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TMI Blog2015 (9) TMI 1747X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of Ld CIT(A) on this issue. Gain on sale of shares - CIT(A) has held that the proof of delivery of shares are not sufficient to prove genuineness of sales, when the purchases were found to be not genuine. We are unable to understand the said reasoning given by the Ld CIT(A). If the tax authorities require any other evidence, apart from the evidences furnished by the assessees, they could have asked the assessees to furnish the same. Instead, they have proceeded to assess the long term capital as income under the head income from other sources. In our view, the said action of the tax authorities is not justified. There should not be any dispute that the delivery of shares could not have been done without purchasing them. Reply give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of shares. The Investigation wing gathered details of the persons who had transacted with Mukesh Choksi and his group of companies. It was noticed that the assessees herein had also purchased shares of a company named M/s Fast Track Entertainment Ltd from them and hence the said details were forward to their respective assessing officer. Based on the said information, the assessments under consideration were reopened by the AO in the hands of these assessees. 4. In the reassessment proceedings, the assessees submitted the evidences for purchase and sale of shares. The assessees had purchased shares through one of the Mukesh choksi group of companies named M/s Alliance Intermediateries and Network P Ltd. Hence the AO made enquiries with Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld CIT(A) upheld the same with the following reasoning:- (a) Shri Mukesh Chokshi has admitted to have received cash towards sale of shares to the assessees. When cash payment is made, the authenticity of the payment/date of payment could not be proved. (b) When purchases are bogus, the sale of shares could not be genuine. (c) The documents furnished by the assessee in support of sales, viz., amount received by cheque, delivery of shares etc. cannot be considered to be correct. (d) The astronomical rise in the prices of shares of M/s Fast track Entertainment Ltd is unbelievable. Aggrieved by the orders passed by Ld CIT(A), these assessees have filed appeals before us. 6. We have heard the parties and perused the record. The assessees have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng relationship with M/s Alliance Intermediateries & Network Pvt Ltd only with regard to the purchases, i.e., they do not have direct relationship with M/s Interconnected Stock Exchange. Further, the assessees do not have knowledge as to how the transactions have been carried out by M/s Alliance Intermediateries & Network Pvt Ltd and M/s Interconnected Stock exchange. It is also not the case of the AO that M/s Alliance Intermediateries have admitted that the trade transactions were carried through M/s Interconnected stock exchange. Hence, in our view, the claim of the assessee cannot be rejected merely on the basis that the stock exchange denied the trade transactions, when there is no material to show that M/s Alliance intermediateries hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the tax authorities is not justified. There should not be any dispute that the delivery of shares could not have been done without purchasing them. 9. From the foregoing discussions, we are of the view that the reply given by M/s Interconnected Stock Exchange India cannot be considered to be the sole criteria to suspect the claim of purchase of shares. Barring this, no material is brought on record to suspect the claim of the assessees that they have earned long term capital gains. Accordingly, we are of the view that the Ld CIT(A) was not justified in confirming the additions made by the AO. Accordingly, we set aside the orders passed by Ld CIT(A) on this issue in the hands of the assessees herein for the assessment year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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