TaxTMI 
TaxTMI 
2016 (11) TMI 886
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.....2005 be treated as filed against the said notice under section 148 of the Act. The assessment was completed under section 143(3) r.w.s. 147 of the Act vide order dated 30.12.2011 wherein the assessee's income was determined at Rs. 18,64,860/- in view of the following additions/disallowances: - (i) Long Term Capital Gains (LTCG) on sale of 7500 shares of Buniyad Chemicals Rs. 7,78,816/- (ii) Disallowance of transfer fee Rs. 3,00,000/- (iii) Commission paid @ 5% Rs. 38,943/- 2.2 Aggrieved by the order of assessment for A.Y. 2004-05 dated 30.12.2011, the assessee preferred an appeal before the CIT(A)-28, Mumbai. The learned CIT(A) disposed off the assessee's appeal vide order dated 30.12.2013 allowing the assessee partial relief on the issue cited at (iii) in para 2.1 by restricting the disallowance of commission to 0.15% of the transaction value, but upheld the AO's finding on the issues listed at (i) and (ii) at para 2.1 (supra). 3. Aggrieved by the order of the CIT(A)-28, Mumbai dated 30.12.2013, the assessee has preferred this appeal raising the following grounds: - "1. CIT (A) has erred in law and facts confirming order of A.O. ignoring ....
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.... purchase and sale of shares, copy of assessee's demat account statement with Stockholding Corporation of India, financial statements for the period relevant to A.Y. 2004-05 were furnished to establish the said transactions. 5.1.2 According to the learned A.R. of the assessee, the assessee had purchased 61000 shares of Buniyad Chemicals Ltd. on 18.04.2001. Out of these, 53500 shares were sold by assessee in the period relevant to A.Y. 2003-04, and 7500 shares pertain to the period under consideration. The learned A.R. of the assessee draw the attention of the Bench to pg. 8 and 9 of the paper book which is copy of the purchase bill for purchase of 61000 shares of Buniyad Chemicals Ltd., though the broker M/s. Goldstar Finvest Pvt. Ltd.; copies of sale bills of shares of Buniyad Chemicals Ltd. through broker Goldstar Finvest P. Ltd. are placed at pg 21 to 28 of paper book which show that the sale in this year took place in the period between 11.06.2003 and 25.06.2003. It is submitted that it is based on these transactions of sale of 7500 shares of Buniyad Chemicals Ltd. that LTCG of Rs. 7,78,861/- arose to the assessee, which was then invested in its purchase of a residential fla....
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....ration is connected and similar to that of A.Y. 2003-04, wherein the issue has been decided in favour of the assessee by the orders of the ITAT Mumbai referred to above (supra), the assessee's appeal on this issue be allowed. 5.2 Per contra, the learned D.R. for Revenue placed reliance on the orders of the authorities below. 5.3.1 We have heard the rival contentions and perused and carefully considered the material on record, including the judicial pronouncements cited. On an appreciation of the facts on record we find that in the case on hand, the assessee has placed on record before the authorities below copies of purchase bills for purchase of shares of Buniyad Chemicals Ltd. on 18.04.2001 through share broker Goldstar Finvest P. Ltd. (pg. 8 and 9 of paper book) as well as sale bills of 7500 shares of Buniyad Chemicals Ltd. through broker Goldstar Finvest P. Ltd. (pg. 21 to 28 of paper book) which took place in the period between 11.06.2003 and 25.06.2003. It is also seen that the AO relied upon the statement of Shri Mukesh Choksi dated 11.12.2009 to hold that the purchase bills showed fictitious profits generated by investment of the assessee's undisclosed income therein ....
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....eproduced here in below: "I have heard the parties and perused the record. The Ld. Counsel submits that in respect of the 'Shares Scam' alleged to be involved by Shri Mukesh Chokshi actions were taken against many persons disallowing their claim in respect of long-term capital gain and short term capital gain. He submits that on identical set of facts the issue has been considered by the Tribunal. The Ld. Counsel filed the copies of the Tribunal decision by way of compilation as under: i) Mukesh R. Marolia vs. Addl. CIT -6 SOT 247 ii) Rajnudevi Chowdhary vs. ITO -ITA 6455/M/2007(Bom) iii) ITO vs. Truptic Shah -ITA 6455/M/2007(Bom) iv) Chandrakant Babulal Shah -ITA 6108/M/2009(Bom) v) ACIT vs. Shri Ravindrakumar Thshinwal -ITA5302/M/2008(Bom) 5. He, therefore, pleaded for accepting the claim of the assessee in respect of long-term capital gain. I have also heard the Ld. D.R. 6. I find that in the present case, the assessee has produced the bills showing the purchase of the shares. The assessee also proved that the shares were sold through the share broker and he produced the proof for the same. The ident....
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....by the learned Counsel, the assessee's name is not figuring in the transactions which were originally enquired by the DDIT (Inv.) on 26-4-2002. Even though the modus operandi was explained and stated that they were getting 0.5% commission in arranging the transactions, nothing was concluded against the assessee in the said statement. The Assessing Officer in the course of assessment again recorded the statement under section 131 on 9-11-2006 in which question No. 4 and 5 which are extracted in the assessment order itself. The main reliance is on question No. 5 which is as under: "Q.5 : Please give the details of bills of profit issued by your company as stated above. Ans: These bills numbers Bills No. CC/2000/16/12501 dt.18-4-2000 which shows that B.87610.85 payable to Shri Chandrakant D. shah. There is another Bill No. CC/2001/07/164 (N) dt.20/2/2001 in which Rs. 89602 was receivable by Shri Chandrakant B. Shah. These bills are issued showing fictitious profit and therefore the purchase are not substantiated by genuine payments." "8. This statement was relied upon by the Assessing Officer to state that the purchase bills are issued showing fictitious profit. ....
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....ssessing Officer in making this addition is confirmed treating it as STCG)). In arriving at this conclusion, the CIT (A) presumed that assessee could have paid full payment of 16 lakhs by way of cash which was not the case of the Assessing Officer either. There is no evidence even to presume these observations of the CIT (A) as stated above. 7. The facts are identical in this case as in the case of Chandrakant Babulal shah (supra). I hold that the assessee has proved the genuineness of the share transactions and there is no justification to disallow the claim of the assessee in respect of the long-term capital gain. I, accordingly, direct the A.O. to allow the same. Accordingly, ground no.2 is allowed. Assessee's appeal is partly allowed." In addition we have also analyse the orders passed in ITA No. 1176/Mum/2012 titled "Shri Mahesh Mundra vs. ITO" the operative para is reproduced here in below: "I have heard the parties. In this case also the assessee has declared the long-term capital gain in respect of the sale of the shares of M/ s. Buniyad Chemicals Ltd. It was claimed that the shares were sold through M/ s. Goldstar Finvest Pvt. Ltd. There was investiga....