TMI Blog2016 (1) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... t account. Therefore, the conditions for making addition under section 68 were missing in the case of the assessee. In view of the above the CIT(A) was justified in observing that the addition made under section 68 of the Act are not justified and the same were rightly deleted by him - Decided in favour of assessee - ITA No. 1148/Mum/2013 - - - Dated:- 28-10-2015 - SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAMIT KOCHAR, AM For The Appellant : Shri K. Mohandas For The Respondent : Shri Madhur Agrawal ORDER PER SHAILENDRA KUMAR YADAV, JM This appeal has been filed by the Revenue against the order dated 30.11.2012 passed by CIT(A)-24, Mumbai and it pertains to A.Y. 2005-06. 2. Following grounds were urged by the Revenue: - 1. (i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 16,15,188/- made by the Assessing Officer u/s 68 of the IT Act. (ii) While doing so, the Ld. CIT(A) has erred in not appreciating that the transactions undertaken by the assessee are not genuine transactions of purchase and sale of shares but the book entries taken for long term capital gains. 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u have received any divided from the company during the holding period. v) Balance Sheet and Profit and Loss account of the company as on 31.03.2003, 31.03.2004 and 31.03.2005, if the same was sent to you by the company. 4. During assessment proceedings, the Assessing Officer also issued notice u/s. 133(6) to M/s. Vakil Shares and Securities P. Ltd., from whom the shares were claimed to have been purchased. The notice was received back unserved with remarks left . The Assessing Officer also issued notice to M/s. Sushil Finance Consultants Ltd, through whom the shares were sold. Assessing Officer has mentioned that there was no response received from M/s. Sushil Finance Consultants Ltd. During assessment proceedings, the assessee vide letter dated 05.12.2007 explained as under:- Regarding long term capital gain on sale of shares of M/s. Shukun Construction. a) we have purchases 15000 shares face value of ₹ 10/- and which is spilled in Re. 1/- per share and hence total shares become 1,50,000/-. b) Purchases of shares were made by cash, copy of bill and contract along with payment vouchers is enclosed. c) Contract Note and bill of purchase and sale is enclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 271(1)(c) of the Act are initiated separately for concealing the true and correct particulars of income by the assessee. 6. The matter was carried before first Appellate Authority wherein various contentions were raised on behalf of the assessee. Having considered the same CIT(A) granted relief to the assessee. The same has been opposed by the Revenue by, inter alia, submitting that the CIT(A) erred in deleting addition of ₹ 16,15,188/- made by the Assessing Officer under section 68 of the Act. The CIT(A) erred in not accepting the transaction undertaken by the assessee are no genuine transactions of purchases and sales of shares but the book entries taken for long term capital gains. Accordingly the order of the CIT(A) be set aside and that of the Assessing Officer be restored. On the other hand, the learned A.R. for the assessee supported the order of the CIT(A) and submitted that the amount of ₹ 16,15,188/- represent sale proceeds of 150000 shares of M/s. Shakun Construction. The long term capital gains earned out of sale of shares were properly reflected in the return of income and accordingly the said amount cannot be said to be unexplained cash credit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Assessing Officer. During appellate proceedings, few additional evidences were also filed i.e. (i) copy of ledger account of M/s. Shukun Construction, and broker in the books of assessee, (ii) copy of letter dated 2nd August, 2003 written by the assessee to the broker for keeping the shares in broker's Demat account, (iii) copy of letter dated 16th May, 2008 given by broker confirming the transaction of purchase of shares by the assessee, print-out of website showing stock supplied of shares, (iv) copy of assessee's letter to the broker requesting for transferring 150000 shares (after splitting up into assessee's Demat account). Assessee requested for admission of these additional evidences. Having considered the same CIT(A) observed that firstly, the issue of purchases, non service of notice on broker from whom shares were purchased, purchase of shares in cash, holding of assessee's share by the broker from whom the shares were purchased, thereafter transfer of these shares after splitting up into the Demat account of the assessee, sale of shares by assessee through another broker and finally the receipt of sale consideration by cheque by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has to prove the nature of credit appearing in the books and also identity, creditworthiness and the genuineness of the credits appearing in his books of accounts. In the case of assessee, the credit of ₹ 16,15,188/- was received by the assessee from the broker through whom the shares were sold. Therefore, the nature of credit in the books was explained. The identity of the share broker was also established by the assessee by filing the contract note and other details of M/s. Sushil Finance Consultants Ltd., through whom the shares were sold. The creditworthiness of the share broker was not doubted by the Assessing Officer. Further, the genuineness of the transactions i.e. the credits in the books of assessee was also explained as received on account of sale of shares by the assessee. The existence of shares of 150000 in the hands of assessee was also established by filing concerned demat account. Therefore, the conditions for making addition under section 68 were missing in the case of the assessee. In view of the above the CIT(A) was justified in observing that the addition made under section 68 of the Act are not justified and the same were rightly deleted by him. This r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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