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TMI Blog2008 (4) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by not treating them the sale proceeds of shares and added the same as income from other sources in her hand. The assessee took this matter before the first appellate authority and contended that the purchase and sale of 2000 shares was fully established by the assessee but the learned Assessing Officer did not considered the same in correct perspective and has wrongly added the same under the provisions of section 68 of the Act after considering the following submissions of the assessee :- "(i)That the purchase of 2000 shares of Surya Udyog was made by payment through demand draft dated 5-2-2001 through S.B. a/c with Bank of India Mathura. (ii)That the appellant was allotted 2000 shares by the said company. She received 20 share certificates for 100 shares each (Nos. 49995 to 50014) distinctive Nos. 2746401 to 2748400. This investment was duly reflected in the balance sheet of the appellant as on 31-3-2001 and 31-3-2002 filed along with the return of income of her father for assessment year 2001-02 and assessment year 2002-03. (iii)That the sale proceeds of the shares were credited in her account No. 6522 with PNB, Krishna Nagar, Mathura. (iv)That t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. However, the broker M/s. S.J. Capital Limited has not disclosed the identity of the purchaser. All share transfers are hacked by share transfer forms which are signed by the transferor, the transferee, a witness to the transaction. However, both the appellant as well as the broker have not disclosed any of these details. Since the impugned sales were off-market transactions, the deal would have been negotiated by S.J. Capital Limited who would have received the consideration and passed on the same to the appellant. However, neither in letter dated 6-12-2006 nor in letter dated 23-12-2006 have the broking company disclosed the identity of the purchaser. The broker has also not claimed that the shares were sold to a completely unknown person by cash that no transfer form was filled in for the purpose and that in their records there is no clue as to the purchaser of the shares. Since the impugned transaction was an off-market transaction only the broker was party to the sale transaction on behalf of the appellant. The appellant has shrugged off her onus to prove the identity of the creditor by pinning the liability on the broker and the broker has remained silent on this aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Beach of Hon'ble ITAT. 5. Having considered circumspectiously the entire evidences on record it is revealed that the assessee had purchased 2000 shares from M/s. Surya Udyog on 5-2-2001 for a consideration of Rs. 20,000. The assessee filed return of income for the year under consideration on 31-3-2004 declaring total income of Rs. 78,120 which consisted of capital gain amounting to Rs. 1,99,140 which was claimed to be exempt under the provisions of section 54EC on account of investment of sale proceeds in the eligible capital gain bonds. The assessee sold 2000 equity shares of Rs. 10 each in Surya Udyog and earned capital gain of Rs. 1,99,040. The gains arising from such transfer was duly invested to get benefit of section 54EC. As stated above the transactions of purchase and sale of shares are evidenced from the evidences placed in assessee's Paper Book. The assessee made application to M/s. Surya Udyog for allotment of 2000 equity shares of denomination of Rs. 10 each by making the payment of Rs. 20,000 through DD No. 053758 dated 5-2-2001 issued from her savings bank account with Bank of India, Mathura. The allotment of 2000 equity shares to the assessee, is evidenced from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oker and she is not a regular trader in share and it was her loan transaction are taken into consideration. The assessee received payments through bank draft. The stock broker firm is the member of stock exchange and is also registered with SEBI. Both the company and broker are body corporate and their PAN, TAN, income-tax and TDS returns are available in the database of the department. In my considered opinion there is no evidence on record which can prove that Rs. 2,19,140 was not the sale consideration of shares which was duly supported by bills issued by broker and there is no evidence to prove that this amount represented unaccounted money of the assessee received in the guise of sale proceeds of shares. The learned Assessing Officer has not even invoked the provisions of section 68 and the fact remains that the assessee disclosed the sale of shares and receipt thereof in her return of income and has claimed exemption under section 54EC. So there is no case of treating these sales proceeds as income from other sources. At page 31 of the Paper Book there is proof of purchase of shares for a consideration of Rs. 20,000. This is a copy of Demand Draft which has not been refuted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - CIT(A) justified in deleting the addition." 6. In this case I, (Judicial Member), was the author and it was clearly held as under :- "Assessee having adduced all the requisite evidence to establish that she held shares in a company and sold the same through a broker to a genuine purchaser and received payment through cheque, the transactions could not be treated as bogus, and the explanation of the assessee that the investment in construction of residential house was made out of sale proceeds of said shares could not be rejected; addition under section 69 rightly deleted." 7. The above judicial precedence is in favour of the assessee and the factual matrix supplement the version of the assessee and there being no evidence on record to supplant the contention of the assessee, in my considered opinion, there is no question of making addition of the impugned amount under the provisions of section 68 of the Act. To further strengthen my above finding, reference may be made to the decision of Hon'ble Punjab & Haryana High Court which was recently delivered in the case of CIT v. Anupam Kapoor [2008] 299 ITR 179 wherein it has been held by their Lordships that:- "The assessed's ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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