TMI Blog2016 (12) TMI 1890X X X X Extracts X X X X X X X X Extracts X X X X ..... curities. In fact, such shares have been subsequently sold through broker Krone Research and Brokerage Pvt.Ltd. Therefore, question of raising doubt as to purchase of shares by assessee is not sustainable. Shri Mukesh Chokshi stated in his statement that (MSPL) was engaged in providing accommodation entries for speculation/delivery profit. Assessee has only purchased shares from MSPL which has been doubted by AO whereas sales have been made through Krone Research Brokerage Pvt. Ltd. which has been accepted. Had the assessee obtained accommodation entries from MSPL as to purchase of shares, concerned shares might have been even sold through MSPL which is not the case. Assessee has neither been provided with the copy of statement of Shri Mukesh Chokshi based on which impugned addition has been made nor has the assessee been given an opportunity to cross examine Mukesh Chokshi. In absence of cross-examination, no addition could have been made based on statement of Mukesh Chokshi recorded behind assessee s back. Assessee has placed on record affidavit of Mukesh Chokshi so as to prove that assessee has genuinely purchased shares form MSPL which has not found to be incor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credits. (ii) The ld. CIT(A) has erred in law and on facts in accepting the contention of the Assessee that purchase and sale of shares was genuine, which was substantiated by bogus documents. (iii) On the facts and circumstances of the case, the Ld. Commissioner of Income Tax(A) ought to have upheld the order of the Assessing Officer. (iv) It is, therefore, prayed that the order of the Ld.CIT(A) may be setaside and that of the Assessing Officer be restored. 3. Now we take up the Revenus appeal in ITA No. 1441/Ahd/2013 for assessment year 2009-2010. The revenue has taken the following grounds. (i) The ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.89,90,400/- made u/s.69 treating the share transaction as being unexplained source. (ii) The ld. CIT(A) has erred in law and on facts in accepting the contention of the Assessee that purchase and sale of shares was genuine, which was substantiated by bogus documents. (iii) On the facts and circumstances of the case, the Ld. Commissioner of Income Tax(A) ought to have upheld the order of the Assessing Officer. (iv) It is, therefore, prayed that the order of the Ld.CIT(A) may be setaside an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of providing bogus speculation profit/loss, short term/long term capital gain / loss, commodities profit/loss on commodity trading (through MCX). The assessee was one of the beneficiaries because assessee has also done some transactions with the M/s. Mahasagar Securities Pvt. Ltd. 9. The modus operadi adopted by the assessee is same as accepted by the prop. of the M/s. Mahasagar Securities Pvt. Ltd. as the shares reflected in the demat account of the assessee are coming within the one week of the sale. 10. Since, it is very clear that the sales of the assessee were genuine but purchases for the alleged shares were bogus. This facts was also supported by demat statement of the assessee in which the alleged share came within one week of the sale. Further, the payment for the all the shares purchase has been made after the sales. 11. Hence, considering the above facts and circumstances, assessee was given a show cause that your purchase from M/s. Mahasagar Securities Pvt. Ltd. seems bogus because as per NSE and ISE M/s. Mahasagar Securities Pvt. Ltd. is no more existed. Further, NSE and ISE has denied about any transactions in your name, so, why should not your capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. RNRL 27,30,025 27,60,722 30697 Total Loss (-) 4523 14. Since, if we calculate, as per the demat holding than assessee has earning loss so, it can be assume that the alleged capital gain is based upon only accommodation entries provided by M/s.Mahasagar Securities Pvt. Ltd. Hence, in view of the above total capital gain of the assessee of Rs.69,28,919/- is treated cash credit u/s.68 of the I.T. Act, 1961 i.e. income from other sources. Penalty u/s.271(1)(c) of the I.T. Act, 1961 has been initiated for furnishing inaccurate particulars. 15. Subject to above, the total assessed income is computed as under: Total Income as per return of income : Rs.79,08,620/- Less: STCG as shown in the return (treated separately) : Rs.69,28,919/- Total income other than STCG Rs. 9,79,701/- Add: Addition u/s.68, income from other sources Rs.69,28,919/- Rs.79,08,620/- Add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the broker's note / contract note and the period of holding is also to be reckoned from the date of purchase and not from the date of dematerialization . Therefore, even the observation of the AO that the shares were lately credited in the DEMAT account after the purchase of shares to hold that the shares were not genuinely purchased by the appellant is not on strong footing. 19. Further it is seen that the AO has accepted the genuineness of the transaction of sale of shares carried out through broker krone Research Brokerage Pvt.Ltd. and accordingly source of the sale proceeds credited to the bank account of the Assessee is found to be proved. Therefore, there is no undisclosed cash credit involved in this case and therefore addition could not have been made by the AO u/s. 68 of the Act. 20. Ld.CIT(A) also observed that the conditions to invoke section 68 of the I.T. Act, 1961 are not prevailing in this case especially cogent explanation supported by plethora of evidence is on record. Considering the facts and circumstances of the case, I decide that the AO is not justified in making addition u/s. 68 of the Act on account of unexplained cash credit u/s.68 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o challenge the correctness of the statement made by the deponent in the affidavit. Same has been held in the matter of Glass Lines Equipment Co.Ltd Vs. CIT-253 ITR 454 (Guj) . Shares have been purchased against payment duly supported by the contract notes and shares have been found to be credited in the assessee s demat a/c and on sale of such shares, the same were debited from demat a/c of the assessee and assessee has received payment through banking channel and sale of shares on the floor of BSE has been found to be genuine and also found to be confirmed by the BSE. There is nothing in record to even remotely suggest that such shares were never transferred in the name of the assessee. Had it been the case, assessee couldn t have sold the same from his demat a/c. Further, Shri Mukesh Choksi himself admits in his affidavit that MSPL had acquired the concerned shares on behalf of the assessee which were later on transferred to assesse s demat a/c and payment in respect of the same was received from the assessee and particularly the contents have not been controverter by AO, so it can be presumed that whatever have been stated therein in the affidavit of Mukesh Choksi is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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