TMI Blog2018 (12) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... nced by the statement of demat holding as on 31/05/2004. The cost of these shares has been reflected in assessee’s Balance Sheet for the financial year 2003-04. All the aforesaid facts lead us to conclude that the assessee, in fact, acquired the share at some point of time and the said transactions were not mere paper transactions. Nothing on record suggest that any cash transactions got exchanged between the assessee and the share broker - assessee invested the entire gains in purchase of new house property - So far as the huge rise in the sale price of the shares is concerned, it is trite law that the additions could not be made merely on the basis of suspicion, conjectures or surmises. Nothing on record suggest that the assessee, in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 68 for ₹ 11.98 Lacs and denial of consequential deduction u/s 54F. The assessment for impugned AY was framed by Ld. Income Tax Officer, Ward-25(3)(1), Mumbai [AO] u/s 143(3) of the Income Tax Act, 1961 on 28/12/2007 wherein the income of the assessee has been assessed at ₹ 13.55 Lacs as against returned income of ₹ 0.93 Lacs filed by the assessee on 23/09/2005. The assessee being resident individual was engaged in garments business under proprietorship concern namely M/s Pramukh Creation. 2.1 During assessment proceedings, it was noted that the assessee sold 8000 Shares of an entity namely M/s Offshore Finvest Limited on various dates [between 01/07/2004 to 08/12/2004] for net sale consideration of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other discrepancies shortcomings as enumerated in para 3.5 of the quantum assessment order, Ld. AO treated the state transactions as sham transactions and added the resultant gains of ₹ 11.98 Lacs in the hands of the assessee as cash credit u/s 68. Consequently, deduction u/s 54F as claimed by the assessee against those gains also got disallowed. In the alternative, Ld. AO opined that deduction u/s 54F could also not be allowed to the assessee in view of the fact that the possession of the new property was not obtained by the assessee within stipulate period. 2.4 The assessee was saddled with another addition of ₹ 61,000/- due to low family household withdrawals of ₹ 89,000/- reflected by the assessee. 3. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of ₹ 42,560/- from a broker Rajendra Prasad Shah . In support of purchase transactions, the ledger extract of the assessee in the books of share broker Rajendra Prasad Shah has been placed on page number 16 of the paper book, the perusal of which reveal that the stated investment has been sourced by the assessee out of sale proceeds of earlier investment i.e. Geomatsoft on 04/04/2003. The gain on sale of earlier investment has been reflected by the assessee in his return of income for AY 2004-05 and the same has been accepted by the revenue. In support of genuineness of purchase of impugned shares, the assessee has placed on record contract note, relevant share certificate, statement of demat holding on various date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has invested the gains in new house property viz. Flat at Ashiana [Kandivali] on various dates, the details of which have been extracted on page number 45 of the paper-book. The assessee s claim has been denied only on the premise that the possession of the flat could not be obtained by the assessee within stipulated period of time. However, the same per se, in our opinion, could not be a ground to deny the deduction particularly when the assessee has acquired certain rights in the property and has appropriated the capital gains towards the same and fulfilled all the other conditions as envisaged by Section 54F. The assessee could not be penalized for delays in the construction which is a common feature of the industry. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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