TMI Blog2018 (7) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase and sale of shares. He has also furnished copies of demat account which shows entry and exit of shares. The assessee has also received payment towards sale of shares though it was received from two other persons on behalf of DPS Shares and Securities P. Limited. In our view, so far as the assessee is concerned, he has proved the genuineness of purchase and sale of shares of M/s. Prraneta Industries Ltd., and hence long term capital gains arising on sale of above said shares cannot be doubted with. We also noticed that the Assessing Officer did not make inquiries with regard to demat account furnished by the assessee and also could not disprove the affidavit filed and statement given by DPS Shares and Securities P. Limited. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er noticed that the assessee had sold scrips of Kotak Mahindra, NIIT Ltd. and Steel Authority of India Ltd. on 27.4.2004 through M/s. DPS Shares and Securities P. Ltd. and the same has resulted in net gain of ₹ 47,133/-. On 29.4.2004, the assessee purchased 25,000 shares of M/s. Prraneta Industries Ltd. for an amount of ₹ 47,040/-, which was adjusted against the profit earned by the assessee. The 25000 shares were converted into 250000 shares of ₹ 1.00 each. The assessee sold all the shares and earned long term capital gain of ₹ 42.22 lakhs. The AO conducted enquiries in this regard. The inquiry made by the Assessing Officer with Bombay Stock Exchange revealed that sale of shares of Kotak Mahindra, NIIT Ltd. on 27.4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kumar Masalia (authorized representative of M/s DPS shares and securities P Ltd) again and recorded his statement on 20.3.2014. In his statement, Mr. Rajkumar Masalia confirmed that the transactions made with the assessee were genuine. The Assessing Officer noticed that the payments against sale of shares have been received by the assessee from two concerns named M/s. T.R. Fabrics and M/s. V.N. Creations and not directly from the broker DPS Shares and Securities P. Limited. When questioned about the same, Mr. Rajkumar Masalia submitted that he does not remember as to how sale consideration was paid to the assessee. 4. The Assessing Officer, however, was not convinced with the affidavit, evidences and statement given by Mr. Rajkumar Masal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the assessee had in fact purchased shares of M/s. Prraneta Industries Limited and sold the same. Accordingly he submitted that the tax authorities were not justified in doubting the genuineness of purchase and sale of shares. With regard to receipt of payment by way of cheques from two unrelated concerns, the learned AR submitted that the assessee had received cheques against outstanding dues and hence the assessee was not concerned with the sources from which cheques were received so long as payments were made on behalf of the DPS Shares and Securities P. Limited (stock broker). The Ld A.R further contended that the irregularities, if any, committed by the Share broker cannot disprove the genuineness of transactions entered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sold the same on 14.7.2005 i.e. after investigation period. Accordingly, learned AR submitted that the order passed by SEBI does not cover the period of transaction of purchase and sale undertaken by the assessee. He further submitted that the assessee has otherwise proved the genuineness of purchase and sale of shares. 8. We have heard the rival contentions and perused the record. We noticed that the assessee has furnished contract note in support of the transaction of purchase and sale of shares. We notice that the Shares purchased by the assessee have been dematerialized before its sale. The fact of dematerialization would prove that the shares were physically available with the assessee, which in turn, proves the factum of purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of purchase and sale of shares undertaken by the assessee. 10. We noticed that the assessee has furnished copies of contract notes in support of the purchase and sale of shares. He has also furnished copies of demat account which shows entry and exit of shares. The assessee has also received payment towards sale of shares though it was received from two other persons on behalf of DPS Shares and Securities P. Limited. In our view, so far as the assessee is concerned, he has proved the genuineness of purchase and sale of shares of M/s. Prraneta Industries Ltd., and hence long term capital gains arising on sale of above said shares cannot be doubted with. We also noticed that the Assessing Officer did not make inquiries with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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