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2010 (4) TMI 1092 - ITAT AGRAThird member appointment - difference between the ld' JM and the ld' AM - sale of shares and genuineness of receipts of money - Addition in Income from undisclosed and unexplained sources - JM decided the case in favour of the assessee that sale transaction of the assessee has to be treated as genuine and the claim of the assessee has to be accepted. while the learned AM decided the case against the assessee. HELD THAT:- The assessee, purchase of the shares has duly been proved and there is no dispute on the purchase of the shares being made by the assessee. The shares were purchased in earlier year. From the entire appreciation of the evidence, I noted that the assessee had acquired the shares, the purchase made on 15th July, 1999 was duly declared by the assessee in earlier years which stand accepted by the Revenue. The shares were sold through stock brokers who were registered with the stock exchange. Shares were sold at the prices quoted at the stock exchange at the relevant time. The payment of sale consideration has also flown from the bank account of the broker where the fund came through clearing, not in cash. The decisions of the lower authorities are influenced by the general observation of the Investigation Wing that arose a suspicion turned into conclusive proof in the minds of the authorities that everybody who has sold the shares at a high price has converted his unaccounted money through accommodation entries. This approach does not have any leg to stand. Hon'ble Supreme Court in the case of Umacharan Shaw & Bros. vs. CIT [1959 (5) TMI 11 - SUPREME COURT] has clearly laid down that suspicion howsoever strong cannot take place of proof. From the entire appreciation of evidence, I noted that AO has failed to establish that the assessee has introduced her own unaccounted money in the shape of alleged sale proceeds of shares. Hon'ble Supreme Court in the case of Kishinchand Chellaram vs. CIT [1980 (9) TMI 3 - SUPREME COURT has observed that "the amount cannot be assessed as undisclosed income of assessee in the absence of positive material brought by the Revenue to prove that the amount in fact belonged to assessee as the burden lay on the Revenue". It was the duty of the AO to bring on record sufficient evidences and materials to prove that the documents filed by the assessee were bogus, false or fabricated and the long-term capital gain shown by him was actually his income from undisclosed sources. The only material to support such conclusion of the lower authorities is either the findings of the DDI in general investigations or the twisting statements of M/s P.K. Jain & Associates which remain untested by the AO himself. None of the judicial precedents supports the case of the Revenue. While making addition as income from undisclosed sources, burden on the Department is very heavy to establish that the alleged receipt was actually income of the assessee from the undisclosed sources. the action of the CIT(A) was not correct in confirming the assessment as the income from undisclosed sources as against the sale consideration of shares declared by the assessee. The CIT(A) was not justified in rejecting the claim of long-term capital gain of the assessee from sale of shares. I accordingly direct the AO to assess the income declared from the sale of shares under the head income from long-term capital gain. In the result, appeal of the assessee is treated as allowed and that of the Revenue is treated as dismissed.
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