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2009 (9) TMI 972 - AT - Income TaxBogus share transactions - transaction is off-market - AO has doubted the purchase of shares by the assessee mainly because of the report received from the ADIT (Inv.), Kolkotta, that the transaction of purchase of shares by the assessee is an off-market transaction as no evidence could be found from the Calcutta Stock Exchange - CIT(A) deleted the addition - HELD THAT:- As regards the purchase of shares from off market, the assessee has placed reliance upon the decision of Mukesh R. Marolia [2005 (12) TMI 457 - ITAT MUMBAI] wherein it has been held that the purchase and sale of shares outside floor of stock exchange is not an unlawful activity and the off-market transactions are not illegal. As regards the AO’s observation that there is exorbitant rise in the sale price of the shares which created a doubt about the genuineness of the transaction, the assessee has placed reliance upon the decision of Smt. Memo Devi [2008 (3) TMI 689 - ITAT AGRA] wherein it has been held that increase in share price by more than 25 times cannot be the basis to assume that the transaction was bogus as abnormal increase in the share price is a normal phenomena. As decided in the case of ITO vs. Smt. Kusumlata [2006 (8) TMI 266 - ITAT JODHPUR] wherein it has been held that for making an addition u/s 69, the Department is required to prove to the hilt that the impugned transactions are bogus. Transactions of sale being accepted as genuine in the AY 2003-04 but the same being disallowed by the AO in the year 2004-05, the learned counsel for the assessee placed reliance upon the decision of ‘F’ Bench of the Delhi Tribunal in the case of ITO vs. Smt. Neelam Chawla [2007 (12) TMI 477 - ITAT DELHI] wherein it has been held that after the assessee furnished proof for purchase, sale, registration of shares in her name duly supported by market quotations etc. and AO ignored the same on the basis of the statement of the share broker through whom the assessee has sold the shares, the purchase of shares made in earlier years cannot be doubted. We find that the CIT(A) has considered the factual matrix of the case in detail and the propositions of the assessee are supported by the legal precedents cited supra. Revenue’s appeal is dismissed.
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