TaxTMI 
TaxTMI 
2014 (10) TMI 174
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....se was Rs. 13,959/-. It was submitted that they were converted into D-mat form, i.e., they were credited to the D-mat account of the assessee on 18-07-2005. Subsequently all the shares were sold by the assessee on 01-09-2005 through another broker named Sanju Kabra at a rate of Rs. 279.50 per share, i.e., at a sales value of Rs. 7,53,061/-. When the assessing officer made enquiries with Kolkatta Stock Exchange, they reported that the transactions entered by the assessee with M/s D.K.Khandelwal & Co (purchase transaction) were not executed through them either in physical or D-mat form. 3. The AO conducted enquiries with M/s D.K.Khandelwal & Co and the said concern confirmed the sale of shares to the assessee in physical form. However, it expressed its inability to furnish a copy of bill or copy of contract note citing the reason of computer problem. Surprisingly, the said concern could provide the Contract note number and the distinctive numbers of shares in its reply given to the AO. The above said broker also expressed its inability to produce the books of accounts. With regard to the payment made for purchase of shares, the above said broker stated that the assessee made a specu....
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....'ble Supreme Court in the cases of Sumati Dayal and Durga Prasad More (referred supra) and further holding that the transactions of the assessee in shares of Prime Capital Market were not genuine. Aggrieved, the assessee has filed this appeal before us. 7. The ld Counsel appearing for the assessee submitted that the transactions of purchase and sale of shares are duly supported by the relevant documents. He also placed reliance on the decision rendered by Pune bench of Tribunal in the case of Shri Avinash Kantilal Jain in ITA No.980/PN/10 and ITA No.1049/PN/10 dated 31.10.2012, wherein the long term capital gains earned by the assessee therein from purchase and sale of Prime Capital Markets Ltd was held to be genuine. In the above said case, the Tribunal, by placing reliance on the decision of Umacharan Shaw Processes Vs. CIT 337 ITR 271, has held that the suspicion, howsoever strong, cannot take the place of legal proof. The Ld A.R also placed reliance on the decision dated 04-05-2012 rendered by Mumbai bench in the case of Mr. Shyam R Pawar in ITA No.5585/Mum/2011, 5620, 5621 & 5622/Mum/2011 wherein the Long term Capital gains realized by the assessee therein on sale of shares o....
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.... submitted that the contract notes are fabricated ones. 9. We have heard the rival contentions and perused the record. The pertinent points are that the assessee has claimed to have purchased the impugned shares through Off market transaction. The purchase price was not paid by cheque, but it was claimed to have been adjusted against the speculation profit claimed to have been made by the assessee. The small difference of Rs. 324/- was claimed to have been paid by way of cash. It is also pertinent to note that the alleged Speculation transaction carried out earlier to the purchase of shares of Prime Capital Markets Ltd was also claimed to have been carried in off market transaction. Another important point is that the assessee did not possess copies of Share certificates or copies of Share transfer forms. The broker M/s Khandelwal & Co., has expressed its inability to furnish copies of contract notes available with it and also failed to furnish its books of account to substantiate the transactions of purchase of shares by the assessee. Since the impugned transaction was an off market transaction, the purchase transaction could not be confirmed by the Kolkatta Stock exchange. The s....
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....ssessee, it could not identify the name of purchaser to whom the shares were sold by the assessee. 12. We have already seen that the tax authorities have applied the test of human probabilities explained by the Hon'ble Supreme Court in the cases of Sumati Dayal and Durga Prasad More (supra) to disbelieve the claim of Long term Capital gains put forth by the assessee. We notice that the test of human probabilities was not applied by the co-ordinate benches of Tribunal in the case of Shri Avinash Kantilal Jain (supra) and Mr. Shyam R Pawar (supra). Hence, in our view, the assessee cannot take support from the above said decisions. We further notice that the ld CIT(A) has placed reliance on the decision dated 04.1.2011 rendered by ITAT Delhi in the case of Haresh Win Chaddha Vs. DDIT, wherein the Tribunal has expressed the view that there is no presumption in law that the AO is supposed to discharge an impossible burden to assess the tax liability by direct evidence only and to establish the evasion beyond doubt as in criminal proceedings. Further it was held that the AO can assess on consideration of material available on record, surrounding circumstances, human conduct, preponderan....