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TMI Blog2012 (5) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue authorities and also the statement recorded by the search party u/s 132(4), the target of search and the assessee were three scrips of shares, which the assessee had transacted through brokers with Calcutta Stock Exchange (hereinafter referred to as ("CSE") and the targeted share scrips were Bolton Properties Ltd., Mantra Online Ltd., and Prime Capital Ltd. These shares were transacted with M/s Prakash Nahata & Co., and Bubna Stock B S Ltd. According to the AR and also as borne out from the orders of the revenue authorities, the transactions routed through these brokers were being looked into. As per the assessee, since the transactions concerning these scrips, were routed through these brokers, the assessee's premises got searched u/s 132 and in the statement recorded u/s 132(4), primarily the question asked by the department, pertained only to the transactions of these scrips, primarily Bolton Properties Ltd. and Mantra Online Ltd. 4. The AO, while framing the assessments brought on record the fact that the assessee brought 1,30,000 shares of Bolton Properties Ltd. in F.Y. 2002-03 and sold the same in 2003-04, 2004-05 and 2005- 06, whereby the assessee earned the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been allowed as deduction. 7. Before us, the AR, explained the history of the case briefly and explaining the facts of the case, submitted that the additions made by the AO and sustained by the CIT(A) are mainly and purely on conjectures and surmises. The AR submitted that the assessee had entered into regular transactions with the brokers for purchase and sale of shares. The AR took us through the APB and pointed out the details of purchase and sale of shares were through regular brokers, M/s. Bubna Stock B.S. Ltd. and M/s Prakash Nahata & Co. The AR also pointed out that each transaction has been through proper broker notes and has taken the effect and has been reflected in the DMAT account of the assessee. The AR also pointed out that the payments of the transactions have been routed through regular banking channels. The AR has placed all this material on record in the form of the paper book. At the time of hearing, the AR placed before the Bench a summary chart of transactions in Bolton Properties Ltd. and Mantra Online Ltd., indicating the page nos. of evidence placed in the APB. 8. The AR after referring to the factual aspects of the case, placed before the Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned shares was bogus/sham. Even the details received from CSE does not mention that on the specified dates, the transaction did not take place. Besides this evidence, the basic onus of the creditworthiness of the payee, i.e. M/s Prakash Nahata & Co. and M/s Prakash Nahata did not have funds to make payments to the assessee or their existence was suspect or that the transaction was not genuine, had not been discharges by the department. It was an investigation conducted by the department on M/s. Prakash Nahata & Co. and Bubna Stock B.S. Ltd., the CIT(A) took into cognizance of the enquiry report submitted by the AO, wherein Investigation wing, Bhuwneshwar found that approximately 97 crores was deposited to the account of Prakash Nahata & Co. in the same bank and branch and he gave full summary of the details. It was noticed that nowhere does the name of the assessee company figures in that list, as such the onus was on the department to nail the assessee through proper evidence, that there was some cash transaction with these suspected brokers, on whom there was an investigation was being conducted by the department. But the revenue authorities on flimsy evidence of discrep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly grounds No. 1 arising out of I.T.A. No. 5585/Mum/11 covering assessment year 2003-04 is allowed in favour of the assessee. 14. Ground No. 2 becomes academic as it arises from ground No. 1. 15. I.T.A. Nos.5621 & 5622/Mum/2011 covering assessment years 2005-06 & 2006-07. The assessee has raised the following grounds (similar to grounds taken in I.T.A. No. 5585/Mum/2005) : (1) The Ld. CIT(A) has erred in law and on the facts of the case in confirming the action of the Assessing Officer in taxing Rs. 1,64,15,471 in assessment year 2005-06 and Rs. 1,10,889/- in assessment year 2006-07 as unexplained cash credit under section 68 of the Act. The action is illegal, unjustified and unwarranted. (2) Without prejudice to the above, the Ld. CIT(A) has erred in law and on the facts of the case in confirming the action of the Assessing Officer in considering the sale consideration of Rs. 1,64,15,471 in assessment year 2005-06 and Rs. 1,10,889/- in assessment year 2006- 07 as unexplained cash credit under section 68 of the Act. The action is unjustified and unwarranted as the purchase cost from the sale consideration should have been allowed as deduction. 16. As regards ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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