TMI Blog2014 (10) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... n the share of a particular company in collusion with others or in the manner of unfair trade practices against the norms of S.E.B.I and Stock Exchange, then merely because of that fact a person who bonafidely entered into share transaction of that company through such broker then only by mere assumption such transactions cannot be held to be a shame transaction. No suspicion can be raised when the shares were purchased years before the unusual fluctuation in the share price - The shares of some of the companies were purchased by the assessees even five years ago from the time of sale and those purchasers were already disclosed in the Balance Sheet of the assessee – the assessee's transactions are genuine transactions - In the absence of any evidence on record that assessee has indulged in making adjustment entries the contentions of the AO which is based on presumptions and conjectures cannot be accepted - capital gains earned by the assessee is to be taxed as such and AO erred in considering the entire sale proceeds as income from other sources - AO is directed to accept the gain as long term capital gain – Decided in favour of assessee. - ITA No.459/Hyd/2014 - - - Dated:- 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee did not furnish the person through whom the broker had been contacted. Doubting the entire transaction, A.O. treated the receipt of ₹ 25,87,400 on sale of shares as income from other sources. 2.4. Before the Ld. CIT(A), assessee reiterated the facts about purchase and sale of shares. But Ld. CIT(A) did not agree and upheld the order of the A.O. by holding as under : 8. I have considered the facts on record and the submissions of the A.R. There is no denying that the stock in which the appellant has transacted was neither being traded regularly nor did it have any strong fundamentals. Therefore, onus was on the appellant to give the full information about the mediators/suppliers etc. who facilitated the appellant to enter into transactions in this scrip or the nature of the market news which prompted the appellant to purchase the shares. The appellant failed to furnish any such information. The appellant has also been unable to explain satisfactorily the manner in which the payment for the purchase of shares was made or to explain how it came into possession of the shares even before making the payment for it. 9. These are yawning gaps in the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequent sale thereof. It is also on record that A.O. did not doubt sale of shares through stock exchange. It is his contention that transaction of purchase is a make believe transaction as the assessee has not paid consideration through cheque and payment of cash was not explained properly. This contention alone cannot make the transaction as a bogus transaction as assessee got the shares and transferred in its name immediately. Moreover, these are also transferred De-mat form through HDFC Bank. Assessee also represented the investment in the balance sheet under the head Investments and for the year ending March, 2003 the shares were also shown to have market value less than the investment value. Why assessee has purchased this particular set of shares and why they are purchased through brokers at Kolkata are not the concern of the A.O. as it is the prerogative of the assessee to transact on its own. What is required to be examined is whether the transaction is a genuine transaction or not. The evidence on record indicate that there is no dispute with reference to purchase of shares and subsequent transfer in assessee's name. 6. Now coming to the sale of shares also, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded does not take a way the genuineness of the transactions which happened much earlier to the above events. In fact, assessee received a price which is more than the investment but not so high as compared to subsequent transactions in the same share as obtained by the A.O. in the course of enquiries. In fact, if assessee wanted to enter into dubious transactions he could have sold at a later point of time so as to gain much more amount. These indicate that assessee has indeed purchased and sold as per its convenience, so as to gain a reasonable amount on the investment. 6.3 We find that the Coordinate Bench of Hyderabad Tribunal in the case of ITO, Ward 2, Nizamabad vs. Smt. Aarti Mittal, Adilabad in ITA.No.165/Hyd/2011 to 169/Hyd/2011, ITA.No.877/Hyd/ 2011 to ITA.No.885/Hyd/ 2011 has considered similar issue and held as under : 24. We find that the case-law relied upon by the learned counsel for the assessee generally supports the case of the assessee, and identical issue has been decided in favour of the assessee by various High Courts and Tribunals in the cases relied upon by the assessee, as noted above. It is worthwhile, to refer, at this juncture, to the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred that such person entered into sham transaction few years ago and prepared for getting the benefit Tax Appeal No.4 of 2011 with analogous case after few years when the share will start rising steeply. In present case even there was no reason for such suspicion when the shares were purchased years before the unusual fluctuation in the share price. Here in this case, we have given example of one of the Tax Appeal wherein the shares were purchased in the year 2004 and were sold in the year 2006, which is said to be one of the case wherein the gap in the purchase and sale of the shares was narrowest. In other cases as we have noticed from the various orders of the C.I.T(Appeals) that, the shares of some of the companies were purchased by the assessees even five years ago from the time of sale and those purchasers were already disclosed in the Balance Sheet of the assessee, then from any angle, it is proved that the assessees had held the shares much prior to 12 months of the sale of the shares. 12. Hence, these appeals are dismissed 25. Further, Coordinate Bench of the Delhi Tribunal in the case of Smt. Neelam Chawla (2008) 6 DTR (Del) (Trib) 141, has been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is in the past assessment year had duly disclosed in the balance-sheet the purchase of those shares. Although, it was an off market transaction but it was properly documented and duly supported by relevant evidences. We have examined few case-laws, wherein the Respected Coordinate Benches have also taken a view that once the purchase of shares have duly been recorded in the balancesheet in one financial year and later on, those very shares have been sold in another financial year, then the purchase of shares should not have been doubted, if duly recognized by the said company and later on transacted through banking channel. To keep brevity in mind, we are not discussing all those case-laws or cited decision of the tribunal, wherein almost on identical facts when the purchases were doubted by the Revenue Department, but considering the totality of the facts and circumstances of the case a conscious view have been taken that once the shares were in respect of a listed company and transaction was through Demat account which was as per the recognized Stock Exchange quoted price, then there was no reason to hold such nature of transaction as non-genuine. Respectfully following the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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