2013 (11) TMI 841 - ALLAHABAD HIGH COURT

Addition u/s 68 of the Income tax act – Addition on account of sale of shares – Held that:- It is well established by the appellant regarding genuineness of share transaction and he has sufficiently discharged the onus cast upon him. AO's action is not well founded in position of law in adding entire amount of sale of shares as income from undisclosed and unexplained sources u/s 68 of I.T. Act - Deleted the entire amount of Rs.19,51,038/-.

There is no evidence on record as referred in assessment order, to prove that the proceeds received against sale of shares represent appellant's undisclosed income. Hon'ble Apex Court in the case of Kishan Chand Chella Ram vs CIT rep[orted in [1980 (9) TMI 3 - SUPREME Court] has held "that the burden is on the Department to prove that the money belongs to the assessee by bringing proper evidence on record and the assessee could not be excepted to call the concerned person in evidence to help the Department to discharge the burden that lay upon it".

Assess was in possession of the shares in question and had sold the said shares in course of ordinary transaction of sale of shares at stock exchange and if the broker did not file any evidence since the same were seized by the Revenue Department, there is no fault with the assessee. From the aforesaid facts it is clear that the shares in question were allotted to the assessee in the public issue which were held in demat a/c of Stock Holding Corporation of India Ltd. The shares were transferred to Abhipra Capital Ltd. The sale consideration was received by demand draft. Therefore, the transaction in question cannot be said to be fake and is a genuine transaction – Decided against the Revenue.