9911796707
TMI Blog2015 (6) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... The brief facts of the case as coming out of the impugned order are that during the course of the assessment proceedings, the Assessing Officer (hereinafter referred to as the AO) observed that assessee had shown long term capital gain of Rs. 9,44,638/- on sale of 90000 shares of M/s Prranet Industries and had claimed exemption u/s 10(38) for the said LTCG on account of sale of shares. In respect of purchase of the said shares, the assessee had shown purchase of 9000 shares of M/s Prranet Industries on 27.04.2004 through the broker M/s Vijay Bhagwandas & Co. However, on enquiry from Bombay Stock Exchange about the said transaction of 9000 shares of M/s Prranet Industries on 2704.2004, BSE informed that on 27.04.2004, no transaction had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), however, observed that the assessee had preferred an appeal before the ITAT against the confirmation of the additions by the Ld. CIT(A) which were made by the AO under section 68 of the Act. He further observed that the ITAT, after consideration of all the facts, had confirmed the additions so made by the AO. He, therefore, held that since the findings of the ITAT clearly established that the claim of tax exempt long term capital gain put forward by the assessee was a false claim, hence, it was a case of concealment of income by the assessee by way of adopting a colourable device of sham transactions of purchase and sale of shares. He therefore upheld the penalty so levied by the AO. Aggrieved by the order of the Ld. CIT(A), the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in question were purchased in the year ended on 31.03.05. In the same financial year, the assessee made speculative profit of Rs. 17,847/- from trading in shares. The said share profit was invested in purchase of the shares in question which was evident from the profit & loss account. The investment in shares was settled against the speculative profit made. The said shares were sold in A.Y. 2006-07 and the long term capital gains earned were shown in the return of income. It was also stated that the transaction was done before dt. 01.10.04, hence the condition of executing the transaction through exchange was not applicable to the transactions in question. The transaction was an off market transaction. The Ld. CIT(A), however, did not agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D-mat account form. No evidence was found by the Revenue authorities to show that the purchase of shares in physical form was wrong or illegal. Even no doubt has been raised by any of the lower authorities regarding the genuineness of the sale transactions of the shares which admittedly have been done through banking channel. Merely because the broker did not turn up in response to the summons issued by the AO under section 131 of the Act, that itself, did not disprove the factum of purchase of shares by the assessee through broker. The addition had been made in the case of the assessee on the basis of assumption that the transaction of purchase did not look genuine. However penalty proceedings are separate from quantum assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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