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TMI Blog2018 (9) TMI 1682X X X X Extracts X X X X X X X X Extracts X X X X ..... n any case if Revenue wanted to make additions on this count, it is the first year i.e. AY 2009-10 when declaration and disclosure was made for the first time for such shares, the additions could have been made by Revenue towards unexplained investment but not the year under consideration. Under these circumstances, the said shares cannot be classified as unexplained investments for the year under consideration before us. Principally agreeing with the contentions of the assessee, we are remitting the matter back to the file of the AO for limited verification purposes and if it is found these shares acquired by the assessee between AY 200506 to AY 2008-09 were declared to Revenue vide declaration of dividend income from these shares were credited in saving bank account maintained with Bank of Maharashtra which was declared in the return of income filed with Revenue from year to year thereafter since AY 2009-10 albeit dividend income was claimed exempt from tax, then the said additions as were made by the AO for shares acquired between AY 2005-06 to AY 2008-09 shall be deleted by the AO as these investments were duly declared and disclosed investments. - Decided in favour of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in partly confirming order of learned A.O. treating investment in flat of ₹ 2,15,28,820/- as unexplained investment u/s. 69 without appreciating that S.69 is not applicable as source of investment is from sale of shares which were acquired in earlier years and hence entire addition made by learned A.O. deserves to be deleted. 3. The learned CIT(A) erred in confirming order of A.O. rejecting excess claim of exemption u/s.10(38) made in revised computation of income by wrongly observing that (i) appellant made a claim that the exemption was claimed in the revised return of income and (ii) revised computation was an act of deliberate attempt on the part of the appellant not to reveal full share transactions in his return of income without appreciating that grounds of appeal clearly stated revised computation of income and hence the excess claim may be allowed. 4. The learned CIT(A) erred in partly confirming order of A.O. treating shares purchased of ₹ 3,395/- from Motilal Oswal as unexplained investment without appreciating that Assessee had explained the nature and source of the same and hence the addition of ₹ 3.395/- ought to be deleted. 5. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in which shares are held by the assessee. It was explained that the demat account as well bank account were duly disclosed to the Revenue in return of income filed by the assessee with Revenue. The assessee had explained that assessee held the share which were acquired over a period of time by way of gift from his grandfather Late Dr. Yahyabhoy E. Kachwalla as per declaration made under sub-section 1 of Sec. 65 of the Finance Act 1997 in respect of Voluntary Disclosure of Income Scheme(VDIS) which was accepted by learned Commissioner of Income-tax, Mumbai. It was explained that the assessee also received gift of shares from his father Shri Shabbir Y. Kachwalla on 11-04-2008 which were transferred to his demat account with Saraswat Co-op. Bank Limited. The assessee produced copy of gift deed executed in his favour by his father before the AO. The copy of declaration made by grand father under VDIS was also filed. The assessee explained that dividend income was received for last several years on these shares which was credited to his singular saving bank account maintained with Bank of Maharashtra. It was submitted that till the assessee was minor i.e. upto AY 2004-05, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich all these shares were held was duly declared and disclosed to the revenue over a period of time as the dividend received on account of share held in this Demat accounts were duly declared and disclosed to revenue from time to time. Thus, it was claimed that all the share which were sold were declared and disclosed to Revenue over a period of time vide disclosure by way of declaration of dividend income earned on these shares as well bank account maintained with Bank of Maharashtra being disclosed to Revenue in the return of income filed with Revenue. The AO disbelieved the assessee and made addition to the tune of ₹ 2,15,28,820/- towards the investments made in the aforestated new residential flat after giving accepting explanation of source for making investment in new residential flat with respect to loan of ₹ 20,00,000/- received from Ms.Shahida Kachwalla. Thus, the AO did not accept explanation of the assessee so far as proceeds of sale of shares which were claimed to be utilised by the assessee for making investment in new flat was disbelieved by the AO to the tune of ₹ 2,15,28,820/-, which falls within following broad categories:- (i) Receipt by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. With respect to ground no. 1 to 3 raised by the assessee in memo of appeal filed with the tribunal, it is explained by learned Senior counsel for the assessee that the assessee has not purchased any shares during the relevant assessment year, while the shares were all acquired/purchased in the preceding years by way of several modes such as gifts/inheritance from grandfather/father, fresh purchases from market/IPO as well bonus shares allotted by the companies. It was also explained by learned Senior Counsel that the assessee filed return of income consistently since AY 2009-10 onwards and our attention was also drawn to return of income filed by the assessee. It is also explained that the dividend income has been credited in the bank account of the assessee maintained with Bank of Maharashtra which was declared to the Revenue over a period of time. It was also submitted that the father of the assessee Mr. Shabbir Y Kachwalla was regularly filing return of income and these shares were declared by him in the return of income filed with the revenue till the assessee was minor keeping in view provisions of Section 64 of the 1961 Act. It was also explained by learned Senior Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief after verifying that income earned and disclosed to Revenue was utilised for making investments in shares in those years. The Revenue has not come in appeal before ITAT against relief granted by learned CIT(A) as neither learned DR nor Senior counsel for the assessee could bring the said fact on record before the tribunal. 8. We have considered rival contentions and perused the material on record including cited case laws. We have observed that the assessee is salaried employee having income from salaries, capital gains, interest income and dividend income. The assessee is not maintaining any books of accounts as it is claimed that the assessee is not required to maintain books of accounts within mandate of the 1961 Act as there is no business income earned by the assessee. The assessee has claimed that it is maintaining singular bank account with Bank of Maharashtra being saving bank account and the said saving bank account is stated to be duly declared and disclosed to Revenue in the return of income filed over several years. It is claimed that all income earned by the assessee is credited to this singular saving bank account and similarly all investments as well expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities below had accepted loan of ₹ 20,00,000/- raised by the assessee from Ms. Shahida Kachwalla as explained source for making investment in new flat and there is no dispute so far as sources for making investment in flat to the tune of this ₹ 20,00,000/- is concerned. The dispute had arisen between rival parties with regard to sources for making investment in new flat to the tune of ₹ 2,15,28,820/- which is stated to be raised by the assessee from sale of shares in the impugned assessment year to the tune of ₹ 1,67,40,371/- (later corrected by assessee to ₹ 1,72,85,949/- on being pointed by the AO through revised computation of income filed in assessment proceedings before the AO but not accepted by authorities below on the grounds that no revised return of income was filed by the assessee) as well as ₹ 50,00,000/- arising from sale of shares during the preceding assessment year again stated by the assessee to be from sale of shares which sources were not accepted by the AO, as the AO disbelieved the purchases/acquisition of shares in the impugned year as well preceding years being unexplained sources, which fell broadly under following fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the assessee has duly declared bank account as well the dividend earned on these shares on year to year basis to Revenue in return of income filed with Revenue. We are in agreement with the contention of the assessee as the assessee duly filed return of income for AY 200910 onwards and if the bank account from where these investments were made as well dividend declared/disclosed in return of income albeit exempt from tax was declared to the Revenue in return of income filed by the assessee for those years in which fresh acquisition/purchases were made as well in subsequent years, then there is no reason/justification for making any additions for the impugned assessment year under consideration before us. If any case if the Revenue wanted to make additions for such acquisition/purchases, nothing prevented Revenue from invoking provisions of Section 147/148 of the 1961 Act and the assessments could have been reopened but to burden the assessment of this year keeping in view factual matrix of the case is not warranted. It is also pertinent to mention that the AO framed assessment u/s 143(3) for the impugned assessment year on 30.03.2015, while for AY 2009-10 onwards till AY 2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in preceding years, wherein bank account as well income arose from these shares by way of dividend were on record with the Revenue. The demat accounts are linked with bank account and the dividend etc is received electronically in the bank account linked with the demat account. The assessee has one bank account with Bank of Maharashtra and one demat account with Saraswat Co-operative Bank Limited. In any case if Revenue wanted to make additions on this count, it is the first year i.e. AY 2009-10 when declaration and disclosure was made for the first time for such shares, the additions could have been made by Revenue towards unexplained investment but not the year under consideration. Under these circumstances, the said shares cannot be classified as unexplained investments for the year under consideration before us. Principally agreeing with the contentions of the assessee, we are remitting the matter back to the file of the AO for limited verification purposes and if it is found these shares acquired by the assessee before attaining majority and dividend income from these shares were credited in saving bank account maintained with Bank of Maharashtra which was declared in the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said additions as were made by the AO for shares acquired between AY 2005-06 to AY 2008-09 shall be deleted by the AO as these investments were duly declared and disclosed investments. The Revenue could have invoked provisions of Section 142(1) or 147/148 of the 1961 Act for those years when the said shares were acquired/purchased or could have made addition in the first year when the assessee disclosed said investment to Revenue i.e. AY 2009-10. Similarly we are of the view that the shares which were sold in immediately preceding year i.e. AY 2011-12 and against which sale proceed to the tune of ₹ 50,00,000/- was invested in the aforesaid new residential flat cannot be brought to tax for similar reasons for the year under consideration and similar directions as are issued by us in preceding para s of this order with respect to other additions are issued for the purposes of limited verification by the AO. This issue is set aside to the file of the AO for necessary verifications. This leaves us with the issue of adopting corrected figure of sale of shares and capital gains arisen thereof as pointed by the AO which the assessee accepted and filed revised computation of in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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