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TMI Blog2017 (11) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... mount as unexplained cash credit under section 68 chargeable to tax at the flat rate of 30%. Therefore, uphold the impugned order of the ld. CIT(Appeals) on this issue and dismiss Ground No. 1 of the assessee’s appeal. Claim for short-term capital loss - Held that:- As observed that the shares were purchased by the assessee at 10/- per share on 01.11.2012 and there is nothing brought on record by the Assessing Officer to show that the fair market value of the said shares as on the date of purchase by the assessee was different from the purchase price shown by the assessee. As regards the allegation of the Assessing Officer that there was no monetary involvement in the transactions in question, the assessee has placed on record the copies of current accounts of the concerned family members as appearing in the books of account of the assessee at page nos. 27 1,00,000/-. Ground No. 2 of the assessee’s appeal is accordingly allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,805.26 and the same was shown as income during the year on accrual basis. 2. The amount was not received during the financial year. It was received by cheque on or about 24.07.2013 as per bank statement [copy enclosed}. Thus, the credit in the bank appears in next financial year 2013-14 and therefore could not be considered in the Assessment Year 2013-14. 3. Thus, there has been no receipt during the financial year 2012-13 which could be hit by provisions of Sec 68. The reflection of an income where journal entry has been passed could not be equated with the credits envisaged u/s 68. 4. In the facts, there could not be application of sec 1158E on the aforesaid amount. 5. The said amount has been treated as undisclosed income u/s 68 whereas there was no such credit in the books of accounts in the previous year relevant to Assessment Year 2013-14 and therefore the provisions of Sec 1158BE could not be made applicable. 6. In any case, the identity of the concerned broker was duly established by the Ld. AO himself. Cheque has been issued by such broker in subsequent financial year. Notice u/s 133(6) was duly served upon the concerned broker. 7. The assertions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assumes greater significance. I am in agreement with the Ld. AO that the transactions relating to the claim of speculation profits as made by the appellant come within the ambit of "suspicious transactions", and therefore the rules of, suspicious transactions would apply to the case. Payment through Banks, performance through stock exchange and other such features are only apparent features. I this case what the Stock Exchange has confirmed before the Ld. AO goes against the appellant-HUF. Therefore, I have to reach the inevitable conclusion that the transactions as discussed by the Ld.AO fall in the realm of "suspicious" and dubious" transactions. The Ld. AO has therefore necessarily to consider the surrounding circumstances, which he indeed has done in a very meticulous and careful manner. In the case of Win Chadha -vs.- CIT (International Taxation) in ITA No.3088 & 3107/Del/200S, the Hon'ble Delhi ITAT, B"-Bench has observed, on 31.12.2010 as under: "SUSPICIOUS AND DIBIOUS TRASANCTION HOW TO BE DEALT WITH: 6.11. The tax liability in the cases of suspicious transactions is to be assessed on the basis of the material available on record, surrounding circumstances, huma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D whose were in the offing, as the relevant investigations were in process. In view of these observations, we do not accede to the assessee's pleas In this behalf. The Assessee's contentions and objections in this behalf that the material available on record was not admissible as evidence and that it cannot be relied on by the AO, are devoid of any merit and are rejected outright .......". In view of the above discussion, I find no infirmity in the orders of the Ld. AO, and I confirm the same. Ground No 1 taken by the appellant stand dismissed". 6. The ld. counsel for the assessee submitted that the claim of the assessee of having earned the speculation profit of ₹ 3,00,805/- was duly supported by the Contract Notes issued by the concerned broker M/s. Jagtarni Commodities Pvt. Limited and there was no reason to doubt the genuineness of the said claim. He submitted that the broker was expelled from the membership of M/s. NMCE from 15th May, 2013, i.e. only after the transactions of the assessee resulting into speculative profit. Referring to the relevant portion of the ld. CIT(Appeals)'s order as contained in paragraph no. 5, he submitted that the claim of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer with the concerned broker, namely M/s. Jagtarni Commodities Pvt. Limited as well as the concerned Commodity Exchange NMCE by issuing notices under section 133(6) of the Act. In reply to the said notices, there was no response from the broker. NMCE, however, reported to the Assessing Officer vide letter dated 29.12.2015 that neither the assessee nor even the broker was ever active on their Exchange. It was also informed by NMCE that M/s. Jagtarni Commodities Pvt. Limited was expelled from the membership of the Exchange w.e.f. 15th May, 2013 for issuance of fraudulent Contract Notes. The contention raised by the ld. counsel for the assessee in this regard is that the transactions in question were entered into by the assessee through this concerned broker before his expulsion from the membership of the Exchange from 15th May, 2013. He has also relied on the Contract Notes issued by the said broker as evidence of the transactions. It is, however, observed that the said broker was indulging in issuance of fraudulent Contract Notes prior to 15.05.2013 as found by NMCE and on the basis of this finding, he was expelled from the membership of the Exchange. The genu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r short-term capital loss of ₹ 1,00,000/- arising from the sale of 25,000 shares of M/s. Paul & Chakraborty Pvt. Limited was examined by the Assessing Officer and on such examination, he recorded the following findings:- "(i) It is apparent from the details submitted during the course of assessment proceedings that the assessee-HUF allegedly purchased shares from Bimla Devi Jain, who is a member of the HUF and purportedly sold to Vikash B. Jain (HUF), whose karta is also a member of the assessee-HUF. (ii) The fair market value of the shares of M/s. Pal & Chokraborty Pvt. Ltd as on 31.03.2012 was ₹ 6.74/-, which was allegedly purchased by the assessee @ ₹ 10/- per share. (iii) The share holders list of M/s. Paul & Chakraborty Pvt. Ltd. for the F.Y. 2012-13 and 2013-14, as filed with the ROC, does not show Vikash B Jain (HUF) as a shareholder. (iv) The entire transactions were done through Journal entries and thus there was no monetary involvement in the alleged transactions". When the above findings were confronted by the Assessing Officer to the assessee, the assessee could not offer any satisfactory explanation, the claim of the assessee for short-te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer himself as genuine. He submitted that recurring current account is maintained by the assessee to post such transactions in shares made by the assessee with family members and this is the regular practice followed by the assessee. 14. The ld. D.R., on the other hand, relied on the orders of the authorities below in support of the revenue's case on this issue. 15. I have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the genuineness of the relevant share transactions resulting into short-term capital loss of ₹ 1,00,000/- was doubted by the Assessing Officer on the ground that these were transactions made by the assessee with other family members. As contended by the ld. counsel for the assessee in this regard, transactions of similar nature were entered into by the assessee with the family members and the said transactions made through journal entries were accepted by the Assessing Officer. Another reason given by the Assessing Officer to doubt the genuineness of the relevant share transactions was that the fair market value of the relevant shares as on 30/03/2012 was ₹ 6.75 per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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