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TMI Blog2015 (3) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... ted into Jumbo Certificates vide communication dated 16.02.2004 and thereafter, there was de-materialization of the shares on 26.07.2004. In the entirety of the above said facts and circumstances, we hold that the gain arising on transfer of shares is to be assessed as income from long term capital gain in the hands of the assessee. - Decided in favour of assessee. No merit in the levy of penalty under section 271(1)(c) of the Act and the same is deleted. - Decided in favour of assessee. - ITA No.2008/PN/2012, ITA No.372/PN/2014 - - - Dated:- 18-3-2015 - Shri G.S. Pannu And Ms Sushma Chowla JJ. For the Appellant : S/Shri Sunil Ganoo K.N. Bora For the Respondent : Shri Rajesh Damor ORDER Per Sushma Chowla, JM: Both the appeals filed by the assessee are against separate orders of CIT(A)-II, Pune dated 11.05.2012 and 19.07.2010 relating to assessment year 2005-06 passed under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 and penalty levied under section 271(1)(c) of the Income-tax Act, 1961. 2. Both the appeals relating to the same assessee were heard together and are being disposed of by this consolidated order for the sake of convenience ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived in the office. After the demise of her husband, she claims to be in tremendous mental shock and it took her more than two years to recover out of the said shock. On or about 30.10.2013, she received a notice from the Registry of Pune Tribunal intimating the date of hearing in the appeal filed against the penalty levied under section 271(1)(c) of the Act for assessment year 2005-06. It was only when she approached the tax consultant in respect of the said appeal, he asked whether any appeal before the Tribunal was filed against the dismissal of quantum appeal. On enquiry, it came to her knowledge that no appeal was filed against the re-assessment order before the Tribunal. After collecting the copies of documents from the Assessing Officer, the appeal was filed before the Tribunal after a delay of about 43 months. In the totality of the above said facts and circumstances, she claims that there was no malafide intention in not filing the appeal within the statutory time limit and the delay in filing the present appeal was due to the circumstances beyond her control. Hence, she made a request to condone the delay in filing the present appeal and the appeal to be decided on mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by the learned C.I.T.[A] 9. With utmost difficulty, I have collected the copies of documents from the learned Assessing Officer. I am now filing the appeal before the Hon. I.T.A.T. Pune Benches Pune challenging therein the appellate order passed by the learned C.I.T.[A] for the A.Y.2005-06, whereby he has dismissed my appeal filed before him against the reassessment order for A.Y.2005-06 framed by the learned Assessing Officer. In the circumstances there is thus delay of about 43 months in filing the present appeal. 10. I have a good case and in various similar cases the Hon. I.T.A.T. Pune benches have quashed the reassessment orders. 11. I am a widow and my husband died due to sudden cardiac arrest. Due to his untimely death, my life is totally shattered. I had no malafide intentions in not filing the appeal within the statutory time limit. The delay caused in filing the appeal is due to circumstances beyond my control. 12. This affidavit is executed for filing the same before the Hon. I.T.A.T. Pune benches Pune, in the matter of condonation of delay in filing the appeal. 13. The contents of this affidavit are true and correct to the best of my knowledge and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice are pitted against each other, the courts are expected to further the cause of substantial justice. This is for the reason that an opposing party in a dispute cannot have a vested right in injustice being done because of a non-deliberate delay. Therefore, it follows that while considering matters relating to the condonation of delays a judicious and liberal approach is to be adopted. If sufficient cause is found to exist which is bona fide and not due to negligence of the applicant, the delay needs to be condoned in such which subserves the end of justice - that being the life purpose of the existence of the institution of courts. 10. Further, the Hon ble Supreme Court in N. Balakrishnan Vs. M. Krishnamurthy (supra) also while adjudicating the issue of delay observed as under:- 13. It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal and proceed to decide the appeal on merits after hearing both the parties. 13. The learned Departmental Representative for the Revenue placed reliance on the ratio laid down by the Hon ble Madras High Court in M. Loganathan v. Government of India represented by Commissioner of Incometax (supra), but because of the ratio laid down by the Hon ble Supreme Court in the decisions referred to by us in the paras hereinabove, we find no merit in the reliance placed upon by the learned Departmental Representative for the Revenue. 14. The issue on merits raised is against computation of income from capital gains on sale of shares of companies, which were held to be bogus and fraudulent, by the authorities below. 15. The brief facts of the case are that, the assessee had declared income from long term capital gains on sale of shares of M/s. Fast Track Entertainment Ltd. The Assessing Officer however, received information from the ADIT (Investigation) Unit-1(1), Pune regarding irregularities in the purchase and sale of share transactions of M/s. Fast Track Entertainment Ltd. and another company and pursuant to the said information, the reasons were recorded for issue of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Ltd. had earned very low income of ₹ 2.1 lakhs and marginal net profit of ₹ 1.1 lakhs during the financial year ending 31.03.2004. However, the price of scrip increased from ₹ 13.16 to ₹ 33.30 and then to ₹ 60/-. Further, information was collected in respect of market transactions conducted by the said company which is reproduced by the Assessing Officer at pages 5 and 6 of the assessment order. On analysis, there was a proposal to initiate action against certain companies and the name of the companies from whom the assessee had purchased the said shares was missing. As per information, it was noted that the contract notes, bills issued by the brokers were found to be bogus on verification from the stock exchange and further, the brokers who had issued contract notes and bills were found to be involved in price manipulations of respective scrips. In view of the above said exercise and the verification from the BSE, the final conclusion was drawn that the purchase of shares of M/s. Fast Track Entertainment Ltd. had not taken place on the said date. Further, investigation by various regulating authorities into the price manipulations of scrips of vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative for the Revenue further pointed out that in view of the surrounding circumstances, the transactions conducted by the assessee was a sham transaction and there was no merit in the plea of the assessee. Reliance was placed on the ratio laid down by the Mumbai Bench of the Tribunal in Shri Arvind M Kariya Vs. ACIT, ITA No.7024/Mum/2010, vide order dated 30.01.2013. 19. We have heard the rival contentions and perused the record. The assessee during the year under consideration had transacted into purchase and sale of shares. One transaction which has been taken note of by the authorities below was the sale of shares of M/s. Fast Track Entertainment Ltd. The assessee claims to have sold 1,00,000 shares of the said concern during the year under consideration, which in turn were purchased by the assessee in June, 2003. The assessee has placed on record the contract notes for the purchase of shares in different lots from the share broker Sunil Shares Stock P. Ltd. along with copy of account of assessee in the books of Sunil Shares Stock P. Ltd. The assessee during the said financial year i.e. 2003-04 was also purchasing and selling shares and against the sale proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is that though enquiries were made in respect of several companies and brokers, but the name of broker through whom the assessee had transacted in the shares of M/s. Fast Track Entertainment Ltd. does not appear in that said list. Further, the assessee has produced complete evidence vis- -vis the purchase of shares and the delivery of shares certificates to the assessee and its consequent conversion into Jumbo Certificates and further sale transaction through different brokers. In the totality of the above said facts and circumstances, where the assessee has placed on record the complete evidence of purchase and sale of shares, merely because the shares were Dmatted in July, 2004 and thereafter, were sold in the month of August, 2004, does not establish the case of authorities below, in view of the circumstantial evidence produced by the assessee. In the totality of said evidences, we hold that once the assessee had taken the delivery of shares by way of share certificates, which in turn, were forwarded to the company along with transfer deeds on 04.07.2003 itself establishes the case of the assessee of having purchased the said shares during that period. Further, the said sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Act, 1961 cannot be faulted. 8. In the result, we see no merit in this Appeal and the same is dismissed with no order as to costs. 22. Further, Pune Bench of the Tribunal in Sushila Suresh Chavan Vs. ITO in ITA No.1436/PN/2011, relating to assessment year 2003-04, vide order dated 15.01.2014, in similar circumstances had held that the transaction of purchase and sale of shares of Database Finance Ltd. was a genuine transaction and the claim of long term capital gain was allowed in the hands of the assessee therein. In the totality of the above said facts and circumstances and the case laws, we find no merit in the order of CIT(A) and reversing the same, we direct the Assessing Officer to compute the income in the hands of the assessee under the head income from long term capital gains . Thus, the grounds of appeal raised by the assessee are allowed. 23. Now, coming to ITA No.2008/PN/2012, in which the issue raised is against the levy of penalty under section 271(1)(c) of the Act, which was levied against the addition made in the hands of the assessee on account of the sale of shares of M/s. Fast Track Entertainment Ltd. being held as income from other source. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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