TaxTMI 
TaxTMI 
2015 (3) TMI 801
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....was any live link nexus between such material and information on record that any income chargeable to tax has escaped assessment and therefore Ld. "CIT(A)" should have held that the entire proceedings based on such "reasons recorded" are bad in law. 3. BECAUSE the enquiry report from investigation wing cannot be said to constitute relevant material or information for the purpose of initiation of proceedings under section 147 and as such the entire proceedings based on such information or enquiry report are bad in law and therefore the Ld. "CIT(A)" could not have sustained the proceedings under section 147 on the basis of such report or information." 3. Learned A.R. of the assessee reiterated the same contentions which were raised before CIT(A) whereas Learned D.R. of the Revenue supported the order of learned CIT(A). 4. We have considered the rival submissions. We find that this issue was decided by learned CIT(A) as per Para 5 and 5.1 of his order, which are reproduced below for the sake of ready reference:- "5. I have gone through the assessment order and the submissions made by the assessee during the course of the appeal. 5.1 The Assessing Officer had rightly ini....
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....- and these shares were sold during 11/09/2000 to 30/11/2000 at a hefty sale consideration of Rs. 48,41,763/- within a period of 13 months from the date of purchase. Enquiries were made from various stock exchanges and also from the brokers before initiating the assessment proceedings. Considering these facts, the reopening proceedings are validly initiated. Hence, we decline to interfere in the order of CIT(A) on this issue. Accordingly, these grounds are rejected. 5. Ground Nos. 4 to 12 are on merit of the additions made by the Assessing Officer of Rs. 48,41,763/- realized on sale of shares. These grounds are as under: "4. BECAUSE the appellant had duly disclosed the full particulars of income, including income under the head "Long Term Capital Gain", by disclosing not only the date and cost of acquisition of shares but also relevant material for sale of shares along with the return filed on 31.07.2001, and therefore, on perusal of such relevant facts given in the return of income, it cannot be said that the Assessing Officer could have come to a conclusion that any income chargeable to tax has escaped assessment, and therefore, the entire proceedings under section 147, con....
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.... not only in law but also on facts. 7. BECAUSE the Ld. CIT(A) has erred in law and on facts in not appreciating the appellant's version of sale of shares for consideration of Rs. 48,41,7637- (Net) particularly that:- (a) the appellant has duly furnished application form for purchase of shares along-with proof of payment made for purchase of such shares; (b) the contract notes issued by respective brokers who were registered members of Stock Exchange; (c) sales bills issued by the brokers for sale of shares; (d) account statement of the appellant given by the respective stock brokers in respect of sale of shares; (e) share certificates and allotment letter giving distinctive numbers of shares as issued by the concerned company; (f) report of listing of shares in respective stock exchanges. and therefore, the contrary view taken by the CIT(A) for sustaining the additions without rebutting the above documents and information is wholly vitiated. 8. BECAUSE the Ld. CIT(A) as well as Assessing Officer have disbelieved the appellant's version of nature and source of credits, which were by way of sale of shares acquired in the earlier year, solely on the bas....
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.... 1 Parnami Habitat Developers Ltd. 19,000 03.06.99 1,12,195 11.09.00 21,61,012 20,48,817 2 (a)Unometal Ltd. 15,000 23.08.99 1,25,250 17.10.00 7.48,500 10,87,250 (b)Unometal Ltd. 10,000 18.10.00 4,64,000 3 B.T. Technet Ltd. 10,000 04.10.99 1,00,000 30.11.00 14,68,251 13,68,251 3,37,445 48,41,763 45,04,318 Deduct 45,04,319 Relief under section 54EC on account of Investment in NABARD (to the extent of investment made in the Capital Gain bonds. 35,80,000 Total Capital Gain 9,24,319 "4. It is stated that all the three companies whose shares were purchased and sold by the assessee were listed companies. Copies of Company/LLP Master Data Report of these companies (as downloaded from MCA website) are enclosed and the same have been marked as ANNEXURE- I, II & III respectively. 5. As far as quotations for the date of purchase and sale are concerned, it is stated that the shares of above mentioned companies were ....
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....Para 3 above, the assessee had purchased 25,000 shares of Unometals Ltd. on 23.08.1999 @ Rs. 5.00 per share, through M/s. D.B. & Co., a broker duly registered with SEBI. The copy of contract note issued by D.B. & Co. is placed at page 101 of the paper book. Further, the transfer particulars of shares; such as certificate numbers and distinctive numbers are available in the broker's bill dated 1.9.1999 (copy of the bill is placed at page no.102 of the paper book) as well as in the letter dated 29.9.1999 issued by the Registrar and Transfer Agents (copy placed at page no. 103 to 104 of paper book). 10. Out of 25,000 shares of Unometals Ltd., 15,000 shares were sold by the assessee on 17.10.2000 @ Rs. 50/- per share and balance 10000 shares were sold on 18.10.2000 @ 46.50 per share. Various documentary evidences in support of purchase and sale transactions are placed at page 99 to 114 of the paper book. 11. Copy of official quotation of Calcutta Stock Exchange of 24.08.1999 (shares were purchased by the assessee on 23.08.1999) is placed at page no. 105 to 106 and copy of official quotation of 18.10.2000 (shares were sold by the assessee on 17.10.2000 and 18.10.2000) is place....
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.... for the sale period is concerned, it is stated that during the course of re-assessment proceedings, the Assessing Officer had himself provided to the assessee, a copy of letter dated 03.05.2005 from M.P. Stock Exchange who have confirmed the quotation of Rs. 147/- per share on 23.11.2000 and Rs. 150/- per share on 24.11.2000. Copy of M.P. Stock Exchange's letter dated 03.05.2005 along with enclosure containing the quotation particulars of 23.11.2000 and 24.11.2000 is enclosed as ANNEXURE- VI hereto. 16. It is worthy of mention here that the transactions are supported by the 'contract notes' and at no stage there is specific 'rebuttal' of the contract notes in the present case." 7. Learned D.R. of the Revenue supported the orders of the authorities below. 8. We have considered the rival submissions. We find that the decision of CIT(A) on merit of the case is contained in Para No. 5.4.1, which is reproduced below for the sake of ready reference:- "5.4.1 In light of these facts it is to be seen whether the documents filed by the assessee in the form of contract notes etc. in support of the claim of genuineness of the transactions can be relied upon or ....
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.... previous history of either dealing in shares nor had any exceptional knowledge of share market, had shown exorbitant gains merely on the basis of the contract notes and money received through bogus transactions. Hence, in view of the categorical findings of the Assessing Officer, the surrounding circumstances and human probabilities, the evidences filed by the assessee in support of the capital gains cannot be relied upon and have to be rejected .and the assessment order has to be upheld. The assessment has been rightly made by treating the income shown under the head long term capital gains as income from other sources and the view of the Assessing Officer is hereby confirmed. The payment of service tax does not make the transactions genuine. Thus, the grounds of appeal no. 7 to 10 and 12 are hereby rejected." 8.1 From the above Para from the order of CIT(A), we find that his decision is merely by following the decision of Hon'ble Apex Court rendered in the case of CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC) and in the case of Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC). This is the basis of decision of CIT(A) that the assessee had no previous history of either deali....
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....see has also furnished the copy of Calcutta Stock Exchange on 24/08/99 and the shares were purchased by the assessee on 23/08/2000 available on pages 105 to 106 of the paper book. Regarding the quotation on the date of sale of these shares, it has been submitted that official quotation of 17 & 18/10/2000 is available on pages 110 to 113 of the paper book and the shares were sold on 17/08/2000. Regarding the third share of B.T. Technet Ltd., it was submitted that these shares were acquired by the assessee directly from the company under allotment on 04/10/99 at face value of Rs. 10/- and the payment was made by cheque directly to the issuing company. The company has also issued share certificates with folio number P00121 vide certificate No.10526 to 10625 and copies are also enclosed with the written submissions. Out of these shares acquired by the assessee company on the basis of preferential allotment, 8,000 shares were sold on 23/11/2000 @Rs.147/- per share and the remaining 2000 shares were sold by the assessee on 24/11/2000 @Rs.150/- per share. Regarding official quotation of these shares, it has been submitted by the assessee that the Assessing Officer had himself provided to ....
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....ery time the statements cannot help the department. How the above mentioned evidences could be ignored? The Revenue has to 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 real unless proved otherwise. Long ago Hon'ble Supreme Court has laid this law while rendering the celebrated decision in the case CIT Vs. Daulat Ram Rawatmal [1964] 53 ITR 574 (SC). 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." 10.1 From the above Para of the Tribunal decision, it is seen that it was held by the Tribunal in that case that every time the statements cannot help the department. It is also observed that how the above mentioned evidences could be ignored? The evidences referred to by the Tribunal were copies of sales and purchase bills, share certificates and transfer letters, contract notes, duly transferred share certificates received from the companies and affidavit. In the prese....