9911796707
TMI Blog2019 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... passed should be set aside and fresh order should be passed after hearing the appellant. 2. The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in reopening the assessment u/s.148 of the Act before the time for original assessment getting time barred u/s.153 of the I. T. Act, 1961. 3. The learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of Rs. 5000/- paid by the Appellant for the share certificate of the property and directing the Assessing Officer to re-compute the capital gains of the appellant by adopting the cost of acquisition at Rs. 1,91,000/-. 4. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 5,65,185/- made by the Assessing Officer for the alleged short term capital gain from dealings in shares. 5. The Appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal. 2. At the outset the learned AR for the assessee submitted that he has been is instructed by the assessee not to press ground No. 1 and 2, therefore we dismiss the same as not pressed. The 2nd issue rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instant case relates whether the assessee has incurred an expense of Rs.5000 by way of share certificate obtained from the society namely Om Dharam Jivan Association where the assessee was holding property. As per the assessee, he has incurred an expense of Rs.5000 in connection with the impugned property. Therefore he should be allowed deduction for the same. However the AO, found that there is no evidence suggesting that the assessee has incurred Rs.5000 in connection with such impugned property. The view taken by the AO was subsequently confirmed by the learned CIT (A). 8.1 However, from the preceding discussion we note that the assessee has filed a share certificate of Rs.5000 issued by Om Dharam Jivan Association where the assessee was in possession of the property. To verify the veracity of such certificate, a notice was issued by the AO under section 133(6) of the Act but there was no satisfactory reply from such society. 8.2 In our considered view the claim of the assessee does not depend upon the confirmation from the third party. The assessee as such has furnished share certificate which is primary document mentioning the payment of Rs. 5000.00. This fact has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 9.3 The AO in the remand report submitted that the assessee has made transactions in the shares of L & T during the year which resulted loss of Rs. 674/- but the same was not shown in the income tax return. The AO also submitted that the assessee has furnished the bank statement for the verification and the confirmation from the broker namely Rajvee Share broking Ltd. 9.4 However, the AO in the remand report also submitted that the assessee has not furnished the confirmation from the Pradeep Enterprises Ltd. 9.5 The assessee in his rejoinder submitted that he had no dealing with M/sPradeep Enterprises Ltd. 9.6 The learned CIT (A) after considering the submission and the remand report has confirmed the order of the AO by observing as under: 6.3 Decision It has clearly been stated by the AO that the appellant has not disclosed the share transactions entered into by him in the return of income at all during the year. There is a clear default on the part of the appellant by not showing these transactions in the return of income. Therefore, all these transactions are undisclosed transactions of the appellant. It is only because of the fact that information was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h there is no profit in the shares of L & T on which addition has been made by the A.O but the fact remains that despite so many opportunities, the appellant has still not disclosed all the share transactions even after the remand report. The appellant is duty bound as per the statute to offer its true and correct income, however, the appellant has miserably failed on this account. As per the information collected in the A.O in the remand report proceedings from share broker M/s. Rajvi Stock Broking Ltd., the appellant has carried out trades in 45 scripts during the year. Even in his submission before me, the appellant has disclosed share transaction in 6 scripts. Therefore, the appellant has not disclosed transactions from 39 scripts. Even in the rejoinder to the remand report, the appellant has not submitted any reply whatsoever as to why these transaction shave not been disclosed either before the A.O or before the CIT(A). The appellant is absolutely silent on these transactions which clearly indicates his guilty mind and malafide intention. Therefore, the appellant failed to discharge the onus cast on him to not only disclose all the transactions but also report correct incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord suggesting that the assessee has dealt in 45 scripts.
From the above, we conclude that the assessee has incurred losses on the sale purchase of L & T shares amounting to Rs. 674/- and as a whole for all the scripts he has earned a profit of Rs. 2,250/- only.
12.3 Therefore, we hold that there cannot be any addition to the total income of the assessee on account of sale of shares of L & T for the reasons as discussed above.
12.4 Regarding the allegation of the learned CIT (A) about the source of investment in the shares, we note that there was there was no such show cause notice issued to the assessee explaining the source of investment. Therefore, in our considered view there cannot be any addition on account of source of investment without showing a show cause notice to the assessee for his explanation.
12.5 After considering the facts in totality as discussed above, we are not convinced with the finding of the lower authorities. Accordingly we reverse the order of the authorities below. Hence the ground of appeal of the assessee is allowed.
13. In the result the appeal of the assessee is allowed.
Order pronounced in the Court on 14/10/2019 at Ahmedabad. X X X X Extracts X X X X X X X X Extracts X X X X
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