TMI Blog2011 (4) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of any contrary material brought on record by the revenue at the time of hearing before us, we do not find any infirmity in the order of the Ld. CIT(A) and the same is hereby upheld. the appeal of the revenue in respect of individual assessee is concerned - the assesee claimed interest expenditure of ₹ 1,68,592/- on the loan. At the time of assessment proceedings, the AO asked for details regarding the nexus between the loan taken and the investments made. Since the assessee filed no explanation before the AO, he disallowed the interest claimed of ₹ 1,68,592/-. In appeal, the Ld. CIT(A) directed the AO to delete the addition. Aggrieved, the revenue is now in appeal before us. HELD THAT:- since the assessee failed to file any explanation and details regarding the nexus between the loan taken and the investments made. In appeal, while allowed the assessee s claim, by the Ld. CIT(A). In the absence of any controverting material brought on record by the revenue authorities to rebut the finding of the Ld. CIT(A), we do not find any infirmity in his order and the same is hereby upheld. This ground of appeal of the revenue is dismissed. Disallowance on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been disclosed in the return. He has also claimed deductions u/s. 80L and 80CCC of ₹ 3,041/- and 10,000/- respectively. The case was taken up under scrutiny and notice u/s. 143(2) and 142(1) were served. From the assessment order it is observed that the Assessing Officer found that the assessee claimed LTCG on sale of shares of ₹ 39,80,980/-. On enquiry u/s. 133(6), the Assessing Officer found that Calcutta Stock Exchange submitted a CD containing details of transactions. As per the details trade No.1549 for purchase of the shares of Bolton Properties did not appear on 07.03.03. Trade No.2102 regarding purchase of Blue Chip shares did not appear on 5.3.2003. The trade No.2103 is shown in the CD as executed at 15.03.34 and not as 12.15.33 as noted in the contract note. As per CD trade No.2103 order numbers were different compared to the order number mentioned in the contract note. The CD disclosed transactions in 2500 shares whereas the contract note disclosed transactions of 7000 shares. Hence, the Assessing Officer treated the transaction as ingenuine and bogus and stated that the assessee used colourable device in connivance with stock brokers to introduce the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer which prove the existence of the transactions. He also contended that the AO has based his order on the information and details in a CD collected from Calcutta Stock Exchange Association Ltd.. However, no such information has been provided to the assessee and no opportunity was given to the assesee of being heard. He also contended that the shares have been duly credited into the demant account of the assessee. The books of accounts clearly reflect the said purchase of shares. The said shares are duly reflected in the Balance Sheet of the assessee filed along with the return. He also placed reliance on the decision of ITAT Mumbai Bench in the case of Mukesh R. Marolia Vs. Addl. CIT, ITAT No.1201/Mum/2005. He also placed reliance on the decision of Hon ble jurisdictional High Court in the case of CIT Vs. Dhawan Investment Trading Co. Ltd. 236 ITR 486 and CIT Vs. Currency Investment Co. Ltd. 241 ITR 494. He lastly concluded that the action of the Assessing Officer is not justified and the Ld. CIT(A) has rightly deleted the addition. He, therefore, concluded that the action of the Ld. CIT(A) in this regard may be upheld. 6. We have heard rival submissions and perused he mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 39,80,980/- 37,49,390/- The appellant submitted that the shares of Blue Chip and Bolton Properties were purchased from M/s. Bubna Stock Broking Services Ltd. The appellant furnished the contract notes issued by the broker M/s. Bubna Stock Broking Services Ltd. regarding the purchase of shares. The appellant furnished the demat account wherein 17000 shares of Blue Chip are transferred on 08-03-03 from M/s. Shiv Mangal Securities (P) Ltd. Further 2000 shares of Bolton Properties are credited in the demat account of the appellant on 11- 03-03 being transferred from M/s. Shiv Mangal Securities (P) Ltd. The appellant furnished copies of the demat account and the contract notes issued by the broker The A 0 noticed that there is a variation in the transactions given, by the broker in his statement furnished. The trade nos. mentioned in the contract note did not appear in the CD given by Calcutta Stock Exchange. There is variation in the trading time mentioned. Further, the order nos. mentioned were also different. The quantity of shares traded also has not tallied. The A.O. concluded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. 10.6.... The above circumstances have made out a clear case in support of the book entries reflecting the purchase and sale of shares and ultimately supporting the money received on sale of shares and finally investing the money received in the purchase of flat. The chain of transactions entered into by the assessee have been properly accounted, documented and supported by evidences. 10.7. Therefore we find that explanations of the assessee seems to have been rejected by the assessing authority more on the ground of presumption than on factual ground.... In the present case, however unbelievable it might be, every transaction of the assessee has been accounted, documented and supported. 10.9. Therefore, in short on the basis of the internal evidences available with the assessee and the fact that the sale proceeds were collected through bank accounts and coupled with external evidence of survey and statement of parties, we have to hold that the sale proceeds of ₹ 1,41,08,484/- has been explained. Therefore the said addition is deleted. In the case of the appellant the purchases of the shares are supported by the broker s contract note and the purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant clearly indicates that the shares were available in the demat account of the appellant. Contract notes issued by the brokers clearly indicates the sale of these shares. The shares are transferred out of the demat account of the appellant. The sale consideration of the shares is received by the appellant through account payee cheques credited in the bank account. Copies of the bank account furnished by the appellant clearly proves sale transactions of the shares. The evidence presented by the appellant regarding purchase of shares and the sale of shares clearly proves the transactions entered into by the appellant. The transactions are supported by the contemporary entries in the Books of Account, in the demat account and also the bank accounts. In view of the Mumbai ITAT decision relied upon by the appellant, the appellant s transactions are proved by the contemporary records. The evidence presented by the appellant and the contentions raised cannot be denied merely due to the variation in the details furnished by the Calcutta Stock Exchange. Further, off-market transactions entered into between the individuals do not reflect in the systems of the Exchange. The vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission as submitted before the lower authorities and further submitted that the assesee purchased plant and machinery worth ₹ 27,74,908/- during the Assessment Year 2004-05 and the same was not put into use during the said assessment year. He also drawn our attention to the notes on account- Schedule 10 to the Balance Sheet for Assessment Year 2004-05 submitted along with the return for Assessment Year 2004-05, wherein it was mentioned that depreciation on plant and machinery amounting to ₹ 27,74,908/- capitalize during 2003-04 has not been provided as it has not been put to use in business. The said machinery was put to use in Assessment Year 2005-06 and depreciation amounting to ₹ 6,93,727/- was accordingly, claimed. He also contended that P L Account of Assessment Year 2005- 06 shows that there has been substantial increase in job work charges receipts in Assessment Year 2005-06 in comparison to receipts in previous assessment year. The job work charges receipts have increased by more than 90% from ₹ 13,08,221/- to ₹ 25,35,338/-. Such a considerable improvement could be achieved only on account of use of plant and machinery in the said Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erting material brought on record by the revenue authorities to rebut the finding of the Ld. CIT(A), we do not find any infirmity in his order and the same is hereby upheld. This ground of appeal of the revenue is dismissed. 12. Ground No. 4 of the revenue s appeal in respect of assessee individual s case is concerned, the revenue has agitated against the deletion of disallowance of ₹ 1,68,592/- made on account of interest on loan. Briefly stated facts of the case are that the assesee claimed interest expenditure of ₹ 1,68,592/- on the loan. At the time of assessment proceedings, the Assessing Officer asked for details regarding the nexus between the loan taken and the investments made. Since the assessee filed no explanation before the Assessing Officer, he disallowed the interest claimed of ₹ 1,68,592/-. In appeal, the Ld. CIT(A) directed the Assessing Officer to delete the addition. Aggrieved, the revenue is now in appeal before us. 13. At the time of hearing before us, the Ld. DR heavily relied on the order of the Assessing Officer and submitted that interest on loan was disallowed by the Assessing Officer as the assesee failed to explain the nexus betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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