TaxTMI 
TaxTMI 
2014 (4) TMI 115
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.... Income [ROI] on 1.8.2005 declaring total income of Rs. 6,18,926/-. Assessment was completed at returned income. Subsequently, order was reopened u/s 147 r.w.s 148 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act', for short]. The assessee had earned LTCG of Rs. 11,07,548/- from sale of shares of Ram Krishna Fin Cap. The assessee has also made a claim u/s 10(33) of the Act. The A.O. obtained information from SEBI that the broker M/s Prakash Nahata & Co. was suspended from dealing in shares by CSE w.e.f 2.5.2005 on account of non-compliance of Unique Client Code through this broker. These shares were purchased on 3.7.2003 and were credited in the DEMAT account of the assessee on 2.1.2004, i.e. after a period of five months. T....
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....e has given the following reasons to come to the above conclusion: "4.4.1. The appellant submitted her return of income declaring total income of Rs. 6,18,926/- inclusive of long term capital gain on sale of shares. The Assessing Officer held that the long-term capital gains shown by the assessee is suspicious in nature and the assessee has adopted a colourable device under the garb of tax planning. The AO has given a reference of proceedings of search under sec.132 conducted at the premises of M/s. B. C. Purohit & Co. and has observed that some share brokers registered with Calcutta Stock Exchange were engaged in the bogus transactions in shares of certain Companies. The Assessing Officer accordingly, assessed the said amount of capital g....
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.... by Prakash Nahata & Co. which shows that the appellant had sold shares of Ram Krishna Fin Cap on 19-7-2004, 20-7-2004 and 16-12-2004 for Rs. 2,86,740/-, Rs. 2,88,540/- and Rs. 5,75,400/- respectively and further purchase shares of Rs. 42,700/- of same Company. On perusal of the various details furnished by the appellant, I find that the appellant genuinely had entered into purchase and sale of shares of M/s. Ram Krishna Fin Cap. The Assessing Officer had not brought on record any documentary evidences to suggest that name of the appellant is appearing in the register seized from premises of B. C. Purohit & Co. He also not brought in the assessment order as what are the questions and answers in respect of purchase and sale of shares by the ....
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.... made a valid basis for any such addition of alleged income from other sources. 4.4.4 There is no iota of evidence, whether direct or indirect, to prove that any cash or unaccounted money had flown from the assessee to the seller of the share, to the buyer of the shares or to the brokers or to anyone connected with, buyer, seller or broker. No cash amount had flown from the assessee nor there was any evidence that the assessee ever gave any cash or unaccounted money to any one in relation to the transactions of shares in question. 4.4.5. It is further observed that onus is on the Department to prove with the documentary evidence that the transactions entered into by the appellant are not genuine and what is apparent is not substantial. Ex....
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....e assessee were listed/quoted shares in the recognized stock exchange. Shares were purchased through registered brokers, duly approved by the stock exchange at that particular time. Rate of purchase are verifiable from the rates quoted at stock exchange. Payment of purchase price was made through account payee cheques. Shares were duly transferred in favour of the assessee in her DEMAT account. These shares were held and possessed by her for more than 12 months. Sale was through registered broker and duly approved by SEBI and stock exchange. Again, sale price was received through account payee cheques. Shares were duly transferred from her DEMAT account in favour of the transferee through registered broker. Thus the entire transactions of p....