2014 (5) TMI 624

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....hat for the year under consideration, the assessee disclosed the income of Rs.7,34,206 under the head 'capital gains'. That the Assessing Officer did not accept the assessee's contention on the ground that the shares were not being traded on the floor of M.P. Stock Exchange at the relevant time. The Assessing Officer assessed the sum of Rs.7,34,206 as assessee's income from undisclosed sources. That the assessee filed appeal before the CIT(A) and then finally before the ITAT against the above change of head. That before the ITAT, the assessee contended that on these facts, Board Circular No. 704 dated 28.4.1995 and 768 dated 24.06.1998 would be applicable. The ITAT agreed that the shares in question were recorded in D-Mat account of the ass....

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.... from sale of shares as capital gains. The Assessing Officer did not accept the same on the ground that there was no trading on the floor of M.P. Stock Exchange at the relevant time. The assessee submitted the photocopy of the newspaper 'Hindustan' dated 21.6.2003 so as to show that the market rate of the shares was Rs. 70 on that day. However, the Assessing Officer did not accept the assessee's contention and assessed the sum of Rs.7,34,206 as income from undisclosed sources. When the matter reached the ITAT, the assessee relied upon the two Board Circulars i.e. Circular 704 dated 28.4.1995 and Circular No. 768 dated 24.6.1998. The ITAT came to the conclusion that these Circulars are not applicable. The relevant portion of the decision of ....

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....rior to 5.7.2003. If the assessee gets such physical shares transferred into her name and then get it dematerialized, the credit in D-Mat account of the assessee will not be on account of transfer of shares from a particular client ID as in the present case. In such case, the credit will be on account of D-Mat request. Since in the present case the shares sold by the assessee for Rs.73,406/- where on account of these shares which are received by the assessee in her D-Mat account on 3.7.2003 being transferred from client ID 14528754, we are of the considered opinion that these are not those shares which revenue expenditure stated to be purchased by the assessee on 17.6.2002 because had it been those shares credited in D-Mat, such credit in D....

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....those shares. Be that as it may, the fact remains that the assessee had offered the income from purchase and sale of shares may be as capital gain. The assessee has disclosed the purchase of shares. The purchase of shares is duly recorded in the books of account and has been shown in her Balance Sheet as on 31.03.2003. The sale of the shares has also been disclosed by the assessee and the same is found recorded in the D-Mat account of the assessee. Thus, the assessee has duly disclosed all primary facts i.e. purchase and sale of shares, details of payments made for purchase and payment received for sale of shares. Profit arising from sale of shares was duly disclosed. On these facts, it cannot be said that the assessee is guilty of concealm....