TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 436
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Rs. 3,96,993/- on 10.9.2003. Subsequently search and seizure action u/s. 132 of the Act was conducted in the hands of the assessee on 14.2.2006. In response to the notice issued u/s. 153A of the Act, the assessee filed return of income for the year under consideration declaring same total income of Rs. 3,96,993/-. In the return of income, the assessee also declared long term capital gain arising on sale of shares of Rs. 1.44 crores of a company named M/s Database finance Ltd and claimed the same as exempt. However, the Assessing Officer treated purchase and sale of shares as bogus transactions and accordingly assessed long term capital gain of Rs. 1.44 crores as income of the assessee from undisclosed sources. The Assessing Officer also added 5% of the long term capital gain as expenses incurred by the assessee in arranging bogus transactions. When the matter was carried to the Tribunal, the assessee submitted new evidences in support of purchases and also raised various contentions against the view taken by the AO. The Tribunal considered various objections raised by the AO, set aside most of them and finally restored the matter to the file of the Assessing Officer in order to e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CIT(A) are extracted below:- ".......Regarding the second objection based on the report of DFL company dated 06.08.2007, the Hon'ble Tribunal has held that this reply should not have been taken into consideration for the reason that this reply was dated 06.08.2007, on which date, the assessee was not a shareholder of DFL company and therefore, the name of the assessee was not appearing in the list of share holders of that company. It was held that the shares were purchased on 05.04.2001 which falls under the AY 2002-03 and the same were sold in October 2002 which falls during the period of AY 2003- 04. It was further stated that the company has nowhere stated about the list of shareholders for the AY 2002-03. Therefore, it was held that the letter dated 06.08.2007 was not for the period of 2002-03 when the shares were purchased and sold. Thus, the Tribunal has held that not much weight/credential should have been given to the letter of the company. Regarding the third objection that Shri G.R. Pandya, partner of M/s. GRPBL share broker have denied the transaction, the confirmation of M/s. G.R. Pandya Share Broking Ltd. was submitted during the appellate proceedings in which he....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it was mentioned that the name of Mrs. Asha Mehta was not there in their record. Now the interpretation of this letter has to be made when it was stated that the building was collapsed and the old records were not traceable then how can it be confirmed that Mr. Asha Mehta was not the client of the broker for AY 2003-04. For this purpose, the Hon'ble Tribunal has already decided that the shares were purchased on 04.05.2001 which falls during the period relating to AY 2002-03 and the same were sold in October 2002 which relates to AY 2003-04. Thus, the company has nowhere stated about the shareholders for the AY 2002-03 because the letter was issued by them on 06.08.2007. Therefore, it cannot be said that this reply was for the period 2002-03 when the shares were purchased and sold by the assessee. It was concluded by the Tribunal that not much weight/credential should have been given to the letter of the company. From this finding of the Tribunal it is clear that the letter dated 09.11.2011 of M/s. G.R. Pandya Share Broking Ltd. has clarified that due to collapse of the building, books of account were not available and confirmed that the assessee, Mrs. Asha Mehta was not their ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s been confirmed by the Hon'ble Mumbai High Court. In the decisions relied on by the AR of the appellant, the Hon'ble Tribunal has decided the issue in favour of the assessee by holding that the seized documents has proved that the transaction was genuine. Even in the present case, the Hon'ble Tribunal in para 7.1 of its order has held that there are ample evidences that the assessee has purchased these shares on 04.05.2001. The purchase note was found during the course of search which was recorded in the panchnama itself. Therefore, it cannot be said that there was no evidence. It is an undisputed point that in the present case the evidences were found and seized relating to the sale of shares through Bombay Stock Exchange and the dematerialization of the shares in the name of the assessee and payments received through account payee cheques. Even the AD did not have any second opinion about the sale of these shares in the name of the assessee. The dispute was relating to the purchase of these shares which were purchased from M/s. G.R. Pandya Share Broking Ltd. by making the payment through credit entry in the hands of the assessee and the balance amount of Rs. 7,000/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that the affidavit was obtained by the assessee from one the directors o M/s G.R. Pandya Share Broking Ltd, where as the said person was holding directorship for other period. He submitted that the return of income for AY 2002-03 was originally filed without Balance Sheet. However, in the return filed u/s 153A the assessee has furnished statement of affairs without affixing signature thereon. Accordingly, the Ld D.R submitted that the order passed by AO should be restored. 8. On the contrary, the Ld A.R submitted that the Tribunal has restored the matter to the file of the AO only to verify the purchases, where as the AO has exceeded the limits by relying on other reasoning to take the very same view. He submitted that all the objections raised by the AO were already duly addressed by the Tribunal. With regard to the purchases, the broker M/s G.R Pandya Share Broking Ltd has filed confirmation letter and later one of the directors gave affidavit confirming the transactions. However, before the AO the said broker has denied the transactions under the misconceived notion without bringing any material in support of the same. The broker has specifically stated that it is not in poss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng the appellate proceedings he has confirmed the account of the assessee in their books of account. The CIT(A) has not admitted the same by holding that these are additional evidence. In our considered view, the CIT(A) should have sought remand report after verifying from the broker and then should have decided this aspect. 9.1 Since the purchases were made through M/s GRPBL and the amount of consideration has been adjusted towards credit balance of the assessee in the books of account of the broker, therefore, in our considered view, this aspect need re-verification. 9.2 As stated above, the department has accepted the balance sheet of AY 2002-03 that these shares were purchased in AY 2002-03. Now, the department wants to hold that these shares were not genuine. In our view, the department should not have accepted the balance sheet of AY 2002-03 while completing the assessment of AY 2002-03 u/s 153A. Anyway, as stated above, this aspect needs re-verification." 10. We notice that the assessee did not file any confirmation letter of M/s GR Pandya Share brokers Ltd in support of claim of purchase of shares before the AO. It appears that Shri G.R Pandya had initially denied t....