TMI Blog2020 (7) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... se of shares was to be accepted as genuine then the sale thereof could also not be doubted. Grounds raised, in this regard, stands allowed. Addition on account of Sale of Jewellery - HELD THAT:- Assessee, being a lady, as per the customs, would certainly acquire Jewellery in gifts on the occasion of marriage and on the occasion of the birth of a child. The said fact could be fortified with instruction No.1916 dated 11/05/1994 issued by CBDT which recognizes a fact that a married lady of reputed family could be expected to own 500 grams of ornaments and therefore the same need not be seized. This is coupled with the fact that the sale consideration has been received by the assessee through banking channels in subsequent financial years. Nothing on record would show that the said receipts have flown back to the purchaser of Jewellery. The assessee has placed on record financial statements of the three purchasers along with copies of their computation of income Income Tax Returns. In their respective Balance Sheets, these purchase transactions have been recognized by the three purchasers and confirmation of account has also been placed on record. Therefore, claim of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of sale of jewellery despite the fact that that purchasing parties confirmed the purchase of jewellery and payment was received by account payee cheques bank drafts. 7. The learned Commissioner of Income Tax, Appeals-45, Mumbai failed to understand that the delay in receipt of payment against sale of jewellery was beyond the control of the appellant and same should not have been made the basis for sustaining the said addition. It is prayed that order of the learned Commissioner of Income Tax, Appeals -45, Mumbai be quashed and additions made of ₹ 33,37,726/- u/s 68 on account of sale of shares and ₹ 17,40,000/- u/s 68 on account of sale of jewellery be deleted so as to meet the ends of justice. As evident, the assessee is contesting the addition of ₹ 33.37 Lacs u/s 68 and another addition of ₹ 17.40 Lacs on account of sale of Jewellery which has been confirmed by Ld. first appellate authority. 1.2 We have carefully heard the rival submissions and perused relevant material on record including documents placed in the paperbook. The Ld. AR submitted that the factual matrix of gain on shares stood covered in assessee s favor by vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ills to acquire the shares of MMTC for ₹ 4.43 Lacs. During the course of search proceedings, statement of Shri Mukesh Chokshi, who was stated to be managing all the group entities, was recorded wherein he admitted to have indulged in bogus billing activities. Accordingly, notice u/s 148 was issued on 10/10/2011 to the assessee which was followed by statutory notices u/s 143(2) 142(1) wherein the assessee was asked to furnish the requisite details and other documentary evidences to substantiate the share transactions. The reasons leading to reopening were duly communicated to the assessee. 2.3 Upon perusal of details filed by the assessee, it was found that the assessee earned Long-Term Capital Gains of ₹ 28.94 Lacs and claimed the same to be exempt. The details of the transactions were as follows: - No. Scrip Name Quantity Sale Value Purchase Value Gain 1. MMTC (sold during April, 2009) 200 33.37 Lacs 4.43 Lacs 28.94 Lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as introduced from AY 2005-06 mandated that the transactions should have been chargeable to securities transactions tax (STT) which would go against the argument of the assessee that the purchase of shares was through off-market purchases and therefore, the transactions had to attract STT. Since M/s AINPL was neither broker nor a sub-broker, the question of STT being paid to the exchange and ultimately to the treasury would be ruled out. Therefore, the stated addition was to be confirmed. 3.2 It was also noted that the shares were de-matted only one or two days before they were sold. The purchase amount was fully paid after the sale of these shares. Therefore, the whole transactions reeks of arrangement made for accommodation entries. In the above background, the addition was confirmed. Aggrieved, the assessee is under further appeal before us. 4. Upon due consideration, we concur with the submissions of Ld. AR that facts in the case of assessee s husband i.e. Shri Ashok T. Shah, were pari-materia the same. The said assessee, earned gain on sale of shares of MMTC on identical set of facts. The coordinate bench of the Tribunal, vide ITA No.4318/Mum/2016 order dated 06/05/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchases bills, contract notes of purchase of shares, holding letter from the broker, bank pass book evidencing payment through banking channels towards purchase of shares, copy of ledger account in the books of share broker, sales bills and sale contract notes issued by M/s JCSL , copy of ledger account in the books of M/s JSCL , delivery position and global net position demat report, bank pass book evidencing receipt of sale consideration through banking channels. 6.4 It is trite law that the additions could not be made merely on the basis of doubts, conjectures or surmises. Keeping in view the totality of facts circumstances, we are inclined to delete the impugned additions of ₹ 28,02,666/-. This ground stand allowed. Similar are the facts in share transactions carried out by present assessee. We find that the sale transactions have taken place through an independent broker and the sale proceeds have been received through banking channels. The sale could not take place without making purchases thereof. The purchases were supported by contract notes, holding letter and the payment was through banking channels. The shares were credited in the demat account of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid claim was rejected and entire sale consideration of ₹ 17.40 Lacs was brought to tax as unexplained cash credit. 6. During appellate proceedings, the assessee submitted the name and addresses of the persons to whom the Jewellery / ornaments were sold. The submissions were subjected to remand proceedings. Confirmatory notices u/s 133(6) were issued to all these parties, however, the same were returned back undelivered. The assessee could only produce confirmed copies of ITR etc. of the persons to whom the Jewellery was sold. Therefore, after due consideration, the action of Ld. AO was upheld by Ld. CIT(A). Aggrieved, the assessee is under further appeal before us. 7. It has been pleaded that the Jewellery was acquired by the assessee by way of customary gifts on the occasion of her marriage in 1982 and birth of her first child prior to 1986 and accordingly, the Jewellery would constitute Streedhan for the assessee. The said explanation would explain non-furnishing of purchases bills with respect to Jewellery. Keeping in view the status of the assessee, the said explanation could not be altogether brushed aside since the assessee, being a lady, as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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