TMI Blog2012 (5) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 808034/- u/s 54F of Income Tax Act, 1961 and on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of assessing officer of denial of deduction u/s 54F of Income Tax Act. c. The reasons and grounds given by the assessing officer as well as Ld. CIT(A) for denial of exemption u/s 54F are incorrect erroneous and not sustainable. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of ₹ 114103/- made by assessing officer as under valuation of closing stock of shares. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of ₹ 200000/- made by assessing officer under section 68 of Income Tax Act on account of Sunil Sharma. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of ₹ 17000/- made by assessing officer under section 68 of Income Tax Act on account of Sunila Kedia. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of ₹ 40000/- (Rs.20000 + ₹ 20000) made by as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Castrol. As to this query the assessee vide letter dated 30th January, 2003 filed copies of sale bills of M/s. Rajdhani Securities and Castrol but copies of purchase bills were not filed. The assessee was again requested to produce copies of purchase bills of M/s. Rajdhani Securities and Castrol vide questionnaire dated 14.2.2003 but no compliance was made in this regard. The assessee did not file copies of purchase bills in respect of shares. The AO in order to verify the genuineness of transactions issued summons to Shree Balaji Share Trading Company, the share broker calling for details in respect of shares sold. The said summons was received back. The AO again issued summons at the new address traced out but the share broker did not produce the complete details as to further sale of shares of M/s. Rajdhani Securities purchased from Smt. Bina Kedia. The stock register was also not produced. However, the AO referred to quotation list of DSE as of 12.02.2000. On perusal of the same it was seen that on 20.09.1999 only 50 shares of M/s. Rajdhani Securities have been undertaken at Delhi Stock Exchange. The Assessing Officer therefore, came to the conclusion that only transaction of 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated the issues raised in the assessment order. I have considered the reasoning given by the AO and the submissions made by the appellant carefully. The appellant has filed before the AO as well as before me the details of shares of Rajdhani Securities held by the appellant and these shares were purchased prior to 31-3-96 are recorded in the balance sheet starting from 1993-94 to 1999-2000 wherein the additions made were also disclosed. The rate of purchase of such shares can be verified from the details of investment attached with these balance sheets. Thus, merely that the appellant has not produced the purchase bill, it cannot be said that the appellant was not owning such shares and that the cost of acquisition cannot be ascertained because in the balance sheets the cost of acquisition is being reflected and it is the same cost which the appellant has claimed as the cost of acquisition. This fact has been confirmed by M/s. Rajdhani Securities Ltd. that the appellant was holding 76200 shares of Rajdhani Securities Ltd. as on 31-3-1999. The details are provided since 31-3-1994. The appellant has adduced reasonable e3vidence to show the ownership of shares and also the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jdhani Securities. Similar is the position in the case of sale of shares of Castor India because that is a reputed and a regularly quoted company. The cost of acquisition has been proved by the appellant from the cost of acquisition shown in the Balance Sheet. There is nothing to doubt the transaction and the AO is directed to compute the capital gains from the sale of shares of Castrol India. Accordingly, no addition made by the AO on account of sale proceeds of shares of Rajdhani Securities and Castro India can be sustained and the same is deleted. 6. Coming to claim of deduction u/s 54F the learned CIT(A) observed that the assessee was owner of another house on the date of investment of capital gains in the purchase of a house. He further observed that possession of DDA flat was given to the assessee in Assessment Year 2001-02 but he assessee had applied for flat much earlier and the allotment has been made in favour of the assessee prior to purchase of new property. Once an allotment letter was issued the assessee became owner of the property. The assessee s case was also covered under Proviso (a)(ii) to section 54F according to which exemption could not be allowed if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head Income from house property , other than the new asset. The learned CIT(A) has mentioned that as on the date of transfer the assessee was owner of another house and hence benefit of sec.54F was not available. We find that the flat in Dwarka was allotted on 28.06.2001 (possession taken on 21.07.2001). Thus the assessee was not owner of any house on the date of transfer of capital assets. Ld. CIT(A) has also held that benefit of sec. 54F cannot be granted as the assessee had purchased residential house other than the new asset within the period of one year after the date of transfer of capital asset as DDA flat was acquired by her within one year. In this case the assessee sold 125 shares of Castrol on 21.08.1999 for a sum of ₹ 53,108.75 and 66200 shares of Rajdhani Securities on 4.10.1999 for a sum of ₹ 11,55,190 through Shree Balaji Share Trading Company. Therefore, the DDA flat was not acquired within one year from the date of transfer of capital asset. Hence proviso to section 54F is not applicable in the case of assessee. The Assessing Officer had accepted short term capital gain in respect of sale of shares of Rajdhani Securities (10,000 shares) thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sec. 55(2) of the Act were not applicable to the case of the assessee. Accordingly, the cost of bonus shares was taken at Nil because the profit from sale of shares of M/s. Pentasoft Media was treated as business income. The learned CIT(A) after considering the submissions made by the assessee observed that the shares sold out of stock were identifiable because as per the assessee s own version, it was bonus shares which were allotted during the year and sold. Therefore, it was admitted fact that bonus shares were allotted during the year without any consideration. In such a situation, the assessee could not reduce cost of balance shares after the sale of bonus shares because even for working out the income from business or profession, only purchase cost of the stock could be allowed to the assessee against the sales of that particular stock and it would not disturb the cost of balance stock. The learned CIT(A) accordingly upheld the stand taken by the AO. 11. Before us the learned AR of the assessee submitted that shares of M/s. Pentasoft Media formed part of trading portfolio, the assessee had applied average cost of acquisition for the purpose of valuation of closing sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee was asked to furnish confirmation. In response to the query raised a confirmation of Shri Sunil Sharma was filed stating therein that he had given a stamp papers of ₹ 2 lakh to Mrs. Bina Kedia when she purchased flat at E-281, Greater Kailash-II, New Delhi during the financial year 1999-2000. This contention of the assessee was rejected by the AO on the ground that stamp papers are always purchased on cash basis. The AO issued summons u/s 131 to Shri Sunil Sharma but he had not responded. This fact was brought to the notice of the assessee. The AO again issued summons u/s 131 which remained un-complied with. In view of above facts the AO made addition of ₹ 2 lakh. 14. Before the learned CIT(A) it was contended that the amount of ₹ 2,00,000/- was payable to Shri Sunil Sharma who made a purchase of stamp papers on credit. Shri Sunil Sharma was broker. However, this contention of the assessee was rejected on the ground that it was not possible to accept the contention of assessee that stamp papers were purchased on credit, particularly when assessee had purchased property worth ₹ 25 lakhs. This fact was not substantiated by any corroborative e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to be made in the hands of the assessee. The learned CIT(A) however, rejected the contention of the assessee that since Mrs. Sunila Kedia was maintaining bank account in more than three banks but still she had given the loan in cash. Moreover, the genuineness of transaction remained unproved. The learned CIT(A) further observed that it was a cover-up situation because while preparing the accounts when the assessee had found that investments were exceeding the sources accounted for that such advances were allegedly shown as receipt in the back date and subsequently squared up against the alleged sale of shares. The learned CIT(A) accordingly upheld the addition made by the AO. 19. Before us the learned AR of the assessee could not adduce any evidence in support of his contention that amount of ₹ 17,000/- was received from Smt. Sunila Kedia though it has been stated that Mrs. Sunia Kedia was sister-in-law of the assessee. However, since no evidence was adduced to prove genuineness of the transaction and the source of transaction of the creditor, in our considered opinion, the learned CIT(A) was justified in upholding the addition. 20. The last issue for consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X
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