TMI Blog2016 (11) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... s already given finding that the genuineness of shares cannot be doubted. The only dispute, in our view, was with regard to the mode and time of purchase of shares and the claim of the assessee in this regard could not be proved by the AO as wrong. Under these set of facts, we are of the view that the Ld CIT(A) was justified in reversing the order passed by the AO and directing the AO to accept the long term capital gain declared by the assessee. Hence the estimated addition made towards expenses was also rightly deleted by Ld CIT(A). Accordingly we uphold the order passed by Ld CIT(A). We have upheld the order passed by Ld CIT(A) in cancelling the additions made by the AO. We notice that the Ld CIT(A) has deleted the penalty on the ground that the additions made by the AO stood deleted. We notice that the Ld CIT(A) has deleted the penalty on correct reasoning and hence order does not call for any interference. - Decided against revenue - I.T.A. No. 6405/Mum/2012, I.T.A. No. 6998/Mum/2012 - - - Dated:- 21-9-2016 - Shri B. R. Baskaran (AM) And Shri Sanjay Garg (JM) Assessee by : Shri Rakesh Joshi Department by : Shri A.B. Koli ORDER Per B. R. Baskaran ( AM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to produce the above said broker to prove her claim of purchase of shares through him. However, the assessee did not produce the broker. Thereafter the Assessing Officer wrote a letter to M/s. GR Pandya Share Broking Ltd. and the borker denied the transactions. Later, the broker filed another letter stating that the balcony of its office collapsed in the rainy season and all records were lost in that mishap. It was further stated in that letter that they were under bonafide belief that there was no client by name Asha Mehta with them. 5. It is pertinent to note here that the assessee had filed an affidavit dated 4.5.2010 obtained from Shri Narendra Shah, director of M/s. GR Pandya Share Broking Ltd. In that affidavit, Shri Narendra Shah confirmed the transactions carried on by the assessee through M/s. GR Pandya Share Broking Ltd. When this affidavit was confronted with M/s. GR Pandya Share Broking Ltd., the said broking firm stated that Shri Narendra Shah was director for the period from June 2004 to February 2006. Since affidavit was given by Mr. Narendra Shah in May 2010, the Assessing Officer took the view that the said affidavit cannot be relied upon. In the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases were made by the assessee, therefore, M/s. G.R. Pandya Share Broking Ltd. and the amount of consideration was adjusted towards credit balance of the assessee in the books of account of the broker. Therefore, the issue was set-aside for re-consideration and reverification. From the perusal of the order of the Tribunal, it is clear that the Tribunal has decided the issue, except the re-examination of confirmation of Shri G.R.Pandya filed before the Id. CIT(A) as additional evidence which was not admitted. Even the Tribunal has given the citation of cases in the case of Mukesh R. Maroli, Prasmal Nata and in the case of Ramadevi Chaudhary where it was held that similar issue has been decided in favour of the assessee. In the assessment order, the AO has held that the assessee has filed the affidavit of Shri Narendra Shah before the Tribunal who has confirmed that he was a Director of M/s. G.R. Pandya Share Broking Ltd. at that time. But the AR of the appellant has submitted that no affidavit was submitted before the Hon'ble Tribunal or the CIT(A) but the assessee has filed a confirmation of account of M/s. G.R. Pandya Share Broking Ltd. before the Hon ble CIT(A) as additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was any doubt of genuineness of the shares, the department should not have accepted the balance-sheet for the AY 2002-03. The Hon'ble Tribunal has also discussed the decisions on similar issue decided by the Tribunal specifically in the case of Mukesh R. Marolia vs. Addl. CIT (6 247) where it was held as under :- For a moment, even if all the above evidences are ignored, one cannot overlook the pressure of the evidence coming out of the survey carried out by the department in the business premises of the assessee. There was a survey carried out by the department in the business premises of the assessee. In the course of survey, contract notes for sale of shares, copies of bills thereof, photocopies of share certificates etc. were found. The purchase and sale of shares were also found recorded in the books of account. The department has no case that the survey was a staged enactment. A survey is always unexpected. So, it is not possible to presume that the assessee had collected certain fabricated documents and kept at his business premises so as to hoodwink the survey party to lead them to believe that the assessee had entered into share transactions. Atleast suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, it is held that the AD has no adverse evidence against the assessee except a letter of the broker in which he has stated that its office building was collapsed and no record was available of the earlier years. Thus, the confirmation submitted by the appellant in the shape of confirmed copy of account of the assessee in the books of account of M/s. G.R. Pandya Share Broker (P) Ltd. has to be accepted as there is no adverse evidence against it. Moreover, in the second assessment proceeding, the assessing officer had made inquiry from the company, M/s. G.R. Pandya Share Brokers (P) Ltd. regarding the purchase of shares by the assessee. In its reply, M/s. G.R. Pandya Share Broker (P) Ltd has not disproved their confirmation given of additional evidence, rather it was mentioned that the records relating to A.Y. 2002- 03 were destroyed due to collapse of building in 2005, hence not available. Further, all the documents relating to purchase/sale, dematerialization in the name of the assessee, payment received by account payee cheque etc. were found and seized during search. Therefore, reliance cannot be placed only on the statement of the husband of the assessee which is not corro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restored the matter to the file of the AO with the following observation:- 11 We have also gone through various other details i.e., purchase and sale of shares, sale consideration and share certificate duly transferred in the name of the assessee and thereafter transferred the shares in the name of purchasers to whom the shares were sold by the assessee under De-mat account. The shares were dematerialized and thereafter the shares were sold through de-mat account which proves that the shares were genuine. The department is also not doubting the sale of shares. 11.1 Once it is held that the shares are genuine, then it cannot be said that the assessee has not purchased the shares or was not the owner of the shares. Therefore, as stated in the foregoing paras that no much credential should have been given to the ltter of M/s DFL whose shares were purchased by the assessee through the broker. There is nothing on record to suggest that these shares are back dated. Therefore, it has to be taken that the shares were purchased on the date as shown by the assessee. However, as stated above that the share broker through whom these shares have purchased had denied the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Tribunal in the first round. The copy of the said letter is placed at page 4 of the paper book. A perusal of the same shows that the client ID of the assessee was given as 1301190000005334 and the ledger account copy for the period from 01.01.2001 to 31.03.2002 is also given. Hence the Tribunal has admitted additional evidence. Since there was contradiction between the statement given by Shri G.R Pandya and the confirmation letter, the Tribunal though it fit to restore the matter to the file of the AO in order to resolve this contradiction. Accordingly, we are of the view that the Tribunal has not kept all the matters open, but restored the issue only to verify the purchases and if anything turns out against the assessee, then the AO was directed to decide the matter in accordance with the law. 11. In the set aside proceedings, the share broker M/s GR Pandya Share Broking Ltd did not furnish any document in support of its statement that the assessee was not its client. It has claimed that the records were destroyed. Hence the Ld CIT(A) has rightly pointed out that the share broker could not deny the transaction without examining its records. 12. We have noticed e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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