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Meenadevi N. Gupta Versus. The Asst. CIT Circle-5, Surat

2013 (5) TMI 865 - ITAT AHMEDABAD

Income from undisclosed sources - Transaction of sale and purchase of shares - off market transaction - genuine or not - Held that:- even in the absence of the confirmation by those share brokers one has to examine that whether the shares have been purchased and after retaining them for a certain period those shares have actually been sold by the assessee. In the present case, facts have revealed that the shares of Sarang Chemicals were duly demated and thereupon the sales were made through bank .....

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ansfer agent" that the transfer of those shares in the name of the assessee was duly approved. The assessee has expressed to hold those shares in "dematerialized form" therefore the assessee was asked to fill up the "dematerialization request form". This information is very vital and proves the fact that the assessee had in fact purchased the shares of Sarang Chemicals Ltd. It is also difficult to ignore an another factual position that the assessee is in the past assessment year had duly disclo .....

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:- 10-5-2013 - Shri Mukul Kr. Shrawat, Judicial Member And Shri D.K. Srivastava, Accountant Member For theAppellant : Shri R.B.Shah, A.R. For the Respondent : Shri Rajesh Kumar, Sr.D.R. ORDER PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER : These two appeals are hereby consolidated both emanated from the orders of CIT(A)-III, Surat identically dated 22/10/2007. We shall take up the lead case of Smt.Meenadevi N.Gupta, wherein the ground No.1 is as follows:- [A] ITA No.4512/Ahd/2007 1. On the facts a .....

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d an income shown under the head long-term capital gain. The working of the capital gain was submitted before the AO as under:- Sales consideration received Date 06.05.2003 Rs.15,93,625/- Less :- Cost of acquisition Date - 08.03.2002. ₹ 1,19,705/- LONG TERM CAPITAL GAIN Rs.14,73,919/- 2.1. The capital gain was out of the purchase and sales of shares. Therefore, the assessee has furnished the purchase and sales bills of the share transaction. It was noted by the AO that the assessee had pur .....

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saction. He has written to the AO that no transaction was done nor any bill was issued. Likewise, the other broker Shri Sanjay R.Shah, through whom the shares were sold has also informed to the AO that the bills were false and no such transaction was carried out by him. The AO has also enquired from the Stock Exchange and noted that no trading was recorded in the Stock Exchange. He has concluded that the purchase and sales Bills furnished by the assessee in respect of the share transactions was .....

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e prevailing on that day was at par with price at which assessee Purchased shares. The share purchased were duly transferred in assessee s name by the Company After obtaining the physical delivery of the shares, he said shares were dematerialized. (copy of demat account with icici bank is enclosed). The broker namely G.R. Pandya share Broking Ltd. might have denied the transaction in order to save their skin. The sales of the shares have also been done though broker namely Sanjay R Shah vide bil .....

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e. 3. The assessee had purchased 27500 equity shares of sarang chemicals Ltd. on 08.03.2002 for ₹ 119705/7. The said company was listed with Bombay stock exchange and Ahmedabad stock exchange. The equity shares purchased were held by the assessee for the period of approx. 14 months. The shares were purchased off market at prevailing market rate. Accordingly shares were transferred in the name of assessee by the company/company s register. The investment in above share being duly reflected .....

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on arrive by you that the transactions were not genuine is not correct. 5. Entire transaction were effected through the stock broker attached with stock exchanges, Relevant bills and contract note already being furnished to your good self Proceeds were received by account payee draft from the broker through whom we have sold these shares. 6. In view of the submission made here in before, the transactions effected by the assessee were fully genuine and accordingly gains were offered for taxation. .....

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not genuine. He has noted that the contract note issued by those brokers did not mention the Order Number, Trade Number and time of the trade. The purchase transaction was made in cash, however, as per the SEBI s Circular dated 18.11.1993 member-brokers were directed not to accept cash for purchase of securities and/or give cash against sales of securities. The direction was that the payments received or made should be through crossed - payee account cheques. The AO was not even convinced that t .....

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he first appellate authority. 2.3. The ld.CIT(A) has repeated the reasons given by the AO for holding that the impugned long term capital gain was nothing but unaccounted income of the assessee. The ld.CIT(A) has added that the assessee had tried to introduce her unaccounted money into the legitimate income by paying lesser tax as income from long term capital gain. At one place, he has also referred that the another lady of the same house Smt.Sunitadevi A.Gupta (the other appellant before us) h .....

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ntion on certain documents which were made part of the paper-book. As per a letter of Ahmedabad Stock Exchange Ltd., the price quotation of transaction of Sarang Chemicals Ltd. was as per the price reported in the Stock Exchange. The price as per Stock Exchange of Sarang Chemicals Ltd. as on 06/05/2003 was shown as open rate at ₹ 58 and close rate was shown at ₹ 40/-. The assessee has also gathered the information in respect of the price of the share in the month April-2003. Accordin .....

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NASFER OF THE BELOW MENTIONED SHARES HAS BEEN APPROVED. YOU WISH TO HOLD THESE SHARES IN THE DEMATERILISED FORM, YOU MAY SEND THIS LETTER ALONGWITH THE DEMATERIALISATION REQUEST FORM THROUGH YOUR DEPOSITORY PARTICIPANT WITH WHOM YOU HAVE OPENED A DEPOSITORY ACCOUNT. IF THE DEMATERIALISATION REQUEST IS NOT RECEIVED WITHIN 21 DAYS FORM THE DTE OF THIS LETTER. THE RELEVANT CERTIFICATIE(S) SHALL BE DESPATCHED TO YOU. HOWEVER, IF YOU DESIRE TO OBTAIN THE CERTIFICATES SUBSEQUENTLY YOU MAY INDICATE THE .....

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account had reflected that the same was credited on 7/5/2003 and sale was recorded on 9/5/2003. The purchase was made through G.R.Pandya Share Broking Ltd. and his Bill dated 8/3/2002 with Bill Number has also been placed on record. Ld.AR has also mentioned that service charges has also been debited to the account of the assessee. The assessee has duly paid the brokerage with those brokers. When the sales were made, the ICICI bank duly mentioned the cheque numbers, therefore there was no occasi .....

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hat the brokers first enter into contracts for purchase/sale of securities and thereafter, follow it up with delivery of shares, accompanied by transfer deeds duly signed by the registered holders. The seller is entitled to receive the consideration agreed to as on the date of contract. The Board are of the opinion that it is the date of broker s note that should be treated as the date of transfer in cases of sale transactions of securities provided such transactions are followed up by delivery .....

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as also been placed on certain decisions; namly - 1. Manojkumar Sarawagi HUF ITA Nos.3233 & 3156/Ahd/2010 - AY 2007-08 (ITAT A Bench Ahmedabad order dated 16.3.2012) 2. Kantadevi Sarawagi ITA Nos.3232 & 3157/Ahd/2010 - AY 2007-08 (ITAT C Bench Ahmedabad order dated 14.10.2011) 3. Smt.Vimalrani Biharilal Batra ITA No.7662/Ahd/2009 for A.Y. 2005-06 (ITAT D Bench order dated 16.9.2011) 4. Smt.Kanta Gopal ITA No.1858/Ahd/2005 for A.Y. (ITAT C Bench Ahmedabad order dated 23/09/2009) 5. Shri P .....

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ightly taxed the same under the head undisclosed income. The assessee was informed a bout the denial but the assessee has chosen not to cross-examine those share brokers. Ld.DR has also raised doubts about the correctness of the dates as mentioned in various services. He has also pleaded that the case laws cited by the assessee are distinguishable on facts basically on the ground that in those case laws there was no denial of any transaction by the share brokers. In assessee s case, there was a .....

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een purchased and after retaining them for a certain period those shares have actually been sold by the assessee. In the present case, facts have revealed that the shares of Sarang Chemicals were duly demated and thereupon the sales were made through banking transactions. The Demat account maintained with ICICI bank has revealed the shares numbers, etc. From the side of the assessee, it is vehemently contested that there was a reason of denial of transaction by those share-brokers because they h .....

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This information is very vital and proves the fact that the assessee had in fact purchased the shares of Sarang Chemicals Ltd. It is also difficult to ignore an another factual position that the assessee is in the past assessment year had duly disclosed in the balance-sheet the purchase of those shares. Although, it was an off market transaction but it was properly documented and duly supported by relevant evidences. We have examined few case-laws, wherein the Respected Co-ordinate Benches have .....

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ubted by the Revenue Department, but considering the totality of the facts and circumstances of the case a conscious view have been taken that once the shares were in respect of a listed company and transaction was through Demat account which was as per the recognized Stock Exchange quoted price, then there was no reason to hold such nature of transaction as non-genuine. Respectfully following these decisions and other case laws, we hereby reverse the factual as also legal findings of the Author .....

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inclusive of four school/college going children. The addition as made by the AO for lowhousehold expenditure was confirmed by CIT(A). After considering the totality of the circumstances of the case, we find no reason to interfere with the findings of the Revenue Authorities, therefore affirm the same. Resultantly, this ground of the assessee is dismissed. 7. In the result, appeal is partly allowed. [B] ITA No.4513/Ahd/2007 8. Grounds read as under:- 1. On the facts and in circumstances of the c .....

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