TaxTMI 
TaxTMI 
TaxTMI 
2010 (12) TMI 713
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....ption u/s. 54EC of the Act. 2. The learned CIT(A) erred in upholding the addition of Rs.8138/- on account of alleged commission paid. 3. The learned CIT(A) erred in not considering the additional ground raised by the assessee vide letter dated 19-6-2009 i.e., no opportunity provided to the assessee to cross examine the stock broker Mr. Mukesh Chokshi, thereby principles of natural justice has been violated." 3. We have heard the learned Counsel for the assessee and the learned DR in detail. Briefly stated the Assessing Officer has treated an income of Rs.15,50,048/- offered by the assessee as long term capital gain from sale of shares as short term capital gain thereby disallowing exemption under section 54EC of the Act. The assessee is an individual. During the year under consideration the assessee sold 10500 shares of Rashel Agro Tech Ltd. at Rs.1627580/- on 26-11-2001/14-12-2001 and after taking indexation benifit on the cost of acquisition declared long term capital gain of Rs.15,37,753/-. The assessee claimed deduction under section 54EC by way of investment in bonds of Rural Electrification Corporation totalling Rs.15,30,000/- on the net capital gain r....
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....vest P. Ltd. for AY 2000-01 f) Sale bills of Goldstar Finvest Pvt. Ltd. 4.1. It is also contended that the said Mukesh Chokshi in his statement under section 131 recorded on 28-10-2006 has given a categorical finding/statement that the assessee's transactions are genuine and since the broker has accepted the transaction as genuine the payment made by way of cheques and entries relating to purchase and sale of shares were duly backed by contract notes and also carried in regular books of accounts the date of purchase in April, 2000 should have been accepted by the Assessing Officer. The CIT(A) after considering the detailed submissions, has rejected the contention vide para 4 of the Order which is as under: "On going through the reply filed by the AR of the appellant, I find that the reply does not have much force. It is the contention of the counsel of the appellant that he had purchased of Rashel Agro Tech Ltd. on 5-4-2000, while contract date of purchase was dt. 11-4-2000. These shares were sold on Nov./Dec. 2001 after a period of more than 1 year from the date of purchase. Hence, he had shown income from LTCG. It is claimed by him that payment of the shar....
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....ee has shown these transaction of purchase of shares in the balance sheet filed for the assessment year 2001-2002 in August, 2001 and these shares were sold in December, 2001 on which the assessee has earned long term capital gain. He then referred to the statement recorded by the Assessing Officer from Mr. Mukesh Chokshi. particularly question No.4 which is also extracted in the assessment order to submit that the said broker has accepted that the transactions are genuine and the payments are made by way of adjustment transactions. The learned Counsel further explained that the assessee had a speculation profit of Rs.87,611/- on purchase of sale of 620 shares of APTECH Ltd. on 13-4-2000/17/4/2000 and this amount was utilised for purchasing 10500 shares of Rashel Agro Tech Ltd. It was further submitted that on 14/2/2001 the assessee purchased shares of BPl Limited and NIIT Limited wherein the assessee had a speculation loss of Rs.89,602/- and these transactions happened in the stock exchange and both the transactions are reflected in the balance sheet of the assessee. Since the net effect of speculation loss is very small amount, the assessee did not claim any speculation loss to b....
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....y examined the purchase of shares and doubted the date of purchase. But in the computation he has given benefit to the same cost of purchase of shares and taxed the long term capital gain offered as short term capital gain only. As far as the date of purchase is concerned, the evidence on record indicate that the assessee had indeed earned speculation profit by sale of APTECH shares which the Assessing Officer has not doubted. Further the assessee also suffered speculation loss as stated above in February, 2001 and debit and credit entries pertaining to same broker were shown in the balance sheet in the return filed for the AY 2001-2002 in August, 2001. There is also a mention of purchasing of shares of the company in the return. It is also on record that the said company vide letter dated 30- 6-2000 had transferred the shares in the name of the assessee with the folio No.15021 and certificate Nos. 105744 to 105848. The Assessing Officer neither questioned the said company nor disproved the transfer of share certificates by 30/6/2000. The only basis for arriving at the conclusion that the transaction is not genuine is on the basis of the statement given by Mr. Mukesh Chokshi on 20-....
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....saction'. In view of this statement in question Nos. 4 and 5, we are unable to understand how the transactions becomes a bogus one. There is no evidence except this oral statement which is also not submitted for cross-examination to prove/disprove the transaction. Whereas the assessee furnished transaction details, the bank accounts, purchase and sale of other listed companies, speculation profit and loss and also evidence in the form of balance sheet filed much before the said shares were sold. The sale of shares was undertaken in December 2001 whereas the return for AY 2001-2002 was filed by August 2001 itself indicating the purchase of shares and outstanding amounts to M/s. Golden Finvest Ltd in the statements. In view of the documentary evidence in favour of the assessee, we are unable to accept the contention of the Assessing Officer based on the statement which is also un-supported by any other evidence to deny the benefit of purchase of shares by the assessee on 8-4-2000. Not only that the Assessing Officer has also gave credit for the same amount of purchase of shares at cost and did not treat the sale proceeds as bogus/unaccounted income. The only action taken by the Asses....