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TMI Blog2015 (6) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... re covered by the aforementioned decision of the Tribunal in assessee’s own case in respect of assessment year 2005-06. Respectfully following the said decision of Tribunal given in respect of present assessee with regard to assessment year 2005-06, we are of the opinion that Ld. CIT(A) has committed an error in upholding the addition. - Decided in favour of assessee. - ITA NO.7023/MUM/2010 - - - Dated:- 13-5-2015 - Shri I.P. Bansal And Rajendra,JJ. For the Petitioner: Shri B.V. Jhaveri For the Respondent: Shri Premanand J ORDER PER I.P.BANSAL, J.M: This is an appeal filed by the assessee and it is directed against order passed by Ld. CIT(A)-37, Mumbai dated 08/07/2010 for assessment year 2004-05. Grounds of appeal read as under: 1. On facts and in circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in confirming the sale consideration of ₹ 55,98,486/-, claimed as giving rise to long term capital gains, as unexplained cash credit u/s.68. 2. On facts and in circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in confirming the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 M/s.Shalimar Agro Product 111750 02.07.03 To 19.03.04 4197361 18.04.02 112500 4084862 3. M/s. G. Tech Info Trading Ltd. 36000 13.10.03 15.10.03 23.10.03 03.11.03 14,01,125/- 13.05.02 45,360 1355765/- 2.2 So far as it relates to observation of AO with regard to shares of Robinson Worldwide Trade Ltd. and G Tech Info Trading Ltd., it is noticed that these shares were purchased by the assessee through M/s. DPS Shares and Securities Pvt. Ltd.(DPS) and director of DPS Shri Sujal C. Shah in his statement recorded on oath under section 131 of the Income Tax Act,1961 (the Act) during the course of survey under section 133A of the Act on 18/1/2007 carried out by Income Tax Investigation Authorities stated that he had not actually carried out any purchase transaction in the said scrip but had merely issued accommodation bills. The AO also during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said transaction also as non-genuine and added the said amount to the income of the assessee. 3. Aggrieved, assessee filed an appeal before Ld. CIT(A). 4. Ld. CIT(A) has confirmed the action of AO in respect of two scrips namely G- Tech Info Training and M/s. Shalimar Agro Products Ltd. However, in respect of Robinson Worldwide Ltd., Ld. CIT(A) has observed that the same pertains to financial year 2004-05 relevant to A.Y 2005-06 which was also confirmed by Ld. CIT(A) in respect of that assessment year and to that extent the addition was duplicate and to that extent Ld. CIT(A) has reduced the addition for the year under consideration. Consequential to that, 5% commission is also reduced which is calculated at ₹ 1,25,214/-. The sustenance of addition by Ld. CIT(A) has been challenged by the assessee in these grounds of appeal. 5. Ld.AR has submitted the synopsis of his arguments, copy of which was also given to Ld.DR. So far as it relates to shares of M/s. Shalimar Agro Products Ltd., the sequence of events with reference to documentary evidence in the paper book is as under: (i) The assessee purchased 15,000 shares of M/s. Shalimar Agro Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed for assessment year 2003-04. Those shares were also dematerialized and credited to the Demat account of the assessee and were sold at stock exchange through M/s. Shreenidhi Stock Brokers from time to time and in piecemeal, in the months June 2003 to March 2004 and, therefore, the sale of these shares cannot be disputed or doubted. It was submitted that all these evidences were filed before AO as well as Ld. CIT(A) and no adverse comment has been made against these evidences, therefore, sustenance of disallowance is contrary to the evidence available on record which has been ignored by the AO as well as Ld. CIT(A) and addition in this regard has been made on the basis of presumptions and surmises without bringing any evidence to contradict the aforementioned documentary evidence submitted by the assessee, copies of which are filed in the paper book. 5.2 So far as it relates to share of M/s. G- Tech Info Training, the sequence of events is narrated as under: (a) The assessee purchased 36,000 shares M/s. G- Tech Info Training Ltd. through Mr. Sanjay R. Shah on 13th May, 2002 for the aggregate consideration of ₹ 45,360/- which was off market tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tech Info Training Ltd. The aforesaid request of the assessee has not been acceded to. (Pages 144 145) 5.3 It was further submitted that aforementioned sequence of events would prove that the assessee had purchased 36000 shares of M/s .G-Tech Info Training through Mr. Sanjay R. Shah and purchase consideration was paid by adjusting the profit on sale of shares. The shares sold by the assessee were obtained in physical form and thereafter they were duly transferred in the name of the assessee by G-Tech Info Training in their record. The purchase of these shares were also declared by the assessee in his return of income for A.Y 2003-04, which was filed on 22/9/2003. These shares were dematerialized and accordingly, credited to the Demat account of the assessee on 28/07/2003 and shares were sold by the assessee at stock exchange through M/s. Shreenidhi Stock Broking in the month of October and November, 2003. Therefore, it was submitted that addition in this regard is also required to be deleted. 5.4 It was further submitted that for shares of M/s. Robinson Worldwide Ltd. were treated by the AO in the same manner, as were shares of the aforementioned two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was not genuine for the following reasons: (i) The appellant's knowledge of racing is very meagre. (ii) A jackpot is a stake of five events in a single day and one can believe a regular and experienced punter clearing a jackpot occasionally but the claim of the appellant to have won a number of jackpots in three or four seasons not merely at one place but at three different centres, namely, Madras, Bangalore and Hyderabad appears, prima facie, to be wild and contrary to the statistical theories and experience of the frequencies and probabilities. (iii) The appellant's books do not show any drawings on race days or on the immediately preceding days for the purchase of jackpot combination tickets, which entailed sizable amounts varying generally between ₹ 2,000 and ₹ 3,000. The drawings recorded in the books cannot be co-related to the various racing events at which the appellant made the alleged winnings. (iv) While the appellant's capital account was credited with the gross amounts of race winnings, there were no debits either for expenses and purchase of tickets or for losses. (v) In view of the exceptional luck claimed to have been enj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because it has not been denied that letter dated 5-11-08 was filed before the AO. In any case, during the hearing photo copies of 150 certificates issued in the name of the assessee by splitting the jumbo certificate, have been filed, which show that shares were in the name of the assessee. A document from the Ministry of Corporate Affairs, Government of India from the cite http://www,.mca,gov.in serial Nos.1 2 of the same read as under: Old Name New Name (1) Robinson Impex (India) Ltd. Sun And Shine Worldwide Ltd. (2) M/s Robinson Worldwide Trade Ltd Sun And Shine Worldwide Ltd. This clearly shows that Robinson Impex (India) Ltd. as well as M/s Robinson Worldwide Trade Ltd were merged and the new name of the company is Sun And Shine Worldwide Ltd. The above extract has been taken on 12-12-2011 which shows that the company is very much in existence even as on today. This is further supported by another extract from M/s. DPS Shares Securities Pvt. Ltd taken from www.bseindia.com. This extract shows the following information: Outcome of EGM 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccommodation of the said assessees for the LTCG purpose and the delivery of physical shares which were given by us to the said assessees were received by us from Mr.Naresh Saboo and handed over to the said assessees. The above clearly shows that the so called bogus shares were issued on the instructions of Shri Naresh Saboo. Before us it was denied that assessee has anything to do with Shri Naresh Saboo. Neither the AO nor the ld. CIT(A) has brought any material on record to show that Shri Naresh Saboo has some connection with the assessee. Even ld. CIT DR has not placed any evidence to show that Shri Naresh Saboo was acting on behalf of the assessee. Secondly, Shri Pratik Shah in answer to both question Nos.22 34 has clearly admitted that physical delivery of the shares was given to the assessee. Now the question is how assessee is going to find out whether this transaction was bogus when physical delivery has been handed over to the assessee. The authorities below have also doubted the source for purchases. As pointed out by the Ld. Counsel assessee has earned speculation profit amounting to ₹ 28,941/- which has been included in the return of income under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have already discussed the particulars of transfer form. Ultimately, a jumbo share certificate showing 15500 shares was issued by the company, copy of which is at page 45 of the paper book. Later on assessee lodged a demat request with Action Financial Services (India) Ltd. for demat of 15500 shares of M/s Robinson Worldwide Trade Ltd and copy of that request is available at page 46. The demat account statement of the assessee with Action Financial Services (India) Ltd. shows that 15500 shares have been dematerialised. We fail to understand how the shares were actually transferred in physical form and later on dematerialised and how this whole process can be called bogus. This cannot be called bogus unless the connivance of M/s Robinson Worldwide Trade Ltd and Action Financial Services (India) Ltd. is also alleged and proved. But no enquiry seems to have been conducted with these entities. Ultimately, the shares have been sold through Anugrah Stock and Broking Pvt. Ltd. on various dates as under: Date Quantity 09-12-2004 3000 13-12-2004 3000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile. Stock exchange cannot give details of transactions entered into between parties outside their floors. Therefore, reliance placed by AO on the communications received from the stock exchanges that the particular share transactions entered into by the assessee were not available in their record will be out of place. 5.6 Ld. AR also placed reliance on the decision in the case of Pushpa R. Shah vs. ITO in ITA No.2669/Mum/2006 for assessment year 2002-03 and Remesh G. Shah vs. ITO, ITA No.2670/Mum/2006 for assessment year 2002-03 order dated 29/07/2008, wherein such transaction made through brokers registered with SEBI and also being assessed to income tax and in the circumstances where shares were duly transferred from assessee s Demat account and sale consideration having been received through account payee cheque then the sale price could not be added to the income of the assessee. Thus, it was pleaded by Ld. AR that the impugned addition should be deleted and appeal filed by the assessee should be allowed. 6. On the other hand, it was submitted by Ld. DR that assessee could not substantiate the purchase of the shares and since purchase of the shares c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed at page 25 of the paper book. The details is as under: Name of the Company No. of Shares Amount Investment in Shares 360,540.00 ICICI Safety Bonds-2000 10,000.00 ICICI Safety Bond 2001 20,000.00 ICICI Safety Bond 2002 70,000.00 Public Provident fund 183,813.24 Shalimar Agro Products Ltd. (15000 shares) 112,500.00 G-tech Info Training Ltd. (36000 shares) 45,360.00 IDBI Flexi Bonds-2003 30,000.00 8,32,213.24 7.1 Thus, it can be seen from the above that in the balance sheet submitted by the assessee to the Department in respect of A.Y 2003-04, shares of Shalimar Agro Products Ltd. were also outstanding and quantity ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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