2011 (4) TMI 1331

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....d return of income declaring income of Rs. 1,58,993/-. The case was reopened u/s 148. The appellant had shown LTCG on sale of shares of M/s Talent Infoway Ltd. amounting to Rs. 71,27,463/- claimed as exempt u/s 10(3)(a) sold to M/s Mahasagar Securities Pvt. Ltd. The AO had been informed by the ADIT (Inv) that there was a search on the broker Mr. Mukesh Chokshi who was the director in the firm Gold Star Finvest Pvt. Ltd. and Mahasagar Securities Pvt. Ltd. During the dourse of search, Mr. Mukesh Chokshi gave a statement that he issued bogus bills of trade transactions and he was involved in selling of artificial profits to various parties. On basis of this, the AO issued a notice to the appellant to explain why this sum of Rs. 71,00,000/- sho....

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.... not enough evidence to prove the genuineness of the transactions. The AO questioned the veracity of the fact brought in the affidavit of Mr. Mekesh Chokshi. The AO has doubted the genuineness of the very transactions entered by the appellant and were sold by the appellant at R.79 to 95 per share where in the rate quoted in the Ahmedabad Stock Exchange (ASSESSEE) was only Rs. 49/- per share on the last trading. The AO was of the view that selling of the shares of Talent Infoway Ltd. at Rs. 79 to Rs. 95 per share as against Rs. 49/- per share quoted in the ASSESSEE on the last trading of share itself give a vital view of the fabricated transaction. The AO also expressed his apprehensions for the genuineness of the real buyers of the shares f....

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....there also on the record that physical delivery of the shares had been taken by the appellant and had got demated in his demat account, the sale of shares has been done by debiting the demat account. All this goes on to show that there was a regular sale and purchase of shares and it was not a mere stage manage show and as stated by the CIT(A)XV simply because the transactions were made off market, it cannot be a conclusive evidence that all transactions are bogus. The AO's objection that the appellant did not produce the buyer was not a valid objection as there was no legal obligation for the appellant to produce the buyers. The AO's objection regarding that the last stated price of the shares of ASR during the period 25.11.99 to 8.3.2004,....