TMI Blog2012 (12) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... was conducted, it is not proper on the part of AO to make an assessment of sale of transactions as investment, as is done in this case. - matter remanded back - appeal filed by assessee is allowed for statistical purposes. - IT APPEAL NO. 8016 (MUM.) OF 2011 - - - Dated:- 27-11-2012 - B. RAMAKOTAIAH AND VIJAY PAL RAO, JJ. ORDER B. Ramakotaiah, Accountant Member - This is assessee's appeal against the order of AO which was ii pursuance of order of the DRP-II Mumbai under section 143(3) r.w. section 144C(13) of the I.T. Act. 2. Briefly stated, assessee a foreign company is in the business of FIIs/Sub Account (Investment in Indian Capital Market). It filed return of income declaring a total income at Rs. 40,95,670/-. Being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of the details came to a conclusion that assessee made investment in the scrip 'Steel Authority of India' of 485909 shares valued at Rs. 11,32,38,770/- on 17.12.2007 and as this transaction was not reconciled or explained, the amount was treated as unexplained investment under section 69 and taxed at the rate of 40%. 3. Assessee filed further details before the DRP explaining that the transactions were not entered on behalf of assessee and the broker M/s Credit Suisse has undertaken the transactions on behalf of the five other funds which are under the control of Threadneedle Asset management Ltd and filed confirmations of trades by M/s Credit Suisse before the DRP. It also filed letter from the custodian (NSDL) indicating that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese transactions on behalf of five other funds detailed in page 6 of the DRP order and assessee is able to furnish the confirmation from M/s Credit Suisse with reference to the various transactions and referred to various reconciliations placed in the paper book. It was his contention that the BSE information through the AIR does not contain any details of assessee transactions, therefore, they could not reconcile before AO in the 14 days time given to it and further before the DRP after inquiry from BSE, the necessary details were also furnished which were rejected by the DRP without giving any opportunity. 5. With reference to the observation that assessee did not reply, assessee placed on record, copy of the letter addressed to the DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he PAN No.AACCT 5709 L pertain to the Threadneedle Investment ICVC Asia Fund with 'tax type'- AIR 'txn code'- 005 for acquiring shares of Rs. 1.00 lakh and above. This information pertains to the 'Power Grid Corporation of India Ltd' was reconciled by assessee on which there is no objection. The balance of the transactions running from No.1 to 64 are reported by 'tax type' N-CIB and 'txn code' 321 giving name and address of the investors and persons who have been entered into share transactions of Rs. 20,000 and above. Under this head there are 64 transactions on17.12.2007 in which the 'Bombay Stock Exchange Ltd' was reported both in the name of the scrip as well as tax filer address. On the basis of this AIR information the total transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PAN No. of assessee, the onus does not shift completely to assessee. It is the responsibility of AO to examine complete details before asking for reconciliation and whether the transactions were indeed undertaken or not. The AIR report also does not contain any authentication but since it is generated by the Department, credit was given by AO and DRP about its authenticity. Assessee after obtaining the details and making efforts to reconcile filed the documents on record duly certified as 'true copy' before the DRP. What further authentication was required could not be understood. In our view, the DRP should have examined the transactions, which could not be done before AO due to lack of time and details. (c) As seen from the findings on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination by AO by giving due opportunity to assessee. AO is directed to examine the transaction report of AIR on 17.12.2007, for which he can obtain fresh details from the BSE, the brokers involved, custodians as all the relevant information which will be duly available with the relevant authorities including the custodians of FIIs. Further the details filed by assessee with reference to various reconciliations including the PAN Nos. given by the respective investment funds are to be examined as this information was not filed before AO and the DRP simply rejected the same. AO also can examine why assessee's PAN was utilized. AO can examine when the said scrips in SAIL were purchased by the relevant FIIs and whether the transactions were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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