TaxTMI 
TaxTMI 
2014 (8) TMI 725
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.... licenses, commission agency and trading. He is having two proprietary concerns named M/s Hallmark Systems and M/s HMV Consultancy. He filed his return of income for the year under consideration declaring a total income of Rs. 3,09,430/-. The AO completed the assessment by determining the total income at Rs. 37,72,120/-. The additions made by the AO, inter alia, included an addition of Rs. 28,18,300/- relating to unexplained cash deposits made in the bank accounts maintained by the assessee. 4. During the course of assessment proceedings, the AO noticed that the assessee has made cash deposits in the following bank accounts maintained by him:- (a) Shree Arihang Co-op Bank Ltd A/c No. CA-030687 - Rs. 8,97,800/- (b) The Progressive Co-op Bank Ltd- O.D A/c No.54 - Rs. 60,000/- (c) The Progressive Co-op Bank Ltd -CA No.24 - Rs.18,60,500/- Rs.28,18,300 Before the AO, the assessee did not furnish any detail to explain the source of above deposits and hence the assessing officer assessed the same as unexplained cash deposits (cash credits). 5. Before Ld CIT(A), the assessee submitted that the cash deposits made in the bank account cannot fall within....
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....purchases. To verify and test check the cash receipts notices u/s.133(6) were sent to the following persons. The persons have replied with certain remarks. The remarks are detailed as under:- Perusal of the confirmation from parties shows that - -All transferred shares were in physical form, The purchasers have not transferred the shares in their name" 6. A perusal of remand report submitted by the AO would show that the assessee has claimed to have sold the shares to some persons in off-market transactions and the sale consideration was also received in cash. All these persons have claimed that the share certificates are not in their possession and they have send the share certificates to the Company for transfer. Under these set of facts, the Ld CIT(A) examined this issue and decided the same against the assessee with the following observations:- "5. I have carefully considered the assessment order, submissions of the AR and the contents of the remand report of the AO as discussed above. The AO on verification of the details filed by the appellant as categorically stated in the remand report discussed above that the parties from whom the cash sales were realized....
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....d explaining the submissions of the AR, I find that the AO is fully justified in considering the entire such cash deposits appearing in the books of account of the appellant or bank account of the appellant as unexplained cash credits u/s. 68 of the Act. I also find no merits in the submission of the AR that these cash deposits should have been considered as unexplained investment of the appellant u/s. 69 of the Act instead of treating the same as unexplained cash credit u/s. 68 of the Act. In this regard, it may be noted that the appellant has throughout claimed the same having received from various parties and the same is deposited in his bank account as discussed in the assessment order. The source thereof as discussed above remains unexplained. Even the transaction of sale of shares under the given facts and circumstances as discussed above are found unexplained. Therefore, on account of these facts, I find that the AO is fully justified in considering the entire such cash deposited in the bank account of the appellant as his unexplained cash credit u/s. 68 of the Act. The entire addition made on this account is therefore confirmed. The ground raised by the appellant is therefo....
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....tion of Rs. 28,18,300/- relating to the deposits made into his bank. The assessee has explained the sources to be the sale proceeds realized on sale of shares. From the table extracted by the Ld CIT(A) from the remand report, we notice that the assessee has sold 76850 shares to 15 persons and received cash of Rs. 7,76,220/-. Thus, it is seen that the assessee himself has furnished the sources only to the extent of Rs. 7,76,220/- and he did not explain the sources for the remaining amount of Rs. 20.42 lakhs. 12. Even with regard to the amount of Rs. 7,76,220/-, it is seen that the assessee has claimed to have sold the shares off-market by receiving cash. However, when the AO conducted enquiries with the alleged purchasers, most of them have given a uniform reply to the effect that the share certificates have been sent to the concerned company for name transfer. None of the parties could furnish copies of the share certificates and share transfer forms to substantiate their respective claim. As submitted by Ld D.R, some of the alleged buyers of the shares have also stated that they have sold back the shares to the assessee at the same rate of Rs. 10/- per share, as there was no ma....
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....y possession, as I had already state shares are in physical form & given to company for transfer". Copy enclosed 37500 Confirmed with remarks "Shares is not in my possession, as I had already state shares are in physical form & given to company for transfer". Copy enclosed. 40360 Confirmed with remarks "Shares is not in my possession, as I had already state shares are in physical form & given to company for transfer". Copy enclosed. 36800 Confirmed with remarks "Shares is not in my possession, as I had already state Document 2 9 Pradeep Shinde K 3800 10 Rajesh Sontake S 4300 11 Ramchandra N 3000 Jadhav 32860 12 Sachin V Uphale 3500 13 Chiland 6000 Godamani 14 Samir Shaikh 10800 15 V Grow 16000 Enterprises shares are in physical form & given to company for transfer". Copy enclosed. 39300 Confirmed with remarks "It is to note dematerialization of shares does not taken place as shares are still in physical form, company is processing towards regularization & will intimate same when & where dematerialization of shares 43000 Confirmed with remarks "Sha....