TMI Blog2021 (5) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... s common issue is decided in favour of the assessee(s) and the finding of the CIT(A) of confirming the action of the Ld. AO of treating STCG/LTCG as income from other sources is set aside. Capital gain from sale of equity shares as income from other sources - HELD THAT:- During course of search, copies of DEMAT accounts were seized by the search team which were having same details as were filed by the assessee in their respective income tax returns before the search took place. No other incriminating material has been referred by the Ld. AO which has been found during the course of search indicating that the assessee(s) have entered into sham transaction and the alleged transaction of purchase and sale of shares are in the nature of accommodation entries or there is any direct nexus of the assessee to have involved in managing/ arranging the accommodation entries. The facts remains undisputed that the alleged additions are neither based on an incriminating material found during the course of search nor any material gathered during the assessment proceedings and the finding of both the lower authorities are just based on the theory developed by the revenue authorities, on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No.224/Ind/2019, Shri Shankar Kumar Lila 1.The Learned Assessing officer has erred in law and on facts in making addition of ₹ 81,322/-. 2. The Learned AO has erred in making the addition of ₹ 81,322/- ignoring the evidence filed by the appellant in support of income from Capital Gain. 3. That the Ld. AO has erred in treating the income of Long Term Capital Gain as income from other sources without having any material or evidence on record to do so. 4.That the appellant reserves the right to add, alter or amend the grounds of appeal before the appeal is decided. Ground of appeal in IT(SS)A No.225/Ind/2019, Shri Anil Kumar Lila HUF 1.The Learned Assessing officer has erred in law and on facts in making addition of ₹ 18,978/-. 2. The Learned AO has erred in making the addition of ₹ 18,978/- ignoring the evidence filed by the appellant in support of income from Capital Gain. 3. That the Ld. AO has erred in treating the income of Long Term Capital Gain as income from other sources without having any material or evidence on record to do so. 4.That the appellant reserves the right to add, alter or amend the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ramed for A.Ys. 2005-06 to 2010-11 but our adjudication is confined to A.Y. 2005-06 only. 4. During the assessment proceedings while examining the computation of income Ld. AO observed that the assessee has shown Long Term Capital Gain at ₹ 4,24,313/-. Details were called and the same were duly filed including the contract note for purchase and sale, DEMAT account for transfer of shares and bank statement in support of the remittance received. But Ld. AO was not convinced as he observed that the transaction of purchase and sale have taken place in physical form. Ld. AO treated the capital gain as bogus liable to be taxed under the head Income from other sources . Though the assessed income of the assessee remained the same as was disclosed in the return of income, except the change of head of taxing the capital gain income as Income from other sources . 5. Appeal by the assessee before the ld. CIT(A) did not bring any relief. As the Ld. CIT(A) also concluded that the transactions were sham and unaccounted income was converted into bogus capital gain and relying on various judicial pronouncements confirmed the action of the Ld. AO. 6. Now the assessee is in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the in respect of the transaction of capital gains, the following details are furnished: - i. The Demat statement for purchase and sale of shares is at PB 4-5. The transaction is duly reflected in the Demat statement of the assessee. ii. Through this Demat only, the sale proceeds of various other listed companies like Axis Bank, Bank of India, Colgate etc were reflected, which has not been doubted by the department. iii. The share broker was DPS shares and Securities, who was duly registered with SEBI. He gave contract notes and broker statement which are placed at PB 6-19. iv. The shares were sold through banking channels and the amount was received in the bank of the assessee. PB 20. v. It is pertinent to note that the purchase and sale both were STT paid. In the contract note at PB 7, details for purchase of shares of Interlink FN is mentioned. STT has been charged in the contract note. 6. No evidence was brought on record to show that the capital gains was bogus. 7. Ld. AO referred to certain inquiries conducted by the Investigation Wing at Mumbai. What inquiries were conducted; whose statement was recorded; what evidence w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases: i. Pr. CIT vs Smt. Krishna Devi (Del. HC) - PB 21-30 ii. Arzoo Anand (Trib. Indore) - PB 31-43 iii. Smt. Smita P Patil (Trib. Pune) - PB 44-60 iv. ITO vs Smt. Arti Mittal (Hyd. Trib) - PB 61-78 v. Consistent Vyapaar Pvt Ltd. (Trib. Kol.) - PB 79-99 vi. Smt. Kalpana Mukesh Ruia (Trib. Mum.)- PB 100-161 vii. Saroj Damani (Trib. Mum.) - PB 162-179 viii. Smt. Karuna Garg (Trib. Del.) - PB 180-186 It is therefore prayed that the addition made may kindly be set-aside both on legal ground as well as on the merits. 7. Per contra Ld. Departmental Representative (DR) supported the finding of both the lower authorities and also submitted that there is mismatch of names in the name of company appearing in contract note with those appearing in the DEMAT account. However, Ld. CIT-DR failed to controvert the fact that the alleged additions are made only on the basis of information collected during the assessment proceeding and the genuineness of the brokers through which purchase and sale were effected and the agency managing DEMAT account is not in doubt. 8. We have heard rival contentions and perused the records placed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anil Kumar Lila HUF 2006-07 18,978/- LTCG Anil Kumar Lila 2007-08 3,47,061/- LTCG Anil Kumar Lila HUF 2007-08 3,39,656/- LTCG 11. Ld. counsel for the assesse has filed separate paper books for each of the assessee(s) in appeal before us, providing the details of computation of income originally filed, DEMAT statement, statement from brokers, ledger account in the books of brokers, contract note, form no.10DB regarding payments of Security transaction tax and the bank statement. Though the Ld. DR in some of cases has referred to some mismatch in the names but the same were clarified by the Ld. counsel for the assessee to our satisfaction. 12. We, therefore, after carefully examining the documents placed before us are satisfied that the assessee had made genuine claim of capital gain (Long Term Capital Gain/Short Term Capital Gain) in their respective returns of income and both the purchase and sales of shares are proved to be corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us are non-abated assessments. Income with same details were again filed in compliance to notice u/s 153A of the Act. During course of search, copies of DEMAT accounts were seized by the search team which were having same details as were filed by the assessees in their respective income tax returns before the search took place. No other incriminating material has been referred by the Ld. AO which has been found during the course of search indicating that the assessee(s) have entered into sham transaction and the alleged transaction of purchase and sale of shares are in the nature of accommodation entries or there is any direct nexus of the assessee to have involved in managing/ arranging the accommodation entries. The facts remains undisputed that the alleged additions are neither based on an incriminating material found during the course of search nor any material gathered during the assessment proceedings and the finding of both the lower authorities are just based on the theory developed by the revenue authorities, on the basis of the result of some investigation carried out by teams of revenue department in some other cases and the reports of such so called theory have not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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