TaxTMI 
TaxTMI 
2012 (10) TMI 1037
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....ares. 3. In the facts, circumstances and position of law Hon. Commissioner of Income Tax, Appeals-II, Nashik erred in not deleting the interest under section 234B at Rs. 2,34,663/-." 2. The facts which emerge from the record are as under. The assessee is in the manufacture and sale of wooden palletes and chemicals. It was noticed by the A.O that the assessee has shown the sale of penny stock and has also claimed the long term capital gain on such transactions. As per the details furnished by the assessee, he had purchased 12000 shares of Prime Capital Market Ltd. on 13 May 2004 through a broker M/s. D.K. Khandelwal and Co. The A.O has observed that as per the bill and contract note furnished by the broker, the transaction was routed through the Calcutta Stock Exchange being settlement No. D-331/04-05 dated 13-05-2004. The settlement ending date was also the same. The purchase price as per the contract note was Rs. 5.15/-per share. The shares of Prime Capital Market Ltd. were credited to the assessee's Demat A/c. on 12th July 2005. Subsequently, those shares were sold in the 3 lots through the broker namely M/s. D.B. & Co. on 29.8.2005. The details are as under : Date Quantit....
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....usiness income and brought to tax Rs. 20,85,595/- (gross sale consideration) as an income from the other sources. The A.O did not give the benefit of deduction of the cost of purchases as in his opinion, the same was paid in cash and not proved by the assessee. The assessee challenged the action of the A.O before the Ld CIT(A). 4. The Ld CIT(A) has given the facts in respect of the share transaction of Prime Capital Market Ltd. in para No. 3 of his order. The Ld CIT(A) accepted the contention of the assessee that the shares of M/s. Prime Capital Market Ltd. was off market transaction and hence, no details could be found in the Calcutta Stock Exchange. In respect of the allegation on the share broker regarding the manipulation of the prices of the shares of the Prime Capital Market Ltd., the Ld CIT(A) held that the A.O has not given any specific findings on the transactions shown by the assessee. Finally, the Ld CIT(A) held that the transaction was genuine but the date of the purchase/acquisition of the shares should be the date on which the shares were credited to the demat a/c. He further held that the cost of acquisition should be taken as shown in the books of account of the as....
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....ssessee has filed the Paper Book in which he has filed the Balance Sheet for the F.Y. Ending 31.3.2005 and under the head 'investment and deposit', the assessee has shown the shares of Prime Capital Market (page no. 36 of the Paper Book). We further find that the A.O has made the general observation in respect of the enquiry initiated against the broker M/s. D.B. Khandelwal & Co., but no details are given in the assessment order whether the said alleged enquiry had any bearing on the share transactions of the assessee. The only reservation of the A.O is that the assessee converted the physical shares in the electronic form by crediting to the demat account after the gap of 14 months. In our opinion, the physically held shares for 14 months by the assessee cannot be the conclusive proof to show that the purchase date of the said shares shown as 17th May 2004 was not genuine. Neither the A.O nor the CIT(A) has denied that the broker never denied the transaction of the assessee. 7. The assessee's case is squarely supported by the decision of ITAT, Mumbai Bench in the case of Mukesh R. Marolia (Supra), which facts are identical to the case of assessee. In the said case also, it was cl....
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....ies. While accepting and rejecting such statements given by the parties, the AO has made a mistake of accepting irrelevant statements and rejecting relevant statements. During the relevant period in which the assessee transacted in shares, persons like Radha Ashok and Sandeep D. Shah were not carrying on their business of brokers as in the manner they carried on the business in the past. Even their Stock Exchange Memberships were cancelled. It was Shri Satish Mandovara who was carrying on the business mainly for and on behalf of Shri Mangesh Chokshi Director of M/s. Richmond Securities (P) Ltd Those two persons have categorically admitted before the assessing authority that they had dealings with the assessee in respect of the share transactions. They have confirmed the transactions stated by the assessee that he had with them. These positive statements made before the assessing authority supported the case of the assessee. There is no force in the action of the assessing authority in relying on the negative statements of the other parties whose role during the relevant period was either irrelevant or insignificant. Therefore, in the facts and circumstances of the case, it is, our ....
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....off market is to be assessed as a capital gain only. The Ld CIT(A) accepted the contentions of the assessee that the shares of the M/s. Prime Capital Market Ltd. were purchased through the broker M/s. D.K. Khandelwal & Co. The Ld CIT(A) also noted that even if the A.O has given the reference in respect of the SEBI enquiry as well as suspension of the license of M/s. D.K. Khandelwal & Co., but, at the same time, in respect of the shares purchased by the assessee and subsequently sold through demat account, nothing has been brought on record. In the present case, the assessee has maintained the books of account and the assessee has also reflected the purchase transaction of the shares of M/s. Prime Capital Market Ltd. The A.O. has not made any comment in respect of the books of account maintained by the assessee. The only reservation of the A.O is that the assessee converted the physical shares into the electronic form by crediting the same in the demat account after 14 months. We have already held that the assessee has purchased those shares on 14th May 2004. On our said finding, the Ground Nos. 1, 2 & 3 are to be decided against the revenue. 13. So far as, Ground No.4 is concerned....