TMI Blog2010 (11) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head capital gains . AO is of the opinion, impugned transactions are bogus and therefore, the profits are bogus and are taxable u/s 69C of the Income Tax Act. The A.O held the same as income from other sources. Relying on a order passed by the undersigned in the case of Smt. Sunanda Jayprakash Surana bearing ITA No. 1310/PN/08 for the A.Y 2005-06 dated 20-08-2010, Ld. Counsel stated that the Tribunal held that such income earned out of the sale of penny stock has to be taxed under the head capital gains. In this regard, the fact of relying on the finding of the Tribunal in another case in the case of Smt. Surekha B. Mundada ITA No. 1332/Pn/2008 was mentioned by the counsel. 3. Further, regarding the other addition u.s. 69C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view of the fact that impugned penny stocks/shares are finally found credited in the D-mat Account of the assessee. In this regard, Ld Counsel read out para 20 to 22 of the said order. We have perused the same and for the sake of completeness of the order, the said paragraphs are reproduced : 20. To sum up, the assessee claims that she earned long term capital gain whih are exempt u/s 10(38) of the Act. As per the assessee, the AO erroneously held the same as income from other sources and the CIT(A) granted part relief holding that the said gains constitutes short term capital gains and in the process, he considered the date of transfer of impugned share to the Dmat account of the assessee as the date for counting the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re off market or otherwise. The lack of credibility to the broker s deals, the date appearing in the alleged contract note have to be ignored. Further, we find that the in the cases like this, the onus is on the assessee as held in the case of Shanthilal Munnalal (supra). This decision also proposes that the impugned purchase transactions must be treated as non genuine transactions under the factual matrix of tainted broker, solitary transaction and also the penny stock. 22. Even we are not privy to such originals of the contract notes as they are not part of the paper book filed before us. In any case, we have given our finding on the credibility of these contracts notes and the same is against the assessee, have also examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessees with comparable purchase transactions through the same broker and revising of their income offering their profits allegedly earned on sale of shares. It is obvious that the said books are written under the guidance of the assessee and the entries are not adequately substantiated by way of proper contract notes and the contract notes themselves suffer form credibility in view of the above discredits too. Further, we have observed that originally, the claim of the assessee /broker is that the impugned transactions are effected through the Exchange, which was found to be false by the AO through his direct enquiries with the Calcutta Exchange. A.O gathered relevant details from the Exchange to demonstrate that the purchase transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of ₹ 28,528/- towards the commission paid by the assessee for helping the assessee for services connected to the impugned transactions relating to the penny stock. At the outset, the Counsel demonstrated that there is no evidence for such incurring of the expenditure by the assessee. It is merely a guess work that the A.O assumed the payment of the said commission. CIT(A) has not passed a detailed order in this regard while confirming the addition. 4. We have perused the relevant orders of the Revenue and perused the material available before us. It is an admitted position that the said amount was arrived at on ad-hoc basis i.e. at 2% of the transactional value. In our opinion, such guess works are not entertainable. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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