TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 168
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....modify, Substitute, delete and/or rescind all or any of the GROUNDS OF APPEALS on or before the final hearing, if necessary so arises. 2. The relevant facts as culled out from the materials on record are as under:- On verification of the statement of income filed, it is seen that the assessee has claimed Long Term Capital Gain of Rs. 5,26,782/- on sale of shares of Talent Infoways, the transaction of which was entered into through Mahasagar Group of cases. In the case of Mahasagar Group, a search and seizure action u/s.132 of the Income Tax Act, 1961 was undertaken in the case of M/s. Mahasagar Securities Private Limited (now known as M/s Alag Securities Pvt. Ltd.) and its group companies, mainly which are M/s Mihir Agencies Private Limited, M/s Gold Star Finvest Private Limited and M/s Alliance Intermediatories & "Network Private Limited on 25-11-2009. During the course of Search, it was discovered that Shri Mukesh M Choksi, a chartered accountant by profession had floated some 34 companies from his office at Shree Sadashiv CHS, Santa Cruz East, Mumbai. Two of these companies M/s Talent Info way Limited and M/s Buniyad Chemicals Limited were companies listed on the Ahmedabad an....
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....ng the course of search statement of Shri Mukesh Choksi, director of the companies was recorded on 26/11/2009. In answer to question No.4, Shri Mukesh Choksi, deposed that he is engaged in fraudulent building activities and in the business of providing bogus speculation profit/loss, STCG/LTCG/loss, share application money etc. In view of the above, the purchase and sale of shares of Talent Infoway from Mahasagar Securities Pvt. Ltd. and Alliance Intermediateris Network Pvt. Ltd. respectively is found to be sham and bogus one. You are therefore, required to show cause as to why the sale consideration of Rs. 5,26,782/- received by you should not be treated as unexplained credit u/s. 68 of the Act and the same should not be added to your total income". 2.5 The assessee vide letter dated 04/12/2013 submitted as under; "During the F.Y.2006-07 I have sold equity shares amount of Rs. 5,26,782/- and earn long term capital gain which is exempt u/s.10(38) of the IT Act which was clearly mention on filling my IT Returns as Exempted Income. I have physical shares which were transfer to D-Mat account and sold through authorized Member of Stock Exchange and received Invoice and charging al....
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.... assessee failed to offer any explanation about the so called transactions except saying that transactions for purchase and sale of shares are genuine. In the statement of Shri Mukesh Chokshi he categorically stated that the companies controlled by him are indulging in accommodation entries and they used to receive either in cash or through cheques from entry seekers. The assessee did not controvert the statement of Shri Mukesh Chokshi, director of the Alliance Intermediateris Network Pvt. Ltd. but simply stated that the transaction is genuine without adducing any valid proof. On the contrary it is evident from the record that the assessee has shown to have purchased the said shares of Talent Infoway Ltd. ranging between Rs. 1.50 to 1.55 from Mahasagar Securities Pvt. Ltd. on 15/04/2004, vide contract Note - Form A No - N/NN/08/-3 stating that the transaction has been entered in National Stock Exchange. As per the guidelines of SEBI the delivery from NSE is to be done in DMAT form within week, if the transaction is genuinely carried out. However, it is seen that the assessee has received the share in physical form in the month of May 2006. Thus, presuming for while that any genuine....
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....ing the facts in totality the claim of the assessee cannot be denied on the basis of presumption and surmises in respect of penny stock by disregarding the direct evidences on record relating to the sale/purchase transactions in shares supported by broker's contract notes, confirmation of receipt of sale proceeds through regular banking channels and the demat account. 19. As mentioned elsewhere and as agreed by the Representatives of both the sides; since the facts are common in all the impugned appeals, all the appeals by the assessees are allowed. The Assessing Officer is directed to treat the surplus as Long Term Capital Gains and allow the exemption a claimed by the assessees. 20. In the result, all the appeals filed by the assessees are allowed." 4.3 Learned AR also cited an order of Mumbai Bench in ITA No.7859/M/2011 for Asst. Year 2003-04, in the matter of Shri Jatin P. Ajmera vs. ITO, relevant Para is reproduced hereunder: "3. Before the Ld. C1T(A), it had been contended that the 14200 shares of Buniyad Chemicals Ltd were purchased in cash for Rs. 8,520/- on 05/06/2001 through sub-broker M/s.Gold Star Finvest Pvt. Ltd and they were transferred in name of assessee ....
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....2008 decided on 24/02/2010. 3. ITO Vs. Truptic Shah - ITA No.1442/M/2010 decided on 29/04/2011. 4. Smt. Manjulaben L. Shah Vs. ITO - ITA No.3112/M/2014 decided on 31/10/2014" 5. We find that the facts of the above stated cases were all most identical to that of the assessee. In the case of "Kataria Ketan Ishwarlal vs. ITO" (Supra), the transactions were carried out through the same broker i.e. M/s. Gold Star Finvest Pvt. Ltd. The Tribunal allowed the appeal of the assessee observing as under: "6.1 We have considered the rival submissions made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. From the copy of the share certificate, Demat account, share transfer form filed in the Paper Book, we find the assessee has purchased 9500 shares of Kushal Software Ltd. from M/s. Handful Investors Pvt. Ltd. We find the Assessing Officer treated the sale of such shares by the assessee through M/s. Gold Star Finvest Pvt. Ltd. as bogus on the ground that Mr. Choksi and his broking company were engaged in giving false share transaction bills. However, from the copy of the statement of Mr. Choksi, a copy of ....
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....ils of share transaction from stock exchange when the sale was not on stock exchange and relying upon it for making addition. 13. As regards points (b) & (c) above, we find that the assessee has filed relevant documentary evidence before the AO but the AO has failed to consider the same. The CIT[A] in his order has considered the said evidence and has come to the conclusion that the share transactions are genuine. However, as held by the Tribunal in the case of Rajinidevi A. Chowdhary [cited supra], which is on similar set of facts, the AO could have verified from the Registrar of companies as to whether the shares have been transferred and the names of the shareholders in whose names shares have been transferred. The decision of the Tribunal in the case of Rajinidevi A. Chowdhary has also been upheld by the jurisdictional High Court as taken note of by this Tribunal in the case of Shri Pinakin L. Shah [cited supra], to which one of us i.e. the Judicial Member, is a party. In these facts and circumstances of the case, we do not see any reason to interfere with the order of the CIT[A] and the same is upheld. 14 In the result, revenue's appeal is dismissed." 7. The facts ....