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TMI Blog2012 (2) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... n the circumstances of the case the learned CIT (A) has further erred in confirming to the action of AO regarding non- confronting to the assessee on the precise material on which he treated share transaction as bogus. 4. That on the fact and in the circumstances of the case the learned CIT (A) has erred in over looking and in summarily rejecting the details statement of facts submitted alongwith memorandum of appeal, various documents, share sales purchase invoice and evidence placed in paper book filed, etc. 5. That on the facts and in the circumstances of the case the learned CIT (A) has erred in confirming to the tax calculations on short term capital gain Rs. 53,901/- by normal rate instead of special rate @ 10% prescribed under section 111(A) of the Act. 6. That on the facts and in the circumstances of the case the learned CIT (A) has erred in confirming the action of AO regarding addition of Rs. 2,00,000/- of genuine advance against agreement on sale of own agriculture land. 2. Following ground was taken by the Revenue :- On the facts and in the circumstances of the case the ld. CIT (A) has erred in deleting the addition of Rs. 1,06,20,000/- made on account of undisclosed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not amenable to verification. 8. From the record, we found that the assessee has purchased 30,000 shares of Niharika India, out of which 14,000 shares were sold during the year on which exemption was claimed u/s 10(38) on the plea that shares were held for more than 12 months and assessee was entitled for exemption u/s 10(38) on the profit arising out of sale of long term capital assets being shares. The Assessing Officer did not believe the purchase bills and observed that the assessee has got the shares transferred from M/s. Dyco Securities to the State Bank of India on 1.3.2005. Thus, as per Assessing Officer, the shares of Niharika India was credited in the Demat account on 1.3.2005 by Dyco Securities Limited as per Demat Account. As the assessee could not substantiate the purchase in the assessment year 2002-03 and 2004-05, the Assessing Officer held that shares were actually purchased by the assessee on 1.3.2005 i.e. during the financial year 2004-05 itself. The Assessing Officer held that transaction of purchase was not genuine and assessee also did not hold the shares for more than 12 months. 9. From the record, we found that to substantiate the claim of purchase, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuineness of purchases is duly established as per the documents placed on record. Accordingly, we direct the Assessing Officer to treat profit on sale of 14,000 shares of Niharika India, as short term capital gains and to tax accordingly. 11. In the result, ground no.1 of the assessee s appeal stands dismissed, whereas ground no.2 is allowed. 12. An addition of Rs. 2 lakhs was made by the Assessing Officer on account of advance shown by the assessee as received against the sale of agricultural land. 13. The assessee was asked to furnish the evidence regarding the genuineness of transaction and creditworthiness of the person from whom the advance has been received. In response to query, the assessee has submitted a letter from Shri Prabhulal from whom the advance has been received in cash and copy of driving license of that person. To prove the genuineness of transaction and creditworthiness of Shri Prabhulal, a summons u/s 131 of the Income-tax Act, 1961, was issued on dated 24.12.2007 to attend office personally with the copy of agreement, income tax returns of assessment year 2004-05, 2005-06, 2006-07 and pass book of all banks. The said summons return unserved as the person was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of tax. At the same, addition of Rs 53,901/- (26,000+27,901) made by the AO (which has not been offered by appellant for taxation is also confirmed. 18. We have considered the rival submissions. The assessee has not been able to furnish details of shares so sold nor offer the capital gains earned thereon in the return of income. The lower authorities were justified in taxing the same as normal rate of tax, in view of findings recorded by them which could not be controverted. 19. In the result the appeal of the assessee is partly allowed. 20. In the Revenue s appeal, the action of CIT (A) for deleting the addition of Rs. 1,06,20,000/-made on account of undisclosed income of the sale value of 15,000 shares for consideration of Rs. 44,25,000/- and unexplained investment, acquiring 21,000 shares for Rs. 61,95,000/- was challenged. 21. From the record, we found that in the assessment order the Assessing Officer, observed that the assessee has purchased total 50,000 shares of Niharika, out of which she sold 29,000 ( 14,000 + 15,000 shares) for which assessee could not explain the source of investment for the remaining 21,000 shares. It was explained before the Assessing Officer that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition. The AO has taken a view that the appellant purchased total 50,000 shares of Niharika and out of them, sold 29,000 (14,000+15,000) shares and the appellant could not explain the source of investment in remaining 21,000 shares. As per appellant's explanation, there was a wrong credit of 20,000 shares in her demat account which were returned by her. The AO considered this return also as a sale. After return of these 20,000 shares, there remained only 30,000 effective shares in her account. Out of these, she sold 14,000 shares in fact, leaving a closing stock of 16,000 shares. Thus, the sale price of Rs. 44,25,000/- of 15,000' shares and cost price of Rs. 61,95,000/- of 21,000 shares has wrongly been added by the AO on imaginary basis. It is not the appellant's case that she has sold the remaining 16,000 shares of Niharika. The AO also does not have any evidence to show that the appellant has sold the remaining 16,000 shares of Niharika. The AO has not accepted the mistake of excess credit of shares to the appellant and then reduction of excess. 4.3.1 Now, since the appellant's explanation of the credit entry for sale of shares at Rs. 41,33,825/-has not been acce ..... 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