2010 (2) TMI 892
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....Gains" (LTCG) of Rs. 9,55,365. The assessee purchased 10,000 shares of the company named M/s. B.T. Techner Limited which were accepted by learned Assessing Officer/Department in the earlier assessment year and on the sale of which the assessee has claimed this LTCG. These shares are claimed to have been sold at the rate of Rs. 106 through the broker M/s. Agarwal and Company who is a member of Delhi Stock Exchange. As per the bill, to ascertain the genuineness or these shares, various queries were raised by the learned Assessing Officer. The assessee supplied various information. The assessee has shown the sale proceeds at Rs. 10,57,900 received in his books of account. The case of the assessee is that the shares were allotted to him in a public issue without paying any brokerage charges which were sold to the broker of which certificate stood already filed. According to the assessee, the shares were sold in the market at market rate, therefore, the profit declared on sale of shares has been shown under the head 'LTCP'. The assessee filed copies of share certificates before the learned Assessing Officer. But the learned Assessing Officer concluded that the assessee did not file shar....
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....70 for 5000 shares bearing distinctive number from 6065501 to 06070500 and certificate number 00046071 for 5000 shares bearing distinctive number from 6070501 to 06075500. The assessee also filed copies of share application alongwith copies of share certificates in response to notice dated 20-2-2004. The assessee purchased these shares in the previous year, i.e., 1999-2000 and duly disclosed the same in his return for the relevant assessment year and the same were accepted by the learned Assessing Officer. Copies of acknowledgement of share application, letter of allotment and the share certificates are duly enclosed in the assessee's Paper Book. The shares were sold through M/s. Agarwal and Co., stock and share brokers who was a member of the Delhi Stock Exchange and was also registered with SEBI having registration No. INB050098315 which is also evident from the Contract note No. 23, bill No. P30-1811 issued by the said broker and submitted with the department. The identification of the broker was confirmed by the Delhi Stock Exchange in departmental enquiry. The assessee has also enclosed copy of directory of members of Delhi Stock Exchange. In the light of the above evidences, ....
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....nder the Sale of Goods Act. The property in goods stands transferred the moment it is handed over to the purchaser after entire sale consideration is paid. So by arguing that the name of the transferee on this should be endorsed to prove the transaction of shares is not legally correct. In cases where the broker could not be produced by the assessee before the Assessing Officer, the Courts have held that no adverse inference can be drawn from this fact. For that proposition, cases relied by the assessee, viz., Currency Investment Co. Ltd.'s case (supra), Korlay Trading Co. Ltd.'s case (supra), Carbo Industrial Holdings Ltd.'s case (supra) some of them are listed above are relevant. There is no evidence regarding travelling of assessee's money in cash for deposit in broker's account and which could be said to have routed back through the banking channels to the assessee. This is exactly what the learned Assessing Officer is trying to establish in this case but purely on the basis of his guess solely based on circumstances. Actually there is a very heavy onus on the department to prove that the black money of the assessee took such a root to be converted into white money. In the abse....
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....mply ad hoc but still in the case of the assessee as an individual non-business user of the expenses cannot be ruled out. But the disallowances in question are on higher side. In the interest of justice we reduce the disallowances to 1/7th in telephone account and 1/10th in car account and, therefore, partly allow ground No. 1, in the given facts and the circumstances of this case. 8. Ground No. 3 relates to addition of Rs. 19,600 made by the Assessing Officer and sustained by the learned CIT(A) in the account of household expenses. Learned Assessing Officer has estimated household expenses of the assessee at Rs. 60,000 as against Rs. 40,000 disclosed by him. The learned Assessing Officer has estimated the expenses without any material evidence on record only on the basis of his general observations which are more of subjective in nature than objective one. Learned CIT(A) has confirmed this addition only because no specific reply was tendered by the assessee in this regard when called for to do so. After hearing both the sides, we are of the considered opinion that before making ad hoc disallowance learned Assessing Officer is bound to bring some concrete basis on which he ....
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.... unexplained income under section 68 of the Act vide assessment order under section 143(3) dated 31-3-2004. 4. In appeal, in response to the assessee's contention that the Assessing Officer had wrongly treated the transaction as not genuine, i.e., without bringing enough material on record, even as the transaction stands executed through a registered broker and duly evidenced by a contract note issued by it and, further, the amount received through the banking channel, considered it fit that the assessee be provided a further opportunity to present its case before him (A.O.) as he had raised specific and relevant issues in the matter which remained unaddressed by the assessee. The assessee, accordingly, was afforded fresh opportunity to furnish its reply on the said requisitions or aspects of the transactions, being in the main:- - confirmation from the broker along with a copy of his bank account; - name and address of the purchaser of the said shares, along with his confirmation, duly stating the rate of purchase and mode of payment (the said information was required to be, in case of its unavailability with the assessee, collected from his broker); ....
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....ed. Needless to add, the replies were general in nature, and the explanations, argumentative, rather than factual. Even the information as to his past experience in share investment or trading, or how he came in contact with his broker, M/s. Agarwal and Co., Delhi, which (facts) would only be in his personal knowledge, was not provided by the assessee. The same stand discussed qua each of the points raised by the Assessing Officer [per his order and the subsequent report(s)], as well as conduct of the other parties, by the ld. CIT(A) vide his impugned order. The broker:- 7. The assessee failing to produce the broker or his books of account, despite several opportunities, and the broker also failing to respond to the notices under section 133(6) as well as the summons under section 131 issued to him, the Assessing Officer deputed his Inspector (ITI) for field enquiry. The Inspector was finally able to trace the broker at his Ghaziabad address; which was among the three different addresses which stood gathered by the revenue from the various documents (the sale bills; the broker's confirmation, and as provided by his bank), to all of which the summons referred to earl....
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....nces drawn, are also stated as under:- Trading in shares:- 9.1 Enquiries were also made by the revenue in this regard. It was found that the market rate in the month of November 2000; the sale of shares being on 18-11-2000, at the Delhi Stock Exchange varied between Rs. 2.60 (*) to Rs. 8.60 per share (refer Annex. B to the appellate order). The share, however, stood quoted at Rs. 123 (on 17-11-2000) and Rs. 118 (on 20-11-2000) at the M.P. Stock Exchange, Indore (Annex. A). Further, while the number of shares transacted at the Delhi Stock Exchange stood at 103399 (in October, 2000), 36732 (in November, 2000) and 40948 (in December, 2000), all between a price range of Rs. 1.70 to Rs. 10.50 per share, the transactions on any given day between 28-3-2000 to 27-11 -2000 at the M.P. Stock Exchange was not more than 200 per day, with there being no trading after November, 2000. As against this, the share continued to be listed and transacted at the DSEL upto March 2003 (scrip being listed at as at low as Re. 0.50 per share). This, representing a very interesting and highly improbable state of affairs, the CEO and Whole Time Director of the company Shri S.K. Gupta stood exam....
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....t of the obtaining facts. The assessee may not be, in a regular transaction, and only understandably, aware of the purchaser's identity, being executed through a broker who issues it a contract note toward the same. However, in the present case the transaction stands not reported to the DSEL, which the broker is obliged to, in terms of the applicable procedure and bye laws, including the guidelines issued in this regard by the SEBI (the market regulator in respect of stock market - refer in this regard para 4.10 of the appellate order), so that it has not been executed through its channel or under its aegis, as confirmed by the DSEL to the Assessing Officer. As regards the M.P. Stock Exchange, firstly, the broker is not a member thereof and, even so, the total shares transacted thereat on any day does not exceed 200 in number, so that it does not stand transacted even through an intermediary (on whom only the assessee or its broker could even otherwise throw light) through the said Stock Exchange. As such, and, thus, the impugned 'sale' transaction is not a market transaction and could, at best, be an off-market transaction. Such transactions are executed outside the Exchan....
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.... accounts, he could only readily give the particulars of the purchaser(s) with reference to his records. In fact, in terms of the bye-laws of the Exchange, and the prevailing practice, a broker is required to issue a client-identity (ID) to every person for whom he brokes a deal. Clearly, no such Client ID code stands issued to either the assessee or the purchaser, the seller and the buyer in the instant case, even as a part of the contract, per the contract note, he has charged a commission on the transaction, as also service thereon and, presumably, from both. and which is also in contradiction to the only other alternative in the present case; the transaction being confirmed as an off-market transaction, even as observed by Assessing Officer, i.e., of the broker having himself bought the shares. 10.2 As such, considered either way, i.e., as regular or an off-market transaction the probability of which even otherwise, the transaction remains unproved, the onus for which is squarely on the assessee. The broker, it needs to be appreciated, is only the assessee's agent, acting for and on his behalf, so that the assessee cannot validly plead non-cooperation by the broker. In ....
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....determined, all the other facets or angles of the transaction do not lead to any logical end. As explained by the Apex Court in the case of CIT v. P. Mohanakala [2007] 291 ITR 278, the expression 'offers no explanation' as occurring in section 68, means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. In fact, given the factual matrix, the inference of the same as in fact being in genuine and a bogus transaction, routed through the medium of broker to give it a colour of genuineness, becomes, rather, the only possible one which one can draw under the facts and circumstances, which, to repeat, are undisputed. The company, it may be noted, has not reported of the impugned shares having been lodged with it for transfer, despite more than one AGM, the cut-off date for the purpose being prior thereto, having lapsed, with the annual returns as furnished with the RoC also being incomplete in this respect, for the assessee to plead discharge of the burden on it, i.e., when it is not in a position to tell in whose favour the transfer stands executed by him (also refer para 10.3). The observations....
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....nue, so that by itself it cannot be said to be conclusive proof of share acquisition. The fact that against the entire block of 10000 shares, the assessee having been allotted two share certificates (i.e., fifty times the market lot size), and only un-explicably so, while the trading lot, as also the share certificate(s) issued to the other shareholders, is for 100 shares, raises serious doubts as to the allotment or purchase of shares by the assessee and which thus stands also doubted by the revenue. This is particularly so as the assessee has prior to the sale not got the share certificates fragmented into share lot size. The share, it must be realized, is a movable property, conveyed through delivery, accompanied by the execution of the instrument of transfer, so that it being in marketable lots, has a direct bearing on its tradability and, thus, of vital import in its transferability and, thus, liquidity. Was the assessee, thus, at the time of purchase of shares in the knowledge that the shares would be sold some time hence to a single buyer or at the most two buyers? Further, the buyer having also not lodged the share certificates for transfer (and thus for fragmentation, whic....
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....idered as only marginal, in a price band of Rs. 2.60 to Rs. 39.30 from March, 2000 to November, 2000 (Annex. B); the decline since March, 2000 being steady. This information stands confirmed by the company's principal director vide his deposition before the Investigation Wing of the Revenue on 27-1-2003, which also conforms to the company's reported profit which for the relevant year is at Re. 0.23 per share. The same falls to Rs. 0.0125 per share for the year ending March, 2003, which again explains both the fall in the trade (volume) as well as in its rate, which stands reduced to Re. 0.50 per share by March 2003. The reported variation is, it must be appreciated, itself significant, when considered, as it has to, in percentage terms, signify as it does a change in the intrinsic worth of the share, or in the public perception thereof or of the company, particularly in the absence of any cause therefor. Contrast with the 'rate' obtaining in November 2000, the period of the impugned sale, at the M.P. Stock Exchange, and which is in the range of Rs. 118 to Rs. 123 per share. There is, firstly, no basis for such a rate, i.e., in terms of the company's performance, either in the past,....
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....section 68 being on the assessee, the province of an appellate authority, reviewing the assessment, is only to examine, on the basis of the material on record, whether the non-satisfaction of the Revenue with the assessee's explanation is justifiable, i.e., is one to which the judicial process must accord its approval, so as to be sustained in law, or is it arbitrary and unreasonable, so as to be disapproved. The assessee's contention of it being not possible to produce his broker after lapse of four years, again, in this context, only requires to be stated to be rejected. Firstly, the onus is squarely on the assessee, more so where the information called for is of routine nature, so that there could be at least a substantial compliance, while his behaviour has been of avoiding proceedings (refer paras 4.4 and 4.9 of the appellate order). Secondly, the explanation is even factually incorrect. The impugned draft stood made on 20-2-2001, so that the assessee was in contact with the broker up to at least this time, while the Assessing Officer's notice calling for the relevant information is dated 7-2-2003. Further, as evident from the broker's declaration dated 15-1-2004, conf....
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.... by the Revenue, so that all that the assessee had done was to realize his confirmed asset at the extant rate. As would be apparent from the foregoing, in the instant case the revenue has doubted the share acquisition as well, and has been found as valid and not satisfactorily addressed by the assessee. As such, the said case is distinguishable at the threshold. Reference in this context is also drawn to the observations/findings at para 10.3 of this order. The revenue has clearly made enquiry into the antecedents of the company, only to find that the company's official address, as communicated, and even as available with the registering authority, i.e., the office of the RoC, not in actual existence, so that neither its address located nor its functioning confirmed by it, in spite of making all possible efforts, including approaching the office of the Registrar of Companies, as well as its Assessing Officer (refer pg. 13 of the appellate order). On access thereto from the RoC's office, its records, to whatever extent filed therewith, are found wanting, being incomplete and inchoate. The issue of two certificates of 5000 shares each by it to the assessee, as against the trading lot....
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....e of income by the creditor. Conclusion and Case Law:- 12.1 The foregoing only goes to show that the contract note issued by the broker is only a paper transaction, with no basis in reality, and which is responsible for my endorsing the second ground on which the transaction stands impugned by the Revenue, i.e., of it being a bogus or sham transaction, i.e., apart from not satisfying the test of section 68 of the Act. It needs to be emphasized that the Revenue has not only considered as the assessee having abysmally failed in the discharge of the onus cast on it under section 68 of the Act in relation to the impugned credit of Rs. 10,57,900, with regard to its nature and source, so as to be not deemed its income in terms of section 68, but also treated, on the strength of its factual findings, and which I find as being not challenged on primary facts, and legally firm qua the inferences drawn, as un-genuine or a bogus transaction, so that it in fact represents the assessee's own money, routed thus. The Revenue's charge or case is thus two pronged and both of which I consider as legally valid and, thus, sustainable. Reliance for the purpose stands made by it on a host of ca....
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...., as in the present case. 12.3 In my view, thus, the assessee's appeal merits being dismissed on its second ground as well; being in agreement with the proposed order by my ld. Brother qua the assessee's ground number 1. Third Member Order P.K. Bansal, Accountant Member (As a Third Member):- 1. Hon'ble President under section 255(4) of the Income-tax Act, 1961 ('the Act' hereinafter) has nominated me to decide the following points of difference between the ld. Accountant Member and the ld. Judicial Member as referred to by them vide letter dated 16-2-2009:- "1. The ld. CIT(A)-II has erred on facts as well as in law while upholding the Assessing Officer's action of treating the income under the head long-term capital gain as sham and bogus and taxing the same under head income from other sources. The income disclosed by the assessee under head long-term capital gain is liable to be assessed only under that head and the same cannot be treated as income from any undisclosed source. Therefore, there arises no point of additional tax liability on this point." 2. The brief facts of the case are that the assessee filed his return of income o....
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....basis for taking the adverse inference. The moment the shares are handed over after receipt of the full consideration, no adverse view can be taken. (x) The onus is on the Revenue to prove that the black money of the assessee was converted into white money through the transaction. (xi) The rate of Rs. 106 per share was duly proved by the assessee. 3. The ld. A.M. was of the view that:- (i) The assessee could not submit the information on various factual areas of the transactions. (ii) No details in the annual return of the Company regarding the share holder were available. (iii) The market rate of the shares on 18-11-2000 at Delhi Stock Exchange varied from Rs. 260 to Rs. 860 while it stood quoted at Rs. 123 and Rs. 118 on 17-11-2000 and on 20-11-2000 respectively at M.P. Stock Exchange. (iv) The draft from the broker's account was issued against the cash deposit in the said account. (v) The case of Ashok Kumar Lavania v. Asstt. CIT was not applicable as in that case the Revenue has accepted the genuineness of the transaction while in the case of the assessee, purchase and acquisition of the shares was also doubted. &n....
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.... copy of which is available at page 43 of the Paper Book. It was pointed out, referring to the declaration that the declaration duly confirmed that the broker has sold 10000 shares of M/s. B.T. Technet Limited vide bill No. P-30-1811, dated 18-11-2000 for and on behalf of the assessee. It was also certified in the declaration that the broker has made payment of Rs. 10,57,900 against the aforesaid bill through two demand drafts and the broker has also deducted the DD charges from the assessee. The broker has also given his PAN as AADPK 4129M in the declaration. The summons issued by the department on remand proceedings were also served on the broker and the departmental Inspector also approached at the doorstep of the broker. Referring to page No. 10 of the order of CIT(A), it was pointed out that the Inspector could locate the broker at the Ghaziabad address but he refused to state anything about the share transaction and said that he would give the statement only after consulting his C.A. Shri K.K. Jain. The department was having all the powers to get the desired information from the broker. In the absence of any adverse statement of the broker or any material evidence against the....
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....no adverse inference can be drawn on this basis. So far the price of the shares in the Stock Exchange is concerned, it was contended that no small investor like the assessee has any control over the price mechanism of any Stock Exchange. The price of shares either on market or off market transaction is decided by multiplicity of the factors like demand and supply forces, varieties of buying interest of buyers in shares of a particular company, personal needs of various sellers, action of market speculators and other countless factors. Neither the assessee nor any other such investor has any control over the market price and trading volume of various stock exchange. The rate list acquired by the department from M.P. Stock Exchange itself indicates the dates and rates quoted at the M.P. Stock Exchange ranging from Rs. 12.90 to Rs. 150 between 28-3-2000 to 27-11-2000. The assessee was not having any control over the price and volume of shares traded in the M.P. Stock Exchange or Delhi Stock Exchange. On that basis no adverse inference can be drawn as the assessee has sold the shares through a registered share broker. He does not have any connectivity with the buyer of his shares. In t....
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....50 per cent. Accordingly, in that case entire sale proceeds plus commission at the rate of 1 per cent was added as income from undisclosed sources. After analyzing the evidences placed by the assessee, Hon'ble Bench allowed the appeal and held the transaction as genuine. Hon'ble A.M. has tried to distinguish this case mainly for the reasons that in Ashok Kumar Lavania's case (supra) purchase of shares was not in dispute and, therefore, all that the assessee had done was to realize his confirmed asset at the extent rate. In the assessee's case also the purchase of shares stands proved through the direct confirmation by the company in response to the notice of the Assessing Officer under section 133(6). Therefore, the assessee's case is not different from the case of Ashok Kumar Lavania (supra). 5. Referring to para No. 7 of the order of the ld. Accountant Member, it was contended that the observation of the ld. A.M. was not correct that the assessee failed to produce the broker. The assessee had entered into only one transaction for the sale of shares. He did not have any subsequent transaction with the broker. It was difficult for the assessee to produce the broker. The ide....
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....t the prices of the shares were duly accepted by this Tribunal in that case. Regarding cash deposited in the account of the broker, reliance was placed on the decision of this Tribunal in the case of Ashok Kumar Agarwal v. Asstt. CIT, [IT Appeal No. 129 (Agra) of 2004], copy of which is available at page Nos. 62 to 80 of the compilation and referring to para No. 35 at page No. 77, it was pointed out that in that case also the cash was deposited by the broker in his account and the Tribunal has accepted the genuineness of the transaction. Thus, it was contended that the order of the ld. A.M. is based on suspicion, surmises and conjectures. Referring to the decision of the Hon'ble Supreme Court in the case of Umacharan Shah and Bros.v. CIT [ 1959] 37 ITR 271, it was contended that the suspicion howsoever is strong cannot take the place of actuality. Thus, the ld. A.R. vehemently relied on the order of the ld. J.M. and contended that the L.T.C.G. shown by the assessee was genuine one and it was not a bogus transaction. 6. Ld. D.R. vehemently relied on the order of the ld. A.M. and reiterated the facts from the assessment order given at page Nos. 2 and 3. Referring to para No. ....
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....the facts of the case of the assessee. In that case also the transaction of sales has not been accepted by the Assessing Officer as he doubted the sale prices and also relied on the statement of Shri Ashok Gupta, Director of M/s. JRD Stock Brokers Pvt. Ltd. who stated that as a matter of fact there was no actual purchase and sale of shares as was reflected in the contract notes issued by M/s. JRD Stock Brokers Pvt. Ltd. to the beneficiaries. In that case the assessee claimed Long-Term Capital Gain of Rs. 25,14,770 and claimed exemption under section 54EA of the Act. The LTCG was shown on account of sale of shares through the brokers. The assessee submitted the copies of bills, share certificates, contract notes etc. during the course of assessment proceedings alongwith details of demand draft through which the sale proceeds has been received. It was also pointed out that the purchases were made through broking concern M/s. JRD Stock Brokers Pvt. Ltd. The Assessing Officer noticed that the shares were purchased at the rate of Rs. 4 per share and sold at the rate of Rs. 65 to Rs. 84 per share. The Assessing Officer was of the view that the transactions were not genuine and are only a....
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....in away them. Every time the statements cannot help the department. How the above mentioned evidences could be ignored? The revenue has io give reasons for rejecting them. These are important documents, some of them arise under the provisions of the Companies Act. The brokers were never confronted with the evidences produced by the assessee. The apparent has to be treated as a real unless proved otherwise. Long ago Hon'ble Supreme Court has laid this law while rendering the celebrated decision in the case of CIT v. Daulat Ram Rawatmal [1964] 53 ITR 574. The assessee has countered the statements of brokers by way of his duly sworn-in affidavit. We have examined the entire evidences placed in the paper book of the assessee. (12) In the case of ITO v. Smt. Kusumlata [2006] 105 TTJ (Jd.) 265, copy placed at page No. 4 of assessee's Paper Book (j udgments relied), the Hon'ble Jodhpur Bench has held as under:- "For making addition under section 69, the Department is required to prove to the hilt that the impugned transactions are bogus. The burden cast on the Department is very high which is required to be discharged conclusively in this case; there is no such evidence. T....
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....e proof of transactions of 9000 shares along with transfer of share certificate. Therefore, in the given facts and circumstances of the case, the CIT(A) has correctly come to the conclusion that the assessee has dealt in these shares and these transactions cannot be held bogus. The deletion of addition of Rs. 4,99,062 is confirmed." (13) The above decision clearly helps the case of the assessee. (14) Credence cannot be given to the statements of the persons who themselves admit and have dubious dealings as against the documentary evidences produced by the assessee. (15) Moreover, when purchases have not been doubted or disputed by the Revenue in this case, the decision of Hon'ble Punjab and Haryana Court relied by learned A.R. in the case of CIT v. Anupam Kapoor[2008] 299 ITR 179 (Punj. and Har.) is very much relevant. The held portion of this decision is extracted hereinbelow:- "Held, dismissing the appeals, that there was no material before the Assessing Officer which could have led to a conclusion that the transaction was a device to camouflage activities to defraud the Revenue. No such presumption could be drawn by the Assessing Officer merely on....
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....lso the party to that decision. I noted that in this case the Assessing Officer has doubted the sale consideration because the share price has increased tremendously. I noted that in the case of Ashok Kumar Lavania (supra) also the assessee has purchased the share at the rate of Rs. 4 per share and sold at the rate of Rs. 65 to 84 per share. In that case also the Assessing Officer has not accepted the transaction but on the basis of the evidence the Tribunal has accepted the transaction to be genuine one as there was no corroborative evidence to support the statement of the broker. In this case, I noted that the statement of the broker was not recorded. The transaction was treated as non genuine as the assessee could not produce the broker. It is on record in the order of the CIT(A) that the inspector was able to locate the broker at his address at Ghaziabad but he did not deny the transaction but rather stated to give the statement after having the consultation with his CA. The assessee has submitted the confirmation of the broker dated 15-1-2004 which was rejected as it was not on the stamp paper duly signed by the witnesses. The revenue also observed that the broker was avoiding....
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....nsion. It is pertinent that the issue of abnormal increase in prices of the shares has come up for consideration before the ITAT, Agra Bench in the cases of Smt. Memo Devi (supra) wherein the Co-ordinate Bench observed as under:- "The assessee has no relation with the directors of the company and was in no way in the capacity to affect the market price of shares. The increase in share prices by more than 25 times too cannot be the basis to assume that the transaction was bogus. Abnormal fluctuation in share prices is a normal phenomena - the learned counsel for the assessee filed a chart showing low and high prices of some quoted shares during the 52 weeks as per Economic Times dated 27-2-2007 from which it can be seen that some shares increased even by more than 100 times." 11. In almost similar circumstances the Hon'ble Punjab and Haryana High Court in the case of CIT v. Anupam Capoor [2008] 299 ITR 179 has also observed as under:- "The Tribunal was right in rejecting the appeal of the revenue by holding that the assessee was simply a shareholder of the company. He had made the investment in a company in which he was neither a director nor was he in contro....
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....gh account payee cheque or draft. If the broker had sold the shares in cash and deposited the same in his, i.e., in the bank account of broker concern, is beyond the control of the assessee. Also as regards the second objection of the ld. CIT(A) that No. of persons have allegedly done such transactions during the same period. We are of the view that the ld. CIT(A) has not provided the details of such No. of persons and also have not linked transactions of such No. of persons to the transactions of the assessee from which it could be proved that the transactions carried out by the assessee are a sham transaction. The ld. CIT(A) has referred to the name of one person, i.e., Shri Ashok Kumar Lavania whose appeal was pending before him, which does not prove the transaction of the assessee as bogus or sham transaction. As regards the next objection of the ld. CIT(A) that the assessee and his group has shown such capital gain in other years also. The ld. CIT(A) has not brought on record whether such capital gain were a sham transaction and have not approved any linkage with the transaction of the assessee which could further approve that the assessee's transactions were bogus and sham tr....
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....al or evidence to indicate that the impugned sale proceeds reflected unaccounted income of the assessee." 15. It was the duty of the Assessing Officer to bring on record sufficient evidences and material to prove that the documents filed by the assessee were bogus, false or fabricated and the long-term capital gain shown by him was actually his income from undisclosed sources. The only material to support such conclusion of the lower authorities is either the findings of the DDI in general investigations or the observation that the assessee could not prove the transaction to be genuine one. This is the settled law in view of the decision of the Hon'ble Supreme Court in the case of CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349 that the apparent is real. Onus is on the person who alleges apparent is not real. None of the judicial precedent supports the case of the Revenue. While making addition as income from undisclosed sources burden on the department is very heavy to establish that the alleged receipt was actually income of the assessee from the undisclosed sources. Jodhpur Bench of the ITAT in the case of ITO v. Smt. Kusumlata [2006] 105 TTJ 265, copy of which is placed i....
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....sp; Dilip Gargh v. ITO [IT Appeal No. 470 (Agra) of 2004]. Gopal Prasad Agarwal v. Asstt. CIT [IT Appeal No. 128 (Agra) of 2004]. 17. I also noted that the case of the assessee is duly covered by the decision of the Third Member in the case of Smt. Sunita Oberoi (supra) in which on difference of opinion on the question under the similar circumstances whether the assessee can be said to have discharged her burden to prove the genuineness of the transaction in shares of M/s. Prasidh Exports Limited and M/s. K.L.P. Finance Limited or that the burden had shifted on the Revenue that can be held to have not discharged by them, the decision to uphold accepting of alleged profit on alleged share of M/s. Prasidh Exports Limited and M/s. K.L.P. Finance Limited as income from other sources instead of assessee has claimed the capital gain is a correct decision or not. The Hon'ble Third Member has held as under:- "In another order of the Tribunal in ITA No. 881/Delhi/2004, dated 28th May, 2004 in the case of Smt. Sunita Gupta which has been followed in Sanjay Kumar Bansal (supra) the Tribunal held likewise. It is therefore to be held that the statement of Shri Praveen M....
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....roker. In yet another case of ITO v. Rajiv Aggarwala [2004] 89 TTJ (Delhi) 1095, Delhi Tribunal held in the context of statements given by Shri Shankar Hari Maheshwari and Shri Praveen Mittal considered the statements recorded by the Dy. Director of IT (Inv.) of Mr. Shankar Hari Maheshwari and Mr. Praveen Mittal; the assessee did not furnish the address of the said company; the fact that the assessee could not adduce evidence in support of his claim of purchase of shares; that the assessee failed to adduce any evidence regarding transfer of shares in his name; and that the assessee has failed to even furnish the name and address of the person to whom the shares were sold. The only reason to make the addition is that confirmation from the share brokers could not be filed by the assessee and summons issued to the said persons were not served and returned unserved and the names and addresses of the buyer to whom the ultimately shares were sold through the broker were not known to the assessee. The assessee was not in a position to compel the share broker for confirming the transaction, she being neither a director nor having large scale dealings with the brokers over t....