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2015 (12) TMI 1014 - ITAT KOLKATA

2015 (12) TMI 1014 - ITAT KOLKATA - TMI - Eligibility to claim long term capital gains on sale of shares at a concessional rate of 10% during Asst Years 2001-02 to 2004-05 - exemption u/s 10(38) for Asst Year 2005-06 in respect of sale transactions routed through recognized stock exchange - Held that:- When purchase and sale of shares were supported by proper Contract Notes, deliveries of shares were received through demat accounts maintained with various agencies, the shares were purchased and .....

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e made on the basis of suspicion or surmise. The AO has not brought any material on record to support his finding that there has been collusion/connivance between the broker and the appellant for the introduction of its unaccounted money. In view of the decisions of Sri Anil Kr. Khemka (husband of the appellant) thus hold that the AO is not justified in treating the long term capital gain as bogus. Direct the AO to treat the long term capital gain as claimed by the appellant and tax them at the .....

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ed CITA in Appeal No. 530/CC-I/CIT(A)/C-III/06-07 dated 21.2.2011,Appeal No. 526/CC-I/CIT(A)/C-III/06-07 dated 21.2.2011,Appeal No. 527/CC-I/CIT(A)/C-III/06-07 dated 21.2.2011,Appeal No. 531/CC-I/CIT(A)/C-III/06-07 dated 21.2.2011 and Appeal No. 532/CC-I/CIT(A)/C-III/06-07 dated 21.2.2011 for the Asst Years 2001-02 to 2005-06 respectively against the orders of assessment framed u/s 153A read with section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The only issue .....

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sst Year 2001-02 ; sold shares of M/s Commitment Finance Ltd (Listed in Kolkata Stock Exchange) and declared capital gains of ₹ 19,24,910/- for Asst Year 2002-03 ; sold shares of M/s Emkay Consultant Ltd (Listed in Kolkata Stock Exchange) and declared capital gains of ₹ 15,67,901/- for Asst Year 2003-04 ; sold shares of M/s Commitment Finance Ltd (Listed in Kolkata Stock Exchange) and declared capital gains of ₹ 16,58,020/- for Asst Year 2004-05 and sold shares of M/s Limtex In .....

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dings, the details of contract notes for purchase and sale of shares were duly filed by the assessee. The entire sale consideration for sale of these shares were received by the assessee from the stock brokers through account payee cheques. The assessee had also duly paid the Securities Transaction Tax (STT) during Asst Year 2005-06 at the time of sale of shares. The Learned AO doubted the computation of capital gains on sale of the aforesaid shares by stating that the shares of said companies c .....

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seizure operation conducted u/s 132 of the Act on Aparna Group of cases which includes assessee herein, wherein, no incriminating materials with regard to the subject mentioned issue before us was found by the search party. The Learned CITA duly appreciated the contentions of the assessee and rejected the contentions of the Learned AO in this regard by placing reliance on the decision of this tribunal wherein addition made towards similar grounds of share transactions in the hands of the assesse .....

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and tax it as per applicable concessional rate without proper consideration of the entire facts and without proper appreciation of the evidences and arguments put forth in the assessment order that the said income was nothing but assessee s own unaccounted money introduced in the form of long term capital gain with connivance of the brokers. 2. The department craves leave to add, modify or alter any of the ground(s) of appeal and/or adduce additional evidence at the time of hearing of the case. .....

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aid income was nothing but assessee s own unaccounted money introduced in the form of long term capital gain with connivance of the brokers. 2. The department craves leave to add, modify or alter any of the ground(s) of appeal and/or adduce additional evidence at the time of hearing of the case. Grounds of Appeal for the A.Y 2003-04 1. In the facts and circumstances of the case and in law, the ld.CIT(A) has erred in directing the AO to treat the long term capital gain of ₹ 15,67,901/- earn .....

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e ground(s) of appeal and/or adduce additional evidence at the time of hearing of the case. Grounds of Appeal for the A.Y 2004-05 1. In the facts and circumstances of the case and in law, the ld.CIT(A) has erred in directing the AO to treat the long term capital gain of ₹ 16,58,020/- earned out of selling the shares of M/s. Commitment Finance Ltd as such as shown by the assessee and tax in as per applicable concessional rate without proper consideration of the entire facts and without prop .....

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s erred in directing the AO to treat the long term capital gain of ₹ 13,46,420/- earned out of selling the shares of M/s.Limtex Investment Ltd as such as shown by the assessee and allow exemption u/s.10(38) of the I.T Act without proper consideration of the entire facts and without proper appreciation of the evidences and arguments put forth in the assessment order that the said income was nothing but assessee s own unaccounted money introduced in the form of long term capital gain with co .....

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y. 6. We have heard the Learned AR and find that the Learned CITA had relied on the decision of this tribunal rendered in the case of husband of the assessee. The operative portion of the Learned CITA order is reproduced herein below:- Para 6 to 6.4 of the ld.CIT(A) s order 6. I have carefully considered the submissions of the appellant and the assessment orders. I have also carefully perused the assessment orders in respect of Sri Anil Kr. Khemka and the order of the ITAT in the case of Sri Ani .....

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the brokers through which the transactions have been made are also identical. 6.1 Hon ble ITAT, Kolkata in its order dated 21.01.2010 (supra) in the case of Shri Anil Khemka has made the following observation: Ïn all these assessment years, the assessee has valued all the shares at cost and offering the income of trade of these shares either as short-term capital gains or long term capital gains as the case may be. It is further observed that the shares at which the assessee has purchased/s .....

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issue and direct the AO to treat the long term capital gains as claimed by the assessee. Hence, the ground nos.1 and 2 raised by the assessee are allowed. 6.2 The appellant has submitted all the original contract notes of sale and purchase, copies of the bills, bank statements in respect of the purchase and sale of shares. All payments were made and received through account payee cheques drawn by the concerned Stock Brokers of Calcutta Stock Exchange and duly recorded in the bank accounts and re .....

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Ltd (244 ITR 422) and CIT -Vs- Emerald Commercial Ltd (250 ITR 549) are also relevant to the issue where the Hon ble Court has held that where the payments are made by Account Payee Cheques and the existence of the brokers is not disputed the assessee cannot be punished for the default of the brokers and share transactions cannot be held to be bogus. The Hon ble ITAT, Kolkata in the case of Rajkumar Agarwal (ITA 1330/Kol/2007 dated 10/08/07) has held that when purchase and sale of shares were su .....

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