TaxTMI 
TaxTMI 
2005 (9) TMI 543
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....that the assessee is an individual who filed his return of income for the assessment year under consideration declaring an income of Rs. 90,303. The income declared in the return was by way of salaries, income from other sources besides long-term capital gain on sale of shares, which was claimed as exempt under section 54F of the Act on the ground that the same was invested in acquisition of a residential house property. The return filed by the assessee was taken up for scrutiny assessment by the Assessing Officer. During the course of assessment proceedings, the Assessing Officer verified the long-term capital gain declared by the assessee on the sale of shares which are as follows. The assessee is shown to have sold 27,000 shares of Adam Finman Limited for Rs. 16,12,913 at the rate of Rs. 60 per share on 27-5-1996. These shares were claimed to be purchased by the assessee on 5-4-1995 at the rate of Rs. 7.40 per share and the indexed cost of acquisition of Rs. 2,16,845 was adjusted against sale-price to arrive at long-term capital gain of Rs. 13,96,068. This amount has been considered exempt by the assessee under section 54F on account of investment in the purchase of house proper....
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....ese shares, the transaction was made on the Magadh Stock Exchange Association Ltd. and filed a copy of quotation in support of the share prices. Regarding non-response from the investee company M/s. Adam Finman Ltd., the assessee submitted that the transaction of these shares was carried out 5 years back and the addressee may have changed. Regarding M/s. A.V. Investments Ltd., it was explained that due to heavy recession in capital market, the broker suffered huge losses and had closed down its business. The assessee stated that despite all efforts, he has not been able to find out the latest address of this broker. Regarding M/s. S.K. Aggarwal & Co., the assessee filed a confirmation from the said broker. The assessee further submitted that the name of the said company was on the records of the Registrar of Companies and he also filed a confirmation from the company with respect to his shareholding. In addition, the assessee filed contract notes and bills of M/s. S.K. Aggarwal & Co. for the sale of shares and for the purchase of shares, a memo of confirmation and a bill of M/s. A.V. Investments was filed. 4. After considering the aforesaid submissions, the Assessing Officer has....
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....rifiable from record. This was supported by the quotations of Delhi Stock Exchange and bill of M/s. A.V. Investments. That the shares so purchased stood transferred in the name of the assessee and the particulars of distinctive numbers and the certificate of the investee company regarding transfer of shares was placed on record. The aforesaid plea was in support of the purchase of shares made by the assessee. Before the CIT(A), the assessee further produced the copies of Annual return filed by M/s. Adam Finman with the Registrar of Companies so as to prove the identity and existence of the company and the ownership of the shares by the assessee. In support of the sale of shares, which was effected during the year, the assessee submitted that the same was sold through M/s. S.K. Aggarwal & Co. and payment was received through account-payee cheque. The assessee submitted that the said shares were sold at Magadh Stock Exchange and the same was corroborated by the Magadh Stock Exchange quotation lists. Accordingly, the assessee supported the trans-action of sale of shares by filing the documents viz., copy of contract note and bills by Shri S.K. Aggarwal & Co.; quotations of Magadh Stoc....
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....e first appellate authority. In support, the ld. counsel has referred in detail to the paper book filed before us, which, inter alia, contain the written submissions made before the lower authorities and the rejoinder of the assessee filed with the CIT(A) in response to the remand report submitted by the Assessing Officer. In brief, the ld. counsel submitted that the sale and purchase transactions were supported by stock exchange quotations; that the contract notes issued by the brokers confirmed the transactions; similarly the distinctive numbers of shares and the confirmation by the investee company demonstrated that the assessee was holding the shares at the relevant point of time. The ld. counsel further submitted that insofar as the purchase of shares was concerned, the same took place in the preceding assessment year and that the same could not be doubted by the revenue in the current assessment year. It was explained that the information during the course of remand proceedings was collected at the back of the assessee and, in fact, such information supported the claim of the assessee. For this, our attention was invited to certain annexures of the paper book, i.e., page 45 w....
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....pany. Therefore, the plea of the Assessing Officer that the assessee has not explained its shareholding in the said company is entirely based on surmises and is contrary to the factual position. Even with regard to the pricing of the shares, the assessee has been able to substantiate the same on the basis of the quotations of Magadh Stock Exchange wherein the said sales were transacted. Similarly, the finding of the CIT(A) with regard to the price at which the purchases were made has also not been controverted before us. On this count alone, we are inclined to sustain the order of the CIT(A) as the revenue has failed to demolish the same on the basis of any cogent or sufficient material. 11. Nevertheless, it is also noteworthy that the Assessing Officer has failed to establish that in lieu of the aforesaid sale proceeds, the assessee has surreptitiously introduced his unaccounted money in the bank account. After having perused the entire material that is available on record, there is no averment, much less any evidence, with the revenue in this regard. In our view, while there may be enough grounds with the Assessing Officer to carry out the impugned verification exercise to tes....