TMI Blog2016 (6) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be applicable and support the case of the assessee since no adverse finding has been rendered in respect of the direct material evidence placed on record in respect of her transactions of purchase and sale of the ‘said shares’ of M/s. Shukun Constructions Ltd. which stand duly disclosed in her audited Balance Sheets filed with the return of income of assessment years 2004-05 and the current year under consideration. In this factual and legal matrix of the case, as discussed above, we find that the addition of ₹ 32,94,982/- under section 68 of the Act made and confirmed by the authorities below to be unsustainable and therefore direct the AO to delete the said addition and accept the LTCG income of ₹ 31,96,507/- shown as exempt under section 10(38) of the Act. - Decided in favour of assessee - ITA No. 3803/Mum/2011 - - - Dated:- 27-4-2016 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Assessee : Shri Rajkumar Singh For The Revenue : Capt. Pradeep Arya ORDER Per Jason P. Boaz, A.M. This appeal by the assessee is directed against the order of the CIT(A)-30, Mumbai dated 24.02.2011 for A.Y. 2005-06. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 3.1 Aggrieved by the order of the CIT(A)-30, Mumbai dated 24.02.2011 for A.Y. 2005-06, the assessee has preferred this appeal before the Tribunal raising the following revised grounds of appeal: - I - Appeal Ground No.1:- That on facts and circumstances of the case and in law, the ld. C.I.T. (Appeals) has erred in confirming the addition made by the ld. Assessing Officer u/s. 68 of the I.T. Act,1961 at ₹ 32,94,982/- on the basis of amount found credited in the bank account of appellant without adjudicating the legal plea raised that assessee appellant was neither required under the provisions of the tax law nor has maintained any books of accounts for the assessment year under appeal hence addition made u/s.68 is bad in law. 2 - Appeal Ground No-2:- That without prejudice to appeal ground no. 1, the ld. C.I.T. (Appeals) has erred in confirming the addition made by the id. A.O. u/s. 68 at ₹ 32,94,982/- without properly appreciating the fat that source identity of such receipt in bank account of assessee appellant and genuineness of the said transaction was established on assessment record with the support of related documentary ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to establish the genuineness of the purchase and sale transactions of the said shares of M/s Shukun Constructions Ltd., such as copy of brokers contract notes for purchase of shares and also confirmation thereof, copy of physical share certificates, copy of letter for split of shares, D-MAT statement of assessee with Stock Holding Corporation of India (SHCIL) evidencing the dematerialization of the said shares in the assessee s name almost three months before the sale of the said shares, copy of contract note of stock broker for sale of the said shares through Bombay Stock Exchange (BSE), evidencing the payment of Securities Transaction Tax (STT) thereon, price movement evidence of stock on BSE on which the said shares were listed and traded and also copy of the bank statement of the assessee evidencing the receipt of sale proceeds of the said shares through regular banking channels. The learned A.R. for the assessee submitted that all these documentary evidences were furnished before the AO in the course of assessment proceedings vide covering letters dated 26.03.2007 and 01.08.2007 and form part of Paper Book I (pages 1 to 42) placed before the Tribunal. 3.2.3 It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough M/s. Falgun Finvest, an authorised sub-broker duly registered with SEB, who had given the delivery of the said shares in physical form through off market trade with appropriate transfer forms and these physical share certificates were lodged for transfer in the name of the assessee. It is submitted that copies of the said share certificates duly transferred in the name of the assessee were placed before the AO and forms part of the records of assessment. These facts, the learned A.R. for the assessee contends, are part of the corroborative documents which are placed at additional Paper Book (pages 1 to 7) which further highlights the erroneous basis adopted by the AO to hold that purchases of the said shares were back dated. The concerned return of income having been filed by the assessee for A.Y. 2004-05, i.e. the year in which the said shares were purchased, within the extended date as per section 139(1) of the Act with duly audited accounts and having been processed and accepted by the Department, it is contended that the AO s observation in the order of assessment for A.Y. 2005-06 that the purchases of the said shares are not genuine/arranged/back dated hold no water. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as a bogus/arranged one was replied to by the assessee vide letter dated 11.12.2007 addressed to the AO. In our considered view, after an appreciation of the material on record, we find that no proper investigation has been carried out by the AO to controvert the material evidence brought on record by the assessee. 3.4.2 It is also seen that, as contended by the assessee, there is no evidence on record to show that any action or enquiry was carried out either by the SEBI or BSE in respect of the alleged manipulation or propping up of the price rate movement of the said shares of Shukun Constructions Ltd., as has been assessed by the AO. We find from the details filed by the assessee on record in pursuance of the query by the AO in the course of assessment proceedings, that the shares of Shukun Constructions Ltd. is listed on BSE and that the sale transaction of the said shares by the assessee is at the rate quoted on the date of sale has been confirmed both by BSE and the concerned stock broker M/s. Khambatta Securities Ltd. It is strange that the AO has made the addition under section 68 of the Act treating the entire sale proceeds of the said shares received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le have been transferred to the buyer immediately is evident from her D-MAT account. In this factual matrix, we find that the decision in the case of Somnath Mani (supra) is factually different and distinguishable from the case on hand; is not applicable to reach an adverse finding in the case on hand and has been erroneously applied and relied on by the AO. 3.4.5 The assessee has placed before us a compilation of judicial pronouncements, the ratio of which has been placed reliance upon in furtherance of her case. The assessee placed reliance on the decision the Coordinate Bench of this Tribunal in the case of Jatin Chhadwa in ITA No. 8573/Mum/2010 dated 24.08.2012 for A.Y. 2005-06. In this case, on similar facts, we find that the Coordinate Bench has held that the claim of the assessee cannot be denied on the basis of presumptions and surmises in respect of penny stock without conducting any inquiry and by disregarding the direct evidences on record by the assessee. 3.4.6 In the decision of the Coordinate Bench of this Tribunal in the case of Harkhchand K. Gada (HUF) Others in ITA Nos. 1772 to 1775, 1788 1789/Mum/2010 dated 08.08.2012 relied on by the assessee, on simila ..... X X X X Extracts X X X X X X X X Extracts X X X X
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