2015 (7) TMI 637 - AT - Income Tax

Assessment of Long term capital gain as income from other sources - Held that - Evidences furnished by the assessee with regard to the purchase and sale of shares of M/s Robinson Worldwide Trade Ltd. should have been discreetly examined and then a holistic view of the matter should have been taken by the tax authorities. The Tribunal in the said case has restored the matter for fresh examination to the assessing officer. The Tribunal has also directed the AO to take into account the decision rendered by the co-ordinate bench in the case of Shri Arvind M Kariya 2011 (12) TMI 509 - ITAT MUMBAI . Thus we set aside the order of Ld CIT(A) and restore all the issues to the file of the AO to decide the same a fresh - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Assessment of Long term capital gain as income from other sources.

Analysis:
The appellant challenged the decision of the Ld CIT(A) confirming the assessment of Long term capital gain as income from other sources. The appellant declared Long term Capital gain (LTCG) on the sale of shares and claimed it as exempt. However, during search operations, it was revealed that the shares were purchased through a broker who admitted to providing only accommodation bills without actual share purchase. The assessing officer proposed to assess the LTCG as the appellant's income. The appellant requested cross-examination of the broker's director, who confirmed providing accommodation bills but denied actual share purchase. The AO concluded the transactions were sham, assessing the LTCG as income from other sources. The Ld CIT(A) upheld the additions, stating the appellant failed to prove the transactions' genuineness under Section 68 of the Act.

The tax authorities relied solely on the broker's director's statement to conclude the transactions were bogus. The appellant argued that the purchases were genuine, evidenced by the time gap between purchase and sale, return filings, and share dematerialization. The appellant cited a tribunal decision supporting the genuineness of similar share transactions. The Ld D.R supported the tax authorities' orders. The appellant submitted various documents, including tax returns, broker notes, dematerialization details, and bank statements, which the tax authorities failed to examine. The tribunal noted the authorities' reliance on the broker's statement without scrutinizing the appellant's evidence. It deemed improper to draw adverse inferences solely based on the broker's statement, emphasizing the need for a holistic examination of the evidence. The tribunal set aside the Ld CIT(A)'s order, directing a fresh examination by the assessing officer, considering the appellant's evidence and the tribunal's precedent.

In conclusion, the tribunal allowed the appeal for statistical purposes, emphasizing the necessity for a thorough examination of the appellant's evidence and a holistic view of the matter by the assessing officer. The decision was pronounced on 8th April 2015.