TMI Blog2011 (12) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... r Purchase qty. Total pur. Price M/s. Poonam Pharmaceuticals Ltd. V.K.SInghania 5,300 35,616 M/s Gautam Resources Ltd. Renu Poddar 1,200 24,324 M/s Star LTCR Ballabh Das Daga 6,000 57,472 Sales Name of the Shares Name of the Broker Sale qty. Total sale Price Total Profit M/s. Poonam Pharmaceuticals Ltd. M.Bhiwantiwala Co. 5,300 1,603,883 1,568,367 M/s Gautam Resources Ltd. Ahilya Commercial P. Ltd. 1,200 119,777 95,453 M/s Star LTCR - do- 6,000 2,054,185 1,996,713 As per the above details, the assessee has purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned any long term capital gain. It has been used to bring in the money to build up capital b paying no taxed. The same was liable to be taxed as unexplained cash credit u/s 68 of the Act. The AO, therefore, added a sum of ₹ 37,77,847/- u/s 68 of the Act. 4. Detailed submissions were filed before ld. CIT (A) and it was submitted that the assessee has purchases 1200 equity shares of M/s Gautam Resources Ltd., Calcutta through stock broker M/s Renu Poddar, Kolkatta, a member of Calcutta Stock Exchange having SEBI Registration No.INB031066310 vide broker Note No. CL/23546D/0045(S) dated 26.03.2003 at ₹ 24,324/-. The payment was made through account payee DD No.679060 dated 09.04.2003 drawn at SBBJ, Calcutta. The assessee has purchased 5300 share of M/s. Poonam Pharmaceuticals Ltd. through stock broker M/s V.K. Singhaniya Co., Kolkatta, a member of Calcutta Stock Exchange having SEBI Registration No.INB030036312 vide broker Note No. R030408 dated 14.04.2003 (Settlement No.2004309) at ₹ 35,616/-.The payment was made out of cash in hand available with the assessee which is evident from the cash flow statement (enclosed). The assessee has purchased 1200 shares of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eds were received through a/c payee cheques and deposited into appellant s bank account. Similarly the delivery of shares on sale was effected through De-mat account. 5. As regards the contentions of the AO of the significant price increase of share it is submitted that the prices of shares are determined in stock exchange and depends on moos and sentiments of customers. The assessee has sold shares of Manta On Line Ltd as per quoted price of stock exchange, the copy of which has been placed before the AO at the time of assessment proceedings and the same is being furnished herewith for perusal. Therefore, any suspicion of the AO as regards to the price fluctuation is baseless, as regards to the contention of the AO about the prices of shares in reference to perusal of profit and loss account and balance sheet of the company disclosed in the annual report of the company with minuscule P L it is stated that price of the shares depend on demand and supply concept and balance sheet and P L account of the company is not only a criteria. The buyer of shares takes into consideration various factors like reputation of group of the company, future scope of growth of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 225 ITR 870 (Raj) and (iv) Jagdish Chandra Gupta Vs. ACIT (1996) 56 TTJ 337 (Chd.). 7. The Ld. A/R further stated that the appellant has furnished all evidences i.e. broker note, contract note, relevant cash flow statement, balance sheet as at 31.03.2002, copy of share certificates etc. which were in his possession to establish the genuineness of purchase and sale transaction of shares. The shares were listed in Calcutta Stock exchange and were regularly traded. The transaction of purchase and sale of shares was carried out at quoted price of stock exchange. The identity of brokers were beyond doubt as they were registered brokers with SEBI. The brokers confirmed the entire transaction of purchase of shares and sale thereof. The shares received in physical form were transferred in De-mat account of the appellant with ICICI Bank, Udaipur. Deliveries of shares were made from De-mat account of the appellant when these were sold. The fluctuations in the market rates of shares were a natural phenomena, depends upon market conditions and sentiments of customers. In the absence of any evidence regarding collusion the suspicion about market rate of shares were without any basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hania 5,300 35,616 M/s Gautam Resources Ltd. Renu Poddar 1,200 24,324 M/s Star LTCR Ballabh Das Daga 6,000 57,472 Sales Name of the Shares Name of the Broker Sale qty. Total sale price Total Profit M/s. Poonam Pharmaceuticals Ltd. M.Bhiwantiwala Co. 5,300 1,603,883 1,568,367 M/s Gautam Resources Ltd. Ahilya Commercial P. Ltd. 1,200 119,777 95,453 M/s Star LTCR - do- 6,000 2,054,185 1,996,713 10. The shares purchased were of M/s V.K.Singhania. The transaction was effected through a broker namely M/s M.Bhiwaniwala Co. The transaction of purchase and sale of shares were executed at prevailing market rate. The identity of broker was beyond doubt as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing received from the companies, dematerialization of shares just before sale etc. would alter an AO and arouse his suspicion for a detailed examination and verification but these facts alone, in the absence of anything else could not negate the impugned transaction in the face of overwhelming evidences produced by the appellant. Moreover, the AO did not confront the appellant about the result of his enquiry. The ratio of the judgment pf Punjab Hariyana High Court in the case of Chiranjilal Steel Rolling Mills Vs. CIT 84 ITR 22 is squarely applicable to the facts of the appellant s case. Thus the presumption of the AO was without any basis. 12. As regards the presumption of the AO that the appellant paid in cash in lieu of accommodation entry given by the broker in the form of sale proceeds of shares, the AO squarely failed to bring any evidence on record to show that the sale transaction was fictitious and the appellant paid cash to broker for obtaining cheques in the form of sale proceeds of shares. While the appellant produced broker notes in support of sale proceeds and could show that proceeds were received by account payee cheques and deposited in the appellant s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance on the order of ld. CIT (A) and also filed a copy of written submission. 13. After considering the submissions and perusing the material on record, we find no infirmity in the finding of ld. CIT (A). The ld. CIT (A) has examined the issue in thread bear and found that purchase of shares as well as sale of shares are genuine. The purchase of shares were made through Shri V.K. Singhania, Renu Poddar and Ballabh Das Daga. The shares were purchased in earlier years and were sold during the year under consideration. The shares were sold through another broker i.e. M/s. M. Bhiwantiwala Co., M/s. Ahilya Commercial P. Ltd. All the purchase and sale of shares were dematized in regular course of transaction. Confirmation of purchase of shares through brokers were filed. All the shares are of listed companies. The shares were credited to demat account of the assessee and thereafter on sale of those shares the account of the assessee was debited through demat account. Therefore, there is no question of doubting the genuineness of transactions. There is no evidence that assessee has not purchased the shares in earlier year. They have been shown in the Balance Sheet and the Balance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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