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2017 (3) TMI 184 - AT - Income TaxIncome from transactions in shares - capital gain OR business income - Held that:- From the plain reading of clause (a) of the said Notification No.6/2016 dated 29.02.2016, we find that it has been instructed that if the assessee is irrespective of the period of holding treat the transaction for sale-purchase of the share as stock-in-trade then the Department shall not dispute on this matter. Accordingly, in this case, assessee has been treating the income arising from the sale-purchase of the share as STCG/LTCG, therefore, AO cannot dispute the same as “business income”. Magnitude of the transactions do not alter the nature of the transactions. Therefore, magnitude of transactions carried out by the assessee in our view should not be very material in coming to the conclusion that income in question is income from “business”. Though the res judicata is not applicable but the principal of consistency will definitely apply and on that basis the claim of the assessee should be held proper. - Decided in favour of assessee Addition as unexplained cash credit u/s 68 - addition on the basis of a witness who examined at the back of the assessee - genuineness of the purchases - Held that:- The absence of proof regarding the existence of the parties cannot, in our opinion, be confused with the question of genuineness of the purchases. If the goods purchased had been accepted by the Department, it would not, in our opinion, be possible for the Department to turn round and say that the debits appearing on account of these purchases in the name of parties were cash credits. But the lower authorities do not challenge the correctness of the trading profit, and in doing so, they impliedly accept the genuineness of the purchases. As purchases were on credit, corresponding debits for them should appear in some accounts. Such credits in those accounts would not be for cash but for goods and it would be wrong to call them cash credits. The names of the suppliers may be wrong, but the supplies of the goods were reality. For wrong names of suppliers, the reality of purchases cannot be negative. It is a case of purchases having been made by the assessee without properly disclosing the identity of the suppliers. Such a situation is not covered by s. 68 of the Act. We, therefore, delete the addition made on account of such credits. We also find that the statement of SPK recorded during assessment proceedings was not cross examined by the AO though the assessee made very specific request. While holding so we rely in the judgment in the case of CIT v. Eastern Commercial Enterprises (1993 (12) TMI 26 - CALCUTTA High Court ) wherein it was held that the Revenue cannot make any addition on the basis of a witness who examined at the back of the assessee. - Decided in favour of assessee
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