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TMI Blog2013 (5) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has expressed to hold those shares in "dematerialized form" therefore the assessee was asked to fill up the "dematerialization request form". This information is very vital and proves the fact that the assessee had in fact purchased the shares of Sarang Chemicals Ltd. It is also difficult to ignore an another factual position that the assessee is in the past assessment year had duly disclosed in the balance-sheet the purchase of those shares. Although, it was an off market transaction but it was properly documented and duly supported by relevant evidences - once the shares were in respect of a listed company and transaction was through Demat account which was as per the recognized Stock Exchange quoted price, then there was no reason to hold such nature of transaction as non-genuine - Decided in favour of assessee. - I.T.A. No.4512/Ahd/2007 , I.T.A.No.4513/Ahd/2007 - - - Dated:- 10-5-2013 - Shri Mukul Kr. Shrawat, Judicial Member And Shri D.K. Srivastava, Accountant Member For theAppellant : Shri R.B.Shah, A.R. For the Respondent : Shri Rajesh Kumar, Sr.D.R. ORDER PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER : These two appeals are hereby c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was issued and in compliance assessee has narrated the facts as under:- 2. Assessee showed long term capital gain of ₹ 14,73,919/- on sale of 27,500 shares of sarang chemicals Ltd. assessee purchased these shares through the broker G.R.Pandya Share Broking Ltd. through bill no.B/239/0012 dated 8.3.2002 at ₹ 4.35/- per share. Assessee purchased these shares through this broker, which is supported by cash voucher, bill and contract note. The market price prevailing on that day was at par with price at which assessee Purchased shares. The share purchased were duly transferred in assessee s name by the Company After obtaining the physical delivery of the shares, he said shares were dematerialized. (copy of demat account with icici bank is enclosed). The broker namely G.R. Pandya share Broking Ltd. might have denied the transaction in order to save their skin. The sales of the shares have also been done though broker namely Sanjay R Shah vide bill no.BW/03025/006 dated 6.5.2003 at 57.95/- per share. The sale of shares through this broker is supported by bill and contract note. On sale of the share assessee parted with the delivery of the shares from here demat a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, Trade Number and time of the trade. The purchase transaction was made in cash, however, as per the SEBI s Circular dated 18.11.1993 member-brokers were directed not to accept cash for purchase of securities and/or give cash against sales of securities. The direction was that the payments received or made should be through crossed payee account cheques. The AO was not even convinced that the shares were dematerialized in Demat account with ICICI bank. He has held that in a situation when purchases were not genuine, then there was no question of holding of Demat account. According to AO, the assessee has also not established that the transactions were intimated to the Stock Exchange. The AO has thus concluded that the sale consideration of ₹ 15,93,625/- was the income from undisclosed sources and taxed accordingly in the hands of the assessee. The matter was carried before the first appellate authority. 2.3. The ld.CIT(A) has repeated the reasons given by the AO for holding that the impugned long term capital gain was nothing but unaccounted income of the assessee. The ld.CIT(A) has added that the assessee had tried to introduce her unaccounted money into the legitim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded and the transfer was as per the reference of a folio number mentioning 27500 shares of Unit Sarang Chemiclas Ltd. This letter was dated 15.12.2002. Further, ld.AR has drawn our attention Demat account maintained with ICICI bank. Through this information, it is evident that the sale was Off Market Cell . The Demat account had reflected that the same was credited on 7/5/2003 and sale was recorded on 9/5/2003. The purchase was made through G.R.Pandya Share Broking Ltd. and his Bill dated 8/3/2002 with Bill Number has also been placed on record. Ld.AR has also mentioned that service charges has also been debited to the account of the assessee. The assessee has duly paid the brokerage with those brokers. When the sales were made, the ICICI bank duly mentioned the cheque numbers, therefore there was no occasion to deny the claim of long term capital gain by the assessee. Ld.AR has also strongly contested that the purchase of shares were duly reflected in the past as per the balance-sheet of the immediately preceding assessment year furnished with the Revenue Department. Ld.AR has also placed reliance on a CBDT Circular No.704 dated 28/04/1995 and relevant para-2; for ready referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares, therefore the entire claim was bogus, hence the AO had rightly taxed the same under the head undisclosed income. The assessee was informed a bout the denial but the assessee has chosen not to cross-examine those share brokers. Ld.DR has also raised doubts about the correctness of the dates as mentioned in various services. He has also pleaded that the case laws cited by the assessee are distinguishable on facts basically on the ground that in those case laws there was no denial of any transaction by the share brokers. In assessee s case, there was a specific denial by both the share brokers; therefore the action of the AO should be confirmed. 5. We have heard both the sides at some length. We have carefully perused the orders of the authorities below in the light of the compilation filed and case laws cited. According to us, there are certain cogent evidences which otherwise corroborate the claim of the assessee. According to us, even in the absence of the confirmation by those share brokers one has to examine that whether the shares have been purchased and after retaining them for a certain period those shares have actually been sold by the assessee. In the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assess the impugned transaction under the head long term capital gain. 6. Ground No. reads as under:- 2. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax(Appeals) has erred in confirming the action of the Assessing Officer in making addition of ₹ 65,000 for alleged low household expenses. 6.1. In respect of household expenditure, the AO has held that the family of the assessee consisted six members inclusive of four school/college going children. The addition as made by the AO for lowhousehold expenditure was confirmed by CIT(A). After considering the totality of the circumstances of the case, we find no reason to interfere with the findings of the Revenue Authorities, therefore affirm the same. Resultantly, this ground of the assessee is dismissed. 7. In the result, appeal is partly allowed. [B] ITA No.4513/Ahd/2007 8. Grounds read as under:- 1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred in confirming the action of the Assessing Officer in treating the income from capital gain on sale of shares as incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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