TMI Blog2022 (12) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... ques from the sources drawn from the bank statements. The immediate source of credit was also explained by the assessee by way of confirmation from third party. These facts are not disputed by he Revenue before us and the same are staring on us. Hence, we have no hesitation in directing the AO to delete the addition made under section 69 of the Act in respect of purchase of shares in respect of Sacheta Metals Ltd. Assessee had also made purchase of shares of Sundaram Finance Ltd. Since the said purchase of 10,000 shares of Sundaram Finance Ltd was made by the assessee from a broker entity belonging to Shri Mukesh Chokshi group, the AO concluded that the said transaction of purchase is bogus and accordingly made addition u/s 69 in A.Y. 2006-07. Assessee had made purchase by making payment by account payee cheques out of sources drawn from his bank statement. The shares have been duly dematerialised as is evident from the DEMAT statement. These shares were subsequently sold in 2 tranches by the assessee through the registered stock broker, Bonanza Stock Brokers Ltd and gains arising thereon were offered to tax by the assessee as business income. In our considered opinion, bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough the broker, Alliance Intermediateries and Network Pvt Ltd in A.Y. 2006-07 and not in A.Y. 2005-06. It was also specifically brought to the attention of the Ld.AO that though as per the contract note issued by Alliance Intermediateries and Network Pvt Ltd, transaction of purchase of shares of Sacheta Metals Ltd was reflected as 30/03/2005; as per rules of Bombay Stock Exchange, the payment had to be made for the said purchase only after 2 days from the date of settlement and accordingly the assessee had made payment for purchase of shares only in April, 2005, which falls in A.Y. 2006-07. It was also pointed out that the payment made for purchase of shares for A.Y. 2006-07 had been duly made out of accounted sources of the assessee in A.Y. 2006-07. It was also submitted that the payments made to the registered broker by account payee cheque only. In fact, during the course of re-assessment proceedings, a statement was recorded by the Assessing Officer under section 131 of the Act. In response to the question No.4 thereon, the assessee had categorically stated that payment for purchase of shares was made by him through account payee cheque in A.Y. 2006-07. The relevant operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transaction covered in FY 2005-06? Please explain. A-7 It is easy for us to maintain and tally accounts that why BSE rules are followed. Q-8 The said transaction is not reflected in FY 2004-05 and AY 2005-06 Also explain whether the payment was made by cash or cheques. Produce proof of the same with documentary evidence. A-8 The said transaction is not reflected in FY 2004-05 and AY 2005-06 but it is reflected in next FY as per BSE rules. All the payments have been done by payee's a/c cheques. The said documents will be submitted on 23-11- 2011. Q-9 Can you remember the date of sale of shares of Sacheta Metals and amount involved? A-9 These shares are sold in calendar year 2005-06. I don't remember the amount exactly. I will produce the broker's bill on 23-11-2011. Q-10 From whom you purchased the said shares? A-10 I purchased the shares from Mukesh Chokshi, Broker. 1 know him for the last 7 years. I met him in the stock market. Q-l 1 How you sold the said shares? A-11 I have sold the shares through Bonanza Portfolio Ltd, the authorized broker. Q-l2 Are you doing all the transaction with Bonanza Port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Alliance Intermediateries and Network Pvt Ltd reflecting purchase of shares on 01/04/2005 duly confirmed by it; (e) Copy of bank statement explaining the source for making payment for purchase of shares; (f) Copy of loan confirmation from M/s Tarlaben Dedhia for source for the immediate source of credit; and (g) Copy of assessee s ledger in the books of Bonanza Stock Broker Pvt Ltd (broker) through whom shares were bought and sold in A.Y. 2006-07. 8. The assessee also made some additional purchase of shares of Sacheta Metals Ltd during A.Y. 2006-07 and had sold the entire shareholding through Bonanza Stock Broker Pvt Ltd. The sale proceeds received on sale of shares were duly offered by the assessee as business income as he is engaged in the business of share trading. It is not the case of the Revenue that the sale proceeds received by the assessee on sale of shares is bogus wherein the nature and source of receipts is not established. Absolutely no discrepancy was pointed out by the Revenue in both the years as far as the scrip, i.e. Sacheta Metals Ltd is concerned. The only grievance of the Revenue is that assessee had made purchase of shares of Sacheta Me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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