TaxTMI 
TaxTMI 
2011 (4) TMI 1364
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....de as unexplained cash credit on account of sale of shares. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) failed to appreciate that the transactions regarding purchase and sale of shares was not established as genuine in view of information received from Kolkata Stock Exchange." 3. Brief facts of the assessee, individual's case are that the assessee is a Prop. Of Jaypee Udyog, carrying on business of job works. He filed his return for assessment year under appeal on 28.10.2005 along with P&L Account, Balance Sheet, Tax Audit Report and computation of total income showing total income of Rs. 23,15,789/-, salary income of Rs. 3,467/-, HP income of Rs. 42,000/-, business income of Rs. 61,956/-, STCG of 21,373/-, LTCG of Rs. 37,49,390/- on sale of shares, income from other sources of Rs. 1,25,141/- have been disclosed in the return. He has also claimed deductions u/s. 80L and 80CCC of Rs. 3,041/- and 10,000/- respectively. The case was taken up under scrutiny and notice u/s. 143(2) and 142(1) were served. From the assessment order it is observed that the Assessing Officer found that the assessee claimed LTCG on sale of shares of Rs. 39,80,980/-. ....
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....at the transactions was not established to be genuine. Accordingly, the Assessing Officer has rightly treated the entire sale price of shares as unexplained cash Credit. He, therefore, prayed before the bench to set aside the order of the Ld. CIT(A) and restore that of the Assessing Officer. 5. On the other hand, the Ld. Counsel for the assessee while relying on the order of the Ld. CIT(A) reiterated his same submissions as submitted before the lower authorities and further submitted that the assessee showed LTCG on sale of shares of Bluechip and Bolton Properties. The said shares were purchased from Bubna Stock Broking Services Pvt. Ltd., which is a member of Calcutta Stock Exchange Association Ltd. Purchase bills and contract notes evidencing the said purchase of shares had been duly submitted to the Assessing Officer which prove the existence of the transactions. He also contended that the AO has based his order on the information and details in a CD collected from Calcutta Stock Exchange Association Ltd.. However, no such information has been provided to the assessee and no opportunity was given to the assesee of being heard. He also contended that the shares have been duly ....
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....5/3/03 44,220/- 24/5/04 10,06,980/- 9,62,760/- -do- 5,000 5/3/03 36,850/- 3/6/04 9,89,000/- 9,52,150/- -do- 6,000 5/3/03 44,220/- 3/6/04 11,86,800/- 11,42,580/- Bolton Properties 2,000 7/3/03 1,06,300/- 31/8/04 7,98,200/- 6,91,900/- Total 39,80,980/- 37,49,390/- The appellant submitted that the shares of Blue Chip and Bolton Properties were purchased from M/s. Bubna Stock Broking Services Ltd. The appellant furnished the contract notes issued by the broker M/s. Bubna Stock Broking Services Ltd. regarding the purchase of shares. The appellant furnished the demat account wherein 17000 shares of Blue Chip are transferred on 08-03-03 from M/s. Shiv Mangal Securities (P) Ltd. Further 2000 shares of Bolton Properties are credited in the demat account of the appellant on 11- 03-03 being transferred from M/s. Shiv Mangal Securities (P) Ltd. The appellant furnished copies of the demat account and the contract notes issued by the broker The A 0 noticed that there is a variation in the transactions given, by the broker in his statement furnished. The trade nos. ....
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....le in their record, is out of place. There is no evidential value for such reliance placed by the assessing authority... We are of the considered view that the materials collected by the assessing authority from the stock exchanges are not valid to dispel or disbelieve the contentions of the assessee. 10.6.... The above circumstances have made out a clear case in support of the book entries reflecting the purchase and sale of shares and ultimately supporting the money received on sale of shares and finally investing the money received in the purchase of flat. The chain of transactions entered into by the assessee have been properly accounted, documented and supported by evidences. 10.7. Therefore we find that explanations of the assessee seems to have been rejected by the assessing authority more on the ground of presumption than on factual ground.... In the present case, however unbelievable it might be, every transaction of the assessee has been accounted, documented and supported. 10.9. Therefore, in short on the basis of the internal evidences available with the assessee and the fact that the sale proceeds were collected through bank accounts and coup....
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....ferred on 01-09-2004 to M/s. M. Bhiwaniwala & Co. (iii) Copies of the bank account evidencing the receipt of sale consideration of the shares are furnished. (iv) It is submitted that M/s. Esha Investment & Trading Pvt. Ltd. is a registered broker at Magadh Stock Exchange having SEBI Registration Number. The evidence presented by the appellant clearly indicates that the shares were available in the demat account of the appellant. Contract notes issued by the brokers clearly indicates the sale of these shares. The shares are transferred out of the demat account of the appellant. The sale consideration of the shares is received by the appellant through account payee cheques credited in the bank account. Copies of the bank account furnished by the appellant clearly proves sale transactions of the shares. The evidence presented by the appellant regarding purchase of shares and the sale of shares clearly proves the transactions entered into by the appellant. The transactions are supported by the contemporary entries in the Books of Account, in the demat account and also the bank accounts. In view of the Mumbai ITAT decision relied upon by the appellant, the app....
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....ry, the Assessing Officer has rightly disallowed the depreciation as claimed by the assessee. He, therefore, urged before the bench to set aside the order of the Ld. CIT(A) and restore that of the Assessing Officer. 9. On the other hand, the Ld. Counsel for the assessee while relying on the order of the Ld. CIT(A) reiterated his same submission as submitted before the lower authorities and further submitted that the assesee purchased plant and machinery worth Rs. 27,74,908/- during the Assessment Year 2004-05 and the same was not put into use during the said assessment year. He also drawn our attention to the notes on account- Schedule 10 to the Balance Sheet for Assessment Year 2004-05 submitted along with the return for Assessment Year 2004-05, wherein it was mentioned that depreciation on plant and machinery amounting to Rs. 27,74,908/- capitalize during 2003-04 has not been provided as it has not been put to use in business. The said machinery was put to use in Assessment Year 2005-06 and depreciation amounting to Rs. 6,93,727/- was accordingly, claimed. He also contended that P&L Account of Assessment Year 2005- 06 shows that there has been substantial increase in job work ....
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....n it is used for the purpose of business. Since the appellant has used the assets for this year, depreciation on the Plant & Machinery claimed by the appellant is allowable for this year. The A.O. is directed to allow depreciation claimed by the appellant." 11. In view of the above and in the absence of any controverting material brought on record by the revenue authorities to rebut the finding of the Ld. CIT(A), we do not find any infirmity in his order and the same is hereby upheld. This ground of appeal of the revenue is dismissed. 12. Ground No. 4 of the revenue's appeal in respect of assessee individual's case is concerned, the revenue has agitated against the deletion of disallowance of Rs. 1,68,592/- made on account of interest on loan. Briefly stated facts of the case are that the assesee claimed interest expenditure of Rs. 1,68,592/- on the loan. At the time of assessment proceedings, the Assessing Officer asked for details regarding the nexus between the loan taken and the investments made. Since the assessee filed no explanation before the Assessing Officer, he disallowed the interest claimed of Rs. 1,68,592/-. In appeal, the Ld. CIT(A) directed the Assessing Offic....