TMI Blog2017 (1) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... e us. We are of the opinion that the income shown by the assessee under the head of capital gain is consistent with the accounting treatment made in the books of accounts. Income from undisclosed source - Held that:- As there was no fault on the part of the assessee we are inclined to reverse the order of lower authorities. Hence this ground of appeal of the assessee is allowed. Disallowance of dividend income from UTI master value fund wherein the amount was invested - Held that:- We find that assessee has made investment on 07.02.2005 for ₹ 75,000/- and on same day the dividend income was received from UTI as evident from the account statement. We also find that the same amount of dividend is also reflecting in the bank statement of assessee and said amount was credited in the bank of assessee on 19.02.2005 through account payee cheque. To this point, Ld. DR for the Revenue has not brought anything on record to contradict the argument made by Ld. AR. Considering the facts and circumstances of the case, we reverse the order of Ld. CIT(A) and this ground of assessee is allowed. - ITA No.1213/Kol /2016 - - - Dated:- 11-1-2017 - Shri A.T.Varkey, Judicial Member and Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee by observing as under:- The ground of appeal number 01 02 relates to tracing capital gain as business income in this regard it is pertinent to mention here that as per findings of the AO, the AO has never treated income of shares transactions as a business income rather than it has been treated as a income from undisclosed sources. Hence, the ground number 01 02 are not as per finding of the AO. In the submission dated 15-02-2016 the appellant has taken ground of assessing the capital gain income as a business income. As these submission are not relevant with the findings of the AO because the AO has not treated it as business income. He has treated it as income from undisclosed sources which are being assessed under section 68. But these submission are made treating it assessed as business income, has no bearing over the findings of the AO who has assessed it as unexplained cash credit u/s 68, and it is miss conceived by the appellant. Hence, these grounds are irrelevant. Therefore the ground number 01 02 are hereby dismissed. Being aggrieved by this, assessee has come up an appeal before us. 5. Before us Ld. AR for the assessee filed paper book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... securities as investment in its books of accounts. The corresponding income on sale and purchase of securities has been offered under the head of capital gain by the assessee for both the years. The AO has merely treated the transaction of sale purchase of securities as an adventure in the nature of trade merely on the ground of magnitude and frequency of the transaction. The securities in the books of accounts maintained by the assessee were classified as investment. Thus in our considered view the AO cannot step into the shoes of the assessee to decide the business decisions for purchase and sale of securities. It is the discretion of the assessee to carry out the activity to the best of his wisdom. Therefore we do not find any substance in the case before us. In this regard, we find the co-ordinate bench of Mumbai Tribunal had an occasion to consider the same in the case of Janak S. Rangawalla vs ACIT reported in (2007) 11 SOT 627 (Mum), wherein it was held that : It is the intention of the assessee which is to be seen to determine the nature of transaction conducted by the assessee. Though the investment in shares is on a large magnitude but the same shall not decide the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to be by way of investment and some transactions were by way of speculation. The Revenue had not been able to find fault from the evidence adduced. The mere fact that there were 1,000 transactions in a year or the mere fact that the majority of the income was from the share dealing or that the managing director of the assessee was also a managing director of a firm of share brokers could not have any decisive value. The Commissioner (Appeals) and the Tribunal had concurrently held against the views of the Assessing Officer. On the basis of the submissions made on behalf of the Revenue, it was not possible to say that the view entertained by the Commissioner (Appeals) or the Tribunal was not a possible view. Therefore, the decision of the Tribunal could not be said to be perverse. No fruitful purpose was likely to be served by remanding the matter. For the aforesaid reasons, we are of the opinion that the income shown by the assessee under the head of capital gain is consistent with the accounting treatment made in the books of accounts. Respectfully relying on the aforesaid judgments we allow the ground of appeal of the assessee. 7. Next issue raised by assessee in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account but he failed to do so. Net worth of buying and selling company was also snot substantiated to the extent of price raised, and worth at which it was purchased. In this case the buying and selling was done by the same person in his favour under different cover of status but the beneficiary was ultimately same. The beneficiary has to discharge its primary onus for any transaction made in is books of account. The AO has very categorically given the finding based on inquiry of SEBI and non-discharging of onus by the appellant. Even at appeal stage the facts brought on record by the AO were not controverted by any material facts. In view of the aforesaid observation of the AO and as stated above about the observation of SEBI and investment of same person as karta of HUF being seller and as a broker being buyer from M/s Rohan International, I agree with the addition made by the AO is upheld and the appeal is dismissed on this ground. Being aggrieved by this, assessee has come up an appeal before us. 10. Before us Ld. AR for the assessee reiterated same submissions as made before Ld. CIT(A) and further stated that the shares were sold after the payment of security transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 4. The assessee has also failed to submit the net worth of M/s RFL and ACPL to justify the amount of capital gain earned during the year. On the analysis of the above facts we find that the lower authorities have not brought on record any concrete evidence for disallowing the long term capital gain of the assessee. The AO should have issued notices and summons to M/s RFL and ACPL under section 133(6) and 131 of the Act for the production of the necessary financial information before rejecting the claim of the assessee. We find that all the necessary information which were available with the assessee had been brought on record by the assessee before the lower authorities. In case ACPL has not filed the financial statements with the stock exchange then the assessee for the fault of ACPL cannot be held guilty under the income tax proceedings. The assessee in the instant case has made the transactions for the sale and purchase of the shares through a valid stock broker who was in existence at the relevant time with the stock exchange and this fact has not been doubted by the lower authorities. In view of the above we hold that the lower authorities had not brought on record su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investment is less than a year and in such short span of time, the dividend income cannot be earned by assessee. Thus, AO treated the dividend income as income from undisclosed source. 14. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who upheld the order of AO by observing as under:- Ground number 03 relates to the disallowance of divided of ₹ 24983/-. The AO has disallowed the same on the ground that no such investment is seen to be made. During the aforesaid period in the balance sheet and the appellant claim dividend income of ₹ 24983/- from UTI master value fund of ₹ 75000/-. The AO further concluded that this cannot be possible as per the prevailing rate of dividend allowed by the UTI concerned. It was further observed by the AO that investment made during the financial year 2004-05 will make appellant eligible to earn dividend only at completion of one year that could be financial year 2004-05 and considering the aforesaid fact the AO added the same under section 68 as from undisclosed sources. The perusal of bank account submitted at appellate stage by the appellant shows that some payment is made on 07-02-2005 and some receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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