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TMI Blog2011 (11) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 24.02.2003 having value of USD 50,000 each from Shri Chhajer Keshari Chand a NRI who had availed this scheme formulated by State Bank of India and gifted the said bonds to assessee on 24.2.2003 by making endorsement on the back of the certificate itself. However, while dong the scrutiny assessment Assessing Officer is of the view that there was no valid gift, the proforma on the reverse side of the bond signed by Shri Chhajed on 24.02.2003 was general in nature and that which had not specifically stated that bonds were gifted without any consideration by Shri K.C.Chhajed. Shri Chhajed was only a casual acquaintance with assessee. Therefore he made an addition of Rs.68,66,377/- u/s 68 as unexplained credit. 3.1. On appeal ld. CIT(A) has deleted the same by observing that: (10) I have considered the submission of the appellant as well as the reasons given by the A.O. for making addition of Rs.68,66,377/- u/s. 68 of the I.T. Act. I have taken into consideration the documents filed by the appellant and the case laws relied upon by him. I have also gone through the assessment records. During the relevant previous year, the appellant has credited an amount of Rs.68, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITIONS" of the scheme of IMD are mentioned. With regard to terms and conditions of gifts/transfers, on the certificate, it is mentioned as under: "The Certificate can be gifted by NRIs (except minors)/OCB/Banks acting in fiduciary capacity on behalf of NRIs/OCBs, once only, to any person resident in India or to any Charitable Trusts recognized under the Income Tax Act, 1961 in India. All benefits under the IMDs will pass on to the donee as well, including the facility for pre-mature encashment, except that resident donees will not be eligible to transfer the certificate. The certificate is transferable between NRIs/OCBS/Banks acting in fiduciary capacity on behalf of NRIs/OCBs by endorsement and delivery. The certificate is also transferable by endorsement and delivery by NRIs/OCBs/Bank acting in fiduciary capacity on behalf of NRIs/OCBs to a Resident Indian/Charitable Trust in India through gift only. The gift/transfer will need to be registered with SBI, NRI Branch, Mumbal on payment of Service Fees prescribed for this purpose and on submitting a statement by the parties in the prescribed form. Such a fee will be USD 10 or Rs.500/- per IMD Certificate by way of Bank braft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t transaction was a colourable transaction arranged with the motive of bringing into the accounts the unaccounted cash in the garb of gift. However, there is no material on record to prove that the gift was a colourable transaction, thereby introducing the unaccounted income into the books of accounts. Merely for the reasons that the appellant could not give the reply of certain questions to the satisfaction of the A.O, it cannot be concluded that the gift transaction was a colourable transaction. The appellant has filed a number of documentary evidences before the A.O to prove the gift transactions, however, the A.O. has not brought anything positive on record to draw the inference that the claim of the appellant was not genuine and the appellant has introduced his own unaccounted income into the books in the garb of gift. In my opinion, the suspicion cannot replace the real evidentiary documents. From the documents filed by the appellant it is apparent that the donor Shri Keshari Chand Chhajer had purchased the IMD Bonds on 29.12.2000 and the date of repayment was 29.12.2005. The said bonds were gifted by Shri Chhajer to the appellant on 24.2.2003. Since the redemption date was o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chand Chhajer made on the reverse side of the certificates is a sufficient proof to the fact that assessee has received the same on 24.02.2003 as a gift and the ld. CIT(A) has rightly analysed the facts and by relying on the decisions of Hon'ble Allahabad High Court deleted the additions. It is further observed that AO has brought no evidence on record to show that the deposit in the bank account was the income from other sources of assessee for the year under consideration. Therefore we are of the view that no interference is required on this issue. 7. In the result ground no.1 of the revenue's appeal is dismissed. 8. The second issue raised by the Revenue in this appeal is relating to deletion of addition of Rs.20,82,170/- as unexplained credit u/s 68. 9. The brief facts of the case are that while doing the scrutiny assessment the AO noticed that the details of Long Term Capital Gains were submitted by assessee along with the return which are as under:- Purchase Sale Company' Name Date Rate Amount Qnty. Date Rate Amount Profit Poonam phar 25.3.03 7.02 24,570/- 3500 16.8.05 302.8694 1060,042.90 1,035,472.90 Poonam Phar 25.3.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital Gain and claimed the exemption u/s. 10(38) of the I.T.Act. However, the A.O. has treated the gain on sale of shares as unexplained cash credit u/s. 68 of the I.T. Act in the hands of the assessee. On perusal of documents filed by the appellant, it is observed from the balance-sheet as on 31.3.2003 that the appellant has shown investment in the shares of Poonam Pharma totalling to 6700 shares purchased on 25.3.2003. As per the Demat account maintained with Depository Participant M/s. Daulat Securities Ltd., the said 6700 shares were credited in the de-mat account of the appellant. These shares were also reflected in the balance sheet as on 31.3.2004 and 31.3. 2005. Thus, it is observed from the balance sheet as well as de-mat account that as on 3 1.3.2005, the appellant was holding 6700 shares of Poonam Pharma. During the relevant previous year, i.e., A.Y. 2006-07, the appellant had sold 6700 shares of Poonam Pharma Ltd. The shares so sold by the appellant has been debited in the demat account of the appellant and he has received the sale proceeds by cheque from the said broker. (20) The A.O. has not accepted the claim of the appellant merely on the basis of information receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also a genuine transaction, and it cannot be said that if the share transactions has not been routed through the Stock Exchange, the transactions were not genuine. There is also no evidence to suggest that the appellant has introduced his own money in the books of account in the garb of Long Term Capital Gains. The suspicion cannot replace the real evidential documents. The A.O. has made addition of Rs.20,82,170/- u/s. 68 of the Act. The amount of Rs.20,82,170/- is the net gain on sale of shares shown by the appellant. It means that A.O. has not made addition u/s. 68 of the entire sale proceeds of the shares, but has deducted the purchase price of shares at Rs.47,034/-, which is contrary to the conclusion derived by him. Under the circumstances, I am of the opinion that the A.O. was not justified in treating the Long Term Capital Gains as unexplained cash credit u/s. 68 of the I.T. Act. During the course of appellate proceedings, the appellant has relied on several decisions of Hon'ble I.T.A.T., Kolkata on the similar issue. 9.4. Aggrieved by this revenue is in appeal before us. 10. At the time of hearing the ld. DR appearing on behalf of the revenue heavily relied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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