2017 (5) TMI 983 - BOMBAY HIGH COURT

Income from share transactions - AO, CIT annd also ITAT held that the assessee had traded in shares and the income was liable to be taxed as 'business' income. - Held that:- The authorities found that though the shares were purchased by the assessee at ₹ 5.50 Ps. Per share and ₹ 4/per share from the two companies in the year 2003, the assessee was able to sell the shares just within a years time at ₹ 486.55 Ps and ₹ 485.65 Ps per share. The broker through whom the shares were sold by the assessee did not respond to the assessing officer's letter seeking the names, addresses and the bank accounts of the persons that had purchased the shares sold by the assessee.

The authorities have recorded a clear finding of fact that the assessee had indulged in a dubious share transaction meant to account for the undisclosed income in the garb of long term capital gain. While so observing, the authorities held that the assessee had not tendered cogent evidence to explain as to how the shares in an unknown company worth ₹ 5/had jumped to ₹ 485/in no time. The Income Tax Appellate Tribunal held that the fantastic sale price was not at all possible as there was no economic or financial basis as to how a share worth ₹ 5/of a little known company would jump from ₹ 5/to ₹ 485/.

The findings recorded by the authorities are pure findings of facts based on a proper appreciation of the material on record. - Decided against assessee.