9911796707
TMI Blog2016 (12) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... as unexplained cash credit u/s 68 - long term capital gain was not genuine - Held that:- In the case of the assessee the purchase of shares were made through SEBI registered brokers though off market which were accepted by the AO in the AY 2003-04 including the source of purchase out of speculation gain of 1,49,916/- and out of cash 8,383/-. Similarly sale of shares were also made through SEBI registered brokers. All the transactions of purchase and sales of shares were evidenced and supported with bills and vouchers of the brokers and confirmations from the brokers, acknowledgements of payments and receiving the sale proceeds by account payee cheques. The ld CIT(A) or AO could not bring any evidence on records to prove or rebut the evidences on records except the some enquiries which could not prove anything.We therefore set aside the order of CIT(A) on this issue and direct the AO to delete the addition Addition towards the cost of purchase of shares u/s 69C of the Act as unexplained expenditure - Held that:- The assessee has purchased the shares for a consideration of 1,58,299/- in the AY 2003-04 out of speculation income of 1,49,916/- and cash of 8,383/- and the investment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming the purchase and sales of shares by the assessee furnished by the assessee, BSE records for sale of Shakun Construction Ltd ,purchase of Kailash Ficom Ltd. Under these circumstances we are inclined to set aside the order of CIT(A) on this issue and direct the AO to delete the disallowance. Disallowance of exemption u/s 54F of the Act out of long term capital gain on sale of shares - Held that:- The various reasons cited by the authorities below are that the assessee did not furnish the agreements with the builder qua the purchase of flat and also that the income by way of long term capital gain on sale of shares was found to be bogus. As we have decided the issue of long term capital gain on the sale of shares as genuine and deleted the additions under the head of other sources, we are of considered view that it would be fair and reasonable to restore the issue back to the file of AO to decide the matter afresh after affording a reasonable hearing to the assessee and the decide the issue of allowability of exemption u/s 54F of the Act accordingly as per facts and law. In view of our discussion hereinabove we set aside the order of CIT(A) on this issue and direct the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. While sustaining the addition of ₹ 79,2371- the Learned CIT (A) failed to appreciate that the AO made the said addition without having any evidence on records but only on the basis of suspicion , surmise and conjecture. 4) Appellant craves leave to add, alter and/or modify the grounds of appeal on or before the date of hearings of the anneal." The assessee has also raised some additional grounds which read as under : Additional Grounds of Appeal "The appellant submits the following additional grounds of appeal which are without prejudice to one another and without prejudice to the original grounds of appeal submitted earlier with the appeal: 1(A) On the facts and in the circumstances of the case and in the Hon'ble CIT(A) erred in confirming the treatment of the entire long-term capital gain of ₹ 15,06,271 on sale of shares as income from other sources for tax purposes by the learned AO by holding it as non-genuine, without there being any incriminating material found during search on this issue at all. The appellant prays that since in the absence of any incriminating material found during search such a treatment is outside the jurisdiction of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the said issue of jurisdiction was not raised before the authorities below nor before the Hon‟ble Tribunal as the same was not advised by the earlier counsel of the assessee which was purely of legal nature. It was for the first time raised before the Tribunal which arose out of facts and assessment records before the authorities below. It was argued before us that since these grounds were of purely of legal nature concerning the jurisdiction of the AO make the additions and thus go to the very root of the matter. The ld AR was prayed for the admission of these grounds in interest of justice. In defence of his arguments the ld AR relied upon the decision of National Thermal Power Co Ltd Vs CIT(1998) 229 ITR 383(SC) and All Cargo Global Logistics Ltd Vs Dy. CIT (2012)137 ITD26 (Mum)(SB). 4. We have considered the rival submissions of the parties and case laws cited above and find that the issue of jurisdiction was not raised by the assessee before the authorities below because the assessee was not advised by the chartered accountants of the assessee to raise the issue of jurisdiction. We find the issue challenging the jurisdiction of the AO to make additions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed by the AO was without jurisdiction and therefore bad in law. According to the AR the addition made in the assessment so framed u/s 143(3) r.w.s. 153A of the Act was bad in law as the AO has no jurisdiction under statute and required to be deleted. In defence of his arguments and submissions the ld AR relied on the following decisions:- A) All Cargo Global Logistics Ltd V/s DCIT - (2012) 137 ITD 287(Mum)(SB) B) Atithi N Patel V ACIT (order dated 22.8.2012 (ITA No.43 to 45 /Mum/2010 C) Hiren N Patel V ACIT (order dated 12.10.2012 (ITA No.39 to 41/Mum/2010 D) Gurinder Singh Bawa V DCIT (Order dated 16.11.2012 (ITA No.s 2075/Mum/2010 6. On the other hand the ld DR relied heavily on the orders of authorities below. 7. After considering the rival contentions and perusing the relevant materials placed before us, we find that the assessment in the year under consideration was not pending on the date of search. The return of income was filed on 21.03.2003 and no notice u/s 143(2) of the Act was issued till 31.3.2004 and thus the assessment for the year under reference attained finality on the income returned by the assessee at ₹ 12,34,485/-. The search action on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years; Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this subsection pending on the date of initiation of the search under section 132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned with an intent to bring them within the non obstante clause. Notwithstanding anything contained in these provisions where search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section132A after 31st day of May, 2003, that the Assessing Officer is in a position to and mandated to issue notice within the meaning of subsection (1) of section 153A. That is because the preceding Chapter, namely, Chapter XIII within which the powers of search and seizure and powers to requisition books of account are spelt out enable the Revenue to take care of cases where it effects a search and seizure. That search and seizure is effected and after the same is effected books of account, other documents, money, bullion, jewellery or other valuable article or thing is found as a result thereof that notwithstanding anything and within the meaning of the above provisions having been concluded, it is open for the Revenue to make an assessment. It is also open to the Revenue to make a reassessment in cases where it exercises the powers to requisition books of account etc. This is because it is of the view that the books of account are requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arts from the second proviso which states that pending assessment or reassessment on the date of initiation of search shall abate. This means that an assessment or reassessment pending on the date of initiation of search shall cease to exist and no further action shall be taken thereon. The assessment shall now be made u/s 153A. The case of Ld. Counsel for the assessee is that necessary corollary to this provision is that completed assessment shall not abate. These assessments become final except in so far and to the extent as undisclosed income is found in the course of search. On the other hand, it has been argued by the Ld. Standing Counsel that abatement of pending assessment is only for the purpose of avoiding two assessments for the same year, one being regular assessment and the other being assessment u/s 153A. In other words these two assessments coalesce into one assessment. The second proviso does not contain any word or words to the effect that no reassessment shall be made in respect of a completed assessment. The language is clear in this behalf and therefore literal interpretation should be followed. Such interpretation does not produce manifestly absurd or unjust res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued to produce books of account or other documents but such books of account or documents have not been produced, b) summons or notice has been or might be issued, he will not produce the books of account or other documents mentioned therein, or c) he is in possession of any money or bullion etc. which represents wholly or partly the income or property which has not been and which would not be disclosed for the purpose of assessment, called as undisclosed income or property. We find that the provision in section 132 (1) does not use the word "incriminating document". Clauses (a) and (b) of section 132(1) employ the words "books of account or other documents". For harmonious interpretation of this provision with provision contained in section 153A, all the three conditions on satisfaction of which a warrant of search can be issued will have to be taken into account. 51. Having held so, an assessment or reassessment u/s 153A arises only when a search has been initiated and conducted. Therefore, such an assessment has a vital link with the initiation and conduct of the search. We have mentioned that a search can be authorised on satisfaction of one of the three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results :- a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the AO, (b) in respect of non-abated assessments, the assessment will be made on the basis of books of account or other documents not produced in the course of original assessment but found in the course of search, and undisclosed income or undisclosed property discovered in the course of search. 54. It may be mentioned here that Ld. Counsel for All Cargo Global Logistics Ltd. was questioned about the scope of pending assessments as it was his contention that all six assessments are to be made, if necessary, on the basis of undisclosed income discovered in the course of search. He was specifically questioned about the jurisdiction of the AO to make original assessment along with assessment u/s 153A, merging into one. However he took an evasive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him u/s 153A for which assessments shall be made for each of the six assessment years separately ; b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means -(i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search." 5. From the above proposition of law laid down by the Hon'ble Special Bench, so far as the assessee's case for assessment year 2004- 2005 is concerned, we find that the assessment for the assessment year 2004-2005 had attained finality and the same will not get abated. The addition in such a case can only be made on the basis of incriminating material found in the course of search and in the instant case, from the perusal of the assessment order as well as the order of CIT(A), it is seen that the disallowance on interest, which has been made, is not based on any seized material or documents found during the course of search and seizure. Therefore, such a disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Long term capital gain on sale of shares at ₹ 69,35,295/- as income from Other Sources. b. On the facts and circumstances of the case as well as in Law the Learned CIT (A) while confirming the addition erred in holding that the entire sale proceeds of shares credited in the books of the Appellant at ₹ 70,93,594/on account of alleged capital gain chargeable to tax u/s 68 of the IT Act and consequently enhancing the addition from ₹ 69,35,295- to ₹ 70,93,594/- . 2) On the facts and circumstances of the case as well as in Law the Learned CIT(A) erred in confirming the addition made by the AO u/s.69C of the I.T Act at ₹ 1,58,299/- being Unexplained expenditure incurred for purchase of shares. He failed to appreciate that the said shares were purchased in the earlier assessment year out of explained sources. 3) a. On the facts and circumstances of the case as well as in Law the Learned CIT(A) erred in confirming the addition made by the AO u/s.69C of the I. T Act at ₹ 3,54,680/- being Unexplained expenditure incurred for payment of commission/ service charges for arranging the capital gain. b. While sustaining the addition of ₹ 3,54,680/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the long term capital gain was not shown in the original return of income and why it should not be treated as concealed income of the assessee. The assessee submitted before the AO that the said long term capital gain was claimed exempt u/s 54F of the Act and hence not shown in the return of income. The AO noted that the assessee did not submit the computation of speculation income used for the purchase of shares, broker bill for purchase and sale of shares earning speculative income, no evidence qua purchase of shares of G Tech Soft Ltd and High Land Ind. Ltd and non submission of D-mat A/C and ultimately treated the long term capital on sale of shares as income from other sources by rejecting the submissions and replies of the assessee that the shares of two companies on which the assessee earned long term capital gain was shown as investments in the balance sheet of the earlier year i.e. AY 2003-04 and the same should not be added u/s 69C of the Act. The AO also rejected the contention of the assessee that the shares were actually purchased and in the form of physical delivery and were transferred in the name of the assessee at the time of book closure by the companies concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ground No.3 of AY 2006-07 4.1 As discussed in earlier para 2.3.24 ground No.2 of AY 2002-03 to AY 2005-06 and ground no.3 of AY 2006-07 are dismissed and the disputed additions are enhanced as under : S No AY Addition made by the AO Enhanced to 1 2002-03 Rs.15,06,271/- Rs.15,84,736/- 2 2003-04 Rs.10,88,547 Rs.11,38,317/- 3 2004-05 RS.69.35.295/- Rs.70,93,594/- 4 2005-06 Rs.49 ,99,180/- Rs.49,83,050/- 5 2006-07 Rs.6,54,961/- Rs.7,25,513/- Penalty proceedings already initiated by the AO will now cover the enhanced income on account of furnishing inaccurate particulars of income and on account of concealing particulars of income. 19. The ld AR vehemently argued that the order of FAA was totally wrong and against the facts on records, judicial precedence and was based on hypothesis by ignoring all the evidences on records. The ld AR submitted that all the transactions of sales and purchase of shares on which the LTGC of ₹ 69,35,295 was earned were genuine and fully supported by the documentary evidences which were available before the lower authorities. The ld counsel of the assessee while arguing drew our to the statement of long term capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment for AY 2003-04 vide order dated 31.12.2007 passed u/s 143(3) r.w.s. 153A of the Act. In defence of his arguments the ld relied on the following decisions :- F) CIT V/s v. Mukesh Ratilal Marolia (Bombay High Court) (Order dated 7.9.2011) (lTXA No. 456 of 2007) G) Mukesh R. Marolia v. Addl. CIT [2006] 6 SOT 247 (Mum) H) CIT v. Jamnadevi Agrawal [2010]328 ITR 656(Bom) I) ITO v. Mrs. Rasila N. Gada & Others (Mum) (Order dated 8/8/2012) (ITA No.1773/Mum/2010) J) Asstt. CIT v. Pooja Arora (Mum) (Order dated 20.6.2012) (ITA Nos. 2788 & 2790/Mum/2009) K) Asstt. CIT v. L. Jaipal Reddy (Mum) (Order dated 20.l.2012) (ITA Nos. 3607 & 3608/Mum/2009) L) Durqadevi Mundra v. ITO (Mum) (Order dated l.6.2012) (ITA No. 1175/Mum/2012) M) Arvin M. Kariya & Others v. Asstt. CIT (Mum) (Order dated 30.12.2011) (ITA No. 787 to 791/Mum/2010) N) Asstt CIT v. Uttara S. Shorewala (Mum) (Order dated 25.5.2011) (ITA Nos. 5506 & 5507/Mum/2010) O) Chandrakant Babulal Shah v. ITO (Mum) Order dated 15.12.2010) (ITA No.6108/Mum/2009) P) Ramesh Matkar v. Asstt.· CIT (Mum) (Order dated 24.9.2010) (ITA Nos. 6302 &6303/Mum/2009) Q) Krishnadevi Kejirwal v. ITO (Mum) (Order dated 25.6.2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly CIT Vs Durga Prasad More 82 ITR 540 SC, Sumati Dayal Vs CIT 214 ITR 801 SC, Hersh Win Chaddha Vs DDIT(Int. Tax)135 TTJ 513, ITO Vs Shamin Bharwani 170 TTJ 238 (Mum), Shri Arvind M Kariya Vs ACIT (ITA No 7024/Mum/2010 dated 30.1.2013 , ACIT Vs Som Nath Maini(7SOT 202 Chd) and Zikrullah Chaudhary ITA No 669/PN/2012 dated 4.3.2014. The ld DR finally prayed before the bench that in view of the ratio laid down in the above decisions the order of FAA be upheld by dismissing the appeal of the assessee. 23. We have considered the rival contentions of the counsels and perused the relevant materials placed before us including the impugned order and the various case laws relied upon by the both the parties. We find from the facts before us that the a search action was conducted on the assessee and her related parties on 24.1.2006 following a information with the department that that assessee along with others has indulged in obtaining the bogus purchases of penny stocks and thereby making fictitious long term capital gain by selling those shares. The assessee filed return of income on 23.1,2007 in response to notice issued u/s 153 A of the Act dated 13.9.2006 declaring an income of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares were not transferred to D-mat a/c as the assessee was not having any D-mat a/c. The AO has accepted the purchase of shares in AY 2003-04 duly shown as investments in the balance sheet as on 31.3.2003 while doubted the sales of the said shares and the consequent gain despite the fact that the assessee has furnished all the bills vouchers payments made and received , confirmation from the brokers of purchases and sales of shares by the assessee who were also SEBI registered brokers. In our opinion, the findings of facts as recorded by the CIT(A) were contrary to the documentary evidences on the records especially when nothing incriminating was found during the search to prove to the contrary as claimed by the assessee. The Hon‟ble Bombay High Court in the case of M/S CIT Vs Mukesh Ratilal Marolia(supra) dismissed the appeal of the revenue by finding merits in its case thereby upholding the order of the Tribunal. The Hon‟ble Supreme Court also dismissed the special leave to appeal (Civil No (s). 20146/2012 vide order dated 27.01.2014 which was filed by the revenue against the high court order. In the case of Mukesh R. Marolia Vs CIT (Supra) the assessee sold some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Mukesh Ratilal Marolia (Bombay High Court) (Order dated 7.9.2011) (lTXA No. 456 of 2007) "6 Similarly, the sale of the said shares for ₹ 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 was genuine. 7. In the circumstances, the decision of ITAT in holding the purchase and sale of shares are genuine and therefore, the Assessing Officer was not justified in holding that the amount of ₹ 1,41,08,484/-represented unexplained investment u/s 69 of the Income Tax Act, 1961 cannot be faulted." 8. In the result, we see no merit in this appeal and the same is dismissed with no order as to costs. The decision of the Coordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho was a non-resident, and payment was routed through NRE account - Whether since remittance of money was supported by banking documents, there was no reason to disbelieve version of assessee and make an addition thereof - Held, yes - Whether, therefore, said addition was liable to be deleted - Held, yes Section 54E of the Income-tax Act, 1961 - Capital gains - Not to be charged in certain cases - Assessment year 2001-02 - Assessee claimed that during previous year, he had sold certain shares and deposited sale proceeds of shares in his bank account - He also claimed that during previous year he purchased a flat and made investment in flat out of sale proceeds of shares - Assessee further claimed deduction under section 54E of long-term capital gains, earned on sale of shares as against purchase of said flat - Whether since sale proceeds of shares had been explained by assessee, he was entitled to benefit of section 54E against purchase of flat - Held, yes" In the case of Jamnadevi Agrawal (supra) the coordinate bench has held as under: "Section 68 of the Income-tax Act, 1961 - Cash credit - Assessment year 2001-02 - Fact that assessees in group had purchased and sold shares o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 ₹ 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 statement of the employee of M/s. Richmand Securities Pvt. Ltd. held that the sale transaction was genuine. In these circumstances, the decision of the ITAT in holding that the purchase and sale of shares are genuine and therefore, the Assessing Officer was not justified in holding that the amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be converted into accounted or regular payment. The discrepancy pointed out by the Calcutta Stock Exchange regarding client code has been referred to. But the Tribunal concluded that same, by itself, is not enough to prove that the transactions in the impugned shares were bogus/sham. The details received from stock exchange have been relied upon for the purposes of faulting the revenue in failing to discharge the basic onus. If the Tribunal proceeds on this line and concluded that inquiry was not carried forward and with a view to discharge the initial or basic onus, then such conclusion of the Tribunal cannot be termed as perverse. The conclusions as recorded in the Tribunal's order are not vitiated by any error of law apparent on the face of the record either. [Para 6] The appeals do not raise any substantial question of law. They are accordingly dismissed. [Para 7]" In ITO Vs Indravadan Jain HUF( ITA No. 4861/M/2014 ) ( supra) has held as under:- "8. We have considered rival contentions and carefully gone through the orders of authorities below and found from the record that the AO has treated the share transaction as bogus on the plea that SEBI has initiated inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich were accepted by the AO in the AY 2003-04 including the source of purchase out of speculation gain of ₹ 1,49,916/- and out of cash ₹ 8,383/-. Similarly sale of shares were also made through SEBI registered brokers. All the transactions of purchase and sales of shares were evidenced and supported with bills and vouchers of the brokers and confirmations from the brokers, acknowledgements of payments and receiving the sale proceeds by account payee cheques. The ld CIT(A) or AO could not bring any evidence on records to prove or rebut the evidences on records except the some enquiries which could not prove anything. We also find that the case of the assessee is squarely covered by the ratio laid down in various the decisions(supra). Now coming to the decisions on which the revenue placed reliance we find that the same are distinguishable on facts. In the case of CIT Vs Durga Prasad (Supra) it has been held as under : 15. Now coming to the grounds that commended themselves to Mukharji J. (the present Chief Justice of the High Court of Calcutta), we are unable to find out how the learned judge was able to come to the conclusion that there was no proof or charge that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. We accordingly discharge that answer and answer that question in the affirmative and in favour of the Department. The assessee shall pay the costs of the Department both in this Court as well as in the High Court-hearing fee one set." 26. In the case Sumati Dayal Vs CIT(supra) the assessee has purchased the winning tickets in the horse races without actually participating in the race by introducing the accounted money to purchase the tickets and therefore distinguishable on facts. Similary CIT Vs Durga Prasad More(Supra) was also distinguishable on facts. In the case of Shamim M Bharwani(supra) the decisions of the apex court and jurisdiction high court in the case of CIT Vs Mukesh Ratilal Marolia(supra) were not considered. 27. From the facts of the assessee as discussed above the case of the assessee is squarely covered by ratio laid down in the various decisions of jurisdictional High Court, supreme court and coordinate benches. We therefore set aside the order of CIT(A) on this issue and direct the AO to delete the addition of ₹ 70,93,594/-. 28. The issue raised in the second ground of appeal is against the confirmation of addition of ₹ 1,58,299/- by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock companies were easily manageable against payment of commission as discussed in the modus operanedi of this case. The share brokers, who arranged the fictitious purchase of the shares did not attend in response to the summons issued to them, (g) the BSE has confirmed that the share brokers had not traded in the aforesaid share on those days. The alleged share transactions were not recorded in BSE and hence that were not genuine transactions. In view of the 'aforesaid reasons the Assessing Officer did not accept the explanation of the appellant. Ld. Assessing Officer came to a considered conclusion that these shares were purchased only few days before their s91e in the F.Yrs. corresponding to the relevant A.Yrs. concerned. Hon‟ble Court of Allahabad in the case of Smt.Reena Jain and others V.s CIT (2007) 210 CTR (All) 491 has held that where the alleged gifts were purchased by the appellant after paying commission, the addition were rightly made u/s.69C of the Act. Hon‟ble High Court of Madrass in the case of Grand Bazzar V/s ACIT (2007) 292 ITR 269 (Mad) has held that the where certain cash credit appearing in the assessee's books of accounts were found to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld AR further argued that the speculation gain was shown as short term capital gain in the return of income was accepted by the AO while framing assessment u/s 143(3) r.w.s. 153A of the Act for AY 2003-04. Lastly the ld AR prayed that in view these facts as discussed hereinabove the addition of ₹ 1,58,299/- deserved deletion. In the last without prejudice argument the ld AR submitted that since the CIT(A) has already added the entire sales consideration as unexplained cash credit , the addition u/s 69C of the Act of ₹ 1,58,299/- on a/c purchase price of shares would result in double addition and prayed to be deleted. 32. The ld.DR submitted that the arguments were same as taken while arguing the ground no 1 and prayed that order of CIT(A) be confirmed. 33. After considering the contentions of the rival parties and relevant materials as placed before including impugned order, we find that the assessee has purchased the shares for a consideration of ₹ 1,58,299/- in the AY 2003-04 out of speculation income of ₹ 1,49,916/- and cash of ₹ 8,383/- and the investment was shown in the balance sheet as on 31.03.2003 and also the speculation income was show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. CIT (2007) 210 CTR (All) 491 has held that where the alleged gifts were purchased by the appellant after paying commission, the addition on account of commission was rightly made u/s.69C of the Act. Hon'ble High Court of Madras in the case of Grand Bazzar vs. ACIT (2007) 292 ITR 269 (Mad) has held that where certain cash credit appearing in the assessee's books of accounts were found to be bogus credits. Then, the cost of purchase was rightly added u/s 69C of the Act, because the source of unaccounted purchase remained unexplained. Hon'ble High Curt has further held that bare reading of section 69C makes it clear that if the assessee incurred any expenditure, but offered no explanation about the source of such expenditure or part thereof, or the explanation so offered is not satisfactory, such expenditure may be deemed to be the income of the assessee. The present appellant had not explained the source of commission and the addition under sec.69C are, therefore, sustainable. Having regard to the facts and circumstances of the case and in law and also respectfully following the decisions of Hon' ble High Court of Allahabad and Hon' ble High Court of Madras, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... broker/operators is approximately 5%. No evidence was found during the course or search nor was any evidence gathered thereafter to prove that the assessee had incurred this expenditure of 5%. In the absence or evidence or having incurred expenditure outside the books of account, in our considered opinion, no addition could be made u/s 69C. The addition has been made on the basis of surmises and conjectures. 4. In the result, the ground no.1 is allowed" 39. In our opinion the facts of the assessee‟s case are identical to the one as decided by the coordinate bench and we therefore respectfully following the same set aside the order of CIT(A) and direct the AO to delete the addition of ₹ 3,54,680/-accordingly. 40. In the result, the appeal of the assessee is allowed. ITA No 3031/Mum/2011 AY 2005-06 41. The issues raised in this appeal are same as decided by us in ITA No 3030/Mum/2011(AY-2004-05) with the difference that shares were transferred through D-mat A/C. Therefore our decision in ITA No. 3030/Mum/2011 would, mutatis mutandis, apply to this appeal as well. Accordingly the AO is directed to delete the additions made. 42. In the result, the appeal of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was wrong and misleading. All these transactions were off market and there was no question of reflection in the records of BSE. Finally the AO disallowed the STL of ₹ 6,54,961/- and added the same to the income of the assessee under the head "Capital Gain". 46. The CIT(A) also dismissed the appeal of the assessee on this ground by upholding the order of AO by observing that the assessee could not substantiate the purchase and sales of shares by proving the documentary evidences, Bank statement of Citi bank and particularly the letter from G R Pandya Brokering Ltd of not having any transactions with the assessee of any purchases or sales shares . 47. We have considered the rival submissions and perused the materials on records. The ld AR vehemently argued before us that authorities below did not appreciate the facts and documentary evidences correctly despite the assessee furnishing all the evidences before the these authorities. The ld AR submitted before us that the payment to G R Pandya Brokering Ltd were made by account payee cheques by referring to the bank statements of Citi Bank and HDFC Bank attached in the paper book from page no. 113 to 126. We find from statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 47 of this order. 49. Now we shall take up the appeals bearing ITA No.3038 to 3043/Mum/2011. Appeal No. Ground No. Decision 3038/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order. 2 and 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3039/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 2 Sec.54F which dealt with separately 3 & 4 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3040/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order. 2 & 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order. 4 Sec.54F dealt with separately 3041/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order 2 & 3 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 10 and 11 of this order 3042/Mum/2011 1 Allowed as per decision in ITA No. 3028/Mum/2011 (AY-2002-03) vide para 7 and 8 of this order 2 & ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
