2010 (11) TMI 969 - AT - Income Tax

Summary

Issues involved: The judgment deals with the issue of treating profit on the sale of shares as short term capital gains instead of unexplained credits on the assessee's unaccounted income introduced in books of account.

Summary:

1. Background: The appeals by the Revenue arose from the order of the Commissioner of Income-tax (Appeals)-II, Surat regarding the assessment year 2005-06 u/s 143(3) of the Income Tax Act, 1961.

2. Common Issue: The common issue in the appeals was the treatment of profit on the sale of shares as short term capital gains instead of unexplained credits on the assessee's unaccounted income introduced in books of account.

3. Assessing Officer's Decision: The Assessing Officer treated the share transactions as unexplained credits u/s 68 of the Act, while the assessee declared short term capital gains on the shares of SLL. The AO found discrepancies in the documentation provided by the assessee regarding the purchase and sale transactions of shares of SLL.

4. CIT(A) Decision: The CIT(A) directed the AO to treat the profit on the sale of shares as short term capital gains, stating that the transactions were confirmed and supported by the broker and the selling agent. The Revenue appealed to the Tribunal.

5. Arguments: The Revenue argued that the purchase of shares was not confirmed by the broker and relevant documents were not provided by the assessee. The assessee claimed that all conditions for STCG under Section 111A were satisfied.

6. Tribunal's Decision: The Tribunal found discrepancies in the documentation and directed the issue to be re-verified by the Assessing Officer for both the assessee and the assessee's wife, as the facts were identical. The appeals by the Revenue were allowed for statistical purposes.

7. Conclusion: The Tribunal set aside the decision and directed re-verification by the Assessing Officer due to discrepancies in documentation and lack of confirmation regarding the purchase and sale transactions of shares of SLL.

This summary provides a detailed overview of the judgment, highlighting the key issues, decisions, and arguments presented in the case.