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A. Sundararaju (HUF) Versus Income Tax Officer Ward 3 (3) Vardan Thane

2016 (5) TMI 16 - ITAT MUMBAI

Estimation of income - LTCG - purchase of shares - Held that:- Since we have held that the shares have been purchased by the assessee on 27.04.2005 i.e., on the date on which the shares were transferred to his Demat account consequently assessment is required to be made in the following manner:-

(a) The difference between the market value of shares as on 27.04.2005 and the cash balance available with the assessee as on that date is required to be assessed as unexplained investment. It .....

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res as on 27.04.2005 is required to be assessed as short term capital gain.

(c) The AO has estimated the commission expenses @ 5% for procuring long term capital gains. Since we have held that the assessee could not prove the claim of purchase of shares in April, 2004, we are of the view that the Ld CIT(A) was justified in confirming the assessment of commission expenses.

Claim of agricultural income - Held that:- Since the assessee has furnished documents with regard to th .....

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disallowance to 40% of the agricultural income reported by the assessee and accept the agricultural income to the extent of 60% of the amount reported by the assessee. - I.T.A. No. 413/Mum/2010 - Dated:- 6-4-2016 - Shri B.R. Baskaran (AM) & Shri Amarjit Singh (JM) For the Appellant: Shri S.C. Tiwari For the Respondent: Shri Ganesh Bare O R D E R Per B.R. Baskaran, AM :- The appeal filed by the assessee is directed against the order date .....

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e said issues are set out in brief. The assessee reported long term capital gain arising on sale of shares named M/s Twenty First Century (I) Ltd amounting to ₹ 33,65,423/- during the year under consideration and claimed the same as exempt. The assessee claimed that he purchased 11500 shares of the above said company on 05-04-2004 for a sum of ₹ 69,250/- by paying cash out of cash balance available with him and also out of agricultural income. The shares were claimed to have been pur .....

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k revealed that the shares have been transferred in off-market transactions from M/s Infra Lease Fin Ser Ltd. The AO made enquiries with that company also and it confirmed that the impugned shares have been transferred by them to the assessee s account maintained with M/s Axis bank out of the de-mat account maintained by a person named Shri Ballab Bhutra. 4. The assessee had claimed to have purchased the shares from a broker named M/s. S.B.Bhutra & Co. in physical format on 05-04- .....

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relevant data. The details of de-materialisation were also could not be furnished by the assessee. 5. When all these facts were confronted with the assessee, he simply relied upon the documents available with him. Under these set of facts, the AO held that the assessee has procured bogus long term capital gains and accordingly assessed the sale proceeds as income of the assessee. Besides the above, the AO also held that the assessee should have paid commission @ 5% for procuring the b .....

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agricultural income and assessed the same as income of the assessee. 7. The Ld CIT(A) also confirmed the order of the assessing officer. 8. Before us, the Ld A.R placed reliance on various documents produced before the tax authorities in support of the long term capital gains. The Ld A.R contended that the tax authorities have disbelieved the claim on suspicion and surmises. He further relied upon a host of case laws and submitted that the identical addition made in those c .....

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physical format has been disproved. With regard to the agricultural income, the Ld D.R submitted that the assessee has failed to show that he had carried on basic agricultural operations. 10. We have heard rival contentions and perused the record. We notice that the assessee has throughout claimed that he had purchased the shares in physical format. This claim was made not only in the letter submitted to the assessing officer, but also in the statement taken from him u/s 131 of the A .....

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27-04-2005. The same clearly contradicts the claim of the assessee. 11. The assessee has claimed to have purchased shares in April, 2004 by paying cash. But the enquiries made with M/s Twenty first century (I) Ltd by the AO reveals that the said company was not in a position to confirm the same. The Kolkatta Stock exchange has also reported that they could not confirm the transactions. Since the shares were claimed to have been purchased by paying cash in April, 2004, the said claim i .....

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hares were transferred to his Demat account. 12. Since we have held that the shares have been purchased by the assessee on 27.04.2005, consequently assessment is required to be made in the following manner:- (a) The difference between the market value of shares as on 27.04.2005 and the cash balance available with the assessee as on that date is required to be assessed as unexplained investment. It is pertinent to note that the assessee should be in a position to prove the a .....

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