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TMI Blog2022 (9) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.10.2010 in Welspun Group of cases, in which assessee was also covered. The assessee had filed his return of income for the AY 2006-07 u/s 139(1) on 31.07.2006 showing total income of Rs. 52,86,860/-. The said return of income was duly processed u/s 143(1) on 14.07.2007 accepting the return of income. Thus, on the date of search, the assessment for the AY 2006-07 stood finally concluded. Accordingly, in terms of 2nd proviso to section 153A, the assessment for the AY 2006-07 is to be reckoned as "unabated assessment‟. A notice u/s 153A was issued on 04.08.2011 and in response, assessee declaring his total income at Rs. 88,86,856/- on 15.09.2011 which included additional income of Rs. 36 lakhs in the said return. 3. In so far as the issue raised in the grounds of appeal are that, the brief facts are that the AO on the examination of return of income and the computation of income noted that assessee has claimed Long Term Capital Gain of Rs. 57,86,609/- in respect of shares of "Asahi Infrastructure Ltd." and Rs. 55,306 shares of "Om Metal Ltd." as exempt. In the computation of income and submission, the assessee had given the following details of Long Term Capital Gain for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old thereafter. ii. Payment for purchase of shares is made by adjustment of speculation profit which is also a adjustment entry. iii. The modus-operandi is absolutely same in such type of bogus transactions, where after bogus purchase, the same are dematerialized iv. once the purchase itself is questioned, the incidence of capital gain cannot be attracted. v. During the course of search action, several beneficiaries have admitted that cash equivalent of sale receipt was given to intermediaries who arranged back dated purchase invoices for which commission was paid. 7. Accordingly, after referring to certain decisions of Tribunal, AO held that the credits on account of sale of shares of Rs. 57,86,609/- was nothing but generating artificial LTCG and added to the total income of the assessee u/s 68 of the Act. 8. Ld. CIT (A) has deleted the additions on merits after making the following observations:- 7.3 The appellant has been heard in the matter. It is submitted by the appellant that the reasons as cited by the Assessing Officer are either irrelevant or immaterial in the context of the present case for the following reasons: a) It is submitted that in paragraph 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficiaries might have submitted that cash equivalent of sale receipt was given to intermediaries who arranged back dated purchases, it is submitted that it does not mean that the appellant had also been given back cash unless the same is established with cogent material. f) It is submitted merely because the shares of Asahi Infrastructure Ltd. were credited in the demat account of the appellant on 19.4.2005, the transactions can neither be termed as bogus particularly when the transaction of sale and purchase are supported by the bills of the share brokers. g) It is submitted that the basic reason for making the addition is the information stated to be in the possession of the Department that Mahanagar Securities Pvt. Ltd. was indulging in providing accommodation entry to various parties. It is submitted that the said information has been mechanically applied in the hands of. the. appellant without independent application of mind on the issue involved in the present case. It is also submitted that neither a copy of the statement of Mahanagar Securities Pvt. Ltd. was provided to the appellant nor any opportunity afforded to cross examine Mahanagar Securities Pvt. Ltd. h) The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source of credit in the books of the appellant for which addition has been made has not been doubted. The holding period of shares, as can be seen from the copies of documents on record is more than 12 months. The shares, as per the copy of the bill from Mahanagar Securities Pvt. Ltd., (placed at page 38 of PB) have been purchased on 13.4.2004. It is found that sale has subsequently been made out of shares held in the Demat Account of the appellant. In the face of the said facts, I am unable to sustain the action of the Assessing Officer in treating the sale of shares as bogus and making addition under s. 68 of the Act.. Therefore this ground is allowed in favour of the appellant. 9. Ld. DR strongly relied on the order of AO and submitted that the addition made by the AO was in possession of some information that the broker Mahanagar Securities Pvt. Ltd. was indulged in accommodation entries to various parties and therefore, the transaction undertaken by the assessee was also dubious. He thus strongly relied upon the order of the AO 10. Before us, Ld. Counsel for the assessee submitted that in this case nothing incriminating material was found during the course of search which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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