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TMI Blog2012 (8) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... broker and the share were transferred to the assessee few days prior to the sale date. However, the BSE has denied, the said transactions of the shares on which exemption u/s. 10(38) was claimed, between 22-09-2005 to 07-12-2005, through the involved brokers. (b) That the shares were kept in the pool account till the payment was received by the broker, as per practice of the stock market, thus the assessee do not become owner of the shares as the shares were not transferred to assessee's DEMAT account. (c) That date of purchase and sale of the shares, and the date of the shares became dematerialized is not clear. (d) Failed to appreciate that no STT was paid on the sale of share on which capital gain was declared and was claimed exempt u/s. 10(38). (e) Ignored the fact that neither any balance sheet was filed along with return of income for A.Y. 2005-06 nor there was any mention of share holding in the return. (f) Has further erred in relying the decision of the Hon'ble ITAT in the cases of Shri Mukesh R. Morolia Vs. ACIT, where as the facts of the case is not exactly the same as that of the assessee. Further, the facts and circumstances of the case, is similar to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition of Rs. 23,28,205/- as unexplained cash credits u/s. 68 of the I.T. Act by not appreciating the finding of the Assessing Officer proving the entire share transaction to be a sham. (ii) The Ld. CIT(A) while providing relief has not appreciated the following facts: a) Assessee did not submit any evidence regarding purchase of shares, her demat account and the proof of payment in respect of purchase of shares. b) The shares were lying in the broker's demat account and were transferred to the assessee's account just days before the sale. c) The assessee has transacted in only 1 scrip of 1,25,000 shares of Maruti Infrastructure in the entire year. d) There is evidence on record, that the Director of the company through whom the alleged transaction were affected has committed to having given accommodation entries to the assessee. e) BSE & NSE has confirmed that the Brokers viz Alliance Intermediaries & Networks (P) Ltd., & Mahasagar Securities (P) Ltd., were not registered on their Stock Exchange. Even the registration of Alliance Intermediaries & Networks (P) Ltd., wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing income of Rs. 82,331/-. The return was processed u/s.143(1) of the Incometax Act,1961(Act). The assessee had not shown any income under the head capital gains at the time of filing the original return. A survey action u/s.133 of the Act was carried out at the business premises of the assessee group on 23.01.2007 by the Department. During the course of survey, the assessee group was informed by the departmental officers that the claim made by the members of the group of long-term capital gains in their returns of income was not genuine since the broker, Sh. Mukesh Choksi, through whom shares were sold, had not paid Securities-Transaction-Tax (STT).The assessee filed a revised return on 11.5.2007, which included long-term capital gains (LTCG) on sale of shares. 3.1. The assessee had claimed that the during the assessment year under consideration she had sold 1,25,000 shares of Maruti Infra Ltd. that were purchased by her in 2004. The AO in his assessment order held that LTCG earned by the assessee was not genuine since the broker had not paid STT, that the shares sold by the assessee were sold in off market i.e. sales were not sold through regular stock exchanges. He further hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares were available in the case under consideration, that the AO had himself had verified the sale/purchase of the assessee and had not challenged the purchase of shares, that he could not hold the sale to be non-genuine. Following the orders of the Tribunal in the cases of Mukesh R. Marolia FAA is deleted the addition is made u/s.68 of the Act by the AO. 5. Before us, Department of representative (DR) submitted that assessee had not claimed long-term capital gains in the original return, that it was only after the survey action the assessee filed her revised return, that there was no verification of purchase and sales of the shares from Bombay stock exchange, that the transfer of shares to the account of the assessee was only before 4-5 days of sale of the said shares, that shares were lying in the pool account of the broker for a long period, that off-market purchase/sale of shares was unaccounted. Authorised representative (AR) submitted that once the assessee came to know about non payment of STT on long-term capital gains she filed her return of income on her own, that she had partly taxable and partly exempt income for the AY under consideration, that in the return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. The ITAT has recorded a finding that the source of funds for acquisition of the shares was the agricultural income which was duly offered and assessed to tax in those Assessment Years. The Assessee has produced certificates from the aforesaid four companies to the effect that the shares were in-fact transferred to the name of the Assessee. In these circumstances, the decision of the ITAT in holding that the Assessee had purchased shares out of the funds duly disclosed by the Assessee cannot be faulted. Similarly, the sale of the said shares for Rs. 1,41,08,484/- through two Brokers namely, M/s Richmond Securities Pvt. Ltd. and M/s. Scorpio Management Consultants Pvt. Ltd. cannot be disputed, because the fact that the Assessee has received the said amount is not in dispute. It is neither the case of the Revenue that the shares in question are still lying with the Assessee nor it is the case of the Revenue that the amounts received by the Assessee on sale of the shares is more than what is declared by the Assessee. Though there is some discrepancy in the statement of the Director of M/s. Richmand Securities Pvt. Ltd. regarding the sale transaction, the Tribunal relying on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had sold 1,25,000 shares of Maruti Infra during the year under consideration. Original return was filed on 21-09-2006 declaring total income of Rs. 2,70,485/-. In the revised return assessee offered LTCG for Rs. 3,56,378/- for taxation under the head LTCG where STT was not paid. Addition amounting to Rs. 23,49,575/- u/s. 68 of the Act was made by the AO. CIT(A)-27,Mumbai, the FAA, vide his order dt. 24-12-2009 deleted the said addition. As the facts and circumstance of the case under consideration are similar to the case of Rasila Gada (supra), so, following the order passed in her case (ITA No1773/M/10)we dismiss the appeal filed by the AO and uphold the order of the FAA. ITA.No.1788/M/10 Mrs. Leela B. Gada Assessee had sold 1,25,000 shares of Maruti Infra during the year under consideration. Original return was filed on 21-09-2006 declaring total income of Rs. 1,60,391/-. In the revised return assessee offered LTCG for Rs. 3,56,961/- for taxation under the head LTCG where STT was not paid. Addition amounting to Rs. 23,64,232/- u/s. 68 of the Act was made by the AO. CIT(A)-27, Mumbai, the FAA, vide his order dt. 24-12-2009 deleted the said addition. As the facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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