TMI Blog2010 (10) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of capital gain arising out of the purchase and sale of shares of M/s Shalimar Agro Ltd. to the record of AO - The issue of exemption u/s 54F is consequential one, therefore, the same is also requires to be decided as per the outcome of the issue of capital gain. Accordingly, we set aside the order of the CIT(A) and restore this issue to the record of the AO for verification and examination - the appeal of the revenue is allowed for statistical purposes and cross-objection of the aseseee stands dismissed. - ITA No. 5670/Mum/2008 - - - Dated:- 20-10-2010 - S.V. Mehrotra, Vijay Pal Rao, JJ. Harigovind Singh for the Appellant Vimal Punamiya for the Respondent ORDER Vijay Pal Rao: This appeal by the revenue and cross-objection are directed against the order dated 9.6.2008 of CIT(A)-XIX for the assessment year 2004-05. 2. The revenue, in this appeal, has raised the following revised grounds: "i) the ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.45,55,979/- being fictitious long term capital gains shown by the assessee, ii) The Ld. CIT(A) has erred in giving relief to the assessee, by not appreciating that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d grounds are more clearly and appropriately highlighting the issue involved in the appeal filed by the revenue. Thus, when the revenue have not raised any new issue in the revised grounds then the same are admitted and taken on record. 5. Only issue arises whether the transactions of purchase and sale of shares of M/s Shalimar Agro Product Ltd was a sham transaction and the sale consideration claimed by the assessee would be treated as unexplained cash credit u/s 68 of the Act. 7. Brief facts of the case are that the assessee has shown long term capital gain of Rs.31,65,175/- and Rs.24,71,310/- under 20% and 10% tax category of the sale of shares and also claimed exemption under section 54F of Rs.31,65,101/-. During the assessment proceedings the AO asked the assessee to furnish the details of purchase and sale of shares along with the purchase note in respect of capital gain as well as a copy of DMAT statement. The AO has observed from the purchase note that M/s Shreenidhi Stock and Broking had issued alleged purchase of 15000 shares of M/s Shalimar Agro Products Limited on behalf of the assessee. M/s Shreenidhi Stock and Broking is a partnership concerned of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He has produced the copies of certificates dated 30.04.2002 to show that the shares were got transferred. The assessee pointed out that no payment was made by him but the amount was adjusted against the credit balance lying with the sub-broker. The assessee further submitted that the shares were purchased from one Shri Bhagvan Solanki on 24.4.2002 for a total consideration of Rs.1,09,500/- which was credited to his account and adjusted against opening debit balance and shares were given for dematerialization on 28.05.2003. The assessee does not know the person from whom the shares were purchased because the shares were purchased from share broker. Accordingly, the assessee does not have his latest status. Since the transaction was done about four years back, for tracing the person is highly impossible. The AO then issued summons to sub-broker M/s Shreenidhi Stock and Broking for submission of clients' registration form of Shri Bhagvan Solanki and PAN. It was replied by M/s Shreenidhi Stock and Broking that it was not mandatory for the sub-broker to maintain clients' registration form of their clients four years ago and now Bhagvan Solanki do not deal with them. Therefore, they do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t accepted because the assessee himself is a partner in the sub-broking firm and thus made the fictitious arrangement. Despite various opportunities are given to the assessee by the AO, the assessee failed to produce Mr.Bhagvan Solanki. Even the main broker has also refused to have done any transaction in the shares of M/s Shalimar Agro Ltd. Therefore, the sale proceeds received and credited in the assessee's books of account in respect of shares of M/s Shalimar Agro Ltd is only a fictitious and accommodation entries manipulated by the assessee. The ld. DR has heavily relied upon the order of the AO. 10. On the other hand, the learned AR has submitted that the AO has not at all disputed the sale of shares in question by the assessee, therefore, without the purchases of shares and sale of the same is not possible. The AO has doubted the transaction of purchase of shares by the assessee and not the sale of shares. The learned AR has further contended that the purchase of shares are not in the relevant previous year but the same in the previous year and therefore the same cannot be considered for disallowance in the relevant previous year. When the sale of shares has not been doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Delhi Bench "C" in ITO V/s Naveen Gupta reported in (2006) 5 SOT 94(Delhi). 11. We have considered the rival contentions and relevant record. The aseseee purchased the shares in question through M/s Shreenidhi Stock and Broking, the firm in which the assessee is a partner. The AO doubted the transaction of purchases on the ground that the assessee has not produced one Shri Bhagvan Solanki from whom the shares were purchased. Secondly, no payment was made by the assessee for purchasing the shares in question. Since the assessee is a partner in the firm, the sale and purchase consideration was adjusted only by way of book entries which is shown in the final account of the firm. Though the assessee has shown the transaction in its balance sheet ending on 31.3.2002. However, no deed of transfer or any record was produced by the assessee to show the actual date of purchase except the purchase note which is issued by the broking firm in which the aseseee is a partner. The AO issued summons to the M/s Shalimar Agro Ltd for furnishing of Annual Return or showing the transfer of shares in the name of the aseseee. The AO had also sought other information from the company but no respons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has raised following grounds in the cross-objection: "1. On facts and in circumstances of the case and in law, the leaned CIT(A) has erred in not properly and completely incorporating contents of the statement of facts filed with him by the cross-objector; 2. on fact and in circumstances of the case and in law, the learned CIT(A) has erred in not properly and completely incorporating contents of the letter dated 14.05.2008 filed with him by the cross-objector " 14. We have heard the learned AR as well as the learned DR and considered the relevant record. The only grievance of the assessee in this cross-objection is that the CIT(A) has not properly incorporated the contents of the statement of facts and letter dated 14.05.2008 filed by the assessee. It is evident from the impugned order that the CIT(A) has decided the issue after considering the contentions of the assessee and also the objection raised by the AO in the assessment order. It is not necessary for the appellate authority to record each and every sentence in the order as pleaded by the aseseee. When the CIT(A) has considered all the relevant contentions while passing the impugned order and decided the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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