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TMI Blog2013 (5) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us. Before us, he has raised following grounds: 1. On facts and circumstances of the case, the learned CIT(A) has erred in confirming the addition of ₹ 52,500/- for notional Salary income alleged to have been received by the appellant which needs to be deleted since no such salary is received by the appellant. 2. On facts and circumstances of the case, the learned CIT(A) has erred in confirming the addition of ₹ 24,000/- for alleged unaccounted income from sale of opening stock which needs to be deleted since the sale thereof has already been shown by the appellant . 3. On facts and circumstances of the case, the learned CIT(A) has erred in confirming the addition of ₹ 64,000/- as made u/s. 69A of the Act for alleged unexplained cash deposited in the bank account, which needs to be deleted since such cash deposits get duly reflected in the regular books of accounts of the appellant. 4. On facts and circumstances of the case, the learned CIT(A) has erred in confirming the addition of ₹ 50,000/- for alleged low household withdrawals, which needs to be deleted as being incorrect. 5. On facts and circumstances of the case, the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny as he had earned in the immediately preceding year. The addition of the sum of ₹ 52,500 is therefore, confirmed. 6. Aggrieved by the order of the CIT(A), the assessee is now in appeal before us. 7. Before us, ld. A.R. submitted that the assessee had resigned from the Directorship of Minaxi Fashions Pvt. Ltd. w.e.f. 15.08.2003 and therefore, he was not entitled to any salary from the date of resignation. The assessee also placed on record at page no.16 the copy of Form no.32 filed by the Company with the Registrar of Companies as evidence of resignation of the assessee. Ld. A.R., thus, submitted that since the assessee has resigned there was no question of any salary and thus, the addition made, be deleted. Ld. Sr. D.R., on the other hand, relied upon the order of the A.O. 8. We have heard the rival submissions and perused the material on record. The ld. A.R. before us submitted that the assessee has resigned from the Directorship of Minaxi Fashions Pvt. Ltd. w.e.f. 13.08.2003 for which it also placed on record the form submitted by the Company before Registrar of Companies. This factual aspect has not been controverted by the Revenue nor it has brought any materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 64,000/- is confirmed. 10. Aggrieved by the order of the CIT(A), the assessee is now in appeal before us. Before us, ld. A.R. submitted that the cash of ₹ 40,000/- deposited by the assessee on 25.09.2003 comprised of the sale proceeds of the closing stock of ₹ 19,500/- and the opening cash balance as on 01.04.2008. He further submitted that the deposit of ₹ 40,000/- (which already included the sale proceeds of stock) has already been added, further addition of ₹ 24,000/- amount to double addition and therefore, the assessee be at least granted the benefit of ₹ 24,000/-. Ld. Sr. D.R. on the other hand supported the order of the A.O. 11. We have heard the rival submissions and perused the material on record. We find that the assessee has not explained or submitted the details of the sale of closing stock. He has just made a submission without substantiated the same. In view of these facts, we find no reason to interfere with the order of the A.O. Thus, this ground of assessee is dismissed. 12. The third ground is with respect to addition of ₹ 64,000/- u/s. 69A of the Act. The A.O. noticed that the assessee had deposited ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usehold withdrawals:- The A.O. noticed that the withdrawal for household expenses by the assessee was just ₹ 25,000/- in the entire year. The assessee was asked to furnish the complete details on household expenses. The assessee submitted that details of ₹ 26,700/- for various expenses like electricity, mobile, telephone etc. on estimated basis. According to the A.O., the withdrawal of household expenses was apparently low and the assessee had also not furnished the details of expenses. He, thus, made a lump sum of addition of ₹ 50,000/- to the return of income. 17. Aggrieved by the order of the A.O., the assessee carried the matter before the CIT(A). The CIT(A) upheld the addition made by the A.O. by holding as under: 14. I have carefully considered both the positions. The Assessee had shown annual withdrawals of only ₹ 72,000 i.e. a monthly withdrawal of ₹ 6,000. I am of the view that the said sum would have been grossly insufficient to meet all the household expenses of the Assessee. The Assessee furnished details of expenses incurred amounting to ₹ 26,700 which meant a monthly expenditure of ₹ 2,225 per month, which according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kothari, share broker to whom the assessee has sold the shares. Assessee also submitted copies of demat account to support his contention the purchase and sale of shares were genuine. A.O. issued summons u/s.131 of the Act to Calcutta Stock Exchange and SEBI. In response to the summons, SEBI informed that some Calcutta based share brokers who had dealt in small cap companies, were debarred by Calcutta Stock Exchange and the debarring orders were confirmed by SEBI. It was also informed that Pramodkumar Kothari s, name appeared in the aforesaid SEBI s order. A.O. also issued summons u/s.131 of the Act to M/s. Bubna Stock Broking Services Ltd. and Pramodkumar Kothari. No reply was received from both the brokers. The A.O. held that the assessee s claim of purchase and sale of shares is not tenable for the following reasons: (1) The Calcutta Stock Exchange have informed that no purchase of shares on 30.12.2002 and on 27.12.2002 of the shares of Shardaraj Tradefin Ltd. was executed on the online system of the Exchange. (2) It is further stated that on 22-11-2002, the assessee has shown to have purchased 2000 shares of Nageshwar Investment Ltd. but no copy of contract note is furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tta, was not genuine and thus, made addition u/s.68 of the Act. 22. Aggrieved by the order of the A.O., the assessee carried the matter before the CIT(A). The CIT(A) has confirmed the action of the A.O. by holding as under: 22. I have carefully considered the findings and conclusion of the AO on one hand, and the submissions of the AR on the other. As was with the AO, I also do not find any correspondence or corelation between the details of purchases and sales shown by the Assessee as also by the bills and contract notes of the alleged brokers on one hand, as compared with the detailed information furnished by the CSE. With regard to the purchases, while the purchasing broker, BSB, claimed to have purchased 2000 and 10000 shares of Shardaraj Tradefin Ltd. On 27.12.2002, the CSE informed that there was no transaction in the said scrip on the said date either in physical or demat form in the on-line trading system of the Exchange. On 9.12.2002, the Assessee claimed to have purchased 1000 shares of Nageshwar Investments Ltd. whereas, the CSE informed that on that date, there were two transactions in the said scrip involving 400 shares each. This was done in the online trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Act or provide any confirmation of the transactions as was required by the AO. The Assessee claimed to have furnished a confirmation from PK, even though the AO claimed (para-9) that no confirmative letter was received from PK. A photocopy of what is claimed to be a confirmation from PK has been submitted along with the written submissions before me. Firstly, the copy is quite illegible and secondly, it does not have any evidentiary value especially when considered against the background of what was informed by the CSE. In other words, the transactions shown in the alleged confirmation cannot be accepted as true and correct. The same is therefore rejected. Therefore, in view of the facts and circumstances of the case, which was inquired into and analysed in considerable detail by the AO, there was complete justification in coming to the conclusion that the source of the sum of ₹ 10,01,420 credited to the Asssssee's books of account was unexplained, and consequently, not genuine. 22.3 As regards the claim of the Assessed for concessional rate of taxation under the provisions of Sec. 112 of the IT Act, even though the claim that the shares only needed to be listed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the shares of Nageshwar Industries were credited in the demat account only on 01.04.2003 i.e. much after the alleged date of purchase on 09.12.2002 and 22.11.2002. No valid explanation or reason for delay of 4 to 5 months in the receipt of shares in the demat were submitted by the assessee. He further submitted that the assessee had failed to prove the payments made to M/s. Bubna Stock Broking Services Ltd. was towards the purchase of shares only and was not for any other transaction or were not in the nature of any advance. He further submitted that the date of purchase have not proved by the assessee. Calcutta Stock Exchange has confirmed that the trades were not executed on the said date and M/s. Bubna Stock Broking Services Ltd. has not confirmed the date of purchase and transactions. Thus, the assessee has not proved the date of purchase and the period of holding i.e. whether he was holding shares for more than 12 months. And therefore in the alternative the assessee s holding the shares for more than 12 months was not proved and therefore, cannot be allowed the benefit of long term gains. He, thus, submitted that the A.O. had rightly made the addition. 26. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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