9911796707
TMI Blog2015 (4) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... mainly M/s Goldstar Invest Private Limited, were engaged in the business of providing bogus speculation profit /loss, Short Term Capital /loss, Long Term Capital gains/loss, which enabled the parties to convert their undisclosed income into income from share trading. During the year under consideration, the assessee had sold 2,00,000 shares of M/s Buniyad Chemicals Ltd through M/s Goldstar Invest Pvt Ltd and received a cheque of Rs. 99,69,498/-. The assessing officer called for relevant details, but the assessee failed to furnish them. The assessing officer noticed from the statement given by a person named Shri Mukesh Chokshi, Director of M/s Mahanagar Securities Pvt Ltd before the DDIT (Inv.) that Shri Mukesh Choksi had admitted about giving accommodation bills. Since the assessee did not furnish the relevant details, the AO took the view that the assessee had also received only accommodation bills for purchase and sale of shares of M/s Buniyad Chemicals Ltd. Accordingly he held that the assessee has paid a sum of Rs. 1.00 crore to M/s Goldstar Invest Pvt Ltd and received the cheque for Rs. 99,69,498/- after deduction of commission amount, calculated at the rate of 0.3% for provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in AY 2002-03 which was payable by the broker, i.e., M/s. Richmond Securities Pvt. Ltd. to the assessee firm. iii) On 26th April, 2001, M/s. Buniyad Chemicals Ltd. transferred the said 2,00,000 shares in the name of Mr Suresh Ratilal Kapadia, Mr Dhirenkumar Navinchandra Kapadia and Mr Jigneshkumar Navinchandra Kapadia, partners of the assessee firm and forwarded the duly transferred shares to the assessee firm. A copy of covering letter of M/s. Buniyad Chemicals Ltd. enclosing the duly transferred share certificates in the name of partner of the assessee firm is enclosed in the Paper Book (Page 21). (iv) On 22nd March, 2002 the assessee firm submitted 2,00,000 shares of M/s. Buniyad Chemicals Ltd. to M/s R.B.K. Share Broking Limited, Depository Participant of Central Depository Services (I) Ltd. for dematerializing the said shares and giving credit of the same in the demat account. A copy of acknowledgement issued by M/s. R.B.K. Share Broking Limited on receipt of the said shares for dematerialization and a copy of duly filled Dematerialisation Request Form are enclosed at pages 22 & 23 of the paper hook. (v) The said 2,00.000 shares of MIs. Buniyad Chemicals Ltd. were cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecurities Pvt Ltd. In the assessment order, it is stated that the above said broker has changed its name into M/s Mahasagar securities Pvt Ltd, wherein Shri Mukesh Choksi was the director. It is seen that the assessee has also purchased and sold shares of M/s Adani Exports Ltd, M/s Digital Equipment (India) Ltd, Bharat Heavy Electricals Ltd during the settlement period from 4.4.2001 to 10.4.2001 and from 11.4.2001 to 17.4.2001 and earned profit thereon. The said profit has been declared as speculation profit, since the above said shares were purchased and sold on the same day. The assessee has also purchased the shares of M/s Buniyad Chemicals Ltd during the above said settlement period and hence the amounts payable by the assessee on purchase of shares of M/s Buniyad Chemicals Ltd were adjusted against the amounts receivable by the assessee towards the profit arising on sales of shares cited above, i.e., Speculation profit. We further notice that the assessee has declared the above said speculation profit as its income in the return of income filed for AY 2002-03 and the same has also been accepted by the assessing officer. The purchase of shares of M/s Buniyad Chemicals Ltd has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dematerialized the shares before its sale. We have also noticed that the dematerialized shares were held by M/s CDSL, one of the reputed depositories. Hence, in our view, holding of shares cannot be doubted with under these set of facts. The tax authorities are suspecting the sale of shares only on the basis of letters given by the Stock exchange, wherein the Stock exchange had stated that the transactions were not carried on either in the name of M/s R.C. Enterprises or M/s Goldstar Finvest Private Limited. However, we have noticed that the De-mat account has been opened in the name of the partners of the assessee firm, i.e., the de-mat account was opened in the name of Shri Sureshchandra Ratilal Kapadia (Partner held the shares on behalf of the assessee firm). Hence the transactions of sales shall also take place in the name of Shri Sureshchandra Ratilal Kapadia and not in the name of M/s R.C. Enterprises. Hence the Stock exchange has stated that there was no transaction in the name of M/s R.C Enterprises. The assessee has also furnished copies of delivery instructions given by it at pages 82 to 85 of the paper book filed by it. A perusal of the same would show that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of shares as unexplained income of the assessee. However, in the instant case, the assessing officer has accepted the Long term capital gain arising on sale of shares of Buniyad Chemicals Ltd and assessed the same also. However, the AO was of the view that the assessee would have given the amount equal to the amount of Long term Capital gain plus commission charges in order to get the accommodation entries. The AO has estimated the amount so given by the assessee as Rs. 1.00 crore and assessed the same as unexplained income of the assessee. Since the assessing officer has accepted the fact of sale of shares and also the Long term capital gain arising on sale of shares in the instant case and since the evidences furnished by the assessee have not been disproved, we are of the view that Ld CIT(A) was not justified in taking support from the decision rendered by the co-ordinate bench in the case of Ramesh Kumar D Jain (supra), since there is marked difference in the approach of the assessing officer in both the cases. 11. The foregoing discussions would show that the tax authorities have proceeded to assess the amount of Rs. 1.00 crores on suspicion, conjectures and surmises. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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