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TMI Blog2012 (1) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of 2,250/- made by the AO is deleted. X X X X Extracts X X X X X X X X Extracts X X X X ..... Ans : I m doing the business of issuing accommodation bills to the purchasers and seller against the brokerage of 0.15% of the transaction value. So far as Shri Rajkumar Soni & Smt Lata Soni is concerned I do not know them personally and I have not received cash from them but I have issued sales confirmation memos against the fund provided to me. I do not know whether Shri Rajkumar Soni & Smt Lata Soni has made any adjustment of their surplus cash, I do not know them personally nor do they know me. Q 3: Please state whether purchases and sales bills and shares certificates, etc issued by Smt Lata Soni & Shri Rajkumar Soni for the shares of Talent Infoways Ltd., were bogus and there was no actual and genuine transaction of such shares. Ans : In this regard, I would like to state that the shares certificates of Talent Infoways Ltd were not bogus but the transaction has taken place of market. Q. 4 : Please send the relevant portion of bank statement and books of accounts wherein the receipts of cash amounts and payments of cheuqes as well as entries recorded for purchase and sales as shown to have been made for above shares, i.e., Talent Infoways Ltd, are duly reflected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sale consideration. By above transaction, the assessee has masqueraded its undisclosed income as LTCG on shares. Thereby making the same white by paying taxes @ 10%. In fact the amount shown as the LTCG is liable to be taxed as unexplained cash credit u/s. 68 of the Act, since the assessee has brought in the unexplained cash in the books discussing the same in the form of LTCG on shares to build up its capital the. assessee cannot use dubious method of tax planning to bring in the money in the books. The AO placed reliance in the case of McDowell & Co. Vs. CTO 154 ITR 148 (SC) in which it was held that colourable devices cannot be part of tax planning and it is wrong to encourage avoidness of tax by delicious method. In view of the above discussion, the AO held that the income shown as LTCG in the sham transaction, in reality the assessee has not earned any LTCG. But it has used to bring in the money to build up capital by paying taxes at lower rate. The AO, therefore, taxed ₹ 14,85,975/- as unexplained cash credit u/s. 68 of the Act. 4. Appellant case: During the course of appellate proceedings, the Id. AR submitted that appellant furnished various details asked for. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and submission of the Id. AR and found that the AO has based his assessment on the enquiry by sending letters u/s. 133(6) of the Act to M/s. Goldstar Finvest P. Ltd. The appellant purchased 31,500 equity shares of Talent Infoways Ltd. vide contract No. CC/2003/071/93(R) dated 11.04.2003, settlement dated 11.04.2003 @ ₹ 1.15 to ₹ 1.45 per share through Goldstar Finvest P. Ltd. and SEBI Regn. No.230932431. The appellant has also furnished copy of transfer of share certificates issued by the company Talent Infoways Ltd. showing the following details vide letter No.SH/TRF/2003/T0001419/l dt 31.05.2003. Transfer No.1419; Folio No.L20; Certificate No. from 101891 to 101896; Distinctive No. from 0004700001 to 0004730000- 30000 and certificate No. from 101909 to 101909; Distinctive No. 0004790001 to 0004791000 - 1000 Shares, Certificate No 101912; Distinctive No. from 0004793001 to 0004793500 - 500 Shares. Further the appellant has sold 10,000 equity shares of M/s. Talent Infoways Ltd. for ₹ 4,873007- through Goldstar Finvest P. Ltd. (SEBI Regn. No. 230932431 ) vide contract note No.CC/2004/118/4(R) dated 22.06.2004, settlement dated 22.06.2004 @ ₹ 48.75; 10,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in rejecting the claim of the appellant. As far as treatment of the sale proceeds as cash credit u/s. 68 of the Act is concerned, the same is not called for. As per section 68 of the Act where any sum is found credited in the books of an assessee and the assessee offers no explanation, the sum so credited may be charged to income tax as the income of the assessee. In this case, no sum has been credited in the books, as the payment of purchase of shares was made and the sale proceed of shares has been received through bank. Thus, it is proved that the sale proceed is against the purchase of shares. Therefore, the amount of ₹ 14,85,975/- cannot be treated as cash credit u/s. 68 of the Act. The stand taken by the AO is not justified. Hence the addition made by the AO is deleted. The appeal is allowed on this ground.'' 2.3 We have heard both the parties. This issue has been decided by ITAT Jodhpur Bench Bench in ITA No. 611/JU/2009 and 501/Jodh/2010 dated 16-12-2011 since the issue of the present appeal is the same. Following the order of this Bench, we find no infirmity in the order of the ld. CIT(A) and the same is confirmed. Thus Ground No. 1 of the revenue is dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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