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TMI Blog2016 (1) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... hs. However, there is a huge price rise. From the above facts, it is crystal clear that the purchase transactions have been concocted and manipulated to declare wrongful long term capital gains. The transactions have been executed through Demat Account and transfer has taken place against the sale. The sale part of the transactions has not been disputed per-se. In view of the above mitigating circumstance, we feel that the assessee deserves benefit of doubt. Accordingly, we concur with the alternative plea taken by the assessee that the quantum of penalty should be reduced to 100% of the tax evaded. In our view, dilution of quantum penalty is justified. - Decided partly in favour of assessee Undisclosed LTCG - Held that:- assessee has made cheque payments against purchase for which delivery has been received. Likewise, delivery has been duly given against sale and the payment thereof has been received by cheque. The CIT(A) has accepted the purchase and sale transaction albeit holding the same as short term capital gain instead of long term capital gain. In the circumstances, it is difficult to say that the transactions do not exist per se. In the totality of circumstances, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr. No. Purchase date Purchase from (Broker) Qty Purchase Rate Purchase amount Demat Date Payment details 1 13.04.2001 G.R. Pandya Share Broking Ltd. 400 12.35 4942 05.09.2002 Cash paid on 13.04.2001 Details of share sales Sr. No. Date of sale Sale through (Broker) Qty Sale rate Sale amount Demat out date Payment received details 1 17.08.2002 Action Finance Services (I.) Ltd. 4000 85.35 341417.5 17.09.2002 Ch. No.5303 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Ghanshyam J. Sukhwani has evidential value and subsequent retraction was nothing but an afterthought. The Assessing Officer further noticed that the onus placed upon the appellant to prove the genuineness of the transaction was not discharged by him. 9. In the backdrop of the enquiries conducted by the Income Tax Department, the Assessing Officer required the assessee to prove the genuineness of the capital gains vide his office letter dated 13.03.2008. The assessee was also asked to produce the Mumbai Brokers as the assessee s witness. In response, the assessee merely filed contract notes in support of purchases and sales. The assessee, however, expressed his inability to produce the Mumbai Brokers who sold the shares of the assessee on the plea that they are not traceable. The Assessing Officer observed that the transactions are peculiar for the following reasons :- 1) The assessee s father is regularly dealing in shares in Pune wherein he deals with 4-5 brokers. However, this is the only transaction with the Mumbai Brokers. 2) Payment for the purchase of shares has been done in cash. 3) The purchase transaction is not routed thought B.S.E. BOLT syste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(A) upheld the action of levy of penalty. However, he observed that interest of justice will be met if the penalty imposed is reduced and substituted @ 150% against 300% of tax evaded. Accordingly, he reduced the penalty to150% of the tax evaded. 12. Aggrieved by the order of the CIT(A), the assessee is in further appeal before us. 13. Before us, the Ld. Authorized Representative for the assessee contended that penalty is not exigible in the facts of the case. He observed that the transactions of purchase and sale are backed by broker notes. He contended that the shares were actually delivered in his Demat Account which is a reality. The appeal has not been preferred before the Tribunal in the quantum appeal only to avoid the protracted litigation. He, therefore, pleaded that the penalty sustained by the CIT(A) should be set-aside and cancelled. In support of the contentions raised, the Assessee relied on following case laws: (i) Smt. Smita P. Patil Ors. vs. ACIT, (2014) 159 TTJ 0182 (Pune); (ii) ITO vs. Ajay Shantilal Lalwani Neelesh Shantilal Lalwani, (2012) 145 TTJ 511 (Pune); (iii) DCIT vs. Smt. Hansa Choudhary, (2012) 143 TTJ 76 (Jd)(UO); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the company had not income of more than couple of lakhs. However, there is a huge price rise. From the above facts, it is crystal clear that the purchase transactions have been concocted and manipulated to declare wrongful long term capital gains. In MAK Data (P.) Ltd. (supra), the Hon ble Supreme Court held on facts that when the assessee had no intention to declare its true income and no explanation is offered for alleged concealment of income, the imposition of penalty justified. The Assessing Officer has reportedly made detailed enquiries and his action is based on incriminating evidences. In the facts of the present case, we are inclined to agree with the findings of the lower authorities that the circumstances exist to say that transactions are not bona-fide per se. We find ourselves in complete agreement with the action of the lower authorities for imposition of penalty. The decisions cited by the Assessee does not set out any proposition of law and are distinguishable on facts. The ITAT Pune in the case of Smita Patil (Supra) inter alia arrived at a finding that Assessee failed to establish clear case against the assessee and contract notes were found to be genuine. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. 10000 3.2 33,500 5/6/03 Chq. No.051962 Dtd. 25/12/02 for Rs.81,500/- 2 25/09/02 15000 48000 5/6/03 Total 81,500 15000 shares written off on 01/04/2007. Details of share sales Sr. No. Date of sale Sale through (Broker) Qty Sale rate Sale amount Demat date Payment received details 1 6/1/04 Drishti Securities Pvt. Ltd. 10000 69.84 6,98,457.13 Ch. No.298099 of Rs.698457/- dt. 14/01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2003-04 against the order of CIT(A)-V, Pune dated 30.05.2013 is noted below for ready reference. 1. On the facts circumstances of the case in law, the learned CIT(A)-V, Pune erred in law and on facts in levying concealment penalty of ₹ 1,92,501/- on the appellant for furnishing inaccurate particulars of income. 2. Alternatively and without prejudice, the learned CIT(A)-V, Pune erred in levying concealment penalty @ 150% on the alleged concealed particulars of income when the law permits levy of minimum penalty of 100%. The appellant craves leave to add, alter or amend to the grounds of appeal, before or at the time of hearing. 24. The facts in Mohini Ghanshyam Sukhwani in ITA No.1515/PN/2013 concerning A.Y. 2003-04 are broadly similar to the case of another family member; Heeranand Ghanshyam Sukhwani in ITA No.1514/PN/2013. The relevant details of the transaction involved is tabulated below for convenience :- Details of share of Database Finance of Mohini G. Sukhwani Purchase details scrip Sr. No. Purchase date Purchase from (Broker) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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