Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2015 (10) TMI 2299

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ITA No.960/Mum/2012 - - - Dated:- 16-9-2015 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER and SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER For The Appellant : Shri V.G.Ginde. For The Respondent: Shri Sumit Kumar (DR). ORDER Per VIJAY PAL RAO, JM: This appeal by the assessee is directed against the order dated 24/11/2011 of the CIT(A)-35, Mumbai, for the assessment year 2008-09. 2. The assessee has raised the following grounds: 1. On the facts and in the circumstances of the case, and also in law, the learned CIT(A) erred in confirming the addition of ₹ 48,59,131/- made by the learned Assessing Officer holding the sale proceeds of shares in Bolton Properties Ltd. received by the appellant as income from undisclosed sources. 2. The learned CIT(A) failed to appreciate the documentary evidence placed on record by the appellant, and, therefore, confirmed the aforesaid addition based on mere suspicion, surmises and conjectures as well as irrelevant material. 3. The learned CIT(A) further erred in not appreciating your appellant's contention that the material relied upon by the Assessing Officer was not given to the appellant for rebuttal. I .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... copy of the certificate dated 22/2/2002. The learned authorized representative of the assessee has then submitted that these 15000 shares of BPL were Dematerialised on 23/5/2003 in DEMAT Account with Bank of India, Andheri (W), copy of Demat Account is placed at page 26 of the paper book. Thus the shares were held by the assessee in its aforesaid D-mat account since 2003 upto their sale in the year 2007 to the extent of 12,500 and balance of 2500 shares remained with the assessee. All these transactions are reflected in the Demat Account of the assessee from 2003 to 2008 at pages 15 to 26 of the paper book. Thus, the learned authorized representative of the assessee has submitted that when the shares were held by the assessee in Demat Account then the transaction of purchase cannot be held to be bogus or sham transaction. The AO has not disputed the sale transaction of the assessee and held the transaction of purchase as sham to deny the claim for LTCG of the assessee. The learned authorized representative of the assessee took us to Demat balances for all these years right from 2003 to 2008 and submitted that the assessee was holding these shares in its Demat account and also showi .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ction cannot be doubted. 6. On the other hand, the learned DR has submitted that the AO conducted a proper inquiry to verify the genuineness of the transaction. The investigation of the AO has revealed the fact that there was no transaction in the scrip of BPL on the Calcutta Stock Exchange as per the report filed by the Exchange. Therefore, the transaction was rightly treated as sham transaction by the AO which has been confirmed by the CIT(A) in a detailed and reasoned order. He has relied upon the orders of the authorities below. 7. We have considered the rival submissions and the relevant material on record. The issue of genuineness of the transaction is a pure question of fact and therefore ought to have been based on the fact placed by the assessee as well as detected by the AO. The AO has doubted the transaction of purchase and sale of shares as arranged transaction and therefore treated the same as dubious and denied the claim of LTCG and taxed the amount of sale consideration as income from undisclosed sources. There is no dispute that 15000 shares of BPL were transferred in the name of the assessee vide certificate dated 22/4/2002 issued by BPL. The said certificate .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... on record, it is seen that the party from whom the assessee purchased the shares was brought to the notice of the AO with complete address. No query was made by the AO about the genuineness of the purchase transaction. M/s Bolton Properties Ltd., whose shares were purchased by the assessee, intimated to the AO in response to summons u/s.131 that the shares were transferred in the name of the assessee on 15-05-2003. In that view of the matter, the fact of assessee having purchased the shares stood amply proved. Once it is proved that the assessee made purchase of shares and also sold the same, the genuineness of the transaction cannot be brought under the shadow of doubt. In our considered opinion, the ld. CIT(A) was justified in overturning the assessment order on this issue. 8. Therefore the said basis of the report of the DDIT in the case of Amrutal H.Chithalia is no more reliable report. Further, when the assessee has produced all the relevant evidence including the record of dematerialization of shares, transfer of shares in the name of the assessee, then the holding of shares by the assessee in its Demat account cannot be doubted. Further, the assessee has been showing t .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ding the transaction as bogus transaction, if the transaction of purchase of shares is off marked transaction. The Hon ble High Court, in the case of Jamnadevi (supra) has observed in paragraphs 11 12 as under: 11. We see no merit in the above contentions. The fact that the assessees in the group have purchased and sold shares of similar companies through the same broker cannot be a ground to hold that the transactions are sham and bogus, especially when documentary evidence was produced to establish the genuineness of the claim. 12. From the documents produced before us, which were also in the possession of the Assessing Officer, it is seen that the shares in question were in fact purchased by the assessees on the respective dates and the company has confirmed to have handed over the shares purchased by the assessees. Similarly, the sale of the shares to the respective buyers is also established by producing documentary evidence. It is true that some of the transactions were off-market transactions However, the purchase and sale price of the shares declared by the assessees were in conformity with the market rates prevailing on the respective dates as is seen from the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates