2012 (6) TMI 807 - AT - Income Tax

LTCG - Income from other sources - Held that - As the assessee has proved the genuineness of the share transactions and there is no justification to disallow the claim of the assessee in respect of the long-term capital gain. Accordingly, direct the A.O. to allow the same.

Summary

Issues:
Challenging impugned orders of Ld. CIT (A)-32, Mumbai dated 08.12.2011 for A.Y. 2003-04 regarding treatment of Long Term Capital Gain as Income from Other sources.

Analysis:
1. Issue 1 - Challenging CIT (A) Order:
- Two appeals filed by different assessees challenging the orders of Ld. CIT (A)-32, Mumbai for A.Y. 2003-04.
- Smt. Durgadevi Mundra's appeal (ITA No. 1175/M/2012) involved the treatment of Long Term Capital Gain as Income from Other sources.
- The A.O. disallowed the capital gain claimed by the assessee due to alleged involvement in a shares scam exposed by Shri Mukesh Chokshi.
- The assessee provided bills and proofs for share transactions, similar to cases considered by the Tribunal previously.
- The ITAT 'C' Bench, Mumbai's decision in Chandrakant Babulal Shah's case was cited, where the Tribunal accepted the genuineness of share transactions based on documentary evidence provided by the assessee.
- The Tribunal found no justification to disallow the claim of long-term capital gain and directed the A.O. to allow it, thus partially allowing the appeal.

2. Issue 2 - Identical Case of Shri Mahesh Mundra:
- Shri Mahesh Mundra's appeal (ITA No. 1176/M/2012) also challenged the treatment of Long Term Capital Gain as Income from Other sources for A.Y. 2003-04.
- The facts and circumstances of this case were identical to Smt. Durgadevi Mundra's case, involving the sale of shares through M/s. Goldstar Finvest Pvt. Ltd. and investigation against Shri Mukesh Chokshi.
- Following the decision in Smt. Durgadevi Mundra's case, the Tribunal allowed ground no. 2 in this appeal as well, directing the A.O. to assess the long-term capital gain declared by the assessee as such and accept it.

3. Conclusion:
- Both appeals were allowed, and the orders of Ld. CIT (A)-32, Mumbai were challenged successfully regarding the treatment of Long Term Capital Gain as Income from Other sources for A.Y. 2003-04.
- The Tribunal emphasized the importance of documentary evidence and previous Tribunal decisions in determining the genuineness of share transactions, leading to the acceptance of the assessee's claims in both cases.