TMI Blog2012 (8) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... D SHRI RAJENDRA, ACCOUNTANT MEMBER For the Respondent : Miss C. Tripura Sundari For the Petitioner : Dr. K. Shivaram, Shri Ajay R. Singh ORDER PER RAJENDRA, A.M. The following are the Grounds of Appeal filed by the Assessing Officer (AO) . Grounds of Appeal: ITA No. 1773/Mum/2010 1. The Ld. CIT(A) has erred in affirming the deletion of addition made by the A.O. of ₹ 23,68,748/- u/s. 68 of the I.T. Act, 1961, as income from undisclosed sources on account of sale of shares. 2. The Ld. CIT(A) has failed to appreciate the following facts and that:- (a) The shares were held in the pool account of the brokers, as per instructions of the assessee to the broker and the share were transferred to the assessee few days prior to the sale date. However, the BSE has denied, the said transactions of the shares on which exemption u/s. 10(38) was claimed, between 22-09-2005 to 07-12-2005, through the involved brokers. (b) That the shares were kept in the pool account till the payment was received by the broker, as per practice of the stock market, thus the assessee do not become owner of the shares as the shares were not transferred to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT(A) while proving relief has not appreciated the following: i) The assessee did not have any proof of having paid for the shares and that the shares were lying in the demat account of the broker and was only transferred to the assessee s account a few days before the sale transaction date. ii) There is an evidence on record, where the director of the company through whom the alleged transaction was effected have committed to having given accommodation entries to the assessee. iii) In the case law relied upon by the Ld. CIT(A) i.e., Popatlal Nandu Others (ITAT No. 1718/M/2006 to 1718/M/2006), the purchase of shares was not in doubt as in the instant case where the assessee could not prove the purchase of the shares. ITA No. 4792/Mum/2009 1. (i) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition of ₹ 23,28,205/- as unexplained cash credits u/s. 68 of the I.T. Act by not appreciating the finding of the Assessing Officer proving the entire share transaction to be a sham. (ii) The Ld. CIT(A) while providing relief has not appreciated the following facts: a) Assessee did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been paid to the broker from which the cheque towards long term capital gain has been received after manipulating the price of the pennny stock involved . 3) The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 2. These eight appeals, filed by the Assessing Officer (AO), are against the order of the CsIT(A), Mumbai. Since the facts and issues are common (except the number of shares sold of three companies and the dates of orders by the CsIT (A) and their designations) so, the appeals are heard together and are being decided by this common order. For the sake of convenience appeal in the case of Rasila N. Gada (ITA. No. 1773 /M/10) is being considered in detail. 3. Assessee, an individual, filed her original return of income on 21.09.2006 declaring income of ₹ 82,331/-. The return was processed u/s.143(1) of the Incometax Act,1961(Act). The assessee had not shown any income under the head capital gains at the time of filing the original return. A survey action u/s.133 of the Act was carried out at the business premises of the assessee group on 23.01.2007 by the Department. Duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of shares of Maruti infra, that the payment of sale consideration was received by the assessee through banking channels, that she had also filed the balance-sheet of previous year in which the investment in shares had been shown in the preceding year, that Sh. Choksi had never mentioned the name of the assessee in his statement, that assessee was not given an opportunity to cross-examine Sh.Choksi, that the AO had not made an enquiry to prove that the alleged transactions were not genuine, that the only reason for making addition was that the shares were held jointly in the account of the brokereven though payment had been made, that the assessee had furnished details of purchases, broker s notes of sales and purchase, details of payment received from broker through banking channels and copy of her demat account, that all details of sale/ purchase of shares were available in the case under consideration, that the AO had himself had verified the sale/purchase of the assessee and had not challenged the purchase of shares, that he could not hold the sale to be non-genuine. Following the orders of the Tribunal in the cases of Mukesh R. Marolia FAA is deleted the addition is made u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e earlier assessment year and her return of income was accepted by the Department. We are of the opinion that once sales/purchase of shares is accompanied by this kind of evidences the genuineness of the said transactions cannot be doubted. Non-payment of STT cannot be and should not be basis for making addition of the section 68 of the Act. FAA has categorically held that all the necessary details about purchase and sale of shares were made available to the AO during assessment proceedings. We have perused the case laws relied upon by the AR. In the case of Mukesh R Marolia (supra) Hon ble jurisdictional High Court has held as under: .On further Appeal, the ITAT by the impugned order allowed the claim of the Assessee by recording that the purchase of shares during the year 1999-2000 and 2000-2001 were duly recorded in the books maintained by the Assessee. The ITAT has recorded a finding that the source of funds for acquisition of the shares was the agricultural income which was duly offered and assessed to tax in those Assessment Years. The Assessee has produced certificates from the aforesaid four companies to the effect that the shares were in-fact transferred to the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing the order passed in her case (ITA No1773/M/10) we dismiss the appeal filed by the AO and uphold the order of the FAA. ITA.No.1774/M/10 Mr. Harakchand K. Gada Assessee had sold 1,25,000 shares of Maruti Infra during the year under consideration. Original return was filed on 27-09-2006 declaring total income of ₹ 3,83,835/-. In the revised return assessee offered LTCG for ₹ 3,56,961/- for taxation under the head LTCG where STT was not paid. Addition amounting to ₹ 23,63,387/- u/s. 68 of the Act was made by the AO. CIT(A)-27, Mumbai, the FAA, vide his order dt. 24-12-2009 deleted the said addition. As the facts and circumstance of the case under consideration are similar to the case of Rasila Gada (supra), so, following the order passed in her case (ITA No1773/M/10)we dismiss the appeal filed by the AO and uphold the order of the FAA. ITA.No.1775/M/10 Mrs. Kesar A. Gada Assessee had sold 1,25,000 shares of Maruti Infra during the year under consideration. Original return was filed on 21-09-2006 declaring total income of ₹ 2,70,485/-. In the revised return assessee offered LTCG for ₹ 3,56,378/- for taxation under the head LTCG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A)-XXI-21,Mumbai,the FAA, vide his order dtd.13.05.2009 deleted the said addition. As the facts and circumstance of the case under consideration are similar to the case of Rasila Gada (supra), so, following the order passed in her case (ITA No.1773 /M /10). We dismiss the appeal filed by the AO and uphold the order of the FAA. ITA.No. 4792/M/09 Minaxi Ramesh Gada Assessee had purchased /sold 1,25,000 shares of Maruti Infra during the year under consideration. Original return was filed on 21.09.2006.declaring total income of ₹ 1,78,141/-. In the revised return assessee offered LTCG for ₹ 3,55,711/-. for taxation under the head LTCG where STT was not paid. Addition amounting to ₹ 23,28,205/- u/s. 68 of the Act was made by the AO.CIT(A)-XXI, Mumbai, the FAA, vide his order dtd.13.05.2009 deleted the said addition. As the facts and circumstance of the case under consideration are similar to the case of Rasila Gada (supra), so, following the order passed in her case (ITA No. 1773/ M/ 10). We dismiss the appeal filed by the AO and uphold the order of the FAA. Appeals filed by the AO stand dismissed. Order pronounced in the open court on 8th August, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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