I.T.A. No.1786/Chny/2017, whereby the Tribunal allowed the appeal of Sohanraj Praveen Kumar, the brother of the assessee in the first appeal, and similarly directed deletion of the addition of Rs.38,05,28,491/- made under Section 68 of the Act, holding the gain on sale of shares of Risa International Limited to be exempt Long Term Capital Gain under Section 10(38) of the Act. 4. Both appeals were admitted on identical substantial questions of law, which read as under:

"1. Whether the Tribunal was right in deleting the addition of Rs.32,90,96,125/- [in T.C.A.No.714 of 2018] and Rs.38,05,28,491/- [in T.C.A.No.721 of 2018] made under Section 68 of the Act, especially when there is no evidence on record to support the stand of the assessee?

2. Whether the Tribunal ought to have applied the decision of the Supreme Court in the case of CIT v. Durga Prasad More, (1971) 82 ITR 540 and that of Sumathi Dayal v. CIT, (1995) 214 ITR 801, wherein the test of human probabilities were to be considered and applied especially in the absence of any evidence?"

FACTS GIVING RISE TO THE APPEALS:

5.1. In T.C.A.No.714 of 2018, the respondent/assessee, who is engaged in the business of property development and investment, filed his return of income for the Assessment Year 2014-15 admitting total income of Rs.11,88,22,830/-. During scrutiny assessment under

Section 143(3) of the Act, the Assessing Officer noticed that the assessee had sold 7,72,000 shares of PFL Infotech Limited for a sale consideration of Rs.34,68,10,572/-, resulting in Long Term Capital Gain of Rs.32,90,96,125/-, which was claimed as exempt under Section 10(38) of the Act.

5.2. A survey under Section 133A of the Act was conducted at the business premises of the assessee on 19.07.2016, based on market intelligence regarding alleged manipulation of the price of shares of PFL Infotech Limited and a suspected "pump and dump" operation. The Assessing Officer, upon analysis, concluded that: (i) the company had no worthwhile credentials or financial standing; (ii) the price of the share rose from Rs.22.38 to Rs.760/- without any corresponding fundamentals; (iii) the assessee lacked prior experience in share trading; (iv) the purchase was made on the strength of an undisclosed "tip"; (v) certain purchasers of the shares, upon enquiry, gave contradictory statements; and (vi) the entire transaction bore the hallmark of an accommodation entry designed to convert unaccou