TMI Blog2014 (6) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... ares was taken - the assessee never paid for the shares purchased by her nor received the sale consideration on sale of shares - Only the difference, i.e. the loss was settled - The transactions of purchase and sale of shares were neither subjected to security transaction tax nor any evidence has been brought on record to suggest that STT was paid on these transactions. This conduct of the assessee defies all logics because such practice is done only in the derivatives market where no delivery is taken and the settlement is done only on account of profit or loss - The statement of the Director of the share broking company cannot be brushed aside lightly - When the person from whom the alleged transaction has been taken place categoricall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case are that the assessee is an individual deriving income from salary. During the year under consideration the assessee filed return of income on 31.10.2005 declaring total income at Rs. 2,39,858/- which included income from salary at Rs. 76,010/- and short term capital gains at Rs. 1,59,094/-. From the short term capital gains the assessee set off loss on sale of shares at Rs. 1,65,077/-. The same was disallowed by the AO on the ground that one of the Directors of the share broking company in his statement recorded during the course of the search has stated that his broking company was giving bogus bills/capital gain/commodities profit, etc. The same share broking company also provided the list of the persons who have taken bogus bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of these shares at the time of purchase, clearly establishes that these transactions were not genuine, when seen in the background that the Director of this company had in a statement during search, accepted the modus operandi of issuing bogus bills to various persons. Therefore it becomes clear that the transactions allegedly entered into by the assessee through M/s. Goldstar Finvest Pvt. Ltd. for purchase of shares leading to short term capital loss of Rs.1,65,077/-, is not established to be genuine/bonafide. Hence, action of the A.O. in disallowing his loss as set-off against the other short term capital gain earned by the assessee, is correct and is hereby upheld. The Grounds No. 2 3 are, therefore, dismissed. Aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation Unit of the I.T. Department. It is also an undisputed fact that through the Investigation Wing the AO came to know that the assessee has taken bogus loss from the said share broking company. The assessee is a salaried employee and nothing has been brought on record to show that she has been trading/investing in the stock market in the past/subsequent years. Any person who is investing in the stock market always takes delivery of the shares and get the shares transferred in the Demat account. In the present case no delivery of shares was taken. Moreover, it is an undisputed fact that the assessee never paid for the shares purchased by her nor received the sale consideration on sale of shares. Only the difference, i.e. the loss was set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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