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TMI Blog2015 (6) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and in the circumstances of the case and in law, the learned CIT (A) 37, Mumbai has erred in holding that the capital gains of Rs. 22,36,965/- returned by assessee is bogus and charged the same as unexplained cash credit on the grounds that the capital gains the appellant neither satisfactorily explained the purchases of shares nor the sales thereof and therefore the nature and sources of the income credited to the books of account remained not properly explained. 2) The Learned CIT (Appeals) has erred in holding that 5% service charge of Rs. 111,848/- being 5% of Rs. 22,36,965/- is charged to tax on the ground that source of purchase of above shares was not properly explained as no person will arrange the benefit of non-genuine l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FY 02-03 Action Financial Services India Ltd. 11,70,901 11,18,340 M/s Drishti Securities P Ltd FY 2001-02 TOTAL 22,36,965 21,72,448 (Though claimed at 21,72,305 5. The AO conducted enquiry from the broker from whom the shares were purchased, i.e. M/s Drishti Securities Ltd., wherein its Director Mr. Narendra R Shah deposed that no such shares were ever transacted for Mr. Aftab E Patel/Mrs. Aisha A Patel. On being questioned, the assessee submitted that he had made the purchases through the broker. If the broker had responded that no shares were not routed through the stock exchange, would not alter the fact that the assessee had made a genuine purchase. Similarly in case of sale of shares, through M/s Action Financial Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Long Term Capital Gain Having regard to the aforesaid facts and in the circumstances of the case and in law, it is held that Section 68 is squarely applicable in this case and since the appellant neither satisfactorily explained the purchases of penny stock nor the soles thereof, the nature and sources of the income credited to the books of account remain not properly explained. Therefore, the alleged capital gain of Ps. 22,36,965/- is chargeable to tax u/s.68 of the Act. Whereas the Ld. Assessing Officer has charged such sum of Rs. 22,36,965/- as income from other sources, the same is confirmed as unexplained cash credit u/s. 68 of the Act. The addition made by the Ld. Assessing Officer is accordingly confirmed, Ground Nos. 1 to 12 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w taken has no strength to stand on, because the retraction of the statement and treating the LTCG as claimed earlier as normal profit in itself is incriminatory. 14. We have heard the arguments and have pursued the material on record and the orders of the revenue authorities. We first agree with the submissions of the DR that since the assessee changed his stand from LTCG to normal gain in itself would amount to incriminating. This is so, because, the assessee was forced to change his statement and claim in the return, after the search. This can only mean that what has been claimed in the ROI was not the complete truth. In such a circumstance, we reject the additional ground. 15. Coming to the original GOA, though we appreciate the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the capital gains of Rs. 21,06,273/- returned by assessee is bogus and charged the same as unexplained cash credit on the grounds that in computing the capital gains the appellant neither satisfactorily explained the purchases of shares nor the sales thereof and therefore, the nature and sources of the income credited to the books of account remained not properly explained. 2. The Learned CIT (Appeals) has erred in holding that 5% service charge of Rs. 105,313/- being 5% of Rs. 21,06,273/- is charged to tax on the ground that source of purchase of above shares was not properly explained as no person will arrange the benefit of non-genuine long term capital gain to other person without charging the commission/service charges. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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