Court affirms lower decisions on share sale tax dispute, emphasizes vendor responsibility. No new legal questions raised.

The High Court of Bombay upheld the decisions of the lower authorities in a case concerning Long Term Capital Gain and the sale of shares. The Court dismissed the appeal, ruling in favor of the respondent-assessee regarding the proof of cost of acquisition of shares and the reflection of transfers in the Share Transfer Register. The Court found the explanations provided by the respondent satisfactory, emphasizing that the responsibility for tax compliance rested with the vendors. The appeal was dismissed, with the Court stating that no substantial question of law arose from the issues presented.

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Issues:
1. Long Term Capital Gain - Proof of cost of acquisition of shares
2. Sale of shares - Reflecting transfer in Share Transfer Register

Issue 1 - Long Term Capital Gain - Proof of cost of acquisition of shares:
The appeal questions whether the Tribunal was justified in allowing the claim of Long Term Capital Gain without proof of the cost of acquisition of 1665 shares of a company. The Assessing Officer had disputed the purchase of shares in 2001, leading to the entire receipt on the sale of shares being treated as short term capital gain. The respondent-assessee claimed to have purchased the shares in 2002-03 for Rs. 41.25 lakhs, which was accepted by the CIT(A) based on the explanation provided. The Tribunal upheld this decision, noting that the vendors' failure to show receipts for tax purposes did not negate the purchase. The Revenue argued the shifting stand of the respondent, but the Tribunal found the explanation satisfactory, leading to the dismissal of the appeal.

Issue 2 - Sale of shares - Reflecting transfer in Share Transfer Register:
The second question raised whether the Tribunal was justified in directing the Assessing Officer to allow the claim regarding the sale of shares without the transfer being reflected in the Share Transfer Register. The Tribunal upheld the CIT(A)'s decision, emphasizing that all payments for the shares were made through account payee cheques, and confirmation letters from the vendors were not considered by the Assessing Officer. The Tribunal found no fault in accepting the explanation provided by the respondent for discrepancies in their income return. The Revenue raised concerns about the vendors not disclosing the sale of shares, but the Tribunal held that the responsibility for tax compliance lay with the vendors, not the purchasers. The Tribunal found the concurrent findings of the CIT(A) and itself reasonable and dismissed the appeal.

In conclusion, the High Court of Bombay upheld the decisions of the lower authorities, dismissing the appeal and emphasizing that no substantial question of law arose from the issues presented.

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