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TMI Blog2015 (11) TMI 1716X X X X Extracts X X X X X X X X Extracts X X X X ..... Emerald Commercial Ltd was genuine transaction without appreciating the fact that;- a. The assessee could not prove the source of funds while purchasing the said shares b. No return was filed during the year in which the share were purchased and the same were purchased through cash c. Physical delivery of shares has taken place. d. Calcutta stock Exchange has denied executing purchase transaction and shares were dematted after more than one year of the date of purchase 2. On the facts and in the circumstances of the case and in law the learned CIT(A) has failed to appreciate that the assessee made shares transaction from M/s Badri Prasad and Sons stock broker who has been penalized by the SEBI for indulging in penny stock transaction during the year 2005 which is relevant to the current year under consideration 3. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in holding that the transaction was genuine without appreciating the fact that;- a. The Broker M/s Badri Prasad & Sons through whom the assessee has claimed to have purchased the shares, has clearly denied the execution of any share transaction of M/s Emerald Commercial Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the transaction has to be undertaken by the client registered with broker. c) The transaction was carried out off the bolt i.e off market deal and even as per the details furnished by Calcutta Stock Exchange in the physical segment of the shares, this transaction did not appear in such list. d) This is the first return of the appellant because the appellant had become major only on 26.05.2005 and there was no previous records of return filed or Balance Sheet available according to which the appellant was holding 10,000 shares of Emrald Commercial Ltd as on 31.03.2005. The cash on hand shown by the appellant as on 01.05.2004 at ₹ 3,45,602/- did not had any antecedent as to how the appellant is in possession of such a huge cash because the appellant was minor prior to 26.05.2005 and the cash has been shown in the hands of the appellant prior to his becoming major. Thus the source of such huge cash remains unexplained. e) The value of the shares which was purchased at ₹ 21.7 per share suddenly jumped in about a year to ₹ 465 to ₹ 489 on the Stock Exchange and the company did not had such fundamental for this share to justify the price. f) The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the online trading system of the Stock Exchange for the gains to be exempt u/s.10(38) of the Act. ii) The appellant had filed with the AO, the copy of the purchase, Bill of the Broker of M/s Badri Prasad & Sons for purchase of 10,000 shares of Emrald Commercial Ltd. and as per information gathered by the appellant, the Broker Badri Prasad & Sons was examined by the AO and everything was explained by the Broker alongwith evidence. iii) The appellant had further filed during the assessment proceedings, the letter dt.17.07.200/1 issued by the Company M/s Emrald Commercial Ltd transferring 10,000 shares in the name of the appellant alongwith physical share certificates for shares transferred in his name which aspect independently confirmed that the appellant was in possession of share certificates duly transferred in his name proving him to be legal owner of shares. iv) The appellant further filed details of Demat Account with HSBC and the Broker's Note for the sale of shares which it made through the Broker Murarilal Goenka and Shivam Stock Broking Pvt.Ltd both Brokers' of Calcutta Stock Exchange through online Trading System on Calcutta Stock Exchange. v) The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e copy of shares dealt on those days on the Calcutta Stock Exchange." 5. In sum and substance the claim of assessee has been that it had purchased 10,000 shares of Emrald Commercial Ltd. through the broker Badri Prasad & Sons vide Bill No. CK012/20053226 dated 06.05.2004 which shares were purchased in physical form which were submitted to the Company for transferring in its name, which the company transferred by its letter dated 17.07.2004, which were later on submitted on 12.08.2005 for demat in the Demat Account of the assessee with HSBC Bank and later on the shares were sold through the online trading system of the Calcutta Stock Exchange through the Broker Murarilal Goenka and M/s. Shivam Stock Broking Pvt. Ltd. and each and every details of sale of shares were duly furnished in assessment proceedings. Hence, in the view of the assessee, the transactions giving rise to LTCG on sale of shares of ₹ 45,43,362/- is fully supported by all the necessary evidences mentioned above and therefore Assessing Officer was not justified to tax the entire sale proceeds on sale of shares as unexplained cash credit under section 68 of the Act. 6. The CIT(A), after going through the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee ought not to have been registered with the Calcutta Stock Exchange. Secondly, the Voucher for shares sold to the assessee issued by M/s Badri Prasad & Sons, broker of the Calcutta Stock Exchange has not been found as bogus or fabricated documents. 8. Assessee duly received physical delivery of 10,000 shares by way of 20 share certificates of 500 shares each of the company Emrald Commercial Ltd. and such shares were duly transferred in the name of the assessee by letter of the company dated 17.07.2004 which aspect is also not found incorrect or manipulated. The physical shares received by assessee duly transferred in his name were thereafter demated by delivering them to HSBC, the demat Account holder and after demating the shares have continued to remain in the Demat A/c of assessee which aspect is also independently verified from the Demat Statement of assessee with HSBC. 9. The 4000 demated shares were thereafter sold through the Broker Shivam Stock Broking Pvt. Ltd. of the Calcutta Stock Exchange through online trading system and the balance shares numbering 6000 were duly sold through the Broker Murarilal Goenka of Calcutta Stock Exchange through online trading system. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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