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2016 (7) TMI 267 - ITAT MUMBAI

2016 (7) TMI 267 - ITAT MUMBAI - TMI - Penalty u/s 271(1)(c) on addition made u/s 68 - Assessee contended that she has neither concealed the income nor furnished inaccurate particular of income. All the relevant particular e.g. bank account, contract notes, share certificates, demat statements, copy of account with broker through whom the share were purchased and sold were submitted. However, the reply of assessee was not considered sufficient and satisfactory - Held that:- The assessee submitte .....

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he claim LT CG was considered as income under section 68 of the Act, Thus it was a sufficient reply as per explanation 1 of Section 271(1) (c) of the Act. - Thus the assessee sufficiently explained in the reply to the notice u/s 274 r.w.s. 271(1)(c) of the Act. And as such no inaccurate particular was filed by the assessee and the levy of the penalty was wrongly inflicted upon the assessee, hence there is no merit in the order of penalty and the same is deleted - Decided in favour of assesse .....

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of income for relevant Assessment Year, declaring total income at ₹ 2,01,190/-. The return was selected for scrutiny and the assessment was completed under section 143(3) of the Act, determining the total income of assessee at ₹ 15,90,534/-. While making assessment AO made certain addition u/s 68 in respect of capital gain of ₹ 1501240/ - and of ₹ 31,344/- sales of shares through M/s Vijay Bhagwandass &Co.The assessee filed appeal against the quantum assessment befor .....

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e nor furnished inaccurate particular of income. All the relevant particular e.g. bank account, contract notes, share certificates, demat statements, copy of account with broker through whom the share were purchased and sold were submitted. However, the reply of assessee was not considered sufficient and satisfactory. And AO concluded that during the assessment proceeding, the enquiries made with the broker, M/s Vijay Bhagwandas & company and the Bombay stock exchange has revealed that asses .....

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rgued that assessee purchased 26,400 Shares of Fast Track Entertainment Ltd in physical form from the registered broker, Vijay Bhagwandas & Company vide bill No 2, dated 17 April 2003 and 23 April 2003, and also placed on record the copy of contract notes, transfer certificates and copy of Jumbo certificates. The appeal filed before CIT(A) was not pursued in view of the reasons stated in letter dated 31st of October 2008, which was addressed to CIT appeals. In the said letter it was contende .....

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i versus DCIT, considered the similar transaction, transacted through Vijay Bhagwandas & Co. and the 3 ITA No. 742/M/2013- Miss. Geeta Kashyap Shah transactions were held to be genuine and the claim of LTGS was allowed in the hands of assessee therein. On the other hand CIT(DR) relied upon the assessment order u/s 143(3) and supported penalty order by AO and the impugned order passed by CIT(A). 6. We have considered the rival contention of the parties and further perused the material availab .....

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t notes, transfer certificates and copy of Jumbo certificates of Fast Track Entertainment Limited (filed in the form of paper book) to show the transaction, transacted through Vijay Bhagwandas & Co. The coordinate bench of ITAT Mumbai, while dealing with the sale of shares of Fast Track Entertainment Ltd (FTEL) transacted through Vijay Bhagwandas & Co. in ITA No. 1123/M/2009 in Nipa Milan Gandhi versus ITO held as under:- 13. Sequences of events may raised suspicion about FTEL shares tra .....

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se discussions, we uphold the grievance of the assessee and reversed the order of CIT appeals . 7. Further, coordinate bench of ITAT Pune in ITA No.2008/Pune/2012, while dealing with transactions of share of fast track entertainment Ltd held as under: 20. The question which arises before us is the treatment of gain arising on the said transaction of sale, purchase of shares is to be assessed under the head income from long term capital gains as claimed by the assessee or under the head income fr .....

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ts ITA No.2008/PN/2012 ITA No.372/PN/2014 Mrs Pushpalata Omprakash Bhandari consequent conversion into Jumbo Certificates and further sale transaction through different brokers. In the totality of the above said facts and circumstances, where the assessee has placed on record the complete evidence of purchase and sale of shares, merely because the shares were D- matted in July, 2004 and thereafter, were sold in the month of August, 2004, does not establish the case of authorities below, in view .....

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materialization of the shares on 26.07.2004. In the entirety of the above said facts and circumstances, we hold that the gain arising on transfer of shares is to be assessed as income from long term capital gain in the hands of the assessee. 21. We further find support from the ratio laid down by the Hon'ble Bombay High Court in CIT Vs. Shri Mukesh Ratilal Marolia in Income Tax Appeal No.456 of 2007, vide order dated 07.09.2011, wherein it was held as under:- "5. On further Appeal, the .....

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ct transferred to the name of the Assesses. In these circumstances, the decision of the ITAT in holding that the Assessee had purchased shares out of the funds duly disclosed by the Assessee cannot lie faulted. 6 Similarly, the sale of the said shares for ₹ 1,41,08,484/- through two Brokers namely, M/s Richmond Securities Pvt. Ltd. and M/s.Scorpio Management Consultants Pvt. Ltd. cannot be disputed, because the fact that the Assessee has received the said amount is not in dispute. It is ne .....

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of M/s. Richmand Securities Pvt. Ltd. held that the sale transaction was genuine. 7 In these circumstances, the decision of the ITAT in holding that the purchase and sale of shares are genuine and therefore, the Assessing Officer was not justified in holding that the amount of ₹ 1,41,08,484/- represented unexplained investment under Section 69 of the Income Tax Act, 1961 cannot be faulted. 8. In the result, we see no merit in this Appeal and the same is dismissed with no order as to costs. .....

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der of CIT(A) and reversing the same, we direct the Assessing Officer to compute the income in the hands of the assessee under the head 'income from long term capital gains'. Thus, the grounds of appeal raised by the assessee are allowed. 8. Now coming to the fact of the present case, the assessee submitted her reply in response to the notice for penalty vide her reply dated 17 November 2007, wherein it was contended that sale consideration was paid through banking channel and she has no .....

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