TMI Blog2015 (7) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was in possession of the shares in April, 2001. Once the source of purchase have not been disputed and long-term-capital-gain is treated as short-term merely on the date of acquisition, then on strength of the certificate itself it goes to show that the assessee was the owner of the shares in the month of April, 2001 and hence, the sale of shares after June, 2002 is nothing but longterm- capital-gain, therefore, treating the gain on sale of shares as short-term-capital-gain by the AO as well as CIT(A) is not correct. The other observations that the source of purchase out of speculation profit is not proved may not be very significant as ultimately nothing has been brought on record as the shares were purchased only in the month of Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Buniyaad Chemicals Ltd. The said return of income was duly processed u/s 143(1). Later on, in the wake of search and survey action taken in the case of Mukesh Chokshi and his group of companies, it came to surface that the said companies were engaged in the business of providing accommodation entries to various persons to book bogus capital gains. The Assessing Officer after receiving the information from the Investigation Wing that the assessee is one of the parties, who had sold the shares of M/s Buniyaad Chemicals Ltd. through Mr. Mukesh Chokshi s companies, reopened the case u/s 147 by issuance of notice u/s 148, after recording following reasons: 1. The Assessee flied his return of income for A.Y. 2003-04 on 30/03/2004 declarin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icals Ltd., however, the assessee submitted that the same was adjusted against the speculation profit on or before the purchase of shares. The AO noted that the assessee could not submit the contract notes and the details showing the earning of speculative profit and no evidence could be furnished as to how the purchase price was paid. The AO treated the said long-term-capital-gain as shortterm- capital-gain after observing and holding as under: 4. I have carefully considered the appellant s submissions and the contents of the assessment order. At the outset, it is an undisputed fact that Shri Mukesh chokshi himself is a director of M/s Buniyaad Chemicals Ltd. and was also a director of Gold Star Filvest Pvt Ltd, carrying on the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in Bank of Baroda which reflects the payments received by her on sale of shares and therefore, the aforesaid material is not relevant to find out either the date of purchase or the cost price at which the impugned shares were purchased. The situation is no different during the proceedings before me. The AR merely made an attempt to stress the point that the appellant had certain speculation profit in the Financial year 2001-02, the proceeds of which were utilized to purchase the impugned shares. Neither the return of income filed by the appellant in form 2D nor the computation of income enclosed there to, throw any light as to the purchase of impugned shares. Mere offering of income from speculation profit does not lead the appellant an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment. Another contention raised by the Ld. Counsel is that, the AO has noted that the assessee has sold 21,000 shares of the M/s. Buniyaad Chemicals Ltd. which, in fact, is not correct as the assessee has sold 30,000 shares and he has also noted that assesee has maintained ledger account with Goldstar Finvest, which fact again is not correct. The assessee has no transaction with Goldstar Finvest. Thus the grounds raised in reasons recorded are not based on correct appreciation of facts; Lastly, he submitted that simply relying upon statement recorded u/s 131 of the Third Party, cannot form the basis for entertaining the reason to believe for reopening the case. 5. On merits, Ld. Counsel submitted that there is no dispute regarding sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erialization i.e. when the shares were entered into D mat Account. In fact for actual purchase price paid by the assessee , they are accepting the purchase of the shares. Before the CIT(A), the assessee have contended that the shares of M/s. Buniyaad Chemicals Ltd. were transferred in the name of the assessee in April, 2001. This fact is also supported by certificate/letter dated 1st April, 2001 issued by M/s. Buniyaad Chemicals Ltd. through the assessee, wherein, 30,000 shares have been transferred in favour of the assessee. This inter-alia means that the assessee was in possession of the shares in April, 2001. Once the source of purchase have not been disputed and long-term-capital-gain is treated as short-term merely on the date of acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
